Good day, everyone, and welcome to Eagle Materials Fiscal 2019 Earnings Conference Call. This call is being recorded. At this time, I would like to turn the call over to Eagle's Chief Executive Officer, Mr. Dave Powers. Mr. Powers, please go ahead, sir.
Thank you, Brian. Good morning to all, and welcome to Eagle Materials conference call for our fourth quarter of Fiscal 2019. We're glad that you could be with us today. Joining me today are Michael Haack, our President and Chief Financial Officer, Craig Kesler, our Chief Financial Officer, and Bob Stewart, our Executive Vice President of Strategy, Corporate Development, and Communications. There will be a slide presentation made in connection with the call. To access it, please go to eaglematerials.com and click on the link to the webcast. While you're accessing these slides, please note that the first slide covers our cautionary disclosure regarding forward-looking statements made during the call. These statements are subject to risk and uncertainties that could cause results to differ from those discussed during the call.
For further information, please refer to this disclosure, which is also included at the end of our press release. You are aware, we pre-announced our preliminary financial results for our fourth fiscal quarter. This pre-announcement was part of our press release last month, where we also announced the initiation of a strategic portfolio review undertaken with the support of our third-party advisors and an additional share repurchase authorization, among other developments. This morning, I'd like to offer some color on the quarter and to say a few words about the current market and business conditions. I also want to introduce Michael Haack to you more formally today, as he will be taking the CEO reins in July.
Michael will bring you up to date on some of our initiatives to improve our primary lines of business, to further extend our low-cost producer positions, and to enhance the resilience of our businesses. Craig will go over the financial specifics for the quarter and our fiscal year, then we'll move on to your questions. I'm sure you will understand, I will not be commenting on or answering questions today on the strategic portfolio review itself, other than to say that management, our board, and our advisors are taking the review very seriously and diligently, and we are making progress on it. Now to the quarter. All in all, we had a quite respectable quarter, in spite of the widely discussed weather and related flooding issues that created delays and interruptions. Business demand fundamentals remain solid, and there are encouraging signs of improvement.
We maintain our base case expectations for low single-digit demand growth for our construction markets and for cement and wallboard specifically. The potential prospect of a federal infrastructure bill, even if it were a fraction of the levels being discussed now, would be additive and will tilt demand higher for U.S. cement markets. We did get meaningful price improvement in cement in April, and our customers are reporting good backlogs. The same cannot be said for wallboard right now. Our volumes do remain strong, but our first quarter price increase was not successful. We continue to generate significant cash, and the go-forward outlook for our cash generation is strong. Eagle remains dedicated to the disciplined use of that cash to preserve the company's financial flexibility and further enhance shareholder value. The company's three capital allocation priorities have been clear and remain clear.
First, heavy side acquisitions that meet our strict return criteria are consistent with our strategic focus. Second, of equal importance, capital investments to organically grow and improve our low-cost producer positions. Third, also equally important, is our balanced capital allocation strategy is the return of cash to shareholders through a combination of dividends and share repurchases. In this regard, it's worth noting that the company has returned nearly $600 million to shareholders in the form of dividend payments and share repurchases since the announced share repurchase authorization in August of 2015. Last month, our board authorized the repurchase of an additional 10 million shares, which increased the total authorization to 10.7 million shares, which is nearly 25% of the company's shares outstanding.
At the same time, I would add the perspective that our acquisition and capital spending during the past three fiscal years has been roughly $800 million, with about three-quarters of this spending allocated towards the heavy material side of our company. These investments include the acquisition of a cement plant in Fairborn, Ohio, a project to increase the finished mill capacity in our Kansas City cement plant, and projects to extend our cement distribution facilities to support our growing and integrated cement plant system, as well as projects to reduce plant energy consumption. This priority of improving our existing system of plants is an important one, and one that has been sustained through the cycles. And quite frankly, this sustained focus has been a key reason for Eagle's long and distinguished track record of superior margin and returns performance.
The operational and process improvement dimension arguably has been the most important part of Michael Haack's focus over the past four years as COO. Michael has taken on sequentially greater responsibility each year and over an increasingly larger scope of operations and processes and has distinguished himself every step of the way. His success in leading these efforts has been a key factor in developing board conviction as well as the conviction across our operating organization that he is well-prepared and well-suited to take on the CEO role at this time. Let me turn it over to Michael to comment on his priorities this last year.
