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spk09: Good afternoon and welcome to Four Star's third quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I will now turn the call over to Katie Smith, Director of Finance and Investor Relations for Four Star.
spk11: Thank you, Paul. And welcome to our call to discuss our results for the third quarter of fiscal 2021. Before we get started, today's call includes forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Although Four Star believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. All forward-looking statements are based upon information available to Four Star on the date of this conference call and we do not undertake any obligation to update or revise any forward-looking statements publicly. Additional information about factors that could lead to material changes in performance is contained in Four Star's annual report on Form 10-K and its most recent quarterly report on Form 10-Q, both of which are filed with the SEC. This afternoon's earnings release can be found on our website at investor.fourstar.com, and we plan to file our 10-Q early next week. After this call, we will post an updated investor presentation to our investor relations site under events and presentations for your reference. Now I'll turn the call over to Dan Bartok, our CEO.
spk05: Thank you, Katie, and good afternoon, everyone. In addition to Katie, I am pleased to be joined on the call today by Jim Allen, our Chief National Officer and Jessica Hansen, ER Horton's Vice President of Investor Relations. The four-star team delivered an outstanding third quarter. We have built our team quickly, and they have done an amazing job of executing on our development projects and identifying attractive investment opportunities. We accelerated our development activities last year, and now that those lots are beginning to deliver, it has put us in a position to capitalize on the significant market demand for finished lots. This resulted in significant revenue growth and market margin expansion, creating meaningful value for our shareholders. Our development teams and contractors continue to execute solidly, positioning us for long-term profitable growth. We have delivered over 11,000 lots to homebuilders fiscal year to date, enabling us to increase our expected deliveries for fiscal 2021 to between 15,500 and 16,000 lots. Executing on our plan is delivering measurable results. Our third quarter gross profit margin increased 610 basis points year over year to 17.8%. Several factors contributed to this quarter's gross margin improvement. The demand for developed lots remains incredibly strong as home builders bolster their inventory positions to meet sales demand. This, combined with our strategy of pricing lots closer to the time of delivery, enabled Four Star to take advantage of favorable market conditions when setting finished lot prices in select markets. We also made further progress in delivering more lots from Four Star source projects, and we continued to reduce our exposure to lot banking. We are committed to our returns-focused business model. Our high turnover, low risk manufacturing strategy led us to achieve a 10% return on equity for the trailing 12 months ended June 30th, 2021. This was a 390 basis point improvement year over year in our fifth consecutive quarter of ROE improvement. We expect to continue to increase our returns on equity and inventory as our platform gains additional maturity and scale, and our team captures increased share in their respective markets. Jim will now discuss our third quarter results in more detail. Thank you, Dan.
spk04: In the third quarter, Four Star's net income increased 56% to $15.8 million, or 32 cents per diluted share. compared to $10.1 million or 21 cents for diluted share in the prior year quarter. For the quarter, revenues increased 76% from the prior year to $312.9 million. We sold 3,858 residential lots during the quarter, an increase of 91% year over year. The average lot sales price for the quarter was $80,700. 86% of lots sold in the quarter were from development projects, up from 77% in the same quarter in 2020. Lots sold to D.R. Horton during the quarter represented 96% of Four Star's total lots sold, down from 98% in the third quarter of fiscal 2020. We sold lots to eight builders other than D.R. Horton during the third quarter this year, up from four builders in the same quarter last year.
spk05: Our pre-tax income in the third quarter increased 105% to $21.1 million with a pre-tax profit margin of 6.7%. As previously announced, during the quarter we refinanced our 8% senior notes due in 2024 with 3.85% senior notes that mature in 2026. As a result of the redemption, we recognized a loss on extinguishment of debt of $18.1 million. However, the refinancing transaction resulted in substantial interest savings. Excluding that $18.1 million charge, our pre-tax income increased 281% to $39.2 million, and our pre-tax profit margin improved 670 basis points to 12.5%. In the third quarter, our gross profit margin increased 610 basis points to 17.8% from 11.7% in the prior year quarter. The improvement was primarily due to increased margins on lot sales from development projects, which was largely driven by capitalizing on the strong demand for finished lots. We continue to expect fluctuations in our gross and pre-tax margins due to the quarterly mix of our lot deliveries and the timing of track sales. SG&A expense as a percentage of revenues in the third quarter was 5.4%, an improvement of 90 basis points from 6.3% in the prior year quarter. We remain focused on efficiently managing our SG&A expenses as we build out our platform to support our significant growth. We believe we will continue to manage our business at a mid-single digit SG&A percentage. Katie?
