Element Solutions Inc.

Ladies and gentlemen, good morning. My name is Abby and I will be your conference operator today. At this time, I would like to welcome everyone to the Element Solutions Incorporated third quarter 2022 financial results conference call. Today's conference is being recorded and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star 1 once again. Thank you, and I will now turn the conference over to Varun Gokarn, Senior Director, Strategy and Finance. You may begin.

Good morning, and thank you for participating in our third quarter 2022 earnings conference call. Joining me are our CEO, Ben Glicklich, and CFO, Kerry Dorman. In accordance with regulation FD, we are webcasting this conference call. A replay will be made available in the investor section of the company's website shortly after completion of the call. During today's call, we will make certain forward-looking statements that reflect our current views about the company's future performance and financial results. These statements are based on assumptions and expectations of future events that are subject to risks and uncertainties. Please refer to our earnings release, supplemental slides, and most recent SEC filings for discussion of material risk factors that could cause actual results to differ from our expectations. These materials can be found on the company's website in the investor section under news and events. Today's materials also include financial information that has not been prepared in accordance with U.S. GAAP. Please refer to the earnings release and supplemental slides for definitions and reconciliations of these non-GAAP measures to comparable GAAP financial measures. It is now my pleasure to introduce Ben Glicklich, CEO of Element Solutions.

