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spk01: Greetings, and welcome to the FGI fourth quarter and full year 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Paul Bartolai, with Valum Advisors. Thank you. You may begin.
spk04: Thank you. Welcome to FGI Industries' fourth quarter and full year 2021 results conference call. Leading the call today are Executive Chairman John Chen, President and CEO David Bruce, and Chief Financial Officer Perry Lin. We issued a press release after the market closed yesterday detailing our recent operational and financial results. I would like to remind you that management's commentary and responses to questions on today's conference call may include forward-looking statements. which, by their nature, are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially. For a discussion of some of the risk factors that could cause actual results to differ, please refer to the risk factors section of our latest filings with the SEC, including the final prospectus from our initial public offering. Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during our call in the press release issued yesterday. Today's call will begin with introductory remarks from John Chen, followed by a performance review from Dave Bruce and a financial review from Perry Lin. At the conclusion of these prepared remarks, we will open the line for questions. With that, I'll turn it over to John. John?
spk05: Thanks, Paul. And welcome to everyone joining our call. As we are a newly public company, I'd like to begin today's call by providing an overview of our business, why we win in the markets we serve, and where we see the opportunities for growth moving forward. Although FGI is new to the public markets, we've been in the business for more than 30 years, growing to become a reputable supplier of kitchen and bath products in North America, Europe, and increasingly throughout the rest of the world. Throughout our history, FGI has built a reputation for innovation, quality, and service, serving a diverse base of customers across mass retail, wholesale, commercial distribution, e-commerce, and specialty channels. Today, approximately two-thirds of our revenues come from sanitary ware, which includes products like sinks, pedestals, and toilets, while the other one-third comes from bath furniture, such as vanities and cabinets, and specialty growth categories, such as custom kitchen cabinetry and shower wall systems. Over time, we have developed a unique value proposition, one that leverages competitive advantages that include our diversified mix of products, market segments, and sales channels, our strong tradition of innovation with deep marketing, design, and product development expertise, our decades-long partnerships with customers and suppliers, and perhaps most importantly, our dedicated and talented employees throughout the organization who work assiduously to provide our customers and suppliers with the high-quality service expertise and trustworthiness that they have come to expect from FGI. Longer term, our objective is to continue to drive profitable organic growth within the kitchen and bath verticals via the introduction of new brands, higher margin products, and increased penetration within new and existing sales channels. This is our BPC strategy, which Dave will highlight in a minute. In addition, we believe we have favorable industry tailwinds, including multi-year growth and home sales activity, low housing stocks as well as demand, and rising home equity levels, all of which positions us to capitalize on robust R&R activity over the next several years. In line with our long-term business objectives, our capital allocation priorities will have two areas of focus as follows. First, Given our organic growth potential and our view of a favorable industry backdrop, we will look to deploy capital towards organic opportunities, principally in the form of capital investments to support our growth. And second, we continue to see opportunities to conduct targeted value-accretive bolt-ons in our fragmented markets in order to strengthen our product offerings, grow channel share, and to expand our geographic presence. When thinking through any capital allocation decisions, Our primary focus is and always will be whether the incremental return on capital deployed truly has the potential to create long-term shareholder value. And let me conclude by saying we understand that our shareholders have entrusted us with their precious capital, and we will endeavor to become worthy stewards of that capital and of your trust. In the end, I believe FGI has the right team, strategy, and market positioning to drive significant value creation for our shareholders. as we enter this new, exciting chapter of our growth. I cannot emphasize enough just how energized our entire team is to move forward. And with that, I will turn it over to Dave for a review of the quarter and a more detailed look at our strategic priorities.
