AmeriGas Partners LP (NYSE:APU) Q1 2017 Earnings Conference Call February 2, 2017 9:00 AM ET
Will Ruthrauff - Director of Investor Relations
John Walsh - President and Chief Executive Officer, UGI
Kirk Oliver - Chief Financial Officer, UGI Corporation
Jerry Sheridan - President and Chief Executive Officer, AmeriGas Propane
Hugh Gallagher - Chief Financial Officer of AmeriGas Propane
Michael Gaugler - Janney Montgomery Scott
Ben Brownlow - Raymond James
Chris Sighinolfi - Jefferies
Jeremy Tonet - J.P. Morgan
Good morning, my name is Scott, and I will be your conference operator today. At this time, I would like to welcome everyone to the UGI AmeriGas First Quarter 2017 Conference Call.
All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.
Will Ruthrauff, Director of Investor Relations, you may begin your conference.
Thanks, Scott. Good morning everyone and thank you for joining us. With me today are Hugh Gallagher, CFO of AmeriGas Propane; Kirk Oliver, CFO of UGI Corporation; Jerry Sheridan, President and CEO of AmeriGas Propane; and John Walsh, President and CEO of UGI.
Before we begin, let me remind you that our comments today will include certain forward-looking statements, which management believes to be reasonable as of today’s date only. Actual results may differ significantly because of risks and uncertainties that are difficult to predict.
Please read our earnings release and our annual report on Form 10-K for an extensive list of factors that could affect results. We assume no duty to update or revise forward-looking statements to reflect events or circumstances that are different from expectations.
We will also describe our business using certain non-GAAP financial measures. Reconciliations of these measures to the comparable GAAP measures are available in the appendix of our presentation.
Now, let me turn the call over to John.
Thanks Will. Good morning and welcome to our call. I trust that you have all had a chance to review our press releases reporting first quarter results for UGI and AmeriGas.
We had a very strong Q1 at both AmeriGas and UGI with all of our businesses contributing higher adjusted net income then in 2016 resulting in a record first quarter for UGI.
This very strong performance can be attributed to colder weather across our service territories versus fiscal 2016 and the significant positive impact of major investments and acquisitions made over the past few years.
We were very pleased with the quality of our earnings in the quarter as our performance was driven by strong customer demand and very solid operational execution by our teams.
I will comment on our key activities and market developments in the first quarter; then I will turn it over to Kirk who will provide you with a detailed overview of UGI's financial performance. Jerry will review Q1 for AmeriGas and I will wrap up with an update on our strategic initiatives.
Our Q1 adjusted EPS of $0.91 established a new high water mark for UGI Q1 performance. This was well above last year's adjusted EPS of $0.64.
Both quarters have been adjusted for the mark-to-market valuation of unsettled hedges and other items that Kirk will cover later.
These exceptionally strong results not only reflect the impact of colder weather in each of our businesses, but also reflect the underlying strength of our businesses.
In the quarter, we saw the continued major earnings contribution from our Finagaz acquisition. The impact of increased base rates of UGI gas and the earnings contribution from new LNG contracts and gas marketing growth in midstream and marketing.
It's important to note that while weather was colder than in fiscal 2016, we still experienced weather that was warmer than normal in each of our domestic businesses.
I should also note that the $0.91 adjusted EPS was also above the prior Q1 record adjusted EPS performance of $0.71 achieved in fiscal 2014 the year of the polar vortex.
While our earnings performance was the headline for the quarter, we also made noteworthy progress on a number of strategic projects and activities. Our teams did outstanding work in Q1 on that front.
There were two keys through our solid performance in the quarter. First, our focus on the fundamentals for consistent long-term performance. Unit margin management, working capital management and control of operating expenses. Second the positive contributions from new investments that will also provide the foundation for future growth.
With respect to major projects, we choose some noteworthy strategic milestones over the past three months. Our $160 million Sunbury pipeline has been placed in the service.
The project was completed ahead of schedule and is currently providing service to UGI CPG. Gas service to our base load power generation customer in Sunbury will commence in August.
We have also achieved mechanical completion of our $60 million LNG liquid fraction unit in Manning, Pennsylvania.
The unit will come on stream this quarter and will add critical capacity to our network as we strive to meet the increasing demand for LNG.
