L.B. Foster Company

Thank you for standing by. Welcome to the Q1 2024 LB Foster Earnings Conference Call. At this time, all participants are in the listening mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Stephanie Schmidt. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to LB Foster's first quarter of 2024 Earnings Call. My name is Stephanie Schmidt, the company's investor relations manager. Our president and CEO, John Castle, and our chief financial officer, Bill Fahlman, will be presenting our first quarter operating results, market outlook, and business developments this morning. We'll start the call with John providing his perspective on the company's first quarter performance. Bill will then review the company's first quarter financial results. John will provide perspective on market developments and company outlook in his closing comments. We will then open the session up for questions. Today's slide presentation, along with our earnings release and financial disclosures, were posted on our website this morning and can be accessed on our investor relations page at lbfoster.com. Our comments this morning will follow the slides in the earnings presentation. Some statements we are making are forward-looking and represent our current view of our markets and business today. These forward-looking statements reflect our opinions only as of the date of this presentation, and we undertake no obligation to revise or publicly release the results of any revisions to these statements in light of new information accepted as required by securities laws. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and presentation. We will also discuss non-GAPS financial metrics and encourage you to read our disclosures and reconciliation tables provided within today's earnings release and within our accompanying earnings presentation carefully as you consider these metrics. So with that, let me turn the call over to John.

Thanks Stephanie. Hello everyone. Thank you for joining us today for our first quarter earnings call. Please turn to the materials to highlight the quarter on slide number five, which reflect continuing progress and building momentum to our strategic transformation. First quarter organic sales improved .9% over the prior year, but they were definitely strong in quarter delivered by our rail segment. In fact, rail segment sales were up .4% on organic basis. The approved sales performance coupled with a 90 basis point gross margin improvement ending at .1% drove a .4% increase in adjusted EBITDA year over year. The overall improvement in profitability was driven by rail segments, which deliver strong profit improvement in technology services and solutions business, both in North America and the United Kingdom. Infrastructure results were somewhat softer in the quarter with organic sales basically flat year over year as the precast business was adversely impacted by challenging weather conditions and observed markets. However, market demand remains through Boston our infrastructure segment and we expect results to improve as we continue through the construction season. As expected, our net debt increased to 74.9 million during the quarter, reflecting the increased funding to our working capital to support sales growth along with annual bonuses and insurance per unit. It's important to note that our net debt was down 2.5 million versus last year and the gross leverage ratio of 2.2 times improved two times year over year. As mentioned in announcement, we sold an adjacent property associated with our former joint venture in Magnolia, Texas for 3.5 million in net proceeds. The associated gain was excluded from our adjusted EBITDA for the quarter. Order rates recovered in the first quarter, increasing .5% sequentially and 3% last year on an organic basis. Backlog remains healthy at approximately 222 million, which is down 37.6 million versus last year. Noting that 12 million has increased, the previous strategic investors completed in 2023. The balance of decline is largely due to our rail distribution business, which has improved to pre-COVID order fulfillment lead times, translating to sales growth at a lower order book level. With a strong start to the year in line with our expectations, we reaffirmed our 2024 financial guidance. I believe we're on track to achieve our 2025 financial goals established over two years ago. Bill will now cover the detailed financials for Q1, and I'll come back at the end with some closing remarks on our markets and our outlook. Over to you, Bill.

