Horizon Global Corporation Common Shares

Good morning, everyone, and welcome to Horizon Global's first quarter 2021 conference call. My name is Matt, and I will be your operator for today's call. All participants will be in a listen-only mode until we reach the question and answer session of the conference call. This call is being recorded at the request of Horizon Global. If anyone has any objections, you may disconnect at any time. I would now like to introduce Mr. Jeff Troika with Lambert IR, Horizon Global's investor relations firm. Mr. Troika, you may proceed.

Thank you, Operator. Good morning and welcome to Verizon Global's first quarter 2021 conference call-in webcast. On the call today are Terry Gohl, Verizon Global's Chief Executive Officer, and Dennis Richardville, Verizon Global's Chief Financial Officer. Earlier this morning, we announced our first quarter 2021 results. The release is available on many news sites as well as in the investor relations section of our website at horizonglobal.com. Turning to slide two, today's presentation will also include non-GAAP disclosures. These disclosures are reconciled to GAAP in the appendices to our quarterly press release and presentation, both of which are available on the investor relations section of our website at horizonglobal.com. Turning to slide three, I'd like to remind you that statements in today's presentation will include our views about Horizon Global's future performance, which constitute forward-looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements. We've described these risks and uncertainties in our risk factors and other disclosures in the company's most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission. With that all being said, I would like to turn the call over to Horizon Global's Chief Executive Officer Terry Gold. Terry?

