Alta Equipment Group Inc.

Good afternoon and thank you for attending the ALTA Equipment Group Fourth Quarter and Full Year 2024 earnings conference call. My name is Joel and I will be your moderator for today's call. I'll now turn the call over to Jason Dammeier, Director of SEC Reporting and Technical Accounting with ALTA Equipment Group. Jason, you may proceed.

Thank you, Joel. Good afternoon, everyone, and thank you for joining us today. A press release detailing ALTA's Fourth Quarter and Full Year 2024 financial results was issued this afternoon and is posted on our website, along with a presentation designed to assist you in understanding the company's results. On the call with me today are Ryan Greenewalt, our Chairman and CEO, and Tony Kalushi, our Chief Financial Officer. For today's call, management will first provide a review of our Fourth Quarter and Full Year 2024 financial results. We will begin with some prepared remarks before we open the call for your questions. Please proceed to slide two. Before we get started, I'd like to remind everyone that this conference call may contain certain forward-looking statements, including statements about future financial results, our business strategy and financial outlook, achievements of the company, and other non-historical statements as described in our press release. These forward-looking statements are subject to both known and unknown risks, uncertainties, and assumptions, including those related to ALTA's growth, market opportunities, and general economic and business conditions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial conditions, and results of operations. Although we believe these expectations are reasonable, we undertake no obligation to revise any statement to reflect changes that occur after this call. Descriptions of these and other risks that could cause actual results to differ materially from these forward-looking statements are discussed in our reports filed with the SEC, including our press release that was issued today. During this call, we may present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's press release and can be found on our website at .altaequipment.com. I will now turn the call over to Ryan. Thank

