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spk03: Hello, and thank you all for joining this Stewart Information Services second quarter 2024 earnings call. At this time, all participants are in a listen-only mode, but later you will have the opportunity to ask questions during the question-and-answer session. Instructions will be given at that time. Please note today's call is being recorded. Lastly, if you should require operator assistance, please press star and zero. It is now my pleasure to turn today's conference over to Kat Bass, Director of Investor Relations. Please go ahead.
spk00: Thank you for joining us today for the Steward's second quarter 2024 earnings conference call. We will be discussing results that were released yesterday after the close. Joining me today are CEO Fred Eppinger and CFO David Heide. To listen online, please go to the steward.com website to access the link for this conference call. This conference call may contain forward-looking statements that involve a number of risks and uncertainties. Please refer to the company's press release and other filings with the SEC for a discussion of the risks and uncertainties that could cause our actual results to differ materially. During our call, we will discuss some non-GAAP measures. For reconciliation of these non-GAAP measures, please refer to the appendix in today's earnings release, which is available on our website at steward.com. Let me now turn the call over to Brenton.
spk05: Thank you for joining us today for Stewart's second quarter 2024 earnings conference call. Yesterday, we released financial results of the quarter, which David will review shortly. I'd like to kick off the call by sharing our outlook on the current housing market, followed by an update on the progress we're making on each of our businesses. I am very pleased with the results this quarter. We have continued to make great progress on our strategic initiatives and are winning share in multiple businesses. These things are difficult to pull off in a normal market, much less an environment that we're in now. The housing market has remained depressed much longer than most people anticipated, but Stewart has maintained our competitive edge by improving our financial and operational positions. We remain confident that we are well positioned to capitalize on improving market conditions. Our view of the current housing market has not materially changed this quarter. We continue to experience a very suppressed housing market through a combination of factors such as the continuation of elevated mortgage rates, rising hope prices, and low but slowly returning housing inventory. The market continues to bounce on the bottom, where existing home sales every month for the last year have been worse, except for one, than the prior. The only exception was January of this year, which was flat relative to last year. To further illustrate how choppy the market conditions are, recent Data shows that the overwhelming majority of the top 25 MSAs in the country are experiencing increased inventory year over year, yet pending sales are down. In June, we saw a feasibly adjusted run rate of 3.98 million existing homes for sale, a 5% reduction from the prior year. There has been a very recent improvement in sentiment around interest rates, and inventory continues to enter the market, but buyers are still exercising extreme caution. There are, of course, some transactions occurring as homes are being bought and sold given various life events, but many consumers continue to remain in a holding pattern given current headwinds. We expect 2025 will be the transitional year, helping shepherd us back to a more normal market, which we see is characterized as around 5 million existing homes annually. So we're poised to capitalize on an improving market, but are diligently manning ourselves like the year will be flat to down. We do believe that the next three quarters will be interesting as we monitor things like CPA reports and rate cuts and the results of the upcoming election. So we will be prepared to capitalize on any improvement. Turning towards our operations, we remain focused on building an improved competitive position by executing upon a disciplined operating model while also identifying efficiencies to prepare ourselves for market rebounds. We are dedicated to growing scale and attractive markets across all our lines of business, and we have made great advances on improving our customers' experience in all channels through upgrades to our technology, capabilities, and operations. We've implemented technology to enhance our title production processes and are working on utilizing technology to improve our data management and access. We continue to focus on attracting and retaining key talent, and we know that Stuart is the best home for industry-leading talent as to grow with us as the market improves. Our direct operations segment is focusing their expansion efforts on targeted MSAs, and we expect to utilize both acquisitions and thoughtful organic growth to drive share gains. We routinely evaluate markets to ensure we have a view of the most attractive markets for growth and leadership, and we have limited our acquisition-related investments in the current environment, but have maintained a warm pipeline to prepare ourselves for improving markets. Even though we are currently cautious about acquisitions, we are still very positive about the outlook for opportunities as the market normalizes, and we have not deviated from our long-term goals for this business, which is to grow, share, and scale in attractive MSAs. In commercial, our results for the last two quarters reflect our focus on increasing share in our commercial operations. This quarter, we introduced our dedicated hospitality team