Portman Ridge Finance Corporation

Good morning ladies and gentlemen and welcome to Portman Ridge Finance Corporation's second quarter 2024 earnings conference call. An earnings press release was distributed yesterday August 8th after market close. A copy of the release along with an earnings presentation is available on the company's website at www.portmanridge.com in the investor relations section and and should be reviewed in conjunction with the company's Form 10-Q filed yesterday with the SEC. As a reminder, this conference call is being recorded for replay purposes. Please note that today's conference call may contain forward-looking statements which are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the company's filings with the SEC. Portman Ridge Finance Corporation assumes no obligation to update any such forward-looking statements unless required by law. Speaking on today's call will be Ted Goldthorpe, Chief Executive Officer, President, and Director of Portman Ridge Finance Corporation. Brandon Satorin, Chief Financial Officer, and Patrick Schaefer, Chief Investment Officer. With that, I would now like to turn the call over to Ted Goldthorpe, Chief Executive Officer of Portman Ridge.

Ted Goldthorpe Thank you. Good morning and welcome to our second quarter 2024 earnings call. I'm joined today by our Chief Financial Officer, Brandon Satorin, and our Chief Investment Officer, Patrick Schaefer. Following my opening remarks on the company's performance and activities during the second quarter, Patrick will provide commentary on our investment portfolio and our markets, and Brandon will discuss our operating results and financial condition in greater detail. Yesterday, Foreman Ridge announced its second quarter of 2024 results, and despite operating under challenging market conditions, we reported net investment income of $6.5 million, or 70 cents per share, an increase of $300,000, or 3 cents a share, as compared to the prior quarter. A well-diversified portfolio remains one of our highest priorities for Portman Bridge portfolio, and I'm pleased to share that we finished the quarter with exposure to 28 industries and 75 unique portfolio companies with an average par balance of $2.6 million. This compares to 27 industries and 79 unique portfolio companies with an average par balance per entity $3.1 million as of March 31, 2024. Further, subsequent to quarter end, we amended and extended our existing senior secure revolving credit facility with JPMorgan Chase Bank. Under the terms of the amendment, we increased the facility size by $85 million to $200 million and reduced the applicable margin by 30 basis points from 2.8% per year to 2.5% per year. The reinvestment period was extended from April 29th, 2025 to April, August 29th, 2026, terming out our revolving period by two years and improving the company's asset liability matching. The remaining $85 million of secured notes will be refinanced with the upsides of the credit facility. We value the long-term commitment and relationship we have with our lenders and J.P. Morgan, a world-class financial institution. The amended credit facility will provide us with meaningful liquidity, as well as the flexibility to grow the company's balance sheet as we look to capitalize on future investment and origination opportunities. We continue to believe our stock remains undervalued, and as such, we continue to repurchase shares under our share repurchase program. During the second quarter, we purchased a total of 79,722 shares for an aggregate cost of $1.620. These were purchases for a creative department's net asset value by $0.03 per share during the quarter. Additionally, the Board of Directors approved a $0.69 per share distribution for the third quarter of 2024, which represents a 13% annualized return on net asset value amongst the highest in the BDC space. Turning to conditions in our primary market, the second quarter of 2024 continued the macro trend scene in the first quarter. New deal activity has picked up pace, and syndicated markets have continued to remain open, though borrowers have continued to rely heavily on private credit capital providers for M&A activity, given the certainty they provide, resulting in tailwinds for our industry. Having said that, the combination of continued private credit capital raising and a more competitive syndicated market alternative has led to meaningful spread compression in certain parts of the private credit market. According to KBRA BLD private data, private credit spreads for borrowers with greater than $100 million of EBITDA and those between $50 and $100 million of EBITDA have both declined by approximately 75 basis points since the beginning of the year. That is compared to spread compression of approximately 50 basis points