Advanced Drainage Systems (NYSE:WMS ) Q4 2021 Earnings Conference Call May 19, 2022 10:00 AM ET

Mike Higgins - Vice President Corporate Strategy and Investor Relations

Scott Barbour - President and Chief Executive Officer

Scott Cottrill - Chief Financial Officer

Garik Shmois - Loop Capital

Good morning, ladies and gentlemen. And welcome to Advanced Drainage Systems, Fourth Quarter and Fiscal Year 2022 Results Conference Call. My name is Rizwan and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions].

I would now like to turn the presentation over to your host for today's call, Mr. Mike Higgins, Vice President of Corporate Strategy and Investor Relations. Sir, you may begin.

Thank you, and good morning, everyone. Thanks for joining us for our call today. With me I have Scott Barbour, our President and CEO, and Scott Cottrill, our CFO. I would also like to remind you that we will discuss forward-looking statements. Actual results may differ materially from those forward-looking statements because of various factors, including those discussed in our press release and the risk factors identified in our Form 10-K filed with the SEC. While we may update forward-looking statements in the future, we disclaim any obligation to do so. You should not place undue reliance on these forward-looking statements, all of which speak only as of today.

Lastly, the press release we issued earlier this morning is posted on the Investor Relations section of our website. A copy of the release has also been included in an 8-K submitted to the SEC. We will make a replay of this conference call available via webcast on the company website.

With that said, I will turn the call over to Scott Barbour.

Thanks, Mike, and good morning everyone. Thank you for joining us on today's call.

Fiscal 2022 played out largely as we communicated in February, with profit improvement occurring in the back half of the year due to multiple actions we took over the course of the year to improve pricing and operations. We closed out fiscal 2022 with a record 2.8 billion in revenue and 676 million in adjusted EBITDA, up 40% and 90% respectively. Our adjusted EBITDA margin was 24.4% coming in at the high-end of our guidance range. This fiscal year, we successfully managed through a number of challenges, including significant inflationary cost pressures, labor shortages in two ways of COVID. Despite material shortages early in the year, and persistent labor challenges, we were able to increase production and improve inventory levels to better service our customers, all while improving the safety within our facilities by double-digit rates.

We employed 149 million in CapEx primarily to drive organic growth, more than any year in the history of the company. We also executed 292 million of share buybacks and acquired Jet Polymers, a recycling company in the Southeastern United States. I'm very proud of the performance of the entire operations team to help the company exceed our guidance ranges in this market environment.

Domestic revenue increased costs all in markets, driven by favorable pricing, as well as double-digit volume growth in the construction markets. As we continued our consistent track record of converting the market to our more environmentally friendly materials. Sales increased 45% in our [40] [ph] states, with notable growth in Florida, Texas and California. In addition, the 8% growth in the agriculture market displayed on Slide four would have been even higher if we had had more available labor drawn all of our production lines and available material in the spring season.

In summary, the sales team did a great job executing our plan to meet the favorable demand we continue to see in the market. We finished out the year strong with a record 678 million in fourth quarter revenue of 53% increase compared to last year. Sales growth was driven by both favorable pricing as well as construction market volume growth at ADS and infiltrator. Agriculture volumes were down driven by the cool wet start to spring in the Midwest.

Infiltrator sales increased 43% primarily due to favorable pricing with strong growth in the southeast and southern regions of the United States. The fiscal 2022 investments in infiltrator continued to give us more capacity to work down the backlog in order rates within that business remain favorable. Housing growth in the South, Midwest and in rural areas remained strong where we have a better penetration of on-site septic products.

Additionally international sales increased 16% this quarter driven by growth in Mexico and the export businesses. We continue to leverage our Mexican and Canadian capacity to help service the strong domestic market demand and reduce our backlog. We have been working closely with our distribution partners to monitor market demand and we collectively remain bullish on activity through calendar 2023. We continue to work programs with homebuilders and are encouraged by continued strength in land development.

Our backlog is up double-digit over this time last year, and we continue to work to reduce our backlog from peak levels through go through the recent capacity additions, improving service levels overall. Pace of orders and project strength remain favorable, as well as our ability to capture price in the market, which gives us confidence in the fiscal 2023 sales targets we issued today. April financial results were strong on a tough comparison to last year, which sets us up well for this year, in line with the guidance ranges we communicated today.

