Motorcar Parts of America Inc

NASDAQ:MPAA

Earnings Call Transcript

[Operator]

Thank you for standing by. My name is Ellie, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Motorcar Parts of America Inc. Fiscal 2024 Year-End Conference Call and Webcast. [Operator Instructions]

I'd now like to hand over the conference to Gary Maier, Vice President of Corporate Communications and Investor Relations. You may now begin.

[Gary Maier, executive]

Thank you, Ellie, and thanks, everyone, for joining us this morning. Before I turn the call over to Selwyn Joffe, Chairman, President and Chief Executive Officer; and David Lee, the company's Chief Financial Officer, I'd like to remind everyone of the safe harbor statement included in today's press release. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements, including statements made during today's conference call. Such forward-looking statements are based on the company's current expectations and beliefs concerning future developments and their potential effects on the company. There can be no assurance that future developments affecting the company will be those anticipated by Motorcar Parts of America. Actual results may differ from those projected in these forward-looking statements.

These forward-looking statements involve significant risks and uncertainties, some of which are beyond the control of the company and are subject to change based upon various factors. In particular, expectations about anticipated future growth and opportunities with customers may not be achieved. The company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. For a more detailed discussion of some of the ongoing risks and uncertainties of the company's business, I refer you to the various filings with the Securities and Exchange Commission.

With that said, I'd like to turn the call over to Selwyn Joffe.

[Selwyn Joffe, executive]

Thank you, Gary. I appreciate everyone joining us today. We are encouraged by our operating results for the fiscal year, including strong sales performance, increased gross margin, increased EBITDA and significant positive cash flow. For the 12 months, we generated $39.2 million in positive cash from operating activities and paid down net debt by $32.5 million to $114 million.

I might add that these results were particularly satisfying considering the industry softness for 2 months in the third fiscal quarter and in the fourth quarter. I also might add that for the quarter, we are comping against a record fourth quarter in the prior year. Also, it should be noted that sales were up in all product categories other than wheel hubs. We have had a realignment of our wheel hub business at one of our customers and expect to regain momentum starting this month.

Let me take a moment to highlight a few key near-term strategic initiatives. First, generating cash both from increased profitability and working capital. With respect to increased profitability, we expect to benefit from volume increases in our brake program that will help absorb overhead, which will in turn result in accretion to overall margins. We expect accelerating brake-related product sales will lead to more opportunities to take advantage of efficiencies from both purchasing and production.

I should emphasize that we started our brake caliper business as a greenfield operation in August of 2019. And today, we are in the top 3 suppliers in this category. As our newer brake product lines gained traction, we expect more efficient inventory turns to further support initiatives to neutralize working capital.

Second, with respect to generating cash from working capital, we are focused on 2 major areas to reduce working capital, which include inventory and accounts payable. We have implemented processes to extend days outstanding on accounts payable and to enhance inventory efficiencies. These processes are still in their early stages. However, we expect to recognize meaningful benefits over time. We continue to evaluate allocation of capital to maximize shareholder value.

Let me provide a few metrics about our accomplishments to date. As I previously mentioned, we are focused on neutralizing working capital. As of today, we have commitments that will extend our days outstanding on payables by 30 days on an annualized basis, which should reduce working capital by $20 million at the end of the full year cycle. We continue to aggressively implement this program.

Third, we are accelerating new part number introductions, targeting at least 800 per year. These new part introductions help us to maintain our leadership position in the categories we supply and adds to our sales base.

Finally, we expect growth and profitability from our "other segment, which includes DMV and Dixie, beginning in this current fiscal year. We expect to sell more than $100 million of diagnostic equipment within the next 3 years with additional opportunities pending.

Additional service revenue should be realized as more testers are deployed. We are gratified that the diagnostic testing business achieved profitability in fiscal 2024, and our heavy-duty business is expected to achieve profitability in the current fiscal year.

Despite some softness for the industry in the second half of the fiscal year, which is rebounding, gross profit improved nicely on a year-over-year basis, among other positive metrics that David will highlight shortly. To reiterate, we remain focused on sales, profitability and neutralizing working capital. We are confident that our sales and profitability will grow organically and through market share gains. Increased profitability along with our working capital initiatives will further enhance cash flow generation.

