Stella-Jones' (STLJF) CEO Brian McManus on Q1 2016 Results - Earnings Call Transcript

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Stella-Jones Inc. (OTC:STLJF) Q1 2016 Earnings Conference Call April 28, 2016 1:30 PM ET

Executives

Brian McManus - President and CEO

Éric Vachon - SVP and CFO

Analysts

Mona Nazir - Laurentian Bank

Mark Neville - Scotiabank

Michael Tupholme - TD Securities

Sarah O'Brien - RBC Capital Markets

Benoit Poirier - Desjardins Capital Markets

David Ramsay - Calrossie Investment

Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Stella-Jones' First Quarter 2016 Results Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. [Operator Instructions]

Before turning the meeting over to management, please be advised that this conference call will contain statements that are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. I would like to remind everyone that this conference call is being recorded on Thursday, April 28, 2016.

I will now turn the conference over to Brian McManus, President and CEO. Please go ahead sir.

Brian McManus

Thank you. Good afternoon, ladies and gentlemen. I'm here with Éric Vachon, Chief Financial Officer of Stella Jones. Thank you for joining us for this discussion of the financial and operating results for the Company's first quarter ended March 31, 2016. Our press release recording Q1 results was published earlier this morning and our MD&A for the quarter has been posted on our website at www.stella-jones.com, and will be available on SEDAR. Let me remind you that all figures expressed on today's call are in Canadian Dollars unless otherwise stated.

Stella-Jones generated solid operating results in the first quarter. We saw sustained demand in our core markets as regular replacement and maintenance programs went forward in the utility pool and railway tie categories. We also benefitted from our expanded reach in the residential lumber category. During the quarter the company generated revenue of $421 million, a 23.6% increase over the first quarter of last year. The contribution from the October 2015 acquisition of Ram Forest Group and Ramfor Lumber which I will collectively refer to as Ram was $9.3 million. In addition the conversion effect from fluctuations in the value of the Canadian dollar had a positive impact of $35.9 million on our U.S. dollar denominated sales. Excluding these factors, sales increased by approximately $35.1 million or 10.3%.

Net income for the quarter amounted to $35 million, a 16.3% increase over the last year. In a moment, Eric, will discuss the financial performance of the company in greater detail. Looking at the results by product category. Railway tie sales reached $200.3 million, an increase of 20.1% over the first quarter of last year. If we exclude the currency conversion effect, railway tie sales rose by approximately $13.5 million or 8.1%. The increase came primarily from the timing of deliveries that had been made from the fourth quarter 2015 into the first quarter of 2016 and sustained industry demand.

Turning to the utility pool category. Sales amounted to $131.8 million, a 10.5% increase over the comparable period last year. Excluding the currency conversion effect and the contribution from acquisitions made in the latter half of last year, sales remained relatively stable. We saw a steady rise in the sales of distribution poles due to regular maintenance programs; however the sale of transmission poles was affected by continuing weakness in the oil and gas and mining industries which reduced demand for special project. Stella-Jones further broadens its presence in the residential lumber market. Sales in this category were $41.9 million, a 47.5% increase over last year. This figure includes $9.3 million contribution from the Ram acquisition. It also reflects the transition in marketing strategy. In place of providing treating services only for wholesalers, we have moved to a value added full service program directly to retailers.

In the industrial product category, sales rose to $26.7 million, an improvement of over 34% when compared to the first quarter of last year. The increase came mainly as a result of increased demand for marine timbers in Eastern Canada.

Finally in the logs and lumber category, sales were $20.2 million versus $6.4 million last year. That figure mainly results from stepped up procurement efforts to support our residential lumber requirement. It also reflects the timing of timber harvesting.

Turning to our acquisition program, we expect to close the two previously announced transactions before the end of the second quarter. The first is the purchase of the shares of Lufkin Creosoting, a producer of treated poles and timbers in the State of Texas, and the second is the purchase of the shares of the parent company of Kisatchie Treating and Kisatchie Pole & Piling. Producers have treated poles, pilings and timbers in the State of Louisiana. The combined 2015 sales of these potential acquisition were approximately $86 million. We expect to finance these transactions through our current credit facility.

We are also moving ahead with the construction of a new wood treating facility in the State of Wisconsin. This plant which represents an investment in the range of $27 million to $30 million, will be used to service the regional utility pole market. We expect the facility to be ready for production in the first quarter of 2017.

