Vertiv Holdings Co (VRT) Earnings Call Transcript & Summary

Good morning. My name is Mark Delaney, and I cover U.S. Autos and Industrial Tech at Goldman Sachs. I'm very pleased to be hosting today Dave Cote, the Executive Chairman of Vertiv; and Rob Johnson, the CEO. Thank you both for joining us today.

Nice to be here.

Good to be here.

Before we start, I remind everyone that this event is not intended for the media. And if you are a member of the media, you should disconnect now. For those of you that don't know Vertiv, the company is a leading supplier of power, cooling and IT infrastructure management solutions geared toward the data center, commercial, telecom and edge markets. The company generated more than $4 billion of revenue in 2019. We will be taking questions over the webcast later in the session. So please feel free to submit questions that you may have through the form provided on the web page.

And with that, let me jump into the Q&A. And I'd like to direct the first question to Dave. And given that Vertiv is a company that certainly became public through a SPAC transaction, I was hoping you could talk about the process you went through to identify Vertiv and what you found attractive about the company and the investment.

Sure. Well, first of all, thanks for doing this virtually because in addition to saving travel costs, it allows me to smoke cigar at the same time, which you don't get to do if it's a group setting. So a nice advantage there to keep in mind for the future.

All right. We'll think about it.

Yes. The -- as you know, my partner in this was Goldman Sachs. And one of the reasons for doing that was to just get access to [indiscernible] because sourcing of a good transaction, as anybody probably knows who does it, is not that easy. We looked at over 300 companies, got it down to like 10 or 15 that we thought actually first got it down to like 70 or 80 that we worked our way through, then 10 to 15 that we thought were serious possibilities, then boiled it down to about 3 that we went in-depth with. And Vertiv was my favorite of those 3. And the reason for it was that it hit all my Honeywell hot buttons, many of which you'll have heard of in the past. But just to repeat them, I liked that it was a great position in a good industry and that you could differentiate with technology. And the way I described it was because of the foundational work, the platinum equity folks had done, which contrary to how most people think of PE firms just kind of coming in and cutting costs, they did the opposite. They hired a great management team, starting with Rob Johnson, who you'll hear from, and investing in systems and other areas that we're going to make this a much stronger company. So I felt like a lot of the foundational work had been done, and this gave us the opportunity to be able to build on that foundational work in the same way that we did at Honeywell. And that's why you see Rob and his team have launched the Vertiv Operating System, or VOS. We're increasing our R&D spend. We're making our R&D spend more cost-efficient and effective to just get more from each dollar we spend. The globalization effort was also already good and is going to increase. And we've started a lot of focus on the gross sales while whole fixed cost constant. So I liked all those aspects of it and the fact that it was at that 2- to 3-year point, and this gave us a real opportunity to turn this into just a terrific company that people were going to look at and go, wow, didn't I -- why didn't I buy that when I had the chance? So we think that's what's coming, and you can probably tell, I'm pretty psyched about the whole thing.

No. That's a great introduction. Rob, you joined Vertiv in 2016, but have been in the industry for a number of years before that. Based on your perspective, not only as an industry veteran, but also as CEO of Vertiv, can you describe what you consider to be Vertiv's competitive advantages?