The rollout of our vendor finance program offered to our suppliers is progressing nicely. This program enables us to extend our payment terms while facilitating a program for our suppliers to have early access to capital. As I just mentioned, we already have commitments to extend the number of days outstanding for accounts payable by 30 days, which will result in reducing working capital.

From a strategic standpoint, we are continuing to leverage our strengths, including great products manufactured at state-of-the-art facilities, solid customer relationships, industry-leading SKU coverage, not to mention our value-added merchandising and marketing support. I might add that we recently received an award for what it takes to do the job right from AutoZone, identifying us in their top echelon of suppliers.

I should mention that we opened a new facility in 2024 in Malaysia to support manufacturing a wheel hub products for direct shipment to our customers, which is expected to further enhance our competitive position.

Our hard part sales in Mexico continues to gain momentum, and we are focused on additional opportunities with multiple product lines as our customers experience increased demand for our aftermarket parts. The rate of growth in this market is exciting and we are well positioned to utilize our footprint to meet the growing demand for our nondiscretionary aftermarket parts.

Favorable long-term industry dynamics continue to bode well for the company and we are extremely well positioned for sustainable top and bottom line growth in our hard parts business as well as testing solutions. We expect growth in all of our product lines, including our quality build brand that continues to gain significant market share within the professional market. This includes our most recent additions to our portfolio of brake calipers, brake pads, shoes and rotors.

I reiterate, as we grow these product lines, we expect overall gross margin accretion. In short, we have in place the capacity and capabilities to support our customers' increasing demand across multiple lines. Our strong cash generation will enable us the flexibility to further pay down debt and pursue other related opportunities to enhance shareholder value.

In conclusion, nondiscretionary aftermarket parts for the internal combustion engine market will be here for decades. And outlook supported by recently updated industry data showing that the average age of vehicles is 12.6 years. It's worth highlighting that the population of vehicles operating with internal combustion engines versus electric vehicles represents approximately 98.4% of all vehicles on the road. One of our key competitive advantages is our ability to offer a broad range of applications for all makes and models. We remain focused on newer model applications and our ability to meet expected demand as these vehicles enter the replacement market.

Finally, before I turn the call over to David, I'd like to comment on yesterday's announcement regarding the Board. The company has been focused on refreshing the Board and working to identify and evaluate director candidates. We are fortunate to have identified Jack Liebau, who we intend to nominate to stand for election at this year's annual meeting. The Board has received input from major shareholders regarding qualifications that would be most helpful to the company. We have taken that input seriously and believe that Jack not only meets the highest standards for independence and governance, but also has experience in the aftermarket industry.

He has a solid background and is an excellent candidate for the Board at an exciting point in the company's evolution. You can read more about Jack's background in the release we issued yesterday. The process is ongoing, and we expect to further report developments in the coming weeks and months ahead.

I'll now turn the call over to David to review our results in greater detail.

[David Lee, executive]

Thank you, Selwyn, and good morning, everyone. I encourage everyone to read the earnings press release issued this morning as well as the 10-K that will be filed later today. Let me first reiterate key financial performance metrics for fiscal year '24 and that we highlighted in this morning's news release.

Net sales increased 5.1% to $717.7 million. Gross profit increased 16.3% to $132.6 million. Gross margin increased 1.8 percentage points to 18.5%. Operating income increased 26.5% to $46.1 million. The company generated cash from operations of approximately $39.2 million. Despite industry softness, contributing to lower net sales for the fiscal '24 fourth quarter of $189.5 million compared with $194.7 million in the prior year, net sales for the full fiscal year 2024 increased 5.1% to a record $17.7 million from $683.1 million. I should mention the fourth quarter sales were primarily impacted by softer wheel hub sales, which we expect to regain momentum in June.

Gross profit for the fiscal fourth quarter was $34.8 million compared with $36.2 million a year earlier. For the full fiscal year 2024, gross profit increased 16.3% to $132.6 million from $114 million a year earlier. I should mention that gross profit for the quarter was impacted by noncash items as well as cash items. The noncash items reflect core and finished good premium amortization and revaluation of cores and customer shelves, which are unique to certain of our products and required by GAAP.

