American Vanguard Company (NYSE:AVD) Q1 2024 Outcomes Convention Name Might 9, 2024 4:15 PM ET
Firm Members
Anthony Younger – Director of IR
Eric Wintemute – Chairman and CEO
David Johnson – CFO
Bob Trogele – COO
Tim Donnelly – Chief Info Officer
Don Gualdoni – Chief Transformation Officer
Convention Name Members
Scott Fortune – ROTH MKM
Chris Kapsch – Loop Capital Markets
Operator
Greetings, and welcome to the American Vanguard First Quarter 2024 Earnings Convention Name and Webcast [Operator Instructions]. As a reminder, this convention is being recorded. It’s now my pleasure to introduce your host, Anthony Younger, Director of Investor Relations. Thanks. You could start.
Anthony Younger
Thanks, Jessie, and welcome, everybody, to American Vanguard’s first quarter 2024 earnings assessment. Our audio system as we speak can be our Chairman and CEO, Eric Wintemute; and our CFO, David Johnson. Additionally becoming a member of us to reply your questions can be our Chief Working Officer, Bob Trogele; our Chief Info Officer, Tim Donnelly; and our Chief Transformation Officer, Don Gualdoni. Earlier than starting the presentation, let’s take a second for our cautionary reminder. The corporate every now and then could focus on forward-looking data. Aside from the historic data contained on this launch, all forward-looking statements are estimates by the corporate’s administration and are topic to varied dangers and uncertainties which will trigger outcomes to vary from administration’s present expectations. Such elements embody climate circumstances, adjustments in regulatory coverage and different dangers as detailed every now and then within the firm’s SEC experiences and filings. All forward-looking statements, if any, on this launch current the corporate’s judgment as of the date of this launch. With that, I’ll flip the decision over to Eric.
Eric Wintemute
Thanks, Anthony. Howdy, everybody, and welcome to American Vanguard’s first quarter 2024 earnings name. We admire your continued assist and curiosity. As you’ll word from Slide 4, I can be masking 4 subjects as we speak. Our Q1 ’24 monetary efficiency, present market circumstances, our ’24 outlook and our transformation efforts. Shifting to Slide 5 on Q1 efficiency. We recorded a 35% soar in adjusted EBITDA throughout the interval. As well as, our working revenue rose by 87%. This enchancment in working leverage is proof that the associated fee management initiatives that we have now began within the second half of ’23 are having their desired impact. As I’ve talked about in prior calls, our cross-functional groups stay centered on controlling bills whereas maximizing operational effectivity. In that vein, we recorded decrease working bills as a % of web gross sales whereas rising gross sales by 8%. Additional, all three of our companies grew throughout the quarter. Inside our consolidated gross sales outcomes, US crop was up 9%, US non-crop, 28% and Worldwide 2%.
Now let’s flip to our gross sales throughout Q1 as per Slide 6. In US crop, we skilled robust outcomes throughout a number of crops. Gross sales of our granular soil pesticides rose, which is indicative of continued robust demand from corn growers. Additional, we skilled robust gross sales of our liquid corn soil insecticide index. Equally, herbicides rose throughout the interval, due partly to Dacthal which was not obtainable final 12 months resulting from provide points. Additionally, Thimet gross sales rose with demand pushed by elevated peanut acreage. These will increase had been partially offset by a drop in soil fumigant gross sales as moist circumstances within the Northwest truncated the applying window. Inside US non-crop, our mosquito adulticide gross sales had been up in anticipation of stronger-than-normal tropical storm exercise. Additionally, our gross sales of pest strips had been up considerably as shopper and technical markets recovered from the prior 12 months. As well as, our decorative and nursery enterprise, OHP, recorded stronger gross sales led by its biorational and pre-emergent product strains. Our Worldwide enterprise was up barely on the high line led by Mexico, the place most product strains grew and APAC aided by favorable climate circumstances in Australia. Our LATAM enterprise was about even for the quarter with the addition of gross sales from our lately acquired enterprise in Ecuador, partially offset by generic strain in Central America. All advised then, all three of our companies demonstrated improved efficiency and on a consolidated foundation, we proceed to develop. Earlier than transferring on to present market circumstances and our ’24 outlook and particulars on transformation, I want to flip the decision over to David for his monetary evaluation. David?
