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spk03: Good day and thank you for standing by. Welcome to the One Water Marine, Inc. Fiscal First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising you, your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised, today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jack Gazelle, Chief Executive Officer.
spk04: Please go ahead.
spk07: Good morning and welcome to the One Water Marine Fiscal First Quarter 2023 Earnings Conference Call. I'm joined on the call today by Austin Singleton, Chief Executive Officer, and Anthony Askwith, President and Chief Operating Officer. Before we begin, I'd like to remind you that certain statements made by management in this morning's conference call regarding One Water Marine and its operations may be considered forward-looking statements under securities law and involve a number of risks and uncertainties. As a result, the company cautions you that there are a number of factors, many of which are beyond the company's control, which could cause actual results and events to differ materially from those described in the forward-looking statements. Factors that might affect future results are discussed in the company's earnings release, which can be found in the investor relations section of the company's website and in its SEC filings. The company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date of the forward-looking statements are made, except as required by law. And with that, I'd like to turn the call over to Austin Singleton, who will begin with a few opening remarks. Austin?
spk06: Thanks, Jack, and thank you, everyone, for joining today's call. Before we get into the quarter, I want to thank our team for their continued efforts in response to Hurricane Ian. We continue to help our communities impacted by the storm to rebuild, but the process is far from over. As of today, all of our stores are open, but several are operating in limited capacity. We expect sales activity in areas heavily impacted by the storm to remain lean until homes, docks and storage facilities can be repaired. Lost volume has yet to be recovered, as many customers still do not have anywhere to put their boats. The timing of this recovery demand is difficult to project, but we will continue to support our team and the community. Turning to our quarterly results, the first quarter played out largely in line with our expectations. We once again delivered record revenue in the quarter and gross margins of 30%. Importantly, we saw an 86% growth in our service parts and other businesses, which is demonstrating our evolving business model that is diversifying us away from the more cyclical boat buying cycles. As we discussed last quarter, our customers are returning to normal pre-COVID buying patterns. With the supply chain improving and lead times decreasing, many customers no longer feel the urgent need to preorder their boats months in advance of the season. That said, overall demand remains healthy, as evident by our backlog that is up over the prior year, strong store traffic, and robust activity at the boat shows so far this season. I want to spend a few minutes discussing quarterly results and what a return to historical seasonality means for OneWater. Sales for the first quarter grew 9% on top of a 57% increase in the prior period. Same store sales were down 14% in the quarter, following same store sales growth of 28% and 38% in the first quarter of 2022 and 2021, respectively. In a typical seasonal environment, we have realized lower sales and higher levels of inventory in the first quarter, which is typical of the smallest quarter of the year. Looking back to the 2017 to 2019 period, the December 31 quarter represented about 15% of our annual sales and 10% of our annual EBITDA. Our parts and service business continues to grow organically and has also benefited from a number of strategic acquisitions over the last 18 months. The diversification of our businesses supported gross margins in the quarter and will enable us to maintain our track record of profitable growth regardless of industry or economic cycles. During the quarter, we also completed the acquisition of Taylor Marine Centers and Harborview Marina. Taylor Marine is an award-winning dealer with strong reputation and complements our presence in the mid-Atlantic U.S., while Harborview fortifies our presence in the Florida Gulf Coast market. The acquisition pipeline remains robust, and going forward, we will remain opportunistic while we monitor the macroeconomic environment and apply a thorough analysis to any potential transaction. Based on where we stand today, all signs are pointing to an upbeat selling season in 2023. Both shows to date have been strong, traffic is good, and demand remains intact. Additionally, gross margins are holding up, and customers are not resisting the current interest rate environment. At the same time, there is considerable macroeconomic uncertainty, and although recent industry data is down, it is not clear if it is the impact of historical seasonality or consumer demand. With so many unknowns, we think it is prudent to revise our outlook for the fiscal year. We believe if consumer settlement holds, interest rates level out, and macro conditions improve, we have an opportunity to outperform. While we know there are a lot of questions out there around the health of the consumer and the current demand levels, we will be back here in a few months with a bit more clarity on the peak selling season. Finally, we announced last month that Mitch Legler will retire as chairman of the board. I would like to thank Mitch for his tremendous contribution and guidance to OneWater over the last several years through the IPO and a period of rapid growth. In line with our succession plan, John Schrodenbach currently serves as vice chairman of the board, and we expect John to be elected as chairman at our upcoming annual meeting. I look forward to working with John in his new capacity and ensuring the continuity of leadership and governance. With that, I will turn it over to Anthony.
