Atlas Technical Consultants, Inc. (ATCX) on Q2 2022 Results - Earnings Call Transcript
Operator: Hello and welcome to the Atlas Technical Consultants Second Quarter 2022 Conference Call. 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, Mr. Parnell.
Jonathan Parnell: Good morning and thank you for joining us. We hope that you have seen our earnings release issued after the market closed yesterday. Please note that we have also posted an updated investor presentation, which can be found in the Investors section of our website at ir.oneatlas.com. Before we begin, Iâd like to remind you that todayâs call may include forward-looking statements. Any statements describing our beliefs, goals, plans, strategies, expectations, projections, forecasts, and assumptions are forward-looking statements. Please note that the companyâs actual results may differ from those anticipated by such forward-looking statements 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, uncertainties, and uncertainties that could affect our business, prospects, and future results. We assume no obligation to update publicly any forward-looking statements. 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 will now turn the call over to our CEO, Joe Boyer.
Joe Boyer: Thank you, Jonathan and I appreciate everybody joining us today. On todayâs call, I will provide an overview of our second quarter results, what weâre seeing in our core markets, and updates on our strategic priorities. Then David will continue with the discussion of our second quarter financial results and our outlook for the remainder of the year and then we will open up the call for questions. The second quarter was another strong period for Atlas with record revenue, adjusted EBITDA, and backlog. These results clearly highlight the successes we are seeing in our strategy to build a national leader in high-value mission-critical technical services to both infrastructure and environmental markets here in the U.S. In the quarter, we generated 19% revenue growth, including an acceleration of our organic revenue growth to 8%, over 17% adjusted EBITDA margin and sequential backlog growth, all to record levels and cash flow improved in line with typical seasonal patterns. Our 8% organic revenue growth in the quarter is one of the best quarterly organic growth rates weâve recorded as a public company. The strong organic growth in the quarter was driven in part by the robust backlog growth weâve experienced over the past several quarters. Fundamentals in our key end markets and geographies remained favorable throughout the quarter. We saw particular strength with our transportation, state, and local government, and power clients, all of which we expect to remain key growth drivers for Atlas moving forward. We also continue to see benefits from increased cross-selling of services across the Atlas platform, including recently acquired services. As we scale the business and added strength to our technical service offering, weâre gaining greater share with our clients and winning more marquee projects. To provide you with a better idea of how the strategy is benefiting in Atlas, let me take a minute please, to describe a few projects we believe really highlight this success. In California, where we have had a longstanding relationship with Caltrans, we were able to leverage our success with them on construction engineering and inspection services into a statewide materials engineering and testing services contract, increasing the number of services under the Atlas umbrella that we have provided to this customer. In Idaho, we were recently awarded a $5 million construction engineering and inspection project and our program construction and quality management service line. This is our first transportation-related PCQM award in the state where we have previously mainly provided testing inspection and certification services. Again, an example we are cross-selling a key customer with additional services. Switching to the private side of our business, in the Southeast, where we have historically provided utilities with smaller environmental-related services on a one-off task order basis, we have leveraged our experience, scale, and breadth of capabilities into a $25 million long-term master engineering and environmental services contract, one of the nationâs largest utilities. Weâre also expanding our services with large national government agencies. For example, weâve been providing the Department of Energy with Geotechnical Services of one of its largest energy laboratories and are now expanding our scope with a $20 million program that includes testing, inspection, and certification services, which we hope to leverage to other sites across the country. While these are only some examples where we are seeing success with our cross-selling strategy, we believe they are great examples of the benefits of our strategy and highlight how it is contributing to growth across the Atlas platform. In addition to strong revenue growth, we had a record gross margin of 60.4% in the quarter when excluding pass-through subcontractor costs. This margin performance is a testament to our high-quality services Atlas offers and demonstrates our ability to pass inflationary pressures through to our clients. Backlog at the end of the quarter reached another record level at $855 million, up modestly from last quarter and up 14% from last year. As we have talked about with cross-selling, we are