Good day, and thank you for standing by. Welcome to the Badger Daylighting Ltd. 2021 first quarter results. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Pramod Bhatia of Badger Daylighting. Please go ahead.
Good morning. My name is Pramod Bhatia, VP of Strategic Planning and Investor Relations for Badger Daylighting. Welcome to Badger's first quarter 2021 earnings call. On the call this morning are Badger's Chief Executive Officer, Paul Vanderberg, and Darren Yaworsky, Badger's CFO. Badger's 2021 first quarter earnings release, MD&A, and financial statements were released after market close yesterday and are available on the Investor section of Badger's website and on SEDAR. We are required to note that some of the statements made today may contain forward-looking information. In fact, all statements made today which are not statement of historical fact are considered to be forward-looking statements. We make these forward-looking statements based on certain assumptions that we consider to be reasonable.
However, forward-looking statements are always subject to certain risks and uncertainties, and undue reliance should not be placed on them, as actual results may differ materially from those expressed or implied. For more information about material assumptions, risks, and uncertainties that may be relevant to such forward-looking statements, please refer to Badger's 2020 MD&A, along with the 2020 annual information form. Further, such statements speak only as of today's date, and Badger does not undertake to update any such forward-looking statements. I will now turn the call over to Paul Vanderberg. Paul?
Thanks, Pramod. Good morning, everyone. Before we get into the quarter, let's take a minute to talk about health and safety. We've managed very well through COVID, and we're really proud of our response, especially to focus on keeping our customers and employees safe. Badger's an essential services provider, and we continue to safely service our customers under any operating conditions we find. We're now looking past the pandemic and positioning the company for market recovery, and we continue to focus on maintaining safe working procedures for everyone. ESG is a critical success factor in the years ahead. Our ESG initiatives align well with our business and corporate strategy, and we're pleased to announce our inaugural ESG report is available on the company website in the Investor Relations section. Now let's get into the quarter.
As we discussed on our Q4 call, market activity in quarter one 2021 started off slowly due to extended holiday job site shutdowns in January and severe weather across many of our markets. In fact, almost all of our markets in February. Activity levels significantly improved during March, and as a result, the revenue run rate at the end of the quarter was up very much from the beginning of the quarter. We've seen an increase in bidding activity, and that indicates we should expect an increase in activity, and we're planning for it in the coming months. We're beginning to see the real benefits of the U.S. accelerated vaccination process as March U.S. revenues in U.S. dollar terms were higher than March of 2020 and were beginning to approach the pre-pandemic March 2019 revenue levels.
We continued to experience weakness in our energy-focused regions, specifically in Western Canada, during the quarter. This weakness, combined with February weather shutdowns and the polar vortex really impacted us all the way up through Northern Alberta, and the slower vaccine rollout that we've seen in Canada. That all contributed to a slower quarter in our Canadian business. We've continued to add operators, sales and support staff to get ready for the summer season and the overall market recovery from COVID that we're beginning to see. We're planning for a busy summer. We're seeing the early signs of U.S. market recovery, and our revenue run rate entering Q2 is again approaching, in the U.S., our 2019 pre-pandemic levels in a number of our markets. We continue to position for growth this year.
The other aspect of the severe Q1 winter weather was that we saw how it impacted a wide range of critical infrastructure. This to us really highlights the potential need for work on these facilities and system upgrades. This needed work, along with increased focus on upgrading and expanding America's infrastructure, that's a significant focus now with the economic recovery plan in the U.S., represents significant long-term opportunity for Badger and how we provide nondestructive excavation services to these end use markets. In addition, increased focus on sustainability in infrastructure is another positive trend. We think additional work will be required on the sustainability side for these facilities, especially in the energy segment. This also we expect to provide additional opportunity for nondestructive excavation.
As we've communicated in the past, there continues to be many markets in the U.S. where use of nondestructive excavation is still in its very early stages. As we discussed at our investor update in April, we continue to invest to strengthen our organization, improve our technology, and in key initiatives to position the company to service the opportunity we see coming. We're aligning our company structure with our operating model by changing our branding, our ticker, and legal entities. We talked about that last week in our investor update. The name Badger Infrastructure Solutions Limited, more accurately describes the work we do and our business opportunities as North America's leader in nondestructive excavation and related services. We provided an update on that, as I mentioned, last week. The background on that from last week's presentation is also available on our website.
