Good morning, everyone. Welcome to Exchange Income Corporation's conference call to discuss the financial results for the three-month period ended June 30th, 2020. The corporation's results, including the MD&A and financial statements, were issued on August 12th, 2020, and are currently available via company's website or SEDAR. Before turning the call over to management, listeners are cautioned that today's presentation and the responses to questions may contain forward-looking statements with the meaning of the safe harbor provisions of Canadian provincial securities laws. Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements.
For additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements, please consult the MD&A for this quarter, the Risk Factors section of the annual information form, and the Exchange's other filings with Canadian securities regulators. Except as required by Canadian securities law, Exchange does not undertake to update any forward-looking statements. Such statements speak only as of the date made. Listeners are reminded that today's call is being recorded and broadcast live via the Internet for the benefit of individual shareholders, analysts, and other interested parties. I'd now like to turn the call over to the CEO of Exchange Income Corporation, Michael Pyle. Please go ahead, Mr. Pyle.
Thank you, operator, and good morning, everyone. Joining me this morning are Carmele Peter, EIC's President, Darryl Bergman, our CFO, and David White, our VP of Aviation. On our first quarter results call in May, we followed a unique format where we had several of our subsidiaries speak about the impact of COVID on their operations and what plans have been made to deal with it. This quarter marks the second report since the onset of the pandemic, and we will return to a more traditional format, which includes commentary from myself, our president, and our CFO. On the Q1 call and in our Q1 report, we laid out our plan to manage in the COVID environment. The plan included the safety of our customers, our employees, and all stakeholders. It also included adopting our service offerings to meet the changing needs of the public.
It included managing our cash resources through the challenging period to ensure we have the resources to take advantage of opportunities for long-term growth that are uncovered. Finally, we prepared for increased demand as the pandemic was better controlled in the future. The second quarter was less about planning and more about execution, putting the plans into actions, and we are very pleased with the progress that we have made. The majority of our revenue and earnings are driven by the aerospace and aviation segment. As such, there has been a tendency within the market to view EIC as similar to traditional North American air carriers, such as Air Canada or Delta. This comparison is fundamentally flawed, as even within the aerospace and aviation segment, our operations are very diverse. With medevac, freight, flight training, maritime surveillance, parts sales, and equipment leasing, in addition to the passenger business.
In addition to this diversity within the segment, we have our manufacturing businesses, which operate in other diverse marketplaces. The value of this diversification strategy has never been more apparent than during this quarter. The airline comparatives are dealing with ongoing passenger declines of over 80% and are describing their business in terms of how many millions of cash per day that is being lost. Our airlines experienced passenger declines of over 90% at the beginning of the pandemic, but the essential nature of the service we provide has seen volumes recover to 40%-60% of normal, depending on the geography of the operation. We expect these levels to recover quickly when travel restrictions are reduced or lifted. Our return to pre-COVID levels will be described in weeks or months, not years, when the pandemic is finally brought under control.
Our revenues decreased 25% year-over-year to CAD 244 million, and EBITDA fell by 29% to CAD 62 million. We remained profitable with adjusted net earnings of CAD 0.16 per share. When the pandemic began, we chose to maintain our dividend of CAD 0.19 per month to our shareholders, which made us an outlier in the aviation business, as most cut or canceled their dividend in its entirety. However, not only do we keep the dividend at previous levels, we committed to fund it and all sustaining capital investments from operations without increasing our debt levels. I'm pleased to report that we not only met that commitment, we have significantly exceeded it. Our payout ratio for the quarter was 78% on a free cash flow less maintenance capital expenditure basis, much stronger than the break-even 100% payout ratio commitment.
Tight management of both maintenance and growth initiatives, together with strong working capital management and a stronger Canadian dollar, have enabled us to reduce our secured debt net of cash by CAD 40 million. We paid our dividend, funded our capital investment, and paid down debt. Our focus, however, was not just on surviving the pandemic, but rather was focused on returning to expansion when the pandemic is under control. Subsequent to quarter-end, we announced the closing of Window Installation Systems, or WIS, a window glazier located on the West Coast of the United States. WIS has served as the installer of Quest Window Systems since it entered this market a decade ago. The acquisition of this company is very similar to the purchase of AWI in the fall of last year. AWI is the installer of Quest products on the eastern half of the United States.
These two transactions, in addition to being significantly accretive to our shareholders, are strategic as Quest, as in Canada, will now provide a single point of contact for all customers for both the design and purchase of windows and for their installation. Installation makes up a significant portion of the window budget, and by internalizing this function, Quest now benefits from the entire project on future contracts. Provincial Aerospace, together with its local partner, JetSupport, was selected as the best bid in the Netherlands Maritime Surveillance contract. The opportunity calls for two adapted Dash 8 aircraft, and the contract, when executed, will have a 10-year term together with two, one-year options. The contract is material financially and is expected to contribute immediately upon the planes going into service in late 2021. The award is also highly strategic as it's PAL's first major surveillance contract in Europe.
It increases PAL's profile in the surveillance community and extends the streak of new or expanded contracts for the company. Work on the two Dash 8 aircraft is expected to begin later this year when the aircraft earmarked for the enhanced Government of Canada fisheries contract are completed and put into service. I am pleased to report that as of today, the 20-day response period for this contract in the Netherlands has passed, and we will now proceed to negotiating the final terms of the contract with the government. The various components of our aerospace and aviation segment have fared quite differently during COVID, and I will speak briefly on each of them. Carmele will add a little color on the future in her closing remarks.
Our medevac business, both in Nunavut, where we are the sole provider of service, and in many provinces where we are one of several licensed operators, saw a significant decline in demand of approximately 1/3 early in the pandemic. Many medevacs are used to transport patients who are not healthy enough to fly on a scheduled flight to the south for medical diagnostic appointments. Early in the pandemic, all but the most urgent of these trips were postponed, and as such, demand declined significantly. Over ensuing months, the demand for service has returned to near pandemic levels. Our maritime surveillance contracts were largely unaffected by the pandemic.
While margins faced some pressures from the cost of safety initiatives put in place to protect our employees and to prevent workplace spread of the virus, small delays in the start of the fisheries contract and the ramp-up of fixed-wing search and rescue contracts have experienced, but they are a non-material issue. The Force Multiplier did not fly during the second quarter as governments focus on other pandemic issues. Prior to the pandemic, discussions were underway with a number of countries for deployments in the second quarter and beyond. Some of these discussions have been restarted and some shorter-term deployments have already been scheduled for the third and fourth quarters. Our freight business has been largely unaffected by the pandemic, and in fact, in some markets, it has led to an increase as the community members have remained at home and not traveled to southern centers to shop.
