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spk00: Land C. Holmes Corporation first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, Drew McIntosh. Please go ahead.
spk05: Good morning, and welcome to Lancey Holmes' first quarter of 2024 earnings call. Before the call begins, I would like to note that this call will include forward-looking statements within the meaning of the federal security laws. Lancey Holmes cautions that forward-looking statements are subject to numerous assumptions, risks, and uncertainties which range over time. These risks and uncertainties include but are not limited to the risk factors described by Lancey Holmes in its filings with the Securities and Exchange Commission. We do not undertake any obligation to update forward-looking statements. Additionally, reconciliation of non-GAAP financial measures discussed on this call to the most comparable GAAP measures can be accessed through Lansing Home's website and in its SEC filings. Hosting the call today are John Ho, Lansing's Chief Executive Officer, Mike Forsum, President and Chief Operating Officer, and Chris Porter, Chief Financial Officer. With that, I'd like to turn the call over to John.
spk02: Good morning, and thank you for joining us today as we go over our results for the first quarter of 2024, discuss current market conditions, and provide an update on our outlook for the remainder of the year. Lansley Homes delivered strong top-line growth of 22% in the first quarter, thanks to a 7% year-over-year increase in home closings and a 14% rise in average sales prices. Order activity during the quarter was also solid, as we generated 612 orders on a sales pace of 3.3 homes per community per month. We continue to see strong interest for our new homes in our markets and look to capitalize on this demand through our well-located communities and our desirable high-performance home product line. The macro environment remains favorable thanks to a resilient economy, strong job growth, and low levels of existing home inventory. Against this backdrop, we continue to pursue a strategy of targeting high growth markets and rapidly achieving economies of scale at the local level. This strategy has been proven successful in places like Arizona and Florida, and we look to achieve similar success in Texas and Colorado. Our Texas expansion goals got a big boost with the April 1st acquisition of Antares Homes. which provided us with 20 communities and over 2,100 lots in the Dallas-Fort Worth area. We are extremely excited about what this acquisition brings to our organization, not only from a land and lots perspective, but also from a talent and local market expertise standpoint. The team from Antares Homes shares our vision operationally as it relates to product and new home affordability, as well as our values when it comes to quality home construction and customer service. The integration is proceeding smoothly, and we expect to have Antares operations fully on board on our platform by the end of this month. In addition to the operational progress we made during the quarter, we also executed two capital markets transactions that added more stability to our balance sheet. First, we successfully placed another 2.8 million shares from our largest shareholder, Lansley Holdings Corporation, with more traditional institutional investors. The transaction brought Lansi Holdings ownership to approximately 47%, meaning Lansi Homes is no longer considered a controlled company under ASTEC listing standards. While we have always operated independently from our largest shareholder, we felt this was an important designation to achieve and believe it is in the best interest of all of our stakeholders to accrue a diverse and stable investor base. The second transaction was our placement of $300 million in senior notes due in 2029 and an interest rate of 8 and 7 eighths. This was a significant achievement for our company as it allowed us to pay down a portion of the outstanding borrowings under a revolving credit facility and provide us with longer term fixed rate capital to pursue our growth initiatives. Given the recent increase in interest rates since the deal closed, We felt fortunate to have placed these notes when we did. One of our goals for the remainder of 2024 is to generate enough cash from operations to bring our net leverage down from current levels while continuing to invest in our home building business. Over the last several quarters, we have made significant upfront investments in our operations, particularly in Texas and Colorado, and we're beginning to see a return on those investments as we sell and close homes. This shifting dynamic will bring more cash in the door, as will the improvement in cycle times, which lowers the capital tied up in work and process inventory. A higher cash flow balance will allow us to operate from a position of strength going forward and will give us the optionality to either reinvest in the business, pay down debt, or return capital to shareholders. We ended the first quarter with 10% fewer shares outstanding as compared to the first quarter last year. a direct result of our share repurchase efforts over the last 12 months. We accomplished a lot in the first quarter, both from an operational and financial standpoint, and feel we are in a great position to achieve our goals for 2024 and beyond. The new home market continues to benefit from a lack of existing home inventory and pent-up demand from buyers who are motivated to own a home. We have made great progress in positioning our company to take advantage of these favorable trends, both in terms of our geographic footprint and our product positioning. As a result, I believe Lansi Homes can build on a success we've already achieved and establish our company as a top builder in each of our markets. Now I'd like to turn the call over to Mike, who will provide more color on our operational performance this quarter.
