Earnings Call: Q3 2020

Nov 17, 2020

Earnings release

Welcome to the Nexus REIT 2020 Third Quarter Results Conference Call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask I would now like to turn the conference over to Kelly Hancic, Chief Executive Officer. Please go ahead. Thank you very much. I would like to welcome everyone to our Q3 results conference call for Nexus REIT. Joining me today is Robert Chaisson, Chief Financial Officer of The REIT. Before we begin, I'd like to caution with regard to forward looking statements and non GAAP measures. Certain statements made during this conference call may constitute forward looking statements, which reflect The REIT's current expectations and projections about future results. Also during this call, we will be discussing non GAAP measures. Please refer to our MD and A and the REIT's other securities filings, which can be found at sedar.com for cautions regarding forward looking information and for information about non GAAP measures. So the REIT has continued to perform during these trying times. Since inception, we have always maintained a conservative payout ratio while providing investors with a solid yield. The structure has allowed us to continue to post strong results quarter over quarter without the need for a cut to our distribution policy. Partway through the Q3, we made a prudent decision to increase our liquidity to further strengthen our balance sheet. Increasing our liquidity resulted in a slightly higher interest expense in the quarter. This combined with the expenses related to our planned move to the TSX resulted in our AFFO payout ratio increasing slightly from the previous quarter. In spite of this, Q3 was another solid quarter for The REIT. I'll let Rob go into more detail on our financials and our collections. As mentioned in our press release, the TSX has conditionally approved the listing of Nexus REIT's units subject to the REIT fulfilling all its requirements of the exchange, and we look forward to graduating very shortly. We intend to complete a share consolidation on a 1 for 4 basis at or around the time of graduation. As I mentioned last quarter, we believe this move will increase our margin ability of our units and bring exposure to a much larger investor base, which should result in positive momentum for our unit price. Our occupancy for the quarter remained relatively stable at 94 point 6 versus 94.9 from the last quarter. The retail portfolio has been very stable quarter over quarter and has actually been very resilient with new leasing activity even during these times. We have a few office tenants that come up for renewal in the 1st and second quarter of next year. These renewals may prove challenging with people working from home as a result of COVID-nineteen. In Richmond, D. C, we continue process of repurposing our 1771 Savage Road building with drawing packages submitted to the City of Richmond on May 15 to accommodate our 2 new leases that have been signed. With continued delays in permitting due to the city employees working from home, we have a delay in completion, but are hopeful the leases commence in 2021 as we have recently received some positive movement from the city as it relates to permitting. On completion, NOI will increase approximately $1,850,000 per year. As an additional positive, we are working through an offer from a developer in Montreal and some excess land that would prove lucrative to the REIT over the next couple of years. Although there are zoning and planning issues to get through, we are very excited about the opportunity of the additional cash. On the acquisition front, we closed on the previously mentioned 95,000 square foot strong covenant non oil and gas related property in Alberta on 10 acres. And we have 2 more industrial buildings with very strong covenant multinational corporations under contract. 1 in the GTA for $28,500,000 which is a half interest on approximately 500,000 square feet and a second 95,000 square foot property in Moncton, New Brunswick for $8,000,000 Both acquisitions are expected to close in 2020. Upon completion of these transactions, our percentage of NOI from industrial assets would increase from approximately 58%, which it is now, to 60%, which is moving us closer to our target range of about 75% from industrial. We're in discussions on additional acquisition opportunities and we're very hopeful that 2021 will be a solid year of growth from the acquisition side. On the disposition side, we are under contract on our small office property in machine 10,330 Cote D'Ileas and have decided to hold off on selling our large non enclosed strong covenant retail center in Victoria. We've had a strong leasing activity and have been a strong center since we acquired it in 2017. We'll be refinancing it shortly and we'll continue to hold the asset for now. I'll now hand it over to Rob Chaisson to give greater detail of the REIT's financials. Thanks, Kelly. Collections have remained strong, thanks in large part to our heavy industrial weighting and the composition of our retail portfolio. Roughly 60% of our retail is Canadian Tire, Metro, Dollarama, Provigo, SAQ and the federal government and other drug and grocery tenants. Since the start of the pandemic, cash has come in a bit slower with people working from home and that's reflected in slightly lower November collections to date at 94.9%. There's also a gap between the SECRET program