Finning International Inc

TSX:FTT

Earnings Call Transcript 2022-Q1

[Operator]

Thank you for standing by. This is the conference operator. Welcome to the Finning International Inc.'s First Quarter 2022 Investor Call and Webcast. [Operator Instructions] The conference is being recorded. [Operator Instructions].

I would now like to turn the conference over to Amanda Hobson, Senior Vice President, Investor Relations and Treasury. Please go ahead.

[Amanda Hobson, executive]

Thank you, operator. Good morning, everyone, and welcome to Finning's first quarter earnings call. Joining me on today's call are Scott Thomson, President and CEO; and Greg Palaschuk, EVP and CFO.

Following our remarks today, we'll open the line to questions. This call is being webcast on finning.com. We've also provided a set of slides that we will reference during our prepared remarks. The slides are posted on the Investor Relations section of our website. You can also view the slides on our webcast page. An audio file of this call and the accompanying presentation will be archived on our website.

Before I turn it over to Scott, I want to remind everyone that some of the statements provided during this call are forward-looking. Please refer to the Slides 9 and 10 for important disclosures about forward-looking information as well as currency and specified financial measures, including non-GAAP financial measures. Please note that forward-looking information is subject to risks, uncertainties and other factors as discussed in our annual information form under our key business risks and in our MD&A under risk factors and management and forward-looking information disclaimer. Please read this information with caution as our actual results could differ materially from current expectations.

Scott, over to you.

[L. Scott Thomson, executive]

Thank you, Amanda, and good morning, everyone. On today's call, I will speak about the first quarter highlights and how we continue to support our customers as we are ramping up for increased activity for the remainder of the year. Greg will then provide more details on our strong performance in the first quarter and our outlook for the remainder of the year.

Please turn to Slide 2. We are pleased with the strong start to the year. First quarter earnings per share was $0.59, bringing our last 12 months EPS to $2.42. This performance is a direct result of our disciplined approach to capturing market opportunities and the successful execution of our strategic plan to grow product support, reduce cost and reinvest free cash flow to compound our earnings.

Our product support revenue was up 16% from Q1 2021, exceeding $1 billion. We saw strong demand for parts, service and rebuilds across all regions and market sectors with construction product support revenue growing at 21% year-over-year. All our regions demonstrated strong operating leverage in the first quarter as we are actively managing inflationary pressures through continued focus on productivity gains.

Consolidated EBIT as a percentage of net revenue was up 180 basis points from adjusted Q1 2021 results. Improved profitability drove higher return on invested capital with ROIC in South America exceeding 21% and ROIC in the U.K. exceeding 15%.

Ongoing constraints in the global supply chain continued in the first quarter. Our teams around the world put in an extraordinary effort to meet our customers' needs by providing various solutions to fill the supply gaps. We have been ramping up our value proposition for construction rebuilds, providing used and rental options to customers and building a healthy inventory position to support delivery of our growing backlog.

We are now offering a wide range of rebuild options on most large construction equipment models, providing attractive financing and warranty with Caterpillar and leveraging our RRR network capabilities for faster rebuild turnaround and cost efficiencies.

We are also prioritizing availability of our rental fleet and expanding our used equipment capabilities. Data from connected machines, value-added technology solutions and our strong customer relationships play a critical role in successfully navigating the current tight supply environment.

In addition, we continue to build a healthy inventory of both equipment and parts, which puts us in a great position to meet strong customer demand and deliver on our growing backlog. Our equipment backlog increased by 70% to $2.1 billion by the end of March, driven by strong market conditions, coupled with increasing lead times.

Our inventory was up 32% from Q1 2021 and up 25% or over $400 million from the end of 2021. Our improved earnings capacity and strong balance sheet provide us with opportunities to reinvest and return capital to shareholders.

During the first quarter, we reinvested $177 million, including the acquisition of Hydraquip and $61 million of share repurchases. We also announced a 5% dividend increase, which marks 21 years of consecutive dividend increases.

The Hydraquip acquisition in the U.K. is closely aligned with our strategy to drive product support growth and is immediately accretive to our EPS. It allows us to provide our customers with a wider range of complementary products and services that increase equipment uptime and reduce operating costs.