spk01: Thanks, Austin. During the quarter, we experienced a change in customer buy-in cadence, rising interest rates and a decline in the macroeconomic environment and the impacts from Hurricane Ian, yet we still capitalized on the solid demand to drive growth. We were able to key in on consumer trends at several boat shows during the quarter where we logged strong activity. Manufacturer rebates and discounts made a return to boat shows, resulting in a more normalized pre-COVID pricing environment. Additionally, customers did not seem to be deterred by higher interest rates. In fact, a vast majority of the sales made at the Atlanta show were financed. As Austin mentioned, with the normalization of certain parts of the supply chain, many customers no longer feel the sense of urgency to lock in a deal months in advance. This is especially true for the smaller standard units where inventory has normalized. However, there are still extended wait times for larger, more sophisticated boats in excess of 30 feet. Fortunately, we have the right portfolio of innovative products, a strong sales team, and the right tools to get customers across the finish line into the boat of their dreams. Total inventory at the end of the first fiscal quarter increased 112% to $527 million. compared to a year ago driven by the return of seasonal inventory built and acquired businesses. While we remain optimistic about the future, we're also closely monitoring our inventory levels in relation to retail sales. Should trends shift beyond expected seasonality, our proprietary tools will allow us to adjust our orders and inventory stocking levels. Furthermore, our flexible operating model enables us to swiftly align our cost structure with the new levels of demand. We have said it several times, we have not seen a material shift beyond return to seasonality. Retail and boat show demand remains robust, but we continue to keep our fingers on the pulse of the consumer activity to identify and make any necessary changes. Our service in parts and other business contributed significantly to the sales and gross margins in the quarter. Despite macroeconomic pressures and seasonality, our service parts and other businesses was also challenged by the destocking that occurred with big box retailers that had a buildup. Inventory in response to the supply chain delays. This area of the business continues to be an important growth driver for OneWater and now accounts for 16% of the total revenues and 22% of the gross profit on a trailing 12-month basis. consistently growing over the last few years. This contribution remarks a significant shift in our diversification, offering a stable high margin revenue profile to OneWater. As we return to a more cyclical environment for boat sales, we will rely on the stability of this business to smooth out our overall gross margins. In summary, Demand remains healthy as the industry returns to traditional sales cycle and the supply chain continues to recover. Our flexible business model allows us to adapt to the dynamic operating environment to continue providing excellent service to our customers while driving value to our shareholders. I will now turn the call over to Jack to review the financials.
spk07: Thanks, Anthony. Fiscal first quarter revenue increased 9% to $367 million. in 2023 from $336 million in the prior year quarter, despite a 14% decrease in same-store sales. New boat sales fell 2% to $232 million in the fiscal first quarter of 2023, and pre-owned boat sales increased 4% to $56 million. We continue to benefit from our emphasis on growing our higher margin parts of our business, which contributed substantially to our results in the quarter. Service parts and other sales climbed 86% to $70 million driven by contributions from our recently acquired businesses. Finance and insurance revenue continues to pace with new and pre-owned boat sales. Gross profit increased 9% to $110 million in the first quarter compared to the prior year, primarily driven by margin insulation offered by our service parts and other revenues, partially offset by a shift in the mix of the size of the boats sold. Gross profit margin remained flat at 30% compared to the prior year. First quarter 2023 selling general administrative expenses increased to $78 million from $59 million. SG&A as a percentage of sales was 21%, an increase from the fiscal first quarter of 2022. In a normal seasonal environment, SG&A is typically higher in the December quarter related to the level of sales and marketing activity associated with boat show participation. In addition, this year the average cost per show increased when compared to boat shows we attended in prior years. We expect these levels of promotional activity to return as we revert to a more traditional sales cycle. Additionally, we expect our SG&A to be higher than historical levels as we integrate acquired parts and service businesses. Operating income decreased 15% to 27 million compared to 31 million in the prior year, driven by higher SG&A and expenses associated with our acquisitions. Adjusted EBITDA decreased to 28 million compared to 41 million in the prior year. Net income for the