Thank you, Jeff, and welcome to all of you who are participating in our call today. On behalf of the complete Horizon Global team, Dennis and I will proudly present our first quarter results for 2021. During the past earnings calls, we have themed our progress and described our position with terms like momentum and on track. Today, while we maintain that these descriptors still apply, We are now into the acceleration phase of our plans. Through great teamwork and solid plans, we have implemented the foundation of the lean operational vision we had defined for the company in late 2019. Our results, even through the darkest COVID periods of 2020, highlighted the value and the importance of our operational initiatives. We drove meaningful improvements across all aspects of our business throughout 2020, as you heard in our last earnings call. We simply did not accept COVID related shutdowns and volume loss in 2020 as an excuse to take our foot off the gas. We continue to improve the business each and every day. Our plans to turn around the business never wavered from stabilization to foundation and standardization to now acceleration. We are now in that acceleration phase as we deploy the best-in-class method successfully implemented at our North American facilities to our facilities in Europe and Africa. We also defined and deployed targeted improvement initiatives across our global administrative business functions, which drove significant improvements in our processes and procedures and simplified the way we do business. 2021, this year, marks the stage of our plan for rapid acceleration and the deployment of our proven process enhancements in support of our safety, quality, productivity, delivery, and growth expectations. I take great pride in saying that never before has this company been as unified in purpose or aligned in plans as we are today as we work to achieve the objectives we set for ourselves. As you will hear in today's presentation, we are definitely in that acceleration mode. Acceleration is represented both on our sales volume performance and by the significant increase in new order intake around the globe. Acceleration in the advancement of the production throughput improvements our team is generating throughout our manufacturing facilities worldwide. Acceleration in terms of efficiency and optimization throughout our distribution centers. Acceleration of the collaboration with our core suppliers as we support the growth of the company worldwide. as well as onboarding a significant number of new qualified suppliers to augment supply where necessary. Acceleration of our operational excellence initiatives to meet and exceed customer and industry standards, as evidenced by our IATF and customer-specific audit results, representing the horizon method and horizon way in which we conduct our affairs. Always set to the highest common denominator, we are transforming the company to best in class, regardless of the audit conditions. Our audit results demonstrate the improvements we have made. They are meaningful and are leading to new business opportunities and wins across the board as they should. We accelerated our first to market new application launch performance and successfully solidified ourselves as a market front runner in our space. This as well led to new business wins and setting up us for the future. As planned in 2021, we have been rapidly transitioning our operational excellence deployment and implementation of principles from North America to Europe and Africa. Acceleration is an understatement as we reflect on the work of the operations team over the past four-plus months throughout our Europe and Africa operations. You will hear some of this in today's update, and we look forward to continuing to update you on future earnings calls on this extremely important initiative. Market demand for our products remained extremely strong during the quarter. Accompanying this increasing demand, however, were material availability issues and transportation constraints as demand levels in our industry and others stressed the system during the period. While we experienced significant period-over-period net sales growth, these factors acted to throttle even further growth that was possible during the first quarter as order intake and booked orders soared, resulting in the retiming of a significantly improved order book into the second quarter and beyond. Our team has done an excellent job in securing materials, components, and freight lanes during the period as we worked our plans while continuously adjusting to sudden changes the market presented to us. Dennis and I will get more into the details of this as we go through our update. We also continued to focus on the company's debt and liquidity structure. We refinanced our debt as previously announced, and also expanded maximum borrowing capacity on our North American ABL. A couple of great indicators of collaboration with and confidence of our financing partners. Acceleration on all fronts. Let's take a look at what that meant for Q1, and then we will provide a glimpse of our gross sales results and order volumes for April, as the market demand and our position within it remains strong. Turning to page five. As you recall, this summary represents a high-level actions and key initiatives in our plan for the year. Focusing your attention to Q2 through Q4 actions, I would like to provide a few highlights of our progress. As far as freight and logistics, demand continues at a heightened level and port congestion remains extremely high. This has led to an increase of in-transit times for products to reach our distribution centers. Offs are up. but we have worked internally and collaboratively with our customers to create new alternative shipping efficiencies, inclusive of lane optimization, transitions to full truckload requirements, and ship direct options to help mitigate a portion of these headwinds. Production throughput levels are higher than they have ever been in our Mexico manufacturing facilities as we executed on the capacity improvement initiatives that continued through Q1 with more to come in Q2. we will continue to increase our capacities for our core products. This has been the backbone of our plan all along, and we are executing to that plan exceptionally well. In terms of material supply and capacities to support our growth, we added over 100 new qualified suppliers to our team in quarter one. 30 of these additions were tied to production material and components such as resins, steel, copper, and electronic componentry amongst other purchased parts. They are represented across seven countries in support of our operations across the globe. These suppliers were excited to work with us and to support our best-in-class product offering. Note that these are additional, they're additional, not replacements of the great suppliers we currently have and have been onboarded to