Motorcar Parts of America, Inc. (NASDAQ:MPAA) Q4 2022 Earnings Conference Call June 14, 2022 1:00 PM ET
Gary Maier - VP, Corporate Communications and IR
Selwyn Joffe - Chairman, President & CEO
David Lee - CFO
Conference Call Participants
Mike Zabran - Roth Capital
William Dezellem - Tieton Capital Management
Ladies and gentlemen, thank you for standing by. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to Motorcar Parts of America's Fiscal 2022 Fourth Quarter and Yearend Conference Call.
All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator instructions] It is now my pleasure to turn today's call over to Mr. Gary Maier Investor Relations. Sir, please go ahead.
Thank you, Brent. Thanks everyone for joining us. Before I begin the call and I turn it over to Selwyn Joffe, Chairman, President and Chief Executive Officer; and David Lee, the company's Chief Financial Officer, I'd like to remind everyone of the safe harbor statement included in today's press release.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements, including statements made during today's call. Such forward-looking statements are based on the company's current expectations and beliefs concerning future developments and their potential effects on the company. There can be no assurance that future developments affecting the company will be those anticipated by us.
Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve significant risks and uncertainties, some of which are beyond the control of the company and are subject to change based upon various factors. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For a more detailed discussion of some of the ongoing risks and uncertainties of the company's business, I refer you to the various filings with the Securities and Exchange Commission.
With that said, I'd like to begin our call and turn it over to Selwyn for our prepared remarks.
Thank you, Gary. I appreciate everyone joining us today. I hope you're all safe and healthy. As announced this morning, we delivered record net sales of $650.3 million for fiscal 2022, representing a year-over-year increase of 20.3%. We achieved this exceptional growth despite continued global supply chain challenges and the continued COVID environment.
I should also highlight several additional successes during the year. We developed a comprehensive line of brake pads, utilizing an industry-leading formulation and brake rotors,, serving the professional installer market under the company's quality built brand. We secured multi-year new business commitments and opportunities of more than $100 million, primarily across multiple brake-related products.
We have successfully expanded sales through additional product line offerings in Mexico. We completed a multi-year expansion programs of our facilities in Mexico, including completion of the new brake caliper remanufacturing facility. We have added capacity to support anticipated future growth with limited additional CapEx investment.
We extended the maturity date of our credit facility from June, 2023 to May, 2026, to enhance our liquidity and capital resources. We secured inventory, which enabled us to support our customers, meet demand and obtain new business, despite worldwide supply chain and logistics challenges.
We secured purchase orders from all major automotive retailers for rotating electrical benchtop testing equipment. We opened an electric vehicle contract testing center in Detroit, Michigan with customer business signed up. We continued a series of prestigious tier one wins for our EV technology with orders from major global automotive, aerospace and research institutions, and equally important, we continued our social responsibility initiatives with plans to launch an agri farm organic food and community program in Mexico and continued our focus on opportunities to enhance our environmental, social and governance practices on a global basis.
All of these accomplishments enable us to resume annual guidance, which at the top range is estimated to reach $700 million in net sales this fiscal year, representing a year-over-year increase of $49.7 million based on our current visibility, notwithstanding potential quarter-to-quarter fluctuation due to timing of orders.
Excluding $13.3 million of core revenue realized in our previous fiscal year, which the company does not expect to -- does not expect in fiscal 2023, net sales are expected to increase between 6.8% and 9.9% in fiscal year 2023. Operating income is expected to be between $57 million and $61 million before the non-economic, non-cash foreign exchange impact of lease liabilities and forward contracts, the non-economic non-cash impact of revaluation of cores on customer shelves and supply chain disruptions and costs related to COVID 19. We estimate other non-cash items will be approximately $21 million, including core and finished goods, premium amortization and share-based compensation and cash expenses will be approximately $2 million for special electric vehicle related research and development expenses, impacting operating income. Depreciation and amortization are estimated to be approximately $13 million.
In summary, operating income before the impact of the non-cash and cash items and before depreciation and amortization, as previously mentioned is expected to be between $93 million and $97 million.
Let me provide some additional commentary about the company's progress. We are particularly focused on meaningful opportunities to enhance gross profit on an annual basis, which would leverage our fixed costs. We also expect to benefit from the company's now completed multi-year investment program to support our expansion, particularly our state of the art global production and distribution capacity.
