Earlypay Limited (EPY) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Earlypay's full year results webinar. Today is Thursday, the 24th of August. I'm pleased to welcome Earlypay's management team, James Beeson and Paul Murray, who will be today's presenters. Just a bit of housekeeping before we kick off. [Operator Instructions] I'll now hand over to James to commence his presentation on Earlypay's full year results.

Thank you, Grace. Thanks, everyone, for joining us. Financial year '23 was a difficult year. We ended up with a loss after tax of $7.7 million, and that compared to the previous year in financial year '22 of a profit of $13.2 million. The big difference was largely driven by credit-related expenses of $22.5 million in '23 compared to just $0.8 million in '22, and making up that $22.5 million, nearly $15 million of that relates to single credit loss, RevRoof, of which $10.5 million was credit origining and $4.5 million to recover. To normalize the financials, we've got a couple of instances now, which is one-off, and we owe them back later to come up with an obvious pro forma and also that's one of those items. In addition to the $14.9 million related to RevRoof, there was another $7.6 million in other credit-related expenses related to the rest of the book, $2.2 million of that is an increase in the general provisions and $4.8 million was an increase [indiscernible] in recovery costs. That's not on-off that is included in the P&L. In addition to that, there was [indiscernible] of trademark intangibles [indiscernible] carrying value of $2.1 million. And that relates to the trademark acquired through the acquisition of Cashflow Finance Australia quite a few years ago and also Skippr, and although one of our trading entities this Cashflow Finance Australia, we don't use that as a marketplace, you may now, we presented ourselves as Earlypay. So we thought it was appropriate to write that down. Heading back to one-offs. Again, the RevRoof credit-related expenses and the markdown of the intangibles, then that would bring us to an underlying pro forma NPAT of $5.2 million profit, just a little down 6% on the previous year of 13.6%. The NTA of the business as of 30th of June was just shy of $39 million, which -- it equates to a bit more than $0.13 per share. From an operational perspective, the event in '23 was RevRoof and the losses and recovery associated with that. We've made significant progress on that in recent months really. There are a couple of outstanding things that need to be resolved. There are a couple of post-completion deliverables that we expect to be finalized really soon. And also, there are some proceedings in the Federal Court with respect to a dispute against the director and the director's related entities and associates, and that's concerning the allocation of some of the proceeds from the design groups, which are currently holding trust. Additionally, we are about to commence proceedings against the director and the director's related entity under the terms of his guarantee that is provide an Earlypay and that's to the extent of the shortfall of the amount that we're owed. Other than that, all other disputes are resolved and it's really just these issues that I mentioned with the director that are ongoing. And because these are ongoing legal matters, I can't go into too much detail because it would jeopardize our position, but that's how things are up. And given everything we know today, it's the provisions and the expected credit recovery costs that we gave guidance on a few weeks ago, we still think they are appropriate, because we don't have any reason to change those. Outside of the specific RevRoof credit-related expenses, it really -- that event really forced us to have a good look at how we do things. And it was a genuine -- it let us a genuine change, a lot of genuine change in how we manage our risk and how we manage our clients. From the beginning of the underwriting stage, there were things that we did wrong, managing the client, things that we did wrong and then also with documentation and a range of other things. So it's been a huge learning experience for us. But we don't want to waste a good crisis, and we really want to learn everything we can -- as much as we can from that experience. So we never have to go through an experience like that again. There are always going to be credit losses, but that -- of that magnitude and in that lighting, we really want to do everything we can to mitigate that. So we've made a lot of progress in the second half of '23. But it's ongoing. We're far from perfect. There's always going to be things that we need to do. And we're going to keep up the pace of change to keep addressing that. One thing that will help with that, amongst other things, is the ongoing investment in the Earlypay platform. You might remember, we've got invoice finance, trade finance on that platform. We still have the legacy invoice financing platform. So we have our clients across 2 platforms at the moment, but we have a big migration happening in coming weeks, which is going to transfer a really big chunk of the clients and continues across health platform to a new platform. And just having less legacy platforms, it simplifies the way people do their jobs every day instead of having 2 platforms to work across just one, helps finance helps funding. It just makes life simple and simple means low cost and people have doing their jobs and other things like that. So that's important. And simplification, not only with the Earlypay platform, but simplifying the business as a whole. There have been 5 or 6 acquisitions over the past, say, 10 years. And arguably, they haven't properly been integrated, and we've got ourselves in a bit of a tangle. So stripping that back and addressing those issues now to have a simpler business, makes it easier to manage and brings down our costs. And part of that is simplifying the old structure relates to RevRoof, but also relates to the general business simplification. We've made some significant changes, I would say, to the old structure at all levels, just to make it clear about who's responsible for what. And make sure that there is proper accountability instead of people sort of never sure about who earns what, which probably suffered from before. Some other changes that are really important is, I guess, the recentralization of certain functions. Previously, we were quite decentralized with big business collaborations in Victoria, New South Wales and Queensland and the consistency and approach across the regions was lacking and it was a problem. So by centralizing some key functions that's giving us a lot of really good consistency and guardrails for credit underwriting as well as documentation for [indiscernible] and client management. Positive change, I think, really positive changes the way we service our clients. In the past, we might have had a client manager that would service someone with $10 million of funds in use and also someone with $100,000 funds in use. They're just so different by businesses and the people that we talk to those businesses. And I think by matching the client managers to a type of segment of SMEs, we can provide better service, but also manage our risk [indiscernible]. Sales and our distribution also changed significantly. Typically, we would have focus that with service BDMs that would mostly focus on invoice financing. There's only a few of those specialists that are in the place. We still service that. We've broken the channels into, I guess, 3 or 4 just to help us with no penetration there. So really, we now have a good dedicated inbound direct sales person, which is making us more efficient because previously, those leads would be allocated out to BDMs and those BDMs would change the focus, also targeting asset finance brokers. There are thousands of asset finance brokers that [indiscernible] and if we can penetrate those brokers more, we're finding that. Just as these businesses have a demand to fund their vehicles or equipment, they also have [indiscernible] and helping them be educated about the benefits of invoice financing is quite complementary to that. And lastly, we've beefed up our internal sales function, which we've never done a great job of cross-selling to our clients and getting the staff referrals and things like that. So that sounds much slower than it used to pay as well and by saying that, the benefits of that, we'll talk a little more about the last point, a bit later, but the warehouse refinancing is very well advanced, the primary warehouse, which is the invoice and trade warehouse. We've signed the mandate and documentation is