FSTR - NASDAQ

Good day, and thank you for standing by. Welcome to the Q1 2024 L.B. Foster Earnings Conference Call. At this time, all participants on this known mode. After the speaker's presentation, there will be a question-and-answer session. [Operator instructions]. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Stephanie Schmidt. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to L.B. Foster's First Quarter of 2024 Earnings Call. My name is Stephanie Schmidt, the company's Investor Relations Manager. Our President and CEO, John Kasel; and our Chief Financial Officer, Bill Thalman, will be presenting our first quarter operating results, market outlook and business developments this morning. We'll start the call with John providing his perspective on the company's first quarter performance. Bill will then review the company's first quarter financial results. John will provide perspective on market developments and company outlook in his closing comments. We will then open the session up for questions. Today's slide presentation, along with our earnings release and financial disclosures, were posted on our website this morning and can be accessed on our Investor Relations page at lbfoster.com. Our comments this morning will follow the slides in the earnings presentation. Some statements we are making are forward-looking and represent our current view of our markets and business today. These forward-looking statements reflect our opinions only as of the date of this presentation, and we undertake no obligation to revise or publicly release the results of any revisions to these statements in light of new information, except as required by securities laws. For more detailed risks, uncertainties and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and presentation. We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and reconciliation tables provided within today's earnings release and within our accompanying earnings presentation carefully as you consider these metrics. So with that, let me turn the call over to John.

Thanks, Stephanie, and hello, everyone. Thank you for joining us today for our first quarter earnings call. Please turn to materials to highlight the quarter on Slide #5, which reflect continuing progress to this [Indiscernible] momentum to our strategic transformation. First quarter organic sales improved to 16.9% over the prior year, with an exceptionally strong quarter delivered by our Rail segment. In fact, rail segment sales were up 29.4% on an organic basis. The improved sales performance coupled with a 90 basis point gross margin improvement, ending at 21.1%, drove a 32.4% increase in adjusted EBITDA year-over-year. The overall improvement in profitability was driven by real estate, which delivered strong profit and approval in Technology Services and Solutions business, both in North America and the United Kingdom. Infrastructure results were somewhat soft during the quarter with organic sales basically flat year-over-year as the precast business was adversely impacted by challenging winter conditions in observed markets. However, market demand remains robust in our Infrastructure segment, and we expect results to improve as we continue to move through the construction season. As expected, our net debt increased to $74.9 million during the quarter, reflecting the increased funding to our working capital to support sales growth along with annual bonuses and insurance premiums. It's important to note that our net debt was down $3.5 million versus last year and the gross leverage ratio of 2.2x [Indiscernible] year-over-year. As mentioned in the announcement, we sold [Jason] property associated with our former joint venture [Indiscernible] for $3.5 million in net proceeds. The [associated] gain was excluded from our adjusted EBITDA for the quarter. Order rates recovered in the first quarter increasing 25.5% sequentially and 3% last year on an organic basis. Backlog remains healthy at approximately $222 million, which is down $37.6 million versus last year. Noting that $12 million increase is due to strategic divestitures completed in 2023. The balance of decline is largely due to our rail distribution business, which has improved to pre-COVID order fulfillment lead times, translating to sales growth at a lower order book level. With the strong start to the year in line with our expectations, we reaffirmed our 2024 financial guidance and believe we are on track to achieve our 2025 financial growth established over 2 years ago. Bill will now cover the detailed financials for Q1, and I'll come back at the end with some closing remarks on our markets and our outlook. Over to you, Bill.

