Energy Fuels Inc. (EFR) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and thank you all for joining us for this Energy Fuels proposed acquisition of VOC. And to get us started with opening remarks and introductions, it is my pleasure to turn the floor over to President and CEO, Mr. Ross Bhappu. Welcome, sir.

Thank you, Jim, and thank you, everybody, for joining us today. We have some really exciting news to talk about, and I'm excited to be here with Eric Essen. Actually, Eric is in Germany, but he's joining me online and we'll be making a presentation together to tell you about this great news. So if we flip to Slide 4. Yes. First of all, I just want to, again, thank everybody for joining. Today marks a very important milestone for Energy Fuels and rare earth supply chain security. With the acquisition of Vacuum Selts, also known as VAC, we're realizing our vision to become the only really true Western mine to magnet platform. This culmination of years of effort to build a world-class portfolio of upstream, midstream and downstream mining assets that comprise a uniquely vertical -- sorry, unique vertically integrated rare earth supply chain. I'm now going to walk you through how all these pieces fit together, starting with the VAC transaction. So just starting on Page 5. VAC is a leading advanced magnetics company headquartered in Hana, Germany. This transaction coming on the heels of our planned acquisition of ASM puts us on a path to create a fully integrated mine to magnet rare earth platform, combining Energy Fuels low-cost upstream rare earth element mining projects and existing separation capabilities with VAC's world-class downstream rare magnet manufacturing expertise. Together, we will be in a better position to serve customers across North America, Europe and high-growth sectors, including the automotive, aerospace, defense, robotics, data centers, electronics and industrial automation sectors. The cash and stock consideration for the company includes $718 million in cash and 65.85 million shares. Based on Energy Fuels closing share price of $16.12 as of Monday, June 22, the transaction implies an equity value for VAC of approximately $1.9 billion. The transaction has been unanimously approved by the Energy Fuels Board of Directors, and we expect the transaction to close in early 2027, subject, of course, to the customary closing conditions including the receipt of applicable regulatory and government approvals. Accounting for the planned completion of the ASM acquisition, our partners is expected to own roughly 19.9% of energy fuels following the closing of the VAC transaction. The stock element of the transaction keeps or invested in the long-term value creation opportunity of the combined company. AR will have the right to appoint 1 director to the Energy Fuels Board and will be subject to customary lockup and standstill restrictions. The acquisition of VAC will be immediately accretive to our earnings and cash flow and VAC's legacy business generated $27 million of adjusted EBITDA in 2025 and has experienced more than 20% year-on-year growth in its order book for 2026. I back some facility is expected to generate approximately between $65 million and $75 million worth of annual run rate EBITDA once its production reaches its current capacity of 2,000 tonnes per annum. VAC is the only commercial European and U.S. permanent magnet producer that's operating magnetic facilities in North America, Europe and Asia. With a commercial spectrum of relevant customer-qualified neodymium iron Boron and samarium cobalt, magnet grades, including energy-density magnets required for nat mission-critical defense and aerospace applications. So if we turn to the next slide, we'll talk a little bit about what VAC is. VAC has more than 100 years of production expertise. It has over 400 patents and more than 1,000 long-term customers globally. Over the last decade, VAC has produced and shipped more than $1 billion, let me repeat that, $1 billion rare permanent magnets. VAC employs approximately 4,000 people across several locations. These facilities include Hanau, Germany, via Finland, Harness Terada, Slovakia and Souther South Carolina. VAC state-of-the-art Sumner, South Carolina facility, the largest permanent magnet plant of scale in the United States is constructed and it's able to produce 2,000 tonnes per annum of neodymium iron boron Magnet block and has a pathway to scale up to 12,000 tonnes per annum. Moving to the next slide. There continues to be a surge in demand for neodymium iron or on magnets in North America and Europe, and we expect it to grow by over 50% over the next decade based on estimates from the International Energy Agency. Bridging the Western supply gap requires significant investment, including more than $60 billion by 2035. That supply gap is concentrated in the most technically challenging and under-invested parts of the value chain. -- which is exactly where VAC adds critical downstream capabilities. Next slide. Let me explain why we've opted for the acquisition to create this Western Mine to Magnet platform and what that market is looking for. we see strong evidence that buying gets us to where we want to go faster and with more capability compared to our peers. Energy Fuels has built a strong foundation across rareearth feedstock processing and separation with planned metals and alloys capabilities being added through the ASM acquisition. Strategically, this transaction is about accelerating the rare earth value chain we've already been building over the past several years. The VAC transaction paves the way for us to become the only company with geographically diversified commercial capabilities across every critical step of the rare earth value chain. It also expands Energy Fuel's participation in higher value downstream markets where customer relationships, technical capabilities and supply chain reliability are increasingly important. I'd now like to hand the floor over to Eric Ashan, CEO of VAC, who will discuss VAC's established platform, customer relationships and differentiated capabilities. Eric?

