Tecnoglass Inc

NYSE:TGLS

Earnings Call Transcript 2021-Q4

[Operator]

Greetings and welcome to Tecnoglass, Inc. Fourth Quarter 2021 Earnings 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, Brad Cray, Investor Relations. Thank you. You may begin.

[Brad Cray, Investor Relations]

Thank you for joining us for Tecnoglass’s fourth quarter and full year 2021 conference call. A copy of the slide presentation to accompany this call may be obtained on the Investors section of the Tecnoglass website. Our speakers for today’s call are; Chief Executive Officer, Jose Manuel Daes; Chief Operating Officer, Chris Daes; and Chief Financial Officer, Santiago Giraldo. I’d like to remind everyone that matters discussed in this call, except for historical information, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act Of 1995, including statements regarding future financial performance, future growth and future acquisitions. These statements are based on Tecnoglass’s current expectations or beliefs, and are subject to uncertainty and changes in circumstances. Actual results may differ in a material nature from those expressed or implied by the statements herein, due to changes in economic, business, competitive and or regulatory factors and other risks and uncertainties affecting the operation of Tecnoglass’s business. These risks, uncertainties and contingencies are indicated from time to time in Tecnoglass’s filings with the SEC. The information discussed during the call is presented in light of such risks. Further, investors should keep in mind that Tecnoglass’s financial results in any particular period may not be indicative of future results. Tecnoglass is under no obligation to, and expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise. I will now turn the call over to Jose Manuel, beginning on Slide number 4.

[Jose Manuel Daes, Chief Executive Officer]

Thank you, Brad and thank you everyone for participating on today’s call. I am excited to disclose our exceptional fourth quarter and full year results, which reflect the focus execution of the Tecnoglass team across all areas of our business. During the fourth quarter, we further advanced our leading industry position to produce yet another quarter of record results across nearly all operating metrics. This allowed us to achieve the most profitable highest cash flow year in Tecnoglass history. Our strong growth continues to be largely driven by outperformance in the sales of our innovative single-family residential products. Single-family sales rose over 140% year-over-year in the fourth quarter, and for the year, our single-family sales increased over 150%. This impressive performance in residential has been supported by a combination of our penetration into the attractive southeast US region and our track record of excellent customer service, including our ability to deliver products with lead times well below industry average, despite the supply constraints impacting our industry. We continue to take a disciplined approach to managing costs. We are leveraging our vertically-integrated structure and prior automation investments to drive operational efficiencies. That has allowed us to further advance our industry-leading margins. This is evident in our fourth quarter gross margins, which increased 710 basis points year-over-year to a record 42.9%, contributed to full year gross margin improvement of 380 basis points to 40.8%. In November, we took further steps to reinforce our balance sheet through additional amendments to our credit facility, which increased our financial flexibility and reduced our borrowing costs, all to support future growth. These achievements were a recognition by our lenders of a careful working capital management and the growing mix of our revenues from our single-family business, which has a shorter cash cycle. Together, these factors helped us generate our 8th straight quarter of exceptional cash flow as we produced a record $117.3 million of operating cash flow in the full year 2021. Our improved cash generation profile has maintained our capabilities to invest further in automation and capacity of our plans. That we also voluntarily prepaid $30 million of debt during the year. Further strengthening our balance sheet to achieve the lowest leverage ratio in our history at 0.8 times net debt to adjusted EBITDA. And given the strength of our business and cash flow, in December 2021, we announced 136% increase in our dividend to further boost capital returns to shareholders. In summary, our fourth quarter results marked the completion of another outstanding year for Tecnoglass. We could not be more pleased with the value we have created from our returns-oriented investments and the actions we have taken to propel our company into a leading architectural glass player. Through a vertically-integrated platform, the strategic geographic positioning and proven growth investments we have established an exceptional track record of cash flow generation, which is helping us create additional value for our shareholders as we set the foundation for the next chapter in our growth history. As we look to 2022 and beyond, we are confident in the actions we have taken to leverage our structural advantages and strengthen our capital position. All these will collectively allow us to gain additional market share, while maintaining our industry-leading margins and a structurally enhanced cash flow profile. I will now turn the call over to Chris to provide the additional details on our record backlog.

