Falcon Minerals Corp (FLMN) CEO Daniel Herz on Q4 2019 Results - Earnings Call Transcript

Falcon Minerals Corp (FLMN) Q4 2019 Earnings Conference Call March 10, 2020 9:00 AM ET

Company Participants

Daniel Herz - Founder, President and Chief Executive Officer

Bryan Gunderson - Chief Financial Officer

Conference Call Participants

Lee Cooperman - Omega Family Office

Derrick Whitfield - Stifel

Welles Fitzpatrick - SunTrust Robinson Humphrey

Jeffrey Campbell - Tuohy Brothers

Gail Nicholson - Stephens Inc.

Jonathan Evans - SG Capital Management

Operator

Good day, ladies and gentlemen and welcome to the Falcon Minerals Fourth Quarter Earnings Conference Call. All lines have been placed on a listen-only mode and the floor will be open for your questions and comments following the presentation.

At this time, it is my pleasure to turn the floor over to your host for today, Bryan Gunderson, Chief Financial Officer. Sir, the floor is yours.

Bryan Gunderson

Good morning, everyone, and thank you for joining today's call to discuss Falcon Minerals’ fourth quarter 2019 results.

Before we begin, I would like to remind everyone that during this call, we'll make certain forward-looking statements. Forward-looking statements often address our expected future business, financial performance and financial conditions and also contain words like expects, anticipates and similar words or phrases. Forward-looking statements, by their nature, address matters that are uncertain and are subject to certain risks and uncertainties, which can cause actual results to differ materially from those projected in the forward-looking statements. We discussed these risks in the quarterly report on Form 10-Q and our annual report on Form 10-K.

I would also like to caution you not to place undue reliance on these forward-looking statements, which reflects management's analysis only as of the date hereof. The Company undertakes no obligations to publicly update our forward-looking statements or to publicly release the results of any revisions to forward-looking statements that may be made to reflect events or circumstances after the date hereof or reflect the occurrence of unanticipated events.

Additionally, in our earnings release, we have provided a reconciliation to the non-GAAP measures we refer to in our public disclosures such as adjusted EBITDA and pro forma free cash flow.

With that, I'll turn the call over to Falcon’s President and Chief Executive Officer, Daniel Herz, for his remarks. Daniel?

Daniel Herz

Thanks, Bryan. Welcome, everybody, and thank you for joining the Falcon Minerals Corporation Fourth Quarter 2019 Earnings Call. Bryan Gunderson, our Chief Financial Officer, who you just heard from will give the financial report following my remarks and we will then take questions.

As anybody who is familiar with the energy business is very aware our industry is subject to periods of high volatility. We are in such a period now. The entire world is now dealing with a serious, uncertain and rapidly changing situation with respect to COVID-19 and the resulting impact on the economic activity and energy consumption.

Additionally, we are facing supply side issues, following the breakdown of OPEC-Plus late last week. We are certainly impacted by this, but believe that our top tier acreage, the high quality of our operators, the strength of our balance sheet, and our ability to run our business with no capital expenditures required will enable us to get through this difficult period successfully.

The human toll of the Coronavirus is of course even more important than the economic consequences and all of us at Falcon want to express our concern and best wishes for all people personally impacted by COVID-19.

I want to now begin today’s discussion by addressing our company’s strengths, especially in light of the current energy environment. While we are in a challenging period for energy generally, this is exactly when Falcon Minerals should outperform due to the following strengths: one, a strong balance sheet with $42.5 million of debt outstanding at year end; two, over 90% of our net asset value is in mineral rights with the very top operators and those operators, ConocoPhillips, BP Devon and EOG are all executing multi-year development plans across our position; three, significant production growth, which is already online in the first quarter and clear line of sight to even more growth in the second half of 2020; four, high operating margins with no capital expenditures, which generate significant free cash flow; finally, number five, we have been extremely disciplined with our acquisition strategy, because we know how valuable our base business is and do not want to dilute that great business, that great base position with less attractive assets at high valuation.

That discipline is proven to be correct given the significant fall in commodity prices and pullback in activity in other plays. This, very well may afford us opportunities to grow our business in other core areas at much more favorable valuations than have just recently been paid.

Now, I’d like to focus on the details of what will drive our business in 2020 and supports our guidance range of 5,300 to 6,100 barrels of oil equivalent per day or BOE per day. On January 24, 2020, we provided an investor deck that sets forth all of the drivers of our guidance range, including line of sight wells.

