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Operator
Good afternoon, ladies and gentlemen, and welcome to the DMC Global First Quarter Earnings Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Jeff High, VP of IR. Sir, the floor is yours.
Jeff High
Hello, and welcome to DMC's First Quarter Conference Call. Presenting today are President and CEO Kevin Long and CFO Mike Kuda. I'd like to remind everyone that matters discussed during this call may include forward-looking statements that are based on our estimates, projections, and assumptions as of today's date and are subject to risks and uncertainties that are disclosed in our filings with the SEC. Our business is subject to certain risks that could cause actual results to differ materially from those anticipated in our forward-looking statements. DMC assumes no obligation to update forward-looking statements that become untrue because of subsequent events. A webcast replay of today's call will be available at dmcglobal.com after the call. In addition, a telephone replay will be available approximately two hours after the call. Details for listening to the replay are available in today's news release. And with that, I'll now turn the call over to Kevin Long. Kevin?
Kevin Long
Thank you, Jeff, and good afternoon, everyone. Our first quarter sales of $55.7 million came in at the low end of our forecasted range and were impacted by the push-out of $1.7 million in orders at Novoclad, our composite metals business, and by our winter storm in Texas that led to a nearly two-week halt in U.S. customer activity at DynEnergetics, our energy products business. Consolidated gross margin was 23% and also was within our forecasted range. Margins were impacted by lower absorption at DynEnergetics due to the shutdown of our Blum, Texas manufacturing center following the winter storm, and by higher spending on patent filings at DynEnergetics. During the quarter, we spent approximately $1 million on patent litigation, which relates to legal action taken against several companies we believe are violating DynEnergetics patents. We are confident in our position and have the determination to see these cases through to a successful resolution for DynEnergetics. DMC finished the first quarter with a strong balance sheet that included cash and marketable securities of approximately $67 million. We repaid in full the $11.8 million balance on our term loan, ended the quarter with zero long-term debt, and raised net proceeds of $25.3 million by selling shares in an at-the-market equity program. Our end markets continue to improve, and we are encouraged by our prospects for stronger financial results during the second quarter and back half of 2021. Novaclad entered the second quarter with an order backlog of $43 million, several large international order opportunities, and a new product offering expected to be commercialized later this year. At Dine Energetics, well completion activity recovered rapidly following the February winter storm. Fract spreads, which are a key barometer of completion activity, are seeing increased demand. After declining to fewer than 50 spreads in May of last year, the industry was approaching 200 frac crews operating in unconventional U.S. basins by the end of the first quarter. The number of active spreads has continued to increase in April. Dyne Energetics implemented a 5% price increase on all products, effective March 30th, and we are beginning to see the impact of the increase in average selling prices month to date. Integrated perforating systems, which are less than 2% of the cost of completing a well, enable safer and significantly more efficient frac operations at a much lower total cost than conventional field assembled systems. After a challenging year, our businesses are again operating at full speed and our teams are back in the market visiting customers and meeting with suppliers. I want to thank our employees for their continued diligence, creativity, and dedication to the success of DMC. I'll now turn the call over to Mike for a review of our first quarter financial performance and a look at second quarter guidance. Mike?