spk11: Four stars underwriting criteria for new development projects include the minimum 15% annual pre-tax return on inventory and a return of the initial cash investment within 36 months. During the third quarter, our investments in lots, land, and development totaled $400 million, of which roughly 40% was for land and 60% was for land development. For the fiscal year to date, our investments in lots, land, and development totaled $1.25 billion. We now expect to invest at least $1.6 billion in lots, land, and development for the full year of fiscal 2021. Four Star's lot position at June 30th increased 91% from a year ago to 96,600 lots, of which 64,200 lots are owned and 32,400 lots are controlled to purchase contracts. Of our 64,200 owned lots, 33% are under contract to sell to DR Horton, representing at least $1.6 billion of future revenue. Another 28% of our own lots are subject to a right of first offer to DR Horton under the Master Supply Agreement. Lots sourced by Four Star continue to grow as a percentage of the company's owned lot portfolio. supporting long-term improvement in our gross margins. Of the company's own lot position at June 30th, 51% were sourced by Four Star, up from 34% a year ago. We are continuing to target a three- to four-year-owned inventory of land and lots. Jim?
spk04: Four Star remains focused on maintaining a strong balance sheet with ample liquidity and modest leverage. We ended the quarter with $470 million of liquidity including $120 million of unrestricted cash and $350 million of available capacity on our revolving credit facility. Total debt at June 30th was $704 million and our net debt to capital ratio at quarter end was 37.8%. As previously announced, during the quarter we amended our revolving credit facility to increase the facility size to $410 million and extended the maturity date from 2022 to 2025. At June 30th, stockholders' equity was $970 million, and our book value per share increased to $19.58, up 11% from a year ago. Dan?
spk05: Looking ahead, we remain confident in the outlook for our business. Continued execution of our strategic and operational plan, supported by favorable market tailwinds, across our diverse national footprint positions Four Star for further success. Four Star is uniquely positioned to gain market share through housing market and economic cycles in the highly fragmented lot development industry. Based on our results for the fiscal year to date and current market conditions, we now expect to deliver between 15,500 and 16,000 lots generating approximately $1.3 billion of revenue in fiscal 2021. We are now expecting our pre-tax profit margin for the full year of fiscal 2021 to be in the range of 11.5% to 12%, excluding this year's $18.1 million loss on extinguishment of debt. Additionally, we expect our tax rate for the full fiscal year to be approximately 25%, which does imply a tax rate of approximately 26% for the fourth quarter. Before we turn to questions, I'd like to remind everyone of Four Star's investment highlights. We have a unique lot manufacturing business model that is very different from a typical land developer. We have no unentitled land. We are focused on developing lots for the affordably priced housing market. We have a seasoned management team that is experienced in consolidating market share and in navigating through market cycles. We have a strong balance sheet and liquidity position with low net leverage. We have been increasingly profitable and are managing our business to a mid-single digit SG&A percentage. And most importantly, we have a unique competitive advantage due to our relationship with D.R. Horton, the nation's largest builder. This highly strategic relationship allows us to expand our platform nationally while minimizing risk. To summarize, we are continuing to execute on our plan and our position for continued success. Paul, at this time we'll now open up the line for questions.
spk09: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.
spk10: Thank you.
spk09: Our first question comes from Ryan Gilbert with ETIG. Please proceed with your question.
spk01: Hi, everyone. Thanks for taking my questions. The first question is just on, I guess, the overall market, and Dan, I'd appreciate any color or detail you can add on the demand that you're seeing from home builders. I think that there's been some concern in the market that home buyer demand is leveling off a bit, and maybe there's a sense that that might be bleeding back into home the land market, although from your results that certainly doesn't seem to be the case. Any color that you could give us or details on demand from home builders would be helpful.