Thank you, Dave, and thank you for the kind words. First, I would like to start by saying that Eagle Materials is an extremely healthy company with an exceedingly strong performance culture that permeates the entire organization. Eagle has a long and established track record of superior performance on virtually every dimension we measure. My point here is that while I will come into the CEO position with a humble frame of mind and the greatest respect for the organization and those who have come before me. We can and will build on this track record, and I truly believe the best is yet to come for our shareholders, our employees, and our other constituents. I certainly am committed to doing my part as a leader in this regard.
Let's discuss a few of the projects we have been working on to illustrate the disciplined investment back into the business. Let me give three examples, each representing a different aspect of our improvement agenda to lower cost, increase productive capacity, or realize system synergies. First, let's start with cement. In an environment where it is extremely difficult to expand cement plant clinker capacity due to permit-related caps, you need to be creative. At our Sugar Creek facility, where we are seasonally sold out, the answer is to balance grinding capacity with clinker capacity. For less than a $20 million investment, we were able to increase the amount of saleable product available to customers by about 125,000 tons per year. Through diligent engineering, we were able to select an option that also yielded significant power cost savings.
This is representative of the kind of projects we look for, relatively small capital, fast payback, high returning, and low risk. Second, let's discuss a larger scope project underway at our paperboard operation. The management of our paperboard plant has done a terrific job maximizing the amount of product that is produced. Through their creative, continuous drive for improvement, the plant is producing a substantially higher amount of product than the original design capacity of the machine. We continue to be sold out. We have a two-year, $70 million project underway that will add over 20% more productive capacity, reduce our dependence on certain fiber sources that are likely to become more scarce over time, lower production costs, and volumetrically reduce the chemicals required for the process. It is a new technology proven in other areas, but it will be the first in our industry.
It is a very exciting project that demonstrates our focus on lowering costs, increasing throughput, and increasing sustainability. The third example is about leveraging system benefits and synergies. We have doubled our cement capacity in recent years and have created a U.S. heartland system of plants. To capture the system benefits we have invested in our cement distribution network. We are upgrading our own infrastructure, something I hope the federal government will get around to doing for roads and bridges sometime soon. The systems we are building are using the latest technology to speed load times and will provide optionality across multiple transportation modes, including barge, rail, and truck. These individual investments conform to the small capital, fast payback philosophy.
Capital expenditures for fiscal 2020 are expected to range from $140 million-$155 million, depending on the improvement projects that we justify and which includes the spend curve of the $70 million project to expand our paper mill, which we expect to be completed late next spring. These examples are not intended to be comprehensive, but rather illustrative of investments we have going on in the operational improvement arena that will keep Eagle at the forefront of the competitive performance. Dave, unless you have any comments to add, let's turn it over to Craig to cover the financials.
Please, let's do that.
Thank you, Michael. Fiscal year 2019 revenue was $1.4 billion, about flat with the prior year. During fiscal 2019, improved cement and wallboard pricing was offset by the unusually wet weather and further weakness in our oil and gas proppants business. Revenue for the fourth quarter was $285 million, flat with Q4 fiscal 2018. Annual earnings per share of $1.47 reflects the impact of a $220 million pre-tax impairment loss related to our oil and gas proppants business. Excluding this non-routine item, EPS would have been $5.05. Fourth quarter EPS also includes the impairment loss, and excluding the issue, Q4 earnings would have been $0.87. Let's turn now to segment performance. This next slide shows the results in our heavy materials sector, which includes our cement, concrete, and aggregate segments. Heavy materials annual revenue was down 1%, and operating earnings were down 10%.
Declines were driven again primarily by unusually wet weather throughout the year, which hampered sales volume and by increased maintenance costs, which were partially offset by improved cement and concrete average net sales prices. Moving into the light materials sector, a 4% improvement in sales volume and a 3% increase in net sales prices drove an improvement in light materials revenue of 5% year-over-year. Annual operating earnings in our light materials business increased 13% to $216 million, reflecting the improved sales volume and pricing as well as lower input costs, namely recycled paper. In the oil and gas proppant sector, revenue was down 16% from the prior year, and we had an operating loss of $29 million.