Thanks, John, and good morning, everyone. I'll begin my comments covering consolidated highlights on our first quarter on Slide #7. As a reminder, the schedules in the appendix provide more detailed information on our financial results for the quarter, including certain non-GAAP measures discussed on today's call. As John mentioned in his opening remarks, our first quarter results were strong, driven by both organic growth and the portfolio moves we made in line with our strategic road map. Portfolio moves completed last year include the sale of Chemtec at the end of Q1 and the sale of the concrete ties business at the end of Q2. In addition, last year, we announced the exit of our Bridge -- Bridge deck product line in Q3, and we also completed the Cougar Mountain Precast acquisition in Q4. Organic results reviewed throughout today's presentation provide insight into the performance of our base business, excluding these portfolio actions. Net sales for the quarter were up 7.6%, 16.9% on an organic basis with the organic growth driven primarily by the strong results in the Rail segment, while infrastructure organic sales were essentially flat year-over-year. Gross profit was up $3 million, which drove a margin expansion of 90 basis points, improving consolidated margins to 21.1%. The improvement was driven by the rail sales uplift as well as the benefit of portfolio actions and improved product mix. Selling, general and administrative costs increased over the prior year due to personnel and professional services costs. However, as a percentage of sales, SG&A was down 20 basis points to 18.3%. Net income for the quarter totaling $4.4 million included a $3.5 million net gain on the sale of the Magnolia, Texas property. The net gain realized was equal to the proceeds received as the property carried 0 book value after the time of the sale. The net gain realized on the property sale was excluded from the adjusted EBITDA for the quarter, which was $5.9 million, up 32.4% versus last year. As expected, cash used for operating activities in the quarter was $21.9 million due to seasonal working capital needs, coupled with funding for prior year incentives and annual insurance premiums. I'll provide some additional color on orders and backlog by segment later in the presentation. The bridges on Slide 8 reflect the organic and portfolio-driven impacts on sales and adjusted EBITDA for the quarter versus last year. The bridge on the left side highlights the strong organic growth realized in Q1 with a $19.5 million sales increase representing 16.9% organic growth. The net impact of M&A activities decreased revenue $10.6 million or 9.2%. The bridge on the right side highlights the improved profitability delivered from both organic and M&A drivers. Notably, adjusted EBITDA was up $0.6 million from M&A activities despite the related $10.6 million decline in sales. The EBITDA leverage on the strong organic sales growth was tempered due to lower profitability and infrastructure, coupled with the higher SG&A. We expect our profitability from organic sources will improve as the year progresses. Overall, we're pleased to see the uplift in adjusted EBITDA, resulting in a 90 basis point improvement to 4.8% of sales for the quarter. Slide 9 highlights the progress we've made in sales growth and margin expansion over the last 2 years. The net impact of our strategic execution resulted in a 7% adjusted sales growth for the trailing 4 quarters ended March 31, 2024. Of course, this reported result includes the impact of our portfolio work. Organic growth over the same time period averaged approximately 13% per quarter with a 16.9% realized this quarter being the high point. Over the trailing 4 quarters, adjusted gross profit increased 17.3%, resulting in a 190 basis point improvement in adjusted gross margin to 21.4%. As a result of our portfolio work and profitability initiatives, adjusted gross margins have exceeded 21% in each of the last 4 quarters. We're very pleased to see the impact of our transformation in our results and believe the structural improvement in the gross margin profile of our business will continue to deliver improving margins given the demand outlook from our infrastructure end markets. Over the next couple of slides, I'll cover our segment performance in the quarter, starting with the Rail segment on Slide 10. First quarter rail segment revenues totaling $82.6 million were up 28.3% over last year, including a 1.1% decline from the Pie divestiture. Strong organic sales growth was realized in both Rail Products and Technology Services & Solutions business units. We're especially pleased with the results in TS&S, which included an uplift from the domestic rail safety business as well as some modest recovery in the U.K. Rail margins of 22.5% were up 30 basis points year-over-year driven by the strength of the TS&S business. New rail orders increased 13.6% year-over-year and 39.4% sequentially, driven primarily by rail products. While backlog levels decreased 24.3% versus last year, this decline is primarily due to shorter lead times and improved order fulfillment in rail products, resulting in meaningful sales growth with a relatively lower backlog level. Last year's orders and backlogs associated with the divested concrete ties business were $2.7 million and $3.5 million, respectively. Turning to Infrastructure Solutions on Slide 11. Segment revenue decreased $9.4 million or 18.4%. However, 19.5% of the decline was due to divestiture and product line exit activity. Organic sales were relatively flat with a 1% increase over the prior year. Strong growth in steel products was offset by the impact of adverse weather conditions on customer project installations and precast concrete. Gross profit margins were up 80 basis points to 18.4% due primarily to portfolio changes executed over the last 12 months. New orders were $48.6 million, down $17.1 million from the prior year quarter with divestiture and product line exit activity contributing a decline of $8.5 million. Backlog totaling $136.2 million reflects a $10.1 million decrease, $8.5 million of which was due to M&A activity. I'll now cover our liquidity and leverage metrics on Slide 12. We were pleased to see the continued improvement in our net debt and gross leverage metrics compared to last year. Net debt levels decreased $2.5 million, and our gross leverage ratio decreased 0.2x. As expected, we saw an uptick in both net debt and gross leverage during the quarter to fund seasonal working capital needs as well as prior year incentive bonuses and annual insurance premiums. We remain confident in our ability to manage our leverage metrics around 2x over the long term given our capital-light business model and improving cash generation outlook. While we had a $21.9 million use of cash from operations during the quarter, we expect operating cash flow to improve along typical seasonal patterns as the year progresses. We remain confident in our free cash flow outlook guidance of $12 million to $18 million in 2024, which includes the final $8 million that's owed under the Union Pacific settlement agreement. Cash generation will be prudently deployed along our capital allocation priorities, including continuing the execution of our share buyback program with $12.3 million of the original $15 million authorization still available through February of 2026. In summary, we believe the key drivers of strong sustainable free cash flow are in place and should continue to improve throughout the balance of 2024 and beyond. I'll next revisit our capital allocation priorities outlined on Slide 13. As I just mentioned, we continue to focus on managing leverage levels while opportunistically investing in organic growth opportunities we see in Rail Technologies and precast concrete. We're comfortable with gross leverage around 2x, which is down from the recent 3.3x high point seen after the complete -- completion of 3 acquisitions in the summer of 2022. Capital spending is expected to run around 2% to 2.5% of sales on average, which is slightly higher than our historical levels due to investments in our growth platforms. As mentioned before, we continue to evaluate opportunities to return cash to shareholders through our stock repurchase program and we've been active since its inception in February of 2023, repurchasing approximately 151,000 shares or 1.4% of the outstanding shares at an average price of $17.89 per share. We continue to evaluate small tuck-in acquisitions that can extend our product portfolio within our growth platforms, such as the recent Cougar Mountain acquisition that was completed at the end of 2023. And finally, we continue to consider a dividend as a capital allocation option as the prospects for stronger free cash flow improved. My closing comments will refer to Slides 14 and 15, covering orders, revenues and backlog by business. The book-to-bill ratio over the last 12 months was 0.941, which is somewhat softer due to the strong order book fulfillment rates and improved lead times. First quarter order rates did improve sequentially 25.5% and were up 3% on an organic basis, highlighting an improving trend in the demand levels. And lastly, our consolidated backlog on Slide 15 reflects a healthy level with the decline year-over-year due both to divestiture and product line exit activity, coupled with improved lead times and order fulfillment execution. As mentioned in the past, our order rates and backlog are susceptible to swings driven primarily by large order timing in our rail distribution product offering. Despite the lower backlog level, we remain optimistic in the longer-term prospects for growth and demand across our portfolio and expect this will translate into improving backlog as the year progresses. In summary, we're pleased with the strong start to 2024 and look forward to continuing this progress throughout the balance of the year. Thanks for your time, and I'll now hand it back over to John for closing remarks. John?

