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Good afternoon, and welcome to the Astronics Corporation First Quarter Fiscal Year 2023 Conference Call. [Operator Instructions] Please note, this event is being recorded.
I would now like to turn the conference over to Debbie Pawlowski, Investor Relations for Astronics. Please go ahead.
Thank you, Priscilla, and good afternoon, everyone. We certainly appreciate your time today and your interest in Astronics. On the call here with me are Peter Gundermann, our Chairman, President and Chief Executive Officer; and Dave Burney, our Chief Financial Officer.
You should have a copy of our first quarter 2023 financial results, which we just released after the market closed today. If you do not have the release, you can find it on our website at astronics.com.
As you are aware, we may make some forward-looking statements during the formal discussion and the Q&A session of this conference call. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated here today. These risks and uncertainties and other factors are provided in the earnings release as well as with other documents filed with the Securities and Exchange Commission. You can find those documents on our website or at sec.gov.
During today's call, we will also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliations of non-GAAP measures with comparable measures in the tables that accompany today's release. With that, let me turn it over to Pete to begin. Peter?
Thank you, Debbie, and good afternoon, everybody. Thank you for tuning in for our call. In general, we feel the first quarter was a reasonably good start to the year, and we're making lots of good progress, though there are challenges. We'll divide this conversation generally into a discussion of the positive points to begin with and then focus a little bit on the challenges towards the end.
Sales were up 35% year-over-year to $156 million that exceeded the range that we predicted when we last talked. Aero was up 34% -- that's Aerospace to $135 million. Our Test business was up 42% to $20.9 million but that includes a $5.8 million nonoperating adder, which we will discuss in some detail a little bit later.
Jumping to the bottom line, we had a net loss of $4.4 million and an adjusted EBITDA of $6.1 million, which was 3.9% of sales. That's a nice improvement from where we were 1 year ago when we had adjusted EBITDA of $1 million and even an improvement over the fourth quarter when adjusted EBITDA was $4 million on higher sales.
Evaluating the quarter and comparing it to last year's first quarter is somewhat complicated due to several factors including this nonoperating revenue of $5.8 million in our Test segment, an equity investment payable write-off of $1.8 million, earn-out income on our semiconductor test sale from a few years ago of $3.4 million in the current quarter versus $11.3 million in the comparative quarter a year ago, and AMJP, Aerospace -- Aircraft Manufacturing jobs Protection Act grant receipts of $6 million in the comparative quarter a year ago.
Dave will dive into some of those specific items when it gets -- when he gets to turn at the mic in a few minutes.
Demand remains pretty strong with bookings at $158 million, once again setting a new record backlog at the end of the quarter. Aerospace orders, in particular, were strong at $150 million, which is a book-to-bill of 1.11. Test was late by comparison at $7.8 million in bookings for the quarter. Test orders tend to be lumpy and vary quite a bit from quarter-to-quarter so we don't get too worked up about 1 quarter being light in that business.
In terms of new business, 2 significant developments occurred shortly after quarter end that are worth mentioning. On April 6, the General Accounting Office, the GAO dismissed the lockheed protest on the Army's FLRAA program, clearing the way for Textron's Bell to proceed. There isn't -- we're not allowed to say too much about that program at this point, but we expect to be turned on with development work in the coming few weeks.
And as we have discussed on these calls in the past, this program promises or has the potential to be one of the most significant programs in our company's history before it's done. Also, in April, we were awarded the handheld radio test sets program by the Marine Corps, otherwise known as HHRTS. This is an award that we expected to come out almost a year ago but we're happy to get it late than never. It's a radio test program for the Marines and IDIQ, which stands for indefinite delivery, indefinite quantity, which we expect will be worth approximately $40 million in revenues over a 5-year period, and we expect it to be front-loaded in the first 3 years, mostly.
We expect a first major task order, potentially of about $10 million in shipments in the coming weeks. This is a complement to the 4549/T program we talked about before. That's a radio test program for the U.S. Army that we won last fall that is in contract negotiation.
As an aside, HHRTS is the final major new program pursuit that we had in our sites when the pandemic began in early 2020. We made a conscious decision to maintain certain resources and pursuits even though we knew that our business was going to struggle as the pandemic took its hold on the aerospace industry.
