NNN - NYSE

Greetings. Welcome to the NNN REIT Inc. First Quarter 2025 Earnings Call. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to your host, Steve Horn, CEO. You may begin.

Thanks, John. Good morning, and thank you for joining NNN REIT's First Quarter 2025 Earnings Call. With me today is Vin Chao, our Chief Financial Officer. I'd like to start with a high-level update on our bank and furniture and restaurant assets before we delve into the first quarter results. We're making excellent progress resolving these vacancies, and I'm confident that we will be in a solid position to have the vast majority resolved by year-end. On a post quarter update, in terms of our 35 furniture stores, 15 are resolved through leasing or sale and 15 have significant interest, and we anticipate nearly all be handled by the end of the third quarter. For the restaurant assets, we gained full possession this quarter following the conclusion of the eviction process. We've leased or sold 38 and have strong interest in the other 31. Looking ahead, as we fully put to bed the 2 tenant defaults from the fourth quarter of 2024, we anticipate a total impact of only $0.15 to $0.25 on our stabilized core FFO per share for the year. That's less than 1%. This minimal effect serves to highlight the lasting significance of robust real estate fundamentals throughout the duration of a 20-year lease. Let's go to the highlights of our first quarter financial performance. Our portfolio of 3,641 freestanding single-tenant properties continue its strong track record. Occupancy at the end of the quarter was 97.7, a slight dip from our long-term average of approximately 98 plus or minus due to the finalization of the eviction process. We are encouraged by the significant interest in our available properties from numerous strong national and regional tenants, and I expect our occupancy rate to trend upwards as the year progresses. Notably, we experienced limited to no credit losses within the portfolio during the first quarter. Given the current macroeconomic backdrop, I'm confident in the portfolio's ability to deliver excellent performance over the long-term. Our portfolio's stability through events like GFC and the pandemic with minimal impact underscore its strengths. We prioritize relationships with sophisticated tenants and actively manage our assets to prepare for future uncertainties. While maintaining our disciplined underwriting approach, we successfully acquired 82 new properties during the quarter for approximately $232 million. These acquisitions featured an attractive initial cap rate of $7.4 million and a long-term lease duration of over 18 years. Significantly, all of our acquisitions this past quarter were sale leaseback transactions, a testament to the effectiveness of NNN's acquisition team and relationship-focused efforts. NNN takes pride in this relationship-driven business model, which facilitates consistent repeat business. Not only in the current environment, but every transaction we remain highly selective in our underwriting and we'll continue to prioritize sale leaseback transactions with our established tenant relationships and not operators or developers that are financial engineers. Regarding the current acquisition pricing market trends, we begin the year with the first quarter initial cash cap rate of 7.4%. This compression was in line with the February discussion. We anticipate some cap rate pressure in 2025 compared to the previous year. Now at the start May, second quarter cap rates are mostly holding steady with the first quarter. However, we are seeing significant compression in the larger portfolio deals, causing us to forego those opportunities. In the first quarter, we executed strategic dispositions. We sold 10 properties and generated $16 million in proceeds and only one of those assets was vacant. These funds are earmarked for reinvestment in new acquisitions and this activity aligns with our full year disposition guidance. Continuing our history of sound financial management, Vin and the team have ensured a robust balance sheet. We finished the first quarter with nearly $1.1 billion availability on our $1.2 billion line of credit and $400 million debt maturity in the fourth quarter is manageable. This reinforces the effectiveness of our self-funding model. The strong financial footing provides the company with the necessary flexibility to execute our 2025 acquisition guidance of $500 million to $600 million. To summarize, our first quarter performance in occupancy, leasing and rent collection further validates our consistent long-term strategy. This involves acquiring well-located properties with strong regional national tenants at appropriate rents, supported by strong and flexible balance sheet. With that, I'll turn the call over to Vin for more detail to review our quarterly numbers and updated guidance.