first fiscal quarter totaled $11 million or $0.61 per diluted share, down 51% from $23 million or $1.45 per diluted share in the prior year. Contributing to this decline was also a $10 million increase in interest expense, which was $12 million in the quarter, up from $2 million in the prior year. This increase is a result of the rising interest rate and an increase in the average borrowing on our debt facilities. Turning to the balance sheet, as of December 31st, 2022, total liquidity was in excess of $100 million, including cash on the balance sheet, availability under our revolving line of credit and floor plan credit facilities. Total inventory was $527 million as industry-wide supply chain constraints continued to ease in the first quarter. I would like to remind you that we are currently approaching the peak of the seasonal inventory bill that typically occurs in February or March. Long-term debt as of December 31st, 2022 was $464 million. Adjusted net debt or long-term debt net of cash was 1.8 times trailing 12-month EBITDA. We are comfortable with our liquidity and leveraged position and continue to monitor the macro environment as we manage our capital allocation. Looking ahead, we believe it's prudent to reduce our annual guidance to reflect the uncertainty around the macroeconomic environment and the potential impacts on the marine demand. As a result, we are now guiding same-source sales to be flat to up mid-single digits compared to the prior year and expect adjusted EBITDA to be in the range of $200 million to $225 million, with earnings per diluted share to be in the range of $7.50 to $8 per share. These projections exclude any additional acquisitions that may be completed during the year. Our strategy from a capital allocation perspective has not changed. We are focused on reinvesting in the business to accelerate organic growth, pursuing strategic M&A opportunities, paying down debt, and repurchasing shares while maintaining appropriate levels of leverage. As always, we are methodical in our approach and will put our cash to work where it will drive long-term shareholder value. This concludes our prepared remarks. Operator, will you please open the line for questions?
spk03: Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again.
spk04: Please stand by while we compile our Q&A roster. And our first question comes from the line of Joette Bello with Raymond James.
spk03: Your line is open. Please go ahead.
spk09: Thanks. Hey, guys. Good morning. I guess the first question may be a housekeeping item for Jack. The comp number, could you break that out between units and price in the quarter?
spk07: Yeah, I would say that during the quarter we saw some increase in price and then a decline in units. I'd say units would be down in the mid-single digits. Okay, that's helpful.
spk09: And then I guess in terms of the guidance and the quarter, you mentioned the quarter was in line with your expectations. Talked about a strong selling season, positive boat show activity and healthy demand. Yet you're cutting your guidance fairly dramatically. And I know you talked about the macro and the cloudier outlook. But is it that much cloudier versus three months ago? Or are you concerned that there may be more than just seasonality going on here?
spk06: Well, I mean, I think it's too early to know that, Joe. And I think that that's a little bit of our issue. You know, I think if we were to come out today and raise our guidance or left it like it was or lowered it, I still think there's a lot of doubt out there on what we're saying. So if we'd have taken it to 12 bucks, people just said we were crazy. If we'd have left it alone, the naysayers would have still said that, you know, we're wrong. And so we went back to the model and really line items, spent a lot of time on going through. We know there's going to be more new boat compression. margin compression and so we kind of factored that in and just went and said hey look you know let's take a conservative approach based off what we know and let's get this right and get it in line so that we don't have to come back at you know next quarter or in the or in the last quarter and adjust you know adjust down again and so i think we're just taking a little bit more conservative approach we just don't know today we feel like it's seasonality because the demand As far as Internet leads, door swings, things backed up at the manufacturers, just where everything sits, it feels like seasonality, but we just can't answer that just yet. I mean, I think we'll have a lot clearer picture in three weeks.
spk09: Okay, so the guidance is more than seasonality, it sounds like.
spk06: It could be, yeah. I mean, geez, we've been beat on for the last year and a half that we're in a recession. So I think we kind of looked at it and said, let's get this right so we don't have to keep coming back to it. and making adjustments. And so, we really spent a lot of time on the model going, okay, well, what if margins compressed to this? And we kind of looked at it, and it took a pretty conservative approach to it just because we don't want to have to come back again. Okay. Got it. Thank you.