Jeff
Thanks, Kevin. First quarter sales were $55.7 million, down 3% sequentially and down 24% versus last year's first quarter. DynEnergetics reported first quarter sales of $38.2 million, up 8% sequentially and a decline of 28% versus the same quarter last year. International sales increased 65% sequentially, while North America sales, which were impacted by the February storm in Texas, increased 1% sequentially. Sales at Nobel Plaid were $17.5 million, down 20% sequentially, and 14% versus last year's first quarter. Consolidated gross margin in the first quarter was 23%, up from 21% in the fourth quarter of 2020, and down from 33% in last year's first quarter. The decline from the year-ago first quarter primarily relates to lower average selling prices at Dyna Energetics. Dyna Energetics reported first quarter gross margin of 22% versus 24% in the 2020 fourth quarter, and 37% in last year's first quarter. Nobel Plaid reported first quarter gross margin of 26% versus 18% in the fourth quarter and 25% in the year-ago first quarter. The increases reflect a more favorable project mix. Looking at our first quarter expenses, consolidated SG&A of $13.2 million increased 5% versus the fourth quarter and declined 21% versus the year-ago first quarter. We reported a consolidated adjusted operating loss of $583,000 which excludes $127,000 in restructuring charges at NOVA Platte. First quarter adjusted net income was $559,000, or $0.04 per diluted share, versus adjusted net income of $5.3 million, or $0.35 per diluted share, in last year's first quarter. Adjusted EBITDA was $4 million versus $11.3 million in last year's first quarter. Dyna Energetics reported first quarter adjusted EBITDA of $3.5 million, while Nobel Cloud reported adjusted EBITDA of $2.7 million. As Kevin noted, we repaid our $11.8 million term debt in full during the first quarter and raised an additional $25.3 million under our at-the-market equity program, bringing our total cash and marketable securities balance to $66.8 million. Looking at guidance, Second quarter sales are expected to be in a range of $67 million to $72 million versus the $55.7 million reported in the 2021 first quarter. At the business level, Dyna Energetics is expected to report sales in a range of $44 million to $47 million versus the $38.2 million reported in the first quarter. Novel-clad sales are expected in a range of $23 million to $25 million versus the $17.5 million reported in the 2021 first quarter. Consolidated gross margin is expected in a range of 25% to 26% versus 23% in the first quarter. First quarter selling general and administrative expense is expected to be approximately $14 to $15 million versus the $13.2 million reported last quarter. The sequential increase primarily is due to an anticipated $1.5 million in litigation expense at Dyna Energetics, investments in digital transformation, resuming business-related travel, and restoring variable compensation. Amortization expense is expected to be approximately $300,000. Interest expense is expected to be in a range of $90,000. Adjusted EBITDA is expected at a range of $6 million to $8 million versus $4 million in the 2021 first quarter. With that, we're ready to take any questions. Operator?
Operator
Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star 1 on your phone now. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold a moment while we poll for questions. Your first question is coming from Tommy Mall. Your line is live.
Tommy Mall
Good afternoon, and thanks for taking my questions.
Kevin Long
Good afternoon, Tommy.
Tommy Mall
Devin, I wanted to start on Dyna Energetics. You're up quarter over quarter again. Guidance for second quarter calls for another sequential increase, which would be four in a row, I believe. So the industry is moving in the right direction here. You've announced a pricing increase. It sounds like you've started to realize some benefit from that. On the other hand, in recent quarters, you've talked to the inventory overhang across the whole competitive landscape. So potentially a cross-current there. So I wonder if you could unpack for us some of the competitive dynamics that you're seeing in the marketplace right now. Thanks.
Kevin Long
Yep. I think you captured it well, Tommy. The inventory overhang has pretty much worked its way through the system. There is still some inventory, but it's not across the board. It's with certain companies. We actually believe that from where we are today going forward, that people are going to be building for demand. and anticipating a greater level of demand going into the second half of this year compared to the first half. We're out in front with a price increase. We're seeing some positive results in terms of our average selling prices going into April, albeit it's still early in April. You know, activity as it picks up will support margins. You know, the one thing that we are always conscious of and still need to see improvement on in the market is the profitability of our customers. And it's also necessary for our customers to improve their profitability for us to improve our pricing and our margins over time.
Tommy Mall
Thank you, Kevin. That's very helpful. Wanted to pivot to the balance sheet. So all your debt's been repaid. You've continued to build cash in part through the offering that you called out in the earnings release. So again, just hoping you could help us read the tea leaves here. Should we think about some potential acquisitions near term? any potential change in capital allocation strategy that might be forthcoming, or should we view this more as conservatism on the heels of a pretty severe downturn and just wanted to protect the balance sheet?
Kevin Long
We believe our two businesses are sustainable from a cash flow and cash generation standpoint. You know, month to month or quarter to quarter, depending on a capital project, they may consume or generate cash. But all in all, we expect our two businesses to generate cash and fund themselves as we go forward. The ATM, the building of our cash balance is to help our two businesses look within their markets for opportunities from a bolt-on acquisition standpoint. Companies or areas that would improve their competitive position, expand their total available market, and leverage their sales channels to the markets that they're in. And it's also, you know, part directed towards future activities looking at businesses that we could add to our portfolio. At the end of the day, DMC is a holding company for technical businesses in niche markets. And the way for us to grow is to expand our total available market through adding new product lines and businesses. And so we are looking towards M&A as we go forward.