winning work across all of our end markets and across all of our service lines. Importantly, we continue to see demand being driven by long-term secular themes as our customers drive to improve their environmental sustainability and to improve the overall efficiency of their existing infrastructure. Beyond our $855 million backlog, we have approximately $155 million of awards pending contract execution, which is significantly higher than the $110 million we had for last quarter, and marking the first time the combination of these figures is greater than $1 billion. As we have discussed, the backlogs and awards figures can be lumpy from quarter to quarter due to the seasonality of our business and the impact of large project wins, which we expect to continue to be a key growth driver for Atlas going forward. And as we look into the second half of the year, we continue to see solid demand for our services, especially in our core transportation and environmental-related end markets, driven by the underlying secular themes such as the aging of the nationâs infrastructure and increased focus on environmental sustainability. While we are cognizant of the factors impacting the broader macroeconomic environment and the risk it composed of demand for certain services in our markets, we believe we are well positioned to navigate any volatility that may be on the horizon. First, Iâd note that our services we provide to end markets that are most sensitive to higher interest rates and general macroeconomic conditions, such as new build commercial construction, and real estate transactions are a relatively small piece of our business. Secondly, and probably most importantly, nearly two-thirds of our business is tied to existing assets and services that are driven by non-discretionary spending because they are tied to regulatory compliance, ongoing testing, and maintenance, making demand for our services relatively resilient through most economic cycles. Driving organic growth remains one of our top priorities and we believe we are in a good position to do so given the nature of the services we provide, the diversity of our end market exposure, our robust backlog and award pipeline as well as our thorough cross-selling initiatives. Beyond driving organic growth, we have a proven strategy that broadens and enhances our technical service offerings and geographic footprint through strategic acquisitions. Our M&A playbook is based on identifying targets with quality management teams that can enhance or expand our service offerings and our regional presence, integrating them into the Atlas structure, retaining their key employees, and then scaling the business across our platform, including the cross-selling of services. In the first quarter, when we acquired TranSmart, we talked about being able to leverage their expertise in intelligent transportation systems and electrical engineering across our national customer base. And we are already seeing opportunities here and are currently working to position analysts for electric vehicle charging infrastructure opportunities in Georgia on projects that will be funded to the national electric vehicle infrastructure formula program. TranSmartâs unique blend of transportation and electrical engineering capabilities places us in a strong position to pursue these types of opportunities in the $5 billion NAVI program. We are also building on relationships to come to Atlas to our acquisitions. Last year, we acquired O'Neill Service Group, a premier construction quality assurance and environmental services firm based in the Pacific Northwest. We are leveraging their strong relationships that were brought to us through the acquisition to establish a strategic alliance with a large national infrastructure construction company. The alliance will allow Atlas to seamlessly provide them with environmental, quality assurance, and inspection services, resisted in our company for additional work on major infrastructure projects with them across the U.S. As we continue to grow, we remain committed to strengthen our capital structure and are constantly evaluating all options that could drive shareholder value. We reduced our total debt in the quarter. Leverage was down modestly from last quarter. And based on our earnings forecast and robust cash generation outlook for the second half of 2022, we expect a further improvement in the leverage ratio in the coming quarters. We are confident that our M&A strategy will continue to drive outsized growth and improve our leverage ratio. We have a robust M&A pipeline with proprietary candidates. However, we maintain a disciplined capital allocation strategy and we will continue to ensure that any partnership we pursue will be highly accretive to our shareholders, deleveraging, and will position Atlas for continued success during all stages of the economic cycle. Lastly, Iâd like to reiterate our commitment to ESG. In June, we issued our inaugural ESG report titled leading with hard. The report highlights the progress weâve made internally as a company on related topics as well as how we help our customers meet their ESG objectives. We have also set goals that will shape how we operate as a responsible and sustainable company and how we serve our customers and cultivate an outstanding workplace. With that, I will turn the call over to David to provide details on our financial performance and outlook and I will come back with a few closing remarks. David?