Thanks, Ross. It's very exciting to be here with you and present this outstanding deal. So quickly, my name is Eric Essen. I'm the CEO of VAC with the company for 10 years now. and happy to provide a little bit of background information, what we are doing. Rack's more than 100-year-old company with a lot of experience in producing soft magnetic materials and permanent magnets. We have about 1,000 customers where most of our products are specked in, which means we develop it with them. It's very sticky to these customers. At the same time, we are highly innovative. More than 20% of our revenue was usually with products. We just implemented in the submarket in the last couple of years. Also for that, we have an outstanding relationship with our customers, on average, more than 30 years, some of them are but also saying that we have a lot of start-ups because we have the full mix whoever is in the innovative world works with us. And most importantly, we are the only producer as Ross already mentioned, on Permian magnets in the rest of world. Saying that, we are fully DFAST compliant and we serve the military in the United States and obviously with the allies for many, many decades and have a significant differentiated IP portfolio. How do we manage our business because with our revenue of nearly EUR 400 million, we are quite diverse. -- we separate in soft and hard magnetic magnets and hard magnets. These are our permanent ones. At the moment, this is our smaller business. But as Ross stated, with a lot of demand out there. And if you look at our financials, We make our gross margin of EUR 68 million and EBITDA of EUR 28 million as we speak with whatever we discussed before. On the R&D side, I think that's very essential for the deal as well and everyone was looking to that. We have 150-plus FTEs in R&D, we have 420-plus patents, a lot of process IP, and we serve with the high end markets. Automotive, it's not only EV but mainly that's where we're coming from. -- the whole automotive industry. We have very strong aerospace and defense and drones, the solar industry for our software kinetic market. And on the permanent magnet market, we have a lot of requests and demand and customers in the robotic sector, aerospace, defense, data centers, obviously, is 1 of the major industries right now and also the whole automotive industries, as I said before, on both sides on the electric as on the combustion engine. If we look -- take a look on the following slide, and this is the most exciting or a very exciting part, that also I'm pretty sure Ross was attracted right from the beginning. We just completed our facility in Santa South Carolina. I'm on Page 10 now. So we got asked a couple of years ago to build a facility on U.S. soil. We just completed that in a very short time frame. It was outstanding what the team could achieve. We are fully commissioned and in production. We are in Santa South Carolina. It's close to the shore air base, where we are familiar with that area. We can, at the moment, produce 2,000 tonnes per annum on block material. And we designed the factory that we can very quickly expand the capacity to 4,000 tonnes without interruption of the current production. So we already saw the head when we designed the first phase and we can easily expand to 12,000 tonnes we have secured the space around and are ready to go that route over the next couple of years. So in the deal together also with Energy Fuels and also with ASM, we are ready and want to integrate the value chain steps before, especially metal making and strip casting, where ASM has great experience, and we are so excited to work together. And also, we are waiting, obviously, to get the material from energy fuels, and we can fill the whole facility with the materials we will get out of Energy Fuels. And you can see the growth potential with the expansion of that sector in Santo South Carolina. And yes, we are just excited the whole team -- it's just here. And we are looking forward to work with Energy Fuels very, very close and happy to have you, Ross and your team. And I'll hand it over back to you.

