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spk04: Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Universal Stainless and Alloy Products Incorporated second quarter 2022 conference call and webcast. 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 the session, you will need to press star 1 1 on your telephone keypad. At this time, I would like to turn the conference over to Ms. June Fillingeri. Ma'am, please begin.
spk00: Thank you, Howard. Good morning. This is June Fillingeri of Compartners, and I also would like to welcome you to the Universal Stainless Conference call and webcast. We're here to discuss the company's second quarter 2022 results reported this morning. With us for management are Denny Oates, Chairman, President, and Chief Executive Officer, Chris Zimmer, Executive Vice President and Chief Commercial Officer, John Arminas, Vice President and General Counsel, and Steve DiTomaso, Vice President and Chief Financial Officer. Before I turn the call over to management, let me quickly review procedures. After management has made formal remarks, we will take your questions. The conference operator will instruct you on procedures at that time. Also, please note that in this morning's call, management will make forward-looking statements. Under the Private Securities Litigation Reform Act of 1995, I would like to remind you of the risks related to these statements, which are more fully described in today's press release and in the company's filings with the Securities and Exchange Commission. With these formalities complete, I would now like to turn the call over to Denny Oates. Denny, we are ready to begin.
spk01: Thanks, June. Good morning, everyone. Thanks for joining us today. Our company made solid progress in the second quarter despite facing several unprecedented challenges. Let me start off today with some highlights. Our order backlog reached a new record high of $222.7 million. Our top line growth continued with sales up 10% sequentially, up 36% from the second quarter last year, and up 32% year to date. The 9% to 12% base price increase announced on July 11th marks the sixth inflation-flighting price increase of this year. Gross margin expanded as expected to 12.6% of sales in the second quarter, excluding a positive AMJP grant of $1.8 million and charges for the liquid metal spill at our Bridgeville melt shop of $3.6 million. Our reported net loss for the second quarter narrowed to $1.4 million or $0.16 per diluted share. Excluding a similar $0.16 per share net charge for the unusual items, we essentially broke even during the quarter. The spill led to a seven-week unplanned outage while our team executed an aggressive recovery plan. We had estimated six to eight weeks of downtime in April. The melt shop is fully operational and focused on making up for lost time. Production, excluding the spill, continued to ramp, increasing about 15% sequentially as measured by pounds processed through our facilities. Plant overhead spending was totally controlled, remaining 15% below pre-pandemic levels. Progress was made de-risking our supply chain for geopolitical and availability issues. Ground was broken for the $15 million vacuum arc remelt facility in North Jackson. Our liquidity remained adequate at $26 million, a slight increase over March 31. Adjusted EBITDA of 6.4 million or 12.4% of sales almost doubled sequentially. Lastly, Universal was recognized by Rolls-Royce as a high-performing supplier, meaning we are one of their top material suppliers based on our quality, service, and responsiveness. Drilling into the details, The main driver of our positive results in the second quarter was the continued recovery in aerospace, which fueled our sales growth, our profitability improvement, and our record backlog. The continued growth in the backlog is noteworthy. We reached $222.7 million by the end of the quarter. That's an additional 10% from the record first quarter, which had jumped 50% from year-end 2021. To add additional perspective, our second quarter backlog increased 124 million or 125% from the second quarter last year. The backlog has increased now for five consecutive quarters. A full 26% of our current backlog consists of premium alloys, which are mainly for aerospace applications. Slightly over 50% of the backlog is scheduled for shipment next year. Although second quarter order entry of 64 million was below the record-setting level of Q1, It represents the third highest quarter in company history. Again, strong aerospace activity, including premium melt products, dominated with relatively stable order entry from industrial markets. Given our substantial backlog, we expect our production levels and our shipments to continue increasing each quarter for the balance of the year and into 2023. Taking a closer look at sales activity, our sales of $52.2 million increased $4.6 million, or 10% sequentially. $2.5 million of the increase was due to price, and $3.4 million was due to volume, with mix and other items offsetting by $1.3 million. We've announced six price increases since the beginning of the year to keep up with inflation and the cost of most operating supplies and consumables. The latest increase was a base price increase on bar products of 9% to 12%. A positive impact of these price increases will continue to build over the next few quarters and into 2023. Second