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spk04: Good morning, ladies and gentlemen, and welcome to the PEMBA Pipeline Corporation 2022 third quarter results conference call. At this time, all lines are in listen-only mode. Following the presentation, we'll conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, November 4th, 2022. I would now like to turn the conference over to Cameron Goldade. Chief Financial Officer, please go ahead.
spk06: Thank you, Colin, and good morning, everyone. Welcome to Pemina's conference call and webcast to review highlights from the third quarter of 2022. On the call today, we also have Scott Burrows, President and Chief Executive Officer, Jared Sprote, Senior Vice President and Chief Operating Officer, and Janet LaDuca, Senior Vice President, External Affairs and Chief Legal and Sustainability Officer. I would like to remind you that some of the comments made today may be forward-looking in nature and are based on PEMNA's current expectations, estimates, judgments, and projections. Forward-looking statements we may express or imply today are subject to risks and uncertainties which could cause actual results to differ materially from expectations. Further, some of the information provided refers to non-GAAP measures. To learn more about these forward-looking statements and non-GAAP measures, please see the company's management's discussion and analysis dated November 3rd, 2022, for the period ended September 30th, 2022, as well as the press release Pemina issued yesterday, which are available online at Pemina.com and on both CDAR and EDGAR. I will now turn things over to Scott to make some opening remarks. Thanks, Cam.
spk10: In the third quarter, Pemina delivered strong financial results, highlighted by a justity of nearly $1 billion. As with the prior two quarters of this year, the third quarter benefited primarily from rising volumes on key systems and strong performance within the marketing business. We benefited this quarter from a wider Chicago Eco gas price differential and a wider condensate price differential between Western Canada and the U.S. Gulf Coast. However, while commodity prices and differential certainly worked in our favor, overall the quarter was a great combination of volume-driven results in the base business and tailwinds in the marketing business. We are pleased that stronger-than-expected year-to-date results have allowed us to raise our 2022 guidance again, with full-year adjusted EBITDA now expected to be in the range of $3.625 to $3.725 billion. Along with strong financial results, the quarter was punctuated by the closing of the transaction to create Pemina Gas Infrastructure, or PGI, with our partner KKR, and the 3.6% increase to Pemina's common share monthly dividend. The integration of PGI is going well, and we look forward to realizing the benefits of this transaction. We see tremendous opportunity to enhance utilization across PGI's asset base and look forward to working with KKR to pursue future growth opportunities through this premier Western Canadian gas processing entity. In fact, a key area of focus at Pemina over the next 12 to 24 months will be growing cash flow by increasing utilization of all of our existing assets, gas plants, pipelines, and fractionation facilities. This is highly accretive growth given the modest capital spending required. As volumes grow, Pemina continues to have success signing new long-term contracts. In addition to the previously disclosed commercial agreements recently signed with three leading Northeast BC producers, Pemina has successfully contracted incremental volumes on its conventional pipelines and its fractionation facilities, the latter reflective of a broader trend of increased utilization and tightening of capacity across the industry. Further, the recontracting success we have had during the first half of 2022 on the Alliance pipeline continued in the third quarter, albeit for smaller volumes. And with rising activity in the Clearwater oil play, we are exploring options to reactivate the Nipissi pipeline and are in discussions with various customers regarding long-term contractual commitments. We also continue to progress our portfolio growth projects, notably by completing construction and undertaking commissioning activities at the Empress Cogen facility and advancing construction on our Phase 8 and Phase 9 Peace Pipeline expansion projects. As well, we advanced development of Cedar LNG and an additional fractionator at our Redwater complex and continue to work towards final investment decisions on both projects. Finally, I would like to note that Pemina recently released its latest sustainability report, which is available on our website. The report features the many accomplishments Pemina has had over the past two years, including those related to our greenhouse gas reduction target, our progress on equity, diversity, and inclusion metrics, and our transformational Indigenous partnerships. And notably, the report enhances our disclosure in key areas and better aligns us with leading ESG disclosure standards, namely SASB and TCFD. I will now pass the call over to Cam to discuss in more detail the financial highlights for the third quarter.
