Interfor Corp

TSX:IFP

Earnings Call Transcript 2022-Q2

[Operator]

Good morning ladies and gentlemen, and welcome to Interfor Quarterly Analyst Conference Call. At this time, all lines are in listen-only mode. [Operator Instructions] This call is being recorded on Friday, August 5, 2022.

I would now like to hand the conference over to Ian Fillinger. Please go ahead.

[Ian Fillinger, President and Chief Executive Officer]

Thank you, operator and good morning and welcome to everybody listening in on our call and welcome to our Q2 2022 analyst call. Before we get into the report, I would like to welcome Tom Temple to our Board of Directors. Tom is a seasoned industry executive and we look forward to working with Tom over the year ahead.

Today, with me you have Rick Pozzebon, our Senior Vice President and Chief Financial Officer; and Bart Bender, our Senior Vice President of Sales and Marketing. Our agenda today will start off with myself providing a recap of our financial results, our strategic focus, and our improvement efforts. I'll then pass the call to Rick, who will cover our financial matters. And then Rick will pass the call to Bart to cover of the markets.

Turning to our financial results, our Q1 adjusted EBITDA was $429 million. We are continuing to execute on our strategic plan and we are generating industry leading lumber margins in returns on capital. I encourage you to look through the investor deck on our website and look at these metrics.

Our improvement efforts again were balanced across the company as we made progress in all regions. For the fifth consecutive quarter, our production volumes were again at an all-time high, largely due to the production quarter of our Eastern Canadian platform and the ramp ups of our mills in DeQuincy, Louisiana and our mill in Eatonton, Georgia.

We are proact actively reducing inventory levels throughout the quarter by managing lumber production and we achieved improvements in logistics and capacity availability. This combined with seasonal impacts resulted in a significant reduction in working capital in the quarter.

Our SG&A expense decreased quarter-over-quarter as economies of scale are being realized from our growth through acquisitions and our capital investments, despite persistent inflationary pressures. We continued with our CapEx improvement plans in every region spending 65 million in the quarter, up from the previous quarter.

Turning to our financial capacity. We continue to have significant financial flexibility to consider several further capital deployment options, which Rick will cover off shortly, including our 100 million SIB buyback that we had announced last week. I'd also like to provide an update on how the integration is progressing with our Canadian Eastern platform.

Since the acquisition dates in February this year, the East region has contributed a robust 206 million of EBITDA in the first 4.5 months or approximately 42% of the 490 million purchase price. Our key focus areas in this region are to enhance our historical operating performance, identify further opportunities for operational improvements and synergy realization, and assess potential long-term strategic investments.

Turning to our strategic focus. We continue on achieving greater returns on capital through our unrelenting focus on operational excellence and our balanced and situational specific approach to capital allocation. As such, I want to outline a few key initiatives. We continue to optimize our portfolio, which included the sale of our Acorn mill on Che coast of British Columbia.

Our DeQuincy mill in Louisiana continues to progress well and we have now fully moved to a two-shift operation several months ahead of schedule. In Georgia, our largest capital project at our Eatonton mill is now complete with very solid production, great outturn, and [cost performances] [ph] thus far.

In summary, our balance sheet is in great shape. Our returns on capital ROCE are again exceptionally strong in Q2 at 53% and year to date at 69%. We continue to work hard on our capital allocation discipline to ensure the best returns for our shareholders and we're continuing to see strong performances from our internal projects and our recent acquisitions.

That concludes my opening remarks, and I'll now hand the call over to Rick.

[Rick Pozzebon]

Thank you, Ian, and good morning. First off, I'll refer you to cautionary language regarding forward-looking information in our Q2 MD&A. Interfor’s second quarter was successful in many respects. Most notably, we continue to capitalize on our significantly increased scale and capabilities to produce and ship the most lumber in our history.

We further enhanced the competitive positioning of our sawmill portfolio, including ramping up our DeQuincy sawmill to two shifts and completing the full rebuild of our Eatonton sawmill. And we also extended our track record of generating the best returns on capital in our industry through our continued focus and operational excellence and disciplined capital allocation.

Our capital allocation in the quarter was balanced, and driven by our focus on maximizing shareholder value over the long-term. We continue to invest in significant capital upgrades to our sawmill portfolio in-line with our multi-year plans and repurchased over 1 million Interfor shares at an attractive valuation to complete our Normal Course Issuer Bid.

