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Plug Power Inc
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Greetings, and welcome to the Plug Power Third Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Teal Vivacqua, Director of Marketing Communications. Teal, please go ahead.
Thank you. Good morning, and welcome to the Plug Power 2018 third quarter earnings call. This call will include forward-looking statements, including, but not limited to statements about our expectations regarding full-year 2018 net revenue and gross revenue; achieving EBITDA break-even; achieving positive EBITDA and cash flow; achieving profitability in the service business; the impact of new ProGen stack technology; the adoption of hydrogen fuel cell electric vehicles; the impact of new lease accounting standard; the impact of Amazon and Walmart relationships; the expansion of applications for ProGen, including opportunities; and the on-road electric vehicle market.
We intend these forward-looking statements to be covered by the Safe Harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We believe that it is important to communicate our future expectations to investors.
However, investors are cautioned to not unduly rely on forward-looking statements because they involve risks and uncertainties and actual results may differ materially from those discussed as a result of various factors, including but not limited to the risks and uncertainties discussed under item 1A, Risk Factors, in our Annual Report on Form 10-K for the fiscal year ending December 31, 2017, as well as other reports we file from time-to-time with the SEC. These forward-looking statements speak only as of the day on which the statements are made and we do not undertake or intend to update any forward-looking statements after this call.
At this point, I would like to turn the call over to Plug Power’s CEO, Andy Marsh.
Thank you, Teal, and good morning, everyone. The investor letter posted on Plug Power’s website provides a thoughtful overview with the past quarter. Some key highlights are: the company had a strong top line, with gross revenue of over $55 million. We had the best quarter in the history of the company for adjusted gross margins and EBITDAS.
In the fourth quarter, we expect continual financial improvement, reaching $175 million to $190 million in gross revenue for the year, and Plug Power remains committed to achieving EBITDAS break-even in the second-half of 2018. Promise for customers and investors is being realized in our Material Handling segment.
We are producing high-quality products that offer value to operators and warehouse, warehouses and manufacturing facilities. Our financials are improving as we deploy more and more units. Revenue growth and quality improvements will continue to drive profitability for Plug Power.
The continued improvements in our financial is a result of technology enhancements and increasing scale now allows us to drive down our costs. We’re using the Internet of Things and artificial intelligence to improve quality and performance. By vertically integrating key technologies into our products, we’re able to both growth and reduce costs.
Our new metal plate stack design, an internally developed MEAs were excellent examples of how we are leveraging technology and vertical integration to improve performance, liability and cost of our products. A distinguishing feature of Plug Power is that we’ve always been market-driven, and have closely linked the market to our internal activities.
We also think big and building extensive relationships with Amazon and Walmart are prime examples. We are pursuing other electric vehicle markets beyond Material Handling, leveraging our years of learning, cost structure and technology leadership. Plug Power’s focus on meaningful deals in these markets with committed partners and a clear understanding of the value chain for delivering holistic solutions.
As I tell my team and Board, we have an enormous opportunity in Material Handling and we must first capitalize on our success in this market. But let us not forget, with modular designs like our ProGen engine, leading technologies and the right partnerships, we are well-positioned for growth in a multitude of EV markets beyond Material Handling.
Paul and I are now available for your questions.
Thank you. We’ll now be conducting a question-and-answer session. [Operator Instructions] Our first question is coming from Eric Stine from Craig-Hallum. Your line is now live.
Hi, Andy and Paul.
Hey, Eric.
Hey, Eric.
Hey. So just thinking about the fourth quarter relative to the guidance – well, so first, revenues, I mean, it’s a pretty wide range there with half of the quarter to go, and also working towards that EBITDAS positive goal. Maybe you could just talk about the puts and takes, both from a revenue perspective and EBITDAS perspective to get to those goals in the fourth quarter?
So, Eric, I’ll take the range, and I’ll let Paul talk about EBITDAS. We’ve become much better at making sure we meet market expectations. And I want to make sure that when keeping the range as broad as we have that there’s no chance we’ll miss our numbers quite honestly. And that – just keeping an eye on the unexpected.
That being said, we’re quite confident that we’ll be in the middle to upper-end of that range. So we’re –we feel comfortable. We just don’t want to surprise if a customer comes in the middle of December, say, “Hey, we want to push out onto the first quarter. We don’t want to be viewed as a miss when we’re really having a very, very strong year.” Paul, do you want to comment on EBITDAS?