spk03: Thanks, John, and good morning to everyone. As John indicated, it's an exciting time for the entire FGI team. Underlying market fundamentals are strong within our core R&R markets, Our pipeline of new and recently introduced products have garnered traction with customers, and we continue to grow our presence with both new and existing channel partners. In my 25 years with the company, I've never been more excited about our opportunities for growth. We delivered strong results in our first reported quarter as a public company, as fourth quarter revenues increased by 47% on a year-over-year basis, driven by strength across our sanitary wear and bath furniture categories. as well as strong momentum in our newer product lines, such as our custom kitchen cabinetry and shower systems business. We generated fourth quarter adjusted operating income of $0.7 million, which was down from $1.2 million in last year's fourth quarter, as a strong organic revenue growth was offset by supply chain issues, inflationary pressures, and public company costs. As Perry will discuss in more detail, we have a strong plan in place to recover most of these costs and expect our margin trajectory to be back in our normal range beginning in the second half of 2022. And over time, we intend to drive margin expansion through increased scale, improved mix, and efficiency gains. Underlying demand trends across the repair and remodel market remain strong, driven by growth in home sales activity, strong household incomes with declining household debt, and an aging household stock. More near-term, there are certainly some uncertainties that could impact or at least part of 2022 due to the ongoing supply chain issues, geopolitical risks, and rising interest rates. However, the R&R market has been incredibly stable and resilient over time, and we expect that trend to continue given customer feedback. With respect to the end markets we serve, it's important to note that we are focused exclusively on the kitchen and bath segments of the residential building products market, a category that historically has been one of the most stable areas of the market. The kitchen and primary bathroom consistently rank as the most heavily trafficked areas of the home, requiring more regular attention. In addition, when it comes to home resale, investments in kitchen and bath accessories tend to drive higher return on investments for sellers. Our focus on these markets is intentional, as over time, this segment of the market has tended to be less volatile than other residential building materials categories resulting in more stable long-term performance. The R&R market has consistently grown in the 3% to 5% range over the last 25 years, with the only exception being during the Great Recession of 2007 to 2009. And it is important to note that while many home improvement categories had total drawdowns of up to 60% to 70% during the Great Recession, FGI only had a total sales decline from peak to trough of 16%. which we think highlights the consistency of our portion of the market and the stability of our product categories. Now, we do see some risk that industry growth may fall below the long-term average during 2022, but we don't see anything at this point that causes us to think these markets should deviate from the long-term trend as we look out over the next several years. Turning now to a discussion of our strategic priorities. Consistent with our long-term strategic plan, FGI intends to drive value creation through a balanced focus on product innovation, organic growth, operational improvements and efficient capital deployment. Beginning with our commitment to product innovation, FGI has a history of being an innovator in the kitchen and bath markets, having been one of the first to market with multiple on-trend products over the years. we have developed deep marketing and design capabilities together with a level of product expertise that is second to none. One example of this is our introduction of our new jet coat shower walls, which offer stylized design options to fit all tastes without the fuss of messy grab. Second is our BPC growth strategy, which stands for brands, products, and channels. In terms of brands, FGI is focused on driving the mix of branded products higher, which we expect will result in larger available market opportunities and gross margin expansion. Our branded products have grown to nearly 40% of sales as of the end of 2021, up from less than 1% at the end of 2010. The second portion of this strategy is our focus on products. New product categories are a key growth driver, with new products such as our jet coat shower system contributing nicely to our growth in 2021. And the last part of our VPC strategy focuses on our channel expansion. FGI is focused on expanding our position in channels such as e-commerce, providing for additional growth opportunities with existing brick and mortar customers, as well as expanding with e-commerce customers. The e-commerce channel accounted for 21% of sales in 2020, up from only 2% at the end of 2010. Third is our focus on driving margin expansion. which is a big opportunity and a key pillar of FGI's value creation focus. We believe our BPC strategy will support enhanced margins through growth in branded products, new product categories, and new channels. Headwinds from supply chain disruptions and inflationary pressures impacted operating margins in Q4, and this will likely persist into the early part of 2022. However, we have adopted measures to offset these challenges. positioning the company to achieve improved margin trends in the back half of this year. Fourth is our dedication to efficient capital deployment. The company benefits from a capital-light business model, allowing us to generate strong free cash flow conversion. The company expects to utilize the strong free cash flow to reinvest in the core business and drive growth through existing brand development and new product category expansion. FGI will also look for selective bolt-on acquisition opportunities over time focused within the core kitchen and bath end markets. Importantly, we look at all capital deployment decisions through our return on capital hurdles, as all investment decisions are subject to our 20% plus return on capital hurdle rate for most investments. And finally, our last strategic priority is focused on continuing to build and cultivate our deep manufacturing partners and customer relationships. FGI has developed strong manufacturing and sourcing partners over the last 30 plus years, which gives the company a competitive advantage in the market it serves. The company also has deep relationships with an established global customer base, offering end-to-end solutions to support category growth. While recent supply chain and inflation pressures have been a headwind, FGI's deep partnerships with manufacturing and sourcing partners have helped to mitigate these challenges. We will continue to update the investment community on our progress against these important goals going forward. With that, I turn it over to Perry for a more detailed review of our financials.