In addition, Hydraquip expands our service capabilities across multiple industries and equipment types to both new and existing customers. We will be leveraging the experience we gained with successfully integrating and growing our 4Refuel fuel business, which operates a scalable hub-and-spoke model similar to Hydraquip. There is a great brand, reputation and cultural fit with Hydraquip and Finning, and we welcome the 270 Hydraquip employees to Finning.

At the end of March, we released our fifth annual sustainability report, which provides a detailed discussion of our progress towards reducing our carbon footprint and our success and commitments in other ESG areas.

As we highlighted during our previous earnings calls, we increased our commitment to sustainable operations and raised our absolute GHG emissions reduction target. Our new target of 40% reduction, up from 20% includes 4Refuel and covers the same 10-year time frame from 2017 to 2027.

We continue to help our customers reduce their environmental footprint by providing low carbon emissions equipment, remanufacturing and technology solutions. To give you a few recent examples, we have developed a sustainability dashboard on our CUBIQ platform to allow customers to monitor carbon emissions.

We are seeing an accelerated adoption of alternative fuel engines among our oil and gas customers in Western Canada. Since the beginning of 2021, we have sold 72 Caterpillar Tier 4 DGB engines, including the orders we have received so far this year. These dynamic gas blending engines allow customers to substitute up to 85% of diesel fuel with natural gas and are capable of operating with up to 20% hydrogen blend resulting in significant cost savings and emissions reductions.

Safety is of critical importance to our customers, and the latest advances in safety technology are generating a lot of interest. In the first quarter, we received an order for 127 Caterpillar DSS or Driver Safety System units from a large Canadian mining customer. The DSS technology alerts an operator when it detects fatigue or distraction by monitoring eye closure and head pose. We saw a significant increase in the DSS unit population in Canada over the last year.

Before I turn it over to Greg, I would like to address the leadership changes we announced at the end of March. We are excited to welcome Kevin Parkes back in the newly created role of Chief Operating Officer. Kevin will oversee our global operations with a focus on consistent execution across the business as we continue to improve the customer experience in a cost-efficient fashion.

David Primrose who has over 35 years of experience with Finning and numerous senior level operational and corporate roles will lead our Canadian business on a permanent basis. We have significant growth opportunities ahead of us, and the new leadership structure will position us to execute our global growth strategy even more effectively.

In summary, Q1 was a great start to the year. Our outlook remains strong, and we are targeting above mid-teens EPS growth in 2022.

I will now hand it over to Greg.

[Greg Palaschuk, executive]

Thank you, Scott. I'll provide more details on our strong performance in Q1 and provide additional regional commentary and outlook.

Our consolidated first quarter results are summarized on Slide 3. Net revenue of $1.7 billion was up 18% from Q1 2021 driven by strong demand conditions across all regions and sectors and excellent execution of our product support growth strategy.

We continue to navigate supply constraints and manage inflationary pressure to deliver a very strong first quarter. EBITDA and EPS were up 30% and 68%, respectively, from adjusted results in Q1 2021 and strong operating leverage in all regions. Our increasing inventory on hand will support delivery of our strong and diverse backlog, driving higher revenue and new equipment mix for the remainder of the year.

Slide 4 shows changes in our net revenue by line of business compared to Q1 2021 as well as the composition of our equipment backlog. New equipment sales were up 31% year-over-year, led by construction deliveries in the U.K. and mining sales in Chile and Canada.

We saw strong demand for rental equipment and high rental utilization in all regions. We achieved double-digit growth in product support revenue in all operations and functional currency compared to Q1 2021, driven by strong customer demand, combined with our strategic focus on growing rebuilds and customer value agreements in the Construction segment.

Our backlog increased to nearly $2.1 billion by the end of March, up from $1.9 billion at the end of December. We expect constraints in the global supply chain to continue impacting availability of new equipment for most of this year and extend the typical delivery time on some orders in our backlog. That said, with inventory arrivals increasing, we now expect to deliver about 85% of our backlog this year.

More than half of our backlog is in our Construction segment, about 1/3 is in mining and 15% is related to our Power Systems segment. In both new equipment and product support growth in our Construction segment is playing a leading role.

Turning to Slide 5. EBITDA as a percentage of net revenue increased by 110 basis points from adjusted Q1 2021 performance. Higher gross profit was driven by an increase in net revenue, stronger rental utilization and improved equipment margins.