spk06: Thank you, Scott. As Scott noted, Pemina reported quarterly adjusted EBITDA of $967 million, representing a $117 million, or 14% increase over the same period in the prior year. Relative to the prior period, the third quarter was positively impacted by stronger marketing results due to higher margins on crude oil and natural gas sales and a higher share of profit from OxAble, partially offset by lower NGL margins as a result of lower propane prices and higher input natural gas prices. Likewise, a combination of higher volumes on the peace pipeline system and higher inflation-adjusted tolls, a higher contribution from alliance pipeline, higher contribution from the PGI assets, and a lower realized loss on commodity-related derivatives. These positive factors were partially offset by a lower contribution from Ruby Pipeline and higher integrity costs. Notably, in our marketing business, we typically see a lower contribution in the third quarter due to the seasonality of our NGL business. However, this quarter, Pemina benefited from a favorable oil price environment and certain price differentials that led to an outsized contribution from the crude oil marketing business, which more than offset the typical NGL seasonality. Earnings for the third quarter were $1.8 billion, representing a $1.2 billion or 211% increase relative to the same period last year. In addition to the factors impacting adjusted EBITDA, excluding the impact of a lower contribution from Ruby, earnings in the third quarter were positively impacted by a $1.1 billion gain on the PGI transaction, lower income tax expense as a result of the PGI transaction, and a higher unrealized gain on commodity-related derivatives related to NGL and crude oil marketing. Facilities results were negatively impacted by lower share of profits from equity-accounted investees due to higher depreciation, interest expense, and an unrealized loss on commodity-related derivatives, partially offset by higher revenue, all within PGI. Further, relative to the prior period, Signings in the third quarter were lower given the $350 million received from the termination of the arrangement agreement within our pipeline in the third quarter of 2021, partially offset by the higher income tax on that payment. Total volumes of 3.42 million barrels of oil equivalent per day in the third quarter were consistent with the same period last year. A 1% decrease in pipeline volumes compared to the same period last year was largely driven by Ruby Pipeline and the Nipissi and Mitsu pipeline systems. These factors were partially offset by higher volumes on the peace pipeline system, coaching pipeline, eggs. 5% increase in facilities volumes relative to the same period last year was largely due to higher volumes at the Redwater complex and at Younger due to less outage days during the third quarter of 2022. It is worth noting that excluding the volume impact of contract expirations on the Nipissi and Mitsu pipeline system and Ruby pipeline entering bankruptcy protection, third quarter volumes would have increased by approximately 5% over the same period in the prior year. Scott noted in his opening remarks, PYMN has raised its 2022 adjusted EBITDA guidance range to $3.625 to $3.725 billion, which is $50 million higher than the previous guidance range and primarily reflects stronger year-to-date results. Currently expect a 5% year-over-year increase in volumes on our conventional pipeline systems, demonstrating a level of growth in the Western Canadian sedimentary basin that is exceeding the expectations at Pemina, and I would expect the broader capital markets had entering here. The revised guidance also incorporates our expectation of a lower contribution from the marketing business in the fourth quarter relative to the third quarter, given the outlook for lower commodity prices and narrowing price differentials in the fourth quarter to date and implied by prevailing forward price curves. M&A is generating substantial 2022 free cash flow, which is being allocated to strengthening the balance sheet and returning capital to shareholders. During the third quarter, we raised the dividend by 3.6%. We repurchased $155 million of common shares toward our target of $350 million, and we repaid $540 million of debt. Additional incremental free cash flow generated in 2022 and 2023 is currently expected to be used to pay down additional debt, further strengthening our balance sheet and preparing the company to fund future capital. Finally, we announced yesterday our intention to move from a monthly to a quarterly common share dividend payment in 2023 payments to be made in March, June, September, and December of each year. This change aligns Pemina's dividend practices with the vast majority of its peers and companies within the TSX-60. Subject to approval by the Board of Directors, the monthly dividend is expected to end with the dividend to be declared in early December and paid on December 30th. The first quarterly dividend is expected to be effective for the dividend to be paid in March 2023. I'll now turn things back to Scott for some closing remarks.
spk10: Thanks, Cam. At Pembina, we are fortunate that our industry-leading midstream footprint affords us the opportunity to engage with most producers within the Western Canadian sedimentary basin, and therefore we are uniquely positioned to gain valuable insight on industry dynamics. In addition to the current volume growth we are seeing on many of our key systems, we continue to observe significant positive momentum that we expect will ultimately result in producers sanctioning new developments, leading to significant additional volume growth in the basin. We see several positive developments within the Montigny, the Duvernay and the Clearwater as examples, and we continue to have a high degree of optimism regarding future basin activity and corresponding growth opportunities for Pemina. Through three quarters of the year, results have been outstanding. We are on track to deliver another record financial year, returning capital to our shareholders while pursuing opportunities that will benefit Pemina and its stakeholders in the coming years. Thank you for joining us this morning. Operator, please go ahead and open up the line for questions.
