Glatfelter's (GLT) CEO Dante Parrini on Q4 2016 Results - Earnings Call Transcript

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Glatfelter (NYSE:GLT) Q4 2016 Earnings Conference Call February 7, 2017 11:00 AM ET

Executives

John Jacunski - Chief Financial Officer and President-Specialty Papers

Dante Parrini - Chairman and Chief Executive Officer

Analysts

Dan Jacome - Sidoti & Company

Chercover - D. A. Davidson

Operator

Good morning. My name is Kaila and I will be your conference operator today. At this time, I would like to welcome everyone to the Glatfelter’s 2016 Fourth Quarter Earnings 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. Mr. John Jacunski, you may begin sir.

John Jacunski

Thank you, Kaila. Good morning again and welcome to Glatfelter’s 2016 fourth quarter earnings conference call. I am John Jacunski; I’m the company’s CFO. Before we begin our presentation, I have a few standard reminders. During our call this morning, we will use the term adjusted earnings, as well as other non-GAAP financial measures. A reconciliation of these financial measures to our GAAP-based results is included in today’s earnings release and in the investor slides. We will also make forward-looking statements today that are subject to risks and uncertainties.

Our 2015 Form 10-K filed with the SEC and today’s release, both of which are available on our website, disclose factors that could cause our actual results to differ materially from these forward-looking statements. These forward-looking statements speak only as of today and we undertake no obligation to update them.

And finally, we have made available a slide presentation to accompany our comments on this morning’s call. You may access the slides on our website or through this morning’s webcast provider.

I will now turn the call over to Dante Parrini, Glatfelter’s Chairman and Chief Executive Officer.

Dante Parrini

Thank you, John. Good morning and thank you for joining us to discuss our 2016 fourth quarter results. Our results reflect operating income performance in line with our expectations with a slightly better effective tax rate.

As noted on Slide 3 of the presentation, we reported adjusted earnings per share of $0.40, down $0.12 compared to the prior year. We continued to operate in a slow growth environment with challenging and competitive conditions in several of our key Composite Fiber markets and soft demand in the North America uncoated freesheet market.

However, we continue to deliver on growth in our Airlaid business, growing wipes 18% in the quarter. Overall revenue for the quarter was $391 million, down 4% on a constant currency basis. Composite Fiber shipping volume was down across all product lines compared to the year ago quarter. However, food and beverage shipments were up 2% on a sequential quarter basis.

Cost controls and ongoing success with our continuous improvement program helped to mitigate most of the impacts from machine downtime that was incurred in the quarter to manage inventory levels. For the quarter, operating income was $2.1 million lower compared to last year including a $900,000 impact from foreign currency.

During the fourth quarter, we also began implementing a cost optimization program that will significantly reduce operating costs. We will speak to this in more detail in a moment.

Fourth quarter results for our Advanced Airlaid Materials business reflects a strong finish to an outstanding year. Customer demand for our products continues to be strong with double-digit growth in many of our product segments. Shipments were up 3% in square meters this quarter supported by excellent operating performance and record Airlaid production, which drove a 9% improvement in operating income.

For Specialty Papers, shipments were down 5.8%, compared to last year which tracked the market. On a full year basis, shipments were down 1%, outperforming the broader uncoated freesheet market for the 12th year in a row.

Overall selling prices were down year-over-year reflecting soft market conditions and declining industry operating rates which finished the year below the 90% level. Lower selling prices led to a $2.6 million drop in operating income compared to last year.

Specialty Papers continues to operate well and generate productivity improvements that offset the impact of market-related downtime in the fourth quarter. We continued to make progress during the fourth quarter with our significant capital programs. We successfully completed the environmental compliance projects in Specialty Papers in January to meet the month end compliance state.

With this project now behind us we expect lower capital expenditures in 2017. And our Airlaid capacity expansion project is tracking to our schedule for late 2017 start-up. Our cash flow for 2016 was in line with our expectations and our balance sheet remains solid.

Lastly, there have been some recent developments related to the Fox River that provide greater clarity about our ultimate costs. This resulted with us recording a $40 million charge to operations taken during the fourth quarter of 2016. John will discuss the specifics during his comments.

At this point, I’ll turn things over to John who will provide a more in-depth review of our fourth quarter results then I’d like to offer some closing comments before taking your questions. John?