Thank you, Varun. Good morning, everyone. Thank you for joining. In the third quarter, Element Solutions produced solid top and bottom line organic growth, despite an environment where macro fundamentals declined. Key end markets, such as consumer electronics and mobile phones, softened further. Automotive did not recover in line with expectations, and the continued strength of the U.S. dollar drove additional foreign exchange translation headwinds. Despite these challenges, both of our operating segments delivered organic growth in the mid-single digits. as pricing actions, new business wins, and a focus on high-growth electronics applications help to offset declining volumes. This is significant outperformance against our end markets. On the bottom line, cost management from synergies and actions taken in the quarter contributed to sequential margin expansion and adjusted EBITDA growth. Demand across the electronic ecosystem deteriorated in the third quarter, and the typical seasonal pattern of sequential growth from Q2 to Q3 did not materialize. In September, European activity levels did not ramp following August holidays. Global handset volumes declined an estimated 12% year-over-year in the third quarter, a deceleration from a 7% year-over-year decline in the second quarter. What started earlier in 2022 as weak demand in the local Chinese market, where we have more limited exposure, has penetrated demand for ex-China mobile OEMs. While we expect to see continued robust growth in our power electronics portfolio and the benefits of pricing actions we took earlier in the year, our outlook for the rest of 2022 across the electronics portfolio is for current trends to continue. Secular growth is not linear. and we believe the current trend is not reflective of any permanent change in the industry. The growth opportunities we have in power electronics, 5G-enabled devices and networks, and sustainable chemistry are substantial over time. We are not slowing our investment in these longer-term growth opportunities. In our industrial portfolio, where automotive is our largest exposure, we see a structurally undersupplied global market where production recovery is more a question of timing than magnitude. OEMs continue to miss their forecast production rates given supply constraints. However, given economic softness, particularly in Europe, we believe that the recovery will occur over a longer timeframe than was previously forecasted. While unit production improved sequentially in Q3, the recovery was subdued relative to industry expectations. Here, too, the long-term trend appears positive. as reflected in the elevated levels of customer engagement and new business winds our commercial teams have closed year to date. We're well positioned as a leading technology enabler for the automotive supply chain and expect to benefit disproportionately when production volumes inevitably recover. Even with a modest recovery in Q4 2022, the automotive production this year will end more than 15% below 2018 levels. In slide three, you can see a summary of our third quarter financial results. We grew the top line 5% organically. A significant portion of that organic growth was driven by both surcharge-based and negotiated price increases. On a constant currency basis, adjusted EBITDA grew 11% year-on-year. Adjusted EBITDA margin improved 40 basis points, with lower pass-through metal prices driving roughly 60 basis points of margin tailwind year-over-year. The steep and fast decline in TIM prices mid-year left us with purchases well above our eventual selling price. This had a negative impact on gross profit in the quarter, but the losses were largely offset by metal hedge gains captured in adjusted EBITDA. This is how our metals pricing and our hedging program are designed to work. Foreign exchange fluctuations drove sizable reductions to our earnings in the quarter, representing a roughly $12 million year-on-year headwind to adjusted EBITDA. Excluding the impact of $93 million of pass-through metal sales in our assembly solutions business, our adjusted EBITDA margin would have been 25% in the quarter. Adjusted EPS grew 6% on a reported basis, despite a negative 9% impact from FX translations. Carrie will now take you through our third quarter business results in more detail. Carrie? Thanks, Ben, and good morning, everyone. On slide four, we share additional detail on the drivers of organic net sales growth in our two segments. Organic growth for electronics was 5% year over year in the third quarter, as pricing and growth in power electronics generally offset consumer electronics softness in Asia. This compares favorably to the overall electronics and mobile end markets that were down in the low single-digit and low double digits, respectively, year over year. Our servitory solutions vertical grew 1% organically, with price action offsetting a sharp slowdown in the memory disk market, as well as slow customer activity throughout Asia. Semiconductor solutions grew 3% organically, and the business saw continued end-market demand for our wafer plating, advanced packaging, and advanced assembly products. This was tempered, however, by software demand in mobile. Both circuitry and semiconductor benefited from higher surcharge revenue, driven by increases in raw material costs, which account for roughly 2% of the organic growth in the overall electronics segment. In our assembly business, we saw sustained growth in higher-end applications, which drove a 9% increase in organic sales. On a year-over-year basis, adjusted EBITDA margins in our electronics segment expanded 20 basis points. Lower metal prices had a positive year-over-year impact to margins. At the same time, gross profit dollars were negatively impacted by the timing of sharp declines in PIN prices within the quarter. The offset to this was over $5 million of realized metals hedge gains that are reported through other income and are included in our adjusted EBITDA. The product mix was also a headwind, with assembly growing faster than circuitry and semiconductor in the quarter. Organic net sales in industrial and specialty increased 6% year over year. The growth trend converged across the three businesses within the segment. Industrial solutions grew 7% organically, which was driven primarily by pricing actions and surcharges. Dozen to auto, which is roughly 40% of the business, grew mid-single digits. We also saw some sequential softening in European construction and industrial end markets that had been resilient in the first half of the year. We anticipate this trend will likely continue to the fourth quarter, given the dynamics in the region. Graphic solutions declined 3% organically year over year. Despite new business that contributed to sales and the impact of additional pricing actions, we have seen a slowdown in new package designs in Europe and North America. We are making progress on multiple initiatives designed to accelerate sales and improve margin in this business in 2023. Energy solutions grew 15% organically. Despite a longer than typical lag along increased energy prices, momentum in this business is picking up. We are seeing increased drilling activity, which has led to increased production as well. Industrial and specialty grew adjusted EBITDA 38% on a constant currency basis, including the contribution of the Copantia business and synergies from recent acquisitions. Margins improved by 160 basis points year-on-year. Similar to electronics, cost management in the quarter helped to offset the combination of increased logistics costs, negative mix, and raw material inflation in our smaller INS businesses. A substantial portion of our operating cost reduction in the quarter came from reduced variable compensation expense assumptions that reflect the change in our near-term outlook. Our bonus program structurally offsets deviations in earnings from our plan and is working as designed. Moving to slide five, we cover cash flow and the balance sheet. We generated $116 million of free cash flow in the quarter, reflecting a significant release of working capital, a sequential sales decline, and safety stocks moderated. We expect a higher level of working capital release in the fourth quarter as both these trends continue. Our other use of cash in the quarter, including cash taxes, CapEx, and interest, all came in better than our expectations. We increased our share repurchase activity in the quarter, buying back approximately $55 million of stock, or roughly 3 million shares. As of the end of Q3, we had repurchased more than 6 million shares this year, or well over 2% of our shares outstanding. Our remaining stock buyback authorization was $616 million as of September 30th, and we continue to be active in the market. Our net leverage ratio improved in the quarter 3.1 times, despite returning over $70 million of cash to shareholders. All our floating rate debt is swapped to fix through the end of next year, so rising interest rates are actually improving our cash interest expense as we earn more income from our cash balance. These term loans are also swapped to Euros, and that cross-currency swap was approximately 150 million in the money at quarter end, effectively reducing our leverage ratio to 2.9 times. Our balance sheet and liquidity position are very strong.

