Babcock & Wilcox Enterprises, Inc. (BW) Earnings Call Transcript & Summary

Good evening. My name is Hannah, and I will be your conference operator today. At this time, I would like to welcome everyone to the conference call. [Operator Instructions] Thank you. Sharyn, you may begin your conference call.

Thank you, Hannah, and thanks to everyone for joining us on Babcock & Wilcox Enterprises Third Quarter 2023 Earnings Conference Call. I'm Sharyn Brooks, Director of Communications. Joining the call today are Kenny Young, B&W Chairman and Chief Executive Officer; and Lou Salamone, Chief Financial Officer, to discuss our third quarter results. During this call, certain statements we make will be forward-looking. These statements are subject to risks and uncertainties, including those set forth in our safe harbor provision for forward-looking statements that can be found at the end of our earnings press release, and also, in our Form 10-Q that will be filed today and our Form 10-K that is on file with the SEC and provide further detail about the risks related to our business. Additionally, except as required by law, we undertake no obligation to update any forward-looking statements. We also provide non-GAAP information regarding certain of our historical and targeted results to supplement the results provided in accordance with GAAP. This information should not be considered superior to or as a substitute for the comparable GAAP measures. A reconciliation of historical non-GAAP measures can be found in our third quarter earnings release published this afternoon and in our company overview presentation that will be filed on Form 8-K this afternoon and posted on the Investor Relations section of our website at babcock.com. I will now turn the call over to Kenny.

