DATA Communications Management Corp. (DCM) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and thank you for standing by, and welcome to the DATA Communications Management Corp. Second Quarter 2023 Financial Results Conference Call. My name is James Lorimer, CFO of DCM, and I'm pleased to be hosting today's call. Joining me on the call today is Richard Kellam, our President and CEO. [Operator Instructions] Before we begin, I'd like to remind everyone that we will be referring to forward-looking information on today's call. This information is subject to certain risks and uncertainties as outlined in the forward-looking information disclosure in our press release and more fully within our public disclosure filings on SEDAR. We have posted a brief video message from Richard, along with a summary of our results and key initiatives for the quarter on our website in the form of an infographic. This presentation will be added to our website for your reference, along with the post-view recording and transcript. Our detailed information is also available on our website and SEDAR. Please also follow us on LinkedIn to keep up to date with other business developments. I'd now like to turn the call over to Richard.

Thank you, James, and good morning and for some of our international people dialing in. Good afternoon and good evening. James and I are in different locations today, doing some new business development. So James will be driving the slides. So hopefully, technology will work here. Objectives for today, I want to talk about our consolidated results for Q2. We'll actually unpack those as we typically do under our bigger and better theme, and then we'll turn it over to shareholders for any questions at the end. Before we get into it, I want to remind shareholders that this quarter 2 of 2023 consists of one week of integration or one week of the acquisition in April and then all of May and all of June, given we closed the transaction for more Canada Corp on April 24. -- So it's not a full quarter of full acquisition of MCC into the quarter. It's 2 months plus a week, okay? So I just want to remind shareholders that before we get into the data here. So James, if you just go to the next slide. Talk about -- I'm going to start with a bigger business, and we're really pleased with the progress we're making to continue to build a bigger business. As you'll see, our growth is quite significant with the acquisition of Moore Canada Corp. at just under 75% in the quarter. We added $51 million in revenue to our top line in the quarter, coming out of $119 million. Really important to note as well, if you look at the next slide, I want to put that 75% into context. If you look at our underlying business, so the underlying business revenue of both Moore Canada Corp. and DCM. The bar on the right, you can see our underlying performance continues to be very strong at 8.2% growth. So not all that 75 or 74.7% came from acquisition growth. Our underlying business is very strong. On the back, as you can see on this slide up to 2 very strong very strong halves prior, okay? Our revenue growth in quarter 2 is now 7 consecutive quarters of year-over-year growth. And you can see from the slide here, the continued performance quarter-on-quarter. So strength to strength. So I'm very proud of the momentum we've got in our business and underlying and of course, now post acquisition growth as well and integration growth. So very good momentum from a revenue perspective and lots of reasons why that momentum is continuing. New business development expansion even with existing clients and just moving strength to strength with our commercial teams. Moving on to gross profit. Gross profit also growing well post acquisition at 56.7%, $32 million in gross profit. And our gross margin is coming at 26.9%. I want to put this into context because a big part of the deal logic here when we did this deal with MCC was MCC had a lower margin than DCM, and obviously, that was very attractive from a value-creation perspective. We're now applying the operating model to move margins forward. And in fact, the margin that we have the combined margin we have in the quarter is higher than what we had planned at 26.9%. And but we have an active plan active process, active program to bring margin back into the 30% and north of 30% range. So again, it was very much as expected, slightly ahead of target on the quarter at 26.9%. And you can see the overall gross profit margin continuing to be very solid. And we're very pleased if you look at the next slide, I talked about 7 quarters of revenue growth. We actually had 8 quarters of gross profit growth. We actually turned the corner on gross profit in Q2 or Q3 rather of 2020 of 2021, and we've had solid momentum since then. So very, very good progress on gross profit growth quarter-by-quarter, a consecutive quarters. All right. Turning it over to share price momentum, James.

