Emerald Holding, Inc. (EEX) Q1 2023 Earnings Call Transcript
Good morning, and welcome to the Emerald Holding, Inc., First Quarter 2023 Earnings Conference Call. At this time all lines are in listen-only mode. Following the presentation, we’ll conduct a question-and-answer session. [Operator Instructions].
Before we begin, let me remind everyone that this call will include certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include remarks about future expectations, beliefs, estimates, plans and prospects.
In particular, the company’s statements about projected results of 2023 are forward-looking statements. Such statements are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from those indicated or implied by such statements. Such risks and other factors are set forth in the company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings.
The company does not undertake any duty to update such forward-looking statements. Additionally, during today’s call management will discuss non-GAAP measures, which it believes can be useful in evaluating the company’s performance. The presentation of the additional information should not be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP.
The reconciliation of these non-GAAP measures to the most comparable GAAP measure can be found in the company’s earnings release. As a reminder, this conference is being recorded and a replay of this call will be available on the Investors section of the company’s website through 11:59 p.m. Eastern Time on May 10. I would now like to turn the call over to Mr. Hervé Sedky, President and Chief Executive Officer. Sir, please go ahead.
Well, thank you Colin and good morning everyone. It’s great to be with all of you today to discuss our first quarter results. I’ll start with an overview of the trends we’re seeing so far this year and then give an update on our growth strategy, focus on customer centricity, 365-day engagement and portfolio optimization. Then our CFO, David Doft, will provide more detail on the financials.
I’m extremely pleased with Emerald’s start to the year. Each quarter, we see more encouraging signs that the post-COVID recovery in live events is progressing at a rapid pace, putting us on track for another year of significant revenue and EBITDA growth. More importantly, this recovery still has plenty of room to play out. So we expect to see higher than historical growth into 2024 and beyond as we benefit from the return of international attendees and improvements in our customers supply chain, lead times in addition to the benefits of our strategic initiatives and investments.
When you look at our business today versus pre-COVID days on an apples-to-apples basis, we are approaching pre-pandemic levels of event revenues. However, that’s only part of the story. The bigger picture is that we’ve grown Emerald meaningfully since 2019, both through strategic investments in our capabilities as well as acquisitions that have substantially contributed to our revenue. This means that we’re a much larger company than we were pre-pandemic with a stronger growth trajectory.
Despite these positive achievements, we don’t believe this value is reflected in our stock price today, which is why during the first quarter, we repurchased approximately 5.1 million shares or 7.5% of our common stock outstanding. At these levels, we firmly believe buying back shares is a highly attractive vehicle for us to deliver greater per-share value to our shareholders.
Over time, we think that the market will recognize the valuation gap between where our business is now, where it was valued pre-COVID and where the market is valuing other trade show platforms. We believe the reality is that the trade show industry is stronger than ever, evidenced by the record attendance and revenue at many of our shows last year and into the first quarter.
The trade show industry has always been a stable, growing industry with excellent cash flow generating characteristics. And we think our current revenue trajectory, combined with the near-term margin improvements as we scale will enable the market to begin to see the full value and potential of the business.
You have already seen signs of this in recent M&A transactions within our industry where peers were acquired for attractive multiples, and we believe our shareholders will be rewarded for their patience. As a reminder, our long-term growth plan post full recovery is to deliver run rate organic growth in the mid to high single digits combined with growth from acquisitions in the mid to high single digits, contributing to double-digit annual revenue growth overall. In the near term, we expect to see even higher growth rates given the recovery tailwinds.
Moving on to our first quarter results. We saw another significant step forward in attendance, which increased 24% year-over-year as we cycled past the Omicron impact of the first quarter of 2022. During that same period, square footage at our events in the quarter grew 18% and exhibiting companies increased 19%. This led to overall revenue growth of 24% year-over-year.
On the M&A front, we acquired Lodestone and its Overland Expo consumer events in Q1, extending our Action Sports franchise and expanding our consumer offering in addition to our core B2B focus.
Given the timing of Lodestone’s Event calendar, it generated no revenue for Emerald in the quarter while we absorbed its run rate overhead costs in our results. Nevertheless, adjusted EBITDA, excluding insurance proceeds, grew even faster than revenue at over 42% year-over-year as we leverage our existing cost structure to drive margins higher.