Thank you, Eric. And we're very excited to be working together with you as well. So this combination brings together very highly complementary capabilities across the value chain, and it pairs Energy Fuels upstream and midstream rareearth platform with ac downstream magnet manufacturing expertise. VAC Sumner facility will be the end destination for the feedstock produced across Energy Fuel's integrated supply chain -- in its first phase, the Donald project in Australia will produce monazite that's expected to be processed into separated rare earth oxides at Energy Fuels existing processing circuits existing at the White Mesa Mill in Utah, just outside of landing, Utah. That's where upgrades are expected to be completed by the end of 2027. The separated oxides are expected to be converted into rare earth metals and alloys at the Korean metals plant part of the ASM acquisition and these in turn will be used to make permanent magnets at the Sumner facility. Energy Fuels planned Phase 2 expansion at the Light Mason mill is expected to increase the mill separation capacity up to 5,200 tonnes per annum of NdPr oxide and approximately 200 tonnes -- 240 tonnes per annum of dysprosium and 70 tonnes per annum of terbium oxide by mid-2029. Energy Fuels will feed this expansion with monazite from the Donald project and Energy Fuels for matapoject and our Bahia heavy mineral sands projects, which are currently in their permitting and development stages. We'll also feed the mill through market purchases of monazite and mixed rare earth carbonate as required. Oxides produced as a result of the Phase II separation capacity are expected to be converted into rare earth metals and alloys at the Korean metals plant and the American Metals plant, both of which facilities are expected to be expanded. The middle Phase 2 expansion is expected to provide more than enough rare earth alloys always to support a full 12,000 tonne per annum scale-up at Sumner as well as BAC's current European rare earth permanent magnet facilities, subject, of course, to demand for the permanent magnets. By integrating feedstock, separated oxides, metals and alloys and finished magnets, we see opportunities to improve the value supply chain security capture more of the value across the rare earth value chain and strengthen structural margins over time. Next slide. We see a significant customer opportunity with over $2 billion of annual customer revenue pipeline that can support someone's expansion case over time. The value creation opportunity comes from vertical integration, customer access, margin capture, supply chain security and participation in higher value downstream segments of the rarest market VAC's permanent magnet customer pipeline includes EV and non-EV automotive applications, data centers, power tools, robotics, aerospace and defense, semiconductors and other industrial applications. By combining energy fuels upstream and midstream rare earth capabilities with VAC's downstream magnet manufacturing platform, we can capture more of the margin across the value chain. -- vertical integration gives us the opportunity to eliminate third-party markups, internalize input costs and create a more structurally advantaged cost position over time. It also gives a combined company greater flexibility to serve customers at variable points -- multiple points in the value chain. That includes oxides, metals and alloys or finished magnets depending on customer needs. For customers, that means a more complete supply chain solutions supported by secure feedstock, Western production capabilities and DFARS-compliant production. For Energy Fuels shareholders, the transaction creates a clear path to margin uplift and long-term value creation as Energy Fuels captures more economics across the entire value chain. And that includes both rare earth and magnet supply chain. On Slide 14, the combined company brings together operating assets, developing projects and long-term expansion opportunities across rare earth, uranium and critical minerals. VAC AB's immediate downstream scale and customer access to Energy Fuel's existing upstream and midstream platform. Energy fuels feedstock and processing capabilities help derisk VAC supply chain while VAC's magnetic expertise helps accelerate monetization of energy fuels are production. The result is a broader, more balanced growth profile with assets at multiple stages of maturity and multiple paths to long-term value. Now I'd like to walk through the intended pro forma of the company, the growth initiatives, which we expect to be supported by government funding that's existing, conditionally committed and in discussion across the United States and Australia. As we announced last week, Energy Fuels has received a conditional commitment for up to $725 million from the U.S. office of strategic capital in the form of a 20-year loan to accelerate the planned expansion at the White Mesa Mill and construction of the American Metals plant. Energy Fuels and its joint venture partner, Astrom, are also making progress on discussions regarding AUD 220 million lending package to support the development of Phase 1 of the Donna project from Export Finance Australia. In addition, VAC has received USD 220 million in total funding to support the scale-up of some there. That government and project level support is expected to help derisk capital deployment and support execution across key growth projects, including Quite Mesa, Donald, the American Metals plant and Sumter. Now let's talk about the value to shareholders. The benefits of the long-term growth, innovation and value creation catalyzed by the acquisition of Act will be experienced by all our key stakeholders. For Energy Fuels stakeholders, shareholders, the transaction creates exposure to fully integrated Western mine to magnet platform with significant value creation potential through an enhanced margin capture and downstream growth. For our customers, the combined company enhances product capabilities supports more resilient western supply chains and provides DFARS compliant production. The combined company will also be better positioned to serve as a secure and trusted supplier of critical rare earth materials and Magna supporting customers, whose supply chains are increasingly tied to national security industrial competitiveness and resilience. VAC will retain its branding and historic identity. Recall, it's been in business for over 100 years. with its technology-based engineering expertise and manufacturing footprint remaining critical to the success of the combined company. Our focus now is on completing the transaction, engaging constructively with regulators and stakeholders and continuing to advance our broader rare earth strategy. I'd like to close by summarizing for the transition in -- where this transaction positions us -- we're creating a fully integrated mine to magnet Veris platform, combining Energy Fuels low-cost upstream rare earth mining projects and existing separation capabilities with VAC's world-class downstream rare earth magnet manufacturing expertise. The acquisition results in a significant margin uplift and long-term value creation as Energy Fuels captures more economics across the rare earth and magnet supply chain. We will be better positioned to serve customers across North America and Europe in high-growth sectors. We will win market share by offering a more complete supply chain solution supported by secure feedstock, Western production capabilities and DFARS compliant production. Combined company growth plan is expected to be supported by government funding that secured conditionally committed and in discussion across the United States and Australia. We're very excited about the opportunities ahead and confident in the long-term potential of the combined company. And with that, I'd like to open the floor up to questions that you might have. So I'm going to turn it back to Jim for polling questions.