Just a couple of comments on the fleet side of the operations. During the quarter, we built eight new hydrovacs and retired 20. We ended the quarter with 1,380 units, down 12 units since year-end. We currently expect and continue to expect to build between 20 and 30 units this year and retire 60-7 0. As we've communicated previously, we're focusing on driving fleet utilization. We have the new tools from our new ERP system, which gives us much better visibility into the fleet. In the near term, we remain focused on driving utilization with the intent to drive higher returns on investor capital. We will, of course, add new units when required. At the plant, we've kept a base level of production in order to retain key staff. This has worked out very well during the COVID downturn.
We have the ability to scale up production as required to respond to growth as market activity improves. We are confident in our ability to ramp up production when required. We took real advantage of the slowdown in 2020 to reconfigure our process flows in Red Deer and related parts storage and warehousing. As we previously communicated, our manufacturing capacity today is at least 350 units a year. This compares to our historical peak production of 220 units in 2014. For the foreseeable future, we're in good shape with our capacity at Red Deer to meet market demand. I'd like to turn things over to Darren to talk a little bit about our financial results.
Thanks, Paul. Good morning, everybody. Our revenue in the quarter was CAD 108.5 million, or approximately 83% of the first quarter of 2020, when normalized for FX. On an FX-adjusted basis, revenue in January, revenue levels experienced in 2020, and roughly 86% of the revenue levels experienced in 2019. April, revenue levels are notably higher than 2020 and approaching levels experienced in 2019. Our RPT in the quarter was approximately CAD 20,000 compared to CAD 25,000 in Q1 of 2020. Gross margin was 15.7%, or 650 basis points lower than prior year. Gross margin was impacted by slower activity levels due to COVID-19 and extreme weather events in the Southern U.S. as Paul previously mentioned. With the increasing volume in our business, we expect margins to return back to normal as we start to flex our operating leverage that Badger has historically proven over the summer construction season.
In late Q4 and into Q1, we began recruiting and training operators, sales, and operation staff to ensure our business is well-positioned going into the construction season and to take full advantage of what is expected to be a strong market recovery. We're a service business, and we view these additional costs as an important investment to ensure that Badger always has a truck and operator available when a customer requires one. The unpredictability of COVID-19 and extreme weather in the quarter presented short-term variability. Recent trends that are approaching more typical ramp-up volumes for the construction season seems to support our expenditure decisions. G&A expense was CAD 11.5 million, which includes approximately CAD 1.9 million in one-time costs related to our strategic initiatives to enhance our organizational design and management structure.
We continue to anticipate our G&A run rate for 2021 to be approximately CAD 40 million, excluding one-time costs related to these initiatives. Of course, we always review costs for additional efficiency opportunities. Adjusted EBITDA for the quarter was CAD 5.5 million, compared to CAD 18.1 million in the prior year. Adjusted EBITDA margin was 5.1% compared to 13.3%. Again, expenses and EBITDA margins reflect our investment in direct costs to position our expected market recovery and strategic initiatives to support long-term growth and shareholder value creation. Onto the balance sheet. Badger maintains a focus on ensuring the strength of its balance sheet and the financial flexibility. We have continued to make meaningful progress in accounts receivable and working capital management, collecting over CAD 28 million in receivables since Q4, further improving our DSO and overall liquidity of the company.
Finally, we had in excess of CAD 300 million in total liquidity through a combination of cash on hand and committed credit facilities as at the end of the quarter, and our debt-to-EBITDA ratio was 1.2 x, well within our financial covenants. We also renewed our CAD 100 million credit facility for an additional year, providing us a total of CAD 400 million in committed credit facilities. I'd like to now turn it back to Paul for some final comments. Paul?
Yep. Thanks, Darren. Just a couple of final comments before we open it up for the Q&A. We're very encouraged with the improved activity levels we've seen in March, and especially into Q2. We are continuing to anticipate a strong market recovery and a strong construction season for 2021. Our view of the significant U.S. and Canadian long-term opportunity for nondestructive excavation and Badger's growth prospects remains unchanged. Nothing we saw in the last year with COVID has changed our view on that. The increased focus on infrastructure in the U.S. and recent stimulus announcements and continued discussion about further infrastructure bills further supports demand for nondestructive excavation over the long term. We stand ready, and our business model is ideally positioned to help strengthen and maintain that infrastructure. We stand ready to supply our services.