Tommy Mall
Thank you, Kevin. And if I could toss one more in. There's a new administration in Washington that's talked about potentially incentivizing plugging old wells. You've got a system, Dynaslot, that can do that for operators. So realizing it's early in the process here, but any comment you would want to offer for a system that investors may be less familiar with just in terms of the capabilities and the potential opportunity that you see here?
Kevin Long
Yes. I mean, there's thousands, actually, potentially 100,000 abandoned wells that have not been plugged properly that – leak, methane, and greenhouse gases. And it's prudent for the industry to invest into capping those so that they no longer contribute to the greenhouse gas situation. And so we're pretty excited about the fact that the new administration is Dedicating resources to this area which should benefit our customers and should benefit the product line that we have that is is a very effective tool used in the plug-in abandonment Thank You Kevin I'll turn it back appreciate it Your next question question is coming from Taylor searcher your line is live
Taylor
Hey, thank you, and good afternoon. Kevin, I wanted to start in Dyna Energetics. The guidance for Q2, I mean, if we add back the $5 million in sort of lost sales due to the winter storm, there's really not a whole lot of growth sequentially. I realize it's not really an apples-to-apples comparison, but I was hoping you could help us parse through U.S. versus international. It looks like Canada's sales were fairly strong, and that'll obviously help. get dinged pretty hard as we go into spring break up in Q2. But could you help us parse through the U.S. and international as it relates to sequential growth in Q2 within Dyna Energetics?
Kevin Long
Yes. One thing I'd like to note first is our two businesses somewhat behave differently when there's a market disruption. Novoclad, which makes a product that goes into the construction industry around downstream petrochemical applications, when there's something that misses in their quarter and it goes into the next quarter and it's added to that quarter, we recover that business. In DynEnergetics, DynEnergetics makes a consumable and And they're an integrated system that's delivered, fully assembled to the field or to the well at time of consumption, just in time. And we're able to catch up in terms of our ability to manufacture products. But the time that was lost in that one to two week period by our service companies is time that they have a hard time regaining. And so it doesn't necessarily go from one quarter to the next in DynEnergetics because it's dependent upon the service companies.
Jeff
And Taylor, I would just add that in the Q1 to Q2, the growth is all in North America, we're forecasting international to be flat Q1 to Q2. It's a lumpy business. We expect that to be much stronger in the second half. So all the growth that you're seeing is North America.
Taylor
Got it. That's very helpful. And my follow-ups in noble clad, I know that business can be lumpy as well, certainly from a margin standpoint, and the margins rebound nicely this quarter. I'm curious as you look out over the balance of 2021 that the backlog is strong and the guidance for Q2 was relatively strong as well. From a profitability standpoint, just based on the mix of backlog and work you have in front of you right now, do you think that the mid-teens EBITDA margin type ballpark that you did in Q1 is kind of the right place to think about that business, at least in the near-term future?
Jeff
Yeah, I would say low to mid-teens. The first quarter was a high favorable project mix. So I think that, you know, that's going to be a business going to be 24% to 25% gross margin, and the first quarter is, you know, I think 26%, 26.4%. So, yeah, I think that's a good ballpark is low to mid-teens.
Taylor
Great. Thanks for the answers. I'll turn it back.
Operator
Your next question is coming from Stephen Ganjaro. Your line is live.
Stephen Ganjaro
Thanks. Good evening, everybody.
Kevin Long
Good evening, Stephen.
Stephen Ganjaro
A couple things, and I guess if you start at Diana, you've talked about in the past, and when you look at what customers are doing, and I think in 2020 they were in cross-cutting mode as the world kind of unraveled, but as you think about this shift towards integrated PERF systems versus components, I know it ties into another question about inventories, but what are you seeing there as far as the overall industry trends to kind of re-accelerate the adoption of the integrated PERF systems versus the components?