Some of this freight is delivered on combination aircraft with both passengers and freight on board. The dramatic decline in passenger revenue led to a reduction in frequency of service to northern communities, which in turn resulted in alternate freight delivery mechanisms being required. Pure freight aircraft have lower margins than combination flights, and this did put some pressure on margins in spite of the increased volumes. Recent increases in passenger loads, however, have facilitated increased frequency, which has now alleviated this concern. Moncton Flight College was closed for a period during the second quarter, as it was not considered an essential service by the provincial government. It is back in service, albeit at less than full capacity.
The demand for international student training remains strong, but there could be some dislocation later this year if international travel is not available to take graduates home or bring the new students here. Passenger volumes were very dramatically impacted by the pandemic, falling by 90% in early April. It was only the most essential travel being allowed in an attempt to keep the virus out of remote communities. As the pandemic has become under better control, volumes have increased, although not evenly across the country. We are now operating at 40%-60% of normal volumes. Travel restrictions and quarantine requirements remain in place in some markets. Nunavut, for example, requires a 14-day quarantine for anyone who is returning to the territory from a trip to the South. As these restrictions are lessened or removed, passenger volumes are expected to rise very quickly.
Regional One, our aftermarket parts and leasing company, has been the hardest hit of our subsidiaries. R1 specializes in regional jets and large turboprop aircraft, which are operated by carriers around the world. It is very well-publicized that airlines around the globe have dramatically reduced operations and are flying far less, which has a direct and immediate impact on the need for parts, engine, and aircraft sales, as well as leasing. We have begun to see an uptick late in the second quarter, but the resurgence of the number of cases in the United States has muted this short-term improvement. Carmele will come back to the outlook for Regional One in her comments, but material improvement in Regional One's results will not be seen until 2021 when regional jet volumes increase.
Our manufacturing sector was impacted by the virus as the process changes required to keep employees safe and prevent the spread of COVID-19 impacted margins. Demand was surprisingly strong across the segment, with the exception of our Alberta and BC operations, where demand was well below normal. These operations in the two westernmost provinces make them a very small part of EIC's total, less than 3%, and as such, the impact was small. LV Control, Ben Machine, and Stainless Fabrication all performed strongly through the quarter, and the outlook remains positive. Quest also performed well in the period but dealt with the most dislocation as the result of the pandemic. COVID-19 hit different parts of the continent at different times, and this resulted in construction job sites opening and closing at different times throughout the quarter.
We also dealt with production employees becoming ill with COVID through contact outside of our plants. Our first job was to reconfigure our production facilities to socially distance our employees to the greatest extent possible. This was simpler in Dallas because of the size of the new plant and much more challenging in Toronto, where we did not have the extra space to spread into. We actually chose to close the Toronto plant briefly on three separate occasions in order to ensure the safety of our team. Our order book remains robust, and we continue to be bullish on the short, medium, and long-term outlook for Quest, as evidenced by our recent acquisition of WIS. We expect there to be continued inefficiency from the adjustments to project schedules and COVID plant configuration in the near term, which will subside with the pandemic.
One last topic before I hand the call to Darryl for a more detailed look at the numbers. We have received approximately $29 million in CEWS payments from the federal government. We've utilized these funds to maintain employees who we either otherwise have had to lay off or terminate. It also enabled us to maintain a higher level of service in certain communities that wouldn't have been possible without the program. It enabled us to do a better job of looking after our people and our customers. I will now hand the call off to Darryl, who will walk you through the second quarter financials.
Thank you, Mike, and good morning, everyone. Within a quarter that was marred with the unprecedented challenges of having to deal with the continuing COVID-19 pandemic, the corporation, through the actions of management and staff across all our EIC companies, were able to maintain positive cash flow after capital requirements and payment of dividends and reduce net debt in the most challenging quarter the corporation has ever faced. This, in turn, is a testament that our distinct business model is sound, even in the most difficult times. The financial results for Q2 2020 that I will summarize here to follow were negatively impacted by the COVID-19 pandemic. I will caution that the comparability of current results with that of prior periods is materially impacted due to this unprecedented event. Conclusions taking into account any comparability should be made carefully given the current circumstances affecting results.
Before turning to the discussion on Q2 2020 financial results, I will lead with comments regarding the corporation's balance sheet and liquidity. To begin, it is noteworthy to reiterate that the size of our corporation's credit facility as at June 30th was approximately CAD 1.3 billion. In addition to that, the corporation can access another CAD 300 million in an accordion feature should we choose to exercise it. Utilization of the corporate credit facility was CAD 802 million at the end of the quarter. This is a reduction of approximately CAD 90 million from the quarter end of Q1 2020, which is comprised of a repayment of debt within the quarter and changes in foreign exchange on the U.S.-denominated debt.
With the lower long-term debt and CAD 66 million in cash on hand, net debt decreased by approximately CAD 40 million in the quarter to CAD 736 million, giving the corporation near-term access to CAD 564 million in liquidity, excluding the accordion. As Mike noted, tight management of both maintenance and growth initiatives, together with strong working capital management and a stronger Canadian dollar, have enabled us to reduce our net debt. In addition, it should be noted that the company has no long-term debt coming due before December 2022. At the end of Q2 2020, our leverage ratios remain well within our covenant with lenders.
Even with the current challenging environment, we are committed to the supporting principle of our business model, which has always been a strong focus on our balance sheet with modest leverage and good liquidity. Subsequent to the quarter end, the corporation amended its leverage ratio from a maximum of 4x- 5x for the fiscal quarters ending December 31st, 2020, through September 30th, 2021. The amendment was unanimously supported by our syndicate of lenders, reflecting a strong support for, and confidence in, the corporation. Given the corporation's opportunistic DNA, the increase in the covenant was solely intended to provide the corporation with flexibility under the credit facility to draw further capital in the future to take advantage of opportunities that meet our proven investment criteria as they present themselves.
Inclusive of the impact of all announcements to date, management continues to expect to be within the original four times covenant. Management has also not changed its attitude towards or appetite for debt. Further on our balance sheet, we ended Q2 2020 with working capital of CAD 339 million, which represents a current ratio of 2.28. This compares to working capital of CAD 308 million and a current ratio of 2.1 at the end of 2019.