These results reflect the impact of the industry-wide slowdown during the second half of the year. Sales volume was under pressure from reduced completion budgets and limited pipeline takeaway capacity in the Permian. In addition, pricing pressure resulted from the reduced demand and increased use of local sand during the year. As we mentioned in the press release, these factors, which are not expected to improve in the near term, led us to record an impairment of long-lived assets and goodwill during the quarter. The effect was a non-cash charge of approximately $220 million. Operating cash flow during fiscal 2019 improved 4% to $350 million. Total capital spending increased to $166 million. As Michael highlighted, this amount included investments to improve and replace existing equipment, complete our frac sand investment, enhance Eagle's distribution capabilities, and to continue to improve our low-cost operations.
Also during the year, Eagle returned nearly $300 million to shareholders through our share repurchase program and dividends. Finally, at March 31st, 2019, our debt to cap ratio was 37%. Thank you for joining today's call. We will now move to the question and answer session. Brian?
Thank you, sir. Ladies and gentlemen, at this time, if you would like to ask a question over the phone, please press star then one on your telephone keypad. If your questions have been answered or you wish to move yourself in the queue, simply press the pound key. Our first question will come from the line of Trey Grooms with Stephens. Your line is now open.
Morning.
Morning.
First off, welcome Michael to the call, and congrats on your appointment to CEO there.
Thank you.
I guess first off here for me, wallboard volume up 22%, clearly stronger than the market. Understanding you guys had a fairly easy comp, but still that's pretty impressive. Can you talk about some of the drivers there? Also, you mentioned that demand remained strong in April. Any additional color you could give us around that comment?
Sure, Trey. When I look back at December 17th, we had quite a bit of pre-buy volume that went into that month of December, as a result, the comp was relatively low versus prior year. We didn't have any pre-buy at all this year. We were in some markets that for us were very strong during the quarter. We're pleased with the volume. In terms of the volumes today, it is still strong. Our volumes have picked up a little bit, and we like the pace we're at.
Your outlook for low single digit demand growth, I think you mentioned that was on both sides of the business, that's kind of the outlook that you would have for the wallboard business even though you came out of the gate with a very strong calendar 1Q?
Yes, I'd agree with that.
Okay. Secondly, you mentioned meaningful price improvement in cement. Granted, I believe you guys even mentioned this throughout the year, that last year was a little disappointing relative to your expectations going into calendar 2018 with cement pricing and what was realized there in the market. I guess it sounds like you're seeing better traction there on the cement pricing side. First off, is that accurate? Secondly, is that across the footprint or more specific to certain markets? Then, in your opinion, what's driving that better pricing environment versus what you saw last year?
Yeah, Trey, this is Craig. The construction season has gotten off to a good start. As Dave mentioned, volumes have picked up. As we've said, utilization rates for the last couple of years have been high, and they continue to improve. While we won't get into specifics on the actual realization, we'll do that for you in the July call. The market environment just continues to improve for our operations and our Heartland system of plants. We look forward to continued strength in the construction season, and that's what's giving us a good outlook for that business.
Okay, fair enough. Last one for me, just a housekeeping and I'll turn it over. Craig, with the impairment of the frac sand business, what should we be thinking from just a P&L standpoint how that changes DD&A or anything else as we look going forward?
Yeah. There'll be a rather significant step down in the depreciation and amortization, going forward. Specifically quantifying, but it'll be significant. If you think about that business that's been running DD&A in the $30 million range this past year, that'll come down quite significantly, maybe not quite half, but somewhere in that neck of the woods. EBITDA-wise, it doesn't change the business. That will change the P&L.
Got it. Okay. Thanks a lot. I'll turn it over.
Thank you. Our next question will come from the line of Brent Thielman with D.A. Davidson. Your line is now open.
Hey, good morning, guys.
Hi, good morning.
First off, a little bit more on the wallboard business. Can you talk about the regional demand variations and what you're seeing, and what you're expecting and hoping for that?
We operate in the Sun Belt, and it's very strong in the Sun Belt markets, and we expect it to continue to grow. We mentioned low single digits, and that would be our estimate going forward.
Got you. Any outstanding impact from maintenance outages for this quarter, and what's the schedule to plan for the rest of the year look like?
Yeah. Our fiscal year just ended, I'll talk on a fiscal year basis. Our outages are typically in the June quarter, so the April, May timeframe. At the beginning of this past year, that cadence was a little different because of the cement plant we acquired in Ohio. Going forward, we'll be on a consistent maintenance schedule here in this June quarter.
