Smart Sand, Inc.

Q4 2021 Earnings Conference Call

3/9/2022

spk00: Good morning, ladies and gentlemen. Thank you for standing by, and welcome to SmartSense 4th Quarter 2021 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 the star, then the one key on your touch-tone telephone. If you recall all of your assistants, please press star, then zero. I would now like to hand the conference over to your speaker host, Josh Jane, Director of Finance and Treasurer.
spk03: Good morning, and thank you for joining us for SmartSend's fourth quarter 2021 earnings call. On the call today, we have Chuck Young, Founder and Chief Executive Officer, Lee Beckelman, Chief Financial Officer, and John Young, Chief Operating Officer. Before we begin, I would like to remind all participants that our comments made today will include forward-looking statements which are subject to certain risks and uncertainties and that could cause actual results or events to materially differ from those anticipated. For a complete discussion of such risks and uncertainties, please refer to the company's press release and our documents on file with the SEC. SmartSAN disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, March 9, 2022. Additionally, we may refer to the non-GAAP financial measures of contribution margin, EBITDA, adjusted EBITDA, and free cash flow during this call. We believe that these measures, when used in combination with our GAAP results, provide us and our investors with useful information to better understand our business. Please refer to our most recent press release or our public filings for our reconciliations of contribution margin to gross profit, EBITDA and adjusted EBITDA to net income, and free cash flow to cash flow provided by operating activities. I would now like to turn the call over to our CEO, Chuck Young.
spk06: Thanks, Josh, and good morning. We enjoyed another good quarter for volume out of both Utica and Oakdale. Fourth quarter volumes of 872,000 tons are up 43% from fourth quarter 2020 levels and up 10% from last quarter. For the full year, we sold just under 3.2 million tons, which was a record for SmartSand. Given the current outlook for commodity pricing and spending by our customers, we believe we will achieve record volumes in 2022. While we enjoyed strong sales volumes in 2021, sand prices remained low. However, the sand market in 2022 is shaping up to be one of both strong demand and higher prices. In particular, coming out of winter seasonality issues and production of weather-related rail delays in January and February, March volumes for SmartSand look strong. Pricing improved in Q1, and we expect to continue moving higher in the second quarter, and with less than 20% of our capacity signed up under long-term contracts, we will benefit from this improved demand and pricing environment. We believe industry consolidation will continue, and our recent acquisition of the Blair, Wisconsin, frac sand mine from High Crush highlights our desire to add high-quality assets at a reasonable price. This facility provides direct CN rail access and has estimated reserves of 110 million tons, over 43,000 feet of track, and 20,000 tons of silo storage capacity. Blair provides an additional source of 4070 sand, which is currently in high demand in the energy market and has annual capacity of 2.8 million tons. Blair meets our requirements of logistics and operational efficiency with multi-unit train capability and ample reserves. Since the beginning of the downturn, we have added 4.4 million tons of nameplate capacity for less than $9 million. We haven't taken on any debt to pursue those acquisitions, and have funded them with cash and equity. As we announced in January, our newly constructed unit train-capable transloading terminal in Waynesburg is up and running. The terminal has more than four miles of track, is located on North Fork Southern's Class 1 rail line, and services the Marcellus Shale in southwestern Pennsylvania, West Virginia, and eastern Ohio. Waynesburg can transload in excess of one million tons of fraxan per year. and there are opportunities to expand the facility as we grow our market share in this area. The terminal will also serve as the new northeastern hub for our smart system last mile well site storage solution. We look forward to our Waynesburg terminal driving incremental opportunities to grow our business, including our smart system utilization, as we did with our van hook terminal in the Bakken. The new terminal is exciting for us, not only because it expands our presence in the Appalachian Basin, but it also provides ESG benefits to our customers in the region by reducing trucking mileage and associated carbon emissions related to sand delivery. We believe that bulk commodities belong on rail and that sustainable logistics must include terminals close to our customers' drilling activity. Our mine-to-well site rail and terminal approach yields a safer, cost-efficient, and more reliable supply chain. While the outlook has improved for oil and gas, we are equally excited about our traction we are seeing in our industrial product solutions division. We have hit the ground running and had our first industrial product sales in the fourth quarter. Our