Yes. We -- our share price has certainly performed very well this year. As we talked about last quarter, there's a little bit of noise in our earnings because of the fair value adjustments related to our long-term incentive compensation. So for the current quarter, we've broken the kind of variations related to RSUs and DSUs and mark-to-market out as a separate line item. And in our EBITDA reconciliation, you'll see that going forward, we'll be reporting that as a separate line item. We have at the end of this presentation, including a reconciliation going back on a quarterly basis from the beginning of the first quarter in 2022, and we'll be posting that on our website so that you can look and get kind of a comparable perspective. But those fair value adjustments represented about $2.3 million in the quarter, given our share price appreciated by almost 23%. And year-to-date, our share price is up almost 133% and total kind of adjustments year-to-date are about $7.5 million. As a result, we've reported adjusted EBITDA of $13.8 million in the quarter. This also includes add-backs for restructuring expenses and other onetime charges relating to the acquisition. We're very pleased that EBITDA was up almost 50% compared to a year ago. And as Richard referenced earlier, this includes 2 months plus a week of the MCC results. And certainly, in the third quarter will be the first kind of full quarter reporting the combined results of MCC. EBITDA did come down a little bit as a percentage of revenue at 11.6% compared to 13.7%, but this is really, as Richard noted, because of the lower overall gross margins in the MCC business, and we have a clear plan not only to grow gross profit back north of 30%, but also to grow adjusted EBITDA back to north of 14%. Included in this table is a summary of how adjusted EBITDA looks for the past 2 years on a quarterly basis. Again, 2 very strong quarters of adjusted EBITDA. So we're tracking very nicely going into the second half of the year. We've included here a summary of our financial performance compared to last year and variance comparison. Most of the numbers here are reflective of commentary that we've already talked about. What I would like to kind of point out is adjusted net income for the quarter of $3.8 million compared to $3.6 million last year. On an adjusted EPS basis, we came in flat at $0.08 compared to last year at the same number. The adjusted net income impact really kind of adding back restructuring expenses, acquisition and integration costs, fair value gains and losses on financial liabilities and the after-tax impact of those. Really, the increase of $200,000 is mitigated a little bit by higher interest expenses related to the financing of the acquisition of MCC and also a slightly higher share count given the equity raise we did a couple of months ago. For the first half of 2023, you can see the comparisons here, we're at $195 million of revenue, which is up $57.7 million compared to last year. Gross profit again up. And on a year-to-date basis, we're at 28.6%, compared to 29.7%. That 110 basis point difference really attributed to the lower overall gross margins of the MCC business. But we are in our core business, certainly experiencing improved volume and also good margins from some of the product mix that we're seeing this year. Again, adjusted net loss -- sorry, net income for the year of $9.7 million is up from $7.7 million last year. And this only reflects as noted, partial results of MCC in the quarter. So adjusted EBITDA is still on a year-to-date basis, 13.6%, that does benefit, particularly in the first quarter of us having higher overall adjusted EBITDA margins in the MCC business, but we do have a plan to continue to drive higher levels of adjusted EBITDA margin. Now I'll turn it back to Richard.

Thank you, James. So clearly, great progress building a bigger business. Now we'll talk about what we're doing to build a better business. So from an SG&A perspective, obviously, our total SG&A costs went up post acquisition. Through my shareholders, we brought on just north of 900 new associates into the business. So obviously, that increased our total SG&A. If you look at the SG&A component of those 900, but again, less than revenue. Most important to look to the far right-hand side of the slide that actually our SG&A as a percent of revenue went down quite significantly, 19.3% versus 20.5% a year ago. so well within our 5-year range of 18% to 20%. We see a path to the low end of that range, actually. As a result of some of the work that we're going to do to continue to optimize the SG&A line and grow the revenue line as well at the same time. So very much in line with the deal logic in deal model that that we completed as in our due diligence as part of this acquisition. So well on track from an SG&A standpoint. We're happy at the [ 19.3 ] range versus 25 years ago. Okay. James? So if we look at -- James, do you want to take this one on?

Sure. We did incur approximately $2.7 million of restructuring expenses. And I'll remind everyone that our target of $25 million to $30 million in annualized synergies will come with some restructuring expenses. We're certainly working hard to try and contain all the initiatives that we're working on within not only this year, but also in 2024. And working hard to have a very clean kind of 2025 as we get out there. So some of these things are going to take a little bit of heavy lifting. But as you can see from the results on the right-hand side of this page, the initiatives that we've already implemented have generated approximately $4.2 million of annualized savings going forward. So really kind of 2.5 -- I guess, really 100 days now into our acquisition, where about 15% of the way to our target of annualized synergies. We did have about $3.8 million of acquisition and integration expenses. These are kind of post-closing tidy ups. That number will certainly go down in future quarters.