quarter premium alloy sales remain level with the first quarter, but we're up 49% from the second quarter of 2021 and up 32% in the first half of 2022 versus the same period last year. We expect sequential premium sales growth to accelerate in the third and fourth quarter, given our current backlog position. Looking at profitability, our progress in the second quarter was achieved despite the challenges posed by liquid metal spill in our electric melt shop. While we captured the financial impact in the $3.6 million charge for the second quarter, it is important to recognize the enormous effort of our team that allowed us to meet our initial deadline to get the melt shop up and running with full operation restored in June. The scope of the recovery plan was significant, including basic cleanup, damage assessment, equipment procurement, installation, complex rewiring work, and an aggressive startup plan. Third-party melt was also acquired to partially mitigate risk to our customers. Meanwhile, most of our other operations continued to function normally, and there were no near-term interruptions to product delivery schedules. Like most other manufacturers, we also faced ongoing supply chain obstacles, affecting the transport and procurement of critical parts and materials, price inflation in supplies, consumables, energy, and services, and staffing our facilities to continue ramping up production. On the plus side, we estimate the positive misalignment between surcharges compared to our material cost added $500,000 to gross profit. We're just under 1%. Rejected higher activity levels in the second half will add absorption benefits and leverage margins higher. We expect both sales and gross margin to increase sequentially through the balance of the year. Steve will take you through additional items in our income statement as well as our balance sheet in his report. Before he does, just a few points on our financial position. Managed working capital increased at the end of the second quarter to $148 million compared to $142 million on March 31st. and $116 million at the end of the second quarter of 2021. The sequential increase in managed working capital is mainly due to increased sales and inventory values. For example, total inventory was $149 million at the end of the second quarter versus $146.9 million at the end of the first quarter. The $2.1 million increase was driven by an $18.1 million increase in material costs, offset by $16 million in lower volume in inventory. This was largely related to the spill's interruption of production. The increased mix of premium product inventory and finished bar products also represented a contributing factor to the increase in inventory. Capital spending was $3 million in the second quarter, bringing the year-to-date capital spend to $5.5 million. We expect to increase capital expenditures in the second half of 2022 as we complete projects that were delayed due to parts availability delays and other supply chain challenges in the first half. In total, we now expect 2022 capital expenditures to be in the range of $18 million, with ongoing supply chain issues being a wild card. We ended the second quarter with total debt of $84 million, an increase of $8 million from the first quarter due mainly to working capital needs. We continue to be in good shape from a liquidity standpoint, which stood at $26 million in June, up slightly from March. Just a few comments on commodities. Except for chrome, commodities remain elevated compared to year end 2021 and June of 2021, but began to retreat late in the second quarter. Nickel prices, which had jumped 70% per pound in the first quarter, ended the second quarter at $11.71 per pound, down just about $4 per pound, or 24% from March. However, nickel remains 29% higher than year-end 2021 and 44% higher than the end of the second quarter last year. The LME has now returned to more normal trading patterns after the distortions caused by a large short position in March, production interruptions, and the Ukraine-Russia situation. On balance, nickel is expected to trade in the $8 to $10 per pound range and was at $9.88 per pound this morning. Most of the other commodities we use for our products are also trading lower at the end of June versus the end of March. Given these trends, you should expect third quarter surcharges to be lower by roughly 10% compared to the June highs. Turning to operations, the resumption of operations at Bribeshell Melt Shop was clearly a major accomplishment in the second quarter. We also moved forward with our other capital projects, although many have been hampered by delays in getting parts and other supply chain challenges. We are acquiring two additional VAR furnaces, vacuum mark remount furnaces, that is, to further support our growth and efficiency, along with our expanding product portfolio. At the time of our last call, I reported that the furnaces had been ordered, and we plan to have them installed in our NARC Jackson facility and operational late in the second quarter of 2023. In the second quarter, we broke ground and have begun the building expansion. Our overall project timeline remains unchanged. Commissioning of the new 18-ton vacuum induction melting crucible in North Jackson was completed in the first quarter. This crucible expands our vacuum induction melting capacity and supports the