that was in place April through September and the Canada Emergency Rent Subsidy or SIRS program that will hopefully be passed into law soon and will be retroactive to September 27. We saw a similar collections delay when Seacra was first announced and awaiting implementation. We're hopeful that SIRS can better support many of our tenants who did not qualify for Seacra as they did not experience the revenue decline thresholds under that program. SIRS is anticipated to be available on a sliding scale basis with the maximum 65% subsidy achieved with a 70% revenue reduction and an additional 25% subsidy available for those forced to close or significantly limit our operations under public health orders. Same store NOI for the quarter, excluding $120,000 early termination fee received, was flat quarter over quarter despite approximately $150,000 quarterly impact of having early terminated an industrial lease in Richmond, BC to repurpose the property in much higher yielding uses, which as Kelly mentioned, will generate approximately $1,800,000 of NOI on completion as compared to approximately $600,000 of NOI under the early terminated lease. As Kelly mentioned, generated just over $14,000,000 in liquidity partway through the Q2 with new mortgage financings on previously unencumbered properties. This pushed up interest expense for the Q3. We also incurred some professional fees in the quarter related to TSX graduation efforts. These led to a slight increase in payout ratio in the quarter and a slight decrease in our AFFO per unit. We expect to put some of our cash to work in the Q4 to acquire an industrial property located in Ajax, Ontario. We maintain a strong balance sheet with significant cash on hand and full availability on our $5,000,000 line of credit, and we expect our refinancing of the Victoria Ville property to close on December 4. I'll now pass the call back to Kelly. Thanks, Rob. I'll now open up the call to any questions. Thank Our first question comes from Fred Blondeau of IA Securities. Please go ahead. Hey, Brett. Thanks and good afternoon. Just on rent collections, what would be your expectations in terms of your tenants participation to the new service program? What would be your base scenario there? It's really hard to say. I mean the program is significantly different than the secret program. Under secret, they had to experience a 70% reduction in revenues, which many of our Quebec retail tenants in particular did not, because business opened up earlier there than it did in much of the rest of Canada. I would expect based on the sliding scale, almost everybody seemingly would qualify for at least some amount of rent subsidy. But it would be difficult for me to quantify the participation rate. Okay. No, that's fair. And moving on to Rich Mond, you mentioned that you expect the project to be completed in Q2 next year. And I understand the cost of the cap to a 7 point $4,000,000 But could you give us a sense of where we are in terms of your overall budget today? Yes. Well, it's very low in the process on that because they without the permits being approved yet, they haven't been able to get in. So they've done preliminary work, demolition work, the things you can do prior to receiving the permits. So we expect it to ramp up probably next year. We probably spend about 500,000 to 700,000 which is, like I said, demo, ordering structural steel, etcetera, so that we're ready to go when the permits are finally done. No, that's fair. But I guess your views on the budget hasn't changed, no? No. Okay, perfect. And then maybe lastly, just in terms of your acquisition pipeline today, how would you characterize the demand for Nexus units and at what price? That's most of the acquisitions we've done have been unit based. So it's been interesting because our price is starting to creep up, so which gives us better opportunity to do the deal at a higher price. The last one we just did or we announced just announced is in Moncton, and that one is set at $2 And that was when we were trading. We started doing the deal, we were trading at around $1.65 So as we continue to creep up the market holds the way it's holding, it just gives me some flexibility to work with that number. So I don't know per se, but really it's going to be dependent on the trading price. But you can see the kind of deals we've done in the past in that 2% to 2.10% range. So I would think about it in the same context there. Perfect. Thank you. I'll leave it there. Thanks, Fred. Thanks. Our next question comes from Paul E. Durnan of Burlington Capital Partners. Please go ahead. Hi. My question is, maybe you haven't thought about this. With the COVID, what percent of rents coming in could be described as essential services? As simple as that. Can you answer that question? Maybe you haven't thought about it that way. Yes. So Paul, when we looked at our retail portfolio in the initial shutdown in March, it was roughly 60% on the retail side. On the industrial side, I'm not sure what portion, if any, would be classified as essential service, but I think it's most impactful on the retail side and there were roughly 60% to 65% was considered essential service when we had the 1st lockdown and it would be roughly the same now. Okay. So you can't give me a date on the share exchanges. And that those dates are not firm. Is that right? Yes. I mean, we're not allowed to disclose the what we're allowed to disclose under