American Vanguard Corporation

Greetings and welcome to the American Vanguard fourth quarter and full year 2023 conference call and webcast. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bill Kuser, Director of Investor Relations. Thank you. You may begin.

Thank you very much, Diego, and welcome everyone to American Vanguard's fourth quarter and full year 2023 earnings review. Our speakers today will include Mr. Eric Wintemute, chairman and CEO of American Vanguard, Mr. David Johnson, the company's chief financial officer. Assisting in your questions, Mr. Bob Tregell, the company's chief operating officer, Mr. Don Goldoni, the Chief Transformation Officer, and Tim Donnelly, the Chief Administrative Officer. Before beginning, let's take a moment for our usual cautionary reminder. In today's call, the company may discuss forward-looking information Such information and statements are based on estimates and assumptions by the company's management and are subject to various risks and uncertainties that may cause actual results to differ from management's current expectations. Such factors can include weather conditions, changes in regulatory policy, competitive pressures, and various other risks that are detailed in the company's SEC reports and filings. All forward-looking information represents the company's best judgment as of the date of this call, and such information will not necessarily be updated by the company. Additionally, bear in mind that financial information that we discussed today is subject to the completion of a full year 2023 audit process. With respect to the filing of our Form 10-K, We are still in the midst of completing documentation and will likely be filing with the SEC for an extension to the due date under Rule 12-B-25. Thus, the 10-K will be filed within 15 days after March 15, 2024. With all that said, I turn it over now to Eric Wintemuth.

Thanks, Bill. Hello, everyone, and welcome. to American Vanguard's full-year 2023 earnings call. I appreciate your continued support and interest.

Today, I would like to cover four topics. All right. Excuse me. You may have muted yourself. Pardon me? Sorry. Go ahead.

Okay. First, as you'll see on slide four, first, our four-year performance with particular note on how we rebounded in Q4. Second, current market conditions, which are stable. Third, our sound business fundamentals. And fourth, our initiative to unlock American Vanguard's full value. Before I get to the last point, I will have David give us an update on our financial performance. When we last spoke in January, we gave you performance targets for 2024. For the reasons I will outline today, we are still targeting 24 net sales to increase by 8% to 12% over 2023. However, we are now raising our target for adjusted EBITDA to fall between $70 million and $80 million. With that kind of performance, we should receive a higher valuation than what we are currently seeing in the market. As you well know, our stock has historically traded at over 10 times EBITDA. And now, if you use net debt plus market cap and divide it by 75 million, the midpoint of our 24 EBITDA target, we are currently trading at under six times. With a strong balance sheet, stable markets, and after having de-risked supply issues, we are poised to enhance shareholder value this year. Further, I'm pleased to report in summary that we were able to accomplish in Q4. At this point, I can say definitively that Q4 was in fact a rebound period for us, as you will note on slide five. Due to global destocking activity, a glut of generic products from China, and supply issues of two of our leading products, Aztec and Dactyl, our performance for the first nine months of 2023 was below expectations. With the supply chain mended, two of our high-margin products in hand, and a subsidence in G-stocking, we were able to record 8% higher sales in Q4 as compared to the prior year. I will also note that, with respect to Aztec and Dactyl, we have dual-sourced the supply of raw materials and intermediates, thereby ensuring continuity and availability going forward. Over the course of Q4, our working capital and balance sheet improved towards more normal levels. With higher sales, we reduced inventory to $220 million, generating cash from both sales and customer prepay, reduced net debt to $128 million, and increased borrowing capacity to $112. In the process, we improved our debt to EBITDA ratio significantly to land comfortably below our target of 2.75 times. In the short term, this will reduce our interest rate by, at a minimum, a half a percent. Further, a stronger balance sheet and improved liquidity both enable us to allocate cash judiciously and provide a firm foundation for operating the business in 24. That brings up the second area of focus, current market conditions. Cover this on slide six. As you know, grain, particularly corn and wheat, also soybeans, are global commodities and their prices are influenced by global factors. In 2023, Brazil passed the US as the largest supplier of corn and soybeans in the world. With grid yields and increased supply from Brazil, prices for these crops have declined. For example, the price of corn in the U.S. has dropped nearly one-third since early last year from $6.38 a bushel to about $4.25 per bushel. That said, the farm economy has been strong for the past two years, and demand for crops and crop inputs remains stable even as commodity price levels issue. At the same time, biologicals are continuing to gain traction with growers. These inputs typically contribute to soil health and appeal to growers as a sustainable long-term investment in their most valuable asset, that is, their land. We are also seeing continued interest in products that have a softer environmental footprint. With respect to distribution channel, the stocking frenzy of 2023 seems to have worked itself out. Growers still need inputs, it's just that they will tend to buy them closer to season in order to minimize carrying costs. This is true over the length of the distribution channel. Also, as evidenced by our Q4 sales, distribution can and will purchase crop inputs even in advance of the planting season. Further, demand for our end-use products in the U.S. was stable in 23 on a four-year basis. That said, we're seeing a higher level of sophistication and discipline in inventory control at the retail end of the distribution. Some of our competitors have softened their guidance for 24, noting an inventory overhang of their products in the distribution channel. The state of oversupply largely affects South America, particularly Brazil and Europe. By contrast, we are not facing blip within our major markets. We are a niche player in Brazil, and our sales into that country are minimal. Further, as I mentioned on our last call, Agchem sales in Brazil dropped by an average of 33% in 2023, while ours declined by only 4%.

