Sterling Infrastructure, Inc.

Good morning, ladies and gentlemen, and welcome to the Sterling Infrastructure third quarter webcast and conference call. At this time, our lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you need assistance, please press star zero for the operator. As a reminder, this call is being recorded on Tuesday, November 4th, 2025. I would now like to turn the conference over to Noelle Diltz, Vice President of Investor Relations and Corporate Strategy. Please go ahead.

Good morning to everyone joining us and welcome to Sterling Infrastructure's 2025 Third Quarter Earnings Conference Call and Webcast. I'm pleased to be here today to discuss our results with Joe Cotillo, Sterling's Chief Executive Officer, and Nick Greinstaff, Sterling's Chief Financial Officer. Joe will open the call with an overview of the company and its performance in the quarter. Nick will then discuss our financial results and guidance. after which Joe will provide a market and full year outlook. We will then open the call up for questions. As a reminder, there are accompanying slides on the investor relations section of our website. These slides include details on our full year 2025 financial guidance. Before turning the call over to Joe, I will read the safe harbor statement. The discussion today may include forward-looking statements. Actual results could differ materially from the statements made today. please refer to Sterling's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these projections and assumptions. The company assumes no obligations to update forward-looking statements as a result of new information, future events, or otherwise. Please also note that management may reference EBITDA, adjusted EBITDA, adjusted net income, or adjusted earnings per share on this call, which are all financial measures not recognized under U.S. GAAP. As required by SEC rules and regulations, these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in our earnings release issued yesterday afternoon. Our discussion of all results today, including revenue and backlog, refer to figures that adjust prior period results to conform to the current accounting for RHB-JV, unless otherwise noted. Additionally, all comparisons are to the prior year quarter, unless otherwise noted. I'll now turn the call over to our CEO, Joe Cotillo. Thanks, Noelle.

Good morning, everyone, and thank you for joining today's call. Sterling delivered another outstanding quarter as we achieved strong revenue growth, expanded margins, grew backlog, and generated excellent cash flow. We are pleased to discuss these results today with you, but even more excited about the opportunities ahead of us. Beginning with the third quarter results, revenue grew 32% fueled by 58% growth in our e-infrastructure solution segment, including 42% organic growth. In addition, our transportation segment grew 10% in the quarter. We grew adjusted earnings per share by 58% to $3.48. and delivered adjusted EBITDA of $156 million, an increase of 47%. Our gross profit margins expanded 280 basis points from the prior year to reach 24.7%. Additionally, operating cash flow generation in the quarter was again very strong at $84 million. Our backlog position and strong visibility drive our confidence in the future. Backlog at the end of the quarter totaled $2.6 billion, a 64% year-over-year increase. Excluding the contribution from the recent acquisition of CDC, backlog increased a strong 34% year-over-year. E-infrastructure solutions backlog of $1.8 billion was up 97% in total, and 45% excluding the contributions from CDC. When you layer in our unsigned awards and pipeline of future phase opportunities, we have visibility into a pool of work in excess of $4 billion for Sterling. The Sterling way, which is our commitment to take care of our people, our environment, our investors, and our communities, While we work to build America's infrastructure remains our guiding principle as we execute our strategy and grow the company. Now, I'd like to discuss our segment results in more detail. In e-infrastructure, third quarter revenue grew 58% over prior year and over 34% sequentially. Excluding CEC, revenue grew grew more than 42% over prior year and 21% sequentially. The data center market again was a primary growth driver in the quarter as revenue from this market grew more than 125% year over year. Adjusted segment operating income grew 57% or 48% excluding CBC. Adjusted operating margins for the legacy e-infrastructure site development business were 28.4% and increased over 140 basis points from prior year levels and 10 basis points sequentially. This was driven by our continued shift towards large mission-critical projects, including data centers, where our superior project management and ability to finish jobs on or ahead of schedule are extremely valuable to our customers. We are pleased to have closed the CEC acquisition during the quarter. We see tremendous opportunities ahead to leverage our expanded service portfolio and are seeing early positive reception from our customers. CEC contributed $41.4 million of revenue in September and adjusted operating margins that were in line with our expectations. We continue to have very good visibility in the e-infrastructure business. With the recent CEC acquisition, the aggregate of our e-infrastructure signed backlog, unsigned electrical awards, and future phase site development opportunities total approximately $3 billion. Moving to transportation solutions, third quarter revenue grew 10% and adjusted operating profit grew 40%, driven by strong market demand and the benefits of the mixed shift towards higher margin services. We ended the quarter with transportation solutions backlog of $733 million, a 23% year over year increase. Sequentially, Segment backlog was roughly flat with awards-keeping pace with burn. As a reminder, the wind-down of our Texas low-bid heavy highway operation is impacting backlog to some extent this year, but will ultimately benefit segment margins.