and our new national affordable housing team through the acquisition of all New York title agencies. We are making investments in talent across our commercial operations so that we have the leadership, operations, and sales teams in place to achieve our goals. We are also investing in technology to support our commercial operations to allow us to better serve our customers and manage our business more efficiently. We expect our commercial transaction momentum to continue, but we know the near-term commercial market challenges may present themselves depending on the outcomes, on outcomes with rate cuts and the upcoming election. Our agency team remains focused on driving share gains in attractive agency markets. We are focused on our 14 target states and are seeing very good progress in a number of states, even in the current market conditions. Specifically, we have seen good leverage from our improved support services as well as our enhanced ability to serve commercial agencies. While success comes from a lot of basic blocking and tackling, we see the opportunity for continued momentum. The real estate solutions team is focused on gaining share with the top lenders through new innovative solutions and cross-selling of our products as we leverage our significantly improved portfolio of services to better serve our lender clients. Our real estate solution businesses maintain solid financial results and growth in the second quarter, particularly given the market We have seen significant growth in new clients as compared to the second quarter of last year, mostly coming from some innovative solutions in our credit information evaluation services. In our pre-tax income results, you can see that we are experiencing an increase in customer acquisition expenses as we have onboarded a significant number of new clients. These expenses will normalize toward the end of the year. The current market makes cross-selling our business in this space a bit challenging, We've been able to offset some of the challenges by gaining share from our existing clients and with new client introductions. Our momentum should continue as we have significant cross-sell opportunities available to build upon over the next couple of years as the market improves. We are thoughtfully managing all our lines of business and remain intentional On our investments in expense management, we have been careful not to take expense actions that we feel would threaten our competitive position or take away from the critical initiatives that help us meet our long-term goals. We are confident that we are focused on growth across all businesses and work where we are doing to invest in our capabilities that will allow us to achieve low double-digit pre-tax margins as we return to a more global 5 million unit purchase mark. We maintain a positive long-term outlook for the real estate market and are confident that Stuart is on a journey to become what we call the premier title services company. We believe in the strength of the company and are committed to fortifying Stuart for long-term growth and performance. Our solid financial footing should best position us to take advantage of the opportunities that we believe that this cycle will continue to provide. Thank you for our customer and agent partners for your continued trust. We are committed to doing our best to serve you with excellence. Finally, I'd like to express my gratitude to our employees. I am thankful for your dedication to Stewart as we work together to create a more resilient company that continually delivers for our customers. And I am particularly grateful to our Houston area employees that have maintained our standard level of service excellence by person going through a very difficult period and with the recent weather events. David, I will now turn it over to you to provide the update on our results.
spk02: Good morning, everyone, and thank you, Fred. I appreciate the outstanding service of our associates and continued support of our customers through this difficult period. As Fred noted, historically low residential and commercial real estate activity persisted during the quarter, causing our results to be similar to last year's quarter. Yesterday, Stewart reported second quarter net income of $17 million, or $0.62 per diluted share, on total revenues of $602 million. Adjusted for net realized and unrealized gains and losses acquired in tangible amortization and other expenses as presented in Appendix A of our press release, second quarter adjusted net income was $25 million, or $0.91 per diluted share, compared to $26 million, or $0.94 per diluted share in last year's quarter. In the title segment, total operating revenues improved $29 million, or 6%, driven by higher revenues from our agency operations, while direct title revenues were similar to the prior year quarter. The segment's pre-tax income decreased $2 million, or 6%, primarily due to the lower agency remittance rate caused by geographic mix. After adjustments for purchase amortization and other items, the title segment's pre-tax income was $38 million, which was 2% higher compared to the prior year quarter, with adjusted pre-tax margins comparable. On our direct title business, total open orders in the second quarter were 2% better, while total closed orders were comparable. Our domestic commercial operations continue to produce solid results with higher revenues of approximately 10 million or 23%, primarily driven by improved transaction size and volume in energy, industrial, and multifamily asset classes. Average commercial fee profile improved 17% to $13,500 compared to $11,600 last year. Domestic residential revenues decreased 15 million, or 8%, primarily driven from lower fee per file with a lower purchase transaction mix. Total international