customer list is growing rapidly, and by the end of the first quarter, we will have shipped industrial products to 10 customers. We believe this is only the beginning and are excited about the opportunity to diversify our business into the industrial product segment. We also have been busy deploying smart systems. By the end of the first quarter, we expect to have two SmartPath fleets and six Smart Depot silo-only fleets operating in the field. With our fast start in 2022, we expect smart systems to generate positive contribution margin this year. By using our smart systems, our customers can reduce the number of trucks needed to deliver sand to the well site by more than 30 percent versus our competitors' offerings. providing our customers with substantial delivery to the wellhead cost savings. Additionally, by taking trucks off the road, we benefit our communities by reducing accidents, carbon emission, noise, and dust. ESG goals are important to SmartSand and its customers, and SmartSand helps achieve those goals by improving the efficiency and reducing impact. Our balance sheet remains strong. Today, we have $11 million in cash on our balance sheet and approximately $30 million in liquidity. We will continue to remain disciplined with the capital spending while pursuing projects that will generate returns in the future. We remain excited about our future for a number of reasons. Our balance sheet remains in great shape, and we have the assets in place that generate significant free cash flow during an upcycle. With mines situated on four Class I railroads, we now have the logistics in place to more efficiently deliver sand to our customers wherever they are operating. The market for sand has tightened significantly, which should allow us to generate strong returns going forward. Having operated the smart path successfully for four quarters, we look forward to expanding our last mile market share. Industrial product solutions will diversify our business at margins that should exceed oil and gas margins and provide more stability to our earnings profile. As always, we'll continue to keep our eye on the future, and we'll always keep our employee and shareholders' interests in mind in everything we do. And with that, I'll turn the call over to our CFO, Lee Beckelman.
spk02: Thanks, Chuck. We are excited about a volume pickup we witnessed both in the fourth quarter and throughout 2021. As Chuck indicated, fourth quarter 2021 volumes were 10% higher than third quarter levels. The opening of our Waynesburg Terminal combined with a tight market for profit and strong commodity prices should lead to increased sales volume in 2022. The addition of the Blair Mine in Wisconsin gives us direct access on the CN, which will provide additional markets in Canada to expand our customer base. As Chuck highlighted, we have been able to expand our operations and logistics footprint over the last two years with the additions of the Utica and Blair facilities and the Waynesburg terminal without adding any debt to our balance sheet. In 2021, we reduced our debt levels by $7 million. We remain committed to low leverage levels, a prudent capital structure, maintaining adequate liquidity levels, and improving our shareholder returns. Now we'll go through some of the highlights of the fourth quarter compared to our third quarter 2021 results. Starting with sales volume, we sold 872,000 tons in the fourth quarter 2021, a 10% increase over the third quarter 2021 volumes of 790,000. We sold approximately 3.2 million tons for the full year 2021, which represents the highest sales volumes in company history. Total revenues for the fourth quarter 2021 were 35.1 million compared to 34.5 million in the third quarter 2021. Sand revenues were 34.1 million of 9% sequentially and logistics revenues was up slightly. We recorded no shortfalls in the fourth quarter and had 2.7 million in shortfalls in the third quarter. Our cost of sales for the quarter were 39.4 million compared to 36.5 million last quarter. Production costs were higher sequentially due to higher utility costs driven by increased natural gas prices, higher freight expense from increased shipments, increased maintenance expense to increase activity and weather-related issues, as well as increased labor costs primarily related to higher incentive compensation related to year-end bonus payments. Gross profit was also negatively impacted in the fourth quarter by 2.2 million inventory impairment due to the estimated waste products in our inventory at year-end. Total operating expenses were 8.5 million compared to 6.7 million last quarter. In the fourth quarter, we restored variable compensation programs that had been suspended in 2020 due to the pandemic, which led to higher salary and wages sequentially. We also had higher consulting and legal fees in the quarter. For the fourth quarter of 2021, the company had a net loss of 12.2 million, or a negative 29 cents per basic and diluted share, compared to net loss of 7.3 million, or a negative 17 cents per basic and diluted share for the third quarter of 2021. The net loss for the fourth quarter was driven by higher freight expense increased utility and maintenance expenses, restoration of certain