Yes. I guess, what I would say is, you’ve seen it in the third quarter, the continued trend of positive momentum there. And what favors Plug quite well is, when we do sell more, particularly products, because there’s a very favorable mix benefit there. So to Andy’s point of meeting the mid to upper-end of that range in the fourth quarter, that bodes quite well for us.
And coupled with that is the traction we continue to make, there has been a tremendous amount of effort this year on service, in particular, stacks and life extending and a lot of those programs are starting to have and continue to yield big benefits and we start to see those pay even more dividend as we go into Q4.
So a lot of good progress, and we feel pretty comfortable with our performance and our progression and we look forward to meeting those expectations as we roll through Q4.
Got it. That’s helpful. And maybe just turning to 2019, I mean, I know you’re not other than EBITDAS not giving a range for revenues, but maybe just from a high-level talk about 2019? And I’m also curious, given Walmart, given Amazon, given some of your other customers, what type of visibility, as you sit here today, you have into what 2019 looks like?
Sure. So, Eric, as we’ve done every year for the past three or four is that, in early February, we’ll provide guidance to the analyst in the market. I’ll just say this, that we’ve looked at the analyst models for next year. We think those projections are realistic. And that additionally I would kind of highlight that, we end most years with about 70% to 75% of the shipping and backlog known for the coming year, and I don’t expect anything different for 2019.
Got it. Okay, thanks a lot.
Okay.
Thank you. Our next question is coming from Colin Rusch from Oppenheimer. Your line is now live.
Thanks so much. Can you talk a little bit about the cadence of cost reduction as you move into the new stacks and to the new manufacturing facility? Is it something that we’re going to see kind of fits and starts in terms of the cost reduction, or is it going to be a steady cadence?
Yes, that’s actually a good question, Colin. And when we look at the stacks, we are and this and we’re talking about, I assume, Colin, in the metal plate stacks we’ve been discussing.
Yes.
Yes. When you look, I would expect the cost to open initially at the same range as our present stacks. And that as we have about 2,000 units deployed in the field, I would expect that the cost will achieve that 25% cost reduction on stacks, and it represents about 25% of the cost of our products. I would expect most of that to start literally being kind of flat in the first-half of the year and start literally declining over the second-half of next year and stay into mid first quarter of 2020.
Okay, that’s helpful.
Okay.
Yes. And then in terms of some of these PPA agreements, as you look out at the technology and having a little bit longer history, at what point do you feel like you’re going to be able to go on and find better finance terms and refi some of these assets? Is that kind of a 12-month projection, or are we talking more like 24, 36 months before you’re going to be able to just get better terms now that you’ve got a little bit longer operating history and a little bit more stable balance sheet?
So, Colin, I’m going to answer the first part, then I’m going to hand it off to Paul. Primarily and almost exclusively, the only PPA agreements have been with Walmart. And the Walmart deals because – over the past year have actually been financed at relatively low rates because of Walmart’s support.
So, those rates are close to our customer’s lease rates. And so the deals that are older certainly are higher rates. But the present deals and anything that’s been done over the past 12 months have been actually at attractive rates. Historically, I think, it’s really worth some of the issues like. Do you want to comment on that, Paul?
Yes. I think just to add some color, there’s three fundamental things that we’re seeing is, one, we’ve been pretty public about it. But it’s part of the new platform agreement that we signed last year with Walmart. They’ve, in the new structure, they’re now providing a guarantee for portions of our financing. So that’s helped tremendously on our cost of capital in our terms.
Second thing is, now that ITC is back, that obviously bodes quite well for us in those agreements. And then the third thing is, now that we’ve had, I would call it, tremendous success in deployments over the last few years, this is the first time this year that we’re seeing financial institutions give credit to – in the financing transactions and residual values, because the banking industry is very conservative. And as you can imagine and prior to 2014, it wasn’t really an easy way for them to kind of approach those estimates for residual values.
And so we’re seeing and provide those estimates and ranges to our customers, and we’re seeing now the institutions we’re working with on the PPA financing as well start to put those estimates in. And so the combination of those have already made a fairly large step function in our our financing transactions.