Thanks, Sharyn. And thanks, everyone, for joining us today. Well, as you can tell by our earnings release, it's been a busy third quarter for Babcock & Wilcox. I'd like to start the call today by first reviewing our third quarter performance on a continued operations basis, accounting for the announced reclassification of our solar business as well as the latest advancements across our BrightLoop and ClimateBright initiatives. I'll also discuss our announced strategic business realignment and the rationale behind that decision as well as details related to our 2023 and 2024 financial targets, which are based primarily on the strong performance of our aftermarket parts and services businesses before turning the call over to Lou. Let me start by highlighting the broad-based activities that drove revenue growth across all business segments during the quarter. Revenue for the third quarter was $239 million, which is 13% improvement compared to the prior year and our third consecutive quarter of revenue expansion on a year-over-year basis. Our top line improvement was led by Thermal revenues that increased approximately 17% when compared to the third quarter of 2022, followed by Renewable, more specifically our Renewable Services as well as environmental revenues increasing 11% and 4%, respectively. Our aftermarket parts and services business in Thermal and Renewable, typically our higher-margin businesses, continue to perform above our internal expectations. Consolidated adjusted EBITDA from continuing operations for the quarter was also impressive at $20 million, an improvement of $7 million or 54% when compared to the same period last year. This is inclusive of roughly $2 million in expenses for BrightLoop and ClimateBright in Q3 2023. While product mix was a large factor in the adjusted EBITDA performance for the quarter attributable to the higher-margin nature of our aftermarket businesses, we also demonstrated strong execution on increased volumes of projects within our Environmental segment. While continued operations bookings and backlog were mostly flat year-over-year, this is largely attributable to timing of new bookings as negotiations on a few larger opportunities are taking slightly longer than anticipated. Some of these delays are positive due to increased scope for B&W aftermarket services as many utilities and large energy companies are reevaluating the timing of new build projects and deferring to upgrades due to higher interest rates and other geopolitical factors. Our outlook for near-term booking opportunities remains robust, positioning us well to achieve updated backlog growth in a range of $550 million to $650 million by year-end 2023 based on continued operations, not including our reclassified assets. In addition, based on our improved performance of thermal parts and services and our global reach in providing clean energy technologies, we remain confident in achieving our revised full year adjusted EBITDA target from continuing operations of $85 million to $90 million in 2023 when excluding BrightLoop and ClimateBright expenses. Transitioning to BrightLoop and ClimateBright commercial activities. We are pleased to provide several updates related to our hydrogen generation technology and project portfolio. As previously mentioned, we are developing a small BrightLoop hydrogen production plant in Massillon, Ohio, very near our headquarters here in Akron. We are close to signing a definitive agreement for hydrogen offtake at this location for up to 3 tons per day of hydrogen production for the next 10 years. We are also excited to announce we have a letter of intent for project-level financing, and we have signed a lease agreement and are moving forward with construction to produce hydrogen by the end of 2024 or very shortly or early into 2025. With regard to our medium and larger platforms, we are also excited to announce a collaboration with Air Products, which represents a key step forward in our development of net-negative carbon intensity hydrogen production facility in Louisiana utilizing BrightLoop technology. More specifically, we have signed a memorandum of understanding with their products to enter into a definitive offtake agreement for up to 200 tons of carbon-negative hydrogen per day as well as the CO2 produced at the facility with the initial production of the facility expected to be operational in late 2026. This comes on the heels of our previously announced offtake agreement with General Hydrogen to acquire both hydrogen and CO2 from our medium-sized biomass BrightLoop platforms. Both of these agreements come with 10-year length terms. Based on the traction we have received to date, it has become clear that commercial solutions that address carbon-neutral targets have become imperative. Importantly, in parallel, we continue progressing in Wyoming and within recently announced hydrogen hubs, especially in West Virginia. This includes permitting, fuel commitments and collaboration, offtake, land allocations as well as project funding. While our recent developments across BrightLoop projects continue to progress, we are also pleased to announce a meaningful update to our Board of Directors. Effective today, Dr. Naomi Boness will join our Board of Directors, bringing an extensive expertise within the energy sector, particularly in hydrogen generation and carbon capture. We welcome Naomi to the Board and are confident her deep industry experience will prove valuable as we continue to accelerate our hydrogen strategy going forward. To reiterate, our updated pipeline when excluding the reclassified operations, is over $8.5 billion across all 3 segments, with approximately $1 billion in BrightLoop opportunities. We believe this puts us on a pathway to reach $1 billion in bookings by 2028 with a combination of small, medium and large projects. We feel confident that could lead to $1 billion in revenues from BrightLoop by 2030 and beyond and would still only represent 1% of the market share of total hydrogen spend by 2030. I'd now like to focus on the announced strategic business realignment, including what it means for the company going forward and its immediate impact to our current operations. In response to today's market conditions, which include higher interest rate costs and reduced or delayed growth capital expenditures by our customers, we see growth a growing global trend in extending the operational lifespan of existing power and industrial generation facilities. This presents us with an opportunity to shift our focus to the more predictable revenue streams generated from our aftermarket businesses. We plan to utilize these cash flows to strengthen our balance sheet and reduce our overall debt. We are also evaluating strategic aftermarket alternatives related to nonstrategic assets. Further, we expect to realize up to $30 million in annualized cost savings, primarily through reduction of the high overhead associated with seeking multiple new build projects. Our heightened focus on producing more predictable cash flow generation is consistent with our approach to provide long-term profitable growth for the company and its shareholders, ultimately driving our decision to streamline our efforts to concentrate on aftermarket businesses and capitalize on higher-margin parts and service opportunities. In order to ensure a successful realignment of our updated strategy, our focus is on the following: one, a greater emphasis on higher-margin aftermarket parts and services across all 3 segments, while further reducing overhead costs associated with certain large new build project opportunities; reducing our senior secured letters of credit facility by up to $20 million by the end of fiscal year 2024; refinancing our existing senior secured credit facility to reduce our interest expense by up to $5 million, and just today announcing a commitment for $150 million in refinancing; bolstering cash flow generation; and strengthening the balance sheet and utilizing federal-, state- and project-level financing to accelerate the deployment of our BrightLoop and ClimateBright technologies. While we recognize the long-term growth potential for solar from both the community and utility standpoint, there were several key factors that our management team and Board considered when evaluating what steps the company would take regarding the pathway for continued growth. As part of this evaluation process, we have decided to reclassify our solar business out of continuing operations. This is primarily due to the historical projects, the higher risks and the margin profiles. Looking ahead to next year, our focus on promoting future growth aligns with the sustained demand we observe across all segments, paving the way for improved performance in 2024 with our announced adjusted EBITDA target range of $100 million to $110 million when excluding BrightLoop and ClimateBright. Importantly, given our strategic business realignment, we now have increased visibility and confidence in our outlook as a significant portion of our targeted adjusted EBITDA will be generated from existing backlog with less reliance on large projects. I'll now turn the call over to Lou to discuss the financial details of the third quarter. Lou?