I will turn to a summarized discussion on financial results. A more fulsome explanation of results can be found in our Q2 2020 MD&A. In Q2, we generated revenue of CAD 244 million, which is a decrease of CAD 82 million or 25% from Q2 2019. Aerospace and aviation segment revenue was down 41% from the comparative quarter in 2019 to CAD 140 million. Revenue from the Legacy Airlines and Provincial decreased by CAD 61 million.
Passenger volumes in the airlines were down as much as 90% early in the quarter, stemming from the reduced demand as a result of COVID-19. Passenger volumes gradually improved throughout the second quarter, operating at 40%-60% of normal volumes, with scale of improvement varied by geographic region, depending on travel restrictions and quarantine periods specific to the region. Cargo volumes remained strong after the onset of COVID-19. The strength can largely be attributed to the communities that we service continuing to need essential goods and supplies. Medevac and charter operations were also impacted by COVID-19 factors early in the quarter, but gradually normalized to pre-COVID-19 levels towards the end of the quarter.
The impact of COVID-19 on the aerospace segment was minimal due to the contractual nature of the work, except for the Force Multiplier aircraft, which was idle during the second quarter while governments globally were focused on the pandemic. For Regional One, revenue decreased in the quarter compared to the same period last year by CAD 39 million. Regional One's operations have greatly been impacted by COVID-19. Regional One's business is dependent on traditional regional air carriers, and lower travel throughout the world has put pressure on all of its lines of business, including parts sales, aircraft and engine sales, and lease revenues. The sales and service revenue stream decreased by 49% in the quarter compared to the same quarter last year.
The level of sales bottomed out at the beginning of the quarter, gradually improved throughout the quarter, and then stalled at the later stages of the quarter with a resurgence of the pandemic. Aircraft and engine sales were down significantly from prior period as the airline looked to defer large purchases. Lease revenue decreased by CAD 17 million or 71% in the current period due to a significant drop-off in customer demand and utilization of the Corporation's leased assets. Turning now to our manufacturing segment, revenue grew by CAD 17 million over the prior period. The total revenue for the segment was CAD 104 million. Quest was higher than the prior period, reflecting the acquisition of AWI in the fourth quarter of 2019, with no comparative in the prior period, and increased production at its Texas plant.
AWI has consistently outperformed our expectations since acquisition, including outperforming pre-COVID-19 forecasts during the second quarter of 2020. The balance of the segment collectively experienced an increase due to the acquisition of LV Control in the fourth quarter of 2019. It should be noted that all of EIC's subsidiaries within the manufacturing segment were deemed essential businesses at the onset of the COVID-19 pandemic and have continued to operate. That said, management measures were implemented to ensure the health and safety of staff because of the impacts of COVID-19 have reduced efficiency and throughput despite robust demand. Moving to EBITDA. Consolidated EBITDA was CAD 62 million, down 29% or CAD 25 million for the quarter compared to Q2 2019. The primary contributing factor to the decrease can be attributed to the impact of COVID-19 on both segments.
CAD 4 million of the reduction in EBITDA was caused by a pending reassessment of certain input tax claims that related to several years for which a charge was booked in the second quarter of 2020. While we have conservatively accounted for the reassessment in the quarter, the corporation does plan to pursue an appeal. EBITDA in the aerospace segment in the quarter was CAD 47 million, a decrease of 41% compared to the prior year. EBITDA generated by Legacy Airlines and Provincial decreased by CAD 11 million. The corporation quickly adapted its operations to mitigate the impacts of COVID-19 travel restrictions and implemented cost reduction measures through scheduled frequency reductions, labor rationalizations, and various reduction strategies, and qualified for the Canada Emergency Wage Subsidy program. EBITDA for Regional One decreased by CAD 21 million from the prior year.
Contributing to the lower comparable is the decrease in revenue across all lines of business, with the most significant being the CAD 17 million reduction in high margin lease revenue. In the manufacturing segment, EBITDA was CAD 22 million, an increase of CAD 6 million compared to the same quarter last year. The increase was driven by the same factors I noted for revenue. Margins in the manufacturing segment continued to be impacted by lower efficiencies from social distancing protocols implemented in the plants and higher costs from sanitization and personal protective equipment. Turning to earnings, in Q2 2020, the net earnings was CAD 3 million , a decrease of CAD 19 million compared to the prior period. The corporation generated lower EBITDA compared to the prior period, as previously discussed, and which mostly explains the earnings variance from the prior period.
Net earnings per share decreased from CAD 0.68 per share in the prior period to CAD 0.08 per share for the current period. It should also be noted that in the period, the weighted average number of shares increased 8% over the prior period, which has impacted the per share amounts in the current period. Adjusted net earnings was CAD 6 million, a decrease of CAD 21 million from the prior period. Adjusted net earnings per share was CAD 0.16 per share, down from CAD 0.83 for the prior period. In Q2 2020, free cash flow was CAD 42 million, or CAD 1.21 per share, a decrease of CAD 23 million from the prior quarter. The main reason for the decrease is the decrease in EBITDA. Free cash flow, less maintenance capital expenditures per share decreased by CAD 0.35 per share to CAD 0.73 per share in the quarter.
The corporation's payout ratios in the quarter were negatively impacted by COVID-19. The payout ratio for the quarter was 78%, which is much stronger than our 100% payout ratio commitment, and given that it occurred at the height of the pandemic lockdowns, management believes it is a testament to the resilience of our business model and our subsidiary operations. We were able to generate sufficient positive cash flow to fund our capital needs, our dividends, and pay down debt at the same time. To allow for variations due to seasonality in the business, we continue to utilize the calculation of payout ratios on a 12-month trailing basis. The free cash flow, less maintenance capital expenditure payout ratio on a 12-month trailing basis increased to 76% from 54%.
Before I pass the call on to Carmele, I would like to note that within the quarter, the corporation reviewed all available programs and government aid in each jurisdiction in which it operates. In addition to the CEWS, which Mike noted, in the quarter for the corporation also received modest support from the Government of Nunavut in the form of a revenue guarantee, which allows for the corporation to continue to provide a level of vital services to our Nunavut customers. The corporation chose not to participate in the Paycheck Protection Program in the United States. Without the subsidies and aid received, the corporation would have sought to offset a significant portion of the subsidies received by way of cost reductions through other means, such as significant reductions in workforce or, as it pertains to our airlines, in frequency of service.
