Lindblad Expeditions Holdings Inc.

Good day and welcome to the Lindblad Expeditions Inc. Third Quarter 2021 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Craig Fellenstein, Chief Financial Officer. Please go ahead.

Thank you, Matthew. Good morning, everyone, and thank you for joining us for Lindblad's 2021 Third Quarter Earnings Call. With me on the call today is Dolph Burley, Lindblad's Chief Executive Officer. Dolph will begin with some opening comments, and then I will follow with some details on our financial results and liquidity before we open the call for Q&A. You can find our latest earnings release in the Investor Relations section of our website. Before we get started, let me remind everyone that the company's comments today may include forward-looking statements. Those expectations are subject to risks and uncertainties that may cause actual results and performance to be materially different from these expectations. The company cannot guarantee the accuracy of any forecasts or estimates, and we undertake no obligation to update any such forward-looking statements. If you would like more information on the risks involved in forward-looking statements, please see the company's SEC filings. In addition, our comments may reference non-GAAP financial measures. A reconciliation of the most directly comparable GAAP financial measures and other associated disclosures are contained in the company's earnings release. And with that out of the way, let me turn the call over to Dolph.

Thank you, Craig, and welcome to all of you joining our call today. Let me begin by saying that Q3 was an extremely busy time for the company as we executed against each dimension of our strategic and operating plans. I am grateful to the hardworking teams on our ships, the many highly professional members of our land companies, and the Lindblad office employees who worked together so well to accomplish so much these past few months. Highlights include our return to broader operations, the success of our COVID protocols, the acquisition of Classic Journeys walking company, the delivery of the National Geographic Resolution, our newest polar ice class vessel, meaningful progress with our digital initiatives, and ongoing development in the areas of environmental sustainability and our commitment to diversity, equity, and inclusion as an organization. I would like to take the next few minutes to provide some additional details on each of these areas, beginning with how quickly we have been able to get the majority of our fleet back into operations in geographies that we have been exploring for many decades. Eight of our nine ships took guests on immersive expeditions this past quarter, including two vessels in the Galapagos, four in Alaska, and two in Iceland, and we were able to achieve a fleet-wide occupancy of 82%. There was particular strength across our Alaska season, where we initially launched only two ships, but due to guest demand, were able to ultimately operate all four of our U.S.-flagged vessels throughout the summer. Our international ships also performed well despite achieving lower occupancies for the most part due to the continued nuances of foreign travel and concerns around the COVID Delta variant. One thing to note is for those guests who were already booked but opted to not travel abroad this year, the majority rescheduled their expeditions for 2022 or 2023. While there may be caution on the part of some due to the pandemic, the spirit of adventure and the yearning to see parts of the world that inspire wonder is very much alive in the hearts of our guests. An important highlight operationally was the strong performance by our field staff and crew on board the ships. Guest feedback has been extremely positive regarding the quality of the itineraries, the knowledge and care of our naturalists, the food and beverage, and the quality of the accommodations. In many cases for our guests, their voyage with us was the first time they had traveled recreationally since COVID began over a year and a half ago. And you could feel the excitement and joy from these guests who are returning to the adventure and beauty that is so much part of the Lindblad Expedition experience. Fundamental to the quality of our operations has been the strict adherence to the COVID protocols across all of our voyages. 100% of guests age 12 and over and all crew and all staff are required to be vaccinated. We also require a negative PCR test prior to travel from home and an additional negative test prior to boarding the ships. Furthermore, we instituted daily symptom checks and mid voyage testing as necessary to ensure the health and safety of everyone on the vessels. We did experience a small number of breakthrough cases but the sizes of our ships and our rigorous protocols enabled us to limit the spread of the virus on any voyage. As we look forward, we remain very optimistic about sustaining our business momentum. Aside from being in a strong booking position, which Craig will cover in more detail in a moment, we're extremely excited to be returning to Antarctica with our first voyage set to depart this week. The season overall is well booked across our three polar ships from November through early March, and particularly encouraging is the response we have gotten for our two brand-new polar vessels. As you may know, we took delivery of the National Geographic Endurance last March and have been eagerly awaiting the time when we could take guests aboard this amazing ship. The Endurance combines cutting-edge marine capabilities, such as her X-BOW, which provides a smoother ride through rough waters, as well as luxurious accommodations and food and beverage capabilities which are at the highest standard in the industry. We were able to catch a glimpse of what she can provide to guests this past quarter in Iceland, and the response was nothing short of phenomenal. She is now preparing to provide guests an unparalleled experience in Antarctica, and she will be joined by her sister ship, the National Geographic Resolution, which is making its way from its birthplace in Norway down to Argentina as we speak. I would like to thank our hardworking team in cooperation with the Ulstein Yard, who were able to deliver the resolution on time and on budget during one of the most challenging business environments in modern memory. This is a truly