[Operator Instructions] We'll hear first from Nick Giles at B. Riley Securities.

Yes. Thank you, operator. Good morning, everyone. -- also, congrats to you and your team on this transformative deal here. So -- maybe just on the first slide, touching on VAC growth. I was wondering, Eric, if you could just walk us through the CapEx for Phase 2, what kind of savings would you see just given the kind of front-loaded investment? And then how should we think about CapEx ultimately to that 12,000 mark.

Should I take it immediately or you want to start?

No, go ahead, Eric.

So obviously, we built our first Phase I in record time with a CapEx of EUR 0.5 billion. we assume there will be some savings for Phase II for 2 reasons. First, some of the infrastructure is already there. We don't have to start from scratch. We also -- even we have been close to perfection. We learned a little bit out of first 1 like you do on every project. And I'm sure the team will get better out of that. So in that range, minus 10% to 20% for each 2000 is a ballpark, I would assume. -- saying that if we then further build immediately from not stepwise by the facility by 4,000, you can have another discount on the overall CapEx. So that's how I would see it. and to my calculation on that.

Thanks, Eric. Nick, I hope that answered your question, and good to talk to you.

Yes. No. And sorry, if I don't have it in front of me, just what was the -- what would be the gross dollar amount just on that basis for ultimately reaching Phase 2?

Eric, I don't know if I publish that number. I don't believe we have for Phase 1. It is a little bit forward-looking. So a little bit more careful. -- but 2,000 tonnes, depending then on the final magnet because not every magnet is the same. You can assume EUR 250 million up to EUR 400 million, depending on the complexity of the magnet with a very, very healthy margin, as you have seen in the presentation. So you can make the math. The payback period is pretty attractive. And what we usually do, we are looking for firm contracts for a period also to secure the investment.

Understood. Ross, I wanted to really just ask you about capital allocation on the back of this deal -- you have a nice bit of cash on the balance sheet, but some of that -- the majority of that will go towards the deal here. So just how do you think about capital allocation to your other growth projects? And what do you think about kind of funding needs from here?

Yes. Look, I think the government support that we announced last week has a huge impact on our cash position on our funding capabilities. Clearly, we are using a fair bit of our cash to get this deal done. But we are exploring how to, I guess, explore other alternatives for funding the rest of our activities. So Nick, we've got -- as you know, the White Mesa Mill feasibility study came in lower than we had anticipated. We've got our Phase 1 expansion going on. And so I think we're in good shape, but we've also put in place a loan from Goldman Sachs that will help support our cash flow. -- then that's a term loan. So I think we're in good shape to manage our cash and our capital requirements.

Understood. Well, very helpful. I'll jump back in the queue for now, but congratulations again.

Thanks, Nick. Appreciate that.

We'll move next to Noel Parks at Tuohy Brothers.

I guess with Energy Fuels doing this transaction at this particular time, I wonder if you could just sort of talk about your assessment of sort of the risk reward of this additional step in integration I'm thinking about -- it does represent additional operational complexity for the parent company. And I assume that was somewhat balanced against your facing in various market and sort of the ability to use the critical minimal moment. So could you just sort of talk about how you assess that and how that affects the timing.