Our utility had an exceptionally busy quarter. Demand in the quarter was very strong with our core throughput up 32% versus fiscal 2016 on weather that was 25% colder.
We continue to grow the customer base at our gas utility with over 4,600 new residential heating and commercial customers added in Q1.
Our infrastructure replacement program for Cast Iron and Bare Steel remains on pace with 67 miles replaced during calendar years 2016 and a similar target for 2017.
The utility team is also busy with rate case related activities. Our new base rate at UGI gas went into to effect in October and we saw the positive impact in our results.
Earlier this month we filed a $21.7 million rate case request for UGI PNG. We expect the PNG rate case passes to conclude by the end of the year.
Even after factoring in this request, it's important to note that our customers at UGI PNG would still have a total monthly bill that is approximately 40% below their bill in 2009.
AmeriGas had a strong quarter with EBITDA up year-to-date due to various effective control of operating expenses and solid volume growth. Jerry will comment in much more detail on Americas’ Q1 performance in a few minutes.
Our international team built on its very strong performance in fiscal 2016 and delivered a record Q1 performance. Adjusted income before income taxes was up 14% over prior year primarily due to increased unit margins and volume growth in our profitable residential and small commercial markets.
Our integration of the Finagaz business remains on schedule and we expect the integration process to conclude by the middle of fiscal 2018.
I will close with a few final points in the quarter before I turn it over to Kirk for a detailed review of our financials. While weather for the quarter was significantly better than Q1 fiscal 2016, we still faced a warm weather challenge at utilities, midstream and marketing in AmeriGas.
We also faced the challenge of rising commodity costs, which makes our unit margin goals more difficult to obtain. The good news is that our businesses responded very effectively to these two key challenges and delivered a record Q1.
I will return late on the call to comment on our strategic initiatives, but I would like to turn it over to Kirk at this point for the financial review. Kirk.
Thanks John and good morning everyone on the call. This first table lays out our GAAP and adjusted earnings per share for this quarter compared to the same for Q1 of last year.
As you can see adjusted results exclude the impacts of mark-to-market changes in commodity and foreign exchange hedging instruments; transition costs associated with the integration of Finagaz; a loss of extinguishment of debt and a recent change in French tax law, which were lower to corporate tax rate in France beginning in fiscal year 2021 for UGI.
At the end of December, the French Parliament approved a reduction in the corporate tax rate from 34.4% to 28.9% beginning in 2020, because our French operations have deferred tax liabilities that are expected to be paid after the new rates become effective, we reduced our net deferred tax liabilities by $24.7 million.
Also beginning with Q1, we centralized our hedging program associated with UGI's international foreign currency exposure; we used foreign currency exchange contracts to reduce the exposure to foreign exchange rate volatility.
These new foreign currency contracts are not accounted for its hedges and the mark-to-market adjustments are recorded in our GAAP net income are excluded from adjusted earnings.
Our prior year foreign currency contracts continue to be accounted for its hedges and will be recognized in earnings upon their settlement.
Our adjusted earnings were $0.91 per share for the quarter, is up $0.21 over last year reflecting as John mentioned earlier, contributions for strategic investments and weather that colder than in the prior year period.
I will now run through the Q1 results for each of the businesses. Turning first to AmeriGas, volume was about 4% higher as the effect of very warm October and November were offset by colder weather in December.
Adjusted EBITDA of a 185 million was up over 7 million versus last year reflecting among other items a reduction in O&M expense. These results also include a one-time non-cash charge for the correction of previously recorded gains on asset sales.
Operating expenses were down 2% in spite of the increase in volume due to technology driven efficiencies and cost control. Jerry will review AmeriGas in more detail later on the call.
UGI International contributed 92.1 million in adjusted income before taxes, an 11 million increase over last year, driven largely by an increase in bulk volume due to the return of more normal winter weather, which was 21% colder than last year along with an increase in LPG unit margins.
The favorable average unit margin impact was primarily due to exiting the lower margin autogas business in Poland partially offset by lower averaged cylinder and bulk unit margins due to rising LPG cost in the quarter compared to the declining LPG cost in the prior period.
Also, you shareholders should note that the adjusted income before tax of 92 million excludes about 8 million of Finagaz integration expense.
Turning to Slide 10, midstream and marketing income before taxes increased by about 7 million to 49 million for the quarter.
