Bally's Corporation

Good morning and welcome to Valley's second quarter 2021 earnings conference call. All participant lines have been placed on a listen-only mode to prevent any background noise. After the speaker's remarks, there will be a question and answer session. I'll now turn the call over to Bobby Levan, Senior Vice President, Finance and Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us on today's call. By now, you should have received a copy of our Q2 earnings release, which we issued early this morning. If you haven't, the earnings release and presentation that accompany this call are available in the investor relations section of our website at www.valleys.com. With me on today's call are George Papinier, our President and Chief Executive Officer, Steve Kapp, our Chief Financial Officer, Craig Eaton, our General Counsel, and Adi Dandamia, our Senior Vice President of Strategy and Interactive. Before we begin, we would like to remind everyone that comments made by management today will contain forward-looking statements. These forward-looking statements include plans, expectations, estimates, and projections that involve significant risks and uncertainties. These risks are discussed in the company's earnings release and SEC filing. Actual results may differ materially from the results discussed in these forward-looking statements. In addition, during today's call, management will refer to certain non-GAAP financial measures. Reconciliation to most comparable GAAP financial measures are included in the schedules contained in our earnings release. We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project special charges within certain expenses. Today's call is also being broadcast live on our investors' site and will be available for replay shortly after the completion of this call. Prior to turning it over to George, Please note in our quarterly filing materials, we revised our reporting segment to better align with our strategic growth initiative, primarily our focus on the high-value, high-growth North American interactive business and the pending acquisition of GameSys. As of June 30, 2020, the company now operates under three segments. Our each segment is comprised of following brick-and-mortar locations, Twin River Casino Hotel, Tiverton Casino Hotel, Silver Downs, Valley's Atlantic City, and Tropicana Evansville. Our West segment includes Hard Rock Deluxe, Casino Vicksburg, Kansas City, Valley's Blackhawk, El Dorado Resort Casino, Shreveport, Valley's Lake Tahoe Casino Resort, and Jumers Casino Hotel. The other businesses consist primarily of our interactive businesses, including Scorecaller, Monkey Knife Sites, VetWorks, AVP, and our mobile and online sports betting operations, as well as Mile High. I will now turn the call over to George.