SG&A increased by 12% on 18% higher net revenue, reflecting additional technical workforce and higher variable cost to support revenue growth, especially in product support, which is more SG&A-intensive. As a percentage of net revenue, SG&A was down 120 basis points year-over-year.

Compared to Q4 2021, our SG&A was elevated, mostly due to a $7.3 million higher long-term incentive plan expense, temporary additional warehouse costs in Canada as we are optimizing our warehouse footprint. We expect to start realizing cost savings from the foot for rationalization by the end of 2022.

We're closely monitoring inflationary pressures, including further price increases for our key suppliers in the second quarter and are working with customers to implement those changes. We remain committed to delivering fixed cost reduction initiatives, productivity gains and strong operating leverage going forward.

The key drivers of our productivity gains include the deployment of our RRR model across all regions, supply chain warehouse optimization and procurement initiatives.

Slide 6 summarizes our Canadian results and outlook. Market conditions were strong in Western Canada in the first quarter. Net revenue increased by 14% from Q1 '21, driven by product support, which was up 18%.

We saw increased spending in the mining sector and great execution of our product support growth initiatives in construction. New equipment sales were up 11% from Q1 2021, largely due to mining deliveries. Rental revenue was up 54% year-over-year, reflecting strong customer demand a constrained supply environment compared to softer market conditions, including certain pipeline and construction work stoppages in Q1 2021.

EBITDA as a percentage of net revenue was 9.1%, up 140 basis points from adjusted EBIT results in Q1 2021, mostly due to higher equipment and rental margins. We expect strong commodity prices, a combination of public and private sector spending and increased capital budgets to support a healthy demand environment across all sectors in Western Canada in 2022.

Please turn to Slide 7 for our South America results. We saw very healthy activity across all market sectors in the first quarter driven by strong copper prices, economic growth in each country. And new equipment sales were up 32%, while product support revenue increased 14% from Q1 2021 in functional currency.

The Construction Products support up 31% from Q1 2021. SG&A as a percentage of net revenue decreased by 180 basis points from Q1 2021 due to a streamlined cost structure and improved productivity. EBIT as a percentage of net revenue was up 280 basis points year-over-year, driven by strong operating leverage from the improved cost structure, combined with higher margins in all lines of business compared to Q1 2021.

In the near term, we expect strong demand for mining product support and fleet replacement to be supported by a combination of strong copper price, mature equipment population and customers focus on leveraging technology to improve productivity.

The political and economic uncertainty in Chile continues to influence customers' investment decisions, particularly as it relates to greenfield and expansion mining projects. Our long-term outlook for copper mining in Chile remains positive, including our expectation for a moderate increase in mining royalties going forward, we believe that Chile will remain an attractive place to invest with an abundance of economically advantaged renewable energy resources, which will play a leading role in the energy transition.

Turning to the U.K. and Ireland on Slide 8. We are pleased with the strong performance in the U.K. and Ireland in Q1. Ongoing HS2 construction activity, coupled with government investments and other infrastructure projects, a strong quarry sector and demand for construction equipment product support also.

New equipment sales were up 63% and product support revenue was up 10% from Q1 2021 in functional currency. EBITDA as a percentage of net revenue was up 180 basis points from Q1 2021 to 5%. Our outlook for the U.K. and Ireland business remains strong, supported by a significant backlog, robust construction activity, high-margin product support contribution from Hydraquip and growing demand for our power system solutions.

Our balance sheet remains healthy, with net debt to adjusted EBITDA of 1.6x at the end of March. We'll continue to make investments to grow our business organically, while share buybacks will continue to compete with M&A for capital.

Building on our strong start to 2021, our global team remains focused on capturing market opportunities in a disciplined manner and executing our plan to grow product support, reduce costs and reinvest free cash flow to compound earnings. Underpinned by backlog deliveries, growth in product support and strong market activity, we expect higher net revenue and overall revenue and new equipment mix for the remainder of the year, we're targeting above mid-teens EPS growth in 2022.

Operator, I'll now turn the call back to you for questions.

[Operator]

[Operator Instructions]. Our first question is from Yuri Lynk with Canaccord Genuity.

[Yuri Lynk, analyst]

Nice quarter. Scott, can you talk a little bit about the nature of your conversations with your customers when it comes to passing along some of these cost pressures that you're facing. And are there any competitors that are acting irrationally? Or is everybody kind of in the same boat when it comes to having to pass this stuff along?

