Good day, ladies and gentlemen, and welcome to Ducommun's third quarter conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we'll hold a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone, and you will then hear an automated message advising your hand is raised. As a reminder, this conference is being recorded today, November 7th, 2022. I would now like to turn the conference over to Ducommun's Vice President, Chief Financial Officer, and Controller and Treasurer, Chris Wampler. Please begin.
Thank you, and welcome to Ducommun's 2022 third quarter conference call. With me is Steve Oswald, Chairman, President, and CEO. I'm going to discuss certain limitations to any forward-looking statements regarding future events, projections, or performance that we may make during the prepared remarks or the Q&A session that follows. Certain statements today that are not historical facts, including any statements as to future market conditions, results of operations, and financial projections, are forward-looking statements under the Private Securities Litigation Reform Act of 1995 and are therefore prospective. These forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from the future results expressed or implied by such forward-looking statements. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct.
In addition, estimates of future operating results are based on the company's current business, which is subject to change. Particular risks facing Ducommun include, among others, the cyclicality of our end-use markets, the impact of COVID-19 on our operations or customers, the level of U.S. government defense spending, timing of orders from our customers, legal and regulatory risks, the cost of expansion and acquisition, competition, economic and geopolitical developments, and disasters, natural or otherwise. These risks and others are described in our annual report on Form 10-K filed with the SEC, and our forward-looking statements are subject to those risks. Statements made during this call are only as of the time made, and we do not intend to update any statements made in this presentation, except if and required by regulatory authorities. This call also includes non-GAAP financial measures.
Please refer to our filing with the SEC for a reconciliation of the GAAP to non-GAAP measures referenced on this call. We filed our 2022 third quarter Form 10-Q with the SEC today. I would now like to turn the call over to Steve Oswald for a review of the operating results. Steve?
Okay. Thank you, Chris, and thanks everyone for joining us today for our third quarter conference call. Today, as usual, I will give an update of the current situation at the company, after which Chris will review our financials in detail. The company remains focused first and foremost on the health and safety of our employees. We've done an excellent job, the team and the leadership, with safety protocols put in place since March 2020. We continue to follow best practices aligned with health authorities. Within the company, we had 188 cases of Omicron variant in Q3 of 2022. Turning to the Q3 financial results, I'm happy to report that Ducommun's third quarter top-line performance was very strong, the company delivering year-over-year revenue growth of 14%.
Net revenues also exceeded $180 million for the first time since before the pandemic started in Q4 2019, and rose to $186.6 million. The commercial aerospace market continued recovery was a real bright spot once again in Q3, with Boeing 737 MAX business up 137% year-over-year, and the Airbus A320 also up 70% year-over-year. Overall, commercial aerospace with Airbus, Boeing, Gulfstream and others was up over 65% from Q3 2021. The commercial aerospace business as well showed year-over-year revenue growth now for the fifth consecutive quarter, an excellent sign as the industry and build rates recover.
The company's defense business, after two years of unprecedented growth in 2020 and 2021, was only down slightly in Q3, but once again delivered solid performance over $100 million in revenue. The company posted solid gross profit of 20.7% sequentially up but down year- over- year, due partially to several one-time factors which Chris will cover in his remarks. Adjusted EBITDA of $26 million was a strong increase year- over- year and the highest since I joined the company in 2017. Adjusted EBITDA margins of 13.9% in Q3 as well was a solid performance. We expect EBITDA to continue to be strong in the quarters ahead. The team also posted adjusted operating income margins of 9.2%, which is a good improvement from Q2.
Quality earnings was solid, with the company reaching GAAP diluted EPS of $0.69 a share versus $0.78 a share for Q3 2021. With adjustments, the diluted EPS of $0.96 a share was higher than last year. Some key drivers for the lower GAAP diluted EPS include the Guaymas fire-related expenses, restructuring charges, and loss on extinguishment of debt as part of the debt refinance. In regards to the revenue outlook comments mentioned in the Q1 and Q2 calls, we continue to see the company coming in at the high end of single digits% for the full year with the commercial aerospace industry recovery leading the way. We estimate that revenue will continue to be strong over the quarters ahead as we see more and more commercial aerospace volume return.
