CPS - NYSE

Good morning, ladies and gentlemen, and welcome to the Cooper Standard First Quarter 2023 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference call is being recorded, and the webcast will be available on the Cooper-Standard website for replay later today. I would now like to turn the call over to Roger Hendriksen, Director of Investor Relations.

Thanks, Gerald, and good morning, everyone. We appreciate you joining our call today. The members of our leadership team who will be speaking with you on the call this morning are: Jeff Edwards, Chairman and Chief Executive Officer; and Jon Banas, Executive Vice President and Chief Financial Officer. Before we begin, I need to remind you that this presentation contains forward-looking statements. While they are made based on current factual information and certain assumptions and plans that management currently believes to be reasonable, these statements do involve risks and uncertainties. For more information on our forward-looking statements, we ask that you refer to Slide 3 of this presentation and the company's statements included in periodic filings with the Securities and Exchange Commission. This presentation also contains non-GAAP financial measures. Reconciliations of the non-GAAP financial measures to their most directly comparable GAAP measures are included in the appendix to the presentation. So with those formalities out of the way, I'll now turn the call over to Jeff Edwards.

Thanks, Roger. Good morning, everyone. We certainly appreciate the opportunity to review our first quarter results and provide an update on our business and outlook going forward. To begin on Slide 5, we provide some highlights or key indicators of how our operations performed in the first quarter. I'm extremely pleased with our operational performance and the focus our teams have maintained in such a dynamic environment. We are continuing to execute at world-class levels in delivering quality products and services to our customers and in keeping our employees safe. In fact, we had one of our all-time best quarters in terms of product quality with 99% of our customer scorecards being green. In terms of new program launches, our customer scorecards were again excellent at 96% green for the quarter. Most importantly, the safety performance of our plants continues to be outstanding. Through the first 3 months of the year, we have a total incident rate of just 0.34 reportable incidents per 200,000 hours worked, well below the world-class benchmark of 0.57. We had 43 plants with a perfect safety record of 0 reported incidents in the quarter. I want to recognize the teams at these plants for their continued commitment and leadership as we continue to strive as a company toward our ultimate safety goal of 0 incidents. I could not be more proud of our global team for their continued focus, dedication and world-class achievements in maintaining a safe workplace for everyone, every day. While challenges such as erratic production schedules, high inflation and tight labor markets continue to impact our industry, we're doing everything we can to offset these challenges and improve our overall results. We're continuing our focus on reducing costs, although year-over-year cost reductions are getting harder to achieve. And as often said in our industry, "you can't cost-cut your way to prosperity". Even so, we are continuing our efforts to be as lean as possible. Our manufacturing and purchasing teams were able to deliver $8 million in savings through lean initiatives and improving efficiencies in the quarter. These savings, combined with some year-over-year improvements in volume and mix and enhanced commercial agreements on pricing and cost recoveries, enabled us to increase our gross margin for the quarter by 94% over the same period a year ago. So we have made modest progress with more anticipated to come later this year and next. Finally, we're continuing to win new business awards, especially on electric vehicle programs, as a result of our strong customer relationships and the value we provide through our advanced engineering and design capabilities, innovative technical solutions and world-class service. In the first quarter, our customers awarded us $18 million in net new business awards on their upcoming electric vehicle platforms. Moving to Slide 6. Another indication of our customer relationships, valued technology and world-class service are the product and service awards we frequently receive. We were very pleased to once again be named as a "Supplier of the Year" for General Motors, one of our top global customers, and I think probably one of the most prestigious awards in our industry. While the award was announced and presented during the first quarter, it's really an annual award that is reflective of our performance throughout the past year. This is the sixth consecutive year that we've achieved this GM award, and we look forward to continuing and expanding our relationship with them, going forward. Now, let me turn the call over to Jon to discuss the financial details of the quarter.