Strategically, we continue to remain focused on our three pillars of value creation: Customer centricity; 365-day engagement; and portfolio optimization. In customer centricity, we’re continuing our efforts to enhance the customer experience with our road map that calls for reducing friction in our attendee and exhibitor interactions as a result of leveraging data and technology.
Our progress on the data front is key to this, in addition to our efforts to increase the actual and perceived value of Emerald’s offerings in all of our products across events, content and commerce. The goal is to provide Emerald’s customers with a clearer picture of the return on investment they receive from the marketing dollars that they put to work across Emerald’s platform. This improves our stickiness with customers, incentivizes them to deploy more marketing dollars with Emerald and ultimately should help drive higher revenue per customer.
Our second pillar, 365-day engagement is geared toward providing multiple entry avenues to the customer engagement cycle through trade shows, conferences, webinars, media content and our e-commerce platform. Trade shows and conferences offer valuable in-person meeting to make connections, build the sales pipeline and stay on the cutting edge of industry changes.
Through media content and webinars, our platform allows advertisers to reach our audiences in 20 different industry sectors where we have events to share knowledge, industry innovations and new products outside of the trade show environments. Our ecommerce platform gives buyers and sellers a technology platform for year-round selling.
Our third pillar of value creation is portfolio optimization, which includes both new show launches and acquisitions. Our Emerald Xcelerator division is dedicated to launching new shows in high-growth industries where we believe there’s an opportunity for Emerald to establish an industry flagship event and scale it up in a cost-effective manner.
In September of this year, we’ll be launching the first edition of Cocina Sabrosa, a Latin Food and Beverage Expo, serving the B2B restaurants, grocery and supplier industry within the growing Latin Food business segments. Emerald has also recently entered a partnership with a major U.S. professional sports league to launch new fan-based initiatives as we build on our efforts to expand into business-to-consumer offerings. Further details will be forthcoming in the weeks and months ahead.
We’ve also remained active on the acquisition front, acquiring Lodestone Events and their Overland Expo series in January. We continue to evaluate a large pool of potential acquisitions within the highly fragmented B2B events and media industry, leveraging our scale and expertise to compete for deals and drive returns by implementing go-to-market best practices and operational efficiencies.
While we face an uncertain economic environment, we have seen how trade show industry has been economically resilient over the decades. Our shows represent a central element of customers’ marketing budgets with a demonstrable return on investments, and as a result, they are among the most easily justified costs for many organizations.
In addition, since our exhibitors booked their spots up to a year in advance and pay deposits in the year leading up to the show, they have no incentive to cancel. As a result, often any impact we see from the economic moderation tends to be smaller in size as compared to the broader economic trends, in particular given our belief that the end markets we serve are quite resilient.
Most importantly, we believe the ongoing post-COVID rebound in trade show industry provides a strong tailwind that would likely more than offset moderation in the economy. To conclude, we’re pleased with the trends we’ve seen so far to start the year.
We think there’s a lot of room left for post-pandemic recovery to play out, which we believe should allow us to keep delivering substantial year-over-year revenue and profit growth as we work our way towards surpassing our pre-pandemic levels. This combined with our favorable working capital dynamics of our business as we continue to scale up positions us well for powerful free cash flow generation into the future.
With that, let me turn the call over to David Doft.
Thank you, Hervé and good morning. Our first quarter revenue was $122.3 million compared to $98.5 million in the prior year quarter. The increase was primarily due to 17% organic revenue growth as events continued to rebound. Organic revenue, which takes into account the impact of acquisitions and scheduling adjustments was $122.1 million for the first quarter 2023, compared to $104.4 million in the prior year quarter.
First quarter adjusted EBITDA was $36.5 million compared to $25.6 million, excluding insurance proceeds in the prior year quarter. The increase in adjusted EBITDA was primarily driven by flow-through of organic revenue as we leverage the fixed cost of running events as well as prior investments.
First quarter free cash flow was $5.2 million compared to $6.1 million, excluding insurance proceeds in the prior year quarter. Last year’s first quarter meaningfully benefited from the ramp-up of deposits following the pandemic shutdown. Historically, Q1 has been a cash outflow quarter due to the timing of cash collections at the end of the prior year and outflow of payables as the seasonally busy Q1 events take place.
