Southern Cross Media Group Limited (SXL) Earnings Call Transcript & Summary

Hello, and thank you for standing by. Welcome to the Southern Cross Austereo half year results teleconference. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker for today, SCA's CEO, Grant Blackley. Please go ahead, Grant.

Good morning, and welcome to Southern Cross Austereo's half year results presentation. This morning, we will be taking you through our results for the 6 months ended December 31, 2022. I'm delighted to be joined for the first time today by our new Chief Financial Officer, Tim Young. Tim joined us on the 30th of January from the Walt Disney Company where he spent the last 11 years of his career, most recently as the Chief Financial Officer and Head of Corporate Strategy across Australia and New Zealand. He has enjoyed a long career in media and entertainment, both in Australia and in Europe, having played a key role in launching the Disney+ streaming product in Australia. Tim is well credentialed to lead our finance team and help SCA deliver on our strategic goals and specifically accelerate our digital audio audiences and commercial returns. We will hear from Tim shortly for a detailed overview of our financial performance. Moving through to Slide 3. I'd like to start today by highlighting on Slide 3, how SCA's portfolio of audio assets, supported by our efficient and resilient operating structure is positioning us for growth. SCA operates more live and on-demand audio content than anyone else in Australia. And our targeted investment in digital infrastructure over the past 5 years means we create an ever-expanding range of content for our audiences to enjoy anywhere, at any time, on the device of their choice. Audiences for our broadcast content in the 5 metro markets grew to record highs in 2022, making SCA the #1 radio network in the all-important 25 to 54 demographic. This is the money demographic targeted by around 70% of advertising briefs. The unwavering focus on this audience segment paid off during the period, with SCA's metro radio revenue growing by 6.8% compared to the market growth of 4.6%. Our developed and operated digital audio ecosystem [ Champion ] by LiSTNR has continued to scale to plan. Since July last year, the number of signed-in users has increased by more than 50% to 1.2 million. The company has also embarked on a systematic review of all workforce structures and processes over the last few years. The result has been a reduction in permanent headcount of circa 12% when comparing FY '19 to FY '23. This has been at the same time when content output has grown 66% or 400,000 hours to 1 million hours a year per annum, but more on that later. Importantly, we have a strong balance sheet, able to support future growth and consistent returns for shareholders. We have modest net debt and our debt facilities are locked in with low margins until January 2026. We will pay a dividend of $0.046 per share, up from $0.045 per share in the prior corresponding period. After today's release of our results, we plan to recommence the share buyback, which we expect to complete by early April. Turning to Slide 4, I'd like to remind you of the breadth and depth of SCA's media assets. Across FM, AM and DAB+, we have 100 live radio stations around Australia. LiSTNR is host to another 29 live music streams providing audiences with access to curated playlists in their favorite genres. LiSTNR is also home to over 600 podcasts, including but not limited to premium international partners, Wondery and Stitcher and local partners, Schwartz Media and newly acquired Diamantina Media. Our Triple M network and LiSTNR hold Australian broadcast and digital audio rights of the NRL, AFL and international cricket matches. We extended the term of each of these rights and their contracts during 2022. SCA also has an extensive sales representation network, which enables our sales team to offer increased reach to advertisers as well as a more addressable audience for digital audio content. We provide national sales representation for 50 non-owned regional stations. In television, our national sales representation enables us to offer a