The federal government has recently announced a new bilateral program with the provinces and territories to support air service into isolated communities. We expect EIC Airlines to qualify for this program, but no details have been released on how to qualify or if the relevant provinces will choose to participate. We look forward to the details of this program being announced. That concludes my review of our financial results and comments. I will now turn the call over to Carmele. Carmele?
Thanks, Darryl, good morning, everyone. I'm going to focus my comments on the outlook for the balance of the year for our various lines of business and EIC as a whole. Although no one can predict with any degree of certainty what the next chapter of the COVID-19 will bring, looking forward to the balance of 2020, we expect sequential quarterly improvements in our consolidated results, even as the CEWS subsidy is phased out. The level of recovery, however, will vary between business lines and geography. As Mike indicated, our scheduled passenger volumes are currently about 40%-60% of normal, as many of the communities we service still have travel restrictions and quarantine periods in place. As these restrictions are eased, passenger volumes will rebound quickly to historical levels as there is pent-up demand.
This demand is driven by the fact that the underlying reason for movement in and out of the communities is essential or near essential travel, like medical travel, movement of healthcare workers, tradespeople, and resource sector workers. The recovery we have seen to date, where we have rebounded from being 90% below normal in April, when travel restrictions were the most severe, to where we are now at about 40%-60% of normal, with only some of the communities opening up or easing restrictions, provides a sense of the speed of recovery we expect. The slowdown in passenger travel has meant an increase in demand for freight for the reasons Mike explained. This increased demand is expected to be sustained for the balance of the year, even as communities open up, although the mix of cargo will likely revert back to more historical norms.
During the height of the pandemic, almost all of the cargo we moved was essential goods like groceries and mail. As people start traveling out of their communities, there is likely to be some reduction in essential goods freight, but an increase in the movement of discretionary items and construction materials. Charter work is nearing normal levels and in some regions exceeding historical volumes assisted by the work we secured from Indigenous Services Canada to move healthcare workers into the north in all 10 provinces, and the resumption of various resource projects requiring movement of workers in and out of the camps. Similarly, our medevac business has returned to more historical levels as governments resume moving non-urgent medical patients who cannot travel for medical treatment on scheduled flights. We expect both of these trends to continue.
The aerospace division will continue to perform materially unaffected by COVID for the balance of 2020, and will be assisted by the resumption of operations of Force Multiplier after being idle in Q2, and the start of a new DFO contract towards the end of the year. The resiliency of the aerospace sector is perhaps most evident from the fact that the Netherlands surveillance contract tendering process was completed. PAL Aerospace together with its partner, Jet Support Holdings, were selected as the successful bidder, and a contract will all be concluded in the middle of a pandemic. This contract solidifies PAL Aerospace as a leader in international ISR solutions and builds on expertise and operations in Canada, the Caribbean, the UAE, and now in the European aerospace market.
Regional One is the subsidiary that has been hit the hardest and will be the slowest to recover as it is dependent on the improvement of traditional regional carriers. The regional jet market is expected to return to service sooner than larger body aircraft. For mainline carriers trying to restore their networks in the wake of a pandemic, passenger volumes will be very low to begin with. To minimize those losses during low demand, mainline carriers will look to utilize regional aircraft. The role of regional aircraft in recovery of the airline industry will create increased demand in regional aircraft parts and engines as customers look for economic parts solutions and ways to avoid expensive shop visits. Regional One is well-positioned to be that solutions provider. With the recent resurgence of new COVID cases throughout the world, the commencement of the recovery of the regional jet industry has stalled.
We anticipate a measured recovery for the balance of 2020 with no material improvements until 2021. However, with challenge comes opportunity. Regional One's data-driven knowledge and discipline has always enabled it to acquire assets that are in the money, such that the end of asset value is greater than the acquisition value. However, the environment created by COVID-19 provides even greater opportunities to access assets at favorable values. The lower acquisition prices enhance potential returns, provide a greater cushion of time and flexibility to monetize the assets, and create new opportunities for Regional One's customers to step up into aircraft that they could not previously afford. These investment opportunities will drive future growth. We expect demand overall in our manufacturing segment to remain strong, but with continued reduced demands and some project deferrals due to the impact of COVID.
Our manufacturers have settled into the new norm of operating in a COVID environment and are focused on finding different ways to mitigate the impacts of the virus. This has included, for example, overhauling shift structures to retain social distancing, but increase overall production hours. The recent acquisition of WIS together with the purchase of AWI late in 2019 now vertically integrates Quest in all of its markets and provides a strong foundation for further growth. Turning now to our CapEx outlook. Our maintenance CapEx is primarily driven by our aerospace and aviation segment and moves in line with our scope of operations. As flight hours decrease, as they did in Q2, so did our maintenance CapEx. This level of maintenance CapEx is expected to gradually increase over the balance of the year as our flight hours increase.
Material growth capital expenditures for the balance of 2020 are comprised of completion of a DFO aircraft, which will be operational by the end of the year, and the acquisition and the start of the Can't say that word, Missionization of the two Dash 8 aircraft required for the start of the Netherlands Coastguard contract, which are required to be completed in about 17 months. No other material growth CapEx is expected. However, we will take advantage of opportunities if they arise. Although there is much uncertainty in the world, a constant has been our business model and our execution of it. Our business model has been developed to achieve three objectives, which we have set out in each and every MD&A since our inception.
Since the best predictor of the future is the past, I thought it useful to conclude this outlook section by seeing how we fared in achieving our objectives in the most difficult time, and how this bodes for the future of EIC. EIC's first objective is to provide shareholders with stable and growing dividends. Q2 was undoubtedly the most challenging quarter in our history, yet we were able to generate free cash flow from our operations and manage our working capital to not only pay all of our capital expenditures, our dividends, but also pay down our debt by more than CAD 10 million. We are just getting stronger, as is our confidence in our ability to continue paying the dividend. Our second objective is to maximize shareholder value through ongoing active monitoring of and investment in our operating subsidiaries. What did we do in the midst of a pandemic?