To that end, we continue to invest in expanding our capabilities with investments in production capacity coming online at both ADS and Infiltrator in fiscal 2023. We plan to spend another 150 million to 180 million on CapEx this year. These investments will allow us to continue working down the high levels of backlog, build back inventory and service the strong demand we continue to see in our end markets, particularly in key growth regions like the Southeastern United States.

From a profitability perspective, our adjusted EBITDA increased 78% this quarter. We realize the full benefit from price increases implemented through the first half of fiscal 2022, covering inflationary cost pressure on materials, transportation and labor. We continue to face challenges around labor shortages and elevated transportation costs, which we expect to continue.

Now I want to highlight some other recent announcements. Earlier in May, we announced the acquisition of Caltech Inc. Caltech designs and sells plastic stormwater and on-site septic chambers with a strong presence in the Eastern United States. Their products expand ADS' portfolio of allied product solutions, enabling us to meet the growing and evolving needs of our customers. Caltech is well respected within industry. We're excited to welcome the Caltech team to ADS.

Finally in a press release issued earlier this morning, we announced ADS’ Board Chair Bob Kidder intends to retire at the end of his term this July and will not seek reelection. Bob has provided tremendous leadership and imparted timely advice throughout ADS's journey as a public company. His board knowledge and management experience are unmatched. And I'm personally very grateful for his guidance and partnership since I joined ADS in 2017. It is ADS's good fortune to have had Bob Kidder serve as Board Chair over the last five years and I wish him success in his future endeavors.

The board has elected Bob Eversole currently serving as Chair of the Audit Committee to serve as Board Chair starting in July. Bob has been on the ADS Board since 2008 and brings a very strong background in finance and business management. I'm excited to work with Bob in his new role going forward.

With that, I will turn the call over to Scott Cottrill to further discuss our financial results.

On Slide five, we present our fourth quarter financial performance. From a top-line perspective we generated 53% growth year-over-year, driven by favorable pricing at both ADS and Infiltrator as well as strong volume growth in the domestic construction markets. Legacy ADS pipe products grew 61%, allied product sales grew 49% and infiltrator sales increased 43% with double-digit sales growth in both tanks and lease field products.

We continued to demonstrate our pricing power was significant year-to-date price increases across each of our segments. In addition, our pipe segment experienced double-digit volume growth in the construction markets this quarter. Consolidated adjusted EBITDA increased an impressive 78% to $169 million, resulting in 350 basis points of margin expansion to 24.8% in the quarter, consistent with our guidance year-over-year margin expansion began in the fourth quarter and we expect to carry this momentum forward as we progress throughout fiscal 2023.

The fiscal 2023 guidance issued today shows an 18% to 21% increase in adjusted EBITDA dollars as well as over 100 basis points of margin expansion year-over-year.

Moving to Slide seven, we generated $126 million of free cash flow in fiscal 2022. In addition to the growth-oriented capital investments, working capital was a significant use of cash year-to-date. We purchased raw materials and built inventory in a much higher cost compared to last year to support our strong demand. In addition, accounts receivable increased compared to last year, primarily due to the significant pricing we introduced into the market throughout 2022. As Scott noted, we will spend another $150 million to $180 million on capital expenditures this fiscal year, as we continued to invest at elevated levels to support the strong market demand we continue to see and work down our significant backlog.

In the fourth quarter, the remaining balance on the company's outstanding ESOP loan was repaid and effective March 31, 2022, the remaining unallocated shares of preferred stock were allocated to participants. In April, those shares converted to 12.8 million common shares outstanding. Closing out the ESOP is another way to thank our employees for the great work they've done throughout this dynamic year. As a reminder in fiscal 2023, we will replace the ESOP compensation expense with an employer 401k match program, which will cost approximately $8 million to $10 million annually. I'll direct you to the 8-K, we intend to file later today after the market closes that will present our earnings per share numbers on an as reported basis, as well as on a pro forma basis.

Finally, on Slide seven, we provide our fiscal 2023 guidance, based on our order activity backlog and current market trends, we currently expect net sales to be in the range of $3.1 billion to $3.2 billion, representing growth of 12% to 16%. And adjusted EBITDA to be in the range of $800 million to $820 million, representing growth of 18% to 21%, translating to an adjusted EBITDA margin of 25.7% at the midpoint, versus 24.4%, this past year.

