Atlas Technical Consultants, Inc. (ATCX) on Q1 2022 Results - Earnings Call Transcript
Operator: Hello and welcome to the Atlas Technical Consultants First Quarter 2022 Conference Call. Currently all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Jonathan Parnell, Chief Strategy Officer of Atlas. Thank you, you may begin.
Jonathan Parnell : Good morning. And thank you for joining us. We hope that you've seen our earnings release issued after market closed yesterday. Please note that we have also posted an updated investor presentation, which can be found in the investor section of our website at ir.oneatlas.com. Before we begin, I'd like to remind you that today's call may include forward-looking statement. Any statements describing our beliefs, goals, plans, strategies, expectations, projections, forecasts and assumptions are forward-looking statement. Please note that the company's actual results may differ from those anticipated by such forward-looking statement for a variety of reasons, many of which are beyond our control. Please see our recent filings with the Securities and Exchange Commission, which identify the principal risks and uncertainties that could affect our business, prospects and future results. We assume no obligation to update publicly any forward-looking statement. In addition, we will be discussing or providing certain non-GAAP financial measures today, including adjusted EBITDA, adjusted EBITDA margins, adjusted net income and adjusted EPS. Please see our earnings release and filings for a reconciliation of these non-GAAP measures to their most directly comparable GAAP measure. I'll now turn the call over to our CEO, Joe Boyer.
Joe Boyer : Thank you, Jonathan. And I appreciate everyone joining us today. On today's call, I'll provide an overview of our first quarter results and an update on our strategic priorities, including the benefits we are seeing from our recent acquisitions. David, will continue with the discussion our first quarter financial results and our outlook for the remainder of the year, and then we'll open up the call for questions. The first quarter was a strong start to the year for Atlas with 10% revenue growth, including an acceleration in organic growth, 13% adjusted EBITDA, growth 24% backlog growth, and the completion of two strategic acquisitions. Operating results in the quarter were in-line with our expectations given our normal seasonality. And we believe we're on pace for continued revenue growth, margin expansion, and improved cash flows, leading to another record year for Atlas in 2022. In the first quarter, we enjoyed a robust 6% of organic revenue growth rate, which was driven through a combination of solid and market fundamentals, and the strong backlog growth we generated in 2021. Additionally, we continue to see benefits from the acquisitions we completed over the last several years, as we offer our customers a broader set of highly technical services across all our key geographic regions. I'll come back to this shortly with more specific examples of how our acquisitions are contributing to our organic growth. Backlog at the end of the quarter reached another record level at $851 million up 5% from last quarter, and 24% from last year, driven by continued organic backlog growth and contribution from acquisitions. Our awards continue to be driven by environmental and infrastructure markets from both our public and private sector customers, supported by secular trends, such as the aging of the nation's infrastructure and an increased focus on environmental sustainability. Beyond our current backlog, we have approximately $110 million of awards pending contract execution. This figure is lower than the last several quarters, because we've had some very large outstanding contracts convert into backlog, such as the $50 million Penn Access project we announced last quarter. This figure is likely to vary quarter-to-quarter, and its trajectory from one quarter to the next does not change our view of the overall end market environment. Last quarter, I indicated I was as optimistic as ever about the outlook and fundamentals driving our business. And I reiterate that statement today. Construction spending has hit record levels in recent months, driving demand for planning and permitting, engineering project management and testing and inspection services nationwide. We're seeing strong demand in our state and municipal markets, as our customers’ tax revenues remain healthy, and they increase the volume of programmatic contracts that will ultimately allow them to allocate additional funding related to the infrastructure bill over the next several years. And on the private sector side of our business, with large national clients like Sam's Club and 7-Eleven, we're seeing continued demand as they invest in areas such as environmental compliance, clean energy, and the digital transformation of their assets. As we grow Atlas’s