And I expect that to continue to get better and actually expect next year to be competitive, because now you’re seeing a lot of institutions start to approach us and say, “Hey, this is a big track of volume and a structure that makes sense for them and very interesting yields.” And so we’re actually getting a lot of inbound interest to participate. So, I don’t know it’ll be another step function, but you’ll certainly see a continued progression as we go forward over the next year.
I think it’s very helpful. Thanks, guys.
Thank you. Our next question today is coming from Amit Dayal from Rodman & Renshaw. Please proceed with your question.
Good morning, Andy. Good morning, Paul.
Hey, Amit.
Good morning.
Good to see you guys marching steadily towards profitability. On those lines, once the service business gets to profitability, can it stay profitable consistently, or should we expect some quarter variances as you make some progress over there?
I’ll let Paul comment. I’ll just say from a technology and product point of view, it’s all about lifetime stacks and being able to reduce the workforce size, as those stacks become better and better. The trends we see with the new stacks that we’re putting in the field today clearly indicates that we can reach that – we can reach profitability. And I guess, I’ll let just Paul talk about what he would expect post mid-next year.
Yes. I think, the fundamental answer to your question is, it will continue to go north and get better and we see that every quarter. And as Andy mentioned, with the improvement of stack pipe and reduction of the average parts cost and increased leverage on labor, it continues to get better. I think, you do see seasonality with customers where you have peak periods and greater usage and accounting rules today makes us amortize revenues for those service lines more straight lines, you do see ebbs and flows.
But I think what you’re going to see is a fundamental progression in the north, where it continues to get better. And we clearly see a path to get that business to 30% gross margin. And I think, you’re going to see that – you’re going to see traction in that direction over the next 12 to 18 months, and we’re going to be continuing to demonstrate that progress as we move forward.
Got it. Thank you for that. Strength in revenues and margins you are seeing in the second-half of 2018, is all of this from contribution coming from Amazon and Walmart, or is it spread out more widely?
More widely.
Okay, got it. And then just one last one for me, in regards to the GenFuel hydrogen stations, so what level of utilization if that is the right way to look at it, are these stations seeing? And are these only in the U.S. so far, or are you putting any of these stations up in Europe as well in the future?
Sure. The utilization – and let me just make sure I answer. The utilization is a typical distribution center with 200, 250 units. They’re used continuously during the day. And so we are – with that – we are the largest user liquid hydrogen in the world. And most of our sites are using somewhere to – between 150 kilograms and 300 kilograms a day, which is equivalent to 300 gallons to 600 gallons of gasoline.
So they are used very heavily. I think it’s – when you have the $180 million hours on the product, that’s a lot of usage. And I think we probably are at the range of where we’ve done $14 million to $15 million fuelings, so it’s pretty big number. I don’t think anyone comes close.
Got it. I’m just trying to see how much more you can extract in terms of, say, leverage if that’s the right word from these existing stations. I think we might have to build more of this [indiscernible]
Sure. Amit, I mean, those stations are going to last 20 years.
Okay. Got it. Thank you so much for that.
Yep.
I’ll take my questions, the rest of my questions offline. Thank you.
Okay.
Thank you. [Operator Instructions] Our next question is coming from Chip Moore from Canaccord Genuity. Your line is now live.
Good morning, Andy and Paul.
Good morning, Chip.
Maybe you can give us a bit of an update on the U.S. pipeline in the core Material Handling market, right? We’ve had the ITC in place for a little bit. I think, last quarter you talked about an initial deployment, at least, to the new retailer with a lot of distribution centers, how’s that going and how’s the rest of the pipeline in the U.S.?
Pipeline is strong, Chip. As I mentioned before, we’ll be talking more about that in early February. But the pipeline is strong and we expect to be – the growth rate to continue for Plug Power. As far as the next big customer, when I look at it, our customers actually been involved in a large effort to redefine their distribution business, which is both good and bad, because now it slowed down our deployments, but it’s good in the fact that a lot of the rethinking of these companies is being driven by what Walmart and Amazon have done.
And if you look at Walmart today, the number that just stuns me is that, if you look at, we’re probably moving 15% of the food in the country at the moment now for retail use. And I think that people who are in that business, they recognize that Walmart and Amazon won’t be doing this if it wasn’t reducing their costs and improving their performance. So we’re – as you may kind of gather by this call, we’re kind of bullish about the North American funnel, as well as the European funnel.