We secured a new long-term maritime surveillance contract in the Netherlands. We invested in Q400 aircraft to meet the growing demand of a customer. We modified two Dash 8 aircraft to increase cargo capacity, just to name a few examples. The strength of our balance sheet allows us to not simply focus on cost-cutting to manage through the pandemic. It allows us to capture opportunities to add shareholder value and come out of this crisis well-positioned for growth. We will continue to invest in our company to create shareholder value. For example, we are assessing the void left by other air carriers, the opportunities to access new revenue streams with larger gauge turboprop aircraft, and investigating providing alternative service delivery models in the aerospace sector as governments look to outsource services to lower costs and reduce debt.
The third objective is to continue to acquire additional businesses or interests therein to expand and diversify EIC's investment. We have done exactly that, as is evidenced by our acquisition of WIS at the end of July, and the pandemic will not stop us from pursuing additional acquisitions, whether that be standalone businesses, tuck-ins, or asset purchase opportunities at Regional One. What can you expect in the future? More of the same. Continued tenacity in the execution of our business model and achievement of our objectives. Finally, before moving on to questions, I want to thank all customers, shareholders, and stakeholders for their ongoing support and all the people who put themselves at risk to look after the rest of us. We would now like to open the call for questions. Operator?
Thank you we will now conduct the question and answer question session. If you do have a question please press the star followed by the number on your touch tone phone. You will hear a tone acknowledging your request. [audio distortion] Please ensure you lift a hands up if you are using a speaker phone before pressing any keys. First question comes from Chris Murray with ATB Capital Markets.
Thank you. Good morning, folks.
Good morning, Chris.
Good morning. Maybe turning back to the Government of Canada support announcement for remote communities. As part of that announcement, they also put out, I guess, what they call a background document. Just sort of connecting the dots, it really does look to impact a lot of your operations in Manitoba, Ontario, and Newfoundland. I also get the impression that the Nunavut program that you've been running or participating in is maybe tied to this somehow. Can you give us some more color on what you think that they're proposing? Is this intended to be, call it a direct subsidy, or is it more to treat the service as a utility and just kind of give you a minimum guaranteed return?
I think, first of all, I got to admit that we haven't seen the precise details. This is from discussions we've had over the last three or four months till this was put in place. The concept is that they understand that we can't stop flying into certain communities because it's an essential service, and they know that you can only lose money for so long flying to those communities. The idea is to provide some revenue effective guarantees to make sure that you can afford to continue to provide the service. The plan we had with Nunavut was similar to that in the past.
That program expired at the end of the quarter, where they made sure that if we met a certain schedule, they would buy a certain number of tickets. We did get some modest support of about $2 million or $3 million out of that program. We expect that the new program will be similar. The challenge is going to be that it's meant as a bilateral program with each province. They've got to lay down these parameters with the province. We have to negotiate with each province. While we're very excited to see this, we view this as we're just kind of getting started. We got to talk to the governments, how it's going to work. I think it'll be very important should we face a second wave and we see a decline in volumes again. Having this as a backstop will be very valuable.
Hopefully, if we don't see that, we'll outgrow this program very quickly because volumes will be such that we won't require it.
All right. The activity level would apply essentially in a lot of ways, it's almost like you're running a CPA on behalf of them because you'd probably be indifferent to passengers or cargo. It's just maintain the support to the communities is the way to think about it?
Yeah, exactly. As much as a pound of passenger is about the same as a pound of freight, the beauty of the passenger is they go south and north, whereas freight largely goes just south to north, and the planes aren't as full. The more active the passenger business is, the more efficient the business is.
Fair enough. My other question is just on the quarterly cash flow. You made the comment about you were able to manage your working capital and cash flows in such a way that you're able to fund the dividend and your maintenance capital expenditures. I guess a couple questions about that. First of all, you received the CEWS payment in the quarter. Just any thoughts around what that might do to Q3? As well certain companies have been telling us that they've received other benefits, tax deferrals, things like that. I guess just trying to think about the rest of the year, how should we be thinking about, call it an unusual quarter of levers pulled to manage working capital and how that might unwind through the back half of the year?
Well, I think if we start with working capital, as the business grows, we'll undoubtedly have a growth in receivables because we're doing more business. I wouldn't expect to see any more funds generated from declines in working capital, but we will stay on top of that to make sure that the build in working capital, to the extent there is one, is at a bare minimum. As it relates to other support, we really haven't taken advantage of any deferrals. We've paid those bills sort of as they're due. We have taken advantage of the CEWS program. It helped us maintain more employees than we otherwise could have. They're skilled employees that you don't want to lose, and it's helped us not do that. We certainly expect to see that phase out over this quarter, or certainly phase down dramatically.
The growth in the business is expected to more than offset that, and we're expecting sequential improvement. We're bullish on that. I think the final thing I'd like to point out is there were other programs we had the option of tapping into, the most obvious one being the PPP program in the U.S. We qualified based on the pure rules of the program. We chose not to access it because the program was intended to support businesses that might not have been able to get through the period without the support. That was never the case with us, and we thought it was disingenuous to draw those funds, and as a result, we chose not to. As we exit this, the wage support program is the only sort of EIC program, size program, material EIC.
The relationship with the Government of Nunavut has been awesome. They've been a great partner. That's a big part of how Calm Air's been able to do what they do. At an EIC level, that's a very modest size program.
Okay. Just to follow up, so just so if I understand correctly. The staffing levels that you maintained in Q2, which were offset by the CEWS program, your expectation is the activity levels in Q3 will probably be able to absorb all that staffing in kind of in a normal fashion, is a way to think about it then?
That'll be the shortest answer of the day. Yes.
Okay. All right. Thanks, folks. Stay safe.
Thanks, Chris.
Next question comes from Cameron Doerksen with National Bank Financial.
Morning, Cameron.
Morning. I guess maybe a question on the restrictions that are still preventing a fair amount of the ramp-up in flying activity. Do you have any sense of when some of these things are going to be eased, like in Nunavut, for instance? I guess there's even individual communities in Manitoba, for instance, that have restricted access. What's your sense on when some of these things are going to start to ease up?
Discussions with the Government of Nunavut are ongoing. We believe they're going to go to a model in the near future, so that's weeks to a short number of months, where they will test when people return to the community. Then they'll quarantine within the community as opposed to quarantining in the south, which will have a dramatic impact on the number of people flying. It depends on what happens with the number of cases, the government intends to move forward with that, our understanding is, over the next 60 days kind of thing. Again, I'm speaking on behalf of somebody else, there's always a huge risk in doing that. In terms of Manitoba, same with Ontario, it's highly variable based on the community's experiences in the past.