One of our biggest advantages at Falcon is that our world-class operators are dedicated to their multi-year development plans. They have maintained seven rigs on average running across our properties in the fourth quarter, the same as the third quarter of 2019 and that has increased, so that they are currently running eight rigs across our position.

Furthermore, we have experienced nearly 100% permit to turn in line conversion ratio over time. That means that when one of our operators permit a well, it is nearly certain they will turn it into line. The key question is the timing of turning that permit into production.

We at Falcon spend a tremendous amount of time analyzing our operators’ historical timing from each phase of development, that is permit, spud it, drill the total depth and complete it and waiting to be turned in line and how long each operator is historically taken from each phase to turn wells in line.

Please note, we have provided a subset of this timing information in our investor deck posted last night. Additionally, we have strong relationships with our operators who often times provide even further insight into the timing. Our operators’ timing from the time they permit until the time they turn wells into line averages from under 200 days to about 300 days.

So, when we announced on January 24th that we had 3.52 net line-of-sight wells and our guidance was solely based on those wells, that implied and included significant conservatism, because given the average time to develop by our operators, it is highly likely even in this environment that we will have additional net wells brought online this year that were not yet permitted at the time.

As we mentioned in our earnings release, we have already had in 2020 1.20 of the 3.52 net wells brought online. Our operators’ size, scale, organizational planning and balance sheets is a major strength of ours and should provide clear differentiation relative to other businesses.

Given the 1.20 net wells turned in line in January and February, we expect in the first quarter of 2020 production growth of greater than 20% from the fourth quarter of 2019. Our Hooks Ranch wells came online on February 7th and favorable initial production has been observed.

Furthermore, given the partial quarter contribution from the Hooks Ranch wells and the fact the second quarter of 2020 will benefit from a full period of production, we currently expect the second quarter to remain at similar levels of production to the first quarter. As exciting is the Hooks wells coming online is, there is even more to come in the second half of 2020.

We noted in our January investor presentation that we expect 2.01 net wells, again that are all line of sight wells to come online in the second half of 2020. Those net wells include a number of high net revenue interest locations including a handful of 10% net revenue interest units that have already begun being drilled.

That should drive even further growth in production in the back half of the year. So, even with the broad energy challenges, we are set up for a solid 2020.

Let’s now move on to how all of this production growth will translate into free cash flow while taking into account the current oil price environment using 2020 strip pricing of approximately $35 per barrel at the midpoint of our guidance range of 5,700 BOE per day, we generate approximately $0.40 of free cash flow per share, that’s at $35 oil, we generate $0.40 of free cash flow per share or a 14.8% free cash flow yield based on yesterday’s trading price.

With respect to the fourth quarter of 2019, we had 73 gross wells and 0.59 net wells turned in line. This resulted in production of 4,027 BOE per day for the quarter, of which approximately 50% was oil. For all of 2019, Falcon had 194 gross wells and 1.54 net wells turned in line which generated full year production of 4,861 BOE per day, which also was 50% oil.

Our four year average net wells turned in line has been 2.60. So, although gross activity remained robust in 2019, we had the bad fortune of lower net revenue interest locations developed. With 3.52 net wells in our line of sight this year, of which 75% have either been turned in line already, or have development activity, we expect to be well above the four year average and over doubled the 2019 net wells turned in line.

Now with respect to our organic acquisition efforts, as I mentioned on the last quarter’s earnings call, we deliberately slowed down our acquisition effort given the clear downward pressure on oil prices and time it takes for sellers to adjust their price expectations. As a result in the third quarter, we did three small acquisitions for a total of approximately $875,000, acquiring seven net, net acres for about $125,000 per net, net acre.

During the fourth quarter, we made seven acquisitions acquiring 18 net net royalty acres for a total of $1.8 million or $100,000 per net net acre.

Now, finally, I will briefly address where we are strategically. Obviously, this is a very challenging environment. We are actively looking at all avenues to stabilize and then reinvigorate our stock price. We remain first and foremost firmly committed to maintaining a strong balance sheet and we’ll continue to benefit from our positive cash flowing business.

As always, we will be monitoring all aspects of our business and the market on a daily basis and update you as appropriate.

With that, I will turn the call over to Bryan Gunderson for the financial report. Bryan?