Sure, Mark. And listen, thank you to all that are listening today and hearing our story. As you can see by Dave, he's pretty psyched about it. I've been in it for 3 years now, and I'm really psyched about it. And what drew me to this particular industry and coming to Emerson, the spin-out from Emerson to Vertiv, was really a couple of things. I always knew the Emerson Group and that has a very strong deep domain knowledge, great global service organization. So there was a great foundation there. The things that we're missing, as Dave mentioned, Platinum, who was very smart about the way they invested in the company, allowed us initially to begin investing in research and development and innovation. And so the things that we're missing were the company wasn't attacking the colo and hyperscale in a way that they could differentiate themselves through innovation, through joint collaboration and development. So one of the things we initiated, and it's something I've done throughout my entire career, is the best way to create innovative products is to collaborate and solve real customer problems. And that's exactly what we did. We put together a sales force to go after the colo and hyperscale to drive innovation, which then puts you in a position where you don't get compressed or as compressed margins and you have the ability to differentiate. So price doesn't become the first lever that someone thinks about. The second thing that we looked at as our thesis and have been executing on is the white space and edge. And while everyone thinks of the data center as this colo and hyperscale and it's all Microsoft, Amazon, Google, Facebook, Apple, a really big part of the world is the edge and the edge applications, and -- which means things like you turn on your Netflix and it spins, that's called latency, and people won't tolerate that. So applications are driving latency issues. And those latency issues require a different type of infrastructure than some big mega data center requires lots of little data centers spread out throughout the world close to the consumption of that application. And so we've developed a series of products over the last few years and brought those products to market. And we think we'll be a leading provider, and I think we are, and we'll continue to be a leading provider and innovator in those edge type solutions. And those things can be from a single rack to a 4-megawatt data center as we go forward. So focusing on innovation, and that's a thing that Dave and I see eye-to-eye on and accelerated in those dollars is a way to drive the sales growth of the company, the way to drive a leadership position, and we're doing just that. We did have to change some things culturally. Vertiv was a 20,000 and is a 20,000 people company. So we had to make some changes in the leadership side, and we feel we're comfortable and confident with the teams at L1 and L2 level within the organization. And during this period of COVID, we continue to invest, and we will continue to invest in research, development, new products, continue to invest in our channel effort, continue to invest in our service organization. And I think that's the key difference then -- with us than maybe some of the others out there is that the way Dave and I think about things during the down period is that was the time to invest, not to back off on that because we come out much stronger and that's certainly what we're doing.

So I think data center is about 70% of the company's total revenue. And I think about 1/4 of that data center portion is currently hyperscale and colocation combined. Rob, you mentioned you needed to make some investments in new technologies in order to better address the hyperscale market. Can you elaborate a bit more specifically on what new technologies the company has been going out in order to better serve those types of customers?

Absolutely. We -- a couple of things we did early on. We did some inorganic activity to get to some technology, and that would be in the white space. What I mean by white space, that's the data center floor where the servers and storage actually exists. We acquired a company called Geist, which is a leading provider and custom power distribution, which is, at the rack level, those power distribution devices power the servers, the networking gear. We haven't been a player in that. And so we acquired that technology to allow us to participate in that growing part of the industry. From an organic perspective, the physical rack and enclosure where the actual servers and storage gear sits, we weren't a player in that market. We sold some here or there, but we didn't have a global platform. So we invested in developing that global enclosure and making that available. Other areas of technology and innovation has been around looking at edge deployments and knowing that a lot of those deployments are going to be outside on top of buildings, near cell towers. How can we do that in a much easier way? How can we have fast deployment, have total systems? That means thermal management, security, power management and make it really easy to ship those and make it standardized and modularized? And what I mean by that, the world is going to how fast can I get it out there? How can I have a repeatable design? Can I mass-produce it in the factory? Because one of the things we're short of today is technicians and skilled labor out there. Especially as you go global, as data centers are appearing everywhere in every parts of the world, having a modular design and modular capability and being able to do that in all parts of the world really allows for the acceleration of the Internet and of the edge side of it. One other area market we invested in was in the custom -- large custom air handling unit. We bought a company called Energy Labs down in Tijuana, Mexico, which has allowed us to participate in some of the areas in the large thermal systems were custom that under previous ownership, that wasn't an area of focus. And for us, it's a huge area of focus, and we've gained share there. So we continue to look at the entire -- we are the only company that's not part of another company that's solely focused on the critical infrastructure that keeps the telecom networks running, that keeps the data centers running, and we do it both in a large scale, and we do it in the edge. And I want people thinking further that the edge is a bigger opportunity ultimately than what we're seeing in the large mega center build-outs.

I think another area the company is trying to better address is small to midsized customers and that channel where margins can be above corporate average. What will it take for Vertiv to be successful in the channel? And do customers and distributors already have providers that they're happy with?