the TSX rules in terms of the conditional approval, it's very limited. It's basically what we put in our press release. We're confident that we'll very quickly get through the conditions. But yes, we can't unfortunately say much more than that at this point. So we'll hopefully issue an update shortly. Yes. Obviously, your main intention of the share consolidation is to get institutional investors interested in this stock. Usually, they want a share price of over $5 don't they? Yes. When I look at it, we're actually quite institutionally held. We have a lot of institutions in the name right now. It really is to broaden the market on some institutions and add even more demand for the unit. So that's really what drives it. It also creates enhanced margin ability of the units, which in turn creates liquidity, which in turn creates institutional and retail investor interest. So yes, we'd see this as not likely happening again, but we're doing the consolidation to get margin ability primarily and liquidity and additional interest. Okay. I didn't quite understand the Montreal expansion. Is it you're buying land or you're enlarging one building? What are you doing there? No, we're not doing anything. We're just looking at divesting of some excess land on a retail side. Oh, that's right. Yes. And it actually just could be quite lucrative. I don't want to say too much right now. It's just it's a positive for next year, if we're able to get through all the details of the transaction in the zoning? Yes. So we would keep the center and we would sell off a portion of land located in the parking lot. So it's straight cash in our pockets without losing anything. Okay. That's Downtown Montreal, is it? Just outside of Downtown Montreal. Okay. Thank you. Thanks, Paul. Our next question comes from Terry Fisher of CIBC Private Wealth. Please go ahead. Hi, guys. Congratulations. Another pretty good quarter given the circumstances. Thanks, Terry. First of all, I went on the site and looked at the press releases and went to the Investor Relations part of it. I couldn't find the statements. So I had to go to SEDAR to get them. I'm just wondering, are they missing something? Are they on your website somewhere? Yes. So we're in the process of transition. We've had a 3rd party IT or website manager. And we've changed the platform on which our website is hosted, so that we can take the website updates in house. So what you're seeing is a delay. The materials were sent to the 3rd party, but seemingly haven't been posted to the website yet. So for next quarter forward, we will be maintaining the website in house and actually that will probably take place in about a week from now. We'll transition it forward. Okay. Well, I have two questions. The first one is on Note 5, the joint venture that you have on Rue Stanley, which a place I'm familiar with. What is the long term sort of strategic view of that property? I mean, it doesn't sound to me like something necessarily fits with the direction you're headed. Yes. I mean that property was acquired as part of the Nobel transaction. It is a well located office property in downtown Montreal and we have long term leases with the notaries who are our partners on the building for roughly 50%, I think just over 50% of that building. And we also have an office in that building as well. And most of our accounting and other staff is located in that office. It was an opportunity when Nobel acquired it, Nobel REIT, which we then later acquired, it was an opportunity for lease up. The building has been pretty much completely renovated from top to bottom. So that one's just a good stable cash flowing property that's pretty much fully leased now and very well located. So that one's kind of a coupon clipper from now on. Okay. No problem. 2nd question relates to the acquisitions that you've made recently and are about to make hopefully. And you indicated before the end of the year. So that would be good to see. But I guess what motivates the question is that these things are sort of scattered around the country. You're casting a wide net. And my question is, where are you finding these deals? Are these related to the people that Kelly you were initially involved with, the 2 sort of wealthy family office type organizations? Or is it just stuff you find on your own or it's referrals? Like how are you finding these things? Where do you come up with these deals? Yes. The bigger one in Ajax has been a relationship I've had, a very good friend of mine now for a number of years and it happens to own this grouping of buildings that is very well tenanted. So it's a friendship based transaction, I would say. That is why we got it off market without bidding against anyone. So known him for a long time. And the other one, I'd say, is fairly similar. I've done a deal with him in the past and brought us this transaction. So both are relationship driven. Related to that then, how much more of this do you think from your past relationships is in the pipeline? Like when you're going to run out of those opportunities and have to grow by looking at finding things in a different way? Yes. Surprisingly, we've had a nice mixture. I mean, these 2 came up and we've worked on them with the last several that we've done weren't really relationship driven. They were in the market brought to us or we found them. So it's been a nice mixture to have. I'd say we are looking at a number of things