Ryerson Holding Corporation

Good day and welcome to the Ryerson Holding Corporation's third quarter 2021 conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Justine Carlson. Please go ahead.

Good morning.

Thank you for joining Ryerson Holding Corporation's third quarter 2021 earnings call. I'm here this morning with Eddie Lehner, Ryerson's President and Chief Executive Officer, Mike Burbach, our Chief Operating Officer, Jim Claussen, our Executive Vice President and Chief Financial Officer, and Molly Cannon, our Controller and Chief Accounting Officer. John Orth, our Executive Vice President of Operations, will be joining us for Q&A. Before we get started, let me remind you that certain comments we make on this call contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve a number of risks and uncertainties, including the impacts of COVID-19 and related economic conditions that could cause actual results to differ materially from those implied by the forward-looking statements. Such risks and uncertainties include, but are not limited to, those set forth under risk factors in our annual report on Form 10-K for the year ended December 31, 2020. You are cautioned not to place undue reliance on these forward-looking statements. which speak only as of the date they are made and are not guaranteed the future performance. In addition, our remarks today refer to several non-GAAP financial measures that are intended to supplement but not substitute for the most directly comparable GAAP measures. A reconciliation of the non-GAAP financial measures discussed on today's call to the most directly comparable GAAP measures is provided in our third quarter 2021 earnings release filed on Form 8K yesterday, which is available on the Investor Relations section of our website. I'll now turn the call over to Eddie.

Thank you, Justine, and thank you all for joining us this morning to discuss our third quarter 2021 results. I would like to begin this morning by thanking, with deep gratitude and admiration, all of my Ryerson teammates for executing another extraordinary, record-breaking quarter as we posted our highest adjusted EBITDA excluding LIFO for the second consecutive quarter, while also setting a new gross margin, excluding LIFO records. I also want to thank both our customers and our suppliers as we continue to navigate through a myriad of industry-wide supply chain disruptions, displacements, and dislocations. Pick any number of descriptors, and supply could not meet demand during the quarter. We would term it demand delayed, but not ultimately denied, as unfulfilled needs are compiling and compounding. At a macro level, we continue to see elevated pricing across our product categories, and while peak spot carbon sheet steel pricing is waning, it is leaving a well-supported price baseline at levels higher than past decade averages given secular drivers such as decarbonization and consolidation, among others. Ryerson's diversified metals mix, with 50% of revenues generated from bright metals, augmented gross margins in the quarter, and we expect this to continue for the balance of the year. We are observing a number of positive demand factors or a regathering of demand momentum in our end markets that support sustainable manufacturing strength. These factors include decarbonization, consumer spending power, company earnings, fiscal policy, monetary policy, infrastructure investment, on-shoring and ongoing restocking from low levels of consumer inventories and longer life asset inventories and build rates. Record results being a function of the right things done well, we can point to accomplishments through the quarter that materially improved Ryerson's financial position while enabling further investments in the future, coupled with tangible shareholder returns. All roads lead to a strong balance sheet, supporting investment in great customer experiences across our network of intelligently networked industrial metal service centers. Our actions in the quarter demonstrated that clarity through a nearly 200% year-to-date increase in net worth value as we pay down higher cost, long-term debt, de-risked legacy liabilities, invested in a value-added acquisition, along with investing in Greenfield service centers, while paying a quarterly dividend and repurchasing shares. Given the noted advancements in Ryerson's financial and operating position, Ryerson's board of directors approved an update to our capital allocation plan. a half cent per share quarterly dividend increase. Our fourth quarter dividend, which will be paid on December 16th to shareholders of record as of November 15th, will therefore be eight and a half cents per share. This dividend increase underscores our confidence in our future trajectory and increased earnings potential while reflecting our commitment to consistently delivering value to our shareholders through the cycle. I'll now turn the call over to Mike to discuss the third quarter pricing environment.