Sure. Yes. We were late, I just call it, late to the channel or not even a channel-friendly company pre-spinout. And this is an area where I spent most of my career focused early on in the data center space, maximizing what the channel needs. So the first thing we needed to have was a product set that wasn't just a MeToo, innovative products that did things that are the current leading competitors in that space didn't have. But more so than this that we needed access. We needed the channel to embrace and understand that Vertiv was going to not just be a direct company. Vertiv was going to utilize the channel and drive that. So over the last 3 years, we've developed a suite of products that we think are innovative and provide more than just a MeToo to our -- to those channel partners. We've had channel programs. And so when you look at a total solution kit globally, we're the only provider that can do the same type of products in any part of the world. So some of our competitors that are in there might have thermal for U.S., but they don't have thermal available in India or in Singapore. And some of them don't even play on that. What the channel partners want to sell today is solutions, and that's how we've organized our company globally. And one of the big changes -- I forgot to mention in the beginning when we bought the company or did the spin, products were developed differently and there weren't global platforms. That was a big change that we made, too, is to have centers of excellence and develop and understand that our customers want to buy the same product globally. And I think by providing both solutions, innovative products and working with them and helping them do that, we're differentiating and not just somewhere in a box, but allowing them to sell things that they haven't been able to sell before, like modular data centers or full complete edge data centers, and they like that because they can get services wrapped around that as well.

Okay. That's helpful. Even though Vertiv was owned by private equity for 4 years, the company was still investing in products and technology, including in ERP resources. Maybe, can you talk about what the company is doing with its ERP consolidation effort and what that means for how Vertiv can better manage both price and cost?

Sure. As I've mentioned and talked to, and Dave has spoken to as well, we have completed our single ERP Oracle product line for Asia, ERP for Asia and for Europe. We're not complete with the U.S. Within -- by mid-2021, we'll have the U.S. Americas ERP complete. That being said, with the tools that we have today, we don't have to wait for that to get after things like pricing and understanding. We've got enough data lakes and so forth to be able to analyze the data and exercise that muscle, which the company hasn't had in the past on pricing. We did some in 2019. It's a part of our plan this year. It's one of the levers that Dave and I have talked about that using that pricing muscle. And while it's hard because sales people don't want to go raise price, naturally, they just want to sell the product. But by using some analytics, and even though we don't have a single instance ERP in the U.S., we're still able to get that data to drive that analysis to use pricing as one of our levers. And it is working. We did get price in Q1.

And Dave, one of your key message has been about holding fixed cost constant in order to help drive margin expansion as the company grows the top line. Maybe give us a few examples of how you're seeing Vertiv implement that.

Oh, yes. We're going to use the same kind of approach that we did at Honeywell. When you think about fixed costs, it comprises, let's see, I guess, about 35% of our total sales. And 60% to 80% of fixed costs in any organization that you're a part of is people. And the way to think about it is if you just have the same number of people and you do the normal raises, et cetera, benefits, it's 3% of a cost increase every year, which means just the whole margin is flat. You've got to grow sales 3%, which is not a great place to be. If you can hold those fixed costs flat and you've got a contribution margin rate of, say, 45%, which is about where we are, the fall-through, when you've got about, we'll say, a 10% operating margin, is huge. So the big thing is to figure out how you control all those people costs. Some people kind of just go through and just start laying people off, which, yes, you can get away with that a little bit. And that's not to say we won't do that. But the big thing is to fundamentally change your processes. And if you recall, functional transformation in Honeywell, we had everybody pulled together strategic plans in -- for fixed costs with a real focus on the, say, corporate functions, but really, we did it for everybody. And as a result of that, if people pull together a strategic plan on how are they going to hold their fixed cost constant while at the same time improving their internal customer service, which we do -- we verified through anonymous surveys, then it's amazing where you can get yourself to. So we're just going through doing the same thing. And I know David Fallon, our CFO, has become a big proponent of it. He didn't quite buy my argument in the beginning. So he actually went and did the math himself and said, wow, this is pretty impressive. If we can do this, this would be great. So we've got that process started now. And everybody understands it, and they all have a vested interest in making sure that this works. So I'm feeling pretty bullish about where that's going to get us. David, I don't know if there's anything you want to add.

Dave, I don't think David is on the call, but I would echo those sentiments. It's a -- well, Dave Cote would say it's a simple concept. In practice, it can be difficult because, culturally, people believe and they just think, hey, more sales, I need more people. I need more HR. I need more finance. And Dave is exactly right. It's something that we, as an executive team have embraced. And we're going through this and understanding that you need to reengineer the process. This isn't about just going in slicing 10%, 20% of the company. It's really about changing the process, which then you get more efficient and you get more effective. And this is something that we are, absolutely -- it's a big lever for us going forward, and we'll continue to embrace it and practice it.

Key competitors for the company, like Eaton and Schneider, had EBITDA margins are about 500 depths higher than Vertiv's. Why do you think that is? And do you expect Vertiv to get to a similar level of those peers in the longer term?