Thanks, Jeff, and good morning, everyone. In the next few slides, I'll provide some details on our financial results for the quarter and discuss our cash flows, liquidity and aspects of our balance sheet. On Slide 8, we show a summary of our results for the first quarter of 2023 with comparisons to the same period last year. First quarter 2023 sales were $682.5 million, an increase of 11.3% compared to the first quarter of 2022. The increase was driven by favorable volume and mix, primarily in North America and Europe and our enhanced commercial agreements. These were partially offset by unfavorable foreign currency exchange. Gross profit for the first quarter was $41.8 million or 6.1% of sales. This compares to a gross profit of $21.5 million or just 3.5% of sales in the first quarter of 2022. Adjusted EBITDA in the first quarter was $12.5 million compared to $100,000 in the first quarter of 2022. The year-over-year improvement was driven primarily by favorable volume and mix, cost recoveries and favorable price adjustments and lean savings initiatives, all partially offset by ongoing inflation headwinds in areas such as energy and labor costs as well as the impact of unfavorable foreign exchange. We made good progress in our commercial negotiations to recover inflation and establish sustainable pricing in the quarter, and we are beginning to see the positive impact on our results. However, certain negotiations that we expected would have been concluded in the first quarter have carried into the second. As we continue our focus on achieving sustainable price, we expect more of these negotiations will be successfully concluded in the second quarter and beyond. And we anticipate this will drive improvements in top line growth and margin expansion in the remaining quarters of the year. On a U.S. GAAP basis, net loss for the quarter was $130.4 million compared to a net loss of $61.4 million in the first quarter of 2022. The current quarter included an $81.9 million loss on refinancing and extinguishment of debt related to the transactions that we closed early in the first quarter. The first quarter 2023 net loss also included $2.4 million in restructuring costs. Excluding these items and the related tax impact, adjusted net loss for the first quarter was $46.2 million or $2.68 per diluted share compared to an adjusted net loss of $51.4 million or $3 per diluted share in the first quarter of 2022. The year-over-year improvement resulted primarily from improved gross profit, partially offset by higher interest expense. Our capital expenditures in the first quarter totaled $29.3 million or 4.3% of sales compared to $32.3 million or 5.3% of sales in the same period a year ago. We continue to have a disciplined focus on capital investments, and we're committed to keeping CapEx at around 3% of sales for the full year. Moving to Slide 9. The charts on Slide 9 provide additional insights into some of the key factors impacting our results for the first quarter of 2023. For revenue, favorable volume and mix, including net customer price adjustments, increased sales by $86 million versus the first quarter of 2022. Improving customer production volume year-over-year was the biggest driver with customer cost recoveries and price adjustments in the quarter, also benefiting the volume and mix category. Foreign exchange, mainly related to the Euro, the Chinese RMB and the Canadian dollar reduced sales by $17 million versus the same period last year. For adjusted EBITDA, volume, mix and net pricing, including the recoveries and price adjustments drove a combined $39 million of improvement for the quarter. Lean initiatives in purchasing and manufacturing efficiency contributed $8 million year-over-year. These positive contributors were partially offset by certain ongoing headwinds in the quarter. General inflation, including energy, salaries, wages and transportation and other costs reduced adjusted EBITDA by $18 million in the quarter. The impact of foreign exchange was $8 million, while material costs were higher by $3 million. Moving to Slide 10. We are pleased to have started the year with positive cash from operations and positive free cash flow. Cash provided by operations was approximately $30 million in the first quarter of 2023, driven primarily by improved sales volume, operating performance and working capital efficiencies. As mentioned earlier, CapEx was approximately $29 million, primarily reflecting the timing of program launch activity. Free cash flow was approximately $1 million in the quarter ending March 31, 2023. With the improved volume and operating leverage we are generating, we ended March with a cash balance of approximately $106 million. Combined with $149 million of availability on our revolving credit facility, which was undrawn at quarter end, we had solid total liquidity of approximately $255 million as of March 31, 2023. Based on our current outlook and expectations for light vehicle production, commercial support in the way of sustainable pricing from our customers and demand for our products, we believe our current cash on hand, expected cash generation and access to flexible credit facilities will provide sufficient resources to support our ongoing operations. That concludes my prepared remarks. So let me turn it back over to Jeff.