Eric will now discuss the financial performance of the company in greater detail. Éric?

Éric Vachon

Than you, Brian. Gross profit for the first quarter of 2016 was $78.8 million or 18.7% of sales compared with $66.4 or 19.5% of sales a year ago. The increase in dollars reflects higher business activity, the Ram acquisition and the year-over-year currency translation effect. The decline in gross profit as a percentage of sales in mainly due to the increased logs and lumber sales which are performed at a value close to their related cost of sales partially offset by greater efficiencies in our network.

In regards to selling and administrative expenses, our expanded presence in the residential lumber category resulted in additional selling expenses $1.1 million compared to last year. While residential lumber sales follow a seasonal pattern, selling expenses are recognized as a fixed cost in each quarter. There results in a higher proportionate expenses in the first and fourth quarters. Reflecting these elements, first quarter operating income amounted to $54.6 million or 13% sales this year versus $47.6 million or 14% of sales last year.

Net income increased 16.3% to $35 million or $0.51 per diluted share compared to $30.1 million or $0.43 per diluted share a year ago. Cash flow from operating activities before changes in non-cash working capital components an interest in income tax paid was $62.9 million, up from $55.6 million in the prior year.

Turning over to our financial position. Stella-Jones's long term debt including the current portion stood at $628.1 million as of March 31, 2016 compared with $669.9 million three months earlier. The decrease mainly reflects the effect of local currency translation on U.S. dollar denominated long term debt partially offset by higher working capital requirements as per normal seasonal demand patterns including the inventory buildup ahead of achieved demand. This build up is also higher due to the addition of Rams business and direct sales to residential lumber retailers.

Finally, the board of directors declared a quarterly dividend of $0.10 per common share payable on June 28, 2016 to shareholders of record at the close of business on June 6, 2016.

I turn back the call to Brian for the outlook.

Brian McManus

Thank you, Éric. As we look ahead to the remainder of 2016 and beyond, we have good reason to anticipate sustained demand for our products. In regards to railway ties, North American railroad operators continue to invest in network maintenance which should provide steady demand going forward. In the utility pole market, the ongoing weakness in oil and gas as well as in the mining sector will like to continue to affect our sales of transmission poles. However, we expect sustained demand for distribution poles as a result of maintenance and replacement programs.

Going forward, we expect the residential lumber category to represent another growth avenue for Stella-Jones. As we enhance our sales approach and appeal directly to retailers with a full service offering, we anticipate residential lumber to become a larger component of our overall revenue.

The company's growth plan supported by the strength of our financial position allows for continued expansion through acquisition and internal initiatives. We will act whenever opportunities arrive that complement our core mission and strategic vision. Meanwhile, in the interest of building further shareholder value, we are concentrating on the integration of recent acquisitions and new assets into our network to achieve the highest possible efficiency.

Éric and I would now be pleased at this point to answer any question you may have.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Mona Nazir from Laurentian Bank. Please go ahead.

Mona Nazir

Good afternoon and congrats on the results.

Brian McManus

Thank you, Mona.

Éric Vachon

Thank you, Mona

Mona Nazir

So just a couple of questions for me. Firstly, touching on the new facility in Wisconsin. I'm not sure if you can, but just looking for some details around it. I know said that CapEx related to it is about $27 million to $30 million. Can you speak about the size of the facility, your decision to maybe go to Greenfield route discussions that maybe you have in place with customers for committed volumes or any additional information would be great?

Brian McManus

Sure. I'll be a little guarded in what information we're giving out at this point. But I can tell you the facility will also include pole peeling operation that will be located on the site as well. The reason for the Greenfield is really, it's a fairly good-sized market area that we have not been able to access really from our existing treating facilities. We've tried with distribution yards but have not been able to meet the regional demands that treating facility would bring. So for that reason, that's probably the biggest driving force behind this and we look forward to showing you what we can do in 2017.

Mona Nazir

Okay, and then secondly, this morning at the AGM you spoke about opportunities and even now you just touched on the residential side. Can you speak to this as if because of your expanding relationship with Home Depot? Is it extracting efficiencies out of Ram? Is it acquisition opportunities and why are you seeing such strong growth in this area, or why is it more appealing now?

