Air Transport Services Group, Inc. (NASDAQ:ATSG)
Q2 2016 Earnings Conference Call
August 09, 2016, 10:00 AM ET
Joe Hete - President & CEO
Quint Turner - CFO
Rich Corrado - Chief Commercial Officer
Helane Becker - Cowen & Co.
Steve O'Hara - Sidoti and Company
Adam Ritzer - Pressprich
Welcome to the Second Quarter 2016 Air Transport Services Group Earnings Conference Call.
My name is Eric, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later we'll conduct a question-and-answer session. Please note that this conference is being recorded.
I will now turn the call over to Joe Hete, CEO and President of Air Transport Services Group. Please go ahead sir.
Thank you, Eric. Good morning, and welcome to our second quarter 2016 earnings conference call. With me today are Quint Turner, our Chief Financial Officer; and Rich Corrado, our Chief Commercial Officer.
We issued our earnings release and filed a Form 10-Q with the SEC yesterday after the market closed, both are on our website atsginc.com.
Our second quarter results this year keep us on course to achieve the targets that we've been sharing with you since our fourth quarter report in March. We hit our own operational goals and produced financial results we had projected.
We also grew our leased fleet of 767s for our customer Amazon to eight and have added two more since the end of the quarter.
That puts us at the halfway point under our commitment to lease them 20 767s by mid-2017. We are poised for significant margin improvement, particularly in the fourth quarter, that’s when we will be fully deployed including 53 Boeing 767 freighters in service by year-end. 43 of them will be dry leased to our external customers leaving 10 in ACMI service.
We are now in a rapid growth phase. Our revenues are up 19% overall in the second quarter and 13% excluding reimbursements. Adjusted EBITDA which we regard as a useful measure of our cash generating power has exceeded $50 million in each of the last three quarter and is on track to reach our target of $218 million this year.
We're investing aggressively to meet strong customer demand for our freighters. With the feed stock aircraft we've purchased this year, our contract to acquire we can meet through 2017 the strong demand we have to date for our converted 767 freighters.
We've also made a significant capital commitment to share repurchases including 3.8 million shares we acquired from an affiliate of Red Mountain Capital Partners in July.
We paid $13.07 or about $50 million for those shares which will be removed from our third quarter share counts. Quint will summarize our progress since our last call and I will come back with a few comments about the outlook for the remainder of 2016. Quint?
Thanks Joe and good morning, everyone. As always let me start by saying that during the course of this call we will make projections or other forward-looking statements that involve risks and uncertainties.
Our actual results and other future events may differ materially from those we describe here. These forward-looking statements are based on information, plans and estimates as of the date of this call and Air Transport Services Group undertakes no obligation to update any forward-looking statements to reflect changes in underlying assumptions, factors, new information or other changes.
These factors include, but are not limited to, our operating airline's ability to maintain on-time service and control costs, the number and timing of deployments and redeployments of our aircraft to customers, the cost and timing with respect to which we’re able to purchase and modify aircraft to a cargo configuration, the successful implementation and operation of the new air network for Amazon, changes in market demand for our assets and services and other factors as contained from time to time in our filings with the SEC including the Form 10-Q we filed yesterday.
We will also refer to non-GAAP financial measures from continuing operations, including adjusted earnings per share, adjusted pre-tax earnings, and adjusted EBITDA which management believes are useful to investors in assessing ATSG's financial position and results. These non-GAAP measures are not meant to be a substitute for our GAAP financials and we advise you to refer to the reconciliations to GAAP measures, which are included in our earnings release and on our website.
As we said in our earnings release and Joe just noted, we hit or exceeded all of our principal operating goals for the second quarter and generated good results overall.
We have some additional non-cash items in our earnings this quarter related to the warrants we issued to our customer Amazon. We highlighted them in our release and included tables with adjusted results to better indicate our underlying performance.
I'll also walk you through the second quarter items in a moment and how they might change going forward. So you can make the appropriate adjustments in your own forecast.
As we told you last time the second quarter and in fact the entire first half would be a transitional period for us. Going from March into April we moved from an ACMI trial operation for Amazon into definitive multiyear agreements for the twenty 767s we leased to and operate for them.
We also completed a full year under our current operating and lease agreements with our largest customer DHL for the 16 767s we now leased to them.