operating revenues improved 3 million, or 10%, primarily due to increased volumes in our Canada operations. On title losses, total title loss expense increased. In the second quarter, it increased 7%, consistent with the increase in title revenues. As a percent of title revenues, title loss expense was 4% for both second quarters 24 and 23, and we expect title losses to average in the low to mid-4% range for the full year 24. Regarding the real estate solution segment, Pre-tax income improved $2 million compared to last year, primarily resulting from increased revenues from our credit-related data and valuation services business. Pre-tax margin was 5.5% in the second quarter compared to 4.6% last year, excluding acquisition and tangible expense and sales tax assessment charge adjusted pre-tax margin. was 11.5% compared to 14.5% in the prior year quarter. The boarding of new customers and scaling the business had an impact on margin, as Fred noted in his comments. On our consolidated operating expenses, our employee cost ratio in the second quarter improved to 30.5% from 33.9% last year, primarily driven by low incentive compensation and average employee counts. On our other operating expense ratio, increased to 25.9 compared to 24% in the prior year quarter, primarily driven by increased credit information and services expenses in our real estate solutions business. On income taxes, our second quarter effective tax rate was approximately 31% higher than our historical tax rate, primarily as a result of income source from international operations which have a higher average income tax rate relative to domestic operations. On other matters, our financial position remains solid to support our customers, employees, and the real estate market during this difficult environment. Our total cash and investments at the end of the second quarter was approximately $310 million in excess of statutory premium requirements, and we also have a fully available $200 million line of credit facilities. Total Stewart stockholders' equity at June 30, 2024, was approximately $1.36 billion, with a book value of approximately $49 per share. Net cash provided by operations in the second quarter was $21 million, compared to $35 million last year, primarily as a result in trade accounts receivable consistent with revenue growth. Lastly, thank you again to our customers and associates. We remain confident in our service to the real estate markets. I'll now turn the call back over to the operator for questions.
spk03: Gentlemen, thank you. And to our phone audience joining today, if you would like to ask a question, please press star and 1 on your telephone keypad. Pressing star and 1 will place your line into a queue, and we'll take your questions one at a time. Once again, ladies and gentlemen, that is star and one on your telephone keypad if you would like to ask a question. We'll hear first from the line of Soham Bonlay at BTIG.
spk01: Hey, guys. Good morning. Morning. Morning. How are you guys doing? Good. Fred, maybe just first one on market share. You know, if I look at, you know, the non-commercial line, it looks like, you know, at least on the purchase side relative to our estimate, it was a little bit lighter. Can you just maybe talk about, you know, what you saw on that front, anything market-specific to note or anything competitors are doing this quarter? That would be great.
spk05: I would appreciate that. So, yeah, there's a couple of things. I feel good about it. As I look at kind of our share in that area, the res area across the board, kind of holding our own, but there's a couple of exceptions that happened, particularly this quarter. So if you remember, at the end of the year, as well as I did again this quarter, I've shut some offices down in some micro markets. So our outlook was that we were going to stay down longer, and I have some sub-scale markets where, I felt it was appropriate to manage our kind of margin and our approach that we took some action. So you saw it at the fourth quarter, I took, you know, what was it, a million and a half, less than seven, so take two million. I did the same thing this quarter. So there's some surgical stuff that we've done on some of the micro markets that is working its way through. The other thing I would say, if you look at the NAR stuff by MSA and the top 10, kind of decreases in pending home sales. You know, a number of those markets are our biggest markets. So places like Houston was number one in that. San Antonio was in the top four. So there's some things we share. But I feel good kind of holding our own in those markets. But we did take some actions, in my view, to ensure the margin. We have a lot of great growth initiatives in our res business and kind of what we call our direct growth. kind of res business where we're doing things like growing kind of Main Street commercial and, you know, inventing that in our offices. We've got some really interesting things going on on micro markets with organic, you know, hiring and teams. So I'm not really worried about it, and I feel it's pretty secure that over the next couple of years we're going to have more share in the res market than we do today. But there are some tweaks that we're doing because I want to make sure that we're managing ourselves in a market that continues to be down a little.
spk01: Okay, great. That's super helpful. And then on the M&A comment, I was a little curious on the cautious approach here. You know, is that more of a function of where the bid-ask spread is today or something else? Because, you know, I would have thought that, you know, the current environment is probably ripe for, you know, acquisitions just given that we're sort of at the trough, right, versus waiting for sort of an improvement in the market.