variable compensation programs, and a $2.2 million inventory impairment due to the estimated waste product and inventory at year end. For the fourth quarter of 2021, contribution margin was $1.9 million, and we had a negative adjusted EBITDA of $4.5 million, compared to third quarter contribution margin of $4.1 million and negative adjusted EBITDA of $1 million. For the fourth quarter of 2021, we had negative $9.3 million in free cash flow, generating negative $5.1 million in operating cash flows while spending $4.2 million on capital investments. Fourth quarter cash flows was negatively impacted by the higher expenses I have discussed and increased capital expenditures primarily related to the construction of the Waynesburg terminal. For the full year of 2021, we had $21.2 million in free cash flow, generating $32.4 million in operating cash flows while spending $11.2 million on capital investments. During the quarter, we didn't use our revolver and still have no outstanding borrowings other than $1 million in letters of credit. Our unused availability under the revolver is currently $19 million. We paid down $1.7 million against our notes payables and equipment financings in the fourth quarter and paid down approximately $7 million in 2021. we paid approximately 6.5 million to acquire the Blair facility. After closing the acquisition, our current cash balance is approximately 11 million. Between cash and our availability in our revolver, we currently have approximately 30 million in available liquidity. In terms of guidance for the first quarter, currently we expect first quarter 2022 sales volumes to be flat with fourth quarter 2021 results. January and February activity were negatively impacted by weather and logistics issues, but market activity is expected to be strong in March. We currently expect the month of March to represent approximately 40% of our sales volumes for the first quarter. As a reminder, the first quarter of the year is typically our lowest contribution margin quarter due to higher inventory adjustment expense, as we normally draw wet sand from inventory to meet sales demand during the winter months. So while we anticipate improving margins in 2022, we don't expect to see that improvement to start to materialize in our margins until the second quarter of this year. We completed our initial phase of the Williamsburg Terminal in January. Some of the capital expenditures that we had projected to be spent in 2021 ended up being pushed into the beginning of 2022. This year we expect capital expenditures for the year to be in the $25 million to $30 million range, including the $6.5 million we recently spent acquiring Blair. This concludes our prepared comments, and we will now open the call for questions.
spk00: Thank you. Ladies and gentlemen, if you'd like to ask a question at this time, you will need to press the star, then the one key on your touch-tone telephone. To withdraw your question, you may press the pound key. Please stand by while we compile the Q&A roster. Now, first question coming from the line of Stephen from C4, your line is open.
spk07: Thank you, and good morning, gentlemen.
spk02: Good morning.
spk07: A couple of things for me, if you don't mind. Just to start with, and I know you mentioned sort of the seasonality and contribution margin in 1Q. Can you give us any guidance on how to think about the magnitude of price moves that you're seeing? relative to, you know, the input costs that you referenced that were headwind in the fourth quarter?
spk04: Yeah, sure, Stephen. So I'll talk about pricing a little bit, and Lee might be able to give a bit more color. But pricing is definitely higher today than it was last year. You know, we're seeing FOB mine pricing into the 30-plus range right now. You know, and last year, you know, FOB mine pricing ranged anywhere from, call it, you know, 15 bucks to, you know, 20 or so. So, we're seeing a pretty good price increase right now. We expect that to continue for, you know, for the foreseeable future. Demand is strong. So, we're in a ramp-up mode right now.
spk07: Are you seeing any pull? We've been hearing more northern white getting pulled down to Texas. Are you seeing that trend as well?
spk04: Well, we're certainly being asked about it. Typically, our strong markets are the Midwest and the Northeast, but we get calls every single day on moving sand down to West Texas.
spk06: One of the things that's happening, Stephen, right now is that, obviously, we've been servicing the northern markets mostly, and our rail fleet is sized mainly for that, so we're having to add additional cars. for some of these other markets that are coming on strong. So all indications is there's going to be a lot more sand being taken out of our mine sites, which we're pretty excited about.
spk07: Great. Thank you. And the second thing I wanted to ask you about is, and I think this probably ties two things together. One is I was curious about the acquisition and when the Blair facility is operational. And if you could tie that in, I mean, you mentioned earlier 40% of your first quarter volumes in March. Is that kind of run rate on a monthly basis sustainable? I think that gets to like 304,000 or 50,000 tons in March.
