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Broadwind Energy (NASDAQ:BWEN)

Q3 2012 Earnings Call

November 07, 2012 11:00 am ET


John Segvich

Peter C. Duprey - Chief Executive Officer, President and Director

Stephanie K. Kushner - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Treasurer


Christopher Blansett - JP Morgan Chase & Co, Research Division

Pavel Molchanov - Raymond James & Associates, Inc., Research Division


Good day, ladies and gentlemen, and welcome to the Third Quarter 2012 Broadwind Energy, Inc. Earnings Conference Call. My name is Janeda, and I will be your operator for today. [Operator Instructions] I would now like to turn the conference over to Mr. John Segvich, Director of Investor Communication. Please proceed.

John Segvich

Thank you. Good morning, and welcome to Broadwind Energy's Third Quarter 2012 Earnings Conference Call.

With me today are Broadwind's President and CEO, Peter Duprey; and Broadwind's Executive Vice President and CFO, Stephanie Kushner.

This morning's earnings news release is available on our website at

Second slide, please. Before we begin today, I would like to caution you that this call will include some forward-looking statements regarding our plans and market outlook and also will reference some non-GAAP financial measures. Actual results may differ materially from these forward-looking statements. Please refer to our SEC filings and consider the incorporated risks and uncertainties disclosed there, including our Form 8-K and the attached news release filed with the SEC this morning and our Form 10-Q, which will be filed later today. We assume no obligation to update any forward-looking statements or information.

Having said that, I will turn the call over to our President and CEO, Pete Duprey.

Peter C. Duprey

Thanks, John, and thanks, everyone, for joining the call.

Let's turn to Slide 3. This morning, we reported third quarter results. Revenue grew 15% over last year's Q3, and EBITDA improved by $3.9 million. As you can see from the graph on the right, this is a significant improvement over the same quarter in the past 2 years. All segments generated positive EBITDA with productivity primarily in Towers and Services improving significantly. Overall, our results demonstrate that we're making good progress in the transformation even in this difficult operating environment.

Let's look at what went well and what we need to improve going forward. In our Towers and Weldment segment, our EBITDA margin improved 4.3 points over the same period last year, due to greater productivity and better expense management. This growth is evidence of our success in expanding our addressable towers market through new customers and the impact of the trade actions on imports in China and Vietnam.

With close expense management, the Services business achieved positive EBITDA in Q3.

As previously announced, we closed on a $20 million credit line, which positions us well for 2013 and beyond.

I want to talk about the challenges. We are seeing weaker gearing demand from the natural gas and mining sectors. The feedback we've been getting on the mining sector is that inventories have been building, thus, new orders have slowed. Gearing for the offshore and onshore oil does remain strong.

Let's turn to Slide 4. We'll now talk about order flow, which was affected by the following factors: Weldment orders in the quarter were $4.5 million with the backlog more than doubling from a year ago. Towers received a small order for production slots in November and part of December 2012 in Manitowoc. Services orders were down against a difficult comparison with last year, which included $2.8 million delayed retrofit order that was received in Q3 2011. In Towers, we had an $8 million downward adjustment to orders to remove the steel content from a tower order previously reported in our backlog. Said another way, orders were adjusted downward by $8 million to reflect the customer's decision to supply steel to a previously booked order.

The anticipated production tax credit expiration has slowed order flow in Towers and the timing of signing new orders. Subsequent to quarter end, we did sign a $30 million -- $31 million order for 2013 delivery. And our quoting activity does remain strong. This demonstrates Broadwind's enhanced competitive position, which has improved as we've broadened our customer relationships up in 2011 and 2012.

The graph on the right represents our backlog. We started to show this 2 ways 2 quarters ago. The blue line on top shows the traditional way backlog has been recorded -- reported, which includes a multiyear framework agreement. The red line below is indicative of our near-term demand as it reflects orders only to be delivered in the next 6 months. The dotted line carries the backlog out through the end of October to reflect the surge in orders after quarter end.

At the end of October, the outstanding backlog was $115 million, which is more in line with our target of having a backlog equal to about 6 months of sales.

Let's move to Slide 5. As we've talked about in the past, we've developed 3 key initiatives to drive the transformation of Broadwind. They are: reducing our manufacturing footprint; diversifying our customer and industry concentrations. This lessens our dependence on the wind industry, which is driven by regulatory incentives at both the state and federal level. We will always have some exposure to the wind industry. We just need to ensure that we're managing this risk. Third initiative is to improve our financial flexibility.

