Concrete Pumping Holdings, Inc.

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Concrete Pumping Holdings financial results for the third quarter ended July 31, 2022. Joining us today are Concrete Pumping Holdings CEO, Bruce Young, CFO, Ian Humphreys, and the company's External Director of Investor Relations, Cody Slock. Before we begin, I would like to turn the call over to Mr. Slock to read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

Thanks, Diego. I'd like to remind everyone that in the course of this call, to give you a better understanding of our operations, we will be making certain forward-looking statements regarding our business and outlook. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see Concrete Pumping Holdings Annual Report on Form 10-K, Quarterly Report on 10-Q, and other publicly available filings with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. On today's call, we will also reference certain non-GAAP financial measures, including adjusted EBITDA, net debt, and free cash flow, which we believe provide useful information for investors. We provide further information about these non-GAAP financial measures and reconciliations to the comparable GAAP measures in our press release issued today or the investor presentation posted on the company's website. I'd like to remind everyone this call will be available for replay later this evening. A webcast replay will also be available via the link provided in today's press release, as well as on the company's website. Additionally, we have posted an updated investor presentation to the company's website. Now, I'd like to turn the call over to the CEO of Concrete Pumping Holdings, Bruce Young. Bruce?

Thank you, Cody, and good afternoon, everyone. Our third quarter marks our fourth consecutive quarter of double digit consolidated revenue growth, which is a testament to the strength and resilience of our business. We also reported double digit growth across all of our segments, reflecting continued organic market share gains and contributions from recent accretive acquisitions. By reporting segment, revenue in our U.S. pumping business increased 33% in the third quarter, driven by our recent strategic acquisitions, strong share growth, in our commercial and market rate increases and pent-up industry demand brought about by the pandemic recovery. Of note, all project types within our commercial market experience demand, which underscores the strength of our team and the end market's recovery. In infrastructure, we continue to benefit from our growing national footprint that allows us to capture increased funding in public project investments. We will continue to work to win projects at the state and local levels and we are encouraged by the passage of the Infrastructure Investment and Jobs Act. While we do not assume any meaningful benefit from the passage in fiscal 2022, we remain well positioned in 2023 and beyond. At this moment, the magnitude of the bill's benefit to our business today remains tough to quantify. Our residential business was relatively stable in the quarter given the structural supply-demand imbalance that continues to unwind. We recognize that there are some negative headlines coming from the residential housing industry, but it is important to note that the majority of our residential work resides in the Mountain States and in Texas. So far, these areas have performed relatively well for our business. For example, as a percentage of our total revenue, our residential work volumes traded 100 basis points with growth in our commercial market in the quarter, which carries the added benefit of higher margins compared to other end markets. This shift in revenue by end market underscores the benefits of diversity and durability of our high service value. In our UK segment, in spite of foreign exchange headwinds, revenue increased 14% compared to the prior year quarter due to organic growth, given the country's continued strong recovery from the impacts of COVID-19. Our team continues to secure energy, road, and rail projects in addition to the work we have previously announced with the Concrete Intensive High-Speed Railway Project, HS2, which is expected to last beyond 2030. In Ecopan, our concrete waste management business, revenue continues significant organic growth with an increase of 26% for the quarter due to an improved sales approach and our team's ability to execute more in-person selling. We continue to expand our Ecopan sales team in 2022 to strengthen our position for long-term growth. Going forward, we continue to expect to maintain Ecopan's double-digit organic revenue growth. We also continue to execute upon our organic M&A growth strategies. In late July, we undertook an expansive strategy along with the U.S. East Coast starting with an organic greenfield expansion opportunity in Washington, D.C., an area that has experienced rapid growth that we expect to continue. Subsequent to the quarter end, in August we strengthened our U.S. East Coast expansion strategy with the creative acquisition of Coastal Carolina Pumping. We're excited to welcome the talented Coastal team to our concrete pumping holdings family and they bring with them the largest concrete pumping service in the Carolinas with 89 units of operating equipment. We expect our East Coast strategy which includes acquisition of Coastal, our greenfield in D.C., and Ecopan Synergies to generate approximately $25 million of revenue in fiscal year 2023 with similar margins as our existing business segments. We acquired Coastal for $31 million, which we funded from existing debt and a strong free cash flow. From a financial perspective, Coastal brings all of the same value creation characteristics of previous acquisitions, such as purchasing power, economies of scale, improved utilization, and price optimization. At an average fleet age of five years, Coastal also brings a young fleet that we can use to offset future capex spend. Strategically, the acquisition checks all the boxes well. Coastal enhances our position of scale, most notably in North Carolina, South Carolina, and the Florida regions. The operational capacity enhanced is expected to provide Brundage Bone and Coastal customers with advantages like increased service offering and expanded fleet availability. Additionally, the acquisition offers a compelling opportunity for Coastal's customer base to access our Ecopan concrete waste removal services. We also plan to leverage the location of these existing Coastal customers to strengthen our recent DC greenfield expansion strategy. Shifting to the cost side of the business, as was the case last quarter, rapid inflation particularly in diesel fuel, continue to impact year-over-year gross margin comparisons. Despite this headwind, our team continued to execute the recalibration of our rates. To put the headwind into perspective, we experienced slightly more than $3 million of year-over-year increase in diesel fuel costs in our third quarter, or approximately $7 million in the first three quarters of the 2022 fiscal year. In spite of the significant cost headwind, we believe we have largely offset these costs through our rate recalibration and our margin dollars are in line with our expectations if we remove the inflationary headwinds. As a result, we continue to realize the expected equipment return on investment for the same volume of work performed. So in summary, we had another great quarter that continues to show the strength and resilience of our business. I will let Ian walk through more detail on our financial results before I return to provide some concluding remarks. Ian?