you, Jason. Good afternoon, everyone, and thank you for joining us today. I'd like to start by expressing my gratitude to our employees, customers, and shareholders for their continued trust and confidence. Despite a complex macroeconomic environment in 2024, ALTA Equipment Group remains steadfast in executing our strategy, reinforcing our position as a leader in the heavy and industrial equipment sector. I'll begin today with a high-level overview of our fourth quarter and full-year results before sharing insights on the current business environment and our strategic outlook for 2025. Following my remarks, our CFO, Tony Colucci, will walk through the financial details, including our cash flow performance and outlook for the year ahead. 2024 was a year of resilience and disciplined execution amid challenging market conditions. The impact of higher interest rates and oversupplied equipment markets and election year uncertainty weighed on market demand across key end markets. Despite these headwinds, our diversified business model helped us to navigate market volatility and maintain revenue levels comparable to last year. For the full year, total revenue held steady at approximately $1.9 billion, underscoring the resilience of our dealership model and the enduring strength of our product support business. In the fourth quarter, revenue declined .5% -over-year to $498.1 million, reflecting broader market trends. However, sequential growth over Q3 suggests a post-election rebound. Adjusted EBITDA for the year reached $168.3 million, a testament to our disciplined cost management and proactive strategies in optimizing our rental fleet and working capital. Entering the year, we faced a 2026 maturity wall on our ABL and high-yield bonds. In June, we proactively addressed this by successfully raising $500 million in senior second lien bonds, refinancing our senior debt, and extending maturities to 2029. This strategic move strengthened our balance sheet, enhanced liquidity, and secured patient capital to support the business through the cycle, ensuring financial flexibility as we navigate the current market environment. I'll now talk about our business segments, starting with construction equipment. The construction equipment sector faced a challenging year impacted by industry-wide oversupply, tightening credit conditions, and a slowdown in private non-residential construction activity. While infrastructure projects provided some stability, overall demand remained subdued. However, market dynamics varied significantly by region. The northern markets, particularly the Great Lakes area, saw steeper industry sales declines with double-digit contractions year over year. In contrast, Florida experienced a downturn, but fared better than the national average, highlighting the localized nature of the CE market and the diverse demand drivers across the geographies. In 2024, new and used equipment sales in our CE segment saw a .2% decline organically, a reduction of over $60 million, reflecting these macroeconomic challenges. However, organic product support revenues increased .7% year over year, driven by stronger service rate utilization. The backlog of federal infrastructure spending under the IIJA program remains a long-term catalyst with significant funds still to be deployed. Additionally, state DOT budgets in key altered regions, including Florida, the Northeast, and the Midwest, remain elevated, reinforcing demand for heavy equipment rentals and service. Our master distribution felt a similar headwind in 2024 as supply-demand imbalances and broader economic uncertainty weighed on sales. That said, we see momentum building. Channel partners are reporting stronger utilization and increased sales of environmental and specialty machines, setting the stage for growth in 2025. As the market adjusts to an equipment oversupply, we are confident that supply-demand imbalance will normalize by mid-year 2025, creating a healthier environment for new equipment sales. Additionally, our -to-sell strategy continues to be a critical tool in optimizing fleet utilization and balance sheet efficiency. Now turning to the material handling segment. The material handling segment also faced headwinds primarily due to the moderation of backlog-driven growth. The North American lift truck market experienced a decline in new order bookings as the industry worked through record backlogs accumulated in prior years. As a result, while deliveries were strong, net new orders slowed, impacting future sales velocity. ALTA's material handling revenue remained stable at $687.4 million for the year, a .9% increase from 2023, supported by sustained product support growth and stable equipment margins. However, pricing pressure, particularly in the used equipment market, presented challenges. Our warehouse solutions business also saw softness, reflecting cautious capital spending from large logistics and distribution customers. Despite these challenges, the long-term outlook for material handling remained strong. The continued growth of e-commerce, increased adoption of automation, and the transition to Class 3 electric equipment create opportunities for ALTA. Our investment in warehouse automation, fleet electrification, and enhanced service offerings position us to capitalize on these trends in the market. Now turning to the electric vehicle segment. I want to provide an update on the current status of our e-mobility business. While recent industry developments have led to questions about the broader adoption of battery electric vehicles and fuel cell electric vehicles, we continue to see steady momentum in key markets. For example, major transportation hubs are making long-term commitments to hydrogen-powered power fleets, reinforcing hydrogen's viability for high utilization applications. That said, challenges remain, particularly around charging and fueling infrastructure, cost competitiveness, and supply chain constraints. As we evaluate opportunities in this space, our focus remains on ensuring we align with technologies that provide real-world value to our customers while maintaining a disciplined approach to investing in emerging solutions. And now to 2025 operational initiatives. As we enter 2025, we remain focused on three key priorities. First, operational efficiency, enhancing profitability through cost optimization, streamlining SG&A, and improving fleet utilization. Second, disciplined capital allocation. We successfully reduced net debt by over $60 million in the second half of 2024 through rental fleet right sizing and working capital optimization. Our $20 million share repurchase program remains active and we will deploy capital opportunistically based on market conditions. And third, strategic growth in M&A. Similar to 2024, we are taking a more opportunistic stance to acquisitions in 2025, prioritizing high margin, reoccurring the business lines with a focus on expanding our geographic footprint of exclusive distribution rights for world-class products. In closing, despite market challenges, ALTER remains well positioned for long-term success. Our differentiated business model, disciplined execution, and customer-centric approach provide a solid foundation for growth. The fundamentals of our industry remain intact and we are confident that our strategic priorities will enable us to navigate short-term uncertainties while driving long-term shareholder value. Now I'll turn it over to Tony for a detailed analysis of our financial and operating performance.