David Quinn: Thank you, Joe. Gross revenue of $156.5 million in the second quarter of 2022 was up 19% compared to the prior year quarter, driven by 8% organic growth with strong performance in all of our service areas as well as contributions from acquisitions. Gross margin was 47.3% down modestly compared to last year due to a greater percentage of subcontractor costs in the quarter. Excluding subcontractor costs, gross margin expanded 90 basis points to 60.4%, our strongest quarterly result on record. This was driven by utilization of our workforce, strong execution, and our disciplined pricing strategy. Adjusted EBITDA was $21.2 million in the quarter, up 16.7% from last year and represented 17.3% of revenue, excluding subcontractor costs. This was an improvement of 20 basis points compared to last year. Year-over-year increase was mainly due to our stronger gross margin and leveraging of fixed overhead costs. This, however, was tempered by higher personnel costs as we are investing in our workforce and retaining key talent in support of current and ongoing growth driven by the fact as Joe discussed, such as a record backlog, pending new awards, and traction on larger projects. For the second quarter, we produced adjusted net income of $4.5 million and adjusted EPS of $0.12 versus adjusted net income of $4.1 million and adjusted EPS of $0.11 in the prior-year quarter. Year-over-year increase was mainly driven by the improved operating results we mentioned. Moving on to our cash flow and the balance sheet. During the second quarter, we generated $9.8 million of cash from operations, and this was compared to $7.8 million in the same quarter last year. Our cash flow in the quarter represented strong performance for the business as we enter our strongest revenue-generating quarter of the year where working capital demands increase. As weâve discussed previously, improving working capital management is a key priority for us, and weâre focused on driving this throughout all levels of our organization. Based on our outlook, we continue to see stronger cash flow in the second half of 2022 with quarterly improvements in the third and fourth quarter and expect full-year cash flow in 2022 to exceed that of 2021. Net debt at the end of the quarter was $500 million, down from $508 million at the end of last quarter. Our bank covenant leverage ratio, which includes cost efficiencies and pro forma EBITDA from acquisitions decreased to 5.6x from 5.7x last quarter and down significantly from 6.7x when we recapitalized the company in early 2021. Pursuing an aggressive path to deleveraging our balance sheet and improving our overall capital structure remains a top priority for Atlas, and weâre continually looking for avenues to do so. Consistent with this, on June 1st, we entered into an interest rate hedge agreement with JPMorgan Chase, which caps the variable portion of our interest rate to 3%. This agreement eliminates the uncertainty of extreme downside risk in a rising interest rate environment. Also, last week, as a result of our continued deleveraging of the business since our recapitalization in early 2021, we effectuated a $20 million expansion of our revolving credit facility via the preestablished accordion feature with JPMorgan Chase, increasing the aggregate capacity to $60 million. This expanded capacity better supports the financial flexibility suited for a rapid-growth enterprise of our size and trajectory. Again, we appreciate the continued strong support of our lenders, Blackstone and JPMorgan Chase as we continue to execute on our robust growth strategy. Moving on to our outlook for the remainder of the year, we are reaffirming our revenue and adjusted EBITDA outlook for 2022. We expect 2022 revenue to be in the range of $580 million to $620 million, an increase of 11.5% at the midpoint as compared to our 2021 results. This outlook reflects the strength of our backlog and visibility on the timing of work and continued solid demand for our technical services, as Joe discussed in his remarks. We anticipate adjusted EBITDA to be in the range of $84 million to $90 million. At the midpoint, this represents growth of 19% and 100 basis points of margin expansion as compared to our 2021 results. We are keenly focused on driving our cash flow throughout the year and as I mentioned, expect enhanced cash flow results moving forward, especially as we get into the latter part of the year. We are extremely excited about this growth expectation for our business moving forward. And with that, I will now turn the call back to Joe for closing remarks.
Joe Boyer: Thank you, David. As I mentioned earlier in the call, when we formed Atlas nearly 5 years ago, our goal was to build a leading national provider of mission-critical technical services to both infrastructure and environmental markets. Weâve made great progress in growing this business both organically and through M&A over the last several years and are excited about the growth prospects going forward. Weâve had a great start to the year with accelerating organic growth and reaching record quarterly levels of revenue, adjusted EBITDA, and backlog. We are investing in our people and processes, cultivating a strong workplace and culture, and building a great portfolio of technical services that are in high demand and that are needed to keep our nation to run it in a safe, efficient, and environmentally sustainable manner. Thank you again for joining us. Operator, we can now open up the lines for Q&A, please.
Operator: Our first question will come from Chris Moore with CJS Securities. You may now go ahead.