This year, however the first quarter was the beneficiary of the delayed collections from the fourth quarter, which we highlighted on the last call. This puts us firmly on track for our full year free cash flow expectations.
Turning to expenses, we continue to effectively manage our cost structure in this inflationary environment. First quarter SG&A was $48.8 million versus $46.6 million in the prior year quarter, an increase of less than 5% despite the three acquisitions we’ve closed since that time. As we outlined on our last call, we’ve made significant improvements to our cost structure at the corporate level, including by rationalizing our real-estate footprint and opening an offshore hub in Manila to ramp support for a number of functions, including telemarketing, sales support and data management.
As for the balance sheet, we had $217 million of cash and marketable securities as of March 31, 2023, versus $239 million as of December 31, 2022. Our total liquidity is $327 million, including full availability on our $110 million credit facility. The quarter end cash balance accounted for the free cash flow I just discussed, offset by the $9.5 million initial consideration paid for the Lodestone acquisition and the $16.9 million we spent to buy back stock in the quarter.
As Hervé mentioned, the trade show industry has historically performed relatively well through economic cycles, given the long lead times and customer deposits for booking shows. As markets face widespread uncertainty, we are fortunate to be in a B2B segment that is considered essential to company’s marketing budgets and where we are making progress on more explicitly outlining the return on investment that Emerald offers to customers.
We believe that as we progress beyond the Fed’s current rate type cycle, some of the economic and market uncertainty may begin to abate and companies will get more comfortable with making larger and longer-term dollar commitments to marketing, providing another boost to the ongoing recovery in live B2B events.
Our balance sheet strength and cash flow generation support our ability to opportunistically invest in and grow the business. We plan to continue to balance capital allocation between acquisitions, investments in our own business, opportunistic share buybacks and debt reduction to execute on opportunities where we see the greatest value for shareholders.
To that end, as Hervé mentioned, in Q1, we repurchased 5.1 million shares of common stock at an average price of $3.34 per share or a total cost of approximately $17 million. We have $3 million remaining on our share repurchase authorization. As of March 31, we had gross debt of $415 million and net debt of $198 million. This leads to a net leverage ratio as defined in our credit agreement of 1.9 times, our trailing 12 month consolidated EBITDA of $102.9 million.
Briefly, an overview of our capital structure can be found on Slide 11 of our earnings presentation. Factoring in $62.8 million of common shares outstanding at March 31 and additional $137.5 million common shares represented by the convertible preferred shares as of March 31, our total share count on an as converted basis would be 200.3 million shares.
Based on yesterday’s closing price, this equates to a market cap of $729 million. Adding in our net debt, estimated contingent consideration on our balance sheet for acquisitions and deferred tax asset worth approximately $70 million. This leads to an enterprise value of $1.0 billion.
In our full year guidance for 2023, as we stated on our last earnings call, we continued to expect in excess of $400 million in revenue and over $100 million of adjusted EBITDA. This guidance reflects a more than 76% increase over 2022 EBITDA, excluding insurance proceeds. Our guidance implies an adjusted EBITDA margin of approximately 25%, and we believe we have considerable runway to continue improving on this number as we work our way back to the 35% plus margins we saw prior to COVID.
We also continued to expect free cash flow in 2023 of over $60 million before accounting for the benefits of working capital inflows. This would bring our net debt to adjusted EBITDA ratio closer to 1 times, assuming no incremental M&A.
Thank you very much for your time. And with that, we’ll now open the line for questions.
Thank you. [Operator Instructions] Your first question comes from Allen Klee from Maxim Group. Allen, please go ahead.
Yes, hello! Congratulations on strong momentum and all the actions that you’re taking to grow the business.
My first question today, if we look at like what you’re doing with Xcelerator to add new trade shows and acquisitions, how should we think about like how that will impact the seasonality as we go through the year?
So, let’s start with the acquisitions. Over the last couple of years, a number of the acquisitions we’ve made have events that are in the fourth quarter or at least have their primary revenue generating events in the fourth quarter, which has definitely changed the seasonality of our business. So going forward we expect 4Q to be almost as large as 1Q, which has historically been the largest quarter in the company in terms of seasonality, while 4Q historically was the smallest and so that’s quite a big change for us in our seasonality.