scale, broaden and enhance our technical service offerings, and strengthen our geographic footprint across the U.S., we're seeing more and more potential to provide our services on larger programs, and with more national customers. We recently announced an award with the Los Angeles County Metropolitan Transportation Authority to provide environmental capital construction support services for their major capital projects and property improvement projects over the next three years. The contract has a maximum value of $86 million, and we put $12 million into backlog, but the potential for additional bookings, as work is released and awarded by the customer. We're excited about the potential magnitude of this project. We're also excited about what it means strategically for Atlas. And this was a prime example of cross selling opportunities across our acquired companies. This is a high profile infrastructure improvement program, and another example of Atlas’s ability to work on some of the nation's largest and most critical infrastructure and environmental projects. Now let's turn to our strategic priorities and update on the progress we've made with these initiatives. As we look to drive organic growth, expand margins, continue to improve our capital structure and drive overall value for our stakeholders, these priorities are at the foundation of everything we do at Atlas. First and foremost, will continue to utilize our broad service offerings and national footprint to capitalize on strong market fundamentals to drive organic growth. I touched on some examples of how we are executing our cross-selling strategy with major project wins and penetration with larger regional and national customers. Our strategy helped drive 6% organic growth in the first quarter, we remain encouraged our new business pipeline and the opportunity for continued organic growth momentum throughout the year. Secondly, we remain committed to our M&A strategy. In the first quarter we completed the acquisitions of TranSMART and 1 Alliance Geomatics. Each of these acquisitions not only strengthened our footprint in key geographic regions, but also added and enhance the highly technical services that we can offer to our national customer base. Importantly, less than two months after these acquisitions, we're pursuing projects that would not have been able to pursue without their technical expertise. To provide additional insight into how our M&A strategy contributes to Atlas’s overall organic growth profile, I wanted to take an opportunity to give an update on one of our previous acquisitions. In August of 2020, we acquired Alta Vista provider of transportation related program management, engineering and inspection services. Not only as AltaVista’s EBITDA, more than doubled since the acquisition, but most importantly, we've been able to leverage Alta Vista’s track record and relationships combined with Atlas’s national footprint and technical capabilities. This has proven to be a key factor in major wins for Atlas such as the Penn Access Project. Alta Vista is also strengthen our position with some of the largest state transportation agencies such as Caltrans, as well as others in key regions. This is only one example of successes we have enjoyed with our acquisition strategy that provides good insight into how acquiring smaller companies with his specific technical skill set and/or regional footprint drives outsize growth for Atlas. Third, we remain committed to strengthen their capital structure and constantly evaluate all potential options that could help us drive shareholder value. We continue to expect improvement in this metric throughout the year and remain committed to reducing net leverage through a combination of organic growth, cash generation, deleveraging M&A, and other potential options that may become available to us. And fourth is our commitment to ESG. Atlas services are aligned with many of our customers’ ESG goals. And we're committed to providing safe and healthy infrastructure and sustainable resilient systems through our comprehensive infrastructure and environmental service offerings. We recently completed a project to remove a 60-year old levee on the Duwamish River outside of Seattle to restore natural salmon habitats that will allow young fish to mature before moving back into the ocean. Patches like this are increasingly driving our customers’ investment decisions and we are well positioned to capitalize here. Additionally, and internally at Atlas, we are in the process of finalizing formal ESG reporting metrics and goals and are looking forward to releasing our first annual ESG report in the upcoming months. We believe these priorities and initiatives are the key factors for Atlas to drive value to all shareholders. And we'll continue to update on our progress going forward. So with that, I'll turn the call over to David, to provide details on our financial performance and outlook.