spk06: Thank you, Dave, and good morning, everyone. I will provide some additional details on the quarter, given an update on our liquidity and balance sheet, and wrap it up with our four-year 2022 guidance. Revenue total $50.2 million during the fourth quarter of 2021, an increase of 47% compared to the prior year, driven by 32% volume growth and 15% benefit from price mix. Revenue benefit from strong growth in both sanitary ware and bath furniture, as well as contribution from new products such as show system and kitchen cabinetry. Revenue trend was strong across each geographic region, with the US, Canada, and Europe up 47%, 54%, and 27% respectively. Looking at our business line, sanitary ware revenue was $36 million during the fourth quarter of 2021, an increase of 57% compared to the prior period driven by 37% volume growth and 20% benefit from price mix. Volume growth during the fourth quarter was driven by continuous change in our pro channel. Fast furniture revenue was $12.5 million during the fourth quarter of 2021, an increase of 20% compared to prior period driven primary fund pricing put in place to offset raw material and logistic cost increase. Other revenue was $4 million during the fourth quarter of 2021, an increase of 72% compared to the prior period, driven by volume growth of new categories, such as our JCO shower wall systems. Growth profit was $7.6 million during the fourth quarter of 2021, an increase of 6.5% compared to the prior year period. A strong revenue growth was offset by supply chain disruption and inflationary pressures, As a result of this factor, gross profit margin was 14.5% during the fourth quarter 2021, down from 20% in the prior year period. We have a plan in place to offset the gross margin pressure when it's during 2021 that resulted from the supply chain and inflationary pressures. We are looking on instituting price increase to offset the inflation headwinds and we have been working with customers to implement these changes, but it is generally a three to six month process. In addition, we are working with our sourcing and manufacturing partners to find ways to reduce costs and further improve operational efficiencies to further offset the cost headwinds. There will be a bit of lag before this major flow through, but we expect to begin to recover the loss margin over the back half of 2022. Operating income, 0.7 million during the fourth quarter of 2021, down from 1.2 million in the prior year period. Strong revenue growth was offset by gross margin pressure, higher selling and distribution costs, and public company costs. As a result, operating margin was 1.4% during the fourth quarter, down from 3.3% in the same period last year. GAAP net income was $1 million over $0.15 per diluted share during the fourth quarter of 2021, up from $0.7 million over $0.10 in the same period last year, excluding a tax benefit of $300,000 related to the true up of our tax expenses. Adjusted net income was $0.7 million over $0.10 per diluted share. Now turning into the balance sheet and our liquidity. As of December 31st, 2021, the company had $3.9 million of cash and cash equivalent and the total debt of $14.7 million. At the end of the quarter, the company had $3.3 million of availability under its credit facility . Combined with cash, total liquidity was $7.2 million at December 31, 2021. Our current liquidity position together with our strong free cash flow conversion is more than sufficient to fund our growth initiatives. We benefit from a capital-like business model with relatively low capital expenditure need. We have a lean inventory management system that has resulted in limited working capital investment, even during the recent challenges. Our working capital level are elevated, but we expect this to work down over the next three to six months. We expect our capital spending need to remain around 1% of revenue. As we look into 2022, there is limited visibility and more uncertainty than we would like, which makes it difficult to forecast industry growth this year. With the continued supply chain challenges, inflationary pressure, and uncertain rate environment, we believe it is more prudent to assume the industry is afraid to down in 2022. As a result, we are guiding to revenue in the range of $182 to $189 million, which is up 2% from our 2021 reported revenue at the midpoint of the range. We expect operating income to be in the range of $6.5 to $7.5 million, and net income to be in the range of $5 to $6 million. That completes our prepared remarks. Operator, we are now ready for question and answer portion of our call.