[Chris Daes, Chief Operating Officer]

Thank you, Jose Manuel. Moving to our backlog on Slide 5. In addition to the strong operating performance that Jose discussed, the trend of our business is also evident in our growing backlog which rose approximately 7.2% year-over-year to a record $585 million. As I have mentioned in the past, the majority of our backlog is weighted towards medium and high rise residential projects, which are outperforming most other commercial sectors. Additionally, our solid single-family residential growth trajectory is not entirely captured in our backlog, given the shorter-term spot duration of projects. While we recognized backlog represents a multiyear pipeline of revenue, it is encouraging to end the year at a backlog amount that is in excess of our full year 2022 revenue outlook and provides us with solid visibility on ourselves into 2023. The majority of our backlog continues to represent projects located in attractive southeast and southcentral US regions, as well as other throughout the US. Our optimism in our end market is supported by recent January ABI readings of 61.0 for the US south, the highest reading for this geography since 2005. As a prime example of our success, Tecnoglass has already contracted to supply architectural glass to 20 of the 22 tallest towers on the construction in South Florida in 2022 and 2023. The fact that we can deliver quality products, exceptional service and dependable lead times all contributed to the impressive accomplishment. I will emphasize that short lead times are a critical factor in the current market and Tecnoglass can deliver the right product at the right time. Our customers are clear with us, that they value that advantage and will pay us for a consistent ability to go above and beyond what other companies can deliver. And the proof is our incredible results. We are encouraged by our significant accomplishment in 2021 and a continued momentum in our business through year end and into the first quarter of 2022. Looking ahead, we remain highly optimistic on the future of our business as we leverage our innovative product portfolio to further capitalize our solid residential macro tailwinds. And a continued pick up in project wins with our commercial customers. I will now turn the call over to Santiago on Slide 6 to discuss the strong demand for single-family products, vertically-integrated strategy and financial results and solid outlook for 2022.

[Santiago Giraldo, Chief Financial Officer]