Shifting to building solutions, in the third quarter, segment revenue declined 1%,

and adjusted operating income declined 10%. Adjusted operating margins in the quarter were 12%. Overall demand for homes has been impacted as potential buyers struggle with affordability challenges. Revenue from our legacy residential business declined 17%, driven by softness in the overall housing market. Even with these headwinds in building solutions, The strength of Sterling's diversified portfolio and strategy to focus on growth in high margin and markets enabled us to deliver another record quarter. With that, I'd like to turn it over to Nick to give you more details on some of our financial metrics and full year guidance.

Nick? Thanks, Joe, and good morning. I'll begin with our consolidated backlog metrics, all of which are adjusted to exclude RHBs. from the prior year. Our third quarter backlog totaled $2.58 billion, a 64% increase from the prior year's second quarter. CEC contributed $475 million to backlog. Excluding CEC, backlog increased 33.8% year over year. We closed the quarter with combined backlog of $3.44 billion, which was up 88%. Excluding CEC, combined backlog increased 43.5% year-over-year. Third quarter 2025 book-to-burn ratios excluding CEC were 1.23 times for backlog and 1.76 times for combined backlog. Year-to-date book-to-burn ratios excluding CEC were 1.31 times for backlog and 1.58 times for combined backlog. Moving to our cash flow metrics, Cash flow from operating activities for the first nine months of 2025 was a strong $253.9 million compared to $322.8 million in prior year period. Cash flow used in investing activities for the first nine months of 2025 included $46.9 million of net CapEx and $484.2 million for acquisitions, including CEC. Year-to-date cash flow from financing activities was an $80.7 million outflow, primarily driven by shared repurchases of $48.5 million at an average price of $135.96 per share. Remaining availability under the existing repurchase authorization is $80.9 million. We are in great shape from a balance sheet perspective. We ended the quarter with a very strong liquidity position consisting of $306.4 million of cash and debt of $294.6 million for a cash net of debt balance of $11.8 million. Our $150 million revolving credit facility remained undrawn during the period. Now, I'd like to discuss our guidance. The strong tailwinds behind our business position us for another record year at Sterling in 2025. We're increasing our guidance ranges to revenue of $2.375 billion to $2.39 billion, which is a more than 5% increase at the midpoint relative to our previous guidance range. Diluted EPS of $8.73 to $8.87. Adjusted diluted EPS of $10.35 to $10.52. This represents a 9% increase at the midpoint over our previous guidance range. EBITDA of $448 million to $453 million. Adjusted EBITDA of $486 million to $491 million a 6% increase at the midpoint over our previous guidance range. From a financial standpoint, we are in an excellent position to continue to take advantage of both organic and inorganic growth opportunities in the years ahead. Now, I will turn the call back to Joe.