Similarly, we do very little business in Europe.

Let's turn now to the third element of our discussion on slide seven, that is American Vanguard and its business fundamentals in light of the market conditions that I just outlined. With respect to last year's destocking and our industry's poor performance, it bears repeating that even with the unavailability of two of our high-margin products, we outperformed the ag chem market as our net sales were down 5% year over year, while the industry average was closer to 13%. In other words, we were not affected as materially by destocking or, for that matter, Chinese generic pressure. And as I say, procurement has been rationalized by the channels. Also, we did not oversupply the market in 23. That is, we sold what the market demanded without price reduction. In fact, we have maintained brand value and legitimacy in the eyes of our customers. This confidence is reflected in their continued commitment towards the significant prepayments that many of our U.S. customers made in Q4. Given our favorable inventory position and the channel of distribution, current sales activity, and our customers' outlook, we are targeting a sales increase of 8% to 12% and adjusted EBITDA of $70 to $80 million in 2024. At this point, I'd like to turn the call over to David for his comments on our financial performance. I will then return and give my thoughts on unlocking value of American Vanguard. David.

Thank you, Eric. I will begin my comments with a recap of full year 2023 during the course of which I will present important metrics for Q4, as well as working capital and liquidity analysis. As you will see from slide eight, our overall sales for the full year declined by about 5% from 610 million to 579 million for the reasons that Eric has already outlined. You can see from the graphic depiction that U.S. crop, with the unavailability of Aztec in the first half of the year, and Dactyl for most of the year declined by 7%, while both U.S. non-crop and international declined more modestly. During the fourth quarter, with respect to U.S. non-crop, we are observing a more stable sales trend following the destocking efforts of retailers that began in the beginning of 2023. With regard to international, the bar graph tends to bear out the fact that oversupply of generic products did not materially affect our business in the regions that we serve. Turning to slide nine, with a sales decline of 5%, our gross profit declined by about 7%, and gross margin percentage decreased from 32% to 31% year over year. As you may know, for our U.S. crop business, carries our highest margin product, many of which we manufacture in our factories. The drop in sales of high margin products such as Aztec and Dactyl would necessarily put pressure on gross margins. As you will see on slide 10, our operating expenses in 2023 edged up to about $156 million from about $151 million in 2022. This was due to increased selling expenses both in South America to support our new business in Ecuador, the largest banana-growing country in the world, and increased travel coupled with additional R&D and regulatory costs, which represent a continued investment in our future with a concurrent defense of our registrations. These increases were partially offset by a decrease in G&A expense, largely due to reduced incentive compensation as a result of overall financial performance. With respect to cash flow as per slide 11, despite a negative change in working capital, which occurred due to slow sales and expansion of working capital primarily driven by the accumulation of inventory, we closed the year with net debt of 128 million. I will cover liquidity in a few moments. Looking at our statement of operation on slide 12, you will note that our drop in sales with slightly higher OPEX translated into lower operating income, lower income before tax, lower income tax, and a consequent net income of about $7.5 million, or 26 cents per share. Bear in mind, as Eric has intimated, for the first three quarters of 2023, we generated very little net income. That's what you're seeing on slide 12. As far as net income in EPS is concerned, was generated in Q4. Turning now to working capital. On slide 13, you will see our inventory trend on a quarterly basis since 2021. Note that as compared to 2022, we took a step up in inventory during 2023. Here again, with unavailability of certain key products and lower demand due to destocking in the distribution channel, we ended up accumulating inventory at the start of the year. We turned the corner in Q4 as more normalized market conditions returned. At 38% of net sales, our ending inventory is higher than we would like. We're targeting to get inventory levels down to 195 million by the end of 2024. Now let's take a quick look at debt and liquidity as per slide 14. The early strain that was apparent in the first nine months of 2023 took a turn for the better in the fourth quarter, where we recorded a significant drop in borrowing, from 218 million in Q3 to 139 million in Q4, and a concomitant increase in borrowing capacity from 29 million to 115 million. Year-end numbers are approaching historical averages. However, with our targeted performance in 2024, we would expect to have an even stronger liquidity position at the year-end. That sums up my detailed comments. On the whole, while 2023 started quite slowly, in the face of adverse market and supply conditions, and pleased with the progress that were made in Q4, during which we significantly improved the balance sheet. This gives us a great foundation for 2024 and beyond. With that, I'll turn the call back to Eric. Eric?