Thank you, Christian. We’re extremely pleased with our record fourth quarter and full year 2021 results. Our strong performance reflects the structural advantages provided by our vertically-integrated platform, focused execution of our growth strategy and the high demand for innovative architectural glass products, which we can deliver on schedule. Our success is evident in our financial results, where we produced record 2021 revenue and adjusted EBITDA, while expanding margins once again to record levels in both the fourth quarter and full year. Expanding on a theme we’ve discussed in recent quarters, we were pleased to see a continuation of outsized growth in our single-family residential sales. Our focused efforts to further penetrate the single-family residential market, row increases of 142% and 151% year-over-year in the fourth quarter and full year 2021, respectively. Single-family sales accounted for 41% of our total fourth quarter sales and represented 36% of our sales in full year 2021. Our rapid expansion and success in this market has also led us to new business wins and farther share gains across the US. Looking ahead, we continue to expect single-family residential sales in the US to be the primary driver of our revenue growth, with additional upside expected from dealer network expansion and geographic diversification in the southeast and southcentral US. We’re seeing good traction with new product launches catering to our untapped opportunity with production homebuilders, such as our Multimax product line that we began invoicing earlier in the year. This upside opportunity is supported by positive macroeconomic tailwinds such as the robust remodeling activity, strong housing starts, the organization trends and upgrades to storm-proof windows, which are collectively providing us with opportunities to further penetrate this attractive market. Now, on Slide number 7, I would like to reiterate several key themes that are supporting our success in this tight supply environment. Our vertically-integrated business model and strategically located operations provide us with a cost efficient operation and entrenched competitive advantages. A few factors critical to our success that I would like to reiterate include, prior high return investments in plan automation and capacity upgrades. Hedging our aluminum costs, and locally sourcing our flow glass applied through our JV with St. Gobain. Being an employer of choice to maintain quality talent and low turnover in a local environment with an ample supply of employees. Keeping transportation cost at less than 5% of revenues due to the current US and Colombia trade imbalance which partially insulates the company from other inflation dynamics seen in other places. And finally, a 15% energy savings from our prior investments in solar and other renewables. As evidenced in our fourth quarter and full year results, our improvements continue to provide us with structural competitive advantages that have enhanced our ability to introduce new product offerings, quote more projects, deliver products on shorter lead times than the industry average and expand our customer relationships through enhanced delivery capabilities. Turning to the drivers of revenue on Slide number 9. Total revenues increased 28% year-over-year to a record $131.8 million for the fourth quarter and 32% year over a year to a record $496.8 million for the full year attributable to strong growth in single-family residential activity, market share gains and accelerating demand for our products. As previously reported, we completed the acquisition of Ventanas Solar during the fourth quarter, a Panama domiciled company that serve exclusively at an importer and distributor of Tecnoglass products in the country of Panama. After eliminated intercompany sales, Ventanas Solar contributed revenues of approximately $2.3 million to our full year revenue. Our results through the nine-month period ended September 30, 2021 have been adjusted to reflect the retroactive recasting of results in line with ASC 805-50 to account for the consolidation of acquisitions under common controls. Looking at the drivers of adjusted EBITDA on Slide number 10. Adjusted EBITDA for the fourth quarter of 2021 increased 65.7% to a quarterly record of $42.2 million, representing an adjusted EBITDA margin of 32%. Adjusted EBITDA for the full year increased 54.1% year-over-year to a record $150.3 million, representing a margin of 30.2%. We are pleased to produce record fourth quarter and full year gross profit on both at dollar and margin basis. Our gross profit for the fourth quarter increased 53.6% to $56.5 million, representing a gross margin of 42.9% compared to a gross margin of 35.8% in the prior year quarter. The 710 basis point improvement in margin mainly reflected greater operating efficiencies and a higher mix of revenue from manufacturing versus installation activity as we increased our mix of single-family residential products, where we do not carry out installation. This strong fourth quarter performance contributed to a year of record full year gross profit, included 380 basis points of margin expansion to a new record full year gross margin of 40.8%. Higher – nominal operating expenses for the quarter mainly reflected incremental variable expenses related to marine and ground transportation and commissions. As a percentage of revenue, operating expenses improved by 100 basis points for the fourth quarter and 240 basis points for the full year compared to their respective prior year periods due to higher revenues and better operating leverage on personnel, professional fees and other fixed expenses. Now, looking at our balance sheet and leverage on Slide 11. Building upon the recapitalization of our debt in 2020, during November of 2021, we further enhanced our financial flexibility through the amendment of our senior secured credit facility. This reduced our borrowing cost by approximately 130 basis points, tripled the borrowing capacity on their credit facility to $150 million and extended the maturity date by one year to the end of 2026. During 2021, we built upon our outstanding track record of cash flow generation to end the year with a record operating cash flow, which increased by $45.5 million to $117.3 million compared to the prior year. Our operating cash flow represents at 78% conversion from adjusted EBITDA for the year, reflecting our shorter cash cycle, single-family revenues, exceptional working capital management and lower interest expense. This impressive cash flow generation provided us with flexibility to drive additional value for our shareholders during 2021 as we made additional growth investments in our operations, voluntarily prepaid $30 million in debt and increased our quarterly dividend by 136%. At year end, we had a cash balance of approximately $85 million in availability under our committed revolving credit facilities of $163 million, resulting in total liquidity of approximately $250 million. Our efforts to maintain a strong balance sheet allowed us to achieve the lowest leverage ratio in company history, which decreased to 0.8 times net debt to adjusted EBITDA at year end, down from 1.6 times at the end of 2020. On Slide 12, I would like to highlight the evolution of our cash generation capabilities over the last several years. The substantial improvement in our cash flows is a direct reflection of better working capital management, operational efficiencies from high return investments in our operations and focused efforts to substantially reduce our overall borrowing costs. The working capital improvements are evident in the reduction in our days sales outstanding. That reflects stronger collection efforts overall, and a higher mix of sales from single-family products, which feature a shorter cash cycle. We have also significantly reduced our inventory days to 104 days in 2021, compared to 132 days in 2018, in part due to streamlining our aluminum operations through automation in addition to other mixed shifts in our business. Overall, we are extremely pleased with all of our efforts to enhance cash generation, which has provided us with the increasing financial flexibility to continue investing in our operations as we prepare for future expected growth. Moving to our outlook on Slide number 14. Based on the strong momentum in our business through 2021 and into the first quarter of 2022, we are confident in our ability to continue our track record of growth in the full year 2022. We are introducing our outlook for full year 2022 revenue to be in the range of $575 million to $600 million. This outlook represents growth of 18% at the midpoint led by single-family residential. Based on these sales outlook and anticipated mix of revenues, we expect full year adjusted EBITDA to be in the range of $170 million to $190 million, representing a 20% growth at the midpoint of the range. Gross margins are expected to be in the range of 40% benefiting from our previously completed high return CapEx investments and the supply chain benefits of our vertically-integrated operations, along with the structural advantages of our operations that I discussed earlier. Additionally, we anticipate that we will have a higher mix of product versus installation revenue during the year. We expect CapEx in 2022 to approximate $17 million to $25 million primarily related to the tail end of our most recent automation investments, as well as further grow investments into our glass and aluminum operations to efficiently manage increasing demand for our products. Maintenance CapEx continues to represent less than 2% of our sales. We believe our structural advantages, the partial insulation from inflationary pressures, tight working capital management and project mix will continue to drive strong cash flow generation in the full year 2022. In summary, 2021 was another milestone year for Tecnoglass. With our strategic geographic positioning, vertically-integrated structure and target our investments, we have confidence in our ability to capture an increasing share of demand, while continuing to deliver significant cash generation and provide superior returns for our shareholders in 2022 and beyond. With that, we will be happy to answer your questions. Operator, please open the line for questions.