Kevin Long
Well, first of all, the recovery is in the very early stages. And somewhat of what we experienced in the back half of 2020 is that when the market is down and down as significant as it was, and there's a large inventory of components in the marketplace, The focus was on cash flow and turning those components, turning that inventory into cash. And systems somewhat took a backseat to consuming inventory and generating cash for the companies that had a lot of inventory. And to move that inventory in a market that was extremely challenged, price was an important factor in moving it. And so we're just beginning to return to a more normalized situation where the inventory is out of the market. The companies are having to invest in working capital and manufacturing capability to meet current demand. And there's a number of companies that that we see that we're consuming components in the downturn that may not go the field-assembled component path as we come out of the downturn. And so I think the next couple of quarters are going to be important in the transition from components to systems. It's also going to be important as the activity picks up for the return of profitability, both through volume and price increases, not just for ourselves, but for our customers. And we believe that the further we get into the year, the stronger our markets are expected to be. And so should to the demand for systems and therefore our revenues and earnings. And the other thing that's important to note is that at the low levels that the market has been operating, some of the service companies have been able to meet their own demand through their legacy approach to the business. But the market has seen some attrition and consolidation is just starting to begin in certain areas. And the capacity coming out of the market slow down. Some people are going to be challenged on that. We're going to see, hopefully with our investments that we've made over the last couple of years, we should benefit because our capacity is in place in order to serve our customers as the market gets stronger. And so kind of a long answer to your question, but I think we're at a pivot point over the next couple of quarters and into the second half of this year.
Stephen Ganjaro
Gotcha. Thanks. And along those same lines, you mentioned a little bit on this, but you clearly saw something because you put forth a price increase on the bioenergetic side, and it sounded like you've seen some traction on that front. Is that fair?
Kevin Long
We've seen some traction. Yes, it's still early. I will say that we probably do not see broad-based support in the market as of yet, but we're hoping that the market pricing will strengthen as the activity strengthens going into the second half of the year.
Stephen Ganjaro
Okay, great. Thanks. And finally, the two questions around the litigation, one is pretty straightforward, I think. The second quarter adjusted EBITDA guide to $6 to $8 million. Is that after deducting or is that excluding the expected litigation of about $9.5 million?
Kevin Long
That's after our spending on litigation.
Stephen Ganjaro
So it's $7.5 to $9.5 if you strip it out. Correct.
Kevin Long
Yeah, if you strip it out, correct.
Stephen Ganjaro
Okay, good. I just wanted to check that. And then I know you're probably reluctant to say much, but is this around the charges and the downhole energetics, or is this around the delivery system?
Jeff High
Yeah, there's three areas of...
Kevin Long
intellectual property that are involved. And two of the areas are around the delivery system and the packaging of the shape charges. And one is around the initiating system and the design of that technology.
Stephen Ganjaro
Okay, great. And if I could slide in one more. As you think about the gross margin progression, and we've talked about this in the past, and you're dying to margins that, you know, I think the gross profit margins were, I don't know if it ticked above 40% for a quarter in 2019 or not, but they averaged just a touch under 40% in 2019. As activity normalizes, and you look into 2022, 2022 maybe, You know, one of the things we're seeing in the industry is as EMPs are sticking to their capital discipline, you know, I think as an industry, for example, like on the pressure pumping side, I think people are not expecting that. They're expecting price improvement as things tighten at some point, I believe, at least some are, but they're not expecting the kind of moves we've seen in prior cycles. And I was just curious, in the context of sort of EMP capital disciplines, Is it reasonable to think that those dyna gross profit margins can get back to 30% plus?
Kevin Long
Without a doubt. It's one market, but we participate in a different part of the ecosystem than some of the other service and product companies. And it's important to realize that we have an asset-light, high-variable cost business with differentiated products that have a greater value in use for our customers. There's significant cost savings to the companies who organize their business around our products and systems. They have a much lower total cost. in a higher value add to their customer. And so our products pay for themselves. And they're an integrated perforating system, which enables the safer and more efficient operations. When you look at the cost of drilling and completing a well, they're less than 2% of the cost of completion, let alone the overall well construction. construction, yet they are a significant contributor to the productivity, safety, and efficiency of completing wells. And so it's a whole different thing that if you have overcapacity in assets that need to be utilized and you have a high fixed cost, It's quite a bit different when it's an asset-light variable cost business and there's differentiation on the performance of the products in use. So we're cognizant of and sensitive to the profitability of our customers. And we're working hard with them to optimize the total cost between our two businesses in our ability with our customers to serve the E&P. And I think that we've got a strong approach that will definitely allow us to return to acceptable margins.
Stephen Ganjaro
Great. Thanks. I'll get back in line, but I appreciate the color.