Great. Thank you. One final one. A little bit more on the profit side of things. Do you have any updated thoughts on building more capabilities around brown sand to supplement your white sand capabilities within that business?
As we've said before, our investment in the frac sand business is complete, and we are not anticipating any incremental capital going into that business.
Great. Thank you for your time.
Thank you. Our next question will come from the line of Scott Schrier with Citi. Your line is now open.
Hi, good morning. I also wanted to say hi, Michael. Good to speak with you, and congratulations. Dave, I certainly enjoyed working with you over the past few years, so best of luck.
Same here, Scott. Thank you.
My first question, a little bit more on the growth CapEx project. If you could talk about why now is the right time, which seems to show that you have confidence, at least in the next few years, for paperboard capacity, how you thought about return hurdles and how this project comes in relative to those hurdles. How you came up with 70,000 of capacity? Is that due to engineering, or is that due to how much you think is going to be used and how much more you're going to be needed? Sorry to throw a bunch in here. If you can clarify the $70 million of CapEx, is that spread out between fiscal 2020 and 2021, or that's just the component that's going to be in 2020?
This is Michael. When we looked at the project, our paperboard facility has been sold out for very many years. Our customers were actually coming to us asking us for more capacity. We feel pretty comfortable that bringing this on, that those customers will consume that capacity. The 70,000 tons that you asked about for increased was just through process efficiencies we get. We had some space in the machine to do some changes to the machine that will let us speed the machine up. It will also let us use a different raw material product with less dependence on white fiber, which we currently today go across the U.S. to get the appropriate amount of fiber to run our operation. This takes a lot of risk out of our operation. The timing we felt was right.
Our customers were asking for the product, and the investment conforms to our normal investment criteria of a less than five-year payback.
Scott, to your last question, this is a project that has actually already been in place. We began this past year, in FY 2019's capital spending, a little over $10 million of spending has already occurred. The majority of the spending will finish up here in FY 2020.
Got it. Thanks. On wallboard, obviously margins compressed because you had a 4% year-on-year decline. If my math is right, it looks like ex shipping your production costs on a unit basis were down over 3%. I'm assuming that's attributable to both OCC and also efficiencies on the large volumes that you had. I'm curious if you can bridge some of the other factors and magnitudes of each, things like energy costs. How should we think about overall production cost trends in the near term in wallboard?
Yeah, Scott, it's a good question, and you're right. Costs were down in that business year-over-year. Certainly, paper prices is a piece of that, although we started to see paper prices down a year ago as well. Look, energy costs continue to remain low. You're talking about $2.60 a million or so for natural gas, and it looks like that will stay low. As we look forward with a benign OCC environment with natural gas prices still low, those input costs should not be significant or it's not significantly changed. Freight costs continue to go up, more modest than where we were a year ago. If you recall on this call a year ago, we talked about double-digit increases in freight. That's not anticipated for this upcoming year. Then you'll have some personnel inflation, but that's not significant.
As Michael pointed out, as we've said in the past, we continue to invest in our assets to reduce our consumption of energy and other raw materials. Again, Scott, as we've talked about, we are largely a natural gypsum-oriented, raw material base, which keeps our costs pretty consistent. From then in that environment, we're pretty well positioned.
Got it. Then one more, I think on the last question you mentioned EBITDA and frac sand should essentially be the same. Are you saying that where we are, we're still going to really see that business run basically at a cash flow neutral rate? If there's any other plans for frac sand, whether you're looking at idling more assets or anything, if you could speak to that.
Yeah, Scott, as we've talked about a couple of times, from a cash flow perspective, that business today is neutral on an operational basis. From an investment perspective, there's no incremental investment into that business. Cash flow wise, it is neutral to Eagle today. In terms of the go forward look, I think I would just suggest to you visibility is very limited, and not only for us, but I think for our customers as well.
Great. Thanks a lot. Good luck.
Thank you. Our next question will come from the line of Jerry Revich with Goldman Sachs. Your line is now open.
Yes, hi. Good morning, everyone, and Michael and Dave, congratulations.
Thanks.
Thanks, Jerry.
I'm wondering if you could offer your take on the cement pricing cycle. We're at a very tight capacity utilization nationwide, yet we're looking at pricing for the industry, and we're seeing it here in your results, too. That's really not keeping up with inflation and pricing for other construction materials product lines. Can you just talk about your view on why the cement pricing cycle is playing out differently from what we've seen in the past and what most of us would've expected a couple of years ago at this point in the cycle?