Our high narrow body to wide body ratio for the business is also a plus, but we will benefit as well from the news that deliveries of 787 have resumed. Ducommun has a business aviation portfolio as well, supplying our world-leading titanium products and other components, and it continues to have good momentum, up 60% in revenue year-over-year with a strong backlog, especially at Gulfstream. One area of our business I'd like to highlight as we move out of pandemic-related headwinds is the significant improvements of our commercial aerospace business within our Structural Systems segment during 2022. Commercial aerospace revenue within structures year-to-date was $122 million, or roughly 60% higher than the year ago period. In addition, Q3 2022 commercial aerospace revenue was $46 million or almost 75% higher than a year ago.
A great sign that growth is accelerating in this part of our business. Finally, backlog at the end of Q3 2022 stood at $321 million or 36% higher than Q3 2021. We are set up for excellent growth to continue now and in the future. Investors should also keep in mind our structures business is component-based, not wings or nacelles, and we strive to produce products from only industry niche technology such as titanium hot forming and superplastic forming. For offloading from defense primes, the work continues as we will meet our target for over $45 million in 2022, up from roughly $31 million in 2021. We then expect to double it to $90 million-plus in 2023, with a great deal of that in our circuit card business for Raytheon at sites such as Appleton, Wisconsin.
The long-term run rate of these defense programs already commercialized or in development for offloading will be over $125 million for Ducommun by 2025. For backlog performance, the commercial aerospace backlog increased sequentially for the fifth consecutive quarter from $276 million at the end of Q2 2021 to $431 million at the end of Q3 2022, an increase of over 55%. This was led by the 737 MAX, Viasat for in-flight entertainment, the A220, A320, and Gulfstream. All, which you would expect after we came out of a very tough 2020 and 2021 for this part of Ducommun's business. The defense backlog remained solid in Q3 as well and ended the quarter at $467 million. The company's cost actions and lean organizational structure are continuing to pay dividends too.
Our supply chain team as well delivered another excellent quarter, managing the supply chain, and this is not only showing in our financials, but we cannot be in a better place with our customers regarding our on-time delivery and quality. Now let me provide some additional color on our markets, products, and programs. Beginning with our military and space sector, we posted third quarter revenue of $106.3 million, a slight decrease versus 2021. Despite being down, as mentioned earlier, it was greater than $100 million and a solid showing for the business in Q3. We saw increases in demand for our F-18, Patriot missile, and other missile programs, as well as other military and space programs. Third quarter military and space revenue represented 57% of Ducommun's revenue, in a period down from 70% last year.
This trend will continue to reflect more balance with commercial aerospace. We also ended the third quarter with a solid backlog of $467 million, which represents roughly 50% of Ducommun's total backlog. Within our commercial aerospace operations, third quarter revenue increased year-over-year to $68.3 million, driven mainly by bill rate increases on large aircraft platforms, in-flight products for Viasat, other commercial aerospace platforms, and business aviation. Ducommun expects this continued improvement in the commercial aerospace market overall to gain momentum for the rest of 2022 and 2023, and the future is bright across all our product offerings. The backlog within our commercial aerospace sector stands at $431 million at the end of the third quarter. Was $145 million higher or over 50% increase year-over-year from Q3 2021.
With that, I'll have Chris issue our financial results in detail. Chris?
Thank you, Steve. As a reminder, please see the company's 10-Q and Q3 earnings for further description of information mentioned on today's call. As Steve discussed, our third quarter results reflected a period of strong performance. The third quarter results saw a significant increase in commercial aerospace revenue. We remain encouraged by the continued strength in domestic and global travel, which should help support higher long-term demand and shipments going forward. There were a multitude of positive themes during the first nine months of 2022, and we are looking forward to building on this performance. Now turning to our third quarter results, let me review some of the highlights.
Revenue for the third quarter of 2022 was $186.6 million versus $163.2 million for the third quarter of 2021. The year-over-year increase reflects $27.2 million of growth across our commercial aerospace platforms, partially offset by $7.3 million of lower revenue within the military and space sector. A portion of the year-over-year increase is directly attributable to MagSeal, which we acquired in December 2021. Thus, our overall growth was a combination of organic and inorganic growth. Ducommun's overall backlog at the end of the third quarter was approximately $954 million. This reflects recent growth across our commercial aerospace platforms. Our defense backlog was $467 million, and we remain positioned for continued solid performance for the rest of the year for our defense business.
