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spk02: Good afternoon and welcome to Apollo Investment Corporation's earnings conference call for period ended September 30th, 2021. At this time, all participants have been placed in listen-only mode. The call will be open for question and answer session following the speaker's prepared remarks. If you would like to ask a question at that time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, press the pound key. I will now turn the call over to Elizabeth Besson, Investor Relations Manager for Apollo Investment Corporation.
spk01: Thank you, Operator, and thank you, everyone, for joining us today. Speaking on today's call are Howard Widred, Chief Executive Officer, Tanner Powell, President and Chief Investment Officer, and Greg Hunt, Chief Financial Officer. I'd like to advise everyone that today's call and webcast are being recorded. Please note that they are the property of Apollo Investment Corporation and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our earnings press release. I'd also like to call your attention to the customary safe harbor disclosure in our press release regarding forward-looking information. Today's conference call and webcast may include forward-looking statements. You should refer to our most recent filings with the SEC for risks that apply to our business and that may adversely affect any forward-looking statements we make. We do not undertake to update our forward-looking statements or projections unless required by law. To obtain copies of our SEC filings, please visit our website at www.apolloic.com. I'd also like to remind everyone that we've posted a supplemental financial information package on our website, which contains information about the portfolio as well as the company's financial performance. At this time, I'd like to turn the call over to our Chief Executive Officer, Howard Wager.
spk05: Thanks, Elizabeth. Good afternoon, and thank you, everybody, for joining us today. I'll begin today's call by providing an update on our ongoing progress repositioning the portfolio, followed by a review of our results by the quarter. Following my remarks, Tanner will discuss the market environment, review our investment activity for the quarter, and provide an update on credit quality. Greg will then review our financial results in greater detail. We will then open the call to questions. During today's call, we will be referring to some of the slides in our investor presentation, which is posted on our website. Beginning with an update on our portfolio repositioning, We continue to successfully execute our strategy of increasing our exposure to first lien, floating rate corporate loans, and reducing our exposure to junior capital and non-core positions. We have constructed what we believe to be a well-diversified portfolio of high-quality senior corporate loans as evidenced by improving credit metrics, including lower leverage, lower attachment point, and higher interest coverage. Regarding our aircraft leasing portfolio company, we believe Merckx has successfully navigated this challenging period. As a result, AIMV earned more income from Merck's during the September quarter compared to recent quarters. Repayments during the quarter included the exit of two second lien investments. Post-quarter end, MC, one of our shipping investments, sold a vessel, which will result in a small pay down to AIMV in the December quarter. Moving to our results for the quarter, after market closed today, we reported net investment income for the September quarter of 33 cents per share, two cents above our quarterly base distribution of 31 cents. As mentioned on our last conference call, given the total return feature in our fee structure and the strong performance of our corporate lending portfolio, we resumed paying incentive fees during the quarter. Net investment income for the quarter reflects a full incentive fee. We ended the quarter with net asset value per share of $16.07, up 5 cents, or 0.3%, driven by our corporate lending portfolio, which continues to perform well, as well as the accretive impact of stock buybacks. Regarding investment activity, the Apollo Direct Origination Platform, which includes AI&V, was very active, closing $4.6 billion in new commitments during the quarter. AI&V's new investment commitments were strong, totaling $222 million, all first lien floating rate senior corporate loans. Given this solid level of activity, our investment portfolio grew, and our net leverage ratio increased to 1.51 times at the end of September, right in the middle of our target leverage range. We remain focused on increasing AI&V's earnings power. Let me discuss how we think about our baseline earnings and the embedded upside in our portfolio. First, as a result of the stability we expect to continue to see from Merckx, during the re-quarter we recast the capital structure and received $6.9 million of interest income from Merckx during the September quarter, $2.1 million more than last quarter. Second, although net leverage was 1.51 times at the end of the quarter, average leverage for the quarter was 1.46 times, a good baseline for projecting earnings going forward. Third, fee and prepayment income totaled $1.7 million for the quarter. Although these sources of income can fluctuate from quarter to quarter, we expect to generate approximately $3.5 million of fee and prepayment income per quarter on average. As an illustration, in the March 2021 and June 2021 quarters, fee and prepayment income totaled $3.9 million and $5.9 million, respectively. Conversely, although we earned a $2 million dividend from MC during the September quarter, we expect to earn