production of our premium alloy products as it significantly improves the efficiency of our melt operations. Operationally, we are alternating 18-ton and 12-ton campaigns, and we validated the operating cost savings in the 30% range. Our new intermediate-sized bar cell in Dunkirk began operation just as the pandemic hit, and we have never really had the opportunity to test its capabilities. Second quarter production was the highest yet, and we are demonstrating a 12% reduction in operating costs and a 15-day reduction in cycle time compared to the traditional manufacturing routes. Looking at our end markets, beginning with aerospace, our largest market. Our aerospace sales increased 19% to $36 million, or 68% of sales in the second quarter. That's up 67% from the second quarter last year. Our aerospace sales increased 51% to $66 million in the first half of 2022 versus the same period a year ago, which shows the extent of the turnaround in the aerospace market. This accelerating momentum in aerospace demand reflects several positive trends. Commercial airliner deliveries are picking up. Boeing delivered 216 planes and Airbus delivered 297 planes in the first half. Build rates are rising generally consistent with expectations. For example, Boeing announced this morning they reached the planned 31 737s per month and are in the final stages of the 787 restart. Airbus is pushing 58 320s per month and shooting for 75 by 2025. New plane orders are slowly increasing again. Boeing has 205 firm orders, and Airbus has 259 through June 30. Plus, Airbus has commitments for almost 300 planes from three Chinese airlines, which could turn into firm orders by year-end. Demand is also supported by the quickening pace of air travel recovery and its positive impact on the aftermarket. Global air traffic in May was 83% higher than in May of 2021, according to IATA, as COVID-related travel restrictions eased further. In the U.S., the TSA reported that passenger traffic has nearly returned to pre-pandemic levels, noting the travel volume over the Fourth of July weekend was 93% as high as the same holiday in 2019. Air freight growth continues to outstrip expectations. Demand in the defense market remains healthy, as defense company order books and production demonstrate, even as that industry copes with the supply chain challenges being experienced by all manufacturers. For example, the current build rate for Lockheed Martin's Joint Strike Fighter is 156 planes per year through 2030. Lastly, rapid increases in aviation fuel prices increases the potential financial return from fuel-saving advanced engine technology available in today's aerospace products. We attended the Foreign Bureau Air Show last week, which traditionally is a great opportunity for us to meet with our top domestic and international service center and forger companies, along with many critically important OEMs. A couple takeaways worth mentioning. There's a strong consensus that aerospace and defense market demand is very robust now and will continue to build over the next several years. A major discussion point was the instability in the current supply chain, specifically a concern that the supply chain is struggling to ramp up production at a pace commensurate with demand, and this could have the potential of tempering the pace of recovery. It's noteworthy that current demand is largely focused on single aisle platforms with the expectation that double aisle activity won't begin in a meaningful way until 2024. Overall, the prospects for aerospace and defense demand remains compelling, notwithstanding supply chain issues, recessionary concerns, and air traffic hassles, which is all good news for our customers and also good news for us. The heavy equipment market remained our second largest market in the second quarter of 2022 at 14% of sales. Heavy equipment sales were 7.2 million or 11% lower than 8.1 million in the first quarter. In the second quarter of 2021, heavy equipment sales totaled 9.3 million or 24% of sales. Metal fabrication demand drives our sales to the heavy equipment market. Last quarter, I mentioned the typical lumpiness in our quarterly sales to this market, which was clearly in evidence during the second quarter. That pattern is understandable given the level of inventories that our customers, many of whom bought heavy at the end of last year, combined with cautiousness due to the economic sensitivity of this group and recent trends in key commodity prices. Even so, we expect heavy equipment market shipments to recover modestly over the next few quarters, driven especially by model changeovers at the automakers in their race to introduce electric vehicles combined with continued industrial equipment demand. The oil and gas end market was our third largest in the second quarter of 2022, with sales of 4.7 million or 9% of sales. That represents an increase of 7% from the first quarter sales of $4.4 million and an increase of 19% from $3.9 million in the second quarter of 2021. Our second quarter 2022 oil and gas sales were the highest since 2019, and first half sales increased 29% from the same period of 2021. Oil and natural gas markets are sending mixed signals. Clearly, prices have been high and volatile since our April call, and a global supply-demand imbalance exists. Oil prices have eased over the last four to six weeks, but the futures market