Thanks, Kenny. I'm pleased to review our third quarter results and our recent commitment for the refinancing of our senior credit facility, further details of which can be found on our 10-Q that is on file with the SEC. I'd also like to call your attention to the fact that I will be referring to amounts of our continuing operations. Our third quarter consolidated revenues were $239.4 million, which is a 13% improvement compared to the third quarter of 2022. This is primarily attributable to higher volumes in our Renewable segment due to the B&W Renewable Services operations as well as the Thermal segment volume, which increased due to higher levels of construction and parts activity. Our net operating income for the third quarter of 2023 was $5.5 million compared to an operating loss of $2.7 million in the third quarter of 2022. Our adjusted EBITDA was $20 million as compared to $13 million in the third quarter of 2022. Bookings in the third quarter of 2023 were $198 million, and the ending backlog at the end of the quarter, third quarter of 2023, was $507 million. Our net loss per share in the third quarter was $0.18 as compared to a loss per share of $0.15 in the third quarter of 2022. As Kenny mentioned, we've reclassified the solar business out of continuing operations. As a result, we'll have taken an impairment charge of about $56.6 million and recognized contract losses of $47.9 million, which include future estimated losses, both of which are reported in discontinued operations. We're pursuing potential recoveries of certain of these amounts, up to $40 million, and there is no assurance that these amounts will be recovered. Accordingly, such recoveries have not been recognized in the financial statements. I'll now turn to our third quarter segment results. Within our Babcock & Wilcox Renewable segment, revenues were $87.1 million for the third quarter of 2023, which is an 11% increase compared to $78.5 million in the third quarter of 2022. The increase in revenue is due primarily to higher volume associated with Renewable Services. And our adjusted EBITDA in the third quarter was $10.1 million as compared to $4.5 million in the third quarter of 2022, primarily due to the higher revenue volumes as described above. Within the Babcock & Wilcox Environmental segment, revenues were $46.4 million in the third quarter of 2023, which is an increase of 4% compared to the $44.6 million in the third quarter of 2022. The increase was primarily driven by a lower volume related to flue glass (sic) [ flue gas ] treatment process projects, offset by a higher overall volume of cooling technology projects. Adjusted EBITDA was $5 million for the quarter as compared to $3.1 million for the same period last year. And again, this is primarily driven by a higher product mix -- higher-margin product mix as described above, along with favorable closeouts of flue glass -- flue gas treatment plant, sorry about that. Hard for me to say flue gas. Turning to our Babcock & Wilcox Thermal segment -- to our Thermal segment. Revenues were $107 million in the third quarter of 2023, which is an increase of 17% compared to the $91.3 million in the third quarter of 2022. And this was primarily attributable to the higher level of volume in our construction projects as well as parts and service and our packaged boiler businesses. This was partially offset by a decline in certain service projects. Adjusted EBITDA in the third quarter of 2023 was $11.3 million compared to $10.8 million in the third quarter of 2022. This was primarily driven by the higher revenue volume and product mix described above. I'll now turn to our balance sheet, cash flow and liquidity. Total debt at September 30, 2023, was $377.6 million and the company had cash, cash equivalents and restricted cash balance of $65.1 million. Additionally, subsequent to September 30, 2023, we obtained a commitment to refinance our senior credit facility and amend our existing reimbursement agreement, including updating certain financial covenants thereunder. The refinance commitment is expected to reduce our interest costs by up to $5 million per year based on current interest rates. The financing, financing and strategic alignment, should significantly improve our liquidity this quarter and onward. I'm also pleased to announce that we have signed -- as Kenny had mentioned, we've signed a letter of intent for the financing of our first BrightLoop hydrogen project being developed in Massillon, Ohio. Now I'll turn the call back over to Kenny.

Thanks, Lou. Well, in closing, while Q3 wasn't without challenges and included several strategic decisions to improve the fundamentals of our business, we are extremely excited about the growth opportunities ahead of us. With increasing commercial interest in our core and new technologies and global demand for our baseload power generation, our market outlook remains robust, and we see the momentum in booking activity accelerating into 2024 and beyond. Finally, as always, I'd like to recognize the efforts of our employees as they continue to drive our success as an organization worldwide. With the outstanding support of our extremely talented and experienced employees and the continued confidence of our customers, we're driving innovation and supporting the global transition to sustainable solutions, and we're focused on delivering strong profitable growth for our shareholders. We are entering a new phase as we execute our strategic business realignment, and we look forward to the transformation that will enhance overall margins and improve cash flows generation for the company. I'll now turn the call back over to Hannah, who will assist with any questions. Hannah?