spk06: Thanks, John, and good morning to everyone. Lansing turned in a solid performance in the first quarter of 2024 as our teams did an excellent job selling and closing homes, culminating in a delivery total of 505 homes, which was higher than our stated guidance. Arizona led the way with 183 deliveries, followed by Florida and California. As John mentioned, we should start to see higher delivery contributions from Colorado and Texas moving forward, particularly with the addition of Antares in the Dallas-Fort Worth market. Our operations in Austin are also starting to gain momentum as several phases of new communities are now selling in earnest with a number of homes under construction and an open model complex. Net new orders were up 23% on a year-over-year basis for the quarter, resulting in a total of 612 home sales. Demand was broad-based across our home building platform as buyers in each of our markets continue to favor our high-performance homes and the value proposition they provide. Financing incentives continue to be an important selling tool to our communities, and the levels that we've needed to use to spur sales activity has mirrored the movements in the mortgage rates. We expect sales incentives to remain elevated as long as rates stay higher for longer. The availability of quick move-in homes continues to attract buyers, which is why we continue to operate with an elevated supply of spec homes. The new home market has filled the void created by the lack of existing homes for sale, and these buyers typically want to close on a home within 60 days. Our goal is to start the homes while leaving enough lead time to allow for personalization and upgrades from the buyer. We are also being mindful of not letting too many homes reach completion without a buyer in a given community and will adjust the pace of our starts accordingly. We are seeing better labor and material availability in each of our markets, which has resulted in better cycle times and improved inventory terms. This has alleviated some of the cost pressures we've experienced in the past, so land prices continue to rise. Some of this is a function of a tight land market, but is also a result of land banking arrangements, which reduce the risk of upfront capital required to own and develop land, but comes at a cost. In general, we believe the benefits of a land light strategy outweigh the cost, and we will continue to look for ways to tie up lots in a capital efficient manner. Overall, I would characterize the spring selling season as solid. Traffic and interest from buyers have been consistent throughout the spring, while the changes in interest rates have dictated the level of incentives we have had to offer. Our cancellation rate for the first quarter came in at 10% compared to 16% last year, a sign that buyers who move forward with their purchase remain confident in their decision. Our existing operations in California, Arizona, and Florida continue to perform well, and we're excited about the addition of Antares in the Dallas-Fort Worth market and the growing contributions from Austin and Colorado. We enter the second quarter in great shape, both operationally and financially, And I believe we are on track to meet our goals for this year and beyond. With that, I'd like to turn the call over to Chris, who will provide more detail on our financial results this quarter.
spk03: Thank you, Mike. As Mike mentioned, our 505 deliveries were 7% higher than first quarter of 2023. And our 579,000 average selling price reflected a 14% increase over last year. Both exceeded the high end of our guidance and produced a 22% increase in home sales revenue to 292.6 million. Our gross margin of 14.9% came in at the low end of guidance as incentives and discounts continued to weigh in the quarter and were approximately 5% of revenue. With the outlook for rates to stay higher for longer, we would expect these levels of incentives to remain relatively constant for some time. Fully adjusted gross margin came in at a stronger 19.4%. We reported net income of 190,000 or one cent per share. This compares to $3.2 million in net income, or $0.08 per share, in the first quarter of last year. This quarter, we had a $1.7 million of transaction costs, primarily related to an interest acquisition, along with $2.5 million of purchase price accounting from previous acquisitions. Excluding the one-time transaction costs, our net income was $1.9 million, or $0.05 per share. We ended the quarter with 63 average selling communities, up 7% from first quarter of last year. During the quarter, we opened 10 communities and closed six communities. As John noted, with the Antares acquisition, we added 20 communities and approximately 2,100 lots as of April 1st. Backlog ended the quarter with 624 homes for a total value of $384 million and an ASP of $616,000. Our SG&A expenses came in at 15.2% of home sales revenue this quarter, 110 basis points better than the first quarter of 2023. Excluding the 1.7 million transaction costs, this ratio would have improved to 14.6%. We will not add any corporate staff or overhead for the Antares acquisition, and we'll begin to see our SG&A leverage improve starting in the second quarter. Our tax benefit of 30,000 for the quarter, was primarily the result of our improved stock performance and the additional tax benefits from stock option vesting in the quarter. Now turning to our balance sheet, we ended the quarter with $364 million in liquidity, $140 million in cash and cash equivalents, and $224 million in availability under our revolver. Our leverage ratios remained in