As a reminder, we define backlog as potential revenue based on customer purchase orders and long-term agreements with firm fixed prices and expected delivery dates of 24 months or less. We posted total gross profit of $38.6 million for the quarter versus $35.3 million in the prior year period, while gross margins were 20.7% and 21.6% in 2022 and 2021, respectively. On an adjusted basis, our gross margins were 21.5% in 2022 and 22.1% in 2021. We continue to share the adjusted gross margins as we have a higher amount of non-GAAP related cost of sales this year, mainly driven by our Guaymas fire-related impact and inventory purchase accounting adjustments related to the MagSeal acquisition.
Like all manufacturing companies, we continue to work through a difficult operating environment with regard to supply chain efficiency and labor availability. While we're not immune to supply chain issues, we were able to manage through another quarter without significant supply chain impacts due to our proactive supply chain efforts, executing strategic buys, leveraging our performance center flexibility, and utilizing inventory investments. Ducommun reported operating income for the third quarter of $13.2 million, or 7.1% of revenue, compared to $13.4 million, or 8.2% of revenue in the prior year period. Adjusted operating income was $17.2 million, or 9.2% of revenue this quarter, compared to $15.3 million, or 9.4% of revenue in the comparable period last year.
The company reported net income for the third quarter of 2022 of $8.5 million, or $0.69 per diluted share, compared to net income of $9.6 million, or $0.78 per diluted share a year ago. On an adjusted basis, the company reported net income of $11.9 million, or $0.96 per diluted share, compared to net income of $11.1 million, or $0.91 in 2021. Adjusted EBITDA for the third quarter was $26 million or 13.9% of revenue, compared to $23.9 million or 14.6% of revenue for the comparable period in 2021. This was the highest quarterly adjusted EBITDA since at least 2017. Now let me turn to our segment results. Structural segment.
Our Structural Systems segment posted revenue of $73.2 million in the third quarter of 2022 versus $58.5 million last year. The year-over-year increase reflects $19.4 million of higher sales across our commercial aerospace applications, partially offset by $4.8 million of lower revenue within the company's military and space markets. Structural Systems operating income for the quarter was $6.7 million or 9.1% of revenue, compared to $4.5 million or 7.6% of revenue last year. The year-over-year operating margin increase was primarily due to favorable manufacturing volume. Excluding restructuring charges and other adjustments in both years, the segment operating margin was 13.3% in 2022 versus 10.2% in 2021. This is a very strong operating performance for the Structural Systems segment.
As a result, the results from our MagSeal business, which was acquired in Q4 2021, are part of the structures business. Our Electronic Systems segment posted revenues of $113.4 million in the third quarter of 2022 versus $104.7 million in the prior year period. These results reflect $7.8 million of higher commercial aerospace revenue, partially offset by $2.6 million in revenue across the company's military and space customers. Electronic Systems operating income for the third quarter was $13.9 million or 12.2% of revenue versus $15.3 million or 14.6% of revenue in the prior year period, primarily reflecting unfavorable product mix, partially offset by favorable manufacturing volume.
Excluding restructuring charges and other adjustments in both years, the segment operating margin was 12.9% versus 15% in 2021. While not at the top end of the range this segment has operated, this was a solid quarter for the electronic segment. Restructuring update. As a reminder, we approved and commenced the restructuring initiatives in Q2 2022. Our team is taking these restructuring actions to accelerate the achievement of our strategic goals and better position the company for stronger performance in the short and long term. During Q3, we incurred $0.6 million in restructuring charges. The majority of these charges were severance and benefits-related. The macroeconomic environment has been dynamic since we started this initiative. As such, we continue to assess the appropriate scope and activities.
During periods of company restructuring, difficult decisions are made, and one example is our decision to move work from our wire harness and cable assembly facility in Berryville, Arkansas, to other Ducommun facilities such as our reopened Guaymas facility along with our Joplin Performance Center. This consolidation will provide additional leverage from scale in Joplin, as well as more fully utilize our expanded Guaymas, Mexico, facility. These decisions are especially difficult as they have a direct impact on the jobs of some of our Ducommun teammates. As a company, we feel we will be providing above-market compensation and benefits for those impacted. We now expect to incur another $7 million-$10 million in expense for facility consolidation, severance, and impairment of long-lived assets over the next several quarters. We plan to update all investors on further details during the December 8th investor meeting in New York.
