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spk01: Good morning. I hope everyone has been able to get through, obviously, a little new technology through the links this morning. We had a couple emails with a couple folks having trouble, but hopefully everybody will get it sorted out this morning and be able to join us for the call. So I'm going to get started. Good morning and welcome to the second quarter 2022 earnings release conference call. On the call today are Mike McRoberts, Chief Operating Officer, Steve Geller, Chief Financial Officer, Kate Hazelwood, Vice President and Comptroller, and Michael Goldstone, Vice President, General Counsel, and Corporate Secretary. Now, Steve will say a few words regarding forward-looking statements.
spk03: Certain statements we will make today are considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Because these statements include risk and uncertainties, our actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause Actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those discussed in our annual report on Form 10-K for the year ended December 31st, 2021, and our other filings with the Securities and Exchange Commission.
spk01: As indicated in our news release, we achieved second quarter revenues of $1.8 billion and net income of $110 million, or $1.92 per diluted share. Earnings per share, excluding the one-time gain, Related to our acquisition of a controlling interest in Rust Drug Centers Canada Limited, we're $1.75 per dosage here. We are very proud of our accomplishments this quarter. Not only did we achieve record high quarterly profits, we also completed the conversion of our previously acquired summit locations to our SAB business system, acquired an additional 30% of Rust Drug Centers Canada Limited, re-purchased 38.4 million of company stock, and declared a cash dividend of 21 cents per common share, or a 10.5% increase in our dividend and our fifth increase since 2018. Our results in the second quarter were due primarily to a strong freight demand and healthy consumer spending. New truck production continues to be constrained because of component supply issues, but our Class VIII new truck sales substantially outpaced the industry. Our aftermarket results also significantly outperformed the market, There's a strong demand for parts and service throughout the quarter. Our results were also positively impacted by 19 locations acquired in the fourth quarter of 2021, as well as 15 locations in Canada, through our additional investment in Rush Truck Centers Canada Limited, whose operating results are now consolidated in our financials. In the aftermarket, our parts, service, and body shop revenues were $598.3 million, up 34.3%, and our absorption ratio was 136.4%. In the second quarter, there was strong widespread demand for parts and service from most market segments. We continue to strategically expand our workforce of service technicians and aftermarket sales professionals throughout our network, including our new locations, extending our reach to large national fleets. We expect supply constraints will continue to impact the industry into 2023, but we believe parts and service demand will remain strong. Due to our network reach and scale of our inventory, along with our partnerships with parts manufacturers, we are better equipped to navigate any industry parts shortages moving forward. With the continued expansion of our workforce of technicians and aftermarket professionals, and by implementing our strategies at our newly acquired locations, we believe our aftermarket results will significantly outpace the market in 2022. Turning to truck sales, we sold 4,168 new Class A trucks. accounting for 6.4% of the total U.S. Class 8 market and 1.7% of the Canada market. While new truck production is still constrained, the Class 8 manufacturers we represent were able to increase production somewhat in the second quarter. We experienced healthy demand from most market segments, particularly over-the-road construction and vocational customers. Our backlog remains strong, and we are proud of our Class 8 truck sales results this quarter, especially given of new trucks available to sell. ACT research forecasts U.S. Class 8 retail sales to be 253,000 units in 2022, up 11.3% from 2021, and Canada U Class 8 retail sales to be 29,500, or up 4.9% from 2021. We believe that because of supply constraints, retail sales of Class 8 trucks have lagged demand by as many as over 100,000 trucks the last couple years. We believe because of this pent-up demand for Class 8 truck sales and the pending changes to emissions guidelines in 2024 and 2027 that the commercial vehicle market will remain strong through 2026. Our Class 4-7 new truck sales reached 2,815 units in the second quarter, accounting for 5.1% of the U.S. Class 4-7 market and 1.3% of the Canada Class 5-7 market. Production capacity remained limited, but we experienced healthy demand from a variety of market segments, including vocational and food and beverage customers. ACT Research forecast U.S. Class 4-7 retail sales to be 230,000 units in 2022, down 7.7% from 2021. And Canada Class 5-7 retail sales to be 10,250 units, or down 22.5% from 2021. Looking ahead, we expect supply constraints on Class 4-7 trucks to continue, though some manufacturers may increase production this year. We believe our results will align with the industry in 2022. Our used truck sales reached 1,629 units in the second quarter, down 22.2% over 2021. Overall demand softened for Class 8 on-highway used trucks due to weak spot rates and high diesel prices. putting an increased burden on owner-operators and small fleets. However, there was still strong abuse of demand for medium-duty flatbed and vocational energy customers. Used drug values have decreased significantly, and we anticipate they will continue to soften through the year. We are managing our values and inventory and believe we can effectively meet the needs of the market this year. I would like to note that our lease and rental operations have grown to become a significant contributor to our company's overall profitability, with second quarter lease and rental revenues increasing 31.2% year-over-year. The growth is driven by our recent acquisitions in the fourth quarter of 2021 and second quarter of 2022, as well as strong demand due to healthy freight environment and limited new truck production. As we look ahead, we are closely monitoring inflation, interest rates, fuel prices, and other economic factors which may impact our industry. That said, while economic growth has slowed somewhat, we believe strong demand for new trucks and aftermarket parts will continue. We have continued to focus on our strategic initiatives and diligent expense management, and we believe our financial results will remain strong. It is very important that I thank our employees for their impressive work and their ongoing commitment to our company and our future. With that, I'll take your questions.
