Austin Engineering Limited (ANG) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Austin Engineering full year result briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Peter Forsyth, Managing Director. Thank you. Please go ahead.

Good morning, everyone, and welcome to Austin's presentation of its results for the 2020 financial year. I also have with me on the call today Sam Cruickshank, our CFO, who will be taking you through the financial details of our results. The, overall presentation should take around 25 minutes and will cover an analysis of the financials, a review of our operations by region and some commentary on market conditions and the outlook. Then Sam and I will be happy to spend the rest of the time taking questions from those participating in the teleconference. So let me begin with a quick summary of the key highlights for the year, including how we have been affected by COVID-19. Revenue was unchanged at $230.4 million. And despite some challenges faced in respect to COVID-19, earnings held up fairly well with normalized EBITDA falling 6% to $22.5 million, which was below our withdrawn guidance of $24 million to $28 million and underlying net profit after tax falling 9% to $8.1 million over the year. COVID-19 has affected some parts of our business more than others. Australia and Chile performed well with strong earnings performance throughout the second half. However, facilities in the U.S., Colombia, Peru and Indonesia were all affected in varying degrees. We estimate that COVID-19 reduced our bottom line statutory result by at least $4.3 million and underlying EBITDA by $1.9 million as a result of closures in Peru and Colombia and deferrals of work in Indonesia, partially offset by government support received in the U.S. Austin recorded a record operating cash flow of $24.1 million, its strongest result since the peak of the mining boom in 2012. This delivered a net cash position of $8 million at 30th of June 2020 compared to a $19.8 million net debt position at the same time last year. Improved financing arrangements have been negotiated on all major facilities, including the recent announcement of a new $15 million core debt facility in Australia with Export Finance Australia. As a result of the strong cash flow performance, liquidity position and a positive outlook for the business, the Board has declared a fully franked final dividend of $0.003 per share, which will be paid at the same time as the interim dividend on 30th of September. As a measure of how far we've come, the annual dividend of $0.005 represents Austin's first dividend in 6 years. Our expectations for FY 2021 are an underlying net profit after tax in excess of $9 million, which compares to $8.1 million recorded for FY 2020. We have strong order books in Western Australia and Chile, and Indonesia is poised for improved performance with a good order book going into FY '21 and large opportunity pipeline. North and South America continues to be affected by COVID-19 into FY '21. The U.S., in particular, is facing a number of short-term issues, including ongoing trade tensions with China, the uncertainty surrounding the upcoming presidential election and the direction of the oil price. Even with the short-term challenges, the U.S. remains an important market for Austin, and we are reviewing our expansion plans for this business in the medium term to ensure we are well positioned to capture the growth in this market. Our operations in Peru and Colombia underwent further restructuring as a result of mandatory shutdowns in those countries due to COVID-19 and will both operate on a reduced footprint in the short term. A source of pride for me is the improvement in the safety culture at Austin during my tenure with the business. We have put in place a number of initiatives to place safety at the forefront of everything we do, and this is reflected in the reduction of key statistics of lost time and total recordable frequency rates during the year. I'll go into some more detail on our operational performance and outlook shortly. But before I do that, I'll hand over to Sam for a more detailed walk-through of the financials.