Thanks, Jon. Over the next few minutes, I'd like to provide you with an update on some of our commercial initiatives that are intended to ensure that we will be adequately compensated for the value we offer our customers. I will also highlight some of our strategic initiatives that we believe are moving us forward to significant transformation as a company, significantly elevating our ability to deliver even further value that our customers need and are willing to pay for. Then I'll conclude with a few comments on our outlook for the remainder of the year. So please turn to Slide 12. We're continuing to work collaboratively with all of our customers to recover incremental costs related to inflationary pressures and establish sustainable pricing that will enhance quality of earnings and value creation over the long-term. During the quarter, we further limited our risk exposure from commodity and material costs by initiating indexed-based agreements with additional customers. As it relates to commodity volatility, we believe we are now better positioned than we've ever been before. As it relates to non-commodity inflation and sustainable pricing, we're continuing negotiations with all customers. Negotiations have been constructive and given the value that our products and services provide them, our customers have been very supportive. While negotiations are ongoing, we expect to achieve further positive outcomes that will drive improving financial results, going forward. We have also been working with our customers to improve cash flow. As part of the progress to-date, we've been able to implement more favorable terms on the trade receivables and on the repayment of customer-owned tooling. We're making solid progress and anticipate further good news in coming quarters as these agreements are implemented. Turning to Slide 13. So part of what gives us confidence in our ongoing commercial discussions is the added value and expertise we provide our customers through the strategic integration of advanced digital tools in our Engineering and Design process. By using tools such as Design by Analysis, Virtual Validation and our AI-based Fomulink tool, the compound -- for compound development, we significantly sped up our overall design process, and we've reduced our engineering costs. These advancements have been critically important in the rapid industry transition to new energy vehicles. As we're now able to design and deliver highly complex systems and optimized technical solutions faster. We are winning new business as a result. In addition, we're increasingly being recognized by our customers as a valued technology partner in design, functionality and sustainability. We've also invested in Advanced Proprietary Digital tools to enhance manufacturing efficiency. Our Pulse OEE system, our Wireless Asset Tracker and Liveline, which is our AI-based Automated Process Control System are a few examples. These are enabling us to reduce scrap, improve efficiency in our secondary operations, plan and conduct maintenance more effectively, and really improve our overall asset utilization. Combined with our suite of digital tools, we've been able to partially -- as a partial driver of the reductions in our SG&A expense and fixed manufacturing costs over the past few years, but we believe there is even more opportunity ahead as we leverage these advanced tools and technical capabilities to grow and optimize our business. They're allowing us to expand into adjacent and complementary product lines as we are now doing in our fluid business. And they're also enabling us to provide incremental value for our customers through more highly advanced, technically sophisticated products and services, which we believe will support more sustainable pricing, moving forward. Consistent with our company mission, we believe that by becoming the first choice of the stakeholders we serve, in this case, our customers, we will ultimately maximize our value creation opportunities. Turning to Slide 14. As you know, each year we publish our Corporate Responsibility Report to provide details on the way we are servicing various stakeholders. This year's report, which we have titled "Creating Sustainable Solutions Together" will be available online within the next 2 weeks. The report will provide you with many insights regarding not only what we do, but who we are, and the values that guide us as individuals and as a company every day. We highly recommend you check out the report. It will be certainly worth your time. Turning to Slide 15. Now I will conclude our prepared remarks this morning with a few thoughts on our outlook for the rest of 2023. First, I want to highlight that we fully expect to achieve significantly improved financial results in each of the remaining quarters of the year. Our initial plan and full year guidance anticipated that the first quarter would be the toughest, given the expected timing of our commercial settlements. So, that is consistent with our plan. Our financial results are very dependent upon industry production volumes, and specifically, the production volumes from our top customers in key platforms in each region. We continue to see a lot of change in industry production forecasts and customer production schedules. So, that certainly makes planning a bit difficult. But our current outlook for production volume remains positive and anticipates continued modest year-over-year growth overall, driven primarily by increases in Europe and in North America. The outlook for inflation is a moderate headwind. We currently expect moderate inflationary pressures will continue through the remainder of the year and costs will remain at elevated levels. Recent reductions in global oil production and tight labor availability in certain markets may represent inflationary risks to our outlook if they continue. On the commercial side, we expect to successfully advance customer negotiations in the remainder of the year to further offset inflation and establish sustainable pricing in all of our segments. As we saw in the first quarter, however, the timing for closing any customer agreement is certainly more difficult to predict. Overall, our outlook for 2023 remains very positive. We will plan to give a more detailed update and formal guidance as we typically do, in conjunction with our second quarter results. I want to thank our global team of employees for their continued dedication and their commitment to excellence and delivering value for our customers and all stakeholders. I also want to thank our customers for their continued trust, confidence and support in managing through this challenging industry environment and for their increasing recognition of the value of our products, technologies and services we provide them. I believe we are approaching an inflection point in the relatively near-term as we benefit from improved volume and enhanced commercial agreements with sustainable price increases. Over the longer term, we believe we will drive increasing value by continuing to transform our products, our services and our company, with advanced digital tools and technology that meet and exceed the demands of today's mobility industry. This concludes our prepared remarks, so let's open the call for Q&A.