Thanks, Bruce, and good afternoon, everyone. We are pleased to report that revenue increased by 29% to $104.5 million compared to $80.8 million in the same year-ago quarter. The double-digit revenue improvement was driven by a combination of volume growth from our recent acquisitions, solid organic growth, and continued improvement in pricing. Revenue in our U.S. concrete pumping segment, mostly operating under the Brandeis Bowen brand, increased 33% to $77.4 million compared to $58 million in the same year-ago quarter. Excluding the acquisitions of Hitech and Pioneer, organic revenue growth for the quarter increased 21% to $70.2 million. This was driven by improvement in many of our U.S. markets due to higher construction volumes and continued pricing improvements. For our UK operations, operating largely under the Camford brand, revenue improved 14% to 14.4 million, compared to 12.7 million in the same year-ago quarter. When excluding the foreign exchange translation effects from the weakening British pound, revenue for the UK operations increased by 28% in the third quarter. The year-over-year revenue improvement was primarily due to organic volume growth from the region's continued recovery from the impact of COVID-19, and continued pricing improvements. Revenue in our U.S. Concrete Waste Management Services segment operating under the Ecopan brand increased 26% to $12.8 million in the third quarter of 2022, compared to $10.1 million in the same year-ago quarter. The revenue increase was driven by organic growth in pan pickup volume, continued pricing improvements, and the ongoing recovery from the impacts of the pandemic. Returning to our consolidated results, Gross margin in the third quarter was 41.5% compared to 46.1% in the same year-ago quarter. The decrease in margin is directly related to inflationary pressures, particularly related to the continued rapid diesel fuel price escalation that Bruce discussed earlier. To give an order of magnitude of the material impact of these inflationary pressures versus Q3 of last year, we estimate our gross margin in the third quarter was impacted by more than $3 million or approximately 330 basis points due to the higher cost of diesel fuel. Year-to-date, we estimate the diesel fuel impact was approximately $7 million or 250 basis points. General and administrative expenses in Q3 were $27.2 million compared to $24.9 million in the same year-ago quarter. Lower amortization cost of intangibles and lower stock-based compensation expense was more than offset by overhead headcount cost increases from recent acquisitions and a $2 million increase due to the foreign exchange fluctuations. As a percentage of revenue, however, G&A costs in the third quarter improved from 30.9% to 26.1% when compared to the same year-ago quarter. Net income available to common shareholders in the third quarter increased to $14.1 million or $0.24 per diluted share compared to $4.1 million or $0.07 per diluted share in the same year-ago quarter. The improvement was due to the strong contribution from acquisitions and organic revenue as well as an approximate $7.4 million gain from the change in fair value of outstanding warrants this quarter versus Q3 of last year where we recorded a $260,000 gain. Excluding the impacts of the change in fair value of outstanding warrants in each comparable period, net income increased in the third quarter to $6.6 million from $3.8 million last year. or an improvement of approximately 74% year over year. Consolidated adjusted EBITDA in the third quarter increased 15% to 32.6 million compared to 28.5 million in the same year-ago quarter. Adjusted EBITDA margin was 31.2% compared to 35.2% in the same year-ago quarter. As discussed previously, the erosion margin was driven by rapid cost inflation, predominantly in diesel fuel. In our U.S. concrete pumping business, adjusted EBITDA improved 21% to $22.4 million compared to $18.4 million in the same year-ago quarter, driven by our strong revenue growth. In our U.K. business, adjusted EBITDA was $3.9 million compared to $4.1 million in the same year-ago quarter, as strong revenue growth was offset by significant inflationary pressures, primarily in diesel fuel costs. For our U.S. concrete waste management business, adjusted EBITDA improved 6% to $5.7 million compared to $5.3 million in the same year-ago quarter. Turning to liquidity, at 31 July 2022, we had two total debt outstanding of $392 million, or net debt of $389 million. We had approximately $134.1 million in liquidity as of July 31, 2022, which includes cash on the balance sheet and availability from our recently upsized ABL facility. As announced in late July, we added JPMorgan Chase to join Wells Fargo in our ABL facility and upsized ABL to provide up to $160 million of commitments from $125 million previously. We remain in a strong liquidity position, which provides further optionality to pursue value-added investment opportunities like a creative M&A, or the reduction of our fleet age to support our overall long-term growth strategy. During the third quarter, we entered into a share repurchase program that authorized the buyback of up to $10 million of our outstanding shares of common stock. To date, we have purchased approximately 63,000 shares for $380,000, and the buyback program demonstrates both our commitment to delivering value to shareholders and our confidence in our strategic growth plan. Given our strong revenue performance and recent acquisitions, we are pleased to be raising our revenue outlook. We now expect fiscal year 2022 revenue to range between $380 and $390 million, which is an increase from our previous revenue range of $360 to $370 million. Given the ongoing impacts of inflation and the timing and size of recent acquisitions, we are keeping the rest of our 2022 guidance unchanged. This calls for adjusted EBITDA to range between 115 to 120 million and free cash flow, which we define as adjusted EBITDA, less net replacement capex, less cash interest, to range between 55 and 60 million. Operationally and financially, we have a solid foundation and have confidence in executing on our growth strategy. With that, I will now turn the call back over to Bruce.