for borrowers between $20 and $50 of EBITDA and just over 25 basis points for borrowers with less than $20 of EBITDA. As always, our strategy at Portman is to be selective regarding new investment opportunities by leveraging the platform scale of BC Partners and its robust deal pipeline, while also increasing the diversification of our investment portfolio through hold size. As an example, during the quarter, we made only two investments in portfolio companies, one comprising a $4.6 million investment and the other a $2.7 million investment. while the remainder of our additions were in the form of incremental capital to existing portfolio companies to support their add-on acquisitions. Patrick will provide details shortly. This has allowed us to maintain a relatively consistent spreads on new origination as compared to our portfolio as a whole. As we enter the back half of 2024, we remain confident in our business. With our amended credit facility, robust pipeline, strong balance sheet, We believe we are well positioned to continue executing our strategy and delivering strong returns for our shareholders. With that, I will turn over the call to Patrick Schaefer, our Chief Investment Officer, for a review of our investment activity. Thanks, Ted. Turning now to slide five of our presentation and the sensitivity of our earnings to interest rates. As of June 30, 2024, approximately 89% of our debt securities portfolio was either floating rate with a spread pegged to an interest rate index such as SOFR or prime rate, with substantially all of these being linked to SOFR. As seen here from the chart, SOFR rates have remained relatively consistent for the last five quarters. Skipping down to slide 10, originations for the quarter were lower than last quarter and were also below the current quarter repayments and sales levels, resulting in net repayments and sales of approximately $18.2 million. During the quarter, we took advantage of rising secondary prices to exit or materially reduce a number of our more liquid loans. This proactive rotation represents a substantial portion of the net repayment and sales amounts. Our new investments made during the quarter are expected to yield a spread to SOFR of 724 basis points on par value, and the investments were purchased at a cost of approximately 98.6% of par. Our investment portfolio at the end of the second quarter remained highly diversified. We ended the second quarter with a debt investment portfolio spread across 28 different industries, one more as compared to the end of the first quarter, and 75 unique portfolio companies with an average par balance of $2.6 million. Turning to slide 11, in aggregate, investments on non-recrual status were nine investments at the end of the second quarter of 2024, representing 0.5% and 4.5% of the company's investment portfolio at fair value and cost respectively. This compares to seven investments on non-recrual status as of March 31, 2024, representing 0.5% and 3.2% of the company's investment portfolio at fair value and cost respectively. The main driver of this increase was due to placing an additional security of Qualtech on non-recrual. We were able to exit our entire Qualtech position shortly after the quarter end, but during the course of the quarter, the buyer for the company made a number of changes to the purchase price that ultimately resulted in our security receiving less than par, and therefore, we have included it on the non-recrual list for the quarter. As of today, we have completely exited all Qualtech securities, and the ultimate NAV impact has been factored into the June 30th financial results. On slide 12, excluding our non-accrual investments, we have an aggregate debt investment portfolio of $383.6 million at fair value, which represents a blended price of 93% of par value and is 91% comprised of first lien loans at par value. Assuming par recovery, our June 30, 2024 fair values reflect a potential of $26.7 million of incremental NAB value, or a 13.6% increase to NAB. When applying an illustrative 10% default rate and 70% recovery rate, our debt portfolio would generate an incremental $1.64 per share of NAV, or a 7.7% increase as it rotates to maturity. Finally, turning to slide 13, if you aggregate the three portfolios acquired over the last three years, we have purchased a combined $435 million of investments, have realized approximately 85% of these positions, and combined realized and unrealized mark of 101% of fair value at the time of closing the respective merchants. As of Q2 2024, we have fully edited the acquired OTA portfolio and are down to a combined $13.8 million of the acquired HCAP and the initial KCAP portfolios. And I'll turn the call over to Brandon to further discuss our financial results for the period.