Thank you, David. Let me now turn to the fourth part of my comments, namely unlocking American Vanguard's full potential, as seen on slide 15. You may recall in our January call that Coe Street Capital asked me, in effect, where do you go after you have returned to more normalized historic performance? What's next? Similarly, one of our analysts posed the question of, how do we unlock the elusive value that is inherent in the company? Let's discuss the answer on slide 16. Along with our advisor, Carney, Our team is driving a business transformation initiative to improve operating leverage and move adjusted EBITDA to 15% of net sales by 2026. We call the process of defining the target Pathfinder, as you see on the slide. This initiative should translate into $15 million or more in additional EBITDA on an annualized basis. This is not a new endeavor. As you may recall, we announced the transformation initiative at the end of Q2 last year. At that time, we had also identified we could achieve a $15 million benefit through operational and commercial changes. With Carney's help, we are validating the initial assessment and defining a plan by which to obtain this improvement on operating leverage. As per slide 17, we expect that about 60% of this benefit will come from operational changes in manufacturing, planning, inventory, and procurement, including freight. About 30% will likely come from commercial areas, such as pricing, sales expenses, product portfolio, and R&D funding. And another 10% will likely come out of G&A. We'll implement these changes over the course of the next two years, and as I say, should realize the full benefit in 2026. In short, we'll be applying sound business principles to all that we do with the intention of returning value to our shareholders. That is our first priority. Turning to slide 18, as part of the transformation initiative, We are reassessing our working capital allocation, including with respect to our three growth platforms, Core, Green Solutions, and Sympath. I'll pause to note that with respect to our core business, our team continues to launch new formulations and mixtures, for example, our Xelo and Rendi herbicides. In the domain of Green Solutions, we reported a 10% increase in sales year over year, with new products like BioWake, the city's lubricant that is being used currently in corn, soybeans, peanuts, and cotton. And now, BioWake Prime, our first corn rootworm biologics exercise. In connection with Sympath, we have validated this technology and proven its mechanical functionality, its use with both solids and liquid inputs, its potential in both the U.S. and Brazil markets, and most recently, as a yield enhancement tool in field trials involving prescriptive versus conventional application. The SimPass platform is ready. Our product portfolio is continuing to increase. At this stage of maturity, we expect that we will incur reduced development costs for SimPass going forward and are now positioned to capitalize on market demand as grower appetite for equipment and prescriptive application technology increases. In closing, we have a solid business with a strong balance sheet, broad geographical reach, and three growth platforms. We are poised to return to greater profitability in the short term. And with our initiative to unlock American Vanguard's full potential, we are investing in returning greater value to shareholders. This is an exciting time for the company, and again, we thank you for your continued interest and support. With that, I'll turn that back to the operator for any questions. Diego?

Thank you, sir. And at this time, we'll conduct our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start keys.

One moment, please, while we pull for questions. And our first question comes from Scott Fortune with Roth MKM. Please state your question.