Thank you, Steve. Let me start by letting you know that, during this call, we will make certain statements that may be considered forward-looking statements under federal securities laws. The company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we may not release revisions to these forward-looking statements to reflect changes after the statements are made. Factors and risks that could cause actual results to differ from expectations are disclosed in greater detail in the company's filings with the SEC and in this morning's press release. With that out of the way, before I get into the quarterly review, I wanted to start with some broader commentary and initial observations. Although, today's elevated level of uncertainty has created volatility in the capital markets, our fortress balance sheet combined with our deeply-experienced team and battle-tested portfolio is well positioned for long-term success in almost any environment. We know this because we've been there. We know this because we've been there. In addition to the weathering the GFC and COVID-19 that Steve mentioned, we are also the only public net lease REIT to have experienced Black Monday, the bursting of the dot com to bubble and the attacks on September 11th, all while delivering 35 years of consecutive dividend growth. While our long and successful track record gives me comfort that, we can manage today's economic environment, it's the strength of the NNN platform and its people that give me the confidence that, we will continue to create shareholder value in the years ahead and through economic cycles. The depth of talent, the strength of the processes and systems and the experience of the team are true differentiators within the REIT universe. I'm not sure if everyone knows this, but the average associate has been with NNN for over 10 years and the senior leadership team has been here for over 20. This deep institutional knowledge is a key competitive advantage, particularly in times like these. NNN truly is a well-oiled machine. With that, I'll get off my soapbox and get into the quarter. This morning, we reported core FFO of $0.86 per share and AFFO of $0.87 per share for the first quarter of 2025, each up 3.6% over the prior year period, while annualized base rent was up over 5% year-over-year. Results were slightly ahead of our internal plan, driven primarily by lower-than-planned bad debt and net real estate expenses. Our NOI margin was 95.9% for the quarter, while G&A as a percentage of total revenues was 5.6% and 5.9% as a percentage of NOI. Free cash flow after dividend was about $55 million in the quarter. This quarter benefited from $8.2 million of lease termination fees or about $0.04 per share. This fee was expected and largely driven by one lease that was dark but paying for some time. We were able to negotiate a deal to recapture the PV of the remaining rent and are now looking to sell the property. Turning to operating results. Overall leasing activity for the quarter was strong with 25 renewals and eight new leases completed in the quarter for a blended rent recapture rate of 98%, reflecting the high-quality of the portfolio. Occupancy remained high at 97.7% despite the fall off from Badcock and Frisch's and has never dipped below 96.4% over the past 20 years, reflecting the stability of the portfolio and its cash flows. As Steve mentioned, we are making good progress on addressing our vacancies and have now released or sold almost 50% of our former Badcock and Frische's stores in only about two quarters and we have good visibility or good activity on the vast majority of the remaining stores, a testament to the strength in the underlying real estate. Although these two tenants have created some near-term noise, the reality is that, our experienced operations teams are well-equipped to effectively handle these situations as they have over the last 40 plus years. As Steve noted, when all is said and done, we expect less than a 1% impact to annual FFO per share. And importantly, we expect to achieve its outcome with minimal tenant CapEx. From a watch list perspective, things have not changed much since last quarter. No new tenants were added and our primary concern remains at home, which we have been flagging for some time. As a reminder, we have 11 at homes that account for about 1% of ABR. In place rents are low at just over $6.50 per square foot and our stores are well-established with average tenure of about 12 years. Turning to the balance sheet. Our BBB plus balance sheet remains in great shape and it's what keeps me -- left me sleep well at night despite what's going on in the world. We ended the first quarter with a sector leading 11.6 years of term remaining on our debt maturities and just 2.5% of our total debt tied to floating rates. This gives us strong visibility. Liquidity stood at $1.1 billion net debt-to-EBITDA was 5.5x and 100% of our assets are unencumbered giving us great flexibility to execute our business plans. On April 15th, we announced the $0.58 quarterly dividend per share, which equates to an attractive 5.4% annualized dividend yield at a conservative 66% AFFO payout ratio. Lastly, I'd like to provide some color on our outlook for the balance of the year. As we discussed last quarter, we signed leases on former Frisch's locations that will add the greater of $2.8 million annually or 7% of sales, when rent commences on May 1st. Also as discussed last quarter, we embedded a credit loss reserve of 60 basis points into the 2025 outlook. Given that we've had no notable credit losses year-to-date and in light of our outlook for the balance of the year, we feel comfortable with the 60 basis points for the full year. Finally, we have a $400 million 4% bond maturing in November. For perspective, we believe current pricing on a new 10 year issuance would be about 5.6%. We also have capacity on our revolver, which is priced SOFR plus 87.5 basis points and had an effective rate of 5.2% in the first quarter. As always, we will be opportunistic and look for ways to capitalize on the current market volatility, as we manage our financing needs. Also, while we do not provide guidance on termination fees, given their inherently unpredictable timing, as you are updating your models, please keep in mind that, the $8.2 million booked in the first quarter was unusually high and not reflective of the normalized run rate. All that said, given our strong start to the year, our internally funded investment plan and with over 40% of our acquisition volume already completed, we are comfortable maintaining our 2025 outlook for core FFO per share of $3.33 to $3.38 and AFFO per share of $3.39 to $3.44. Details regarding the underlying assumptions supporting our guidance also remain unchanged and can be found on Page 3 of this morning's press release. Lastly, you may have noticed some changes to the earnings release presentation. We take pride in the transparency of our disclosures and are committed to providing investors and analysts with the information they need to efficiently and effectively underwrite the long-term value of our company. We hope you find the changes we made helpful in your analysis, and I'm always available to discuss ideas on how we can improve our reporting. Before I turn the call back to the operator for Q&A, I want to thank the executive team and the Board of Directors for entrusting me as only the second CFO in NNN's history. There's a long tradition of success here that I, along the rest of the team, will work tirelessly to continue. I also want to thank the entire organization for their warm welcome to the company and for their help in making this seamless transition. With that, John, please open up the lines for questions.

