Cleveland-Cliffs Inc. (CLF) Earnings Call Transcript & Summary

Welcome to the 2020 Annual Meeting for Cleveland-Cliffs Inc. Our host for today's call is Lourenco Goncalves, Chairman and CEO. [Operator Instructions] I will now turn the call over to your host, Mr. Goncalves. Please go ahead.

Thank you very much, and good morning, ladies and gentlemen. I'm Lourenco Goncalves, Chairman, President and Chief Executive Officer of the company, and I will preside as Chairman of the meeting. I'd like to call the Annual Meeting of Cleveland-Cliffs to order. And on behalf of the company, its directors and officers, I would like to welcome you and thank you for joining our virtual annual meeting. Our meeting is being webcast at www.virtualshareholdermeeting.com/CLF2020, where it will remain archived for replay at any time until the 2021 annual meeting of shareholders. As is our custom, following the conclusion of the meeting, we will answer questions regarding the company's business. Though we may not be able to answer every question, we will do our best to provide a response to as many questions as time allows. We encourage questions from all shareholders, particularly from retail investors. These investors are usually unable to address the CEO directly. This virtual shareholders meeting is your opportunity. Please take advantage of the opportunity. I will be glad to answer your questions. You may ask a question at any time during this meeting by timing -- typing your question directly into the questions box on the website you are using to access the meeting. In fact, we encourage you to begin submitting questions right now rather than waiting until the formal Q&A session to start. That will ensure you have adequate time to type and submit your questions. Please note, only validated shareholders will be able to submit questions. Out of consideration for others, please limit yourself to 1 question. Now I would like to introduce James Graham, our Executive Vice President, Chief Legal Officer and Secretary, who will act as Secretary of the meeting. James?

Good morning, everyone. This is James Graham.

Thanks, James. With us on the line today, representing the company's independent registered public accounting firm, Deloitte & Touche LLP, is [indiscernible]. Also with us on the line today is Tony Carideo from Broadridge Financial Solutions, our tabulator. Tony has been appointed to act as inspector of election. I will now introduce the independent director nominees of the company. John Baldwin, former CFO of Worthington Industries; Robert Rip Fisher, former Managing Director at Goldman Sachs; William Bill Gerber, Managing Director at Cabrillo Point Capital LLC; Susan Green, former Deputy General Counsel, U.S. Congress Office of Compliance; Ann Harlan, former Vice President, General Counsel and Corporate Secretary at the J. M. Smucker Company; Ralph Mike Michael, Chairman of Fifth Third Bank for the Greater Cincinnati region; Janet Miller, former Chief Legal Officer and Corporate Secretary at the University Hospitals; Eric Rychel, former Executive Vice President, CFO and Treasurer of Aleris Corporation; Gabriel Stoliar, former Executive Vice President at Vale; Douglas Taylor, former Managing Partner of Casablanca Capital; and Arlene Yocum, former Executive Vice President and Managing Executive of Client Service for PNC Bank asset management. I will now move the business of the meeting. The agenda for the meeting consists of the proposal set forth on the agenda available to you on the website you are using to access the meeting. Also available to you are the rules of conduct for the annual meeting. To conduct an orderly meeting, we ask that participants abide by these rules. Mr. Graham, please present your report on the notice of the meeting and other procedural matters.

Mr. Chairman, I have the affidavit from our tabulator, Broadridge, and the secretary's certificate as to the mailing to shareholders of record as of February 24, 2020, of the notice of the annual meeting and proxy statement, form of proxy card and 2019 Annual Report. The notice of annual meeting was mailed to each shareholder on or about March 9, 2020. I have a list of registered shareholders of record as of February 24, 2020, certified by Broadridge Financial Solutions, our transfer agent and registrar. I also have our financial statements covering the year 2019 as certified by Deloitte.

Thank you very much, James. Please place the secretary's certificate in the minute book. Our first order of business today is to determine whether the shares represented at this annual meeting either in person or by proxy are sufficient to constitute a quorum for the purpose of transacting business. Mr. Graham, you have a report on quorum?

Yes. The certified shareholders list shows that on the record date for the annual meeting, there were outstanding and entitled to vote a total of 271,441, 006 common shares. We are informed by the inspector of election that there are present in person or by ballot proxy 223,322,968 shares, representing substantially more than a majority of the total voting power of the company. And this constitutes a quorum.