well in progress. And we're still on track to close that for the end of September. To the financials, remembering that we've decided to present our financials on a pro forma basis, which strips out those 2 factors, the credit-related expenses relating to RevRoof and also the $2 million of intangibles. The opportunity that is available to us at the moment is pretty unique. I think that invoice financing as a product is really -- it's the time where it's going to come into its own. We see banks stepping back from loaning into SMEs, unless they've got property, the unsecured lenders. They want to see the cash coming through the operating accounts of SMEs. And at the moment, when times are tough, that's not easy to show, where instead of finance if someone -- if a business may be struggling a little bit or not super strong if they can go to a bank, but if they've got a good ledger, that's factorable then we can help and invoice finances can help. So I think in tough times where credit is being contracted from other providers, it's a good opportunity for us, and we're certainly seeing that. We're seeing a lot of opportunity for the new business. The trick is there's 2 sides of that coin, [indiscernible] for cash from SMEs because times are tough. And the other side of that coin is that means that the risk of insolvency. And I guess, poll conduct from directors from that stress is also a risk. So we need to be really cautious with how we grow the book. And part of that caution has meant that the book is growing as fast as it has in the past, just because we don't think it's some to be here [indiscernible] rapidly, we want to make sure that we go in a good way, where we don't have any more losses like we had in '23. The net interest revenue last year, there were a few factors that weighed on interest revenue and margins. I always talked about this at the half year. But in the first half of '23, [indiscernible] in really large trade clients, very tight margins between the overall average margins. At the beginning of the financial year '23, we had our clients linked to one of the bank's floating rates, and we're at the mercy of them as our cost of funding went up. We had to wait for this bank to put up their rates, so we can put up our rates to our clients. So we're pretty -- we're pretty good at getting away from that [indiscernible] proprietary Earlypay base rate, but it did take a couple of months. So in really Q1 of financial year '23, we had some margin compression as we moved clients on to the early base rate. But since then, we've been able to pass on all of our funding cost increases. So that's good. And they're all on healthy pay base right now. So that's not a problem going forward. The interest cost or the interest expense on the trade finance loans for the first 9 months of '23 was 0, because it was all funded in our balance sheet. It was only at the end of the quarter about the trade finance warehouse was put in place and the interest expense started, so that was only there for 1 quarter of '22, but it's been placed for the full year of '23, so that's also been a headwind to the margins. On Equipment Finance, naturally equipment finance loans are fixed. And almost all of our EF loans are funded with a warehouse that is [indiscernible]. So we're receiving fixing the client. We're paying fixed funding. So that's fine, but there is a small basis whereby we have a warehouse, which is time. I think it's just north of $10 million, where we actually pay floating and also some of the EF loans run on the balance sheet as well. So even though there's no interest rate expense associated with that, it still creates a basis risk. But these things will be solved when we move to our new [indiscernible] at the end of September. The OpEx I think is pretty high. We [indiscernible] as efficiently as possible and the restructure has helped with that and looking at the numbers, [indiscernible] little bit because there's the [indiscernible] intangibles there as well. So it's focused, and we think that we grow [indiscernible] very much leading to a higher cost-to-income ratio. The credit impairment expenses outside of that $15-odd million relating to RevRoof still had some significant increases in credit impairment expenses. The general provision increased by $2.2 million and the specific provision increased by $4.8 million. Both of those largely because of deteriorating economy and the stress on SMEs, which are our clients, and we feel like it's prudent to increase provisions from where they were. Again, the noncash impairment of cash flow finance intangibles, we mentioned that before. So adding those back, the underlying NPAT would be $5.2 million profit. The Invoice Finance and Trade Finance segment. Again, we are seeing huge demand from clients [indiscernible], but we think that tailwind of demand is not going away and the opportunity is just going to keep coming. In fact we're seeing some competitors that are not -- that are retracting from invoice financing, either closing down their books or -- but there's a couple of examples of it climbing up. But typically, the competitive landscape is a bit easier for us at the moment, I would say, not that it's easy, but better otherwise because there are less people involved in our core market. Again, the NIM decreased, must have to trade finance receivables. We have funded and the timing delay on passing on clients to the Earlypay base rate. I think that's all on the page. So predicting the jumps out here is that the year-end continues to shrink and the originations in this financial year compared to the previous year was way less than in '22. So in financial year '22, we originated a lot quite quickly towards the end of financial year '22 and that put pressure on our funding facility. There's also quite a competitive time in the market that our margins went what we wanted to target, so we essentially turned off equipment finance there for a while, only provided it to existing invoice financing clients, which is why the books run down. And I think it amortizes down $3 million or $4 million per month. So unless we originate 3 or 4 months, the book shrinks. In the last couple of months, we have started to turn on origination in EF in a targeted way. We're not trying to be all things to all people with equipment finance. We're going to have a targeted offering where we feel like we can get good margins, whether it's cross over between our invoice financing clients, and another thing that gave us confidence to start that up again is our arrears on the back book is incredibly low still despite the stress that we're seeing in the economy. So we'll look to keep ramping up originations and I would expect the book certainly won't shrink anymore and it might see some growth over the year. The margins look terrible there. A big part of that is technical reasons whereby the $20 million corporate bond, most of that interest expense is allocated to the equipment finance segment, which really weighs on the margins, we can [indiscernible] refinancing, that will be corrected and you'll see that [indiscernible] 10% more. Just again on this one, the EF segment. It's a really good little business. You can see there that profit before tax, pretty much flat on the year despite us not originating much. We took a lot of cost out after we were originating a lot at the end of '23, you can see that OpEx has fallen by 40%. So it's really rightsized and we used Salesforce really, I think, globally now with how we originate EF loans. And I think we can turn it upside there a bit and increase net revenue without any [indiscernible] months for the corresponding increase in OpEx. So that's important time of our business. And one other thing on that is when -- given there are thousands of asset finance brokers to have this tool in our toolbox when we speak to them, and then we can start the conversation about invoice financing as well as they are really quite complementary, I think we've always said that. In terms of the balance sheet. So despite [indiscernible] that came with RevRoof in the difficult financial year '23, the balance sheet remains really strong. The end of financial year cash position of $53 million to be a portion of our assets, although that number does bounce around below. It's still meaningful. And the other thing to call out there really is the increase in provisions, the allowances for expected credit losses, which I talked about before. Tangibles, I've have talked about that and the NTA again, the NTA of the business revenue to where the share price is, that's not a heap of a premium there's NTA. I'll hand over to Paul to talk you through this one.