spk05: As it relates to what the home builders are seeing, I don't really have that strong of visibility as to whether they're really seeing a fall off in demand. What I know is that they have a hunger for lots. That seems to be, at this point, at least you know, insatiable. You know, our number of finished lots that we have on our inventory actually went down this quarter, even though we delivered, you know, really strong lot deliveries. You know, as fast as we can deliver them, they're buying them. And, you know, obviously based on our guidance for the rest of the year, we expect fourth quarter to be a record breaker for us. So it's... At this point, we're not seeing any lack of demand from home builders that want to buy lots. I think one of their constraints is the ability to get lots to build houses on.
spk01: Okay, great. Thank you. Second question is just on 2022. I think you've discussed like a 20% sustainable growth rate with no additional capital needed on the balance sheet going forward. And that's kind of how I've been thinking about 2022. But, you know, your land bank's up 91% year over year. So it seems like you have a lot in place to do better than 20% growth. So do you think you can produce ahead of that growth rate in 2022 or just any color on 2022 would be helpful?
spk05: Yeah. At this point, it's probably too early to give any real guidance for next year, although We thought about it a lot preparing for this call, and I'm not backing off that 20%. I feel very good that we will be able to hit that 20% growth rate based on the lots that we have under development today. Obviously, market conditions are strong right now, and we hope that those continue. But at this point, I feel really good about that 20% guidance, Ryan. And as I said, next quarter, we're going to try to tighten that up and give you some better colors going forward.
spk01: Okay, great. And then last one for me is just on pricing. It looks like your average selling price is pretty flat sequentially from the second quarter. I'm assuming that's mostly mixed, but maybe you can just talk about what you're seeing in the market in terms of finished lot price appreciation and how that compares to pricing of undeveloped lots.
spk05: Yeah, it is mixed. You know, we are definitely seeing some pricing power. I think that showed up in the margins. As you remember, last quarter we were probably guiding you down. for the rest of the year and we were able to overachieve on that. We are definitely seeing strength, but we really, again, look at every project on a project by project basis and think about the returns that we're trying to achieve and really looking at velocities and making sure that as we believe there's pricing power there, we're being very careful not to hamper that affordability of the house lot package. But again, I felt really good about the quarter. Again, obviously better than we probably had anticipated for the quarter in pricing power. Really, I'm looking forward to seeing what the future brings as we say we have a lot of lots under development right now.
spk01: Okay, great. Thanks very much.
spk09: Thank you. Our next question comes from Anthony Pattenary with Citi. Please proceed with your question.
spk07: Good afternoon. Can you talk a little bit about what drove the change in lot delivery guidance? I guess 1,000 units at the midpoint. How much of the raised guidance was 3Q deliveries above maybe your internal expectations versus sort of the outlook for the balance of the year?
spk05: Yeah, I don't know that I have a specific number of what was delivered in third quarter versus fourth quarter. I think it's probably more driven by fourth quarter expectations. There's been a lot of talk in the market, at least from our perspective, of delays in being able to get certain materials. There's been potentially delays in getting projects completed. We are very careful in making sure what guidance we give we're comfortable with. As this quarter has unfolded and we see where we're at on deliveries for next quarter, it made us comfortable in raising that guidance. So I feel really good about what we're seeing for the next quarter.
spk07: Okay, that's very helpful. And then in terms of just sort of hitting the higher or lower end of guidance, do you think it's mostly a function of demand materializing on the part of the builders or maybe just timing or is it sort of those maybe labor permitting material related bottlenecks that, you know, in terms of the kind of driving the greatest risk to the upside and the downside?
spk05: Yeah, I think the risk of upside versus downside is really in the delivery side. We have not seen any fall off in demand for lots. If anything, I think the demand has increased, which again has given us a little bit of pricing power. So I think it's predominantly based on the ability to complete those projects that we see hitting substantial completion this quarter and being able to deliver those lots.
spk07: Okay, that's very helpful. Maybe just one quick follow-up. In terms of cycle times, it seemed like you were able to sort of accelerate cycle times in the wake of the pandemic because of some looseness in the labor markets. Obviously, you know, that's probably tightened quite a bit. In terms of cycle times, where they stand now, are they stable, improving, maybe deteriorating, just any color you can give there?