We continue to see significant value in the Interfor shares, and last week announced our intention to commence a substantial issuer bid to purchase up to $100 million of Interfor shares within a tender price range of $29 to $34 per share. Assuming successful completion of this bid at $29 per share, Interfor would have then bought back and canceled over 24% of its shares within the past two years. Over the same span, we've grown our lumber production capacity by over 60% and added significant diversification with our growth into Eastern Canada.

In terms of financial results, Interfor generated adjusted EBITDA of $429 million in the second quarter. These exceptional earnings include $116 million from our recently acquired Eastern Canadian operations, which is net of $17 million of non-recurring purchase accounting expense. Excluding this, total adjusted EBITDA would have been $446 million in the quarter.

Earnings benefited from selling a record 1.1 billion board feet of lumber and historically strong lumber prices, while general cost inflation continue to be a headwind. Cash flow from operations was $218 million with another $176 million generated from working capital reductions for a total of over $7 per share.

The working capital reduction was driven by the collection of trade receivables, improved lumber shipment rates, and seasonal reductions in log inventories. Our current lumber inventory level is now within our target range and we will continue to adapt our production rates to match demand if necessary going forward.

Regarding capital allocation in the quarter, we invested $65 million into capital projects and returned $33 million to shareholders through buybacks. We ended the quarter with our balance sheet and the net debt to invested capital position of 5%, which is at the lower bound of our target leverage range.

This leaves us with ample liquidity to continue pursuing our strategic plans, which includes spending in the range of $275 million to $300 million on capital improvements for the full-year 2022, which is up about $25 million over prior guidance. We'll also continue to be disciplined in looking for accretive lumber acquisition opportunities.

To wrap up, I'll highlight two points: First, our business is well-positioned, operationally and financially to succeed through ongoing market volatility. And second, our record setting financial results in Q2 have demonstrated the benefits of our strategic growth and portfolio optimization, including generating the best returns on capital in our sector.

That concludes my remarks. I'll now turn the call over to Bart.

[Bart Bender, Senior Vice President of Sales and Marketing]

Okay. Thank you, Rick, and good morning everyone. I'll provide an outlook on lumber markets through Q3 and into Q4. First, I'll start off with logistics. Our ability to service our customers has been challenging as equipment availability and labor continues to impact logistics capacity.

Overall, I'm pleased with how our team mitigated the situation and with the progress we made through Q2 and to Q3, our inventories have essentially normalized and the service levels from our carrier partners has improved. It's not perfect yet, but it's better in all of our operating regions.

With respect to end market inventories, our understanding is that levels are holding at below historical lows and should be considered minimal. In terms of the markets, much like we discussed last quarter, there continue to be some uncertainties that is pushing our customer base to be cautious in their procurement strategy.

Current demand levels remain quite good. The uncertainty [indiscernible] with what might be coming. Certainly, the overall fundamentals in the market continue to support medium-term solid demand for lumber, however, the impacts of affordability weigh on expectations. In particular, new home construction is facing affordability issues given house prices and interest rates that is impacting their ability to sell homes.

The demand for homes remains, so we expect this situation to be resolved over time. Accordingly, housing starts are starting to show the impacts of this. However, given the fact that completion rates are so much lower than starts, the impact on lumber demand is in our view more tied to completions.

Repairing the model is showing signs of strength. There was a period in Q2 where high lumber prices seem to slow demand. However, today, I can tell you, our sales through this segment of the market are encouraging. In the industrial and non-residential markets, they're essentially holding and continue to be steady.

Q2 marks our first full quarter with I-Joist as a part of our product offering. Our distributors continue to support our production levels, and I'm encouraged by the resilience of this product in the market, which is supported by high quality standards and excellent customer service. Overall, our outlook for the balance of the year is for less volatility in lumber prices at higher than historical levels.

So, with that, I'll stop there and pass it back over to you Ian.

[Ian Fillinger, President and Chief Executive Officer]

Okay. Thanks Bart and Rick. Operator, we're open to take questions from our analysts now.

[Operator]

Thank you. [Operator Instructions] Your first question comes from Sean Steuart, TD Securities. Sean, please go ahead. Sean, your line is open.