At this point, I can say we have been stunningly successful actually winning pretty much every item on the list, except for a couple that have -- on indefinite hold which includes in addition to FLRAA and HHRTS, 4549/T that I just discussed, a new generation in-seat power architecture, which was instrumental in winning Southwest Airlines as a customer and has subsequently been successful with narrow-body operators all around the world and antenna hit program for Safran and Airbus, establishing ourselves in the emerging electric and eVTOL aircraft market and a few other programs that we are not yet allowed to discuss.
These programs, as a group are barely represented in our backlog and have not yet meaningfully affected our results, but they will begin to do so as 2023 rolls along.
Looking forward, we are holding our 2023 revenue forecast at $640 million to $680 million and establishing second quarter guidance at $165 million to $175 million. At the midpoint, this implies second quarter growth of 32% year-over-year and 9% sequentially. For most of the pandemic, we have vacillated between $100 million and $125 million in quarterly revenue. The last 2 quarters have been in the $155 million to $160 million. And now we feel we are stepping up to $175 million -- $170 million, $175 million or slightly more for the rest of 2023.
At that level, we would expect for the rest of the year to be strongly cash positive and profitable.
Some discussion on margins. We are reasonably comfortable with how our Aerospace segment is progressing. As volume increases, the margin profile will continue to improve, especially since the growth is largely in commercial aerospace, a market that has traditionally been quite lucrative for us. We are making margin progress in our Test business also, but first quarter results make it less obvious.
We restructured the business in mid-April and took out about $4 million to $5 million of annual costs with savings being evident in the third quarter this year after severance costs are finished. This action was necessary due to delays with some of the new programs we have won, particularly in the area of the radio test, HHRTS and 4549/T programs discussed recently but also with some transit test work that we are progressing on slowly due to customer delays.
We expect these new programs eventually to contribute $20 million to $40 million of annual revenue, which will be a significant adder to the current business level of about $80 million per year, but they've been slow to take off and they are not here yet. And to bridge the gap, we felt it necessary to cut some costs. This action will allow the business to establish profitability at current revenue levels of $80 million, $85 million per year while waiting for the new programs to launch.
So the Test business has been a challenge. Another of our challenges is working capital. The sales ramp we are experiencing is a good thing, but it has led to higher receivable balances and ongoing supply chain snags have resulted in increased levels of stranded inventory. This was especially apparent in the first quarter. Receivables remain -- will remain high in the near term as revenue continues to ramp but we believe we are at the high point on inventory and expect to see a gradual decline from here.
At this point, I'll turn it over to Dave to go into some details of some of the topics I brought up, Dave?
Thanks, Pete. As Pete mentioned, there are several unusual income and expense items to point out in the quarter and one in the comparable 2022 1st quarter. For reference, you can see these items called out, I think it's Page 8 of the release in the table that reconciles adjusted EBITDA to GAAP net loss.
First and most significant of which was a $5.8 million increase to sales, that is a result of reversing and opening balance sheet contract liability that was created in one of our acquisitions a few years back. The short explanation is that we bought a test company and assumed a $5.8 million deferred revenue liability related to a customer contract, which is no longer expected to occur.
Second item I'd like to point out is the reversal of another liability of $1.8 million that was recorded in other income this quarter. It was related to an equity investment in another company that we no longer are required to make. It was a startup company that failed to meet certain milestones.
Third item, we recorded a final earn-out payment of $3.4 million from the sale of our semiconductor test product line a few years ago. In last year's first quarter, we recognized $11.3 million for the earn-out and as compared to $3.4 million this year. And it was the final earn-out for that sale of that business from several years ago.
Fourth item is our legal cost defending our positions in the IP-related suits was high in the quarter of $4.4 million. It's about $3.2 million higher than last year's first quarter.
And last, I'd like to point out that in last year's first quarter, we recognized $6 million from the AMJP grant program that Pete mentioned. It's a reduction in cost of sales for that period and there have been no comparable grants available since then.
So considering all these puts and takes, our adjusted EBITDA improved from $949,000 in 2022 first quarter to $6.1 million this quarter and a $34 million increase of sales, excluding the adjustments for the $5.8 million of nonoperating sales that I previously referred to.
I'd like to add that adjusted EBITDA also improved when compared to the preceding fourth quarter of 2022.