remarkable achievement and a great moment in our company's history. While we are certainly optimistic about the future for the Lindblad feed of vessels, it is also important to note some of the hurdles we continue to face due in large part to the pandemic. After an early summer where we saw pent-up demand pushing booking levels to two-year highs, the Delta variant did slow that progress temporarily in later summer and early fall. We saw a number of guests decide not to travel, with many of them pushing their reservations into 22 and beyond, as I mentioned earlier. The daily adherence to COVID protocols is also something that, while necessary, adds a layer of complexity for our guests. our shipboard teams, as well as those explaining and documenting compliance on a per-guest basis in our offices. As all of you are likely familiar, we're also working through the challenges related to the global supply chain slowdown. We have so far been able to navigate the supply chain challenges by diversifying our sources, including using more local suppliers for both consumables, such as food and beverage, as well as the parts and technologies required to run our ships. Another exciting development in early October was the next acquisition, which expands our platform of best-in-class land company operators, delivering authentic travel experiences across the globe. Classic Journeys is a leading luxury cultural walking tour company based in La Jolla, California. They run premium walking tours focusing on engaging experiences that immerse guests into the history and culture of the places they are exploring and the people who live there. Classic Journeys tours are highlighted by expert and well-connected local guides who live in the regions being explored. They feature luxury boutique accommodations and handcrafted itineraries, which have been curated through years of local connections and experience. Classic Journeys is a very complimentary addition to our stable of land-based adventure travel companies that includes Natural Habitat and our acquisitions from earlier this year Off the Beaten Path and the DuVine Cycling and Adventure Company. Lindblad will leverage its experience and resources to accelerate the growth of these unique offerings so we can further capitalize on the growing demand for authentic and immersive adventure travel around the world. We also see great potential in the cross-marketing opportunities that exist between the now five companies under the Lindblad platform. It was a thrill for me to be part of a summit a month ago where all the founders of these companies shared best practices, sought to learn how they could take steps together to provide our combined pool of guests more and more compelling travel experiences. This team of pioneering founders, combined with the shared services we can provide, as part of the larger Lindblad platform, will be hard at work determining how we can really grow these collective businesses. And we have actually already started to see the benefits of our diverse platform. This past quarter, our land businesses delivered positive earnings as they were able to take advantage of the surging demand for domestic travel. With regard to our digital initiatives, we continue to make strong progress. This work is multidimensional and includes revamping our website the booking flow for our guests, transforming our reservation system, our approach to CRM, and the addition of marketing technologies which will allow us to be much more data-driven in our approach to both marketing efficiency and also understanding the needs of our guests. This past quarter, we were able to increase the amount of web traffic by nearly 50% versus the same period in 2019. We also more than doubled our social media audience versus 2019. At the moment, we continue to focus on building the foundations for each of these capabilities, and we will keep you posted on the results we generate. Before I turn the call over to Greg, I would like to mention our work this past quarter on the environmental sustainability and company cultural front. As you know, we are a company that is very mission-driven, which is a function of what we care about as a group of leaders, and the wonderful legacy that was always part of our founder and now co-chairman Sven Lindblad's approach to building the company. This past quarter, we made good progress with our program geared at providing funding for ocean conservation in collaboration with our partners at National Geographic. We also were pleased with the progress being made as part of our Galapagosal Island Relief Fund, which has provided 56 microloans to date ranging from $400 to $5,000 to support entrepreneurship, business reactivation, food security, and education for the islanders of the Galapagos. And we had a total of 135 educators who traveled with us in the Galapagos this summer before returning home to their classrooms to share what they had learned with their students. Also of significance is that we are well into the training of all our leaders on the subject of diversity, equity, and inclusion. This training is only a start in our efforts, which will also involve reviewing our recruiting, hiring, and training approaches with the goal of being an ever more inclusive organization where everyone feels that they belong. Our work across the planet is inherently diverse in terms of the places and people with whom we work, and we want to ensure that our team mirrors that same diversity. Let me close by sharing a personal note. I had the opportunity to visit with several of our ship teams last quarter, speak with guests from a variety of our voyages, and also take a few days to experience a divine bicycling tour in the Shenandoah Valley. This combination of experiences reinforced for me how meaningful these travel experiences are in the lives of our guests. We take this responsibility very seriously and are committed to making this product better and better, building the strength of our teams. and by advancing our technologies, as well as investing in the study of fascinating places and people on all continents, and additionally, closely listening to the needs and wants of our guests. Now, entering my sixth month at the company, I am more excited than ever about the future for Lindblad Expeditions. And now, I would like to turn the call over to our Chief Financial Officer, Craig.