Pete Lucas: Hi, good morning. Itâs Pete Lucas for Chris. First question for me relates to labor. First, at Atlas in terms of employee levels and turnover, it looks like you guys have a significant number of job openings. How do you view labor availability at this point? And is that a gating factor in terms of your growth? And then as a side question, what are you hearing from your customers? Is it impacting their growth in terms of labor availability?
Joe Boyer: Pete, thanks very much for that question. This is Joe Boyer. We â and Iâve often said this, weâre always in a tight labor market here. It just has been since we started this business. And we have internally relied on recruiters to help us fill our positions and stay ahead of our demand for labor. And weâve done an absolutely great job of that ever since back in the period of COVID and going through today. So we see a nice steady progression of our backlog and future going into Qs 3 and 4. Our labor demands, our utilization is high, but we still have 3 or 4 points of labor production in our current labor force, and weâre steadily adding labor to that direct labor and new hires to that as we go along. So we feel good about our outlook for our labor and filling those positions. Let me say in regards to our clients and their issues with labor, I canât say that Iâve had any input from our clients in regards to restrictions on their business due to labor. I know we are seeing increased demand for program management services to help them with their projects on our public sector markets.
Pete Lucas: Very helpful, thanks. And a follow-up for me just on revenue. Anything you can talk about in terms of cadence you look for from Q3 to Q4? And in terms of your guidance that you stated the $580 million to $620 million, a wide range and weâre a couple â weâre into Q3 here. Just wondering, are there any wildcards in Q4 in terms of whether you make the high end of that range or not? And what specifically are you focused on there?
David Quinn: Great. Thanks. This is David Quinn. So you should expect to see the traditional profile for our business, meaning the third quarter is typically our strongest quarter. So youâre going to see a minimum, letâs say, 5% bump in volume coming off of Q2. And then youâll probably see Q4 trail down maybe more closely in line with our second quarter as the momentum of the business continues to build. Relative to the outlook for the year, first, we feel very confident about the guidance, the strength of our backlog, the contract not executed at $155 million that Joe mentioned. So we have great visibility through the end of the year. That said, the $580 million to $620 range, what could influence that? Really not a lot. Weâve got a couple of larger projects that are going to come online. But at this point, weâve got pretty good line of sight on it, and we feel good about revenue.
Pete Lucas: Very helpful. Thanks. I will jump back in the queue.
Operator: Our next question will come from Rob Brown with Lake Street Capital Markets. You may now go ahead.
Rob Brown: Hi, Joe. Hi, Dave. Congrats on the nice quarter.
David Quinn: Thank you, Rob.
Joe Boyer: Thank you, Rob. I appreciate that.
Rob Brown: First question is really on the M&A pipeline. I think you talked about evaluating some things. Just wanted to get a sense of how active is it at this point. And how do you see that over the next few months, how is the environment at this point? Has there been any changes in valuation?
Jonathan Parnell: Yes. Rob. So Iâll take that in two parts. In terms of valuation â this is John Parnell, by the way. We really havenât seen much change in recent months. There is still a lot of interest in the space due to the resilient nature of public work spending. And obviously, thatâs been bolstered recently here by the infrastructure bill. So we havenât seen a change in terms of multiples, but weâre still seeing plenty of opportunities right in our valuation wheelhouse where weâve been successful all along. In terms of our pipeline and activity going forward, we have a very full pipeline with proprietary deals that weâre continuing to evaluate. I would say, however, now more than ever, weâre focused on being disciplined in our capital allocation strategy, and we will only move forward with deals that have a client base that we know is going to be resilient through all stages of the economic cycle. Itâs going to be highly accretive to our existing shareholders and deleveraging. And we saw some volatility in our stock price in Q2. And I think itâs safe to say in situations like that, weâre not going to be jumping out ahead to issue a lot of shares to fund M&A. So I hope thatâs helpful, Rob.
Rob Brown: Thatâs great. Thank you. And then second question on gross margins, a nice uptick in the quarter. What sort of your thoughts on increasing mills going forward? How is pricing and labor costs flowing through at this point? And do you see that stepping up in the back half?