Yes. Can you give us an update on Europe, whether it’s Carrefour or others?
Yes. So yes, it is folks like Carrefour or auto companies. And I know that we’ll be at a grand opening coming up. And that, I think our sales team has told me, they believe in the next 18 months our revenue in Europe will increase by a factor of 4 or 5.
That’s great. And just one follow-up, when you talked about visibility, that 70% to 75%, is that mostly Walmart and Amazon in that at this point?
It’s a good percentage, but there are others. I mean, Walmart and Amazon usually dominates, but it’ll be a mix. So if I think about the mix, it’ll probably be, like our business today, it’s probably 40% of that funnel will be Amazon and Walmart activity.
Yes. Okay, it’s helpful. And maybe just last one for me on the new metal stack. Can you talk about potential for that given the better power density in EV fleet space? Is that something you’ll be looking at?
Absolutely, and we probably have more going on there than we really talk about, because I don’t want to lose focus on the opportunities in Material Handling. But we do believe there’s a value proposition, especially when we look at items like delivery vans. And we – when this – while we believe the Material Handling, it’s – a lot of this starts with hydrogen and there are places like Germany, UK, California hydrogen that is becoming available.
And we’re – we have active business development and sales activities going on in all those areas. And like – and this is really kind of fundamental to Plug. I’m not interested in projects. I’m interested in dealing with companies that can move the ball like Amazon and Walmart rapidly for us. And those are the kind of discussions we’re having.
I’m not interested in doing 10 one-off projects. I’m interested in doing two or three big projects that can move the ball, and that’s the kind of folks we’re engaging with and talking to. Quite honestly, we do best when we’re working with that Fortune 500 type customers.
Got it. That’s helpful, Andy. Thanks.
But the metal stack is a key, Chip.
Thank you. Our next question is coming from Carter Driscoll from B. Riley FBR. Your line is now live.
Good morning, guys.
Good morning, Carter.
So first question is China, and I know it’s not a focus and you’ve done a good job of calibrating expectations. But they subtly changed the rules in terms of subsidization and on-road vehicle time qualified for subsidy. Has that had any impact on your outlook for China or discussions with the partnerships?
Sure. Carter, we’ve been, as you know, deliberate about China.
Yes.
And there has been two reasons. One is that IP is important to us. We spend a lot of time developing the products we had. And I think if you go back and listen to our call two quarters ago, we highlight the fact, both the regulation front and some of the challenges with hydrogen that from our activity over there that we recognize were challenges.
We’ve continued that dialogue with major companies in both mobility and logistic industry. And we do believe – and let me – just because we’ve been deliberate, I think, China is one of the real markets for fuel cells. And I believe that what you’ll start seeing is a ramp probably in the 2020 – mid-2020 timeframe, and I think really accelerating 2022 when the Olympics come. When I talk with potential Chinese partners, they’re very interested in making sure that hydrogen fuel cells are a showcase for that Olympics.
So, we’ll make a deal if and when it makes sense to Plug Power, but we continue to engage and continue to understand. We’re just not going to do something that doesn’t help us grow or continue to grow this business.
Okay. Thinking back to Europe because it tends to get short trip. When you talk about – and I know you don’t generally quantify the geographic contribution, but 4 to 5x could we kind of put that in framework of what that would mean numerically. And is that potentially…
$5 million range, Cart.
$35 million, got it. Okay. I mean, could you develop a – it seems like Amazon and Walmart, but a deep relationship like you started with Carrefour, I mean, could there be other retailers out there that you could have a similar type of anchor customer in Europe by, say, the end of 2019 or early 2020?
I would call both retail and auto manufacturing. And when I say auto manufacturing, I mean, in their manufacturing facilities.
Yes.
So the answer to that question is, yes.
Okay, excellent.
And I wouldn’t discount on-road vehicles either in Europe.
Even though they probably have even greater challenges for fueling infrastructure, or…?
Not really. And this is one of the items that if you look at Germany, Germany is actually – by 2023, plans to have 400 hydrogen fueling stations available, and they’re probably running a year ahead of schedule. So – and if you look at Germany, when I look at it, I think, it’s the most interesting – I actually think Germany may be as interesting as China, because there’s government commitment station.