spk02: Yeah, Steve, but in terms of the volumes for March, yes. We had some operational and weather issues that led to delays in January and February. We're doing a little bit of catch-up in March, but that level is sustainable going into the second quarter and throughout the rest of the year. We believe we can support that. We're adding additional rail cars. We're ramping up activity at Oakdale. Our mining season starts as well. So being able to run at that level of activity in the second quarter and beyond is something we believe we'll be able to do and deliver this year.
spk06: We're not including Blair in that number. So the nameplate capacity... At Oakdale, it's nameplate five and a half. And obviously, our utilization of that has been nowhere near that. So we've got room to grow there, but we've had to do things like add additional rail cars there.
spk02: And then Blair, just on Blair, Blair has been idle since June 2020. So we need to go in and do kind of a full assessment of what needs to be done to bring that back online. And we need to also line that up with we now have an asset on the CN that we can go out and market to customers. primarily in U.S. markets, but also really gives us an opportunity to get into the Canadian market on that rail line. So we need to go out and start really assessing the market appetite and line that up with kind of the expectation of what it's going to take us to bring that plan online. So it's too early to kind of give you guidance on when that plan could start coming on, but we are doing that evaluation in the second quarter, or in the first quarter, and by the call in May we should be able to give you an update.
spk06: And it should provide us a pretty decent supply of 4070 out of that mine.
spk07: Excellent. Just a quick follow-on to that. Is the capex you expect around Blair part of that 25 to 30 million number?
spk02: Well, that 25 to 30 million includes a 6.5 million for Blair, also includes about 3 to 4 million of capex carryover from last year for Waynesburg. And so if you back those two out, you get to kind of a $15 million number on the low end, which is in line with what we spent in terms of our guidance for 2021. So, yes, to get to that higher number, the $30 million, that does include some room for discretionary investment potentially at Blair or, you know, investments around other terminals, et cetera, to kind of help support incremental sales.
spk07: Okay, great. Thank you, gentlemen.
spk06: Thank you.
spk00: Our next question coming from the line of Samantha Hope of Evercore ISI. Your line is open.
spk01: Hey, guys. Congrats on the Blair acquisition. Thank you. I realize it's still very, very early days, but is there an opportunity for you to maybe reach out to former employees of that plant? I'm just kind of wondering how quickly you could ramp that plant up if you needed to. Do we potentially see volumes by year end from there?
spk04: Yeah, so Samantha, yeah, I mean, the answer is yes. We'll be reaching out to former employees of that plant. You know, it's in a relatively rural place in Wisconsin, and Blair has never been there, but our anticipation is that we'll be able to staff that plant when we're ready to start operating it. You know, we've gone out. We know what we bought there. We're excited about it. It's got a fantastic logistical situation, massive rail yard. It brings a fourth class one railroad into the smart sand into our portfolio here. So it's super exciting to us from that perspective. You know, we're aware of staffing issues and everything that are, you know, every industry is dealing with right now. But in that particular area, we think we'll be able to utilize, you know, some of our Oakdale employees to help get it up and running. And we think we will be able to, you know, get folks who used to work that mine back.
spk01: Okay, great. Maybe sticking with the rail topics, what are you seeing in terms of, you know, opportunities to add rails car? Is, is there also constraints in that area as well?
spk04: We haven't seen any so far. I've got, you know, I've got plenty of, plenty of rail car, rail, rail car offers and proposals in place to handle our requirements. I think that one of the things that you have to remember about rail cars is at the height of the northern white sand space, there was 70 to 80 million tons of northern white capacity that was moving on rail. And so rail assets were built for that. Rail cars were built for that. And although some of them did go to the scrapper, there's still a lot of what we call small cube cover hopper rail cars out there, and we don't anticipate that that'll be a drag on our ability to meet our volumes.
spk06: One other add to that, I think with all the trucking issues that we're seeing out there, what we've been preaching for years is that you need to move this stuff, bulk commodities by rail, and get it as close as you can to the activity. I think people are starting to come around to that just because the trucking is kind of unmanageable when you're doing it long distance. So we think rail is going to pick up, activity on railroads are going to pick up. Okay. As it relates to fraxing.
spk01: Maybe just a little housekeeping. You've historically gave us your mix of take or pay versus spot sales in your 10K. I couldn't find that this past release yesterday, but I was just kind of curious if you could update on that. I know you said less than 20% of your capacity is signed under long-term contracts. you know, what does that mean in terms of the mix of take or pays versus spot sales?