Thanks, Dolph. Good morning, everyone, and thank you for joining us. As Dolph mentioned, we are extremely excited to have nearly all of our expanded fleet ramping up operations, with nine of our ten owned and operated ships taking guests prior to year end. I would like to once again thank all of our dedicated crew and staff across the world, as well as our diligent office personnel, for their sustained resiliency over the past year and a half, and for their commitment to not only prepare us to return to operations, but to do so as a strong and vibrant company. While we have clearly accelerated our operating momentum, it will take some time to fully return to the financial levels we were generating when we paused operations. In the short term, we have ample liquidity to ramp up operations and weather any immediate uncertainties. And looking further ahead, the investments we have made during the pandemic to expand our fleet capacity and diversify our product offerings has positioned us to drive significant growth over the next few years as we capitalize on the demand for authentic adventure travel. Turning to our current financial position, we ended the third quarter with 156 million in unrestricted cash and 29 million in restricted cash, primarily related to deposits on voyages that originate in the United States and credit card reserves. The 185 million of total cash declined 18 million versus the end of the second quarter of 2021 as significant guest payments for upcoming voyages and deposits for future travel were offset by increased operating cash usage as we launched itineraries, prepared additional ships for sailing, and increased marketing spend to drive future bookings. The change in cash during the quarter also reflects the receipt of $21 million grant under the Certs Act, as well as capex spending of $19 million net of export credit funding, primarily due to $13 million used in the acquisition of the Crystal Esprit. which will replace the National Geographic Islander in the Galapagos next year, as well as build costs associated with the National Geographic Resolution, which was delivered on time and on budget in September 2021. Additionally, the third quarter also included $5 million in principal interest and financing payments. Following the quarter, as Dolph mentioned, we invested $13 million to further broaden our product platform of high-quality and immersive adventure travel offerings, with the acquisition of leading luxury walking tour company Classic Journeys. We also received the remaining $6 million of our certs grant following the quarter. Overall, our monthly operating expenses will continue to increase as we return additional ships to service, market upcoming expeditions, and spend on our digital initiatives. At the same time, we are seeing a continued ramp in cash inflows from final payments for upcoming voyages. most notably related to travel to Antarctica across three of our polar ships and deposits related to new reservations for future travel. Bookings overall for 2022 are currently 51% ahead of where we were for 2021 at the same time a year ago and 27% ahead of 2020 at the same point two years ago. The strong year-on-year trends include guests on canceled voyages that have opted to reschedule but they only make up about 21% of our bookings for 2022. We are also seeing strong demand already for 2023 with bookings way ahead of where we were at the same time two years ago for 2021. There is no question that there is significant pent-up demand to get out and explore the world's amazing geographies, and we are primed to take further advantage of this trend. Turning to the P&L, Lindblad delivered third quarter revenue of $64.5 million versus only $1 million in the same period a year ago. The current quarter included $33.1 million at the Lindblad segment from operating ships predominantly in Alaska, Iceland, and the Galapagos, and $31.4 million at our land experiences segment, including trips to Africa and Alaska at Natural Habitat, Rocky Mountain and Desert Southwest National Parks at Off the Beaten Path, and bike trips in California, Maine, and parts of Europe at Devine. EBITDA loss of $6.6 million during the third quarter improved $10.9 million versus the third quarter a year ago, as the revenue generated was partially offset by an increase of $52.4 million in operating expenses before depreciation and amortization interest and taxes. The higher cost base was led by $37.5 million increase in cost of tours, primarily related to the rampant ship expeditions. increased spending as we prepared additional ships for operations, and expenses related to operating additional land trips at Natural Habitat and our recently acquired land businesses Off the Beaten Path and Divine. Sales and marketing costs increased $8.1 million versus a third quarter year ago as we increased spending to drive future bookings, focusing on digital targeting and social opportunities, as well as increased outreach through trade advertising and travel advisors. We also have further ramped up spending on our digital initiatives, including additional development of our new website and CRM capabilities. G&A spending increased $6.8 million, excluding stock-based compensation versus the third quarter a year ago, primarily due to higher personnel costs as we ramp operations and increase credit card commissions related to final payments for upcoming itineraries and higher deposits on new reservations for future travel. Total company net loss available to common stockholders in the quarter was $25.7 million, or $0.50 per diluted share, versus net loss available to common stockholders of $27.8 million, or $0.56 per diluted share, reported in the third quarter a year ago. The $2.1 million improvement was primarily the result of the ramp in operations and $4.4 million in other income related to utilization of the SEARCH grants. partially offset by tax expense of $2.5 million in the quarter versus a $2.9 million tax benefit a year ago, and foreign currency losses of $1 million in the quarter versus a $1 million foreign currency gain a year ago. Looking ahead briefly to the fourth quarter, we are excited to have the majority of our fleet operating, including ships exploring the Pacific Northwest, Galapagos, and Antarctica, as well as the return of our polar bear trips and natural habitats. We do anticipate higher EBITDA losses than Q3 due predominantly to repositioning days for our polar fleet for the first half of the quarter, startup costs associated with launching the resolution, the traditional slower Q4 season for our U.S. fleet, and seasonality at our newly acquired land-based businesses. But our momentum will reaccelerate in the back half of the quarter as we head into 2022. Looking at our debt obligations, we ended the third quarter with $562 million in principal outstanding, an increase of $47 million from the end of Q2, primarily reflecting borrowings under our export credit agreement during September 2021 for the final installment payment on the National Geographic Resolution. The company is currently in compliance with all of its debt covenants, and our leverage covenants are suspended across all facilities through March 31, 2022. Additionally, we have deferred all principal payments on our export credit facilities through the end of the year. Overall, as we get closer to returning to full operations, we have positioned ourselves for sustained growth in the years ahead. While it will still take some time to return all the way to pre-pandemic levels, with a strong cash position supporting an expanded fleet and a broader platform of growth businesses, Lindblad is poised to take further advantage of the growing demand for experiential travel and build additional shareholder value in the years to come. Thank you for your time this morning, and Adolf and I would be happy to answer any questions you may have.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone sound. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question will come from Steven Wisniewski with Stifel. Please go ahead.