Northwestern Ontario, as an example, experienced a very difficult time with the SARS outbreak a decade ago. As a result, the restrictions in Northwestern Ontario would be far higher than they are in Manitoba. So one's at the high end of that range, one's at the low end. Having said that, as governments have come to grips with the fact that this is going to be about managing COVID, not eliminating it, I think you're going to see programs to travel more simply because the medical needs that those people are traveling for, whether it's to go see the orthopedic surgeon about their hip or go see the cardiologist or go see the kidney doctor, those aren't going away. You can only defer those for a period of time. So we expect that those volumes will continue to rise over the third quarter.
They likely plateau somewhat less than 100% of normal because some of the pure discretionary stuff may not come back till the very end. Things like fishing lodges and those kinds of things may not return until next year on some of that. We anticipate continued growth in those passenger loads sort of on a progressive basis over the ensuing period with the big asterisk that if something else happens with COVID, it could change.
Okay. No, that's helpful. Just my second question relates to Regional One and specifically on the aircraft leasing revenue. I mean, obviously down significantly year-over-year. I'm just wondering how you're accounting for that. It looks to me like if you've got an airline that's leasing one of your aircraft from Regional One, that if they're not paying you're not recording that as revenue. Have I got that right, or are you actually building some receivables in there somewhere from deferred payments or anything like that?
The short answer is no, we are not. We are only recording revenue that we expect to receive. In fact, our receivables, if I were to look over Q1 and Q2, I'd say 2/3 of those have already been collected, just to give you a sense of how we're dealing with this. Anything that's deferred does not get recorded.
Okay. That's helpful. Maybe just quickly, a third question, just on the, I guess, the manufacturing margin in the quarter. Obviously there was, I guess, some benefit from government subsidies in there. I'm just wondering what kind of a more normalized margin or sustainable margin might look like as you've acquired some business this year that I think are, in the last six months or so, that are probably positively contributing to margin. Just any commentary around sort of the go-forward manufacturing margin would be helpful.
Product mix is a huge part of that issue. When you look at our manufacturing stuff, where we make things in factories, whether it's at Ben Machine or Quest or at Stainless Fabrication, those tend to be higher margins. Some of the stuff we do in the field where we're doing service work, WesTower, for example, would be lower margins. Product mix is a large driver of this. The things we've bought recently would tend to be towards the higher end of the margin structure, whether it be the glaziers or electrical distribution controls. You're right. To the extent there is a benefit to the bottom line of the CEWS would be in the manufacturing, because the demand remains strong for those, and we did have some benefit of CEWS in there. That helped the margin profile in manufacturing in the quarter.
We would expect, from a big picture point of view, that as things stabilize, we would see an improvement in margins over time from margins from operations simply because the amount of work that went into keeping our people safe, shutting down plants, COVID-proofing, for a lack of a better term, is significant. I don't want to give anybody the misinformation that that's somehow changing. That's exactly where we're staying. We put a lot of effort to get to where we are. In the future, as we get this nasty pandemic under control, we'll be able to see some improvements in margins as we put more people into our factories. That's not expected in the near future, however.
In the second quarter, we did experience what I'll call some ebbing and flowing, in particular at Quest, as we had some of those job sites shutting down because of COVID, and they'd reopen, and they'd shut down again. That was obviously challenging. In the comments I made, one of the points was that we're settled into how we need to operate our manufacturing factories. As such, our focus now is actually on improving efficiency. This is the new norm, but how do we get better? We're starting to see some changes that are driving some increased efficiencies for us.
Okay. That's great. Thanks very much.
Next question comes from Steve Hansen with Raymond James.
Morning, Steve.
Just a couple from me. Mike, you referenced the opportunity set, the near term, medium, and long for Quest in your remarks. I'm just wondering if you could speak to the near-term demand profile as you see it right now. Just trying to get a sense of how much dislocation might still be out there. There have been a number of public companies report in the U.S. recently on the building product side, not perfect comps, admittedly, but they all seem to have very strong rebound built into their profiles and even through the quarter. Just trying to get a sense for how that business is performing today relative to norm and sort of what you're seeing here through the balance of the year.
In the near term, our biggest challenge is simply just changes in the timing of certain projects that have been delayed or not delayed and making sure we can get those delivered on time. It's really just shifting of capacity. We were booked to a very high level of capacity before this happened, and so just keeping up is the challenge. In the medium term, our order book's strong. The completion of new projects, there's delays in terms of the final award of some of those. You may see pockets in the next couple years.
As projects push out, they're seeing a bit of what is a little more challenging as we look into medium term is the ability to pull in new work, which was an easier task a year ago. As we saw smooth production previously, to the extent something gets pushed, it's harder to fill. You might, in the medium term, see a little bit of some pockets of us not having the throughput that we've had in the past. The demand long term, very strong. We're still definitely quoting a lot. We don't see any reduction in that regard. Still fairly optimistic in this space.
I think the long-term part of it, Steve, is driven quite simply by densification of markets. We've seen this through dislocation before in 2008, 2009. There wasn't a hiccup in Toronto, as an example, in terms of our building. The simple fact is that people want to live in major centers. It's too expensive to build low-level housing, so it's high-rise buildings, which are our strength. We're very bullish. I don't think there's any greater evidence of that than investing $40 million+ U.S. in the purchase of WIS.
That's a good segue, Mike. Just wanted to ask about the capability profile there now. You've got AWI previously, and now you've got WIS. Is that done? Do you have the complement that you need now as a service profile for the U.S., or do you need additional capabilities on the service side over time?
No, that covers everything off. In Canada, we always looked after our own installation. In the U.S., we use these two third-party companies. The beauty of this is, as we expand into new cities, you'll recall we're in a relatively limited number of markets with Quest, the Western Seaboard and a little bit in the Northeast. As we move into the Dallas' and Houstons and Miamis of the world, our window installers will move with us. Our experts from AWI and WIS will continue. As we move into those markets, we'll no longer have just the procurement part of the project, but we'll have the installation part of the project, so each project will be worth more money.
Okay, very helpful, guys. I'll jump back in the queue. Thanks.
Thanks.
Next question comes from Mona Nazir with Laurentian Bank.
Morning, Mona.
Good morning. How are you?
It's a good day.
Good. Congratulations on the quarter.
Thank you.