John Jacunski

Thank you, Dante. For the fourth quarter, we reported a loss of $16.2 million, or $0.37 per share, which include an after-tax charge for the Fox River environmental matter of $25.1 million. After excluding this and other non-core business items, we’ve reported net adjusted earnings of $17.6 million, or $0.40 per share, compared to $0.52 in 2015.

Slide 4 shows a bridge of adjusted earnings per share from the fourth quarter of last year to this year. Composite Fibers results reduced earnings per share by $0.04 including a negative $0.02 impact from foreign currency. Advanced Airlaid Materials results improved earnings per share by $0.01 including a negative $0.01 impact from foreign currency.

Specialty Papers results reduced earnings per share by $0.05. Higher corporate cost for the Fox River legal matter and higher incentive compensation expense reduced earnings per share by $0.06 and lower pension expense added $0.02.

Slide 5 shows a summary of fourth quarter results for the Composite Fibers business. Total revenue for this business was $125 million, down 4.9% when compared to the prior year, and down 1.6% on a constant currency basis. Selling prices were slightly lower compared to the prior year and shipping volume was down 6.6% together impacting earnings by $1.1 million.

Food and beverage shipments were down 3% compared to the year ago quarter and the full year and were up 2% in the fourth quarter compared to the third quarter. As previously discussed, during 2016, we had a few key customers reduce inventory levels. There were some shifts in customer market shares and excess production capacity impacted the food and beverage market. We believe these markets have stabilized and we expect modest growth in shipments in 2017.

Shipments of wall cover products were up 4% compared to the fourth quarter of 2015 and were up 1% for the full year. This market is stable, but we have not seen a recovery of the important Russian market as of yet. Shipments of composite laminates and technical specialties were also down for the quarter and flat for the full year.

And finally, our metalized products shipments were off 13% as this business is impacted by a customer changing substrates towards packaging applications. Raw material energy trends followed the same pattern through the year with prices lower compared to the year ago quarter.

Tightness in the availability of abaca fiber continues and has led to substantial increase in the cost for this fiber. These increases have been more than offset by lower prices for purchased pulps and energy. This business took machine downtime during the quarter to manage inventory level which were down 17% during the quarter. The $2.5 million cost for this downtime was nearly offset by continuous improvement activities and cost control initiatives.

Overall, operating profit declined to $13.8 million including a $900,000 negative impact from foreign currency. Despite the top-line challenges this year, the business was able to hold EBITDA margins largely flat for 2016 at 16%. During the fourth quarter, we initiated a cost optimization program with Composite Fibers to better align our cost structure with near-term demand and aligned our production output following years of productivity gains created by our continuous improvement initiatives.

While we see long-term growth in our core markets, this initiative ensures that we will serve our customers in the most cost-effective manner by reducing the number of shifts on certain machines to better manage production output with market demand. The program also includes spending reductions, workforce rationalization administrative step and bringing certain sales activities that are currently serviced via agent agreements in-house.

We expect to incur one-time cost of $8 million on a pre-tax basis to implement this program, of which $3 million was recognized in the fourth quarter. We anticipate the annualized benefits to be approximately $13 million once fully implemented with a $10 million impact to 2017.

For the first quarter, when compared to the fourth quarter, we expect shipping volumes to increase approximately 5% with the benefit of these increases offset by lower selling prices. Raw material and energy prices are expected to increase slightly driven by continuing tightness in the supply of abaca fibers. And in the first quarter we should start seeing benefits from the cost optimization program.

Advanced Airlaid Materials results are summarized on Slide 6. This was another solid quarter for Advanced Airlaid Materials business with wipes volume up 18% compared to last year, as well as volume growth in tabletop, home care, and food pad products. These gains were partially offset by lower volume in hygiene products, which were down 6%.

Overall, shipments for this business unit were up 2% in tons and 3% in square meters. The lower selling prices were driven by customer contract provisions that recorded a pass through of raw material price changes. As a result, net revenue was down 0.5% to $61 million on a constant currency basis. Operations for the Airlaid business continue to perform well. Operating income for this business was $6.6 million, up 9% including a $400,000 unfavorable impact currency.

For the year, the business has delivered total operating income of $26 million, which represents a 24% improvement over last year and EBITDA margins were an all-time high of 14.4%, which is 210 basis points higher than 2015.