Okay. So this is what I was referring to when I was talking about SG&A. You can see we went from $910 to $1,822 post acquisition. But importantly, if you look at the right-hand side of the slide here, our revenue per associate wasn't $300,000, did not drop very much at all, in fact, pretty much flat post acquisition of $2.99. As we work through our integration efforts, we see a path easily into the mid-3s and as we grow revenue up into the high 3s and low 4s on a revenue per employee or revenue per associate. So very good progress here, and you can see the glide path we've been on over a number of years, okay? so certainly building a better business here from a productivity per associate perspective. And we continue to be proud of our ESG efforts. A lot of work on the sustainability side with waste reduction. And with renewable energy and carbon footprint, we've also actively started to bring these programs into the acquired facilities of MCC, bought a great work on social. I think I've told shareholders that we're pretty active with how that present and many other supplier diversity programs. And certainly, governance and our governance capabilities extended to the new MCC, to the new and bigger and better company. But I think the one that we're very proud of, and we're proud of a lot of results we're delivering on an ESG strategy. But I think a long we're very proud of, James, if you can jump to the next page, is our PrintReleaf effort. To remind shareholders, we reforest 100% of our paper use for clients. And since we got into this program just over 1.5 years ago, we have reforested close to 1 million trees, 959,000 trees, but 79 million pounds of paper used. We flow these credits directly through to our clients as well. if clients want to pick up the credits for their ESG for their ESG efforts. So it's a very solid program. And we will cross 50 million trees reforested in September, and certainly, we'll press release that, and we'll celebrate that. And to put it in perspective, what million trees actually looks like it's roughly 20,000 acres of reforestation, about 80 square kilometers, 15,000 football fields. And for some of our American friends that are on the call today, it's 23 central parks. So significant effort here on reforestation, which we're super proud of. And certainly, our clients are extremely supportive of this program as well. We're also making good progress from a DCM digital perspective. You can see that our first half growth is north of 18%, just under $3 million in revenue on our digital offering. So a lot more -- we'll report a lot more on this to shareholders over the course of the next kind of 3 to 6 months, but good progress from a digital penetration perspective.

From a debt perspective, shareholders know, we've been on a very good glide path over the past several years, paying down debt. We did incur some incremental debt, of course, with the fully financed transaction of MCC. We're pleased to stay on a pro forma basis, while our debt spiked up to approximately $145 million with the acquisition, we've reduced that number by approximately 20% through the quarter. Probably more important is net debt, and we exited Q1 at approximately just under $20 million of net debt. The MCC acquisition net of cash was approximately $126 million. We repaid $24 million of working capital as a result of the private placement we completed in May and then the [Indiscernible] sale in June generated approximately $23 million. And then just additional working capital payments allowed us to exit the second quarter at approximately $93.6 million in net debt. And that's, I think, after including approximately $21 million of cash at the end of the quarter. I will point out during the quarter are actually really -- yes, I guess, during the quarter, we finalized the final purchase price adjustments for the acquisition of more. It was a subsequent $4.9 million adjustment to the purchase price, which is shown in our accrued payables, and that was largely due to stronger working capital in the business than we had expected when we closed the deal. A big chunk of that was cash. And as you see below, there is approximately $4.8 million of kind of net cash when we close the transaction.