Moving to Slide 6. It highlights the progress that we've made in our footprint reduction and our plans ahead. As we've reported in the past, we've sold our logistics business and closed our European office. We've renegotiated a lease on our service facility in Abilene, which will become effective in 2013. This reduces the footprint by 225,000 square feet and we'll save more than $500,000 a year. In the next few weeks, we'll be relocating our corporate offices to the gearing facility in Cicero, Illinois. This will save $0.250 million a year. We're in the process of negotiating the sale of the Cicero avenue gear manufacturing facility. In the Brandon, South Dakota plant, we've seen an increase in activity. A potential buyer is inspecting the facility. However, we have received no acceptable offers.

These actions, together, should remove about 600,000 square feet, save $5 million to $6 million annually and still support a $400 million revenue-capacity business.

Turning to Slide 7. It shows the progress we've continued to make in diversifying the business. Even though gearing sales to industrial customers has slowed in the near term, its contribution to rebalancing our revenue composition is dramatic. Year-to-date 2012, 88% of our revenue came from industrial customers, an improvement of 32 percentage points from a year ago.

In Weldments, orders year-to-date were $12.5 million, which is more than double from last, year's level of $5.9 million.

In Towers. We've added 3 new customers since the beginning of 2011, which have contributed $86 million in orders. We serve a significantly larger portion of the U.S. market and we're quite comfortable with our customer balance in Tower -- in the Tower business.

In Services. Our business has changed quite dramatically from a contract labor support business to a more focused provider of products and services to the wind energy owner-operators. Year-to-date, revenue was up 48% from last year. The business leverages our expertise in wind, providing non-routine maintenance services on an installed base of 36,000 turbines in United States. Overall, these efforts are transforming our business model.

Slide 8 shows our progress to improve our financial flexibility. First, we paid down debt using the proceeds from our equity raises. Secondly, we've begun to generate more consistent, positive EBITDA, which enabled us to recapitalize the business. During the third quarter, we closed a $20 million asset-based borrowing line to fund the working capital to support our growth. This offers us more appropriate -- a more appropriate financial structure, which will give the company more financial flexibility. We remain very focused on consistent growth in EBITDA and positive cash flow generation.

Stephanie will talk more about the liquidity position in her financial overview.

Slide 9 demonstrates how the supply and demand in the wind industry are coming in to better balance as we enter a weak demand environment, at least in the first half of 2013. Recently, there have been a number of changes around suppliers of wind turbine towers. A number of competitors have shifted to other industries, including fabrication work and other products such as railcars. This has reduced the available capacity by about 15%. A number of competitors, approximately 30% of capacity, have exited the tower manufacturing business. Finally, the preliminary tariffs imposed by the Department of Commerce have effectively eliminated the importation of towers from Vietnam and China. These market changes represent an approximate 78% reduction in tower supply and starts to bring the demand, supply into balance.

We believe this shift significantly reduced the excess capacity that had built up in the tower market.

Turning to Slide 10, I'd like to discuss our new focus on continuous improvement before I turn the call over to Stephanie. When I came to Broadwind, the company still required integration of some of the acquisitions into 1 common business platform. We had made -- we have made significant operational improvements in the past year. However, we want to create a step function change in the business. To that end, we are kicking off a new continuous improvement program.

We have appointed a new CI leader at corporate with 20 years of experience in driving change through businesses. Every business segment will have a continuous improvement czar who will train, coach and prioritize improvement projects. These dedicated resources will accelerate the rate of change in the businesses and create a common data-driven approach to solving production and quality problems and ensure we are focused on the things that are important to the customer.

We're enhancing our IT capabilities to better analyze production information and ensure we, in fact, are using a data-driven approach. I'm sure, in the future, we'll be talking more about our CI efforts.

I'll now turn the call over to Stephanie to discuss the financials in more detail.

Stephanie K. Kushner

Thanks, Pete, and good morning. Turning to the consolidated financial results on Slide 11. Q3 revenue was $55 million, up 15% from last year due to a higher number of more complex tower completion. Gross profit rose to $2.7 million, including $230,000 in restructuring expenses. Our gross profit margin, excluding restructuring, trended up to 5.4% of sales and included $3.5 million of depreciation. This brought of our 9-month gross margin up to 4.6%, within 40 basis points of our full year estimate of 5%.