line with our expectations, ending the quarter at 46% debt to total capital and 35% net debt to total capital. On April 1st, we utilized cash on hand and revolver capacity to purchase on-terras homes for approximately $242.5 million and closed on the issuance of our $300 million five-year note, which gave us longer-term fixed-rate capital and reduces our reliance on our revolving credit facility. The rate is effectively equivalent to our current pricing and our revolver. Subsequent to these transactions, we completed the refinance of our revolver, led by Bank of America and U.S. Bank, that broadened our bank group by adding two new banks to the syndicate and extended the term into 2027. We reduced capacity to a total of 355 million, reflecting the lower reliance for this facility and paid down 75 million during the quarter. We continue to have an accordion feature to increase up to $850 million should we need the capacity. Additionally, we updated our pricing to a grid pricing and will initially realize an approximately 50 basis point improvement in rate. Net net, consistent with what we have been indicating, our leverage will increase temporarily for the acquisition and should be back in our targeted levels of 45% debt to cap within one year. Now looking forward to the second quarter, we anticipate our new home deliveries to be between 600 and 650, at an average selling price between $525,000 and $530,000, with GAAP gross margins of 15 to 16%. And for the full year, we are confirming our previous guidance of new home deliveries in the range of 2,500 to 2,900 units. We expect ASPs of these deliveries to be in the range of $500 to $525,000. Additionally, we anticipate GAAP home sales gross margin for the full year to be in the 17 to 18% range. These gross margin ranges are dependent upon assumptions in our purchase price accounting with the interest acquisition. We will not know the final allocations until later in the second quarter. Also, this guidance is based on our estimates as of today with the current market conditions. As inflation, incentives, and interest rates continue to change, overall results could change accordingly. That concludes our prepared remarks, and now we'd like to open the call up for questions.
spk00: Thank you. We will now be conducting a question and answer session. If you would 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 would 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 keys. Your first question comes from Matthew Bully with Barclays. Please go ahead.
spk07: Morning, everyone. Thank you for taking the questions and congratulations on completing the acquisition. On that topic, now that you've kind of broadened out your exposure and obviously building the Texas footprint here, should we look at this stage that, at least for the time being, that the focus is really just going to be on organic investment in the markets that you're now in? Or is there kind of any room in the sort of near to medium term where you still feel like you want to fill out some more spots in the geographic footprint? Thank you.
spk02: Hey, Matt. Good morning. This is John Ho. Yeah, we're really pleased with the closing of the Antares Homes acquisition. As you know, we moved our headquarters here to Dallas, Texas last year. We believe that... Texas and in particular the DFW area is a significant Place of growth for us and for a future of the company I think it's a good market to be in Very similar to how we penetrated the Florida market two years ago when we acquired hand and over family builders Roughly same price You know we used a combination of cash on hand and availability under the revolver and We're really pleased to have completed the high-yield offering at the same time essentially as a closing of the And terrace homes so that really puts us in a really good place from the quality of our debt the stability of that debt We usually can within 12 months be able to reduce leverage After the acquisition and really be able to drive cash flow generation from that acquisition And that's what we'll be You shouldn't expect any year-term M&A. As we have done acquisitions in the past, we've done really good at it. We integrate them very quickly, and then we move to generate significant cash and growth in our business and reduce debt. At the same time, we do grow our businesses organically in each of our respective markets. I can also have Mike chime in in terms of
spk06: areas I think potential growth for us yeah not much more to add than what John said Matt other than it's consistent with our acquisition strategy where we we buy and digest by and digest and so it's a stair-stepped approach to growth not necessary it's parabolic so this is pretty consistent As though we do this, we do always remain around the hoop in markets on which we're targeting and looking at in terms of future growth that are consistent with our strategy. And we'll continue to do that. I think that puts you in a position when it's time again to find these opportunities that will help add accretive growth to our business. You're in a position to do so in a relatively quick basis. And Tarez was a company that we'd been talking to for almost two years before we brought it over to the bow and did the acquisition. So these things take time. And, you know, for us, you know, as I said, it's a multi-pronged strategy of, as John said, organic growth, along with a consistent look at the creative growth and synthetic growth and just the continuation towards the place that we want to be. which is one of the most effective performing home builders in the United States.