Thank you, Ryan. Good evening, everyone, and thank you for your interest in ALTER Equipment Group and our fourth quarter and full year 2024 financial results. Before I start, I first want to thank all of my ALTER teammates for their hard work and dedication to our business and our customers in what was a unique 2024. More importantly, thank you for your commitment to one another in concert with ALTER's guiding principles. My remarks today will focus on four key areas. First, I'll briefly present our fourth quarter results. Second, I'll present and comment on our full year 2024 results focusing on key themes and the factors that led to the -on-year reduction in EBITDA. Third, I'll provide guidance for 2025 adjusted EBITDA and discuss the assumptions that underpin the annual guide. Lastly, I'll be reiterating our cash flow profile, specifically resetting for investors why our -to-sell business model allows us to cash flow throughout the cycle. As the 2023 and 2024 comparative is indicative of that theme. Before I get to my talking points, it should be noted that I'll be referencing slides from our investor presentation throughout the call today. I'd encourage everyone on today's call to review our presentation in our 10K, which is available on our investor relations website at ALTG.com. With that said, for the first portion of my prepared remarks and as presented in slides 10 to 12 in the earnings deck, fourth quarter performance. For the quarter, the company recorded revenue of $498.1 million, underpinned by a notable $69 million sequential increase in equipment sales when compared to Q3, indicative of a return to the equipment markets by our customer base post-election. While this increase was a welcome relief from the first three quarters of the year, gross margins on equipment sales were weak as the overhang of supply in the markets continued to do pressure pricing in Q4. Additionally, given the uptick in demand in Q4, we made prudent inventory decisions to ultimately relieve the balance sheet by taking lesser than average margins on a certain subsection of the used equipment, something that we don't expect to reoccur going forward. While the equipment sales lines outperformed our expectations, part service and rental revenues underperformed for the quarter as rental equipment in the north came back into the quarter, which we believe to be more of a timing issue than anything structurally wrong in our business, as the midweek holiday schedule impacted PTO for our technicians and for our customers more acutely than in previous years, ultimately leading to reduced work days in the quarter when compared to years past. On the cost line, expense optimization initiatives that started earlier in the year began to take hold as investors should take note of the sequential reduction in SG&A expenses realized in Q4. On a run rate basis, our calculations suggest these cost optimization efforts have yielded approximately $8 million on an annual basis. In summary, we recorded $40.7 million of adjusted EBITDA for the quarter. Now turning to our full fiscal year, 2024 financial results. The company recorded $1.88 billion in revenue in 2024, effectively flat when compared with 2023 revenue. On the adjusted EBITDA line, the company achieved $168.3 million to the year when compared to $201 million pro forma adjusted EBITDA in 2023, effectively creating an estimated $33 million gap between 2023 and 2024. When we look back at the anatomy of that gap, the explanation is fairly simple. One, given 2024 market conditions previously noted, we didn't sell as much equipment in 2024 when compared to 2023, with the issue most acutely present in our construction and master distribution segments. All told, a reduction of approximately $100 million from pro forma levels of the 2023 in new and used equipment volumes impacted EBITDA by roughly $13 million. Number two, given the supply overhanging the equipment markets and the competitive environment for deals, gross margins on equipment volumes we were able to execute on were compressed year over year, and that margin compression on new and used equipment impacted the EBITDA line roughly $24 million in 2024. These two factors totaling $37 million were offset by previously mentioned cost optimization efforts, as well as variable cost relief on lower sales volume, which totaled approximately $7 million for the year. To conclude, the reduction of our 2024 adjusted EBITDA was almost exclusively related to the supply demand dynamics and the macro factors that were at play in the construction of equipment markets this year, and we are proud of how the business reacted to these factors. A quick check in on the balance sheet as of year end, and as depicted on slide 15. We ended the quarter with approximately $330 million of cash and availability on a revolving line of credit facility, certainly a comfortable amount of liquidity to navigate any business climate that may be ahead of us. Last point on 2024, as it relates to the balance sheet and optimization efforts, I want to point investors to slide 19 and note that at the end of Q2, when we realized that we were in a different demand environment than what we had planned for, we outlined for investors that we expected to reduce the size of the fleet by $40 to $50 million and de-lever the balance sheet as much as possible by year end. I'm pleased to report mission accomplished, and as noted on slide 19, we were able to flex our fleet by $45 million, which was the primary factor in us paying down funded debt by $61 million in the second half of 2024. I'll provide more detail on how we were able to accomplish this when I present our cash flow model momentarily. Moving on to the third portion of my prepared remarks, 2025 adjusted EBITDA guidance, which was included in today's earnings release. In terms of the guidance range itself, we expect to report $175 to $190 million of adjusted EBITDA for the full year 2025. A few observations on the guide, and I'd like to point investors to the bridge provided on slide 20 of our presentation, which presents the path as we see it from our 2024 adjusted EBITDA to the midpoint of the 2025 guide. First, I should point out that the guide does not have any aggressive assumptions on equipment sales growth, specifically in the construction segment. That said, between better volumes in our material handling and master distribution segments and expanded gross margins overall, we have calculated this positive impact to EBITDA at $7 million. Investors should keep in mind that 100 basis points of gross margin on a billion dollars of equipment net of direct selling costs is approximately $7 million of incremental EBITDA for ALTA. Second, we expect to drive organic growth and product support revenues, much like we've done historically, and more notably, we expect to be more efficient in product support in 2025. Our confidence here is based on technician productivity efforts that began in 2024, which will yield less non-vulnerable time and better profitability in 2025. Between these two items, we expect an incremental $9 million of EBITDA coming from product support. Third, as mentioned