Together these commercial agreements represent a solid foundation of contracted cash flow for several years forward and cover more than half of our projected 767 fleet. That cash flow also backs the growth investments we're making now as Joe will talk about in his remarks.
Now let me take you through a few items in our second quarter results. Our consolidated revenues rose $28.2 million to $176.5 million from $148.4 million a year ago. Excluding reimbursements, revenues rose 13%.
We had revenue growth in each of our principle segments and across our other businesses. The gains stem largely from leases, flight operation and maintenance and logistic services for six more Boeing 767 cargo aircraft that we had in service a year ago.
Net earnings from continuing operations were $11.5 million this year and $10.6 million for the second quarter in 2015. Earnings per share from continuing operations was $0.12 diluted in the quarter versus $0.16 a year ago.
On an adjusted basis, excluding certain effects of the Amazon warrants and other non-cash items, our second quarter earnings from continuing operations were $8.5 million or $0.13 per share diluted for the quarter.
You can find the earnings and EPS adjustments that I'm describing in a reconciliation table in our release. Pretax earnings from continuing operations for the quarter were $18.8 million, up from $17.2 million. Adjusted pretax earnings for the quarter were $16.3 million, that is net of pension related charges and lease incentive amortization and financial instrument transactions mostly associated with the warrants. The comparable 2015 adjusted amount for the quarter was $16.7 million.
Both the GAAP and adjusted pretax results for the quarter include $2.6 million of ramp up cost for Amazon this year and a $2 million insurance gain last year.
As we advised you before, pension expense which is a non-cash item will be up $9.5 million for the full year versus 2015 and $2.4 million in the second quarter. We began excluding these pension effects from our adjusted earnings and EBITDA this year.
Our adjusted EBITDA for the quarter was $52.1 million and $103.4 million for the half. Assuming the stronger second half that we certainly expect, we are on track to achieve our adjusted EBITDA guidance for the year of $218 million that we provided back in March.
CAM, our aircraft leasing business had a 4% overall revenue gain to $47.4 million for the second quarter. That revenue is net of amortization of the lease incentive asset we established for the warrants.
Revenues from externally leased freighters and aircraft engines increased 23% as CAM added six more external Boeing 767 dry leases compared to last year. CAMs pre-tax earnings for the quarter increased 12% from the prior year period, which reflects the revenue gain less increased depreciation expenses on CAMs larger fleet.
CAM owns 56 cargo aircraft in serviceable condition as of June 30, including our 48, 767s and eight, 757s, that’s the same number as in the first quarter, but two more than last year.
Eight CAM owned 767 were in or awaiting passenger to freighter modification and one 767 200 was being prepared for deployment in the third quarter.
As Joe said, we are at the halfway point in our scheduled 20, 767 freighter deployment for Amazon. Eight were flying at the end of second quarter and 10 are in operation today. We’ll deliver all the remaining five 767s committed for 2016 including three, 300s by the end of the year.
CAM is meeting demand from other customers as well. It delivered a 767 300 freighter to Amerijet in July under an eight year lease and expects to lease another 300 to DHL also for eight years starting in September. That would make five leases of 767s to Amerijet and 17 to DHL.
We will lease another 767 200 CAM second to Raya Airways in Asia early next year. You can find more information about our fleet and plans for growth in the table at the end of our earnings release. You will see that we've added a line that tracks the feedstock aircraft we have acquired, but not yet modified.
Turning to our ACMI services segment, revenues increased 10% to $114.1 million. Excluding reimbursable this segment's revenues were essentially flat at $98.2 million.
Our airlines operate at fewer aircraft on an ACMI basis where aircraft rent is part of their revenue stream and operated more aircraft on a CMI basis where CAM captures the external aircraft lease revenue and the airlines are paid for crew maintenance and insurance services.
The airlines capture block hour utilization under both ACMI and CMI arrangements. So total block hours went up a strong 12% primarily from expanded CMI.
Our pre-tax margins in ACMI services were down significantly from a year ago and we listed the principle factors behind that shift in our release. We try to concentrate our required heavy maintenance checks in the first 10 months. So we can provide all of our aircraft to customers when they need them most during the holiday peak season in the fourth quarter.
Our second quarter scheduled heavy maintenance expense was $3 million higher than in the second quarter a year ago as we had two more scheduled heavy maintenance checks in the 2016 second quarter.
