Mesa Air Group, Inc.

Thank you for standing by, and welcome to the Mesa Airlines Quarter 2 Investor Conference Call. All participants are on a listen-only mode until the question and answer session. At that time, please press star 1, unmute your phone, and record your name at the prompt. This call is being recorded. If you have any objections, please disconnect at this time. I would now like to turn the call over to CEO and Chairman Jonathan Ornstein. Thank you, sir. You may begin.

And thank you, Operator. Good afternoon and thank you for standing by everyone on the call. I'd like to welcome you to the second quarter fiscal year 2021 earnings call. It is now my pleasure to turn the conference over to me. Oh, there you go. So there we have it. Okay. This is Jonathan Ornstein. I'm the chairman and chief executive officer of Mesa Airlines. On the call today is Mike Lotz, our president and chief financial officer, Brian Gilman, our executive VP and general counsel, and Brad Rich, our Chief Operating Officer, and Tork Zubek, our new Senior VP of Finance. You may have seen the announcement, but to reiterate, Tork brings 20 years of industry experience from Alaska Airlines and will be a terrific asset on both the operational and financial side of our business. I'd like to open up with our forward-looking statement. Before the presentation and the comments begin, Mace would like to remind you that our press release comments made on the conference call and responses to your questions during this call may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. As such, they are subject to future events and uncertainties that could also affect our results to differ materially from those statements. Also, please note the company undertakes no obligation and makes no commitment to update or revise these forward-looking statements. Any forward-looking comments should be considered in conjunction with the cautionary statements in our press release and the risk factors included in our filings with the SEC, which Mesa encourages you to read. In addition, please refer to our press release in the investor section of Mesa's website to find additional disclosure and reconciliations of non-GAAP financial measures that will be used on today's call. Okay, I'd like to begin with my usual way by thanking all of our people in the field for their dedication and hard work throughout what is clearly one of the most, if not the most challenging period for our industry. Thank you, everybody. In spite of this tough environment, I'd like to cover a number of highlights of the quarter. On the financial side, we reported a pre-tax profit of $7.6 million, which included a $4.5 million non-cash adjustment for the purchase of a previously leased CRJ 900, resulting in an adjusted pre-tax profit of $12.1 million, or $0.23 per share. At American, After reaching an agreement to extend our capacity purchase agreement in November 2020 for five years for 40 aircraft, American increased that number by five additional aircraft starting in January and extending through the summer months. At United, we added two more of the 20 new Embraer 175LL aircraft to our fleet, with the last two deliveries expected next month bringing the total Embraer 175 fleet to 80. In our cargo operation, we are adding a third 737-400, which we expect to be in service in July to support the existing operation. As a reminder, we are the first and only regional airline to operate narrow-body cargo aircraft and will continue to pursue additional cargo opportunities. We announced our LOI with Gramercy Associates, to begin regional jet operations in Europe with some of our surplus CRJ-900s. Gramercy is a private company founded by Tony Davis. Tony is the former CEO of Tiger Airlines in Singapore and Australia and Vimy Baby. He is also the former COO of Arlandia Aviation. Importantly, we are making significant strides in our adoption of new technology and decarbonization of air travel. This quarter, we announced our investment in Archer Aviation's eVTOL aircraft alongside United Airlines. In the transaction, Mesa and United received equity in Archer Aviation in the form of wards and will purchase up to 200, that's 160 for United and 40 for Mesa, subject to certain conditions. During the quarter, Mesa recorded initial 40% vesting awards at $16.3 million. Though it may seem cutting edge, we are essentially going back to our roots, operating smaller, efficient aircraft. We are excited to be at the forefront of this eVTOL technology and continue to pursue other opportunities in the area of sustainability and eco-friendly flying. We are also proud to be named to the Forbes list of America's Best Midsize Employees for 2021. Our relationship with our employees is of critical importance to us, and we are pleased to see our efforts recognized. Once again, I'd like to thank all of our people for making this possible. With that, I'd like to turn the call over to Brad Rich, our Chief Operating Officer, to give you an update on our level of operations, as well as our American United and DHL operational performance. Brad, thank you.