David Johnson
Thanks, Eric. I’ll start my feedback with a recap of our first quarter 2024 efficiency throughout the course of which I’ll current necessary metrics for the interval and we’ll shut with feedback on working capital. As you will note from Slide 8, our total gross sales for the primary Three months of 2024 elevated by about 8% from $125 million to $135 million for the explanations that Eric has already outlined. It’s value repeating right here that each one Three of our companies, US crop up 9%; US Non-crop up 28%; and Worldwide up 2%, grew on the web gross sales line. Turning to Slide 9. Whereas gross sales had been up 8% total, gross margin {dollars} improved by 10%, pushed by stronger gross sales of a few of our higher-margin pesticides and herbicides and the robust manufacturing facility efficiency. General, worth quantity actions, mixture of gross sales and manufacturing facility efficiency resulted in gross margin that improved barely from 30.8% to 31.4% of gross sales. As you may see on Slide 10, our working bills within the first quarter of 2024 edged as much as $36.Three million from $35.Three million in the identical interval of 2023. This improve was pushed primarily by our spending of $1.2 million on growing our digital and enterprise transformation plans. We plan to spend extra within the subsequent few quarters to spend money on the long-term way forward for our enterprise by implementing initiatives to attain substantial enchancment in enterprise efficiency. We’ll see some preliminary enhancements in 2024 which can be anticipated to be largely offset by transformation spending after which primarily benefiting 2025 earnings and past.
As well as, we had will increase on the whole and administrative bills associated to international alternate, audit prices, long-term and short-term incentive compensation and investments in initiatives to enhance each our data expertise techniques and our human assets infrastructure. These value will increase had been offset by value management efforts in promoting, regulatory, product improvement and R&D. With respect to money stream, as per Slide 11, the corporate has a pronounced annual cycle of constructing stock initially of the calendar 12 months in an effort to gas world gross sales, notably throughout the second and third quarters. It’s common for working capital to increase within the first quarter and Q1 2024 is just about in step with the identical interval of the prior 12 months. We use our revolver debt to fund working capital growth initially of the 12 months and pay down as swiftly as doable because the money cycle completes often later within the 12 months. Now we have been fastidiously managing the stock construct as we monitor business demand tendencies. On the finish of the quarter, we had $13.7 million in money as in comparison with $19.6 million this time final 12 months. This enchancment in decreased quantities of money held in an effort to pay down debt is a results of vital effort on the finish of the quarter to drag money again to the company middle to scale back debt and curiosity bills as a lot as doable.
Taking a look at our assertion of operations on Slide 12, you’ll word that our gross sales grew by 8%. Our gross revenue elevated by 10% and our working bills elevated by solely 3%. These elements collectively generated vital enchancment in working leverage, with working revenue up 87% over the identical interval of 2023. Moreover, the truthful worth of our fairness instrument improved throughout the quarter. Consequently, revenue earlier than curiosity and tax improved by 107%. Our rate of interest elevated from 6.8% final 12 months to eight.3% this 12 months, primarily associated to actions within the Fed price, but in addition on account of the present modifications we have now with our bankers. That features extra flexibility on leverage and stuck cost protection ratios, however provides about 0.5% of rate of interest. On the identical time, our borrowings are up on account of our present funding in working capital. As I simply talked about, our enterprise cycle is such that we are going to usually see working capital and consequently debt rising throughout Q1 and Q2, probably leveling to barely up in Q3 after which considerably — vital discount in This fall because the rising cycle for our main markets completes its personal annual cycle. Our tax price is increased this quarter, primarily on account of the truth that our entities in Brazil made losses within the first quarter of 2024. Due to Brazil’s previous enterprise efficiency, US GAAP doesn’t presently allow us to take the profit on tax expense that will usually be obtainable. On account of the elevated curiosity expense and the adjustments in year-over-year tax expense, our web revenue is down barely, though our working efficiency and consequently, adjusted EBITDA was up considerably.
Turning now to working capital on Slide 13. You will note our stock tendencies on a quarterly foundation for the final a number of quarters. Whereas stock grew on an absolute foundation in Q1 2024 as in comparison with Q1 2023, you may see that the rise since 12/31/23 is definitely decrease than in 2024 than in 2023. Additional, 39% of web gross sales are funding in stock much like the extent right now final 12 months. And although we want to see this stability come down extra shortly, it’s one thing we have to handle fastidiously down, making certain that we have now the appropriate stability of merchandise in stock to fulfill buyer wants in a well timed method throughout the 2024 season. Throughout the later a part of the 12 months, we plan to maneuver stock ranges down with the intention of reaching a 2024 year-end goal of round 34% of web gross sales. That sums up my detailed feedback. On the entire, the primary quarter of 2024 confirmed enchancment compared to the identical interval of 2023 by way of each working revenue and adjusted EBITDA. The corporate has launched into an thrilling section of transformation and is managing to spend money on a significant initiative and nonetheless return a worthwhile consequence. And as such, I am fairly happy with the progress we’re making on this regard. This initiative can be critically necessary to the enterprise within the latter a part of 2024 and into 2025 and past. With that, I flip the decision again to Eric. Eric?