Sure, Noah. Thanks for the question. Look, I think from a risk-reward perspective, we chose that because it's existing because it has over 1,000 existing customers. It is an operating company. It's been in operation for 100 years. So -- from a risk perspective, we're not developing new technologies. We're not building a new plant. They have already got existing facilities in place. So we think it's the lowest risk way for us to vertically integrate -- it's a tremendous opportunity for us. The fact that AR chose to work with Energy Fuels, we chose to work with them and acquire this company I think it's sort of a testament because there were certainly other suitors, and I don't know specifics about that, but I'm sure there were other suitors for VAC. And so I think this is just a tremendous match between the 2 companies and the lowest risk way for us to get into the Magnet business as opposed to trying to develop the path on our own.

Got it. And if you could just sort of talk about where the ASM piece and the Korea processing sort of fits into the puzzle. I'm just curious, I guess, first of all, would this would would doctors made sense if without the ASM piece. And I'm just wondering if you foresee I don't know a real opportunity of being able to arbitrage the cost structures in the marketplace now you have these different -- I mean, with your various monazite sources and Resources long term, -- is that a big piece of it? Or does it really just boil down to the efficiency and the customer opportunities?

Well, look, I think the acquisitions of both companies provide this full vertical integration. I think that had we not acquired or been acquiring the -- in the process of acquiring the Australian entity, I think we would want to get into middle of alloy making regardless because that's a missing piece of the value creation matrix. And so having the full vertical integration, I think, is vitally important. Would we have done VAC without them? I don't -- I think, of course, we would have would have certainly thought about that. But I think not being reliant on a third party to supply metals and alloys gives us a tremendous leg up on anybody else operating in this space. But I do think it's just that whole vertical integration makes incredible sense.

[Operator Instructions] We'll move to Joseph Rager at Roth Capital.

I guess my first question is just on VAC. What was their production rate last year that resulted in the $29 million of?

Yes. I'm not sure that, that's been publicly disclosed -- does anyone here know disclose that amount.

And by the way, we don't have a production rate because we have facilities and so many different products, there's not 1 production rate. So nothing to disclose on that end. And just like Ross said.

Okay. Fair enough. And then, Ralf, should we expect energy fuels immediately post closing of this transaction to provide investor guidance on what you guys expect revenue run rates and EBITDA margins to look like on the combined business?

So yes, we will -- we have put out guidance in the past. We will continue to put out guidance. I got to tell you, it's not my favorite thing to do because we're in this massive growth phase. We've got all these exciting things happening. And it's hard to judge us quarter-to-quarter, but we will certainly do that. I think the long-term value creation is where people need to be focused on with Energy Fuels with these acquisitions.

Okay. And then 1 other one, if I could. Just on the $1.9 billion valuation, is there any way from energy fuel side that you can kind of break down how you guys got to that number as a fair value to acquire it, given the EBITDA was only $29 million last year?

Yes. $29 million last year, but historically, it's been much higher. And the growth profile that we're looking at is and the value that it brings to the combined entity, I think the calculations were pretty easy to 0 in on that sort of number and we worked with our advisers. I know or I worked with their advisers and jointly, we came up with a number that was appropriate for both parties and accretive certainly to our shareholders.

And we'll take a follow-up from Nick Giles once more at Briley Securities.

I was just curious, Eric, if you could maybe walk us through your current feedstock. Obviously, it will be replaced, energy fuels at a later date, but if you just walk us through where you're currently sourcing your metals today.

Yes. That's a fantastic question. That's why we are so excited. So traditionally, our feedback for permanent magnets and I'm only talking about that side of the business because that's I assume you are referring to -- most of that feedstock traditionally comes out of China. We have a supply chain outside China for 15, 20 years, mainly for military, but also for customers, who were asking for that. where we use material from outside, but that's a small volume, and this is where the Western world is struggling. The capacities there from the mines to the midstream are not sufficient, and we are the only producer for permanent magnet in the Western world. And therefore, we are excited to get as quickly and as much material out of the mine from energy fuels. And we will replace that. It's highly cost efficient as well competitive. I think there are great opportunities also from the margin on all -- on each and every step there and we will replace as much as possible. And the first year it's more like how much can we get at the moment, just to say that and make that clear. we cannot fulfill all the demands because we need more raw materials. And therefore, it's -- for me, it's a merger made in heaven to have energy fuels now on our side.