Looking at segments. Our Aerospace business continues to see a strong recovery and is ramping to satisfy customer demand. Aerospace sales were $135.6 million, up $34.2 million or 33.7% from last year, and bookings were strong at $150 million. We expect Aerospace sales to ramp to $150 million to $160 million in each of the final 3 quarters of the year, which will see segment -- the segment return to solid profitability. So we're still expecting to incur some spot buy expense in the second quarter, which will impact margins in that period.
Aerospace operating margin was $4.1 million or 3%, and an improvement of $7 million compared to the 2022 1st quarter when you exclude the impact of the $6 million AMJP grant from last year.
Our Test business, on the other hand, had a mixed quarter. The top line of $20.9 million looks all right, but it includes $5.8 million of nonoperating adjustment discussed above and mentioned by Pete. If one backs out the adjustment, the Test results were not so good. We expected sales to pick back up to $20 million in the second quarter and stay there for the rest of the year.
Certainly, after the quarter closed, we had a restructuring. Pete went through that a little bit, where we're expected to benefit $4 million to $5 million annually from that restructuring. They'll start to show up in the third quarter. And the restructuring, again, was necessary due to the slow takeoff of some of the higher dollar programs for the Test segment.
Turning to debt and the balance sheet. Cash flow continues to be a challenge due to inventory growth. Cash flow from operations was negative $19 million due primarily to inventory growth which increased by $13.9 million and receivable growth, which increased by $4.2 million during the quarter. While the supply chain is improving, part shortages and last-minute reschedules from suppliers are hampering our efforts to reduce inventory levels and improve inventory turnover.
Receivable growth was mostly due to the timing of shipments weighted toward the last month of the quarter, where roughly 50% of our shipments occurred in the month of March. We're compliant with our debt covenants and are forecasting continued compliance and positive cash flow for the balance of the year. And Pete mentioned maintaining revenue guidance of $640 million to $680 million for the year. And that's all. Pete?
Okay. I think that almost concludes our prepared remarks. With everything being said, we feel that the first quarter was a reasonable start to the year. There are challenges. There always are. But we think the rest of 2023 is setting up to be a pretty exciting time for our company. And we will open it up at this point for questions, Priscilla.
[Operator Instructions] Our first question comes from Jon Tanwanteng with CJS Securities.
My first one is just wondering how much you left on the table in terms of sales because of the inventory that was stranded whether there's component shortage or timing of other stuff that's going on?
Probably about $25 million. We got about $25 million of orders that are scheduled or overdue past due at this point and most of that is due to part shortages.
Yes. Are you seeing release in...
So we're seeing continued, I'd say, continued progress on our supply chain in general. We've been saying that now for probably about 5 to 6 months and it continues to get better, but it's still not perfect. And so you end up with these situations. And you never know what it's going to be from period to period or week-to-week or month-to-month. But in general, $25 million is the number that we think is past due.
Now I should distinguish a little bit because we have this huge backlog and customers would happily take stuff faster and sooner if we could accelerate and do it. So -- and as our supply chain improves, sometimes it improves and fits and starts. So to give you some color on that, we're putting guidance out there for the second quarter of $165 million to $175 million. We've got scheduled orders well in excess of the high end of the range there.
So we're taking into account our current performance level of our supply chain, and we're not assuming significant improvements in the short term. But I might point out that for each of the last 2 quarters, we've actually exceeded the high end or hit the high end of our range. So it's starting to come back, and it's starting to come back, we think, a little bit faster which is a good thing in general for the world and for our industry. But it also caught us a little bit by surprise with inventory growth in the first quarter. So there's a flip side to it that's not so positive.
Got it. That's helpful. Just thinking about the run rate that you were forecasting for the rest of the year, $150 million to $160 million on the Aerospace side and $20 million on the Test side, that gets you to the high end of your range already. So I'm wondering if that's kind of what you're planning at in your guidance, what those expectations? And second, what's the profitability you're expecting at that run rate, the $160 million to $170 million?
Well, we don't typically -- did you say profitability or possibility?
Possible probability.
Sorry, Jon, we have a weird setup in this room that we're in -- it's not totally easy to hear what you're saying. Did you say what's the probability of hitting the high end of our range?
I said what's the profit at that range, the profitability?