All right. Thank you, Jonathan, and good afternoon to everyone. Thank you for joining us today. I'd like to begin with highlighting some of our main priorities. First, the health and safety of our employees and passengers remain at the top of our priority list. As you would expect, we're in constant contact with our partners and the CDC on the latest guidance and protocols. We're also committed to improving our operational performance as a high priority. Our collective work with our partners continues to strengthen these relationships, and we're committed to continuous improvement of our performance. While all of the new things going on and the new ventures of the company are exciting, I would like to reemphasize that the key to maintaining these long-term relationships is delivering consistently strong operational performance and producing industry-leading economics. By way of review of the March quarter, we generated 73,942 block hours, which was down 32% from last year, but up 6.8% from the December quarter, and that's despite flying fewer aircraft in the American operation. Based on current guidance from our partners, we expect the June quarter utilization in the United operation to be at about 75 to 80% of pre-COVID levels and in the American operation at approximately 100% of pre-COVID. The September quarter is projected to be 85 to 90% at United and a little over 100% in our American operation. If recent demand trends continue, we anticipate a steady increase in block hours as we progress towards a strong recovery in capacity. As far as operational performance, we continue to see improvements in our key operational performance metrics. During the March quarter, our controllable completion factor was 99.9 percent, which is consistent with 99.9 percent a year ago. but we've seen very good improvement in our controllable on-time departures, which was 91.1% versus 81.3% a year ago. As I said, focus on continual improvement in operational performance will remain one of our highest priorities. I'd now like to provide an update on our American operation. As Jonathan stated, we previously announced both a five-year extension that was finalized in the December quarter, as well as an agreement with American to add five additional CRJ aircraft above those CPA levels. Subsequent to quarter end, we formalized the agreement to operate those five additional aircraft through mid-August of 2021, and we believe there may be additional future opportunities. As a reminder, our current fleet consists of 64 CRJ900s. Of these 64 aircraft, we own 49, and 41 of those are financed under our previously announced U.S. Treasury loans, and seven are financed with EDC, Export Development Bank of Canada. We also have 15 aircraft leased through 2024. We will be using the majority of these aircraft to support the American operation. However, we are still reviewing several new opportunities that would productively utilize some of these aircraft. Given the attractive financing and low debt balance on a majority of the fleet, we believe these aircraft are valuable assets and will remain productive. We are making a number of investments in our CRJ fleet designed to improve the overall fleet health enhance long-term value, and strengthen operational reliability. These investments include cabin interior refurbishment and a significant increase in the volume of aircraft heavy checks. We have a historically high level of heavy check lines due to bringing aircraft online as demand continues to strengthen and to create additional operational spare support to enhance performance. Access to and productivity of the heavy check providers has been challenging, but we're working very aggressively to add additional providers to bring aircraft back into operation as quickly as possible. Due to all of the investments in the fleet and our focus on performance, we do remain confident in our ability to meet the operational requirements of the new agreement with Americans. Now moving to an update of our United operation, our relationship with United remains strong and productive. We continue to work collectively on many strategic and operational initiatives that we feel will create additional value in our relationship. We are proud to be one of few airlines taking delivery of new aircraft in today's difficult environment. And by way of update, We currently have 18 new E175LL aircraft that have been placed into service between November of 2020 and May of 2021. The last two will be delivered by the end of June 21. We have removed all of the CRJ700s from our fleet and we continue the transition process of leasing these 20 CRJ700 aircraft to GoJet Airlines as part of the previously announced agreement, which ends in 2030. We are in the final month of retraining the current CRJ700 pilots in Washington Dulles on the Embraer 175s. And most of that training expense will be covered by the training credits that are part of the Embraer 175 purchase agreement. Now that we are operating a single fleet of Embraer E175s for United, we are seeing not only an improvement in cost reductions, but anticipate consistent strong performance and enhanced network efficiencies through aircraft flow and increased utilization. In regards to our DHL operation, we have two 737-400 cargo aircraft in service with DHL. We have secured a third 737 that we anticipate to be available in July of 21 that will provide additional support for this operation. So far, we have been pleased with the operation and believe we are well positioned to grow this line of business. I'd now like to make some comments on a topic that is getting a lot of attention recently, which is the anticipated hiring requirements for airline industry labor. First of all, I too would like to express my appreciation to all of the aviation professionals at MESA that have demonstrated their commitment and dedication through this difficult time, and we do greatly appreciate each one of them. We remain focused on hiring and training to meet increasing staffing requirements in nearly all of our operational divisions. Our applicant pools are strong, and in the case of pilots, stronger than we have seen in recent history, and we believe in our ability to hire across the airline. We remain active in the hiring of mechanics, flight attendants, and other operational support positions, and we are bringing back the pilots that were in training at the beginning of the pandemic. Furthermore, we feel like we are very well positioned to be an industry-leading option for regional airline pilots, through opportunities such as the United Aviate Program. We are one of few airlines able to offer a direct pathway for our pilots to become a career pilot for United Airlines. We also have the 737 aircraft on certificate. We're the only regional airline offering the ability to fly larger aircraft and earn the highest pay in the regional industry. We're also well-positioned with crew domiciles across the country that allow our pilots the opportunity to live where they desire and commute easily to work. We are also currently offering upgrade opportunities, and we are actively recruiting from hundreds of aviation schools across the country. With that, I'd now like to turn the time over to Tork to walk through our financial performance.