The Badger-proven business model, operating scale and flexibility, our diversification of end use and geographic markets, combined with our strong operating track record across all stages of the economic cycle, and we've just come through a very interesting one, all support achieving Badger's long-term growth aspirations. Let's turn it back to the moderator for questions.
Ladies and gentlemen, to ask a question, you will need to press star one on your telephone. Again, as a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. First question, Maggie MacDougall from Stifel, your line is open.
Thanks. Morning.
Hi, Maggie.
Hi. I think we were all anticipating a soft Q1. I think the margin weakness is particularly surprising. I guess there's two questions that I have coming from this. The first would be, what level of activity are you currently staffed up for in terms of a recovery? Is it back to pre-pandemic levels or is it also in anticipation of growth? The second question I have is, your commentary highlighted improved activity. Wondering if we are, in fact, seeing a consistent recovery in all across the U.S. markets with regards to getting back to pre-pandemic levels. Thanks.
As far as our staffing levels for different levels of activity and comparing to pre-pandemic, we're still a little bit below the staffing levels we would've been at this time in 2019. We were actually just looking at that this week. However, we have more operators in the recruitment process, almost double the operators in the recruitment process in early May 2021 than we did at the same time in 2019. We're continuing to ramp up. The other part to your question is, what position are we in to service demand? We're very confident that we're going to have the operators, and will have the operators to service demand as the summer season rolls out. That's part of what the cost was in Q1, quite frankly, is we always want to have operators and trucks available.
The last thing we want to do is turn a customer away or say we can't get there until next week. That's part of what the cost was, you have to have those folks on board. The second part of your question on activity levels and were they consistent across our regions in Q1? We continue to see a range of activity. Our softest area right now, and from Q1 into Q2, would be Ontario. It's very much impacted by the COVID shutdowns. What we've seen is that especially the larger projects have just been delayed in starting this summer season because of COVID. It's quite a wait and see. Other than that, really that's probably the softest area.
Still a little softest in some of our oil and gas markets, but we anticipate that recovering as we get it through the breakup in Western Canada that's just getting started and into the summer season. Other than that, some of our older, more mature regions in the U.S. are the ones that actually are the most positive, versus not only this time last year, but also versus pre-pandemic levels in 2019. That bodes very well for a strong summer season for us.
As you go through the next couple of months, how should we be thinking about the cadence of margin improvement as activity increases in the U.S.? Especially considering that, I'm sitting in Toronto, and it doesn't feel like things are really opening up much at present. We're probably going to continue to have a weak Canadian market for a little while. Is this a situation where you're going to be able to trend back to a pre-pandemic margin through Q2 on a sort of like for like basis given the seasonality? Or is it a situation where we may be sort of waiting for that to happen for a while?
Yeah. I would expect that to happen just about everywhere as the summer plays out, Maggie, other than Ontario. You're better positioned to understand what's happening there. It's really going to be dependent on volume in Ontario. Ontario's about 10%-15% of the company. It's a bit of a drag. It is what it is. We'll manage through it just like we managed through the last 16 or 18 months. We're well- positioned in Ontario. Our cost structure is the best it's ever been in my time at Badger, we're very well- positioned there. I see improved volume driving improved operating leverage and improved margin. I am highly confident in Badger's operating leverage, it'll flex up just like it's flexed on the downside. Q1 was really an anomaly in my mind.
When you get a week or two wiped out with weather in February, and you lose a week or 10 days with just slow recovery because of COVID-19 from the holidays and a slow startup. You lose three weeks in a quarter, that's a tough one, especially when you're staffed up to service the customers, which is our business model. We manage through these things, and we're managing for this summer and the long term and beyond. I'm very confident in the margin ramp-up as volumes improve.
Okay, thanks.
Next question, we have Jonathan Lamers from BMO Capital.
Thanks. Maggie touched on the topics I wanted to cover. I'm curious, how did activity levels in Q1 compare to your internal expectations following the staffing increases you made in late 2020?
Yep. Well, that's a great question, Jonathan. Good morning. Actually, as far as our 2021 budget, we were behind in January and February and significantly ahead in March.