Thanks, James. Because a quorum is present, I declare this meeting duly convened for purposes of transacting such business as may properly come before it. The first item before the shareholders is the election of 12 directors. The Board of Directors recommended the election of the following persons as directors: Lourenco Goncalves, John Baldwin, Rip Fisher, Bill Gerber, Susan Green, Ann Harlan, Mike Michael, Janet Miller, Eric Rychel, Gabriel Stoliar, Douglas Taylor and Arlene Yocum. The next item of business we will consider is the proposal to approve, on an advisory basis, our named executive officers' compensation as disclosed pursuant to the SEC's rules, including the compensation discussion and analysis, the compensation table and the related material disclosed in our proxy statement, commonly known as Say-on-Pay. As an advisory vote, this proposal is not binding on Cleveland-Cliffs. However, our Board will always consider the outcome of this vote when making future compensation decisions for named executive officers. The last item is the ratification of the appointment by the audit committee of the Board of Directors of Deloitte & Touche LLP as the independent registered public accounting firm to examine the financial statements of the company for the year 2020. That completes the presentation of proposals to be voted on at this meeting. The polls are now open. We will now proceed to vote on each of the previously discussed proposals. If you have previously sent in proxies or voted via telephone or the Internet and do not want to change your vote, you do not need to take any further action. You are done. Any shareholder who has not yet voted or wishes to change their vote, may do so by clicking on the voting button on the web portal and by following the instructions there. We will pause for 1 minute to allow for any final votes to be cast. [Voting]

This is the beauty of the virtual meeting. I don't have the benefit of seeing any movement, so I need to give a little time. Thank you for your patience. I hereby declare the polls closed. The inspector of election will count the votes. Will the secretary please report the results of the voting?

Mr. Chairman, we have been informed by the inspector of election that the ballots have been counted and wish to report the following. A plurality of the shares present as well as the majority of the shares voted have been cast for each of the 12 Board nominees and therefore, the nominees for election to the Board have been duly elected. We have not received an affirmative vote of more than a majority of the shares present to indicate support for the resolution to approve on an advisory basis, Say-on-Pay. And lastly, a majority of the shares present have voted to ratify Deloitte & Touche LLP as the company's independent registered public accounting firm for 2020.

Thank you very much, James. I declare that each of the persons nominated to be a director of the company has been duly elected, and each of the proposals presented at this meeting has been approved, except Say-on-Pay. At this time, I would like to congratulate each one of my fellow Board members Douglas, John, Ann, Mike, Arlene, Rip, Susan, Janet, Gabriel, Eric and Bill for their reelection to serve with me in our Board. With official business concluded, the 2020 annual meeting is hereby adjourned. Now that the business of the 2020 annual meeting has been concluded, I will answer the shareholders' question. Paul Finan, our Director of Investors Relations, will work on facilitating the Q&A. So Paul, please.

Yes, this is Paul. If you have a question that you have not yet submitted, please do so now. [Operator Instructions] Your first question is, what was the main driver of the AK Steel acquisition?

The main driver of the AK Steel acquisition was to give Cleveland-Cliffs and to give me the ability to participate actively in commercial negotiations in the automotive business. Cleveland-Cliffs stand-alone, just as a producer of pellets, as a mining company, already had all the exposure to automotive because our biggest client is ArcelorMittal USA, and ArcelorMittal USA has an enormous exposure to automotive. Our second largest client is AK Steel, and AK Steel is 66% exposed to automotive. So automotive is the vast majority of the business of 2 of the 3 biggest clients that we have -- actually the first and the second. The only problem is that because we are behind the pellets, we're a supplier of pellets, we had no say on what AK Steel or ArcelorMittal does or does not do in their commercial negotiations with automotive. We still don't have that type of ability through ArcelorMittal, but we absolutely have that with AK Steel. So even though we did not increase our exposure to automotive, now we are a player. That was the main reason. Also, a bigger platform with more clients, more diversified broad number of products, more ability to drive revenues and profits is a lot more comfortable in situations like the one we're going through right now. Before it, Cleveland-Cliffs stand-alone through this pandemic would be hard pressed to be able to continue to generate liquidity to take care of business. With AK Steel, we're able to put in place an ABL of $2 billion that per se is better than having a very little ABL that we had in Cleveland-Cliffs, an asset-based loan. Then we're able to raise capital and increase debt liquidity. Then we're able to add a follow tranche to our ABL to further increase liquidity. And as early as yesterday, we were able to conclude a transaction that was fantastic in terms of the exchange unsecured debt that was trading at a discount to secured bonds that were trading at par. And with that, we eliminated $181 million from our debt. So long story short, AK Steel facilitates our ability to make money. AK Steel reduces our exposure to commodity prices like IODEX, hot-rolled coil, pellet premium. Now it's all diluted inside a much bigger platform. So overall, having AK Steel is a good move in terms of ensuring that Cleveland-Cliffs will be profitable, will be healthier and will be stronger. Next question, Paul.