previously, we believe that the cost out initiatives implemented in 2024 yielded an $8 million run rate in savings. Estimating that we realized half of those savings in 2024, this leaves the other half or $4 million to be realized in 2025. Fourth, when it comes to rental, our growth expectations here are minimal. As we look to drive physical utilization year over year versus getting aggressive on any rate increase assumptions or on the size of the fleet. Lastly, we have general inflationary type costs on our impacts in our cost structure each year associated with raises for employees, increases in employee benefits, and other selling expenses, which are a headwind to the aforementioned positive factors influencing EBITDA. I would caveat that all the factors predispose a generally supportive macro environment, which seems to be changing daily. And to the extent that, to the extent more than typical macro dislocations occur, some of our assumptions may prove false. To summarize, we may remain confident in our business model and in our long-term prospects, and the team at ALTA is committed to the execution of this plan and getting the business back to a more profitable growth path in 2025. Moving on to the last portion of my prepared remarks, I'd like to focus investors on slides 13 and 14 from today's earnings presentation, which present ALTA's cash flow performance in 2023 and 2024. As an introduction to the slides, in the five years of being a public company, one of the items that I spend more time dealing and discussing with investors is ALTA's cash flow profile, especially as it relates to our rent to sell business model, which is admittedly unique and requires a second level understanding. Slides 13 and 14 aim to help equity and debt investors alike with this understanding and presents the rent to sell model in a more simplistic way than previous iterations. First, slide 13, which provides the definitional foundation of rent to rent fleet versus rent to sell equipment. As noted on the slide, rent to rent is treated and invested in via maintenance capex like a traditional fixed asset. Notably, rent to rent fleet is meant to be health or the long term and the return on investment in the rent to rent fleet will come via the rental stream on that fleet over many years. As opposed to rent to rent, rent to sell equipment should be viewed more like an analyst would view general inventory as it might be temporary or as it is meant to be a temporary or short term investment in equipment to take advantage of market demand for slightly used heavy construction equipment. The return on investment on rent to sell fleet, similar to new equipment, is primarily made through the ultimate sale of the equipment versus the rental stream earned on the equipment during its time on our balance sheet. Most importantly, like inventory, minimal to no maintenance capex is required on the rent to sell fleet. Lastly on slide 13, you will note the variation of the rent to sell equipment levels in 2023 versus 24. Important to note that in 2023, we are planning for a strong 2024, which ultimately was not the case. Said differently, in 2023 we flitted up for a certain level of demand we were experiencing and expected to continue in 2024, but in the midst of 2024, when it was clear that demand levels were lower than what we had planned for, we prudently reacted and reduced our rent to sell equipment efficiently and profitably. Overall, the juxtaposition that was 2023 versus 2024 presented on slide 13 is a great example of the flexibility of our rent to sell business model. Moving on to slide 14, which presents an updated way for investors to deserve our cash flow performance in a simplistic manner. The first layer of the analysis is to isolate free cash flow prior to rent to sell or RTS decisioning, which allows us to remove the complexity with the rent to sell equipment from the analysis. To walk, now walking down the analysis on slide 14. First you will note that the analysis starts with our traditional adjusted EBITDA calculation, but has additional non-cash add-backs that come directly from our cash flow statement. This adjusted EBITDA is then reduced for the gain loss on the sale of rent to sell fleet, a figure that comes directly from our construction segment financial. Next we burden the calculation for net PP and ECAPX, needed for traditional operational fixed costs and cash taxes, two items that must be attended to annually. Going down the slide, next we burden for pro forma maintenance CAPX associated with the rent to rent fleet, which again is treated as a traditional fixed asset. This first layer of the calculation ultimately yields free cash flow prior to rent to sell decisioning. Next we bring in the rent to sell cash activity for the year, which is presented in a simple cash in and cash out manner, all sourced directly from our GAP financials. Note that as previously discussed on slide 13, in 2023 we made the decision to fleet up, which depressed free cash flow after rent to sell decisioning, while the flexing down of the fleet in 2024 allowed us to drive free cash flow after rent to sell decisioning in 2024. As you will know, we had a better free cash flow performance in 2024 versus 2023, despite the notable reduction in EBITDA year over year. In the end, free cash flow after rent to sell decisioning is what is left before we service debt and make other capital allocation decisions. To conclude the presentation of the slide, we bring in cash interest to provide a coverage ratio that you will note has been nearly two times in each of the past two years, a comfortable level on that ratio. In summary, free cash flow after rent to sell decisioning produced in each of the past two years, which encompass two extremely different operating environments, the company has plenty of cash flows to service its current debt levels and still have a different operating system and additional cash flow to allocate elsewhere. Finally, I would note that the average cash flow available for equity investors in 2023 to 2024 was approximately $45 million, which means that recent trading levels in the stock would suggest that ALTG common is trading at a 30% free cash flow yield and below one turn of EBITDA. Last point on slide 14 is that this analysis is fully reconcilable to our gap-based financial statement, our gap-based statement of cash flows, and that reconciliation is available in appendix B of our earnings presentation, which I encourage investors to digest and inquire on to fully understand ALTG's cash flow and financial profile as the uniqueness of our business model and gap requirements can sometimes be difficult to navigate in determining the business' true cash flow capability. In closing, again, I want to thank my teammates at ALTA for your commitment to our business and to each other throughout 2024. You embodied our guiding principles in a challenging environment, and I'm proud of all of your efforts. To our shareholders, we appreciate your confidence and look forward to driving shareholder value in 2025. Thank you for your time, and I will turn it back over to the operator for Q&A.