approximately $1 million on average going forward, a level consistent with prior periods. Taking these items in aggregate would produce a baseline of approximately $0.34 per share. From that $0.34 baseline, there are a number of items we are focusing on to grow earnings in the near term. First, we continue to generate incremental cash proceeds from the portion of our non-core assets that are not generating income. For every $10 million of cash we generate from these non-income producing assets, we can generate approximately $650,000 of annual net investment income, or approximately one cent per share. In this regard, we have generated incremental cash each quarter and are very focused on executing some more significant progress in the coming quarters. Second, we continue to make progress with MERCs. Prior to COVID, MERCs generated a 13% return on average over a number of years. The current payment level, as recently adjusted this quarter, is approximately 9%. Although we don't expect to close this gap completely, we do believe that we can improve the return by either reducing capital in MERCs with the same gross dollar return or increasing the cash return by improving the capital structure. Third, we continue to focus on monetizing underyielding assets, specifically Spotted Hawk, Dynamic, MC, and Chiron. Taken together, these assets and a few others account for approximately $230 million of fair value and generate only $16 million of annual income. Redeploying those assets at our approximate all-year yield should generate an incremental $2 to $3 million of annual net investment income. And last, we continue to buy back our stock when the price dictates. We obviously hope these opportunities become more and more infrequent, but when they occur, the buybacks are both accretive to book value and moderately accretive to EPS. We believe these items provide additional support to our baseline earnings and also provide a path to generating the earnings above the baseline. Turning to our distribution for the quarter, the Board has declared a base distribution of $0.31 per share and a supplemental distribution of $0.05 per share. Both distributions are payable on January 6, 2022 to shareholders as of record on December 20, 2021. I'd like to remind everyone that as we've indicated previously, we intend to declare a quarterly base distribution of $0.31 per share and a quarterly supplemental distribution of $0.05 per share for at least one more quarter. With that, I will turn the call over to Tanner to discuss the market environment and our investment activity. Thanks, Howard.
spk07: Beginning with the market environment, the broader market sentiment remains mostly positive with the continued rollout of the vaccine and the reopening of the economy. While the post-pandemic recovery continues, concerns about inflation due to supply chain problems, higher energy prices, and labor shortages could create periods of volatility. Specific to our business, competition for attractive middle market loans remains intense, as the syndicated loan market and private credit providers buy for new opportunities, particularly as private credit providers make increasingly larger commitments. As a result, terms and covenants are becoming increasingly borrow-friendly. That said, we continue to see more companies finance through private credit. Moving to AI&B's investment activity, new corporate lending commitments for the quarter totaled $222 million across 18 companies for an average new commitment of $12.3 million. Eighty-eight percent of the new commitments were leveraged lending, five lender finance, five asset-based, and two percent life sciences. Consistent with our strategy, all new commitments were first lien floating rate loans with a weighted average spread of 613 basis points and a weighted average net leverage of 4.4 times, and 95 percent were made pursuant to our co-investment order. Gross fundings for the quarter totaled $211 million, excluding revolvers. Sales and repayments totaled $107 million, excluding revolvers. The strength in the market enabled us to continue to reduce our exposure to second liens. During the quarter, repayments included $35 million of second liens, including the full exit of two positions. Net fundings for revolvers totaled $10 million. In aggregate, net fundings for the quarter were $114 million. Moving to Merckx, the overall air traffic environment appears to be improving, particularly in the U.S. We are optimistic that the demand for air traffic will continue to grow, with the ongoing rollout of the vaccine and the lifting of travel restrictions. Furthermore, the aircraft leasing market will continue to be an important and growing percentage of the world fleet, as airlines will increasingly look at third-party balance sheets to finance their operating assets. Specific to our investment, as Howard mentioned, we believe Merckx has successfully navigated the significant disruption caused by the COVID-19 pandemic. The level of lease revenue generated from our fleet has stabilized. We have worked through our exposure to airlines that have undergone restructurings. We have been able to remarket aircraft during the period with long-term leases or sales. And Merck's continues to benefit from a growing servicing business, which has increased in value over time. Given the stabilization of Merck's during the quarter, we recast $84.5 million of Merck's equity into debt, and as Howard mentioned, AINB received $6.9 million of interest income from Merck's during the September quarter, $2.1 million more than last quarter. Merck's remains focused on remarketing aircraft that are due to come off lease via extensions with existing