A more detailed explanation of core accounting is available in a video posted on the company's website. Fourth quarter gross margin was 18.4% compared with 18.6% a year earlier, impacted by inflationary costs. Additional price increase in effect and operating efficiencies will enhance gross margin. For the full fiscal year '24, gross margin was 18.5% compared with 16.7% a year earlier. Gross margin for fiscal 2024 was impacted by $16.3 million or 2.3% of noncash items and $7.5 million or 1% of nonrecurring cash items as detailed in Exhibit 4 of this morning's earnings press release.

Operating expenses were $22.6 million compared with $12.4 million in the prior year period. This included a noncash gain for the foreign exchange impact of lease liabilities and forward contracts of $1.2 million compared with $6.7 million a year earlier. In addition, prior operating expense was favorably impacted by $3.1 million employee retention credit recorded in March of '23. The remaining $1.5 million of operating expense increases for fiscal '24 fourth quarter included employee-related incentives.

Operating income for the fourth quarter was $12.2 million compared with $23.7 million in the prior year, reflecting a noncash $5.6 million less favorable foreign exchange rate gains associated with lease liabilities and forward contracts and the benefit in the prior year of 5.1 million employee retention credit. I should point out for the full fiscal year, operating income increased 26.5% to $46.1 million from $36.4 million in the prior year.

Results for the fiscal fourth quarter were impacted by $2.8 million or $0.09 per diluted share of higher interest expenses, primarily due to higher market interest rates and increased collection of receivables, utilizing accounts receivable discount programs on higher sales. Interest expense was $14.7 million compared with $11.9 million for last year, which is primarily related to accounts receivable discount program.

We are working diligently to address the higher interest environment, particularly areas that we can control. For example, among other initiatives, we're focusing -- focused on neutralizing working capital to generate positive cash flow to pay down debt, as evidenced by our year-end results. In addition, we continue to work with our customers to mitigate higher interest rates.

Results for the full year were impacted by $20.5 million or $0.78 per share of higher interest expenses primarily due to higher market interest rates and increased collection of receivables, utilizing accounts receivable discount programs and higher sales. Interest expense was $60 million compared with $39.6 million for last year.

As I previously noted, we are working diligently to address the higher interest environment, particularly areas that we can control. Net income for the fiscal fourth quarter was $1.2 million compared with $1.5 million for the prior year. Net income for the fiscal '24 fourth quarter was impacted by approximately $800,000 or $0.04 per diluted share of noncash items and $1.2 million or $0.05 per diluted share of cash items as detailed in Exhibit 1.

For the full fiscal year, due primarily to higher interest expense of $20.5 million I previously discussed and $50.3 million of noncash expenses including a $38 million U.S. federal and state deferred tax asset valuation allowance under U.S. GAAP, we reported a net loss for fiscal '24 of $49.2 million or $2.51 per share compared with a net loss of $4.2 million or $0.22 per share a year ago.

Once again, this valuation allowance is a noncash accounting item and does not impact any operating metrics. The details of the noncash and cash items impacting results on Exhibit 2 of this morning's earnings press release. With higher expected sales volume moving forward and the full impact of certain price increases already in effect, results are expected to further improve. I should also add that price increases in effect will contribute an additional $10 million in annualized sales, gross profit and EBITDA.

EBITDA for the fiscal fourth quarter was $17.7 million. EBITDA was negatively impacted by $300,000 of noncash items and by $1.6 million in cash items before the impact of noncash and cash items mentioned above, was $19.6 million for the fourth quarter. EBITDA for the full fiscal year 2024 was $58.6 million. EBITDA was impacted by $16.4 million of noncash items and $9.3 million in cash items. EBITDA before the impact of noncash and cash items mentioned above was $84.2 million for the current period compared with $71.2 million in the prior year, taking into account the noncash and cash items noted in this morning's earnings press release, Exhibit 5. We anticipate supply chain disruption expenses will be nonrecurring.

Now we will move on to cash flow and key corporate items. We generated approximately $39.2 million of cash from operating activities during fiscal '24 and reduced net bank debt by $32.5 million to $114 million from $146.5 million, notwithstanding $9.3 million cash used in operating activities during the fourth quarter due to seasonality of the company's business.

