Blue Bird Corporation

Good day and welcome to the Bluebird Corporation Fiscal 2023 First Quarter Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw from the question queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mark Benfield, head of investor relations. Please go ahead.

Thank you, and welcome to Bluebird's fiscal 2023 first quarter earnings conference call. The audio for our call is webcast live on blue-bird.com under the investor relations tab. You can access the supporting slides on our website by clicking on the presentations box on the IR landing page. Our comments today include forward-looking statements that are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters we have noted on the following two slides and in our filings with the SEC. Bluebird disclaims any obligation to update the information in this call. This afternoon, you will hear from Bluebird's President and CEO, Matthew Stevenson, and CFO, Razvan Radulescu. Then we'll take some questions. Let's get started. Matt?

Thank you, Mark, and good afternoon, everyone. It has been just two months since our most recent earnings call, but Razan and I are still very excited to update you on the progress of Bluebird. As we discussed last time, through the hard work of the Bluebird team, we have positioned the organization for significant success this year and a dramatic turnaround from the results we've posted in fiscal year 22. This quarter, We are pleased to report that the business continues on its upward trajectory, and as we will review during this call, is even ahead of plan. On slide six, you can see some of the key takeaways for the quarter. Overall, industry demand continues to be robust, and the backlog for Bluebird school buses is incredibly strong. In this past quarter, we also built the last major tranche of legacy price buses in our backlog. As we have forecasted in previous earnings calls, this will drive a significant inflection in our financials. We define these legacy price units as those at price levels prior to October of 2021. We also continue to aggressively manage costs throughout the business, which you will see in Razan's portion of the presentation. Through strong leadership, tenacity, and lean process improvements, We are seeing some of the best operational performance in the company in nearly two years. We also continue to be incredibly excited about the impact the Clean School Bus Program will have on our business. And we are starting to see orders for our leading electric and propane buses come through. The market demand is strong. The business is back on track to deliver and is beginning to fire on all cylinders. We are incredibly upbeat about what is in front of us. Now let's take a look at some of the highlights from the first quarter. The financial performance for fiscal year 23, quarter one, shows a number of bright spots. Our units sold were nearly 2,000, which drove a record first quarter revenue for Bluebird, up over 100 million from fiscal year 22. This was over an 800 unit increase from the same period last year. As a result, adjusted free cash flow for the quarter was up 54 million compared to the first quarter of fiscal year 22. Overall, it was an incredibly solid first quarter for Bluebird, with the legacy price units being the main thing holding us back on the EBITDA conversion, which was negative 4 million. The great news is that those units are now largely behind us. On the right-hand side of the slide, you can see some of the ongoing highlights for the business. As I mentioned, demand continues to be strong, with the industry having roughly eight months of backlog. Bluebird is seeing that strong demand as well. Our backlog is incredibly robust, with over 5,300 units worth over $675 million in revenue. Included in that backlog is 120 million firm orders for electric buses, and we are starting to receive orders from the EPA's Clean School Bus Program. In fact, We're already seeing some of the largest volume EV orders to date for customers in the states of Nevada, Kentucky, Tennessee, and Utah through this program. Our sales for the quarter were 63% alternative power, demonstrating our continued leadership in the space. Part of that was our EV volume growth, up 130% year over year. And we recently crested over 950 electric school buses on the road today, including Type A, C, and D. As we've discussed in previous quarters, we have raised pricing considerably since July of 2021. The average selling price of our backlog is up 22% year over year. Part sales continue to be a bright spot for us, also up 34% year over year. We recently completed a grassroots meeting with our dealers in Atlanta where we laid out the vision for the company for the next three years. It was well attended by our dealers whom we consider to be the best in the business. They were incredibly excited about what they saw and heard. Part of that meeting included a plant tour where they saw some of the examples of the lean transformation in our operation. As you can see on slide 8, these improvements in operations helped us hit some major performance