total 10 service to advertisers in regional markets throughout Australia. Our range of assets and services are supported by a fully digitized national architecture and have experienced and engaged workforce following the completion of our 5-year digitization program last year. Turning now to Slide 6. Let me summarize a few key achievements over the last 6 months. EBITDA of $43.1 million was 7.3% below the corresponding period. As I mentioned earlier, our Metro Radio revenue grew by 6.8% compared to a market growth of 4.6%. This led to radio broadcast EBITDA of $48.2 million. Our Metro Radio audiences grew strongly during 2022. Our total audience queue was up 22%, to a record high. And SCA was the #1 radio network in the coveted 25 to 54-year-old demographic. While regional radio revenue contracted by 2.5% during the period, we were delighted this month to expand our national sales representation network to include ACE Radio's 21 radio stations. Mostly located in regional Victoria, the ACE Radio stations have filled a previous gap in our sales representation network. Importantly SCA continues to lead the growth in Australia's digital audio market through LiSTNR. Our investments in attracting signed in users, optimizing the user experience and expanding the range of premium digital audio content in our LiSTNR digital audio ecosystem are starting to gain traction and generate increasing returns. LiSTNR revenues grew 37.5% compared to a broader digital market of just 11%. Broadcast television markets have been challenged in the year-to-date. Our first half television revenues were down $6.2 million from the prior corresponding year. Despite the inflationary pressures, we limited growth in group expenses to 1.7%. We will continue to be vigilant and monitor our expenses closely as the year progresses. Finally, we have made 2 significant executive appointments in recent times. I've already mentioned Tim Young, who has joined us as CFO. I was also pleased to announce last week that Seb Rennie will join us next month as Executive Head of LiSTNR Commercial. Currently Chief Investment Officer for Australia and New Zealand for GroupM, Seb has over 20 years' experience in media in Australia and in the U.K. Seb's role with SCA is a new one, with responsibility for leading LiSTNR's commercial strategy and optimizing commercial returns from our digital audio assets. Seb's appointment is timely with LiSTNR having achieved more than a critical mass of signed-in users and premium live stream and on-demand digital audio content. The group results summary is shown on Slide 7. Group EBITDA of $43.1 million was 7.3% or $3.4 million below the prior corresponding year. Net profit after tax was down by $1 million or 6.1% to $14.6 million. Total group revenues were slightly above last year led by improving Metro Radio revenues, up 6.8%, resulting in SCA achieving a higher share of market. Regional radio revenues were 2.5% below last year. However, the overall growth was adversely affected by the television assets. We have managed growth in expenses to just 1.7% with inflation particularly impacting wages and software costs and other increases brought about by a return to a more normal operations compared to the comparable period in 2021, which was still affected by COVID lockdowns. The variable nature of our television affiliation fees also mitigated the downturn in television revenues. At $102.5 million, our net debt remains conservative, and our leverage ratio of 1.33x EBITDA is well below our banking covenant. Free cash flow was higher than the prior corresponding period at 78% as working capital continued to normalize and CapEx reduced. As noted earlier, we will pay a fully franked interim dividend of $0.046 per share on the 11th of April. I should note that the comparative results in the presentation for the prior corresponding period exclude the $1.7 million cost offset and $0.5 million tax impact of the PING government grant received in that period. We provided the reconciliation to the statutory reported results in the appendix to the presentation. I'll now hand over to Tim to provide some detail on our financial results for the half.