David Quinn : Thanks, Joe. Before I begin the discussion of our quarterly performance and outlook, I'd like to point out new detail we're providing in our income statement. As you've likely seen in our press release and 10-Q, we've adjusted the way we report revenue and expenses. And we believe this breakout provides additional transparency into our business, and will help investors understand how growing our scale will ultimately allow us to drive margin performance going forward. Turning to the quarter. Gross revenue of $135.2 million in the first quarter 2022 was up 9.7% compared to the prior year quarter, driven by 6%. Organic growth with strong performance in all of our service areas, as well as contributions from acquisitions. Gross margin was 46.8% in the quarter, down modestly compared to last year, due to a greater percentage of subcontractor costs in the quarter. Excluding subcontractor costs, which would compare to our net revenue metric, gross margin increased 20 basis points compared to last year to 57.9%. This increase is the result of our disciplined pricing strategy over the last year and improved utilization of our workforce. Adjusted EBITDA was $16.5 million in the quarter, and was up 13.4% from last year, and represented 12.2% of gross revenue and 15.1% of net revenue, both higher than last year. This was driven by the solid operational performance I mentioned, benefits of growing our scale, as well as improved management of overhead costs. In our new reporting format, you can see the breakout of personnel costs and benefits, which represents the majority of our overhead costs. This metric declined over 200 basis points as a percent of gross revenue from the prior year quarter. And in our view, provides insight into how Atlas is benefiting from an efficient cost structure and operating leverage as we continue to scale. For the fourth quarter, we produced adjusted net income of $900,000 and adjusted EPS of $0.02, versus $4.8 million and $0.14 in the prior year quarter. The variance in year-over-year net income and EPS was driven primarily by the conversion of our preferred equity into our Unitron structure in Q1 2021. In that period, we had $5.9 million preferred dividend that did not impact net income, which in this quarter is now reflected in our interest expense. Moving on to our cash flow and balance sheet. In the quarter we had a cash use from operations of $16 million. As Joe mentioned, there's a normal seasonality in our operations, with first quarter being the lowest and building throughout the year. This is also the case for our cadence of cash flows. You can expect to continue to see a use in the early part of the year, followed by a steady increase through Q2 and a strong contribution in the second half of the year following our higher volume quarters. Improving working capital management is a key priority for us especially as we bring acquired companies onto the Atlas platform. And based on our outlook, we expect a strong year of cash generation with full year free cash flow exceeding that of 2021. Net debt at the end of the quarter was $508 million. The increase from the end of the quarter was primarily related to the debt associated with the acquisitions we completed in the quarter and working capital needs due to the seasonality of our business. Our bank covenant ratio, which includes cost efficiencies and pro forma EBITDA from acquisitions was 5.7 times, up from 5.4 times at the end of the year in 2021 and down a full turn from 6.7 times in the same period last year. We've demonstrated excellent progress over the last 24 months and simplifying and strengthening our capital structure and will continue to drive improvements through the balance of 2022 and into 2023. Moving on to our outlook, we are reaffirming our revenue and adjusted EBITDA guidance for 2022. We expect 2022 revenue to be in the range of $580 million to $620 million, an increase of 10% at the midpoint as compared to our 2021 results. This outlook reflects the continued strength of our backlog and visibility on the timing of work, the strong market tailwinds we see, the contributions from acquisitions. We anticipate adjusted EBITDA to be in the range of $84 million to $90 million. At the midpoint this represents growth of 19% or 100 basis points of margin expansion as compared to our 2021 results. We are also keenly focused on driving cash flow throughout the year. And as I mentioned, expect improved cash flow results over the next several quarters, especially as we get into the latter part of the year. We are extremely excited by this growth potential for our business moving forward. And with that, I will now turn the call back to Joe for closing remarks.
Joe Boyer : Great. Thank you again, David. We had a strong start to 2022 with accelerated organic revenue and adjusted EBIT growth and another quarter of record backlog. We're building on the momentum we gained over the last several quarters and are on track for another record year in 2022. Our focus is capturing the opportunities that are available to Atlas both organically and inorganically, driving efficiencies in business, and improving our capital structure. I'm extremely proud to represent our many employees who are fully committed to delivering mission critical projects in the U.S. in a safe and sustainable manner. Thank you again for joining us. Operator, we can now open up the lines for Q&A please.
Operator: Thank you. At this time, we'll be conducting a question-and-answer session. Our first question comes from Rob Brown with Lake Street Capital. Please proceed with your question.
Rob Brown : Hi, good morning, guys. Nice job on the quarter.
Joe Boyer : Hey, Rob. Good morning. Thank you very much.
David Quinn : Thanks, Rob.
Rob Brown : Yeah. First question is about some of the nice contract wins you had in the quarter. And I think you've included some cross0selling efforts that helped those. But maybe what's drove some of those contract wins, and what were you able to do to help ?
Joe Boyer : So Rob, really, it's just a continuation of our overall strategy. And we built this company on the basis of really adding a platform, bringing on really solid companies onto the platform with additional technical capabilities, relationships, and then been able to leverage those relationships and combine them with the Atlas’s current capabilities to pursue larger opportunities. So, Rob, we've been able to do that. And that's really been the key to organic growth and our growth in the quarter as well. So we've had successes in the cross-selling integration of really gaining revenue synergies. We are also -- I know and that's the case with LA Metro. That was the case, Rob with the win at Penn Access. We've also pursued some really nice opportunities during the quarter that are, we're still pursuing haven't heard of. Some nice opportunities in the mid-Atlantic around transportation should, and then using some of the recent capabilities of TranSMART. Although we just bought them two months ago, we're already pursuing opportunities that we would not have been able to pursue without their capabilities. It’s California rail opportunities, what we're doing significant relations, relationship and technical capabilities, combination from legacy acquisitions as well, Georgia transportation opportunities, commercial development opportunities, the Northeast all the way to the west coast. So that's really -- what we're doing, Rob as part of the strategy. And we've been successful at been able to do that.