Hey, guys. Good morning. So, you know, my first question is going to be somewhat of a, you know, a theoretical guidance question. So, you know, I'm not sure if you're going to answer this or not, but I'm going to take a shot here. So, you know, the question is, you know, kind of based on what you're seeing today, you know, in terms of demand and pricing and if the world stays pretty much status quo in terms of the virus, Would you guys expect that you'd be in a positive earnings position next year in 22? And I guess really what I'm trying to understand is how quickly these increased startup costs that you guys have been incurring will start to roll off as well as the technology investment headwinds. Hopefully that all kind of makes sense.

Sure. Thanks, Steve, for your question. So when we look out to 2022, there's certainly a lot of variables still. There's still a variety of geographies and destinations that are still uncertain about whether we can actually travel there over the course of next year, although the signs for the vast majority of those destinations is very, very positive. The guest demand curve is very, very positive with regards to the want to travel across the fleet over the course of 2022. And the cost base that we have, what I would say, instilled over the last year is not that dramatically different than the cost base moving forward, sorry, moving forward than what it was historically, aside from some minor costs associated with additional crew and cleaning costs and testing costs and things of that nature. So when you layer all those factors together, we certainly would expect at this point for 2022 to be a positive earnings year. In fact, it is the potential for the first quarter of 2022 to be a positive EBITDA quarter. That said, there's still a lot of variability to that, and we're not going to sit here and say that's going to happen, but it is certainly something that is achievable when you look out to 2022.