Thank you. We'll now open the line for questions. If you'd like to ask a question at this time, please dial star 1 on your telephone keypad. If for any reason you need to remove your question, please dial star 2. Again, to ask a question, dial star 1. As a reminder, if you're using a speakerphone on today's call, please remember to pick up your handset before asking your question. We'll pause here briefly to allow questions to generate in the queue. The first question is from the line of Matt Somerville with DA Davidson. Your line is now open.

Hi, there. You've got Canyon Hayes on for Matt Somerville tonight. Thanks for taking our questions. You had already moved it to a different degree in the guidance. I just wanted to double-click a little bit on the equipment sales volume. What's the sort of underlying assumption for price capture imbued in that guide? Along those lines, what are the base assumptions within each of all of this market? Should we be assuming this guide assumes an inflection in any degree or any help there as far as underlying growth rates would be helpful?

I think, Canyon, the way that we're thinking about it and to go segment by segment, one is it's important for everybody on the call to understand kind of the impact that was 2024. And we'll start in the construction segment. Whereas Ryan noted, we had markets like Florida and upstate New York that were down 10 to 15 percent, and a market like Illinois down 20 percent just selling equipment. So it's important to understand kind of the impact to the downside that happened to appreciate kind of what the guide represents. So overall, in the CE segment, we're not making any grandiose prognostications, if you will, on the size of the market in 2025 versus 2024. We do think that given the supply overhang sort of melting away here over the first half will allow us to be more competitive from a market share perspective. So even if the markets are off a little bit here in 2024, we're thinking flattish at least because we can potentially take some share back. In the material handling, and then that's not at all to say anything about what I mentioned on margins. In the material handling side, again, modest low single sort of growth there where we know that we've got a half a year or so of backlog. Some of that is at risk, maybe in the back half, but we think that the back half is going to be stronger bookings-wise than the first half, as Iser Yeles mentioned. So but modest low single digit sort of numbers there in the material handling. On the master distribution side, again, we've kind of gone back to an average of the last two years. That's more of an asset-like master distribution agreement business, right, where they're more of a broker in between sub-dealers and OEMs. And the way that we're thinking about sales there is sort of the average of 23 and 24, which puts that number at a 20% sort of -on-year increase. The nominal dollars aren't as big given the size of the segment, but that's what the guide is based on.

Great, thank you. And with -to-sheet leverage at 4.7, how should we think about kind of immediate actions and prioritizations to bring that leverage lower and maybe what you're thinking about in the -on-year leverage profile?

Thanks. Yeah, sure. I think, you know, we did a lot throughout the second half in terms of being mindful of the leverage. And I think of leverage on a nominal dollar basis sometimes versus just the leverage ratio. If you look at slide 15 in our deck, a year ago, we would have been sitting at mid-3s and now we're mid-4s. And that gets to the -to-sell sort of model that I laid out for investors here, which means that's all to say that the leverage ratio can be fleeting. But we worked hard to kind of take care of the nominal leverage. So to get the leverage ratio down, we'll continue to, you know, pour cash flows against the debt as they come in and be mindful of the leverage. We have no grand intentions to grow the fleet, -to-sell or -to-rent this year. And so there should be some cash left over to pay down nominal debt. How EBITDA plays out, we've given you kind of our prognostication there, and so we're hopeful that we can have, you know, some accretion on the leverage ratio. I would also point out for investors that we've provided a new slide on tangible asset coverage in slide 16 that is another way to think about the leverage profile of the business where we believe that the debt is covered by, you know, over $250 million on a fair market value basis.