Okay. That's what I thought. We don't do down bottom line guidance, as you know. But we would expect as we get to that range, and you're right, the kind of the numbers we're forecasting put us at the high end of our stated range, we would expect to be positive cash flow and reasonably profitable in the second half of this year, in particular. And as far as the range goes, we're sticking with 640 to 680, as I said, the supply chain and all the unpredictabilities of the world certainly mean that there is some risk of downside potential there.
But there's also opportunity for upside potential, in my opinion, as the supply chain continues to improve, we certainly have the business, and we have the orders. So -- and the customers will generally take product if we can deliver it earlier than what we're currently agreeing to.
So I think the second half is going to be an exciting time for the company, and it will begin to feel and look a lot more like it did kind of pre-pandemic than it has since.
One of the things that as a general rule of thumb is to think about is our contribution margin on incremental sales is going to be close to 40%, 35%, 40%. We have some spot buys that are continuing to happen, but they're much smaller than -- I think last year, some quarters, we had $3 million of costs related to spot buys. First quarter this year, it was somewhere rounded to $1 million or so.
That will -- those will drop off as we move into the second half of the year, but the contribution margin should improve to -- we were down in the 30% to 35% last year. I think we're progressing up moving toward that 40% contribution margin on the incremental sales.
Okay. Great. Last one for me. Just within that $20 million run rate for the Test business for the rest of the year, does that assume any pickup from the Army or for Marine contracts that you landed? Or is that expecting more of a ramp in '24?
They're going to significantly ramp in 2024. We do have some kind of lower level assumptions in 2023, but they're kind of there for test units and low rate initial production units, things like that. And we don't have this HHRTS task order yet. We expect it partly, but it will probably become more of an early 2024 issue than a 2023.
4549/T on the other hand, we are, at this point, expecting formal contract award sometime in the August, September time frame, and there will be some positive impact at that point in terms of low-rate initial production units and some engineering expense that will get relieved once the contract is signed. But that also will significantly begin to ramp more in 2024 than in 2023.
Our next question comes from Pete Oberland with Truist Securities.
I'm on from Mike Ciarmoli this evening. So first, I just wanted to ask on the Aerospace segment. So looking back historically, at the revenue run rate you delivered this quarter, you've been able to generate segment operating margins that were more in the low teens. So I was just kind of wondering how to kind of think about the difference. Like how much of an impact to margins do you estimate that the spot buys had in the first quarter? And kind of where are the other biggest margin headwinds that you're seeing versus what your cost structure look like pre-pandemic.
Just trying to get at if there's any other potential drivers for margin expansion throughout the rest of the year, aside from the volume impact you called out.
Well, most of the spot buy was in the Aerospace segment. So that was roughly $1 million. But the volume is what -- the top line growth is what's going to drive the operating margin for the segment as we move through the year.
I would answer by saying that I don't know how far back you had to go to look at that similar kind of revenue run rate for our Aerospace business. But today, we're -- and deep company and frankly, we didn't really have a chance at back in those days.
I mean, the system that we're putting on FLRAA is just an example on Bill's V-280 valor is something that I think most of the industry didn't think even today, we were capable of [Indiscernible] because we've been working with them on their previous 2 commercial helicopter projects. So they knew what we could do.
But a FLRAA type of program is not something we could have done, say, 5 or 6 years ago. So we do have more of an overhead element to our business. I think it's a very capable element, and I think it's one that's going to drive results, but they take time to mature and FLRAA will not be an exception to that. It will take time. But those kind of programs can be incredibly valuable over a long horizon period.
That's very helpful. And then just as a follow-up, I wanted to ask a question on the labor front. Are you fully staffed to the degree that you need to be in order to meet your full year revenue guidance? And have you seen any recent changes over the last few months, either with attrition or just overall labor availability?
We have certain hotspots in our company where we do have labor challenges. But in general and even in those hotspots, I would say that labor getting to be an easier issue. It's freeing up a little bit. We, like most companies, had a lot of churn over the last couple of years. We're starting to see some of those people come back even now.
It turns out the grass isn't always greener on the other side. But we're also -- by having an easier time just attracting people in general across most parts of our business. So if all of the parts came in right now, would we have all the people we need? Probably not. But the big challenge for us is not people. It's much more parts.