Great. I really appreciate that. And then maybe just -- there was a slide, a nice slide on kind of your soft magnetics contribution versus that of permanent magnets. I was wondering if you could just touch on the margin profile between both of those segments? And then how do you ultimately see the margin profile expanding as you go from kind of Phase I to Phase II and Phase II to the 12,000.

Yes. So historically, our margin profile is pretty stable over the 2 businesses we have a few points lower margins on permanent magnets. Just recall, we are the only competitor to the Chinese dominance and therefore, the competition there is very, very strong. But with our innovations we are having on that side, we could make an attractive margin. On the soft magnetics side, we have a lot of products where we single source. The competition is a little bit less intense. And most of our competitors, by the way, come out of Europe and the U.S. So it's a complete different competitive profile, and therefore, the margins are a little bit higher. What we see right now is there's a lot of political efforts in North America as well as in Europe to source more out of the Western countries, what might change the overall picture. So I'm just with Ross, and we haven't calculated it through with the whole process yet. So this is what we are going to do in the next couple of months and weeks. It's difficult to make predictions. But I'm very positive we can further improve there if we are working together.

Great. And then just while we have you, I'll sneak in 1 more, if that's all right. Magnet qualification cycles are not short to my knowledge. So -- how far along is Sumter in that process? And how do you kind of see that time line shrinking? Or can it shrink as you ramp further and you get more products in the hands of these customers?

That's an outstanding question. So we produce these kinds of permanent magnets for more than 40 years when they got innovated. So we have all the qualifications you need, if you work for automotive, for aerospace and defense. This takes usually years to get. As we are doing it, we are just having that. We could bring our experienced team from Europe to Sumter and actually, most of the workers, really the shop floor workers and obviously, the whole management team -- we trained up to 18 months here in Germany in our facility brought them over to Sumter and they are trained the trainers. So we are fully operational and qualified. And -- that's 1 of the huge advantages. I think noone in the industry -- or wait, not in the industry, actually industry observers are not aware because you are looking on the mine and process technology, and this is all key where we are leading and -- most of our technology we installed in Samter, we changed and developed ourselves. That's why we are still here and the others all failed against the Chinese competition. By the way, we never made a loss in permanent magnet over the last 40 years. I just want to say that here as well. And getting these qualifications, this is completely overseen by everyone. It's pretty harsh because you have to produce. You have to produce for months, if not years, to get qualified, we have it. And just imagine, you cannot send a magnet into a fighter jet or into a commercial plane if you are not fully compliant with all the regulations. And they are audited, they are tested, and they are tough to get, as you can imagine, and it takes ages to get them. And just to repeat once more, we are already there.

[Operator Instructions] And we have no signals from our audience remaining. Mr. Bhappu, I'm happy to turn it back to you, sir, for any additional or closing remarks that you have.

Thanks, Jim. I appreciate that. Look, I want to just reiterate that this is a transformational acquisition and merger with -- for Energy Fuels it's extremely value accretive just in a long-term strategic position for our shareholders and for our company. This is going to allow us to capture margin across all stages of production, and I can't overstate the value of that. What we're taking on with VAC is a very dedicated workforce, very capable workforce. Energy Fuels has the same. We have a dedicated very, very successful and extremely valuable workforce, and I can't help but think that combining the 2 is going to be extremely valuable. I can't overstate the value of acquiring the capability that VAC has. As Eric just mentioned, developing this capability organically is extremely challenging. You can't just start a manufacturing facility and get qualified and get your magnets into production at the OEMs or defense contractors overnight. It's a long, long process. And that's what really drove us to the attraction of this partnership with VAC. So just I want to close by saying we're extremely excited about this acquisition. I think this combination is extremely powerful. It should make us the most valuable rare earth company outside of China. And I'm very confident when I say that. So -- thank you, everybody, for listening. We're excited about this and look forward to answering more questions in the future. Thank you, Jim.

Ladies and gentlemen, this does conclude today's Energy Fuels Inc. conference call. Thank you all for your participation. You may now disconnect your lines. We hope that you enjoy the rest of your day.