Yes. Thanks, James. We spoke about this at the half and eventually goes to James' simplification comments earlier. We've got a range of warehouses and corporate loan facilities across our different businesses. And during the year, we have been rationalizing those where we can. And we also engaged in a warehouse in a process. That was originally planned to kick off in December. Our positive RevRoof made us delay that. So we repeated that much later on the surplus to the end of May. We're actually really excited about how well that process is going on. And given the external market environment, but also uncertainty around us as a credit. So we're particularly excited around the -- I'm sorry, the structure is a very simple structure -- we've 2 warehouses, invoice of trade in one and equipment in the second. We're also looking -- and that's going to be provided by the 2 separate senior funders. And we're also looking to have an institutional quality being provider, across both structures. So the end result is a very scalable log book funding platform. As we said, we're very excited about the new invoice of trade warehouses across a couple of dimensions. James mentioned earlier, mandates signed on that. We're [indiscernible] the documentation looking to achieve and close by the end of September. There's been an important or a material reduction in rates that we've achieved by moving into that warehouse structure. The benefit of that is strong, but the overwhelming benefit is really around the nature of the structure. So the funding of invoice financed directly from the warehouse as opposed to our balance sheet and then into a funding structure, at least to a much, much simpler cash and operating model. In particular, it frees up a significant amount of cash that we need to hold to support intra-month outflows through our correspondence activity. In addition, we would look to [indiscernible] into that. So that's going to free up an additional amount of cash through that structure. On the equipment finance side, there's modest pricing announcements there but just that, that facility is still relatively small. And as we scale that, I think we'll have additional price benefits come through. But the main benefits that we outlined at the half in relation to the first component, we're very confident we're going to realize, as James said, from the end of Q1 this year going forward. A question which James will get to shortly is how we might apply that $20 million to loss cash, and in particular, what we might do for the corporate bond going forward, but James will come back to that shortly.