Thanks, John, and good morning, everyone. I'll begin my comments covering consolidated highlights on our first quarter on slide number seven. As a reminder, the schedules in the appendix provide more detailed information on our financial results for the quarter, including certain non-GAAP measures discussed on today's call. As John mentioned in his opening remarks, our first quarter results were strong, driven by both organic growth and the portfolio moves we made in line with our strategic roadmap. Portfolio moves completed last year include the sale of Chemtech at the end of Q1 and the sale of the concrete ties business at the end of Q2. In addition, last year we announced the exit of our Bridge grid deck product line in Q3, and we also completed the Cougar Mountain precast acquisition in Q4. Organic results reviewed throughout today's presentation provide insight into the performance of our base business, excluding these portfolio actions. Net sales for the quarter were up 7.6%, .9% on an organic basis, with the organic growth driven primarily by the strong results in the rail segment. All infrastructure organic sales were essentially flat year over year. Gross profit was up $3 million, which drove a margin expansion of 90 basis points, improving consolidated margins to 21.1%. The improvement was driven by the rail sales uplift, as well as the benefit of portfolio actions and improved product mix. Selling general and administrative costs increased over the prior year due to personnel and professional services costs. However, as a percentage of sales, SG&A was down 20 basis points to 18.3%. Net income for the quarter totaling $4.4 million included a $3.5 million net gain on the sale of the Magnolia, Texas property. The net gain realized was equal to the proceeds received as the property carried zero book value at the time of the sale. The net gain realized on the property sale was excluded from the adjusted EBITDA for the quarter, which was $5.9 million, up .4% versus last year. As expected, cash used for operating activities in the quarter was $21.9 million due to seasonal working capital needs, coupled with funding for prior year incentives and annual insurance premiums. I'll provide some additional color on orders and backlog by segment later in the presentation. The bridges on slide eight reflect the organic and portfolio driven impacts on sales and adjusted EBITDA for the quarter versus last year. The bridge on the left side highlights the strong organic growth realizing Q1, with a $19.5 million sales increase representing .9% organic growth. The net impact of M&A activities decreased revenue $10.6 million or 9.2%. The bridge on the right side highlights the improved profitability delivered from both organic and M&A drivers. Notably, adjusted EBITDA was up $0.6 million from M&A activities despite the related $10.6 million decline in sales. The EBITDA leverage on the strong organic sales growth was tempered due to lower profitability and infrastructure coupled with the higher SG&A. We expect our profitability from organic sources will improve as the year progresses. Overall, we're pleased to see the uplift in adjusted EBITDA, resulting in a 90 basis point improvement to .8% of sales for the quarter. Slide nine highlights the progress we've made in sales growth and margin expansion over the last two years. The net impact of our strategic execution resulted in a 7% adjusted sales growth for the trailing four quarters ended March 31, 2024. Of course, this reported result includes the impact of our portfolio work. Organic growth over the same time period averaged approximately 13% per quarter, with the .9% realized this quarter being the high point. Over the trailing four quarters, adjusted gross profit increased 17.3%, resulting in a 190 basis point improvement and adjusted gross margin to 21.4%. As a result of our portfolio work and profitability initiatives, adjusted gross margins have exceeded 21% in each of the last four quarters. We're very pleased to see the impact of our transformation in our results and believe the structural improvement in the gross margin profile of our business will continue to deliver improving margins given the demand outlook from our infrastructure and markets. Over the next couple slides, I'll cover our segment performance in the quarter, starting with the rail segment on slide 10. First quarter rail segment revenues totaling $82.6 million were up .3% over last year, including a .1% decline from the TIEs divestiture. Strong organic sales growth was realized in both rail products and technology services and solutions business units. We're especially pleased with the results in TS&S, which included an uplift from the domestic rail safety business, as well as some modest recovery in the UK. Rail margins of .5% were up 30 basis points year over year, driven by the strength of the TS&S business. New rail orders increased .6% year over year and .4% sequentially driven primarily by rail products. While backlog levels decreased .3% versus last year, this decline is primarily due to shorter lead times and improved order fulfillment in rail products, resulting in meaningful sales growth with a relatively lower backlog level. Last year's orders and backlogs associated with the divested concrete TIEs business were 2.7 million and 3.5 million respectively. Turning to infrastructure solutions on slide 11, segment revenue decreased $9.4 million or 18.4%. However, .5% of the decline was due to divestiture and product line exit activity. Organic sales were relatively flat with a 1% increase over the prior year. Strong growth in steel products was offset by the impact of adverse weather conditions on customer project installations and precast concrete. Gross profit margins were up 80 basis points to .4% due primarily to portfolio changes executed over the last 12 months. New orders were $48.6 million, down $17.1 million from the prior year quarter, with divestiture and product line exit activity contributing a decline of $8.5 million. Backlog totaling $136.2 million reflects a $10.1 million decrease, $8.5 million of which was due to M&A activity. I'll now cover our liquidity and leverage metrics on slide 12. We were pleased to see the continued improvement in our net debt and gross leverage metrics compared to last year. Net debt levels decreased $2.5 million and our gross leverage ratio decreased 0.2 times. As expected, we saw an uptick in both net debt and gross leverage during the quarter to fund seasonal working capital needs, as well as prior year incentive bonuses and annual insurance premiums. We remain confident in our ability to manage our leverage metrics around two times over the long term, given our capital light business model and improving cash generation outlook. While we had a $21.9 million use of cash from operations during the quarter, we expect operating cash flow to improve along typical seasonal patterns as the year progresses. We remain confident in our free cash flow outlook guidance of $12 to $18 million in 2024, which includes the final $8 million that's owed under the Union Pacific Settlement Agreement. Cash generation will be prudently deployed along our capital allocation priorities, including continuing the execution of our share buyback program with $12.3 million of the original $15 million authorization still available through February of 2026. In summary, we believe the key drivers of strong, sustainable free cash flow are in place and should continue to improve throughout the balance of 2024 and beyond. Next, we visit our capital allocation priorities outlined on slide 13. As I just mentioned, we continue to focus on managing leverage levels while opportunistically investing in organic growth opportunities we see in rail technologies and precast concrete. We're comfortable with gross leverage around two times, which is down from the recent 3.3 times high point seen after the completion of three acquisitions in the summer of 2022. Capital spending is expected to run around 2 to .5% of sales on average, which is slightly higher than our historical levels due to investments in our growth platforms. As mentioned before, we continue to evaluate opportunities to return cash to shareholders through our stock repurchase program, and we've been active since its inception in February of 2023, repurchasing approximately 151,000 shares or .5% of our stock. We're also looking at .4% of the outstanding shares at an average price of $17.89 per share. We continue to evaluate small tuck-in acquisitions that can extend our product portfolio within our growth platforms, such as the recent Cougar Mountain acquisition that was completed at the end of 2023. And finally, we continue to consider a dividend as a capital allocation option as the prospects for stronger free cash flow improve. My closing comments will refer to slides 14 and 15 covering orders, revenues, and backlog by business. The -to-bill ratio over the last 12 months was 0.94 to 1, which is somewhat softer due to the strong order book fulfillment rates and improved lead times. First quarter order rates did improve sequentially .5% and were up 3% on an organic basis, highlighting an improving trend in the demand levels. And lastly, our consolidated backlogs on slide 15 reflects a healthy level, with the decline year over year due both to divestiture and product line exit activity, coupled with improved lead times and order fulfillment execution. As mentioned in the past, our order rates and backlogs are susceptible to swings driven primarily by large order timing in our rail distribution product offering. Despite the lower backlog level, we remain optimistic in the longer term prospects for growth and demand across our portfolio and expect this will translate into improving backlogs as the year progresses. In summary, we're pleased with the strong start to 2024 and look forward to continuing this progress throughout the balance of the year. Thanks for your time, and I'll now hand it back over to John for his closing remarks. John?