support the increasing demands we are experiencing, as well as the demand that we expect in the future. Our targeted new business wins are on track to plan, We were also on track with our footprint rebalancing and manufacturing flexibility strategy in Europe and Africa. Turning to page six. How did we perform in Q1 of 2021? A few top headlines to highlight our performance are net sales of $199.2 million represented a 22% growth from Q1 of 2020. Both operating segments were up in terms of sales. Relative to margin performance, our results continue to show strong period over period improvements. Our adjusted EBITDA performance for the first quarter of 2021 improved $9.8 million to $12.7 million over the prior year. This represents an adjusted EBITDA margin improvement of 460 basis points over the prior year. An even more impactful way of looking at this is that the improvement in adjusted EBITDA absolute values of $2.9 million for 2020 quarter one to the $12.7 million result in Q1 2021 represents a 331.7% improvement in this metric. A great rate of change for sure. This was bolstered by positive sales volumes and as we have stated in previous earnings releases, the impact of our continued improvement actions across all aspects of our business. Please note that these phenomenal results are despite a quarter that was challenged with material economics, rate constraints, and ever-changing production schedules at our OEMs. A truly great job by our team. Our gross profit and operating profit performance also substantially improved during the first quarter of 2021. Q1 2021 gross profit of $40.6 million for the quarter reflected an improvement of $14.3 million over Q1 in 2020. This resulted in a 430 basis point improvement in gross profit margin. Q1 2021 operating profit improved by $13.5 million to $6.8 million, reflecting a 201.5% improvement over the prior period. Quarter one 2021 net loss from continuing operations of 15.2 million, represented a $1.3 million improvement or 840 basis point improvement over the prior year comparable period. Of special note, this was inclusive of a one-time $11.7 million loss on debt extinguishment related to the February term refinancing. We added to this favorable debt refinancing and an ABL expansion during the quarter. Again, Dennis will highlight this in this part of his presentation. Turning to page seven. On this slide, we continue to present our sales performance in terms of units sold for our core manufactured products in North America, hitches and brake controllers. Consistent with the improvement levels seen previously, you can see increases in sales performance as compared to Q1 month-over-month 2020 levels. For hitches, combined OE and aftermarket, we are up 41% for the quarter, culminating with an 87% year-over-year increase in March 2021 versus March 2020 in terms of unit sales levels. Similarly, for brake controllers, our unit sales on a Q1 2021 versus a Q1 2020 basis are up 53%. But even more impressive is that this increased to a substantial 123% increase as we compare March 2021 versus March 2020. We added capacity to support the demand for our core products as it represented a large opportunity for us. Through the tremendous efforts of our team and the support of our customers, we've been able to capitalize on that opportunity. The market fundamentals remain strong for our portfolio with all sales channels showing growth. Turning to page eight. Again, as we've presented in our previous calls, we remain focused on increasing our performance in terms of sales efficiency. with our metric of dollars per unit shipped out of our central distribution center in North America. We continued on a positive trajectory throughout the first quarter, improving this metric from a $19.17 average sales dollar per unit shipped in January to a $21.79 per unit sold in March. When we compare the impact of our actions in their entirety, Along with the market demands, we have improved our efficiency compared to 2021 versus March 2020, this by over 52% in terms of sales dollars per unit shipped, a truly great result. This was achieved through a multitude of actions, with the top contributors being further deployment of minimum order quantities to our sales offerings, strengthening mix supported by the additional production throughput from our Mexican operations, and the result of our pricing initiatives. We experience favorable mix for certain products, and we continue to drive mix optimization through improved production-level performance. We remain on track and are accelerating further efficiency actions throughout our distribution centers worldwide. More to come on this as we go through to quarter two. Turning to page nine. When we graphically depict our monthly net sales performance, it presents a solid trend. With sales up 22% in quarter one 2021 versus quarter one 2020, our adjusted EBITDA under the same period improved by an impressive 331.7%, or 9.8 million, repeating that. We had a 22% improvement in our sales, yielding a 331.7% adjusted EBITDA improvement. This is a great spread, and it's a great improvement. The period over period performance gap continues to expand with this trend continuing through March of 2021. Net sales increased by 57.3% March over March, and we generated significant adjusted EBITDA improvement from prior year. We are pleased with the significant improvement levels and positive trends we are generating month over month throughout the quarter in absolute terms and in percentages as compared to 2020 performance levels. To further this point, please turn to page 10. On this chart, we depict our gross sales versus booked order levels that were in place at the end of each month in North America as compared to 2020. As you can see, during the first quarter of 2021, we had monthly booked orders yet to be filled well above prior year levels. Booked order balances increased each month throughout the quarter from $56 million at the end of January 2021 to $60.3 million at the end of the quarter in 2021, or 169.6% better than the end of Q1 2020. This, even with a 41.8% higher growth sales in March 2021 over March 2020. Great momentum and great accelerations. As I mentioned earlier, and even with the exceptional sales performance for the quarter, more was possible. Further incremental sales were retimed due to constraints experienced in supply and logistics. These booked orders have been held and will be processed through the second quarter as we continue to increase capacities to expand their supply base. These year-over-year comparisons represent significant improvements in order book velocity driven by the strength of our market and the response of our customers to what we are accomplishing here at Horizon Global. Consistent good signs across the board. I'll now turn it over to Dennis for the financial section before returning with some closing comments and providing some preliminary April highlights.