[L. Scott Thomson, executive]

Yes. Thanks, Yuri. So one, I think it's an industry-wide issue around inflation. And if you think about sitting in particular, look at the first quarter, we had increasing costs through the business, and we did take price action. And the order intake continued to increase. If you think about the second quarter, I think cost increases are going to continue, and we are engaging with our customers on increasing price.

I think it will take some time to have those conversations, but given the value proposition, given the end market environment and given the importance of availability, we're optimistic we'll be able to pass that on without significant demand erosion. Those conversations, Yuri, are ongoing. Obviously, in some cases, more difficult than others. But given the environment, I think we're -- everyone is kind of in this place. So it's not a finding Caterpillar specific issue. It's an industry-wide issue, and I don't think there's any difference between any of the major suppliers in my view.

[Yuri Lynk, analyst]

Yes. No, that makes sense. Second and last one for Greg. Can you quantify the warehousing costs that were in SG&A and provide an update on when you feel we might get to the 17% target?

[Greg Palaschuk, executive]

Yes. Thanks, Yuri. So we're not putting an exact quantification on the number. We are consolidating 4 warehouses into 1. So we are ramping up people, and there are some duplicate costs during the quarter. And so those costs are a bit of a drag in Q1. But ultimately, it's a project we're really excited about. I was just there on Thursday, actually, and the level of automation we put in that warehouse is really impressive. And we think it will be a real big net benefit when it comes through the business case is very solid. So it's a great investment to make we feel good about it, but we are just carrying some extra costs at a minute.

In terms of the push towards 17%, as we highlighted, we do think that there's a step-up in revenue here going forward. We've got a lot of inventory that's landed and we'll move that through. So we expect to continue to see good operating leverage. And so I think we'll see -- start to see some meaningful progress towards that number for the quarters remaining in the year.

[Operator]

The next question is from Jacob Bout with CIBC.

[Jacob Bout, analyst]

I had some questions here about -- around supply chain, inventory position and free cash flow. So a nice build in inventory during the quarter. How comfortable are you with the current inventory levels as you think about meeting demand reflected in your current backlog? And are supply chain issues showing any improvement at all?

[Greg Palaschuk, executive]

Yes. Thanks. So the supply chain, obviously, used to be an industry-wide challenge. I think we put ourselves in a good position. I think we've worked proactively over the last 18 months to make sure we're in a good spot between our ordering patterns and how we use data to help with that. But also just the timing of our backlog and when we built some of the large orders, I mean the timing is such that a lot of that is arriving now. And so we feel like that's in a good position. We're busy working that equipment through the workshop and getting it in customers' hands. And so we do think it will be a solid cash to cash from the time that inventory arrives till we get it in customers' hands.

And so of course, there continues to be challenges. There's been challenges for the last several quarters. There are certain pockets of improvement, but certain pockets of challenge. We do think it's going to be with us through the year. But ultimately, we feel like we're in a good spot with some really good dynamic tension between new use and results through that period, and we'll continue to invest across that chain to get equipment in parking customers' hands.

[Jacob Bout, analyst]

And then as you think about EBITDA and free cash flow conversion, heavy capital investment in the quarter, maybe comment on your expectations for the remainder of the year and 2023 as far as free cash flow conversion?

[Greg Palaschuk, executive]

Yes. So certainly, that would -- this is kind of more of a normal earlier build because we're in spring selling season now. A substantial majority of the inventory that arrived is for backlog, so it will work its way through quickly. That said, we're seeing strong growth, and we'll continue to invest to make sure we've got the inventory we need. And so through this up-cycle period, there can be lower conversion ratios. But certainly, we'll work it through the system and really focus on turning it through quickly.

[Operator]

The next question is from Michael Doumet with Scotiabank.

[Michael Doumet, analyst]

Nice quarter. My first question is on product support. In the last 3 quarters, double digit, you're far exceeding that 8% that I think you called out in the mid-cycle. Canada, in particular, looked quite impressive. I'm just thinking about the sustainability of that growth as we consider share gains in construction and mining spend and presumably some price inflation and whether you can sustain double-digit growth for the balance of 2022 given the tougher comps?

[Greg Palaschuk, executive]

Yes. Thanks, Michael. I guess, from Investor Day last June, we're certainly seeing some good solid momentum. Some is higher pricing levels, but the majority is fundamental volume improvements. The other thing in mining, we've seen starting in Q4 a real increase in our customers' willingness to spend and prioritizing effective maintenance and that's going really well.