Thank you, Lourenco. Your next question is from [ Jim Butterfield ]. What criteria will you use to determine when to reinstitute the dividend?

We are not going to reinstitute a dividend in the foreseeable future. The dividend has already proven that it was not a good thing in terms of keeping shareholders loyal. In today's world, shareholders tend to go in and out too easily. There is no real attraction to shareholders in our space because we're paying a dividend, institute a dividend that was not negligible. In terms of yield, that dividend was in the 2% to 3% range for a period of time. And then after prices -- when the stock price went down, the dividend became ridiculously high because the stock price was going down. But that 2% to 3% yield for a dividend was fantastic. But the only thing that particularly retail shareholders could see is that it was a $0.06 dividend. Well, for me, that I'm a big shareholder, that dividend was very meaningful because I carried almost 4 million shares. So every time they are paying me $0.06, it was a pretty chunk of money. But if you are a small shareholder, you don't feel that as the yield because you have other opportunities to invest our money, you have other alternatives. So I heard you loud and clear. So I'm not foreseeing any opportunity to reinstate a dividend. And it's not part of the question, but I will address because it goes with returning money to shareholders. We bought back a lot of stock. And we bought back a lot of stock to support the stock price. And because we had the cash and because big shareholders were totally in support and in retail shareholders as well. And then it's considered at the time we're doing, it's a very tax-efficient way to return money to shareholders and this and that. And then stock price goes down, and then it's no longer a good thing. Good for the ones that have the benefit of doing month a morning quarter back. I don't. I have to make decisions in real-time and live with the consequences. So I bought stock. I don't like the fact that I bought stock. It looked a good move at the time. It was widely supported by shareholders, big and small, institution or retail. And now we are criticized. I don't care about being criticized. I just regret that I spent $300 million buying back stock, and that was not enough to support the stock prices. So it's not going to happen either. So no more dividends for the foreseeable future, no more stock buyback for the foreseeable future. I'm going to be focused on knocking down that, and we are -- we actually have already started. While other CEOs are looking like deer in the head light, not knowing what to do, I have already made 3 -- in case you haven't noticed, I have already made 3 very important and very efficient financial transactions, and I'm very pleased with the result of this transaction. On behalf of the shareholder, I am a big shareholder. I'm very pleased with that. Next question, Paul.

Lourenco, you recently announced a $555 million note offering. It was stated on the 8-K that the proceeds will be used to redeem $736 million of senior notes. You know what specific notes will be redeemed? And will these be open market purchases at a discount or in a separate transaction?

Yes. We absolutely know each one because this was a private transaction with a number of funds. But unfortunately, this is a 3 plus 3 transaction. So the transaction that was executed a couple of days ago, we will only close on Friday. So with that, we can't provide the details yet, but the unsecured funds, the unsecured tranche that were used will be public once the transaction closed on Friday. That would mean it was all good, so much so that we're able to eliminate $181 million of debt, eliminated, erased, completely erased through the transaction and our interest expense only increased by $8.8 million, which is fantastic. That's a great outcome. There are a lot of CEOs right now in our space, are in Steel and outside of our space, trying to understand what we did, actually, some bankers, too. Some bankers still don't get it. But we did. It's all playbook. We did at Cliffs, we did at Metals USA. We have been doing over and over again, and we will continue to do because every time I do that, I take the investor by surprise. So that's the way it works. We'll continue to do that. But that will be until Friday that we release that, before the transaction closes on Friday. Next?

Lourenco, could you please explain the steps the company has taken in response to the COVID-19 pandemic to include any impact to employees, including benefit changes and any policy changes to protect the health of the employees and the community?