For the first quarter, we expect shipping volumes to be slightly higher compared to the fourth quarter and we expect average selling prices and raw material and energy prices to be in line with the fourth quarter.

Slide 7 provides a summary of the results for Specialty Papers. Revenues for Specialty Papers was $204.7 million or 6.7% lower than the prior year quarter. Shipments for specialty papers decreased 5.8% when compared to the fourth quarter of last year.

On a year-over-year basis, our shipments were down 1% compared to the broader uncoated freesheet market decline of $1.9%. Shipments during the quarter were flat or down in every market segment except engineered products where volume was up 8% driven by increased shipments of inkjet, playing card, greeting card and other specialized products.

Selling prices in the fourth quarter were below year ago levels in all major product categories resulting in a $4.8 million impact to operating profit. Lower raw material and energy prices provided a partial offset of $2.1 million.

Operating performance at our facilities was quite good during the quarter and for the year. We delivered improved pulp and paper productivity and this improved operating efficiency and cost control offset the negative impact of machine downtime that was taken in the fourth quarter to manage inventory levels. Overall, operating results declined $2.6 million to $13.3 million when compared to the year ago quarter. On a full year basis, operating income for specialty papers improved 25%.

For this business in the first quarter, we expect shipping volumes to be slightly higher than the fourth quarter with selling prices declining slightly. Raw material and energy prices are expected to be similar to the fourth quarter. Overall energy costs are expected to increase by approximately $4 million due to seasonal demand and the recently completed boiler conversions to natural gas from coal.

The higher costs for energy are expected to be offset by less downtime in the first quarter than in the fourth quarter.

Slide 8 shows corporate costs and other financial items for the quarter. During the fourth quarter, we incurred costs related to the environmental compliance and Airlaid capacity expansion capital programs and the composite fibers cost optimization program that excluded from adjusted earnings. We also recognized a pension settlement charge that I will speak to in a few slides.

In addition we took a $40 million charge for the Fox River environmental matter in the fourth quarter. As we reported in an 8-K filed with the SEC on January 19, NCR and Appvion entered into a proposed consent decree with the United States and the State of Wisconsin. This proposed consent decree helped clarify the ultimate potential cost for the Fox River environmental matter for Glatfelter.

The consent decree requires NCR to complete the remaining river remediation at an estimated cost of $200 million and NCR and Appvion has agreed not to seek claims against Glatfelter so long as we don’t pursue claims against them. The consent decree if approved, would result in Glatfelter being responsible for past and future government oversight costs and monitoring and maintenance of the completed remediation. Some of these costs would be shared with another responsible party, Georgia Pacific.

The adjustments to the reserve recorded in the fourth quarter reflects a change in the most likely cost to Glatfelter for this matter and results in a total reserve as of December 31 of $53 million. We will also be significantly lowering the upper-end of the reasonably possible range of loss that we have disclosed in our prior SEC filings.

We continue to analyze the consent decree and consider how we may respond including potentially challenging it through the course. As a result of the consent decree, the trials in this matter previously scheduled to begin in April have been stayed. We will include a more detailed discussion in this matter in our 10-K which we will be filing on or about February 27.

Corporate costs during the fourth quarter were $7.7 million compared to $4.6 million in 2015. The increase was driven by higher legal costs for the Fox River matter and higher incentive compensation. We expect corporate cost in the first quarter to be approximately $2 million lower than the fourth quarter.

Slide 9 shows our free cash flow. During the fourth quarter, cash flow from operations was $57 million, slightly lower than last year. Total capital expenditures for both the quarter and the year were higher than the year ago periods due to our two major capital programs. Excluding these projects, our 2016 capital expenditures are closely aligned with our historical investment levels.

Slide 10 provides estimates and related costs for 2017. The boiler environmental compliance work at our Ohio facility was completed in the fourth quarter and we successfully completed the compliance work in Spring Grove in January. The total capital investment to meet the environmental regulations is estimated at $113 million most of which was paid by the end of 2016.

The Airlaid capacity expansion project and the one-time implementation cost remain on target. For the full year of 2017, we expect capital expenditures to total between $125 million and $140 million and we expect depreciation expense to increase to $72 million versus $66 million in 2016.