Operating expenses continue to show significant improvement versus the prior year. The $6.2 million total for Q3 included a $230,000 legal settlement concerning an outstanding claim in our Services business. Operating expenses, without restructuring, totaled 10.6% of sales, down from nearly 14% last year. Spending improved across-the-board, including lower expenses for legal and other professional fees and lower employee compensation expense. At $18.2 million for the 9 months, we are well positioned to improve upon our target expense of $25 million to $26 million for the year. In fact, we are now expecting a full your total of about $24 million.

Our operating loss declined to $3.5 million, including $613,000 in restructuring charges.

Adjusted EBITDA totaled $2.4 million, up sharply from a $1.5 million loss last year.

We continue to record no meaningful income tax effect due to our significant tax loss carryforward.

On the new post-reverse split basis, the loss per share was $0.28, less than 1/2 the prior year loss.

Moving to Slide 12. Towers and Weldments recorded revenue of $37.4 million in the quarter, up 26% from 2011. As shown in the bottom right-hand table, neither period included any significant amount of fabrication, only towers. The jump in revenue reflects production of a richer mix of towers. As you can see, the megawatt equivalent was up nearly 55% as these were towers for higher-megawatt machine. Also contributing to the boost was progress at expanding our industrial weldments business with $2.9 million of Weldment revenue in the quarter. As Pete noted, at quarter end, our Weldment backlog had risen to nearly $9 million.

Our throughput and production flow were much improved from the prior quarter, and we reported operating income of $1.7 million and adjusted EBITDA of $3.1 million, 8.2% of sales.

Fourth quarter Tower and Weldments sales will decline to about $25 million as deliveries for wind farms that are being commissioned prior to the scheduled expiration of the production tax credit have been pulled into the first half or the fourth quarter to allow time for delivery and commissioning before 12/31. Therefore, production will be at a more moderate pace during the second half of the quarter as we focus our build on towers being exported into Latin America or for the recent tower orders that are not required until 2013.

Adjusted EBITDA should be at the same run rate, about 8% of sales.

Next slide. Our Gearing business encountered some challenges in Q3, but continues to show dramatic improvement versus 2011. Revenue of $11.3 million declined from the prior year, due to a shipment delay on a $1.4 million highly complex state-of-the-art gearbox, which we now expect to deliver in the fourth quarter.

As you can see in the graph, in the bottom right-hand corner, our Gearing business has completed its transmit -- its transition out of new wind gearing with a 100% of sales going to a broad range of industrial customers or for replacing gearing for the installed base of wind turbines.

In its next stage of evolution, this business is now focusing on shifting its emphasis to the design and manufacture of enclosed drives for complete gearboxes for industrial customers rather than solely loose gearing. We believe the manufacture of enclosed drives offers greater opportunities for value add and will allow us to better capitalize on our gearbox engineering know-how. Today, less than 10% of our sales are for enclosed drives. We're targeting a shift to a 50-50 mix within the next few years.

Our EBITDA margin of 7.6% was below the first half run rate, but still dramatically higher than 2011. The margin decline from the first half due to lower production volume and machine downtime, which delayed shipments of bevel gears generally produced for mining industry customers.

During the quarter, we incurred $515,000 in restructuring expense and spent about $250,000 on capital for our plant consolidation projects.

We have essentially completed the relocation of all equipment within the Central Avenue plant where we intend to consolidate. So that we can now begin transfer of the larger pieces of equipment from the Cicero Avenue plant, which is being vacated.

We have reached tentative agreement with a buyer for the Cicero Avenue plant and are negotiating the final terms of sale. This has been a long-standing industrial manufacturing site, so we have some environmental remediation work to complete before the asset transfer occurs likely in 2014. During the quarter, we established a $350,000 reserve to cover the estimated cost of the environmental work.

Our operating loss of $2.6 million continues to reflect the very high depreciation and the amortization that we are recording in this segment, $2.8 million in this quarter or about 25% of sales with the current run rate.

Last quarter, we began to accelerate the amortization of a portion of our customer intangible, which has added an additional $440,000 in noncash charges per quarter until June of 2013.