Virtually all the pension expense I referenced when I reviewed our earnings adjustments steams from our ACMI services segment, which has most of our pension eligible employees. Pension expense in that segment increased $2.4 million compared with 2015.
Our quarterly pre-tax results for ACMI services also included two other items I mentioned earlier, $2.6 million in increased personnel cost this year to compensate and train additional flight crews and other personnel for the expanding Amazon fleet and a one-time $2 million benefit last year from an insurance settlement.
Much of our consolidated second quarter revenue gain came from the businesses we collectively refer to as other activities. $25.1 million in additional second quarter revenue captured there included $11.9 million from intercompany sales of aircraft fuel and maintenance services to our airlines.
External revenue gains and our margin growth of $2.3 million from those businesses stem from expanded third party aircraft maintenance for Delta Airlines and others, plus more package handling services for Amazon and the postal service.
At the summary of our second quarter and first half operating results, in addition to leasing and operating aircraft, we've have also been active in deploying our capital this year. Our first half capital expenditures were $125 million versus $76 million in the first half of 2015.
We have purchased seven Boeing 767 300 aircraft this year, including three in the second quarter. The rest of that spending includes freighter modification costs, capitalized maintenance and payments for other ground and maintenance equipment.
Joe mentioned that we have stepped up our purchases of 767 feedstock aircraft for conversion to freighters to meet demand we anticipate in 2017 and beyond. As a result, ATSGs CapEx budget for 2016 is now projected to total $315 million, of that total, $235 million is for fleet expansion, which is $25 million more than we have projected earlier in May.
In May we announced that we again increased our access to growth related credit by amending our credit facility primarily to increase our revolver capacity. That revolver cap was increased by $100 million to $425 million, giving us more flexibility for fleet expansion, share repurchases and other opportunities we might pursue.
The interest rate structure is unchanged. Outstanding debt against the revolver was $240 million at June 30, leverage against EBITDA was still a very conservative 1.8 times and the variable interest rate on the revolver balance was 2.2%.
You probably also saw the news that we purchased 3.8 million of our shares for $50 million from an affiliate of Red Mountain Capital, our largest shareholder. That transaction was completed in early July, following a Board authorization in May that doubled our repurchase capacity to $100 million. The resulting debt increase and corresponding change in our outstanding share counts will show up in our third quarter statements.
It’s important to keep in mind that even as we invest more, we are still generating a significant amount of cash on the assets we already have. Even with our stepped up spending on aircraft and share repurchases this year, we don’t expect our debt levels to exceed 2.5 times our adjusted EBITDA.
We briefed you on the accounting for the Amazon warrants on our first quarter call in May. The approach is basically the same as we discussed then. We recorded the fair value of the warrants granted to Amazon as a lease incentive asset to be amortized against CAMs revenues over the duration of the aircraft leases.
The corresponding value of the warrants is classified as a liability, which we will mark-to-market for fair value based on our stock price at the end of each quarter. The change in that warrant value from the prior quarter will yield a gain or loss in our non-operating results each quarter.
Those non-cash gains and losses may have a significant effect on our GAAP earnings each quarter as our stock price changes and as more warrants to Amazon vest for each of the eight 767 300 as we release then.
During the second quarter we booked a $5.8 million pre-tax gain on our warrants due to the decline in our share price through June 30. Assuming our stock price appreciates during the third quarter, we would expect to report a mark-to-market non-cash loss.
We have included a reconciliation page in our earnings release that illustrates both the GAAP and non-GAAP impact of the warrants on our EPS. We can give you more color on the warrants and other items in Q&A. Overall we're pleased with our results for the quarter and look forward to even more progress in the second half. Joe?
Thanks, Quint. Our second quarter results adjusted for the non-cash items Quint explained left us exactly where we thought we would be at this point in 2016, with significant revenue growth and on course toward the $218 million adjusted EBITDA target we set in March.
Revenue growth over our last four quarters after backing out our fuel and other reimbursements has averaged the solid 12%. I anticipate that our double-digit growth pace will continue along with margin improvement as we expand our dry leased aircraft fleet in CMI operations.
That is significantly better than the growth that we see in long haul air cargo markets, including the data from the world’s leading cargo hubs that are captured and published reports.
Our business is only indirectly sensitive to overall air cargo trends because we're focused on long term commitments to our aircraft rather than spot charter and other volume-sensitive demand.