Operator
Your next question is coming from Jerry Sweeney. Your line is live.
Jerry Sweeney
Hey, good afternoon. Thanks for taking my call, Kevin.
Kevin Long
Yeah, hi, Jerry.
Jerry Sweeney
Just following up a little bit, maybe, on just Dyna Energetics. Just curious, you know, it's all about, well, I think it's partly about expanding a customer base. I know there was a lot of components in the market, and people are sort of chewing through them over the course of the, I don't know, past year, let's say, but would you be able to say, I mean, do you have more customers today than you did a year ago? Or Spectin or however you would want to answer that?
Kevin Long
I think we have more EMP companies, operators that are aware of our product line. We have probably a similar number of customers to a year ago. It's really about going deep with those customers. And, you know, we're not out chasing low price component business, which is what the market has been for the last essentially four quarters. And so, uh, you know, we're, we feel that there's a pretty strong awareness and that we're working with the right people so that when the market, uh, does start to improve, we'll go deeper with them and you'll see the growth in our revenues.
Jerry Sweeney
On that front. I didn't want to imply that you were chasing price components, but go ahead. I'm sorry.
Kevin Long
Well, we're not trying to be all things to all people. We're trying to be all things to a handful of people where we align culturally and we're focused on creating value for the E&P and optimizing the ecosystem. And so, you know, we're going after the more technologically focused, total cost focused who also value safety, reliability, the actual product performance, and companies that are doing the right thing from an ESG standpoint. And so, you know, we're not trying to be all things to all people. We're trying to be the best in our area and associate with the best.
Jerry Sweeney
And I absolutely understand that and agree with that. But digging a little deeper, as you said, deeper in the customers, is this a function also maybe some of your customers, they have a baseload of employees, and if activity picks up, right, you remove a certain labor constraint and hiring and supply chain. If activity picks up, are they sort of at the base where they want to be, and as activity picks up, do they use more of your equipment because you alleviate the need to bring more people on? You know, components aside, right?
Kevin Long
Yeah, I mean, we're definitely, you know, the industry as it's gone through two once-in-a-lifetime downturns over the last seven years, has fewer people in it, fewer knowledgeable people and skill in the area of assembling explosives into perforating systems. And it doesn't make sense for companies who are not vertically integrated in the components themselves and have the engineering and the technology support aspects around it to by the very nature, they're going to be less efficient and less skilled and they're assembling systems of components that aren't designed to work together. And so, you know, we think that the consolidation that's taken place, the attrition in either people or companies is going to favor the perforating companies And we're just one of them. There's others that will benefit from this. It will favor those that have a medium to longer view investment of the market and the investment to build systems on things that we're vertically integrated in doing. And even managing supply changes becoming more complex, and we can do it more effectively and efficiently than people who do it for a part-time basis or for a small part of their overall needs.
Jerry Sweeney
Got it. Switching gears slightly to, well, entirely, actually, to NOBLECLAD, how, you know, has COVID impacted Or how much has COVID impacted the sales cycle there? Obviously, you know, these are long lead time projects. And, you know, once they're started, they're started. But things can shift around by several quarters, if not more. Do you have anything?
Kevin Long
Yeah, COVID did not. I mean, it impacted it in a more of a around the peripheral compared to Dyna Energetics. And because of the longer lead time longer gestation period for these projects. If it You know, we've seen things where there's been shipment slowdowns and and and difficulties on the logistics of either getting metals or or shipping composite plates and products. But it's but not in terms of the overall activity and and a lot of what they make goes into markets that are more GDP driven and more stable on a longer term basis.
Jerry Sweeney
Got it. Okay. I appreciate it. That's it for my end. Thank you.
Operator
Your next question is coming from Matthew Galenko. Your line is live.
Matthew Galenko
Hey, good afternoon. Thanks for taking my questions. Maybe first on the patent litigation, can you give us a rough sense of timeline and how should we expect expenses, litigation expenses to hit as we move through that litigation process?