Thanks Bill. Please turn slide 17 to run over to our key business and market drivers underpinning our outlook. We are optimistic in long-term prospects for growth and demand markets for both segments, particularly given the continued emphasis on effort-sorcery investment. In 2023, we began to realize some project-related business from U.S. federal programs approved over the last several years, and we expect that trend to continue moving to 2024 and beyond. In addition, emphasis on rail safety programs is another favorable driver for our business. We see an uplift in demand for a total track monitoring technology products in 2024, and since this trend will continue. We're also cautiously optimistic that the U.K. construction markets have stabilized and are showing modest signs of improvement after a challenge in 2023. And finally, record spending on recreational parks and campgrounds, funded by the Great American Outdoors Act, continues to drive strong demand for our CXP concrete buildings. Coupled with government funding for road and bridge rehab projects, as well as robust regional commercial residential real estate development, we believe the outlook for our long-term demand is favorable for our infrastructure segment. In summary, overall prospects for sustainable, profitable growth should remain strong way of the infrastructure investment supercycle we expect for years to come. On slide 18, I'd like to emphasize the investment thesis for LB Foster, which is supported by four key pillars. First, we've taken the strategic steps necessary to transform our business portfolio, resulting in structural improvements and profitability that were delivered in 2023 and are continuing as evidenced by first quarter results. Second, we report a stronger organic growth in 2023 and also started this year again with health to growth. Third, with exceptional cash flow in 2023 and our capital-like business model, coupled with the improving profitability and the completion of our unique Pacific settlement payments later this year, should all provide even more favorable cash flow in the future. Fourth and finally, we have disciplined capital allocation process with multiple drivers that have been deployed and creating value for our shareholders as evidenced in our improved equity returns. So in summary, we believe our strategy is found in our situation along these four pillars should deliver improving results through 2024 and beyond. With these pillars in place, we're confident in our prospects for the future. As I wrap up today's call on slide 19, I remind everybody to be closely monitoring the potential for LB Foster to be added back to the Russell 2000 index this year. Our market cap as of last Tuesday, the measurement date, was approximately $255 million, up 106% over last year. The index was up .6% over the same time period and the market cap cut off last year was approximately $160 million. Given our equity performance relative to the index, we believe we will be on the list for inclusion once published later this month. Looking back, it's been two and a half years since our investor day. At that time, we rolled up our strategic transformation roadmap and aspirational goals for 2025. Since then, we've completed nine transactions where we simplified our business structure, improved our profitability profile, and aligned the business to capture robust demand in our served infrastructure markets. We are pleased with the progress, but the journey continues. We reaffirmed our guidance for 2024 and have a clear line of sight to our goals for 2025. Our team is energized by the prospects for the future. Yes, indeed, we have momentum. As I started today's call, I learned the call with recognition to our employees in the rail segment, this time on the topic of safety. This group worked the entire first quarter, over 365,000 employee production hours without a recorded injury. Congratulations to Greg Lippert who leads this group and all that made this happen. So with that, thank you for your time and continuing interest in L.B. Foster, and I'll turn it back to the operator for the Q&A session.