In short, we have successfully built upon our history and industry reputation and expanded our product line offerings from a single category of rotating electrical to offering multiple non-discretionary products with an particularly important focus on brake-related applications. These products have different gross margin profiles that will impact overall gross margins, but we expect to enhance gross profit as we leverage our overhead levels.
I should note that we have been in a ramp up mode for brake-related products as should be expected -- as should be -- as I should note, there has been a ramp up mode for brake-related products as should be expected in newly launched products. We expect gross profit and margins will be enhanced as this business matures. Equally important, we expect to grow our product lines without substantially increasing your overhead.
In summary, new and existing custom expansion across all of our product lines is continuing. Brake related product categories are gaining momentum and being further enhanced by the recent launch of brake pads and rotors. The underlying fundamentals of the aftermarket parts industry are vibrant, supported by an average vehicle age now exceeding 12 years resulting in increased demand for replacement parts. Demand is strong and we are a valued partner to our customers from a product quality and supply standpoint.
Our electric vehicle diagnostic testing subsidiaries continues to gain traction. I should mention we are well positioned to address both internal combustion engine market and the emerging electric vehicle market with product functionality and applications across both markets. That said, industry observers expect continued growth demand for combustion engine application for decades and we offer a broad line of non-discretionary aftermarket parts necessary to serve the internal combustion engine car population, which is approximately 280 plus million vehicles.
At the same time, applications and services also offer significant opportunities to address the emerging electric vehicle market. As this EV market continues to gain momentum, we will not only benefit from our non-discretionary product offerings, but also from increasing demand for battery powered emulation, testing and development of inverters, electric motors and high speed battery charging station applications, offered by EV subsidiary.
As I mentioned on previous calls and highlighted earlier, our benchtop testers for alternators and starters continue to roll out at more than 15,000 retail customer store locations. These benchtop testers enable retailers to offer accurate advice with the latest protocols to diagnose problems for consumers and reduce unnecessary returns. This provides a value added benefit for the retailer, while strengthening their consumer relationships.
The global automotive [tested] (ph) market is also very large at approximately $5.4 billion, and we remain enthusiastic about our growth opportunities in this market. Notwithstanding the challenges facing the aftermarket industry in the near term supply chain, freight, raw materials and other pandemic-related headwinds, we are working hard every day to mitigate these challenges. Our global team is working in collaboration with our suppliers and logistic providers, and we are passing through price increases and freight surcharges to our customers, which we believe are necessary and not unreasonable. David will elaborate in more detail shortly.
I will now turn the call over to David to review our results in greater detail.
Thank you, Selwyn and good morning, everyone. I would like to encourage everyone to read the earnings press release filed as an 8-K earlier today. It contains more detailed explanations of our results, including our full fiscal year results. On this call today, I will review both our fiscal fourth quarter together with the full fiscal year.
Before I get into details, I would like to emphasize that our quarterly results are not indicative of our year-over-year potential. As we have stated on previous calls, it is not unusual to experience quarter to quarter fluctuations due to timing of orders. We also continue to experience extraordinary global supply chain challenges and inflationary cost pressures, while our price increases were not fully in effect. And we made strategic inventory investments to support business growth and mitigate supply chain challenges. Net sales for the quarter were $163.9 million compared with $168.1 million for the prior year period. However, for the full fiscal year, net sales, as Selwyn mentioned increased 20.3% to a record $650.3 million from $540.8 million a year earlier.
Gross profit for the quarter was $25.8 million compared with $32.1 million a year earlier. Again for the full fiscal year, gross profit increased to $117.9 million from $109.5 million a year earlier. Gross profit for the quarter was impacted by non-cash items as well as cash items. Let me provide details for each and then I will provide further details on the impact on each additional line item, so you can accurately understand the underlying fundamentals between periods and appreciate our optimism as a new fiscal year evolves.
The non-cash items reflect core and finished good premium amortization and revaluation of cores on customer shelves, which are unique to certain of our products and required by GAAP. The total for these non-cash items in the quarter was approximately $4.1 million. A more detailed explanation of core accounting is available on our website and I would encourage anyone with questions about this topic to review the video.