With that, I'll open the call for questions. Operator, please open the line.

Thank you. [Operator Instructions] And the first question comes from the line of Josh Pokrzywinski from Morgan Stanley.

So just a -- I guess a question first trying to understand the some of the volume comments because the EBITDA waterfall shows that as a drag that I think you mentioned up double digits in pipe. Can you maybe just sort of kind of explain where you're seeing maybe that volume shortfall, if I'm understanding the waterfall chart, right? And then, how much kind of deferred revenue or unexpected backlog build you have in the quarter?

All right. So this is Scott Barbour, Josh. And if you look at that kind of fourth quarter chart, which I think is the one you might be referring to. Look at that non-residential and residential and take a very solid double-digit volume growth, as well as the price attainment that we've been getting. And if you look at the agriculture, think of that as some price attainment but volumes over a tough comp of a year ago, in addition to a very slow start to the agriculture selling season, which is what like 7%, 8% of our sales price in total. And if you, one level deeper would be lots of good agriculture orders, but they're not released for shipment yet. And that's kind of speaks to your is that a delayed revenue thing? And I would kind of think about this coming year as not a great spring season for the agriculture business, but potentially very good fall business if things, if the weather is favorable and all that. It is not only seasonal, but highly cyclical segment. We're in the right part of the cycle. We're kind of having a bad season, if you will, if that that helps to clarify.

Got it. That's helpful. And then just on '23 guidance, obviously, a lot of volatility over the past call a year and a half with inputs, especially on the resin side. Is there sort of an explicit price cost benefit that you guys are thinking about in guidance? I know that the long-term targets laid out at the Analyst Day didn't really have anything, but just given that, like, kind of see the whites of their eyes now, anything that you're building?

Yes, Josh. Scott Cottrill here. So yes, absolutely, there is when you look at the yield or pricing side of the house, really good momentum saw that in Q4. All year, really, as we kind of ratcheted that up. And we talked about run rate in Q3, Q4. We'll continue to take pricing actions as we deem appropriate and necessary. On the other side of that coin now, we're very much keeping focus not only a resin, but what's happening with labor, transportation, diesel, all of those costs. So we've got those in our guidance would kind of assuming that those continue to be up well over what they were in for the full year '22. So we've kind of taken a realistic we think, approach on what those costs are going to mean to us, and then made sure that on the pricing side, we continue to stay in front of that. So absolutely, that variable spread and again, starting with resin, absolutely the right thing to do. But we look at it as part of our manufacturing, labor, transportation, diesel, all in making sure that this margin expansion story that we started hear in Q4, and we've been talking about this all year, that we continue that momentum, and we have that margin expansion line of sight as we move through Q1, Q2, Q3 and next year.

Thank you. Our next question comes from the line of Mike Halloran from Baird.

So on the guidance, maybe just some thoughts and how you guys are thinking about the underlying demand patterns for the year by your end markets, if you're assuming that backlog normalizes as he works through the year and any thoughts as you see it on sustainability of some of those end markets, because obviously, there's a lot of commentary on softening and some of the residential pieces, even some of the non-res pieces like say, the distribution center side. So any kind of help on the assumptions that you're embedding in the guidance be really helpful.

Scott Barbour here, Michael. And so there's a lot to unpack underneath that. But I think let me kind of boil it down to a couple of things. The first half of the year, we look at continued growth in orders. And we say that because of our code activity. There are a number of projects we're tracking continue to grow. And the sentiment that we get from the waterworks distribution, we're out there talking to every day. And I spent quite a bit of time communicating with those guys over the last 30, 45 days. And they remain very optimistic and bullish about the projects and demand they're seeing and working on that's translating into us. We continue to work off some backlog as this capacity comes online, particularly if you think about infiltrator. And the capacity that we've added there in the last year is working well for us. And we're able to get our lead times down on some of our products, what we're more accustomed to. And we're in the process of doing that.

So that kind of all works its way through the first half, I'd say to our second half was kind of modeled it as a kind of normal year. We don't have any kind of cliff out there. We don't have any kind of tailing off. We tried to model it as a more traditional year of more profit in the first half versus the second half trying to base ourselves against, what we will call average type of volumes in the second half. And we remain firm that we're going to hold our pricing. And that, we'll take our pricing up, inflation gets -- we started to get hit worse. Like Scott said, we like where we're at. Right now, we got on top of it. It took us six months. But we feel good about doing what we said we were going to do and the performance in the fourth quarter. And I think you'll recognize that velocity of the fourth end of the first -- will I think set us up well. But overall, on the demand side. That's how we're kind of kind of going at it.