Rob Brown : Okay, great. Great to see. And then in terms of some of the margin trends here, and maybe what you're seeing in terms of labor price inflation. I think you're going to apply some improvement, gross margin. But how do you see that playing out at this point?
David Quinn : Yeah, great, Rob. So again, fortunately, we're a 90% cost reimbursable business. And as we said, in the past, we've been actively increasing our pricing with our clients, which is evident in the margins we're delivering. If you look at our EBITDA margins, this quarter versus a year ago, if you look at our gross margins on labor, they're also up. So we still look at the labor cost, inflation has been transitory. But we've been really effective in building in pricing and driving our margins up.
Rob Brown : Okay, great. Thank you. I'll turn it over.
Operator: Our next question comes from Chris Moore with CJS Securities. Please proceed with your question.
Chris Moore : Hey, good morning, guys. Thanks for taking a couple of questions. Yeah, maybe just a follow up on -- good morning, on the kind of the macro challenges. A little bit longer term, it's -- there is a much higher interest rate environment have an impact on any specific areas of your business from kind of a customer demand standpoint?
Joe Boyer : Chris, that's a good question. Let me say that. And I think it's important to realize that, as we built this business, this business has never been reliant on new construction to drive our growth. We do quite a bit of work, maybe two thirds of our work is around work being done on existing assets. So the maintenance of existing assets and the assessment of those various types of assets is a key part of what we do. Our services are really around co-compliance and regulatory compliance. So I'm not -- we've done really well in the past, in situations where there's been a reduction -- I'm sorry -- in a tighter economic cycles, our business has done fairly well. I think, what you might think about is the commercial space typically might have some tightening in the commercial space. But I also -- we haven't seen it so far, I got to be honest. And I think there's quite a bit of pent-up demand in the commercial space with the COVID impacts over the last two years, that are really driving that continuation in that space as well, not to mention just the whole drive and logistics and warehouse space and that stuff. So I think we're comfortable, where we are there. And just remind you that we do quite a bit of maintenance work. And so I think -- I think we're comfortable going forward. I think the commercial real estate market, although interest rates are high is still -- somewhat real estate transaction. There's still a tremendous drive for environmental due diligence and property condition assessment services as well. So that's continuing to plod along. Our private -- our state -- I'm sorry. Our state and municipal markets are seeing some really nice growth as well. Tax revenues remaining healthy and really fueling continued investment and the growth of their communities. Roads and bridges and, and parks, I mean, sidewalk improvement programs, fire houses, and libraries as well. So we're seeing quite a bit of growth in those areas as well.
Chris Moore : Got it. Extremely helpful. Looking at your -- at the revenue guidance. Is there any -- is there any tailwind from infrastructure bills built into the -- to the high-end of the guide?
Joe Boyer : Chris, as we said before we're not anticipating a real uplift in our business to late this year and into 2023 in regards to the infrastructure bill. So the high end of our guidance really doesn't anticipate any current pickup from the infrastructure bill. And I think that the bill is going to fund existing state DoT, maintenance and preliminary engineering and safety programs and those programs that we're currently driving our work. So that'll be a continuation of our current work. But the answer -- the short answer to that is our current numbers don't anticipate any significant revenues in 2022 from the infrastructure bill.
Chris Moore : Got it. That’s helpful. I’ll jump back in line. Thanks, guys.
Joe Boyer : Thanks, Chris. Appreciated.
Operator: Our next question comes from Jean Ramirez with D.A. Davidson. Please proceed with your question.
Jean Ramirez : Good morning. This is John Ramirez for Brent Thielman.
Joe Boyer : Hey, Jean, how are you?
Jean Ramirez : Good. How are you? Coming my first question -- thank you. Are any infrastructure being delayed due to an increase in costs above agency estimates? And has that impacted the flow of new project?