Brian McManus

It's really a business that we've been in for many, many years and I guess your multi-part questions or some of the reasons you presented are really more to do with the first two you said. One is in terms of the acquisition of Ram opened up some opportunities for us in which we were now more able to have a direct link to our major customer. And by doing so we were able to expand our offering and again the rest of the business that we were doing more it's really wholesaler at the time, we were able to remove that block between ourselves and the end-clients. So where we would have traditionally done a lot of this business under what we would call a TSO, essentially a treating services only, we're now offering the full service to this customer. And so that's why we're quite excited about it. I guess I would compare it a bit, if you look at railway ties and kind of the difference between doing what we call the black tie or model approach or TSO approach. In this case we're doing a full lumber service approach, as well as distribution and other accessory products with it.

Mona Nazir

Okay. And just on the margin front, I'm seeing that because of the product mix there was some compression there. For 2016, you'd kind of given soft guidance of 15% to 15.5%, do you think this could trend down as you have a higher percentage of lumber sales or do you expect product mix to kind of shift back and then margins will come back in line with the historical levels?

Brian McManus

We're still confident in the sort of that margin range that we did provide as guidance, probably more towards the middle of the 15% that you were referring to, and really if look at the first quarter what we're facing is much more seasonality in 2016 with the addition of the consumer lumber that really your first quarter in particular is always your softest, yet as Eric pointed out in his discussion we have selling cost that pretty equally spread, so our in-store reps things like that are pretty equally spread throughout the year, yet we have a small percentage of our sales that would occur in the first quarter. So we're confident that we'll see the margins creep up and overall for the year, again comfortable with kind of our guidance at this point.

Mona Nazir

Okay, that's it for me for now. Thank you so much.

Brian McManus

Thank you, Mona.

Operator

Your next question comes from the line of Mark Neville from Scotiabank. Please go ahead.

Mark Neville

Hi, guys.

Brian McManus

Hi, Mark.

Mark Neville

Just a follow-up on that point, Brian, I wasn't sure what you meant what the EBITDA margin when you said towards the middle 15%, I guess you're sort of implying that the 15.5% is sort where you think you can land on the EBITDA or is this sort of the midpoint of the range, I just wasn't sure.

Brian McManus

I'm sorry, no the 15.5% you're right.

Mark Neville

Okay, that meant nothing, 100%. Other Ram, again you touched on the seasonality, I'm just curious, I mean -- I think it $80 million or $90 million sales when you bought -- I think the first two quarters, now I mean there's seasonally weaker, you've seen about 25. So does it make sense that we can see about 70%, 75% sales Q2, Q3?

Brian McManus

Yes, definitely. In fact beyond just the Ram, we'll also be, the kick we will get from going directly with our major customer that Ram brought us. So there's kind of a leverage effect on top of the just the Ram acquisition itself.

Mark Neville

Okay, and I guess just on the poles. Maybe just give us potentially some sort of sense of how fast the distribution, maybe growing as the transmission down because I guess they just turned out to get a feel for what we sort of start laughing this in the second half. What sort of demand looks like on the distribution side or sort of growth?

Brian McManus

Sure, well I can tell you in the first quarter we saw about 6% to 7% on the distribution side that was offset by a bit on the transmission side. But as you pointed and rightfully so, though it's hardly a case for why we'd be excited but we're going to be laughing ourselves eventually over a weaker part of 2015, and thus we should see the growth come back.

Mark Neville

Yes. And I guess just finally on the balance sheet. I know we've talked with equity a couple of times. You mentioned it when you announced the acquisitions, and I'm just curious if you guys have come to a decision on that or sort of is it still up in the air or still on the table I guess?

Brian McManus

We did come to a decision and that's why you may have not picked it up that when I was discussing it about the upcoming acquisitions that we will be using our existing credit facility. We're comfortable in terms of where our debt leverage has landed and borrowing another big acquisition in that term to pop up. We're comfortable at this point in time.

Mark Neville

Okay. All right, thanks a lot guys.

Operator

Your next question comes from the line of Michael Tupholme from TD Securities. Please go ahead.

Michael Tupholme

Thank you, good afternoon.

Brian McManus

Hey, Michael.

Éric Vachon

Hey, Mike.