With that, I will turn the call back to Ben. Thank you, Kerry.

Despite our growth in Q3, it's clear that our end markets are softening in line with the rest of the global economy. We've reduced our outlook for automotive recovery in the fourth quarter, and now anticipate a softer consumer electronics environment as well. In addition, the translational headwind from the strong U.S. dollar has grown significantly in recent months. In Q4, FX will be a greater than $15 million year-over-year headwind, and the current headwind to 2023 adjusted EBITDA is approximately $30 million. As a result of these impacts, we now expect fourth quarter adjusted EBITDA to be approximately flat year-over-year on a constant currency basis and full year 2022 adjusted EBITDA in the range of $525 to $530 million. Accordingly, we're updating our full year 2022 adjusted EPS guidance to between $1.40 to $1.42, and free cash flow guidance to approximately $250 million. While the consumable nature of our product and our highly variable cost structure help insulate our business from macro volatility, we're not immune. However, we remain highly confident that Element Solutions is well-positioned to continue to deliver long-term profitable growth. We see opportunity in this operating environment. Our scale, liquidity, and strategic horizon should allow us the stability to weather and capitalize on these markets. Our customers are engaging with and interested in our new technology platforms, and our commercial and technical teams remain busy. This is a reflection of the longer-term momentum in our markets and the persistent, iterative innovation we provide to enable our customers' products. I'd like to thank all of our stakeholders for their continued support of Element Solutions, and in particular, express my appreciation to our talented and dedicated people around the world responsible for another quarter of growth. Our business can withstand end market volatility while retaining strong margins in cash flow. And our team has demonstrated that ability to balance that with maintaining a long-term strategic focus and orientation. With that, operator, please open the line for questions.

Thank you. And at this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. And we will pause for just a moment to compile the Q&A roster. And we will take our first question from Kieran DeBruyn with Mizuho Corporation. Your line is open.

Hey, good morning. Morning, Kieran. Morning. I just wanted to touch a little bit on margins. It seems like they held in pretty well in 3Q. They've been showing some progress, particularly in the INS segment. You know, how should we think about that into the fourth quarter? And any preliminary thoughts as the trends kind of progress into 2023? It seems like you do have some cost levers, and as things recover, there should be substantial leverage on the upside. So any comments on that would be helpful.

Sure, absolutely, Kieran. So a couple of things to call out in Q3 with regard to margin, and then we can talk about the go-forward trajectory. For starters, metal prices came in, and that's a tailwind to margin. We talked about that being about 60 basis points of an improvement. We threw cost levers in the quarter to preserve profits. That's the hallmark of this business, that in difficult times we can reduce costs and preserve profits, and we saw an impact from that as well. So sequentially and year-over-year margins improved. As we roll into Q4, obviously we're expecting a sequential decline in sales given end markets and typical seasonality. So margins will be under a bit of pressure relative to Q3 driven by that. But we've taken a lot of price over the past year. We're managing cost and we've got more opportunity for cost into Q4 and particularly into 2023. And so margins should improve as we enter 2023 in light of the dynamics we've walked through.

Great. And then maybe just a quick follow-up on the end markets. Just on the automotive front, I mean, Europe does seem to be weaker, but there still seems to be some kind of recovery and strength, especially on kind of the EV side in China and the U.S. So if you could just, you know, walk us through what you're seeing by region maybe and just, you know, I know the outlook for the fourth quarter is a little bit weaker than what you were originally expecting, but some commentary from other kind of peers in the industry has alluded to the fact that they expect a meaningful recovery at some point next year in the automotive side. So I'm just curious your thoughts there.

Yeah, so the auto market is recovering, I would say, sequentially, but it didn't recover to the extent or didn't grow to the extent that it was expected to grow by the industry and industry observers in Q3. And similarly, expectations for Q4 have moderated a bit. And so to our comments in the script we just went through earlier, We are seeing a recovery, but we expect it to be a bit more slow than one would have expected entering the second half. We are seeing that recovery differently in different regions. So things in Europe remain soft. China has seen a more accelerated recovery. That has skewed towards the low-end EV. America has been reasonably stable. An ESI business perspective, our business hasn't really tracked from a timing perspective with autos recently. If you look at last year, we significantly outperformed units in our auto business. In this quarter in our business, we saw growth in our auto market, but not to the same extent as the overall market. That's not a comment on share. We're confident in our share, and we view this as more of a timing issue. I would say that activity levels at our largest customers, who are the largest players in the plating market in Europe, don't really reflect the estimates we're seeing for auto production increases in Europe. But we are seeing growth in that market. It's been moderated in the IS business by a slowdown in the construction and industrial space. We do expect 2023 to be better from an auto standpoint.