Total margin was up about 6 million or 8% primarily reflecting higher peaking margins, gas marketing margin and capacity management margin. Other income primarily reflects the recording of [ASEBC] (ph) associated with construction on the Sunbury pipeline.
UGI utilities is reporting income before taxes of $72 million up 33 million on weather that was 25% colder than last year, which along with customer growth of over 32% increase in core market volumes. The UGI gas base rate increase also contributed to this substantial increase in margin.
Operating expenses were down slightly primarily due to the lower distribution system expense and other expenses decrease due to a prior year environmental charge.
Finally, on January 19th, we filed the request with Pennsylvania PUC for a 21.7 million base rate increase at our PNG utility. We expect the process with the PUC to conclude by the end of this fiscal year.
As you can see from this slide, we had a very strong quarter with all of our businesses contributing to the record quarter for earnings per share.
As I mentioned earlier, the utility benefitted from a large increase and core volumes due to the colder weather this December, the UGI gas base rate case and continued customer growth.
The international business contributed significantly stronger results due to the combined impact of the return of normal weather, operational synergies associated with Finagaz and unit margin management.
That completes my prepared remarks, and I will now turn the call over to Jerry for his report on AmeriGas.
Okay, thanks Kirk and good morning. Adjusted EBITDA for AmeriGas, in the first quarter of fiscal 2017 was a 185 million compared to 178 million in the first quarter last year.
As mentioned in our earnings release adjusted EBITDA in the current quarter includes the impact of an 8.8 million charge, which is recorded to correct, and error from prior periods. Therefore, this was a non-operating and non-recurring charge.
Although October and November were 26% warmer than last year, December came in essentially normal and first quarter weather overall is 14% warmer than normal and 7% colder than last year.
Retail volumes increased 10.5 million gallons or 4% on this colder weather. Average propane cost as now [indiscernible] increased 39% when compared to the prior year.
However, national inventories remain at strong levels, and although propane cost have risen the supply outlook remains relatively stable historically.
We kept up with the rising cost environment, our retail margins were in line with last year. Expense management was particularly good in the quarter, as we remain in warm weather mode through the first few months of the quarter and then quickly transitioned into winter mode in December.
Operating expenses were down $4 million despite the 4% increase in volume. Although our performance this quarter was certainly better than last year on modestly colder weather, we are most encouraged by an additional comparison of this quarter to Q1 and fiscal 2015.
This analysis reveals that our current quarter's operating results compare nicely to the comparable quarter in fiscal 2015 despite the 11% warmer weather.
Adjusted EBITDA was a 185 million this year and again includes the $8.8 million error correction I mentioned. This compares to the 189 million of adjusted EBITDA in Q1 of 2015. This year's quarter again 11% warmer than Q1 in 2015 and as a result of volumes 35 million gallons or 10% lower. Expenses were down $20 million or 8% from Q1 2015.
So, we believe these results demonstrate the efficiencies we are gaining from our various technology investments and the commitment of our field management use new tools to drive these efficiencies, basically turning fixed costs into variable.
In addition to our emphasis on efficiency, we continue to focus on our growth trust. AmeriGas cylinder exchange, or barbeque cylinder program delivered volume that was 13% higher than last year and same-store sales growth was up 4%.
Our national accounts program, volume also increased 17% benefitting from both December weather and several large new accounts. Finally, on December 28th, the partnership concluded a tender offer for $500 million of its 7% notes due 2020, and issued $700 million of 5.5% notes due 2025.
Excess proceeds from the bond offerings were used to repay borrowings under the operating partnerships revolving line of credit. For the second time in six months, we were able to extend our debt maturities at lower rates. So, after a very warm start and a strong December, this has now put us back on solid footing for fiscal 2017.
Let me now turn the call back over to John.
Thanks Jerry. As I noted earlier on the call, we were very pleased with our strong financial performance in Q1. We were equally pleased with the progress on our portfolio strategic investments.
We have strengthened our midstream asset network in the Marcellus with the addition of the Sunbury pipeline and the Manning LNG liquefaction unit.
Our PennEast pipeline project continues to move through the FERC approval process, although the current phase has been extended.
We now expect the environmental impact assessment phase to conclude by mid-April. Our target completion date for PennEast remains the end of calendar 2018.
In addition to the Manning project, we are executing a series of smaller LNG projects that will add storage, vaporization and fuelling facilities at strategic points in Central and Eastern Pennsylvania.