[Sean Steuart, TD Securities]

Sorry, guys. A couple of questions. Bart, I'll start with markets and you noted that your inventories at the mill level have normalized, you highlighted a sense that inventories at the buyer level are low. And I'm just hoping you can square that with the pressure we're seeing on prices right now, it feels like we're below cash costs for higher cost producers in BC at this point. How are you squaring good takeaway from repair and remodeling and what seems like tight inventories from your perspective with ongoing pressure on prices? Is this just a seasonal thing or is there more to it than that?

[Bart Bender, Senior Vice President of Sales and Marketing]

I think there's probably a bit more to it than that, Sean. When you think about the uncertainties that are ahead, people look at their inventories and they base what they feel is acceptable based on their consumption rates. And if they're expecting those consumption rates to fall, they'll adjust accordingly. And I really feel that that's part of this. And so people are prepared to take their average inventory levels lower in anticipation of a future decline.

And I think that a lot of the interest that we're getting from our customers is, you know they're particular on specification and they're very particular on shipment. Shipment is a big part of it. And that tells us that they don't have the inventories. They need the wood fairly quickly to meet the demand that they're continuing to see in the marketplace. And so, I think until those expectations – sorry those uncertainties are more known, we're just going to see a very cautious tone from our customer base.

[Sean Steuart, TD Securities]

Okay. Thanks for that detail. And a question for Ian and or Rick. I wanted to, sort of, wrap my head around the next leg of discretionary CapEx. This is obviously the busiest spending year. And I think the indication your slide deck is that CapEx should moderate in 2023. Can you give us a better idea of what the next round of CapEx looks like for the company, is it going to stay as focused in the U.S., so there is a more spread out? How should we think about that?

[Ian Fillinger, President and Chief Executive Officer]

Yes, Sean. Ian here. Thanks for the question. We have a great view of obviously our [South] [ph], Pacific Northwest and Washington and Oregon and BC mills. What we're working on pretty hard is the Eastern Canadian platform looking at what strategic projects and discretionary projects could look like over the coming years.

So, I think to be able to answer that with a bit more clarity is probably a few months away as we go through our normal course planning exercises on fiber and synergies, etcetera like that. So, we're, kind of November, January-ish, probably be able to provide better context on that, but I can tell you that there are several operations that are on our radar that we're working on currently with different levels of business cases and engineering and those type of things, but it's just a little early for us. But the guidance that's in the south that we've provided over the last year or so is still accurate and solid. And it's just the new platform that we've got in Eastern Canada that we're spending some time on now.

[Sean Steuart, TD Securities]

And the bumps to CapEx this year, that's strictly capital cost inflation for these types of projects or is there any pull forward of a project [division] [ph] for 2023?

[Ian Fillinger, President and Chief Executive Officer]

It's actually the first point you brought up is, accurate. The second would be that after acquiring the Eastern Canadian platform, there was some capital spending that we did pretty immediately and some of it’s been implemented and some of it will be implemented by the end of the year. So, I would say the majority of that is inflation and new projects that were identified over the last few months.

[Sean Steuart, TD Securities]

Okay. Thanks very much Ian. That's all I have for now. Thanks guys.

[Ian Fillinger, President and Chief Executive Officer]

Thanks, Sean.

[Operator]

Thank you. Your next question comes from Mark Wilde, BMO. Mark, please go ahead.

[Mark Wilde, BMO]

Thanks. Good morning, Ian, Rick, Bart. And Ian and all of the team, I really want to acknowledge I think did an excellent job of capital allocation over the last couple of years. We've really been in a very unusual environment, and I think you've actually, from a capital allocation standpoint, you've managed it very well. So, with that said, I wondered just if you could give us some sense of where you think cash cost is sitting right now in BC and how that will change over the next couple of quarters as we see stumpage costs going down?

[Ian Fillinger, President and Chief Executive Officer]

Yes. I don't know if we could share the exact number that we have in mind, but I think the several [points of view] [ph] are out there, but I don't know, Rick, if you have anything else to add? It definitely is that as you clearly identify Mark, it is to the benchmark now. BC see is the highest cost in these situations.

That's where we think the downtime will come, not necessarily with us, as you well know, our three operations in British Columbia are not in the same fiber basket as some of our competitors so we enjoy the ability to cut different species and stay off the [random length] [ph] price deck a fair amount with Adams Lake, Castlegar, and Grand Forks, but Rick, anything else to add on it?