Thanks, Peter, and good morning, everyone. Let's start with a look at our financial results reported on a normalized basis. And the first point to note is the strong turnaround in performance in the second half. We reported a small loss in the first half of $0.6 million, followed by a net profit after tax of $8.8 million in the second half. This is the nature of this business. And every now and again, we are reminded that it's not a good idea to get too attached to the idea of annual earnings being evenly distributed across the year. While revenue for the year is unchanged from 2019, the mix is different, both by type of sale and region. The Asia Pacific and North American region each increased their revenue base to account for 80% of group revenue compared to 75% for the year before. South America's revenue declined due to COVID-related shutdowns and contract cancellations. To allow for an easier comparison year-on-year following changes required by AASB 16 in respect to accounting for leases, we've represented the 2019 numbers as if AASB 16 is already in place. On that basis, EBITDA declined by 6% to $22.5 million, largely due to COVID impacts, which are estimated to be $1.9 million at this level. These were partially offset by operational improvements and an improved product mix. In terms of the impact to the bottom line, without COVID, NPAT would have increased by 13% to $10.1 million instead of falling 9%. Adjusting for changes to accounting standards, the 2 big movements over the year were an 8% increase in depreciation and amortization and a 21% fall in net interest expense. Depreciation increased as a result of increased capital spending in recent years, while interest expense fell due to lower debt levels. The expense remained higher than ideal due to high fixed costs attached to that debt. Around $1 million of this expense relates to AASB 16 leases. With new financing arrangements in place, which I'll touch on shortly, further interest expense reductions will flow through to FY 2021. In terms of our statutory results, we recorded one-off net costs during the year of $2.6 million, which were principally from retrenchments and shutdown costs associated with the termination of Colombian site contracts, which included the retrenchment of over 300 people. Included in this was a small net gain of $0.5 million from the sale of the Hunter Valley property and the Chile crane hire property. There were no impairments required to continuing operations this year, which helped boost the increase to pretax profit compared to last year. Net profit after tax, on the other hand, continued to be impacted by a high effective tax rate. This year, it was due to a combined $5.8 million pretax loss for the Colombian and Peru business units, for which no tax benefit was recognized. Last year, a deferred tax asset in Colombia of $2.2 million was derecognized, resulting in an effective tax rate of 60%. In future, we would expect the tax rate to reflect closer to the Australian corporate tax rate of 30%. Turning now to cash flow. As you can see, there continues to be significant improvement in operating cash flow during the year with $24.1 million delivered, the strongest result in this business for 8 years and its third strongest ever. The key contributor to this result was a $16.3 million decrease in working capital, which included an increase of $11.4 million in payments received in advance for orders due for delivery after 30 June 2020. Another $7.5 million was received from the sale of surplus assets, including the Hunter Valley and Chile crane hire facilities. Capital purchase items for the period related mainly to smaller items such as welding machines to improve efficiencies in the U.S., Perth and Mackay operations. The net cash inflows from operating and investing activities were mostly directed to debt repayment. Working capital for Austin tends to be lumpy as our new product business is high in value per unit with relatively low volume. This means a material difference in the working capital that is seen when a client delays or brings forward a payment or when we have smaller or larger works in progress. This year, working capital reduced from $22.1 million at 30 June 2019 to $5.4 million mainly due to prepayments received for clients for work to be delivered after 30 June 2020, as mentioned earlier. Receivables continued to be closely managed with favorable payment terms in place with large clients. And inventories increased from $26.7 million at 30 June 2019 to $32 million due to a large amount of work in progress at the end of the financial year and the raw materials required to support the order book for the first half of '21. On this slide, we've also included a pro forma 30 June 2019 number on the basis of AASB 16 being in place at the time. In our annual report, we adopted AASB 16 for the first time this year. We're simply allowing you here to compare apples for apples. We have continued to reduce debt levels, with net debt reducing by $28.9 million during the year to $2.8 million. When excluding AASB 16 leases, we finished up the year with a net cash of $8 million, a great position. To put into context, from the end of FY 2014 when the company was in a very difficult position with $90 million in bank debt and a rapidly declining revenue base, right up until FY 2017, Austin was totally reliant on support from its shareholders through capital raises and various funders. Over the past 3 years, our sole capital management focus has been paying back debt, restructuring the business and returning value to shareholders. So the significance of being able to declare that the business is now in a net cash position of $8 million cannot be understated. As mentioned at the half, our intention is not to remain entirely debt-free. So our focus since the beginning of the year has been on restructuring major debt facilities, particularly in Australia and Chile, so that they more appropriately reflect the significant reduction in Austin's financial risk to its lenders. As recently announced to the market, we have signed a new debt facility with Export Finance Australia, which replaces the facilities that have been in place since November 2017 with Assetsecure in Australia and Bibby in the U.S. This is a $15 million revolving working capital facility, which will fund selected client purchase orders from receipt until ultimate repayment as a connected invoice. It's priced in line with traditional bank financing, which represents a significant reduction from the current Australian and U.S. facilities. The term loan facility that was provided by BCI in Chile has also been refinanced following the sale of the Chile crane property. The new terms include a discounted interest rate to support the business during COVID, with interest rates ranging between 3.5% to 6% on various lines. The expiry date on the loans are due in April 2024 as well as an increase in the size of funding to around AUD 7 million, which will support the South American region. These new facilities put Austin on a very solid footing in these particularly uncertain economic times. I'll hand back to Peter now for some comments on the operational performance and outlook.