Thanks, Bobby. Good morning, everyone, and thank you for joining us. During the quarter, improved consumer confidence, minimal capacity restrictions, and our discipline operating strategy all contributed to extremely strong numbers across the board. This quarter, we have safely welcomed back many of our loyal patrons, across our brick and mortar locations and are confident that we will continue to benefit from rebounding demand as we approach and exceed historical operating levels across our land-based portfolio. Total consolidated revenue for the second quarter was approximately $267.7 million. We also achieved record adjusted EBITDA for the second consecutive quarter of approximately $83.8 million. Similar to the first quarter, incremental revenues from recent acquisitions contributed to positive results. Our destination properties have outperformed and are above historical levels, including Biloxi, Shreveport, and Montpelier. Renewed focus and expansion of table games is accelerating our long-term plans in Kansas City. Our Lincoln property delivered more than $25 million of quarterly EBITDA, despite prolonged COVID limitations. which is in line with our expectations of performance post encore impacts. Pivoting continues to grow in line with our expectations. All other properties outperformed other than Atlantic City, which turned the corner in July and should continue to perform better as the property continues its planned capital investments into the property. I'm also happy to say that trends have continued in July and early days in August. Our each segment recorded revenue of approximately $132.4 million and adjusted EBITDA of $41.6 million. These increases were driven primarily by strong results at our Rhode Island properties, which combined contributed approximately $33 million in adjusted EBITDA for the second quarter. Our Dover Downs property also had strong results and adjusted EBITDA of approximately $10 million for the second quarter, even with rent starting in June. Our West segment recorded revenue of approximately $127.9 million in adjusted EBITDA of $52.1 million. These increases were driven primarily by the Shreveport and Kansas City acquisitions in the second half of 2020 and contributed a combined approximately $25 million in adjusted EBITDA for the second quarter of 2020. coupled with strong results at our Hard Rock Biloxi property, which contributed approximately $19 million in adjusted EBITDA for the second quarter. Now I'd like to provide a quick update on the brick-and-mortar acquisitions we completed this quarter. On April 7th, we acquired Bally's Lake Tahoe Casino Resort, formerly known as Montblanc Resort Casino and Spa, from Caesars for approximately $14 million. We believe this property represents a premier asset that expands our geographic reach while providing an attractive West Coast destination that Valleys will utilize to drive cross-marketing visitation to Lake Tahoe. On June 3rd, we acquired Tropicana Evansville from Caesars for $140 million. Importantly, through this transaction, we acquired the unencumbered rights to Indiana sports betting and iGaming skins, which will provide us with greater access to this growing gaming market. Additionally, given the structure of the transaction, no cash outlay was required at the closing. On June 14th, we acquired Joomers Casino and Hotel from Delaware North for $120 million. The transaction will also allow Bally to capitalize on lucrative sports betting opportunities by further expanding our geographic footprint into the rapidly growing Illinois gaming market. In addition, we have pending land-based acquisitions. Tropicana Las Vegas Casino, which we agreed to acquire from GLPI in April of this year. Importantly, the acquisition requires no cash outlay from Valley at closing and is expected to be accretive to Valley shareholders long-term as we expect EBITDA on the property to be in the mid-20s after short-term targeted CapEx and then grow from there. We're excited about the longer-term potential and the cross-market opportunities we have and will provide incremental information once we acquire the property. We continue to expect the acquisition to close in early 2022. Turning now to capital expenditures, we continue to make progress on our $40 million redevelopment initiative at Valley's Kansas City Casino, which includes a physical expansion of the property that will feature national restaurant plans in addition to new amenities and retail offerings located in the expansion facility. We also recently kicked off the property's formal rebranding by changing its name from Casino KC to Valley's Kansas City Casino, replacing its exterior signage and implementing our new Valley Rewards Player Club program. In Lake City, we continue to execute our $100 million redevelopment projects, which will occur over the next five years. In addition to reopening the permanent FanDuel sportsbook location within the property, we have also incorporated and planned vibrant new restaurant concepts, which we expect will contribute to the overall guest experience and drive increased visitation. As for Rhode Island, On June 11th, the governor signed into law legislation that aims to preserve and enhance Rhode Island's gaming revenue. The legislation allows for the formation of a 20-year joint venture between Bally's and IGP that will create a licensed VLT provider to supply all gaming machines to the Rhode Island Division of Lotteries with Bally's Twin River Casino Hotel and Tiberian Casino Hotel. As a licensed VLT provider, Bally's now owns and leases 23% of the gaming floor machines to the Rhode Island Division of Lotteries in exchange for 7% of net terminal income. Beginning January 1, 2023, Bally's will own and lease 40% of the gaming floor machines, subject to further increases based on machine efficiency in exchange for 7% of net terminal income. We expect to spend up to $15 million this year on purchasing VLTs in Rhode Island, which is immediately accretive and provides us more control of our slot floors. Lastly, we kicked off this summer with the rebranding initiative and investments in order to create a single national customer database. For the next 12 months, All of our casinos, other than Hard Rock Biloxi, will be rebranded to Bally's, increasing the awareness of the brand and providing the company opportunities to send local customers to our destination casinos, as well as a national player database and incentive program. With that, I'll now turn it over to Addy to provide an update on our interactive business.

Addy? Thanks, George, and good morning, everyone. Since our last call, we have significantly developed and diversified our interactive business. and are very pleased with our progress today. Leveraging BetWorks' proprietary technology stack, we've launched live beta versions of our BallyBet mobile sportsbook in two states, beginning with Colorado on May 24th and then Iowa on June 29th. In its beta stage, the BallyBet platform offers sports betting fans not just access to betting options for all major sports, but including a variety of unique and innovative features, exclusive in-app parlay games, and integrated social offerings. Given its beta launch, we are not supporting the launch with an advertising push at this time. We are proud of our tech team's efforts to launch markets so quickly post our June closing of Bet.Works. That being said, with the near-term closing of the GameSys acquisition, we're concentrating resources from rolling out version 1.0, developing our 2.0 version, which combines BallyBet OSB with the GameSys iGaming suite of products. Expect to see that product rolled out in early 2022, including our iGaming product in New Jersey. With respect to our strategic mid-year partnership with Sinclair Broadcast Group, we continue to receive strong feedback on the performance of the Valley Sports RSNs, as well as the recently launched Valley Sports app, which represents the first phase of a major investment we're making across the digital ecosystem to drive increased engagement with fans. We were also able to further diversify our operations through the acquisition of Association of Volleyball Professionals on July 12th. AVP is the premier professional beach volleyball organization and host of the longest-running domestic beach volleyball tour in the U.S. The transaction provides us with a significant opportunity to gamify and incorporate interactive content into beach volleyball, which in turn will drive traffic to Valley's platforms and promote customer acquisition. I will now turn it over to Steve. Steve?