lessees, releasing to other airlines on long-term leases or sales. During the September quarter, Merck's sold two aircraft and signed lease extensions for six aircraft. Our lease maturity schedule is well staggered. We believe Merck's portfolio compares favorably with other major lessors in terms of asset, geography, age, maturity, and lessee diversification. Merck's portfolio is skewed towards the most widely used types of aircraft, which means demand for Merckx's fleet is anticipated to be resilient. Merckx's fleet primarily consists of narrow-body aircraft serving both U.S. and foreign markets. The Apollo Aviation Platform will continue to seek to opportunistically deploy capital. To be clear, Merckx is focused on its existing portfolio and is not seeking to materially grow its balance sheet portfolio. However, growth in the overall Apollo aviation platform will inure to the benefit of Merckx as the exclusive servicer for aircraft owned by other Apollo funds. Turning to the overall AI&D portfolio, our investment portfolio had a fair value of $2.61 billion at the end of September across 144 companies and 26 different industries. We ended the quarter with core assets representing 93% of the portfolio and non-core assets representing 7%. First lien assets represented 92% of the corporate lending portfolio, up from 90% last quarter. At the end of September, the weighted average spread on the corporate lending portfolio was 602 basis points. As a reminder, the weighted average LIBOR floor on our floating rate investments is approximately 1%, well above today's current LIBOR. As Howard mentioned, we continue to see ongoing improvement in our credit metrics as we reposition the portfolio. The weighted average net leverage of the corporate lending portfolio declined to 5.1 times, down from 5.22 times last quarter. The weighted average attachment point declined to 0.3 times, down from 0.4 times last quarter. Our low attachment point is a clear indication of the seniority of our corporate lending portfolio compared to loans which are classified as senior but have much deeper attachment points. the weighted average interest coverage improved to three times up from 2.9 times last quarter. The improvement in these metrics, not just this quarter, but over the last several quarters, clearly demonstrate the improved quality of our investment portfolio. Investments made pursuant to our co-investment order represent 84% of the corporate lending portfolio at the end of the quarter. Although overall quality of our portfolio remains strong, our second lean position in sequential brands was placed on non-accrual status during the quarter. Squitchell Brands owns, manages, and licenses a portfolio of consumer brands in the active and lifestyle categories. The company filed for Chapter 11 bankruptcy in August and is seeking an orderly liquidation of the brands in its portfolio. Our second lien position was marked at 91 at the end of September compared to 82 at the end of June. The mark at the end of September reflects the liquidation process and the resolution of our current position, which is expected to occur in the December quarter. At the end of September, investments on non-accrual status totaled $28 million, or 1.1% of the total portfolio at fair value. During the quarter, Spotted Hawk completed a restructuring of its balance sheet. Our second lien position, tranche A, was converted to equity, and our third lien position, tranche B, was canceled. Both of these positions were previously on non-accrual status. The valuation of our investment in Spotted Hawk was not impacted by this restructuring. With that, I will now turn the call over to Greg, who will discuss the financial performance for the quarter.
spk06: Thank you, Tanner, and good afternoon, everyone. Beginning with AI&V's statement of operations, total investment income was $52.9 million for the quarter, up 4.6% quarter over quarter, reflecting higher interest income and higher dividend income, partially offset by a decline in prepayment and fee income. The quarter-over-quarter increase in interest income was attributable to higher earnings from Merck's as well as a larger average investment portfolio. Dividend income was $2.7 million for the quarter, an increase of $2.3 million driven by a dividend from MC, one of our shipping investments. The income was $1 million compared to $1.2 million last quarter. Prepayment income was $700,000. down from 4.1 million last quarter, which is below normal levels. As Howard mentioned, fee and prepayment income can fluctuate quarter over quarter, but we expect to generate approximately 3.5 million of fee and prepayment income per quarter on average. The weighted average yield at cost of our corporate lending portfolio was 7.6 percent at the end of September, down from 7.7 percent last quarter. The weighted average spread of our corporate lending portfolio declined from 616 basis points to 602 basis points. Decline in yield and spread reflects the continued shift of the portfolio into first lien investments and away from second lien investments. Expenses for the quarter were $31.7 million, an increase of $6.5 million quarter-over-quarter driven by our incentive fee as well as slightly higher interest expense. Prior to the September quarter, AINV had not paid any incentive fee since the quarter ended December 2019. As a reminder, AINV's incentive fee on income includes a total return hurdle with a rolling 12-quarter look-back given the reversal of unrealized losses during the look-back period, the manager earned a full 20 percent incentive during the quarter. The total return requirement closely aligns the incentives of our manager with the interest of our