As you mentioned that in fiscal '24, we also paid off and retired by $11.25 million term loan, which further highlights our solid financial position. We expect to generate an increase in operating profit on a year-over-year basis for fiscal '25, supported by organic growth from customer demand and operating efficiencies from our now completed footprint expansion and generate positive cash flow for fiscal '25. In addition to our goal of generating increased operating profits, we are diligently focused on opportunities to neutralize working capital, including customer product demand planning, enhanced inventory management and further extend our vendor payment terms. We expect increasing financial performance from our new and existing product lines, including our emerging brake categories. Our net debt at the end of the quarter, excluding our convertible note, was approximately $114 million, while total cash and availability was approximately $114.9 million.

Now let me address our outlook. As stated in our news release this morning, our expectation for fiscal '25 is to achieve sales in the range of $746 million to $766 million, representing between 3.9% and 6.7% year-over-year growth, respectively. We expect to see margin accretion from efficiencies related to the higher volume, price increases and cost-cutting initiatives. With respect to cash flow, our expectation is to continue to improve cash generation. Operating income is expected to be between $62 million and $67 million before the noncash foreign exchange impact of lease liabilities and forward contracts and the noncash impact of revaluation of cores customer shelves. The company estimates other noncash items will be approximately $17 million, including core and finished goods premium amortization and share-based compensation. The company estimates depreciation and amortization will be approximately $11 million.

In summary, operating income before the impact of the noncash and cash items and before depreciation and amortization is expected to be between $90 million and $95 million.

For further explanation on the reconciliation of items that impact the results and non-GAAP financial measures, please refer to Exhibits 1 through 5 in this morning's earnings press release. I would now like to open the line for questions.

[Operator]

[Operator Instructions] We have our first question from Carolina Jolly from Gabelli.

[Carolina Jolly, analyst]

Just quickly, could you discuss some of the trends that are kind of benefiting the April, May numbers that you mentioned in the release? And is that just wheel hubs or is that growth in other areas?

[Selwyn Joffe, executive]

Yes, that's a great question. I appreciate you asking that. No, we had -- it's hard to define exactly what's contributing. But we certainly are seeing much more vibrant market. And as the weather gets hotter and hotter, we see increases across the board in all of our product lines. So it's not just the wheel hubs. The wheel hubs are just beginning to regain the momentum towards the end of the quarter. But in the first 2 months of the quarter, it's everything else.

And so we're optimistic that we're off to a strong start. I think a lot of it is weather. And if you listen to the retailers report, tax refunds are helping. So we're encouraged.

[Operator]

Our next question comes from Bill Dezellem from Tieton Capital Management.

[William Dezellem, analyst]

I had a group of questions, please. First of all, do you have any further price increases that are currently lined up with your customers?

[Selwyn Joffe, executive]

Yes. So we have $10 million of additional price increases that we'll start seeing -- overall -- that we'll start seeing go into effect now. And we're very focused on the interest rate expenses and hope to get more.

[William Dezellem, analyst]

And Selwyn, when you say going into effect now that will really affect the second fiscal quarter as opposed to the first. Is that the proper scaling of that?

[David Lee, executive]

So price increases that went into effect towards the latter part of fiscal '24, we'll see additional benefit in fiscal '25.

[Selwyn Joffe, executive]

Yes. So starting from the first quarter.

[David Lee, executive]

That's correct.

[William Dezellem, analyst]

Okay. Great. And then the brake business -- the new brake business, when do you anticipate that the margins will meet the company average?

[Selwyn Joffe, executive]

Yes. The brake margins are significantly below our legacy product margins right now. I think it's a 2-year process. We will see significant accretion this year. We've got additional business that's coming on, and we expect the brake business to get more vibrant. I mean we've had certainly in the last 4, 5 months, and I think there is a lot of industry chatter around very difficult tire sales. And one may ask, why do I care about tire sales? Well, the cross-sell from tires to brake job is very significant.

And so when you have a reduction in tire sales, you usually have a big reduction in brake sales. So we haven't seen the acceleration that we had hoped to have seen, although we've got the share acceleration that we had planned on getting. And as this -- and as this turns and we believe it is turning, we should see an acceleration in the brake business. And I also think -- and I'll just go back to sort of the brake caliper operations and opportunities.

