AZZ Inc.

Good morning, and welcome to the AZZ, Inc. first quarter fiscal year 2023 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Joe Dorme with Litham Partners. Please go ahead.

Thanks, Gary. Good morning, and thank you for joining us today to review AZZ's financial results for the first quarter of fiscal year 2023, ended May 31, 2022. Joining the call today are Tom Ferguson, Chief Executive Officer, Philip Schlump, Chief Financial Officer, and David Nark, Senior Vice President, Marketing, Communications, and IR. After the conclusion of today's prepared remarks, we'll open the call for questions. Please note there is a slide presentation for today's call, which can be found on ADZ's Investor Relations page under Latest Earnings Release Presentation at ADZ.com. Before we begin with prepared remarks, I'd like to remind everyone certain statements made by the management team of AZZ during this conference call constitute forward-looking statements within the meaning of the Private Securities Legation Reform Act of 1995. Except for the statements of historical fact, this conference call may contain forward-looking statements that involve risks and uncertainties, some of which are detailed from time to time in documents filed by AZZ with the Securities and Exchange Commission, including the annual report on Form 10-K for the fiscal year ended February 28, 2022. Those risks and uncertainties include, but are not limited to, changes in customer demand and response to products and services offered by the company, including demand by the power generation markets, electrical transmission and distribution markets, the industrial markets, and the metal coatings markets, prices and raw material costs, including zinc and natural gas, which are used in the hot-dip galvanizing process and the coil coating process, changes in the political stability and economic conditions of the various markets that AZZ serves, foreign and domestic, customer requested delays of shipment, supply chain vendor delays, acquisition opportunities, currency exchange rates, adequate financing, and availability of experienced management and employees to implement the company's growth strategies. In addition, AZZ's customers and its operations could potentially be adversely impacted by the ongoing COVID-19 pandemic. The company can give no assurance that such forward-looking statements will prove to be correct. These statements are based on information as of the date hereof, and AZZ assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. With that out of the way, let me turn the call over to Tom Ferguson, Chief Executive Officer of AZZ. Tom?

Thanks, Joe. Welcome to AZZ's first quarter fiscal year 2023 earnings call, and thank you for joining us this morning. I am excited to have the opportunity to share the progress we have made on our strategic commitment to become predominantly a metal coatings company, as well as the outstanding results of our legacy AZZ businesses for the first quarter. During May, we completed the acquisition of Preco Metals and have structured it as AZZ Preco Metals Segment, led by Kurt Russell. When sales are combined with AZZ's metal coating segment led by Brian Stovall, we anticipate over 75% of our second quarter revenue to be derived from our metal coatings businesses. After the first quarter closed on June 23rd, we announced entering into a definitive agreement to sell 60% majority stake in infrastructure solutions to Fernway Group LLC for estimated cash proceeds of $228 million. I know many are asking why we decided to participate in a joint venture rather than divesting AIS entirely. I can assure you that all, I can assure you all that we evaluated numerous options before entering into a joint venture. We believe this joint venture offers the optimum benefits for our investors, employees, and customers. AZZ will receive approximately $228 million in cash to quickly reduce debt. and we will have an ongoing equity income stream and potential cash dividends from the success of the joint venture. The JV will also allow AZZ to deconsolidate the financials of AIS. FERNWAT brings resources, capital, and industrial process improvement expertise to the JV, all of which bode well for infrastructure solutions' future success. So let's talk about the outstanding operational performance of our businesses in spite of the corporate and segment disruption that resulted from these concurrent transformational transactions. With the addition of pre-code during the middle of May, we generated sales of $314 million, with the AZZ metal coating segment posting almost $161 million, which is another record quarter. The infrastructure solution segment generated a solid $110 million in revenue, for what is typically a slow quarter for our industrial platform, and Precoat contributed $44 million for just two weeks of being part of AZZ. Most markets were active, and we had great bookings in our electrical products platform, which bodes well for the balance of this year and even into the next. Our businesses managed well through the ongoing supply chain delays and labor shortages and continue to take care of their customers while operating safely. AZZ legacy company sales were up 18%, and pre-cut metals joined with some momentum. EBITDA, which we will be referring to more going forward, was up 27% versus prior year's first quarter, and up 41% on an adjusted basis. Net income and EPS were up nicely on a reported basis, but really strong, with EPS of $1.40 on an adjusted basis, which is an increase of 59%. It gives me great pleasure to congratulate the entire Metal Coatings team on another amazing quarter. In spite of zinc supply issues and labor shortages, they battled through another wave of COVID cases, kept their people safe, took care of their customers, and drove operating results to another record level. The results also reflect a full quarter of DOM and Steel Creek galvanizing, but Metal Coatings still had organic sales growth of over 20% versus prior year's first quarter. Operating margin of almost 28% provided operating income of over $44 million, or a 41% increase. We will get pre-code metals into the same format as metal coatings in AIS next quarter, but I wanted you to see how pre-code was doing while we were working on closing the transaction. Pre-code on a performa basis for the first quarter had sales up almost 40% year-over-year at $237 million. operating income up 57% at over $46 million with 19% margin, and EBITDA of $54 million up over 40% at 22.8% margin. The AAS team dealt with the disruption of supporting due diligence efforts with Fernway and also battled supply chain delays, labor shortages, and outbreaks of COVID, but posted solid results for the first quarter. Backlog continued to grow as bookings remained strong. Electrical platform bookings were particularly strong, even with longer quoted lead times on most of the electrical products due to longer component lead times. On a 7.6% growth in sales, the AIS team increased operating income by over 33% to $12.9 million, primarily as a result of electrical's strong quarter. Industrial had slightly lower sales than the first quarter of last year as some projects continued to push out, but did improve their operating margins through great execution. With that, I'll turn it over to Philip to discuss our results in further detail. Philip?