spk04: Thank you. Ladies and gentlemen, we'll now conduct the question and answer session. If at any time you'd like to ask a question, please press star, then followed by the number one on your telephone keypad. If you'd like to withdraw your question, please press star, followed by two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment for your first question. Okay, your first question comes from Jeremy Tonette. from JP Morgan. Jeremy, please go ahead.
spk00: Hey, this is Steve McGee on for Jeremy. I guess just starting out on the guide, you hit on it a little bit there, but I just wanted to see if there's anything that we should think through on the other side on facilities and pipelines. Is there any downtick there, or is it purely just marketing going down?
spk06: Hey, Stephen. Yeah, so let me provide some context there. First of all, I'd say, you know, obviously, you know, we raised the guide by $50 million on each end. You know, I think it's at this point, our outlook is that, you know, we'd likely be trending towards the upper half of that guidance range. When we look at the business, first of all, on the marketing segment, I think you look across the commodity complex and pretty much all the spreads were deeply in the money for Q3. When you compare that to Q4, the curves across the board almost universally show compression, whether it be crude, NGLs, or gas spreads. You know, on the NGL side, we were adding inventory during Q3 at levels that are, you know, obviously in excess of where the prevailing prices are today to the tune of, you know, 20 to 30%. And last year, we saw what an important quarter Q4 is for the full year results. So, you know, with all those factors in mind, that was the biggest piece of it. I would say in the rest of the business, there are some puts and takes. I mean, obviously, we've got the benefit in the fourth quarter of a full quarter of the PGI transaction and the PGI incremental contribution. It's a bit of a tailwind. We did have some sort of more unique or circumstantial wins in the pipelines business in Q3 that did offer another tailwind there that our current outlook would see normalizing. And when you roll all those factors together, you know, that's where we got to on the revised guide.
spk00: Okay, great. Thanks, Sam. And then just hopping over to CAPS with PGI now fully in. I guess the next thing to look for is the CAPS sale. Just wanted to see, you know, progress on that. What are you thinking about proceeds there? Where do you see them going? Could this go more towards buyback authorization? Is it, you know, just how are you thinking about that aspect of it?
spk06: Yeah, thanks, Steve. You know, I appreciate everyone is quite interested in the outcome of this. You know, I think what I'll say and stick pretty tightly to is that the cap sale is progressing. And until there is a signed agreement, we probably don't have much more to say on it, you know, just out of respect for the process and all parties involved. But it is progressing along nicely.
spk02: Okay. I appreciate it. Thanks, guys. I'll leave it. Hi, Colin.
spk06: Is there more questions on the line?
spk04: Oh, I apologize. Sorry. I had a brief technical issue there. Yes, we have another question from Rob Hope from Scotiabank. Rob, please go ahead.
spk07: Morning, everyone. Questions on the next potential frack at Redwater. With what is a stronger than expected volume outlook, some contracts in hand, as well as your existing advantage land opportunity there. What else do you need to see before you want to sanction that project?
spk08: Morning, Rob. Jared here. Yeah, great point that you just made. You know, we obviously do believe that we obviously have a a really competitive advantage here to provide our customers a great opportunity to expand fractionation. You mentioned the land. We wouldn't require any incremental spec storage and or inlet storage. We've got the unit train capabilities today. We've got high complex utilization that obviously keeps our customers off x per unit extremely low across the entire complex. And then it gives us significant flexibility around outage planning, having, you know, four fractionators, you know, with significant storage being able to accommodate our customers' volume. So we do think that we have a really good solution for our customers. What we need to see, Rob, is we're just going through the process of firming up and extending some of the base contracts. You may recall that RFS 2 and 3, I think they were – around, you know, 2016, 2017. So, you know, wanting to bring up a little bit of that base and push that out, get a little bit more tenure there. And then just where we're finding the capital as we speak. So that's kind of where we're at right now. But those are kind of the two triggers. Let's get the capital in line. Obviously, there's been some inflationary pressure. So we're working really hard on to offset those by, you know, different construction practices, procurement, contracting strategies, et cetera, and then bringing up that base.