Thank you, Grant, and good morning, everyone. I'm very pleased to have joined SCA and look forward to meeting many of you personally in the days and weeks to come. Let's turn now to Slide 9, which set out our statutory results for the first half. As already noted by Grant, group revenue was flat and group EBITDA and NPAT were down on the prior corresponding period by $3.4 million and $1 million, respectively. While expenses were up, the increase was limited by disciplined cost management. Due to a benefit attributed to our swap facilities and refinancing costs in the prior corresponding period, net finance costs were down by $0.5 million on the prior corresponding period. Depreciation and amortization were also $1.3 million or 8.2% lower. I'll provide some more detail on our CapEx in the next couple of slides. But first I'll turn to the cash flow statement on Slide 10. The main point to note on this slide is the impact of the share buyback. To date, we bought back 22 million shares at a total cost of $24.4 million, equating to 8.3% of issued shares. This includes $18.9 million during the half just ended. We will resume the buyback after announcement of these results and we'll continue it until expiry of the committed 12 months in early April. If we turn to Slide 11, I'll touch on our CapEx, which at $7.9 million, is a little lower than in the prior corresponding period. It's worth restating that we completed our 5-year digitization program last year. As a result, just 10% of CapEx this year relates to property. Instead, as evident here, our CapEx is now firmly focused on innovation. In fact, some 83% of our CapEx during the half was devoted to digital first core systems, the development underpinning the evolution of our digital product suite for LiSTNR, including enhancements to acquisition and audience reach and engagement. Turning now to our balance sheet. Slide 12 illustrates the strength of SCA's balance sheet. With leverage of 1.33x EBITDA, SCA has significant headroom under our debt facilities, which will mature in January of 2026. At 76% of NPAT, the interim dividend of $0.046 per share is within our dividend policy payout range and has improved on last year. Let's now turn to Slide 14 to discuss the performance of our operating units. Audio revenue of $200.4 million was up 3.5%. Metro Radio revenue, which includes digital audio, grew by 6.8%. On a standalone basis, LiSTNR digital audio revenue was up 37.5% on the prior period. Regional radio revenue contracted by 2.5% due to some key national advertiser categories contracting and the subdued recovery by small and medium businesses in regional areas, which is now rebounding in January and February. The increase in audio expenses is attributable to ongoing investment in growing and scaling LiSTNR, along with wage increases and CPI-linked increases to broadcast transmission costs. Television expenses increased by 7% due principally to CPI-linked increases to broadcast transmission and plant costs. Television cost growth was mitigated by lower affiliation fees that offset reduced television revenue. Corporate expenses were down $3.3 million or 21.7%, principally due to savings in employment and insurance costs. Turning now to our operating costs, on Slide 15, which provides a breakdown of our cost base. Revenue-related expenses were slightly lower at 24% of revenue. Nonrevenue-related costs increased by 3.3%, reflecting ongoing investment in LiSTNR and the managed impact of inflation across all expense lines. Slide 16 summarizes the performance of our broadcast radio assets, excluding digital audio. Overall revenue growth of 2.7% was driven by Metro Radio revenue growth of 6.8%. Revenue-related expenses grew by 6% as sales related and promotional activities returned to normal. As a result, radio broadcast EBITDA of $48.2 million was down $3.9 million. National Radio revenues grew by 2.7% after cycling over a strong post-lockdown recovery in November and December of 2021. This is further illustrated on Slide 17, where we explore 2 distinct periods in the half. The first 4 months of the half show that the market and SCA continue to recover well. In the case of audio, revenue growth of 8.7% in the first 4 months, was cycling over an equally buoyant period in the 2021 financial year when revenues grew 8.6% over the 2020 financial year. By contrast, in November and December, audio revenues contracted by 5.1% compared to the prior year. While total audio revenues for the 6 months finished the half up $6.7 million or 3.4%, television weighed on the group result with half year revenues back $7.3 million. Key underperforming advertising categories across the broader media market included government, which was down 28.8% and is seasonally impacted following the federal election. Consumer Electronics down 19.5% and Financial Services down 37.4%. Slide 18 outlines the performance of our television assets. Broadcast television markets generally recovered from the impact of COVID in 2022 more quickly than audio and other media markets, led by a stronger national advertiser rebound. However, in the 6 months just ended, SCA's television revenue reduced by 9.5% to $59.6 million and EBITDA declined to $14.2 million as these gains contracted. SCA's variable affiliation fees saw television expenses reduce by $3.4 million. SCA's television assets continue to be a well-run business, delivering an EBITDA margin of 23.9%, providing a solid contribution to earnings and cash flow, while also contributing substantial noncash marketing support for both LiSTNR and our portfolio of radio assets. We recognize that television is a structurally challenged sector, but SCA will continue to operate the asset to maximize cash flow and returns over the coming years. Turning to the performance of our digital audio business, which is shown on Slide 19. Top line revenue growth of 37.5% in the most recent half was underpinned by growing in stream and podcast revenues while attracting a higher advertiser count, bringing LiSTNR closer to cash flow breakeven. We were delighted to announce we secured sales representation for leading local and international podcast publishers during this past 6 months. Key new partners include the globally acclaimed U.S. publishers Wondery and Stitcher together with Australia's Diamantina Media. As a result, LiSTNR is the #1 podcast sales network in the Australian Podcast Ranker. We also secured digital audio rights for the first time from the NRL, AFL and Cricket Australia. This led to an increase of $1.1 million in revenue-related expenses as contra was included in digital audio inventory. LiSTNR employee expenses unashamedly grew by more than in other parts of the business, reflecting the high demand for digitally skilled executives and resources. I'll now hand back to Grant to talk through some of the core influencers on our results in the first half.