Slide 11 shows the status of our pension plans. During 2016, we offered a lump sum cash out to deferred vested pension participants. As a result of this program, we’ve recognized a charge for a partial settlement of fine liabilities of $7.3 million on a pretax basis, which we excluded from adjusted earnings. The funded status of our plans improved in 2016. We have not had made cash contributions to our qualified plans for some time and we do not expect to for the foreseeable future. With respect to pension expense, we expect 2017 expense of $5.3 million compared to $5.5 million in 2016.

Slide 12 shows some balance sheet and liquidity metrics. Our net debt on December 31 totaled $317 million, up $62 million from the end of 2015. The increase was driven by the $100 million spend in 2016 on our two major capital programs. Last week, we finalized an amendment to our revolving credit agreement to increase our financial flexibility. The provisions in the amended agreement provide for the carve out of certain one-time costs and calculating our bank availability.

We finished the quarter with $55 million of cash and $177 million available under our revolving credit facility after reflecting recent amendments. Our balance sheet remains in good shape with leverage based on adjusted EBITDA and on a net debt basis of two times.

This concludes my comments. I will turn the call back to Dante.

Dante Parrini

Thanks, John. 2016 was a solid year for Glatfelter considering the competitive pressures from overcapacity in key markets. Our operating income is stable and our adjusted EPS is up 3%. As shown on Slides 13 and 14, adjusted earnings per share finished at $1.38 versus $1.34 last year.

To start, Fox River litigation costs and unfavorable foreign currency impacts created a $0.15 headwind for our businesses. The impact of lower selling prices was offset by continued favorable pricing for raw materials and energy. Our advanced Airlaid Materials business unit grew shipments 3% in 2016 and our Composite Fibers and Specialty Papers businesses each declined 1% facing overcapacity in competitive markets.

And our continuous improvement initiatives drove outstanding operations performance in 2016 resulting in a substantial benefit to operating profit. These operating improvements included record pulp production in Specialty Papers and record Airlaid production in our Gatineau Canada facility allowing us to meet growing demand from our hygiene and personal care customers.

This resulted in an approximate 25% improvement in operating profit for both Advanced Airlaid Materials and Specialty Papers while Composite Fibers operating profit declined 12%.

As I look forward for the Composite Fibers business, we expect to return to growth in 2017 despite a continuation of competitive market pressure. We remain the global leader in markets like tea, single served coffee and wall cover with attractive long-term growth rates. We expect growth to return to each of these segments.

We will continue to invest in new products and new business development to build our positions in electrical products, disposable wipes and other technical specialties and we will execute our cost optimization initiatives to take advantage of productivity improvements and improve our cost structure to deliver a $10 million benefit in 2017.

For our Specialty Papers business, we expect to outperform the uncoated freesheet market for the 13th consecutive year. With the broader market declining approximately 3% per year, business will remain very competitive. So we will continue to focus on the things we can control delivering a great customer experience, offering innovative and competitive products to the market and delivering operating improvements to help mitigate the impact of inflation on our operations.

The Advanced Airlaid Materials business continues to have a long runway for growth with opportunities in specialty wipes, hygiene products and niche applications. I continue to be pleased with the Glatfelter people and this business as they work diligently to deliver on customer commitments and earnings growth.

We will continue to drive operating improvements in our facilities to meet customers’ growing demand and bridge the supply gap until our new 22,000 ton capacity facility in Fort Smith Arkansas comes online in the fourth quarter of 2017 with commercial shipments beginning in the first quarter of 2018.

We remain focused on executing our long-term growth strategy including winning in our core market segments, driving efficient seize through cost improvements and cost optimization and delivering on our new product and new business development goals. And as always, we remain committed to identifying growth opportunities through acquisitions.

I’d now like to open the call for your questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of Dan Jacome from Sidoti & Company.

Dan Jacome

Can you hear me?

John Jacunski

Good morning, Dan, yes, we hear you.

Dante Parrini

Good morning.

Dan Jacome

Great. Okay, just quick – four quick questions. First, Airlaid, continue to do an excellent job there. I think you said your wipes were up 18% in the quarter and then, looking on my notes, at the end of September, you were kind of up 11% year-to-date. So could you just give us a little more flavor there of kind of what improved that kind of sequentially or what’s driving that?