Good afternoon, and thanks for the questions here. Wanting to step through, I know you were kind of focusing on looking at the growth platforms going forward here, and you've highlighted that for the near term. Just want to get sense for now where I guess specifically focusing on SEMPASS and the confidence there of this really starting to take the adoption where you're at as far as the number of SEMPASSes in the fields now. And that ramp of, you know, you mentioned new products and productions for the CEMPAS going forward here. Just kind of step us through as you look out over the next couple of years, the opportunity, you know, CEMPAS is taking a while to get here, but the opportunity now for that going forward that would be helpful.

Yes. And as far as the numbers, we're still delivering equipment now, but I think we're somewhere in that 240, 250 systems range. that are in play currently. And as you know, we're growing our platform. We did get some, have some approvals from EPA for this season that we were looking for. We are, we have some products that we've got teed up for 25 that we think we'll have in place. One of the things we were able to complete in 23 and have received the results from was specifically with counters, a prescriptive application with nematodes. And we were seeing an average 10 to 12 bushels increase in those areas where nematode pressure was present. And then we also tested product to see where there wasn't nematode pressure and found what you might expect was essentially very little benefit. So, modeled out, mapped out different fields and we've seen the results that we would expect from prescriptive application. Similarly with zinc, and not just what we're modeling, but we're modeling on soil type as well as nematode count. As you might imagine, sandy soil has the highest level of nematodes. Within zinc, we also found that there are certain soil types where zinc deficiency is an issue, and we've seen, again, teen type increase in on a micronutrient, which is relatively inexpensive compared to the insecticide application. We think we've got some potential pickup value on zinc. Iron, we have not figured out exactly where the benefits are, at least for the 2,000 acres that we did. So it's growers through their agronomists to write prescriptively applications and being able to demonstrate the return on investment is kind of what is the important part to convincing people that they can do it. In Brazil, we did get material out in Counter, some of them prescriptively this year. Counter is a big upside for us there because it is registered not only Okay, I appreciate that color.

And then one more for me. Just kind of stepping through the transformation plan, you've kind of unpacked that a little bit. You were going to provide more color on the KPIs and targets of focus for that. But I just want a clarification. The additional savings, the additional $15 million, that cadence, you mentioned timeline through 2026 to fully optimize all that. Is that 15 million on annualized basis, or that's going to be taken over time through 26? Just kind of clarification there, and then just kind of a little bit more color on the transfer of nation plan around the KPIs that you guys have been suggesting.

So what we did is kind of looked at 24 and said, what's our gap to getting to 15 percent? And as you know, 24 had improvements that we baked into it. and came up with this gap of 15, 17 million dollars. And so what Carnies is doing for us is creating that pathway, as we said, to getting us to that level. So what we identify in the 24 year should be opportunities to expand that number in 25 and 26 with the target again of moving moving us up to getting to that 15% of net sales. So obviously, we expect 25 and 26 to grow, and therefore, that's what we're saying, 15 or more. But we're tying it to the year that we have in front of us, 2024. With regard to KPIs, Don, if you want to just highlight kind of where we're at with our KPIs, since you're unleashed on the team now, and I think you're getting ready to to get ready to kind of put those in place.

We are. Thanks, Eric. Thank you for the question. This is Don Goldoni. So on KPIs, we are looking at both financial and operational KPIs. The financial ones are certainly the ones that you would expect, gross margin dollar performance of the business as a whole, EBITDA, and varying forms of operating expenses. Now, we take those and then we want to push those out into the business units. That's done normally and always through the budgeting process. And then we want to go one double-click further on that and then cascade those business unit targets down into key roles so that each individual that has a responsibility for driving the performance of the business knows exactly what their targets are. Again, this is not new into the business. We've done that historically, but we haven't necessarily done it as thoroughly as we're going to do it in this past. Another type of KPI are the operational KPIs. So, raw materials for a manufacturer. So, the raw material efficiency is very important for our business and is a lever of driving profitability. So, we are going to have an approach for how we measure the raw material efficiency in the business. And it already is part of our continuous improvement process to get better in that regard. But marrying up those KPIs across our top, say, 10 products and a continuous improvement effort allows us to know where we need to be focusing more of our attention. There's also improvements that we're seeking to make on forecasting, both on the manufacturing side and the commercial side of the business. So making sure that we're manufacturing to the plans that we intend and and that those plans are informed by the commercial forecasts of the business. Those are some examples of KPIs that we're working on. And then also, as I said, driving these KPIs to the business units and from the business units into those key stakeholders, the roles in the organizations. that are responsible for each one of those. Not something necessarily that's new, but certainly much more exhaustive process. And it is something, as Eric just mentioned, that I'm working on with the presidents of the business presently.