Thanks, Nick. As we look to the future, we remain very bullish on the multi-year opportunity in each of our markets. Our strong backlog, future phase opportunities, and discussions with our customers contribute to our confidence. First, in e-infrastructure site development, we anticipate that the current strength in data center demand will continue for the foreseeable future. Our customers are discussing multi-year capital deployment plans and are focused on how to align with the right partners to support these plans. We are getting pulled into new geographies by our customers, including Texas, where we are now performing site development work. In the manufacturing market, we are seeing a fairly steady pace of activity in 2025. As we look out to 2026 and 2027, there remains a very big pool of megaprojects on the horizon. This would include planned semiconductor fabrication facilities. The e-commerce market has strengthened significantly in 2025. We have built a sizable level of backlog and believe we should continue to see momentum in 2026. Together, these dynamics support strong growth opportunities over a multi-year period. Moving to CDC, we have very good momentum heading into 2026. Customer demand is very strong particularly in the data center market, and the organization has booked several large projects in recent months. We continue to see opportunities for margin expansion over the next couple years. We have a high degree of confidence in our ability to leverage the combination of site development and electrical services as we head into the new year. For 2025, we expect to deliver e-infrastructure revenue growth of 30% or higher on an organic basis and approaching 50%, including CEC. Adjusted operating profit margins for e-infrastructure should approximate 25% for the full year, including CEC, as compared to 23.7% in 2024. In transportation solutions, We are approaching the final year of the current federal funding cycle, which concludes September, 2026. We have built over two years of backlog and continue to see good levels of bid activity. For 2025, we anticipate continued growth in our core Rocky Mountain and Arizona markets. The downsizing of our low bid heavy highway business in Texas is progressing according to plan resulting in some moderation of transportation solutions top line and backlog, but should drive meaningful margin improvements as we move through the year. We expect transportation solutions revenue growth in the low teens on an adjusted basis in 2025. We forecast adjusted operating profit margins in the 13.5% to 14% range compared to 9.6% in 2024. In building solutions, we continue to believe the business is well positioned for growth over a multi-year period. Our key geographies of Dallas-Fort Worth, Houston, and Phoenix are expected to see continued population growth, driving new home demand. Additionally, there is a significant opportunity for share gain in Houston and Phoenix. In the near term, we are anticipating a continuation of soft market conditions driven by affordability challenges. For full year building solutions revenue, we forecast a mid to high single digit decline. We anticipate adjusted operating margins in the low double digits as compared to 14.8% in 2024. As a reminder, From a seasonality perspective, our fourth quarter and first quarter tend to be slower than our second and third quarter, with the first quarter typically our lowest of the year. On the acquisition front, we are continuing to look for small to midsize acquisitions that are the right strategic fit to enhance our service offerings and geographic footprint. Moving to our full year guidance, The midpoint of our increased 2025 guidance range would represent 27% revenue growth year over year as adjusted for RHB, 47% adjusted EPS growth, and 42% adjusted EBITDA growth. With that, I'd like to turn it over for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two. And if you are using a speakerphone, please lift the handset before pressing any keys. The first question comes from Brent Thielman at DA Davidson. Please go ahead.

Hey, thanks. Good morning. Congrats on a tremendous quarter. Thank you, Brent.

Joe, yeah, maybe just the first question. It looks, I mean, it looks like CEC signed and unsigned work has substantially grown since the June deal announcement. So again, we'll just be sort of interested on kind of what's behind the momentum and award activity there. And how do we think about, sounds like some large data center projects, but how do we think about them converting that over the next sort of 12 plus months?

Yeah. So they had a very good and strong bookings and wins in the quarter. It's mostly around the data center front as that continues to move forward, along with a couple other big projects that are a little outside of the data center front. Here's what I'll tell you. They had a great bookings quarter. We're excited about that. But we're really excited about the reception that we're getting from our end customers and our end markets from this combination. and are in the early stages of talking about several 2026 projects and how do we do those as a joint package instead of an individual package. So we're very excited about that. As we said in the call, we have started doing site development in Texas. We think that is going to grow very aggressively as we go into 2026. And I will tell you, the teams are working diligently together to pull each other into that market, into these next big future phase jobs. So we're, man, I'm tickled to death with where we are. You know, the team spent two weeks together right out of the chute working on stuff, and I was excited about the deal before. I came away even more excited after that two weeks together on the opportunities they saw between the site development and the electrical teams.

And, Joe, it sounded as though you're optimistic around some origin expansion opportunities. There are some specific things that you're seeing in the award activity that – you know, gives you some confidence there? What drives that, you know, margin expansion?

Yeah, so combination of things, you know, certainly on just the pure site development, the size of these projects continue to get bigger and bigger. And what our customers are talking to us about the next level of projects that are coming out, again, they just, they're getting bigger, which is fantastic for us. On the combination of the electrical and site development side, We've proven significant productivity gains with the small dry conduit business tuck-in we did at the beginning of January. We've seen their margins improve 40% just by combining that with the site development. We think there's certainly some opportunities to lever that larger with CEC, but also as CEC continues to move further and further into data center space, those margins are accretive to their average margins. If we can build their portfolio and backlog stronger in that area, their margins will continue to increase as well. So we feel very good on continued margin enhancement across the segment.