spk02: All right, thank you for that.
spk07: And then just on the volume outlook, yes, you are correct. The 5% volume outlook, I would say, has been a nice surprise in 2022. When you look into 2023, what are the tailwinds and headwinds that you're seeing for further volume growth? We did see a little bit of pipeline constraint on the gas side there through the summer, but how long do you think you can get this above average volume growth to persist?
spk08: You know, we are seeing that continued strong volume. Like, it's kind of that slow and steady increase. I think if you were to see some potentially, you know, step changes would be, and Janet could speak to this more if there's more clarity required, but the Blueberry River First Nation Resolution, obviously we have some strong dedications in and around that area. So, you know, that could be a step change. But regardless of the step change, Rob, we're just continuing seeing that you know, strong drilling performance and a lot of wells being drilled, right? So it just keeps coming. It's not any one organization or customer that's really focused. It seems to be, you know, a multitude of all of our customers just continuing to grow at a fairly, you know, moderate pace.
spk02: That's it for me. Thank you.
spk04: Your next question comes from Robert Cattelier from CIBC Capital Markets. Please go ahead, Robert.
spk05: Hi, everyone. Just a quick question. I just want to make sure I understand the motivation to sell your interest in E1 and E6. And how does that really change your frack spread exposure? And is there any interplay there with PDH, for example, you have lost access to propane that otherwise could have been used for a PDH facility other than your own or a third party?
spk08: Good morning. Yeah, great question. So this is a little bit complicated, so just bear with me. We had, so what we did was created a win-win solution with our partner at the complex. So we had working interest capacity in a third-party non-operated facility that commercially it was extremely hard to access due to various reasons. So what we did was, you know, we got together on a cashless transaction, and we essentially, you know, sold down our working interest ownership, but we, in return, we received a long-term, we'll call it a virtual processing agreement, So, actually, the physical volumes that we'll be extracting liquids from across that virtual processing is in excess of what we typically would have processed across that asset. So it's a long term deal. And what this will also do is provide the owner. Now they're the sole owner of that entire site. It'll allow them to optimize the facility, you know, to drive efficiencies specifically around the operating cost side of the business. So it's not a straight up disposition of working interest capacity. In return, we received incremental virtual capacity. I hope that makes sense.
spk05: Yeah, I think it does. I'm just curious. So has your frack spread exposure increased as a result of this, or is it effectively unchanged? Very slightly, modestly, it's increased. Okay. And then, you know, we've had news of attacks coming eventually on share buybacks. I'm wondering how that impacts how you're looking, I know it's early days, but how you might look at returning capital to shareholders or other capital allocation priorities?
spk10: Rob, even, Scott, even before yesterday's announcement, you know, I think you heard on the call today and messages over the last couple of months that with where we're seeing rates going and with our optimism around, you know, potential future projects, incremental free cash flow in the near term here is going to go towards debt repayment, both, you know, obviously with the rising cost of debt, but also in preparation of hopefully a build out in 23 and 24. So it's, It's not like right now we're allocating significant capital in 23 and 24 to share buybacks where that may be an issue. So for now, it's a bit of a moot point for Pemina. Obviously, that could change. But for now, I think our allocation priority is towards debt repayment.
spk02: Okay, got it. Thank you.
spk04: Your next question comes from Ben Pham from BMO. Ben, please go ahead.
spk09: Hi, thank you. Good morning. On Patendra CAP's proceeds, are you actually able to or plan to take out the proceeds into PAMNA for that, or is that all staying at the PGI level?
spk06: Yeah, the proceeds would likely be dividended out to the partners.
spk09: Okay, got it. And then on the FRAC... expansion opportunity. Should we think, or is there something to think about in terms of restrictions on market share in that frack business, the competition act? Is there restrictions on that market share or just level of ownership?
spk10: No, this is a new build with third parties freely signing up for this capacity, so we don't see any issues with that at all.
spk09: Okay, so it's not a situation that you had a couple parties running fracks in the province and there's certain percent market shares. There's no restriction that you know of? No. Okay. And maybe lastly on Cedar LNG, I'm wondering if there's some noise around this competing LNG export project a little bit north of that, I think, with facing some adjacent First Nation challenges. Is that Is that something you're hearing with your project in a particularly adjacent First Nations-run area?
spk02: No, we're not hearing anything of that sort. Okay, great. Okay, thank you.