spk05: I think as compared to where they were six months ago, we are definitely seeing cycle times extend. Again, you're right, we were able to kind of accelerate cycle times when we really stepped on the gas earlier last year when a lot of people were not. It's really into lots of things. It's delivery of certain materials. It's the ability to get inspections. A little bit has been weather. I always hate to use weather, but it's been a pretty rainy season in certain parts of the country. So we're definitely seeing an extension, but probably back to more what was normal for us a year ago or a year and a half ago, but extended definitely from earlier this year.
spk10: Okay, that's helpful. I'll turn it over.
spk09: Thank you. Our next question comes from Deepa Raghavan with Wells Fargo Securities. Please proceed with your question.
spk00: Hey, good evening, Dan and Jim and Katie. Thanks for taking my question. Just following up, trying to get a little bit more clarity on the kind of growth you're experiencing, but also trying to manage your operations for that level of growth. Are there any new challenges that kind of cropped up this quarter? You mentioned a little bit of the cycle time, but labor seems like it should be more of a challenge just given the way you're growing. Just curious, anything new that actually cropped up this quarter, any new challenges? And if you can gently talk about how you're managing for this kind of growth, especially with regards to operations, that would be pretty helpful.
spk05: Yeah, I guess I'll start with the second question or second part of your question first. You know, we have been planning for our growth for quite a while and have been staffing up, you know, pretty considerably. You know, we've almost doubled our headcount from a year ago. on really preparing for the volumes that we have today. So from a labor standpoint, for Four Star itself, I think we're very well positioned to continue to execute on our business plan. And obviously we'll need to continue to add staff as we continue down the growth path. As it relates to our operators and getting projects completed, again, to some extent I feel very fortunate. We're not really seeing delays any delays really related to the contractors not being able to get people on the jobs to complete the jobs. We are hearing that they're having more turnover where people are, you know, operators are moving to another operator for a couple extra dollars an hour, but they've been able to replace those people. So we feel good about that. Probably the one thing that I would say, you know, last quarter I was talking about we're hearing about, you know, shortages in material. We are starting to experience some delays in getting things like fittings to put PVC pipe together. We have seen some delays related to concrete allocation, not being able to get full day pours in on certain projects where you're kind of limited in the amount of concrete you can pour. So I think some of the things that last quarter we were hearing about, we are starting to see some impact of. But nothing that at this point has been dramatic. Again, I think we're trying to stay ahead of the curve. We're making sure materials are ordered earlier in the process than would have normally been appropriate. And part of it is relying on really good contractors. Our customer base is strong, and our contractor base is strong, and we've aligned ourselves with, I think, some of the best people in the various markets. So that has, I think, been very beneficial for us.
spk00: Okay, that's helpful. My second question is on the lot price increases. I mean, it's kind of flattish, but still the trajectory is not down or infected. It's already at 80K. You know, is this where you're starting to see it stabilize a bit at this point in time, or you think there's enough, you know, the backdrop is still pretty strong demand-wise, and there's still a supply imbalance. So I think, in all fairness, Expectation is lot prices have still more to run. They're not stabilizing here. But from your side, are you undertaking any measures to keep that average lot pricing under a certain affordability threshold? How are you thinking about that?
spk05: Well, we think about it on a project-by-project basis. We really look at sales velocity that the builders are experiencing in those projects, or in the case of a new project, what we think is a comparable project. And we try to make sure that we're balancing price versus velocity. At this point, even with an average sale price of a little over $80,000, we still think it keeps us in that affordable price point. An interesting fact is even though our average is $80,000, our median price is closer to $70,000. So over half of our lots that we sell are under $70,000, which again I think really sets us up well for that affordable price house today. But yeah, as far as trying to manage it, it's probably where we spend a significant amount of time is on a project-by-project basis as we're setting prices and and trying to negotiate appropriate pricing is making sure that we're keeping velocity to keep our returns high.
spk00: All right, my final one. Any updates on how July is trending so far? Just curious, and I'll leave it there. Thank you.
spk05: You know, as far as July, again, we're issuing our guidance today for the full year, which, again, implies a record-breaking quarter for us and a lot of deliveries. So at this point, as I sit here on July 20th, I feel really good about July, and I feel really good about the next two-plus months ahead of us.
spk00: Thanks so much. I'll pass it on.