spk07: Great. Thanks for that color, Mike and John. Secondly, maybe just kind of zooming into the near term, you know, a lot of great color you gave up top around, you know, sort of the necessity of keeping incentives elevated given the latest move in rates. Just kind of looking for sort of a finer point on the recent trends, you know, what is happening to incentives since rates have moved over the past, you know, four to six weeks here. And curious as well if any color around, you know, traffic or sales pace in your communities through the month of April. Thank you. Sure.
spk06: I'll take this one first. It's Mike again, Matt. And for us, the spring selling season has been terrific. I think that's indicated in our numbers around our orders and then also the closings thereof. So we're very happy with the consumer side of our business as they continue to show strong interest in homes, particularly homes that are deliverable within roughly 60 to 45 days, which is reflective of the new home market really responding to the dearth of resale that's available out there today. But that being said, we're also on a difficult interest rate market, at least as it is historically. So it is requiring us to be active in doing forward mortgage buy-down commitments, which are not cheap, and it moves daily almost. And so it is either a day-to-day or week-to-week or month-to-month evaluation and assessment against the backdrop of these rates moving against existing incentives and then also competitive posturing in terms of what our competitors are doing also. But at the end of the day, we are focused and committed to a consistent sales absorption around three per month per community to continue to drive cash flow. We believe this is a cash flow business. And going back to you again, what John has said is that We will continue to do everything we can to have manageable and appropriate debt rates around our business. And so as we kind of do these acquisitions and we maybe go up and take up a little bit on debt, we're going to drive our business to generate the cash to buy down the debt and then redeploy it into land that is more reflective of our cost structure and better positioning as we go forward. We're just always sort of in the mix of trying to appropriately respond maintain margin keep pricing Elevate pricing a little bit which by the way is also some things that we're able to do in our markets We're seeing one to three to five percent price increases that we can take As we go forward to sort of mitigate some of the costs associated with it. It's not crazy, but our teams are doing amazing jobs of finding those little opportunities for us to do the best to offset the cost and to continue our absorption and maintain margin where we can.
spk10: All right. Thanks, Mike. Good luck, guys. Thanks, Pat.
spk00: Next question, Carl Riker with BTIG. Please go ahead.
spk04: Hey, good morning, guys. Hope you're doing well. Thank you for taking my question. Just at housekeeping, Chris, how much backlog in units and dollars did you pull in from NTARES on April 1?
spk03: We haven't disclosed that as far as backlog from there. We did pull in 20 communities, and we'll work through that and work through those numbers, but we don't have those numbers right now, Carl.
spk04: Do you know when you think the purchase accounting will bleed off by? 4Q, I'm assuming?
spk03: No, it'll probably be about... 40, 50% in the first year of operation. So between now and this time of next year, and then it will slowly bleed the rest of it off over the next eight months to 12 months after that.
spk04: Okay. So longer. Okay. And then Mike, just to sort of following up on the last question, can you talk a little bit about performance across the various price points? I'm curious if entry level versus move up is seen sort of a differentiation in terms of traffic or conversion rate or sales.
spk10: Right.
spk06: Yeah, it's interesting. And it is evolving. And it's fluid, Carl, as you know, as this business is. It's actually interesting to me because, you know, over the course of my career, uh markets have been pretty independent of each other it's not been monolithic and when we came out of the gfc was the first time i actually saw the whole country sort of moving in lots step with each other uh but now we're starting to see a little bit of a breakaway where regions are now responding more regionally as opposed to nationally so everybody is encumbered by rates so with that being said um our highest uh as one of our highest asp markets is in southern california it's actually doing incredibly well. It's a very strong market. It's healthy. It's healthy in terms of the balance of offering that's out there and price points. And it's also one of the markets in which we're having to apply the least amount of incentives and rate buy downs. And we have a higher monthly mortgage rate per closing there. Florida, on the other hand, is one of our most affordable markets. It's doing very, very well. but it's requiring us to have a combination of incentives along with mortgage rate buy downs that are relatively costly against the backdrop of a lower ASP. There, what we're really trying to do is to maintain a mid $3,000 a month mortgage payment, which seems to be a real driving force in that entry level market. They are very, very focused on their monthly payment not necessarily what the rate is. They don't translate it that much, whereas if you took Northern California, they get very focused on what their rate is. It's the rate. It's the ultimate rate for them. So we're listening. We're getting data back, and we're trying to be responsive as uniquely to what we're trying to present out there, Carl, as best as we can, but it's really across the board for us.