In terms of the cash items, let's begin with Malaysia. The shutdown of the country by the government due to COVID and then the slow reopening impacted our facility and our regional network of key suppliers. In response, we quickly moved to outsource certain products in China, but these products were unfortunately subject to 25% tariffs.
These territory disruptions in the supply chain, as well as timing of shipments are being reduced as we ran back up the Malaysia and our suppliers recover. As a reminder, one of the benefits of production in Malaysia is low tariffs. So return to production at our facility in this country results in fairly immediate relief on tariffs.
Next we incurred higher freight costs that were in excess of the customer freight surcharges that we already implemented. We have taken swift action to implement additional freight surcharges and further price increases to mitigate this impact going forward.
These are expectedly further in effect in the fiscal first quarter, ending June 30, 2022, and should offset more of the higher freight cost being incurred based on current rates. Freight costs have stabilized for the time being, but we continue to monitor the situation closely. The total cash impact of these transitory cost pressures related to supply chain disruptions on gross profit was $3.3 million as referenced in Exhibit Three of this morning's earnings press release.
Before moving on, I should note that there were no ramp up and transition expenses related to our Mexico expansion this quarter, nor the third quarter, compared with $4.8 million in a prior year fourth quarter. We're pleased that breakout of production is increasing nicely.
Reported fiscal fourth quarter gross profit as a percentage of net sales was 15.7% compared with 19.1% a year earlier. Reported gross margin was impacted by 2.5% from the previously mentioned non-cash items as well as 2% from the previously mentioned cash items from transitory cost pressures related to supply chain disruptions.
In addition, gross profit, as would expect was further impacted by three key items. First we experienced inflationary costs related to raw materials and supplies and offshore wage increases. The price increases I mentioned a moment ago should help offset these price pressures. Second, we experienced ramp up costs related to our growth initiatives for the new breakout for product line, with price increases and the ramp up. For our new business opportunities, we expect enhanced gross margins. Finally, gross margin was impacted by product mix.
Moving on, operating expenses were $21 million compared with $26.6 million for the prior year period. The decrease was primarily due to a non-cash gain of $3.4 million for mark-to-market foreign exchange impact of lease liabilities and voter contracts compared with a non-cash loss of $3.7 million for the prior year fourth quarter. The remaining $1.5 million increase was primarily due to increased share-based compensation, commissioned travel and outside services expenses.
Reported net loss was $332,000 or $0.02 per share. I should emphasize that results were impacted by items that totaled $5.1 million or $0.27 per share. This includes non-cash items totalling $1.9 million or $0.10 cents per share, and primarily transitory cost pressures related to supply chain disruptions, totaling $3.2 million or $0.17 per share. I should also note that reported net loss reflects $4 million in interest spent compared with a $3.7 million for last year, primarily due to higher interest rates on the accounts receivable discount programs offered by our customers and higher borrowings.
Additionally, there was $1 million in interest income tax expense compared with $939,000 in the prior year period. Reported net loss in the quarter compares with net income of $835,000 or $0.04 per diluted share in the year-ago period. Results for the prior period were impacted by a total of $13.7 million or $0.70 per diluted share. This includes the non-cash items totaling $6.9 million or $0.35 per diluted share and cash items totalling $6.8 million or $0.35 per diluted share, primarily related to brake caliber or start-up costs and other product relocation expenses related to expansion in Mexico and corporate related expenses.
EBITDA for the fourth quarter was $8 million. EBITDA was impacted by $2.5 million of non-cash items as well as $4.3 million in cash items, primarily due to the transitory cost pressures related to supply chain disruptions. EBITDA before the impact of non-cash and cash items mentioned above was $14.8 million for the fourth quarter. EBITDA for the prior year fourth quarter was $8.5 million. EBITDA was impacted by $9.2 million of non-cash items as well as $8.8 million of cash expenses, primarily related to brake caliber startup costs and another product relocation expenses related to the expansion in Mexico. EBITDA before the impact of non-cash and cash items mentioned above was $26.6 million for the prior year fourth quarter.
It is important to recognize that we experienced a particularly strong nine month period. So the fourth quarter is not indicative of our year-over-year performance or our positive outlook.