Well, I think, and then Dave, let you comment, but my belief is we can actually do better than that, ultimately. And we're going to do that through some of the levers that Dave just talked about, the fixed cost constant. Certainly, we've talked a lot about the procurement side. When we got into this company, and it wasn't really until mid-2019 that we really began to get a global purchasing organization in place. But even with that in place, some of the stuff we've learned from Dave and things that he's used in the past, e-auctions and driving that, there's just more to go get. An organization can actually do a lot more than I believe it can do. So if you take the fixed cost constant, you take the procurement lever, you take the Vertiv Operating System, which we've started and it had really good interface and some training from our Honeywell friends, you take that, that takes longer, and as David say, whether you get 50 basis points a year or 100 basis points. So you take that, at pricing and put all those things together and we think we have a bucket of potentially 1,500 basis points. Not that we're going to get all of them and not that they're all going to happen next year. Just we know they will happen. Dave knows it's happened. We've experienced it by working with some of the Honeywell friends and seeing the same thing. And so the religion is there. And I think we would not be serving the shareholder right, if, ultimately, we didn't do better than our competitors. I don't know. Dave, do you have any thoughts on that?

Yes. Mark, I should have mentioned upfront now that I think of it on the Honeywell parallels. If you recall, we started in the same place with Honeywell. And I always said it's -- and people wonder why is it possible. And I'd always say the same thing is, well, it's easier to get to where somebody has already gotten to than it is to keep pushing the envelope. So I feel pretty good about being able to pick up that 500 points. And with all the things Rob has described, we think we've got somewhere between 1,000 and 1,500 basis points of opportunity even while we're investing more in R&D. So to me, it feels pretty good. It doesn't happen all at once. And I know a lot of people will want to know, well, do I plug in 50 points a year or 100 points a year? And Rob and I always say the same thing is, well, we can't really do it that way. It does happen over time. And some years are better. Some years are worse. But overall, you do get there, and that's all found money.

That's very helpful. Speaking on the competitive environment, Vertiv's primary competitors are industrial leaders like Eaton and Schneider. The companies like Huawei also have products and uninterruptible power supplies. Are they making different types of UPS products? Or is there technology or solution set not comparable enough to make the industry more price-competitive than it is?

Yes. So while Eaton and Schneider -- and we like the fact that they're of a division of a large corporation because we think speed is very important here. So we like our position where we're at. Being a solely focused infrastructure provider allows me and Dave to move real quickly on decision-making process and getting things done, not having to fight for another divisions dollars. When it comes to Huawei, Huawei is in a lot of things, right? They're in -- one of the best things they did for us was they got into the cloud space in China, which certainly turned off some of the cloud providers there. Huawei has been an innovative company, but they're focused on everything from cloud to cell phones, to radio gear for 5G, to infrastructure. And yes, they've made some creative solutions there, and they're wanting to keep an eye on as we go forward. But we operate in China, and we compete against Huawei every day. And one of the things that makes us stronger competitor globally is we have something like Huawei that we do compete with, and we do win and it isn't on price. It's on innovative solutions. So we welcome that type of competition because it's going to push us and drive us to be that more -- that much more innovative and hungry as we go forward. So I -- yes, I look at it and say, from a solution set base, still, there's nobody that has that global manufacturing footprint. And the thing that probably I would say Huawei would be missing that we have in still this years of knowledge, the service side, the installation side, we have the largest service organization on the globe in the critical infrastructure space. And that's a real -- that's really important because it's not just about the product, it's about that product is going to have an issue or that product is going to need to be maintained. And we do that in over 130 countries. So from a footprint's perspective, nobody has what we have.

Mark, the other thing I would add here, and Rob can add more color to it, but you've probably noticed, we have a very good China presence with Vertiv. And 20 or 30 years ago, somewhere in there, we began that China presence with the acquisition of Huawei's business. So we are very much viewed as a Chinese company in China, which is exactly what you want to be.

Yes. Yes. Absolutely. We've been manufacturing, engineering, servicing, selling in China for a long while, and our roots come from a Huawei spinout. And so we will feel real comfortable with whether it's state-owned entities or whatever that they view us and look at us as very much Chinese when it comes to how we take care of them to support them and develop products for the in-country, for country.

That's very helpful. On the 1Q '20 earnings call, the company spoke about certain end markets that were seeing higher demand from our work-from-home economy and others like the channel business that were softer. Orders in the first quarter were up 13% year-on-year. In aggregate, do you think end demand is higher or lower for Vertiv products in the current environment?