[Rick Pozzebon]

I'd say, maybe it's important to look at where SPF prices have bottomed out recently in terms of what cash costs might do over the next couple of quarters. If you look at stumpage rates in the BC Interior there about $60 per cubic meter in Q2. They're going up to about $90 in the current quarter. And then in Q4, down to about $50 per cubic meter. So, that will drive some reduction in cost throughout the rest of this year.

[Mark Wilde, BMO]

Okay. All right. That's helpful, Rick. And then can you also just help us with, kind of what's going on with log cost for you in the Northwest and in the U.S. South? It does seem like in the South that we have finally hit an inflection point over the last probably 6 or 7 quarters, I'd just be curious about what you're seeing in terms of log pressure there and again down in the Northwest?

[Rick Pozzebon]

Yes. I mean, it’s different dynamics starting with the South Mark there. In our platform there, one thing we do enjoy in some of our areas is some proximity advantages between operations. So, when log costs tend to go up in the South, our opinion is largely it's through some upset conditions whether it's weather events, and that causes shortages at pulp mills or competing mills and then there's a short-term bid if you will or bidding more that goes up for a few weeks.

And so, where we have a cluster of mills, we're able to mitigate that, and so in some areas in the south, it's been pretty flat, and in some cases a little bit down. In other cases, it's gone up and when it does go up, we sense that it's not a fundamental shift. It's more of a situational or an upset condition that after a few weeks works itself out. So, I think we're in pretty good balance, and we just have puts and takes, but there's nothing material that's on our radar in the South.

Pacific Northwest is actually, I would say, balanced also. We actually saw a log cost decrease this past quarter in the Pacific Northwest, which was great to see. And we don't see any major swings up or down coming at us. And I think the log cost decrease was around 3% or something if I've got that right in the Pacific Northwest.

So, fairly imbalance, and I think the growth that we've done is both in the Pacific Northwest with [indiscernible]. If you look down the coast of Washington, Oregon or mills and the log circles and competition circles are very strategically lined up in the northwest and that's helping us from Port Angeles all the way down to [Philomath] [ph].

[Mark Wilde, BMO]

Okay. Turning to the sale of the prospective sale of the harvest rights, I'm sitting out here in suburb in New Jersey, is there any way you could help me to kind of frame perspective values when you sell harvest rights on the BC coast?

[Ian Fillinger, President and Chief Executive Officer]

Yes, I'll take a shot at this. I mean, if Rick or Bart have anything else to add, but the – I'm glad you actually asked this question, Mark. You obviously picked that up and that's great. So, just the back story is, Acorn was our last coastal manufacturing operation. And with that now off or out of our company, we're assessing a number of strategic alternatives for the coastal business, including potential asset in [tenures sales] [ph]. I would add that any dispositions are subject to working with First Nations and consent from the Government of B.C. and we've been advancing and have advanced talks with both of those stakeholders and it's going very positively.

From a timing perspective, we would think between 12 and 18 months for the process to unfold. And from a value, I think, to your questions, it’s a little bit hard for us to provide reliable guidance on this, but the disposition of the entire Coast [tenures] [ph] is about 1.6 million cubic meters and we would expect that to be significant and material. And then for context, our coastal assets, if I've got this right, the book value are at the end of Q2 around 94 million. So, we'll continue to work on this. We think there's great value for our shareholders and we'll obviously announce anything significant at the right time.

[Mark Wilde, BMO]

Okay. Last question for me, I mean, it's very impressive results coming out of Eastern Canada. I'm just curious if you could help us think about the contribution from that I-Joist business because, I mean, I-Joist prices the last six quarters have moved like I've never seen them move in my entire career. So, I'm just curious about sort of what type of what type of benefit you're garnering from that tightening in the I-Joist market?

[Ian Fillinger, President and Chief Executive Officer]

Pretty strong, Mark. I'll maybe leave it at that, but we're very pleased with the contribution from I-Joist plant. We control a lot of the input stock through MSR, great out turns from our internal operations in Ontario and Quebec, and we have an advantage, I believe, on that side of it, but we're very, very pleased with Sault Ste. Marie’s contribution.

[Mark Wilde, BMO]

Any way to quantify just overall like is it 10%, is it 20%, is it 30% of kind of the earnings stream right now Ian? I’m just looking for, kind of a rough order of magnitude?