Great question. And we absolutely implemented a lot of changes. We were the -- let's start when things started. Things started here in Cleveland when we realized that this pandemic was coming. And at that time, there was not a lot of talk in the press about the pandemic other than it was a Chinese thing. Well, it was a Chinese thing, but we already had a few cases in the United States. So I was the first one to shut down the office here in Cleveland, Ohio and West Chester and sending everybody home to work from home. And we did that actually a couple of days before the official closing of our acquisitions. And that was the basis that Governor Mike DeWine of Ohio used to do the same thing with other companies. So we are very pleased with the fact that Governor DeWine not only supported what we did, but also used our move to incentivize other companies to do the same. I think that one of the reasons why we still have very few cases here in Cleveland is because we acted very early in Ohio, particularly in the greater Cleveland area. At the plants, we don't have the luxury of sending people home, but we were very proactive in implementing a few things right away. First thing, employees check their temperature at home. If they have fever, don't come. Employees have cold-like symptoms, cough, sneezing, things like that, don't come to work. Just phone in, and we'll take your word. So we did that instead of trying to take tons of men and women at the door of the plants because that would be a logistics nightmare. I could see lines forming of people waiting to have their temperature taken and it's still very ineffective because at the very least, the person taking the temperature will be very exposed at the beginning with no PPE, no nothing. So we did that, working extremely well. Nobody -- I'm saying that in a broader sense, it's very difficult when you have 13,000 employees to state that finally. But apparently, nobody abused to the system. So much so that we did not contaminate any one at work. So we have been working. And the guys and girls are protecting themselves and protecting the teammates. We also took a very strict approach with social distance inside the plants. Give you an example. You have a maintenance task that needs to be executed. That maintenance task is proceeded with what is called a toolbox meeting. Well, to have the toolbox meeting, if you have to have in person, you are going to have to stand in a place on the floor that's marked with an x, you stand there, and your colleague will be in another place with an x, and those 2 places are at least 6 feet apart. And there's a third place, 6 feet apart and another place 6 feet apart and so on and so forth. And that's how we do the toolbox meeting. All we do the toolbox meetings over the radio or over the phone. But because it's a very -- usually a very serious thing to be done before something dangerous is performed. We prefer to do face-to-face and doing stand in the circles. We also separated when we have in a control cabin in a control pulpit, you have 2 shares, so 2 operators operating with less than 6 feet apart. We separated them at the beginning with a plastic sheet of plastic -- transparent plastic to avoid them to be breathing on each other. And now we evolved to plexiglass because now we had time to improve. And these are the main things. We also took a very humane approach. If someone is 65, 64 years old, so it's already advanced in age and is not feeling comfortable because he's is afraid he has high blood pressure, something like that, he phones in, and we are in a case by case, allowing these people to be home, even employees that have nothing, they're young, they're strong, but their spouse is a nurse working in the emergency room. We had a case that the guy phones in and said, look, I'm going to work, but my wife can't come back to home from working because she works in the emergency room at the hospital. And she is afraid that she comes back home to contaminate our kids. So I need to stay home to take care of the kids. We accepted that. And this guy have been at home since then. So all in, we had no contaminations on the job at all, one; and second, the only plant that had a number of cases was Dearborn, Michigan. It's the only one that we are shut down. So people are getting contaminated outside of work, not at work. Sorry for the long answer, but that's something that we are very proud that we implemented what we did, and we implemented during the problem. So it's not like something that we planned ahead. But like I said, we never stay like deers in the headlights. We just go ahead and do what we have to do, and we are very proud of what we have been doing. Next, Paul.

How much of the AK Steel business is the auto industry? And if we have hit peak auto and/or if the auto industry faces a downturn due to the pandemic, how will this affect AK Steel business?

Very much, no doubt about. We are exposed to automotive. And lots of economic activities are exposed to automotive. I'll give a few -- by the way, let me give you the objective answer. AK Steel, 66% of the 2019 order book was automotive. And that number increased from 2018, that was 63%. So 63% in 2018, 66% of 2019. So 2/3 of AK business is automotive. And that's a good thing. That's a good thing. That's where everybody would like to be. They have been amused. They want to be in automotive. They are one of these in automotive. Nucor, Steel Dynamics, they are preparing themselves to produce automotive quality. And I take them very seriously. They can't produce exposed parts. But they can produce a lot of the structural parts already, and we are very confident. And I know that, that's why we put an HBI plant to supply them. We have good competition. And good competition is good for the business. So we are already in automotive. Others want to be in automotive. ArcelorMittal is in automotive. US Steel is in automotive. They're shrinking because we are gaining, and we are going to gain even more. But make no mistake, the backhaul in automotive in the United States will be in the end of a lot of industries. Automotive is the biggest consumer of steel. Automotive is the biggest consumer of glass. Automotive is the biggest consumer of rubber. And automotive, believe it or not, is the biggest consumer of upholstery. So automotive brings up or takes down everything. The great depression of 2008-2009 was corrected by cash for clinkers. As soon as automotive reignited, the economy turned around. So automotive is at the basis of capitalism in the United States. And that's why everybody and somebody else wants to be in the United States producing cars. Honda, Toyota from Japan; Hyundai, Kia from South Korea, keep growing. Volkswagen, Mercedes, BMW from Germany, they are all here, and they want to grow. [Technical Difficulty] AK Steel, but for the United States is [Technical Difficulty]