Thanks, Tom. We finished an extremely busy first quarter, closing on the pre-code metals acquisition and funding the acquisition with a new credit facility that significantly modified our debt structure. And then, subsequent to the end of the quarter, we announced entering into a definitive agreement to sell a majority stake in our AZZ Infrastructure Solutions business segment. As Tom noted, we reported first quarter sales up $314 million, 37% higher than the $230 million reported in the first quarter of last year. Excluding $44 million in sales contributed by pre-code metals in the last half of May, sales were still roughly 18% above the prior year on a comparable basis. Gross profit margin increased 170 basis points, finishing the quarter at 25.9% of sales compared with gross margin of 25.2% of sales in the prior year same quarter. The businesses were able to offset almost all the inflationary pressures, supply chain disruptions, and higher corporate spending related to the acquisition and divestiture transactions, providing great operational results. Today, we reported first quarter operating income of $40 million, which was a 30% increase over the prior year first quarter, reported operating income of $31 million. The operating margin for the quarter was 12.7% of sales, about 70 basis points below last year. This was directly a result of our increased SG&A costs, which were significantly higher due to being impacted by $12.6 million in the transaction-related expenditures during the current quarter. Excluding these transaction-related expenditures, operating margins for the first quarter would have been 16.7% of sales, or 330 basis points above the prior year's same quarter. Reported net income of 24.1 million was 7.8% above the 22.3 million for the first quarter last year. On an adjusted basis, net income was 35.9 million or 61% above last year's first quarter. Reported EPS for the quarter of 96 cents finished 9.1% above the 88 cents for the first quarter last year, which was impressive operational performance given this is before the transaction related expenses adjusting EPS during the quarter. On an adjusted basis, EPS increased 51% over the prior year. Interest expense during the quarter was $7.5 million, or $5.8 million higher than the first quarter interest expense of $1.7 million incurred last year due to having to refinance our existing credit facility to fund the $1.3 billion pre-coat metals acquisition. We expect the acquisition to be strongly accretive, more than offsetting the higher interest costs that we will incur. First quarter income tax expense was $7.6 million in both first quarters for fiscal year 23 and fiscal 22, while our effective tax rate of 23.9% was 160 basis points improved over the first quarter of the prior year tax rate of 25.5%. The prior year was impacted by increased tax reserves. Cash flows from operations in the quarter increased 110% to $23.3 million compared with $11.1 million reported in the first quarter of last year, primarily on higher earnings. Capital expenditures were $7.8 million, comparable to the $7.5 million recorded in the first quarter of last year. While we are still seeing impacts from supply chain disruptions on our capital investments, we expect to invest $40 to $50 million in capital in the current fiscal year. During the quarter, we declared and paid $4.2 million in dividends, and we did not repurchase shares during the quarter as funds were dedicated to our recent acquisition and excess cash was used to fund that reduction. As Tom discussed earlier, we've made significant progress on our strategic initiative of becoming predominantly a metal coatings company and are already seeing the positive impact of adding pre-coat to our portfolio offerings. During the quarter, we incurred $12.6 million in transaction-related expenditures primarily related to the pre-code acquisition. We are in the process of evaluating and completing purchase accounting. Due to the excess purchase price over the net assets acquired, we incurred and expect to record higher amortization on a go-forward basis than we have historically realized on our tuck-in acquisitions. Additionally, our interest expenses going forward will be higher due to our new debt associated with the pre-code acquisition as well as currently higher lever positions. During the quarter, we entered into a new credit facility led by Citibank and Wells Fargo and supported by Barclays, U.S. Bank, CIBC, and Bank of America. Highlights of our new credit facility include $400 million five-year revolving credit facility, and we had zero outstanding at the end of the quarter, a seven-year $1.3 billion term loan fee, an eight-year $240 million Blackstone 6% subordinated notes that should convert into preferred equity following our annual shareholder meeting, which is being held tomorrow. On June 6th, we repaid our existing $150 million senior notes as part of entering our new credit facility. We finished our first quarter with leverage ratio of 4.7 times, lower than our model 2022 trailing 12-month leverage of 5.3%. We will continue to focus on paying down our debt as we enter our typically strong cash generation quarters in Q2 and Q3. Our first quarter tends to be our low cash generation quarter of the year. We also plan on utilizing cash proceeds received from the AISJV transaction to also reduce outstanding term loan debt. Before turning the call back to Tom, I would just like to take a moment to welcome our newest teammates from Precoat. and to thank the folks who have participated in supporting our transition and transformation efforts. With that, I'll now turn it over to Tom.