On the new launch side, it’s a little harder to predict, because it does depend on those launches as they come up and where we determine the right time in the calendar is to serve that industry properly. I would say that it’s likely it will shift the weighting a little bit more towards Q2, Q3, just from what I see in the launches that we have coming up, but they start out very small. So it wouldn’t meaningfully impact the overall seasonality of the company unless there was a breakaway success in there, and we’d update you in the future about that.
That’s great. And one of your strategic pillars is customer centricity, more engagement. Could you go into a little bit more of the strategy of combining all the different things that you offer and how that’s adding – should add more value to your exhibitors and customers?
Absolutely Allen! So around customer centricity, our focus is to better leverage our technology platforms as well as the data assets and data capabilities that we’ve built over the last couple of years through the single data hub that we have, to really as I mentioned earlier, remove the friction that exists and make it so much easier for our customers to, for instance get leads. So much easier for customers to not only get leads while they are at trade shows, but get leads throughout the entire journey as they interact with different Emerald products such as content and in our ecommerce marketplace.
So our customer centricity, while it has a number of different capabilities that also include things like pricing. We want to do business on our customers’ terms, offer choice for customers, so that they can participate and activate in a way that makes sense for them. We’re making some really good progress around what we call Event of the Future, strong pricing initiatives, as well as leveraging data and technology to create a significantly enhanced experience for the customers.
Thank you. You reiterated your free cash flow guidance for ‘23 of at least $60 million, but you say that’s prior to working capital improvements. Could you just explain what you mean by the – what the working capital improvements could be?
So in that number we’re assuming neutral working capital. However, one of the great things about the economic model of the trade show business is our customers are signing contracts and paying deposits up to a year in advance of an event. And we’re collecting full payment 30, 60 days or more ahead of the staging of the event, and yet we pay our vendors mostly closer to the event or after the event. And so as our business grows, the increase in deposits lead to a larger negative working capital balance, thus a cash inflow to the company.
The pandemic reversed all of that, which if you look at our financials over 2020 and 2021, there is a significant amount of customer refunds paid that led to a flush out of cash, which we had to plug through our financing and ultimately through the insurance recoveries we had. But as the business comes back, that deposit balance builds back up again. So that’s what we’re referring to. It is a little hard to predict the exact timing of all that, which admittedly we tried to do last year and weren’t so accurate on it, and so we’ve decided this year we’ll make the neutral assumption and then update throughout the year how that’s tracking.
So in the prepared comments that I made I talked about how pleased we were with the first quarter working capital swing, where if you look back to 2017, 2018, 2019, our first quarter was typically a very significant outflow of cash from working capital, where this year was a much more moderate outflow and thus the business overall is able to generate a nice amount of free cash flow relative to the seasonality of the past.
That’s great. You also mentioned SG&A only increasing 5%, and you had done some – exited some offices and leases and moved into utilizing Manila for some things. Could you go – the actions you’ve done, was that all reflected in this quarter or is there more to be expected from that? I’m trying to understand, is the SG&A run rate a pretty good one from 1Q and maybe talk a little about kind of what you expected from the benefit from the lease abandonments and from your opening operations in Manila? Thank you.
Sure. So this was all implied in our full year guidance. A lot of this took place in the latter part of 2022. The setup of the facility in Manila was about nine months ago at this point, and we’ve been slowly ramping it and we’re beginning to accelerate some of the opportunity to leverage that, to invest in the business, but doing so at a more reasonable cost.
In terms of real estate, in the fourth quarter we closed six offices out of 10, and so we only have four remaining physical offices. Our workforce is largely remote and a few hybrid folks in the offices that we have, and it seems to be working really well for our business. Given our live events that we run, there’s plenty of opportunity for us to get our teams together at the events that we run and we are able to drive some efficiency on that front.
In terms of SG&A run rate throughout the year, there will likely be a small build as we move through the year based on general kind of wage inflation that we’re always managing, hopefully offset a bit by managing the offshore resource hub, as well as continued investment plan that we have in the business around some of our initiatives. But overall, we don’t expect a meaningful increase barring incremental acquisitions that could change that.
That’s great. Do you have the numbers for the exhibitors and the attendees that there were during the quarter?
I don’t have that handy. We could follow-up with you Allen on some of that.