Dante Parrini

Sure. Your data are correct and wipes were up 18% in Q4 and 12% for the year and so as we’ve been saying associated with the investment in the Forth Smith capacity expansion, we have continued to develop relationships with customers and supply and oversold market in North America and leveraging our Gatineau facility as we continue to get Fort Smith ready for production by the end of the year. So, I would say that this is a favorable and encouraging development. It’s consistent with our internal expectations and was part of the calculus for the investment in Fort Smith.

Dan Jacome

Got it. Okay, and then, turning to uncoated, I think you said the cap utilization rates are now down under 90. So, at what level in your view are kind of – did things got really sloppy? Or maybe you can instead of answering that, just give us kind of what your line of sight for operating rates maybe for the balance of the year or what are you kind of baking in into your calculus for guidance?

John Jacunski

Yes, so, fourth quarter operating rates were about 88%, December was 85%. So the year ended soft which is not always that unusual as people look to manage inventory levels and focus on working capital optimization as the fiscal year ends.

Dan Jacome

Yes.

John Jacunski

I would say that there are some general rules of thumb that many people in the industry tend to pay attention to – if operating rates are at 92% or higher that tends to bode very favorably for price improvements. I’d say that 90%, 91% is a stable market, when you are in the 80%s, that’s when things can become weaker and at times you can see this manifest itself in less favorable mix, sometimes market pricing, more market-related downtime or all of the above.

Dan Jacome

Okay.

John Jacunski

And so, I don’t have a crystal ball and we use some of the same data as well as our own perspective on the outlook. But, clearly, some level of capacity rationalization would certainly be constructive for the industry.

Dan Jacome

Right.

John Jacunski

And help us push back toward that 91%, 92% level. We are going to continue to operate with the assumptions that we will have to focus really hard on the things we control. So, managing great day-to-day execution being very aggressive on our cost structure, leveraging our continuous improvement infrastructure and the fact that we have a repeatable model that has outperformed the market for 12 years in a row.

Dan Jacome

Got you. Okay, two quick last questions. Is the CapEx – just remind us again, what’s your real maintenance CapEx? As I noticed, like last year, you had a peg at 60 and now taken the midpoint of your 2017 outlook, it’s kind of jumped to maybe I think 75. So remind us again, I mean, I kind of know the answer, but remind us again what’s there? And then, if we were to kind of guess what 2018, maintenance CapEx would be?

Do you think directionally, it would be lower? And then the last one, just very quickly on Fox River, I guess, we have to wait for the 10-K in a couple weeks. What can we expect? Can you give us like a trailer for what can we expect in that? Is it – are you going to in that filing possibly rejected the decree, is that kind of how to read it or?

Dante Parrini

Yes, let me just provide a couple comments on Fox River and then I’ll come back to the CapEx question that you had. So, yes, so, when we file a 10-K, we will obviously be giving a more full discussion of the situation as we said in our 8-K we filed in January.

Dan Jacome

Right.

Dante Parrini

There are different avenues that we can take if we would like to contest the consent decree and we have not formed an opinion yet as to whether we will do that or not. We continue to study it. However, we made an accrual in Q4 because as we look at the range of possible outcomes, we previously have been had about $13 million accrued and we said that the range of loss was up to just over $200 million.

Based on this consent decree, we think that the most likely point in that range has changed and we accrued the $40 million to get to $53 million, which we now think is the most likely range. We also expect that the high end of the range is going to come down dramatically.

Dan Jacome

Yes.

Dante Parrini

So, we will finalize our thoughts on that with a disclosure in our 10-K and we will continue to determine how we will approach this and whether we will sort of contest or not the consent decree.

Dan Jacome

Okay and on the CapEx?

Dante Parrini

Yes, on the CapEx, so, our CapEx, maintenance CapEx typically is $70 million to $80 million per year. It can ebb and flow a little bit. We spent, I said maintenance, that’s our normal CapEx. So that includes maintenance CapEx plus some improvement programs. And so our sort of normal capital expenditures were $73 million in 2015 given the significant capital programs we have going on with the boiler environmental compliance and the Airlaid capacity expansion, we’ve pulled back a little bit this year to $60 million.