Hey, Paul, try taking it off the office speaker if you have it on the speaker.

Yes. How does it sound?

Better. Better.

Okay. This next question is from Jim Perry. Do you have an idea of how much customers business will be affected by the drop in demand in fossil fuels and how it will influence the demand of iron ore and steel?

I'm sorry, say it one more time. You read too fast. So can you do it again?

Do you have an idea of how much your customers business will be affected by the drop in demand for fossil fuels? And how it will influence the demand of iron ore and steel?

Well, let's see what happens with cost of fuel first. Because we -- nobody was planning for oil to be as cheap as it is right now. It's absurd. It's not going to be sustained at these levels. But everybody and somebody else was planning for the moving into electrical vehicles. And I still believe in the trend, and I still believe that one way or another, we are going to be building a lot of cars in this country. So it's very hard to guess right now. And one thing we know, whether the car will be gasoline or electric or a hybrid or whatever, the car will still use a ton of steel. 1 car, 1 ton of steel. That's the way it is, that's the way it will be. Let's go to the next, Paul.

Your next question. Why are there no announced HBI contracts yet? Was production being planned to start in June? There has been nothing whatsoever announced.

Well, if I had a take-or-pay contract announced right now, we will be in deep trouble because for cash flow purposes, I had to interrupt [Technical Difficulty] Can you hear me now?

Yes.

Hello?

Yes, we can hear you now.

Okay. All right. So people that talked about the so-called contracts, they don't even know what the contract is. Because if I had a contract, a two-way contract right now, and I'm no longer finish in June, and I would have, let's say, a pick-or-pay starting July, I would they have to pay because I would not have the material to deliver. So the fact of the matter is that HBI, we will sell to mini mills. We have orders from mini mills. We do have the orders. We don't have the long-term, [ 2-tier ] contracts that we have for pellets, but we do have the orders. As soon as we start producing, we will start selling. We don't have a contract now, an order now in place because we don't have the product, but we do have the orders. We do have the commitments, and we will sell. First we need to finish, then we'll start selling. By the way, one thing that's not being generated in this country right now besides cars is scrap. Because scrap is only generated when you have manufacturing. So if there is a time that's good to sell HBI, which was already a great deal before when I start building, and it's still a great deal in -- it was still a great year in December of 2019. But right now, with the shortage of scrap that are coming, particularly busheling that comes from automotive, this HBI deal will be the best deal of this company. So if you are very patient, sell your shares. If you're really impatient, sell your shares in short against Cliffs because we are not -- we don't have a problem having you as a shareholder. You've got to go. You don't understand the business. So you don't belong here. We are going to be selling a lot of HBI, and we are going to be using a lot of HBI in place of scrap that will be absent and on top of scrap for the ones that need feedstock to produce the steels to compete in high value-added steels. That's the story. Next question, Paul.

Yes, Lourenco. Your next question is from Carolyn Chanko. If there is an infrastructure bill, how would this quantifiably benefit CLF and specifically in what parts of the business?

We will benefit on anything related to infrastructure indirectly. We don't produce, by and large, the things that will go in an infrastructure bill. We don't produce plate, we don't produce beams. But we produce a lot of galvanized. We produce a lot of materials that we go in things like HVAC, converts, things like that. So we will indirectly benefit. But the important thing of the infrastructure bill is to raise the level of manufacturing activity in the United States. And by raising the level of manufacturing in the United States, that should have a very positive impact on prices. So the infrastructure bill will be the high tide that will float all boats, and we will benefit indirectly. Next question, Paul.

The next question is from Mark Lange. Lourenco, what can stop the shorting of our stock?