So certainly great progress from building a better business, as you saw, kind of improving productivity per associate by significantly reducing debt the ESG efforts that we're delivering. Now I just want to really talk about where we are on our integration. Talk to shareholders about a $25 million to $30 million annual synergy target across 4 areas: operations, organization, procurement and revenue. To remind shareholders, we actually used Boston Consulting Group to help us prepare for premerger integration. We're obviously now well into a post-merger integration process. We've got Real Fisher, who was the President of Moore Canada Corp., leading our integration management office, so a large team executing the integration, and the team is off to an incredible start combination of real and his team as well as all the program managers that are in function are doing an outstanding job, obviously being well prepared to help, but now it's about execution, and the team is doing an outstanding job in execution. We did announce the closure of 2 plants, 2 facilities from an operational perspective. Those were announced about 6 weeks ago. Lots of work happening on organizational optimization, some already great work delivered from a procurement perspective. And then our teams have come together very quickly from a commercial perspective to drive revenue. And there's a lot of great results that we've delivered on both revenue expansion, so expansion within existing clients and several new businesses or new logos that we brought on. So we're more than comfortable delivering this $25 million to $30 million in annual synergies. In fact, we'll likely be to the high end of that range. And I can tell you the team is executing with excellence here. So off to a fantastic start. Remind shareholders that Wednesday of last week was 100 days, and there's been a lot done in those first 100 days. Again, we were well prepared. But no matter how well prepared you are you need to be able to -- an organization that knows how to execute certainly, our organization knows how to execute. So we're moving with strength across all areas here. Okay, James? And then maybe just to close on this before we move into Q&A. We updated our 5-year strategic financial objectives. We did present this at our last shareholder meeting. We see a path to north of 5% organic revenue CAGR. You can see the 8.2% through the first half of this year. We see a path to north of 14% from an adjusted EBITDA perspective. Over the next 5 years. So we're well on track there. James took you through the -- our relentless focus on reducing debt. You can see that glide path is a pretty quick one. We'll easily be in target here within the 5-year plan. And then Martek solutions are starting to ramp and we see good progress on our digital expansion over the course of those -- that 5-year time horizon as well. So we've got a very detailed 5-year plan that we're executing against in addition, obviously, to all the integration efforts that we're executing against, okay? So pleased with the progress we're making here. And I think we're over to Q&A now, right, James?

Yes, we are, Richard. [Operator Instructions] And I have a question from looks like Noel Atkinson. [Operator Instructions] Okay. Well, we're waiting for Noel. We have a question in the chat. The question is, can you give an estimate of the synergies expected to achieve for the second half of 2023? Richard, do you want to run with that?

Yes. I think I'll leave that one for you, James, just from a more comfortable for the disclosure perspective, if you answer that one?

Yes. Okay, sure. We -- the synergies we've talked about kind of $25 million to $30 million in aggregate. We're trying to get at those over the next 18 to 24 months. We see probably about almost 1/3 of those being implemented by the end of this year. As we have talked a little bit about costs related to those are probably about $1 per dollar. We're a little ahead of plan kind of in the second quarter with the restructuring expenses kind of versus the annualized savings. But as we get into some of the bigger kind of plant moves, those costs will maybe kind of being switched the other way. So yes, I'd look at kind of roughly about 1/3 of those will be before the end of this year. And we relate mostly to organizational changes. The Edmonton plant that we've talked about that we're closing, that's relatively a smaller plant. So that will be completed by the end of December. And then the Fergus Ontario plant. We've talked about that being kind of an 18- to 24-month project. So pretty complicated to move production. The plan is with Fergus to move that to our Drummondville, Quebec plant, which does a very similar type of work.

And I'll just add to that. So if you think about the 4 areas operation, organization, procurement and revenue operation takes longer, obviously, because we're talking about moving the equipment around to James' point, organization, a lot of detailed plans that will happen already started to happen. Procurement, we're already well into delivering procurement synergies. So a lot of those will be complete by year-end. And then revenue, which we've actually modeled quite conservatively from a growth perspective is a big opportunity for us, and you saw the numbers, we continue to deliver a strong kind of revenue growth. So there's opportunities to deliver even kind of more revenue synergies if we continue to accelerate that revenue line.

Okay. I'm going to try Noel here again, and I think I've had a little bit of figured something out here. So Noel, do you want to go ahead.

It's Noel Atkinson from Clarus. Can you hear me?

Hi, Noel. We've got you.

Yes.

So congrats on a really strong Q2 there overall, and so very well done. You've mentioned a few of the questions I was already going to ask, but I guess just so far with the MCC integration, how has that been proceeding? Like are you seeing any client churn out of that unit or out of the other DCM units that we would commonly see after a big acquisition?

Yes, I can take that on, James. So one thing we did, Noel, is we were very well prepared on day 1 of the acquisition day 1 of the integration. So we closed the deal on the 24th and on the 25th morning, we had 120 salespeople together in 6 locations across Canada with a theme we called moving from competitors to collaborators, and it was a 2-day session, well planned, to talk about how we work together, and how we how we protect and build our enterprise clients, especially as you know, enterprise clients represent 94%, 95% of revenue. And there were certainly less some crossover clients. So as a result of that, our teams are working extremely well together. We're off to an incredible start as true collaborators. And we have not lost any clients on this turn. In fact, if anything, we've secured and picked up some new business as a result of our -- the start -- the -- how we started this most important thing. And I think it's a good point right, deals that I've done in the past, you've got to protect that client that client and that revenue line. So as a result of just being well prepared for day 1, I think you talked to any of our commercial teams, they'll tell you the same story that we're working very, very well together and have had very good success as we kind of align our commercial teams, right, or integrate our commercial team. So a really good start from that perspective. So no client losses at all.