spk04: I appreciate that, Collin. Thanks, Mike.
spk00: Next question, Alex Rago with B. Reilly Securities. Please go ahead.
spk01: Good morning, gentlemen, and nice quarter. A couple questions here. First, as it relates to SG&A, you talked about starting to realize some nice leverage on that, particularly since the interest acquisition is not going to layer on too much more corporate overhead. Can you comment a little bit further on that topic?
spk10: Sure.
spk03: So if you think about, Alex, the G&A in each of our divisions is roughly 3% to 4% of home sales revenue and later on the rest of it on the corporate side of that. And when I say S&A, it's primarily G&A, right? On the sales side, it's typically running pretty consistently between 6%, 6.5%, and that's your variable cost. that's in there. And then the SG&A side layers on within the division. So if you back into the corporate perspective of that, we will pick up some G&A with the Antares acquisition just from their division operations, et cetera, but we won't layer on any corporate side at all on that one. And so just from a pure leverage standpoint, that will start improving that leverage.
spk01: Excellent. When we look out sort of maybe a year or two down the road, do you have maybe sort of a bracketed sort of target for where SG&A as a percent of revenue can get to?
spk03: Yeah, I think we think that we can get back to kind of close to where the rest of the industry is. Now, size definitely matters, and a lot of that is continuing to grow, the top-line side of things. But we think that between that 10% to 12%, is where the industry is and where we can typically lay out over time.
spk01: And then circling back to an earlier question, can you talk a little bit about the cadence of new orders sort of in January through March and now into April?
spk06: Hey Alex, it's Mike. Yeah, I guess the cadence is that it's been a strong selling season for us spring selling season week over week has been very consistent and actually a little bit better week over week as we go through it so we're pretty excited about again what the market has brought to us here in the first four months of the year and we're building a nice order book and then looking to be in a good position as we go into the summer with a healthy backlog, and then subsidize it through the summertime, and then finish off the year strong. So I think from our standpoint, our mix of incentive, mortgage rate buy-downs, good product offering, and the right pricing is resonating in our marketplace.
spk08: Great. Thank you very much.
spk00: Next question, Jay McCandless with Wedbush. Please go ahead.
spk09: Hey, good morning, everyone. I wanted to touch on the comments earlier that you are able to raise prices in some markets. Could you identify which markets those are and talk a little bit more about, you know, is that a price increase at the same time with a higher mortgage rate buy down or what's going on there?
spk06: Yeah, Jay, it's Mike. I was the one who made that comment. So we're able to do it really almost in every one of our markets currently. And as I said, we're a little fixated on where we can get any pricing advantage. We'll go after it. But in some cases, it may be a net wash against the mortgage rate buy down on a price increase. In some cases, we may get the full benefit of that price increase. So as I said, in Florida, particularly in the northern part of Florida, we've had really strong absorptions there. been doing the best that we can to continue to raise prices. Southern California, Arizona is a very, very competitive market right now. And so it's probably net neutral as we move through there. And Northern California, we're probably a little bit above in terms of getting advantages from raising prices. But we're not talking about raising, you know, 8%, 10%, 12%. you know, from release to release, like we've done in the past when the market gets running. It's just little incremental ticks here and there. But everything matters at this point, along with increasing your cycle times, driving cost reductions through our processes, as well as, you know, just the consistency of watching our spend, which we're real fixated on because it's a mix of everything right now.
spk10: You can't depend on one thing to get you through this.
spk09: Got it. I want to ask about the new markets in a second, but could you maybe talk about California and Arizona for a second and what you're expecting for community growth this year for those two markets?