spk05: Thank you. As a reminder, to ask a question, you will need to press star 1-1 on your telephone to please stand by while we compile the Q&A roster.
spk02: Our first question comes from Justin Long with Stevens.
spk05: You may proceed.
spk07: Thanks. Good morning and congrats on the quarter.
spk01: Thank you, Justin.
spk07: I guess to start, I wanted to ask about Class 8 sales. We saw a pretty nice step up here in the second quarter versus the first quarter. Any thoughts on how that number trends sequentially headed into 3Q and 4Q?
spk01: It looks like it's going to be pretty flat, okay? You know, I think manufacturers have pretty much gotten to where they're going to be, still dealing with, you know, not dealing as much as we were last year, of course, but there still are component supply shortages. There still are trucks being partially built that are offline. They're still dealing with those headwinds. So, you know, if I was going to look somewhere, you know, and a lot of that has to do with timing, right? and mix of what the trucks are. Do they need bodies? Do they have this? I don't have all that detail in front of me. But as far as what we're getting from a production perspective, I would call it basically flat. I don't want for new truck deliveries to change a whole lot over the next quarter. And I own out through Q4. Remember, we are still on allocation. So it's more of what we can get, right? It's not what we have sold. Our backlog is still strong. Our backlog is as strong as it was at the end of the quarter last year. Last quarter, excuse me, at the end of Q1. So, you know, we feel good about it. And if manufacturers are able to ramp up production some, then, you know, it will go forward. But I'm not going to hedge out on that right now. You know, I think they're doing a decent job of managing what they've had to manage, you know, dealing with the supply issues that we've had We've gotten pretty good at it. We've been dealing with it for like 15, 16 months now, so I think manufacturers have figured out how not to over-promise and under-deliver after what we went through in 2021.
spk07: Got it. You started the call and mentioned the strong and widespread demand for parts and service. Obviously, a big revenue number here in the second quarter, but Could you share what the same store or organic grocery was in parts and service and how you're thinking about that in the back half?
spk01: Well, it was a robust, I think you remember, right? We were 18% in Q1. It was a fairly robust 19%. I was in Q2, right? So I guess I've missed the mark a little when I started coming in the first of the year and I told you it'd be high singles, but I guess we missed it on the right side of it anyway. So as we look forward, I would expect comps to get harder, but I still would expect some pretty solid double-digit growth rates on a same-store basis. I'm not sure we'll hit 19. That's to be seen. I can reflect upon where I'm at as of today. And this far in July, we have continued to maintain the pace that we were setting in June. So we've seen no slowdown or anything. There'll be some seasonal slight slowdown in the winter. That's just natural because we've got so many stores in the south just because of the air conditioning work, et cetera. But it's not significant. That's just abnormal seasonal things we deal with. But right now, demand remains robust. And, you know, we continue to believe and we have the initiatives that we have going on out there, whether it's mobile side, are really chasing after the large fleet business. We've really been very focused on that, given our network, leveraging off the largest network in the country. We still believe that we can maintain pretty strong double digits. I'm not going to go to 19, but you never know. These guys surprise me all the time. Good, robust growth as we go forward.