Great. Thank you very much.

And we will take our next question from Josh Spector with UBS Financial. Your line is open.

Hey, guys. Good morning. Just curious if you could provide some color on volumes. And I guess a few things there. One, your expectations for fourth quarter. And it might be helpful to provide some context if you can. Maybe first half volumes on a multi-year stack versus 2019 versus where things are now. it's just becoming a bit harder to differentiate given where pricing is and just given the organic reporting. So trying to kind of level set to where things are kind of exiting the year versus how you performed over the past couple.

Yeah, sure. Sure. Josh, good question. So, so as we called out, most of our growth this quarter, um, was driven or our growth this quarter was driven more by pricing, both negotiated price increases and surcharge pricing. Then by volume, volume was down, um, in both businesses. You know, the driver of that is the mobile phone market, which was down 12% year on year in the third quarter. And the construction and industrial business, general industrial and the IS business is also down from a volume perspective. And Q4, you know, we expect to see similar dynamics from a volume standpoint. You know, we will be well below 2021 volumes And from a circuitry perspective, our circuitry business is looking more like 2018 to give you a sense for how far that market has fallen, which gives us, frankly, a lot of confidence in a very strong recovery because the trends propelling the business forward are durable trends. And we believe we've just hit an air pocket. in terms of the megatrends propelling this business around expansion of computing power, the need for more data storage, 5G-enabled devices and 5G networks. Those things are all still happening, but they clearly have pushed pause. The first half over first half comp entering 2023 will be challenging because the market was quite healthy, particularly in electronics in 2022.

Okay, thanks. And I guess just Kind of the easy math here is, you know, annualizing second half EBITDA to next year, you're about 480 million. It may be a little bit worse than that with FX. I guess, why would that be wrong for investors to look at it that way? What kind of visibility do you have or other cost levers you could pull for that not to be the right way to think about 2023? Or is it the right way?

Look, we're not in a position to give 2023 guidance today. It's clearly a very dynamic market environment. But, you know, these are growth markets. And historically, we've seen strong snapbacks when you think about the mobile phone market, right? One platform isn't as successful as, you know, expected. Typically, we've seen the subsequent platform being more successful. The auto market is recovering and is expected to recover into 2023. And there are additional cost levers at our disposal should our markets not recover. So, you know, not going to comment on what the right number to think about for 2023 is. But, you know, if the market dynamics aren't recovering, there are cost levers and there are reasons to believe that several of our end markets should be healthy at some point in 2023.

Okay. Thank you.

And we will take our next question from John Roberts with Credit Suisse. Your line is open.

Thank you. The SG&A expense of $131.4 and the R&D expense of $11.3, how much did they benefit from the reversal or accrued compensation in the first half? And did those expenses go up sequentially in the fourth quarter because you won't have the reversals again?

Yeah, so we did throw cost levers, as we mentioned, John, in the third quarter. And some of those are true ups based on first half accruals. And so you could think about that as maybe a $10-ish million cost savings in Q3, of which we won't have that full lever at our disposal in Q4. But there are other levers we could throw if the business isn't tracking organically to plan from a top-line and GP perspective to deliver on our fourth quarter. And, John, I would just add to that that there's also about an $8 million to $10 million FX impact in those year-over-year numbers as well.

Got it. Thank you. Your own inventories were down sequentially. I don't know whether metals contributed to that sequential inventory decline, but usually when the end market sales decline, inventories back up all along the supply chain. Do you have any visibility to inventories down the supply chain beyond you?

Yeah, so a few observations. First, Our inventories declined sequentially. Some of that was metal price, some of that was FX, and some of that was a reduction in safety stocks as we've seen our supply chain stabilizing, not completely, but beginning to stabilize. As we look into the channel, there definitely has been some level of inventory unwind associated with demand in the semiconductor market, in the data storage market, for example. You know, there may be some more of that in Q4 as we look forward and, you know, triangulate what our expectation for demand is relative to end markets. But typically in our business, there isn't a significant amount of inventory of our product in the supply chain. And we don't believe that dynamic has changed.