spk07: The only thing, Joe, I'd tell you, too, on the models and just kind of looking out there at consensus, you know, looking at consensus, most people have at Q2 higher than Q4. And again, that's not our typical seasonal cycle, right? Our typical seasonal cycle is Q1 and Q2 are the smallest quarters of the year. Q3 is the largest. And then Q4, you know, is a little bit bigger than Q2. So there's some of that cadence out there and, you know, that I just want to point that out.
spk09: Got it. Thank you.
spk04: Thank you, and one moment for our next question. And our next question comes from the line of Drew Crum with Stifel.
spk03: Your line is open. Please go ahead.
spk05: Okay, thanks. Hey, guys. Good morning. So on the same-store sales, and obviously several factors that contributed to it being down 14% in fiscal 1Q, The updated guidance would suggest that you think that metric improves over the course of fiscal 23. I just want to confirm that and understand what's driving the confidence behind that assumption.
spk07: Yeah, definitely the backlog gives you some confidence to it, but it's the seasonal change, right? I mean, we had a 28% and a 38% December comp the last two years. And so in order to return to a normal seasonal cycle, that dynamic has to change. And, you know, so we would, I'm not surprised that it was where it was at. I think next quarter is, you know, we're up against some pretty heavy comps in the second quarter. You know, last year we were 8%, we were 57% the year prior to that. You know, so there's some tougher comps there. I think if you look at trends, we're softer comps in the back half a year in those larger quarters. I also think that in prior years, as we worked our way through the season, inventory availability became a lot leaner. And I think what you see today, as you see the traditional seasonal build, we'll have boats now for the start of the selling season. And then as manufacturers send us more product and replenish, you know, we'll have product to carry us through the end of the season, you know, versus, you know, inventory supplies, you know, falling short as we get to the September quarter.
spk06: Jack, also, I mean, January is a positive comp, isn't it?
spk07: Yeah, January was positive. And again, we're cautiously optimistic with the data out there. I think if you look at, you know, some of the – SI data in December quarter, I think it averaged being down around 28, 30%. So us being down 13 is considerably better than them. But there's just a lot of unknowns out there and a lot of cloudiness in the forecast.
spk05: Got it, okay, that's helpful. And then Austin, in your preamble, you talked about M&A a little bit. I just want to get a better understanding of what the current thinking or stance is on that. You know, a few months ago you decided to hit the pause button and we're going to rely on some of the January boat shows to gauge the health of the industry. Are you at a point now where you can share more definitively what the company's plans are for the balance of fiscal 23? And if so, you know, what is the strategy?
spk06: Yeah, you know, we're probably going to end up holding tight so there's more clarity in the macro. You know, like we've all said through our opening remarks and answering the questions, I mean, boat shows were good. We're hearing that not only the boat shows that we're in, but we're hearing that from other people in the industry that are doing shows that we're not in. Milwaukee, some of the other bigger shows have been pretty good, and sediment remains strong. But we're still dealing with, you know, a big inflated, in our opinion, new boat margin out there. So that needs to normalize somewhat. And I think right now, just with the overall macro situation, for us to hold steady for the next 90, 120, maybe 180 days and kind of watch and see how this unfolds. And we're watching it on a daily basis. I mean, things can change pretty quick, but I don't think we're in any hurry to go out there and do a deal just to do a deal. I think it's prudent for us to continue to build cash on the balance sheet, but we are going to be opportunistic if something that's just too good at the right price comes along. Getting back into our normal cadence is not something that we're ready to do just yet.
spk05: Got it. Okay. Thanks, guys.
spk03: Thank you. And one moment for our next question. And our next question comes from the line of Michael Schwartz with Truist. Your line is open. Please go ahead.
spk10: Hey, guys, good morning. Just maybe a few follow-up questions on the guidance. It doesn't look like you took down your comparable store outlook too much in the update here. Maybe give us a sense of how you're thinking about the bottom-up build with that comparable store outlook, just in terms of your industry outlook today maybe versus where it was when you first gave guidance, pricing, mix, share gains, anything of that nature that you can kind of help us with.