Joe Boyer : That's a really great question. I think the short answer that is, is we are seeing some moving around and rephasing of some projects because of the current estimates. And I know that's happened in Georgia. They around -- the Georgia 400 project, the I-285 project as well. So that is being definitely a challenge to state DoT's as they move around and phasing their projects, with the increased costs currently being from these activities. But I will tell you the activities, it just moves to another project. So they may have moved around, but the current opportunities to propose on large projects really hasn't slowed down yet.
Jean Ramirez : Thank you. And just to follow up on margins. Are there any signals that you've seen from the private sector, any weakness? As you mentioned, you say that it was pretty strong in the public. But could you give us more color regarding the private sector? Thank you.
David Quinn : Yeah, so it's -- this is David Quinn. We haven't seen any real impacts yet. In fact, we've seen steady, if not improving, hitting opportunities on commercial work. We've raised our pricing. And we've been successful and continuing to win projects. So all the signs for us are, that we're going to continue to be able to drive margins in the business. If you look at the things we're targeting beyond growing revenue and driving pricing increases or being aggressive on driving, operational efficiencies. And this all in the whole will support the almost 1.5 percentage point margin expansion, we've guided to at 18.1% for the full year.
Joe Boyer : So let me just -- I’ll just add on to that, as Dave said. We really aren't seeing, as I said mentioned earlier, really aren't seeing any slowdown in the commercial sector currently. I mean, the construction activities, construction labs are high. As I mentioned, I think that's do a lot of pent-up demand there. We are seeing growth in, in really some of our existing customers using and leveraging relationships in our experience to take us into new geographies. And we're seeing that and really sort of logistics and warehouse developers taking us to new projects and, and existing customers like Sam's and clients like 7-Eleven, who are really driving -- really a management of consolidation of their vendors and relying on Atlas to really to manage compliance and environmental issues and entire new regions.
Jean Ramirez : Okay. Thank you so much. I appreciate the time. I'll jump back in the queue.
Joe Boyer : Thank you.
Operator: Our next question comes from Noelle Dilts with Stifel. Please proceed with your question.
Noelle Dilts : Expand a bit on your acquisition pipeline. And just sort of how you're thinking about deals right now? And specifically when you're looking at a deal, how are you assessing if the companies you're targeting, how they're dealing with some of these challenges around labor supply chain, things like that. And if it's kind of changing your assessment process? Thanks.
Jonathan Parnell: Hey Noel. So a lot of the deals we're looking at, are very similar to what Atlas is doing, or similar to what Atlas is doing in certain areas of the region. So we're looking to make sure that they've been able to have success and increasing their prices. And they're not getting squeezed on their margins, similar to what we've been able to do here at Atlas. So the pipeline is active. We're still finding plenty of opportunities with proprietary deals. And will continue to make progress on our M&A strategy.
Noelle Dilts : Okay, great. And then then could you also speak to you're just sort of the project opportunity pipeline? Obviously, there's been this big shift in your backlog toward larger projects. Do you expect that to come -- do you expect that to continue to move in that direction as you get additional awards through 2022? Thanks,
Joe Boyer : Noelle. As you know, that's always been a part of our strategy. I think we've clearly articulated that since the very beginning, right. So I think as we have grown, this platform, increased our head of capabilities, it just makes more sense for us to pursue more complex and marquee projects and programs. So we'll continue to do that. That's clearly part of our strategy. We've been extremely successful at doing that. We feel, really from the integration and the cross-selling from our legacy company. So it clearly is a continued part of our strategy. There's nice opportunities in front of me. That's also to say, we're not turning it away from small projects from our existing customers. We still have our company that's got a tremendous amount of small projects. And continue. I think one thing I would like to note, though, that larger projects to us don't mean more risk, that's really important to understand. Because it's still time and material work for us, for the most part. And it's still asset light, and it's still labor intensive work that we have throttles and handles on being able to control our labor and labor cost there. So no additional risk. We're not except -- it's this is not an EPC. We’re not taking firm fixed price, large report, cost reimbursable, time and materials still strictly in our lanes of our four service areas that we know and do very well. So still a large part of our pursuit pipeline, Noelle, and then we're taking our existing customers and growing into new regions, and new services as well.