milestones. In fact, we are seeing some of the best performance in nearly two years in several critical areas. Missing parts are down dramatically due to our efforts to improve material flow to the plant. Those have included adjusting our warehousing strategy, resourcing numerous problematic suppliers, revising production constraints, and making changes in leadership to increase the level of tenacity to ensure we have all the necessary parts at production start. We also saw tremendous improvements in plant efficiency, overtime, and production hours per bus. This helped us achieve a number of first quarter records for Bluebird, including first quarter revenue, volume, and EV bookings. We also realized a record alternative powertrain mix and parts revenue for the first quarter. All these achievements are further proof that the company continues to progress in the right direction. Slide nine is a reminder of our key pillars around care, delight, and deliver. Our focus areas within those pillars remain the same for fiscal year 23 and include our people, lean transformation, expanding our total addressable market, and scaling EV. I want to briefly touch on the progress of each of those since our last call. Regarding our teammates, we continue to update our facilities to enhance the working environment. In addition, we rolled out a large-scale wage increase for our hourly teammates to increase job satisfaction and help offset attrition. A new organizational structure of the plant is also in its final stages of implementation. It provides more resources for our frontline teammates by narrowing the span of control and offering essential support functions by creating manufacturing cells, or what we call quality leadership teams. Development of our commercial chassis offering continues to progress while we stay focused on meeting the demand for our core school bus offerings. The work on our new EV center is advancing nicely. and we expect it to be complete by the end of March. As we've mentioned in previous earnings calls, this will allow us to take EV production from 4 to 12 units per day by the end of June, with the ultimate goal of 20 units per day by the end of December. On the next slide, you can see some of the specific examples of initiatives rolled out across the plant focused on teamwork, safety, accountability, material placement, and reducing waste. Pictured on the left is an example of our quality leadership teams, or QLTs. These teams work to deliver the best output at the lowest cost and focus on immediate problem resolution, accountability, training, and coaching. Each cell works as a team with defined roles and responsibilities around production, quality, materials, and manufacturing engineering. Specific colored vests identify the teammates by function. Every morning, the QLTs have huddle meetings to review the prior day's performance. And we have also installed and onboard so they can track their progress throughout the day. One of the first areas in which we implemented these QLTs nearly six months ago was the chassis lines. We are now seeing dramatic improvements in these areas and in the quality of the product coming off the line. Through lean methodologies, we have also enhanced the layout of areas of our plant to make them safer and more efficient. A few examples of this include our new air conditioning installation center and new detail center. Changes like this helped our final finish area pictured in the bottom right to increase output by over 30%. Slide 11 is a reminder of the EPA's Clean School Bus Rebate Program. This program allocates $5 billion over five years for clean and cleaner emission school buses. Approximately 2,500 buses will be funded in this first year, with an average rebate of $375,000 per electric bus. Customers have until the end of April to submit payment request forms to the EPA demonstrating that new buses and eligible infrastructure have been ordered. We have already seen many buses come in from this program, and we expect that to pick up as we near the deadline for customers to submit their information to the EPA. We are working closely with our dealers to secure orders for the customers for whom we collectively applied and secured funding for. We are also partnering with our dealers to aggressively market the merits of our industry-leading EV solution to the remaining customers who make up the 1,200 buses that are not yet allocated to a specific OEM. Therefore, we expect the total impact of the first round of the program on Bluebird to be at least $200 million in revenue based on securing 500 to 700 additional EV orders. The long-term impact of this program will be well over $1 billion in revenue to our organization. The next round of the EPA's Clean School Bus Program is expected to start early in 2023 as a competitive grant program, and we will be right there with our customers supporting their applications. I would now like to hand it over to Rosvon to walk through our fiscal year 2023 quarter one financial results in more detail, as well as our updated fiscal year 23 guidance.