Thanks, Patrick. For the second quarter of 2024, Portman generated $16.3 million of investment income, of which $13.9 million debt investment portfolio. This compares the total investment income for the first quarter of 2024 of $16.5 million, of which $14.2 million was attributable to interest income inclusive of fixed income from the debt investment portfolio. The decrease was driven by lower interest income due to net repayments and sales during the quarter, as well as the reversal of $0.1 million, or a penny per share, of previously accrued unpaid interest on a loan placed on non-recrual status during the quarter, partially offset by higher dividend income from the Great Lakes Joint Venture. Excluding the impact of asset acquisition accounting, our core investment income for the quarter was $16.2 million as compared to core investment income of $16.5 million in the prior quarter. Total operating expenses for the quarter ended June 30th, 2024 decreased by $0.4 million to $9.9 million as compared to This decrease was largely driven by a decrease in interest expense as a result of a $6.6 million pay down on the 2018-2 secured notes during the quarter, as well as a larger $34.2 million pay down on the 2018-2 secured notes in the second half of the prior quarter. Our net investment income for the quarter increased to $6.5 The increase in NII was primarily due to lower interest expense during the quarter. For the quarter ended June 30, 2024, net realized and change in unrealized losses on investments in debt was $12.8 million. This compares to net realized and change in unrealized losses on investment in debt of $1.7 million in the prior quarter. As of June 30, 2024, the company's net asset value was $196.4 million, or $21.21 per share, a decrease of $14.2 million, or $1.36 per share, compared to the prior quarter net asset value of $210.6 million, or $22.57 per share. As of June 30th and March 31st, 2021, For the same period, our leverage ratio net of cash was 1.3 times and 1.2 times, respectively. Specifically, as of June 30, 2024, we had a total of $285.1 million of borrowings outstanding, with a current weighted average contractual interest rate of 6.9%. This compares to $291.7 million of borrowings outstanding as of the prior quarter, million of available borrowing capacity under the Senior Secured Revolving Credit Facility and no remaining borrowing capacity under the 2018-2 secured notes as the reinvestment period has ended. As Ted mentioned, subsequent to quarter end, we amended and extended our existing Senior Secured Revolving Credit Facility located in Oregon. Under the terms of the amendment, the credit facility was upsized by $85 million for a total revolving capacity of $200 million. Additionally, the applicable margin was reduced from 2.8% to 2.5%, and the reinvestment period was extended by approximately two years to August 29, 2026. This amendment has reduced our overall cost of debt capital and extended the duration of our debt capital structure. Further, we intend to refinance the remaining $85 million of 2018-2 secure Finally, the Board approved a quarterly distribution of 69 cents per share payable on August 30th, 2024 to stockholders of records at the close of business on August 22nd, 2024. With that, I will turn the call back over to Ted.

Thank you, Brandon. Ahead of questions, I'd like to reemphasize that we believe we are well positioned to take advantage of the current market environment as shown in the first half of the year. Through our prudent investment strategy, We believe we will be able to deliver strong returns to our shareholders in the back half of 2024. I would like to thank once again all of our shareholders for ongoing support. This concludes our prepared remarks, and I'll turn the call over for any questions.

Thank you, and we will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, press star 1 to join the queue. And your first question comes from the line of Christopher Nolan with Lautenberg Tallman. Your line is open.

Hey, guys. What was the driver for the realized loss and the unrealized appreciation, please?

Yeah, so I'll turn it over to Brandon for the realized. But on the unrealized front, the primary driver is Qualtech, which I talked about a little bit in my remarks. But we ultimately exited the investments sort of right after quarter ends. and had to take an unrealized write-down in and around the exit price there that, again, we'll just flip from unrealized to realized in Q3. But for Q2, it was a significant portion of our unrealized loss.

Yeah, that's right, Patrick. Just on the realized front, Chris, it was an investment called Tank. We realized it at the mark we had last quarter, so that was already embedded in our net. It was just a flip from unrealized to realized.

And if I'm correct, Tank was on one of the old Capitola investments. Is that correct?

No, this was an old K-Cap, like way legacy one. It was on non-approval. It took over the portfolio. We've had like a $40,000 receivable or something left from like some state, like a state liquidation that finally got resolved. So it's been running at like almost no value on our SOI for several, several years now.

Yeah, no, okay. I'm getting your portfolio company – excuse me, your BDC is confused. Qualtech, what should we expect in terms of a realized loss for 3Q on that?

The short answer is it should be all a flip from unrealized to realized. There should be no NAV impact for Q3, Chris. I don't have the exact quantum of that. We can follow up with you with the exact quantum, but it will be a complete flip from unrealized to realized. So we baked in, and again, it closed in on like July 7th or something like that. So the price as of 630, that bakes in the exit price, but we can follow up with the exact amount that you should expect. No need.

That's fine. Okay, on the credit facility, the text of the press release says a margin of 2.5% or so. Am I to presume that's a spread over some sort of index? And if so, what's the index?

Yeah, SOFR.

It's a 250 over SOFR. Great. And final question would be, can you give any sort of perspective as to what the BDC M&A market might be evolving like, given... Many BDCs are starting to see asset quality deterioration this quarter.