Certainly. [Operator Instructions] The first question comes from Daniel [indiscernible] with Bank of America. Daniel, please proceed.

Good morning. The 1Q acquisition pace was much higher-than-expected. Could you expand on that? Do you see less competition in the transaction markets?

I mean, John, good question. This is Steve. We operate in a highly competitive market and we've been it's been a highly competitive market for twenty plus years I've been doing it. Just the names have come and gone. Now the result was all of our transactions except one were sale leaseback primarily through the relationships. But it was elevated just more timing. Going into the fourth quarter, we knew there were some M&A deals that we're looking to get done and they landed in the first quarter. However, it was within our guidance range for the full year. And it was primarily the auto services again was the sector where there's a fair amount of consolidation going on.

Got it. And if I could just follow-up on that. Could you touch on the expected pace of acquisitions moving forward? And do you plan on expanding into the auto services?

Yes, we do the bottom-up approach. We can only buy stuff that's be for sale, and we look for consistent core FFO growth over time. We maintain guidance of the $500 million to $600 million, but as Vin alluded to, we're kind of 40% there. And looking at the pipeline for the second quarter, I'm very comfortable that we'll hit that guidance range given where we stand today. But given everything that's going on in the macro economy and the uncertainty, I don't think it's prudent to elevate acquisition volume since I don't have visibility to the third or fourth quarter yet. However, that being said, if everything kind of maintain status quo, I could see us in good acquisitions for the year.

The next question comes from Spenser Glimcher with Green Street.

Given the recent economic volatility and ongoing uncertainty, can you just talk about existing tenant appetite for growth? And then maybe on the flip side, are there any tenants who had expressed interest to grow and maybe kind of hit the brakes on growth plans as of late?

I think they're reevaluating their growth plans. Though deals or -- that we had in the pipeline were canceled because of what's going on they don't want to miss out on opportunities if things settle down. So kind of what I alluded to in the first question, our pipeline for Q2 is pretty solid, and we're just starting to look at stuff for Q3. But no, our tenants are still looking to grow at the margin. I don't think you're going to see any heroic M&A deals in the near term. So we've noticed that pace has slowed down in the U.S.

Okay. And then any changes to tenant rent coverage, just with ongoing tariffs and things related to consumer spending?

Spencer, this is Vin. Yes, as far as rent coverage and tariffs and all that, I mean I would just say on a tariff perspective, between service tenants and nondiscretionary tenants, that's about 85% of our ABR. And so we feel relatively okay about tariff impacts, other than the impact on the overall economy, which we will filter through if things stay in place or I'm not sure where we're at today. But in any case, we feel like we're comfortable on the tariff side. As far as rent coverage go, as you know, we don't really talk about rent coverage in detail. But the data is usually a little stale. And so it's not reflective of any sort of tariff impact at this point anyway. But generally speaking, I would say rent coverage have remained stable on that.