Okay, that's great color. Thanks, Greg. And then second question would be around new hardware. Obviously, with the delivery of the resolution, you guys don't have any new builds on order, and it seems that the demand for your products obviously remains extremely strong here. So, How should we think about or how are you guys thinking about new orders at this point? Or another question is, how do you balance ordering new hardware versus buying existing hardware?

Well, Steve, we're pretty opportunistic as it relates to looking at ships around the world that we feel that we can buy at a good price that would represent good replacements for older hardware. We don't have anything that we are looking at at the moment other than what we just accomplished with the Crystal Esprit as a replacement for the Islander. As it relates to new hardware going forward, we do intend to be a growth company and we're very bullish on what we see as opportunity not only in the polar regions but also a number of other destinations that our guests are really showing a lot of excitement about. So, as you can imagine, we are carefully gauging the P&L and the incoming cash and looking at what's going on from a capital structure standpoint on our balance sheet in order to be able to have the right timing for the purchase of what would be more vessels in the future. So at this point, we are making sure that the resolution comes in for a good landing and we're just very focused on that. But I think in the coming year, we'll have more to talk about as it relates to plans for future hardware.

Okay. Gotcha. Thanks, guys. Really appreciate it.

You bet.

Thanks, Steve.

Our next question will come from Tyler Boyd with J&E Capital Markets. Please go ahead.

Hi, good morning. This is Jonathan on for Tyler. Thanks for taking our questions. First one for me, land experiences came in well above our expectations. I'm wondering if you could provide some additional color on that segment and what drove the strength there and follow on to that. It's how the ramp is going at Devine and off the beaten path compared to your original expectations when you did the acquisitions.

Sure. Thanks for your question this morning. So overall, I would say I'll answer the second-party question first, which is we certainly had a stronger performance out of the gate than we originally anticipated for both of these acquisitions because they were made at the start of the pandemic. But what we ascertained rather quickly is, especially for someone like Off the Beaten Path, which does the majority of their trips and their experiences in the U.S., that demand for travel in the U.S. was stronger than it had been in a really long time. So the results over the course of the second and third quarter was better than we anticipated because of that surging demand, as Dolph mentioned, for domestic travel. When you look at those businesses, it is important to note that the second and third quarter, traditionally for them, is their strongest quarters because of where they operate and the variety of trips they offer in Q2 and Q3. So you will see a slowdown in Q4 and Q1 from those entities. But overall, the seasonality would be very strong again in Q2 and Q3.

And maybe I'll add, Jonathan, that it's important to remember that for the land company experiences, the size of the guest group is quite small. And so you're often on a tour with between 8 and 12 people. And so the ability to be more careful related to COVID and be with people that you know and that you're traveling with is actually, I think, more comforting to guests than people who go on tours. on larger group excursions. I think that's worked in our favor. Off the Beaten Path was really a standout this last quarter because of the domestic nature of what they worked and just the tremendous excitement that Americans found in going back to our national parks. As you may recall, Off the Beaten Path is primarily focused at the national park experience. We're really pleased with how those companies are doing. And as I referenced earlier, we see nothing but great futures for them as they compare notes, share guest lists, and innovate around the types of experiences they can do, possibly even together at times in different geographies.

One other thing that I'll add, Jonathan, is that when you think about the thesis when we acquire these companies, which is there's a certain amount of heft and weight that Lindblad can bring to the table for these uh smaller land-based companies with regards to marketing to our list as well as some additional marketing spend opportunities and that is already starting to play itself out so our ability to market across the platform of companies that we have has borne fruit across the the assets that we now have and we should see some nice continued growth as that only grows over time so we feel very confident that the thesis will continue to play itself out even more so in 2022 and beyond

Okay, great. That's a very helpful caller. Thank you. And then turning to the guest demographics, I'm wondering if there's been any change or any color you can provide there in terms of the average age or income or percentage of repeat customers for people that are signing up for these future voyages?

Yeah, you know, we haven't seen a whole lot of change, what I would say is, in terms of a shift in anything over the last several months. The one thing that has happened is we did start to send out some more hard calls direct mail brochures over the last quarter that we had, I would say, over the last year and a half. And typically when you do that, you tend to get more repeat guests because that's who you're mailing to. So the number of repeat guests was up a little bit in the third quarter versus what had happened over the, I would say, six months prior. But that's really the only change. For the most part, the demographics in terms of age, the demographics in terms of wealth, household income hasn't changed dramatically recently.