Thank you, Eddie, and good morning, everyone. In the third quarter, metals markets remain tight. LME aluminum ended the third quarter up 16% compared to the end of the second quarter and appears to continue to appreciate into the fourth quarter driven by magnesium supply shortages. Likewise, LME nickel prices increased by 8% by the end of the third quarter compared to the end of the second, and current supply dynamics for stainless products remained tight. Pricing across carbon steel products continued to increase throughout the third quarter, but posted incremental declines across specific carbon sheet categories in the beginning weeks of the fourth quarter, as prices show signs of modest spot market and futures curve retracements. Overall pricing remains strong across most all products and grades with availability more of a concern than price. Although carbon prices may be peaking as predicted by carbon futures pricing, we also foresee demand conditions remaining positive supported by longer-term secular trends. Expanding on the demand environment, macroeconomic indicators remain positive in the third quarter. The ISM manufacturing PMI index read well above 50 for each month in the third quarter, reflecting in an expanding manufacturing environment, while the U.S. industrial production also reported year-over-year growth rates in each month. Juxtaposing the positive economic data, North American industry shipments, as measured by the Metal Service Center Institute, or MSCI, contracted nearly 5% quarter-over-quarter. which represents a stronger seasonal decline than historically experienced. We attribute this weakness to ongoing supply chain bottlenecks that intensified during the summer months. Early Q4 indicators indicate improved reopening trends after the fourth pandemic wave that pervaded the third quarter. Ryerson's third quarter North American per day shipments reflected the broader industry trend as most of our end markets with the exception of oil and gas saw softer customer activity compared to the previous quarter. However, we believe we are seeing demand deferral rather than erosion, as our customers are reporting strong demand and increasing backlogs for their products. Supply chain constraints are currently delaying the production and completion of finished goods. Constrained resources include everything from labor, transportation, and chips to imported parts. As consumers, we see the effects of these constraints as lawnmowers, furniture, and appliances are harder to come by, and auto dealer inventories remain lean. With that, I will turn the call over to Jim for our fourth quarter outlook.

Thank you, Mike, and good morning, everyone. Building on the market dynamics that Mike discussed, while we recognize constraints persisting in our customer supply chains, We are optimistic about the fourth quarter business conditions and anticipate reporting a strong finish to 2021. At this point in the quarter, pricing growth across carbon products appears to be plateauing. However, we have seen continued strength in stainless and aluminum prices. We expect fourth quarter volumes to soften compared to the third quarter due to normal seasonality patterns. and some continued supply chain and market constraints. Therefore, Ryerson anticipates fourth quarter 2021 revenues of $1.5 to $1.6 billion, assuming sequential average selling prices up 5% to 7% and shipments down 7% to 9%. LIFO expense in the fourth quarter is expected to be in the range of $71 to $75 million, as replacement costs continue to increase relative to average inventory costs. Given these expectations, adjusted EBITDA, excluding LIFO, is expected to be in the range of $228 to $232 million, and earnings per diluted share are expected to be in the range of $2.38 to $2.48. Turning to Ryerson's asset management in the third quarter, Inventory restocking to normalize service levels increased our cash conversion cycle to 68 days, up from 55 days in the second quarter. This intentional inventory investment resulted in days of supply of 78 days, up from 63 days in the previous quarter. As a result of this third quarter restocking investment, the company used $21 million of operating cash. In the third quarter, Ryerson realized expense leverage as warehousing, delivery, selling, general and administrative expenses decreased as a percentage of sales from 12.6% to 11.4%. Despite inflationary pressures on labor, fuel, and operating supplies, Warehousing, delivery, selling, general and administrative expenses only increased $2 million nominally, quarter over quarter, or 1.1%. After distributing Ryerson's first quarterly cash dividend on September 16th, Ryerson's Board of Directors has improved an increase to the dividend of half a cent per share. Our fourth quarter dividend of 8.5 cents per share of common stock will be payable on December 16, 2021 to stockholders of record as of November 15, 2021. Additionally, during the third quarter, Ryerson repurchased approximately 39,000 shares at an average price per share of $22.31. resulting in an additional return to shareholders of approximately $1 million. These repurchases were made as a part of our share repurchase program, which authorizes purchasing up to $50 million of the company's common stock over the two-year period ending in August 2023. Between the dividend and the repurchase program initiated in the third quarter, we were pleased to have returned approximately $4 million of value to our stockholders. Now I'll turn the call over to Molly to provide further detail on our third quarter financial results.