On Slide 14, the Services business generated positive EBITDA in the quarter, the first time since 2009. This marks significant progress and was achieved despite the unplanned $230,000 settlement charge to resolve a lawsuit related to a 2009 turbine commissioning project. Revenue rose 4% from the prior year quarter, mainly due to growth in drivetrain repair activity. The improvement in adjusted EBITDA reflects both cost reductions, notably the reduction of the Abilene leased space and productivity improvement. Conversely, the operating loss rose to $600,000 due to $100,000 in restructuring costs, as well as higher depreciation versus the prior year, due to completion of the investment in the gearbox re-manufacturing center.

Slide 15, please. Our operating working capital spiked at quarter end to $39.3 million or 18% of trailing 3-month annualized sales. As you can see on the chart, this working capital level is highly unusual and outside our normal band of variability. The spike reflects the final distortion related to tower production delays experienced earlier in the year. Because production was slower than planned, we built inventory early in the year as steel was received for towers that were not completed per our initial schedule. In addition to higher inventories, customer deposits declined as expected.

During the third quarter, we used our new credit line to pay for the steel deliveries, but only received customer proceeds for a portion of the completed towers, and our accounts receivable balance rose to a 15-quarter high. Payments from customers have been received since that time, and we project the year-end working capital balance to be closer to 12% of sales or about $22 million to $25 million, a significant source of operating cash flow.

Next slide. So along with our working capital spike, our net debt rose to $25.1 million at September 30, including $17.6 million outstanding on our new asset-based credit line with AloStar. During the quarter, we used proceeds from the line to pay off outstanding balances with Wells Fargo and repay notes with a former shareholders and with Investors Community Bank, as well as to fund other working capital needs.

Our total debt, excluding grants, rose to $25.2 million. As you will recall, the liabilities held for sale represents the mortgage on our Brandon tower plant, which we are currently marketing for sale. The loan will come due when we finalize the sale transaction. Until that time, we'll continue to pay down the principal balance at a rate of $250,000 per quarter. And I've commented before about the $2.9 million balance of grants and forgivable loans, which have little associated interest expense.

Our cash balance declined to $3 million during the quarter. Under the new AloStar line, we will retain minimal levels of cash since our customer receipts will be routinely applied to repay the credit line.

With the reduction in working capital in the fourth quarter, we expect the net debt level to decline by $10 million or more and to end the year with less than $10 million drawn on our credit line. About 1/2 of that debt reduction has already taken place, and today, the balance outstanding under the credit line has dropped by more than $5 million to $12 million.

On the final slide, 17. As I mentioned, Q4 financial results will be impacted by lower tower shipment as most of the 2012 tower sales will be completed this month. We expect our consolidated Q4 revenue to be in the $45 million to $47 million range, bringing full year revenue to about $212 million, a 14% increase from 2011.

With expect to generate about $1 million of positive adjusted EBITDA. And as I've said, operating cash flow should be strongly positive and reduce our net debt balance below $15 million.

And with this, I'll turn the call over to Pete to lead the Q&A. Do we have any questions?

Question-and-Answer Session


[Operator Instructions] Your first question comes from the line of Sanjay Shrestha with Lazard Capital Markets.

Unknown Analyst

It's [indiscernible] here from Lazard Capital Markets. Two questions. First, on Slide 9, so when we look at that slide, it seems to imply that industry capacity is roughly close to 4 gigawatts going in to next year, which is down substantially from the 10- to 12-gigawatt level. Now, what kind of impact are you seeing in terms of customer negotiations and is there any potential impact on pricing, given that supply-demand balance is -- supply and demand are coming closer to balance now?

Peter C. Duprey

Yes, I would say we're still in a somewhat tough market because the -- given the environment of low natural gas prices, it is more difficult for wind energy to compete. So everyone is pushing very hard on making sure that they have lowest possible price to make these projects work. But back to my comments on continuous improvement, and I think where we're going to see some margin improvement is making the operations a lot more efficient. There's still a lot of pressure on pricing. What we're trying to do is make sure that we are very focused on improving our productivity on our plants, being able to get more throughput through the same infrastructure that we have and that should -- we do expect that there will be some margin improvement as a result of those initiatives.

Unknown Analyst

Got it. Second question on the production and the manufacturing footprint. How should be thinking about -- what part of the $5 million to $6 million in cash flow improvement is still to come versus some of the measures you ready implemented?