Bryan Gunderson

Thanks, Daniel. Production for the fourth quarter was 4,027 BOE per day. Our oil volumes were 50% of total production and 58% of total Eagle Ford volumes for the period. Our assets generated $13.1 million in royalty revenue during the period.

Of that $13.1 million in revenue, Falcon returned approximately $11.6 million back to its shareholders through the form of a quarterly dividend paid on March 9th 2020 to shareholders of record on February 25th, 2020, which is inclusive of the amounts paid to non-controlling interests.

80% of dividends paid to Class A shareholders during 2019 were classified as non-dividend distributions and therefore represent a reduction of basis rather than dividend income.

Falcon generates non-dividend distributions due to the company’s high payout ratio, coupled with the increased depletion that results from the step-up in tax basis of Falcon Minerals interest that occurred as part of the transaction with royalty sources in 2018.

Falcon expects a greater than 50% of dividends paid to Class A shareholders during 2020 will be classified as non-dividend distributions in 2020. Again, Falcon’s non-dividend distributions will not constitute taxable dividend income rather they will generally result in a non-taxable reduction to the tax basis of shareholders common stock.

The reduced tax basis will increase shareholders capital gain or decrease their capital loss when they sell their shares. Our net realized price for oil during the fourth quarter was $55.88 per barrel. Our average realized price for natural gas was $2.34 per Mcf and our NGL realizations averaged $16.86 per barrel.

Realized oil prices tightened quarter-over-quarter as we saw positive base in differentials compress during the fourth quarter.

The total cash operating costs were $4.3 million. Looking at the component pieces, ad valorem and production taxes were approximately $1.3 million for the quarter. This is inclusive of $0.6 million increase compared to the prior quarter, largely due to an increase in ad valorem taxes assessed to Falcon compared to estimates. This increase was partially offset by a decrease in production taxes tied to lower production.

Marketing and transportation expense was approximately $0.5 million for the quarter. Cash G&A expense was approximately $2.5 million for the fourth quarter. This cash G&A excludes approximately $0.7 million of non-cash stock compensation expense recognized in the period. The increase from prior quarter was due primarily to an increase in professional fees associated with the annual audit.

Adjusted EBITDA for the fourth quarter was $8.9 million. Falcon's fourth quarter GAAP net income was $2.3 million on a standalone basis, and $4.4 million including non-controlling interests. GAAP income tax expense was zero for the quarter due to a step-up in basis in our assets that Falcon recognized as part of the transaction with Royal Resources in 2018.

Our effective tax rate is approximately 0% for the fourth quarter versus a federal income tax rate of 21%. We expect to benefit from this increased depletion allowance for at least several years in the future.

At the end of the fourth quarter, Falcon had $42.5 million outstanding on its revolving credit facility and $2.5 million of cash-on-hand, resulting in a total liquidity of approximately $50 million at the end of the fourth quarter. Our net debt-to-LTM EBITDA ratio as of the end of the fourth quarter was 0.76x.

The company paid a fourth quarter dividend of $0.135 per share. Pro forma free cash flow per share was approximately $0.10 per share for the period. We define pro forma free cash flow as adjusted EBITDA inclusive of non-controlling interests, less interest expense and pro forma cash income taxes.

Our estimate for pro forma free cash flow for the fourth quarter 2019 did not include an estimate for pro forma cash taxes. Falcon's taxable income was minimal due to a decrease in revenue, production and associated depletion.

As Daniel mentioned, we currently expect average daily net production to be in the range of 5,300 to 6,100 BOE for the full year 2020 and we expect oil contribution to be approximately to be 50% to 55% of total production.

With that, I will now turn the call back over to Daniel.

Daniel Herz

Thanks, Bryan. Jetz, why don't we open the call up for questions?

Question-and-Answer Session

Operator

[Operator Instructions] We’ll go first to Lee Cooperman at Omega Family Office.

Lee Cooperman

Yes. Thank you. I just want to make sure I understood that, you said you had a $35 oil back to midpoint of your production guidance should expect a dividend of $0.40. What are you selling oil for currently?

Daniel Herz

Good morning, Lee.

Lee Cooperman

Good morning. Good morning.

Daniel Herz

So, we receive a modest discount to Louisiana light sweet crude, which is a premium to WTI, it’s one of our advantages. But that does put us generally with that discount and where LLS trades, right about where WTI is today. So, call that $33, which certainly, obviously average well above that for the first two months of the first quarter.