Thanks, Ian. Overall, we are pleased with our Q3 results, and heading into the final quarter of 2022 fiscal year, we expect our revenue momentum to continue due to the strength in our end markets and our diverse business model. While inflationary cost headwinds have started to ease somewhat, we believe we have proven the steadfast nature of our high-value service, which has well-positioned us for 2023 and beyond. This inelasticity stems from the necessity of our mission critical service in today's construction industry. As we think about where our business is positioned for fiscal 2023, we have conviction that commercial and infrastructure will continue to have strong demand due to the factors we are experiencing today. Given interest rates rising and recent indicators of consumer spending weakening, it is only practical for us to assume our residential business volumes may fluctuate and give up some ground to our commercial and infrastructure business in 2023. However, this is an example of the agility and resilience of our business model and fleet management. Where construction volumes change in one region or end market, we adjust our fleet management to ensure we optimize equipment utilization. In summary, we are pleased with our third quarter results and are optimistic about our business position heading into 2023. We remain focused on our strategy of driving scale through investing in organic growth in M&A and believe this is the best path to provide superior shareholder value. With that, I would now like to turn the call back over to Diego for Q&A. Diego?

Thank you. And at this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your questions from the queue. For participants using speaker equipment, it may be necessary before pressing the star keys. Our first question comes from Andy Whitman with Baird. Please go ahead.

Yeah, great. Thanks for taking my question, guys. Just a quick technical one to start out here maybe for Ian. The $2 million that was in the G&A line related to FX. Can you just explain the mechanism for that? I just don't understand how that happened and if that could happen again. Is there like some hedge in there or something that's a mark to market so that's non-cash or what?

Yeah, it's non-cash. It's all translation FX between really translation of the balance sheet and the income statement just on the average rates for the income statement and the closing. FX rate on the UK. It's really just that change, Andy, year over year between the US dollar and the British pound with it weakening. So it's non-cash.