Yeah, I would say... I think it's still pretty quiet on that front. And there is a lot of strategic activity happening in the broader asset management space. So you've seen two big deals happen this past quarter. And M&A activities pick up a lot in the broader asset management space. So I'm not sure that applies. I wouldn't say we've seen that in the quote-unquote BDC space. in the broader institutional space. And the theme is the same. The theme is scale matters. So, you know, I think costs keep going up. You know, there's pressure on fees. So, I think, you know, a lot of firms are having to put a lot of money into distribution in terms of expenditures. So, I think the themes are becoming more pronounced. So, I think some people in 2020 had issues with credit. I think now it's much more people have issues with scale. So I think you're going to see a lot of M&A over the next 12 to 18 months, but that's a comment more broadly around 40X and around asset management as opposed to just VDCs. Got it. Okay, that's it for me. Thanks, guys.

Thanks, Chris.

And as a reminder, please press star 1 if you would like to ask a question. And your next question comes from the line of, of Deepak Sarpengal with Repertoire Partners. Your line is open.

Thank you. Hi, good morning. So a few questions. On the recent quarter, obviously we'd all like to see zero markdowns at any given point in time, but that's essentially impossible. Curious, I know Qualtech was one of the big drivers. Um, it did seem like a lot of it was like a lot of the weakness has been primarily in the high tech industry part of your portfolio. Um, is there something broader that you're, you know, that you're seeing? Um, um, I know that that's, you know, the size of that has come down now, which is good, but, but is there anything else, um, you know, any other context, um, you know, with respect to that?

Because it looked like there were a few of them that... Yeah, that's actually a very perceptive question. I would say Qualtech's not really a tech company. And again, it's a long-term legacy position and with no exit. I will say across our tech portfolio, which is, generally speaking, enterprise software, so recurring cash flow. I will say that they've definitely seen two factors impact them. One is sales cycles becoming longer for new sales, so their existing base of business is still turning along. But number two is, you know, this AI theme and the expenditures in AI, they are taking away a little bit of the budgets for what I'd call traditional software, it feels like, just looking at our portfolio companies. And then number three is, you know, there has been some very, very company-specific events that have impacted some of our companies in the broader space. I mean, obviously, everybody knows the CrowdStrike example, but that's actually happened in a couple other situations. We had a specific investment in a company that had a cyber issue this quarter that we think is a temporary markdown. We think the company is totally fine. But there is some idiosyncratic events happening in tech that we haven't seen before. CrowdStrike is the most public example, but we're seeing it on a smaller scale.

Okay. That makes sense. And then is there, also, is there anything, I know your business isn't seasonal, but like it also just so happened that last year it was like Q2 that was, you know, maybe a tougher quarter, but then it kind of reverted. Is there anything maybe just kind of like where, you know, there's, like you said, maybe there's company specific factors or like the overall market just happened to to be in a particular position? Is there anything just in terms of kind of like timing that contributes to maybe this being like a tougher quarter than most?

Yeah, another really good question. I would say, Thematically, the banks were really closed in 2020. So post-Twitter, a lot of the investment banks were really reticent to take on risk. And then you obviously had the regional banking crisis. So we felt like there really wasn't a lot of issue. We've had more loan issuance year-to-date than we've had in the last two years combined. It hasn't really impacted us because we're the smaller in the market. So we haven't seen the refis that some of our larger peers have seen. Coming into this year, our portfolio, our pipeline was not that great. We were incredibly busy up to June, and now our pipeline's slowed down again. And the theme there is there's just not a lot of new LDO activity. So when you're seeing M&A pick up broadly, and you're seeing the investment banks comment on M&A, we're not seeing it on the private equity sponsor level. So exits are hard. You know, prices haven't come down that much. you know, financing costs are higher and the economy is slowing down. So I think we're seeing, like, our pipeline for new M&A activity in LBOs is pretty anemic. So I think that'll pick up. Like, if you look at our portfolio today, a very large percentage of them are supposed to go for sale in the fourth quarter. Now, again, that was the same thing last year. That doesn't mean they're actually going to transact, but there is a very, very large... pipeline of companies in the middle market that need to be sold over the next one, two, three years. So this should revert to the mean at some point. Okay. And then this is more of a random question. I wouldn't say it's seasonal. It's more thematic, I would say.