Lee Cooperman

Good. Secondly…

Daniel Herz

So, that’s why…

Lee Cooperman

I am sorry, go ahead.

Daniel Herz

No, no, no, go ahead.

Lee Cooperman

So, you, clearly in the last quarter pay out a dividend in excess of your cash flow, the balance sheet started moving in the wrong direction. Normally at this price that’d be boosting you to buy back stock given the unfavorable environment for energy and the uncertainty, I would say, I would focus on improving the balance sheet.

And I would discourage you from paying a distribution in excess of cash flow, I would focus on reducing your debt and keeping liquidity very high. That would be my only observation.

Daniel Herz

Thank you, Lee. I guess, that’s not a question, but I’ll respond anyways and we agree with you at Falcon in maintaining a pristine balance sheet with $42.5 million under one-times leverage, I think we are well positioned. But we’ll continue to improve that as we move forward.

Lee Cooperman

Well, good luck and thank you for your reports.

Daniel Herz

Thank you, Lee.

Operator

We’ll move next to Derrick Whitfield at Stifel.

Daniel Herz

Derrick?

Derrick Whitfield

Yes, hello.

Operator

Yes, your line is open.

Derrick Whitfield

Hello. Can you hear me?

Daniel Herz

Yes.

Derrick Whitfield

All right. Sorry guys. Good morning all. Regarding your comment on potential – the potential addition of line of sight wells for 2020, could you help frame the amount you’d expect to add if operator activity remains static with your comments on Page 5 of the presentation?

Daniel Herz

Yes. So, our – I think, most importantly, our guidance is based solely on our line of sight wells of 3.52 net wells. So, most importantly, everything that we include in our numbers has already been at least permitted. In fact, as I mentioned, 75% of our line of sight wells have been either turned in line already or have existing development activity already, yes, in the first or second week of March of the year.

So, we are well on our way to fully moving through that. We’ve had additional wells permitted since the January 24th release of that and we’ll continue to see those. But most importantly, we – especially given the environment want to remain conservative. And so, basing our forecast of the 3.52 net wells, looking at production in the second quarter as a stable level relative to the first quarter seems pretty clear.

And then, having high NRI wells which will lead to high net wells in the second half where there is already development activity on those locations should really further move into second half of the year and I certainly don’t want to be overly optimistic, but we are positioned pretty well for a solid 2020.

Derrick Whitfield

Sure. That makes sense. It sounds like there could be a little bit of upside in the line of sight forecast. But, as my follow-up perhaps for you Daniel, regarding your M&A comments on growing minerals outside of your focus area, could you elaborate on that comment and share your views on the broader M&A environment if this period of the prices persists for an extended period?

Daniel Herz

Yes. I guess, I wanted to say one other thing that really – again, I appreciate you saying on the previous question that there is upside to that. I think most importantly, what we want to get across is that, our business at Falcon is different than most other businesses given we are in the highest returning basin in the U.S., in the high area of that basin with probably the three best operators in the United States from a balance sheet perspective from an organizational planning perspective and one that has demonstrated over long periods of time, their prosecution of their plays.

So, when oil prices have periods of volatility like we are currently experiencing, we should have continued favorable development across our position. We’ve even seen that through the 2015, 2016 periods with this asset base. But as far as the M&A environment, over – for a long period, you know, and our background has been in acquisitions and consolidating businesses.

We took very conservative approaches. We developed, I think a best-in-class team at Falcon with a very small group of highly capable individuals at this company who are capable of reviewing and evaluating the best assets in the best basins.

We were very deliberate in not moving too quickly because we felt the uncertainty especially in 2019 of the M&A landscape, or of the oil landscape, which we thought would then materialize in more favorable pricing, coupled with the significant assets that have been accumulated by private equity firms in core basins like the Permian.

And so, I think, I mean, I think, we have a very valuable asset in the current trough of the Eagle Ford. We also have, what I think will prove to be a very valuable structure as a publicly traded minerals business and that may position us over time to be a consolidator of minerals in other core areas.

But for now, we are going to as I think Lee was saying focus on our balance sheet, focus on returning capital and then, ultimately reinvigorating our stock price, because we certainly feel undervalued today, given the strengths of our business.

Derrick Whitfield

Understood. That’s helpful. Thanks for your detailed response.

Daniel Herz

Thank you, Derrick.

Operator

We’ll move next to Welles Fitzpatrick at SunTrust.