Our next question comes from Tony Bancroft with [Kibali] Fund.
Maybe you could remind us again what the FLRAA program entails, potential full rate ship set and then is there a potential to get more content on that program?
Well, as you know, Tony, these programs can have a long and somewhat unpredictable trail. And our piece of it at this point isn't even firmly defined yet. It's still a little bit in flex but I think I used this line before, and I'll use it again, even though we're not under contract yet, and this isn't formalized, but as our company has grown over the years, our ship set content has grown also.
And I use the example of -- there was a time when the business was based on maybe $10,000 per business jet and that we are largely a business jet company.
Today, if you were to take a wide-body aircraft and put absolutely everything on it that we could possibly put on it from a lighting perspective, from a safety perspective, from a in-sea power perspective, from antennas and file servers and wireless access points, all the things that we do, you'd probably come up with -- and by the way, there's never been an airplane like this. We've never had one. But if we had one, it would be somewhere in the neighborhood of probably a $750,000 shipset, something like that.
And our FLRAA shipset content as it exists right now is well north of that. So it's a major program. And it's as you know, largely designed to replace Black Hawk or to complement the Black Hawk and nobody is saying they're going to be a one-for-one replacement. But there are 4,000 Black Hawks out there, and many of them have been out there since the mid-1970s.
So there's due for a major upgrade. And I think the working number that I come across most is somewhere in the neighborhood of 2,000 ships before you start selling internationally. So it's a significant program.
That's great. And then again, could you remind me -- I know that the second program is obviously the FARA program obviously is not -- it's much -- it's not -- doesn't have the same kind of volume as FLRAA. But is there any -- just because of the relationship with Bell and just what you guys do. Is there any potential to be on that program as well? Is that a possibility? If so, like maybe what [Indiscernible].
With Bell, certainly, we are on their FARA and [Indiscernible] also.
Great. Wonderful. And I guess with such a long -- such a transformational this contract is and potentially too transformational, maybe longer-term view, where do you see your company 5 years from now when this program matures, does it make sense to do something transformational with Astronics or how do you see that? I mean such a -- this has just really changed; I think it's probably going to change your business quite a bit. I just want to get your thoughts on that.
Well, to tell you the truth, we've been thinking so much about quarter-to-quarter through this end and then the program delays and then the challenges legally and all that stuff. But yes, I think it opens up a ton of opportunity for our company. We were challenged in this pandemic largely because when we went into it, we were 70% commercial transport. And that's the area that got kicked in the teeth the most by the pandemic.
We were only 10% military aircraft. If you run those numbers that we were talking about just moments ago, that program single handedly has the probability or potential to rebalance our business, I think, in very favorable ways from a market diversification standpoint. So we're certainly looking forward to that. That will be transformational in and of itself from my perspective.
But beyond that, we haven't put any stakes in the ground as to what we want to accomplish or even where we would plan to build those products because we're going to design them in our facilities where we have that expertise. But it's going to take a lot of floor space and a lot of capital to get that program going. So luckily, we have a few years to get that effort underway.
Yes. That's a really good point. And maybe just one more. You sort of talked about how this is likely going to shift the business, giving the split more balanced in defense, but then sort of another -- the second benefit, of course, is the back to the commercial side, you have all of these aircraft that are still being flown longer than extending out time. You've heard all the other conference calls and discussions about this.
And so I mean it seems like on the sort of aftermarket piece, there's probably a huge wave of opportunity for these extensions and then just retrofit. Maybe could you just sort of update us on what -- how are you seeing that and how that's sort of transformed over throughout the pandemic and up to this point?
I think it's a good point, and it is a growing part of our business. Our business has grown quite a bit over the years, but in many respects, we're still a pretty young company. I'm going to date myself here a little bit, but I remember a time when we were about $4.5 million in sales, and we hit $800 million right before the pandemic. And a lot of that growth came over the last 10 years or so, 10 to 12, 13 years. And a lot of the products that drove that growth are maturing and needing to be replaced.
So we definitely are seeing an uptick in some of the spares purchases and some of the repairs purchases. That's never been a big part of our business. But as we get larger and as these products -- everything on an airplane breaks, again, as you know. And I think being a pilot is a much easier job if airplanes never broke, right? But they do. So there's certainly a market there.