Thanks, Matt, and good afternoon. It's my pleasure to share with you the financial highlights from Blueboard fiscal 2023 first quarter results. The quarter end is based on a close date of December 31st, 2022, whereas the prior year was based on a close date of January 1st, 2022. We will file the 10Q today, February 8th, after the market closes. Our 10-Q includes additional material and disclosures regarding our business and financial performance. We encourage you to read the 10-Q and the important disclosures that it contains. The appendix attached to today's presentation includes reconciliations of differences between GAAP and non-GAAP measures mentioned on this call, as well as important disclaimers. Slide 13 is a summary of the first quarter for fiscal 23. It was a very good operating quarter for Bluebird, with somewhat reduced supply chain disruptions, but with a significant number of legacy price low margin units. We have exceeded the revenues and adjusted EBITDA midpoint of our quarterly guidance provided in the last earnings call. The team has done a fantastic job and generated 1,957 unit sales volume, a record Q1. which was 808 units or 70% higher than prior year. Consolidated net revenue of $236 million was also a record for Q1 and $107 million or over 80% higher than prior year, driven by higher units, improved mix of electric buses and pricing actions that are starting to take hold. The adjusted free cash flow was $20 million positive, $54 million higher than the prior year first quarter. This outstanding performance was driven by the further reduction in inventory back to normal levels during the quarter and supports our great liquidity position at the end of this quarter. Adjusted EBITDA for the quarter was negative 4 million due to increased material costs and still a relatively large amount of lower priced old backlog units. The missing pricing accounted for approximately negative $10 million, so excluding this, we would have posted a positive adjusted EBITDA of approximately $6 million. Moving on to slide 14, as mentioned before by Matt, our backlog at the end of Q1 continues to be extremely strong at over 5,300 units, with the vast majority of these units at much higher price levels compared to the fiscal 2022 built units. Breaking down the $236 million in revenues into our two business segments, the bus net revenue was $213 million, up by approximately $100 million versus prior year. Our average bus revenue per unit increased from $98,000 to $109,000, or about 10%, which was largely the result of pricing actions taken over the past 18 months, as well as a higher mix of electric buses. EV sales were at a level of 92 units, or 52 more than last year, a 130% increase. Parts revenue for the quarter was $22 million, representing a growth of $6 million, or 33% compared to the prior year. Over the past few quarters, we have seen higher parts sales, which is also a reflection of our improved supply chain in aftermarket. Gross margin for the quarter was 3.2%, or 930 basis points lower than last year due to the old backlog fixed pricing and increased material costs. In fiscal 23Q1, adjusted net income was negative 10 million or 8 million lower than last year. Adjusted EBITDA of approximately negative 4 million was down compared with prior year by 8 million. Adjusted dilutive earnings per share of negative 30 cents was down 23 cents from the prior year. Moving on to slide 15, we have all across the board positive developments year over year on the balance sheet. We ended the quarter roughly with $6 million in cash and reduced our debt by $16 million. The improvements in operating cash flow and adjusted free cash flow were primarily driven by trade working capital due to our operational improvements leading to inventory reductions. As a reminder, at the end of November, we entered into the Sixth Amendment to our credit facility, extending the maturity date to December 31st, 2024. The Sixth Amendment provides for revised covenants, modifications to the revolving credit facility, and the new pricing grid. The amended covenants and the extended maturity of our loan provide Bluebird with both flexibility and stability as our business continues to recover from the COVID-19 pandemic and associated global supply chain disruptions. On to slide 16. As a reminder, together with our dealer partners, we also were able to increase partially the prices for backlog units, beginning in the middle of last fiscal year, and recovered about half of the missing pricing for each respective price level. However, during fiscal 23Q1, we still had approximately one-third of our production with very old units and some of the worst margins. We estimate its headwind to be 5% or approximately 10 million for fiscal 23Q1, but confirmed by our reported results today. Nevertheless, starting with fiscal 23Q2 in January, we will have put the vast majority of the old backlog units behind us and have locked in pricing and backlog units at increasingly better margins. In fact, our production schedule is almost full through the middle of fiscal 23 Q4, with some production slots left open for EPA EV orders. While on some models, type D, for example, we are sold out for the entire year, currently we are filling the remaining slots open in fiscal 23 Q4 for type C and EV at very good margins. Slide 17 shows the walk from fiscal 22 Q1 adjusted EBITDA to the fiscal 23 Q1 result. Starting on the left at 3.6 million, the impact of the bus segment gross profit was negative 13.3 million, mainly due to the large number of old legacy price buses from 2021. The impact of these missing prices was negative $10 million. This was offset by favorable development in the part segment gross profit of $4.6 million, driven by higher sales and improved margins. Furthermore, we reduced our fixed costs by approximately $1 million compared to Q1 a year ago. The sum total of all of the above-mentioned developments drives our reported adjusted EBITDA results of negative $4.2 million. However, if you raise the fiscal year 21 orders just to fiscal 22 pricing level or 5%, that would have generated approximately 10 million more as reflected on the chart. It is also worth noting if we assume all bookings at current fiscal 23 pricing at the 25% level plus an additional 10% in throughput, we would see an additional 15 million positive impact. And this is how we are viewing the fourth fiscal quarter of this year. On slide 18, looking at fiscal year 23, we want to share with you our updated forecast by quarter, which serves the basis for our fiscal year 23 total year guidance. As a reminder, we are taking a more transparent and conservative approach this year, as it will still be a somewhat uncertain year from a supply chain perspective. yet we are confident that we have course-corrected all the other business levels that we could address. Looking forward at fiscal 2023 Q2 and Q3, we have higher prices taking hold, higher revenues, small improvements from lower material costs, partially offset by increased labor costs due to inflation. Therefore, we forecast $245 to $260 million in revenues and approximately $10 million in adjusted EBITDA for Q2, and 255 to 270 million revenues and approximately 15 million of adjusted EBITDA for Q3, each with a margin of plus minus 2 million. Finally, in fiscal year 23 Q4, with higher volume, increased EV mix, best pricing and lower material cost, we expect to generate 265 to 285 million in revenues with adjusted EBITDA of approximately 20 million plus minus 2 million. This represents a run rate of 80 million, or approximately 8% going out of the fiscal year 23, and sets us up for taking it to the next level in fiscal 24 and beyond. Putting it all together, for the total year, we expect revenues in excess of 1 billion, and then increase the adjusted EBITDA of approximately 43 million, with a range of 40 to 46 million. Moving to slide 19, in summary, we are forecasting a significant improvement year over year in all aspects, with revenues up more than 25% to over $1 billion, adjusted EBITDA in the range of $40 to $46 million, and positive free cash flow of $5 to $11 million. On slide 20, we want to reiterate our outlook beyond 2023. Once the supply chain further normalizes, we expect to sell approximately 9,500 units, including 1,500 units EVs, and generate 100 million or 8% adjusted EBITDA on approximately $1.25 billion in revenue. This could be as early as fiscal year 2024 if the business environment is further stabilizing by then. Looking beyond that in the medium term, our EV growth and operational improvement can support volumes of 10,500 to 11,000 units, including EVs in the range of 2,500 to 3,500 units, generating revenues of 1.5 to 1.75 billion with adjusted EBITDA of 150 to 200 million, or 10 to 11%. Our long-term target remains to drive profitable growth towards $2 billion in revenues, comprising of 12,000 units, of which 5,000 are EVs, and generate EBITDA of approximately $250 million, or 12%. We are incredibly excited about Blueboard's future, and now I'll turn it over back to Matt to further expand on this.