Peter C. Duprey

Stephanie, you want to take that?

Stephanie K. Kushner

At this point, really as of this fourth quarter, we'll be experiencing, I believe, it's a little over $1 million dollars of the benefit. So most of it is yet to come. And that -- a lot of that is linked to either the sale of the Brandon plant, which will remove some fixed costs, about $1 million a year or -- and most importantly, the consolidation in our Gearing business.


Your next question comes from the line of Christopher Blansett with JPMorgan.

Christopher Blansett - JP Morgan Chase & Co, Research Division

I just wanted to ask about your commentary about a part of your industrial Gearing business or market outlook is weakening at least for your end customers. I just wanted to see how you think this is going to affect Broadwind's business since you -- you're still a pretty small piece of that market and I don't how you think about your share gain opportunity versus maybe some softening in some of your end markets?

Peter C. Duprey

Yes, I think as we look at that business, it is pretty well diversified. I mean, the mining market has grown to probably 20% of our overall revenue. But we are -- as we continue to shift from wind into industrial, we continue to win new customers. So even though there's a little bit of softness in natural gas, we're taking some of that capacity and trying to grow what I would say is more of a traditional industrial customer in crane-type work or gearing in steel plant and other manufacturing applications. And we also have an initiative to move from more loose gearing to enclosed drives or a completed gearbox and that part of the business is growing nicely. So, yes, we are seeing some softness in mining and natural gas, but I think that's being taken over by enclosed drives, on and offshore oil and then industrial applications. So I think we still feel that we can navigate through this softness. And from what we're hearing from the customer, we also believe it's more of a first half 2013 issue whereas they're saying they see things picking up in the latter half of 2013.

Christopher Blansett - JP Morgan Chase & Co, Research Division

Okay. And then kind of to touch on the concept of moving toward more enclosed or completed gearboxes, how do we think of the, I guess, the time to qualify? I'm assuming this means that someone comes to you with a need and you help develop a product for them. Generally speaking, what's the -- how long do think it'll take for this business to kind of get going in a bigger way? I mean, just kind of trying to understand the growth rate expectation over the next year or 2?

Peter C. Duprey

To qualify on a new gearbox, it's likely a 6- to 9-month process, but some of that effort has already started with customers. We are -- we have quoted a lot of gearing on industrial applications and in the oil sector. So like, for example, an offshore oil rig uses a lot of enclosed drives on that rig and we've been working with that segment to really show them what we can do. It sort of leverages our fabrication on our Weldments business and our Gearing business, so I think we really are uniquely qualified to provide them a total solution. So we are down the path with a number of customers on the enclosed drive site.

Christopher Blansett - JP Morgan Chase & Co, Research Division

I guess, a couple more things related to that. Will you need to add more people into the company to help enable this business? Is it all in-house? And then secondly, how does it affect your gross margin structure for these products given that you're adding kind of value content there?

Peter C. Duprey

Yes, well, it should enhance our gross margins 5 to 10 margin points and we are adding more in the engineering resources. We're adding gearing engineers to help us better -- to design these gearboxes for our customers. But it's not a lot of people.

Stephanie K. Kushner

And again, Chris, like some of the other actions we've taken in Gearing, this is something that Brad Foote did quite a lot in its history. So some of it is kind of restoring some of the position and capabilities we've had in the past.

Peter C. Duprey

Right. In fact, if you go back 10 years ago, we had our own line of gearbox -- industrial gearboxes called the Keystone gearbox line. So we have done this in the past.

Christopher Blansett - JP Morgan Chase & Co, Research Division

Okay. And then question, probably more for Stephanie. When you aggregate up all the structural cost savings you're expecting next year, Stephanie, I know it's difficult to control, to understand the revenue outlook for 2013. But how should we think about your OpEx, the SG&A-related expenses? And maybe just think about it going forward, what aggregate structural costs you expect to come out and so we can kind of have a better idea of how to model that?

Stephanie K. Kushner

We're just now starting to pull together budgets and so on for next year, so it's maybe a little premature to give much of an indication. We do think we will be making progress next year in our overall profit margins.