[Operator]

Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Julio Romero with Sidoti. Please proceed with your question.

[Unidentified Participant]

Good morning guys. This is [technical difficulty] on for Julio, thanks for taking the questions. With the adjusted EBITDA outlook of $170 million to $190 million, it implies a very strong growth, but it also has a wide variance. Can you talk about the puts and takes that could put you at those high and low ends of that range?

[Santiago Giraldo, Chief Financial Officer]

Yeah, it’s obviously going to be determined by gross margin. We’re implying 40% for this year which is in line with what we ended up in 2021. Obviously input costs on raw materials are going to play a part, SG&A we’re expecting to be kind of in line of what you’ve seen in the – in year’s path fairly flat. So I think it’s going to depend mostly on gross margin and the mix of business that we do installation versus manufacturing which as you know manufacturing carries a higher margin.

[Unidentified Participant]

Okay, thank you. And I – another one, could you give a progress update on the Multimax line? And how much revenue did it contribute to the quarter?

[Jose Manuel Daes, Chief Executive Officer]

Well we are around 36% residential, and off that, where Multimax is around maybe 20% of those 36%. So, 7% of ourselves. So we are still growing in that sector. I mean, we have not made more penetrations until we learn the market. Now, things are going to speed up as I think is going to be a larger percentage.

[Unidentified Participant]

Okay, thank you very much, guys.

[Operator]

Our next question comes from the line of Tim Wojs with Robert W. Baird. Please proceed with your question.

[Tim Wojs, Robert W. Baird]

Hey, guys. Good morning. Nice job.

[Chris Daes, Chief Operating Officer]

Good morning.

[Tim Wojs, Robert W. Baird]

Maybe just to start on – on the – on kind of the revenue guidance. You know, Santiago, I know you said the growth is going to be led by single-family residential. And any kind of – you know can you unpack that a little bit just in terms of maybe where you expect US residential to kind of grow and then maybe the contributions you would expect from you know the commercial business and maybe Latin America within the guidance?

[Santiago Giraldo, Chief Financial Officer]

Yeah. So if you look at the higher end of that guidance, Tim, we’re looking for resi to grow between 30% to 35% and commercial to grow about 15%. That’s at the higher end of the guidance range. So, in line with what we were saying, residential continues to lead the way, but obviously commercial is making a nice comeback. So we are looking for both segments to contribute.

[Tim Wojs, Robert W. Baird]

Okay, okay. And then on the residential.

[Jose Manuel Daes, Chief Executive Officer]

Let me further tell you the following about commercial. Commercial is really ramping up, because there are more than 100 buildings, 30 floors and up in the Worlcenter, South Florida area alone. So we expect residential there, commercial to pick up a lot.

[Tim Wojs, Robert W. Baird]

Okay, okay. That’s great. And then when you think about the long-term scope for the residential business, I mean, you’re ending this year at you know, call it up you know just over $200 million kind of run rate. What is kind of the, I guess three-year to five-year you know type opportunity for the residential business as a whole?