Thanks for that. And on the free cash flow side, obviously took on extra inventory this year to make sure you could get in front of some of the environmental challenges or the challenges in the environment, I should say. Maybe some help on how you think that plays out as we work through the year -- is this year where you're going to see some normalization working capital side or do you think you're going to have to keep some elevated inventory on hand to manage through the challenges?

Yes, Michael. The way we think about working capital is, it'll start to normalize. We will hit and target kind of a 20% working capital as a percent of sales, we ended up last year, this current year, we just closed fiscal '22 at 21.8%. A little bit higher than obviously, we like to be for all the reasons that we indicated with all the pricing that we got into the market, as well as that inflationary, resin costs, plus building some of that inventory in that Q4 winter period, which we normally do.

So as we look forward, we have not forecasted any of those costs or pricing come off. So those rates kind of stay at those elevated levels. So it's much more of just kind of a pounds and sales volume gain. And so again, we think that'll be right at that 20% of working cap was percent of sales target as we move forward.

Our next question comes from the line of Garik Shmois from Loop Capital.

I was just wondering if you could expand a little bit more what you're seeing on the cost side, whether it's on raw materials and polypropylene or on the transportation side, you had a nice deceleration sequential released on the transportation manufacturing cost buckets. So just kind of curious if you could expand on that a little bit.

Okay. This is Scott Barbour, good morning. And you know how I think about this, I think about the raw materials. And raw materials are really rose up fast, kind of peaked in November, December, they've come down a little, they've been pretty darn flat. And there's a mix underneath that between the polypropylene, the virgin high-density polyethylene and the recycled. But in any given month, we're kind of looking, it's flat, month-to-month-to-month. And looking forward, that's how Scott's kind of built it in. And if that moves up, we'll take action.

From a labor standpoint, our labor costs went up a lot last year, there's some full year effects of that, plus, we're going to be mixing up our labor rate, a little bit more than we have in the past, and so you'll see though, we're covering that now but you've seen that elevated. Transportation, we could talk all day long about our fleet. But think of it this way, what you might be seen in the band market have a decrease, not so much in the flatbed market, which we tend to play. So we're not seeing deflation in what I would call our contract trucking, or it's kind of steady right now. But we continue to have a shortage of drivers. And so we're running more on outside fleets in our fleet than we like. We're using some contract drivers, which are a lot more expensive than our drivers to drive our own equipment. And we're doing that for capacity reasons. So the transportation costs remain elevated.

Now, we baked that into our pricing models, because that's part of the service we provide. And I believe if you look at that fourth quarter that, we kind of got on top of it, actually, we got on top of it in the third. And we got to top it in the fourth in the first and second we didn't.

But just to elaborate a bit, our communication, we believe was very consistent throughout the past year, FY '22, that boy does, it came on, it's hard, it came fast. It took us six months to get that pricing in the market, it was going to be a back half loaded year, and it was going to be dollars. And I think we got that done nicely and exceeded our expectations.

Now we come out of that, where we can get continue to improve our profitability, getting back to a better rate. We put that in our guidance, I think that's maybe unique right now to put that in your guidance. But we think we're at the right place to kind of drive what you would think of is the normal execution that we've been doing over the last couple years to drive the revenue that conversion, the allied products, infiltrator growth, drive margin improvement at a faster rate than sales, work our programs, our execution, all that kind of stuff. So we feel good about getting back on top of that.

Got it. And just want to follow up on the EBITDA margin guidance that you provided in the Investor Day the 400 to 500 basis points expansion to fiscal 25. Just given the world is ever changing, just kind of curious as how you're thinking about that long-term guidance, it's only been two months. But has there been any change or anything at all about that?

Holy crap. We get pretty busy to just get there. Let me take that because we had this question the other day, actually. So this is a good question. So we gave you like 400 to 500 basis points. And we told you that was going to be front-end loaded, in that three year plan. So the guidance that we issued, we think lives up to that promise at the Investor Day that we see a way to execute that we have line of sight on that. So we're going to put it out there and work to do what we said we were going to do at the Investor Day. That's how we kind of looked at it. And as far as, these next couple of years, I still think that's our goal, we're not going to change our three year goal, based on the last couple of months, which has been pretty chaotic, I would agree with a war starting and everything else. But we're not going to move off that.