Thanks, Philip. For metal coatings, markets remain strong, and the team continues to focus on taking share and expanding our service offerings. Fabrication activity is solid, although a few customers are experiencing steel shortages or delays. Zinc LME prices have dropped significantly, and there have been some supply interruptions that we have covered with our existing inventories. Zinc costs on our kettles will continue to rise much of this year. Pre-coat is seeing stable market conditions and is focused on profitable growth. They are carrying higher than normal levels of customer steel and aluminum coil inventory, which does provide production stability. They are experiencing inflationary increases in their costs, most of which is paint, which they pass through. but have been able to pass through price increases to its customers to offset inflation. Paint is readily available, but there have been some shortages in PVDF, which the team has been offering alternatives for. So much like AZZ Metal Coatings, the Preco team is meeting the market challenges and overcoming them while generating strong operating results. For our infrastructure solution segment, summer is relatively quiet on the turnaround and outage front, but industrial is lining up a strong fall season. including some large international opportunities. The electrical platform has a strong backlog, particularly due to a large battery energy storage enclosure project, but all businesses have good backlogs and are bidding on a solid pipeline of new opportunities. Transmission and distribution and renewables are providing great project opportunities. Corporate is focused on cash management and effectively deploying capital to reduce debt, investing in safety and productivity, and completing the AIS joint venture transactions. While we are finalizing purchase price accounting and completing the AIS joint venture transaction, we will not be issuing full year guidance. We do not anticipate the AIS joint venture transaction will close before the end of the second quarter, so we will provide a financial outlook for the second quarter sales and EBITDA. We believe sales should be in the $480 to $510 million range and EBITDA in the $90 to $110 million range. As a reminder, Both AZZ metal coatings and AZZ pre-code metals have historically proven to be very resilient during previous recessionary periods. This is due to about 75 percent of their cost being variable, so they can shed cost quickly if necessary. As we complete the AIS joint venture transaction and have more time to complete the pre-code purchase price accounting efforts, we will provide more color on the balance of this fiscal year and beyond. And with that, we'll open it up for questions.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question is from John Franzrib with Sudoti and Company.

Please go ahead. Good morning, guys. Thanks for taking the questions. I guess I want to start with pre-code here.