spk04: Your next question comes from Linda Ezegrilis from TD Securities. Linda, please go ahead.
spk03: Thank you. I'm wondering if you could just help us understand a little bit in this dynamic environment. When you're thinking about your dividend policy and balancing growth, sustainable growth in the dividend versus retaining free cash flows to finance projects, how do you balance that? And can you give us a sense of over the next couple of years as you're looking at some of the opportunities, what your thoughts are on the guardrails around that.
spk06: You know, I think, Linda, you know, the approach to dividends has been relatively consistent, I think, over the past few years. And it's always obviously been anchored around the fee-based business. So, you know, if you use 2022 for a moment as an example, you know, obviously we saw a performance in the marketing business throughout the year. And really, you know, that cash flow, as we said, was redirected towards both share buybacks and debt reduction. What we've looked for previously for consistent dividend growth is the reliance on the fee-based growth in the business. I think we obviously have been through an interesting time over the past two or three years here, and obviously we'll be out more formally with our guidance in December. But, you know, the environment is quite constructive, obviously, and you can hear from the comments that Jared and Scott are making on some of the project opportunities that we have that we do have NAPL fee-based opportunities in the portfolio, which should continue to support, you know, that trend.
spk03: Thank you. And maybe just also, and I don't know if you're able to provide this today or maybe when you provide guidance, Would it be possible to get, you know, an aggregate, a sense of your views on your aggregate direct commodity price exposure and any key sensitivities recognizing that they might be imperfect? That would be very helpful.
spk06: Yeah, I think I think we'll, we'll certainly provide that information for 2023 in December in our budget release our guidance release for now. I think we've provided that information back in the 2022 guidance release for this year. And I think the way we think about it is. Obviously, the marketing business contains our commodity-exposed cash flow. The pipelines and the facilities businesses are fee-based businesses, and so that would be a fair way to think about the delineation.
spk03: Thank you, Cam.
spk04: Your last question comes from Robert Kwan from RBC. Robert, please go ahead.
spk11: Great. Thank you. Good morning. Just starting on volumes, you noted that X some of the runoffs that volumes were up 5% year-over-year in Q3. So I'm just wondering, A, has that trend continued into Q4? But where are volumes sitting on your core systems versus the minimum take-or-pay levels?
spk02: Hey, Rob.
spk06: Yeah, I would say that, you know, it obviously varies. It varies by business. You know, if you sort of look at... Sort of look at the frac business to start with, maybe backing up from there. Obviously, the frac business is running very high utilization and you'll recall that the fracs that we built in the 2016-17 timeframe were essentially 100% take or pay. So, we're running right up against those. On the conventional business, you know, it does vary, you know, according to segment. But if you look at the capacity, which we talk about in, you know, really at the Fox Creek region, you know, we're running right around the take or pay levels. You know, we have been running just shy of them. And as we've seen sort of, you know, obviously Jared's comments to continued and modest growth, you know, we're sort of bumping right around those. And I think you can see that as uh in some of the disclosure around our our take or pay recognition particularly in this past quarter um you know if you back up from there and start to look at the gas business i would say it's a similar story you know generally speaking across the board you know varies from facility to facility but uh with uh with those facilities that have a take or pay component to them you know which would be the the legacy Pembina facilities, now sitting in PGI. Again, we're running right around take or pay levels in those businesses, in those assets in aggregate.
spk11: Got it. So in short, it sounds like where a lot of the volumes are growing in the basin, we're kind of now on the cusp of starting to see that a little bit more directly in the results. Is that a fair characterization?
spk06: I think that's fair, yeah.
spk11: Okay. Just turning to guidance, I know you said that you're trending to the top half of the range, but you've got $100 million top to bottom, which is pretty wide with one quarter to go. I'm just wondering, is that just being conservative or are you seeing some things in the quarter, whether that's being less hedged or what have you, that's being more volatile than usual?
spk06: I think it's a fair comment, especially as we sit here on November 4th. Keep in mind, we haven't seen our October results just yet. We're a few days away from that. And we're just recognizing that, you know, obviously we saw what Q4 was for Pemina last year in 2021 and how, you know, obviously, you know, a sharp change in the price environment in Q4 really led to a performance in that year. I think we just recognize that, you know, clearly that there's a lot of volatility and a lot of external factors influencing markets right now across the board, both, you know, commodities, currencies, interest rates. And so it's a fair comment that the range could be perceived as a little bit wide with a quarter to go here. I think we're just reflecting that it's a wild world right now, and we just want to make sure that we're appropriately capturing that.