spk05: That's exactly what you said. So it's the trading price. So usually, you know, what's great about the way we've been able to do it is between getting to a fair price with an earn out, you can get at it if the person selling thinks it could be more, they can capture it. If they can't, they can't. And we've had every single transaction done that's been accretive, and it's a great way to set it up. The problem right now is most agents are making very little money. And so it's hard to bridge the expectations, the value expectations with earnouts. And so they don't feel as good, we don't feel as good. So in my view, you just got to have a little bit of normalization in the run rate and a little bit more transparency about the outlook, and it'll be fine. And so, again, real living transactions, sure, but it tends to be because somebody's retired and they have to do it or whatever. Or you have some unique transparency to their pipeline because they're in a niche or something like that. So we fully expect that comes back. We're having a lot of great conversations, dozens, frankly. And so there's a lot of people that have rethought their positions. given the downturn and the stress that's going through. So I think there's going to be lots of opportunities, but I think it's going to be a little light and will continue to be a little light for the next couple of floors because of the clearing. Just what you said. It's really just that. It isn't, you know, we'll get there, but it's, you know, we had a little bit of that same thing right after 21 where people wanted to get paid like it was 21. It could be duplicated and it took us a while to settle so that we could get the right kind of valuations that we did, and we'll do it again. So I'm not really worried about it.
spk01: Okay, great. And then just last one, on your long-term margins, I know that you said you can get to the low double digits in a normalized market. But maybe just talk to us about, you know, how much of that lift is in sort of your control versus just the overall market normalizing, right? And I'm asking because, you know, I think while the low double-digit margin doesn't seem that far-fetched, I think it would be helpful for your thoughts – for investors to hear is to delineate between an SDC being sort of a show me story versus sort of a set it and forget it story.
spk05: Yeah, great question. And again, the reason I talk about it is because I have great confidence in the work we've done. So we have what I would consider excess capacity in our direct operations, right? That's where most of our fixed costs are. That's where our distributed offices are. That's where a lot of our revenue is. And the reality is because of the work we've done, any growth back to a normal market, a lot of it gets to the bottom line, right? So those margins, I talk about the fact that in 2021, while we were showing 13.5, part of that was fake because the marginal contribution of such a robust market was really high because we're using overtime, and that wasn't sustainable. So in 21, my guess is we were in the 10% kind of margin. The work we've done since then, the convenience of the search work, the centralization, I believe that number is now 11.5 to 12 in a 5 million purchase market, which comes from the utilization of the capacity we've created in our system that will come through when the market just gets normal. And, again, it has a lot to do with the structure of how direct works in the offices and how much the workflow is centralized. Now, I would also tell you we've done a heck of a job managing the down market. We changed kind of our financial discipline and structure. And so in the 10 years previous to our journey, before I got here, the most we ever made in any given period was 5% margin. Well, we just went through the worst. That's one of the worst markets in 35 years at 3.89, and we're at 5%. I also feel good about our ability to manage our margins, but I feel that's a market. Now, what's controllable by us, we've done a lot of, right? The operating model, the variabilizing more of the costs, making sure that the way we manage the discipline of staffing is there. You know, yes, the journey from here to the numbers I'm talking about, you know, has some help from that. Now, what's the exception of that? Well, the exception of that is we are gaining share in some of our other businesses, right? So the reality is in things like our services business, if we can continue to gain share and mature a larger business, if that business was $30 million three years ago, it's now $350 million. I think it has an opportunity to double again as we continue to cross, et cetera. So there's other things that I think regardless – I mean, the market may not have to get all the way to five. It has to be better than horrible. But with a little bit of improvement, we'll also get some benefit from some of the growth we're seeing there and an agency where we're literally going to share in many states. So, you know – Again, we need the market to get to the full opportunity that I talk about. I need it to just normalize a little bit. But for us, again, our model right now, the problem we have is, you know, you've got a market going down 5% or 3% to 5%, and so you're overcoming the additional work you have to do to make up for that lost volume against your fixed cost basis. So, you know, I feel good about it. I'm confident in it. But I'd love a little help, let's say, from the market, you know.
spk01: Yeah, makes a lot of sense. All right, thanks, guys. See you in a few weeks. Yeah, thank you very, very much.
spk03: Next we'll hear from Bose George at KBW.
spk06: Hey, guys, good morning. This one is for you. I just wanted to follow up on the margin again. Just given the trends right now, and I think you sort of alluded to this in your outlook comments as well, but does it look like this year, if all things, you know, trends continue, the margin's going to look kind of similar to what you guys did last year?