Michael Tupholme

Brian, very strong growth in the railway ties business this quarter and I know you mentioned that were some timing issues when we looked at Q4 versus Q1, but can you just talk about the outlook for organic growth within ties over the rest of the year?

Brian McManus

Sure, at this point in time we're kind of expecting a fairly flat year compared to last year overall. Some of that will be dependent on how we see Q4 play out, quite honestly in terms of whether there will be any pre-buying done or whether it will be similar to what we saw in Q4 last year. So but at this point in time similar to what we said when we searching for results we're kind of seeing, we expect a relatively flat year on overall demand just given that some of the volumes are down in terms of our customers in terms of what their shipping volumes.

Michael Tupholme

Right, okay, perfect, thank you. And then just you were asked about it just part of this by Mark. But within the utility poles segment, when is the point at which you begin to lap those easier comps? So at what part in the year should we expect to see that happen?

Brian McManus

Tailing at Q2 so it really should start to show in Q3. Maybe even in Q2.

Michael Tupholme

Okay, great. And then within utility poles, was there any contribution to the revenues in the quarter from acquisitions?

Brian McManus

There was. It wasn't that material that's why we blended it all up. Essentially if you take the growth of the distribution, slight offset from transmission, the effect of the currency and the two smaller acquisitions were pretty much flat, organically.

Michael Tupholme

Okay. And then within the logs and lumber segment, I guess just a two-part question there. Are you still guiding to approximately $120 million of revenue for that segment of for the year, and secondly how should we think about the revenues in that segment given that it's a new segment or at least part of it is the lumber contribution. How do we think about the revenues over the balance figure in terms of seasonal distribution?

Brian McManus

It will be a little bit higher, in here I'm strictly speaking to the lumber component. The log part of it is sometimes not even seasonal, it really just depends on our timber operations and the timing of when we're actually maybe in the forest. But on the lumber side it will be a bit more seasonal, so you'll see a bit more occur in the second and third quarter in terms of revenues. And your original question of the roughly about $120 million, $125 million we're still kind of looking at that number.

Michael Tupholme

So Q4 would look a lot like Q1 in terms of revenues but then Q2 and Q3 are elevated?

Brian McManus

Exactly, yes, not quite the seasonality as you would see on the treated consumer lumber part of our business but still some seasonality.

Michael Tupholme

Okay, perfect. And then just lastly, Eric, I think this quarter you had an effective tax rate of just slightly below 30%, how should we think about that on a full year basis for 2016?

Éric Vachon

I believe full year, twelve months will be around the 30% mark. Quarter-over-quarter we are a bit lower this year when we had -- I guess from our end [ph], we agreed a proportion of taxable income in Canada, but for the whole year 30% would be the proper rate.

Michael Tupholme

Okay, thank you very much.

Operator

Your next question comes from the line of Sarah O'Brien from RBC Capital Markets. Please go ahead.

Sarah O'Brien

Hi, good afternoon.

Brian McManus

Hi, Sarah.

Sarah O'Brien

Brian, can you comment at how much of the additional revenue beyond kind of the treatment service only that you were alluding to for residential lumber? Should we expect you to pick up in 2016?

Brian McManus

Again it's going to be a rough estimate but we're saying net of the TSO revenue and some of the other full service revenue we already have going through a broker. We're anticipating probably about $80 million uptick over and above the Ram and over and above what we call our logs and lumber. I'm referring just to the consumer lumber part of the business.

Sarah O'Brien

Okay, that's helpful. And then maybe can you help us understand the working capital a little bit more so that if free cash flow positive in Q1 despite an inventory tie up, does that go very positive Q2, Q3 and then Q4 we see sort of negative working capital again, just how does that likely to flow through the year?

Brian McManus

Exactly as you said it.

Sarah O'Brien

Okay, great. And then just on the equity issue. Looking at opportunities, I mean pipeline wise I think at the AMG you commented there's still some opportunities in poles. Is it still sort of the intention to sort of wrap those up as you can through year and given your balance sheet in better shape I think, then I would have expected just to add to Q1? Is there opportunities just use your leverage for the rest of the acquisition opportunities you see in front of you now?