Great. Thanks for the detail.

Thanks, Kenny.

Thank you. The next question is from Stephen Ramsey with Thompson Research Group. Your line is now open.

Hi. Good evening. I wanted to start on the product support operating expenses moves. Maybe can you clarify how much you have already done in that area to make that, those business lines more efficient? How much of the guide is based on what you've done versus what you plan to do in 2025?

Yes, Stephen, I think, I think of it in two ways. The cost out of the $8 million, that was more fixed cost sort of administration expenses. So I would say that that's done, but on, let's just say the first kind of wave, if you will, is done. The rest that's left in product support is sort of embedded in the guide and is started in earnest probably in Q4, and then we expect to realize some gains in 2025 related to technician productivity, and this is where things like training, rework, non-billable time, and just being more efficient or productive with every hour and price realization, that is all yet still out there, I would say, and that's one of the bars that's in our bridge here in the slide deck. That would be bar number three, parks and service efficiency. So that's a go get for us in 2025.

Okay, that's great. And then I wanted to think about for construction customers, purchasing equipment, how you think that unfolds in 2025. Do you think the key lever there is optimism around in-market activity? Clearly, that's somewhat tied to interest rates, or do you think it's more about borrowing being more conducive to purchasing, or I'm sure it's a mix of both, but curious how you're assessing that backdrop?

Stephen, I'll weigh in. Maybe Ryan might have a thought here. I think so much of what we saw and observed in 2024 was what we believe to be kind of sentiment-driven, uncertainty related to the election, and that's gone. We saw the pop that we were kind of expecting in the fourth quarter relative to our customer-based committing to capital assets. Now, whether it continues in the face of additional uncertainty with what's going on tariff-wise, is creating a bit of a cloud. What I would say is what we're observing in our construction segment is sort of a tail of two customer bases. One is those that are DOT infrastructure-based are not as much tied to the cycle or interest rates. Those projects are fully funded. We feel pretty bullish about that side of our construction business, whereas on the private non-res projects, that's where the pressure sort of continues.

All right. Then last one for me, I'm curious your take on the warehouse solutions business, maybe the context of where it stands versus the prior peak, and then what your outlook on this business is for 2025.

Good evening, Stephen. This is Ryan. I'll take this one. Relative to the prior peak, we think that we can get back there in the next probably 12 months just through organic growth. We are excited about that business segment. We know that that market is forecast to nearly triple by the end of the decade. We believe that it could be a powerful part of our platform as our material handling customers embrace automation. We're committed to it. We think long-term we can really grow that business both on an organic and potentially an M&A basis. Our near-term goal is to kind of get back to that peak level from previous years.

Yes, Steve, just to maybe weigh into, we won't give guidance on peak logic specifically, but we've got kind of a reinvigoration and a renewed kind of stance on that business, and we're in it for the long haul.

All righty. Thank you.

Thank you. The next question is from Ted Jackson with Northland Securities. Your line is now open.

Thanks. My questions have all been basically answered, but I was curious, Tony, and this could just be something wrong with my model, but did you do any reclassifications of anything or restatements of anything in the, you know, from in historic periods? Just because things in my model aren't footing, and when I go back into... Ted, if you're...

Ted, we broke out -to-sell, -to-sell gain... I'm sorry, -to-sell capex and proceeds between investing and operating cash flows, and we broke those out from -to-rent, so there's now two lines where there used to be one, and that may be... I

saw that, but my... No, I know, but it's nothing that would change like your historic net income on any given period because my fourth quarter floats, and when I look at the first three quarters of it, it floats, but it doesn't... Okay. All right, well, that answers it for me. Thanks. Thanks, Ted.

Thank you. There are no further questions, so as a final reminder, it is star one if you'd like to ask a question.

I think, operator, that would conclude the analyst questions, and we can conclude the call here. Thank you, everybody, for joining, and we look forward to talking to you all after Q1. Thank you. Good evening.

That concludes today's call. Thank you for your participation. You may now disconnect your lines.