Thank you, Terry. Good morning, everyone, and thank you for joining us. To echo Terry's comments, we are pleased with the first quarter results, and we continue to work diligently to maintain our momentum heading into the traditional selling season focused on earnings growth, liquidity, and working capital management. Please turn to slide 11 for a view of the company's consolidated results for the first quarter of 2021. Consolidated net sales for the first quarter of 2021 were $199.2 million, an increase of $35.9 million, or 22%, compared to the first quarter of 2020. The net sales increase was primarily attributable to higher sales volumes in both the Americas and Europe-Africa operating segments, driven by strong customer demand combined with the initial impact of COVID-19 beginning late in the first quarter of 2020. Gross profit increased to $40.6 million, an improvement of $14.3 million compared to the first quarter of 2020. The higher gross profit was a result of the higher net sales coupled with manufacturing and operating efficiencies across the business. We reported operating profit of $6.8 million and improvement of $13.5 million over the first quarter of 2020 driven by the improved gross profit. Net loss from continuing operations was $15.2 million, an improvement of $1.3 million over the first quarter of 2020, despite a one-time $11.7 million loss on debt extinguishment recorded in the first quarter of 2021 related to our February term loan refinancing. We reported adjusted EBITDA of $12.7 million an increase of $9.8 million over the first quarter of 2020. Improved adjusted EVTA was primarily due to the increased gross profit and business performance previously mentioned. Consolidated adjusted EVTA margin increased to 6.4% as compared to 1.8% in the first quarter of 2020. Let's turn to slide 12 to review the segment performance for the quarter. Net sales in the Americas were $109.8 million, $17.4 million, or 18.8% higher than the first quarter of 2020. Net sales increase was primarily driven by a combined increase of $9.8 million in the automotive OEM and OES sales channels, coupled with a $4.9 million increase in the aftermarket sales channels. We reported operating profit of $11.8 million in the America segment compared to an operating profit of $2.7 million for the first quarter of 2020. The increase in operating profit was primarily driven by higher gross profit attributable to the increased sales volumes and operational performance improvements realized across the segment during the first quarter of 2021 partially offset by higher outbound freight costs attributable in a large part to increased sales volumes. Adjusted EBITDA for the segment increased to $12.9 million as compared to $6.1 million for the first quarter of 2020 due to strong operational results previously discussed. Adjusted EBITDA margin was 11.7% as compared to 6.6% for the first quarter of 2020, driven by the strong quarterly operating performance. Transitioning to our Europe-Africa operating segment, net sales were $89.4 million, an increase of $18.5 million, or 26.1% over the first quarter of 2020. And that sales increase is primarily due to a combined increase of $10.8 million in the automotive OEM and OES sales channels, as well as a $6.7 million increase in the aftermarket sales channel. We reported an operating profit for the segment of $1.5 million compared to an operating loss of $2.5 million for the first quarter of 2020. The improvement was driven by a $4.7 million increase in gross profit, primarily attributable to higher net sales combined with favorable manufacturing costs. Adjusted EVDA for the segment increased to $5.4 million as compared to $2.3 million for the first quarter of 2020. Adjusted EVDA margin increased to 6% as compared to 3.2% for the first quarter of 2020. Now moving on to our working capital liquidity and free cash flow position on slide 13. Great working capital was $81.8 million for the first quarter of 2021, which represented an increase of $26.2 million compared to the end of the fourth quarter of 2020. Specifically, receivables increased $24.5 million or $111.9 million compared to the end of the fourth quarter of 2020. The change in receivables was driven by higher net sales in the first quarter of 2021 compared to the fourth quarter of 2020. Day sales outstanding was 51, an increase of five days in the fourth quarter of 2020. Inventory increased $19 million to $134.4 million compared to the end of the fourth quarter of 2020. Days on hand, inventory was 76 days, an increase of two days from the fourth quarter of 2020. The higher inventory represents a strategic build to position ourselves to meet significant booked order levels and customer demand in anticipation of our traditional peak selling season. This includes an increase in in-transit inventory related to international shipments of $2.6 million compared to the fourth quarter of 2020 and $10.9 million compared to the first quarter of 2020. Accounts payable increased $14.4 million to $113.9 million compared to the fourth quarter of 2020. Days payable on hand was 65 days, an increase of one day from the fourth quarter of 2020. Cash and availability or liquidity totaled $63.4 million for the first quarter of 2021, which is comprised of $38.8 million of availability under our credit facilities and cash on hand of $24.6 million. This reflects a $20 million reduction from the fourth quarter of 2020. Free cash flow was a use of $21.6 million at the end of the first quarter of 2021, which is $23.3 million lower than the prior year, driven by the higher working capital, which is primarily the result of higher inventory levels related to our strategic build previously mentioned. Turning to slide 14 for a view of our debt and capital structure. Total gross debt increased by $14.3 million to $280.4 million compared to $266.1 million at the end of the fourth quarter of 2020, primarily reflecting proceeds from the term loan refinancing completed during the first quarter of 2021. Moving on to debt maturities on slide 15, the February 2021 refinancing allowed the company to address its near-term maturities in a cost-effective manner. In addition, with the ABL amendment completed in April of 2021, our maximum available credit under our ABL facility increased $10 million to $85 million. We believe these recent improvements to our capital structure provide the company with the financial flexibility and extended runway to execute on its long-term strategic plans. With that, I will turn it back to Terry for his closing comments.