Thank you, Jim, and good morning. In the third quarter of 2021, Ryerson generated revenues of $1.58 billion, which is within the range communicated in our third quarter guidance, with average selling prices up 19.6%, and volume down 7.2% from Q2 2021. Gross margin expanded to a record 23.1% compared to 18.1% for the second quarter of 2021, as selling price growth outpaced inventory costs. Reflective of the rapid increases in industrial metal prices in the third quarter, Included in third quarter 2021 gross margin is LIFO expense of $102 million, which is in line with the second quarter's LIFO expense of $105 million. Excluding the impact of LIFO, third quarter gross margin expanded by 410 basis points from the second quarter of 2021 to 29.6%. Net income attributable to Ryerson Holden Corporation for the third quarter was $50 million, or $1.27 per diluted share, compared to net income of $113 million, or $2.91 per diluted share for the second quarter. Included in third quarter net income is a $98 million non-cash settlement charge related to the partial annuitization of our pension liabilities, and $6 million of expenses related to the partial redemption of Ryerson's 2028 notes. Adjusted net income attributable to Ryerson Holden Corporation, excluding the pension settlement charge, loss on retirement of debt, and the associate income taxes, was $127 million for the third quarter of 2021, or $3.25 per diluted share. This compares the second quarter 2021 adjusted net income of $48 million. or $1.24 for diluted share, which excludes the gain on sale of assets and the associated income taxes. Ryerson generated adjusted EBITDA, excluding LIFO, of 301 million in the third quarter of 2021, an increase of 104 million compared to the previous quarter. To put our results into perspective, our third quarter adjusted EBITDA, excluding LIFO, nearly equaled the $308 million attained in the full year 2018, which was our best year since Ryerson was acquired by Platinum in 2007. Year-to-date, Ryerson has generated $622 million of adjusted EBITDA, excluding LIFO. We completed a partial pension annuitization in the third quarter as part of our continued efforts of reducing Ryerson's pension plan liability exposure. This $206 million annuitization is expected to result in economic savings of approximately $5 million on a net present value basis. Additionally, the partial annuitization resulted in a remeasurement of the Ryerson U.S. pension liability, leading to an accounting liability decrease of $44 million since prior year end, primarily driven by increasing discount rates and strong pension asset returns in 2021. We also furthered our financial transformation by utilizing the proceeds from our second quarter sale leaseback transactions to repurchase $100 million of our outstanding 8.5% senior secured notes due 2028 at a price of 104% in July. We also executed our second $50 million notes redemption at a price of 103%. These transactions were possible due to the optional redemption features we secured in our 2020 refinance, and they effectively decreased the outstanding balance on our senior secured notes to $300 million as of the end of the third quarter, a decrease of 40% compared to the original $500 million principal. This $200 million reduction has reduced our annual interest expense by $17 million. Ryerson ended the third quarter with $633 million of net debt, an increase compared to $563 million for the previous quarter. However, as a result of our increasing trailing 12-month adjusted EBITDA, excluding LIFO, the company achieved a leverage ratio of 1.0 times for the quarter, down from 1.5 times in the second quarter of 2021, and at the low end of our long-term strategic target range of one to two times. Ryerson's third quarter global liquidity of 698 million represents a decrease compared to 890 million as of the end of the second quarter, as the company applied sale respect transaction proceeds to redeem a portion of the 2028 notes and made working capital investments. In sum, the third quarter financial records reflect both the successful efforts of our long-term financial transformation as well as the dedication of our commercial, operational, and corporate teams. With this, I'll turn the call back over to Eddie.

Thank you, Molly. With the completion of Ryerson's 179th year in sight, we can say with hard knocks conviction that we will begin our 180th year in business with proof and promise. The proof of delivering on our plans and the promise of better times ahead. We are now seeing the commonative positive effects of lower fixed cash commitments, a lower cost of capital, lower leverage ratios, lower legacy liabilities, higher book value of equity, and intelligent capital allocation, all powered by higher intrinsic EBITDA and cash flow generation. Creating great customer experiences with passion and purpose is the once in future perpetual opportunity machine, enabling our growth as an organization and the realization of our vast human potential. As we look beyond the past two years that fell every bit like 20 inexperienced years, we continue our work for a more just and inclusive society while tirelessly advocating for the investments required in the many types of infrastructure that engender and sustain a broader base prosperity and a better quality of life for all. That is why metal matters. as you will see when visiting us at Ryerson.com, and why the Build Now movement at MSCI.org are so vital and imperative. Give them both a long look. Let's make infrastructure investment happen without further delay. We need it. We need a lot of it. And we will see profound betterment across the board because of it. With that, let's take your questions. Operator?

Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask a question, and we'll pause for just a moment to allow everyone an opportunity to signal for questions. And we'll take our first question from Michael Leshock with KeyBank Capital Markets. Please go ahead.

Hey, good morning. First, I just wanted to ask on how much third quarter margins benefited from import arbitrage opportunities, just given that foreign steel prices, notably HRC, are dramatically lower than domestic levels. And how should we think about that opportunity going forward as prices begin to normalize?

Michael, good morning. This is Eddie. We really have not imported significant quantities of anything. We've said in the past, I mean, some of our imports come into Canada and they really tend to be on the margins in terms of really wide product or heavy product or things that are just really, really difficult to procure. But our import margins are, I mean, our import percentages are negligible and really didn't have, didn't really didn't make any contribution to our to margins or to holding gains in inventory during the quarter. I think going forward, you'll see some of that arbitrage, even if you look at the futures curves now based on the announcements that were made earlier this week in Europe, you're already starting to see the ARB close between European HRC and United States HRC futures. So I think if you tie those two threads together, you'll start to see that ARB come in. I think it will support margins for those that choose to import to some extent. But the pricing environment is still healthy and strong. And I really think it's underpinned by demand that is going to have a really nice trajectory going forward. Because as we noted, we really believe it was demand deferred and not denied. And we see that demand continuing to accumulate as we go forward into 2022.

Got it. And going off of that, as we look at your end markets, you alluded to a broad demand deferral rather than erosion. Are there any markets where you're seeing that more prominently, or is there any market that might have more pent-up demand as a result of the deferrals as we move into 2022?

I'm going to kick it over to Mike. I would just say that that demand accumulation It's really broad-based and widespread. I don't think we're even back to restocking levels through the channels that go out to our end customers and to our end customers, to their end customers. So I think it's got a good duration to it and it's got a good tenor to it, but I'll let Mike expound on that some more.

Thanks, Eddie, and good morning, Mike. Yeah, I think Eddie hit it right. We don't really see any one area that's impacted more than others. Obviously, you hear a lot about chips and transportation in the automotive sector, so that's kind of easy to identify in other areas that uses chips. But I would say the theme that we hear pretty much from all sectors is the constraints that so many people are dealing with these days, and that can be chips related it could be supply chain bottlenecks you know for imported products it could be any sort of labor issues or parts whatever it really seems to be impacting most end markets and the theme is demand is good and for the reasons mentioned the backlogs are increasing and in the future is looking pretty pretty positive if they're able to get past these constraints

Great. And then how should we think about networking capital going forward, specifically as it relates to the inventory restock that we saw in the third quarter? Is that something we should expect to continue into year end?

Jim, why don't you take that one?

Yeah. Good morning, Michael. Really, it was an intentional restock in Q3 on the inventory side, and we see that waning as we head into into q4 our service levels have have normalized and and we're really in a good position to service our customer base uh would expect if as you look at the other pieces uh you know ar tends to track revenue fairly closely for us got it thank you so we would yeah so we would expect we would expect to be cash flow positive in q4

And we'll take our next question from Alan Weather with Rabadi Advisors. Please go ahead.

Oh, good morning. Can you talk about, you know, if or when pricing declines, kind of changes you've made to kind of just how you can, you know, play through that environment?

Sure. Hi, Alan. Good morning. I think if you look at our history, and you really sort of deep dive into the last 10 years and past being prologue, we've really done a lot of good work and all credit to the team around variable lives in our cost structure. So if you look at how we've been able to get cost per ton and variable cost per ton down and, and rebuild it very carefully as, as we go from counter cyclical to cyclical, I do think that the proof is certainly in the pudding there, but, You know, we have a base case and we also have a top drawer plan and we have a bottom drawer plan that we keep at the ready all the time. And we're always revising that plan to make sure that we can get in and out of the cycle well. And I think given the results that we've put up this year, it gives us really an even better framework for how we manage that process as we go from cyclical to counter cyclical. Really great work done by the team, and I think you see it. I think you see it in the working capital metrics. I think you see it in the expense metrics. We generated expense leverage again this quarter, and I think we certainly have demonstrated the ability to manage that the other way when counter cycles inevitably come.