that are larger portfolios that we don't really have a relationship with. And I'd say there's another few larger portfolios that we do have a strong relationship with over the years. So it's really a mixed bag. So on this second category, and it turns out to be something fairly large, it would move the dial, and you need to put in a good chunk of equity to do it. Do you think you're going to be able to continue to issue equity on anti dilutive terms like you've been doing, which is, to me, one of the wonderful features of this particular investment and REIT. So and now you're going to be listed in TSX. So I guess what I'm looking at is where is the capital going to come from to do these deals? Is that on the same terms or no? Yes. I a lot of them that we look at are based on the same way we've structured the deals in the past, the Athena deals and it's getting guys comfortable with the REIT units and what we've put together as a company and where they see it going. So it's been very successful and we continue to look at the majority of our transactions to be funded this way. Okay. Well, if you can keep issuing units at $2.30 and I can keep buying them at $1.70 we'll just keep doing that, okay? I'm happy. So are my clients. Yes. Sounds nice and easy. Yes. Okay. Keep going. That's great. Thank you. Thank you. Our next question comes from Andrew Stewart, a Private Investor. Please go ahead. Hi, good afternoon, gentlemen. You're almost getting to 2, so we're catching up to those deals. I have to echo those comments and congratulations on another good quarter. Certainly, it's nice to see you back on the full trend towards the TSX. So very exciting time in NexSys history for sure. I had a very general high level more macro question for you and that's really the feedback you're getting from your tenants more from non essential businesses that you're working with. What is the feeling 3, 5 years, I would ask renewals are coming and how they're seeing their business and their requirements for space, both retail and to a certain extent industrial? Yes. So we've actually seen some retail leasing of late. At our Victorio Mill property in particular. We've got 3 or 4 different deals at play. It'll be interesting to see how office develops. We haven't had extensive conversations with our tenants about long term planning. We've seen some that are anxious to return to the office environment. We've seen others that seem to think that working from home is working. And I think time will tell. Most of our industrial tenants are service industrial. And so we think that their requirements for space will stay the same. And then we've got a component that's Old Montreal office, where we're seeing some leasing, in particular, of smaller units and maybe a little bit of turn there as well. But 3, 5 years down the road, hopefully, we all think that we'll be back to some sort of a norm. We may see some more distribution space on the industrial side. Kelly, do you want to? Yes. I think overall retail has always churned on the smaller we've got the service oriented guys that are they don't plan on going anywhere that stays. Our partner who manages the most of our retail products are well in tune with the market and have been able to fill vacant spaces for us, so have done an outstanding job. And then on the office side, I think we will see some headwinds down the line. I think it's natural that people are reevaluating their space and saying, do I need the space, do I not? So I think we'll have a few headwinds there. On the industrial side, I think it's pretty stable. You're either warehousing and moving products, cold storage where you're still moving product or you're building something. And if you're building something, it's very difficult to move. It's costly to take that manufacturing equipment and move. So in this industrial side, you'll see it remain very stable and hence our stated goal of trying to move towards that 75% of our NOI on the industrial sector. So we're creeping along trying to get it there. We're at about 60% right now. If we're successful in next year in the number of deals that we're looking at, you'll see that grow pretty close to that. So, I think overall that is our strategy is to try to move things closer and closer to the industrial side of things. Our next question comes from Frank Meyer of Vision Capital. Please go ahead. Hello. A number of questions, if I might. Regarding the Montreal transaction, selling the excess land, Could you give us some idea of how much cash could be involved or receivables or proceeds? Yes. I don't want to say too much yet just because it's relatively early in the process. We're in the process of close to negotiating a purchase and sale agreement, but then that has conditions on it for zoning and successful zoning by the developer. But We're talking high single digits or low double digits of 1,000,000 of dollars. Yes. I'm sorry, I didn't understand that. Sorry, high single digit, low double digits of 1,000,000 of dollars for us at our interest. So trying to give you a wide range, but also at the same time give you a sense of the materiality of it without getting too much into detail given we're still in initial stages on that. So in other words, that could significantly impact your acquisition capacity? Yes. And it would be staged. So you wouldn't expect it all to hit in 1 year. So that's why I say over the next several years, it's a staged