Thanks, Tim. Let's now turn to Slide 21. I would now like to take you through a number of core influencers and key priorities underpinning our future growth. Before we discuss those, you may recall we had 5 core influencers, which we published in August 2022. They were build audiences for our broadcast assets, secure new premium content partnerships to supercharge LiSTNR, increased signed-in users and develop additional products and enhancements for LiSTNR while ensuring we effectively manage our cost base in creating even greater efficiencies. Turning to our influencers moving forward. The first core influence on our business is internally driven. To support SCA's evolution to a digital-first business, we have systematically reviewed and revised our workforce structures and processes over the last few years. As a result of these actions, we have reduced permanent head count by 12% or circa 250 people since 2019. Importantly, at the same time, increasing our production of content by around 66% or 400,000 hours per year to now deliver over 1 million hours of content each year. The composition of our workforce has also changed with more than 20% of our people employed as digital specialists, including data scientists, designers, developers, commercial sales specialists, podcast creators and sound engineers. In concept of identifying new digital skilled executives, we've educated and upskilled our broadcast teams to think digital first, ensuring our content can be consumed and monetized across broadcast and digital platforms simultaneously. Slide 22 illustrates a fundamental external influence on our business with online consumption of audio growing 51% over the past 5 years. This includes online listening to live radio as well as online listening to podcasts and streaming services. That is why our investment in LiSTNR and our digital audio ecosystem is paramount to our future for audiences, advertisers and investors. We have also worked hard to ensure our audiences can listen to audio in a range of Internet-enabled devices, including mobile phones, tablets, desktop computers, smart speakers and car dashboard systems. Slide 23 shows how live Metro Radio audiences have grown over the past 6 years. The most significant growth has been in the most recent year. Even as the devices our audiences use to listen to live radio have changed and multiplied, the number of people listening has continued to grow strongly. Radio continues to evolve and be a resilient and capable media in the Australian media market. Slide 24. Earlier I mentioned that SCA audience had grown more than 22% in the past year, which is a stronger rate of growth than our peer set. Over the next 12 months, we are acutely focused on driving time spent listening for each and every show to further improve our share of market. Capitalizing on the audience or cume growth achieved in 2022. It is worth restating that SCA already is the #1 network for the all-important people 25 to 54 demographic. Slide 25 confirms that sign-ups to LiSTNR have increased consistently over the past 2 years, have now reached a new record of $1.2 million. The quarter-on-quarter growth as per the slide on the right-hand side in sign-ups is on plan and is expected to continue at a similar trajectory. Slide 26 highlights additional supporting data showing the number of stream starts on LiSTNR. This tells a similar story to the number of signed-in users, only the growth is more pronounced. Our signed-in users are finding more content in the house of LiSTNR to enjoy and recommend to others. These factors are combining to provide critical mass for brands to reach engaged and addressable audiences at scale. Slide 27. A key priority for the company over the last 6 to 12 months was to identify and engage with premium content publishers on a domestic and international basis. Pleasingly, our partnership suite has demonstrably improved across the range and the depth of content within LiSTNR. Our exclusive Australian sales representation of partners such as Wondery and Stitcher has expanded the reach of the LiSTNR sales network to 6.1 million monthly listeners. One misconception in market is that when you listen to, say, a Wondery or Stitcher podcast in Australia or a LiSTNR original podcast for that matter on Spotify and Apple, you'll hear an ad sold by that platform. The fact is we control the RSS feed and insertion of every advertisement to every platform in the region, and you will always only hear and ad sold by SCA or LiSTNR. Let me now turn to Slide 29 to touch on some core drivers of value in our business for the year ahead. Our ongoing work to scale LiSTNR will be at the center of our business. We have adopted a strategic choice to control our destiny by developing and operating our own digital audio ecosystem. We will continue to tailor it to the needs of our audiences and advertisers to grow and optimize returns for our shareholders. This includes ensuring LiSTNR continues to offer compelling premium content to attract larger audiences and more advertisers. Our sports rights and local and international content partnerships are key to this objective. LiSTNR operates through a signed in app, and this unlocks a known audience, which is more valuable to advertisers than the comparatively unknown audiences on our broadcast radio and television assets. In turn, advertisers will pay a premium rate to connect with known audiences. At the same time, our broadcast assets will continue to provide valuable mass reach and frequency for a large cohort of advertisers. The addition of ACE Radio's 21 stations has filled a previous gap in our regional radio sales network, providing expanded reach for our advertisers. We have a unique business model for our suite of DAB radio stations, which now has an audience of 1.4 million people. Our FM DAB stack provides extra reach for advertisers on our Triple M and Hit network stations. In the year ahead, we will plan to review whether breaking out our DAB brands could further improve commercial returns and earnings. SCA dominates the top 20 stations and an appendix to this presentation shows the top 20 DAB stations, of which 11 are SCA stations. Finally, Slide 30 provides a trading update. SCA's Q3 broadcast radio revenue is forecast to show flat to low single-digit growth. January Metro radio growth was up 3.4%, and in February is forecast to be up 2%. In regional markets, local radio revenue was up 7% in January and is expected to be up 10% in February. Local revenues account for just over 60% of our regional radio revenues. However, national radio revenue in regional markets declined by 14.8% in January, but is forecast to be back 8% in February. In contrast, digital audio revenues will be up more than 65% for January and February compared to the prior corresponding period. And this is principally driven by more content, more stream starts and a growing cohort of advertisers. We also expect the EBITDA loss on digital audio to continue to narrow as revenue grows well ahead of costs. For LiSTNR, we're targeting 2 million signed-in users by July 2024, and we are currently forecasting achieving cash flow breakeven during the 25 fiscal year. The television market is tracking 10% to 12% below last year for Q3. On the cost side, nonrevenue-related costs are reforecast to be up between 0% and 2%, down from our prior range of 2% to 4% for the full year to June 30. Financing costs will be around $17 million and full year CapEx is forecast to be around $20 million. Thank you for your time this morning, and I'll now hand you back to the operator to take any questions you might have. Thank you, operator.