And I expect that will become a bigger part of our business. In certain places, it's starting too now. But it's not a major thing yet for us. It's not something we break out separately in our financials, but I can see us getting to that point at some day.
Our next question comes from Scott Lewis with Lewis Capital Management.
A question on -- one question on FLRAA. What kind of margins will the development work entail?
Well, we anticipate being fully funded for sure, and we anticipate having a reasonable return on at a risk-reduced return. So that contract is in negotiation. So it's a little hard to talk about it at this point. But I expect that we're going to be turned on before our next conference call. So I should be able to talk about it a little bit more by then.
I can also say that the scope of activities over the next, say, 15 months has bounced around quite a bit. So we don't really know exactly what we're going to be asked to do yet, at least I don't -- some people in our company may know. So it's a little hard to say. But we expect to be turned on, and we expect to be shuffling some of our people around and adding to our staff to do it, but we're not going to make additions and we're not going to do too much of that shuffling until we finally get under contract.
Okay. Got it. And then the second question is looks like in 2024, you'll be pushing good volume through your main kind of business units. How about your smaller business units, some of those that gave the company some troubles right before the pandemic. Anything there that is concerning that could detract from the overall performance of the company?
No, not really. You have a long memory, Scott. But also remember that those 3, I think we call them problem children at the end of 2019, we took some pretty major restructuring steps to fix them. And those steps have largely, I feel been successful. We haven't talked about them a whole lot since. And they're, in general, doing pretty well.
One of them, in fact, is probably one of the most profitable parts of our business right now, right? Which is a big change. So yes, I don't -- we're not going to go back to those days. I think we got those things fixed.
Okay. Good. It's good to hear. And as far as long memory, I remember the big -- last really big military contract, the F-16 night vision cockpit.
Yes, that's correct. So that was...
Started in the late '90s.
Yes. It was earlier than that. It was the reason we built this building. My recollection at that time was that was just when we were just -- we had 2 operations. It was just New Hampshire and New York. We were a $16 million program. And the program Scott's referring to for those who don't know, it was a air national guard-led program to retrofit the yard fleet of F-16 fighters for night vision goggle compatibility.
So everything that lit up on the airplane interior cockpit and exterior had to be replaced. We were about a $60 million company; I think that was a $50 million contract before you started doing spares and all that. And then the Air Force jumped in on it, too. So it turned out to be 1,156 airplanes just -- that's right for what it's worth. 4 of them crash before got done. So it was really 1,152 airplanes.
Yes, where it does as many and maybe more.
Yes. I mean that would be nice.
Our next question comes from Jon Tanwanteng with CJS Securities.
Just wanted to go back to the margin question. Do you still expect to be back at those low teens operating margins in the Aerospace business sometime in the next maybe 5, 6, 7 quarters or so.
I think we're going to -- it might take a little bit longer than in the next 4 or 5 quarters to get back to the low teens in terms of operating margins. But yes, I think our expectation is to get up to the mid-teens in terms of EBITDA margins as the top line grows when we get probably post this year, maybe into the beginning of next year.
But I can see us getting into the teens in terms of operating income on the Aerospace segment, probably not within the next year, though. But definitely, as the top line grows.
What we'll also see is new contract pricing start to kick in more than it is right now. We're really not seeing a whole lot of it. We quoted a lot with new pricing in it. And those are typically year 2, 3-year programs that will begin as we move through this year and into next year. And those -- the new quoting -- the new pricing is reflecting the inflation that we saw in the past 12 months here. So it's -- we're going to see some margin expansion related to that versus what we're seeing right now, too.
Got it. That's helpful. And then just a quick question on the legal costs. What are you expecting for the rest of the year and kind of when do you expect that to finish up?
That's a hard one to predict. Probably it may not be consistent from quarter-to-quarter, but probably in the $2 million to $4 million a quarter range, I would say. It could -- it might be $4 million quarter, $1 million the next. It's depending on what's going on in the process for each of the suits.
Okay. And then just remind us how much room you have on your covenants at this point. In case you have more problems with receivables inventory or something else is going on.
Yes. Where we are right now, in terms of the minimum EBITDA compliance, we have around $9 million of room on the minimum EBITDA compliance. That's our financial covenant right now.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.