Thanks, Bill. Please turn to Slide 17 for an overview of our key business and market drivers underpinning our outlook. We are optimistic and longer-term prospects for growth in our end markets through both segments, particularly given the continued excise on infrastructure investment. In 2023, we again realized some project-related business from U.S. federal programs approved over the last several years, and we expect that to trend to continue going to 2024 and beyond. In addition, emphasis on [real safety] programs is another favorable driver for our business. We've seen an uplift in demand for our total track monitoring technology products in 2024 and [Indiscernible] this trend will continue. We are also cautiously optimistic that the U.K. construction markets have stabilized and showing modest signs of improvement after a challenging 2023. And finally, record spending on recreational parks and campgrounds funded by the Great American Outdoors [Indiscernible], continues to drive strong demand for our CXT Concrete buildings. Coupled with government funding for road and bridge rehab projects as well as robust regional commercial and residential real estate development. We believe the outlook for our long-term demand is favorable for our Infrastructure segment. In summary, overall prospects for sustainable profitable growth should remain strongly of the infrastructure investment super cycle we expect for years to come. On Slide 18, I'd like to emphasize the investment thesis for L.B. Foster which is supported by 4 key pillars. First, we've taken the strategic steps necessary to transform our business portfolio, resulting in structural improvements in profitability that were delivered in 2023 and are continuing as evidenced by the first quarter results. Second, we reported strong organic growth in 2023 and also started this year again with health to growth. It's our belief and strategy that we will presenting infrastructure pure play with [Indiscernible] for growth through the multiyear investment programs that are clearly needed in our served markets. Third, with the exceptional cash flow in 2023 and our capital-light business model, coupled with improving profitability and the completion of our Union Pacific settlement payments later this year should all provide even more favorable cash flow in the future. Fourth and finally, we have a disciplined capital allocation process with multiple drivers that have been deployed and creating value for our shareholders as evidenced in our improved equity returns. So in summary, we believe our strategy is sound and our execution along these 4 pillars should deliver improving results through 2024 and beyond. With these pillars in place, we're confident in our prospects for the future. As I wrap on today's call on Slide 19, I'll remind everybody we even closely monitoring the potential for L.B. Foster to be added back to the Russell 2000 index this year. Our market cap as of last Tuesday, the measurement date was approximately $255 million, up 106% over last year. Index was up 11.6% over the same time period and the market cap cutoff last year was approximately $160 million. Given our equity performance relative to the index, we believe we'll be on the list for inclusion once published later this month. Looking back, it's been 2.5 years since our Investor Day. At that time, we rolled up the strategic transformation road map and aspirational goals for 2025. [Indiscernible] completed 9 transactions through a simplified our business structure, improved our profitability profile and align the business to capture robust demand in our set infrastructure markets. We are pleased with the progress that the journey continues. We reaffirmed our guidance for 2024 and have a clear line of sight to our goals for 2025. Our team is energized by the prospects for the future. Yes, indeed, we have no momentum. As I started today's call, I will end the call with recommission to our employees in the Real estate this time on a topic of safety. This group worked the entire first quarter over 365,000 employee production hours with record injury. Congratulations to Greg Lipper who leads this group and all that made this happen. So with that, thank you for your time and [Indiscernible] interest in L.B Foster. And I'll turn it back to you, operator, for the Q&A session.