Thank you. For the second quarter, we reported an adjusted EBITDA margin of 31.3%. Excluding Atlantic City from the results, adjusted EBITDA margin would have been 37.6%. This compares to 33.1% in the second quarter of 2019 and 35.4% in the first quarter of 2021. Again, excluding Atlantic City. Atlantic City continues to move in the right direction, and we do not expect it to be a significant negative drag on margin going forward, although that market is highly seasonal. With the close of Betworks in late May, our North American interactive business delivered approximately $6 million of net revenues in the quarter, a slightly negative EBITDA. We expect revenues to grow significantly quarter over quarter going forward, while at the same time, we expect interactive EBITDA to be somewhat more negative as we invest in that business. Such investments will not be anywhere close to the levels of our peers, given Adi's prior comments, and we are seeing an uptick in the Valley's brand awareness from the recent launch of Valley Sports. On the CapEx front, we expect requirements to moderately increase as a result of the properties acquired in the last 18 months. As George mentioned, we have a $40 million redevelopment project underway in Kansas City, and we plan to invest $100 million or so into our Atlantic City property over the next five years. In addition, we estimate the total cost of our casino development project in Pennsylvania, including construction, licensing, and sports betting, iGaming operations, to total approximately $120 million. We're enthusiastic about soon commencing our expansion and capital improvement plan at Twin River Lincoln related to our joint venture with IGT and agreement with the state of Rhode Island. We expect to use cash on hand and cash generated from operations to fund this CapEx. For the first half of this year, capital expenditures were $36 million. We expect CapEx to ramp into the second half of this year with a plan to invest $90 to $100 million in the second half, including $15 to $20 million, or perhaps more if possible, at each of Valleys, Atlantic City, and Twin River Lincoln, pursuant to our commitments in each of these states. Moving forward, our approach to maintenance and growth capital investment will continue to be focused and disciplined. Now I'd like to provide an update on our financing plans for the GAINSYS acquisition. On April 20th, we completed our public equity offering of 12.65 million shares of common stock at a price of $55 per share. Total shares issued included 1.65 million shares in the full exercise of the green shoe by our underwriters. The proceeds from this offering netted the underwriting discount of $671 million, which we intend to use to fund the GAINSYS transaction. In addition to that equity raise, we also announced the sale of a warrant to Sinclair Broadcast Group to purchase 909,000 common shares for an aggregate purchase price of $50 million, which will also be applied toward our combination with Gainsys. We also recently disclosed entry into a purchase agreement for the private placement of $1.5 billion in aggregate principal amount of senior notes in two separate 8- and 10-year series. $750 million in aggregate principal amount of senior notes due 2029, and $750 million in aggregate principal amount of senior notes due 2031. The offering is expected to close mid-August, subject to customary closing conditions. All or substantially all of the proceeds from the notes offering will be placed into an escrow account with one of the banks that have committed to finance the combination. Upon the closing of the combination, we will assume the role of issuer under the notes, and certain of our subsidiaries will guarantee the notes. We also entered into agreements for approximately $1.945 billion of a term loan B, as well as a $620 million revolver. The maturity of the term loan B is seven years, and the maturity of the revolver is five years. The proceeds of the Term 1B, together with the notes mentioned earlier, will be used to fund GameSys acquisition and refinance our own debt. We look forward to providing further updates on the financing of this transaction on our next call as we move closer to the anticipated closing date of GameSys. We believe the GameSys transaction will accelerate our growth strategy to be a premier global omnichannel gaming company and look forward to working with GameSys' seasoned management team to take our operations to the next level. We continue to expect the transaction to close in the fourth quarter of this year and look forward to sharing additional information on our progress. And with that, I'll turn it back over to George.

Thank you. So to sum it up, we are pleased to have achieved strong quarterly results while expanding and diversifying our collection of land-based and digital gaming assets. We've continued to evolve as a company and position ourselves to capitalize on favorable industry trends. We're confident that the momentum we have demonstrated in the first two quarters of 2021 will carry through to the end of the year. That concludes our prepared remarks for this morning. I will now ask the operator to open the line for questions.