Okay. Just last one, I think, along those lines on the e-infrastructure business and the current backlog, I guess, for the legacy site development side. Joe, could you talk about maybe how The size of projects, even within mission-critical, has evolved over the last 12-plus months. I know mission-critical is bigger for you now, but, you know, how is that sort of being redefined with the projects you're putting in backlog now?

I don't know that we're really redefining it. You know, the only incremental add to EM structure is obviously the CEC acquisition piece. But the base business was up, what was it, 34%, I think, in backlog. And so for us, mission critical, again, is data centers, manufacturing, e-commerce distribution is kind of what I'll call the three core elements of it. Did I miss anything? 45%. Yeah, so we're up 45%, 45%. in that area. So we haven't redefined anything. Just the project size of these data centers and when the chip plants come out, those are pretty sizable as well. We'll continue to help us on the margin front. One of the things we really don't talk about in the script that I think is important that everybody understands is we said we're in Texas. I will tell you that there's some other geographic footprints that we are aggressively looking at expanding into, not because there's large projects there today, but we believe there's going to be large projects there based on our customers telling us that over the next two to three years. So we're trying to get in early, get our footprint established, and be ready for those to come up.

Yeah, Brent, this is Noelle. I would just say, you know, we're now over 80% of our work is mission critical and backlog, you know, looking at kind of data centers, manufacturing, et cetera. So that continues to move higher. And then to Joe's point, even within that bucket of mission critical, the projects are getting larger and more complex than that. There's underground infrastructure, which is great for us. And so that intensity of the work we're doing continues to expand. Yeah, and just to add to that, I think it's sparkly to look at the

you know, kind of a thought. If you think not only, we talk about data centers getting bigger, but I will tell you that every piece of mission critical jobs are getting bigger in size. As we talk about e-commerce distribution coming back, I think we're up 150% in backlog growth in e-commerce distribution. Those jobs are about two to two and a half times the size of historical ones. Not only are the footprints getting bigger, But what Noel mentioned, the infrastructure associated with these, an e-commerce distribution center is starting to look a little bit more like a data center. And what I mean by that is with all the EVs that are being used by an Amazon, all the underground utilities that now have to be run to these charging stations and everything else look like a mini duck bank. So it just continues to add value. to the complexity, the size, and the scope, which is perfect for us. And now adding the electrical piece, you can quickly in your head see how we can integrate those two together and make that part of the package.

Okay, very good. Thanks all for all the detail. I'll pass it on. Thanks, Brent.

Thank you. The next question comes from Julio Romero at Sedoti Company. Please go ahead.

Thanks. Hey, good morning, Joe, Nick, and Noel. I wanted to hone in on the combined backlog plus the forward pipeline of future phase work of $4 billion plus that you mentioned. Help us think about the mix of in-markets or customers that are driving the growth of that forward pipeline. And then secondly, what's your estimation of when that forward pipeline begins to convert into orders?

Well, I think you've got to break it down into the pieces. The backlog, we're either converting or we'll be converting shortly into work. The low unsigned, those are projects that we either have letters of intent or we have won the physical job or negotiating terms of contracts or there's some final design work that's taking place. Those are likely to start in 26th. depending on the actual project, when in 26 could vary. And some may start first quarter, second quarter, third quarter. A lot of the big design build highway projects, I will tell you, are going to start second and third quarter of next year, kind of in the process there. And then that future phase work, the way to look at it is as we burn off current backlog, the work we're working on today, that then flows into current backlog. So that spreads out over what I'll call a 26, 27, and then 28 timeframe in which that will hit.

Got it. Very helpful there. And then, you know, just go ahead. Sorry. I'm sorry.

I just want to make sure I answered everything you're looking for there.

I would say in terms of the composition.

Well, yeah, you know, if you take a look at it, 3 billion of the four is in e-infrastructure. And the highest percentage of that is going to be data center, which would probably be 75% or 80% of that piece there.

Got it. Extremely helpful there.

And then maybe just turning to transportation solutions, really notable margin strength there here in the third quarter. If you could help us unpack the drivers there. I don't think the impact of low bid phase is starting to come through yet, unless I'm mistaken. And then Just talk about the margin profile of what you have in transportation backlog and unsigned awards.