Okay, that’s fine. On the buyback, it’s very encouraging to see, would there be a time that you would consider kind of re-upping it, the amount that you could continue to do for the buyback?
I think philosophically as a use of capital, as we indicated in the prepared remarks, we do think share buyback is a good way at the right prices to create per share value for the remaining shareholders. From time-to-time, it gets discussed at the Board level and I would imagine if the share price stays down around here, we’d probably have that discussion again.
Okay, great. And then my last question would be more just on kind of your trade shows overall. I’m just – I mean it sounds very positive, everything that’s going on. I’m just trying to – is there anything else you could add in terms of the metrics of – for the same apples-to-apples trade shows of how you’re thinking about kind of the benefits from increased exhibitors relative to maybe – and attendees relative to potential pricing.
As we’ve discussed in the past, one of the initiatives that we’ve taken and have benefited from is more focus and putting more science around pricing our products and services for the value that they deliver. And so a couple of years ago, we centralized pricing into a dedicated department here. It used be decentralized within our brands. We hired pricing experts in order to build models and help us better understand where the opportunity was, frankly up or down in optimizing price. With that we have been able to improve our yield per square foot of our trade show space.
Pricing this year, we would expect to be up kind of high single digits relative to 2022 and 2022 was up in the low double digits from 2019 from pre-pandemic. And so if you do the math, we’re 20% plus up in pricing versus four, five years ago, and so there’s a tremendous amount of leverage here as net square footage ramps back up in our events to drive meaningfully higher revenue we believe, than what we had in 2019.
And that Allen, I’ll just add is tied to your earlier comment of customer centricity, the way that we’re able to and the reason we’re able to increase pricing is because we’re maniacally focused on adding customer value. And so through the initiatives that we’ve put in place around leveraging our data, through the technology and because we are able to deliver more leads to customers, more qualified leads to customers, match the customers more intelligently and more frequently, driving that level of value allows us the opportunity to get compensated for the value that we’re creating for our customers.
That’s great. One other question, could you maybe highlight for 2Q some of the trade shows coming up and kind of your strategy of kind of building scale in certain verticals and how we can look for what the opportunities are there? Thank you so much and congrats on the great results.
Thanks, Allen. So some of the larger events in the second quarter are Hospitality Design, which is actually taking place right now in Las Vegas. Couture, which is a luxury jewelry event in Las Vegas later in the quarter, and ICFF, which is a furniture design show here in New York as well as Outdoor Retailer in June in Salt Lake City. Our full event calendar is on our website. So you can see every single one of our 130, 140-ish events and when they are throughout the year up there.
Okay, that’s great. Thank you so much.
Your next question comes from Barton Crockett from Rosenblatt. Barton, please go ahead.
Okay, great. I’m very interested in what the – how to think about kind of the unreached potential of the revenues at this point tied to some metrics. So you gave us 20% up in pricing versus four to five years ago. How much up in square footage are you versus four to five years ago with the acquisitions you’ve done would you say?
Well, because of the impact of the pandemic and the length of time it’s taking for things to fully recover, we’re behind on square footage versus what we were before. I’d say on an apples-to-apples basis, for this year we’re looking at 75%, 80% of square footage volume of 2019 implied in our numbers, so there’s still a ways to go.
And just as a reminder, I know we’ve talked about this for a few earnings calls, but there still are lingering impacts of the pandemic on our business. International travel for business purposes is not fully back. If you recall, only last summer did the U.S. really reopened to travelers. Only at the end of the year, did China reopen from its lockdowns. There are lingering impacts of that.
There’s still a massive delay in getting visas to come to the United States, and we’re hearing stories of customers who can’t get a visa appointment for over a year, because during the pandemic the state department cut back on employees and they’re having trouble ramping back up to service the volume of people who want to come here. And so it’s really hard to get someone to commit to buying a booth at a trade show if they don’t know if they can even get here and so that is impacting us.
The supply chain issues, while getting better, continue to impact some industries, some of the manufacturing based industries we serve. If they don’t know if they can get product to market, so they’re deferring for another year their attendance at a trade show. And so those things we expect will play out over the next one to two years and help us get back towards the pre-pandemic square footage. And when it does, with our efforts around pricing to value and driving incremental value to our customers, we’re pretty excited about what that could mean for the revenue growth of this company.