David Quinn: Yes. So, we are really pleased, obviously, where the quarter came in. We broke through the 60% level to 60.2%, which is an all-time record for the firm for gross margins on labor. I think what we are seeing in the quarter is that we are really demonstrating the pricing power of whatâs a 90% cost reimbursable organization. We have been aggressively instituting increases across the client portfolio, and we are really now seeing the benefit of that catch up to our results. In addition, we are seeing excellent utilization across our workforce, as Joe mentioned. We increased our workforce by several hundred this quarter, and utilization is higher than itâs ever been. So, we are really starting to see that efficiency prove out as well. Relative to driving our gross margins up on labor, they are pretty high. Over 60% is elite for sure. You will still continue to see some flux in the mix of self-performance versus subcontractors, and we had a little bit more subcontractor contribution this quarter. And we are always going to be trying to move the needle on that as well. But I think we are kind of in a range where you may see it move 1 point, 1.5 points on gross, but we are in a pretty good range right now.
Rob Brown: Okay. Thank you. I will turn it over.
Operator: Our next question will come from Brent Thielman with D.A. Davidson. You may now go ahead.
Brent Thielman: Hey. Thanks. Good morning guys.
Joe Boyer: Hi. Good morning Brent.
David Quinn: Hi Brent.
Brent Thielman: Nice quarter. I guess I had a question. It looks like your pending awards were up nicely from the first quarter, but your bookings and backlog look to be lower. Are you seeing slower conversion of pending awards to award? Maybe you just got some larger pursuits that take longer to get approved or maybe there is just another explanation around that.
Jonathan Parnell: Brent, thanks very much. Really, I canât say that we are seeing a slowdown in the awards. I think that those awards pending signatures to move the backlog does vary quarter-to-quarter. And as you saw the growth, we grew a little about $40 million or so in the quarter, but itâs not indicative of anything other than just straight timing of some projects, some large project awards. We havenât seen any slowdown in moving those from pending to backlog, anything noticeable.
Brent Thielman: Yes. Okay. Understood. And then, Dave, I guess I mean you typically generate really good cash flow here in the second half, which probably puts the dent in the leverage. This $50-odd million in adjusted EBITDA that you anticipate doing over the next couple of quarters, are you expecting typical conversion, call it, 50%-odd to operating cash flow. Is there anything in this environment we are in right now that changes those dynamics at all?
David Quinn: Yes, Brent, I would say we are probably looking at something a little closer to 35% to 40%. And obviously, we are going to press to do better than that, but we are probably in the 35% to 40% range. And we are seeing some impacts of the inflationary environment. Obviously, some impacts with interest rates rising and that kind of thing, which is tempering it a bit in the back half of the year. But we will â true to form will deliver a very strong cash flow second half of the year.
Brent Thielman: Okay. Great. Thanks guys.
Operator: Our next question will come from Don Crist with Johnson Rice. You may now go ahead.
Don Crist: Good morning gentlemen. How are you all?
Joe Boyer: Hey. Don, good morning.
David Quinn: Hey Don. How are you doing?
Don Crist: Doing well. I just wanted to, I guess ask a little bit more on Brentâs question and more for my knowledge of the industry. As far as inflation is concerned amongst your customers, does that influence kind of buckets of money that could go towards your projects? And I am more kind of curious as to gasoline prices all they have come back recently, but a lot of municipalities were kind of in a tight situation there. And I didnât know if the ongoing contracts that you have with them could be influenced and kind of slow down new awards if they had to shift money around to pay for municipality gas prices for cops or anything like that. And just any color you could give around there would be helpful.
Joe Boyer: Okay. Let me sort of take the first part. I think Don, what we are seeing is want to remind you that a lot of our work is around maintenance of existing projects and infrastructure, so stuff thatâs sort of non-discretionary right has to be done. But we are seeing some impacts of the inflation in construction costs with our clients. And really, thatâs around budget in our projects. They might have put a project out in the scale and construction costs have come back higher than budgeted. So, they have had to come back in and retool that project, put it out in another â in a scope in a smaller fashion to match. We see quite of that in the public markets, municipalities for sure, and the projects continue to come out just a little bit smaller to make sure they match their budgets and stuff. So, thatâs really the only impacts we have seen in regards to what you are referring to, but it doesnât impact our work. We are still out in the field, still progressing our work along. And I am trying to â can you help me on the second part of your question? You were talking about â I sort of missed the second half of the question.