Yeah, I think people grossly underestimate the progress that transportation group has really made. We've got some class margins and they continue to get better. It's really, again, it's really around what I'll call project selection and focus is we continue to do more design build or alternative delivery type projects, along with aviation and rail, continue to diversify that portfolio, the margins will continue to increase. We haven't seen a significant part of that, though we've seen a little from the wind down of our Texas low bid business. We'll see that impact more in 2026 as we weed out or wean down, I should say, that backlog, but that'll continue.

So probably the first, most of that will be burned off in the first half of 2026. Great. I'll pass it on. Thanks very much.

Thank you. The next question comes from Adam Thalheimer at Thompson Davis. Please go ahead.

Good morning, guys. Great quarter. Hey, Adam. Thank you.

Joe, I wanted to ask you about, so you said 26 and 27, big pool of mega projects. Obviously, your ability to bid on mega projects isn't, or your capacity to bid isn't infinite. So how do you think about how you prioritize what you're bidding on and how do you price that work?

Yeah, I think that's a good question, Adam. We do have a fair more capacity. We've been planning for this. We've been in conversations on some of these projects for a couple of years now with our customers. So we have been doing stuff internally to plan for this. As we've said, generally our biggest limitation to capacity is around project management and the program we put in place to develop future project managers. We've been doing it for, I think, four or five years now is really starting to pay off to add some increased capacity. But at the end of the day, I don't want anybody to be surprised if we pass on one of these megaprojects, because if the pricing is not right, the margins are not right, or the complexity of the contracts don't make sense for us, we're okay to pass on that with the visibility we have at data centers and the rest of this critical stuff coming out. But I will tell you, we're looking at those And we will continue to build capacity as needed to do those. Just to keep in mind, if we have a year runway to build capacity, we can build a lot. If somebody comes in tomorrow and says, I've got three $500 million jobs, it may be tough for us and they need to start in 60 days. That would be a challenge for us. But we've got our customers have been very good. The hyperscalers and even these big chip plants have been very good at kind of forward-looking and anticipating what's coming out. The other good thing on the chip plants is they've taken much longer than I think the builders have anticipated for them to hit the ground running with all the upfront work that's had to be done. So we've seen these coming now for two years. So we'll be ready.

And then I was curious, you talked about entering Texas for site prep. I guess you're doing that organically, and I was curious what you're doing with the assets from the Texas highway work that's winding down.

Yeah, another good question. Well, you may see those on a site development job or two. The smaller assets that we have there are very capable of doing some of the utility and underground work with CEC. In those assets combined, now we can start doing duck banks in Texas. So I think over the next six to 12 months, if you go to one of our sites, you may see some stuff that has a TSC logo on it.

Cool. And then lastly, you said you continue to look at small and mid-sized deals. Was that just a comment in the residential segment or is that for the whole company? Yeah.

No, no. The vast majority of deals we're looking at are in and around the infrastructure. It's not that we won't look at stuff and be opportunistic in building solutions, but I would tell you right now about 95% of everything we're looking at or folks we're talking to isn't around added either capabilities, geographic expansion, or just pure assets in and around the infrastructure.

Okay. Thanks, guys. Thank you.

Thank you.

The next question comes from Noah Levitz at William Blair. Please go ahead.

Thanks, Joe, Nick, and Noel. Good morning, and thanks for taking my questions. To start off on the transportation side, has there been any impacts from the government shutdown on transportation funding. And you've also mentioned in the past about a potential successor bill to the IIJA. Can you give any update as to do you still think that's moving along? Should it be bigger? Anything you can add there? Thanks.