spk01: Thank you. If you'd 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'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line, of Ruben Garner with the Benchmark Company. Please proceed with your question.
spk02: Thank you. Good morning, everybody, and congrats on your first quarter.
spk05: Thank you. Thanks, Ruben.
spk02: So let's see. Maybe to start, can we talk about – I appreciate the segment detail that you gave, the price mix versus volume. Do you have that information that you could share for the full year in 2021, and then what – What's kind of embedded in your revenue outlook for 2022? All right. This is Perry.
spk06: For our year 2021, our revenue increased 35%, 80% from the volume, and 17% from the price and mix. Yeah, and going into – this is Dave – going into 2022,
spk03: Um, it's a little different scenario in 2021. We didn't, um, have as much affected by price. I think we had mentioned that a lot of our price pressures came in the second half into Q4. So there'll be a little bit more of a price impact, um, in 2022, but we still are seeing a large end user demand at this point. So volume will still play a factor, uh, as well as mix, um, uh, as it did in 2021. But price for sure will have a little bit more of an impact in 2022 going forward.
spk02: But from what you know today, you guys are expecting or in your revenue range, you're assuming that volumes are going to decline and price and mix are going to offset that. Is that the correct way to look at it?
spk03: In some cases, yes. You know, because of our multiple product categories, we see a flattening more in the cabinetry side than we do anywhere else. But we're getting a lot of demand on our sanitary wear, specifically from the pro side of our business. So we don't see demand lessening too much there. But overall, yeah, the price segment would be where the growth is going to come from for the most part.
spk02: Okay, got it. And then... on the cost side can you talk specifically about uh what what some of these near-term pressures are is it largely uh freight driven is it is it you know just as much inflation and then maybe by segment are you seeing the same price cost pressures in in both of or all three of your businesses or is it more driven by one than the other
spk03: Yeah, I would say, to answer your first question, we're definitely seeing freight as the primary factor in our pricing pressure. In 2021, we received pricing adjustments from our suppliers. And to answer the second part of your question, it was more heavily weighted on the cabinetry business, the bath furniture business. They had a little bit more higher price adjustments than the rest of the business. But freight continues. We had expected to see a little bit of easing towards the end of the year. There has been, in some cases, some easing, so to speak, but what's happened is you can get containers for a little less money, but those containers are not being prioritized for shipment as much as the ones that you're paying top dollar for. So there's a balance between how much you want to pay for a container and how fast you want to get it here. So we expect that we would see by the second half of this year some easing on the price on ocean freight, which would be a positive for us going into the back half.
spk02: Can you share with us what roughly you've been paying for ocean freight containers so we can kind of try to track this year to see if it might get worse?
spk03: Yeah, sure. So, you know, this year, you know, we have multiple distribution centers in the U.S. and obviously we buy from, you know, source product from different ports. But just as an average, you're talking probably anywhere from $17,000 to $20,000 for an ocean container. And you can compare that to a year or so ago, a year and a half ago, we're about $4,000 to $5,000. So it's a substantial amount of increase, you know, going into this year or last year particularly.
spk02: Okay, and then a couple more questions, if that's all right. The recent trends kind of, you know, we're already through the first quarter. Can you talk about what kind of top-line trends you've seen maybe for the quarter and the month of March? I know you mentioned rising interest rates in your press release. Is that – impacting demand at all already? Or is that just a just in case kind of message in the press release?
spk03: Yeah, I would say, you know, we're always very conservative. We've historically been a very conservative company, especially the way we forecast. But to answer the first part of what you're asking, you know, we have not seen a real let up in demand per se in the first quarter at this point. There's a little bit of a leveling off on the retail side. Some of our um cabinetry business because there was due to the shipping issues that we experienced towards the end of the year a lot a lot of product came in all at one time for everybody a lot of i should say everybody a lot of our customers along with us so there's a little bit of a backlog of inventory um through the first quarter but the demand has not changed so there's going to be probably a flush out of that inventory over the next month or two that will sort of get our order cadence back into line uh to a more regular pattern But overall, in all of our geographies, in all of our product categories, we have not seen much of a let-up in demand at this point.