[Operator Instructions]. Our first question comes from Michael Ward of The Benchmark Company.

Thank you. Just a question on the commercial agreements. Is sum of what we're seeing over the last 3, 4, 5 quarters is just the maturing of the process? When you say more sustainable pricing, I assume that's referring to just more consistent commercial agreements where you don't have to have these big [lumps] of waiting. Is that fair?

Mike, this is Jeff. Thanks for the question. So, I'd put it in 2 buckets. One is the index-based price agreements that we now have virtually with every customer in the world. So that's a raw material approach for recovery that we haven't had in the past. And as raw material prices go up, we recover, as they go down, we give some of that back to the OEM. The sustainable size and...

So that deal is negotiated. Okay, so that deal is negotiated, you don't have to redo it every quarter or anything like that?

It's ongoing. It's already negotiated. It's in place for all contracts going forward. Related to your second question regarding sustainable pricing, that's just real simple, we have prices out there in all regions that don't allow us to get a return on the investments that we've made. And we're back in with each customer renegotiating those prices on existing product. And certainly, that impacts the price of the new business going forward, much easier there because we've already won that business at higher price. So it's really about getting price increases to offset all the other inflation that's taken place and also the volume that hasn't been there as forecasted. So that's really what we're doing to make sure that Europe, North America and Asia all return to these sustainable levels of profitability, so that we don't have to go back in every year and talk about price.

Yes, yes. Okay. And based on the timing -- or based on the regional performance on the EBITDA level, it looks like Europe was probably the one that was slower on the commercial negotiations. Is that fair?

Yes. I would say this about Europe. I mean, the timing is probably fair because we certainly have concluded several that didn't allow us to book it in the first quarter. I will say that. What I will tell you on Europe going forward, Mike, and we've mentioned this here quite often, that we were set to burn close to $100 million in cash in Europe over the next 2 years, if we didn't address sustainable pricing in Europe. And as I sat here today, I'm very confident that, that's not going to happen. The negotiations are going well. And our customers are proving that we're a valued supplier in Europe, and I really look forward to those results hitting our bottom line in the second half of the year.

Well, that's a big number. And in Europe, is that part of the delta -- well, from Q4 to Q1, currency year-over-year was an $8 million. How did currency stack up relative to Q4? And was that all in Europe?

Mike, this is Jon. It wasn't all in Europe, sequentially, Q1 to Q4, but the euro was a significant driver when you look at the results that we posted in the end of 2021 -- sorry, 2022 until the first quarter of this year. Inflation was a big driver continuing, obviously. But the FX with the euro and other currencies driving higher sales with negative earnings pull-through was actually a big part of the sequential bridge.

Our next question comes from the line of Brian DiRubbio by Baird.

A couple of questions for you. Jon, first, with the change in the terms that you -- that we talked about with AR and tooling, what kind of release could we see from working capital this year?

We're continuing -- I'll start with tooling, Brian. Thanks for the question. We're looking to continue the efforts that we've been talking about for the last couple of quarters as far as not using Cooper's balance sheet to fund our customers' assets. And we've been running about $100 million of customer-owned tools that sit in our balance sheet until they meet the requirements to actually bill once they're finally approved and they're ready to start production. So the efforts there have been to implement progressive payments along the way, whether that's upfront deposits before we kick the tools off or whether it's interim milestones, whereby we get reimbursed on a regular basis for monies that are spent to-date, and we don't have to wait 12 months, 18 months or even longer to get reimbursed by our customers. So the global team is continuing to drive that number down, but you can think about certainly a double-digit increase in that $100 million -- decrease -- sorry, decrease in that $100 million that we're looking to drive and unlock towards the end of this year. We're making incremental progress every day. So I won't point to anything here on our Q1 results, but you should see a benefit as we close the year out. From a customer term standpoint, we are continuing to see that benefit cash flows and unlock working capital, certainly. In Q1, we always have a working capital outflow when it comes to the sales ramp. We're purchasing more inventory, because we are able to have laid it down at year-end, but then also with the sales rise, you are putting an incremental receivables on the balance sheet as of March 31. So seasonality would typically have you seeing those be a usage of working capital. And this is no exception, but it has been mitigated by the terms changes that Jeff alluded to, and we'll continue to see that in the next couple of quarters.