You can – I understand you can actually get in a hydrogen fuel cell car today and drive across Germany. I don’t think there’s very few places you could do that. And so I wouldn’t discount the opportunities for fuel cell providers there.
Okay. Thank you for that. A point of clarification, Paul. So, again, just over $1 million loss in EBITDAS this quarter. So, obviously, you’re talking about, at least, generating that in the fourth quarter to get a second-half break-even, correct?
Yes, I think that’s in our range, yes.
Got it. Okay. Number of fueling stations domestically is you’re up to three, any plans to, maybe you could share with us in terms of targets either end of this quarter, end of next year? And I think one of the other analyst is asking about kind of economics, utilization rates. Does that becomes a positive contributor on an individual basis or collectively at some point in near future?
Okay. So I – let me be clear, Carter. We – when we talk about fueling stations, we’re talking about industrial fueling stations and we built over 80. I think, the three you’re referring to are kind of the hybrid systems that we’ve developed, which helps reduce the cost of hydrogen, while providing a certain level of hydrogen backup during emergency.
So, there are three sites that are hybrid sites that we developed, which use reformers on site to provide the base hydrogen load and liquid hydrogen that provide peaks and backups. So, we believe when we move to the hybrid systems, especially for sites that have long-term commitments, I mean, that the cost of hydrogen reduces and our profitability for hydrogen will increase.
Right. So, I guess, what I’m trying to get at it, but that – is there are a number of hybrid stations that will help fill that line item towards positive break-even or even positive number over some timeframe?
Yes. I would say that somewhere as we deploy 20% to 25% hybrid stations, it helps.
Got it. Okay.
We do it.
Yep. The work you’ve done with FedEx, obviously, a lot of run time with the hybrid vehicle and even work course in it. Maybe just an update on pull-through with FedEx, some of the other last-mile competition and the opportunities domestically for on-road?
FedEx is going quite well. I think, the biggest challenge and then we will be doing more – we expect to be doing more of FedEx in next year, probably most likely in place like California, where the fueling stations exist on the road today.
I think, the biggest challenge in North America is the financial debt of people who are in the EV chassis business. And our focus is also looking for, I’ll say, larger partners with deeper balance sheet that can help accelerate this market. And I think that’s probably the bigger challenge in the market. Obviously, hydrogen in the U.S. outside of California, so you could go to tether fleets like we’ve done in Material Handling.
But I think, the partnership needs to be with someone with a real financial scale. And I think, Carter, you know this market. I think, the integrators in the market today lack that capability. And so I think the structures have to be a little bit different to make sure there is somebody with money and service capability at the table. And that probably to me is probably the biggest North American challenge.
Yes. Last question for me is…
Interesting less of a challenge probably in Europe.
It’s interesting. Well, better state commitment, obviously.
Yes.
And the PPA gross profit. Is that – I mean, obviously, it’s a blend of the older less profitable PPAs you’ve signed and it takes time to that to break-even. Is Walmart will continue on the same type of growth trajectory, it obviously is – it’s more mature. Is there a realistic timeframe we could see that being, at least, break-even on the gross line, could it be by the end of 2019, first-half of 2020? Just trying to get a sense, because that’s one that is still a bit of hindrance to your profitability on the gross line?
Yes. I think, I mean, we’re – as we mentioned and you just referenced, we have a series of older deals that have to run their course. So that’s a couple of years. The new deals coming in will bode well. The part of the cost that goes into that line is the service component that to service those specific sites. And as we’ve seen in service to direct customers, that cost continues to come down.
So there’s a positive trend on that line as well. So I think holistically, you’re going to – we will and we have this year and we will continue to see progression in that line item. But it’s probably 2020 or early before just to break-even moves in the positive range. The other factors that will – and it is a drag in that regard.
But it’s a small percentage of the overall volume and we’ll continue to be more and more diluted as we sell and we will grow the business and grow more direct sales, which are much higher product mix. And so it will have less and less impact just as we go forward.
Okay. And maybe just could you summarize on a high-level the accounting impact in the balance sheet just through the Slide 3 that you referenced in the letter?