The brake calibers, we have -- we've built a greenfield state-of-the-art brake caliper remanufacturing facility. And any time you get into brand-new facilities, there's some scalability in getting to the margin point. Our margins on our legacy product just are completely stable. We have not deteriorated at all. Brake caliper business has taken time to get to the margins. We believe that we'll start seeing that accretion in the next quarters ahead. And it's going to take until we get fully ramped up, which we -- again, we have new business coming in that will start towards the end of this fiscal year. We'll get there, and there will be a significant contribution from the incremental brake business.

So hard to give you an exact, but I think a 2-year period is what we should be looking at. And I think the other thing I'm going to point out on the brakes, Bill, even though you're not asking this question, is inventory levels, and we've made a big commitment to -- with a proprietary formulation in the brake pad business, we've made a pretty big commitment to getting into that category. It's going slower than we expected because of the tire situation that I talked about, in particular, when you talk about tires with the job that sold relative to the tire job is pads and rotors. And so we're sitting with -- we believe we've got headwinds in the inventory number there, but that product provides good -- really good margins.

And as we accelerate growth there, we expect to see margin accretion as well coming from that. And so I think we've got tailwinds on margin, we have tailwinds on cash flow with our new working capital initiatives. We've been conservative on the revenue side now as we see how the market unfolds, but our position is extremely strong.

[William Dezellem, analyst]

Great. And speaking of brake pads, would you please discuss, Dan, and I'm probably not going to pronounce his name correct, but Lelchuk, would you discuss his joining MPAA and kind of how you see him fitting into the organization? Is he replacing someone? Or is this a new position? What are you wanting him to accomplish?

[Selwyn Joffe, executive]

Great. Good question on the Lelchuk. And I apologize to Dan if I messed it up as well. But Dan is a unique individual. Dan was one of the Co-Founder of Centric Parts. Centric did well in excess of over 300 -- almost $400 million, I believe. I can't remember the exact number. But as a brake business, they were private, I don't know exactly, but Dan as a Co-Founder, we're extremely fortunate to have one of the top brake gurus in the industry being part of us. He has incredible relationships with, first of all, all the customers that are out there because Centric had an incredible reputation on the brake program.

We were very fortunate, and I think we've discussed this where we were able to take the Centric formulation -- get the exclusivity to Centric formulations that they still really respect. And Dan was played an intricate role in putting that together. We think that he will add significant credibility to our program. It's a new position. He is doing fantastic already. We are positioning the brake line and repositioning the brake line and making sure that we're leading the industry in our coverage and our quality levels and that -- with the appropriate pricing.

And the other thing Dan brings to the party is he's got years and years of experience in understanding costing from the supply chain. And so while I think we've done a great job on getting the right cost on supply chain, we'll have a continuous effort from him making sure that we ensure that we remain effective on our pricing. So I couldn't be happier to have him, and I think the team is embracing him, and we should see -- we expect big things from him.

[William Dezellem, analyst]

Great. And lastly, I want to circle back to wheel hubs. I don't think that I have clarity or an understanding of why the wheel hub business has been soft and particularly why it has lagged the rest of the industry? What insights can you share there?

[Selwyn Joffe, executive]

Yes. So I think I've mentioned it last quarter, we've just opened up our ship direct factory from Malaysia, where we can bring in product directly from Malaysia to the customers. We have an old factory while a very good factory, but it didn't pass the environmental, well, not even an environmental, but didn't pass the audits of some of the large customers that wanted ship direct programs.

We've now opened a brand-new factory, which I announced last quarter. And we've seen where we've gone. We've lost some share because of that on a short-term basis. But we've now picked it up right back up. And so we expect to start shipping incremental product this month, I mean, perhaps next week even. And we see opportunities for that growing. So we had a short-term setback. I think I mentioned that, that may happen in that. But I'm encouraged and happy to be able to say that, that's reversing out.

So I don't see any weakness in our product lines right now. That may take another month or so before wheel hubs get back to that vibrancy and accelerate through that. But we look at every one of our product lines. We are seeing a pickup through the register, we are seeing a pickup in market share and we're seeing the introduction of new SKU opportunities and new business opportunities. And while I'm extraordinarily disappointed at the stock price and the response to what we're doing and hopefully, we will have new directors, and I want to try and get more granular explaining, the progress as we go through hopefully in this next quarter release to see where we're going.