Thanks, Sam. I'll start with our Asia Pacific operations, which performed exceptionally well in the second half, more than doubling their earnings contribution on the first half and lifting margins for the year from 10.5% to 12%. This was mainly due to the Perth facility, which delivered close to 60% of the region's $116.7 million in revenue for the year and 43% of group revenue. There is no doubt that the workshop reorganization that was undertaken during December 2019 has paid dividends with throughput increasing by around 20%. And the good news is that our order book will see this activity level continue well into FY 2021. As previously communicated, the site services business in Western Australia was closed down in the first half of the year. In Mackay, results for the year were patchy with a clear impact on demand in the second half due to COVID-19. Our Indonesian business was also affected by a reduction in demand in the second half as several large orders were held back due to the uncertainties at the time around COVID-19. As a result, revenues for the year fell by 25%. Perth has been operating at near capacity in FY 2020 and shows no sign of slowing down. The order book stretches well into FY 2021, and there is a robust pipeline of work. We are investigating expansion of the main workshop to support the current demand levels. In Indonesia, the 2 large projects that had been anticipated to land in second half 2020 were finally converted and are in production for delivery this half. There are a number of opportunities in pipeline for work to support the East Coast of Australia as well as emerging opportunities in Africa and the domestic Indonesian markets in FY 2021. In terms of capital expenditure projects, we have both the cash and access to credit to invest back into the business, enabling us to further improve efficiencies in building product. We are looking at deploying more robotics, for example, as well as improved manufacturing jigs and fixtures. The slowdown in demand experienced by our U.S. operations, that was noted at the end of the first half and turned around in the second half as orders that have been lined up prior to COVID-19 came through. Nevertheless, this business has been facing a number of challenges over the past 12 to 18 months, including an undermining of confidence in investment due to the simmering trade dispute between the U.S. and China and escalating concerns around climate change and the future of domestic thermal coal. More recently, it has been the uncertainties posed by the outcome of the upcoming presidential election, not to mention the pandemic and the associated steep decline in the oil price. Despite all this, our North American operations contributed close to 30% of group revenue. Revenue increased slightly on the previous year to $66.4 million, and EBITDA increased 26% to $6.9 million. This was off the back of a strong improvement in margins from 8.4% to 10.4%. Our U.S. operation, based in Casper, Wyoming, was also the recipient of government assistance designed to support companies to retain employees during the restrictions imposed by COVID-19. It has enabled us to retain the vast majority of our 180 employees going into FY 2021, which is important as we are one of the largest employers in the city with a population of around 60,000. While the U.S. market remains soft and activity levels in the manufacturing sector generally are slow, we have been turning our attention to ways of improving productivity. The Casper facility is in need of capital renewal, and investing back into the business would enhance returns in a high labor cost region for Austin. Canada is a growth market for Austin with the majority of sales already going to clients operating in the oil sands sector. With the oil price recovering above the breakeven point of USD 40 per barrel for many operators, the outlook for FY 2021 is improving. Other key commodities in North America, where the long-term outlook is strong, are iron ore, copper and metallurgical coal. We are watching for developments on the U.S. election and further movements in oil prices. In the meantime, we are actively quoting on a large number of projects, so there is some reason to be optimistic beyond the first half of FY 2021. Our operations in Chile, Peru and Colombia performed differently during the second half of the year, largely as a result of how each country was impacted by COVID-19. The region overall accounted for 20% or $47.2 million of group revenue, which was down 18% on the previous year. EBITDA fell 65% to $1.6 million as margins contracted by 57%. Both Peru and Colombia were particularly affected by mandatory shutdowns in the last quarter of the year, with each business recording a normalized EBITDA loss of just under AUD 1 million. In Peru, the decision was taken to close Austin's Arequipa facility and shift its business model to a focus on new product sales. This is managed out of Chile, supported by approved local subcontractors. In Colombia, our main site contractor was impacted by the temporary closure of the mine, resulting in a mutual agreement to terminate the contract in June 2020. At the same time, we took the decision to terminate a number of other small site contracts with the same client affected by the temporary closures of the mines. This led to the retrenchment of over 300 employees. On a more positive note, Chile performed strongly in the second half following the resolution of restrictive funding arrangements, which had the effect of placing a cap on throughput in the first half. Our operation was streamlined with the closure of the loss-making Calama facility and the leasing of an additional workshop adjacent to our main operation in La Negra. We have a lease on that workshop, which allows us to service the increased demand in Chile. The outlook for the Chilean business is strong. Its order book for financial year 2021 is amongst the strongest in the group, and the outlook for this market is very positive. It has been less impacted by shutdowns and curfews than it might have been due to its location on the outskirts of the Antofagasta region. Having said that, when the 6-month lease from the second workshop at La Negra expires this September, we will be taking to account both the COVID-19 situation in Chile and the market outlook as to whether we seek an extension. We anticipate the results from our businesses in Colombia and Peru will be subdued as they transition to their reduced operating levels. While our South American operations run a high risk of being disrupted during FY 2021, it is also seen