I'll add a little kind of real-time coverage, Spencer. Our team was out at the car wash conference this past weekend and reported that the car wash sales were very strong for the quarter. And the CEOs that I spoke with -- and if it was collision or the tire sector and within the auto services, said the last 2 months, they've seen an uptick in their sales. So that was all positive. But yes, to echo what Vin said, for the most part, I would expect our rent coverage to be pretty stable throughout the portfolio.

The next question comes from John Kilichowski with Wells Fargo.

I guess an extension of the tariff question, it sounds like the existing portfolio is still performing well. But maybe as we think about your strategy on underwriting go forward for new investments, have tariffs impacted that at all? Like are you looking at different sectors or is it same old?

If you look across our portfolio, not that we're tariff proved by any means, but we have a very solid tariff-resistant portfolio. And since 2/4 to 3/4 of our deal flow comes from our tenant base, I still expect it to be representative of our current portfolio. Now when you get into discretionary tenants, this is what separates the sale-leaseback model opposed to buying from developers. The sale-leaseback model, it's an inherent -- the tenant does some underwriting and they're signing the 15- to 20-year lease. So they do a self-selection and they know their consumer better than any real estate executive. So we sit down with the tenants, and it's more on the discretionary side that we are kind of sidestepping deals right now that might be pro forma on if it's family entertainment sector, where there's a little bit more discretionary income. But I think the auto services and C-store, if the opportunities come, we'll still lean into those.

Okay. And then maybe just jumping to the furnitures and Badcock side. We appreciate the update. How has that impacted the nonreimbursable percentage of your OpEx outlook? It sounds like credit is -- your credit expectations are still flat.

Yes. I mean if you look at our guidance for net real estate expenses, it's a little bit higher than we've historically reported, which is probably more in the $13 million range, we're a $15 million to $16 million for the year on guidance. That's reflective of some of the vacancies from the Badcock and furnitures. So as we release those or sell them over the course of the year, that should improve, but that's all embedded in our outlook.

The next question is from Michael Goldsmith with UBS.

Acquisition cap rates ticked down about 10 basis points in the quarter. So in terms of what you're seeing in the pipeline, are you expecting that trend to kind of continue to tick down or maybe just kind of flatline from there? Just trying to get a sense of where we're headed from a cap rate perspective.

Yes. Good question, Michael. Yes, I'm not seeing a material move up or down for the second quarter pricing, it's pretty much in line with the first quarter. Now as deals might slide in the third quarter, you might have 5, 10 basis points either way. But the 740 is kind of where I'm looking at the second quarter. Again, third quarter is too far out to speculate. But as we run out our models, we're not putting increase in cap rates because people in the first half of the year are looking to deploy money, so deals -- cap rates get compressed a little bit unjustifiably, I would say. And as I mentioned in my opening remarks, there were some large portfolio transactions that got done, and they look like they were going sub-7, and we just didn't think that was the right price for the portfolios.

Got it. And I'm a little jealous that I wasn't able to make it to the car wash conference this year. But lastly, Mr. Carwash earnings, they talked about a steady reprieve to the competitive intrusion with a number of competitive new builds since the peak in 2023, but they also talked a little bit about market rationalization over the next several years. So do you think the tenants -- the carwash tenants that you have, do you see those ones that you partnered with as net winners over time and thus have limited downside from that perspective?

They're very comfortable with our carwash holdings. I mean the reality is carwash real estate is really solid in demand real estate. And the vast majority of our carwash holdings are with Mr. Carwash, arguably the best operator in the business. and we did those deals well before the market got overheated. So our average cost in the Mr. Car wash is significantly lower than the deals that were done in the last few years. And our acquisition team did a fabulous job passing on the deals where they thought there were financial engineers getting into the carwash business. So yes, I'm comfortable, and I think we're going to be net winners in the long run on our carwash holdings. Fortunately, we didn't do any SIPs, for example. That was a good one not to do for us. But the rest of our operators, we think are pretty solid and underwrote the assets appropriately.

Good luck in the second quarter.

Thanks, Michael.

[Operator Instructions]. Up next, we have Smedes Rose with Citi.

This is [indiscernible] on for Smedes. I just wanted to ask, there's been kind of some negative headlines and stock underperformance from some of your more discretionary-focused tenants, particularly Game & Busters and Camping World? Do you have any overall concerns from a tenant perspective on these? And is there maybe anything differentiating about the particular locations that you own that may be less concerned from a risk perspective?