shareholders. In addition, during the quarter, AINV received a slight fee offset from our navigator fund, one, which is Apollo's flagship commercial aircraft leasing fund. Not only does Merck receive income from servicing aircraft in this fund, AI&V benefits from a direct fee offset equal to 20% of fees earned by Apollo Global in connection with managing aviation assets for Apollo, including Navigator. The increase in interest expense reflects both the growth in the portfolio as well as an increase in our funding costs. As a reminder, in July, we issued $125 million of five-year, 4.5% unsecured notes, which drove the increase in our weighted average cost of funding from 3.08% to 3.2%, quarter over quarter. Importantly, unsecured debt increased to 30% of our outstanding debt at the end of September, up from 24 percent last quarter. Net investment income per share for the September quarter was 33 cents. Net leverage at the end of September was 1.51 times, up from 1.39 times at the end of June. And our average net leverage for the September quarter was 1.46 times. On page 16 in the earnings supplement, We disclosed the net gains or losses by strategy over the past five quarters. As Howard mentioned, our corporate lending portfolio continues to perform well. During the September quarter, our corporate lending portfolio had a gain of $5 million or $0.08 per share, partially offset by $1.3 million or $0.02 per share on non-core and legacy assets. The net loss on non-core and legacy assets reflects net losses on oil and gas, renewables, and shipping investments partially offset by a gain on carbon-free and legacy investments. Regarding carbon-free, as a reminder, our investment in carbon-free consists of an investment in the company's proprietary carbon capture technologies and an investment in the company's chemical plant. Carbon-free is benefiting from strong interest in carbon capture, utilization, and storage as part of broader ESG trends. We believe carbon-free is a leader in this space, as evidenced by partnerships announced during the quarter, which demonstrate market acceptance for its technology. NAV per share at the end of September was $16.07, a 5-cent increase quarter over quarter. The 5-cent increase is attributable to a $0.06 per share gain on the portfolio, $0.02 from buybacks, partially offset by $0.03 from the distribution in excess of net investment income. Regarding liquidity, given the continued improvement in the quality of our investment portfolio and our recent unsecured debt issuance, our liquidity position continues to strengthen. Moving to stock buybacks, during the quarter, AINV purchased 450,953 shares at an average price of $13.09 for a total cost of $5.9 million. Since the end of the quarter, AI&V has purchased an additional 308,000 shares at an average price of $13.30 for a total cost of $4.1 million, leaving $14.9 million of authorized authorization for future purchases under the Board's current authorization. This concludes our remarks. And operator, please open the call to questions.
spk02: At this time, if you would like to ask a question, please press the star and 1 on your touchtone telephone. You may remove yourself from the queue at any time by pressing the pound key. Once again, if you would like to ask a question today, please press star and 1. And we'll take our first question today from Kyle Joseph with Jefferies. Your line is open.
spk08: Hey, good afternoon. Thanks for taking my questions. Just want to make sure I got the moving parts on non-accruals. So Spotted Hawk came off and sequential was added. That was the only movement in terms of non-accruals? Yeah, yes. And then, you know, how are you guys thinking about credit at this point? You know, obviously we're You know, knock on wood, kind of through the pandemic at this point, but, you know, obviously there's some inflationary pressures and wage pressures. You know, what's the biggest risk economically you guys are thinking about as you're deploying capital?
spk05: Well, I mean, right now, you know, the – The performance has been great, right? And so that's terrific, sort of shows in the sort of the corporate debt portfolio. But it also means, right, there's nowhere to go but down from there, right? And so, you know, if you think like through cycles and part of that, like you mentioned a few of the things, inflation, wage pressure, supply chain constraints. And so, obviously, like, as we've talked about over an extended period of time, the best defense to that is sort of granularity and diversity so that, like, any of these risks don't expose you across the portfolio. We're, of course, looking at sort of, for example, supply chain constraints and how they affect individual borrowers and might impact them. and feel relatively comfortable where we are in the capital structure, that in and of itself is not a tremendous risk to our portfolio. But it's sort of like the combination of all of these pressures combined with a very aggressive debt market, which you know, means you have to, you know, retain your humility. And not everyone in the market is, and so that's a concern. You know, again, it's why we've always said, like, that one of the key aspects is to have a very wide funnel, you know, have a diversity of products, and be able to be as selective as you can be in a market like this. So I know I didn't give you like a specific answer, but that's really, it's a very benign environment this minute, but you can see all sorts of things that could potentially come your way. So, you know, we take portfolio construction very seriously. And then on individual credits, try to look out at these specific risks we see coming to see how they can absorb them.