as a key market for us in the long term, with Peru, in particular, expected to be a key market in the future given its copper reserves. Finally, we are working through the sale of the office in Peru, the Calama property in Chile and some residual crane assets. It is a challenging market to sell at reasonable prices. However, the assets remain on the market, and we'll endeavor to earn a strong return on them. Given the reduced debt level, there is no requirement to sell at depressed values. I want to now touch on some broader topics related to safety and our people. As I mentioned in my introduction, in recent years, we have made significant strides in strengthening our safety culture globally through a coordinated pursuit of appropriate incident reporting. Our total reportable incident frequency rate continues to improve. Over the past 3 years, it has fallen from 18 in FY 2018 to 13.5 in the 12 months to the 30th of June 2020. The lost time injury frequency rate, also reported on a 12-month rolling average basis, has decreased from 7 in FY 2019 to 5.3. Austin's lost time injury frequency rate remains well below the industry average of 10.3. In terms of overall head count, which includes both permanent and flexible staff as well as those on labor hire arrangements, numbers fell by 471 or 27% to 1,248 at the 30th of June 2020. This includes those retrenched in Colombia as well as reductions in flexible workforce personnel in the U.S. and Peru. During July, another 64 people were let go in these regions due to the challenging markets all continue to face. Before I finish up with our outlook for Austin in financial year 2020, I'd like to spend a couple of minutes on some of the indicators around pricing and production for copper, thermal coal and iron ore, the 3 main commodities that Austin's major clients produce as well as the global outlook for CapEx on mining equipment. Iron ore pricing remains steady for most of FY 2020 but rallied in May to July due to supply disruptions. Austin sales to iron ore clients increased strongly over FY 2020, with 1 client undertaking their replacement cycle. Sales declines in the Australian coal market increased in FY 2020, but weak conditions in North and South America drove overall sales down. While the thermal coal price held steady for most of FY 2020, by mid-April, it began to decline due to the weakening import demand as a result of COVID-19. Glencore, a major force in Australian coal, recently announced temporary closures of a number of their mines in addition to some closures in Colombia. Copper prices have been volatile over FY 2020, increasing through the first half, falling sharply in the first quarter of 2020 and then recovering strongly since its low in April. Copper is an important commodity for Austin, particularly in South America, where the vast majority of revenue for Chile and Peru are sales to copper miners. The indicators that we watch, in addition to gathering anecdotal evidence from talking to clients, are telling a reasonably clear story about capital expenditure trends in mining. Overall CapEx peaked in 2019 and is forecast to reduce over the next 3 years, largely due to decreased development CapEx in the copper and gold sectors. Almost all regions will see CapEx declines in the copper and gold sectors, while new iron ore projects in Australia will drive development CapEx higher in Asia Pacific. From Austin's perspective, however, we are interested in what the trends are in sustaining capital expenditure. For us, that is the indicator of immediate opportunity, and the outlook for that paints a very different picture. Sustaining CapEx is expected to grow in iron ore and to be relatively stable in copper, whilst our understanding is the coal market will be challenging moving forward. We are also seeing a shift in projects moving from the construction to production phase, with a reduction in new projects coming through the early stages of the pipeline due to a lack of financing. This is positive for Austin in the near term as our products are used in the production phase more so than during development. As to the miners, contractors and OEMs that buy our products look for ways to reduce their cost per tonne in their operations, we can help them do that with our lighter-weight bodies and other innovative and market-leading suite of products. Turning now to our outlook for this financial year, which is mixed across the 3 regions in our business. Asia Pacific is expected to perform strongly, with both the Perth and Indonesian operations commencing with good order books and a pipeline of work well into FY 2021. North America has started with a low order book, but good prospects of work picking up in the second half. In South America, earnings will be driven by Chile, which is very well positioned for FY 2021, while Peru and Colombia are shrinking their operation bases. We have close to 50% of the required work for our projected budget already locked in, up from 32% this time last year. Austin's tender book is strong, particularly in the Asia Pacific, which reinforces the confidence in our revenue targets. Our guidance for FY 2021 is an underlying net profit after tax from continuing operations to be in excess of AUD 9 million. We are very conscious of the risks associated with COVID-19, both in terms of our ability to continue operating in different markets and also the global impact on demand due to the economic recession that most countries are experiencing in FY 2021. Our guidance assumes that there are no significant changes in the severity of the virus in regions that Austin operates in. I am looking forward to the opportunities that I see ahead for this business. We have commenced the 2021 financial year with our strongest balance sheet in many years, excellent cash flow and $8 million net cash in the bank. We have agreed on new debt facilities on significantly better terms and are well positioned to grow this business. We will continue to invest sensibly in internal projects that will deliver improved earnings, and we are committed to paying sustainable dividends, starting with our first payment in September 2020. That concludes the formal part of the presentation. There are some slides which have been included as appendices, which I won't go through here, but provide a summary of those areas where we have a competitive advantage and analysis of those markets and regions where we operate, an overview of the products and services we provide and a reconciliation of our financials to the recent accounting changes. Sam and I would now be happy to take questions.