I appreciate the answer and I appreciate that the way I phrased the question wasn’t exactly what I was trying to get to, but I think what you said there was very helpful. But what I’m trying to get to is, with the acquisitions, what is your square footage potential now versus pre-pandemic? I mean is the potential up 10%, 20%? How would you kind of – how would you assess that?
Give me one second, I’m doing something math in my head. I’d say it’s an incremental 10% to 12% of potential NSS.
Okay. And right now you’re kind of at pre-pandemic revenue levels, even with these headwinds. Can you quantify for us a little bit, how much down are you in exhibitors from China now versus pre-pandemic? Where are we now versus that baseline would you say?
So in 2022, it was essentially down 100%, because none came. In 2021 we’re starting to see a trickle. I’d say we’re still down 80% – sorry, 2023 – sorry about that. I’d say we’re still down at least 80% on China and probably 50-ish percent overall in international.
And what would you say pre-pandemic was China and international as a percent of your exhibitor base?
International was about 10% of our business pre-pandemic.
One of the things that I’d like to add around that, and David mentioned the visa processing times and other challenges that we’ve had in bringing back international. The reality is also we haven’t had a focus on international sales.
So just in the last, less than a year, I would say nine months or so, we’ve built an international sales team. So we now have dedicated resources inside of Emerald that are hunting international opportunities, working directly with customers, but also working with agents across a dozen countries around the world to really build a very targeted strategy and initiative around driving international.
So the combination, and that’s why we’re bullish on the return of international. The combination of the post-pandemic recovery in easing of visa processing and international borders opening, plus our own efforts and initiatives to drive international sales will make international a bigger part of our diet in the future than it was even pre-pandemic.
Thank you, Hervé. I was curious, but you did talk about China. Is China – can you give us some sense of how large that was in the international mix?
So, it’s not a simple answer. Well, there’s a simple answer and there’s a not so simple answer. The simple answer is in 2019, it was 3% to 4% of revenue. The not so simple answer was it used to be more, but during the Trump administration with the trade wars with China, there was a hit to Chinese business coming to the U.S., and so there was a hit in ‘18, ‘19 from those policies, the more protectionist trade policies under the Trump administration, that we believe in this – under the current administration we could potentially see a bounce back beyond that 3% or 4% based on those policies. So I’m sorry I didn’t really say that so well, but hopefully you got the gist of it.
Okay. And then Hervé, you kind of tease this thing that sounds very interesting about a pro-sports league and a consumer facing effort that we’re going to get more info on later. So maybe I just have to just sit with what you said, but is there anything you can add to that? Why strategically is consumer-facing a fit for you guys? And anything else that you can say to help us kind of get prepared for this and more information to come on this opportunity.
Of course. I can add a little bit more and what I’d like to share is more strategically why consumer is important, for two reasons. One, and very importantly, it is part of our revenue diversification strategy. So we’re diversifying in high-growth sectors, but we also believe there’s an opportunity to diversify in the types of business that we’re in, and B2C is one segment that we were not in, that we believe will drive significant growth for us. We are very focused in sports and sports related categories, sports culture and related fields and we think they are underserved or not well served and that we can play a role there.
The second reason is that as you know, many companies have developed of late business-to-consumer direct strategies. So while we want to continue to serve them in a business-to-business environment, they are also looking for ways to talk to consumers directly and to market and target consumers directly. So for us, it’s a way to continue to serve our customers.
We’re really focused on customer centricity, on doing the things that make sense for our customers, on serving our customers, on being where they are and on continuously providing new products, new offerings that make us even more relevant to the customers. So it’s in the Live Events business, but also in the content business and in the commerce business.
In terms of the specific agreement that we signed, I’m not at liberty to share more today, but we’re working very closely with the sports league and promise to announce things in the weeks ahead.
Okay, that’s all very helpful. Thank you guys very much. I appreciate it.
Thank you, Barton.
There are no further questions at this time. I’ll turn it back for closing remarks.
Very good, Colin. Thank you all very much for joining us today. As I mentioned, I’m extremely pleased with Emerald’s start of the year, our continued quarter-over-quarter improvement, putting us on track for another year of significant revenue and EBITDA growth. Thank you very much for your participation and engagement today and look forward to speaking to you next quarter. Take care.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.