Great. Thanks, Brad. Appreciate that. Let me do a quick recap on the earnings. For the second quarter of fiscal year 2021, we reported net income of $5.7 million, or 14 cents per share. This compares favorably to net income of $1.9 million for the same quarter last year, or 5 cents per deleted share. As noted in our press release, the primary reason for the increase in earnings from Q2 2020 to Q2 2021 is due to the combination of a $56 million pre-tax benefit. received through PSP2 under the CARES Act, largely offset by temporarily reduced rates offered to our partners related to the PSP program and the deferral of $4.9 million of revenue, all of which was billed and paid by American and United during the quarter and will be recognized over the remaining terms of the contracts. We reported $1.9 million of income tax expense for the quarter. However, we do not pay any cash taxes as we have over $500 million of valuable NOL carried forward. So let me review where we are in cash and liquidity. We ended Q2 at $148 million compared to $181 million in Q1. As we pointed out last quarter, $181 million for Q1 included $48 million of United CPA prepayments for future months, which was reduced to zero in Q2. During the quarter, we also made $21 million in scheduled principal payments. And for the PSP programs, we received $48.7 million for PSP2, and a $7.3 million top offer PSP2 in Q3. For PSP3, we have been allocated $52.2 million, half of which was received in April with the balance expected in Q3. There was no CapEx in the quarter, although we did make a $7 million deposit to GE on five engines to be delivered in calendar year 2021. CapEx for the remainder of fiscal year 2021 is one GE engine, with the remaining nine in fiscal year 2022 and 23. Going forward on cash, although we've booked reduced rates to our partners for PSP2 and Q2, the actual cash credits of roughly $30 million will be given in Q3. And as we look to the end of fiscal year 2021, we expect cash to be in the $100 to $110 million range. As for our debt, total debt is $725 million, down from $746 million at the end of Q1 2021. We have debt payments of $14 million in Q3 and $45 million in Q4, of which $18 million was previously deferred. Assuming no new debt, fiscal year-end debt will be $666 million, down from almost $900 million just two years ago. Now let me turn to guidance. We are still operating in an uncertain environment, but we are getting better visibility as we have hopefully moved past the worst of the pandemic. We are expecting a gradual improvement in block hours throughout the remainder of the fiscal year. For fiscal year 2021, we expect 85,000 block hours in Q3 and 89,000 in Q4. We are approaching pre-COVID levels and expect further progress as the vaccine rollout continues. On heavy maintenance, which is engine and seat checks, we have provided our estimates. These amounts are higher than we would consider normal run rates. Much of this work, as Brad pointed out, is related to seat checks, which were previously deferred. and we are catching up on them through the end of the calendar year, as well as enhancing our aircraft interiors. And now I'd like to turn it back over to Jonathan for closing remarks.

Thank you very much, Tork. The last year has obviously been very difficult for the entire industry, for the entire country, the entire world. However, we are pleased that NASA has been able to remain profitable, perform well for our partners, and importantly, kept our people fully employed. This is due to our operational performance, our industry-leading economics, and the tremendous support that we've received from our people in the field and here in the office. These factors division as well for growth, and we will continue to look at new opportunities as the industry evolves. I'd like to now open this up for other questions that we might be able to help you with.

Yes, sir. It is now time for the question and answer session of today's call. If you would like to ask a question, please press star followed by 1. Please make sure that your phone is unmuted and record your name clearly when prompted. The first question comes from Sabi Scythe from Raymond James. Thank you. Your line is open.

Sabi Scythe All right. Thank you. Good afternoon, everyone. the block hours, it looks like maybe block hours down slightly versus the guidance provided last quarter, even though you're kind of extending the aircraft with the Americans. Just curious if you can provide any color around that.