Gary, the point, I would add to Scott's comment there is what gives us that confidence in that three-year plan, in addition, is that conversion story, right? You can look at the end markets, and you're entitled to your view of what's going to happen there. But we always talked to one that 200 basis points above our end markets is what ADS historically has done. It's been much greater than that over the last couple of years. So we see that conversion story accelerating. We've talked about the strength in April, we talked about how we've ended fiscal '22, our pricing power. We've got a lot of levers, and we've got a lot of diversification that adds to the strength of this company and what we can do. So we are still very bullish on the future. And there would be nothing that we see right now that'd be changing those guardrails.

[Operator Instructions] The next question comes from Matthew Bouley from Barclays.

The first question is just given, all the price you've taken and sort of the broader challenges with inflation, are you expecting to see any pushback from customers on price or elasticity and volume, just any larger customers or channels, where that risk keeps you up at night?

Scott Barbour here, Matt. I always worry about that. The most price elastic market we have is the is the agriculture market. And we work hard to be very disciplined in our sales team and our leadership there and they are about that pricing. And we remain disciplined around that. So I don't think we're going to back off of that, right now, in this environment. We worry about, of course, competition from competing materials. They have extraordinary inflationary pressures also, right now. So we would be -- I think we've mentioned in the past, we've seen localized problems versus the reinforced concrete pipe sometimes. So we have very localized pricing to kind of deal with that. But I don't feel like there's an overwhelming or overarching channel, geography or segment that is going to come in and blow a hole through what we've been doing. Does that clarify a bit?

No, it sure does. Thank you for that, Scott. And then I wanted to zoom in on the residential end market. I know there was a question about broader markets earlier. I think you said at the top that you're still seeing strength on the front-end land development side, which is I guess not that surprising but what are you hearing from customers on the front-end, and as well on the back-end septic side on new construction, just given all the concerns out there, it'd be helpful if you can kind of talk through some of the things you're seeing? Thanks, all.

Okay. So let's take the on-site septic, which deals kind of around the housing completion stage. And the -- as you guys all know, you folks all know, there's a greater period of time between start to completion today than historically, it used to be about six to nine, now it's nine to 12, nine to 15. So that's part of this backlog of Infiltrator that's kind of extending out. And they also continue to see good order rates, particularly from those areas like the Southeast, the Midwest, rural areas, custom home areas. I was at their sales meeting last week, their sales and kind of big manager meeting with everyone, and they're optimistic and bullish about what they see out there, because they have great penetration, great distribution, good new products that they're introducing there.

So let's just call it on the on-site septic side, and we think that there's a very nice volume and demand support there. And we're not -- we think we're in good shape. On the land development side, we continue to, I would call gain share with additional relationships with homebuilders being more and more involved in the early stages of their planning for kind of moving dirt to get their communities up and going. This is related to supply chain problems, where they can't get other products, they might not be able to get concrete. We can help them with our -- with a good availability. In addition, we can help them with local regulatory matters and stuff like that. So that continues to be a real nice strength. I mean, Mike, you were -- just beforehand, we were talking, I mean, up solid double-digit, solid double-digit in both the fourth quarter and our backlog there.

And I think they're going to be with two of these homebuilders next week with the senior, the senior leaders and kind of the channels that we -- the organizations we work with down there. So I guess I feel pretty good about both of those, Matt. I mean, we're not saying that there's not -- interest rates don't matter and all that stuff, it does, but I think we're positioned in the programs we're working on, all support this guidance that we just gave you in that -- in the three-year outlook that we gave you a couple of months ago.

Yeah, I would add to Scott's point about the relationships we have with the builders, I think our visibility, communication has never been better there. So, and I know all you guys follow the builders, and what you hear from them is the same type of, it's not a demand problem, they don't have a selling problem, it's kind of a building problem. So they still seem to be very positive on acquiring land, starting communities, building homes to meet the demand that there is for single-family construction.

And our distributors say the same thing, that's what's so encouraging is when we're with the senior leaders from our distribution, they're watching this just as close as we are. And they remain very confident about demand levels in the residential segment.