But the cash -- the working capital situation is improving. The vendor supply chain program has gained tremendous traction. I mean, we weren't planning on announcing exactly what that is yet, but you can see already that we're looking at onetime reductions in working capital of $20 million, which, assuming everything else is equal, that working capital moves around with inventory as well. But when that's $20 million already that we think in cash that we'll generate from that.

But -- and that can be used in multiple ways. I mean, looking at how we allocate capital to enhance value cited to have our Newport member on. We look at -- we expected to put others on. And we're looking for a very aggressive program to prove to the market that we should be more valuable than we believe we should be.

[Operator]

Our next question comes from Chris Riemenschneider from Morgan Stanley.

[Chris Riemenschneider, analyst]

A couple of questions. If you look at the shareholder equity, year-over-year, it's down $35 million for a company that has a market cap of $90 million. It's quite significant. And with that being said, would the Board consider anything such as a buyback? And two, with your outlook of a 3.7% revenue increase and where you said margins could be with debt at $114 million, where does the Board and management want that to be a year from now?

[Selwyn Joffe, executive]

Okay. So I'll try and take them in the sequence, same sequence you asked. Chris, I appreciate the question. We do have an authorization for buyback in place, and that's certainly something that we would consider. So we think our liquidity is strong and our capability to execute that would be good. We're also -- we do see enhanced liquidity going forward and positive cash generation as we move forward. And so that gives us some flexibility as well in making those decisions.

From a debt level perspective, it's -- probably the elephant in the room is the interest expense. And from a debt level perspective, we're at about $113 million, $114 million of debt. And depending how you look at EBITDA, we're not more than 2x, 2.5x of leverage on EBITDA. That's excluding all the interest expense from the supply chain factoring program. And so the debt levels are not a concern to us today. I mean what is of concern is the amount of interest expense that we're incurring on the supply chain finance program from our customers.

I mean we've seen that double now. That's happened because of two reasons that the rates out there for those companies have doubled -- have gone up significantly, not doubled. But -- and our revenue continues to go up with these customers is good news and bad news. And so we expect to have further conversations about that. And that needs to be resolved. I don't know if that answered all your questions, but I hope it did.

[Chris Riemenschneider, analyst]

So do you expect bank debt to decline next year -- at the same time next year?

[Selwyn Joffe, executive]

Bank debt could decline as a percentage of EBITDA depending on where we -- how we allocate capital on buybacks. We could bring back debt down. And we have an opportunity to pay down the bank debt. I mean, with all the initiatives we have built out, not in the next year, but in the next couple of years. So it just depends on how we -- there is an allocation of capital question that we'll look at because, obviously, you've identified, I mean, the market cap of the company is very little.

[Chris Riemenschneider, analyst]

All right. You're going to be at Oppenheimer Conference tomorrow. What do you tell prospective investors regarding the recent earnings and disappointment of the share price? I mean I know you don't want to comment on share price, but it is a disappointment. I know the shareholders listening here are disappointed. You look at the demographics, and they all look positive, miles driven. We hear that every year, miles driven average age of car. What can you tell prospective investors tomorrow at Oppenheimer?

[Selwyn Joffe, executive]

Well, I think it's the same thing I've just said. I think we're in a mode of where we'll have margin accretion, both organically and through the growth of the brake business, and we see growth in the products, we see incremental cash flow. And we have the flexibility of allocation of capital relative to increased gross cash flow.

[Operator]

As of right now, we don't have any raised hands. I'd now like to hand back over to the management for the final remarks.

[Selwyn Joffe, executive]

In summary, we are gratified by the accomplishments in fiscal 2024 and the things we're discussing. But we are not done, okay? We are laser-focused on further reducing our global cost structure and fully benefiting from a not easily duplicated global platform to meet demand for nondiscretionary products as well as from our diagnostic testing capabilities.

We are leveraging our expertise in solid customer and supplier partnerships. This includes our recently launched supply chain vendor finance program that benefits our suppliers. Our liquidity is strong, and we have the resources capacity, professional expertise to capitalize on significant market opportunities in all of our product lines, particularly our brake-related business, which is gaining solid momentum.

In closing, I must recognize the contributions of all of our team members who are continuously focused on providing the highest level of service. We are all committed to being the industry leader for parts and solutions that move our world today and in the future.

Thank you, and I look forward to further communications. Thank you.

[Operator]

Thank you so much for attending today's call. You may now disconnect. Have a wonderful day.