Yes, we'll both answer this. But good question, So as far as Camping World, Camping World arguably is probably one of our greatest partnerships within the portfolio. We are actively managing that portfolio since we've been doing business with them for over 15 years. So our rent coverage in the peak during COVID, who would have thought, Camping World would explode and become a cash cow, that we were over 8x covered in those assets. And that's been a testament to the management team at Camping World of calling us up and renegotiating leases, selling assets and only wanting to stay in the strong assets. So the Camping World property level coverage, I am very happy with and comfortable. And the same goes with Dave & Buster. Our Dave & Buster exposure primarily was from main event over a decade ago of doing deals with them and the main event management team were true operators that wanted to keep the rent low. So our property level coverage at Dave & Buster is very solid. And kind of what I alluded to, there's a couple of deals in the past year which we passed on Dave & Buster because they were newer assets. And then we just thought the cap rates were getting a little bit too low for us. But they're a good partner. And going forward, we'll probably do more deals with them in the future.

Yes. I think Steve said it pretty well, so I don't have too much to add there, but the coverage on Dave & Busters is pretty healthy here. And on Camping World, they just reported yesterday, I know the stock didn't do so well. But from our perspective, as a landlord, there are some positives in the quarter, and I think their news businesses is a bright spot for them. So as we're dealing with tariffs and uncertainty and possibly an economic slowdown, Camping World, they're not catering to the highest end side of that market. And so we think that's relatively better, but then also the used business can really help offset some of the tariff impacts and that was quite strong

Up next is Linda Tsai with Jefferies.

Did less-than-expected bad debt contribute to 1Q? And then of your 50 bps embedded reserves, how much of that is like known versus unknown?

Yes. Linda, it's Vin. So in the first quarter, we really didn't have much in the way of bad debt or credit loss. So if you think about it, 10 basis points of credit loss is about $0.05 per share. So that -- you can think about it that way for the first quarter. As far as known or unknown, I mean we've talked about at home, that's probably the one on our watch list that's the one that we're most focused on. But at this point, we have no credit loss associated [indiscernible].

And then on at home, what would be like the possible outcome? Do you think you would be able to sell those leases or would there be a backfill?

Yes. Let me just start with that home in terms of their potential impact, right? I mean I know there's been some news out there on them. At this point in the year, as I said, we don't have any loss associated. And so if something were to happen, we think our 60 basis points would still cover us. If you think about if there is some kind of filing or something like that, that we'd have some -- a couple of months of additional rents as they go through that proceedings. And so at 100 basis points, if we if everything were to be rejected, that's about 50 basis points, but we think that's pretty highly unlikely given our low rent basis of just over $6.50. And so we feel comfortable with our outlook for credit loss. As far as the recovery on at home, they're much larger, as you know. So that by default it probably will take us a little longer than your more fungible boxes that we typically invest in. But there is a lot of good interest. We're already getting inbounds from some really high-quality tenants about some of the spaces, which we're pretty happy about. And we've also got some flexibility in terms of how we manage these properties. I mean, yes, there's a potential sale. But they sit on 11-acre lots. And so that gives us a lot of optionality in terms of redevelopment, carving up the boxes, things like that. So we're still evaluating all the different options, but we do feel pretty good [indiscernible].

Yes. It's good.

Your final question comes from John Massocca with B. Riley Securities.

So just on the lease termination income, apologies if I misheard something on that, but it seems like there's kind of this constant narrative, like, yes, it's a little unusual to have this much, but then there's a couple of quarters -- it's been pretty heavy in recent quarters, so what do you consider the new maybe run rate to assume for lease termination income? And maybe kind of what drove lease termination income in 1Q?

John, this is Vin. Yes. So in the first quarter, as I've mentioned in my prepared remarks, I mean, we did have basically 1 tenant that really drove the bulk of the $8.2 million book for the quarter. It was a dark, but paying rent tenant that had been dark for, I don't want to say, 6 years, 5 years, something like that. We were able to negotiate a great deal where we got basically the entire PV of the rent that was owed over the balance of the lease. And we're now able to potentially sell that asset and redeploy those assets, that capital. And so we feel good about that outcome. As far as the go-forward run rate, it's really tough. I mean I would say lease termination fees are definitely part of the business, they are recurring. They're just very hard to predict, and that's why we don't really guide on it. If you look historically, we've probably been long-term average, call it, $2 million to $3 million a year, but recent years, it's been a lot higher than that. So it's hard for me to say what the goal forward run rate is just because it is unpredictable. But we do have additional lease terminations embedded in the outlook, but certainly not $8.2 million going forward.