[Jose Manuel Daes, Chief Executive Officer]

We expect the residential to grow at least 20% a year. We still have a lot of ground today in South Florida, the rest of Florida which we will serve it like the Panhandle north of Orlando, Jacksonville. And also we’re going to keep growing to other states. We developed a new line with [technical difficulty] which means that we can sell in other states on residential line. And we’re going to start as of March-April this year.

[Tim Wojs, Robert W. Baird]

Okay. Okay, that’s great. And then maybe on you know just the commercial side of the business. I mean, what are you kind of – I know there’s a lot of buildings going up, but what are you seeing around just kind of the pace of construction for some of those projects and how you kind of factored in any kind of risk of delays just based on you know labor, installation or things like that, that might be out of your control?

[Jose Manuel Daes, Chief Executive Officer]

Yes, of course well let me explain this. Commercial is geared by a few things. Number one, the permits are taking longer, because there is a lot of backup in the offices, because there is an unprecedented amount of buildings that ask you for permits. But they’re all sold out. I mean, everything that it comes for permit is because they have 50%, 60% sold. So what they are going through now is lack of GCs and this and that. I’m only counting in the growth, the ones that already have permits, and the ones that already have a GC. And we have a contract on or a letter of intent or a solid grounds to believe [technical difficulty]. If all of the buildings [technical difficulty] like they do go up. 2023 is going to be at least 40% higher than this year, and this year is already 20% higher than last year.

[Tim Wojs, Robert W. Baird]

Okay. Okay, that’s really helpful. I appreciate that. I’ll hop back in queue. But good luck on ’22 guys. Thanks.

[Chris Daes, Chief Operating Officer]

Thank you.

[Operator]

Our next question comes from the line of Alex Rygiel with B. Riley. Please proceed with your question.

[Alex Rygiel, B. Riley]

Thank you very much. Good morning, gentlemen. Great quarter. Can you talk a little bit about capacity utilization and the incremental cost to add additional capacity?

[Santiago Giraldo, Chief Financial Officer]

The capital utilization what – the CapEx that we put in place last year?

[Alex Rygiel, B. Riley]

Just as it relates to manufacturing capacity utilization you know how much you plan to use right now? How much more capital do you believe we need to add for growth opportunities?

[Jose Manuel Daes, Chief Executive Officer]

With investment that we did last year and with the CapEx that we’re going to do this year, we’ll be able to reach $700 million of sales at least if we have the demand for the products, which I think we will. We won’t have any problem reaching $600 million or $650 million this year, if we can make it all happen. And if we add on like, we added on in March, in April, we’re coming in with two additional laminating lines, we’re coming up with another [inaudible], we’re coming up with six new lines of windows. So we should be able to reach with more invested last year and this year, up to $750 million easy without any big efforts.

[Alex Rygiel, B. Riley]

Excellent. And then I think last quarter you mentioned that you had maybe about five relationships with US homebuilders. Maybe you could update us on that certainly it’s expanded a little bit as well. And you talked a little bit about expanding your residential product outside of the State of Florida. Maybe you can give us an update there.

[Jose Manuel Daes, Chief Executive Officer]

Across those and they keep repeating business. As I mentioned in the last call, we like to start slow and let the business grow and we’re growing, there could you know some more communities. And we are designing also now for up north, we’ll be starting March or April that in businesses outside of Florida. And we expect the residential side to grow like I said before 20% a year and hopefully more.

[Alex Rygiel, B. Riley]

Great. Thank you very much.

[Chris Daes, Chief Operating Officer]

Thanks, Alex.

[Operator]

Our next question comes from the line of Joshua Wilson with Raymond James. Please proceed with your question.

[Joshua Wilson, Raymond James]

Good morning. Thanks for taking my question. Congrats on the quarter.

[Jose Manuel Daes, Chief Executive Officer]

Thanks.

[Santiago Giraldo, Chief Financial Officer]

Good morning, Josh.

[Joshua Wilson, Raymond James]

First, just to clarify on the capacity question. So, exiting 2022 you’ll have capacity for $750 million in sales. Did I hear that right?

[Jose Manuel Daes, Chief Executive Officer]

Yes, it is.