And then when you look out several years, right, the balance sheet's in much better shape. The cash flow at least should be better. How do you think about acquisitions and just, you know, the company when you look out, say, five years, right, because you're going to, as you said, you're kind of at the low end of your leverage ratio today, and, you know, that really should improve.

Yeah, Alan, we certainly agree that the trajectory we're on is a really good one, and it's a trajectory that we look forward to getting used to for a long time. I would tell you that we've done a good job with our acquisitions. When you look at some of the feedback we got initially when we did the CS&W acquisition, we knew we were going to take it in the teeth for a little while. But as you can see, that decision has more than validated itself, again, based on the great work done by everybody involved in the organization. So we have a robust M&A pipeline. We really have a very good outlook and line of sight on the type of CapEx investments that we would make to drive organic growth and organic improvements in the business. And there's no shortage of those ideas. The really wonderful thing about the strategy that we've laid out is when you deconstruct the customer experience and you break it down into its elemental parts and pieces, you work to get to that future state at every part of the customer experience. There's a lot of good investment you can do there. There's investment that has a high return to it. Given our market share, we've got a lot of market share that we can grow organically while always being at the ready to look at acquisitions that are, you know, I would say are incremental, but also those that may be transformative. But it's a high bar. I think we're – but we're always looking. We're always looking at the same time. We still have some more work to do on the balance sheet, and we want to make sure we finish that job.

Just my last question, in terms of acquisitions, how do you think about when you look at companies, right, because they're going to have, they may be smaller than you, but they're going to have obviously, you know, much improved EBITDA this year. Like how do you look at in terms of thinking about evaluation when you kind of, you know, if their results may rejoice to some extent, you know, how do you think about that?

The way we think about it is we stay disciplined and we keep that discipline. I mean, that's how we think about it, meaning we understand the entire cycle of this industry. And I think that means you have to maintain that discipline. And I would say, again, past is prologue. I think if you look at the acquisitions we've done, you would expect us to behave the same way going forward.

Okay, great. Thank you very much.

Thanks, Alan.

And we'll take our next question from Matthew Fields with Bank of America. Please go ahead.

Hey, everyone. Great progress whittling down the maturity on your bond this quarter. Just sort of a housekeeping question. When is the next time you can do another $50 million at 103? Is it next July?

I'm going to say yes, and I'm going to go ahead and ask – Jim and or Molly to confirm that, but I believe that's the case. Yes. I think, yeah, July.

That is the case, Matthew. It's next July. We have a potential $50 million redemption.

Okay. And that's the last $50 million you can do until the bond becomes callable, right?

Yeah.

Go ahead, Eddie.

Go ahead.

No, that's okay. You first. I was just going to say, yeah, we have that $50 million redemption, and then there is a special redemption feature if there was an equity claw of 40% of the base value. And then the call date is 2023. Right. Okay.

Yeah, Matthew, I would just say our bondholders seem to like these bonds, so...

They seem to like them.

Fair enough. And then, you know, given the, you know, kind of age-old pull and push between EBITDA growth and cash flow use, you know, can you give a comment about how you plan to, you know, work down the revolver balance over the next year or so in balancing with your kind of new shareholder return policy and kind of the next forward 12-month environment that you see?

Yeah, putting some color around that, I would say looking at cycles and counter cycles in our industry and looking at the amount of, at least historically speaking, if you look at just the counter cyclical cash that you could project that's being stored on balance sheet now, you can understand very clearly what that means in terms of a trajectory towards paying down debt overall. and the work that we can do on the bonds and the work we can do on the ABL. So the leverage ratios that we're showing now of one times and 1.8 times on a trailing basis, you know, as LIFO effects settle out, I think you can see that we should have a very healthy free cash flow profile that allows us to balance shareholder returns against debt reduction and investments towards growth, Matthew. And I would say that we find ourselves in a really, really good position and would expect that to continue for the foreseeable future.

Do you expect to be able to start to sort of turn working capital around as you see maybe prices start to soften in this quarter or the next? How do you think about the cash flow, working capital release sort of aspects of it over the next few months?