[Operator Instructions] Your first question is from Philip Pepe from Blue Ocean Equities.

Firstly, well done on a good result, especially at the cash flow level. Very, very good in challenging conditions, so well done on that. Just on the outlook with 50% of projected revenue sort of locked in. Are we expecting all that to come through in the first half? Are we likely to see another second half bias this year?

Well, thanks for the comment, Phil. Look, we've -- I think this FY '21 will be more balanced than last FY '20. I think it was like 1/5, 4/5. We've roughly got around 3/4 of the first half locked and loaded and 50% for the full year. So I'm anticipating it's going to be more balanced than it was last year. But still a little bit undecided on the second half, but certainly a lot more balanced than the 1/5, 4/5.

[Operator Instructions] Your next question is from James Lennon from Petra Capital.

Yes, just a quick one for me just on currency. Can you just remind us what your exposures are there and how you manage it?

Sure. Thanks, James. So we -- our main currency exposures, other than Australian dollars, of course, is the U.S. dollars, followed by Chilean pesos. So generally, from a U.S. dollar perspective, we both buy and sell plenty of product and raw materials in U.S. dollars and have a relative natural hedge in U.S. dollars. Of course, that depends on the earnings profile coming out of the U.S. in any given year. But we don't do any hedge accounting or currency swaps or anything like that at this stage because we don't feel like we're overly exposed to currency at this point.

Your next question is from Daniel Porter from Wilsons.

Good set of results there. Can I just ask a few questions around your guidance and outlook, just to flesh that out a little bit more? Obviously, we can see the pipeline building around Perth, and that's all looking positive. But just more specifically around North America and South America, just your comments there. Just given your end market exposures, I guess, in North America, particularly to coal and then up into shale regions in Canada, how are you seeing that? Obviously, your comments there sort of suggest that you see a weaker first half but potentially a stronger second half just based on your tendering. Are you looking for a result that could be at similar sort of levels to FY '20? Or you're expecting that to be down year-on-year overall?

Look, I guess just discussion around North America and South America, North America, definitely, the Powder River Basin, as we've mentioned a few times, is increasingly decreasing over the years. And that's the pivot away from coal to gas, and there's a whole host of reasons for that. A lot of our business is north of the border into Canada, particularly the shale oil and iron ore. Iron ore is going to hold up well, and we're already currently doing a lot of business in that. And the gold price is the other thing, which is a positive move and particularly around Arizona and Nevada, where there's a lot of deep-pit copper mines and gold mines. So on the one hand, coal is waning. The oil price is picking up. Their breakeven is in the vicinity of $40. So we anticipate probably the second half shale picking up -- or the oil sands, sorry. And Chile, the copper price is boding very well and gold price boding very well for Chile, and we've got a lot of business locked in. So just getting back to North America, the next 6 -- or the next 4 months, 3 or 4 months with the elections, with a lot of unrest, with the management of COVID, it's a pretty murky picture there. But I think once the elections are behind us, I think people will put their heads down and get on with it. So I think it's going to be a story of 2 halves in North America. I think the second half will come out a lot stronger than the first half, but I'm not hugely concerned about it. But it's just the next couple of months which is a bit uncertain for us.