The revenue contribution in the two short weeks was part of the company. It was very impressive in my view. Can you talk a little bit about the sustainability or is there something to a ton here that we should be cognizant of? Just a little bit more color of how that's going to play out on a goal-forward basis based on the current order book.

Yeah, John, good question. Number one, let's not multiply that into like four quarters, but first quarter in terms of their first quarter with us is typically a strong construction quarter, as will be the second quarter. So this is kind of high season, similar to our galvanizing business, but Generally, they're carrying a lot of customer steel and aluminum, which provides stable opportunities going forward. We see that continuing. We're having to add space to be able to absorb those higher-than-normal customer inventories. We're also carrying more that's been coated. So it bodes well for Q2, which is why we decided to go ahead and give our outlook for that. hopefully that gives you a little bit of color.

Okay, fair enough. And on the metal coin business, another impressive quarter. Can you talk a little bit about your ability to pass through zinc prices that seems like you're carrying higher zinc, at least we'll be carrying for the balance of this year, despite the fact that we're looking at a falling zinc market, maybe kind of reconcile with the pricing environment it's looking like for you on a go-forward basis?

Yeah, I think there's a couple of things there, John. One, you know, we've done a lot with digital galvanizing and how we provide customer service and how we manage customer jobs. So I think the value we bring as AZZ is far significant to probably what we delivered, you know, several years ago. We have been able to provide value pricing given our network of facilities and And let's face it, even though zinc is going down, every other cost we have and every other cost our customers are seeing is going up. So whether it's labor, fuel, energy, transportation, wire, so, you know, kind of you name it. Consequently, we've been able to pass prices through and continue to increase those by ensuring we provide the value. So You know, I can't guarantee that's going to continue that way. But, you know, we have moved from we did have surcharges. We're still doing some of that. But for the most part, you know, we've tried to deal with just the overall price increases, which reflects the higher cost, but also the higher value we're delivering.

Got it. And since we're going to maintain a stake in IS business, the margin profile has been the best in years. Is there anything in particular that's owed that margin, and how sustainable is that? It kind of suggests there's going to be kind of a little bit of a flattish market on a go-forward basis until we get to the fall.

Yeah, I think there's a couple of things. One, if you had asked me three or four years ago whether we could book electrical projects, you know, with 12, 12-month lead times, I would have probably laughed and said we'd be out of business. But because of supplier component delivery cycles and, you know, it's virtually every major component from breakers to panels to even some of the steel in some cases is just out there pretty significantly. So we've had a lot of customers that have booked projects well in advance of what they normally do. So, you know, that allows us to flex how we manufacture and produce to utilize the labor that we have available to, you know, manage our supply chains, which has allowed us on the electrical side to improve our margins pretty significantly. And we think that's sustainable going forward because everybody's scrambling for supply and predictability of delivery. So we're using a lot more contract labor to help us with, you know, where we have skill craft shortages. And then on the WSI or the industrial side, as we mentioned, the third quarter is stacking up very nicely. We had taken some pretty significant costs out during, well, 2020, so fiscal 21 for us, because of COVID. And so I think their margins are more sustainable now. And then when we get the opportunities, particularly on some of these nice international jobs where we can get the engineering done early and be ramped up to deploy in the fall season, then that also improves our surety of margins. And I do think Fernois being consulting expertise oriented, you know, I look for them to continue to sustain that and maybe even improve it beyond what we've been able to do.

Okay, great. Thanks, Scott. Let's go back into the queue.

The next question is from Noelle Diltz with Stifel. Please go ahead.

Hi, guys. I was hoping that you could sort of walk us through more of the details on the trends you're seeing in the end markets for metal coatings, both the legacy business and then also on the pre-coat side, you know, how you're thinking about some of the... more commercial and residential exposure, and how you're thinking about higher interest rates impacting those markets. Thanks.

Yeah. Hi, Noel. Good morning. It's David. I'll take those. So, you know, starting off on the metal coating side, particularly the legacy business, you know, we're still seeing strong demand from the typical end markets, including utility, the T&D markets, you know, general construction, as well as renewables, particularly in solar. So, all those markets are holding up really well, and we like what we're seeing with respect to each of those. When we switch over to pre-coated metals and you take a look at that, the biggest market and markets served there is the general commercial, industrial, and architectural construction markets, which equates for about 26% of their volume. Still seeing good demand coming out of there as well as the container market, which is about 23% of their volume. So collectively, you know, that's about half the business. And, you know, we're still seeing a strong demand, like I said, from both. I'll turn it over to Philip for your other half of your question. On the financing.