When companies choose to develop or expand regional point to point air networks based on their own business strategies our name often comes up.
As because we are the number one source of dedicated freighters, crews and other support services that express in other regional markets require.
Growth is good of course, but it's even better when it's sustainable over several years and when it comes from more diverse base of customers. That’s where we are today with solid growth and a set of major long-term lease and operating agreements with world-class customers.
The HR remains our largest customer but in the second quarter it represented a bit more than the third of our revenues, down from nearly a half a year ago. Amazon comprised about 20% and U.S. Military about 15% of total second quarter revenues. That's far different than when we started as a public company in 2003 when DHR represented 99% of our revenues.
As I mentioned at the outset, we are now halfway toward completing our commitment of 27, 67s to Amazon. We’ll have deployed 15 with them by the end of the year, including three 767 300s and the final five 300s by mid 2017.
Along the way we are incurring cost to hire, train and deploy the flight crews and logistics and maintenance staff, we need to support the full scale operations. We regard these costs as simply part of being a growth mode company and an investment on what we expect will be a long term relationship with Amazon.
We are also continuing to grow with DHL and other strong customers. Last week DHL reported good growth and second quarter margin gains. It also said that, its revenues in the Americas grew more than 6% for the quarter faster than any other region it tracks.
DHL leased one 767 300 from us in February and will take another, their 17th in September, both to be deployed in its U.S. network under eight year lease terms.
Amerijet based in Florida also leased an additional 300 freighter in July, again for an eight year term to serve their markets in Latin America and elsewhere. Raya Airways in Asia, which leased a 767 200 freighter from us in February is expected to add another one early next year.
This growing demand from multiple reaches of the world has transformed our business. Three years ago, more than half of our 767 fleet was deployed under ACMI agreements where commitments averaged only a few years and redeployment cycles could leave aircraft idle for several months at a time.
But by the end of this year when we expect everyone of our 53 767s to be in service, more than 80% will be deployed under dry lease agreements with the remaining lease terms ranging from three to eight years.
Three of them will be operated by our airlines under CMI arrangements with DHL or Amazon and the majority if not all of the seven aircraft in or awaiting freighter conversion at the end of the year are just in for long term dry lease deployments in 2017.
While the Amazon agreement was the primary driver of our decision to step up fleet expansion, it certainly wasn’t the only reason. Other customers want to lease 767 freighters from us when we can deliver them next year. Rich Corrado is in discussions with some of them for multi-aircraft placements.
Last fall our role as Amazon’s initial choice for air capacity and operations, plus our knowledge of the demand we had from other customers gave us the confidence to source and lock down more 767 feedstock.
We were able to acquire or obtain commitments to buy all the feedstock we expect and need through 2017 along with the contractor commitments to convert them from passenger to freighter mode, under better terms then those prevailing since Amazon’s plans become public in the spring.
We have access to significantly more than the seven we will have in process at year end and the customer commitment we have today give us confidence that we can place them at unlevered rates of return that meet or exceed our requirements.
We would not be in this position today without our determination to focus on the midsize freighter market, which is an essential component of the express networks needed to support eCommerce and other customer volumes.
We also have a set of businesses that add substantial value to our freighter offerings and give us turnkey capabilities that include everything a 767 lessee might need, even including loading, unloading and sorting cargo if the customer requires it.
We've transferred more of our fleet from the ACMI services to CAM under long term dry lease arrangements and are bringing on new airline personnel to accommodate growing CMI operations.
We expect our airlines to be profitable in the fourth quarter as utilization increases while scheduled airframe maintenance cost decline. In 2017 we’ll show further year-over-year margin improvement as ramp up cost subside and operations for Amazon and other customers increase.
Meanwhile our aircraft maintenance and logistic businesses, which have grown significantly this year will continue to do so with further demand from multiple airline customers and Amazon.
The hangar space we added here in Wilmington is now fully booked and we have added personnel as required to support that increased volume. Our work for the U.S. Postal Service also continues to generate good returns.
I know that many of you welcome the news that we have repurchased 3.8 million of our shares in a negotiated transaction with our largest shareholder Red Mountain Capital. That transaction pushed our total spend on share repurchases since May of 2015, the $71.6 million for about 5.8 million shares.