At this time, if you would like to ask a question, please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, you may do so by pressing the bound key. We remind you to please unmute your line when introduced and, if possible, pick up your headset for optimal sound quality. We'll take our first question from Jeff Stample with Stifel. Your line is now open.

Hi. Good morning, everyone. Thanks for taking our questions. I wanted to start on Atlantic City. You know, you talk about it. Clearly, it's taking a bit longer than expected to begin to drive growth at that property. I was hoping you'd be able to provide a bit more color here. Is it just issues with COVID-19 as more of a regional destination market, or are there more underlying issues with the asset market you're working through? And, Steve, you touched on this a bit in the prepared remarks, but any expected timeline we should be thinking about to revert back to even a positive, and then the $20 million long-term target you previously disclosed would be helpful.

Hey, Jeff, this is Steve. Listen, as George commented, that property did turn the corner in July, and strong trends are continuing into August. So there's been dramatic improvement there as our ownership is taking hold. But let me kick it to George for any further insight. Sure.

Thanks, Steve. And good morning, Jeff. Listen, thanks for your question. While the property was neglected by the previous owner, but certainly the major focus of ours, as we said earlier, we're going to spend $100 million in capital improvements over the next several years. So we're focused on incremental improvements to our performance, which is mainly supported by what I'll call incremental improvements to the physical property. and the rebuilding of, you know, a higher-end database that Caesars effectively pulled out over the last few years prior to the sale. Steve said, you know, we will see profit this third quarter, but we'll become, you know, much more aggressive in promoting Bally's AC probably during the first quarter of 2022, and really that's so that we can align all this aggressive marketing efforts with the physical state of the property. So by summer of next year, we'll have our rooms back online after the renovation of that, as well as all our restaurant products. So we're looking forward to really getting to where we can really start promoting the property a lot more aggressively.

Okay, great. Very helpful. And switching gears here to the online business here in the U.S., you know, if you think about some of the marketing and the development costs that it's going to take to be competitive, you know, how should we think about the timeline to reflect the EBITDA positive for the U.S., and how deep of losses are you open to as you look to begin building out a more robust user base on the online front? You know, you touched on this a bit in the prepared remarks, but just any further color here would be great.

Yeah, sure, Jeff. This is Steve again. Listen, there's a lot of focus on this side of the business, of course, and some of our peers have said that they will invest maybe a billion dollars over the next few years. But bear in mind, we already have some of the assets that others will be investing in, right? We already have the back-end and front-end tech stacks with Betworks and Gamesys. We already have the land-based database and the awareness and impressions from Sinclair and our land-based casinos. Now, that all said, we will still need to invest. We have a new CEO coming into the business in the coming months, and I don't want to speak for him. But right now, to kind of cut to your question, we expect to burn approximately $10 million into the back half of this year. And that may well increase up to circa 10% of pre-tax cash flow into 2022. Look, it's early days for us, Jeff, right on this front. So as Lee Fenton comes in, we'll put more meat on this bone for you. But those are the expectations currently.

Perfect. That's all from me. I appreciate you putting some parameters around it ahead of Lee coming in here. Very helpful. Thanks for all the color, guys. Thank you, Jeff. Appreciate it.

And we will take our next question from Barry Jonas with Truce Securities.

Great, thanks, and good morning, guys. Maybe, George, we'd love to start on the land-based trends and get your thoughts on whether the top line and margin trends we're seeing now feel sustainable.

Very good morning. Listen, from a revenue perspective, you know, my feeling is improvements over 2019 is sustainable, you know, through year-end. We may see some uh retrenching during the winter months but certainly we'll be ahead of 2019 and and we'll establish a new base from that point of business and and before and then that's when we'll start to see what i'll call kind of a more of a inflationary historical inflationary growth pattern from a margin perspective listen as a result of covet And the first closing and restart of our operations, we had benefit of building our business model. And we're looking at improved margins for certain. We think a lot of these improvements will be sustainable and will stick. And it's really just from a – certainly from a staffing perspective, we're going to see that. We're able to operate much more efficiently than we have historically. There's been some offset of that as a result of rate growth, wage growth. but we're certainly seeing an overriding benefit of staffing reductions. Second to that would be promotions and marketing. We think as long as the competition's rational, then a lot of that margin will stick. Certainly we've redeveloped kind of what we do from a pure business perspective. A good example of that would be buffets. You're seeing a lot of companies starting just to cut that out, which was historical whole loss leader. We're doing that as well. And we also have had opportunities from renegotiating long-term contracts as well as procurement arrangements that we think will have a long tail to that. So, yeah, certainly there's going to be a good portion of this margin improvement that we're experiencing now that's going to be sustained.