Yeah, well, I think you get one or the other. If prices stay elevated and the underpinnings of demand start to actualize more than they have, then you're going to get it in EBITDA and you could expect working capital to start to level off. And so that cash flow would be driven by EBITDA and would certainly exceed the working capital needs of the business. And then as we go counter-cyclical, that cash that comes in, to the extent that we can work down the high-yield bonds, we will, because that's the best first option for us. But after that, we would start to pay down the ABL to a responsible level, and then we go from there.

Okay, great. Thanks very much, Eddie, and good luck in the rest of the year.

Thanks, Matt.

And as a reminder, please press star 1 to ask a question. We'll take our next question from Satish Kasanathan with DoucheBank. Please go ahead.

Yeah. Hi, good morning, and thanks for taking my questions. My first question is on your decision to build two new facilities. Can you talk about the rationale behind that and maybe your latest thoughts on how you see the buy versus build strategy?

Satish, I'm sorry.

Could you just clarify the last part of that question?

Yeah, maybe, I mean, latest thoughts on how you see the buy versus build. So you're investing in new facilities instead of buying or consolidating the industry, which is already much fragmented.

Yeah, absolutely. Well, I would say part of the success that we've had is figuring out what notes to play and then playing those notes really well. And when you look at the monetizations in the Seattle area and the monetizations in the Chicago area and the beneficiation of some of our own real estate, we received a very, what we thought was a really good value for those assets. And then we turned around because we had an opportunity to modernize and build new facilities supporting the Chicagoland market specifically for the CS&W brand and franchise, and then also repositioning ourselves in the Pacific Northwest marketplace with a modern facility with much higher degrees of efficiency and automation and really customer experience potential. So this is part of that growth, part of that modernization that we're conducting throughout our network to really re-engineer and get to that future state customer experience. I think it's a very logical, I think it's a very smart progression as we think through that network of how to build our market share over time profitably and the investments required to do that while also having taken advantage of opportunities in the marketplace for the revaluation of assets that's going on in our industry. And I think that's something that is just starting to be recognized is that the assets in this industry are really more valuable than how they've been valued over the last decade.

Okay, thank you.

And sorry, yeah, go ahead, please.

No, I was going to say, in terms of buy versus build, in this case, in Centralia, in the Pacific Northwest, and in the Chicagoland area, specifically for CS&W, developing those greenfield service centers made the most sense. And I would say concurrent with that, we're always looking at our M&A pipeline and the opportunities out there. to buy assets that we think are really accretive to our strategy.

Okay. Are the new facilities more focused towards value-added processing?

John Worth, you want to talk about that a little bit? Sure.

Thank you, Eddie. Hello, Satish. We are definitely focusing on where and how to intelligently allocate our capital, and we see the value-add processes as as an area of great opportunity and also service to our customers. At both of these greenfield facilities, we are looking and analyzing what our best opportunities are around equipment automation, both from a safety and throughput perspective, but also from a state of the art on what can be done around plate processing and servicing our customers.

Okay. And also, can you remind us what your current value-add processing mix is today and how much more incremental capex or equipment spending is required for you to achieve your 15% target?

Sure. So, historically, going back to 2010, the way we've measured it, it was 10%. If we looked at it in 2010, we brought that up to about 16% to 17% satiation. And we'd look to move that above 20%. Now, in order to achieve that, we don't need to invest more than what our rate of depreciation is from a growth CapEx standpoint. But we see a lot of very attractive IRR opportunities within the value-added equipment, value-added processing, value-added systems, and the IT and systems tools that go with it to make incremental investments as conditions allow. to accelerate that value-add percentage as we move it towards 20% and look to take it higher than that as we move through the next, say, you know, one to two to five years.

Okay. Yeah. Congrats on a great quarter, and then good luck for the next one. Thank you.

Thanks, Satish. Appreciate it. Thank you.

It appears there are no further questions at this time. I'd like to turn the conference back to Eddie Lehner for any additional or closing remarks.

Thank you, and thank you for your continued support of and interest in Ryerson. Please have a safe, healthy, and happy holiday season. And we look forward to being with all of you again for our virtual Investor Day on January 27, 2022, and again in February when we review our fourth quarter and full year results. Take care. Stay well.

This concludes today's call. Thank you for your participation. You may now disconnect.