We have available liquidity of $221 million as of the end of the third quarter. We used $5.5 million of cash in operations this quarter compared to cash provided by operations of $5.5 million in the prior year period. A higher use of cash in the current year quarter was primarily due to increased inventory and contract assets as we work to not only meet customer requirements, but also be in position to take on drop-in work. Our 12-month debt-to-adjusted EBITDA ratio was 2.6 and remains among the lowest in the last several years. As we previously announced during Q3 2022, we completed a refinancing of all of our debt on July 14th with favorable terms. The new credit facilities have a 5-year term and will mature in July 2027.
In addition, at the same leverage ratio, the interest rate spread in our new credit facilities is more than 200 basis points lower than the Term Loan B that we had at the end of Q2 2022, and slightly favorable to the Term Loan A that we had at the end of Q2 2022. To conclude the financial overview, in the third quarter, we posted strong results through balanced contributions from our two segments while continuing efforts to position the company for strong long-term performance as we maintain a robust backlog, continue to work on our restructure initiatives, and improve our long-term debt structure. I'll now turn it back over to Steve for closing remarks. Steve?
Okay, thanks, Chris. In closing, look, it was a strong quarter. It was our best so far in 2022, coming out of another tough year in 2021. The themes are, you know, commercial aerospace recovery as we move forward. I think our defense is in good shape with offloading active. Our lean cost profile, excellent supply chain, strong customer preference, and a very positive refinancing outcome to drive the company to the next level of the future is all gonna be tailwind for us. As I usually do, I'd like to, again, thank our employees, investors, and other stakeholders as we have been through an unprecedented time in the past couple of years, and we're in excellent shape moving forward. I will now open it up to questions. Thank you.
As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from Ken Herbert with RBC. Your line is now open.
Hey, good afternoon, Steve and Chris.
Hi, Ken.
Ken, how are you?
Pretty good. Hey, I just wanted to first ask on the margins in Structural Systems, sequentially, you know, really nice step up both in the operating margin as well as the adjusted EBITDA. Is there any way to identify if there was anything unusual this quarter or maybe, I mean, it looks like maybe volume on the MAX was a nice tailwind here, but how should we think about the key drivers of that sequential and year-over-year improvement in the margin, so in that segment?
Yeah, I mean, the volume, Ken, was, you know, the volume is always helpful. I would say when we think about the performance centers in that Structural Systems group, you know, we had, I would call it, normal flow through the majority of them. I would say, you know, what helped us get to more of a bigger step up in the higher end of I think what anybody would have expected for the quarter, you know, was a nice book of business that came through a couple of facilities. I think, you know, I think that put a nice high mark out there for us. That's what we'll strive to get back to.
Okay, helpful. As we look at the defense business, when should we expect sort of positive growth in the defense business? Or when do you think, you know, bookings and the backlog will have troughed, and we can start to see some organic acceleration in that business?
Let me take that on, Ken. Look, you know, we're obviously active. You know, it's always a little bit of timing of orders. We've had a lot of positive news, you know, especially on programs such as Apache with the Poland order and lots of things that are gonna drive our defense business higher. We're looking definitely into 2023, probably midyear, that we're gonna see something. We're continuing to work the offload, continuing to build the book of business with Northrop Grumman and other places. You know, it's a bit of a timing issue and a little bit of a lull here.
Okay. It sounds like, I mean, if the timing issue is that timing in terms of like customer contracts are maybe delayed or from a budget standpoint, or is it supply chain issues impacting your ability to deliver and ship? I mean, how should we maybe a little more detail on that, Steve?
Sure. Yeah, sure. Like I mentioned, it's not supply chain. Okay?
Okay.
You might hear some other competitors, you know, our peers or whatever. It's not supply chain. It's just timing of orders. It's you know, flow through of demand. Sometimes your FMS is gonna help us, sometimes it's not, you know. We're a little bit in that mix as well with some of the products we make. I'd say it's more leading that way for sure.
Okay, great. Thanks. I'll jump back in the queue.
Okay, thanks.
Please stand by for our next question. Our next question comes from Mike Crawford with B. Riley. Your line is now open.