Brian McManus

Really going to depend on timing, Sarah, and I think also we want to insure that the freeing up of the working capital happens at the pace we expect it to. So I'm just cautionary, say I agree with your comment and really we'll see how it unfolds as of the timing of any other potential acquisitions. But we're definitely comfortable with the two that we previously announced that we expect to close in Q2.

Sarah O'Brien

Okay. And then maybe just lastly going back to the consumer lumber and the residential lumber. How do you project that internally? I mean it's becoming a much more important category for Stella-Jones. There is inventory tie up for quarter two before you start delivering. What kind of metrics are you looking at to gauge to the type of demand you're going to have to meet in the coming quarters?

Brian McManus

It's very much based on historical and as well as where our customers will indicated they feel, and it varies by region, but where they feel the regional demand will be headed. And so we try to keep as efficient inventory to insure that we can meet that demand and even lend some so that we last thing we want to do is short deliver any customers.

Sarah O'Brien

Okay. So is it safe to say there is a bit of an excess inventory store because of the new category and because of all the different kind of SKUs you have to deliver on?

Brian McManus

Yes, and then actually we are building up even on the treated inventory side for the consumer lumber because our capacity would, we cannot treat at the speed you would require during the peak season, Q1 and Q4, it's because we are still treating at near full capacity if you want to say. So it's much more efficiently to approach it as well.

Sarah O'Brien

So do you need to build out your CapEx for consumer lumber or you have sufficient right now?

Brian McManus

No, we have sufficient. We're maximizing the facilities that we have, but we do have additional capacity in our network should we need to tap it.

Sarah O'Brien

Okay, that's it for me. Thank you.

Brian McManus

Thanks, Sarah.

Éric Vachon

Thank you.

Operator

[Operator Instructions] Your next question comes from the line of Benoit Poirier from Desjardins Capital. Please go ahead.

Benoit Poirier

Good afternoon, Brian. Good afternoon, Eric. Just to come back on the $80 million additional contribution from consumer lumber, what would be the amount on annualized basis? I understand it will probably be for the remaining quarters or is $80 million kind of the total amount for the year on annualized basis?

Brian McManus

No, that was annualized, Benoit, and that's over and above the $90 million plus that Ram brought us and separate from the lumber and logs that we spoke to as well.

Benoit Poirier

Okay. So we'll see…

Brian McManus

Because I know there's a lot of number that are coming in all around, sort of $80 million to $90 million, so want to just be clear that there's no confusion on it.

Benoit Poirier

Yes, perfect, and I would assume also that the margins will be comparable to the rest of the business, right? It's kind of not the low margin business?

Brian McManus

That is correct, yes.

Benoit Poirier

Okay, perfect. Okay, that's really good. And also looking at the move in the Canadian dollar, just want to ring what will be the implication on your net debt EBITDA ratio at the pro forma level? You've been talking before close to three pine [ph] but I would assume right now that it will lower your debt. So just want to understand what kind of extra flexibility provides you on your balance sheet?

Brian McManus

In some ways you've answered your own question that it has the strengthening of the dollar have had the opposite effect we were facing when the ending liabilities were getting calculated at a weaker dollar yet our average EBITDA was being done at a stronger Canadian dollar. We have now the opposite in which our liabilities are getting reduced, the U.S. dollar liabilities at least are getting reduced because of the stronger Canadian dollar, so it does create a deleverage for us.

Benoit Poirier

Exactly.

Brian McManus

So it's certainly as you said to our advantage and definitely a good part of the reason where we're more comfortable to proceed with debt.

Benoit Poirier

And would you be able -- Brian, to quantify what would be the impact versus kind of the previous FX you were using, is it kind of a turn of 0.3 time, 0.4, would you be able to quantify?

Brian McManus

You're referring to the EBITDA coverage ratio?

Benoit Poirier

Exactly.

Brian McManus

Eric, would say probably about 0.2 to 0.3 would have been the effect between...

Éric Vachon

Yes.

Benoit Poirier

Okay, perfect. Very good, and last one for me. Could you walk us through the working capital requirement for this year given what we saw in Q1, what would you expect for the full year in terms of consumption?

Brian McManus

Well really I would say we're probably near at our peak right now. As we are discussing, I think it was Sarah who asked the similar question, that we'll see it unwind Q2, Q3 and then we'll start to have a bit of a seasonal build up again in Q4. But overall on a December to December basis we at this point sort of fill in the $35 million to $40 million range of change in working capital, sort of a pull on the working capital just because of the new growth in the consumer lumber.