Got it. Okay, then just in terms of the demand for your services, Bruce, I guess drilling in the commercial first, I guess in the prepared remarks you said it sounded like it's fairly broad-based. for the quarter. I was just wondering, subsequent to the quarter and what you're seeing in terms of the bidding and quoting activity that you're doing right now, are you seeing any slowdown in any particular types of commercial, or are things continuing to be kind of steady?

It's been pretty steady, and as you know, we do a thousand jobs a day, so of those, on average, about 600 of those jobs will be commercial in various different segments, and And all the segments seem to be improving. Even hospitality has even stepped up some over what we saw last year. So we're very encouraged. The bidding volume has increased in all areas. Our specialty equipment that we use largely in the commercial work is all in use now. And so we are very encouraged about that market going into next year.

Okay. On infrastructure... I guess maybe the first question is specific to the UK and the HS2. I mean, this is a massive project for that economy to be undertaking. Are you hearing anything from your customer or from the government there that would suggest that that's getting slowed down or anything, or is it just too new with the challenges in the economy there to have an effect? I guess... Given its relative importance, I'd just like to hear kind of what you guys are hearing on that job in particular.

Yeah, it might be too new to see any changes in the pace. Now, we've built up to what we think is going to be our volumes for the next several years there, and it's steady at that pace right now. And as of what we know right now, that will continue into the future.

Got it. I mean, just... On the United States side of infrastructure at all there, it sounded like the share shift inside the company was from residential to commercial, suggesting that the percentage of the revenue that you have in infrastructure has been steady. Do you expect that infrastructure, as we move forward into 2023, will be taking a larger percentage of your equipment's time next year?

Yeah, we do expect that we will get more clarity on that as time goes on. It's still very difficult to know where those dollars that have been approved are going to be spent. Infrastructure has been relatively consistent for us as a percentage of revenue over the last several years, and so as those dollars flow down into the states and municipalities, we expect that that will gain some share.

Got it. I think I'll leave it there. Thanks, guys.

Thanks, Andy.

Our next question comes from Stephen Fisher with UBS. Please go ahead. Thanks.

Good afternoon. I wonder if you could just give us a sense of the pricing trends year over year versus your volume trends. I'm curious if the pricing is still accelerating, kind of what you see for the balance of the year and kind of what kind of pricing you have carry over into 2023 at this point?

Yeah, good afternoon, Steve. This is Ian. So if you look at the pricing improvements in Q3, it's quite similar to what we've seen in Q2. So the momentum on pricing is continuing. For example, a headline in the third quarter, with all that 29% growth, about 10% came from volume and about 19% from price. So as you'll remember, that continues to outpace where we thought we'd be at the beginning of the year. So we are seeing some continued encouraging signs on the pricing side.

Okay. And then on the cost side, beyond diesel, can you just give us a sense of the other categories you're seeing the most impactful inflation, be it labor or other things, and maybe what kind of magnitude you're seeing there?

Yeah, so really, I mean, as you would expect, we're seeing it in the fuel price as we've talked about. Other areas, as you would expect, are across labour and repair and maintenance, which is mostly on the supply chain of parts. But what I would say is that the pricing improvement that we just talked about has largely covered up the labour and the supply chain repair and maintenance part side of things. And the fuel is the last piece that causes the remaining headwind. So the pricing that we've done so far has done a good job on the the cost of supply chain that we're seeing today.

Okay, so on a sort of a net price versus cost basis, would you say that was sort of a net negative in the quarter still? And then do you see that sort of neutralizing or turning positive at some point? I guess what are your expectations for that in the fourth quarter and then maybe as you get into the first part of 2023?

Yeah, where we're at right now, and it's really looking at the margin change that we talked about in our prepared remarks. The erosion in the margin, I mean, the fuel piece that remains is 80% of that margin change. So that's the last remaining piece. But what we have said is that the margin and the dollar impact are slightly different. So when we catch up on passing through the cost of that inflation, that's what's happening today. And the next stage of that catch-up inflation is to improve on the margin side.

Steve, what I think I would add to that is our revenue increases have offset our costs of inflation, whether it's fuel, labor, repair and maintenance parts, but our return is exactly what we expected it to be. As you know, we've raised our guidance on revenue to offset that, but our return is exactly where we expect it to be on the volume that we're doing.