process as they move along. I see. And in terms of cash without using shares, what is your current acquisition capacity? So we've got about $15,000,000 give or take on the balance sheet and another $5,000,000 available on our line of credit. We'll use some of that cash to acquire the Ajax property in December. We don't have an awful lot of excess cash. We'll have another $5,000,000 to $10,000,000 of cash on the balance sheet. We also just closed the financing where we took out another couple of $1,000,000 of equity. So I'd say between $5,000,000 to $15,000,000 for the next few quarters of cash available for acquisitions. Yes. And that doesn't include anything from Montreal. Is that correct? Correct. Correct. Okay. In terms of the I found it interesting that the Balzac by the way, isn't Balzac just north of Calgary? Yes. So it's basically a Calgary area industrial building. Is that correct? That's correct. It's literally Calgary. Yes. So you have a 6.8% cap rate. Could you give us some idea what the cap rates are on the other properties that you've purchased and press released? There is some vendor sensitivity around it. So I would say that much that it's an attractive cap rate for a GTA property. And the Moncton property would be higher than that. It would be in what you would expect from the Moncton area, I think, in the 7s. In the GTA one, it's still very attractive for GTA. And is the vendor the remaining 50% interest in the Apex property? Yes. It actually is a very interesting property. It's a big large U. S. Multinational and part of the transaction is that we'd be building a new 100,000 square foot addition to one of the buildings with high clear heights. Fantastic property on rail. So the rail comes in, product gets loaded off, they'll move it off into the new building beside them and then ship it out. So it's a great transaction for us. Just to be clear, our $28,500,000 purchase price includes that $100,000 square foot addition. So we acquire with 500,000 square feet, including 100,000 of new build. And what is the return on the new build? Well, again, we're purchasing it as built. So we're purchasing it based on a blended cap rate for the 500. You're purchasing it as built. As built. Yes, exactly. And when will that kick in, in completion, in other words? It is expected to be complete, I think, 1 year from now. Having said that, our return will include the NOI from that property as built. So until the construction is complete, we'll get a higher proportion of the NOI from the property than 50%. So basically, we're getting the same NOI we would get when the construction is complete. Do you guys do an IFRS valuation? We do. And what is it? I didn't notice it in the press release. So and I didn't have time to go through your whole filing perhaps to illuminate. So I'm pretty sure that fair value under IFRS. We didn't have any significant adjustments this quarter. We took an adjustment last quarter, and I want to say it was roughly $10,000,000 to $12,000,000 of devaluation, net of some write ups on properties that we had acquired and broke back up to their fair value. So I think we had we did take an adjustment last quarter based on COVID. This quarter, no significant adjustment. So what would the number be, please? The number on our balance sheet is at fair value under IFRS. What is the IFRS value per share per unit? If you give me a minute, I can actually, you know what, Frank, why don't I email you the answer on that. Okay. The numbers are Next question, on Richmond, do I understand you correctly that the NOI will go to $1,850,000 Is that the change? Or is the $1,850,000 less the $600,000 on the terminated lease? In other words, dollars 1,200,000 Right. So the lift is $1,200,000 The lift is $1,200,000 And when is that likely to happen? I guess it depends on the when you get your Yes. It depends on the permitting. They've been excruciatingly slow on the city side, as you can imagine, during COVID. But we did get some positive news that it sounds like they're working their way through the application and the permit. So I'm hoping that if it comes in December or January, the beginning that some of the income starts to come on probably June, March, maybe May or June of next year. June, I would think more. Okay. The write down or the adjustment to the IFRS valuation that occurred last quarter, dollars 10,000,000 to $12,000,000 Did you say $10,000,000 to $12,000,000 Yes. Was that largely on retail properties? It was. So was it one specific property or a number? It was really across the portfolio. We took a look at our cap rates and we adjusted considering the uncertainty in the market. Yes, we basically revalued our entire retail portfolio. Tell us what to what cap rate you adjusted them to, from? I don't have those details in front of me on the retail, but note for your financial statements in Q2 would have had our average cap rate as does the note in Q3. Okay. The how much CapEx do you think will be required well, let me put it another way. What is the vacancy rate currently in the retail portfolio? We're sitting at 90% plus occupancy on retail. Over 90%. Kelly is second. He's just opening. Yes. Just bear with me a second. We have Richmond, but it's kind of underdeveloped in ours. Yes, I would say overall, we're I don't have it grouped in front of me, but it's probably around 90%. What kind of CapEx requirements are going to be required to deal with the problems that