would suggest increases are coming. In recent days, oil has been trading in the $100 per barrel range. IEA forecast that world oil demand would reach 101.6 million barrels per day in 2023, surpassing pre-pandemic levels and pointing out that higher prices and a weaker economic outlook are moderating consumption currently, but China is expected to drive gains in 2023. Natural gas has rallied to over $9 per million BTU on unusually hot weather, but again, the futures market suggests a downward trend as we move into the fall. Baker Hughes reports U.S. operating oil drigs are up by 272 over the prior year, and international rigs are up by 66. Halliburton is forecasting, and I'll quote, multiple years of growth and characterizing the North American market as strong, steady, and all but sold out, end quote. Add in the Ukraine-Russia situation, the administration's policies, and things get very complicated. At Universal, we expect generally higher exploration activity, leading to more demand for parts and the metal we produce to make them. Supply chain inventories appear to be in balance. Based upon our backlog and current lead times, we anticipate modest growth in this market in the second half of the year. The PowerGen market became our fourth largest market in the second quarter of 2022, with 72% sequential increase in sales, which totaled 2.2 million or 4% of sales. Power generation sales were up 58% from the second quarter last year and up 35% year to date. Maintenance demand continues to account for most of our power gen sales, and it was improved in the second quarter. We expect that to be the case for the remainder of the year. General industrial market sales in the second quarter totaled 1.8 million or 4% of sales, a decline of 45% from 3.4 million or 7% of sales in the first quarter, and 18% lower than the second quarter of 2021. Our general industrial market includes sales to semiconductor, medical, and general manufacturing markets. There does appear to be a pause in semiconductor activity due to uncertainty about our government's policies regarding the industry, coupled with reduced consumer demand for smartphones and personal computers. We do not expect a semiconductor upturn until later this year, but we do believe Q3 and Q4 sales will exceed the second quarter. Steve, let me turn the call over to you for a review of our financial situation.
spk02: Thanks, Denny. Good morning, everyone. Our sales for the second quarter reached $52.2 million, which represents a 9.7% increase sequentially and a 35.5% increase versus the second quarter of 2021. This reflects increases in both shipment volume and average selling prices in the latest quarter compared to both the first quarter of 2022 and the second quarter of 2021. Sales to our aerospace end market drove the increase. Second quarter aerospace sales were higher than the first quarter by 5.6 million or 18.5%. Sales to the balance of our end markets in total were down 1.1 million or 1.9%. As Denny just outlined, that decrease was driven by the timing of orders from our customers in the heavy equipment end market and lower volume in our general industrial end market due to the apparent pause in semiconductor supply chain activity. Second quarter gross margin totaled $4.7 million, or 9.1% of sales, an increase from 8.5% of sales in the first quarter of 2020. 5.6% of sales in the 2021 second quarter. Our Q2 gross margin included a $1.8 million favorable impact from the Aviation Jobs Manufacturing Program grant that we were awarded in the first quarter and we will continue to earn into Q3. To date, we have recorded a total benefit of $2.8 million in the first half of 2022, the additional benefit expected in the third quarter is between $500,000 and $600,000. Gross margin was unfavorably impacted by the liquid metal spill on our Bridgeville melt shop, which caused $3.6 million of expense in the second quarter, net of a $1.5 million insurance recovery payment received in the quarter. After removing the impact of the grant and the spill, gross margin for the quarter was 12.6% of sales, representing an increase of more than 400 basis points from Q1. This reflects our continued focus on expanding gross margin as we rebound from the COVID pandemic-induced downturn as discussed on previous calls. The spill costs of $3.6 million include fixed assets and consumable supplies lost in the event, internal labor and vendor spend related to cleanup activities, and incremental operating spend incurred due to the spill's impact on productivity throughout the plant, as well as a direct charge of $1.3 million of plant fixed costs that would have otherwise been inventoried if the melt shop operated for the entire quarter. There is no contingent insurance receivable booked at June 30, and future cash received under the claim will be recognized as income in the second half of 2022. Selling general and administrative costs in the second quarter totaled $5.3 million, or 10.1% of sales, which is an increase of about $200,000 compared to the 2022 first quarter and about $100,000 compared to the 2021 second quarter. But for the six-month period ended June 30th, SG&A expenses are slightly down versus last year. We expect SG&A to be in the $5 to $5.5 million range for each of the next several quarters. Our reported operating loss for the quarter was $538,000, an improvement compared to