Thank you. As a reminder, [Operator instructions]. Our first question today will be coming from Alex Rygiel of B. Riley Securities. Your line is open.

Thank you, and good morning, gentlemen. So a couple of quick questions here. First off, very nice quarter. Congratulations on that. But there was no change to our full year guidance and understanding it's early. First quarter was strong. Did you see any kind of pull forward? Or are you really just kind of staying conservative given where the new order activity is in the first quarter?

Yes. Actually, we're pretty -- the order activity we're feeling pretty good about. We did have a little bit of activity that we thought may be a Q2 that moved into Q1. But most of it is, like you said earlier, is Q1. And there's a lot of headwinds out in the markets today. We're experiencing some nice results and nice start, but we're being cautious in our guidance that we're giving in the market.

Fair enough. And then as it relates to your comment about shorter lead times, can you go into a little bit more detail on that and [Indiscernible]?

Yes, I appreciate that. Yes, real distribution, I mentioned that and kind of back to pre-COVID levels. It's a good thing. It did impact what we built in the backlog because in the past, we had -- the customers were coming to us with the extended lead times and gave us orders and greater visibility because you have to build out that capacity in the mill, specifically a [SIPCO], which is a steel provider. And in the last 6 months or so, we've seen that get back to basically normal conditions, so the order rate or and bidding rate is still good, but they just don't need to place the orders as often as they did in the past, resulting in a little less order book. But that's a good thing for us. We're being pretty stressed or, if you will, from a supply chain in the past. So we feel much better about where we're at today. It's much more back to normal.

And then lastly, as it relates to capital allocation, clearly, you expect a pretty decent cash flow this year. CapEx is sort of being managed and maintained. So I suspect that's going to free up some capital here to allocate towards M&A. So maybe if you could talk a little bit about that and how you think about using debt and stock and future M&A transactions.