spk07: Yeah, I would say if I think about, you know, the December numbers, the December quarter, you know, SSI data, you know, that may, and everything that's come out kind of related to that probably has been a little bit more negative than it was as of September. You know, I think that all the feedback that we're seeing, like Austin mentioned, with respect to floor traffic and leads, generation, et cetera, has been positive, so we're We're trying to be cautiously optimistic, and so I think that leads us to outperforming the industry. I think it's gonna be, I think you'll start to see unit volumes level off, and I think price will still be a factor, but to much less degree than the recent years.
spk10: Okay, that's helpful. I think you had made – Austin, you had made the point that you expect new boat margins to thin, which is, I think, what most people have expected. Maybe give us a sense of, you know, as it pertains to your guidance, maybe what you're – how you're thinking about that now, you know, maybe relative to pre-COVID or prior to – or versus maybe some of the elevated margins we've seen in the mid-20s the past two years or so, like how should we actually think about boat margins this year as it pertains to the guidance?
spk06: Yeah, I'll let Jack speak to that. I mean, we threw around a bunch of numbers. I don't know what he ended up putting in the model to kind of get us to the number, what we ended up settling on or what he ended up settling on in the model. But me, Anthony, and Jack, you know, once we got done with the Atlanta Boat Show, spent a lot of time talking about, you know, Lauderdale, what we'd seen since Lauderdale, through these first boat shows in January. And one thing that was pretty evident is there was a lot of promotional pricing for manufacturers, a lot more than we expected right off the bat. We expected them to kind of ease into that, which in a way is good because it allowed us to maintain our margins and use those promotions as the discount. But that's like phase one. And so it just continues to go from there. I've said many times, you know, A third of the dealer network out there has zero to offer the consumer but price. And they usually sell, they can usually get a sale on price the first time, and then they never sell that customer another boat because they don't have anything else to offer them. So you'll continue to see that erode. Promotional pricing from the manufacturer usually leads the way. Once that doesn't work anymore, then these, I would just say these lower side dealers will start discounting on their own. So they'll start working on their margins. we have to kind of follow suit so when you start thinking about let's say 30 feet down 35 feet and down that'll move a lot quicker than what anthony was speaking about earlier in his opening remarks about the bigger stuff that's still got the longer build times it's still got a backlog so we'll start to see that erode but jack i don't know what you ended up putting into the model um what you ended up saying
spk07: Yeah, I think as you look at how we ended up this quarter, obviously as you work through the quarters throughout the year, we'll see margins fluctuate quarter to quarter as you sell different types of boats, different parts of the year. But I think that we're definitely discounting and bringing margins down a bit. Again, not drastically, but certainly taking a haircut on them. Again, that's what we've seen to date, and that's where we're modeling it. The other thing I'll point out is just to reemphasize the point we've made a handful of times. Despite this haircut on the new boat margins, we're seeing used boat margins hold up well. We're also seeing that, you know, our expansion into parts and service, those expansions, that higher margin business really supporting our overall margin and keeping it at, you know, that 30%. And so, you know, I think the likelihood of us staying at that 30% plus, you know, or in and around there, you know, 29, 31, you know, is a likely range.
spk06: Yeah, and one other thing real too, you know, we've said this a lot in the past. Boat shows are our lowest margin business. That's why we've never really liked them. I mean, you've got to be competitive. You've got to go in there and make it worth the money in an effort that you spend on that. So you end up coming out of a boat show with some of your lowest margins. So we've got some meaty deals still in the pipeline, you know, that are coming in that are sold. We're still working as hard as we can to get every dollar out of the consumer. And that's one of the things that, you know, I would say that, The takeaway was, I mean, we've got to get back into the true discipline of selling and not just order taking. And we're really working hard with the team, and the team's really stepped up. I think the whole entire sales staff saw coming out of the boat shows that, hey, it's not like it used to be. We have to get back to be the elite sales team that we were, and we're going to step up our game because nobody's going to beat us. But this quarter, coming out of those boat shows, that's always been our lowest margin business. Okay.
spk10: And then just one last question for me, maybe for Jack. I think you said inventory was at $500 and some billion in the quarter. Is there any way to look at just in terms of the new boat inventory, maybe what that looks like on an apples-to-apples or same-store basis relative to pre-COVID, just to give us a sense for, you know, excluding acquisitions and everything?