Okay, I appreciate it. And then one last quick one for me, sorry about that, but just wanted to step through, provide a little bit of color. I know you said the different geographies, the U.S. is doing well here. You didn't mention much in Latin America. Just kind of unpack 2024 as some of the pressures still remain in South America and Latin America, which doesn't affect you as much, but just kind of help us understand the strength in different geographies and where there might be some pressure still.

So Mexico is very solid. Certainly there is generic pressure in all the markets. But we do have some kind of unique products in New Mexico. And there were inventories, and particularly kind of globally, if you look at the broad application of herbicides. I think that's probably a big glut. There were certain insecticides that I think were loaded up that got into the generic world. Central America, we probably had more generic pressure there where we saw products that, as the Chinese price of a lot of the commodity products came down, we saw some pressures certainly on inventories that we had. And not as much in Brazil, because Brazil we have We have predominantly was kind of a fruits and veggies business that expanded into corn and soybeans with with counter. Um, but again, not not sitting with with generic generic pressure as much. From a timing standpoint that he's talking about that that I think was universal. I think every virtually every. Thank you for the question. And our next question comes from Chris Capsh.

With Loop Capital Markets, please state your question.

Yeah, hi, good afternoon. I have a few questions. So one regarding the outlook for 2024, given that you had these two key products, that were impacted by absence of availability of actives last year, just curious about what the expectation is for those products baked into your overall 24 expectation? Would you expect just a normal demand environment or will you see outsized growth because of restocking of those products throughout the channel in 24? Any color there?

So, I mean, we started selling asset in Q3 and Q4, so part of that was building back some inventories because the inventories were down 5% or somewhere in that range. So we did have good demand. We continue to have good demand now as the season is unfolding. We're not seeing any inventory build, so we would expect to have a strong second half of the year as well. Dagdahl was pretty much completely gone. We did and do have ongoing orders. filled all the orders yet, but we did have been supplying between fourth quarter and first quarter a fair amount. We are expecting, I mean, the demand does look strong going forward. The product was growing for us, and so how it looks good certainly so far. So I think we're looking at an unwise line for both sides. That said, this corn rootworm pressure, I think Aztec is kind of the key product where pressure is heavy. And so we have grown, we grow, I guess, with the corn rootworm pressure that's in the field.

Got it. That's helpful. And then on the Pathfinder and the focus on, I guess, 15% EBITDA margins 2026, I'm curious if that bogey, if you will, is based on the portfolio as it exists today, or is there any instances where you're looking at a product line or a suite of products that you just structurally can't see it getting there and therefore might be subject to, I don't know, rationalization? Or is this sort of improvement expected to be kind of across the portfolio by 26.

We're not making, we did not make any acquisitions per se into the model. We do have kind of ongoing projects that we do in our core business. both through licensing and combination products that are part of that. And, of course, as we expand the products in the portfolio for SimPass, those are targets that we've identified going forward for the next couple of years. But as I said, we did not fake acquisitions into the model.

Well, just as a follow-up, what about rationalizing products, meaning just products that are lower margin, dragging on the overall mix, and don't really see a pathway to get to that or to help the overall company get to the 15%? And then what also is embedded in the growth rates of the more novel products growth platforms, and maybe just more generally, when might you expect to kind of update the growth targets for those product suites?

Thank you. So with regard to product rationalization, yes. I mean, we are, as part of what we're identifying, we're identifying quality of business, return on working capital. So those products that do have lower margins, or won't be emphasized the way we want to focus our team on our higher margin products and build those. So that is part of the process that we're building. Of course, we're looking to improve both our manufacturing outputs as far as yield, and then combine that with working on purchasing power to lower our cost of goods. And right now is a pretty good time as we saw prices spike 22 during the pandemic. We are seeing a softening back on a number of these core intermediates that we use. And with that, that's part of improving our margins as well. With regard to as far as the growth platform, We've done an initial pass with that as far as over the next couple of years. We do want to get through this process with Carney, kind of identify what we're talking about, some rationalization, if that's what it is, how we improve, as I mentioned, kind of 60% that would come from the operational side and then 30% maybe from the commercial side. But once we've baked that and put clear direction, audit won't be in a better position to assess how that affects each of the three platforms.