So going forward, the outlook, we expect that earnings in '24 will exceed the underlying pro forma earnings in '23, the way we said not a lot [indiscernible] for that to be achieved. Certainly, the expected credit losses last year at 7.6% pro forma [indiscernible] do a lot better than that, which is a big tailwind for earnings in '24. The growth in the invoice finance we talked about before will continue because we've got tailwinds we just need to go about it the right way, but there's certainly no lack of demand in our core product, which is a great thing. Equipment finance, I mentioned. Now we can do a bit more of that and it's a profitable business. The lower interest expense that we get through the refinance in the warehouse will help earnings. And generally, just an efficient cost base, which we're obviously focused on income that the operating leverage we get from growing net revenue will start to draw out of it, and currently there's no real [indiscernible] our cost base that we can grow permanent revenue. Again, the economic environment, it's such a tailwind that we have right now. We just think it's a nice opportunity in the right way, [indiscernible]. So in terms of the primary warehouse being refinanced at the end of Q1, there are a lot of funding cost benefits there, but the biggest kind of it is releasing some extra cash that's trapped as Paul described. Now we've been doing some analysis on the best way to deploy that cash. And the standout alternative at the moment is to do on-market buyback, which we announced this morning and that by far exceeds the EPS accretion of the other options. So that's our [indiscernible] look at the other options [indiscernible] with any funding facility, the software processes and procedures, the people in the business, the distribution, I think that we can pick up a complementary business in invoice financing. It would only be in invoice financing that gives us scale, then we can benefit from that operating [indiscernible] improve the earnings number, but we really are focused on earnings per share growth and that is not the best -- the most EPS accretive thing to do. So we might do some of that, but it's not plan. And lastly, we dipped into negative retained earnings after the loss in '23. We expect that to bounce back to positive quite quickly. And the equity that's required to grow the business it's relatively small, will be even smaller with the new warehouse facilities and the lower equity [indiscernible] loss contribution, so a fairly high dividend payout ratio of retained earnings going forward is what the Board plans on doing. We'll reinstate the dividend as soon as possible. So that's all I wanted to talk about, but we're happy to take questions.