Yeah. So first, no impacts from government shutdown. The funding that's on these jobs has already been allocated. It's out there. So no impact at all on that. That's not to say there may be some grant projects or grant programs that somebody has out there that could be delayed. Good news is I'm not aware that we have anything tied to that. I haven't heard a single word from our business units in a few or so. Not an issue there. On the next bill, the existing bill ends at the end of September of 2026. I will say that I was with the DC team, it's probably been four weeks ago now or five. Things have been progressing very well. I always use the caveat, it is DC and it is the government. We can see the functions or dysfunctions of things. But they're probably six months ahead of where they have been historically. And I'm optimistic that something will happen in a timely manner. However, keep in mind that why we are not losing any sleep over this is we will go into September with roughly two years of backlog. Second, if there is not a resolution or a new bill passed is probably how I should phrase it. They will put an extension in place generally or historically. The extensions have been the current kind of spend rates plus an inflation adjustment. So we don't stop. We continue at that. The thing that does generally happen in that year where there's a gap or that six months or whatever time frame it takes to bridge to the new bill is is the states tend to do more smaller projects than the big multi-year projects because they're unsure of how much funding they'll have over a multi-year period. But the reality is the world doesn't shut down. Our projects don't stop. The bid activity projects change a little bit. But what we're seeing, the thing that people don't understand is that There is spending that will continue to take place on this current bill. There's still two years of spending left, approximately, on the current bill that they have to get out before the end. So today, we're anticipating going in with two years of backlog. We can go in with more backlog than that, depending on what projects get squeezed into this last, call it 18 months or less. Now, I guess it's almost a year until the next one.

Right, that's helpful. And then just my last question, you said that data center growth was greater than 125%, which is exceptional, and it comes after last quarter, which was more than doubled. Can you break that down a bit more? Is that growth in existing projects? Is that new projects coming online? Is it the current phases that the work was being done during the quarter being bigger phases? Yeah.

Yeah, it's a combination. I think if you talk to our teams out in the field, one of the things they're most proud about in the quarter isn't the great quarter they had and the results they were able to deliver, but it was really impressive for them to grow total backlog with the burn rates that they have. But some of that is new projects, and the way to look at it is if we didn't get new projects and we just shifted from future phase to backlog, our total would have decreased, right? So we not only shifted future phase to backlog, but we want enough new projects to offset that burn rate and grow that total backlog.

Great. Thank you very much. That's all from me.

Thank you.

The next question comes from Alex Regal at Texas Capital. Please go ahead.

Good morning. A very nice quarter, and thanks for taking my questions. A lot of good answers here so far on the call, but I got a few here, questions for you. Do you generally experience any permitting issues that possibly delay project starts historically?

Well, what I will tell you is the permitting process certainly is longer today than it was pre-COVID. And I would have told you pre-COVID that it sucked and was really long, okay? It definitely takes longer for permits to happen. But we generally, on the site development side, where we see the delay isn't from the time we get the contracts to start It's more waiting to get the contract. So we know the projects are coming. We know that we're going to win them, but we may not win them in this month. It may be a month later. It may not be this quarter. It may be the next quarter. We haven't seen historically where we've got equipment ready to go, we're ready or on the site, and we have the links. So we're fortunate in that where it takes place in our process tends to be before we start. However, I will tell you that from historical numbers, it certainly is what used to take six weeks for a permit now takes three months, maybe five in certain markets. So that upfront piece is the laying stuff. It's also why some of these mega projects are taking so long to hit the ground. You know, these chip plants, we know they're there. We know they're coming. but they're still going through a lot of the permitting, getting utilities, and utilities require permits and everything else, right? So it kind of cascades. So it's definitely a long pole in the tent. I will tell you, and I've told everybody this, if the U.S. wants to accelerate onshoring, reshoring, chip plants, whatever it is out of build, if they can get through the regulatory and permitting issues, it would speed up these projects in spending and funding exponentially.

Double. And then within building solutions, are you seeing any signs of green shoots?

I'm sorry, say that again.

Within building solutions, are you seeing any signs that 2026 could start to improve again?

No. You know, I think we don't believe, honestly, that anything would happen until the second half of 26 at the earliest. You know, certainly interest rates continue to creep down. Builders have a lot of programs in place. We have not seen – we've flattened, okay? It's not getting worse. That's the good news. But we have not seen anything that would tell us we're going to see an uptick here any time soon.

Thank you very much.

Thank you. We have no further questions.

I will turn the call back over to Joe Cotillo for closing comments.

Thank you. Thanks again, everybody, for joining today's call. If you have any further follow-up questions or would like to set up a call, please contact Noel Diltz, or if contact information is in our earnings release. Hope everybody has a great day, and I appreciate you taking the time. Thanks.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and we ask you that you please disconnect your lines.