But also on the construction side, I mean, there's some real fundamental improvements in terms of our rebuild proposition across a wider range of models, providing very compelling financing and warranty associated with those rebuilds. And so I think there's a good chunk there that's market share gains and a really good value proposition to customers. And so we think that there's still good momentum. The sales funnel was really strong. And so we're really pleased with the progress and expect that to continue.

[Michael Doumet, analyst]

Yes, that's good. No doubt. And then a question on the other operating costs. I think that came in at $18 million for the quarter. I think that's a multiyear high. I think you flagged some consulting costs related to energy transition strategy. Just can you speak about maybe the go-forward amount in terms of costs and provide them maybe some of the elements to the energy transition strategy, if there's anything incremental there?

[Greg Palaschuk, executive]

Yes. No, I think there are some elements in this quarter that were typical to the run rate. So I think that would come down in the performance of time. And there are some FX and then other costs within there that can go up and down. But yes, from an energy transition perspective, it's something that we're spending time on working through 4Refuel and ComTech strategy. But more broadly, just seeing a lot of opportunities, particularly in South America around the energy transition, what customers would like to do in terms of renewable energy sourcing and the potential of them as ultimately a net exporter.

So that's something that we spend a lot of time on and as well, I'll just add that there's LTIP in that category, which is the other stock being up 18% in Q1, also adds to. So in a difficult quarter, we would expect to see that to be a lower number.

[Operator]

The next question is from Bryan Fast with Raymond James.

[Bryan Fast, analyst]

I was just looking to get more color on the Hydraquip acquisition and maybe if this is a model that you could envision expanding into other regions?

[Greg Palaschuk, executive]

Yes, absolutely. It's a business that we really like. It really helps customers on their uptime. For example, if somebody has got now an excavator with a hose issue from call to fix can be 2 to 3 hours. The customers really value that and help with up time, and they do a really good job in dense areas like the U.K.

The first move will be make sure that we've got the best possible proposition and network within the U.K. I think there's very immediate opportunities within Ireland, where they are today, but we are. But ultimately, you could see a fit longer term for some of the more densely populated areas in Canada as well as South America.

[Bryan Fast, analyst]

Okay. And then you provided some numbers around the adoption of dual gas lending engines. Could you just frame this in the context of your expectations and then maybe some of the early feedback on how it is meeting customer needs?

[Greg Palaschuk, executive]

Yes, absolutely. I mean this is a product that we've offered for a while. Certainly, we didn't see a lot of capital spending for a number of years on the oilfield service side, there was a shift from Tier 2 to Tier 4 engines as well as some real capital constraints. But certainly, as that sector ramped back up, and we're certainly seeing signs of strength with $8 gas and over $100 oil. Certainly, there's some more spending and activity going on.

And so from 2 years ago or even from Investor Day, that ramp back up has been higher than we thought at that time. But certainly it makes sense given the environment. But it's a great product. We had a demo in Calgary last fall. It's an engine that can run off diesel and then while working switch to natural gas and hydrogen without losing power loads. So it's a great product, heavily differentiated and we're glad to see more orders in that space.

[Operator]

[Operator Instructions] Our next question is from Michael Sytchev with National Bank Financial.

[Maxim Sytchev, analyst]

I just had a question in terms of the ability to do rebuilds and specifically in Canada. We're hearing sort of from people on the ground that its water availability is quite tight and just curious to see what you're seeing on the ground.

[Greg Palaschuk, executive]

Yes, absolutely. There's definitely a competitive market for talent. There's lots of growth across the industry. We think we've got to get a great employee base, a lot of long-tenured employees and loyalty there. So I think we've got a good solid base. The work we've done over the last few years to get the right people and the right branches for the most leverage and adjusting our shift patterns has certainly helped us be more productive through this cycle and getting more costs done in some of the lower-cost jurisdictions.

With that said, we'd certainly like to be growing our technician count. We're certainly working on that, targeting that, and it's certainly competitive to get top people. So we are spending more time on the apprentice program and thinking long term, and we're really happy through 2020 and 2021 to keep that program going and still have 25 apprentices going through, and we'll continue to build up that program.