Kevin Long
Yeah, I think intellectual property IP litigation is more of a marathon than a sprint with the way that the discussions take place, the filing takes place, and then the response to the filings. And, you know, we expected to continue throughout 2021 and into 2022 without a doubt. I will say that we've had litigation happening kind of in the background for a couple of years now. It's just accelerated both as our patent portfolio has grown and as the strength of our designs have been recognized. We had a step up in September, October of last year in terms of sending letters to those that we believe are infringing. We've had a mixed bag of responses. And we started filing infringement suits. Unfortunately, we do not enjoy this. We wish we did not have to take this path but we started filing those in december and um and so we're just early in the innings of some of the two out of the three areas that were we have intellectual property and one we've been in it for quite some time and it's uh it's a long process
Jeff
And Matt, when we think about the $1.5 million in Q2, we'd expect that run rate. Currently, right now, we're not giving guidance, obviously, for the rest of the year, but that run rate's going to be there for Q3, Q4 as well.
Matthew Galenko
Got it. So, I mean, as if we get to the point of a trial, I mean, would we expect a run-up at that point? So if we, you know, get scheduled for a trial in 2023 and you're not able to figure something out of court, you know, or maybe 2020, I guess just generally, I mean, do you have a sense of, you know, at what point you get to a trial? Is it 2022? Is it 2023? Just how far backlogged are the courts now? Has COVID created any challenge there? And, you know, as I said, do you expect to see a bump up in those expenses as you get closer to a trial?
Kevin Long
A trial certainly would bump up the expenses. But we're communicating with all parties right now. They understand how we believe they infringe. We are open to discussions for resolving this outside of court in hope that we can avoid going to court. But we're also organized very efficiently on this. And it's important. We knew this was a potential and necessary action that may have to be taken when we filed the patents in the first place. And so there's an obligation on our part when we feel that infringement is happening and it's impacting us in the marketplace that we have to defend the intellectual property that we filed in the first place. And so we're very focused on this and committed to seeing it to a successful conclusion, but it's a, you know, the path we believe is straightforward, but there's a lot of jockeying to get to where we need to be.
Matthew Galenko
Got it. That makes sense. And, um, you know, just, I guess as a followup, the, the backlog and client business was, was pretty nice move sequentially. I'm just curious, how much of that do you put on market development efforts that you've been kind of engaging in over the last couple of years?
Kevin Long
Well, I think the market development, uh, a small amount, um, You know, one of the other things that we measure in addition to our backlog is our book to bill. Our book to bill has just seen a modest increase over the past year. And so, you know, the backlog is quite a favorable backlog, but it doesn't reflect some of the projects that we hope to start landing over the next few quarters. We're pretty excited about some of the new applications and products that Noble Cloud is now commercializing. And it takes a long time to commercialize in a construction-related product, a process-related product. And so we feel pretty good that they'll have a modest improvement this year over last. but it should get stronger from here on out.
Noble Cloud
Great. All right. Thank you.
Operator
Your next question is a follow-up coming from Steven Gingaro. Your line is live.
Stephen Ganjaro
Thanks. Two quick ones. One is any color on the Lone Star system that you guys started talking about, I think, on last quarter's call? and any other new products worth highlighting that are gaining traction?
Kevin Long
Yeah, we're seeing a great deal of interest in the Lone Star. And we've rolled it out cautiously so that we get time in the market. And the bugs worked out a bit, but it's a pretty powerful perforating system that's gaining a lot of interest. And so the areas that we see right now are the Lone Star and also our oriented perforating systems. Those would be the two areas that have our gravity system that has the strongest level of interest right now.
Stephen Ganjaro
Another quick one. I think Mike mentioned earlier the international business thing. a little bit lumpy on Dyna Energetics. And I struggle to sort of think about how to model it. But last year, I believe that did about $35 million for the year. Is that a reasonable place to start as an international revenue target for 2021 in Dyna?
Jeff
You know, when we say international, it's everything but the U.S. and Canada. And last year, I believe that was 31 million. And, you know, that 30 to 35 range, low 30s, is where we see that going this year. And, again, it's about 7 million in Q1, and we've got it forecasted for 7 million in Q2.
Stephen Ganjaro
Thanks. I was actually including Canada by mistake there, but thanks for that. All right. That's all I have. Thank you, gentlemen.
Operator
We have no further questions from the lines at this time. I'd now like to turn the floor back to Kevin Long for closing remarks.
Kevin Long
We'd like to thank everybody for joining us for this call. As I mentioned earlier, the further we get into this year, the stronger we believe our markets are expected to be. And we look forward to... discussing this with you in July. And thank you very much.
Operator
Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day.
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