[Operator Instructions] Our first question is from the line of Aaron Spychalla with Craig-Hallum.

First for me, on the guidance, I appreciate some of the color there. Can you just talk a little bit more about the exclusion of kind of BrightLoop and ClimateBright there? What those investments might look like as we think about 2024? And then maybe just elaborate a little bit, you talked about some kind of project-level financing and other things that you're pursuing there.

Sure. No, I'd be happy to. So I would think about BrightLoop and ClimateBright from a broader company expense standpoint to be, I don't know, under $10 million, but $5 million to $7 million perhaps, somewhere in that neighborhood, just to give some transparency there from a B&W standpoint. Obviously, the project financing that we're referring to will go in at the project level versus an impact necessarily to B&W. So there will be a timing, and depending on how that project financing is set up and the exact structure of ownership of those particular projects, how the revenue will flow back and forth to B&W as we mentioned in the past. But from an expense perspective, rough order of magnitude, that's how we're thinking about BrightLoop and ClimateBright.

All right. And then second, just on the backlog, you talked a little bit, but can you just give a little more color on some of those projects? It sounds like maybe just slipping into 2024. Have any of those been lost? Or is it just kind of more of a project timing? And then you kind of talked about accelerating momentum, just maybe some of the areas that you're looking for as we head into '24?

Yes. Well, actually, I would -- even though we're in November here, we're talking about Q3 on this call, I would say some of those are slipping more into Q4, maybe into 2024. It just depends as we work through those negotiations on a few projects that we're trying to complete on that. As referenced in my comments, some of those delays I referred to is increasing some scope and activity potentially for B&W. As a few of the projects we're looking to larger upgrades and enhancements, and some of our customers are now trying to ascertain how they can extend out the life of these plants longer than maybe they had anticipated. So it's caused us to or caused them to relook at some of the scope in a positive way as it relates to B&W. And so we're excited about that. So those negotiations continue. But hopefully, and we have full intent to get those booked still in Q4, but 1 or 2 of those may slip out into 2024 as well. But more of a timing, I think, just from a negotiations aspect and as the customers relook at their approach to some of these technologies and the lifespan of the plants, which in the long run bodes well for us as an aftermarket provider. So that's how we look at it. I think worldwide, obviously some new build opportunities, in particular, I would say in renewable energy, waste-to-energy. Some of those are delayed a little bit because of the interest rate increases, the timing of capital expenditures, but not for any other reason. So there's a few that will probably extend into next year overall. But for us, as we've talked about on the businesses, is reducing the overhead associated with large new build, which this is an opportunity for us to do that. We also see potentially increasing opportunities around licensing and licensing some of our waste-to-energy technologies in support of some of the new direction that we want to take in the company. So we'll balance that as we transition more towards licensing and less on specific large new build opportunities.

Our next question is from the line of Brent Thielman, D.A. Davidson.

Kenny and Lou, I just wanted to confirm, the 2024 EBITDA target is $100 million to $110 million ex BrightLoop and ClimateBright?

That's correct. Yes.

Okay. And just again, another clarification. I think you said $5 million to $7 million against that potentially in costs just in support of BrightLoop and ClimateBright? Is that the right sort of baseline?

Yes. That -- I think that's -- I'd say below $10 million, but somewhere in that range I think is a good number. It will tweak and vary a little bit depending on the project financing and how we deal with that on these projects as they continue to advance and the timing of some of the state funding that we're anticipating as well as other SPV-level investors that would be investing in those projects. So there's just an element of that timing piece and how the revenue flow between the projects back to B&W would take place, which could plus or minus those expenses from an EBITDA standpoint. And it's a little early to predict precisely how that will work and the timing of that, but we see that pathway unfolding. So just to give you some range, that's kind of how we're thinking about it.

Okay. That's helpful. And then I guess, I mean, particularly in regard to some of these moves to boost the cash flow of the business, can you talk about what sort of your expectations are assuming kind of this 2024 EBITDA target range should get some benefits from this overall strategic realignment? I assume there's less drag from certain operations as a function of this. How should we think about that '24 EBITDA converting into cash flow?

Yes, Brent. From our standpoint, with the emphasis on the Thermal business and what we're now, what we also call Power business, which generate much more cash flow than new build projects, we should start seeing a better conversion than we've had in the past from adjusted EBITDA to the cash. Some of that cash will be used, as Kenny talked about, to continue to expand our BrightLoop penetration. But we should be able to convert a much higher percentage than we've converted and have positive cash flow coming into the second quarter of next year. Conversion rate would probably be -- I'll be a little bit broad on that because of CapEx, but the conversion rate would probably be in the 60% range with respect to cash.