spk05: Yeah, that's the way I think about it. So if the market stays kind of where we are today, we're a tad better, but the market's down a little bit, we'll be about where we were last year. And You know, it is what it is. We've just got to tread water on the decrease. I think we still stay at this kind of decreasing a little bit. It's kind of going to be relatively similar to what we made last year. Now, the comparisons are a little odd because if you remember last year, the third quarter, there was a couple of very robust quarters, and then the world came to an end, right? So the comparisons are a little bit month to month. kind of interesting, but I think the way you articulated it is similar from last year's kind of way we think about it.
spk06: Okay, great. That's helpful. And then, is there much to do now on the cost-cutting side, or is it as you kind of said in your earlier comments, you need a little help from the market and your kind of position for that?
spk05: Yeah, it's a great question. I mean, I keep saying it's We're kind of running out of things that make sense. We've done some surgical things, you know, as I said, this quarter and a little bit in the year on some micro markets where I couldn't see the long-term view of getting where we needed to. But for the most part, we're actually kind of there. We are trying to offset by being smart about prioritization. the investments we're making because we are making, you know, kind of a number of investments in some of the businesses that we talked about, whether it's commercial, whether it's what we're trying to do in some of the services businesses, particularly if it's ramping up clients. But we're trying to make sure we're, you know, making the tradeoffs on other places to manage it. But to your point, I think that is description. There's no magical information. place left after, whatever we're talking, 20 months of decreasing market to find a lot of expense opportunities.
spk06: Yes, yes, that makes a lot of sense. Okay, great. Thank you.
spk03: Once more to our phone audience, that is star and one, if you would like to ask a question. We'll hear next from John Campbell at Stevens Inc. Hey, John. Good morning.
spk04: Hey, guys. Good morning. um okay so uh wanted to touch on real estate solutions obviously really good results here you're at some progress um fred you rattled off a few of the standouts uh you talked to kind of broader market share i'm hoping you guys can help maybe a little bit with the modeling so first um you know it maybe help on the transactional mix if it's being a transactional versus contractual and then secondly Maybe for David, if you can double-click on the commentary around onboarding costs. I want to see, you know, to what extent that normalizes this year. It sounds like maybe just a mismatch of revenues versus costs as you onboard. So maybe you could help with that as well.
spk05: Great, Sean. Great questions. So if you look at our portfolio, it's a place where there's a little bit of a standout right now. is kind of some of the data solutions. One of the projects we call Verification Waterfall. And so we have a really nice uptick in new clients that we're onboarding. And it's quite a few. And so it's transactional by its nature, but it is kind of selling data and insight too. And so what you see is Because of that, there is a big ramp-up. We had a ramp-up of onboarding costs. You've got to integrate the new clients into your systems. There's a bunch of data you have to get access to to buy and transition into the solution. You've got kind of a ramp-up of servicing personnel. And so there's a little pressure on margin as we have kind of the significant growth, right? And I would also say our first quarter solutions margin was probably a little high. We had some one-time things that happened that made it a tad high. But I do think as we get to the end of the year and things normalize a little bit, the margins will go up a little bit, right? And so, you know, I think we went from mid-teens to low double-digit, and I can see it getting into that 12th, 13th, against at the end of the year depending on the mix of all those solutions that we sell. Now, it's hard to predict that because if the market comes back a little bit, some of our other services will grow a little bit more too. But it is very much explicit. We know exactly what we're doing. We know the returns of those clients. We know what the ramp-up expenses are. There is a little bit of like there's been some data input cost increases in that world that we're now passing on to our clients that had some time delay that's also in that mix a little bit. But I'm really quite excited about our services business because what we're doing is we're getting really good traction in a market that's still quite anemic and down, particularly for lenders. I mentioned in my transcript, and I believe it's too, you know, vet businesses, We ran a $30 million business. We'd have a $300 million business with multiple products in depth. Typically, lenders, like for me, it's a counterparty risk. So they like to have people in that business with a balance sheet. And we weren't participating. It was really the big boys that were participating and then some private companies. Over time, as the market gets just a tad better, our ability to cross-sell is even going to get better because their markets, their availability will get bigger, and they tend to use multiple players on their shelf space. So we're living on a new period of new client growth, which will transition to kind of cross-sell growth as we go forward here over the next few quarters. And so I'm pretty bullish on that business. That's why I talk about it. I believe it's going to continue some of the trends we're seeing there. Now, again, it's seasonal, so there's some seasonal nature to that space. But I like where we are, and I do think the margins, you know, will normalize at the end of the year as we just – the onboarding gets to be a more normal percentage of what the revenue is.