Thank you. Regarding the restructuring, how much of that would you say is attributable to consolidating some of these niche acquisitions you've made in the past few years? I guess further to that, did some of these companies formerly use different facilities that they're now completely out of?
Hey, Mike, it's Chris. Thanks for the question. The restructure, it's nothing to do with the acquisition companies. You know, this is more, sort of base business and, you know, as we continue to move along, trying to just optimize where we think we need to go. It's much more about the base business. Therefore, you know, like the new news this morning or today with, you know, the wire harness and the Berryville situation, I mean, that's sort of core business. But I think the acquisitions themselves, you know, continue to be, you know, provide the niche, you know, engineered product type of benefit, within their normal footprint and, we continue to move forward with them.
All right, thanks.
Yeah, Mike.
Oh, yeah.
One other thing, just so you know, so we're looking, you know, where it makes sense for, you know, for consolidation. I know you brought it up on the call before. You know, we have a even though we had a terrible thing happen a couple of years ago at Guaymas, I mean, we have our operation now up and running, and we just expanded it. We're looking to consolidate, we're looking, you know, to do smart things going forward with our square footage.
Okay. That's a good segue, Steve, to my final question, which is there any further development in your thought on perhaps doing a sale-leaseback at your rather large California facility that's kind of a hidden real estate asset value on your books?
December 8th, Mike. December 8th, we'll have more color on that, but I would just say, look, it's absolutely ongoing. It's you know, the sale of Gardena you know was a real home run for the company, for our investors. You know, we have more to come there. We'll have more to say in the Investor Day, but we are continuing to look at it. It's something that's active.
All right. Thank you very much.
Thanks, Mike.
Thanks.
Please stand by for our next question. Our next question comes from Michael Ciarmoli with Truist. Your line is now open.
Hey, good afternoon, guys. Thanks for taking the questions.
Hey, Mike.
Steve, just on defense, I mean, you're not gonna give us, you know, 2023 guidance, but I'm just trying to understand, you know, the $45 million, you know, of sort of the outsourcing now, thinking that's gonna grow to $90 million. I mean, that's gonna put you in a pretty good revenue trajectory next year. I mean, is that the right way to think about your defense revenue growth? You know, if you end the year this year.
Yeah.
The math is easy, 420. You know, I mean, should we be thinking more than 10% growth? If we get some more broader thawing of the defense supply chain, could that be additive?
Yeah, a couple of things, Mike. First, good to be with you. First, look, you know, we had an excellent run in 2020 and 2021. I mean, we're up 40% and we kinda really, you know, sort of changed the game of the company for defense. We're coming in a little heavy into this year. You know, we got a lot of programs. I think that, you know, this whole outsourcing with Raytheon and SPY-6, all that is gonna happen. But we, you know, do have some headwind on timing of orders and, you know, when these will kinda come in, especially FMS related. I don't think I would look at it that high.
Okay.
I'd be more modest.
Okay.
More modest, yeah.
Okay. Yep. That's helpful.
Still, yeah, still a good story. You know, again, we're coming in heavy into this year, as you know.
Yeah.
After a couple of years.
Got it.
Yeah.
Just to follow up with what Ken was asking, I mean, you guys seem to be handling supply chain well, but do you think some of this timing is just related to other players in the industry? I mean, we're hearing a lot of, you know, supply chain headwinds. I mean, do you think that's causing the timing issue? I mean, we're also hearing contracting officer delays. Should we think about the timing as sort of, you know, that dynamic and when we see the supply chain start to ease a bit, you know, maybe that kinda opens up some things for you?
Yeah, I think it's both. I mean, you know, we've been a little more strategic in our buying. You know, we're being a smaller company. We're able to move a little quicker on things. You know, we've done a few of those things with semiconductors and titanium. Absolutely, I think, you know, between supply chain issues at other OEMs and timing of orders and State Department, I mean, you know, that's ongoing. It will continue. I think over the next three or four quarters, that's gonna be more of the same, unfortunately.
Okay. Got it. Maybe Chris, just on free cash flow, you know, how should we think about, you know, that kind of item going forward? Obviously, inventory continues to build. I mean, we're seeing that, you know, among a lot of suppliers out there. You know, maybe just some color as to how you're thinking about cash flow and as it relates to the working capital.