On the financing, yeah, I mean, we're looking at our interest rates will be a lot higher, obviously, this year, SOFR-based. We have good visibility to what it's going to cost us, and the cash flows we're generating should cover that. I don't know if you have specific questions, Noelle.

Sure. That's fine. Thank you. And then I guess just one sort of housekeeping question. You talked about anticipating and seeing higher levels of amortization, which is expected after the deal. Is that something you'd be adjusting out in Adjusted EPS? Are you thinking about keeping... Including that, just curious how you're thinking about treating that from a reporting perspective.

Yeah, we're still evaluating that as we finish the purchase accounting, but it is a big number. And so we will look to highlight that cost either in an adjusted basis or in our earnings presentation because it's a significant number and much different than where we've been historically.

Okay, thank you. The next question is from John Bratz with Kansas City Capital. Please go ahead.

Phil, just going back to the borrowing costs, you know, at this time, what do you got, $1.6 billion outstanding. What's the rate you're paying on that debt?

Right around 5.5%. Our Blackstone equity piece is 6%. Yes, yes, okay. $5.95. Our term loan B is running about 5.5% right now.

Okay. Given the formula used in that rate, assuming the Fed raises rates 75 basis points, would you see that number going up 75 basis points too?

We would.

Okay. Okay. All right. All right. David, you mentioned some of the stronger markets in metal coatings. it seemed as though the solar market maybe tailed off a little bit because of the issue surrounding tariffs, but you said it was still fairly strong. Did you see it back off at all with the possible imposition of tariffs?

There's always that possibility with the imposition of tariffs. For us in particular, what What we see, of course, is that there's a lot of steel that has to get fabricated and then galvanized to support the panels. And I know earlier this year there were some issues with respect to panels and panel shortages. Those have largely subsided and are starting to come back into the market. So that's why we still look pretty optimistic around what we're seeing in solar.

Okay, okay. On the pre-code business... most of the costs are passed through quickly. Was there any delay in passing through the higher paint costs?

No. Preco has been, as the customers are hit with paint increases from the paint suppliers, they're able to quickly pass those along.

Yeah, because usually they're specified by the customer. Okay, okay.

All right, thank you.

The next question is from Josh Takowski with Credit Suisse. Please go ahead.

Josh, your line is open on our end. Perhaps you have it muted. Hey, can you hear me? Yes, sir. Hey, good morning. Good morning, guys. Just a couple from me. First, more administrative. Just looking at the reconciliation on page 21. Totally get the 12.6 in acquisition costs. But this pre-code contribution, the negative 6.7, just trying to understand that. It looks like you're stripping it out to show, I guess, the year-over-year comparison of the base business. But I guess, is that correct? And then how does that 6.7 compare with what's like 9 million of contribution from pre-code this quarter?

Yeah, that is what it was, just attempting to strip that out to be comparative for the legacy businesses. And one was operating income, and then the $9 million was the EBITDA. So that was the only reason for doing that, since we were also stripping out all the one-time costs and incremental amortization that we picked up just because they were on the books for two weeks.

Got it. So is the difference between, if I look at, I know this is, we're talking 2 million of differential here, so I apologize, but just curious. Is that the difference between like a quote-unquote gap EBITDA figure and adjusted EBITDA?

It is. Okay.

Okay. Got it. And then just the last one for me, I know you mentioned in the prepared remarks, you know, some issues, you know, getting... procuring zinc. I was wondering if you could just comment a little bit further on that. What kind of issues are you seeing? What's the, you know, how much do you have currently in the kettles and how long can you go?

Yeah, so it was more around just regional supply and a lot of the LME warehouses were depleted. And I think there was a, a smelter in Brazil. It was a mix of things. So the inventory I'm talking about, we keep our kettles full, but we also carry some ingots in certain plants just for this eventuality so that we can transport those and move them to ensure that our kettles remain full and functioning. So that's the inventory I'm talking about. And we were in good shape. We were able to move that. It was just part of the benefit of having you know, over 40 locations and have an inventory in several of them that we can move around.