Starting 2Q, is that right, Lou?

Yes. I'd say middle of Q2, we'll start seeing that. Because Q1, as you know, Brent, Q1 is always a slow quarter for us as well as others in this industry.

Yes. Okay. And then I guess just in regard to some of the financing that you've done here recently, maybe your thoughts next steps just related to the capital structure that you may or may not need to take, I guess, in order to sort of support the ongoing kind of financing commitments you've got out there, support the growth of the company, support BrightLoop. Do you feel like the capital structure is in a place you can do all that at this stage?

Yes. I think the committed financing that we talked about earlier for the $150 million for the senior credit facility, which will be both what I'll call the letters of credit facility and the revolver, certainly helps our capital structure as does the lower interest rate. And as Kenny mentioned, we're kind of looking at some of the strategic areas that may not fit with our new direction, and that may generate some cash.

I'll add to that, just real quick though. But that $100 million to $110 million EBITDA range, it's important to note and we tried to emphasize this that we're lessening, if you will, the reliance on large new build projects as it relates to that target. That doesn't mean that we won't be entering into certain projects if it makes sense for us to enter into. We're trying to obviously allow those to be more upside to that target rather than a necessity in order to achieve the target. So tried to be a little more conservative on that approach with putting that guidance or targets out there.

Our next question is from Rob Brown with Lake Street Capital Markets.

I just want to clarify a little bit more on your comments on the realignment and not sort of pursuing these larger projects. Sort of what kind of the -- I assume it's waste-to-energy, but are you then no bidding projects? Or how do you sort of go to market with that? And how do you change your focus there?

Yes. It's not as complicated as it sounds. We're simply twofold, and I'll explain it further. Certain opportunities in certain parts on waste-to-energy, in particular, are international opportunities that require certain security package levels. The security packages, i.e., LCs, letters of credit, as it relates to us come with high interest rates, right? So a lot of -- in waste-to-energy, the margins are not as high on new build. Clearly not as high as our aftermarket parts and services and Renewable Services, but those letters of credit and the interest associated with them really compresses the margins, plus additional risk. So as we look at going forward, two aspects. There are opportunities and projects that we're in discussions and negotiations on regarding waste-to-energy specifically that would have a higher margin potential or targets associated with them that are well above and beyond the interest expense associated with the letters of credits. So those are positive ones or opportunities for us to pursue. But we want to remove the reliance of that in our forecast so that they are more upside rather than a necessity, if that makes sense. But secondarily, we do see an expansion opportunity on licensing. We have been licensing our waste-to-energy technology in several markets, and that typically comes at even higher gross margins and significantly lower amounts of letters of credit. So the interest rate expenses or the costs of that are much more attractive to us from a margin standpoint. So it's not necessarily a no bid or zero bid. It's just as we continue to focus, we'll reduce the overhead down to match what we think is the 1 or 2 or 3 or whatever the projects that we think that are a stronger opportunity for us from a margin and cash flow standpoint as we also increase the licensing model that we have, particularly around our waste-to-energy technologies. So I don't know if that makes sense, but it's as simple as that sounds.

Yes. Okay. Got it. And then on the BrightLoop pipeline, I know you've given some pretty good color on it over your last analyst update. But how is that pipeline kind of at this point? Are you seeing more projects come into it? Are you seeing -- what's the direction in terms of project certainty in some of those projects that we're waiting for some of the government supports and financing incentives?