Thanks, Dennis, and compliments again to you and your team for continuing to drive the process improvements that we have seen throughout the financial organization and the company as a whole. Thanks as well for your outstanding leadership on the refinancing and the ABL expansion actions completed during the quarter. Once again, great job. Turning to page 16. Here on this page, we are providing a preliminary view of our April gross sales for the company. As you can see, we have dramatic increases for both operating segments on a year-over-year basis, 2021 versus 2020. The America segment is positive 39%, with Europe and Africa being up 55.5%. Specifically, when looking at gross sales on an April 2021 versus April 2020 basis, we are up year over year in the Americas by 202%, while Europe and Africa led the way with year over year improvements of 359.1%. Our booked order levels also increased in North America significantly, as you will see when we flip to the next page. Let's turn to page 17. North America order intake and our sales level performance continued to improve throughout April. Growth sales for April 2021 were up 201.6% for North America over April of 2020, while our booked orders increased to $74.2 million at the end of April 2021. The year-over-year ending book orders for April 2021 reflected an increase of 222.6%, again, presenting evidence of the strength of the market and the incredible demand for our brands and our products. This improvement was built off incremental organically-driven sales growth supported by significant operational improvement. On to page 18. That will summarize the key hot topics that circle our segment and highlight our focused response to the issues we face. Commodity prices are up and demand is stressing the market. We have taken what we consider to be final results with price increases to offset commodity increases for the likes of steel, copper, resins, and electronic components. Most of the impact of these increases will be recognized post Q1 2021. as we honored booked orders that were in place before our announcement to our customers. We will continue to assess the commodity situation as we move out through the course of the year. As I noted earlier, we have added capacities in conjunction with our current suppliers, as well as onboarding 30 new production material and component suppliers during the first quarter, as referenced earlier in the presentation. We are also capitalizing on operational improvements made internally to our manufacturing operations with insourcing of select products and process where it made sense to either increase supply, to optimize costs, or both. As far as supporting the growth we have in booked orders and our long-term projections, we continue our capacity increase initiatives in North America and are aggressively driving improvements throughout Europe and Africa. as was always the sequence in our planning. The next steps in yield improvement in North American metals capacity will be introduced this quarter. We laid the foundation for operational flexibility during 2020. This is paying dividends for us as we navigate through the impact of shifting production plans at the OEMs as the market deals with the global microchip supply constraints that are so prominently reported in the news. Shifting to and from OEM to aftermarket demands is allowing us to somewhat level the impact of those issues. Finishing on page 19, we'll leave you with these metrics. For the quarter, as compared to Q1 2020, net sales are up 22%. Adjusted EBITDA is up 9.8 million or 331.7%. Cash and liquidity is up $12.6 million. Gross profit is up $14.3 million. Gross profit margin is up 430 basis points. Production capacity is at an all-time high for the company with more to come. Booked order strength in North America continues to grow even with significant year-over-year sales increases being realized. Booked orders at the end of Q1 2021 were 169.6% better than at the end of Q1 2020 and increasing to 222.6% at the end of April 2021, versus the same period in 2020, even considering the staggering overall growth sales increase globally for month of April at 247.6%. Our debt has been favorably restructured and our ABL facility has been improved. We launched a significant level of new products during the quarter. We generated an impressive and successful results with our audits performed throughout the quarter. We are recognizing some great new business wins tied to our customers recognizing the improvements our team has implemented. We are truly in our acceleration mode and look forward to reviewing our Q2 performance when we get back together later this summer. Thank you, and I'll now turn it back to the operator for any questions.