Welles Fitzpatrick

Hey, good morning.

Daniel Herz

Good morning, Welles.

Welles Fitzpatrick

I mean, you guys hit on this a little bit in the prepared comments, but can you go a little bit deeper on your thoughts on permit the spud conversion in this environment? Obviously, you have some of the best capitalized operators in the business. But are there any kind of preliminary indications? Are there any historical case that is you can kind of point to as to how resilient those permits might be?

Daniel Herz

I love the word resilient. I was thinking about at this morning. I had been thinking about it when I prepared my remarks. I think, I mean, we have spent a lot of time on the data analytics side looking back over the last, almost ten years this asset base has been together. And as I mentioned in my prepared remarks, we have seen nearly a 100% permit to conversion ratio over time.

And so, our studies indicate whether it’s 90%, whether it’s 95%, we see very, very high permit to conversion ratio because often times, and most of the time our operators don’t permit a well until they have clear line of sight on the rig coming on. And so, it’s simply a function of time from permit to spud and then spud to total depth and then total depth to completion and turned in line.

So, I think it’s fair to assume that we may see a push out in timing from our 200 days to 300 days permit to turned in line. But it isn’t about whether we’ll be converting those permits. It’s about the timing of those. And with 75% of our net wells already in line or in development, we are in a very strong position to deliver a solid 2020 even at $35 oil.

Welles Fitzpatrick

Okay. Okay. Now that makes total sense. And then, kind of an odd ball one, but obviously oil is down, but gas is down pretty hard too,, any thoughts to going down if during this dark season for gas?

Daniel Herz

We are going to mind our own shop right now. I think that type of move is not a bad move for others and makes a lot of sense, but for us, right now, we are going to continue to manage expenses down and keep them low. We are going to be very prudent with any acquisitions, if we do any. We are going to mind our balance sheet and I think we are going to benefit from the development activity of our operators.

And I think you’ll see us rewarded over the short-term for that type of activity. And then, we will be – I think proactive in being getting back on track to be a major consolidator of minerals.

Welles Fitzpatrick

Perfect. Perfect. It makes sense. Thanks guys.

Daniel Herz

Thank you.

Operator

We’ll move next to Jeffrey Campbell at Tuohy Brothers.

Jeffrey Campbell

Good morning. Daniel, earlier you provided the suggestion that M&A and other basis might materialize due to the current oil price volatility and the stress it is engendering. With equity pretty beaten up throughout the E&P and minerals space and with your specific priority for balance sheet resilience, I was just wondering what sort of acquisition could be viable in 2020.

Daniel Herz

Yes, I don’t even want to – hey, Jeff. Nice to talk to you. I don’t want to speculate given the – this volatility of the market. It’s not even worth it to guess tomorrow versus today. So, we do as a reminder, have a very strong balance sheet. We are in a very good position with respect to – I mean, every stress case that we have and you all can run.

With respect to our balance sheet, we are just going to continue that strength and continue to develop – benefit from our operators’ development. But I am not going to speculate on what may or may not transpire over the coming months and quarters.

Jeffrey Campbell

Okay. So, we’ll think of that is kind of a high – high-level comment at this time. I was just wondering, and you gave us some color on – in the last – earlier in the fourth quarter, we were told that there were some high NRI wells that were delayed in their timeline. I was just wondering have those things come online and are they performing up to expectations?

Daniel Herz

I am going to let Bryan answer the question. Bryan, please.

Bryan Gunderson

Yes, so, just to give you some color from Q3 to Q4, we have reported 4,825 BOE per day in Q3. Fortunately that was a benefit from a prior period adjustment in Q4, we saw a little bit of a base decline as well, because of the low net well count turned in line in Q3.

Then, obviously the impact from the offset fracs that we outlined in January investor presentation and the timing of the high NRI wells that we laid out in our January investor presentation. The December trajectory has been upward and those are now back operating, so.

Jeffrey Campbell

Okay. So, the point of the high NRI wells, are they performing up to your expectations?

Daniel Herz

Yes, the high NRI wells are back online. In fact, all of those transitory items have subsided and they have subsided as we entered 2020. Thank you, Jeff.

Jeffrey Campbell

Sure. And a last quick one. Is there any further development at Hooks Ranch anticipated during 2020 at this time?

Daniel Herz

Not in any of our numbers, no.