Thank you. Our next question comes from the line of Josh Pokrzywinski from Morgan Stanley. Please, Josh, your line is now open.

Good morning, again, guys. Just wanted to follow up on the like warehouse and like e-commerce fulfillment market. I know it's not the biggest piece of what you guys do, but it's gotten some airtime over the last couple of years. And I think you've heard from the integrators from the likes of Amazon that they're kind of tapping the brakes there. I get to the world is sort of bigger than one player, but like are you guys seeing any change there or any kind of new project mix or anything would sort of be worth pointing out is maybe an inflection point one way or the other?

So good -- this is a good question. Yeah, it has gotten a lot of airplay. We've grown nicely in that market. It's been a big focus for us. And so here's what we are hearing. And again, our team is going to be out there here in the next couple of weeks to meet with some of the largest developers in that segment. Nothing has stopped. There are some things that had moved out by a year in what I'm told is kind of the last mile or sub-regional type of facilities that they were planning, that they continue to be bullish on the bigger facilities.

Now this is what I'm told. I -- we haven't seen any degradation in our order book or anything like that or the projects. So that I think that's yet to come, Josh, those activities by some people out there. That said -- and Mike Higgins, we talked about this just the other day, there's a tremendous shortage of available warehouse space. So, particularly out in the West Coast and on -- and in the Eastern Coast, up East. So we continue to see very strong project tracking and quotation activity in those areas. So the other players, I think will still be doing some of this, but there is that potential change of behavior of a major player in that area.

Got it, that's helpful. And then just one more follow-up if I could on residential. Obviously, if there's like municipal services and water, wastewater like that not as much of a content opportunity for you guys. Any sense for what homebuilders are sort of scooping up in terms of land activity? Is it more of the rural stuff where you guys would get some of that higher content on things like septic or are they kind of building more land a little closer into town was, I would imagine like the choice of land location probably matters a lot for Advanced Drainage?

For on-site septic, you're absolutely correct, that it matters a lot. And here's my sense is that those top 10 homebuilders are -- the on-site septic participation in there is probably less than the 33% of the overall market. We tend to do well, like you said, in the rapidly, rapidly growing areas, areas of 10 or 20 home development, not 200. Now I'm sure the Infiltrator guys will listen to this and give me 10 examples where I'm wrong. But I do believe there is a different mix with those big guys and the smaller builders doing 10 homes, 10, 15 miles outside the Bellway, I mean, that's our bread and butter, the South and Midwest called semi-rural areas, which are growing very rapidly. You look at those counties, they're growing very rapidly, that's where we have very superior participation.

I was going to say with, think of their business being with more regional local custom type homebuilders versus the much larger builders for the most part. And I think just the other point to remember too is, roughly 30% of their business is repair and replace. So that's very steady. It's on existing homes. The system is old. So it's an old piping stone system gets replaced with plastic chambers or hey, there's more activity going on in the home, you have more people living there, and you've expanded it, you need a bigger leachfield in this septic tank, et cetera.

Thank you. We currently have no further questions. So I will hand over back to Scott Barbour for any final remarks.

All right, thank you very much. And we really appreciate the questions and the participation today from you all. Just a couple of comments to wrap up. I mean, I think we issued pretty strong guidance for next year, we're very confident in it. We have line of sight on that. We have the right programs in execution to do this plan. I think really importantly, we had this right velocity out of the fourth quarter into FY23, we feel very good about that and what we achieved in FY22. We have programs defined, We have an execution orientation.

We've got management processes in place to achieve this year and those long-term goals. I thought that was a good question by Garik, how does this fit into the long-term? And I think we've got that well dialed in. We can always do better, and we strive to do that, but we feel very comfortable about where we are. And then last, I want to thank our employees. Before we got on today, Mike said, it feels like it was two years ago that we were having the kickoff for FY22. It's been a long year, and there's been lots of twists and turns, but our employees and operations, sales, our SGA employees, our transportation, network guys working in the yards, our truck drivers, I mean, this was a lot very different from the year before, but still a lot of hard work and I'm very appreciative of all that they put in and the support that our Board gave us through a lot of twists and turns. So we look forward to the subsequent conversations and thank you all for joining.

This concludes today's call. Thank you so much for joining. You may now disconnect your lines.