Don Crist: Itâs just that we have seen some reports that buckets of money have been moved around municipalities because of higher gas prices, etcetera. And I am more referring to the press releases that police departments, etcetera, have been blowing through their budgets because gas prices were $2 to $3 more than they budgeted, etcetera. And I didnât know if that kind of impacted any awarding of contracts going forward, whether in regards to roads or maintenance of anything else.
Joe Boyer: Yes. Okay. So, I canât say that I can add a whole lot to that other than what I have described there. I think Don, we â I mean I canât â the coffers of the public clients, we are seeing are really full and the projects are continuing to come out. I donât know that I have insight into them moving around their pockets of money behind the same, but our steady projects have been rolling out. We are continuing to do a lot of our work under the MMIP programs, the management pieces of maintaining their existing infrastructure. So, we arenât seeing any current delays, particularly in our public and municipalities market, any other infrastructure projects seems pretty steadily moving along, so.
Don Crist: Thatâs good. And I appreciate all the color there. And just one more quick one if I could slip it in. Are you still seeing a lot of demand kind of going into early â23 from infrastructure projects from the infrastructure build specifically, because I donât believe those have really started rolling out yet?
Joe Boyer: Thatâs correct. I think as I have said, we continue to see that more as a 2023 type impact on our business on. I mean I think we are seeing municipalities and DOTs or planning projects, but the funding hasnât quite come through on that. So, we are still seeing it as a 2023 impact to our business.
Don Crist: I appreciate all the color. And I will jump back in queue. Thanks.
Joe Boyer: Thanks.
Operator: Our next question will come from Noelle Dilts with Stifel. You may now go ahead.
Noelle Dilts: Hi. Good morning. So, I was looking at your percentage of pro forma revenues, it was a little bit lower. I think you talked about some reasons why, curious how to think about that moving forward given your project mix and that you are ramping on some of these larger projects should we expect â I guess how should we think about self-perform versus outsourced work moving forward? Thanks.
David Quinn: Yes. No, great question. I will start here and Joe may add to it. But yes, as we are bringing on larger projects and programs to the platform. Often, we do see that the contracts have some minority or disadvantaged business requirements that come along with them. And that does drive a bit of an uptick on our subcontract component. On a positive note, we have seen some ramping of our field geotechnical drilling and analytical chemistry activities this quarter in support of our government solutions work, environmental solutions work. And lastly, there has also been some inflationary impacts on our subcontracts, where they are looking to recover their costs the same way we are. So, the fact that we are maybe 78% this quarter versus 81% where we have been running, we are not too worried about it. We are going to kind of move, I think in that 79% to 81% range from quarter-to-quarter. Joe?
Joe Boyer: Yes, I wouldnât add anything other than that. I donât think anything really appreciable. I think our margins are on some contract work, maybe have changed a little bit in regards to some of the field mix, right, more geotechnical work. So, I just think, Noelle, between 78% and 81%, and thatâs going to be â we are going to sort of be in that range depending on what projects are in the fields and what the mixes might be.
Noelle Dilts: Okay. Got it. And then just on â with the Inflation Reduction Act, moving forward, have you looked into â or how are you thinking about any potential impacts for some of the environmental work that you do? Do you think this could lead to an uptick in work given that private corporations may be facing tougher regulations or standards, any thoughts on that?
Joe Boyer: Yes. No, thatâs a great question. I will tell you that one is fairly new on our radar screen, and we are trying to still analyze that. But as we see it, itâs just like the infrastructure bill, itâs more of an instructor bill for the environment, right. So â and there are tremendous amounts of buckets in there that we perform really well into the markets. I mean there is EV charging stations in there as well, new build EV facilities. There is block grants for air pollution, there is air monitoring in there, whole climate resiliency. So, all of those elements of that Inflation Reduction Act, we feel, just like infrastructure bill, plays nice into our services. So, still in the early stages of analyzing that, but we see it as an upside potential going forward.
Noelle Dilts: Okay. Thank you.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Joe Boyer for any closing remarks.
Joe Boyer: Thank you very much. And listen, thanks everybody for joining us today. We appreciate your support and look forward to discussing our results in Q3 and Q4. Thank you very much.
Operator: The conference has now concluded. Thank you for attending todayâs presentation. You may now disconnect.