Jeffrey Campbell

Okay. Great. Thank you.

Daniel Herz

Thanks, Jeff.

Operator

[Operator Instructions] We will go next to Gail Nicholson at Stephens.

Gail Nicholson

Hi, good morning guys. In regards to guidance, you guys just based that on the line of sight wells. But I was just curious how you guys are factoring or thinking about potential refrac opportunities and/or EORs across the asset base?

Daniel Herz

Thank you, Gail. Always nice to talk to you. I know, Bryan feels the same way. So, we have not factored into any of our numbers refracs or enhanced oil recovery. We, very much have benefited from refracs on our positions including from ConocoPhillips as they have developed some of our higher NRI locations.

They have refracked. We’ve also experienced that from EOG, all of that is upside to our numbers and we’d like to just benefit from that upside and overachieved.

Gail Nicholson

I like the overachievement. With the volatility in the commodity price environment, have you guys rethought or reconsidered a future hedging strategy at all?

Daniel Herz

It’s a really good question. I thought about it on Saturday and Sunday, but it felt like it might be a little bit post-mature if that’s a word. Yes, it’s something we considered constantly. We have consistently felt given our very low operating expense – low operating expense per barrel providing both the upside as well as the downside is fair to our shareholders.

I have certainly, at these levels, I am not an advocate to hedge even though prices very well may go lower. They probably will go lower. Our balance sheet is solid. We obviously have more than twice as much liquidity as we do draw on.

So we are in fine shape. Our operating expenses are low. We will generate positive free cash flow above, like $10 a barrel. So, the answer is, yes, thought a lot about it. No, not currently contemplating hedging.

Gail Nicholson

Okay, great. Thank you so much.

Daniel Herz

Thanks.

Operator

We’ll go next to Jon Evans at SG Capital.

Jonathan Evans

Again, I am just curious, have you guys thought about making any SG&A cuts et cetera? Some of your brother in that are bigger have made some substantial cuts and I am just curious it doesn’t seem you are going to be able to grow besides organically in the near-term to medium-term, because of the price of the equity. So, any thoughts there?

Daniel Herz

Yes, thanks. Appreciate the question, Jon. And it’s always nice to talk to you, as well and I think Bryan shares that deal.

Bryan Gunderson

Yes.

Daniel Herz

Good. So, the answer is, we are very focused on expenses. We have our eye on some very clear administrative tight costs that we regardless of commodity prices that we want to prune out. We are very different from our brother and with respect to our organizational structure.

And as a reminder, I had the responsibility of reducing staff in running an E&P business, hundreds and hundreds of people, as well as cutting G&A and administrative costs in building Falcon employee-by-employee, we designed this company and have a total of 11 employees dedicated to this business which is half of our next closest competitor or peer who is about 20 or 21.

And about a quarter of another peer of ours who is about the same size and I know, Blackstone Minerals who has obviously much larger and a significant reduction, but they also have a large working interest portfolio and have been buying in 48 states. I know the folks over there are very, very good people and that’s very tough obviously.

But having been through this environment, not just in 2014, 2015, but also 2008, 2009, and then even back in 2000, 2001, we, very, very much designed our company to only have people and really who are doers and be understaffed. But we do had certain administrative costs.

And for example, Mike Downs was pointing out yesterday in our budget and in maybe even our guidance we have an estimated expense for acquisitions and looking at acquisitions legal, engineering, third-party staff, et cetera of almost $0.5 million. We are certainly not spending that. That’s one of the kind of handful of items that we would expect to prune on the G&A side.

Jonathan Evans

Great. Thank you for the answer. I appreciate it.

Daniel Herz

Sure. I hope that provides enough color and move. You can be sure we were committed to running as lean as, as one can possibly run.

Operator

And with no other questions holding, I’ll turn the conference back to management for any additional or closing comments.

Daniel Herz

Thank you. It’s nice to speak to everybody during these challenging periods, we at Falcon wish everybody well. We certainly are satisfied with our business, the strength and stability of our business, how we designed our business to withstand this type of environment and really even be strong through it.

So, I look forward to speaking to you on another day and another period when everybody is doing better. But in the mean time, Bryan, myself and we all at Falcon wish everybody well. We are available to the extent anybody would like to speak any further. So, with that, we’ll speak to you soon.

Operator

Ladies and gentlemen, that will conclude today's call. We thank you for your participation. You may disconnect at this time and have a great day.