Sure, sure. And is there any thought behind, I mean, I guess to the extent you can find it, but kind of just given where we're seeing spots in prices today, you know, any consideration in, you know, purchasing in bulk and just kind of holding on to it?

We typically don't. purchase in large bulk, but as the pricing has come down as quickly as it has, we look across the facilities and purchase inventory as we can find availability, but we typically don't load up on inventory.

But this is kind of a unique situation, and we do. We look at it. Well, a team looks at it every day, but these are things we look at and try to primarily we're focused on availability. But in this case, it's just dropped so quickly. So we'll work with our banking advisors, which we do every month and every quarter. So I don't want to preclude that we may not do that, as it's always a possibility. But at the moment, we're continuing to kind of let it ride.

Got it. Okay. And then maybe if I could just sneak one last one in. I know you touched on demand already, but any pockets? um, uh, of end market customers where you're seeing it, you know, actually starting to weaken a bit more.

Hmm.

Oh, not, uh, on the metal coating side. No. Uh, you know, there's always geographic things is, is we see for a while we saw solar fabrication move into different parts of the country. And, um,

But, yeah, I can't think of anything. Yeah, not really. And even on the pre-coat side, you know, I know a lot of the analysts will follow things like non-residential construction. However, the areas within non-residential construction that we particularly play in on the pre-coat side have been performing quite well. So we're really not seeing any particular end markets with slowdowns.

Again, if you have a question, please press star, then 1. The next question is from Brett Kearney with Gabelli Funds. Please go ahead.

Hey, guys. Good morning. Congratulations on execution on the base business as well as all the moving pieces strategically.

Thanks, Brett. Thanks, Brett.

Just had one question on the JV partnership with Fernway. It sounds like a great fit for that business going forward. And I know you guys had highlighted in the past, you know, this business could benefit from someone kind of dedicated to um, you know, a hundred percent, uh, you know, operationally and maybe even some incremental investments to make there. I knew you can't speak directly for them, but anything you understand in terms of how they think about investing in that business, um, and whether that would kind of, um, would like 40% of go forward, uh, growth investments, um, uh, you guys be funding.

You know, I think there's a, there's a couple of things there. Um, We did believe that if we could focus more fully and consistently to streamline processes and do some of that kind of thing, that there would be a benefit. But for the last two years since COVID, that had pretty much been put on hold. Now, interestingly enough, I had known the Fernois guys when they were still with McKinsey, so we'd actually been engaged with them in discussions around some of these potential process improvements. which is why it became, you know, one of our opportunities to pursue that fairly quickly as we pivoted to it. So I think it's around streamlining processes, moving to, you know, quoting one product where it makes sense, like for enclosures or switchgear, and quoting the best product from the best location, which means you've got to have rough cut capacity planning in place, S&OP, stuff like that. So These are all things that I think Fernweck can bring to the table quickly. We have really, really good operating teams, and these are mostly ideas that they've been serving up the last couple of years, but we haven't been able to focus on it. In terms of the capital investments or if they go do tuck-in acquisitions, things like that, we'll look at each one of those on its surface and decide whether to invest. We're not required to by contract. But obviously, we'll have to make a decision around each one of those, you know, if it's significant. And there would be additional capital required either for an acquisition or for a major growth investment. So we'd look at them. We're not ready to call the ball on that. We'll have a couple of board seats. So we look forward to seeing those opportunities.

Okay, terrific. And then just on the convertible with Blackstone, is it the expectation, just timing-wise, that that would, upon shareholder approval, that would kind of convert to preferred equity this week?

Yeah, I think it's got a five-day window, if I remember correctly. And so at our shareholder meeting tomorrow, we anticipate that would be approved. If it's approved, then we'll go ahead and move into that five-day or seven-day window of exchanging.

Terrific. Thanks so much, guys. All right. Thanks.

This concludes our question and answer session. I would like to turn the conference back over to Tom Ferguson for any closing remarks.

All right. Well, thank you, and we appreciate your attention. We look forward to presenting the second quarter results here in just what seems like just a few weeks. But So we thank you for your time. We thank all of our employees that have also logged on to listen in, and we look forward to talking about another quarter of success and completing another one of the major strategic transactions. Thank you.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.