I'll start, and I'll let Bill join in as well. First of all, Bill mentioned we're 2% to 2.5% of sales is our capital play. So we're pretty light on the capital side. We like to do what we can, think through things, really work on the process itself and then bring capital only when it's needed which has been very beneficial for us, especially with -- as you see, our improved margins. A lot of that is the heavy lifting and by our men and women that are just making things and doing things better, including the safety results that I mentioned. Cash is critical. Free cash flow is something we really measured, we monitor. We're excited about getting to the settlement payments with Union Pacific. That's $8 million that comes off and changes in the balance of this year and we'll have some dry powder as we move forward. But get it back to your M&A question, right now, we did quite a few as we mentioned, 9 deals in the last 2.5 years. And we feel very good about where we at with respect to our portfolio. We went from 3 segments to 2 segments and we're really focused on execution right now, make sure we hit the guidance and then go from there building our platform. With the mind is in 2025, the numbers that we put out there, we put 2.5 years ago in building that platform, building that growth top and bottom line lined up to that. So we're not going to get too crazy as far as M&A work. I think we built a lot of credibility back in the marketplace today and showing up what it is that we are, building our core comp and very focused on our things that really make the profitability in our investors' interest in the company. That said, we will continue to look at the cash situation. And Bill, I'll let you maybe chime in on what your thoughts are, including the dividend, perhaps in the future.

Yes. Yes. I guess I would say after John's point, we had a great cash flow year last year, right around $32 million, $33 million of free cash flow last year, and the guidance is $12 million to $18 million this year. And the CapEx that we're doing this year is actually a little higher run rate than what we would expect over the longer term because of some of the organic opportunities we're investing in that will help us make the jump from where we are expecting to be in '24 to '25 guidance. And then with the stock repurchase programs, those will be continuing. And with the UP obligation going away and stronger cash flows in 2025, I think that's when the prospects of a dividend will get greater attention and that's something that's continuously a discussion with our Board today. So feeling good about the direction we're going and look forward to continue to make progress this year.

[Operator instructions]. The next question is coming from Chris [Bake] of Singular Research your line is open.

I had a question on backlog trends. You mentioned you see it improving throughout the year. Can you help us understand or give a sense as to what levels do you see it going to?

Well, first of all, the bidding activity is very, very strong right now across the entire company, both in the infrastructure and rail side. I mean, sequentially, we feel very good about our uptick in the activity from quarter-to-quarter and even when you look at Q1 versus Q1 year-over-year. I don't know necessarily, we don't give guidance to what the backlog is. All I know is we have enough activity and upending activity to be able to reconfirm our guidance for this year.

Okay. Great. It looks like rail had a good quarter for revenue growth. Can you comment on what were the main drivers there?

We had -- as I mentioned in my remarks, a very strong performance in rail and actually very good performance of the entire rail segment, including the U.K. I haven't said that in quite a while. I'd say a year, it might have been even longer. So U.K. year-over-year has really stabilized and something that we feel much better about conditions going forward. The team over there has done a great job of just rightsizing as to what the market is going on, and we saw that come through in the first quarter. Our acquisition we made over there scratch been also had a very, very good quarter with nice profitability. So that came through. And the other piece that really is jumping off the page is our condition monitoring here in North America related to our salient business, specifically with the [Wild Mark 4], introduction of that product in the market, specifically helping our customers, the freight customers as well as the transit customers with safety and safety measures that are going on, keeping the trains on the track as well as really looking at their operational efficiencies and effectiveness of how we run and manage their train operations. They've had a very, very strong start to the year, and they're going to continue to have a fantastic year as far as we can see. So we're very excited about the technology, the innovation, the things that the company has really been working on in the last couple of years, moving us migrating this technology from the U.K. and Western Europe and North America, and we're really seeing the fruits of our labor right now in the rail space. So that's really exciting us as much as anything else. It may not be coming through a per se, order backlog in dollars to dollars, but it's coming through a profitable backlog with gross margin and giving us the opportunity to really grow this business to do something significantly. So from that point of view, where we expected to be at this time, and we're looking to put together a strong Q2 and beyond.

One moment for the next question. And our next question is coming from Justin [Bergner] from Gabelli Funds.

Nice Quarter. Just a couple of questions. On the infrastructure side, any sort of estimated quantification of the impact of tough weather on sales and EBITDA in the quarter?

Yes. We really didn't put a pen of the paper on that. I was often myself in that geography this spring between the rain and you actually had snow and talking to customers, it was just a lousy quarter related to -- we built quite a bit of product ready to go. And as the construction areas kind of dry out, things will improve. I really couldn't put a number to it. Maybe, Bill, you gave [Indiscernible].