[Ian Fillinger, President and Chief Executive Officer]

Yes, I'd be a little hesitant to share that in this form, Mark, but I can say that it's – we were very pleased with its contribution.

[Mark Wilde, BMO]

Okay. All right. We'll leave it at that. Thanks very much. I'll turn it over.

[Ian Fillinger, President and Chief Executive Officer]

Okay. Thank you, Mark.

[Operator]

Thank you. Your next question comes from Hamir Patel, CIBC Capital Markets. Hamir, please go ahead.

[Hamir Patel, CIBC Capital Markets]

Hi, good morning. Ian, there may be some pulp mills that come up for sale in Ontario. Just given some of the co-dependency you have in Eastern Canada is in of course starting to move beyond the lead with lumber approach to also potentially include pulp assets into the mix of potential targets?

[Ian Fillinger, President and Chief Executive Officer]

No, that's not our priority. The lead with lumber is still corridor company. When we do say that, businesses like say, the I-Joist that come with significant lumber volume we're very interested in, but we really are focused in on, you know growth in lumber. And having said that, I can say never say never, but we like to look at assets that come with significant lumber capacity. And if there's a side non-core business, we'll look at it and we'll have a plan for it one-way or the other, but yes, I would say Hamir that we were core to lumber.

[Hamir Patel, CIBC Capital Markets]

Fair enough. Thanks, Ian. That's helpful. And Rick, I just follow-up on the B.C. coastal logging operations, are you able to say how much EBITDA is associated with that business?

[Rick Pozzebon]

No, I think similar to the I-Joist, we don't disclose that level of information in here. It's a pretty steady business, I'll say.

[Hamir Patel, CIBC Capital Markets]

Okay. Fair enough. That's all I had. I'll turn it over.

[Operator]

Thank you. [Operator Instructions] Your next question comes from Paul Quinn, RBC Capital Markets. Paul, please go ahead.

[Paul Quinn, RBC Capital Markets]

Yes, thanks. Good morning, guys. Just a questioning the operating rates going forward, whether you expect any change or should we expect the U.S. South, which kind of ran, I guess, my number is 81% in Q2, should that increase to, kind of 90% over the next three to four quarters?

[Ian Fillinger, President and Chief Executive Officer]

Yes, I would think so. Paul, Ian here. As we continue to ramp up on DeQuincy and Eatonton, and there's several other projects, you know Paul that across the company that have had some minimal amounts of downtime for implementing capital and, you know Friday here and a Monday here and what have you, but a lot of those are coming to an end here in the next couple of quarters. Having said that, we're also planning future strategic capital for 2023, right now 2027, but I see the south as continuing to improve on the run rate there.

[Paul Quinn, RBC Capital Markets]

Okay. And then, I guess, B.C., you're running kind of the interior assets at around 80%, can expect that level to hold for a while?

[Ian Fillinger, President and Chief Executive Officer]

Yes. Well, I would think that we had a bit of downtime at Castlegar for the planer rebuild that we're doing, but that's coming to an end here in the next month or so. And then the other impacts have really been around managing our inventory levels in a falling market. So, we'll continue to monitor that. There may be some, but we don't see any material events happening in the Interior and British Columbia for us.

[Paul Quinn, RBC Capital Markets]

Okay. And then when I do the math on Eastern Canada, that's sort of the $116 million in EBITDA, it kind of [indiscernible] contribution per thousand, which is if I look at the rest of your operations, less Eastern Canada it’s is quite a bit higher. What's so special about Eastern Canada this quarter, and is it something that the [stand] [ph] was going forward?

[Ian Fillinger, President and Chief Executive Officer]

Yes. I mean, it's – as we went through the process, these are what we're expecting. And I would say that we see improvements in Eastern Canada that we're working on minor CapEx or non-CapEx improvements, whether that's in grade out turns or production. So, we do see actually improved performance coming from the operations in Eastern Canada.

We had downtime at Ear Falls as an example for several weeks from a road that washed out. I mean, highway that's now behind us. And there's been a few other weather-related upset conditions, but the teams have done a great job. They did have an outstanding quarter for Interfor. And as expected, when we did our due diligence, they're performing exactly how we expected them to.

[Bart Bender, Senior Vice President of Sales and Marketing]

And Paul, I'll just add the $116 million will include the I-Joist results, so much [indiscernible], something for that to get into your numbers?