spk02: Well, our long-term contracts typically have some form of take or pay in them. And so when we say long-term contract, that's typically a contract that will have some kind of base take or pay. It's really dependent on the customer and what's negotiated. So take or pay long-term contracts really kind of are, for us, are typically synonymous. But currently today, our Under longer-term contracts, we have probably about 20%, 25% of our activity currently is contracted. Okay.
spk06: With the way the market's moving is a good thing because, you know, over the last year or two, the price hasn't been at points where we would be interested in doing a long-term.
spk02: Now, I will say a fair amount of that spot business is with long-term customers. So when we say we got, you know, we do have a lot of room for upside in terms of being able to move pricing as pricing moves on a spot basis, but also we're working that with existing long-term relationships that we've had either previously been contracted with us or been good spot customers for a long period of time.
spk01: Are you seeing customers approach you with interest in signing long-term contracts? And I take it the pricing would be higher than what it was like FOB mine last year, but maybe not as high as where it is currently, or maybe it is higher?
spk04: Yes, certainly there's more interest in signing long-term contracts, and typically you do see that. As the spot pricing gets higher, folks want to mitigate their risk there and take advantage of potentially getting into long-term. So we are having those discussions today. I would term the contracting environment to be healthy today and something that we are interested in, as opposed to last year where the long-term contract pricing was not something we'd want to tie to for a long period of time.
spk06: People are having trouble getting their sand now, which definitely is a positive for us. We're definitely excited about that.
spk01: Okay, excellent. Another question I had with regard to your smart system, it sounds like it probably impacted margins on a negative basis last year. Can you give us a sense of how much that is? I know you said it should be contribution margin positive this year, but just kind of wondering what sort of a negative impact it had last year.
spk02: Well, yeah, last year I think you could say that it had a negative impact probably, again, on contribution margins in, let's say, the $2 million to $3 million range.
spk01: Okay. Not too much. On the industrial initiative, you know, what end markets are you targeting?
spk04: Yeah, so we're targeting foundry, glass, industrial, you know, which includes kind of turf and things like that. Basically, we're not limiting ourselves on who we're targeting. Industrial has been a bright spot for us, you know, as we've looked to diversify the business. The team that's come in is, you know, has come in and made a real impact there. And, you know, as we're growing that business, we expect to have more to talk about over the next, you know, kind of few quarters.
spk06: Yeah, I think that the team that we have is pretty experienced in the industry, kind of, you know, they're well-known, and they're really excited that they're able to originate industrial sand on four different Class I railroads, which I think is pretty unique.
spk01: And you can service these products directly from your two existing mines. Do you foresee having to put in more capital? I got it.
spk04: I'm sorry, Samantha, I didn't catch that. You faded out right at the end there.
spk01: Yeah, sorry. Can you service this business out of your existing production capacity, or is there a need to put some CapEx here maybe next year, if not this year?
spk04: Yeah, we have a small amount of CapEx in the budget to handle things like bagging and other stuff like that. But ultimately, yeah, we're supporting these out of our existing mining assets.
spk01: Okay, that does it for me. Thanks, guys.
spk04: Thank you.
spk00: Our next question coming from the line of Jonathan Kaplan of Kaplan Capital. Your line is open.
spk05: Hi, good morning, gentlemen. I just have two questions. One is that, you know, you have record volumes here, and I look back at your history. When you were kind of operating at record volumes, you were making a fair amount of money, and right now we are still losing money. And I'm wondering whether this is a, if you consider this a smart sand specific issue or is it an industry issue, and what are the factors that you think need to change here in order for you to grow profitably going forward?
spk02: Well, yes, I think this is more of an industry, particularly for northern white. I think you go back to our previous high volumes of 2018, we had, you know, pricing well north of what we had in 2021 and what we currently have. And so, because of the switch from regional in 18 and 19 and moving some of the demand there, it led to pressure on northern white pricing over the last three years. It has brought down our margins relative to sales activity. As we got into 2021, as you can see, our volumes are improving, and because there's been supply taken off the market for Northern White, we do believe the supply-demand balances are getting back in line. And as we go into 2022, and we're already seeing that in the price improvements that we're getting or starting to get here in the latter half of the first quarter, So we do see that that's going to start leading to us to having improvement in margins through improved pricing. As you've seen our volumes pick up, it's now because of the supply and demand are getting back in balance. Activity is continuing to improve. We don't see a lot of new incremental supply coming on. And that should lead us to start getting improvement in pricing and getting our profitability and margins back to where it was previously at these types of volume levels.