So definitely a tight market. I feel like the net and bolts of what we did around RRR, they certainly help us to maximize through this period. And we still think we've got capacity for growth from a facilities perspective and certainly adding and retaining and motivating our employees will be key for the continued growth here.

[Maxim Sytchev, analyst]

And just in terms of -- you haven't increased shifts in the facilities or can you share any information there?

[Greg Palaschuk, executive]

Yes, absolutely. So in our distribution demand between Calgary, Regina, Edmonton and Kamloops, we've gotten a continuous shift over the last couple of years. So adjusted shift patterns, you added week-on-week up shifts for a second shift. So we certainly added capacity through that piece of the network for the strategy and obviously continue to be on mine sites around the clock. So that's part of the RRR strategy, and we've been building those ups and bolts and the network approach over the last few years, and that's certainly helping us as we grow at an outsized level here.

[Maxim Sytchev, analyst]

And then just one last one, if you don't mind. In terms of Chile and the rebuild opportunity there, just curious if there's any update on that strategy?

[Greg Palaschuk, executive]

Absolutely. So I mean I think as I mentioned last call, our SVP of Mining from Canada for the last 4 years, moved back to Chile a year ago. And so he's very familiar with our rebuilt strategy in the oil sands. And he's been talking to customers about that, and there's definitely a lot of interest and some early wins. But at the scale that we see in the oil sands, I think that takes some time. There could be a really good match here with some people looking to get one more life out of their current equipment. So I would say there's a massive uptick to date, but certainly a lot of interest and some early success.

[Operator]

The next question is from Sabahat Khan from RBC Capital Markets.

[Sabahat Khan, analyst]

Just, I guess, a longer-term question, particularly on the mining side. I guess, over the last year or 2 or from the last year, there's been a bit of a step function change in the outlook for kind of copper and some of these green metals. I guess as you talk to your customers, do you see the potential for some of these new mine developments or just the bigger projects to take hold regardless of what happens to the price over the next 12 to 24 months? Or do you think your customers are going to wait for an outlook? Or are we only going to go ahead with these projects if the price remains supportive? I just want to understand if there's sort of new demand from kind of green economy changes that outlook for your customers, whether it's Chile or even in Western Canada?

[L. Scott Thomson, executive]

Yes, Sabahat, it's Scott. So one, I think most of our customers are pretty constructive on the commodity price. In the case of Chile, it's copper, and that plays into the energy transition. When you think about Chile and how well it's placed from a copper perspective a lot of our big global mining customers are really constructive on Chile. I think the one thing that's holding it back right now is the political uncertainty around the constitutional process. And to me, that's kind of more important than the price issue. I think we'll get through that in the next 6 months that I think process is coming to a head in September.

My sense is a lot of the radical proposals that sometimes read about in the press are not going to be included in that referendum. And my sense also is that Chilean population is, they're changing a little bit their views on that overall process. So I'm hopeful that rationality will prevail on that constitutional process and that will, I think, open the gates to customers taking a more constructive view on new mine development.

Now that all being said, there's a lot of activity, as you see from our results in Chile even with that uncertainty. So when you think about tech, when you think about Codelco, when you think about BHP and Escondida, I think there's a lot of activity ongoing. But I do think it will help significantly when we get through that political uncertainty.

[Sabahat Khan, analyst]

And then just, I guess, one on the kind of cash flow working capital side, it looks like you got to hold a bunch of inventory this quarter. What should we expect on kind of the investment, whether it's working capital or where the capital might be deployed for the rest of the year? It looks like you've renewed your NCIB as well. Just some thoughts on that at this point in the cycle.

[Greg Palaschuk, executive]

Yes. I think you'll just see continued balanced approach. We certainly -- as you saw, we grow the dividend for our 21st consecutive year this year. We're proud of that. And continue to look at M&A. We like acquisitions like Hydraquip and we'll continue to look for similar kind of premium businesses that help our customers drive uptime and then will compete with share repurchases. I think it's a balanced approach.

[Operator]

This concludes the question-and-answer session. I'd like to turn the conference back over to Amanda Hobson for any closing remarks.

[Amanda Hobson, executive]

Thank you, operator. Before concluding our call, I'd like to remind everyone that our annual meeting with shareholders will be held today at 5:00 p.m. Eastern Time. The link to join the meeting online is available on the Investor Relations section of our website. This concludes our call. Thank you for your participation and have a great day.