spk07: Good to hear. I'll leave it at that. Thanks for the time.
spk01: You betcha. Thank you, Justin.
spk05: Thank you. One moment for questions. Our next question comes from Jamie Cook with Credit Suisse. You may proceed.
spk00: Hi. Good morning. Nice quarter. So, Rusty, I guess my just first question, you know, in your prepared remarks, I think you said, you know, you see strong demand on the truck side, I think, through 2026, just given pent-up demand and um, you know, emissions, emissions requirements that are, are, are coming up. So just interested on sort of, that's a pretty bold statement. Um, just your thought process there and what your assumptions on the macro and that environment is everyone's sort of worried, um, you know, about a recession. Um, and then just my second question, when you were talking about, um, you know, class eight sales or new truck sales, or, you know, and you said, um, uh, flat year, I think you said flat with that relative to the first half or year over year. Thanks.
spk01: Well, I'll answer it back in reverse order. That's sequential, Jamie.
spk08: Okay, okay.
spk01: That's what I thought. Yeah, that's sequential. So a little bold statement from me. You don't hear many of them, do you? So I wouldn't – look, those comments are industry-specific directed, okay? I cannot control the general economy. What I can tell you is that given what we've dealt with since 20 – just step back a minute and look at the last two and a half years. We were shut down for a month and a half in 2020. We didn't even build trucks when COVID hit in April and into May. So you lost that production. Then you get into 2021, you start in about March or April, and all of a sudden we've got supply constraints. And we don't build. We built 220-something U.S. retail last year. The demand was there for way more. And we get into this year. Where are we going to be in the 250? You know, understanding this industry like I do, if you go back in time, we historically have always built to max capacity. Manufacturers have never worried about anything but producing everything they could. I've talked, you know, I do have some customer touch and a lot of large fleets. Now, not the smaller people. They're getting hurt right now, right? Spot rates and all that coming in, but a lot of large fleets have not been able to keep track and replace at the rates they want to. So you've still got this pent-up demand. Look, if we have a big deep R, of course that's going to affect it all. I can't predict that, and that's not my job to be that economist. But I can tell you that everything in the industry aligns. If you go back and look at a year and a half of what people rejected a year and a half ago for 2024, and understanding what's going on. We went through a decade between 2010 and 2020 where we didn't have any governmental influence. We didn't have really any emissions issues. We sure did between 2000 – In 2010, that's how you know I'm old, we had a lot to deal with. We had some pretty big years in 05 and 06. And I would somewhat compare what we have coming in front of us when I look at 25 and 26, because the same things, excluding what we're going to start dealing with in 24. Remember, most people were figuring in 24, you know, we're going to be down to 170,000 U.S. units. But because of taking not being able to meet demand, I think we somewhat, we're going to go down in 24, no question. But it's not going to go to 170. Maybe it's 210, 215. These are my thoughts. I could be wrong. There's no question that the overall economy can throw things for a look. But the industry specifics are aligned that once we get through that, then the whole country, again, we're talking about diesel engines going up maybe $20,000, okay? And I realize that the economy can override all of this. But if you look specifically at the industry specifics, they pretty much align that way, given 24 and 27 emissions and given the lack of product that we typically would have produced to meet that demand. We haven't done it. With backlogs like this, we'd be busting out at not 220 and 250, 50 and 240, we'd be busting out at 280, 290,000 units and more. Manufacturers are not running at full capacity currently. And it's really been a good thing from my perspective. This will, I like to believe, outside of the overall economy, I can't control that. We get a soft R, a middle R, not a big R. You know, there'll be some effect, but I don't think it's just bad given these other things that I've talked about is what we've, you know, is what could be expected. And so that's really where those numbers I'm giving to you come from that I believe. But, you know, we're going to ease, you know, we're going to ease, we're going to be fine as long as I believe. And if it is a big R and the whole country tanks down, obviously it's going to have an effect. But I'm, you know, I'm not an economist and I don't believe it to be that case.
spk00: Okay, and then just one follow-up question on G&A. You know, G&A has been, you know, trending higher. I know there's some acquisitions that are in there as well, and you've done well at expense management. Just maybe, Steve, how you're thinking about that in the back half of the year.