spk08: Got it. Well, it's been very helpful. Appreciate it. One follow-up for me, you know, repayments have been, I don't know, for lack of a better term, lower than feared, I'd say, for not just you guys, but, you know, what are your thoughts there? You talked about how active the debt markets have been and are, and I know it's hard to predict, but just give us a sense for how you see repayments trending over the remainder of the year.
spk05: Yeah, I mean, repayments in the, you know, the first two quarters of the year were really high, right? And so you saw, as we mentioned, our fee income, you saw that everywhere, and that, it just sort of seemed to sort of all of the low and medium-hanging fruit had sort of dissipated on repayments, yet new issuance was high, and so you saw that this quarter. I think you'll see in the December quarter some return to maybe not the levels it was in the beginning of the year, but sort of a return back to some normalized levels of repayments. There was a real sense, I think, in September of people thinking that there was a major tax change coming. It was going to drive behavior. So that would drive sales. So it would drive new business and payoffs. I think, obviously, that's changed some and sort of changes some people's focus. But end of the year still always drives a bunch of activity. So that's both on the repayment side and the new deal side. So I think it will pick back up to normalized levels in the fourth quarter.
spk07: Yeah, I would add to Howard's comments and the overall takeaways are still the same. If I would hazard one guess for maybe why across our space, maybe it's seen a little bit less despite record M&A volume. Is there some auto correlation, Kyle, to the type of companies that that want a private debt solution. And because of that, you see less of our companies graduating. And more specifically, those type of companies that need heavy delay draws are active in their own M&A pipelines within the companies. And as a result, the private credit players, and this kind of goes to power of accumbency, which we beat the drum on within our institution. I know others do the same. you see a longer duration on those assets and maybe on the margin perhaps less of the syndicated markets really, really hot, and we're seeing, as you might have seen in the past, and names that graduate and leave our market and go to the syndicated market. Maybe that's happening a little bit less on the margin. But overall, would echo what Howard was saying as well.
spk08: Appreciate the call, and thanks for answering my questions.
spk02: And we will move next to Melissa Waddell with JP Morgan. Your line is open.
spk03: Melissa Waddell Thank you. I appreciate you taking my question. I'm curious how or whether really there has been any conversation amongst the board and the management team about any fee waivers in the context of NII not covering the dividend?
spk05: I mean, what we've been focused on with the board is the same thing we've focused on in these calls is, you know, effectively establishing with like a very sort of, you know, hopefully like a tight band of certainty or long-term earnings power. So we try to go through that and set that up. And then once that's set up, I think sort of obviously, you know, the major expense for all BDCs is the manager, you know, fees, and that has to basically, you know, take into account how we deliver on that and what the return the investors have. So the answer is, you know, it's always there, sometimes in the foreground, sometimes in the background. But right now, you know, it's let's deliver on, you know, where we think we can deliver, and then we can assess what's appropriate there, given what our portfolio is and what the yield is.
spk03: Okay. One follow-up question. Sort of on that point, you've talked about a few of the areas where you believe you can rotate some assets and sort of boost the baseline earnings power of the portfolio. One of the things we recognize is that the timing of that portfolio rotation can be uncertain and it's not always entirely within the manager's control. Can you talk us through how you're assessing that timeline for rotation? Thanks so much.