Brad or Mike?

Oh, this is Mike. Yeah, so I think they're fairly close to where we were. I think we're probably just being a little bit more conservative as, you know, these schedules you know, they're changing week to week. So I think we're just being a little bit more conservative with our estimate.

That makes sense.

Yeah, hey, Mike, Brad, I second that completely. It's just we're just trying to be a little cautious in the projections.

Okay. And just around the CRJ purchase off-lease, I'm kind of curious the thinking around that, if you can provide any color on that. you know, how attractive that deal was and any update on the European JV as to kind of the conversations you're having there and the timing of when we might hear more on that front.

Yeah, so I'll take this one, Jonathan. So on the lease purchase, look, we have made it clear we're trying to buy out all of our leases and take them on as owned aircraft. We had 18 leases. We're down now to 17. This particular aircraft was just one of the unusual ones in our fleet because it's the only aircraft we were paying supplemental maintenance rent for. So net-net, we ended up having to return, forego getting the maintenance reserves on it, So we picked up from a cash standpoint, we picked up the aircraft for very little cash and avoided return conditions. But the way the accounting works based on fair market value ended up being a non-cash write-off. As far as the European JV, we're still moving along with it. We had the LOI. We intend to probably give a better update next quarter. I don't know, Jonathan, if you want to add anything to that.

Well, yeah, I mean, I think that, you know, as some of you know, Mike and I have some experience over in Europe. We had known Tony for a while. He had actually advised us on a couple of the other deals that we'd looked at. I think he's probably the most knowledgeable guy in Europe when it comes to regional operations. He has had tremendous experience in Europe and, you know, with real serious players in the industry who respect him. And so, the fact that they were willing to invest alongside with us was very attractive. And I think this could be a good opportunity for Mesa to put to use a few aircrafts that are towing the water. There has been a significant restructuring in regional operations in Europe as a result of COVID. And I think this could be a really good example of being in the right place at the right time.

Appreciate the comments. Thank you.

Thank you. Our next question comes from Helaine Baker from Cohen. Your line is open.

Helaine Baker Thanks very much, Operator. Thanks for the time, guys. So on CapEx, I kind of missed the number. I think you said TORQ 1, GE Engine, and then 9 come in fiscal 2022 and 2023. Or do I think of that as calendar year? So do you have just a single point number for, I guess, fiscal 21 and fiscal 22?

Yeah, this is Mike. I'll jump in for torque here. For fiscal 21, it's just one aircraft for fiscal 21?

Yeah, one engine.

One engine for fiscal 21, and then it would be four in fiscal 22? Yes. And the remaining five. And the remaining five in 22, in 23.

Okay, that's perfect. And then do you have an estimate for the storm and power outages in Texas and how they impacted your operations?

Yeah, Helene. We estimated it was roughly an impact of about $3 million net at the end of the day.

okay do you have to cover that or do your partners well we we um this is mike um we cover the crew cost of that right because you know we our crews have a guarantee flying and the extent that that flying is canceled then then we still have to pay the crews you know the maintenance cost you know we're not we're not burning engines we're not you know burning parts expenses um so it's kind of a mix but um we we still absorb the the crew cost

And then my final question is... I think what we're saying is that the net impact after what our partners pay us and what we pay impacts about $3 million of net income. Okay.

That's perfectly understandable. Thanks, Jonathan. And then my last question is how long will you give your partners lower contract rates? Is it just when you're receiving PSP or does that continue after PSP?

Well, you know, I'll answer it then, you know, Mike, if you want to give some more technical piece, but the lower contract rates clearly were around what was going on with COVID and PSP. So I don't think that anyone would expect us to continue to have lower rates in the absence of PSP. You want to add anything to that, Mike?

No, I think that's fairly accurate. I mean, we are going to offer these rates through PSP3, which is through September of this year. And if there's a PSP4, we'll address that and probably do something along those as well. But right now, it's just through September.

Gotcha. Okay. Thanks, everybody. That's all very helpful.

Thank you. Again, if you would like to ask a question, please press star followed by one. Please make sure that your phone is unmuted and record your name when prompted. Our next question comes from Michael Linenberg from Deutsche Bank. Your line is open.

Hi, this is Hillary on for Mike. Thanks for taking my question. I guess in terms of the JV agreement with Gramercy, how will that be recorded? Will that be recorded as earnings from an affiliate given that you'll be owning, you know, less than 50%? And if that's the case, I guess we'll, you know, we probably won't see any expense coming out of the operating P&L, right? Or will we?