My first question is just maybe another way of asking the prior line of questioning, and that would be, what would reasonable expectations be if I'm thinking about you guys receiving aid in Q3 and Q4, specifically in regard to the Canada Emergency Wage Subsidy? I understand that you're expecting and already seeing a pickup in demand, which would ultimately reduce that. Is the figure perhaps CAD 5 million or CAD 10 million versus CAD 29 million in Q2? I'm just trying to get my head around that. Thank you.
The calculation for CEWS is such advanced math. We're still running different models on exactly how to qualify, because you could claim it on an individual company basis, and you could claim it on a consolidated basis, and you can claim it under the old program and the new program. I think it's safe to assume you'll see a decline in the range of half. My controller is glaring at me right now for giving a number, because it's really hard to determine exactly how it's going to work with the rules and where the numbers shake out. There will be a material decline into the Q3, and what's left in Q4 will be quite small.
Okay.
By the time it gets to Q4, the amount is not material.
No, that's very helpful. That's great. Exactly what I was looking for. Secondly, just in regard to the recent acquisition of the window installation company. In the press release, you provided the purchase price, but I was just wondering if you could give revenue, EBITDA contribution, or what we could expect. I understand the vertical integration and complementary nature of the acquisition versus Quest and AWI, but just wondering if you'd talk to me about your thought process of why purchase now, especially when you are looking to rein in spending.
Okay. No, I'm not telling you EBITDA. I will tell you that when we released AWI, we told you those transactions were accretive on a pure equity basis. This transaction would be no different. It's at the very low end of the multiples we pay because of the symbiotic nature of the two businesses. We're the natural buyer. You can work backwards off that and get a pretty good estimate. The other thing we said when we bought AWI, which isn't much different here, the backlog of about three years pay us for the majority of the company. Those are two nudges in the right direction. In terms of why now, we were way down the road with this before COVID.
When COVID hit, we literally paused because we were so busy trying to juggle the balls of this job is closed, this job is open, hurry up and catch up on this job, or slow down on this job. As we got that under control, we did a little third-party due diligence to confirm what they thought the market would look like in months and years to come, and it was directly in line with our thoughts. Because we knew the people, because we had negotiated a deal largely going into COVID, and because we could do the due diligence because we knew that we knew the owner book, there was no reason to not take advantage of the profitability of the projects and not close the deal now. It strengthens Quest.
It's a very unique deal, Mona, in that it's highly accretive from a financial point of view, but it's also highly strategic in terms of allowing us to grow in the future, internalize processes, and quite frankly, make it easier for our customers. They now have a single point of contact. If the windows aren't installed on the right time, there's no debate about whether or not the installer's late or the production was late. It's our fault no matter what it is. It makes it easier for the customer, easier for us, and makes it easier to pay the dividend with the returns.
It also showcases the EIC business model quite well, in my view. There's a couple different ways you can deal with it in a pandemic. You can put your head down, focus on cost, and use that as your sole tool to manage through it. That's not our view. We have a balance sheet that's strong, that enables us to seize opportunities. For the reasons Mike stated, we felt confident we were able to do due diligence on this deal, and we knew it would be very accretive. It was an opportunity that we took advantage of. If other opportunities like that arise, we will continue to take advantage of those opportunities, because that will continue to propel our growth going forward.
That's great. I want to be cognizant of the time, but if you could just share perhaps the biggest takeaway or most significant surprise while working through this pandemic.
Everyone might have different answers here, but I'll go first. To me, it's our people, without a doubt. How they've stepped up, how they've effectively almost done the impossible in managing operations and putting themselves on front lines, given the nature of all the things that we do and products we make. It was coming up with ideas to be able to take care of needs that we had as a society, whether that's the manufacture of face shields or IV poles. Everyone stepped up. We acted as a big family, and we got through this successfully, as these quarterly results show, and we contributed to trying to minimize the impacts of the pandemic.
Yeah, I have to agree with Carmele. I think the biggest sense of pride takeaway is the cross-collaboration within the organization as well, and just that overall effect of a family and making sure that as an overall company, our health is strong going forward.
That's great. Thank you.
Next question comes from Konark Gupta with Scotiabank.
Hi, this is Konark Gupta.
Hi.
Good morning. I would like to know at what level of capacity or load factor do the Legacy Airlines break even on cash flow in the current fuel price environment?
That's an impossible question to answer because we were profitable in the airlines in the last quarter with the very low load levels because of the diversity of our product, with the medevacs and the charters and the other things we do. On a pure schedule basis, we're profitable now with the load factors we have in aggregate. In certain markets, we are significantly losing money where the load factors are. It's not as simple as saying at 48% of capacity, we make money because some have more freight than others. Our business is too different to simplify it in that way. As load factors climb over 50%, we start to getting closer to making money on a pure schedule basis. We make money in aggregate now because of our diversity.
Okay, thank you. I do have another question. What do you expect cash flow before working capital and growth CapEx to be for the next two quarters?
We don't provide specific guidance like that. We have said sequentially we expect results to improve in the third quarter, increases in EBITDA with maintenance CapEx remaining modest by historical standards. Carmele outlined the growth CapEx profile being essentially limited to the two aerospace projects. We expect continued improvement in that. To look to Q4 is difficult with COVID. It changes so fast. All things being equal, we'd expect continued improvement.
Thank you. I don't have any questions.
Next question comes from Scott Thompson with CIBC.
Hi, folks. Just a couple questions on Regional One. I guess it's three questions in one part. Can you give some color on the current operating situations at their carrier customers, particularly SkyWest? Do you anticipate any changes to the partnership? As well, what strategy changes and cost measures can you take should COVID-19 continue to hit those regional airline customers?
Okay. With SkyWest, we maintain a strong partnership. The conversion of 700 to 550 has been slowed by this. The main airlines, underlying airlines, we're looking to that strategy, are still looking to that strategy. The implementation of it may be slowed, but the ultimate deployment of those aircraft, I don't believe is in jeopardy. SkyWest, like all carriers, is reducing its fleet, and that has some impact on some of the older aircraft we have with them, but it's not a material issue. In terms of the strategies we could deploy, the beauty of the Regional One model is as sales slow, the amount of capital that needs to go into it declines dramatically because we have the assets available there. It generated positive cash flow in the quarter, even though the regional airlines were very slow.
We fully anticipate that there's going to be a supply and demand imbalance over the next couple of quarters in terms of people trying to liquidate assets because of financial difficulty. We look forward to that because we understand the value of those assets better than anybody else. When we can buy them at prices that are advantageous, we will do that. We had a small deal where we bought some Q400s at a price that was materially less than we would have paid six months ago. We've already found homes for a significant portion of the planes we're purchasing. Regional One is going to go through a period where it's small. There's absolutely no question about that. There's also regional carriers are not going away.