Okay, yeah, that makes more sense. And this question is a little bit more random, but I noticed that One thing I do like that, again, the joint ventures and CLO parts of your portfolios are smaller and continuing to get smaller. You know, in your fair value disclosures and assumptions, it looks like you kind of value those with discount rates of over 20% on a weighted average. I'm glad that's conservative. It does seem like a high discount rate. Can you maybe explain a little bit more about how you come up with that and, you know, how to think about that? Yeah.

Yeah. So this is Patrick. So the short answer is for all those valuations, we send those out to third parties to be valued. So, you know, third parties are kind of come up with the discount rates. But the reality is. CLO equity, and that's kind of generally where those discount rates are coming from, not as much like Great Lakes Joint Venture, but really more so the other CLOs. You know, Kindly is just a very opaque market, and where spreads are right now, you know, liabilities came down a little bit, but not nearly as much as spreads have come down. So, like, the return to equity in CLO land has been relatively compressed, which means you need to kind of price it at a much higher discount rate. So, again, that's not, like, the most obvious of answers. But just in the CLO market, in order to get potential buyers to transact, you know, you really need to have a very healthy discount rate that back end of because of where the liability asset spread is on BSLs.

Okay. And then...

As you mentioned, it's a very small portion of our book, and as we continue to get smaller, our Great Lakes Joint Venture, which is the biggest piece of that, is not valued at a 20% discount rate. All the individual loans within that joint venture are valued at. their own individual discount rates that then kind of rolls up into a joint venture valuation. And I don't know the exact numbers off the top of my head, but those are all substantially lower than 20%.

Yep. And again, in the relatively smaller cases where you're using EBITDA multiples, it does look, again, I know that these are not necessarily apples to apples, but to what extent are the businesses that you're valuing in like just lower multiple businesses versus, you know, maybe just like better, you know, better priced investments. And the reason why I asked that is like, for example, like your multiples are like by far the low, which is a good thing, I think, but By far the lowest, like, you know, if you look at the larger, you know, the larger BDCs, Aries, it's more like 11 or 13 times, I think, in terms of those EBITDA multiples. Now, I know, like, those could be, like, software businesses or something like that, but I'm just curious, is there anything else there? that accounts for that?

Another good question. So I'd say a couple things, which is, one, I think generally trying to be pretty conservative on our valuations, particularly on equity securities, which is what you're referencing, just because, again, like, it can tend to be volatile, so we prefer to be on the conservative side. I think the other little bit of a... That nuance there is, generally speaking, our equity positions are tended to be, you know, some of the acquired portfolios from either Harvest or Garrison or even, you know, like CKCAP, where the bars themselves are probably a little bit smaller. And so we do tend to try and factor in a little bit of a, like, size discount in terms of size of the portfolio company relative to, you know, a quote-unquote peer set and where we think a valuation multiple should trade. So, again, I think the combination of being able to conserve out the multiple and, like, if you're just using areas as the example, they're going to have much larger portfolio companies. So, you know, they're kind of, I guess, able to, or probably can look more similar to, like, the actual peer set from a valuation multiple perspective, as opposed to ours, we tend to apply a meaningful discount to where the peers trade, just to factor in the fact that they're smaller companies than the peers.

Great. I think that's all my questions. I am glad to see that you're continuing to take advantage of your undervalued stock and it's not every company that demonstrates that kind of savvy capital allocation and especially in the BDC space. So thanks and look forward to more ahead. Thank you.

As a reminder, it is star one if you would like to ask a question. And your next question comes from the line of Steven Martin with Slater Capital Management. Your line is open.

Hi, guys. You've addressed a lot of my questions. Can you comment on what the current trend is in amendments, extensions, waivers, etc.? ?

Yeah, I don't think we've seen a material pickup in amendment and waiver activity. So again, a lot of companies who are not fully levered were having trouble, not trouble, but they were asking for extensions the last couple of years. Now the market's kind of normalized. And so there is some repricing activity. And to the extent we're not willing to do it, there's other lenders who have to do it. So I don't think there's been, I mean, obviously we have some normal course amendments going on. I don't think we've seen a material pickup in amendment activity. Actually, it's pretty, honestly, like this quarter has been relatively muted.