spk11: Got it. You mentioned currency, but just within the commodities, is there any particular spread that you'd point to that you're most not concerned about, but where you might have more exposure or maybe the range of outcomes is wider?
spk06: You know, I think it's just, it's a bunch of different things. I mean, obviously, and I sort of mentioned it in a prior comment, but, you know, if you look at, say, for example, the ACO to Chicago spread, you know, that was, you know, shooting the lights out really in Q3. And if you look at where it is today, I mean, I think the current forward curve has it, you know, roughly half of what it was in Q3. Similarly, on the sweet crude environment, those spreads went from areas where there was more opportunities, more optionality. They've certainly narrowed into Q4. Obviously, with the heavy spread still staying wide, it would suggest that those opportunities would remain, but that's not really much of our business. It's more so indicative. And then clearly, just back to the NGL price environment for a second, to my earlier comment, we've been putting inventory into the caverns throughout Q2 and Q3 at levels which are 20% to 30% higher than we're seeing in Q4. So just a bunch of those factors together just lead us to create some width to that guidance range.
spk02: Got it. Okay. Thank you very much.
spk04: We do have another question. This is from Patrick Kenny of National Bank Financial. Patrick, please go ahead.
spk01: Yeah, good morning, guys. Just back to your comments around prioritizing debt repayment into next year. We've seen some of your peers sell down a minority stake in certain mature assets, which, although might be slightly dilutive financially, wouldn't without be very accretive to your social license as an operator. And again, raise some cash for paying off maturing debt. So I'm just wondering, you know, as you look ahead at the strategy for 2023 and beyond, how important do you think it is to execute minority interest transactions with various stakeholders across your legacy portfolio of assets as a key part plan overall value?
spk10: Thanks, Pat. You know, I think starting off, we're pretty proud of the two Indigenous partnerships that we have today. And we think we're working really well with our partners and looking to build and grow those partnerships. So we feel like we've made good progress on that front. As it relates to asset sell downs, I mean, that's always a tool in the toolbox and something that we consider, whether it's outright dispositions or minority sell downs. So nothing's on the docket right now, but certainly it's something that we run in our scenario analysis and talk about internally. But, you know, I do think as we sit today, you know, we're pretty happy with where the balance sheet is. So there's no need to do anything like that. But there's always the opportunity if there's financial benefits or intangibles that come along with it. So on the drawing board, but nothing that's inactive negotiations or discussions.
spk01: Got it. And I guess as a segue to the NIPC pipeline, would you be looking to bring in a partner for that system as well if you do reactivate? Maybe you can just remind us back in the day what the revenue or EBITDA profile looked like on NIPC, what the capital requirements might look like to reactivate the system going forward.
spk08: So great, great question, Pat. So right now we're just in the in the throes of executing some preliminary work to reactivate that pipeline. You know, we're, we're fairly bullish on the clear water. Obviously, everyone's seen the results, but we expect to have that pipeline in service, you know, kind of like Q3 next year. We do require some capital. We're just working through that right now. Just some integrity digs, some normal course, you know, and then some different tie-in options once that pipeline gets into Edmonton. Currently, we have not explored the reactivation with a partner. working at this partner, as you were asked. But that's not to say that's not out of strategy or in strategy. It's just focused on the execution and getting it back online here right now. And then I think you had a question, Pat, around the EBITDA. I think it was around roughly $32 to $35 million of EBITDA, the full run rate prior to shutting down.
spk01: And directionally... I guess if it does get reactivated, cash flows above or below historical contributions, too early to say.
spk10: I think ultimately our goal would be to get back there and to exceed it, but it's not going to happen in year one. It'll be a ramp.
spk02: Okay, perfect.
spk01: That's great, guys. Thank you.
spk04: There are no further questions at this time. I'll turn it back to Scott Burrows for closing remarks.
spk10: Thank you, everybody. Thanks for taking the time on a Friday to listen to our call. We're really proud of the results. And just before I sign off, I want to say thanks to all the staff on the phone and to everybody that were involved in the quarterly results. It was just a fantastic quarter. So thanks, everyone.
spk04: Ladies and gentlemen, this concludes your conference call. We thank you for participating and ask that you please disconnect your lines.
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