We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you'd like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Matt Caronda with Roth Capital. Please go ahead.

Hey, guys. Thanks so much for taking the questions. Just wanted to start on slide 17, very helpful monthly cadence for North America. I was just curious if you could speak a little bit more about the gross sales cadence into April. It looks like typically it should be ticking up sequentially, seasonally. I noticed it looks kind of flattish in April. Obviously, the order book looks very strong. Is that just supply constraints that are sort of – holding back production and delivery? Is it outbound shipping? Talk a little bit about the gap there in terms of the order book growth versus the sales growth in April.

Matt, first of all, it's great to have you on the call. Second, when we look at April, that's not a shift in momentum. If you look at the European side, you've got three fewer days between March and April and you're averaging $1.6 million a day in shipments going out. So it lined up with additional holiday days during that period. So it brought it down a little bit. North America, you saw the backlog order business that we had leaving out of there at $74 million. So there is a bit of an extension on inbound materials that are coming in for buy-sell. But that's not the real story. I mean, that's part of the story. That's throttled us from probably another $20 million of sales possible in the month of April. But really, when you look at this, we had some really strong sales in the last several days of the month that you don't recognize until their receipt at the customer. So that's part of that. But truly, it's just the timing. It's just the timing game. We have an extension probably up to nine weeks. There's a nine-week time shift or timing from port to port coming from international, and that's exacerbated a bit by port constraints in getting product off the dock onto rail into our facilities. So, again, it's mostly – it's almost all timing, and – And as I mentioned, those get pushed into the second quarter. So April and May, June have a very strong order book to fulfill.

Okay, very helpful. And then I thought slide seven was also relatively helpful, just going through the cadence of hitch unit sales and brake controller sales. A thought came to mind when I was looking at that, though, and I'm wondering if you could maybe speak to what Where do you think your market share is in each of those categories? Are you winning market share in North America in those categories with the growth that you've highlighted in Q1?

Yeah, and again, our OE business has grown tremendously. We have the Ford truck business that has really pressed the brake controller content up on the OE side. But with the additional capacity that we've generated, some new products that we've launched, our aftermarket business in brake controllers is also significantly up. And we are conquesting business. We are conquesting business in our North American hitch segment. I'll leave it at that. But we are growing our position in a growing market.

Okay, great to hear. Last one for me, and then I'll jump back in queue. But on the price increase front, so you mentioned announced price increases. You're honoring the old order book until sort of you start delivering on the product later this year. Just curious how you're thinking about raw material inflation, especially as it pertains to steel and resins. and how you may consider taking price for the remainder of the year. I'd just like to get your thinking of how that plays out for the rest of 2021.

Yeah, I can't put it in perspective, Matt. I mean, the steel prices quarter one to quarter one year over year is up 41%. So it's not a small shift in raw material prices.

We have added again, we've gone out to do everything we possibly can to mitigate those expenses so we don't pass it on relative to pricing, right? So we've added multiple steel suppliers, component suppliers that convert steel for steel products for us to gain additional capacity, but also to drive pricing options where possible. But we don't see that mitigating itself anytime soon, right? So the The steel is an issue in the marketplace. It's going to be there. It's going to be there for a while. Copper, again, as we look at the use in our electronic components, copper prices are up 60% year over year. So these are real, real tangible changes. Now, what we did is we did an increase last year in the latter part of the year. And then given this shift in material pricing, Um, and working with our customers as well. I mean, we, we adopted new pricing, um, effective. We announced it early, right. Early in the quarter. And we made it effective April 1st, uh, for any new orders that came in. So there was a, some minor new orders that came in during the period. I think our pricing amount is about 2.4 million during the quarter. That's it. Right. So it was very limited impact in, in the first quarter. Um, So the expectation and what we're looking at is that the flow through of that is to be seen in quarters two through quarters four. But we have to be flexible, and we will be flexible. It is our last, last course of event to raise prices. And we are working very diligently with our customers for alternates to mitigate costs on all fronts, just not on materials. to avoid price increases. But if we have to do that, we will. But we'll do it in conjunction with a good, strong communication link with our customers.

Okay. Makes sense. Thanks for taking the questions, guys.

One thing, just to follow up on that. We put in 11 new steel suppliers during the quarter. So it's not like we're just tiptoeing into this to find alternatives. We're being very aggressive. We're being smart, but we're being very aggressive.

We are showing no more questions. I would like to turn the conference back over to Terry Gould for any closing remarks.

Well, I want to thank everyone for joining the call. I didn't get a roster yet, but I will, and I know we have a significant amount of follow-up calls over the next couple of days. Look forward to those. Again, to the people in the company that are on the call, there's a lot of them. I want to say thank you again for the great work and dedication that you've put to the company and to our customers. So we look forward to talking to you at the end of quarter two. We have good trajectory, and we are looking forward to that conversation.

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