spk03: Thanks. G&A, so we did have salary increases that went effective July 1st, and the numbers you see printed only have two months of Canada consolidated in the quarter. So that's when you get the third month and you take into account the salary increases that we put through the company in July, that's probably going to add on a quarterly basis about $8 to $10 million to GNA. And then, you know, the rest of the lift will be just coincide with the lift and back in business after market GP.
spk00: Okay, thank you.
spk01: Yeah, one thing, Jamie, I think, you know, when you look at that absorption rate, remember that takes into account expenses at the dealership level, right, the fixed expenses. So we're managing to keep that, grow the gross a whole lot more than we are the expenses, right? That really reflects the spread that you get.
spk00: Thank you. You bet.
spk05: Thank you. One moment for questions. Our next question comes from Andrew Obin with Bank of America. You may proceed.
spk04: Hey, Rusty. Good morning.
spk01: Thank you, Andrew. Good morning to you.
spk04: Just a question, just to follow up on Jamie's question. You know, parts and services clearly, you know, big beneficiary of the environment, big beneficiary of the investments that you guys have made. You know, it seems pricing is strong. So first, you know, if we have disinflation, how sticky is are the prices and part two you know you sort of outlined this you know regulatory environment for the next five years that i think is going to be fairly favorable so what should we expect from your parts and services uh in terms of growth uh over the next uh several years and how should we think about profit you know gross margins right because it's such a huge driver of your profitability uh and you have outlined this you know you know, these big regulatory changes that's going to drive demand. But how should we think about demand for parts and services within that environment, given how profitable they are?
spk01: Right. Well, that's a good question, Andrew, right? Because all of a sudden, if you start, you know, taking the age of the fleet down, you would naturally think that that would be a hit to parts and service. But I've got to tell you, a lot of the, you know, we look at what we've been doing. Our growth, you know, we've been affected by inflation. We all know that. But I do believe that the majority of our growth has been, slight majority of our growth, has been through share gain. Yes, we've benefited through inflation, but we've also taken share at the same time. And that's really what it's all about. This last acquisition and the last two acquisitions really continue to help fill out our map. And understanding that we're after that large fleet business. We're after all customer base. But our map is our differentiator. No one can put up a map when it comes to service, especially across the bottom two-thirds of the United States like us. And, you know, we're going to continue to try to take share. That's what we get paid to do around here. Competition is strong, but I have a belief that the historical track records that we put up support and the continued growth in our map to support our abilities to grow our parts and service market, right? And take share. So, you know, I mean, that's the best I can tell you. Will the fleet, if all those markets stay strong, will the average age of the fleet come down? You better believe it will. But at the same time, it's more about, you know, adding technicians, putting more emphasis on on where we believe, and I don't want to get into everything we do. I do have people who probably listen to this call that are competitors, but I do believe we have, I don't want to go into it, there's no secret sauce to this business, but there is an ability to leverage off of that map and continue to provide support to a customer through a broader base than anyone else, and we can take share. We've done it in the past, and we will continue to do it from my perspective uh going forward our people for the best and we're trying to best provide them the best tools we can uh from a technology perspective or even you know an equipment perspective across the board facilities whatever and listening to customers and what they're asking for uh especially when it comes to mobile and embedded technicians and these types of supports that i think we you know we lead the industry in so i know that's just a maybe to you maybe a generic answer But it's a solid answer, my friend, let me tell you. It's what we do. And I think it's reflective in the numbers we're showing, right? And I have no reason to believe that it's going to stop.
spk04: And just to, you know, just to, and then I'll, you know, segue into a question about macro. But, you know, I think a lot of folks on Wall Street are concerned about a downturn. You brought it up. You know, given, you know, how you phase in price increases and given the the market share that you've gained year to date, do you think you can grow a partner services business in a mild recession? Just top line that you report to us.