Thank you. As a reminder, if you would like to ask a question, please press star 101 on your telephone. Also, we ask that you please wait for your name to be announced before you proceed with your question. One moment while we compile the Q&A roster. Our first question today will be coming from Alex Briegel of the Riley Security. Your line is open. Thank you

and good morning, gentlemen. Hi, Alex. So a couple of quick questions here. First off, very nice quarter. Congratulations on that. But there was no change to your full year guidance and understanding it's early. First quarter was strong. Did you see any kind of pull forward or are you really just kind of staying conservative given where the new order activity is in the first quarter?

Yeah, actually, you know, we're pretty the order activity we're feeling pretty good about. We did have a little bit of activity that we thought maybe a Q2 that moved into Q1. But most of it was, you know, like you said earlier, is Q1. And there's a lot of headwinds out in the markets today. We're experiencing some nice results when I start, but we're being cautious in our guidance that we're giving in the market.

Fair enough. And then as it relates to your comment about shorter lead times, can you go into a little bit more detail on that? Yeah, you know,

yeah, I appreciate that. Yeah, real distribution. I mentioned that and kind of back to pre-COVID levels. It's a good thing. You know, it did impact to what we built in the backlog because in the past we had the customers were coming to us with extended lead times and gave us orders and greater visibility. Because you had to build out that capacity in the mail, specifically a CIPCO, which is a steel provider. In the last six months or so, we've seen that get back to, you know, basically normal conditions. So the order rate and bidding rate is still good, but they just don't need to place the orders as often as they did in the past, resulting in a little less order book. But that's a good thing for us. We were being pretty stressed or, if you will, from a supply chain in the past. So we feel much better about where we're at today. It's much more back to normal.

And then lastly, as it relates to capital allocation, clearly expect a pretty decent cash flow this year. CapEx is sort of being managed and maintained. So I suspect that's going to free up, you know, some capital here to allocate towards M&A. So maybe if you could talk a little bit about that and how you think about using debt and stock in future M&A transactions.

Well, sir, I know Bill, I'm in this as well. First of all, Bill mentioned we're at two to two and a half percent of sales is our capital place. So, you know, we're pretty light on the capital side. We like to do what we can think through things, really work on the process itself and then bring capital only when it's needed, which has been very beneficial for us, especially with, as you see, our improved margins. A lot of that is the heavy lifting by our men and women that are just making things and doing things better, including the safety results that I mentioned. You know, cash is critical. Free cash flow is something we really measure, we monitor. We're excited about getting to the settlement payments with the Union Pacific. You know, that's eight million that comes off and changes the balance of this year. And we'll have some dry powder as we move forward. But get it back to your, you know, your M&A question. Right now, you know, we did quite a few, as we mentioned, nine deals in the last two and a half years. And we feel very good about where we're at with respect to our portfolio. We went from three segments to two segments, and we're really focusing on execution right now. You know, make sure we get the guidance and then go from there, building a platform. With the mind is, you know, 2025, the numbers that we put out there. We put two and a half years ago in building that platform, building that growth, top and bottom line, lined up to that. So we're not going to get too crazy as far as M&A work. I think we built a lot of credibility back in the marketplace today and showing up what it is that we are, building our core companies and really focus on our things that really make profitability. And that's just interest in the company. That said, you know, we will continue to look at the cash situation. Bill, I'll let you maybe chime in with your thoughts on including a dividend perhaps in the future.