LNG peaking is one of the core activities for our midstream business. We continue to see an increase in request for peaking services and our LNG network is being enhanced to ensure that we can meet this demand. These projects leverage our existing LNG asset base and provide very attractive returns.
We are deploying record levels of capital at UGI utilities to support our growth and infrastructure replacement programs. These investments ensure that we continue to deliver efficient and reliable service to our expanding customer base.
We expect our total capital spend at utilities to exceed $1.1 billion over the next four years, roughly 40% above the capital spend over the preceding four years.
These projects enable access to low cost natural gas for our core customers and have contributed to the significant reduction 40% to 50% in the average monthly bill our customers have enjoyed versus their peak monthly bills in 2008 and 2009.
AmeriGas is positioned well as we enter Q2. Jerry and the team have done a great job of utilizing enhanced distribution logistics and customer service tools to improve our customer service performance while reducing our cost to serve.
We continue to leverage AmeriGas's scale as the largest LPG distributor in the U.S. with noteworthy customer gains in both our national accounts and cylinder exchange programs in Q1 and a healthy pipeline of opportunities as we look ahead.
Our UGI international team is performing at a high level. We are right on-track with our Finagaz integration plan and we continue to look for opportunities to expand our position both organically and by our acquisitions.
As I have noted on our prior calls, our LPG businesses are contributing both earnings growth and significant free cash flow for UGI that play a major role in fueling the growth engine that is powering UGIs performance.
In closing, I would like to emphasize our strong performance across the board in Q1. Each of our businesses delivered improved financial performance versus fiscal 2016 and push forward with their critical growth projects.
We have demonstrated the collective strength of our businesses, while retaining our strong focus on critical strategic program including our Marcellus infrastructure build-out and the Finagaz integration process.
As I noted, when we provided our fiscal 2017 EPS guidance on the last call, the major investments that came online over the past 18 months, such as Finagaz, [Indiscernible] and our Temple LNG liquefaction expansion are all significantly accretive.
We can now add Sunbury and Manning LNG to that list. These major projects provide the foundation for our future earnings growth. Our cash flow and balance sheet are extremely strong providing us the capacity to fund all of our existing projects and support major new investments.
We are very proactive in developing new investment projects, while remaining focused and disciplined in our assessment of each opportunity. The strong performance of our businesses and the diversity of our growth opportunities position us to deliver on a long-term growth in income targets. Our path forward has never been clear and we are excited about the opportunities that lie ahead for the company.
With that, I will turn the call back over to Scott, who will open it up for your questions. Scott.
[Operator Instructions] Your first question comes from the line of Michael Gaugler with Janney. Your line is open.
Good morning everyone. Congrats on a great quarter. Just couple of questions John. On the FERC EIS date, you mentioned you are expecting mid April. I wonder how you are filling path of the vacancies at the FERC and if perhaps all those vacancies could potentially slow down that final EIS?
On the EIS that assessments can be finalized and issued with the FERC that’s currently constructed. On the lack of a quorum at the FERC would potentially impact the final certificate being issued, which will be several months after the environmental impact statement.
So we are assuming that by the time the timing comes up for the certificate that we have a quorum at the FERC.
Okay, you also mentioned deploying capital into other projects of significance. I was wondering if you would anticipate any announcements this year or new larger projects might be more tilled towards the 2018 to 2019 time frame.
Yes, Mike, I wouldn’t speculate on that. We are constantly looking at opportunities; there is a broad range of activities that cut across the businesses. So we are working every day to develop opportunities that kind of run the gamut in terms of scale.
So we are eager and as soon as we have something to communicate, we will communicate it; but a nice range of opportunities are out there for us.
Okay, and I just want to slip one more question in. speaking about your guidance and the weather here in the quarter, I know Eastern Europe has been particularly cold; where the U.S. has been probably warmer than you would like and just maybe your thoughts on how you see the quarter playing out in terms of the weather and the impacts, when we get out to the next quarter's results?
Yes. As you know Michael, we typically don't comment on guidance at least we get through the winter and there is a lot of winter left. A nice thing about our business and we saw it in the past quarter is that we do have a diversified set of businesses.
So as you noted the weather in Europe has been up to this point normal for the winter, which is great and it's currently fairly cold in parts of Europe, winter. So that diversification is key; so any cold weather, any place around map will help us and we will benefit from the diversification we have in terms of the reach of our businesses.