Yes. Yes. No, understood. And then the losses there in Colombia and Peru, would you expect those to be significantly smaller next year? Or can those businesses move back into a profitable situation at all?

Well, with the footprint we've got in Colombia and Peru, it's significantly down from what it was 12 months ago. We've got a lot less employees. We're still running the ruler over exactly what that business is going to look like in Colombia, and we have more or less trimmed down Peru to a much smaller group of people. So it's all about coverage of that territory, Dan, not so much building equipment in that territory. And certainly, our coverage is going to be enhanced. But we believe we can support South America very, very well out of Chile. So I think, overall, with our business initiatives we've got in other parts of South America, I see the results in South America being better than what they were in FY '20.

Yes. And I think, Dan, we spell out in the annual report that we lost from a pretax basis in Colombia and Peru $5.8 million for the year. And a lot of that was around the structural issues of coming out of those site contracts in Colombia and also continuing to pay our employees during times of shutdown from COVID. So without that $5.8 million loss before tax, the statutory numbers look quite different. But as Peter said, the footprint is much lower. So the losses will be considerably lower, and we'll be pushing to get the best result we can out of that region.

Yes. Okay. Understood. Just on your working capital as well, Sam. Obviously, a good result there and a lot of prepayments coming through. Would you expect that to unwind fairly rapidly over the first half or you're looking for another sort of decent -- maybe not to the same extent, but a decent improvement in working capital then again for FY '21?

Yes, Dan, some of it depends on, I guess, commercial discussions we have with customers. Obviously, the prepayments that we've got on the balance sheet at the end of the year will unwind. And whether between ourselves and our customers, we elect to sort of go down similar rates to which we went in last financial year in respect to big prepayments, yes, it's going to be as a result of commercial discussions. So we're in a much better position from a net debt perspective and perhaps less urged to go after those types of arrangements but -- from a purely cash flow perspective. But it's really going to come from a commercial discussion. So certainly, the ones at the end of June will unwind, to a large extent, by the end of December. But we'll see how things develop for the new financial year.

Yes. But fair to say probably that your entire cash cycle over the last 2 years has moved or improved fairly significantly on an underlying basis. You've just -- your -- it seems like your receivables, you're collecting on them a bit quicker.

Yes. Yes.

Yes, yes, yes. Okay. So some gains there to be locked in, no doubt, as well.

Yes. Yes.

And do you guys have a dividend policy now as well going forward, Peter?

No. We'll set that as we go through the year. And we felt very comfortable with our refinancing and with the business, the outlook and our performance. So -- but no, we don't have a defined, set-in-concrete dividend policy. We'll just be reviewing that on a 6-monthly and 12-monthly basis. But as we've said all along, we want to do things on a sustainable basis and not just be a flash in the pan. So I think that says a lot about what we think the strength of the business is going forward. And what we do is we want to be consistent and sustainable in how we go about that. So...

Yes. Yes. Understood. Understood. And maybe just a final one, again, back to Sam. Just in terms of your financing facility that you announced yesterday as well. Talking about interest rates being on sort of normal bank terms, would that be -- you're looking at sort of sub-5% or something around that level? Is that fair to assume?

Look, Dan, I can't disclose the rate, unfortunately. But I think you can sort of derive an order of magnitude from the comments. So I'll leave it at that.

[Operator Instructions] There are no further questions at this time. I would now like to hand back to Mr. Forsyth for closing remarks.

Thank you for your time. The outlook for Austin is very positive, and I firmly believe we are on the cusp of delivering sustained earnings growth, underpinned by the business improvements we have made over the last 3 years. I encourage you to read our annual report, which we released today and which features our engineering expertise, our ability to stay ahead of the pack on innovation and our high-quality client service. Thank you, everyone, for joining the call.

Thank you. That does conclude our conference for today. Thank you all for participating. You may now disconnect.