Okay. And then you mentioned, I think it was like 8% year-over-year revenue growth for the combined business on a pro forma basis in the first half of 2023. And do you see the environment out there for commercial print activity do you still see such a robust environment? Are you still seeing kind of passing through price increases, that sort of things? How are you looking about the second half of the year?

Yes. As you know, we kind of mapped all the profit pools in the industry. Not all of them are equal, of course. So we understand where to focus and how to focus and where to win and how to win. We still see positive momentum in the marketplace. James, I don't know if you want to comment outlook for the second half or not? But certainly, experience we're seeing right now from a client standpoint, we're seeing certainly positive momentum as we look out through the balance of the year. But James, do you want to get any more specific?

Yes. I think our -- Richard talked about our kind of 5-year objectives, and we think we can certainly exceed kind of 5% year-over-year growth, and year-to-date combined kind of pro forma business is certainly tracking ahead of that. From an inflationary perspective, I'd say we have certainly seen that moderate, and we're not -- we haven't seen any significant price increases on raw materials for the last couple of months. We are continuing to kind of pass price increases a little bit of a kind of a lag on some of our contracts still, but the kind of the inflationary benefit is going to moderate. I think a lot of the benefit is going to be from the collaboration across our kind of combined business and the capabilities that MCC brings to us and vice versa that we bring to their sales team.

The other thing I'd add as well, other thing as well is we're a very growth obsessed organization. And we kind of look at the industry as north of a $10 billion industry even if it's flat or modest growth or modest decline. We're $540 million on $10 billion, $540 million on $10 billion. So lots of opportunities for us to go after, and how we look at the market. Every day, we sort of wake up. We we dream about opportunities, and we'll wake up and go and secure and source those opportunities.

Okay. Great. And then just lastly, maybe just if you could talk a bit about the assemble. I know you mentioned that you're excited about talking about this in coming quarters. But is it -- are you sort of -- where are you in the development process and the rollout process for assemble and specifically?

Yes. Great question. So as you know, we've been in market with a white labeled solution over the last 1.5 years. And we've got a few clients that are using our white label solution. At the same time, we've been building our own platform to compete against some of the other dams out there in the marketplace. We actually have a beta product in market right now, and by end of the year, we will release our final version, our final product once we get through the beta testing. So we've got some active beta clients using it right now. And that will be a pure kind of SaaS offering, if you will, all that we'll have high tech hi-tech low-touch marketing automation to market. I think there's lots of opportunities even outside Canada with that platform in addition, obviously, to our own kind of enterprise route to market.

[Operator Instructions] I think that question has already been answered.

Can you hear me? It's Chris Thompson eResearch.

Yes.

Hi, Chris.

Can you just quickly just go back and talk about the organic growth in the quarter. It was fairly quick. And as a percentage, was that for the DCM organic growth? Or was that organic growth at both DCM and MCC?

James, do you want to talk about that?

Yes, I'd say the organic growth was at both businesses, Chris. In the MCC business has certainly been solid. Even before we bought it, they had a strong first quarter. I'd say our product mix has shifted a little bit. We had some very strong orders for technology hardware equipment last year and some other resales products. Those were off a little bit this quarter, really nothing unexpected, but our production revenue kind of more than made up for those declines and production revenue for us certainly is beneficial because that more more throughput through the factories helps our overall gross margin. So gross margin on both sides or both sides of the house were nicely above plan.

Okay. Great. And when you're talking about the acquisition cost versus the restructuring costs, I'm assuming that restructuring will be similar moving forward for at least a couple more quarters. But the acquisition costs, are they going to come down then next quarter because you've sort of closed everything off? Or how do you see that going forward for Q2 to Q3?

Yes. I think that's a good way to look at it, Chris. Restructuring expenses, probably similar to maybe a little bit higher over the next couple of quarters. And acquisition integration costs will go down significantly in Q3 and Q4.

Okay. And then finally, you break down your product sales by categories. I did a quick scan. So I couldn't really see a breakdown by MCC versus DCM. Are you -- is it going to be merged together than going from this point forward. So there'll be no separation of the 2 companies?