spk02: And, John, just to add a couple things here. I mean, I think you were trying to get a sense on transactional versus more like subscription – And the subscription is probably only in around the 15% or so of revenue range. Most of that business is transactional. And also, just to give a little more color on the cost, if you think about bringing on a big bank or lender, you have to set up a service team, right? So you need account reps to, you know, give them what they need to run their business. And so you're ramping a decent amount of people, particularly if you're bringing on a big account. Yeah.
spk05: But, again, I like the margins today, frankly, and I think they'll normalize and get a little bit better going forward. So I think we're in a pretty good spot there.
spk04: Okay. That's very helpful. So, David, the 85% transactional, it does sound like maybe that's reoccurring, I guess, where you're setting up a team around these guys. It's going to be seasonal. It's going to move with the housing market. But, generally, when you lock in that lender, it's pretty secure revenue, right? Yeah.
spk02: Correct. I mean, it varies by service. So, like on the credit side, you tend to get the lion's share of the business. On the appraisal side, it's spread around more. But, yes, once you sign an account, you're getting, you know, their business. And their business then varies by the market.
spk04: Okay, helpful. And then last one for me, just total other op-eds, you know, that's grown at a much faster rate than revenue in the last two quarters. It sounds like that the real estate solution, the onboarding cost is part of that. Obviously, you took the actions on the office closure, so I'm guessing maybe there was a little bit of excess, obviously, excess office or facility costs. So maybe if you could help talk through the extent of the savings from those office closures, and it does sound like that you expect the mismatched them to normalize another state solution segment. So just any kind of high-level thoughts on overall total impact versus what we looked at this year?
spk05: Yeah, again, the office closings were only about a million and a half, and then seven, I think it was 500,000. So that's about two. So it's not a huge amount. One of the interesting things, John, just to clarify what else is in there, which is relatively significant, we've had a tremendous growth of commercials. A lot of that commercial is big energy. In big energy, you do a lot of outside search and data work. We've had a pretty severe ramp up in our commercial operations. We've upsized our purchase of data and some of the outside third-party search because a lot of this energy stuff is in rural places where we don't have our own feet on the street. remote locations where you're using a third party to make sure you're accessing data. So a lot of the ramp up is also in that. So it's in services and it's in commercial. And on the commercial side, one of the interesting things is there's a little bit of a mismatch. So if you ramp up, you provide all those services, you pay for all those services because they're period expenses, but the revenue from those don't come until those transactions close. So we have a really nice pipeline of business and commercial that's going to continue through the year, that we've ramped up our search and outsize third-party costs. So it's really, it's that and it's the real estate search that are by far the two places where those businesses are growing pretty materially, and they both have input costs that are in that category. So the margins are good. When you look at it and you break it down by those businesses, the margins are good. But in both cases, there's also a tad bit of timing because our ramp-ups are so fast, right? So there's a little bit of a delay in terms of the revenue generation and earnings generation for both those things. So I'm very comfortable with the line of sight for the margins of those businesses and the reason for those. But it is really, you know, if I think about our model, if you look at the beginning of the year and you think about our model and your guys' model versus where we are, what's different? Well, I think what's different is we felt that the market was going to grow five or so percent, right? Not a lot, but a lot. So our core business was going to expand where we have excess capacity. That has shrunk five percent. over three of a year and continues flat. But what we've done is we've grown significant share in these other businesses. And so we've offset the shrinkage of the market by growth of these other businesses, but those other businesses have different profiles in their economics, right? And so part of that profile is this other expense category, which is the imports of these businesses that have grown nicely for us. They've just changed the profile for expense-based. But again, I'm very comfortable with the margins in both places and the fact that we're going to have, you know, over time, enhancing margins because of the timing. If that helps anything, I don't know if it does.
spk04: No, that's perfect. Thanks for all the color, guys. Appreciate it.
spk05: Thanks.
spk03: And ladies and gentlemen, we'll take just another moment to allow star and one from our phone audience for anyone that has a question this morning. Just take another moment. Star and one, ladies and gentlemen. And having no signals from our phone audience, I'll turn the floor back to Mr. Eppinger for any additional or closing remarks.
spk05: I'd just like to thank everybody for your interest in Stuart during our call. Thank you so much.
spk03: Ladies and gentlemen, this does conclude today's teleconference, and we do thank you all for your participation. You may now disconnect your lines.
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