spk01: I got you. It's a good question. The last time I had an issue in growing it was I was really more heavily weighted in one particular industry, and you would know what that is, and that would be oil and gas. You got it, brother. And you know what the good thing about right now is? We're not weighted that heavily in that business. So while it may slow our growth rate down, and I'm not here to say guarantee 100% that if we had a pretty strong recession, I wouldn't take a few hits because that's just natural in this business. People will tighten up their belts a little bit. it would be nothing as significant as we might have seen in the past. And we would try to do our best to combat that with share gain. So, you know, I don't see, even if we have a pretty strong recession, I see no way to take more than 5%. If I had to take more than 5%, it would really bother me, given the diversity. I mean the diversity of our customer base now. Our customer base is much more diverse than it has been historically. So it should be better equipped to weather any storm that might come our way. Not that you're not going to be affected by a storm. Doggone it. We'll be in a whole lot better shape given that diversity of customer base across many market segments, not as focused. You have to remember, back in, what, 17 or so, we figured that we were, what, 15% died to shale or something, right? Foley deaths. but it's not three. So I don't believe that, you know, we're quite as, you know, quite as affected. We're going to get affected, but I believe we can maintain pretty close to flat. That would be my answer to you right now, Andrew.
spk04: So flat or bad, or flat or bad, or in a mild recession, maybe down mid-single, something more severe.
spk01: Yeah, mild, flat, or better. If you get a, you know, a heavier recession to whatever, we'll keep it within 5%, my friend. And then remember, I got another lever to poke all the expenses at the same time. So don't forget about the other side of the house.
spk04: And just to follow up, I guess clearly part of the reason your services are doing so well is because of the systems you guys have. And of course, these systems give you a lot of visibility in your end markets in terms of real time. Can you just tell us what are you seeing in the economy? We're in towards the end of July. People are talking about recession. There seems to be a consensus that There's going to be a recession in the next six to 12 months. What are you seeing? Maybe go by geography. You did highlight key verticals. You did highlight that you were seeing things slowing. What are you seeing slowing? And I think last time you sort of talked about the fact that the spot rate maybe was bottoming. What's happening there? Just would greatly appreciate your insight. Thank you.
spk01: Sure. You bet. Well, I'm going to take it in reverse order. Spot rates. You know, I think the bond rates peaked around three bucks, and they're around $2, or $2.95 to $1.95, somewhere in there, give or take a few percent. So, obviously, you know, they've taken quite a bit out of them. I don't know. I mean, you probably got it all talking to the truckload guys and the LTL guys about where those rates are and where they believe they're trending. They're going to be closer to it than me. I know where they've been, and I know how it's affected some of our stuff, you know, on the used side and that small customer. and will have. I was talking to a finance company last night and they were starting to see some delinquency and that more marginal customer out there. That's the effect of spot rates. Now, when we talk about across the country, I'll be honest, Andrew, we're not seeing a lot of softening in any certain area. There's not One area, I've got some folks around me here at the table, and I looked around, and everybody sort of shook their head. Nothing's going backwards specifically. Are our antennas up and we're looking for it? We all listen to the same news headlines every day. We all read the same stuff. So, yes, they are. But are we seeing it right now? No. And, you know, if our customer said, look, it's softened, but it's still pretty good, okay? I mean, it's often, yeah, I'm still doing extremely well and will be the first or second most profitable year they've ever had. Even if we have a slight R next year with zero flat GDP, I mean, from folks I've talked to, our customers may have the fourth best year they've ever had even next year. I mean, it's pretty good in our industry right now for our customer base, I've got to tell you. And, you know, I mean, everybody's gotten their, you know, they're not going to get the same contract rates and increases. Some people said flat. You've heard one or two people say maybe a little contraction. Some people said, well, I'll still get, you know, low to mid single-digit increases. I don't know. The market will dictate that. But you're not hearing doom and gloom. And... It's still, for people that are behind on replacement, I have not heard about, well, no, I'm just going to stop. I'm going to let my fleet age more. I have not heard that yet. So I don't think it's, and, you know, the drug business is usually a leader in and a leader out. You know, it's a great indicator of what's going on in this country when it comes to goods being hauled. But I'm not, I'm just not, I'm not seeing that or not hearing it. So I'm thinking, yes, but it was such high levels and they were getting, 10, 12, 15% rate increases, that would have been unrealistic to expect that to continue. But, you know, I was talking about replacing drugs. So, you know, I really believe that to be the case. I just haven't, you know, what we've seen is, you know, the only place that you've seen it, and I'm sure maybe somebody will ask you used, okay? and that's usually for that, you know, but that's because new truck production is up, and we're delivering more new trucks, so it was naturally took, you know, used, that put pressure on used, which was used to, you know, crazy rates and the spot market effect of it, so used is softened more than used. Used is the one area that I can say is softened, but that would be expected as new truck deliveries increase. So, I mean, the best answer I can give you is we don't, Our antennas are up. We read about it. We see it. We know that people aren't getting to get rate increases. They were. They're flat, but they're still hauling a lot of rate, and there's still demand out there at this moment.