retail are having, both in terms of physical structure and in terms of leasing concessions, etcetera, etcetera, what will be the nut to crack the CapEx requirements? Yes. I guess, the one thing to say is we have a number of what would be considered enclosed malls. However, they tend to be smaller centers that have a very limited amount of the GLA that is enclosed. So we don't foresee having to spend anything to demall or to structurally restructure any of those malls. The Victoriaville Mall was one that was demalled before we acquired it. And that's our largest retail. It's demalled. It's got a Canadian Tire, a Metro, a Dollarama, etcetera. And also about 60%, 65% of our tenants are not really subject to or haven't been subject to reductions in sales and profitability through COVID-nineteen because they're the Dollarama's Canadian Tires Groceries in the world. We're actually seeing positive lease momentum on retail, and we haven't yet seen increased demands for free rent, for TIs, those sort of things. So while we'll need to further evaluate down the road, I think right now we don't foresee any significant additional CapEx required. Kelly, would you? Yes. Just as Rob said, I noticed a deal came across our desk the other day, which replaced replacing a struggling retailer. And it's pretty much for the most part an as is transaction where new tenant comes in and takes over the space. So it's been fairly positive. And then Frank go ahead. Just to your previous question, so we held our investment properties at $605,000,000 at the quarter. And if we were looking at a NAV per unit, roughly $2.45 per unit, book NAV. I mean, enclosed malls, it's almost like a dirty word today. And so many have been demauled, as you put it. I can't get the proper pronunciation. Is it Victorville? Victorville. So it was demauled. Why wouldn't the others need to be demauled as well? I mean They tend to be small centers like poker chair or Forestville that are small, more remote. The major tenants, they're all, for the most part, grocery anchored. The major tenants all have exterior access and you're left with a small handful of retailers that only have indoor access. I guess our biggest enclosed mall exposure would be Sherbrooke. And down the road, maybe demalling is something to look at, but that's I don't know that that's one that demalling would necessarily make sense. But it certainly as COVID progresses, something we could look at. Yes, it's also co owned with our partners. So I mean, we need to do that in consultation with them, but it's been a fairly success center despite the fact that it is enclosed. Yes. They're very in tune in the market in Quebec on the retail front. So we've had fairly decent positive lease momentum from deals and relationships they have with the tenants over the years. So for now, we typically meet every year to review the portfolio and go, so that'll be coming up soon and we'll take a good hard look at the retail portfolio as well. I mean, I guess there's a lot of skepticism about retail because I mean, look what artists tried to do with their retail. They tried to spin it off. And of course, they've got to protect it. I mean, I don't need to tell you all this. I mean, you're very familiar with it all. We are. And you know what? It is something as we go along here, I mentioned we have a stated goal of increasing our NOI from the industrial side. It's really our focus. I don't think you'll see us purchasing any retail at any point in the future. So we continue to move the needle towards that higher amount percentage of income coming from the industrial sector. Last question then. You said you want to move your industrial from 60% currently to a target of 75%. Is that going to be accomplished through growth? Or will it be accomplished through the sale of nonindustrial properties such as retail? Yes. I think you'll see growth. I mean, we do have some things that we're looking at. And if we were successful at them, that would move start to move the needle significantly. And I mentioned before about Victorville. It's a great center. It's performing really well. It's held up through COVID really well, actually better than we could have imagined. And right now, I don't believe is the time to sell retail because I think what you have is a disconnect between buyers and sellers. And what you have on the buying front are guys that are looking for crazy deals or low balling offers. So we've decided to pull it off for now until things get under control because it has value. It's well anchored, but the buyers of retail, I think, are out there trying to find huge discounts. So it is something that in 2021 as things stabilize hopefully with COVID and hopefully things stabilize, we'll revisit and look at it then. So in other words, the 75% is coming from both acquisitions and dispositions? Yes. Yes. I would say, I mean, if for next year, I would agree. We would start to peel off some retail and underperforming. We're moving a small office building in Montreal, hopefully, that's underperformed for us. So, we'll just continue to look at the portfolio. Thank you very much. All right. You're welcome. This concludes the question and answer session. I would like to turn the conference back over to Mr. Hensick for any closing remarks. Well, I want to thank everyone for taking the time to call in. It was a good quarter, and I look forward to our next results call and more positive results.