[Paul Quinn, RBC Capital Markets]

Yes, it's still – even if I back out something for that, I mean, it still seems like it's above the average [indiscernible].

[Bart Bender, Senior Vice President of Sales and Marketing]

Yes. Another thing to look, it’s Bart here, another thing to consider for the East is the proximity of those assets to the markets. Very strategic locations to the GTA and also to the Great Lakes markets. So, I think that that also helps the top line of that equation.

[Paul Quinn, RBC Capital Markets]

All right. Great. Thanks. That's all I had. Best of luck.

[Operator]

Thank you. Your next question comes from Mark Wilde, BMO. Mark, please go ahead.

[Mark Wilde, BMO]

Yes. I just wanted to kind of follow-up a little bit, get some thoughts on capital allocation, particularly around the SIB.

[Ian Fillinger, President and Chief Executive Officer]

Sorry, Mark, you cut out there.

[Mark Wilde, BMO]

Yes. Ian, I just wondered if you'd like to share any more thoughts about capital allocation and the SIB?

[Ian Fillinger, President and Chief Executive Officer]

For sure, Mark. The SIB is a continuation of the balanced approach we've been taking over the last couple of years. As I mentioned in my remarks, we see continued value in our share price. And when we look at our balance sheet, our leverage range is, like I said at the lower end of our target range and we saw an opportunity to buy back shares in an attractive price and still remain with a very strong balance sheet at the end of it. That's really the summary of the thinking there.

[Mark Wilde, BMO]

Okay. And then Ian, I want to just finally, any thoughts, incremental thoughts since you picked up the Eastern Canadian assets, including the shares in GreenFirst, just about, sort of opportunities across the Eastern Canada. I mean, Eastern Canadian lumber business in my career has always been, sort of a core stepchild to much of the rest of the North American lumber industry?

[Ian Fillinger, President and Chief Executive Officer]

Yes. We actually don't see it that way at all. And I think that when you look at what's happening in British Columbia and in the other timber producing region in the South with heavy competition in greenfields being announced, etcetera, etcetera. Our strategy was to diversify and reduce risk. And we're very pleased with the governments of Quebec and Ontario, their approach to business, their support for our industry and their support for Interfor has been top shelf.

So, we see that as a very key component to Interfor, obviously today and going forward and we will continue to be as strong and competitive as we can in that region and spend the appropriate time and money to make sure that we're doing that.

[Mark Wilde, BMO]

And Ian, and just going forward, do you think that we should anticipate a different relationship between pricing on these regional lumber grades? Because it is striking that the curve has moved a lot over the last 10 or 15 years, species gone from being, kind of a low cost to high cost. You know, does this change the relative price of let's say, SPF lumber relative to, kind of southern lumber over time, just the fact that it's a more scarce resource and I think it's still preferred by many builders?

[Ian Fillinger, President and Chief Executive Officer]

Yes. Mark, I mean, I think that – I think you're on to something there. I mean, we've talked about that exact question. And when we look at the forecast for B.C. for the next 12 months to 10 years, in areas where our mills are not located in B.C., we think it could get a little rough. And that SPF premium that has been enjoyed traditionally, I think it's just going to continue to be there. And one of the key reasons for going to the East for us was to secure quite a bit more of that SPF preferred species for the foreseeable future. And so, we do see benefits of having SPF volume outside of British Columbia.

[Mark Wilde, BMO]

Okay. Sounds good. I’ll turn it over. Good luck in the second half of the year.

[Ian Fillinger, President and Chief Executive Officer]

Thanks Mark.

[Bart Bender, Senior Vice President of Sales and Marketing]

Thank you.

[Rick Pozzebon]

Thank you.

[Operator]

Thank you. There are no further questions at this time. I will now turn it back for closing remarks.

[Ian Fillinger, President and Chief Executive Officer]

Okay. Thank you, operator. Just in closing, we are focused on maintaining the health and safety and well-being of our employees. I hope you heard that we continue to drive cost reductions across our company. We are matching production rates and order files and continuing with our balance to approach the capital allocation. Thank you, everybody, for dialing in and participating in our call this morning and your interest in our company. If you have any further questions at all, please feel free to reach out to Rick, Bart or myself at any time. Thanks everyone. Have a great day.

[Operator]

Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.