For 2017, we expect to be in the $70 million to $80 million range and we would expect to largely complete the Airlaid capacity expansion. There might be a little bit of carryover of spending into 2018 as we finalize payments. Clearly the boiler environmental compliance will be concluded, payments on that will be concluded early this year. So we would expect 2018 that our CapEx will be in that $70 million to $80 million range. That’s our normal CapEx.

Dan Jacome

All right. Thank you guys.

John Jacunski

Sure.

Operator

[Operator Instructions] Our next question comes from the line of Steve Chercover from D. A. Davidson.

Steven Chercover

Good morning, Dante. Hi, John.

John Jacunski

Good morning, Steve.

Dante Parrini

Good morning.

Steven Chercover

Just a couple of quick ones also on paper. So you said that you’ve finished the year with operating rates below 90%, above 92% is where you might had some pricing power. I am just wondering, is it getting harder to find alternatives as traditional applications decline?

Dante Parrini

Yes, I would say that, we continue to work harder every year. But I would go back to the fact that we’ve got a track record on repeatable model and one of the things that we’ve baked into our operating strategy is to leverage the flexibility of the portfolio of assets we have. So – and when we make some of these smaller investments on a year-to-year basis, clearly, we are looking at things that can improve our cost position, but also improve the asset flexibility so that we can be much more nimble and recognizing that we only represent about 7% of the market share.

So, what might be very material to Glatfelter may not be so material some of the larger players that have a different operating strategy in a different asset configuration. And so, if you look at engineered products by way of example in the fourth quarter, it was up almost 8% year-over-year, digital inkjet was up almost 13%, playing card was up 40%, greeting card was up substantially.

We’ve got a great cross-functional group of technical and commercial people that are constantly scouring the markets and have strong relationships that can identify underserved sub-segments and underserved customers and can also pick up the pieces when some of the larger assets may be rationalized. So, yes, it’s hard work. It’s picking shovel work, but it’s something that is part of – a way of life for Glatfelter and we have a demonstrative track record of doing it. So we have every reason to believe that 2017 will be our 13th consecutive year of outperforming the broader uncoated freesheet market.

Steven Chercover

Just sounds like a way of life for all of us, working a little bit harder. Okay, and also on the energy costs, up $4 million in Q1, as you swap from coal, natural gas, but is there an element of startup expense in that, because I would have thought that natural gas was cheaper and if that’s the case, what was the financial outlay for the project and how long is the payback?

Dante Parrini

So, see the start-up cost, we did had some start-up cost but we have excluded those from adjusted earnings. So you can see that in the reconciliation in the earnings release or in our slides. The – natural gas is on an MMBTU basis is a much more expensive fuel than the price we are paying for coal.

And so there is a cost penalty in the fuel shift and also, obviously the first quarter is the coldest quarter of the year. So there is some seasonal demand that that increases. We expect that for the full year, that there will be a slight benefit to our EBITDA. So we will have some lower maintenance cost because we’ll have new assets.

We will not be using coal. So there is some fewer positions that we will have. So we expect to be able to overall, have a slightly positive EBITDA, but when we factor in the depreciation expense that comes from this $100 million investment, it will be negative to our operating profit overall by about $2 million.

Steven Chercover

Okay. But in the long run, the switch to natural gas should you’ll benefit despite the fact that it’s a bit higher cost fuel?

Dante Parrini

Slightly, yes.

Steven Chercover

Got it. Okay, thanks.

Dante Parrini

Remember, the reason for the investments was to comply with new boiler emissions regulation. So this wasn’t an investment done to create a return. There is a small benefit to EBITDA. But that’s not – the purpose that was to be able to meet the new emissions regulations.

Steven Chercover

Understood. Well, maybe, without touching the third rail, but, are there any early indications that some environmental regulations are going to become less onerous for you?

John Jacunski

I mean, that’s a question that we’ve been asked more than one occasion with the change of administration. And so, I think it’s too early to tell some of the rhetoric and positioning that you are hearing may suggest more business-friendly environment in terms of regulations, taxes and other things. So, I think there is – it’s a wait and see, but encouraging, narratives and dialogues coming from Washington DC, but we’ll see.

Steven Chercover

All right. Thank you both.

Operator

There are currently no more questions. And at this time, I would like to hand the call back over to Dante for any closing remarks.

Dante Parrini

Okay, well, thank you for joining us on our call today and we look forward to speaking with you next quarter. Have a great day.

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