[Operator Instructions] Our first question comes from the line of Darren Leung with Macquarie.

Good result. I just had 2 questions, please, and I'm going to ask them together. So the first one, just on the outlook commentary between radio and TV. I'm going to get a bit more color as to what you think is underpinning different tier, please? And then the second question was just in relation to CPMs, which were mentioned last time in the presentation. Was this sort of the advantage of radio versus the broader TV markets? Do you think this is a trend that's been playing out in the last sort of 2 months where the market has been a bit softer? And do you think that's sort of accelerating in the third quarter, please?

Thank you, Darren. It's Grant. In response to that question, the -- there is a bit of a difference between radio and TV. We know that radio has good consumption, in fact, increasing consumption and advertisers and agencies are migrating to that platform more because of its resilience, and it is delivering good value in market. TV, we know to be more structurally challenged. That we've been seeing for some years. We continue to see some denigration in viewership as the market changes. So yes, there is fundamental differences between the 2 platforms in relation to the composition of revenue for each as well. What you tend to find with radio versus TV is, TV typically is a 90% to 95% driven national market and about a 5% to 10% local market. So an actual fact, all of your money is in the hands of some 1,300 national advertisers. If they are strong and the outlook is positive, they will obviously spend more willingly than they will when times are a little bit more cautious. With respect to radio, we tend to have much more connection with the local community and SMEs. And to that end, we have a disproportionate share of revenue that favors local, in fact, over national revenues. We have been progressively working to build up national investment into both our metro and regional radio set, particularly in the regional areas. And that has continued to flourish. But as some national categories have contracted in the last 6 months, we've been able to pull that second lever. And with the rebounding of local advertisers, they have filled the void on the way through. In regard to your second question on CPMs, yes, you do see some fluctuation between the 2. There's not an enormous difference between the 2. So that 2 lever system of pulling more on the SME market to deliver more volume into the marketplace is something that we can control and SMEs are coming back as referenced in our outlook, where local revenues are actually outpacing national revenues into the regions at this point.

Our next question comes from the line of Roger Colman with [indiscernible].

I just want to cover a few things, right? The dollars of revenue you get per point of DAB ratings versus normal FM, is there still a big difference or not?

In the manner in which we've structured ourselves in effect is a quality between FM and DAB because it is in the stacked environment, which actually means if you buy a spot on FM, it flows through to DAB simultaneously and therefore has directly the same impact in terms of the value. I did mention in our final statements that we are looking, given the maturity of the DAB stations and they've been maturing very strongly, which is no real surprise because online listening and IP-enabled listening is growing exponentially. And to that end, therefore, the DAB stations are more willingly or readily available in market. So we are considering adopting either a hybrid or a slightly different model for our DAB stations because in the standalone environment, they are becoming quite meaningful. And we feel that we might be able to, under a different commercial model, in fact, gain a superior return by fundamentally separating those core stations, which is consistent with us putting, say, a breakfast show into our lead RnB station on the Hit Network on DAB with Mike E & Emma. So it is different content. And effectively, we think there can be different premium activations.