So we are really pleased to see blue on the weather maps in Europe that's a very helpful situation for us.
All right. Congrats on the quarter guys. Thanks.
The next question comes from the line of Ben Brownlow with Raymond James. Your line is open.
Hey good morning. Jerry on the propane margin stability, unit margin stability and actually it looks like a slight increase year-over-year despite the cost backdrop. How much of that was favorable mix shift to residential and can you just give a little bit more color there?
No, really wasn't a mix shift to residential; I mean we did had some warm weather in those first two months; so if anything we had mix going against us a little bit. Commercial is very strong, but our fuel teams are just very good at this; pricing management to core competence across the system imagine 650 stores and they all have to adjust their pricing accordingly.
With the run up we have seen, I was just pleased that they are able to [save] [Ph] in the past year despite a little bit of a mix going against us actually.
And the 8.8 million error correction; what line item did that fall into?
It was other income and expense, the low OpEx.
Okay. And just from one more modeling quick question, do you have the December quarter breakout on revenue from the wholesale propane at your fingertips?
I do. And as you know wholesale generally is a fairly immaterial aspect of our business, but we had 13 million gallons sold in the quarter versus 12 million last year. So about close to 10% increase.
And do you have the revenue numbers?
Yes, I have it. Revenue was 594 million versus 565 last year.
Great, thank you.
I'm sorry 10.5 versus 8.8.
Okay great that makes sense. All right great, thank you guys.
[Operator Instructions] Your next question comes from the line of Chris Sighinolfi with Jefferies. Your line is open.
Hey good morning guys. So early to say it, because I think it sounds healthy, but congrats on a quarter it was really solid. With regard to taking up maybe where the last series of questions, Jerry looking at propane prices, clearly they were up in fiscal 1Q from the prior quarter. We have seen a spike as of late I think driven mostly by export activity.
So I'm just wondering how you and the APU teams sort of manage that cost and I think we are up now 60% from where did we averaged last quarter, if I look at last night’s [Indiscernible] price and I know with polar vortex that that pricing spiked a couple of years ago, sort of coincide with some procurement issues, and that was weather driven, this maybe is expert driven, but just any color you could offer on how you are managing that price dynamic would be helpful?
Well as I said with the last question it's a real core competence, I mean we watch pricing every single day and we often reset pricing every single day. So we are quickly reacting penny-by-penny as this run up has occurred.
If you are getting at possible shortage and resulting in a real serious spike, so far we are not seeing that. Propane inventories nationally still remain about 7% or 8% above the five-year average. So we are feeling good and we are coming through the winter that at least for this year we are in pretty good shape, but we will have to keep an eye on exports going in the next winter.
Okay, so the supply disruption issues that affected us a couple of years ago, we are not seeing anything along those lines?
Okay, perfect. I guess switching gears, John I know there was a prior question about FERC. I'm just curious; I mean clearly we are all hopeful that things return to normal from the functionality perspective on a commission.
I'm just wondering how you are thinking about not only PennEast but other things that might be in the hopper, and if there was anything that you are seeing and it's been a debate with I think our investors about, if there is federal relaxation in sort of the review process coming off Obama its turning going into to Trump.
Like do we see retrenchment by some of the less leaning states maybe New York being one of them. Anything that you are seeing that was maybe offer color on that and then as it pertains what you guys are considering doing on the midstream backlog?
Yes, I can't say that we have observed any fundamental change in activity at the ground level and we basically keep doing the same thing we have been doing. And in the case of PennEast it's with our partners is stay focused in terms of working hard to address any issues that have risen over the last year and a half on the project, and then communicate very actively with all the stakeholders at the federal level and also at the state level and the municipality level, including that the land owners to make sure everybody understands what we are doing, how we are going to do it and why we are doing it, and that continues.
Any steps that can be taken that would improve the efficiency of the process and address some of the timing issues certainly would be beneficial, but on the day-to-day basis it's really, PennEast’s continued collaboration with our partners and communication.
It's a great project basically fully subscribed, or close to fully subscribed for the major need that it is to be served in terms of homes and businesses in New Jersey and in terms of more broadly on infrastructure development that continues on an ongoing basis.
We have had a lot of success over the last five or seven years executing on infrastructure projects such as Sunbury that just went into service.