Benoit Poirier

Okay, thank you very much for the time.

Brian McManus

Thank you.

Éric Vachon

Thank you, Benoit.

Operator

Your next question comes from the line of Michael Tupholme from TD Securities. Please go ahead.

Michael Tupholme

Thanks. So just a couple of follow ups. With respect to CapEx, can you just update us on your guidance there for the year including the Wisconsin facility?

Brian McManus

Sure. I play a bit at the strength of the Canadian dollar, so if you remember we were guiding sort of around the $70 million mark in terms of Canadian dollars so were probably a little bit lower, maybe $65 million in terms of the year and as you know we gave the sort of roughly around the $27 million mark on the U.S. dollars on the Wisconsin facility. Although all of that may not actually appear in this year, so that might be the upper range. It really depends how much we're able to finish on the Wisconsin facility in 2016.

Michael Tupholme

So not really much change from last quarter other than FX related impact is what you're saying?

Brian McManus

Yes.

Michael Tupholme

And potentially a bit of the slippage of CapEx on Wisconsin into '17?

Brian McManus

Correct, yes.

Michael Tupholme

And just a follow up on that. I mean, the further reason I ask is because CapEx seemed quite low on the first quarter. So of the remaining amount to get you to the sort of the amount that you're guiding for the full year, would that be fairly evenly spread over the next three quarters or is it peaks as it get toward the back part of the year?

Brian McManus

I would say you're probably, it's going to be pretty evenly spread with maybe a bit of a push towards the end only because sometimes our ability to do some of the CapEx projects gets hampered as we get into the very busy season. I would probably say we'll see it a little bit heavier weighted towards the end of the year.

Michael Tupholme

Okay, that's helpful. And then just two other quick ones. Within industrial products, I know it's not an overly large segment but the growth there is very strong and you mentioned the due to marine product demand in Eastern Canada, is that something that you see as being sustainable for the next few quarters, should it be strong again in the next couple of quarters?

Brian McManus

A little tough to say. That is something that, it sounds funny because it came as a surprise to us, but it was just unusually strong in the first quarter of this year. We're certainly hopeful that it will continue that we'll see continue strong demand on it. Not an area we have a lot of visibility on. It comes out a lot just sort of in bids and that's really, that market in particular is a little harder to estimate where it's going. But it's certainly off to a good start.

Michael Tupholme

Definitely. And then just lastly, the two acquisition that you've already announced, Kisatchie and Lufkin, I know you suggest that you expect them to close in the second quarter. I mean do you have any, just for modeling purposes, should we be assuming as sort of toward the end of the quarter, is that fair or could it happen a little sooner?

Brian McManus

I think that's very fair.

Michael Tupholme

Okay, that's all. Thank you.

Brian McManus

Great. Thanks.

Éric Vachon

Thanks.

Operator

Your next question comes from the line of David Ramsay from Calrossie Investment. Please go ahead.

David Ramsay

Hi, is it fair to say that the consumer lumber business is likely to be more cyclical over a full cycle than the railway ties and the hydro pole business, and if that is the case are you seeing that reflected in lower acquisition multiples? And more generally, on the same topic, do you see a lot of acquisition opportunities in that space at similar or better multiples than you've had to pay in the past in ties and poles?

Brian McManus

In regards to you first question, I think we've been fortunate in our approach of who we really support in the consumer lumber market is that we have not over our history at least seen the, I do agree with your statement that it should tend to be a bit more cyclical but we actually have not seen that. We've just hoped are wagging to the right horse. And in regards to acquisition opportunity, it's not really something we're actively seeking at this point in time. The Ram acquisition we completed with something that was always in our sites and we're waiting for the right opportunity because of we knew that the fit it would give with our existing client base, but we're not actively pursuing other acquisition opportunities on the residential side at this point.

David Ramsay

Perfect, okay, thanks very much.

Brian McManus

Thank you.

Éric Vachon

Thank you.

Operator

There are no further questions at this time. I turn the call back over to the presenters.

Brian McManus

Well, thank you everyone for joining us on this call. And we look forward to speaking with you again at our next quarterly call. Have a great day.

Operator

This concludes today's conference call. You may now disconnect.

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