[Santiago Giraldo, Chief Financial Officer]

Yeah. So I’ll –

[Joshua Wilson, Raymond James]

And then –

[Santiago Giraldo, Chief Financial Officer]

CapEx that was put in place last year, plus the CapEx that has been invested this year, that would be their capacity.

[Joshua Wilson, Raymond James]

Got it. And then as it relates to the true like commercial, non-residential office part of your business, what are the latest readings you’re seeing there in terms of the activity?

[Santiago Giraldo, Chief Financial Officer]

So most of what we’re doing still and you can see it in the presentation is related to multifamily within that commercial space, right. But the reading in other places, especially in the main geographies where we are in the southeast are strong like hotels and office space.

[Jose Manuel Daes, Chief Executive Officer]

Yeah, there is a lot of office demand now in Palm Beach, in Miami, there is a lot of companies moving to Florida. And so they are building new offices. The hotels in Miami are packed on the premise is like 97% capacity, they are sold out. So there is a lot of hotels also growing up. And we in the Florida, we get the majority of sales away, I mean we get 70%, 80% of anything that goes up.

[Joshua Wilson, Raymond James]

Excellent. Thanks so much.

[Operator]

Our next question comes from the line of Zane Karimi with D.A. Davidson. Please proceed with your question.

[Zane Karimi, D.A. Davidson]

Good morning, congratulations on the quarter. And thank you for taking my questions.

[Santiago Giraldo, Chief Financial Officer]

Good morning, Zane.

[Zane Karimi, D.A. Davidson]

So to follow-up on Tim’s question earlier on residential growth. Are you seeing or are there supply chain and labor issues which some of the homebuilders are experiencing, creating bottlenecks for your residential products?

[Jose Manuel Daes, Chief Executive Officer]

Well, let me tell you this. They are with all their trades, although trades, I mean, the concrete or the wood or whatever, but in my trade which is aluminum windows, everybody that we are serving is very happy, because we are on time, we have short delivery times. And the quality of our product compared to our peers is way, way, way better. And they are as happy as they can be.

[Zane Karimi, D.A. Davidson]

Okay, thank you for that. And maybe on the backlog. How is pricing on new work in commercial backlog? And what are some of these competitive dynamics looking like currently?

[Jose Manuel Daes, Chief Executive Officer]

Well the prices, I mean, every time we sell a business, we already lock the prices on everything for the future. And I mean our margins look good. And we obviously are increasing the prices, because aluminum has jumped in just a year from 2850 to 3700 today. So every month or every two weeks that the prices jump, we increase the prices to whatever is not sold. Aluminum sold, we have to lock the price and we do it also with our suppliers.

[Santiago Giraldo, Chief Financial Officer]

Just to add to that, Zane. If you look at what we are guiding for this year, where we’re implying gross margin in line with last year, right. So 40% basically accounts for what Jose just said, I mean to the extent that input costs go up, we’ll – pass that through to the end clients. But on the commercial segment, when you have these long-term contracts, you’re ready to kind of lock up prices and input costs. So that’s what we based our gross margin projections on.

[Zane Karimi, D.A. Davidson]

Okay, thank you for that. And last one for me. What are you guys thinking about buybacks at the current price versus other investments?

[Santiago Giraldo, Chief Financial Officer]

I think that’s something that has to be on the Board’s plate to evaluate everything. And we’ll just kind of base that on the projected cash flow and the opportunities that are presented to the company. But you know we’ll evaluate every option. And as you know we already increased the dividend for shareholders to return incremental cash to shareholders. So, everything is on the table and if it makes sense, you’ll be evaluated.

[Zane Karimi, D.A. Davidson]

Yeah. Thank you, again and congrats on the quarter.

[Santiago Giraldo, Chief Financial Officer]

Thanks.

[Jose Manuel Daes, Chief Executive Officer]

Thank you.

[Operator]

That is all the time we have for questions. I’d like to hand the call back to Jose Manuel Daes for closing remarks.

[Jose Manuel Daes, Chief Executive Officer]

Thanks everyone for participating on today’s call. We’ll keep improving in every way we can, in promotion, in sales, in expanding geographically, and we’ll keep giving good news from the company that is well managed and is the best time that in the industry. Thank you.

[Operator]

Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.