spk07: Yeah, we've dug into, we've tried, I don't have, you know, a same store inventory number per se. And, again, we've been looking at weeks on hand. You know, we're currently at, you know, 16, 17 weeks on hand, which is influenced a little bit by acquisitions. But if I go back to 18 and 19, which is also a little influenced by acquisitions, you know, we are at, you know, 24 weeks. So it's, you know, again, we're at that seasonal peak. So you'll see it at the highest from now into February, March. A lot of times it depends on weather as to exactly when that spring season kicks off and the volumes we get out. But I think we're close to the peak, and then we expect to see things go out. But I think on a comparable basis, I think the other piece I think that you're getting at too, right, is is there's a good chunk of our inventory, you know, related to the parts and service business. And I don't have that number in front of me, but I'll work to get that out to you and maybe get it into, you know, some of the future releases. Okay, wonderful. Thank you.
spk03: Thank you.
spk04: And one moment for our next question. And our next question comes from the line of Craig Kinison with Baird.
spk03: Your line is open. Please go ahead.
spk08: Hey, good morning, guys. Thanks for taking my question. Just wanted to follow up on Hurricane Ian. I'm wondering if there's a way for you to look at markets affected by the hurricane versus markets that looked, you know, were unaffected by that catastrophe and maybe parse the same source sales environment in that context.
spk07: Yeah, I mean, we looked at it a little bit. I looked at it more on the, you know, I guess I'll say the EBITDA side. And, you know, those stores were down about $2 million of EBITDA. You know, and we're still carrying a lot of expenses, paying our people, you know, rebuilding. You know, so I think it's certainly contributed to it. But, you know, again, I didn't want to go through a lot of effort to try to say, oh, the hurricane caused, you know, this much revenue because it just isn't something that is easy to track. And then as we move forward, right, it gets even more complicated as to, you know, when the customers come back in the market and that replenishment cycle hits. So, you know, it certainly is impacting the numbers. You know, like we've said many times, if we miss a truckload of deliveries the last day of the month, That could also, you know, a big vote or two can, you know, also impact, you know, same source, same couple points.
spk08: Good stuff. That's great. Thanks so much.
spk03: Thank you.
spk01: Sorry, Anthony. No, I was going to say we're seeing a lot of consumers in those markets, you know, still without docs and things like that. So there's still a lot of business to be had there. Very good. Hey, thank you, guys.
spk03: Thank you. And again, if you have a question at this time, please press star then 11 on your telephone. And our next question comes from the line of Griffin Bryan with DA Davidson. Your line is open. Please go ahead.
spk02: Yeah, thanks, guys. I was just wondering if you could talk about the availability of these boats and what the current demand looks like for them.
spk07: Yeah, I'd say availability has gotten a little bit better. I think you see that a little bit in our results where, you know, pre-owned was up. And I think the market, you know, continues to be strong for pre-owned. I don't know, Anthony, if you have a different sense.
spk01: Yeah, I mean, it's something that we continually go after. I mean, there's a great market, and we continue to grow consistently. the business in that direction where we're employing buyers and that's all they do is, you know, trying to source boats and things like that. So there's a tremendous amount of upside that we continue to go after and focus on. And there hasn't been any slowing of it whatsoever.
spk02: Okay, great. And then can you just talk about demand trend just being in the value segment compared to the premium segment right now?
spk01: Well, I think that as we've been talking about the seasonality portion of it where, you know, the value segment for the last two years, it didn't matter what amount of people were buying it. And I think we're going back to more of a seasonal type thing. That's why we're seeing the build in our most type boats. But, you know, at the recent Atlanta boat show a few weeks ago, the value boats were selling as good as they did in the past. So, you know, I think it's – our business is just turning more back to seasonality.
spk07: That value customer tends to be the person who comes in on a Wednesday and they want to be in their new boat by the weekend. A hook and roll almost. Those are the people who it was pretty abnormal for those people to be customers in the December and March quarters versus you know, coming in April 1, you know, looking to get out of the water on the first sunny day.
spk02: Okay, great. Thanks, guys.
spk03: Thank you. And I'm showing no further questions, so this is going to conclude today's question and answer session. Ladies and gentlemen, this is also going to conclude today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.
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