spk09: Thank you. Our next question comes from Truman Patterson with Wolf Research. Please proceed with your question.
spk06: Hey, good afternoon, everyone, and thanks for taking my questions. First, just wanted to touch on your balance sheet and kind of spin going forward. You know, you're approaching that 40% net debt to total capital threshold. You're owned lots, you know, over 64,000, four years owned if you look at kind of 21 closings. I guess going forward, you know, assuming that, you know, development work takes up a decent amount of net working capital, right, are you all comfortable going above
spk05: that 40 percent threshold or should we just expect that your lot acquisition to start you know to moderate a little bit over the next we'll call it six to twelve months you know our our sales velocity should continue to accelerate so we you know the need to replace the existing lots um will be there um as far as am i comfortable going over 40 we're really managing to that 40 number you know it may trend over a little 40 for a while, but our goal will be to bring it back down. It's still about finding those projects that we believe fit our operating model and our underwriting requirements. Frankly, it's also a little bit harder to find those with as much other people that are out there trying to bid up the price of land, especially in those smaller shovel-ready projects. There may be just less that fit our underwriting requirements today anyway. I feel good about our pipeline. I think that we're going to be very careful in making sure that we're only buying projects that we think are really good, solid projects. But again, we're going to guide to that 40%. We don't look to exceed 40% for very long or by very much if that happens at all.
spk06: OK. OK. And then you all are finding lots that are hitting your underwriting. There's clearly some lot pricing power in the market right now, very strong builder demand in your markets. You know, when I look back at, you know, the past couple quarters, gross margin in that 18% range, same thing, just looking at your guidance, it seems like it'll be at least in that, you know, in that range. Is it safe to assume, just given kind of the tailwinds in the market, that this is kind of a new normal that we should see at least maintain out into 2022? or are there any big items that we need to think about?
spk05: We're still maturing our portfolio. I think you're still going to see some fluctuations from quarter to quarter. I wouldn't take that 18% as a run rate. I think that what I've now done, at least to myself and I think maybe to you folks as well, is show that we can actually hit 18% more than just once, which is really good. But I wouldn't, if it was me, I wouldn't be betting that I'm going to do that every quarter for the next umpteen quarters. Hopefully that will happen. You know, I can't say that it's impossible. But, you know, the market's still the market. I've got to make those pricings fit the market. You know, we were really fortunate when you really think back, you know, a year ago and we had those quarters, you know, was it our first quarter of the year or maybe last quarter when We bought a lot of land. It was really outsized for us. It was before all these prices ran up. Whether it was luck or just we were really smart people, but we bought a lot of land at a really good point in the market and feel really good about the inventory that we have.
spk02: Truman, as you've heard Dan and team say over and over, the focus is more on returns than it is gross margins. They've reported a fifth consecutive quarter of improvement in ROE, and the gross margin will be what it'll be based on market conditions, but they're going to maximize their portfolio to drive the best possible return.
spk06: Okay. Okay. Fair enough. And then just final one from me. There's been a lot of talk already on the call about very strong demand, and builders are basically short lots right now. You know, just hoping you could give a little bit more color. You know, are there any markets that you're scaling back investment? You know, just any metros where you perceive as a bit of a frothy land environment? Or, you know, are there any markets where you're starting to see or hear builders, you know, push back a little bit or their appetite for lots soften a little bit?
spk05: Yeah, I don't think there's really anywhere we're seeing a slow up in demand. When When our investor presentation deck gets published and you compare our map against the map last quarter, you'll probably see we have less exposure up in the Pacific Northwest than we did before. And again, further increased exposure in Florida and in Texas. So our focus has been in the markets that we know we can get velocity and are hopefully not as... governmental regulated governmentally regulated as other markets where we where we can you know have a more plannable and deliverable lot timeframe so I you know I again I it's not from lack of demand it's more from you know looking at opportunities and making sure that the projects that were underwriting we can deliver on and so they say you will see a a less allocation of our dollars and lots into the Pacific Northwest right now.
spk06: Okay. Thank you, and good luck on the upcoming quarter.
spk05: Great. Thanks, Truman.
spk09: Thank you. Our next question comes from Michael Rahat with JP Morgan. Please proceed with your question.