Yes. We didn't break their results quite same as ours. They don't quite -- they don't have technology hardware equipment sales that we do. They do have freight and warehousing fees. So those have been broken out with our results. They do have what they refer to as sourcing. But in our kind of jargon would be resales revenue, and that will be products that they outsource either things like envelopes or other commercial print applications that they didn't have capabilities in-house for. Those are all kind of in -- or at least those would be in their product sales, so that would be in the kind of combined product sales bucket going forward. And then historically, they're kind of what we call program management fees and subscription services fees. They have some professional services fees at least for the time being, those are kind of included in their product sales, so they're typically attached to some of their programming management where they're doing a transactional print work which is pretty good margins in that business for them, particularly in the first quarter, which is year-end statements and tax statements. But going forward, we'll be carving out some of their technology fees like us, they charge for their -- they have a platform called Custom Point, which is kind of a legacy RRD platform that would be kind of the equivalent of our DCM flex. We actually have a couple of customers that were transitioning from that platform to our platform kind of starting the work plans on that already. So we expect to see positive contributions to our technology services and subscription fees going forward.

Yes. Chris, as well -- Chris, I'd also add your question. Yes, as we continue to fully integrate, it's going to be tougher and tougher to report separate line items or separate growth between 2 businesses because we're already moving product around between facilities, and we're already moving product around between clients. So we think it's better to run a lot of client through an MCC facility and invoice it through an MCC facility versus DCM facility or vice versa. So we're doing it for the best interest of obviously, margin, the best interest of client and client service. So we definitely are down the path. We've already started to move a lot of volume between facilities to deliver that client experience and maximize revenue and maximize gross margin. So we will -- it was a tougher and tougher to report independent businesses.

Okay. Then one final question. You mentioned that you had digital growth of about 18% to $2.9 million, I think, if I'm correct, in one of those slides. But when I try to correlate that with your sort of your breakout. It looks like your technology sort of -- when you break out your revenue, the technology really solutions haven't really increased and there's not sort of a one-to-one correlation. So how do you -- when looking at that -- those technology sales, how might -- how do you sort of trying to figure out what the actual growth is?

Yes. Chris, that was a little bit of a subset of the tech-enabled subscription services and fees, and that is about $3.6 million year-to-date. There are some other fees that are kind of lumped in their program management fees and other things, and we had a couple of things that kind of wound off, but the actual kind of tech services fees were growing as we showed in the deck.

Okay. So that's -- I'll just keep on using that as the growth metric down as opposed to the numbers in the financial statements. Great quarter. I look forward to seeing the continued integration.

Okay. We have a question in the chat. Congrats on a good quarter. Is the current level of cash lease payments in the quarter a good run rate, or do you expect it to increase over the next 12 to 24 months, considering the partial quarter with MCC. Yes, in terms of kind of lease payments, cash lease payments, I would look at -- historically, last year, our business was about, I think, about $9 million the MCC business is about -- it has been kind of $3 million to $3.5 million. That will increase a little bit one of the -- as we -- because included in that, not only equipment leases, but also facility leases, 3 of the sites that we acquired Oshawa, Ferguson Trenton were owned facilities, and so there wasn't any rent on those with the Oshawa site, we will see kind of lease expenses increase a little bit on an annual basis. And then we still hold the Ferguson Trent sites we still -- sorry, Ferguson Trenton sites. We do have a strategy on those to move forward with those, and we hope to be able to report back in next quarter on some progress there. So there will be some incremental lease rates, but really not significant, I'd say, kind of a good number to use kind of for the annual year is probably $14 million to $15 million on a combined basis on a kind of an annual basis. Okay. Yes. It looks like we don't have any further questions. Richard, do you want to wrap up?

Thanks for joining us on this call today. Certainly, we're very focused on continuing to build both a bigger and a better business and drive success this integration. We're off to a great start. As I said, we celebrated 100 days last week. I'm very proud of our team, our new DCM team and all the hard work and hard efforts and results the team is delivering. So congratulations to the team for great kind of first 100 days into our bigger and better company, and look forward to reporting on Q3 results in 3 months from now, I guess, right, James?

That's great. Yes.

All right. Thank you, everybody. Enjoy the rest of the summer.

All right. That concludes our call. I hope everyone enjoys the rest of their summer. And you may now disconnect your lines. Thank you.