spk03: Well, I think that, I think they'll be consistent with the rest of the company, which is a 10 to 15% organic growth there. So I don't see that either one of those would be any different overall.
spk09: And then if you could just remind us all about the pace of openings in Austin and also are you going to be able to grow the Antares count this year? Is that going to be more of a 25 event?
spk06: Yeah, so we're locked and loaded on our communities that we're going to have available to us in Austin. We just need to get the last couple open, which they're really driving towards. We have a large community in Kyle known as Anthem. It's a multi-segment and community. They're very excited about it And so they're very close to giving the full breadth of our offering. So that's coming along Jay and then In Antares we have the acquisition as Chris said the things roughly 20 communities there we do have a controlled pipeline through that acquisition and and they will continue to deliver slots along the way for communities that we actually have open and running at this point, as well as identified communities, which I believe only one towards the end of the year would be brought online and open and selling. So we have plenty to eat from that transaction. That's going to really help with our growth, and we have a great team over there, super excited. We look to be fully integrated from a marketing sales point standpoint by May 15th is our goal. So if you get on our website on May 16th, Antares will no longer exist. They will be full communities with all of the branding through Lansi Homes and manned through our internal and external sales forces. So we're really excited about our ability to now get faster, better, smoother in terms of our integration. around that area. And so we'll bring all of our marketing and sales power to bear, and we're really going to try to drive and do better over there as well. So we're excited. I think there's some exciting things to come from Antares here soon.
spk09: Okay. That's great. Thanks, Mike. And the last question I have, just wondering about land costs, how much those are up year on year, and what kind of increases are you thinking about for the rest of the year?
spk06: Yeah. fortunate downside about holding sales adsorptions through incentives and buy downs is that the land sellers think everything's great so you know from the standpoint of them witnessing any lack of pace or insorptions coming through us it's hard to prove that you know the cost of our sales are getting a little bit steeper and we're trying to drive it through the land residual so though I would say they're not going totally crazy, but I would still say that they're about a single-digit percentage increase as we go from opportunity to opportunity. And honestly, I'm not really sure if I see that really changing. So we're factoring not only higher for longer in terms of baking in what is taking us to move houses in our cogs, but also in our land bases going forward. It's going to be a little bit tighter, so... You know, it's just going to, you know, all the things are kind of compressing a little bit, and we're going to have to continue to fight to find every nickel, like I was saying earlier, in the process and in our business to offset those costs that we can't really control right now.
spk02: I would add, Jay, this is John, that with the acquisition of Antares Homes, Mike mentioned that we're going to add about 2,100 lots to our lot that we hold. So that will put us, you know, just over 13,000. We've got control now of our destiny over the next several years now. So we're really, really focused on building a lot of supply really for 2026 and beyond. It gives us a little bit of flexibility, maneuverability to find good land opportunities and be able to make in some of the costs that Mike was talking about to think about sort of future years, outer years.
spk08: That's great. Thanks, guys. Appreciate it.
spk00: Once again, if you would like to ask a question, please press star 1 on your telephone keypad. We have a follow-up from Carl Reichart with BTIG. Please go ahead. Thanks.
spk04: Hey, guys, again. Just one question, John, on buybacks versus debt paydown. Obviously, I know you want to reduce the DDC back to sort of your norms in the mid-40s. Does that change your thought process on repurchases over the course of the next year or so, despite where the stock is trading?
spk02: Yeah, Carl, the stock buybacks has been a useful tool. We've used it, as you guys can tell, in this past year. But it's never been at the expense of growing the business, scaling the business, and leveraging our SG&A. So we've also demonstrated that we can continue to do that through this acquisition. Now that the debt will be slightly taking up, we will be focused on reducing debt. And then thereafter, also thinking about how we can continue to do shareholder distributions. It's never been the expense of growth. We've got to grow the business. We get to scale. And like we've done in the past with acquisitions, we've reduced debt first. And then we, as another tool in our toolbox, be able to use additional capital and cash flow that we generate for shareholder distributions.
spk04: I appreciate that. Thanks, John.
spk00: There are no further questions. I would like to turn the floor over to John Ho for closing remarks.
spk02: Thank you, everyone, for joining us today, and we look forward to speaking to you next quarter.
spk00: This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.
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