Thanks, James, and Paul, for that. I'll go through the questions that have been submitted. So the first 1 is, is the intended jumbo refinancing proceeding? What size is intended and what are the main benefits? In particular, the savings on present interest rates on existing facilities. Has an adviser been appointed and how many credit providers are contemplated? Has any -- would be loan providers ignored?

Yes. So there's a few aspects to that. I think I have a couple of those, but just to back some of them and please [indiscernible] remember that. So in terms of an external provider -- as our external adviser, yes, we work -- have worked with an adviser to help us run that process, and that's working very, very well. We went out to circa 7 senior banks and about the same on the [indiscernible], at different stages, both on [indiscernible] senior potential providers chose not to continue. All of those were on the basis of SME exposure and outlook and not name specific issues. We had 4 senior bank term sheets and [indiscernible] 3 indicative term sheets on the mezz side. In terms of saving, [indiscernible], you'll see that the headline rate on the senior side on the invoice finance trade warehouse, we've achieved a sub 2% margin result there, which is a fairly significant improvement as to where we were previously. The mezz is slightly more expensive than we had hoped, but the top end of the range, but not sort of out of [indiscernible] prevailing market there. The word jumbo was used, that's right at the half, we talked about an intention or desire to have a single warehouse structure. We weren't able to achieve that. So we've gone with the 2 bank structure. Longer term, I would like to have 2 seniors in each of the warehouses to give us some flexibility and additional sort of scalability. But given the size, we've got the size on the page of 350, we think that the facilities get the full 100 in a reasonably short period of time, but both of those are -- sorry, [indiscernible] facilities is quite meaningful. As I mentioned before, the equipment is a little small, but we do expect that to reverse the reduction that we're seeing in the last 12 months. Did I miss any questions there?

I think you've covered that all. Thanks Paul. The next 1 is what has been the staff turnover since the RevRoof receivership in executive ranks and amongst staff?

Not just related to RevRoof but just, I guess, recent management changes, there has been some turnover. We're very focused on having the right people in the right roles, in the right org structure, and that there's been some change. Relating to the RevRoof thing. And generally, I guess, if we keep doing the same things with the same people, we can expect the same results, so change is necessary, and we've done that and we feel like we're [indiscernible] for the future now. And what [indiscernible] is not necessarily the right formula for what's going to take us for the next 5 or 10 years. So there has been change. We have -- some people have done -- we're experienced that finance people, but there's a lot of experience in invoice financing business, lending in our business. And we've actually brought in 1 or 2 people as well. So I feel like we've got the right means to take us forward.

I know you touched on it during your presentation, but I do have a question about your current dividend policy. Have you got anything else to add to that?

Not really. It's the Board's intention that as soon as we get back to positive retained earnings, assuming our cash situation is as strong as it is now. But has every intention that we'll start to pay ordinary dividend since we can.

All right. Next one, can we get some detail on why it's costing so much, $4.5 million to collect $17 million in debtors?

Good question. It's just been a long drawn out complicated process.

Okay. The next 1. How have the receivership funds held in trust being accounted for in the financial statements?

Yes, that's right. So then on our funds, that R&M has collected that through the sales proceeds. Clearly, we take them into account in calculating the specific provision, but as of today, they're not assets of Earlypay and are not directly accounted for.

Thanks, Paul. This was submitted earlier. Why is the opportunity unique to Earlypay?

The tailwinds that I mentioned, they're not necessarily [indiscernible] you need to secure vendors as a broader set. And I think invoice financing has a specific product. I think the environment, [indiscernible] stepping back and other lenders stepping back. If the business has a good letter, [indiscernible] can help and it's pretty [indiscernible] in that regard and that doesn't take real estate. So it's nothing really special about Earlypay in that regard, although I think that with the changes we've made recently, we are -- and how exploration is to be the best at invoice financing. And we're not there yet, but we think about it every day. And we're working hard to get there. And you can probably see by the pace of change that we're super motivated [indiscernible] and it comes down to software and people and processes and procedures and underwriting the way we service our clients is a whole raft of things that we want to get better at. I wonder how we can say that we're the best in invoice financing in Australia, but it's aspirational at the moment.

How many customers are 90 days plus in arrears? And what is the dollar value of outstanding of this arrears category?