Now let me discuss the full fiscal year results. Next sales has increased 20.3% to a record of $650.3 million from $540.8 million a year earlier. Net sales included $13.3 million in core revenue compared with $12.8 million in the prior year period, due to a realignment of inventory at customer distribution centers with expected future sales benefits as product mix changes. Gross profit for fiscal '22 was $117.9 million compared with $109.5 million a year earlier.
Gross profit as a percentage of net sales for fiscal '22 was 18.1% compared with 20.2% a year earlier. Gross margin for fiscal '22 was impacted by 2.6% of non-cash items and 2.8% primarily by transitory supply chain destruction as detailed in Exhibit 4 in this morning's earnings press release. Net income for fiscal '22 was $7.4 million or $0.38 per diluted share, compared with net income of $21.5 million or $1.11 per diluted share a year ago.
It is important to appreciate the impact of non-cash items on our business, primarily due to the foreign exchange impact of lease liabilities for our Mexico operations and forward contracts, which are non-economic and beyond our control. For example, for the prior fiscal year 2021, the foreign exchange impact of lease liabilities and foreign contracts was a favorable pre-tax gain of $17.6 million, which resulted in a total non-cash favorable impact of only $80,000 or $0.00 per diluted share.
In the current fiscal year '22, there was only a favorable pre-tax gain of $1.7 million from the foreign exchange impact of lease liabilities and forward contracts, which resulted in a total non-cash impact of $16.8 million or $0.86 per share as detailed in Exhibit 2 in this morning's earnings press release. The company also incurred a cash impact of approximately $14.1 million or $0.72 per diluted share for the current year compared with $15 million or $0.77 per diluted share for the prior year as detailed in Exhibit 2 out this morning's earnings press release.
To summarize net income for fiscal '22 before the impact of non-cash and cash items mentioned above was $38.2 million or a $1.95 per diluted share compared with $36.4 million or a $1.88 per diluted share last year. It should be noted that start-up cost relates to Mexico -- expansion in Mexico, primarily brake calipers were realized during the first half of fiscal '22 and no cost occurred during the second half of fiscal '22. I should mention the effective tax rate was impacted in part due to specific foreign jurisdictions from which we did not expect to recognize the benefit of losses. However, we expect these losses will be utilized against the future profits, which will benefit future tax rates.
EBITDA for fiscal '22 was $41.6 million. EBITDA was impacted by $22.3 million of non-cash items as well as $18.5 million in cash items, primarily due to the transitory cost pressures related to supply chain disruptions. EBITDA before the impact of non-cash and cash items mentioned above was $82.5 million for fiscal '22. EBITDA for the prior year fiscal '21 was $57.8 million. EBITDA was impacted by only $107,000 of non-cash net gains as well as $19.4 million in cash items, primarily related to brake caliper startup costs and other product relocation expenses related to the expansion in Mexico. EBITDA before the impact of non-cash and cash items mentioned above was $77.1 million for the prior fiscal 2021.
Now we will move on to cash flow and key corporate items. Net cash used in operating activities during the fourth quarter was $22.7 million versus $16.4 million cash used in operating activities in the prior year period. This reflects working capital requirements to support record sales growth and inventory increases for anticipated business growth, as well as proactive strategic initiatives to address potential supply chain disruption due to the corporate related issues.
We believe these investments in our business will not only mitigate risk, but also spur further growth for the company on a year-over-year basis. Our return on invested capital on a pre-tax basis at the end of fiscal year was 19.0% compared with 19.1% a year earlier. We are continuing to realize the benefits of expanding our Mexican operations and the launch of our new brake categories with expectations of the increased returns from both new and existing product lines as the benefits of our strategic expansion are more fully realized.
And lastly, our net debt at the end of the quarter was approximately $148.7 million while cash and availability on the revolving credit facility was approximately $100 million. For further explanation on the reconciliation of items that impacted results and non-GAAP financial measures, please refer to Exhibit one to five in this morning's earnings press release.
I would now like to open the line for questions.
[Operator instructions] Your first question is from the line of Matt Koranda with ROTH Capital. Your line is open.
Hey guys, it's Mike Zabran on for Matt. Could we just start with a breakdown between rotating electrical brake products and wheel hub revenue for the quarter?
Yes, for the fourth quarter ended March 31, '22, our rotating electrical products were 68% of sales. Wheel hub products 14% of sales, brake-related products were 13% and other products were 5% of sales.