spk04: Thanks a lot, Rusty. I really appreciate it.
spk01: You bet. Thank you, sir.
spk05: Thank you. One moment for questions. Our next question comes from Matthew Brooklear with GAMCO. You may proceed.
spk06: Hey, thanks, and good morning. So I have a question on the used truck side of things. It sounds like Class 8 over the road, those used prices are sequentially down, but yet positive mix in the quarter. Are you able to maybe put some numbers or percentages around how much the over-the-road trucks are down on a sequential basis? And then second part of the question would be, what are your expectations for the remainder of the year?
spk01: Got it. Good question. Used. Used peak. Let's talk about peaks, then we'll take it down. Peak was, what, the late fourth quarter, January-ish, something like that. And then we started falling. We started falling at the auction levels first. Then it rolled into retail probably by about March. And numbers, 20%, 25%, depending on the exact specifications. But on over-the-road, somewhere in that range, it was trickling down about 5% a month there instead of the typical. Remember, you typically get about a 1.5% depreciation on a truck. It can be a little more at different stages of its life, but just use 1.5%. Well, we ramped it up to about 5%. Then you run about five months in a row, and then we can do the math, right? Somewhere in that four to five. So you've got, in that, you told me a month ago, I said 20, now I might say 25. I do expect that to, but it's still higher than where, it got so high, unlike I have never seen in my entire 40 years in this business. Okay, 40 plus years. Gosh, I'm old. In this business, I've never seen it like that, peak to that kind of, but there was just such strong demand out there. But it got really high. It's still higher than it probably was a little over a year ago, around a year ago. So it can come down further, and I would expect it to, but not at that same pace. You know, I think you'll see that, you know, you're getting further down the hill, right? You get into the valley and it starts declining. It was a big, it was a real, it's like a mountain, man, real steep up top. And it starts getting a little bit more of a, you know, a trough, you know, a U in it as it comes down, but it's still declining. So maybe another 10% the rest of this year, something like that. That's just a guess. Because, you know, we are building more new trucks, not building as many as we probably could given demand. But we are building more, so you've got to expect... We are building more new trucks, not building as many as we probably could given demand. But we are building more, so you've got to expect it to, what, 5%, 7%, 8%, 10% more, I'm hoping. That's it. And then it'll, you know... sort of soften out and get more back from it. Who knows? You get a big recession, you can drop more or something, but I'm not forecasting that, but I'm not an economist. So those are your answers. Look, I mean, when you're buying trucks more than you sold them two years ago, you know things are crazy. And that's kind of stuff that was going on late last year, back half of last year, and into the first quarter of this year. That's all ended now. So it will work itself out and through. This I can tell you, as we always do, as we always do, and people need to know that. Yeah, our margins were down. My margins had gotten crazy. Our margins in the quarter were more like we always tell you, 8 to 10, and they were up for 10s. But my inventory, we believe, is marked market at the current rate, and we are working on Getting our inventory levels down, we peaked at about 2,400. We're at about 2,000. I'm hoping to get to 1,800, 1,900 units by the end of this month. We've been attacking it for about the last 60-plus days. So, you know, you always look back. We should have started maybe 60 days before, but we started a little early. We started at a good enough time, and I feel good about where we're at. How's that?
spk06: Okay. Appreciate the call, Rusty.
spk01: You betcha.
spk05: Thank you. And as a reminder, to ask a question, you will need to press star 1-1 on your telephone. Our next question comes from Jim Misago with FactSet. You may proceed.
spk02: Oh. If your line is on mute, please unmute. Oh. That's a great question.
spk05: And I'm not showing any further questions at this time. I would like to turn the call back over to Rusty Rush for any further remarks.
spk01: Sure. Well, we appreciate everyone's time this morning and listening in. We look forward to talking to you again in October with hopefully great results again. So thank you very much. We appreciate your time. Have a great next quarter.
spk05: Thank you. This is today's conference call. Thank you for participating. You may now disconnect.
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