Yeah, Jerry, I guess that's a backward-looking statement about calendar 2018. Again, as we talked about, fairly much of a washout year across many parts of the country. As we look forward, as we talked about in the beginning, we think the pricing opportunity for this business should continue to improve as utilization rates improve at already fairly high levels. Again, for our markets, not talking about all the markets in the U.S., but the ones that we play in and where we are in terms of our utilization rates gives us confidence around the pricing cycle for the remainder of this cycle.
Craig, so your comment implies price realization improves to the, call it $5-$6 per ton range, which is, I think, a bit better than what we've been hearing about a couple of dollars price increases that had been expected to be implemented across most markets. I just want to clarify when you mean more meaningful inflation in this fiscal year, that we're on the same page that we're not talking about a 2%-3% type price increase. We're talking about more substantial price realization like we've seen earlier in the cycle.
Jerry, I'm not trying to quantify the actual number for you, and we'll do that in the July call. In terms of looking forward over the remaining part of this cycle with these higher utilization rates and continued growth in demand, we should see continued improvement in cement prices on the forward look.
Can you talk about, across all of the markets that you folks serve, what proportion of the markets are achieving the price realizations in April or earlier this year, and what markets the price increases have failed to go through?
Yeah. We have cement price increases across all of our markets that were being implemented in April.
Successfully implemented in April?
They were across all of our markets in April, and we've seen improvement across all of our markets in April.
Okay. In terms of from a wallboard pricing cycle standpoint, can you just talk about how we should be thinking about wallboard pricing for you folks from here, given the different cadence in the pricing schedule this year compared to last year?
Jerry, I would just look at the housing start numbers. They've been soft the last three or four quarters, and actually the permits have really outpaced the housing starts. Just keep an eye on that. That'll be a good indication of what our intentions are.
For pricing, Dave?
Yes, sir.
Okay, perfect. Thank you, everyone. I appreciate the discussion.
Thank you. Our next question will come from Adam Thalhimer with Thompson Davis. Your line is now open.
Hey, good morning, guys. I wanted to ask first on the wallboard volumes, your comment about up low single digits. Do you see that as a comment kind of consistently across the rest of the calendar year, or is that for the full year, including the 22% increase in Q1?
Adam, it's a good question. We've had some variation because of pre-buy activity and timing of price increases, and I'll remind you that a year ago, we also had a price increase that went into effect in mid-July. We had pre-buy activity in May and June. The comparability for even this past quarter and this upcoming quarter will be a little wonky. I think what we're trying to communicate is if you think about what's hung on a wall, right? Trying to parse out pre-buy activity, and actually look at the underlying economic, and the improvement in sales volume. That's the low single-digit improvement that we're expecting that what our customers are moving product will be that type of improvement.
Okay. Understood. I wanted to ask about on the If I look at your Cement business, Craig, last year, the operating margin's down 300 basis points year-over-year for the full year. How much of that was the maintenance that you talked about?
It was a big piece of it. Again, the other costs were pretty on par. Certainly, volume impacts that. When you have a fixed cost business with slightly lower volume, that will impact your cost structure as well. Maintenance, and some of that maintenance, if you recall, as I mentioned earlier, was oriented around the timing of the Fairborn acquisition. That will start to be more consistent. There were some outages in the fall timeframe that were not expected and shouldn't continue.
Great. Okay, thank you.
Thank you. Our next question will come from Philip Ng with Jefferies. Your line is now open.
Hey, guys. In Cement, it was clearly impacted by weather in the quarter. Curious if you've seen a pickup in activity in April, May. Some of the other heavy material producers that have reported thus far have talked about seeing a little catch up from some of the projects that were pushed out from last year due to weather and maybe some of the bottlenecks, whether it's labor or some other element improving. Just curious to get your thoughts in the markets you're in.
Yeah. As I said earlier, Phil, the construction season has gotten off to a very good start for us.
Okay. From a competitive standpoint for wallboard, pricing did fade a bit. Curious what you're seeing on that front. Have things kind of leveled off? Any color on where wallboard prices kind of exited last quarter, and where are things settling out in May?