Okay, great. Thank you for all the color guides. That's all from me. Thanks, Jonathan.

Again, if you have a question, please press star, then 1. Our next question will come from Alex Furman with Craig Hallam Capital Group. Please go ahead.

Great. Thanks very much for taking my question. You know, I wanted to ask about the, you know, you mentioned in the prepared remarks that the Delta variant caused a temporary slowdown in bookings. Is that something you started to see come back yet? Or is it more just your expectation that that slowdown will end up being temporary?

We are starting to see it come back just a bit. We really surged in the early summer, and this was before the Delta variant. And so what we were referring to in the prepared comments was the fact that there was some slowdown and then some number of guests pushing out into 2022 and in some cases 2023. But we are seeing a return to health on the part of bookings. And part of that is that we typically have a eight to 10 month lead time when people are booking. That was more compressed obviously this last summer because of the return after the pandemic. But what you're seeing now is people getting organized around not only the latter part of the Antarctic season, which is a more compressed cycle, but also out into next year and even next fall and winter. And so we're encouraged by that, and we're particularly encouraged by what we're seeing on the digital side with so much interest, increased interest from a web traffic standpoint and the interest we're seeing on some of our new social media activities. So we know there's a lot of interest out there. We are seeing some more booking, and so we feel we're not past the Delta variant, completely, but I'm optimistic just based on some of the news around booster shots and potentially children becoming vaccinated. I think all of those things suggest a more positive trend and kind of consumer confidence going forward.

One other thing that I would add to Dal's comments, Alex, is that the other thing that plays into this for us is when we announce geographies. So, for example, when we announced that we were going back to Antarctica, We started to see a nice surge in booking, again, because there's a definitive geography that people are trying to book for. We saw the same thing happen early in the summer when we announced that we were going back to Alaska. There was a surge for Alaska at that moment. So while there was a slowdown kind of towards the tail end of the summer due to some of the delta noise that was out there in the marketplace, in October, once we announced we were going back to Antarctica, we started to see that surge happen again in a positive direction.

Great. That's really helpful. And you mentioned the return to Antarctica. Can you share a little bit about your outlook for the Antarctica season? Anything maybe in terms of how many voyages you expect to complete this year and how that's compared to prior seasons when you operated there?

Yeah, I wouldn't talk about it in terms of number of voyages because voyages are shorter or longer depending on the year in terms of where you're going and ultimately the itinerary specific to that year. But what I would say is up until 2019, we only had two ships in Antarctica. It was the Explorer and the Orion that were there historically. This year, we're going to have three ships in Antarctica. The Endurance, the Resolution are the two new ships, and the Explorer will return there as well. So we will have more opportunities for guests to travel to Antarctica this year than we have previously. So more inventory in one of our, what I would say, is most desirable geographies bodes well for the future. There's still some challenges because there's some protocols that people have to follow with regards to Antarctica that are a little bit more strict than they normally would be. But for the most part, the guest demand to travel there has been fantastic, and we expect to have a really profitable season in Antarctica over the next several months.

That's really good to hear. And then lastly for me, can you give us an update on when to expect countries like Norway and Russia to open up for you? And what is your strategy if you look at 22 for modifying voyages and accommodating guests on voyages that are planned currently for some of these geographies that you can't currently sail in if you get to the close to departure date and that's still the case?

Well, let me take those in reverse order. We We work pretty carefully to remain agile and to always be keeping track across the globe of what would be viable alternatives. And so if, in fact, we were shut out of a certain country. And so we have backup plans for most of our ships if, in fact, the first choice itineraries aren't able to play off. With regard to Norway and to Russia, this is very much a wait and see at the moment in terms of Specifically, those countries, I would hesitate to guess when they're going to come back to full strength. We would say that we're not counting on them in the near term and would expect that presumably they would come back into pretty good shape for next year. but they are definitely on our watch and see list. And I wish I could be more specific, but we've just, as we stay close to them and as we stay close to the officials in our country who monitor these things, we've learned to be patient and not predict too confidently. So I wish I could be more specific, but that's really how we're managing it at this point.

Yes, that makes sense. Thank you very much. Thank you. Thank you.

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

Thank you very much for joining us this morning, everybody. And if you have additional questions, please reach out and we'll be happy to schedule a call to catch up. Thank you.

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