the last quarter and the second quarter of 2021. More important, however, is that operating profit for Q2 was a positive $1.3 million after adjusting out the impacts of the grant and the spill. This is an encouraging step toward our continuing drive to return to profitability. Total interest expense for the quarter was $870,000, up compared to about $710,000 in Q1 and $490,000 of Q2 of last year. interest expenses increased in line with both higher borrowing levels and increased interest rates. The interest paid on the majority of our revolver and term loan is variable and fluctuates with changes to LIBOR. During the second quarter, we recorded income tax expense of $68,000 despite our pre-tax loss position. The expense was caused by the effect of expired stock options during the quarter and the corresponding write-off of the related deferred tax assets. Net loss in the second quarter is $1.4 million, or 16 cents per diluted share. The second quarter bottom line, after adjusting out the impacts of the AMJP grant and the liquid metal spill, was break even, as the net after-tax impact of those items was $1.4 million of expense. Second quarter EBITDA totaled $4.3 million. Our adjusted EBITDA includes add-backs for non-cash share compensation, the spill expense, and the grant benefit, and it totaled $6.4 million. The calculations for EBITDA and adjusted EBITDA are provided in the tables at the end of the press release. We used $5 million in operations in Q2 after using $4 million in Q1. The 2022 cash use in operations for the year to date corresponds to our higher level of managed working capital, as Denny went through, which supports our higher sales levels and backlog. As Denny detailed earlier, inventory per unit values have increased along with higher prices paid for raw materials and supplies. and accounts receivable have increased in line with sales. The impact of the increase in inventory values in the current quarter was partially offset by the spill, which caused lower melt activity and lower inventory levels. Capital expenditures for the second quarter were $3 million, an increase compared to the first quarter. We borrowed $7.3 million on the revolver during the second quarter, funding our working capital and capex needs at the end of the day total debt was 84 million dollars and revolver availability increased modestly versus q1 ending at 26 million this provides us sufficient liquidity as we step into the second half of 2022. that concludes the financial update denny i'll turn the call back to you thanks steve
spk01: Let me summarize quickly. We made solid progress in the second quarter as measured by our record backlog, continued strong top line growth, expanding margins, narrowing of our net loss, and the improvement in our adjusted EBITDA. The continued recovery momentum in aerospace and defense was a major factor in all these items. Our backlog as we enter the third quarter is at a record level. Our gross profit margins were double-digit in the second quarter, and as I said, we expect that to continue to increase as we move through the third and fourth quarter. The results in the second quarter were achieved despite several obstacles, supply chain, labor availability, and, of course, the spill. Our team did a fantastic job tackling the spill in the melt shop with a very complex recovery plan that we executed on time and basically within the budget we set for ourselves. We are moving forward with our capital plans to add remelding capabilities to our North Jackson facility, and we expect to hit the timelines we talked about last April. Our liquidity position is adequate to fund our current working capital requirements, our record backlog, as well as our capital needs. We were very pleased to be recognized by a major aerospace OEM, Rolls-Royce, as a high performing supplier. And I guess as we sit here today, we remain very optimistic about our business. Based on our backlog, our success in new product development, we expect both sales and gross margins to increase sequentially through the balance of the year and into 2023. That optimism is based on the enormous efforts, talents, and resilience of our employees, who once again enabled us to overcome significant challenges and seize new opportunities. I'm personally grateful for all their contributions and for the support of our board, customers, financial institutions, and stockholders. With that, operator, we'll turn it over for some questions.
spk04: Yes, sir. Ladies and gentlemen, if you have a question or comment at this time, please press star 1 1 on your telephone keypad. Again, that is star 1 1 to ask a question.
spk05: Please stand by while we compile the Q&A roster.
spk04: Our first question or comment comes from the line of Mr. Phil Gibbs from KeyBank. Your line is open.
spk03: Hey, good morning.
spk04: How you doing, Phil?
spk03: Good. As it relates to the outlook, you still probably have some residual absorption issues from the spill. You do have some of the credits persisting, but at lower levels. Sounds like the raw material surcharge timing might be a bit of a headwind relative to what you just experienced. So as we roll all this up and there are a lot of moving pieces, your comments on margins, should those be relative to the 9.1% that you just recorded on a gap basis last quarter or are we using the 13% of something to grow off of?