spk03: Hi. This is Maggie on for Mike. Thanks for taking my questions. First, I was hoping to zero in a little bit on the gross margins this quarter. You listed several factors driving the upside, demand, pricing the lots closer to delivery, delivering more four-star sourced lots. But I was wondering if you could maybe rank order the different drivers of that upside and maybe give a little bit more color there.
spk05: Boy, rank order, that's a tough one. But what I can say is if I had to pick the top two, it is four-star sourced transactions where we didn't price earlier in the transaction. And it's a strong market demand. So we happened to be in a position last quarter and where we were delivering lots that had been recently priced into the market strength. But again, a lot of that is driven by four-star source transactions versus builder source transactions. And again, we're growing our portfolio in that area. Now over 51% of the lots that we own are in four-star source transactions.
spk03: Got it. Thanks. And... Second, just on SG&A, I know you spoke to kind of a mid-single-digit range. I know in the past you had talked about maybe being comfortable in the kind of 5% to 6% range, so mid-single digits. But as we look forward into 2022 and kind of the next few years, can you talk about the ability to continue to see some leverage on that line and how we should be thinking about SG&A over the more medium to longer term?
spk05: Yeah, I think 5% is a pretty darn good rate, at least the way I was brought up, and I think that we can manage to that. Is it going to be six? Is it going to be four? I think you'll see some variability quarter to quarter based on volumes. As far as Can it be leveraged further? I think as our platform continues to mature and scale up, I think that you will probably see some leverage, but I don't know that I could quantify that for you today.
spk03: Got it. Thank you.
spk09: Thank you. Our next question comes from Alex Barron with Housing Research Center. Please proceed with your question.
spk08: Yeah, thanks for taking my question. I was hoping you could help me understand, you know, how sensitive are your prices on the lots relative to the home prices? And, you know, in other words, if home prices start to move up as they have in the last couple of quarters, how quickly could you reprice your lots? And B, you know, are the lots priced as a function of the home price or is there some other metric you guys are using? Thanks.
spk05: Well, I think as far as our ability to continue to move up lot prices, it's probably more based on the builder's margins than it is on the house price itself. Obviously, they're trying to match with certain margins themselves, and if I can squeeze some of that increased margin out of it, I will. As far as metrics, we don't have any kind of true-up based on a percentage of the house price. That's not the way we're pricing our lots. We do our best to try to get a sense of what the market pricing is in an area. But really, it's focused on project by project, trying to understand that balance between velocity and pricing and hitting that number where we're really maximizing our returns on our invested dollars.
spk08: Got it. Thank you. That's another one on materials. You know, as you mentioned, builders have been facing various material supply chain issues. And I think I heard you mentioned concrete. So I was curious, you know, if you could give us a sense whether you guys are experiencing shortages of concrete, and if so, is it just in one market? Or is it pretty widespread across the country?
spk05: It is really in only certain isolated markets, and we're basically a couple things that we're seeing delays on, and that is in some places we are seeing concrete allocations where you're only allowed so much concrete per day as they're allocating out to their various jobs. But again, it's not widespread. It's only in certain locations. The other thing that we're seeing is you know, again, more delays on is pipe fittings. We're going to pretty much get pipe, but with the fittings that put the sections of PVC pipe together. And there seems to be a shortage of that. My understanding is a lot of that is being manufactured in India. And because of some of the COVID issues in India that those factories have been either closed down or operating only marginally, which has created somewhat of a shortage for those fittings, at least from the suppliers that we're getting things through. But we've been still able to get them. We're trying. We've learned to order them earlier in the process, but in some cases we have had some delays in getting them on job sites. But again, pretty isolated. Some of our contractors are inventorying more things than others. Some of them only buy to kind of outfit your job. So it is not widespread, but they are things that we're seeing.
spk08: Thank you very much.
spk09: Thank you. There are no further questions at this time. I would like to turn the floor back over to Dan Bartok for any closing comments.
spk05: Thank you, Paul. And thanks to everyone on the four-star team for your focus and hard work. It was a great quarter. We look forward to working together to continue growing and improving our operations over the coming years. We appreciate everyone's time on the call today. We look forward to speaking with you again in November to share our fourth quarter results and our full year results. Thank you.
spk09: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful evening.
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