spk05: Yeah, we're approaching it very aggressively right now. You know, we have, you know, talked a long time about sort of working that portfolio down, and we did from a very high number, but it's been sort of, you know, dribs and drabs over the past whatever, you know, year or 18 months. And now we're very focused both because the market is welcoming, there's some positive tailwinds on some of these investments, and because we feel like the corporate portfolio is so strong and steady that it needs to sort of have its opportunity to shine, if you will. So the answer is, you're right, we can't say definitively what's going to happen with illiquid positions, but we think that there is a pathway for all of our illiquid positions to to be able to do something sort of strategic, whether that fully monetizes them or partially does, we're very focused on the next, you know, within the next year to have something strategic done with all of them. And, you know, and hopefully that will happen linearly, not like meeting, you know, some each quarter, some each, you know, but we're very focused to have that sort of done and completed so we can sort of, tell what we've always thought is the core story of this without any other noise. And Melissa, actually, that really goes to your other question. It's like, well, how do you look at the fees? Well, the fees and the appropriate level of the fees will depend on what sort of the solid clean portfolio looks like and what its yield is and what it's delivering to the shareholders. And so we need to sort of prove the nav of these investments and make them earn the right return.
spk00: Thank you.
spk02: And as a reminder, if you would like to ask a question today, please press the star and one on your touchtone telephone. We will go next to Robert Dodd with Raymond James. Your line is open.
spk04: Thanks. Good afternoon. On Merck's, if I can, I mean, obviously this quarter you recast, reallocated, moved some of the equity to debt. At the margin, would it be your preference to do that kind of going forward to rotate more of the remaining equity into debt and get up the ROIC over the total committed capital that way? Or I mean, obviously, you could reduce the amount as well. I mean, you talked about that. Or should we expect dividend income from Merck so that the equity might stay the same and you just collect, you know, the excess cash flow or earnings from Merck and that would flow to maybe dividend income? Or would you prefer to convert it essentially to interest income?
spk07: Yeah, thanks, Robert. Thanks for the question. And I appreciate there is some complexity here. As a reminder, this is our investment in the business. And on the margin, as you asked the question, Robert, our preference would be to characterize it as debt. It creates more predictability. It takes away what is, as I acknowledged, a complex investment, or at least characterization of investment, and makes it a little bit less complex. And so On the margin, we would prefer to do – to characterize it as debt. You know, I would also state that it would – and you would hopefully expect us to do this as well. We would only be doing that to the extent that we had the confidence that we could support it. So that would obviously be the counter to that or how we balance that decision-making process within the management team. Okay.
spk04: Understood. I appreciate that. One more if I can. On the broader corporate lending platform, obviously Apollo's now got the debt solutions product that's about to launch, which could have a large pool of capital behind it. I mean, I presume obviously the plan would be to co-invest. And do you think the launch of that product or where that product is, say, a year from now, Do you think that would have any impact on the available or not necessarily even available, but target bite sizes for the AINV BDCs?
spk05: No, good question. But no, I'd say two things. First of all, the core strategy of that vehicle is to do sort of like the, you know, the large market origination, which you've seen some deals, you know, Apollo and, you know, billion and a half, $2 billion sort of proprietary origination where they take a portion of those deals. That, you know, to do that and whatever sort of other bespoke really large origination is done. And then a smaller portion of that vehicle would potentially overlap with, you know, what we're doing in sort of our base origination. So we do expect there to be some co-investing, but not a huge amount of co-investing. By the same token, you know, for us, we don't expect to take part in their deals unless we feel like they're particularly, you know, aligned with what our strategy overall is. The fact that that vehicle will, you know, will raise capital and grow should be helpful to our overall origination effort because, you know, like everybody else in our market, you know, the key to originating is having scale. We have quite a bit of scale. That's why we're able to originate. But, you know, it's like, you know, you always need more. There's like an arms race. And so having a vehicle like this with permanent capital that has appetite for the deals and actually has appetite for the deals on the larger end of our spectrum, you know, because that fits their strategy, is also where we need more capital, obviously, because those are bigger deals. And so we do not expect it to affect AIMV's bite size, and that's because AIMV gets its full bite size on all these deals. It doesn't get cut back. You know, there's always enough. And so it's always about having more, you know, capital than it is the asset. So we don't expect it. Now, if it became a $40 billion, you know, vehicle, would my answer start to change? Maybe. But it's only going to become a $40 billion vehicle if it does a lot of those large deals anyway. So hopefully that answers the question.
spk04: It does. I appreciate that, Howard. Thank you.
spk02: And I'm showing that we have no further questions at this time. I'll turn the call back to management for any closing remarks.
spk05: Great. Thank you. And thanks, everybody, for listening today. And we want to thank you again for signing on. And feel free to reach out with any questions you have. Thanks. Bye.
spk02: This does conclude today's program. Thank you for your participation. You may disconnect at any time.
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