spk01: I'm looking at the 12.6% excluding the spill and the grant money. As you look at margins down the road, what our expectations are, we'll be seeing higher shipments, higher sales dollars. You're right, the surcharges will be down roughly 10% based upon where we're at today. But if you look at the underlying base price increases that we've announced, we would expect to see selling prices fall in, continue to increase in this third quarter and the fourth quarter. From an operational standpoint, we expect higher activity levels, which should help us from a variable cost standpoint, but also to your absorption standpoint, all positives to the gross profit margin. So if you think about those, six or seven of them are positive from where we sit here today. The negative would be The surcharge issue. As far as absorption negatives related to the spill, there probably will be some items in the third quarter. It's very difficult to call those out today. We will if it becomes, you know, I don't anticipate that to be more than $400,000 or $500,000 in the third quarter where we can actually call out any impact related to the spill and downstream operations. And I think Steve mentioned also, again, another number that we can't really quantify is anything additional from the insurance company would flow through P&L. And of course, we would call that out specifically as well.
spk03: Okay. That's helpful, Denny. And in terms of the outlook in the back half for CapEx, I think that implies something over $10 million for the second half, and then also networking capital, you know, I would think starts to level out, but you guys tell me on that.
spk01: You're right on the capital spending. Capital spending is really difficult to forecast. You remember we were at $20 million. We've dropped that estimate to $18 million. I'm sure engineering people are cringing when they hear me say that. But I'm just looking at the supply chain and what we think will come in. That's why I mentioned it as a wild card. So an $18 million is our best estimate right now. And if that's the case, obviously we had $5 million in the first half. So you're looking at another $10 million to $13 million of capital spending in the second half of the year. And the biggest chunk there would be on the vacuum mark remelt project that we talked about. As far as working capital goes, as we ramp up, it will start to stabilize. We do expect some increases in the third and fourth quarter. Within the detail, obviously, we've had to work very diligently in the second quarter on raw materials. We've had significantly higher prices. We had to spill. We had to kind of push back and not, we didn't want to get into an availability problem. So, we're heavy from a raw material standpoint right now in our inventory. That will be moving through production in the working process here in the third quarter. So, I would expect to see higher inventories as we move through the third quarter for that reason. coupled with the fact that we have higher sales expectations as we go through the latter quarter of 2022 and into 2023. Thanks, Denny.
spk03: And then lastly, labor availability has been an issue for the industry, supply chain constraints. I would imagine a lot of that was spoken about at Farm Bureau as well. What... What have you all done to sort of overcome the challenges in the marketplace, or how do you see that all playing out? Thanks.
spk01: Well, you're correct. At the air show, that was a major subject of discussion, and it didn't matter whether you are a U.S. producer, a service center, a forger, or an OEM, or whether you were a global player in the market. This issue with labor seems to be basically around the world, so to speak. So it continues to be an issue and it will continue to be an issue in the second half of the year. Obviously what we've done is a number of things. We are using contractors and we are using outsource partners to a much greater degree than we ever did before, which is a negative obviously in terms of our profitability. But we need to do that to keep production flowing and to meet our commitments to our customers. We've also stepped up our game from an onboarding standpoint. We've become much more aggressive from a recruiting standpoint. and doing everything we can not only to attract employees to our company, but also once they're here to basically retain them. There's a lot of soft issues there that we're pushing in order to make Universal an attractive place to work, and that is having some benefits as well. But essentially, at the end of the day, like all other manufacturers, I think we have our nose to the grindstone, and we're basically bullying our way through this issue. I will tell you that there are some pockets of unemployment that are popping up near some of our facilities where some of the people we compete for labor with are reporting layoff plans, and we would hope to capitalize upon those plans in our facilities.
spk05: Thanks, Dave.
spk04: You're welcome. Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star 1-1 on your telephone keypad. I'm showing no additional questions in the queue at this time. I would like to turn the conference back over to Mr. Oates for any closing comments.
spk01: Okay, thank you. And thanks for joining us this morning. We're beginning the second half of the year with a record backlog and an especially strong aerospace market. We'll continue to seize our market opportunities as well. And we're looking forward to talking to you in October, the year's going very fast, to update you on our progress. In the meantime, be well, stay safe, and enjoy the rest of your summer. Thank you.
spk04: Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone have a wonderful day.
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