Yeah, this is Mike. Depending upon the final structure, we're not sure what the accounting will look like. But there is, you know, not expected to be anything in this fiscal year that would be significant.

Okay. Gotcha. Thank you. And then I guess a longer-term question. You know, you've been doing a great job of paying down debt. And just wanted to get your thoughts on what your longer-term capital structure will look like. I guess over the next, you know, next year or so, you know, will you be focused more on paying down debt or maintaining liquidity? You know, do you have a target, you know, debt to cap number and target liquidity? I guess over the next, you know, year or so?

Well, I'll tell you then, if anybody wants to add in, I mean, you know, the government loan has helped us significantly in terms of liquidity. And, you know, while Obviously, we repaid United some of the money that they had given us in terms of an advance. The benefit of that loan will become apparent as we continue to receive payments and we are not making principal payments. So in my view, that will more than suffice for liquidity that we will require for at least the next few years. I think that we'll continue to pay down all the other debt that we have and we'll focus on continuing to purchase aircraft off of lease, which we find, obviously, we find attractive. The likelihood of us taking on any additional debt, which, of course, you know, we have a somewhat different view sometimes than the street, in that when we take on debt, it means we're getting new orders for aircraft, and, you know, that debt is effectively a pass-through to the partner that takes on that aircraft. So if we were to take on additional debt, In all probability, that would be associated with the addition of aircraft or potentially down the road, you know, some of the engines that we have to purchase. Mike, Tork, do you want to add anything to that?

No, I think that's about right. I mean, you know, like Jonathan said, taking on debt to buy aircraft to expand our operation with our partners is a good debt for us. There's no better debt for us. And, you know, absent that, we're still on, you know, we're still – Like Tork alluded to, I think we end the year at $650 million. And without any new debt, I think we're scheduled next year to pay off the next fiscal year over $100 million and close to $100 million in 2023. So we're starting to pay down the principal payments pretty significantly.

Okay, great. That's very helpful. Thank you so much.

Thank you. Our next question comes from Savi Seif from Raymond James. Your line is open.

Hey, thanks for the follow-up. Just a couple of questions for me. One, a bit of a longer-term question. What do you think, Jonathan, is kind of the normalized margins of this business coming out of COVID, and when do you think you'd get there?

Normalized margins. That's an interesting question for sure. You know, there's always been so much that's impacted our margins and earnings that it's just, it's hard to say as we, I think it's, I mean, you know, because for us, obviously, the timing of maintenance events always plays a big role in that, as well as what our, you know, our partners. I think as we get through this next period where we do have, as we mentioned, uh you know a fair amount of heavy check work that we have to do moving forward through that i mean mike or torque do you want to comment where we think margins will be you know 22 23 24 given the existing fleet i mean look we generally don't uh project our margins um you know but look they they should return to the levels they were at pre-covet by um

fiscal 2022. This year is still a transition year. Some of our heavy maintenance will roll out maybe into the first quarter of 2022 for us, and beyond that, it should be back to traditional levels.

That's helpful. And if I may, just a clarification on the PSP. The PSP Is it kind of roughly half and half over the next couple of quarters, or is it, how should we think about how that PSP3 shows up from a timing perspective? Since it goes out through September.

Yeah, so it goes from April through September, so six months for this last round. So if you think about, we've got $52 million in change for this one. That's going to be spread over six months. versus the PSP2 was over four months. So we're gonna be getting net less every quarter compared to where we were in PSP2. Does that make sense? And it'll be split about 50-50. Yeah.

Okay, that's helpful. And actually, if I might, just on the commentary on the maintenance, is that kind of tied to, are you seeing that both on the ERJ side and the CRJ side, or is that kind of tied to more on the Bombardier side with, you know, that not being an aircraft that's manufactured much and, you know, people's willingness to support that aircraft type.

Can you talk about on the speed check issue?

Yeah, it's definitely more so on the, almost exclusively on the CRJ side. Remember the EJETs, you know, United owns 42 of them. So that expense is really a pass-through. It doesn't really impact our bottom line. We own 18 of them. And the new 20 we got aren't scheduled for, you know, a few years before they're in C-check. It's really a CRJ 900 cost item.

And so are you expecting that to be an issue going forward, Mike, or is this more of a, you know, COVID-related recovery pain?