Thank you.

We'll take our next question from Stephen Byrne with Bank of America. Your line is open.

Hi, this is Rock Hoffman on for Steve Byrne. My first question is, how would you split the new wins into buckets of share gains, cross-selling, or customer capacity expansions? And is any of this from the strategic initiatives identified by ESI's business unit leaders?

Thanks, Rock. So we've been winning new business in all of those categories, frankly. We've seen new site opening driven by either geopolitics out of markets in Asia or out of markets in Europe, we've seen significant new wins in adjacent markets, in our semiconductor space, in our MES and bio business, which is water treatment. And, you know, anytime we, you know, get more than a quarter, if you will, because, you know, more than a quarter of the new lines that are coming in from a capacity perspective, we're gaining share and And we believe our performance year to date and even in this quarter is demonstrative of our getting more than our disproportionate amount of business. If you look at unit performance relative to our performance, we see ourselves as improving our share position. And this is largely driven by strategic focus and what we call ESDI or strategy development and implementation program. still early in terms of its lifecycle at Element has been rewarding.

Thank you.

And just to follow up, how much of your assembly sales are from that silver sintering technology used in EV motors? And where do you expect sales for this product line to go longer term? Would this technology be used in stationary storage?

So we haven't disclosed sales from that product. But when we refer to power electronics, that is that market. And we have seen continued growth in power electronics year on year and expect that growth to continue in Q4 and into 2023. The primary application for that product line is in EVs, high-end EVs. But we're seeing interest in it for infrastructure and other applications, early days, very long runway, and expectation for continued strong growth.

Great. Thank you.

And as a reminder, it is star one if you would like to ask a question. And we will take our next question from John Tanwanteng with CJS Securities. Your line is open.

Good morning. Thank you for taking my questions. I was wondering if you could talk about your expectations for content growth per application, you know, in the businesses where that's relevant, auto electronics, et cetera. Where is that metric as you see going forward compared to maybe what your historical was, you know, given your program went so far and what your customers are telling you?

Yeah, thanks, John. So, you know, what we've said is that we get a 15% content uplift on a 5G phone versus a comparable 4G phone. 5G penetration of mobile phone units is still relatively low, bumping around 50%, and so there's more uplift opportunity from a content standpoint. And we're trying to grow our value per unit entering markets like thermal interfacing materials and conformal coatings and other types of electronic adhesives where we have a very small market position, but good technology that we've acquired through acquisition. In electric vehicles, we have a very significant content opportunity driven by what we were just talking about, power electronics, for example. And that's one and a half to two times the content on an EV versus comparable internal combustion car. And EVs, as a percentage of the automotive fleet, remain comparable. quite low, though that dynamic is changing rapidly. And so we see significant opportunity from a content perspective. And even on an ICE, as new models, years are introduced, there's more electronics, there's more decorative and functional surface treatment. And so we see an uplift, you know, a couple points of content growth per year over unit growth going forward.

Great. Thank you. And I was wondering if you could also comment a bit more on the semiconductor business. Where is the most exposed in terms of market applications? Is it consumer or more forms computing and networking? Just trying to get a sense of where that business is going to go given the current economy and demand in those end markets.

Yes. So our semi-business is more exposed on the logic side than the memory side. If you were to split the market into two, the logic versus memory split is the applicable one, and we've got more exposure on the logic side than the memory side. And we're gaining significant traction in heterogeneous packaging. So if you think about advanced packaging applications, system and package designs with OSATs, our capabilities from the high-end circuit board side and the assembly side are very relevant in these next generation chips and chiplets, which is a nascent market that's been growing very rapidly and continues to grow rapidly. where we have a very significant opportunity. But again, that's more on the logic side than the memory side.

Okay. Final one for me. Do you expect any change in your capital allocation strategy? You've been buying back a lot of shares, but maybe are there more opportunities maybe in smaller acquisitions or tuck-ins? Just give them a say in the markets. Help us think of what you guys are planning and thinking about going forward.

Yeah, the simple answer is no change, John. We're going to remain opportunistic. and deploy capital prudently to compound earnings per share over the past, you know, several quarters. It's been in the form of buybacks and wouldn't expect that to change, you know, in Q4.