Ultimately our repurchases will reduce the number of additional shares required to bring Amazon's potential ownership stake to 19.9%. We intend to continue making regular share repurchases in the future at a more moderate pace to retain the flexibility to purchase blocks of shares should they become available under attractive terms.
The commitment to ATSG’s products and services we're seeing today is attribute to the substantial value that our employees with your support have created since ATSG became a public company in 2003.
That concludes our prepared remarks. Eric, we’re ready for the first question.
Thank you. We'll now begin the question-and-answer session [Operator Instructions] And our first question comes from Helane Becker.
Thanks operator. Hi guys thanks for the time.
Good morning. So just one question, are you finding that it's getting more costly to acquire the aircraft or I was kind of expecting a lot of airlines would have used aircraft -- more used aircraft available for sale by now, but they seem to be holding on to them a little longer. So I'm kind of wondering if what the cost to acquire looks like now?
Helane, as we noted in our remarks is we've kind of got ahead of the power curve in anticipation of the additional business would be coming online and so we locked down a number of aircraft early before the news came out about the increased demand that would be coming with the Amazon build out of their network.
So we pretty much locked ours in at attractive prices and ones it meet our return thresholds by the time we put them through the modification process.
That said, the availability of additional aircraft on the market today is a little scares and if you do acquire one, you're generally going to pay a bit more than what we've locked them in for previously. So it is a pretty tight market at this point.
Okay. And then just with respect to other customers, if other customers come to you, do you have aircraft available for them or are they going away left?
Hi Helene, it’s Rich.
We have -- short term the answer to that is we do not have aircraft available today. All of our aircrafts are under agreement or in conversion right now. We do have aircrafts that may come available in the second half of 2017 and we're discussing actively with several customers about multiple deployments in that time period.
But it's difficult being in marketing and sales when a customer comes to you and you don't have anything to sell at least in the short term, which is why we did lock up some feedstock going forward looking to the potential market going into 2017.
Got you. And then are you having any issues getting pilots?
Actually we haven't had any problem at all in that respect Helane. We’ve added a quite a few, as you -- it's noted in our release and in our remarks, we incurred expenses to the tune of about $2.6 million in the second quarter, just for training crews in anticipation of the additional aircraft coming online.
And we actually, got a little bit ahead of the curve by bringing on people earlier than what we normally would be required to once it would fly aircraft into 2017, but the last thing you want to do is be sure the crews during the peak season, knows what kind of volumes we’re going to see, especially in the Amazon network.
And we sure don’t want to have an aircraft sitting waiting on a crew member but to date we have had no problem bringing on additional folks.
Okay. Great. Well, thanks for your help. I appreciate.
And our next question comes from Steve O’Hara.
Hi, good morning.
Good morning, Steve.
I think you just answered this, but maybe just curious, you talked about having enough freighters or kind of in process or purchase rights maybe for all current demand. You don’t have any excess that you bought. Is that fair or do you have some excess that you haven’t signed up yet that will come -- could come in 2017?
Yes, Steve probably the best way to answer that, we've got the five that we're deploying for Amazon in early 2017 and in 2016 if you look at what we’ve explained in the earnings announcement, we’ll have about four additional aircraft that we are deploying over and above the Amazon requirement.
And we’re pretty comfortable based on current agreements with prospective customers going forward, that we'll be able to lease match that four over the Amazon deployment and then have still strong demand for additional aircraft going forward.
We do have the feedstock available for those four or five that Rich mentioned.
Okay. And then just on the -- just within CAM, and maybe it was the maintenance, but I was maybe a little surprised that the pre-tax went down sequentially and what drove that?
It was depreciation -- was the biggest factor, with the larger fleet, that’s the biggest driver.
Okay. Okay. And then last one. Just on the Amazon's move, do you see that maybe putting pressure on some of the older customers that you've maybe typically worked with?
Has that may be forced their hand, just maybe more willing to sign longer-term agreements then they may be had in the past assuming that their supplier would kind of be there if they wanted it. Is there anything happening there in that regard?
Yes, Steve, I think there is one of the key reasons why you see a much higher demand for dry leasing over prior or ACMI requirements where customers before would access us for shorter term lift, but now are looking because they feel more comfortable with their business model, particularly, with the growth of the eCommerce business to step up to dry leasing.