All right. Thank you, Razvan. On to slide 22. As detailed in the fiscal year 23 guidance that Rosalyn walked through, we are now past the vast majority of the legacy price units that were holding back our financial performance. Plus, we are seeing the results of all the hard work around operations starting to flow through to the P&L. We are now planning on booking at least 8,250 units, a 20% increase over fiscal year 22, and driving a top line of $1 billion, a 25% increase year over year. Part sales will continue to be on plan, with line of sight to at least $84 million in revenue, up 10%. We now expect the EBITDA performance to be approximately $43 million, up nearly four-fold compared to fiscal year 22. EBITDA bookings continue to be on plan, and we expect those to double to over 500. There have been no significant changes in the ACT retail sales forecast for fiscal year 23. It continues to be supply chain constrained across the industry, and our targeted bookings will put us right where we want to be around that 30% market share. I cannot emphasize enough the exciting demand in front of us. Retail sales have been off from their average of 32,000 units per year for the past three years in a row, and the national school bus fleet is aging. The market was first constrained by COVID and school closures and has been held up more recently by the supply chain. This aging fleet must be replaced and we expect substantially robust years ahead of us to address this pent up demand. ACT is forecasting a compound annual growth rate of 10% from our fiscal year 23 to fiscal year 27. Our business is back on track and we look forward to the robust market ahead. There are so many exciting things in front of Bluebird. Let's turn to slide 23 as a summary reminder as to the strong investment highlights around our company. First is the market demand for Bluebird school buses. We are a great counter cyclical play to many companies and industries being affected by the slowdown in consumer spend. Plus, not only are the fundamentals of our industry strong, it's just starting to heat up. With a 10% compound annual growth rate expected over the next five years, Second, there is a commitment from the highest level of government to electrify this country's school bus fleet. Not only will this reduce greenhouse gases, it will help reduce particulates that are found to be a contributor to childhood asthma. Electrifying school buses is a mission that makes sense to everyone. And Bluebird will be a direct beneficiary of this as we have more electric school buses on the road today than anyone. We also have a proven reputation as a leader in alternative powered school buses for over a decade, as evidenced by the 20,000 plus propane powered Bluebirds on the road today. Our exclusive partnership with Ford and Roush offers us a distinct performance advantage no one else has with propane. And on EV, our collaboration with Cummins offers something no other electric school bus manufacturer provides, a powertrain partner with over 100 years of experience and who knows the school bus industry inside and out. Roslyn walked through our long-term forecast, and as impressive as the outlook is, it does not even factor in our efforts to expand our total addressable market. The commercial strip chats offering could add a few thousand units per year to the long-term forecast. We have discussed previously how we structure the organization to be leaner. And with our lean transformation efforts, we're removing non-value-added processes and reducing standard production hours per bus. We are continuously looking for ways to take costs out and at the same time increase quality. As we touched on today, we have now gotten through the last significant tranche of legacy price buses and are beginning to fire on all cylinders. All these factors will provide us with 10% plus adjusted EBITDA margins in a midterm normalized operating environment. As you saw in the guidance we provided for the second half of fiscal year 23, we get back to approximately 7% adjusted EBIT on supply constraint volume, proving that in a normalized operating environment, double-digit adjusted EBIT will be in our reach. As I mentioned at the beginning of this call, we continue to be extremely excited about the progress of Bloober. Our team has worked incredibly hard to get the business back on track, and the results continue to show it.