Thanks. Is the bulk of the increase in direct costs related to paying permanent staff? Is there any way to break out the portion that's related to recruitment that will kind of roll off next year?
That's a great question. Recruitment is there in Q1. It's always there in Q1. As I mentioned, we have double the activity going on with recruitment this year than we did the same time in 2019. That's there. The most significant factor is always that direct labor and the operators and you have to call people in. You have jobs canceled. You have that expense when you have people called in. In our union areas, there are minimum hours for call-outs, whether you work or not. If we call people in, you could pay people for a half a day or a day. That's always there when you have choppy demand in the short term. Also you want to make sure you keep operators there. You do maintenance on the trucks, you do things around the branches.
That's just good smart business to make sure the operators are there and they get some hours. Those are individual branch decisions, and we support that. Our local area managers have to run their business, and it's tough when you have the kind of choppy demand we saw in January and February. It's short term, it's transitory, and there's really nothing structural that's a concern of mine. As the volumes come, the operating leverage will kick in, and we'll see that margin. The Q1's behind us, and it is what it is. We're in a contracting business. We dig holes outside. When you get the big weather impact, everything shuts down in outside construction, and that's just the way it is, and you manage your way through it.
Paul, I believe you mentioned at the Investor Day last week that there's been no real change to the business model. Badger still believes in paying operators for hours worked and incentivizing local area managers based on local profit. It sounds like any shifts have been kind of just due to this abnormal period of disruption as you're rapidly rehiring.
No. In fact, I could almost make comments on our business model, not so much based on short-term transitory factors in Q1, but really the downturn we went through last year with the COVID-19 downturn. I think we all saw the ability to flex the business model very successfully in a long-term, protracted downturn. That to me, was the real test, Jonathan, and we were extremely successful in that. We didn't even know how it would work going into it, but we were really pleased with how the business model flexed. That's really a reflection of the operator pay structure, which is if they don't get called in, they don't get paid. Also, the majority of that direct labor is a variable cost, and that's a real strength of our business model.
You have challenges on the rebuild side, because ideally you'd love to keep all those operators, but the cost add up very dramatically. It's just unsustainable to keep operators on with a long-term downturn like we saw last year. We're paying a little bit of the price right now. When you look at the success we had last year and the margin and earnings generation and the cash flow generation in a very challenging time, that to me really speaks to the strength of the model. The second part of your question on our incentive plans. For everyone on the call, the area managers have a bonus pool, which is a percentage of pre-tax earnings after a capital charge. That really works, and it encourages them to manage everything from the top to the bottom of the income statement and also their capital employed.
It, to me, is a real strength, and it's part of Badger's secret sauce of an entrepreneurial leadership team. I wouldn't see that changing. It's a real plus for our business model.
Thanks. Two just quick follow-ups on this just to circle it up. In the annual information form, it lists the number of operators, and those were down 16% year-over-year as of December 31st. Are you able to tell us how much that was down at the end of Q1 and how much that's down at May? I know you said slightly.
Yeah. I'd have to refer to the quarterly numbers. Do we disclose those, Darren?
No, we don't.
No, we don't disclose those quarterly. I can say, as I mentioned a minute ago, that our operators that are in the recruitment process right now are about two times what they were at the same time pre-pandemic. It gives you a little bit of color on the build-back. It's twice what we would've had pre-pandemic, and pre-pandemic would've been a normal seasonal summer build. It's about a 2x factor on that.
Wow. Just a quick one on manufacturing. I would assume some of the direct costs are there to maintain truck assembly capacity. Does that have a material impact on gross margins? I know it's fairly small.
No, that would not be in gross margins at all. That would go into the cost of the Badgers. You'll see the cost per unit in Badger is higher than it has been historically, and that's just the allocation. We're really pleased with the decisions we took in that area, and our ability to ramp up, and we're starting to look at what's all required to ramp up. Our ability to ramp up is very robust. We're really pleased with the decisions we took there. No, none of that would go into margin, just into the cost of the Badgers.
Thanks for your comments.
Thanks, Jonathan.
Next question we have the line of Daryl Young with TD Securities.
Good morning, guys.
Hey, Daryl.