So, we will keep doing what we are doing. Keep our heads up to look at any changes that happen in the regulatory processes and most critically make sure we are undertaking projects that meet a required need and that we are confident we can execute.
So for us its keep doing what we are doing, but make sure we stay abreast of any changes in developments at both the federal and state level that could ease the process in anyway.
Okay and I guess as it pertains to other investments, on the utility side you guys are clearly, as you highlighted earlier on this call and in prior statements, try and spend quite a bit of money at the utility businesses over the next couple of years.
We saw the rate case on UGI utilities last year, we see in the filing that one and natural gas. I'm just curious as we think about the cadence of rate action, first thing we should be thinking about from a model perspective.
Like when might CPG be in for the next case, when should we sort of make that expectation or any guidance you could offer on that front would be helpful?
Yes, I can certainly make a broad statement there. We expect to be filing rate cases with more frequencies than we have; UGI there was a 20-year gap, PNG there was an eight or nine year gap.
So those intervals will shorten, although one thing that's changed for us in the last couple of years is we now are eligible for the [DISC] Tariff, which will enable us to earn a return on our infrastructure investments, which is the largest portion of our capital spend in between rate cases.
So that certainly will push our rate case filings out a bit; so a significantly shorter intervals that we have seen in the past; but we still have growth; in our utilities, we added 4,600 new customers in the quarter.
We have got some larger projects as well in terms of adding customers. That growth also has the effect of pushing out rate cases and one of the things that has changed that's - we talked about propane costs running up; fuel oil costs have run up.
So that differential between natural gas and fuel oil, if you look at a customer assessing conversion that differential sort of bottomed out and has increased again. So that will help us in terms of growth of our customer base in utilities if we continue to see an increase in that differential and an increase in the savings that a fuel oil customer will attain if they convert.
So that growth will also have the impact of pushing rate cases out. So that was a long answer but much shorter intervals than we historically have seen, but we don’t expect to be filing constantly, because of DISC and growth.
Okay, and following the rate case last year at UGI, now all three utilities are capable of recovering under the DISC is that right?
Yes, all three now qualified for the DISC yes.
Okay, perfect. Thanks a lot for the time this morning guys. I appreciate it.
Your next question comes from the line of Jeremy Tonet with J.P. Morgan. Your line is open.
Apologize if I missed it. With the final environmental view again push to mid-April, what does that do to the completion date, I think prior you said they are [indiscernible] around second half of 2018. So does that get rest to 2019, I’m just trying to understand where that is?
Hey Jeremy, it stays in the second half, by the end of calendar 2018, assuming we stay on the schedule we are on, we will still execute in the window that we have at the end of 2018 start in the spring and work through the end of the year.
Okay, and you also said it's almost fully committed.
Yes. The great thing about PennEast is it’s underwritten by capacity holders who are directly serving customer demand. So it's a demand driven project.
Got you. And then just secondly, just a little more color I guess on the inventory levels. Trying to see kind of what turns you saw in December. I know last quarter you said inventory is pretty lien. I'm just trying to understand kind of the magnitude of demand we saw in December, obviously oppose to the prior two months of the quarter?
This is John, I will comment brief and I will turn it over to Jerry. I mean our own inventory turns pretty quickly, so our inventory that was retained in the business is quite low and during the winter if you look at return on propane, if you look gallons on hand it's return on days of inventory on hand during the winter, because of the is the level of demand.
So we haven’t seen any material differences, what you see typically across the balance sheets of UGI, we tend to have maximum maturity at the beginning of the winter, if you look across all of our businesses and then that inventory then be worked down, various elements of inventory, particularly and [Indiscernible] side gets worked down. But I'll like Jerry to talk about this inventory.
Not too much more I add other than our inventory levels are actually a little bit lower than last year, simply because December was so strong, but as John said we don’t have a lot of storage infrastructure, so our inventories are turning very, very rapidly that's good, because we don’t want high cost inventories sitting around too much if prices are dropping. But generally our inventory levels are stable and as I mentioned a couple questions ago, the supply levels have also been stable.
Okay. Thank you.
There are no further questions at this time. I will turn the call back over to the presenters.
Okay. Thank you Scott, thank you everyone, I appreciate your time this morning and we look forward to talking with you after our quarter two results are issued. Thank you.
This concludes today's conference call. You may now disconnect.
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