Gotcha. Can you comment on the nature of your PIC income? It's been relatively flat. Is it penalty? Is it, you know, a little extra income? Are you eventually collecting? What's the status?

Yeah, the answer is, hey, Steve, it's Patrick. The answer is it's a little bit of all of the above. So, you know, there are some instances that have been historically where, and a lot of it was coming out of COVID, where you get an extra 100 or 150 basis points of price and concession for a covenant relief or a maturity extension or something. And that typically came in the form of PIC. And so you have, you know, whatever it is, 80% of your spread in cash. and the extra 100, 150 basis points you get is in foreign picks. There's a combination of that. I think more recently, and there's three good examples of this that we've done in the last handful of months. Riddell, which was done at the end of Q1, and then Princeton Med Spa and Care Connectors are the doing business as names that were the new portfolio company. Those two were the new portfolio companies that are in this quarter where, you know, we as, you know, BC and Portman collectively, you know, we did effectively like a two security unit tranche where, you know, we provided, let's call it, you know, 80% of our capital in the form of a senior secured first lien loan. and then 20 percent of our capital in the form of some kind of structured equity solution. And so, that equity piece itself is all PIC, but the way we look at the investment is a combined investment in both the term loan and the preferred equity. And so from a cash pick component, you know, in terms of our investment in the bar and aggregate, it's probably something like 80-20, 85-15 type of a split. But those two securities themselves happen to be all pick because they're structured equity. So the answer, Steve, is we look at both cash and pick as like a collective investment. And so more often than not, it is a little bit of extra pick. in addition to cash coupon for a borrower. But there are some instances like the handful of deals or three deals that we've done recently where technically once a year it is all cash, but we did it as a strip between a first lien that is all cash and then preferred equity that's all cash. And so it kind of blends to, again, you know, more something that makes more sense in terms of like, again, 85-15 or whatever you want to think about a cash tip.

Okay.

Yeah, see that.

Yeah, just point out.

Oh, go ahead. I just want to point out that there's a little, you know, it looks like PIC increased by 1% this quarter. There's a little bit of a denominator effect there. The reality is PIC increased by less than 200 grand.

Right. I was more commenting on the, you know, the last couple of quarters, it's been around the $2 million level. So I was, you know, curious as to the composition. On the unrealized, Ted, you said spreads have tightened over the last couple of months. If spreads have tightened versus the prior four or five quarters where they were wider, are we seeing or shouldn't we see a recapture of some of our unrealized losses?

Yeah, it's a good question. I mean, there's a bit of a lag. So, I'll take a couple things. Spread compression always starts at the top. So, we've seen spread compressions at the big cap level. And, you know, obviously, over time, that'll trickle into our market. So, that should be a tailwind for valuations. And again, Patrick gave some color around, you know, NAV upside in our book right now. And so, I think, you know, it should be I'll filter through. There's always a lag, though. So, spreads have really come down pretty aggressively over the last, I'm going to say, three months. And, again, the way our valuation methodology works is there's a bit of a lag on our matrix. So, there should be some tailwind there. Obviously, recent volatility excluded, you know, like in the markets.

Gotcha. With respect to position sizes, The last couple of deals you've added, you know, Riddle as an example, you've taken very little of the deal. Is there a reason why the position sizes you've added seem to be much smaller?

Yeah, I mean, Steve, I think the simple answer is, you know, I think our view on BDCs specifically is that they should be very well diversified portfolios. I think where we sit from a, you know, leverage perspective, that's the capital perspective, you know, I don't think, you know, we need to put out significant amounts of capital. And so for us, we've been focused on trying to continue to run a diversified book. And in our opinion, you know, you know, being able to take smaller bits of more deals is more advantageous for our shareholders as they're able to invest in, again, a more diversified portfolio where any individual deal, you know, becomes less impactful, either, you know, positive or minus, and it increases a lot more consistency of results.

All right. Thanks a lot.

And we have no further questions at this time. I would now like to turn the conference back over to Mr. Ted Goldforb for closing remarks.

Thank you all for attending our call. And as per always, please reach out to us for any questions which we're happy to discuss. We look forward to speaking to you again in November for our third quarter conference call. And we hope all of our shareholders and stakeholders have a very good end of summer. Thank you.

And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.