That's the first one. The second question I've got is related to the pretty substantial reduction in expenses, the 12% fall in corporate. Is there any more to come there?

Yes, that principally relates to all of our technology costs are centered within that corporate expense. And naturally, we have built and deployed successfully LiSTNR. So we saw a natural end to that initial phase of building up our manpower and the natural falling off of that after we successfully launched. We'll continue to look at our corporate costs moving forward as we adopt more technology products and automation in the business. So at this point in time, I'm not at the point of sharing any additional news at this point, but it is an ongoing function of the company, as you know, to continually lean on technology to actually improve the efficiency of our overall operations.

I know you've -- obviously the Board asks you given the advertising environment to cut these quarter costs. But looking back upwards, I note that in fiscal '22, your nonexecutive director payments were within $12,000 of non-network, which was 5x the size of your company. Maybe the 1 or 2 of the Board members are listening in and could take note of the high cost of their director's package relative to the size of companies. [indiscernible] comment about that, Grant, yes.

Now we do have a very experienced group of nonexecutive directors on the Board, I'll let you speak with those nonexecutive directors and our Chairman in due course, but we certainly value their advice and guidance.

Yes. And just going to Tim, the expected $17 million interest payments, including implicit interest charge inside leases. It looks like around about a mix rate of 6.3%, I calculate. I'm wondering if there's a more efficient way of paying for leases or acquiring leases relative to on balance sheet, given your last year's mixed interest cost of 3.3% on actual debt? I mean there's an implication as you are paying 8%, 9%, 10% implied on your leases and finance costs.

Yes. Thank you for that, Roger. We are obviously looking at ongoing capital management across the piece, and we'll factor that into our ongoing assessment of that -- those costs.

Yes. I think we'll take that offline with you, Roger, if you feel comfortable with that.

Yes. And altogether, a reasonable result in the circumstances of the consumer collapse. All the best, gentlemen.

[Operator Instructions] Our next question comes from the line of Conor O'Prey.

Just a question on regional TV, if that's okay and, hopefully, this is a reasonable comparison. I think the [indiscernible] had regional television [indiscernible] 1% to 2% maybe for the December half, we've seen minus 9.5% will be significantly underperforming that. And I know you -- so I just wonder if that's a function of the kind of [ TAM ] offering and you just have to live with that or something else? And I guess, obviously, if I missed this in the presentation, you used to the publish the power ratio, but is the power ratio still above 1 fir regional TV?

Yes. Thank you, Conor. I just don't have in front of me the half year results for regional TV. It's certainly contracted. Our power ratio is 1, which is slightly below where it was at the same time last year. That is partly a function of 2 things. I think what you have seen is that the regions unfortunately has contracted along with the broader television market. Secondly, that there has been changes of ownership and interpretation of revenues across different parties, which has brought about a change in different behaviors. And I think it's been well documented that Tim hasn't enjoyed the best 6 months of the career. That said, they're still providing a meaningful 25 to 54-year-old proposition in about 27% of the marketplace. So we can still rely upon that. But they don't unfortunately have the same repertoire of special events that we thought they might, which are premium activations on the way through. But I am pleased to say that our power ratio still is a 1 at this point in time.

And just on -- I mean there was some press reporting a few months ago that there were some discussions around [indiscernible] assets, we decided not to [indiscernible] address that formally. Is there an opportunity? Would you revisit that as it come up again? Or do you feel like these kind of results kind of would put off potential buyers?

Well, I think the key issue here is to look at the margin that we can drive from this business, which is 23.6%, a higher margin in actual effect than the 7 networks delivering and we'll wait to see what the 9 network is delivering. So we're enormously proud of the state of those operations delivering just under 24% margin. And the Board and ourselves, as management, went to market to respond to interest in regard to those television assets. The offers at that point in time didn't yield the result that we were willing to part with the asset. In this world, Conor, you never say never, of course, but there is no process running at this point. We have -- we are running the asset as effective and efficient as we can. And most importantly, we're looking at more ways to improve not only the margins and profitability, but how do we make that a very sustainable outcome moving forward. So that's where we're centering our attention at this point.

I'm showing no further questions in the queue. I would now like to turn the call back to management for closing remarks.

Thank you very much, and thank you for joining us this morning, and we look forward to talking to you again shortly. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.