Sure, sure. No, comments well taken. I'd say, first off, Q4 is always our sort of cash quarter. You know, we'll look to that again this year to get our yearly cash flow back to a sort of reasonable range. We had a really nice Q2, Mike. And that really put us a little ahead of where we probably would have intended to be. Q3, a little lighter, so we're looking to sort of make it happen in Q4. Then as you move forward, I mean, your point's right on. I mean, what we're looking to do is grow the business with the contract assets and inventory, you know, as a percent starting to come down.
You know, flat dollar amount might be sort of level as we're growing, but that's really where there's gonna be some additional cash that comes into the model over the next, you know, over the next several quarters.
Yeah.
Okay. Got it.
Yeah. Mike, just to comment on the cash too. Look, we're using some cash strategically, and I mentioned this in my remarks. I mean, since I've been here, we've never been in a better place with our customers across the board on-time delivery and quality. I mean, it's just been super. Just a heads up on that.
Got it.
It's paid off.
Got it. The contract assets, is that mostly tied to defense timing? You know, any sort of milestones there? I mean, if I'm looking at inventory and contract assets, you know, do you think you get tailwinds from both or do we think we get an unwinding of the contract assets?
No, you get. You'll start to get. It'll come through both. I mean, we, you know.
Okay.
We've got contract asset build that I think, you know, over the course of several quarters, the percentage on both sides of the business, you know, should come down some.
Okay. Perfect. I'll jump back in the queue, guys. Thanks.
Thanks, Mike.
Yeah, thank you.
As a reminder, to ask a question, please press star one one on your telephone. Please stand by for our next question. Our next question comes from Ken Herbert with RBC. Your line is now open.
Yeah. Hey, thanks. Just, Chris, wanted to clarify on that last comment. Are you still expecting to be positive free cash flow for the full year?
Yes. Yeah, I mean.
Fourth quarter?
That's the expectation. Yep. The fourth quarter will come through strong to get us to, you know, to a positive free cash flow.
Okay. You know, obviously, I don't wanna get in front of things too much here, but as you think about the business over the next couple of years, what's the right framework we should think about the cash generation potential of the business maybe as a percentage of EBITDA or some other way that you look at it? I mean, where could that get to in the next couple of years as you continue to see success on the defense side and continued ramping on the commercial aerospace side?
Yeah, I mean, I think well, number one, I would say we'll talk a little more about it at the Investor Day, a little more detail on the cash flow, Ken. I would say, again, we're at an inflection point. You know, we talked about a little bit through this year, you know, not knowing exactly where the pivot is, but we're ready for that to start moving. And again, as the business breaks free and things start to happen, you know, that's a lever for our cash generation that will be there.
I think, you know, if you look historically, as the business was sort of this size, having free cash flow of, you know, $20 million+ is really where we've got to get back to first, and then we keep moving it from there.
Okay. We're coming up on the one-year anniversary of MagSeal, and I think you've been on sort of a deal-a-year type pace. How does the M&A pipeline look, and where are you focusing your efforts?
Sure, Ken. Great question. Look, you know, I mean, I'm sure you're hearing it from other folks too. It's a bit slow. We certainly would like it, you know, more active, but, you know, that's our reality. We do continue to work our proprietary deal pipeline, which is outside of, you know, the regular relationships we have with bankers. We're active. We're looking at things as they come through. We're meeting with people. We really like these acquisitions, at least one a year, hopefully, right? And they've been a nice accelerator for the company. More to come, and we are active.
Great. Thanks. I look forward to seeing you in December.
Yes. We do too.
Thank you.
Thank you, Ken.
There are no further questions at this time, and so I will pass it back to Steve Oswald for any closing remarks.
Okay. Thank you, Michelle. Thank you everybody for joining us. Great questions. It's good to be together again. Look, we couldn't be more happy with Q3. Again, you know, it's been a long journey. You know, we had defense come in big time in 2020 and 2021, and that's still, I think, moderating nicely. You know, we're thrilled to see commercial aerospace back and moving forward, and we think it's gonna be great for our team, for our, you know, overall company, for our investors. I wanna wish you a great day. Again, thanks for joining us.
This concludes today's conference call. Thank you for participating. You may now disconnect.