We would now like to open up the line for questions.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw from the question queue, please press star then two.

At this time, we will pause momentarily to assemble our roster. First question comes from Mike with DA Davidson.

Please go ahead.

Good afternoon, and thank you for taking my questions. I wanted to maybe first ask a few about the outlook. Now that you had mentioned the 10% CAGR for the industry over the next five years, but if you look at the chart you put out there, and it's out there for ACT as well, it's a pretty big jump between 23 and 2024. I'm curious if you know if there's any reason why there'd be a big jump there. Are there any regulatory changes taking place that would have a pull forward or push back of revenue or anything else unusual that makes it such a strong growth rate from this current fiscal year to the next fiscal year?

Yeah. Hey, Mike. It's Matt Stevenson. Thanks for the question. Really, my concerns are on the pen of demand. You know, if you look at an industry that historically is around that $31,000, $32,000, and then in the kind of more recent history, around that 35,000 mark, there's just a lot of pent-up demand for school buses there. And the forecast is, you know, we've seen some improvements in the stability of the supply chain. And then by the time you get into 24, the feeling is a lot of this is going to get, the kinks will be worked out, and it will enable us to get higher production capacity as well as our competitors.

Okay. That makes perfect sense. And then talking about your EV outlook as well, you had mentioned that you expect to get a billion plus out of the $5 billion from the EPA program. That sounds okay, but your overall share of the market is roughly 30%. You're talking about 20 or low 20s here in your comments. Is there anything out there from the competition or anything we should be thinking about as to why you might not get 30 or if not quite a bit higher than that when all is said and done on the EPA program?

Yeah, I think you're spot on. We're just being conservative in terms of how we're looking at it. But if you take our, like you said, our historic market share and our leadership in the EV position, that would forecast an opportunity to have more than that. But we're just being conservative with our approach here.

Okay. Maybe one last one for me on pricing. Can you just give a little more color on some of the cadence of pricing going forward? Could it just kind of inch up to the rest of the year as backlog evolves and as EV mix grows? And do you think there's opportunity for further growth in pricing in 2024?

Hi, Mike. This is Razvan. I'll take this question. So as you see on slide 16, you can observe that the makeup of our upcoming project itself based on the different price levels. We are already sold out almost all the way through the end of fiscal 23. So those are pretty much locked in. We are now filling the second half of fiscal 23 Q4 with orders at the current price level, which is the 25% price increase versus 18 months ago. So in terms of fiscal 23, it's pretty much set, and we are also getting good orders coming in at this price level. As far as fiscal 24, it's a bit too early to predict how it's going to go, and we will update you as we have more visibility into fiscal 24 later.