Christopher Blansett - JP Morgan Chase & Co, Research Division

Well, I'm thinking more about just your fixed cost because you have multiple facilities you think you're going to come out, and I just wasn't sure is this because it's uncertain the timing of the sale of some of these assets and so it's uncertain when the actual structural costs come away from these?

Stephanie K. Kushner

No, we quantify the structural cost reduction, right? So we talked about $5 million to $6 million -- sorry, $2 million of that is really productivity. So say, it is $4 million of structural fixed cost and one of that we're getting as of the fourth quarter. The rest of it will depend on when we -- what will happen, really, over 2013 for Brad Foote and then it will depend on when we actually complete the sale of the Brandon plant.

Christopher Blansett - JP Morgan Chase & Co, Research Division

Okay. And then just one last question that's tied to working capital. So as we head into the -- at the end of the year and kind of -- we're going to most likely have a lull in wind tower demand in the first half of the year because of the big push going on in the latter half of this year, how do you think about your ability to manage your working capital, maybe draw down steel levels bringing cash on the balance sheet? How should we should think about that over, say, the next 6 months?

Stephanie K. Kushner

Well, certainly between now and year end, we'll bring a considerable amount of cash back or -- actually not cash. It'll just be a reduction in our credit line. We should be certainly below $10 million on that number. And our working capital, I said we're at $39 million we were at 9/30. And we're expecting it to be more like $22 million to $25 million, so a lot of cash out of working capital. We are not looking at a material slowdown in our tower facility now in the first half of next year.


[Operator Instructions] Your next question comes from the line of Pavel Molchanov with Raymond James.

Pavel Molchanov - Raymond James & Associates, Inc., Research Division

Since here we are the day after election and I -- I would be remiss if I didn't ask on your latest thoughts on the PTC extension and whether there is any read-through from the results last night on what you think will happen?

Peter C. Duprey

Yes, I think, certainly, Obama has supported a broader selection of energy sources beyond just fossil fuel. So I think, if anything, it's likely to be a positive. I think our hope is that messages were sent to the Congress yesterday that we need cooperation and we need to sell some of these issues. So I still think that we -- there has been bipartisan support for the PTC. I think we believe there will be an extension in the lame-duck session and then we'll need to -- the industry will need to negotiate with Congress on likely phase-out of the PTC over some period of time.

Pavel Molchanov - Raymond James & Associates, Inc., Research Division

And I remember 3 months ago, kind of in the same context, you indicated that your internal assumption for U.S. installations next year, I think, you said 2,500 megs or so, is that still the case or are you inclined to be a little bit more optimistic at this point?

Peter C. Duprey

I think, right now, we think that's a pretty good number. I mean, the issue is the industry has -- we've already gone through our slowdown. I mean, every -- the developers have slowed down, people have redeployed resources to other markets, so it is going to take a while for things to come back. But I think the really -- the good news for us is that the supply and demand have come into balance and getting the $31 million order right at the beginning of the year has really helped us navigate through that and we are talking to every major OEM about their tower needs and we are putting towers even with this uncertainty about the PTC. So things are happening, but it's just going to be a much lower level than 12,000 megawatts.

Pavel Molchanov - Raymond James & Associates, Inc., Research Division

Great. Just last quick one for me. You mentioned you have a plant that's up for sale. Amid the current industry conditions, do you think, realistically, there is going to be buyer interest in that at a reasonable price?

Peter C. Duprey

Yes. I mean, I said it in my comments that we are seeing activity. We've had a number of buyers going through there and so there is a lot of activity going on in that South Dakota and North Dakota area. And we don't want a fire sale. We want a reasonable price for the facility, and I do believe we will close on that some time in 2013.


At this time, we have no further questions. I would now like to turn the call back over to Mr. Peter Duprey for any closing remarks.

Peter C. Duprey

Okay. I would say that 2012 posed a number of challenges for each of our businesses. We had to navigate through a very difficult period in the wind energy business and we had our own regulatory cliff. With the tower market coming into better balance between supply and demand, we are feeling more confident about this business segment in 2013. With the election behind us, I guess, finally -- it's my hope that Congress can do their job in dealing with energy policy, tax policy, fiscal policy and a Simpson-Bowles-like spirit of give-and-take for the overall benefit of the country and it will provide greater certainty to businesses going forward. We'll see how that plays out over the next few months, but I do appreciate everyone joining in the call, and look forward to updating you on the close of the year. Thanks.


Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.

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