Perfect. And just a general question on your M&A pipeline scenario. You know, we would love to sort of hear how rich it is, but more so how you're balancing sort of deals like the like the Association of Volleyball Professionals with land based expansion opportunities.

You know, Barry, Steve here. Good morning. Thanks for joining us today. Listen, we have established what we think is a disciplined and focused M&A strategy from day one as a public company, actually from day one as a private company back in 2014. with our original acquisition of Hard Rock Biloxi. But we'll continue that going forward. Look, it's always a balancing act, right, for capital allocation between deleveraging the business to the place where we would like this business to be longer term, which, by the way, is approximately four and a half times with M&A and CapEx. So the Pennsylvania investment is just part of that balance, right? AVP, from a content standpoint, is part of that balance. I will tell you, in 2021, this won't be any news to you, but the land-based M&A opportunities have been a little quieter than they were during a very tumultuous, if opportunistic, year for us in 2020. So we haven't had to forego much there yet because there hasn't been much that has interested us. But, look, it will be balanced going forward. And, look, I will tell you, with the combination with games that started this year, you know, the free cash flow profile of each of these companies, if you look historically at the numbers, free cash flow conversion has been, you know, plus minus 90% on consolidated EBITDA for each of the businesses. So it's a lot of capital to work with on a go-forward basis, but we will maintain a balanced approach to it.

Great. Thanks so much, guys.

Thanks, Barry.

And we will take our next question from David Katz with Jeffrey.

Hi. Good morning. I wanted to just follow up on the interactive business with a couple of points. You know, we obviously are starting to take a little closer attendance around, you know, where the customer bases are coming from. Could you share any learnings that you may have acquired so far on the you know, what you consider to be your constituency and how separate it is, you know, as this, you know, market becomes a bit more competitive. You know, we'd love to hear any initial learnings from, you know, Colorado, Indiana, you know, with that in particular, but just getting a sense that you've carved out a niche for yourselves.

Well, David, hi. This is Steve Kapp here. Thanks for joining us this morning. Listen, I will tell you from an interactive perspective, it's early days, right? We have launched in Colorado and Iowa on a beta test basis without advertising support, as Adi mentioned. So I'm not going to tell you we have a ton of data. Adi also mentioned that we're getting very positive feedback on the Valley sports awareness through the rebranding of the Sinclair RSNs.

um so very early days for us but uh let me let me kick it to adi for any or george for any uh other observations at this point thanks david it's addy and good morning i agree we don't have a lot of data as steve alluded to as it relates to what we're seeing in colorado and iowa what we've noticed in terms of databases we're pulling from in colorado we have our physical casino database we were able to cross out to that We also had a Monkey95 database that we were able to cross-sell to. And in Iowa, we tested the broadcast TV reach that Sinclair has. And it's early days, but we're seeing good numbers in terms of impressions that are generated. And we will track conversion coming out of the TV impressions that are being created in Iowa.

Got it. And apologies. I said Indiana. I meant Iowa. It's been one of those mornings. My second question is with respect to the land-based business, and I've asked this before around whether there is any notional change toward capital spending on some of the properties on, let's say, like a Colorado set of assets. Just given that the land-based world has really shifted a bit coming out of COVID-19, And, you know, what you might underwrite today would be different from the last time I asked the question probably 18 months ago.