Got it. That's helpful. And then the last one for me just is related to sort of an industry issue that seems like it's becoming pretty acute or leaves some uncertainty, and that is around the herbicide dicamba and the fact that the EPA's registration could be, you know, I guess, up in the air or uncertain given the lawsuit. And then I guess, you know, there's the ability for growers to use it this year, but next year it's in jeopardy, I suppose. So I don't know if you have a view about how that may play out, Eric, and, you know, what the implications might be if that's further, if there's further restrictions on dicamba. Does that represent any opportunities for ABD? Thank you.

Yeah, from the DICAMBA side of the marketplace, I think it's up to the basics that have platforms on DICAMBA to decide whether they want to challenge that ruling. So that would be a decision for the courts. I'm sure there would be a fair amount of support for that challenge, but it's not something that we would be involved in. From an opportunity standpoint, I mentioned Zalo and other kind of herbicides that we've put together, our Sinead, which is kind of Topramazone plus Flossinate. We're ramping up our portfolio of herbicides and have such opportunities there. But Bob, maybe from your side?

Yeah, I think that the opportunity is being discussed with customers now. The news is pretty recent. You know, we're in the middle of the season, so there'll be really this is a 2025 discussion, you know, as the crop season ends. You know, one of our key initiatives as far as innovation has been our pro-lease formulation technology, which is in Salo. and allows a good, solid solution into windows of herbicide resistance, but also if technologies like DECAMBA do not survive the regulatory process, that will open up a window for AMVAX technology.

Got it. Sorry, just one quick follow-up on that, Bob. Appreciate it. Is that the one that's associated with Endance or different chemistry?

No, that comes out of our formulations team here in California. It's a technology where we can put multiple chemistries together with the basic chemistry of glufosinate ammonia and stabilize it and deliver it to the end user. It broadens the acre opportunity for us as far as value extraction, and it targets any resistant weed issues that the grower may have as far as timing. It enhances his ability to be more flexible as far as application. So it's something that we're very, very excited about going forward, and we have a family of products that are coming with that. basic formulation technology.

Okay. The difficult chemistries that don't mix well together like oil and water and having a great emulsifier that suspends for long duration periods of time. So that's been a drawback on a number of products is just compatibility with other products. Got it.

And this one is sort of centered around glufosinate, it sounds like. Thank you.

Yeah, correct, glufosinate, but we see potential in other uses also.

Thank you. Thank you.

And just a reminder to the audience, to ask a question at this time, press star 1 on your touchstone phone. To remove yourself from the queue, press star 2. Our next question comes from Andrew Lester with Harla Capital. Please state your question.

Hi. Thanks for taking the question. Last quarter, in light of different market conditions, the company had to borrow bank debt that they thought would be sort of short-lived. In light of better results, could you state how much of that debt has presently been repaid and how quickly you expect to be able to pay down the balance? Thank you.

So, yeah, you can sell that. Okay. So, yeah, there's an extension of that multiple that's mentioned in 2.75 that the bank did before the end of Q3. The reason we mentioned the 2.75 target is this amendment has stayed in place for a year and has kind of graduated back to three and a half. But if we got to 2.75, which we did, and feel we can maintain at that level, we have the ability to determine that. Just go back.

Okay, and just a suggestion for the future. I know you released the news that the earnings call would come out via Bloomberg. I would just make a recommendation that it sort of more broadly be disseminated because it's very easy to miss for somebody who didn't have Bloomberg, whether it be, you know, Reuters or Dow Jones or Yahoo Finance, something like that. I just think it would be helpful for shareholders. Thank you.

Appreciate it.

Appreciate it.

Thank you and final reminder to ask a question press star 1 on your touchstone phone. We'll pause for a couple moments to see if there are any questions. And there appears to be no additional requests for questions. I'll hand the floor Back to Eric Wintemute for closing comments. Thank you.

Okay. Well, again, I appreciate everybody taking the time to listen to the presentation. Again, as I said, it's an exciting time for us. We're making a lot of improvements in our organization as we go forward. We feel very bullish about the outcome for 2024 and beyond. on our next call, which is not all that far away as we get through Q1. And I appreciate your participation. Thank you very much. Thank you. That concludes today's call.

All parties may disconnect. Have a good day.