I mean I was going to add a little bit more, John, on the lease term. As we get bigger lease term fees, there's more opportunities. If you actively manage your portfolio, you're going to have lease termination fees. The lease termination fee is solving future problems and redeploying those proceeds into current opportunities. So I agree with Vin, we don't know it's kind of lightning in a bottle when they strike, you don't know as you're actively managing the properties. But the elevated lease term in the last couple of years is a result of us really focusing in and creating a high quality of earnings going forward.

But is there something maybe in terms of the tenant base or your portfolio of a certain vintage that drives this or something that's occurred in the last 2, 3 years? It seems like it wasn't really something that got called out on earnings calls, 5 or more years ago as much as it has been in the last, call it, 8 quarters.

No, it's primarily been just 1 tenant working with us reconfiguring their portfolio and their larger boxes, higher rent. So that's why they've been elevated.

Okay. On the furniture side or former furniture side. I know it's early days with the new tenant in the leased assets, the re-leased assets. But any outlook on to how their performance has been just given some of the rent there is contingent on that?

Yes. I mean, just like any new retail concept, when they first opened, they come out of the market really strong. There's that honeymoon period, and we are currently in that honeymoon period. So they are performing exceedingly well currently. But as we look forward, they'll lose that a little bit, but very optimistic. I spoke with the CEO recently in the last week, everything is going well for them, getting stores open slowly but surely. And I would expect in the next 6 months, we'll have -- I'll be able to answer that question as far as their performance a little bit more clear for you.

Fair. And then with the remaining kind of former restaurant properties, is the view with most of those that they would also remain restaurants or is it thought that either whoever you sell them to or yourself, if you're looking to release them, is going to convert into something else. And if that is the case, what kind of CapEx outlook there maybe for you or a potential buyer?

It's too early to talk about the CapEx side of things, but we are getting interest. If it's car washes, if it's convenience stores and it's the large regional convenience store operators, great credit. And then there is some QSR involved and we're early in negotiations. So we don't know if it's going to be a ground lease and they're going to fund the building or they're going to expect some CapEx from us currently. But that being said, we have some good interest on those sites right now.

But I guess maybe the way you kind of phrased it, it would be fair to assume those are some of the later assets that are going to get dealt with in terms of both the form furnitures and former Badcocks?

I think Badcock is going to definitely outpaced the former furnitures. The -- because we're probably going to sell more of those and is there's a lot of redevelopment opportunities. And just by definition, redevelopment takes a longer period of time to go through the pruning process and stuff like that.

We have one additional question in the queue coming from Ronald Kamdem with Morgan Stanley.

This is on for Ron. I'm just curious if there's any specific like retail new concept like you're looking to reduce exposure in the next 12 to 18 months?

I mean one that we're looking to reduce exposure, I mean, obviously, we have our watch list. And so those are ones that we would love to pay back exposure. But unfortunately, by the time they're on the watch it's a little hard to get economics that make sense. So I'll give you an example. I mean, AMC is on there. It's been on there forever more from a category perspective, not so much from a bottom-up performance, recent issues or any like that. But not the easiest to sell one of those. And so -- but that's sort of our target list. We also have the dark paying list. We have the sublease list, and those are the ones that we're trying to proactively manage [indiscernible] but it's not specific to a content per se.

I see. Yes, that makes sense. Regarding the acquisition volume like in the last, I would say, 20 days-or-so, like do you see any changes in the competition landscape or compared to last year? If you can make some comment on that?

Yes, I think the landscape is pretty similar. You probably have a little bit more of the private guys entering the market again as we move through the year. But again, kind of what I kind of said earlier, we work in a highly competitive market, just the names change. So I'm not seeing any more or less overall competition. There's plenty of opportunity for us to hit our numbers.

We have reached the end of the question-and-answer session. I will now turn the call over to Steve Horn, CEO, for our closing remarks.

I appreciate you guys taking the time this morning and jumping on the call, and we look forward to seeing you guys in the upcoming conferences in here. Thanks.