Bruce, you mentioned you're seeing some uh, inflation moderate. Is that just referring to diesel prices?

No, we're seeing some in our parts supply as well. Um, as a supply catches up with the demand, um, labor, I think will probably stay where it's at, but I think some of the, some of the other supplies will back off some.

Uh, okay. And then maybe just lastly for me in terms of, uh, your visibility to 2023 on the end market demand, and you gave us some good color on sort of housing expectations, but how much visibility do you have on the non-res side at this point? Do you have sort of a backlog or do you have kind of a list of indicative inquiries? And then I guess I'm curious if you're just seeing any delays or cancellations on the non-res side.

Yeah, so good question. So we're not seeing any delays or cancellation on the non-res side. Our backlog for non-res is actually better than what we've seen, and we see that with some of the specialty equipment and some of the projects that would be maybe out of the normal and longer in nature than what we've seen in the past. So we're seeing more of that. We are cautious that that may be offset some by softening in the residential market, but the commercial side, the backlog looks really good.

Okay, thank you very much.

Thanks, Steve. Thanks, Steve.

Our next question comes from Brent Thielman with DA Davidson. Please go ahead.

Hey, thanks. Good afternoon, Bruce, Ian. Bruce, just with Coastal, when you announced that you talked about 89 units of operating equipment versus Capital when you acquired it, which came with 144 pieces of equipment, obviously Capital was really accretive. I guess just with what looks to be a decent sized transaction here, can you compare it with capital or maybe there's another deal more comparable? And I guess just getting to why this wouldn't be more accretive to the bottom line EBITDA guidance in the near term.

Yeah, I think so comparing it to capital, I think capital had better margins than Coastal did when we bought the business. So there's more opportunity for growth there. Capital was in a market that was fairly saturated with equipment, where I think the opportunity for growth in the Carolinas, not only with what they're doing, but with the future work coming in there, it looks like a really good opportunity for us long term. And honestly, we're really excited about it.

Got it. Okay. Ecopan continues to see great momentum. Maybe if you could just give an update on market penetration geographically where you're making some inroads and if possible, any sort of key performance indicators you can share just to give a feel for the underlying kind of volume growth in that business.

So with Ecopan, and we've talked about this all along, it's really about getting out in front of the customers and saturating the markets where we currently have existing operations with our concrete pumping service. We've done a really good job of integrating the sales team with our concrete pumping service with the Ecopan sales team by offering incentives to the concrete pumping group. That's helping. Ecopan has added several sales folks into the geographies that we were already existing in. And, you know, so there's, you know, we do plan on moving into a few new geographies, you know, leveraging our opportunity with coastal, but largely it's just creating more density in the markets that we're already in.

Got it. And it looks like the diesel fuel headwind is abating. I guess I'm just wondering if there's a labor or sort of productivity on the job site component still out there that might weigh on the margins over the near term, even as you sort of pass through these inflationary pieces of the business. And then I guess, Bruce, also just to keep hearing about cement on allocation in certain regions, how that might be kind of impacting the results. Thank you.

Yeah, so I'll start with the cement. So we've had challenges with cement. We've had delays in various geographies since really April. And so that slowed things down in some markets. It's actually helped in the residential market where there was a little softness. It pushed some of that work out to where it kind of levels things off. So the cement shortages really haven't caused us that much of an issue. It's actually maybe helped us in the long run. Labor on the job site seems to be getting slightly better. I don't hear near as much about it out in the field. And honestly, we're not seeing that much within our own business. It seems to be lightening up some. And I'm sorry, Brent, I forgot what the third question was.

Bruce, I think you hit it. I appreciate it.

Okay. All right.

Thank you.

Our next question comes from Tim Mulrooney with William Blair. Please state your question.

Bruce Dean, good afternoon. Hey, Tim. So let's see. Just a couple questions on the guide. You raised your guidance for the full year. Is that primarily due to the acquisition of Coastal Carolina Pumping, or are your organic results running ahead of internal expectations so far this year?