That's a good question. That's a good question. Paying down debt is a great thing. Not incurring new debt is a good thing. Understanding the business by -- even people that short the stock is another good thing. Remember, when we started Cleveland-Cliffs, we had to explain that we are not a high cost producer of iron ore. We're a producer of pellets. And at the time, they were shorting our stock for the wrong reason. They're shorting our stock because we were high, in their opinion, a high cost producer of iron ore. So now it's, 6 years -- 5, 6 years after that, time clear that we are a producer of pellets, and we do not have high cost. But through time. Same thing now with AK Steel. I hear unformed people say that AK Steel is the symbol of old assets. Wrong. AK Steel was well maintained when other integrated companies were saving -- "saving money" not doing madness, and were destroying their equipment, AK Steel was doing investing and preserving the equipment. And the biggest proof of that is the fact that AK Steel was able to keep 2/3 of their business supply automotive. Automotive is unforgiving. If your quality is not good, you can't supply automotive. But the shorting of the stock will continue to shrink as we continue to deliver, as we continue to generate results. Our stock price right now is affected by a lot of things. The unknowns about AK Steel, the uncertainties surrounding the economy, the lack of an infrastructure build, the overall lack of knowledge about the importance of manufacturing and U.S.-based supply chains in the United States, all these things are affecting our -- the shorting of our stock. And also the fact that the ones that short our stock are a small community, and they communicate a lot, they talk among themselves. They go to the Bloomberg chat rooms, they chat. They have other chat rooms that they talk about. And I think that the main thing is the longs should have more commitment to the long run and not be in and out, not be trying to time. Look, how I do. Like, look, how I invest. I'm a big shareholder of the company. And I absolutely hate shorts. I believe that shorts are bad, and you'll have a lot of shorts. We continue to do that. This transaction right now that we just did and we will close on Friday, that eliminated that, a portion of that converts, we took a little of the converts, not all. And this converts we have to close the short. So we're working -- we'll continue to do that, and we will prevail at them because they play with infinite opportunity to lose money. Their ability to make money is limited. And they have one thing against them that they have no idea how bad this can be, they don't know anything about the company. And I not only know what I'm doing, but I'm doing. I'm with the hand at the wheel. And they never win against me, and they will not win against me at this time. Again. Next question.

Is Tesla a potential customer and why?

Say one more time, Paul, I could not understand.

Is Tesla a potential customer and why?

Tesla is a potential customer. Tesla developed the material as far as I was informed, the materials for Tesla 3, which is all steel, Tesla X, by the way, it was all aluminum. Tesla 3 is all steel. They developed the material with AK Steel. But at the end, they placed the order with the competitor. I was not there running the company, but Tesla is my go to recover as a client. That's all I can tell you right now. Next.

I believe the Q&A period is coming to an end here, but we have one more question. Lourenco, looking 2 years ahead to 2022, what does Cleveland-Cliffs and you want to achieve for the company?

2 years down the road, we are going to be producing 1.9 million metric tons of HBI. We will continue to be a very important supplier of automotive. I don't know if we're going to have 2/3. Maybe we will have less. Maybe we're going to be more selective. We are going to be supplying more of very high-end stainless steels. And last but not least, the Secretary Wilbur Ross do his job, we will still be producing electrical steels. But right now, Secretary Wilbur Ross is sitting on a proclamation to take the President Trump for his signature, and he's not acting. I have a lot of pressure on him from politicians in Pennsylvania, politicians in Ohio, businessmen that depend on the -- keeping transformers being produced in the United States, but we have a few companies using Mexico and Canada as platforms to Circumvent Section 232. And so far, Wilbur Ross, Secretary of Commerce, is allowing them to win. So if Wilbur Ross does his job and takes the proclamation in front of President Trump, we will still have electrical steels. If not, we will not have electrical steels. But regardless with or without electrical steels, AK Steel will be very profitable. We'll continue to supply pellets to select competitors that do a good job and we will be the best steel company in the United States. Thank you very much for joining me for this shareholders meeting. I -- even when we go back to the traditional format, I will institute this Q&A in a virtual setting because I appreciate the questions. It gave me the opportunity to talk to retail shareholders that don't participate in investors conferences, don't have the ability to be in conference that I can speak and I give my presentation. So that's a unique opportunity, and I really appreciate the questions, and I appreciate the support going forward. Thank you very much. Stay safe, and have a great rest of the week. Bye now.

This now concludes the meeting. Thank you for joining, and have a pleasant day.