Understood. Thank you.

And we will take our next question from Chris Kapsch with Loop Capital. Your line is open.

Yeah, good morning. I had a question. You frame your electronics business as having not much exposure to personal computer PCBs, which, you know, are more commoditized than, say, smartphones. And just looking, you know, at the macro, that seems to be the area where there's the most pronounced weakness in consumer electronics ecosystem, even as its, you know, weakness is broad-based. So I'm just wondering, as you saw your electronic business and circuitry in particular grow, endure some abrupt sequential weakening during the third quarter. I'm just wondering which end markets do you attribute that to? Is it mostly smartphone or any way to bracket or bucket those end markets where you see what you see attributable to the sequential weakening?

Yeah, absolutely, Chris. So I'd say two things. The two biggest markets that impacted the third quarter were smartphones and data storage. This was the first quarter that we can remember, and the corporate memory here is quite long, where Q3 was softer in electronics than Q2. Every year there's been a ramp in Q3 associated with new mobile platform launches, and this year that just didn't happen, which was a big surprise. So mobile units decelerated. They were down 7% year over year in Q2, 12% in Q3. And the data storage market was helping us through the first half. The mobile market was already soft entering Q3. It just softened. And data storage was very robust in the first half. And that market really saw a significant decline in Q3 from the handful of customers we have there. And so those two markets are the biggest drivers of the sequential weakness we saw, not PCs.

Got it. That's helpful. And then My follow-up is kind of more about, I don't know, a bigger picture commercial strategy sort of question. And as I've observed electronic chemicals feeding into the semiconductor space over many years, during periods of downturns, there's actually sort of an opportunity when the fabs have, there's more tool time, if you will, an opportunity for for suppliers to get products qualified, maybe innovations that help lower the cost of ownership for the fab operator. So I'm wondering if there's something similar dynamic or opportunity in the printed circuit board ecosystem with what presumably is going to be at least an air pocket soft patch where there's underutilization of those assets, if that's an opportunity for you to do something commercially, you know, for example, to ramp up the adoption of your electrolyzed copper plating solution, something like that. How do you think about that dynamic? Thank you.

Thanks, Chris. Yeah, it's a great observation, which is to say when utilization is lower, there's more time for trials. And that's something that we certainly intend to seize upon. And that is a dynamic that is true in semiconductor market as well as the circuit board market. And, you know, you heard us say on prior calls, and it continues to be the case, that customer activity, customer engagement remains very high. And I don't think that's necessarily being driven by utilization levels. I think that's being driven by technology inflections. But utilization levels being lower may accelerate some of those technology inflections, and it's certainly something that is not lost on us.

I appreciate the color. Thanks. Thanks, Chris.

And we will take our next question from Angel Castillo with Morgan Stanley. Your line is open.

Hello, this is Stefan Diaz sitting in for Angel Castillo. Thanks for taking my question, guys. Good morning. At the investor day, you laid out a long-term 2026 EPS target of $2.50. That implied an annual CAGR of over 10%. Admittedly, there's still a lot of time between now and then, but given all the macro uncertainty and near-term challenges, do you still feel like this is an appropriate way to think of annual EPS growth, I guess particularly in 2023, given all the cost levers you've mentioned?

Yeah, it's a good question, Stephan, but our targets are unchanged. They're long-term targets for a reason. If we were to put ourselves in our shoes in 2020, we would have thought that it was, you know, nearly impossible to achieve our goal for 2022, yet we did in 2021. These are dynamic markets, and our company is executing and well-positioned to benefit from growth in these markets. Historically, we've seen strong snapbacks from air pockets like this. And so our goal is unchanged, and our confidence in our ability to deliver that goal is unchanged.

Great. Thank you. And then as a follow-up, how are you seeing the order book trends? I know it's early in the quarter, but I guess the first few weeks of the quarter.

Yeah, you know, October is playing out in line with what we would have expected and what we guided towards for the fourth quarter.

Great. Thank you. Thanks, Stefan.

And ladies and gentlemen, there are no further questions at this time. I will now turn the call back over to Mr. Ben Glicklich for closing remarks.

Thanks, Abby, and thanks to everybody again for joining us today. We look forward to seeing many of you soon. and speaking with you as well. Thank you.