What I can tell is we did have some competitive pressures the first three and a half months of this year, and our exit price at the end of March was probably a couple bucks lower than the average that we reported for the quarter.
Okay. Has that stabilized in May?
Yes, sir.
Okay, great. From a buyback standpoint, you guys have obviously announced a pretty big authorization, and then bought back your stock pretty consistently last year. Just curious how you're thinking about the pace and sizing this year, just given your stock obviously bounced from the bottom a bit. Any color on the M&A pipeline would be very helpful. Thanks.
Yeah, Phil, it's a good question. In terms of the share buybacks, if you look at what we've done the last several quarters, we've actually picked the pace up pretty significantly from where we began last year. I can tell you, we've continued to see good value in the shares and have continued to pick up the pace on the share repurchases. We'll be in the market. On the M&A environment, as we pointed out in the beginning, again and again, our emphasis has been predominantly on the heavy side of the company, on the Cement and the Aggregates businesses. Right there's criteria that have to be met, quality of the asset, the location of that asset, and then frankly, the valuation of those assets.
If those opportunities, if those three criteria are met, there's a reason to invest, and we'll look hard at it. To the extent those criteria aren't met, we'll continue to return cash to shareholders, as we've done in the past. It's a constant balance between those items.
Okay, great. Thanks a lot.
Thank you. Our next question will come from the line of Josh Wilson with Raymond James. Your line is now open.
Good morning, Dave, Michael, Craig, and Bob. Congratulations on the good quarter, and Michael, I'll add my congratulations as well on the new position. I look forward to working with you.
Thanks.
Regarding the paper pricing, I was surprised to see that move up sequentially as much as it did in light of the broader trends in OCC. Can you talk about what your outlook is for that going forward?
Josh, the paper pricing is a contractual arrangement and a formula, if you will. As paper sales go, so will that price. It's going to follow and stay pretty much in this range, absent OCC doing something unusual.
Got it. In light of the impairment charge, can you give us a sense of what the tax basis might be of the Proppants business now?
The tax basis continues, if you think about it as part of tax reform, the other things Well, let me say, first, the impairment didn't have an impact on the tax basis. That's a GAAP accounting entry, not affecting your tax books. In addition, with tax reform, there were other changes that were made so that investments were immediately deductible. You've heard the accelerated depreciation moniker. Those assets are depreciated over a fairly short period of time. It's not a tax basis that's consistent with our investments over time. It's lower than that.
Got it. Then to the extent you're comfortable, Dave, can you give us a sense of what past portfolio reviews the board has done have looked like or entailed, or what ways this current one might be different?
We're not going to comment on that. The board is fully engaged on the project, and we will report back to you when the time is appropriate.
I understand. Good luck with the next quarter.
Thank you.
Thank you. Our next question will come from Keith Hughes with SunTrust. Your line is now open.
Thank you. My question is in wallboard. What is your view on distributor inventories, or said another way, in the second quarter, do you expect to be producing at the rate of end-use demand, or will there have to be some kind of a takedown?
Keith, in reality, there is not a lot of inventory storage capability at either the distributor level and/or frankly, at the manufacturer level, at least at our facilities. It's a product that can't be stored outside, as you know. It will go bad over time. It's pretty limited. We always match our supply with demand as a result because you can't store it outside.
Okay. We do have pre-buys periodically, as you discussed just earlier, that can affect demand. I think what I hear you saying is that you expect to go wherever demand goes in the quarter. Is that fair?
Yeah. pre-buy, to be clear, is weeks, not months.
Got it
of sales opportunity. It gets a lot of attention because of the quarterly variation. You really got to look at these business over a 12-month view, and in reality, that it doesn't move the needle a whole lot.
Okay.
Yeah, Keith. A distributor would normally carry about a month's supply of drywall, and if he surges, he might get two or three extra weeks. There are accounts like mass merchandisers that have no ability to surge.
All right. Okay. Thank you very much.
Thank you. Ladies and gentlemen, this concludes our question and answer session for today. Now it is my pleasure to hand the conference back over to Mr. Michael Haack, President and Chief Operating Officer, for any closing comments or remarks. Please proceed, sir.
Yes. Just wanted to say thank you for participating in today's conference call and webcast, and we look forward to talking to you later this summer.
Ladies and gentlemen, thank you for your participation on today's conference. This does conclude our program, and we may all disconnect. Everybody have a wonderful day.