Got it. Helpful. Thank you guys. So in the quarter, certain cash items related to supply chain costs seem to have gotten incrementally better. Can you just elaborate on where specifically we're seeing improvement there?
So overall, as you mentioned, those supply chain disruption costs have decreased. So as further price increases go into effect, we are seeing a smaller impact as you mentioned, sequentially over the prior quarter and we do expect as the further price increases go into effect that those supply chain disruptions, the cost that we identify will continue to come down.
Okay, got it. That's helpful. And so in terms of the revenue guide, it looks really strong and the press release we highlight and expected ramp and growth throughout the year, could you guys just provide some color on what guidance is factoring into product category growth in fiscal '23? Are we assuming kind of similar growth across all products or is the guide giving credit to stronger growth in specific categories?
Look, the newer categories so, as a percentage are going to have much higher growth, the brake related categories are going to have higher growth. We expect growth across the board. I think our guidance is reflecting sales commitments that we have now. So, that we think there's still plenty of opportunity as we go down the road, but I think overall brake-related products will continue to grow significantly as well as all of our other product lines on a more stable basis.
Got it. Okay. That makes sense. Last one for me, any implied EBITDA guide, could you just speak to how and to what degree we're factoring in headwinds into the guide? So headwinds such as higher gas prices, potentially lower vehicle miles traveled in the year and supply chain pressures.
I think we've looked at that and I think that certainly is mitigating what we think could be even incremental growth. We've got high gas prices. Miles driven though is continuing to be fairly strong, but we're going to have to wait and see how that unfolds, but I think the fundamentals of the market with the aging population of cars and the lack of new car availability, people are going to be required to repair their cars and I think regardless of miles driven, we should see some positive growth.
Got it. That's all for me, guys. Thanks.
[Operator instructions] Your next question comes from the line of Bill Dezellem with Tieton Capital. Your line is open.
Thank you. If you'll allow, I have a number of questions. First of all, I would like to get your commentary around the softness that you saw in January and February and what you believe was the cause of that? And conversely discuss the strength that you saw in March, what led to that and to what degree that strength has continued in April, May and year into June?
That's a pretty comprehensive question, Bill. Yeah and we’re so focused on the future. I'll try and sort of recount those months, but we had a soft start certainly to the quarter in that there's been a new sync to update orders and so the first thing is that just because of supply chain challenges and not always related to us, but to be related to other suppliers. So sequencing update orders by our customers changes. So we see some pushback out of the fourth quarter into later months in this current year of some update orders.
The other thing is there was some pretty reported by our customers some extreme rain in some high volume areas and that affected sales, but I can tell you March, I think was the, I think [Indiscernible] probably the biggest month we've ever had in the history of the company. So you're right, March did come back strong and things started to normalize more and demand is –while it is choppy, is continues to be strong.
So, our outlook as we go through this next year, we think is strong, although we are cautious because there's a high degree of uncertainty, just in the world in general, quite frankly. I think recessionary times for us generally could be, I don't want to say good, but we certainly don't suffer like others because of recessionary times. And in some ways it's helpful because these cars stay on the road longer and people have got to perform repairs and the repairs they perform for us and, we have non-discretionary parts.
So you need your brakes to drive your car. You need an alternator, you need a starter and etcetera. So, we are very positive about the future. I think as you know, we think on an EBITDA basis, we are going to be pushing close to $97 million for this fiscal year.
And while there still will be the non-cash fluctuations, which are completely noneconomic with revaluation of leases on our subsidiary, it means absolutely nothing. These are -- the lease has to be in the Mexico subsidiary because of the maquiladora rules and it's a dollar cash lease. So all these currency fluctuations are completely 100% non-economic. The write downs on cores on customer shelves are completely non-economic. Our contracts require that the customer if ever terminates, if they ever terminate us, pay a fixed dollar value for those cores. So those write-downs are completely non cash, non-economics.
So they're -- we think that the amount of economic adjustment should come down dramatically. We're expecting good price increases and so overall, I've sort of overstepped your question a little bit, but I see strong -- I see strong demand because we are gaining share in product lines and I see continued strong demand in the fundamental industry. The average age of the vehicle is growing and repair rates go up as cars get older and guess while fuel prices have gone up, that they affect airfares substantially and so people are driving their cars on vacations, and the alternative is better in driving your vehicle than spending on other means of transportation. So that's our outlook. Hope that answered your question.