Badger's managed through a lot of volatility historically and been able to keep the margins slightly more stable, I would say. Obviously, COVID is a very unique situation for managing a business. Just trying to understand if there's been any changes to how your pay structure or your thinking of how quickly you let people go or bring them back, versus prior maybe oil and gas downturns that would really change how the margin profile is reacting to some of these changes in activity levels.
Yeah. Great question, Daryl. We don't really see anything in the business model that's different from past downturns. In fact, we were talking a couple of weeks ago that Q1 2021 has a lot of similarities to Q1 of 2017. For those that followed Badger in 2017, we were coming out of the 2015 and 2016 oil and gas downturn, and the market was basically looking for a bottom in Q1, and it pretty much bottomed during that quarter. We were doing a lot of the same things, which is trying to gauge the size of the market opportunity for the year and the recovery, and making sure also we had the operators in place. That was about the last time we had some similarities. It was much amplified this year versus 2017 because of the COVID-19 uncertainties.
Maggie had commented in that we talked about Ontario earlier, which is pretty unprecedented when you think about it, compared to normal economic or seasonal cycles. We don't really see anything different there. We're going to manage through all this. Highly confident we'll manage through it, and highly confident that as the volumes kick in, we'll see the margins recover and that operating leverage is very much intact in my mind, Daryl.
Okay, great. Then just one more follow-up question. When you look at the new go-to market strategy and how, I think you've mentioned it some of the investor days, how you're going to attack some of the major markets. Would you anticipate more cost to come ahead of revenue in those markets as you deploy that strategy? How should we think about the margin profile of entering some of these major markets under the new approach?
Yeah. Well, we've always had an organic growth model. What the market segmentation does is it really puts that on steroids, and it actually helps us focus better, so we can capture more of the market and actually achieve higher penetration than our historical smaller add-on type of branch locations strategy. We're basically doing the same thing. It's organic growth, but it's taking a very targeted and segmented approach. In these large metro markets, it's actually an acceleration of the entry and putting the infrastructure in place to go bigger in those markets. It's kind of a small, medium, large approach. Darren would say it in a more sophisticated way from a marketing strategy side. That's the way I think about it.
There are going to be costs ahead and built ahead, but it's really no different than our historical organic growth model where you add one truck and one operator and one area manager at a time. Historically, those costs have always had to be put in ahead. To the extent the costs are accelerated on the upfront side, we fully expect that the benefits will be accelerated due to larger size markets and improved penetration.
Okay, great. That's all for me. Thanks, guys.
Thanks, Daryl.
Next question, we have Maggie MacDougall with Stifel. Your line is open.
Morning. Just one follow-up question that I had. I'm wondering if you can quantify for us the impact of weather on the Q1 results in terms of revenue and EBITDA.
Yeah, I commented a little bit earlier. From my view, we probably lost about three working weeks across the network in the quarter.
Are you able to quantify it in terms of your financial results, or just that's the extent of what you're comfortable with providing?
Yeah, no. That's the way I look at it, Maggie. We haven't done the detailed analysis on it, but the revenue numbers are there. We basically lost about three working weeks because of weather and the slow startup from the holiday and the COVID shutdowns.
Okay. Thank you.
Thanks, Maggie.
Maggie, I think the way you could look at it is that Paul's comments impact top-line revenue but don't necessarily impact expenses.
Yeah.
If you extrapolate that out, that'll probably give you the answer you're looking for.
Right. I guess I'm just not clear if it's three working weeks relative to U.S. revenue, consolidated revenue. There's a bunch of different ways to sort of pull the numbers apart.
Yeah.
Perhaps I'll follow up offline.
Yeah. My comments were on a consolidated basis, Maggie.
Okay. Thank you.
Yeah. That's about what we saw.
Again, as a reminder, if you wish to ask a question, you will need to press star one on your telephone. Again, that's star one to ask a question. Our last question, we have Jeff Fetterly with Peters & Co.
Morning, everyone. Couple of random questions for you. Last year, Paul, you referenced pre-COVID in Q1 hiring or bringing on about 250 new operators. How did that number compare in the first quarter of 2021?
Very similar.
The 2x that you referenced earlier, from a magnitude standpoint, how would that compare to that 250?
Yeah. The 2x I referenced would've been 2019, early May of this year versus early May of 2019.