If I could just take a shot, I think that there's two issues there. There is some amount of COVID-related, but there is also the impact of Bombardier being acquired by MHI. And obviously in any transition, it's not always as smooth as one would like. I do think having had extensive conversations with the MHI Bombardier team, that they are working very hard to correct any deficiencies that we've had over the last few months in terms of parts availability or timing. So I think that that has probably played as much of a role as anything else. And knowing Mitsubishi, I think that there is a high probability that all that will be behind us as we go out, you know, six months. Mike, do you want or Tork or Brad want to add anything to that?

Jonathan, this is Brad. I think you've covered it pretty well. I mean, you know, the issue primarily 900s, the issues of there's some, you know, COVID-related, you know, labor issues at the respective heavy check providers. Their ability to support parts is becoming an issue. But look, we've got very high levels of leadership attention on this issue. We're bringing on new providers. We're opening new lines. I mean, we've got a lot of just attention and focus on this issue. And, you know, we've got a kind of a bubble here to get through as we're bringing these additional aircraft backup that have been down during COVID. And once we get that behind us, you know, I expect us to be in, you know, relatively good shape.

Yeah, and if I could add something, you know, which, I mean, American has been very good in terms of understanding is, you know, there was a, as you can tell by our numbers at American, a rapid spool up of the American hours. I mean, they are now at 100% and going over 100%. They came to us asking for us to fly five additional aircraft that we had not planned on flying. We accommodated that request, obviously, because, A, we want to be good partners. B, we think we can make more money flying more aircraft. But that certainly impacted some of these items because we had to keep five additional airplanes flying and you know, again, move around our sea check schedule. So, you know, there's a lot of good news to this is the fact that our partners want more flying and we've been able to provide it. And, you know, as a result, we've had to make some accommodations in terms of sea checks. So I don't want to give the impression that this was something that was unplanned. It's something that happened in large part due to the result of the fact that we took on additional flying.

All right. Appreciate the answers. Thanks.

Thank you. I'm showing no further questions in queue at this time.

Okay. I'd like to just make a couple comments that I think I'm a little bit surprised that no one asked us more about what we're doing in terms of decarbonization and electric because I want to make sure that people appreciate that this is going to be a very significant emphasis for the company going forward. We fully intend to be the leader in decarbonization and eco-friendly flying. We see how important this has become around the world, led, of course, in Europe. It's one of the reasons why we're beginning a European certificate. We are already now invested with United with Archer, which we think is the leading developer of urban mobility vehicles, which technology changed so rapidly, even since I began in the industry, which It didn't seem like that long ago, but I tell the story that the first aircraft that I loaded back at Air LA was a chartered DC-3 built in the 1940s. Now we're flying regional jets to Havana. The idea that electric aircraft are not going to be a big deal I think is wrong. I think there's a huge opportunity in front of us. I am really delighted that United has chosen us to be their partner. We had worked very closely with them on this deal. I think there are more deals down the road that we are working on today that we feel have a high probability of coming to fruition and that the EV call is just the beginning as we see this technology really emerge into what I think is going to be the wave of the future. And we are really dedicated to make that happen. In addition, you know, one of the areas that we think provides us still to be a big opportunity is our cargo. We're taking on this third 737 to support the operation. We think that we'll find a lot of business to that aircraft. We are looking at putting on additional fleet types. And I think we're, you know, in the discussions with our partner that would provide some additional opportunity as we move going forward. But, you know, to do that, the area that has our biggest focus is then in our operational performance, which to date, given the fact that we're operating only two aircraft with no spares, I think has been excellent and has been beyond our expectations when you think about the fact we're operating a new fleet type remotely with no spares. I think it really does bode well for the future for us. So those are two big areas of opportunity that I think the company is going to excel at, and I think it's something that people will begin to focus on when they realize exactly how big the opportunities are, which I think they're extensive. So, you know, with that, if there are no other questions, I'm happy to conclude. I want to thank everybody at the company again for a great job. In spite of the difficulty out there, it's nice to see things beginning to look like they're getting better. And I would like to thank everybody for their support out on the street and in the investment community. The industry is a tough industry. We appreciate you hanging in with us. And again, if you have any additional questions, please feel free to call any of us privately, and we'll be glad to answer them as best we can.

That does conclude today's conference. You may disconnect at this time, and thank you for joining. Have a great rest of your day.