Yes. I mean, the net of it is an adoption of the new lease standard. The biggest change quite frankly is and I’m sure, you’ll see this will accompany as well as they adopt is that, you basically recognize an asset and a liability on your balance sheet for the present value of those operating lease payments in the future and the asset is deemed a right of use to those leases.
And so your operating lease expense becomes the amortization of that right to use asset with the interest component as you amortize that over time. But it’s a little over $30 million when you look at the collection of those leases. The majority of those obviously are associated with our PPA financings in the past and where we’ve had sale leaseback treatment, those are deemed operating leases.
And so we’ve always disclosed it in our footnotes with minimum lease payments and PPA payments over time. But now the accounting standard has to throw that up on your balance sheet as well.
Okay, got it. I appreciate taking my questions. Thank you.
Thank you. Our next question today is coming from Jeff Osborne from Cowen and Company. Your line is now live.
Hey, good morning, guys. I had a couple on my end and then it may be related to that last question. But I noticed in the letter that you called out that GenDrive under – units under service and PPA actually declined for, I think, the first time ever to 17,300 from 18,000. Is that because of the accounting change, or were there any facility closures? I just want to understand what was going on with that?
Yes, it’s part of the accounting and it’s also just ebbs and flows when we look at new sites plus older ones coming off, so it’s a combination. But overall, that business continues to grow.
Got it. And then can you just touch on the fuels segment that seem to have a pretty poor margin relative to prior quarters?
Well, I think, actually, if you look at it in the contrast to prior last year and prior periods, it’s pretty positive in terms of its trend. I think and we may have talked about last quarter, we had for the first time, I think, maybe ever that we broke even as slightly positive trends on that.
The design of that model is such that it’s not – it’s in that single-digit, maybe not even up to 5% kind of gross margin, because it’s a pass-through, and the efforts that we’ve been putting on the efficiencies and kind of making sure that we can continue to maximize the value prop there in terms of what we recognize as well as our customers has really driven that improvement over the years.
But I think in the next 12 to 24 months, I expect that to continue to be kind of a break-even to maybe slightly positive business. And some of the – the number of the new hydrogen strategies, including things like generation system that we referenced we put in this quarter, those continue to promulgate and we do more, as well as some of the other things that we’re rolling out. In the longer-term, I think, you start to see some real traction in that margin line.
Got it. And then can you just touch on, I think, in that you’re continuing to guide on gross revenue. I think, in the past shareholder letters, you had a table talking about the delta there. But were there any accounting changes that, that you’re factoring in as it relates to the Amazon warrants there?
And then maybe related to that, what’s your expectation for Amazon versus other customers in the fourth quarter just given we’re heading into the holiday season. I would have expected that both Amazon and Walmart might slowdown. But maybe just touch on what you’re seeing with the mix of customers as it relates to warrants and just in general, given the holiday impact in your business?
I would say this, Jeff. We got to be sensitive being that exact. I – there are shipments going to both, which are reflective of the typical quarter like the third quarter.
Okay. So I was going to the accounting difference between the gross and net and not a big step up of that delta. I think, it was about $2.1 million of impact this quarter, down from just under $4 million last quarter. So some – somewhere in-between those two quarters, is that fair?
I think that’s fair.
Okay. And then can you just touch on the number of sites you’ve done for both in terms of the backlog?
Part of that Walmart. Walmart is close to 40 sites. And Amazon, last year we did 10 sites and we’re at the same clip for this year.
Okay. And then, any noticeable trends on field reliability that you can share?
I think that’s an area where over the past six months, it’s really, I think, we’ve got the equation right. The units, I can say it, some of our larger customer sites, the uptime of the units are beyond 99.5%. The number of down units is probably one-third of what you would find with the forklift truck.
So I’d tell you, Jeff, one of – I’ve had about four goals this year that we’ve been driving the business on. And one of the big key goals was to get the quality level to the point that not only is important to customers, but shareholders, and. I think we’ve got the equation. So I’m excited.
Perfect. Great to hear. Thanks much.
Yes.
Thank you. We’ve reached the end of our question-and-answer session. I’d like to turn the floor back over to management for any further or closing comments.
Thank you for taking the time today, and we’re looking forward to a strong fourth quarter and talking to you in February about 2019. So thank you, everyone.
Thank you. This does conclude today’s teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.