There may be insolvencies in the business, if you're going to fly from Cincinnati to Cleveland, you're still going to do it on a regional jet. If you're going to go from Toronto to Montreal, you're still going to do it on a regional jet or a turboprop. As those recover, so will that business, and it will recover faster than wide-body jet service. We aren't in any way concerned about the long-term health of this, even the medium-term health, but in the short term, it doesn't absorb cash. It's not a cash bleed. We will ride through it, and we'll look for opportunities to make us stronger when we come out.
I can add a little more color.
Sure.
Sorry, Scott.
No, go ahead.
Okay. Like the 550 program, we are still receiving lease payments, just to put some kind of reality to your question. Expect, regardless of whether it's from the existing carriers or the program they shift, that program from United will remain. Also, time will tell, but that's what kind of industry thoughts are at the moment. On the cost side, it was pretty nimble, our cost infrastructure at R1, so we can adjust that and have adjusted that accordingly. When I look out and see potential opportunities, when regional carriers start to fly again, they're going to be looking for effective cost ways to deal with maintenance, accessing parts, engines. They're not going to want to spend $1 billion to overhaul an engine. They might lease something in the short term until they're able to build up their maintenance reserves again.
Those are all things that's what we do at Regional One. Scheduled charter is actually growing some momentum in the sense that people look to perhaps not want to travel on the typical scheduled service airline where you go to a major airport and there's obviously lots of other people there, that they want to go to private FBOs where they can get to the places they need to go to on aircraft that have fewer people than you would typically see. So people are looking at maybe buying a CRJ900, but stripping out a number of seats. Again, we're there to provide solutions because that's what Regional One does. It's not raw and lessor, not just a parts provider. It is a solutions provider.
We're in discussion with many of our customers to be able to make sure we're there for them to provide thoughts and options as to what they can do to be able to access the market that does exist.
That's great. That's very useful. Just the other question on a little bit related to Regional One and aerospace. How does COVID-19 and airlift deterioration change your longer-term acquisition focus? Is it going to be more manufacturing-focused companies that are directly related to your current portfolio and making manufacturing a larger part of the asset portfolio while aviation and aerospace are hampered or impaired?
I think there's a few parts to your question. I think if we start with the manufacturing piece first, I think it's likely that you see more opportunities on that side simply because we're a bigger portion of the aviation market already, and the number of companies that meet our criteria are smaller. Over time, yes, I think it's a reasonable assumption that you would see more acquisition on the manufacturing front. The one part of the underlying question I would challenge, though, on the aviation front, we've seen that some parts of this business have done very well through the pandemic and, in fact, actually increased our diversity. Whether it be maritime surveillance, medevac, some of those, we love those businesses, and COVID has probably made us like them even more. We're not scared away of investing in that segment.
Having said that, there's probably less opportunities to do it. If we get something that fits that would augment our, as an example, our surveillance business with a new technology or something, we would jump at that opportunity. Practically speaking, I think it's realistic that there's more opportunities on the manufacturing side.
Okay, thanks, Mike. Just a couple of housekeeping questions. What is included in growth CapEx for the first half of 2020? I apologize if I have missed it. Your disclosure is more than detailed. Had you incurred CapEx for the two Netherlands Dash 8? Is that included?
No, not yet. We just won the contract. You may see a touch of that at the end of Q3, more likely that begins in Q4. Most of the growth CapEx relate to finishing the fisheries contract. That's where the lion's share of the growth CapEx we have in that. Again, the start of part of it has been delayed a couple of months by COVID, that stuff still goes into service what, late Q4?
Correct. Yes.
No material impact on the start date, but most of the money we've spent is getting ready for that contract.
Okay, thanks. Just final question, how's the Quest sales backlog? How long is it going to take to see revenue synergies with acquisition? I assume that part of it includes expansion into new markets.
Yeah. Obviously, the new markets, we're going to wait till we get through a little bit of this COVID stuff and things normalize. The order book will probably be down marginally quarter-over-quarter simply because people aren't finalizing projects in terms of the inquiry book and the intent basis, that's actually up. It's really just variations in times of closing of that. The synergies, and I struggle with the word synergies on this because we're buying a service we didn't do before, so it's really mostly additive, but essentially now every new job we book, we book at 30%, 40%, 50% more than it was before because we have the installation part of that job. With the nature of the order book, Carmele, help me here, 18-24 months out?
Yes.
The new jobs we book don't show up till then. Till then, it's the order book we purchased as part of this to show up. It's instantly in our results, and the organic improvement of it helps as we book new jobs. Because of the order cycle, that's probably 2022 sometime before you see it.
Sorry, that's 18-2 4 months for WIS or for the whole Quest?
They're all the same thing. The order profile, we get a job booked at the very short end a year in advance, and the longer end two years in advance. What we're booking for now isn't until 2022.
Okay.
In terms of new orders. That's why the order book is so significant.
Okay, great. Thanks, Mike and Carmele. That's a very useful detail.
Thanks, Scott.
Once again, if you'd like to ask a question, please press star one on your telephone keypad. Next question comes from Steve Hansen with Raymond James.
Yeah. Hi, guys. I just want a quick follow-up on the Force Multiplier. Mike, you had mentioned it didn't fly in the period, but you had some short-term duration contracts set up for the back half of the year. Just trying to get a sense for how much activity there is in sort of the options there for that aircraft into the back half. Are you still booking additional deployments at this point to fill up the back half? Just how should we think about that as incremental to what we saw in Q2 to 0?
Sure. Steve, it's Carmele. I can take that question. We're actually booked now to the end of the year, fully booked, with the Canadian government. We are now looking into 2021. We're in discussion with a couple of different governments for its use that would be longer term as we work through those details. We're very comfortable obviously with having it fully utilized for the balance of the year.
Oh, okay. Great. That's very helpful. Thanks. That's all I need.
Once again, if you'd like to ask a question, please press star one on your telephone keypad. We do not have any telephone questions at this time. I will turn the call over to the presenters.
There are no further questions. I'd like to thank everyone for participating in today's call. None too soon, I've lost the ability to speak. Have a great day, and look forward to speaking to you when we report Q3 in November.
This concludes today's conference call. You may now disconnect.