Just to get -- hi, Justin, just to give you order of magnitude, the precast business unit was down about 13% on a year-over-year basis, which is just about $3 million. And we would say the lion's share of that was due to the weather impact. We've got a good order book position for the business. We feel like we're going to get back on track in the second quarter, but that was the year-over-year decline attributable to the precast business within Infrastructure.

Okay. And are you seeing any macro impacts on precast positive or negative, I guess, the negative side might be higher interest rates? Or is that still very manageable?

No. No, very manageable. And the supply chain, as I mentioned on the rail side, getting back to normal, the supply chain related to concrete and availability of cement is getting back to normal. So that's very, very good for us. The allocations that were there in the past can limit our ability to perform, that situation has improved dramatically. Our markets are booming, doing very, very well down in Texas and the Southeast related to the need for concrete. So we don't see any pushback on concrete or the type of products that we're providing in the marketplace. To the contrary, the opposite. We're running -- we'll be running at full capacity as long as we can see.

Okay. That's great. On the rail side, help me understand there wasn't much gross margin, I guess -- or there's modest gross margin improvement on sales being very strong. Is that just a function of some mix or would you expect margins to be flat with this type of sales growth normally?

Yes. Yes, that's right. I'll let Bill get into the details -- actual numbers, [Indiscernible] to share, but it's definitely a mix play that we see came through this year, which is typical in the rail with the project type work that we do. If we get a big rail product type work that's moving around by components, rail components, we'll bring down the revenue will be up in respect to margin will be a little bit dilutive on the bigger picture. But the nice thing is after we supply that, you got the other products coming right behind it but the friction management and the condition monitoring, things like that, that really helps boost up the profitability. And that's the nice thing of our company is we give them the whole package now. It's not just selling the components anymore, it's about providing the [Indiscernible] chemicals and the treatments and now they're monitoring devices for them to run effectively. So that mix will come in and out but as we get into more of the actual rail season, which is Q2 and Q3, most of the work is done that's where we'll see the really uplift in leveraging of the business even more -- it will be more impactful. Bill, any color you want to add to that?

Yes. Yes. Thanks, John. The -- I guess what I would highlight is the growth that we saw within the Rail segment was highlighted by rail products where they were up in terms of dollars, $13 million on a year-over-year basis, about 33%. And across the portfolio, that's the business that's going to have the lowest gross profit profile, which would have tempered the margin growth that we saw on a year-over-year basis. On the other hand, steel product -- sorry, TS&S, which is the technology element of the portfolio had really strong growth on a year-over-year basis, about 100%. Now from the dollars point of view, they're a much smaller component of the business and their margins are stronger as well. So that contributed to the lift that we saw but from a percentage point of view, the strength in the Rail Products portion of the business is really what tempered the margin performance on a year-over-year basis.

Okay. Got it. And then just one last question on rail. So it seems like what you're saying is there's very good growth in rail, but some of the revenue increase in the first quarter was a function of working down backlog as lead times return to normal, but amidst still a good [Indiscernible].

Yes, that's right.

Thank you would like to ask questions, [Operator instructions]. At this time, there are no more questions in the queue, and I would like to turn the call back over to John for closing remarks. Please go ahead.

Thank you, Lisa. We appreciate everybody's for being a part of today's call. As I said in my opening remarks, we had exceptionally strong start to 2024 and we have momentum. So we really feel good about where we're at today. We have quite a bit of work to do ahead of us to hit our aspirational goals of what we've set off to do, but we're off to a great start of the year. And I really appreciate everybody's -- the company, the employees as well as the Board of Directors, everybody coming together to make this happen. I mentioned earlier with the group, the safety performance. And that's really a testament to when we put our efforts together of really focusing on making something important, and safety is a core value of our company that we -- this company makes results happen. And that was a great example of us coming together. The last couple of years have been a tough time for the company. It's been exciting to see everybody moving together kind of rowing the boat together and really focusing on things that are really driving the profitability as well as our return to our shareholders. And [Indiscernible] so much it's a fun place to work today. So thanks to everybody. Thanks to the company as well as investors are saying [Indiscernible], and we feel good about where we're at today and understand we're going to keep working on your behalf into the future. So thanks again. Have a wonderful day, and we look forward to talking to you after Q2.