spk05: Okay. And do you see if things are going this direction, do you see yourself as cash flow positive some later this year?
spk02: I'm not going to give a prediction as to when we'll be cash flow positive, but I will say we're definitely focused on improving our margins, improving our cash flow, and as prices improve and we get a higher utilization of our asset, that should lead to a better unit cost for us over time, and that should drive improving margins and improving cash flow.
spk05: Great. Thank you very much.
spk02: Thanks. Thank you.
spk00: And we have a follow-up question from Stephen Gungaro from Steevil. You'll let us open.
spk07: Thanks. Thanks for taking the follow-up. The overall market, just curious on sort of your take. I mean, we get asked a lot about saying supply and demand, especially given, you know, what we're seeing right now as far as tightness and prices rising. What is your take kind of on the current market, the capacity, the, some of these shuttered mines potentially coming back on stream. I'm just curious how you guys evaluate sort of the current supply and demand side of your business over the next year.
spk06: Well, I think there's a lot of northern white capacity that's been taken out of the marketplace. One thing we've done during the period is we've basically – taken our capacity and almost doubled it over the last year by picking up some other assets, getting us onto other rail lines. And now it looks like the utilization of those assets is picking up. So we feel pretty good about that. I don't know, John, if you have anything to add.
spk04: Yeah, and I would just add with regard to, you know, fracks and demand and the market conditions, I mean, I think that, you know, everybody's aware of some of the challenges that some of the regional mines are under right now. And a lot of that is, you know, has to do with plants, you know, not being maintained properly and things like that. But ultimately, what's happening in northern white is, as Chuck had mentioned, it's A lot of supply has been taken off the market. The supply that maybe people were relying on in these regional mines is not exactly what was thought. And when you look at the entire supply chain, when you're trucking, when you're having trouble finding truckers to move that sand, it kind of leads to bottlenecks all over the place. And certainly, we think we've got a pretty good solution with our commitment to rail and rail to terminals that are close to the acreage that folks want to operate in. And when you shorten those truck rides on the last mile, you're able to be more efficient. And eventually, you know, folks will recognize that as they're having kind of these supply bottlenecks all over the place. We think the market is going to be strong this year. You know, certainly high oil price, high natural gas price helps with that. But ultimately, you know, we're expecting to continue growing this year. And, you know, as Lee had mentioned before, we think pricing is going to be on the march up, and generally it looks pretty good.
spk06: There definitely is a panic out there from a lot of the consumers of sand on where they're going to get it from and how they're going to be able to support it logistically. And a lot of that points back to having to utilize rail. It's just that the trucking long distances is too difficult.
spk07: Okay. Thank you. And just one final – And I know you're not going to want to give me a specific answer, but when we look at the last couple of years, and it could be a little bit foggy based on some moving pieces, but the quarterly, the first quarter change in contribution margin per ton, right, it obviously tends to go, to be impacted by the inventory adjustments, et cetera. Is that kind of a move, like should we be thinking about sort of a $3 to $7 type impact in the first quarter? I'm just trying to get a sense for the moving pieces again. I'm not sure if you could add a little more clarity or not.
spk02: Well, again, there's been a lot of moving pieces in the past, but I think if you look at kind of last year's results, first quarter to second quarter, there was about a $2 to $3 difference per ton in contribution margin from first quarter to second quarter driven by you know, us having the higher expenses in the first quarter related to inventory adjustment, et cetera.
spk07: Male Speaker Okay. Okay. Yep, that's fine. We can, I'll work through it. But thanks for the call. I appreciate it.
spk00: Female Speaker Thank you. And I'm showing no further questions at this time. I would now like to turn the call back over to Mr. Chuck Young for any closing remarks.
spk06: Chuck Young Thank you for joining us for our Q4 call. We look forward to speaking with you in May.
spk00: Ladies and gentlemen, that's the conference for today. Thank you for your participation. You may now disconnect.
Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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