Yeah, yeah, I guess I would say to echo John's point, you know, we had a great cash flow year last year, you know, right around 32, $33 million of free cash flow last year. And the guidance is 12 to 18 million this year. And the capex that we're doing this year is actually a little higher run rate than what we would expect over the longer term because of some of the organic opportunities we're investing in that will help us make the jump from where we're expecting to be in 24 to 25 guidance. And then with the stock repurchase programs, those will be continuing. And, you know, with the UP obligation going away and stronger cash flows in 2025, I think that's when the prospects of a dividend will get greater attention. And that's something that's continuously a discussion with our board today. So, I'm feeling good about the direction we're going and look forward to continue to make progress this year.

Very helpful. Thank you. Nice quarter.

Thanks, Alex.

Thank you. One moment for the next question. If you would like to ask a question, please press star 1-1 on your telephone. The next question is coming from Chris Saki of Singular Research. Your line is open.

Hi. Good morning. I just had a question on backlog trends. You mentioned it. You see it improving throughout the year. Can you help me understand or give a sense as to what levels do you see it going to?

Well, first of all, the bidding activity is very, very strong right now across the entire company, both the infrastructure and rail side. I mean sequentially, we feel very good about our uptick in activity from quarter to quarter. And even when you look at Q1 versus Q1 year over year, I don't know necessarily. We don't give guidance what the backlog is. All I know is we have enough activity, enough bidding activity to be able to reconfirm our guidance for this

year. Okay. Great. Thanks. And it looks like rail had a good quarter for revenue growth. Can you comment on what were the main drivers there? We had, as I mentioned

in my remarks, very strong performance on rail and actually very good performance on the entire rail segment, including the UK. I haven't said that in quite a while. I say a year might have been even longer. So UK year over year is really stabilized and something that we feel much better about conditions going forward. The team over there has done a great job of just right sizing as to what the market is going on and what we saw that come through in the first quarter. Our acquisition we made over there scratch has been also had a very, very good quarter with nice profitability. So that came through. And the other piece that really is jumping off the page is our condition monitoring here in North America related to our salient business, specifically with the Wild Mark IV introduction of that product in the market, specifically helping our customers, the freight customers, as well as the transit customers with safety and safety measures that are going on, keeping the trains on the track as well as really looking at their operational efficiencies and effectiveness of how they run and manage their train operations. They've had a very, very strong start to the year and they're going to continue to have a fantastic year as far as we can see. So we're very excited about the technology, the innovation, the things that the company has really been working on the last couple of years, moving, migrating this technology from the UK and Western Europe and North America. And we're really seeing the fruits of our labor right now in the rail space. So that's really exciting us as much as anything else. It may not be coming through in per se order backlog and dollars and dollars, but it's coming through a profitable backlog with gross margin and giving us the opportunity to really grow this business and do something significant with. So from that point of view, we're where we expected to be at this time and we're looking to put together a strong Q2

and beyond. Okay, great. Thanks for the answers.

Thank you. One moment for the next question. And our next question is coming from Justin Burgener from Cabeli Funds. Your line is open.

Good morning and nice quarter.

Thank you, Justin. Appreciate it,

Justin. Just a couple of questions on the infrastructure side. Any sort of estimated quantification of the impact of, you know, tough weather on sales in Ibiza on the quarter?

Yeah, you know, we really didn't put a pencil to paper on that. I was out there myself in that geography this spring, you know, between the rain and actually it's snow and talking to customers. It was just a lousy quarter related to we built quite a bit of product. We have it ready to go. And as the construction areas kind of dry out, things will improve. You know, I really couldn't put a number to it. I maybe,

Bill, you could give a... Just to get... Hi, Justin. Just to give you order of magnitude, the precast business unit was down about 13% on a -over-year basis, which is just about $3 million. And we would say the lion's share of that was due to the weather impact. You know, we've got a good order book position for the business. We feel like, you know, we're going to get back on track in the second quarter. But that was the -over-year decline attributable to the precast business within infrastructure.