Yes. So we are excited about the opportunities in the pipeline building. We -- when we announced the pipeline, we typically keep it to 3-year projects that we think we'll book in the next 3 years. So I guess if we expanded that pipeline to total opportunities, you would see several more billions in those opportunities. And that's mainly around BrightLoop as it relates to those large projects. So our overall opportunities on BrightLoop keep growing around that. We have, as a result of that, we keep expanding that organization going forward in BrightLoop and ClimateBright. We haven't got to a final decision on this yet, but we're debating and discussing whether or not we should move BrightLoop and ClimateBright maybe to a separate at least discussion, not necessarily segment, going into next year, but we're not at that point yet. But the short-term aspect, the opportunity, as Lou mentioned, Ohio now is moving into a real project for us. The financing is coming into place. The offtake agreements are moving into definitive agreements for up to 10 years of take-or-pay on that hydrogen. Obviously, it's not a big plant relatively speaking. But it's important because it puts in the ground commercial technology for us and moves it from where we were before. The state discussions that we're having with several states now continue, those applications are moving into a real status. Some of those will start to move into public domain soon, and you'll see further announcements on that. It might be a phased-in approach on some of that funding coming from states. And we're -- we continue the discussions on the federal level as well, too. The other aspects, again, it's kind of a circular piece, but the hydrogen hubs that were just recently announced by the DOE, in particular the Appalachian hub, there's mention and we've mentioned before previously some of the work that's taking place there in Mountaineer. In West Virginia, that's all pull-through that will eventually some of that will get down to us. That's going to take time, obviously. But those things keep moving on. We've increased testing now, boy, I'm going to throw out a number. It's probably -- we're up to about 30 different fuel testing, samples that we're testing across a broad range, both in utilizing solid fuels such as certain coal developments, also in biomass developments in multiple locations. That's going through our labs at this point in time. So we keep increasing the amount of fuel testing related to the opportunities, and we keep developing the opportunities as we keep unfolding the projects that are before us. But as mentioned in the comments today, the developments around Air Products and getting to a 10-year agreement with moving forward with them to finalize a 10-year agreement, that location is a big step. That plus the General Hydrogen announcement puts us in an offtake of up to 220 tons a day. We are in negotiations on the feedstock aspect, mainly biomass in that particular location, and we're in negotiations on the lease and then the air permitting process there. We are also in discussions on funding around that project. So all corners of that pyramid are coming together. The same in some of the other locations. And we'll keep announcing that obviously as we continue to make progress there. But BrightLoop keeps expanding, and we're excited about those opportunities. One of the areas I didn't talk about in the comments, but I'll say it on the call here that we're starting to see, and we're early on this, so we'll identify it as we move along. But what we're starting to see globally, and potentially in the U.S., is actually combining ammonia, either net negative or net neutral ammonia, with coal-fired plants to reduce the overall CO2 offset of those coal-fired plants. We see a wide -- that activity happening a lot, especially in Asia. There's been some discussions with a few here in the U.S. So really early on in that application, but that's exciting for us because as I mentioned before, a lot of these plants now are looking to extend their life cycle and power generation. And if we can introduce a net neutral or net negative ammonia production from biomass, which BrightLoop can do, these power plants can actually have a carbon offset that would take literally, depending on the mix, could take a coal plant down to at least net neutral by 2030. And we think that's an exciting development. We're early in that discussion, but it bodes well for us because it's both aftermarket parts and services for our baseload power generation and thermal group, but it also opens up offtake for the ammonia produced by net-negative carbon intensity BrightLoop using biomass. So we're excited about both ends of that spectrum, and that's one of the decision points that went into our thinking to get more around our thermal parts and services and our renewal parts and services and focus more on the BrightLoop, ClimateBright because it's becoming more real for us. At the same time, reduce some of the costs associated with some of the other areas. So all of that adds into that realignment strategy.

Our last question is from the line of Alex Rygiel with B. Riley.

A lot going on here. So let's get into a couple of things. First, as it relates to the $30 million in annual cost savings, can you comment on the timing of that? And how important is that in getting to your guidance of $100 million to $110 million next year?

Yes. Some of that has already started and will help out a little bit in Q4. And clearly, we'll kick in heavily into Q1 on that. Yes, so that process has already begun. Obviously, we're taking steps. Some of the timing of that may be more in Q1 than now, but they've been identified, and those are in process to be implemented, I guess, is the best way to describe it.

Excellent. And then there was a reference to strategic alternatives related to nonstrategic assets. Is there any chance you could quantify kind of the possible value here that you could realize in making those?

No, great question, Alex. I wish I could, but I'll leave that out for the moment, but just wanted to say we look at various things from assets. Some of those could be property locations and other things, assets that no longer strategically that we need going forward. But I don't have a valuation or anything that we'd want to put out at this point in time. Thanks, everyone.

That concludes the question-and-answer session. I would now like to turn the call over to Sharyn for any closing remarks.

Thank you for joining us today. This concludes our conference call. A replay will be available for a limited time on our website later today.

That concludes today's call. Thank you for your participation. You may now disconnect your lines.