So the way I'd look at this, and I would look at it, really look at the verticals that we participate in. Certainly, the end demand in the colo and hyperscale, we lump those together because the hyperscale companies use colocation in various parts of the world, depending on where they're building out, and then when they need to go faster, do a lot more briefing and building themselves. So I'd say that end market certainly has accelerated. And I don't think it's a temporary thing because I believe that the change in this work-from-home has really driven a new way of thinking, and you hear a lot of CEOs talking about how they're going to go back to the office. I hate to say go back to work because all the employees are working now, but how are they going to go back to the office. And I think the environment is going to change, and it will continue to drive that capacity. And as far as we can see with our funnels and pipeline, that vertical is going to be good. The telecommunications vertical, it's no secret. China has announced massive spend in the area of getting 5G and being a world leader in 5G. We will participate in that. They've also stimulus builds around data center build. We'll see that. So I would say colo and hyperscale, telecommunications globally, those are verticals. As you know, the entertainment industry and travel has been hit really hard. So we're not sure how that's going to recover and what that will look like. And I would say the channel side, as we've seen now represented in China, and China has gone through a cycle. They were in it early, and we're watching how they come out, and we're beginning to see the enterprise pick back up again, the channel business pick back up again there. So it's a matter of -- it's not going away. It's just going to take time. And who knows? With COVID and things changing and each state doing their own thing, once we get back to normalcy, I think we'll see that share gain that we had talked about that we're going after through innovation in the channel come back to life. We certainly have delivered the products, and now we just need this COVID take the pass, and we'll continue attacking that channel globally.

That's helpful. Backlog was a record high for Vertiv exiting 1Q. How long does it normally take for backlog to convert into shipments?

Yes. It's a great question. Typically, what we say is anywhere from 9 to 15 months with a lot of it, I would say, a fair amount depending on whether the projects -- 6 months. Now I want to caveat that because what has happened in this time is getting site access or having our factories online to be able to produce the product, and it changes daily. I'm telling you, it's a war out there. It changes daily as local governments decide what the rules are and the supply base that we have and then access to the sites, the certain sites, give the example, Singapore shut down now, and Singapore is a big data center hub. They need building going on there, but they're closed at least until June 1. So a combination of us having factories, supply chain, Tier 1, Tier 2 suppliers for us and then access to the sites will really determine how we eat into that backlog and what that looks like. What I can say is that backlog is firm. It's always been firm. Most of our orders are under a contract or not prepaid, but penalties for cancellations. So I've seen the orders that have come in and the quality of the companies that are placing those orders. And I feel real confident that we haven't seen cancellations or anything like that. I think it's going to be quite the opposite. It's going to be when the market opens up. Is there enough capacity around the trade, electrical workers and contractors to be able to get this pent-up demand taken care of. But right now, we just can't predict what the future brings until we all get through this COVID thing.

Rob, you mentioned Singapore and some challenges there. Were you referring to a Vertiv site that's down in Singapore? Or are you referring to there's customers in Singapore that are having trouble servicing?

No. I'm just referring to Singapore as a country. They're in lockdown mode. So there's no construction. Things aren't happening, data center builds and then put on hold. So in general, not just for Vertiv, for the industry. And that's happening in hotspots all over the world, whether it's Russia today or whether it's Africa. This is a living, breathing thing that me and my management team and Dave, we work through every day. And I would tell you the status changes, getting workers to the factory, the rules in which the local governments require. So this is not something that's just specific to Vertiv. It's for the entire kind of industrial space. We see our -- those competitors or other industrial companies experiencing the same thing and having to deal with this on a real-time basis.

Okay. I'd like to dig in more there, but just in the interest of time, I'll move on to the next question. On the earnings call, Vertiv described a scenario. And to be clear, it's not your base case view. But the company talked about a scenario where revenue is down roughly 10% year-on-year in 2020. The EBITDA dollars are still around $500 million. Can you discuss what the assumptions are on cost reductions and margins in that scenario?