Okay. That's great, Keller. I appreciate the discussion. I'll pass it along.

Thank you, Mike. Thanks, Mike.

Again, if you'd like to ask a question, please press star then one. Our next question comes from Eric Stein with Craig Callum. Please go ahead.

Hi, everyone. Thanks for taking the questions. Eric, hey, so, I mean, obviously, a really strong start to the year, you know, I think above where you had kind of forecast last quarter. And it looks like, you know, maybe not as steep as your typical ramp. It's more of, you know, a general ramp throughout the year. So, you know, just curious, what do you attribute the first quarter strength to? I mean, is it that you've had a modest loosening of the supply chain? Obviously, there's pent-up demand, you know, something around productivity of the plant, because that was a pretty eye-opening number. So just curious if you could fill in some blanks there.

Yeah, thanks for the question, Eric. It's Matt. You know, we talked about the operational improvements we've been working on, you know, for well over a year now. And, you know, month over month, week over week, the team continues to get better. And we're really starting to see the realization of those efforts. And there has been some improvement in the stability of the supply chain, which always helps. But it's just the hard work is starting to pay off.

Got it. I mean, and then thinking about, so the remainder of the year, except in the second half of the fourth quarter, you're pretty much full. I mean, is that, is that limited more just by customer delivery schedule requests? Um, I mean, cause it seems that you actually could push harder on that. Now it sounds like you were also holding off on filling some slots so you can, you know, have them open when electric orders are placed here over the coming months. Um, But, you know, maybe some thoughts on the ramp.

Yeah, so I think you touched on it, Eric. You know, historically, Bluebirds would have a much bigger second half on volume than first half. And it's more even keeled throughout the year. And that's really due to supply chain constraints. You know, we're seeing it across the industry still. Suppliers are having issues finding frontline labor supplies. and having those teammates available to increase their capacity. And the same with the commercial truck market still, you know, holding in there pretty strong. So really it's just, it's centering around supply chain limitations from taking volume higher because the demand is there. Got it.

Okay. And then maybe last one for me, you know, just on, obviously you expect, you've had nice order flow on electric and you're expecting that to pick up here over the next couple of months. But when you think about the coming quarters here in fiscal 23, I mean, I would assume that you're not able to fulfill all of those orders within the fiscal year. And I guess what I'm getting at, if you're talking about an $80 million EBITDA run rate, just trying to get a sense, it would seem like in fiscal 24, and I haven't done the math yet on the slide you had, but in fiscal 24, I mean, you certainly would look at that $80 million as a number that you would grow from year over year.

Yes. Hi, Eric. This is Rosman. I'll take this question. So it's a bit too early to give guidance for fiscal 24. Obviously, there are still many variables. However, as we've shown in our outlook on page 20 in our presentation, In the short term for a normal year, we expect to have about 100 million plus of EBITDA with 8% on roughly 9,500 units with a good mix of EVs. So this could be as early as fiscal 24, assuming the business continues to improve and the supply chain continues to stabilize a bit more.

Okay, that's great. Thank you. Thank you, Eric.

This concludes our question and answer session. I would like to turn the conference back over to Matthew Stevenson for any closing remarks.

All right.

Thank you, Sarah, and thank you to all those joining us on the call today. As you heard during our prepared marks, demand in our market continues to be strong, and the backlog for Bluebird buses is robust. Orders for the EPA's Clean School Bus Program are beginning to come in, and will continue to fuel our leadership in alternative power and electric school buses. The business has turned the corner, as evidenced by the numerous first quarter records for the business, including revenue, bookings, EV sales, and our parts business. Plus, we are increasing the total year EBITDA guidance. Bluebird is starting to fire on all cylinders, as the vast majority of legacy price buses are now behind us, and numerous operational improvements are starting to take hold. We are very confident and certain about where we are headed, and that is back to historic margin levels and beyond. Should you have any follow-up questions, please do not hesitate to contact our head of investor relations, Mark Benfield. Thank you again for your time, and we look forward to updating you on the continued progress of Bluebird next quarter.

Thank you, and good evening.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.