You know, David, this is David. I'll ask. Maybe George can follow up. But, you know, we've not fundamentally changed our view. You know, we have a different operating model than some of our peers have. George talked about, you know, kind of the way we inherited the Atlantic City property. It's been a little underinvested, you might say. We, you know, we don't focus on, you know, we focus on increasing our EBITDA and margins by, through a focus on customer amenities. and the customer experience, property by property. We're an investor in those amenities and that customer experience. And so that's an integral part of our strategy as the land-based casino experience and those databases form a foundational piece of our omni-channel strategy. So

uh you know we're continuing to invest uh just to say the least george uh how would you follow up to that yes the only i'll add to that is we're going to continue to look for assets that we feel have upside you know what i mean by upside is steve touched on it you know we've done a good job of acquiring assets for sub seven times pro forma and obviously the last year it was even less than that so we're certainly going to look at properties that we feel we can improve but also we're going to continue to look at properties to provide access to sports betting i gaming markets as well and so so that's that's the first approach to touch on what you what you said about Colorado using that as an example We bought that asset. There's an opportunity for improvement of that asset. We could develop on top of parking structures. There's also adjacent land that we can develop on. Now, it's really early days of Monarch reopening, but we've always had to wait and see to see if they can really grow the market, obviously primarily from Denver, as a result of their expansion. And based on that, you know, there may be opportunity there for us from a development perspective.

Understood. Thanks very much.

Thanks, David. Appreciate it.

And we will take our next question from John Decree with CBRE. Your line is now open.

Good morning, everyone. I wanted to continue the conversation on the interactive business a little bit and realize there's a moving target. launched in two states of sports betting and beta. I was wondering if you could give us a little bit of an update on your expectations for the rest of the year and into 2022 as it relates to getting live in additional states. And in addition to that, when might you consider ramping up the marketing spend and really starting to push the app in Colorado and Iowa and then subsequent states?

Hey, John, Steve here. Thanks for joining us. Nice new banner you're flying for Company Colors there. Congratulations. Hey, listen, Adi touched on this, and I'll kick it to him in just a moment. But, look, we are really enthusiastic for the combination of games in the fourth quarter of this year. You know, their technology is leading edge. That's going to lead to a 2.0 version of – of the BallyBet app, and that's going to be, we think, transformational. That will layer into the rollout strategy into additional states and more investment in the business, even from a marketing standpoint, as I had mentioned earlier on. So it's very formative. We're in very formative stages, very important transactional stages as this all comes together. Adi, what comment would you have?

Good morning, John. I agree, Steve. A lot of what we're focused on right now is developing the 2.0 version, which would involve the technology stacks of both GameSys and BetWorks. So we've shifted our engineering resources away from launching additional states with our 1.0 version to focus on the 2.0 version. In addition to this, I would like to know that GameSys already has an iGaming product that's live in New Jersey. And what we're looking to do is develop our own version of the iGaming app and launch it later this year, early next year. And one point to note on GameSys' performance in New Jersey, with a B2B product, as you may have seen in some of the numbers that come out for the industry, they have anywhere between 6% to 8% market share that they've had consistently. So you can imagine once we turn it into a B2C product and launch it, it would be very easy for us to ramp up and focus on developing that business further.

That's a great point, Adi. Thank you. Maybe the follow-up question perhaps for Steve. Financing in place after last week now for GameSys, I think shareholder votes are done. So there's a little bit of a regulatory process ahead you guys have talked about. fourth quarter, hopefully closing on GameSys. I wonder if you could give us a high-level update on what the milestones are from here. You know, investors kind of ask us what they should be paying attention to between now and closing to kind of track that progress.

I'll tell you, John, it's a great question. Progress has been significant, as you mentioned right up through last week with the raising of all of that kind of global debt, if you will, uh by us in both the senior unsecured and uh senior secured credit markets so look uh all the capital's in place now right the equity went went very well uh the debt went uh went very well uh you know we will globally refi all the debt at games just all the debt at valleys and and fund the acquisition with uh all of these various proceeds so Really good progress there. We've been spending a lot of time as a management team and a board with Lee Fenton and his management team at GameSys. Early days, it's going very well. The remaining issues to close are simply regulatory in nature and customary, I would say. We have a You know, we're running the last of the traps in the United States regulatory markets and as well in the U.K. But there's very good progress there. It's going well, as it usually does. These things, as you know, always take a while. Six to nine months, we kind of flashed that early on. That is continuing to be our expectation. You know, each regulatory milestone is very important, and we focus on all of them. But I would tell you that it's going well, and we think that timing, implied timing right now is, you know, October, November timeframe. It looks like our best guesstimate at this point. Great. Thanks, Steve. Thanks, everyone. Thank you, John. Appreciate it.

And we have no further questions on the line at this time. This does conclude today's Valley Second Quarter 2021 Earnings Conference call. You may disconnect at any time and have a wonderful day.