So I guess, I'll maybe put it this way and I understand the seasonality, are we expecting to see a source of cash from receivables as well in '23? Or is that something that may take a little bit longer to realize on a cash basis?

Well, it remains to be seen whether that continues out towards the end of the year into the following. I think, the biggest benefits we'll see this year are related to tooling and inventory reductions.

Got it. Fair enough. And then as we're looking at the progression, obviously, better than last year. But what does the company really need to have happen, for it to get back up to historic profitability. Supply chains are a little bit better. I know, inflation is still a problem, but trying to understand how quickly can you get to sort of a sustainable rate of EBITDA and cash generation? Is that something you think is achievable in the next 12 months? Or is that going to take a little bit longer?

Brian, it's Jeff. Clearly, the sustainable price negotiations that we're going through as we speak and that we expect to conclude here in the second quarter are the primary foundation, if you will, to get Europe, especially Europe, back to a level of generating positive cash flow. Clearly, when you see the industry operating at 85 million units, you see North America I guess, struggling to get to 15 and sustainable -- a sustainable 15 million units. Those numbers, we all want to see them go substantially higher. Clearly, the global volumes probably need to be somewhere closer to $100 million to be considered a good year. And I think here in North America, we'd all like to see by those 17 million or 18 million unit years. That would certainly return us to double-digit ROIC and double-digit EBITDA everywhere. But in the short term, because volume is not expected to be quite that strong. Our focus is, continue to take costs out of the business where we can and negotiate all of these sustainable price increases so that we're cash positive everywhere, and then we're back to a level of profitability that we don't have to keep talking about each quarter.

Got it. And just a final question. You mentioned material costs were a headwind of about $3 million. Do we see that becoming a tailwind at any point this year or -- are we just going to be just trying to catch up throughout the year?

Brian, it's Jon. When we came into the year, we thought of may be a very minor headwind overall, single digits in terms of inflationary pressures on the commodity side for the whole year because we knew we would be facing a bit of a lag effect on some of the purchase commodities here in Q1, and you're seeing the impact of that. There is some good news when you look ahead on certain of the inputs made perhaps on the rubber side, but we're also starting to see signs of pressure in the metals area in the way of cold rolled steel, so there could be some volatility. We don't see anything significant at this point, but we're obviously watchful of where those trends are heading. And the good news here is, in many cases, we do have the customer support and the way of the index contracts that will help recover a significant portion of any commodity inflation that does come our way.

Great. Appreciate all the thoughts.

Our next question comes from the line of Patrick Sheffield of Beach Point Capital Management.

Could you repeat how much you said you were going to burn in Europe over the next 2 years? I missed that comment.

Yes, Patrick, it's Jeff. So what I said was our business plan that we were looking at, I guess, 6 months ago, right, when we first compiled that, it showed us in consecutive years, burning $40 million to $45 million each year. So what I was saying to Mike is that we were going to burn $100 million in cash over a 2-year period in Europe if we didn't address sustainable pricing. And if we didn't address the other inflationary costs that we needed recovery on like raw material and getting the prices indexed as we've already negotiated. So -- and then I went on to say that I'm confident that, that's not going to be the case based on the way the customers are negotiating with us, and I'm very pleased about that. I think that when you go into a tough negotiation and one that requires the type of adjustments that we needed in Europe, you don't really know what the customer's response is going to be until you ask. And clearly, we're a valued supplier in Europe and the negotiations are reflecting that. So as we work our way through the second half of the year, I said that I expect you'll see those prices reflected in the bottom line of the business, and we're pretty proud of that.

Okay. Great. And just broadly looking, high level at Q4 to Q1 sequential performance, seeing revenues increase and EBITDA decrease. What were the biggest -- I don't know if you could, provide some of the buckets similar to what you do on a year-over-year basis. And was there a big change by region? Or was it kind of broad-based?