Okay. Are you seeing any macro impacts on precast, you know, positive or negative? I guess the negative side might be higher interest rates or is that still very manageable?

No. No, very manageable. And the supply chain, as I mentioned on the rail side, getting back to normal. The supply chain related to concrete and availability of cement is getting back to normal. So that's very, very good for us. You know, the allocations that were there in the past kind of limited our ability to perform. That situation has improved dramatically. Our markets are booming, doing very, very well down in Texas and the southeast related to the need for concrete. So we don't see any pushback on concrete or, you know, the type of products that we're providing in the marketplace. To the contrary, it's the opposite. We'll be running at full capacity, as long as we can see.

Okay, that's great. On the rail side, help me understand, you know, there wasn't much gross margin, I guess, or there's modest gross margin improvement on sales being very strong. Is that just a function of some mix or, you know, would you expect margin to be flat with this type of sales growth normally?

Yeah, yeah, that's right. I'll let Bill get into details, you know, actual numbers of it to share, but it's definitely a mixed play. That we see, you know, came through this year, which is typical in the rail with the project type work that we do. If we get a big rail products type work that's, you know, moving around by, you know, components, rail components, you know, we'll bring down the revenue will be up in respect to margin will be a little bit dilutive on the bigger picture. But nice thing is after we supply that you got the you got the other products coming right behind it, but the friction management and the condition monitoring things like that. That really helped, you know, boost up the profitability. And that's the nice thing about our company is, you know, we give them the whole package now. It's not just selling the components anymore. It's about providing the chemicals and the treatments and now the monitoring devices for them to run effectively. So that mix will come in and out. But as we get into more of the actual rail season, which is Q2 and Q3, we'll, you know, the most of the work is done. That's where we'll see the really uplift and leveraging of the business even more. It will be more impactful. Bill, any color you want to add to that? Yeah,

yeah, thanks, John. I guess what I would highlight is the growth that we saw within the the rail segment was highlighted by rail products where they were up in terms of dollars, 13 million dollars on a year or year basis, about 33 percent. And across the portfolio, that's the business that's going to have the lowest gross profit profile, which would have tempered the margin growth that we saw on a year over year basis. On the other hand, steel product, sorry, TMS, which is the technology element of the portfolio, had really strong growth on a year over year basis, about 100 percent. Now, from the dollar's point of view, they're a much smaller component of the business and their margins are stronger as well. So that contributed to the lift that we saw that from a percentage point of view, the strength in the rail products portion of the business is really what tempered the margin performance on a year over year basis.

Okay, guys, and then just one last question on rail. So it seems like what you're saying is there's very good growth in rail, but some of the revenue increase in the first quarter was a function of working down backlog as lead times returned to normal. But amidst still a good. Yeah, that's right. Okay. Yeah, that's

right. Yep. Thank you, Jeff.

Thank you. If you would like to ask a question, please press star one one on your telephone.

At this time, there are no more questions

in the queue, and I would like to turn the call back over to John for closing remarks. Please go ahead.

Thank you, Lisa. We appreciate everybody's being a part of today's call. As I said in my opening remarks, we are exceptionally strong start to 2024 and we have momentum. So we really feel good about where we're at today. We have quite a bit of work to do ahead of us to get their aspirational goals set off to do, but we're off to a great start of the year. And I really appreciate everybody's the company, the employees, as well as the board of directors, everybody coming together to make this happen. I mentioned earlier with the group, the safety performance. And that's really testament to when we put our efforts together of really focusing on making something important and safety is a core value of our company that we this company makes results happen. And that was a great example of us coming together. Last couple years have been a tough time for the company. It's been exciting to see everybody moving together, kind of rolling the boat together, and really focus on things that are really driving the profitability as well as our return to our shareholders. And honestly, it's a much, it's a fun place to work today. So thanks to everybody. Thanks to the company as well as investors hanging with us and we feel good about where we're at today and understand we're going to keep working on your behalf into the future. So thanks again. Have a wonderful day and we look forward to talk to you after Q2.

This does conclude today's conference call. Thank you all for joining. You may now disconnect.