Yeah, Tim, hi, this is Ian. It's not so much on the coastal side. I mean, given that we've just announced that there's not a lot of runway to the end of the year, obviously it will contribute, but not in a meaningful way. We'll see that more on next year's guidance. The up on the revenue guidance is largely because of the pace that we have right now in our business. As you can see, we're outpacing where we would expect it to be, both on the organic growth and the contribution from acquisitions in volume and price. So So with that in mind, that's why we've changed the outlook for the current year. But on the acquisition side for Coastal, there's not enough time or significance that we'd change anything for this year.

Okay, that's helpful. I think that's important. And then, you know, your guidance, Ian, I mean, you guys had really strong revenue growth this quarter. Your guidance at the midpoint implies a slowdown. in that revenue growth rate from the third quarter to the fourth quarter. Is there anything to call out here, your third quarter results being so strong? Was there any pull forward of projects into the third quarter that you originally expected to hit in the fourth quarter? Or is it just comparisons? What do you think accounts for that kind of that slowdown from the strong results you had in the third quarter?

Yeah, so if you look at Q3 and Q4, as you know, are usually quite compatible. And if you do the math, if we were to peak Q3 and Q4, it's not actually a slowdown. It would be to the top end of that range. So we don't have an expectation of a momentum slowdown for the fourth quarter.

Okay. So if you did 29% revenue growth in the third quarter, and that's inclusive of 30% revenue growth in your U.S. concrete business, are you saying that those are the kind of rates that you'd expect to see in the fourth quarter as well?

Yeah, I mean, based on the run rate right now, yeah, that would be the expectation. I mean, thought about it maybe a different way, Tim, is if we re-perform Q3 and Q4 and add $105 million, it would be the top end of that range. So that would be based on the same momentum that we have today. Okay.

All right. That's very clear. Thanks. That's all I've got. Thank you, guys.

Thanks, Tim. Thanks, Tim.

Just a reminder to the audience, to ask a question at this time, press star 1 on your telephone keypad. To remove yourself from the queue, press star followed by 2. Our next question comes from Stanley Elliott with Stifel. Please go ahead.

Hey, guys. Thanks for taking the question. Stimulus, in terms of the infrastructure stimulus piece, have you all thought about I guess switching gears a little bit on that, in terms of the Inflation Reduction Act, a lot of wind towers out there, a lot of concrete goes into stabilizing those. What sort of impact do you all envision that having on the business? Is that too much of a reach? I'm just curious kind of what you're thinking about there.

Well, we know that most of the projects or structures that come through the infrastructure bill outside of paving are concrete structures. whether it goes into wastewater, water treatment, wind, solar. There's foundations in all those types of projects. So as those dollars are let loose into the markets, and since we cover such a wide footprint in the U.S., we expect they'll be in some of the areas we're in, and we'll get some benefit of that. We're still just trying to better understand where those dollars will go.

In terms of some of the larger projects out there, we have compensation contractors. the builders, are they concerned about inflation actually taking away the real purchasing power on these jobs that effectively we're looking at smaller size projects going forward because of the inflation? Anything along that that you're hearing?

We're not hearing much on that, but it stands to reason that those dollars won't go as far as what they might have originally gone, and so there would be some concern there. Okay.

How are you guys thinking about CapEx right now with the fleet age where you have it into next year? And then also curious kind of what sort of commitments you have to make for the machine to get down next year. Right now everything still seems pretty good, certainly from a momentum standpoint, but just kind of what sort of levers you have to pull if the economy were to slow down into next year.

Yeah, so we have the ability to turn the faucet on and off. You know, if you'll remember when COVID hit, we did just that. We turned off our CapEx immediately. We put it on hold. Turned out that it wasn't as much of an effect on us as we thought, and we turned it back on. We would have the same flexibility going into 2023. We're going to take a little bit of a cautious approach going into 2023 just because of the unknowns, but... But we're still in a really good position to make sure that the fleet age is where it should be and we're taking care of any replacement that needs to take place. Perfect.

That's all I had. Thanks so much.

Thanks, Stanley.

Thank you. At this time, this concludes our question and answer session. I would now like to turn the call back over to Mr. Young for closing remarks.

Thank you, Diego. We'd like to thank everyone for listening to today's call, and we look forward to speaking with you when we report our fourth quarter fiscal 2022 results in January. Thank you.

Thank you, ladies and gentlemen. This does conclude today's teleconference. You may now disconnect your lines at this time. Thank you for your participation.