Equipment finance, we have less than 30 basis points of the exposure. That's 30 days plus in arrear. So equipment finance is very low. On the invoice finance side -- question [indiscernible] individual invoices, debt exposures greater than 90 days, and they were [indiscernible] funding against them. In terms of the clients' impaired loans, and I'll probably talk to the economic and -- expected credit loss provision mode [indiscernible] financials. So we can [indiscernible] credit impaired invoice finance loans by circa $20 million of exposure, and we've got $5.3 million of provision against that.

What is the material difference in funding costs from the refinanced warehouse facilities?

It's not exactly like-for-like because we didn't have mezzanine in the original structure for invoice and trade. But broadly speaking, we have achieved a 50 basis point reduction. The real benefit, though, will come from how we utilize that cash. So if we utilize the cash [indiscernible] out of the structure and repay the corporate bond, the savings are much, much larger. But as James talked to, we may use that cash differentially because of the earnings per share impact on clients. So the low-end aspiration that we talked to at the half was at least a 1% pickup in NIM and again, depending on how we slice and dice the cash, I think we're going to easily achieve that.

Do you think that '24 earnings will exceed '22?

[indiscernible] There are a lot of tailwinds in that period.

Okay. How much of the book has trade credit insurance coverage? Why was there such a big losses with this insurance in place?

Yes. That's a good question that the response is slightly involved. The quick answer is it varies for a year. It's currently between 40% and 50%. The nature of our trade credit in insurance is related to the debtors for each individual facility that we have. So we don't have [ TCI ] across all our facilities. Some facilities, the client elects to take [ TCI ], and we effectively help provide that by utilizing our own [ TCI ] policies. Other clients, we [indiscernible] that usage. And then the third one is from a proprietary perspective, we can choose from a [indiscernible] to mitigate our risk. So [indiscernible] in that period, about 40% to 50% is the average TCI coverage. And the second part of the question is [indiscernible] why that didn't...

Why was there such big losses with the insurance in place?

Yes. Like I -- particularly with the RevRoof matter, we either didn't have [indiscernible]. In some other instances, we have been able to utilize that. And in others, we didn't have to see that coverage for those particular exposures.

And just to expand on that [indiscernible] wasn't necessarily the result of the failure of the debtors, which is what trade credit insurance [indiscernible]. There are other factors that contribute to that.

So just probably for [indiscernible] exposure was broken into -- sorry, [indiscernible] trade finance and equipment finance. So, as James said, we don't have [indiscernible] benefit from trade [indiscernible] insurance from the equipment or the trade finance component, just the invoice component.

Okay. Next question. Has the Board considered whether it would be better to find a suite and delist the business?

[indiscernible].

Okay. Next one. James and Paul, when you mentioned about turning the [ tap ] back on for the equipment finance segment often by brokers, was wondering how Earlypay navigates the potential conflict or competition with our largest shareholder, [ COG ], given this is their core business. In other words, I would guess they don't really want to see us eating their lunch especially given the extensive news of broken networks. Do you ever hold discussions with them about this?

First, the scale of our -- any originations we do is tiny compared to what [indiscernible] so I don't think they have a problem with us doing a little bit more, and what exactly was the second question, Grace?

Just saying, do you have a whole discussions with them about it?

No. Specifically, no, but we have an open dialogue with [indiscernible].

Okay. And the last one is tax rate?

Question mark for the current year? Not sure what the question would be on that. There are no one-off benefits as they have been in prior years. Clearly, this year, we're [indiscernible] recognize a [ DTA ] for future years. So in terms of a forward-looking basis, we would hope to utilize that [ DTA ] in the next couple of years. The tax rate for this year is slightly impacted by the intangible impairment. But I think I cut a couple of percent, but otherwise, the expectation is around the [indiscernible] tax rate, but I misinterpreted that.

Yes. So they're asking, it's about future rate.

Yes. So future rate. So there's circa $6 million of deferred tax asset there to utilize. So we've not factored that in, in terms of projections, but that's yes, to note absolutely.

Okay. I think that rounds up all the questions. Just handing it back over to you guys to make any final comments.

I guess I will just close by thanking investors for your support. It's been a really difficult time and disappointing time and frustrating for everyone involved. But I really think Paul and I and the Board we're really optimistic about the future. We're past the worst and there's a lot [indiscernible] to be optimistic about. So thank you, everyone, and thank you, Grace.

Thanks, everyone. That concludes today's webinar.

Thanks, Grace.