spk06: And this is Barry. To answer your second question on the interest rates, right now we are seeing like a 25 base point increase. But considering we expect that we're not going to have our working capital demand will continue decline because, you know, the inventory management, those kind of systems that we've been working on, we believe that the exposure on the interest amount of loan, working capital loan, I think it should be in the minimum range.
spk02: Okay, great. And then last one for me is just an update on the own brand strategies. maybe mid-term, long-term targets on where that 40% can go, or even short-term, any business wins or new things to think about this year that could take that number higher or still too early to call?
spk03: Yeah, well, it's a little bit of both. We definitely know we can drive that number a bit higher. But at the same time, when you look at a mixed percentage, we're also growing more The rest of our businesses and a lot of those other businesses are also in proprietary brands or private labels. So as they grow, the percentages may not grow as fast. However, I think the key takeaway is that the quality of the products within the categories we have and the new categories that we'll launch in the brands is what's important. We're changing the mix and the quality story with our brand names. We just launched, as Foremost Bath evolved into FGI Industries, we just launched our Kraft and Main brand, which is now going to be a strong driver. We've been out with a large social media presence with that. So we fully expect that the number of SKUs and the category depth and breadth will grow within our brand. The percentage part, as far as what percentage of the business, that'll take a little longer time. But we absolutely fully expect that to be part of the story as we move forward.
spk02: Great. Thanks, guys, and congrats again. Thank you.
spk01: Thank you. Our next question comes from the line of Greg Gibbous with Northland Securities. Please proceed with your question.
spk05: Hey. Good morning, John. David Perry. Thanks for taking the questions, and congrats on the strong first quarter of the public company. Thank you. Thanks, Eric. wanted to kind of follow up on your guidance assumptions um you know you talked about kind of volume declines implied in your range you know relative to pricing increases uh just wondering if you could talk a little bit more about uh the dynamics or i guess gauging the um degree to which you expect uh volume declines versus pricing increases in 2022 yeah i think you know we say volume declines you know we're we're confident and we see
spk03: I mentioned earlier, we're not seeing a let-up in end-user demand. There's a couple things that have gone on. Supply chain pressures, of course, and late deliveries have affected some things. And like I mentioned earlier, we do expect to see some easing of that in the second half. DIY business, of course, has flattened a little bit, more so in our cabinetry, our bath furniture business. I sort of mentioned there's been a lot of this bullwhip effect of inventory all coming in at one time, but we think that's going to flow out. that's that's taken some time and and to some degree um you know retails have been raised you know the higher retail pricing at least on the cabinetry side may have had some impact we think is having some impact on on the demand there potentially to some degree but at the same time we're also very conservative um uh forecasters you know if you if if we had been a public company in 2020 we would not have forecasted the the fourth quarter that we had in 2021 right so there's a lot, we still think there's a lot of upside, you know, and we're conservative with what's going on with COVID still over in Asia and the geopolitical environment and, you know, inflation, of course. But, you know, we also see the upside. DIY could pick up once inventories start to flush out, demand comes back, supply chain bottlenecks improve. And of course, if ocean freight rates start to drop, which they very well might in the back half, you know, we didn't really bake that in. So these are all positives that we think can affect the budget in a positive way as far as growth.
spk05: Got it. Very helpful. And, you know, I'm wondering if you could maybe discuss any disruptions in Q1 relative to the Omicron variant that you're seeing, I guess, in any aspect of the business, you know, whether any of that carried over from December. And I guess, you know, on kind of a overall seasonality basis. How would you think about that in terms of quarterly trends generally?
spk03: Yes, that's a good question. You know, Omicron, it may not have been in the news as much, but Omicron has affected Asia again. You've probably seen some of the cities in China have shut down briefly. We've been lucky that it hasn't impacted our production or shipping at this point for the But those are part of the reasons why we've been around for a long time and we are conservative in our forecast. We don't anticipate that we're going to have any impact from Omicron at this point impacting our production, but that's not to say it can't happen. Some of these reports that you see have impacted other suppliers and other industries as well for a relatively short period of time at this point. And the hope is that this variant is, as we're hearing, is not as serious. And hopefully in Asia, they will not lock down for too long. So we're not as, I guess we could say overall, we're not as worried about this variant as we were maybe a year ago when things were quite difficult, a year and a half ago when things were severely locked down. So as of right now, we're not anticipating any impact there at this point.