Noelle Dilts : Perfect. Thanks so much.
Operator: Our next question comes from Kathryn Thompson with Thompson Research Group. Please proceed with your question.
Kathryn Thompson : Hi, thanks. Just following on from the last question. As Atlas starts to win these larger projects, how do we think about subcontractor use the chair and which has stepped up in the past two quarters?
Joe Boyer : So let me --
Kathryn Thompson : Really just know about managing subcontractors for these larger projects.
Joe Boyer : Yeah. Kathryn, I think it's a really, really good. I think for all of these larger projects we certainly pursue, there is a minority or a DBE component, in most of our work that at stipulates what percentage of work we need to subcontract out. I think in the last two quarters, what you've seen since fourth quarter and the first quarter here, and a large geotechnical and drilling project that I know that really drove significant subcontractor usage in there, so it's little off of that quarter. So overtime, though, over the year, I think you'll see are still focused on trying to deliver as many of our services and keep those opportunities in-house as there's better margins for us than subcontracted out. So, outside of contract requirements, I don't anticipate any additional need and subcontracting out work from where we currently are.
Kathryn Thompson : Okay, great. With several -- you also touched on larger projects, like LA Metro project, Penn Station. And you're continue to grow the platform and add services, which is an evolution and the firm and company. How is this resonating with your stakeholders and your customers as you continue to develop in your capabilities?
Joe Boyer : Well, let me -- I believe it's been extremely favorably received from our shareholders, our stakeholders and investors. They've just been able to deliver a wide array of services, and using our existing relationships with our customers and an offering, an expanded list of opportunities keeps those relationships going. We go to new geographies, Kathryn in that. And I think some of our customers do have larger projects, and as we've grown are more comfortable with us pursuing that work as well. I think although we do rely on our national platform of experts. We have a technical organization that we deliver our work from. And so trying to bring the right technical resource to the job. We still have and rely on local relationships. That's really the key to driving our businesses is having those local relationships, and then using all of our technical capabilities and bringing them to the right job at the right time.
Kathryn Thompson : Okay. Finally, my last question. Listen, you really are like a services company, but you're not immune to some of the ongoing challenges with supply chain as you complete jobs and work with your key customers, who are also mentioned supply chain. How has that supply journey chain been for you so far and ’22 isn't any better or worse, unchanged versus three to six months ago? And then how do you see it going forward for the remainder of the year?
Joe Boyer : Yes, I would say as you mentioned, supply chain is not a significant challenge to us personally, it may delay or widen a project schedule. But there are markets in which it's a direct impact to us. I think I mentioned two quarters ago, in regards to landfill liners, particularly on projects in the Midwest for us, there was a slowdown in that, that really caused about a two month delay in us being able to do landfill liner inspection work. And to do that, that has since moved on, and those projects are moving. We have a little bit of challenge, just getting vehicles just for us our own resources. We just had our recent delivery of trucks that we ordered six months ago, or so we got as to where we're ecstatic about that. And then I think also our petroleum market, we do quite a bit of work in the retail petroleum market, and there are some delays there in regards to getting new tanks, and retail gas stations and those kinds of issues are driving some project delays there. But we don't see significant issues outside of that. I'm just going to hit anything, I'm missing in this regard, that you would add to that.
Jonathan Parnell: Well, I don't think we don't expect a significant worsening by any means going forward. So I think, we've been able to dodge sort of supply chain commodity side impacts that other EPC firms might have experienced.
Joe Boyer : And I think the only other thing I'd add to that is, we did have a concrete strike in the Pacific Northwest that caused us some pretty good impacts in the first quarter, in the Pacific Northwest. It's now been resolved and projects are being accelerated to pick up that change. But I don't -- they said, I don't see any additional challenges going forward outside of those that I've mentioned.
Kathryn Thompson : Perfect. Thanks so much.
Joe Boyer : Thank you, Kathryn. Appreciate it.
Operator: We've reached the end of the question-and-answer session. I'd now like to turn the call back over to Joe Boyer for closing comments.
Joe Boyer : Thank you, operator. Appreciate that. And I want to thank everyone for joining us today. We do appreciate your support of Atlas. And look forward to updating you on our continued progress going forward. So thank you. Have a great afternoon.
Operator: This concludes today's conference. You may disconnect your lines at this time. And we thank you for your participation.