No, that is helpful, and how about the strength that you saw in March? Maybe not continuing with record month levels as you said, March was a record March. Have you seen that strength then continue in April, May and here into June, since weather was better and maybe the supply chain is a little less challenging?
Yes. I'm not going to say because the March was an extraordinary March coming off of a very soft January. So they sort of offset each other. All I would say is that the fundamentals are strong right now, and we expect to be in the high end of our guidance. So perhaps even beat it. But we want to be conservative and we want to be -- we want to take into account considerations of where we are.
And actually, let's jump to supply chain. I made a presumption that the supply chain was improving. Maybe I should just ask flat out. Is it improving? Is it worsening? Or is it just really very similar over the last few months?
Well, you saw Shanghai have these enormous shutdowns over the last 2 months, 3 months. And so that really put a hold on the improvement in supply chain. And once Shanghai shuts down, you can't move trucks around, and I mean, quite frankly, I'm not sure what happened. I got to check the outcome.
But over the weekend, Shanghai went through mass testing, and another shutdown over the weekend looking out to see what infection rates were. And it's hard to predict. There are days I would tell you it's improving, and then you have an unexpected Chinese event mostly that affect us pretty dramatically.
The good news for us is that our Malaysian operations are up and running and producing and our dependence on China continues to diminish, and our brake caliper facilities are absorbing more and more production and our dependence gets less and less. Freight is -- for a while seemed to be getting better in terms of availability. And then -- it's very choppy. So I would say, in general, just lots of caution around it right now. Prices are up dramatically on components, and we're pushing them through, and we have no choice.
And speaking of price increases, would you please update us in terms of the timing of when price increases will flow through the P&L, and when your last price increase is expected to be flowing through the P&L?
Yes. We expect more price increases in May. We got pushed back a little bit. They should have been earlier in the quarter. And to be honest with you, there are perpetual price increases going on as we react to the marketplace. And so we'll have price increases going through all the way through August at this point in time. So we don't expect that to stop unfortunately or fortunately. I mean, there is inflation, and there are just costs that have to be passed through to ultimately to the consumer.
And then -- so just for clarity on that. So the -- through August, is that price increases that you will be announcing with your customers or the price increases will be flowing through the P&L starting or ending in August as of what you know today?
As of today, true, we have price increases that have already been notified all the way through August.
And then lastly for now, benchtop testers, is there an opportunity to reduce the return levels as a result of having the benchtop testers? So here's the theory or the spirit of the question, if you will, that your -- these 15,000 retail locations are buying these testers from you, but the advantage is that when a consumer comes into the store, they actually know whether they need a new component or not. And if they do, then that's installed in the vehicle and not brought back to the store and returned because there was a mistake, and that ultimately would lower your costs. Is this a correct line of thinking? And if so, what's the magnitude? How significant is it?
First of all, that's absolutely correct. The magnitude is going to be interesting as we roll them out. I mean, right now, they are testers and they're not the testers that are in place and not capable of testing all the new applications that are out there. The most important thing though for the store -- for the retailer is that they are able to give accurate and trustworthy advice. And so instead of disappointing a customer without solving the problem that the customer is trying to solve, they'll be able to guide that customer more effectively through making the right choice. I do think that costs will come down. It's going to be very hard to quantify, and it's going to take some time before we see that.
There are no further questions at this time. I will now turn the call back over to Mr. Selwyn Joffe.
Okay. Thank you, everybody. And I just want to say, in summary, we are excited about our future. We have reached a strategic inflection point in our transition, and we expect a strong year with opportunities to build on both our top line and our bottom line with our existing product lines.
In closing, I want to thank all our team members for their ongoing commitment and as usual, customer-centric focus on service. During these challenging times, we remain particularly focused on the safety and well-being of our employees, and I'm extremely proud of our team members and our company. And I look forward, and we appreciate your continued support, and I thank you again for joining us on the call, and we look forward to speaking with you when we host our fiscal 2023 first quarter conference call in August, and at future investor conferences. Thanks.
Ladies and gentlemen, thank you for participating. This concludes today's conference call. You may now disconnect.