Now when customers saw the Amazon announcement, I should say both Amazon announcements, I think they looked at the market going forward, and thought between conversion slots and feedstock they would definitely be a shortage in the market going into the call it the 2017, 2018 time period.
And that has increased significantly, folks being more serious about tying aircraft up now for the future. We've got cash deposits as an example. We’ve got cash deposits on some of these aircraft that aren’t going to deliver until 2017.
Okay. Thank you very much.
And our next question comes from Adam Ritzer.
Good morning, guys. Just a couple things I want to ask you. In terms of your CapEx, I think you said this year is going to be $315 million, $235 million is fleet expansion, which I assume is acquisitions and conversions. Is the $80 million that’s left, is that all maintenance or are there other components in that you can break out from your maintenance spend?
There is a significant chunk of that is the maintenance side Adam, but there is also ground support equipment for example that we have to acquire in order to run the hub operation that we’re running here at Wilmington, things like K loaders and tugs and dollies and things of that nature.
It's a growing number from what it’s been in years past.
So is maintenance now up to $60 million with the bigger fleets it's going to go up but can you break that down a little bit?
Yeah the interesting part of that, Alan, this is Quint, is a lot of our leases going forward is particularly for the 300s. The customer handles the maintenance under the terms of the lease.
So even though the fleet will grow with these 300s, you won’t necessarily see much increase in the maintenance CapEx going forward, because the customer handles that over the term of the release.
Got it. Okay. And then just I try, I know you gave more detail about your fleet and what you have in terms of conversion and then Joe said, I think at year-end you're going to have 53 planes in service, is that correct?
You might be referring to the 53 767s and we have the eight 757s that we have on top of that. So total 61 aircraft in the fleet.
Right, and 43 of those we expect to be on lease -- dry lease.
Okay. So there are 61 in the fleet, but how many of those will be in service because that still includes conversions or the conversions are on top of that. I am just trying to see...?
Conversions are on top of that. Adam, if you go to the, there is a last table in our earnings release Adam, breaks out the serviceable aircraft that are projected at the end of the year.
Okay. So that’s the 61, you had in the report, right?
Okay. And then....
Top of that, that are either in or awaiting conversion. And as Rich mentioned a moment ago, call it five of those roll into the Amazon commitment by mid-2017 and the other two basically are also sold to customers next year and he mentioned that he felt like he was confident that we could do -- call it four over and above the Amazon requirement.
So that would be couple in addition to the seven, based upon discussions and deposits and things that we've accomplished with the customers.
Okay. So its five -- I am just trying to see by year-end '17 it could be 68 and then maybe a couple more from what Rich said, is that the best way to look at it?
Probably 70 anyway, now.
Okay, that’s great nice. And maybe Quint when do you think, I guess, there is really no acquisitions you have in the queue right now. I know Joe will probably figure out a way to squeeze a couple of those out there, but when do you think a debt will peak in terms of what you see going forward?
Well, some of that -- what we've said Adam is that we don’t foresee exceeding 2.5 times. We are projecting what 2018 of EBITDA. So we don’t foresee exceeding that this year.
In terms of next year, of course that will depend upon what opportunities present themselves. So it's a little -- when you say peak, it just depends upon what returns we’re receiving for our growth investments. We'll continue to do that as long as those opportunities exist.
Sure, but based on what -- let's say you can’t find anything else to buy?
Well our aircraft access in terms of airframes, the aircraft that we have contractual access to next or through next year. And so after that we are not committed in terms of taking additional airframes at this time. And so -- the model can be de--lever quite easily. I think it is may be what you're looking forward.
Right, that’s what I am trying to see, when does that deleverage start to...
Well assuming there was no additional assets probably the second and third quarter timeframe.
Okay. Got it. Right. Okay, great. That’s all I had. Thanks very much for taking the call.
We have no further questions at this time. I would like to turn the call over back to Mr. Hete for closing remarks.
Thanks Eric. Thanks for joining us for the latest installment of our exciting growth and cash flow story, which is already getting significant attention from the market. Our stock price is up 40% since the end of last year, which was before our customer -- our work for Amazon and our fleet development for them and other customers became known.
We understand it's up to all of us at ATSG to turn our growth investment into cash returns. I can assure you that the people at ATSG are working hard every day to make that happen. Thank you and have a quality day.
Thank you, ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect.
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