Patrick, it's Jon. I'll take that one. Generally broad-based, but in Q4 of last year, we did have commercial agreements get locked in and settled in Q4 of last year. So that certainly helped the quarterly performance in Q4, and those one-timers don't necessarily repeat. We are continuing to make good progress on the commercial front, as Jeff has been talking about here. But because of the magnitude of that one-time deal we booked in Q4 of last year, you're seeing that decline. It's mostly all of that. I talked to Mike about the FX impact. There is about $6 million of FX quarter-over-quarter to the negative, that is impacting profitability. But the positive lean initiatives, both on our purchasing front and our manufacturing front, continue to benefit the comps sequentially. So all in, those are kind of the pieces that you'll see. Certainly, the North American volumes picking up and the European volumes that remain strong Q4 into Q1, also benefit the sequential Q.

So how much of the decline was that onetime benefit in Q4? It sounds like 6 million negative on FX and other stuff was positive. So it’s kind of the bulk of that.

The negatives were the FX and the good news booked in Q4 that didn't repeat here in Q1.

Okay. All right. That makes sense. And then, you guys were providing some color on volumes and margins you get in a more normal year. What kind of global volumes would you need to get back to just cash flow positive everywhere? Where we sit today?

Patrick, this is Jeff. Yes. What I was saying earlier was an answer that -- the context wasn't what you just asked. Clearly, the volumes that we have forecasted and the pricing that we are negotiating gets us back to cash flow positive, which is your question.

Okay. Yes…

Yes. The question that was asked earlier was when do we get back to sort of the double-digit level performance that we have always come to know here and related to EBITDA and related to ROIC, and that's when I talked about the larger volume forecast out there, probably 25 or so. I'm not sure it keeps changing, but we're going to see a 3% or so increase in the second half of this year, I'll take it. And I would expect that next year is probably going to be up a little bit as well, and then we'll see how 2024 plays out, and then we'll talk about '25. But at least the volume news going forward is more positive than it's been in the last 3 years. How about that?

Yes. That helps. And then just looking at Q1 performance, how did that compare to your internal expectations when you guys set the budget, I guess, at the end of -- I want to read it, end of last year.

Yes. I think the Q1, as I said, was pretty much what we thought it was going to be with the exception of timing associated with a couple of commercial negotiations that didn't allow us to book the type of retros that we were planning for. But that catches up over time here. So I'm not too worried about it. I think, the volumes were basically what we thought they were going to be. We think they're going to be a little bit stronger in Europe and North America, second half of the year. So that's what we think, and we'll talk to you about our guidance, if there is any updates there in the July call, like we usually do.

[Operator Instructions]. Our next question comes from Ben Briggs of StoneX Financial.

So all around kind of not a bad quarter. I think, it sets you up to come in somewhere close to guidance. One thing that I had a question on here though is the gross margin. So I'm wondering if you can provide any more clarity? I know, you said you would see improvement in gross margin over the course of the year. But if you could just get any more granular on kind of what the pace of gross margin expansion should be? It looks like, you took certainly a step forward on a year-over-year basis with gross margin this quarter, but kind of a step back on a sequential basis. So any more granularity there would be appreciated?

Ben, it's Jon. Are you looking for the forward look or what happened from Q4 into Q1 of this year? I just wanted to understand your question.

I guess, both. I guess, both.

Okay. Well, certainly, the items that I already talked about as far as the sequential bridge, most of those, in fact, do benefit gross profit as well. Anytime you have commercial wins or losses, they impact the top line and then immediately gross profit, they fall through at 100%, right?

Right.

And then, in the purchasing front being direct materials are a significant portion of our cost of goods sold, any benefit you see there and then the efficiencies we get in our -- at our manufacturing environment, both of those would be positive benefits and drivers too to the gross profit sequentially, period-over-period. FX is kind of scattered all over the P&L. So you can't peg that to one individual line item. But presumably, a portion of that 6 million I already talked about would impact the gross profit negatively as well. Going forward, we don't guide to the gross profit level. And as we've already said, we're not updating guidance here today for you. But the commercial work streams and the sustainable pricing that we've been so intently focused on, will certainly drive gross profit improvements as will the entire organization coming to work every day, they continue to look at the cost structure and drive efficiencies across all areas. So those will be the big pieces, you'll continue to see gross profit improve each quarter and the overall financial results, as we've already said earlier today.

Thank you for your question. It appears there are no more questions. I would now like to turn the call back over to Roger Hendriksen for closing remarks. The floor is yours.

Okay. Thanks, everybody, for joining the call and for your engagement, your questions. We look forward to speaking with you again. If further questions come up, please feel free to reach out to us directly, and we'll talk to you soon. Thanks very much.