Sure. So again, as you said, that's not our worst-case, base-case. What we were trying to do is give an example of something that gives the investors confidence that in the scenario like that, we're still okay. We're actually really good. And we're still producing and generating $500 million in EBITDA. And our liquidity is very strong at that point. We have, as we've mentioned on the call, we've taken about $60 million in actions. And those actions are above and beyond the levers that Dave and I are talking about as it relates to the long-term 1,500 basis points. These are actions that are near term that will help us in 2020. Some of it is carryover because there's some long-term things on discretionary spend side, T&E, things like that, that we won't let creep back end because we'll take advantage of what we've learned through COVID and how we can do business differently. We do have things that we've talked about. We've practiced and took Dave Cote's playbook early on, take a look at things like furloughs and utilizing those rather than layoffs because we know our business is going to come back. It's going to come back stronger, and we don't want to have to go rehire all those people and our employees. Really take them for understanding and participating and willing to go through that. We haven't done that before. So we have additional levers on discretionary spend that we would use and pull if we needed to. Additional furloughs, if it was necessary. And we just feel -- we feel confident that in that particular scenario, we're going to be just fine. We've even modeled worse than that, not that we expect that to happen, but we're in a real good position from a liquidity perspective.

That's helpful. I'm going to go to some of the questions we've got in over the webcast. And if anyone else wants to submit one, please go ahead, although we have several already that have come in. We've gotten a couple around cash flow. And maybe I can combine a couple of the different investor questions on these topics. So maybe part 1 of the cash flow question, the company built some working capital and inventory in the first quarter. Can you just talk about how the company is planning to manage working capital going forward? And then the second cash flow question, just to talk about the company's priorities for use of cash.

Sure. So yes, there was a build in inventory and we do -- throughout the year, you'll see cycles where we will build inventory. We typically -- the first part of the quarter, we're building because the second part of the -- last month in the quarter is usually our biggest, and that's not atypical of kind of any industrial. As we think of the use of cash for this year is things that are necessary, things around capital expenditures. Those are areas that we can decide not to spend if we don't have to. So again, plenty of levers there as it relates to driving the free cash flow. I think at the beginning of the year, we stated and talked about an annual cash flow number run rate of a 285. And when you take the adjustments out for the SPAC and the cost of the transaction, the refinancing and the other onetime costs, you get down to about $140 million in free cash flow kind of pre-COVID. But we expect, and as we get back to normalcy, the 285 that we had talked about with no adjustments is dead on where we think ultimately will be there and then higher going into 2021. Dave Cote, any thoughts there?

No. I think you said it right. When it comes to application of cash or deployment of cash, our first priority is going to be to pay down our debt, and we're going to be very thoughtful about how we generate cash. We'll keep focusing on it. I love cash, as you know. I've always viewed it as cash gives you freedom, and we're going to be thoughtful about how we deploy.

We had another question that came in over the webcast. And the question is, under what set of circumstances will the Honeywell playbook not be successful for Vertiv?

That's interesting one. I think the businesses are different in many aspects. But fundamentally, the tools that we're using that Dave taught us and Honeywell has brought to us and Dave brought from Honeywell, we've operationalized those to be Vertiv specific. So quite honestly, I don't see a scenario where those tools don't work, where they don't make sense because there are fundamentally basic things that could be applied to anybody's business. So yes, I look at it as very useful tools. And I've used some of them in the past. They invest through the downturn and come out better on the top side. So I -- as a CEO, I look at it. I don't know, Dave, if you see any different, but I think they're applicable to Vertiv and many other companies.

Yes. I appreciate you answering first and give me the time to think about that one a little bit because, Mark, I got it missed, not what I thought of that way. And I agree with Rob, is these things are tools that you can use in any business, really. And you've heard me say in the past -- I mean one of my favorite lines is the trick is in the doing. Anybody looking at the stuff that we're talking about would say, well, yes, of course. Well, yes, of course, it's exactly what you do. And yes, that's obvious and say, okay, yes, all this stuff is obvious, but why are people so different in terms of how good a job they do with it. And the reason is the trick is in the doing. So it's the application of these tools. They're not industry specific. It's really just how you think about business. So no, actually, we've been -- I'd say, Rob and his team have done a really good job of grabbing every single one of these tools and starting to use them. So no. I don't see anything that would be excluded.

Great. Well, unfortunately, we are out of time. Dave, Rob, I'd like to thank you both for joining us for the webcast today. Investors, thanks for listening. And this will conclude the webcast.

Well, thank you very much, Mark, for having us.

Yes. We're good. Thanks, Mark, and thanks for letting me finish my cigar.

Thank you.