spk05: Okay, great. wondering if you could touch on or maybe just expand on your, you know, what types of acquisition opportunities make the most strategic sense for you guys right now, and maybe just kind of how much of a capital priority that is relative to some of your organic growth opportunities.
spk03: Yeah, well, you know, I think we've stressed that organic growth is obviously our number one priority, and that's where we see the majority of our growth coming from initially. But I think John and Perry have mentioned before that bolt-on opportunities are something we're looking at, and we are actively looking at that in the market right now. So those acquisitions would have to be, and I think we've talked about this before, would have to be part of our core kitchen and bath business. They'd have to relate to everything we're doing, whether it's a product we're already selling or if it's an ancillary accessory product. to some of the core products that we sell. But obviously we're not, John had mentioned in our initial statements, you know, we're a kitchen and bath company and that's what we wanna stay. We're not gonna really deviate from that. But we are active already in looking at acquisitions now. So I would say it's an important part of our go forward business as we've talked about, in addition to our focus obviously on organic growth.
spk05: Okay, got it. Yeah, I look forward to any updates there. You know, if I could follow up on one of Ruben's questions, just related to gross margins, any kind of expect, you know, when we think about, you know, pricing-related pressures, inflationary impacts, kind of your maybe range or what you're expecting in terms of trends for 2022 from a gross margin perspective, and, you know, relating to the branded products, you know, 40% today versus private labels, kind of, can you remind us on the margin differences there between those two?
spk03: Yeah, I mean, I think we've talked before about the differentials in margins on our private label ranges from 10 to the high teens, and then the branded products are anywhere from the 20s to the 30s. And the pricing pressures as we go through 2022, we are mitigating those. I think we've talked before, there's a lag in passing on some of the price adjustments to customers. But we are trending in watching our, Perry can make a mention of it, but we are trending in Q1, watching our margins improve. And we fully expect by the second half of 2022, and as we go through the year, we're expecting continued margin growth. And that's, again, making the assumptions, again, we're very conservative, that freight doesn't go crazy again and go higher. There's not any disruptions from Asia, which, again, we don't expect. But We do expect continued margin improvement as we go through 2022, and our goal is obviously to get back to where we were previously and to get cost-price neutrality by the end of the year.
spk06: Yeah, this is Perry. Just add something here. If you look at our back half of 2021, because the freight increased, all those pressures that caused we only have somehow around 15% on our gross margin, and right now we are seeing In our first half, like Dave mentioned, we are improving as we have been working on, so I think this is something pretty positive to what we see currently.
spk04: Okay.
spk05: Yeah, I appreciate the additional color there, and it makes sense. I guess last one for me. You know, what kind of sales channel or, you know, maybe several sales channels that you are kind of most excited about or see the largest potential for expanding in 2022?
spk03: That's a good question. You know, we're active in all geographies in retail, obviously, but especially our wholesale builder business up in Canada. But I think in North America, primarily in the United States, I think our biggest excitement is going to be penetrating wholesale and hospitality a little bit deeper than we have so far. I think we talked about that in our roadshow. You know, we do a great job at retail and we're going to continue to invest there, which we are. But we have a great opportunity in wholesale and hospitality, especially with some of our new product categories. And also on the e-comm channel. We've just been, I think we've talked about how well received we are and how we support e-comm businesses everywhere. A lot of our product lends itself to e-comm. We've learned and do a great job in the way we package product and ship. And, you know, so it's just, it's an exciting opportunity. And finally, maybe the biggest opportunity long-term is our kitchen business. You know, the kitchen expansion that we're seeing, Throughout the dealer networks, throughout the United States right now with our, as you know, our Covered Bridge custom kitchen business is an exciting, exciting opportunity for growth, and we expect a lot going into the second half of 2022. Got it.
spk00: Thanks, guys.
spk01: Thank you. Ladies and gentlemen, this concludes our question and answer session. I'll turn the floor back to Mr. Bruce for any final comments.
spk03: Well, thank you, everybody, for the time and interest today. We appreciate your continued support of FDI. Stay well, and we look forward to connecting with you on our next quarterly call. Thank you. Thank you.
spk01: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
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