Should we be thinking about sort of the number of operators in your training program in that 250 range or higher or lower than that?
No. Operators in training would be in addition to that. This would just be in the various stages of recruiting and onboarding.
Okay. Sorry. The reference of the 2x, that's across the spectrum of people you're hiring.
In the hiring process. People in training would be in addition to that, yes.
Okay. The comment in the MD&A about pricing being stable across most markets, given that you and the overall market has excess capacity right now, how's that possible that pricing has been holding flat?
Yeah. Even through COVID-19, we've not seen a lot of what I would call price flurries. In the market, there's always local markets where you have an individual competitor or some competitive intensity, that's always been the case. I would expect that will always be the case, just because of local circumstances. Our comments are really based on broad trends across many markets, and we have just not seen broad trends in market pressure. There'll always be small markets and individual markets with what I call pricing flurries. Don't ever expect that to change.
With the recovery and demand and your outlook for the summer construction season, do you expect any change in pricing?
We don't have anything major that we're expecting at this stage, Jeff. Again, as we do new bids, we're obviously watching our costs very closely. The one we'll be watching in the coming months and through 2021 and into next year is the obvious one, which is going to be direct labor. That's something we've always had, and our organization is very tuned into that. That's about the only cost plus area that we're seeing will be significant. We'll have fuel, which is always the second biggest one. Of course, that's higher year-over-year. We've had good success and continue to have good processes in place on surcharge recoveries, which is pretty well accepted now in the market. I don't expect any significant margin deterioration there.
On a net pricing basis, things are holding relatively flat?
Yeah. That's been a very pleasant trend that's come out of the whole COVID thing and continues to be the case.
Okay. On the capital spending side on new builds, what do you need to see, either in outlook or broader markets, to get your build cadence back to at least equal to replacement of retirements?
Yep. Well, that's something we watch very closely on an ongoing basis. It's really going to be based on the market activity we see and the utilization that we're seeing. As we've communicated, we are pushing utilization, and with our new visibility from the ERP system and tracking it a lot more closely. We've moved a significant number of trucks around in the last nine months and into Q1. A little bit different than Badger's past pattern in a very positive way for shareholders and a return on invested capital. We will ramp up when we see the need, and we're well aware of our lead times at the plant and with our key components like chassis. We're very well- positioned to be able to ramp up when we see it coming. We've done it before. We do it every year seasonally.
If you go back to what we did during 2017, coming out of the last downturn, you can see how we responded there, and it worked out very well too. The model's well set up to go after it.
Is that something you envision for later this year? Or is it more likely to fall into the next construction season cycle in 2022?
That's a great question. We're looking at things very closely and on a weekly and monthly basis, staying in very close contact with our operating leaders. I'd love to be able to have a conversation that we're looking at increasing the build rate, but we're not at that stage with releasing our Q1 results. If I saw a bias over the next year and a half, it would be to the upside for sure.
Okay. Last question, Darren. Just a clarification on DSO. As you said, you saw some improvement on a sequential and year-over-year basis, but DSO in Q1 was still higher than that 80-day number that you've mentioned as a target. When do you expect or think you could be getting to that 80-day level?
We track this on a weekly basis. We're below 80 days in our latest reporting. Jeff, I just want to go back to the question on manufacturing build. One of the things that Paul has had us do is carry perhaps modestly higher key manufacturing component inventory, i.e. chassis. We can respond fairly quickly. We have probably around 50 chassis in inventory. That allows us to be able to respond very quickly to avoid any lead time issues from our chassis suppliers. To Paul's point, there's a longer view that we look at the RPT and the business volume, but we've also got the contingency benefit of carrying a little bit higher inventory.
Okay. Sorry, just to clarify on the DSO side. When we think about Q2, it's likely to be around that 80-day cadence is where you come in or targeting?
Yes. I think my objective is slightly below, but yeah, 80 days is probably a good modeling parameter.
Okay, perfect. That's what it covers.
Thanks, Jeff.
There are no further questions. I will now turn the call over to Paul Vanderberg.
Okay. Thanks, Brian. We appreciate everyone's participation this morning. On behalf of all of us at Badger, we want to thank our customers, employees, our suppliers, and obviously, and most importantly, our shareholders for all your ongoing support that drives our success. Brian, you can end the call. Thanks.
Ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.