Eric Wintemute
Thanks, David. As per Slide 14, on information of an enhancing US financial system, the Fed appears to have shifted away from making rate of interest hikes and is now debating whether or not to chop or maintain these charges. As well as, the U.S. greenback has begun to strengthen over foreign currency echange. Whereas serving to customers with buying energy over foreign-made items, the robust greenback, when coupled with excessive grain stock shares has served to suppress commodity costs in comparison with 2023. Nonetheless, at the same time as present corn and soybean costs at present ranges, farming nonetheless stays a worthwhile enterprise. Additional, whereas nonetheless observing conservatism and shopping for crop inputs, our distribution companions have relaxed their stringent destocking method from final 12 months, a minimum of with respect to our portfolio. Briefly, the farm financial system is robust and we anticipate steady albeit extra deliberate shopping for exercise. The identical is true of the non-crop market, the place we’re seeing additional normalization of procurement patterns by retail {and professional} clients.
Now let’s flip to Slide 15 on our 2024 full 12 months outlook. Whereas market circumstances stay steady, there’s one issue involving our herbicide Dacthal that causes us to regulate our earlier full 12 months targets. In the middle of routine registration assessment, US EPA has expressed concern over potential well being problems with this product. Accordingly, out of abundance of warning, the corporate has voluntarily suspended gross sales of Dacthal and submitted a considerably slender product label to the company that we imagine addresses their issues. Now we have dedicated to sustaining that suspension of gross sales pending UPH assessment and potential approval of that new label. The result of the company’s assessment is unsure at current, however we’re factoring the lack of Dacthal gross sales into our ’24 forecast numbers. Accordingly, our full 12 months ’24 targets are as follows: we anticipate subsequent gross sales to extend between 6% and 9% as in comparison with ’23, whereas adjusted EBITDA can be throughout the vary of $60 million to $70 million. The midpoint of this vary can be a 16% — I am sorry, a 19% improve over ’23 adjusted EBITDA. Additional, at that midpoint, our inventory is presently buying and selling at a reduction of practically 50%, assuming a regular valuation metric of 10x EBITDA.
Let me flip subsequent to our transformation initiatives as per Slide 16. On the digital slide, we’re working with QAD not solely to improve their present — to their present adaptive world ERP system, but in addition to standardize our enterprise processes. On the finish of this initiative, then, all segments can be following the identical processes utilizing the identical set of instruments and drawing from one supply of instrument. This can give senior administration a transparent granular view into our enterprise operations and each improve our potential to make real-time choices and to plan and forecast with larger accuracy. On the structural transformation facet, we’re transferring shortly, with what we name Challenge Accelerator. Working with shoppers’ group over the following 16 weeks, we’ll be doing deep degree evaluation and several other sub initiatives in parallel. Throughout the business realm, we are going to concentrate on our gross sales and advertising technique, pricing and product combine. Inside operation, we are going to do deep dives into materials sourcing, logistics and manufacturing productiveness. Inside G&A, we are going to choose and refine a company design that finest helps our future marketing strategy in addition to be sure that these many efforts are managed by means of a correctly resourced transformation workplace. This broad initiative will generate EBITDA advantages by means of a spread of outcomes, together with decreased prices, improved efficiencies, emphasis on higher-margin merchandise and higher outlined roles and tasks. As I’ve acknowledged in our final name, we’re assured that we are going to acquire a minimum of $15 million of annualized adjusted EBITDA by 2026 by means of this funding.
In closing, throughout the quarter, we navigated our enterprise by means of complicated markets whereas enhancing working efficiencies and rising gross sales. Additional, the ’24 market circumstances are steady and I’d argue, stronger than 2023. These circumstances will serve to generate demand for our merchandise and allow us to enhance our stock and dealing capital positions. As well as, having begun transformation initiatives in earnest, we’re poised to generate even larger working leverage. Briefly, we see promising alternatives for progress and are taking robust measures to make sure that we’re positioned to capitalize upon them. So with that, I will flip that again to you, Jessie. Thanks.
Query-and-Reply Session
Operator
[Operator Instructions] Our first query is coming from the road of Scott Fortune with ROTH MKM.
Scott Fortune
Simply need to observe up concerning transformation technique. Good to see that that is beginning to be carried out right here. It seems like that can actually come by means of for many of the 12 months. However I heard you say in your feedback that any value financial savings for 2024 right here can be offset by a few of the bills to that. So actually form of factoring in additional of a 2025 to anticipate that that $15 million in efficiencies, ’25, ’26 going ahead right here. Simply need a clarification on that from the operations standpoint?
Eric Wintemute
Sure, Scott, that is true. So we do have value to implement and undergo this deep dive that we’re going by means of an implementation proper now. We hope to have — we’ll have some profit definitely this 12 months. However as I mentioned, we’re projecting that it’ll overshadow the quantity of transformation. However as we go into ’25, many of the heavy lifting can be accomplished and we’ll begin seeing getting that $15 million of improved precise EBITDA.
Scott Fortune
After which simply following up in your outlook. Clearly, bringing it right down to the 6% to 9% from the 8% to 12% that gross sales facet of it. Simply form of step us by means of, Dacthal was simply getting again available on the market from that standpoint. This type of the scale of that from a form of a income standpoint that is driving that down slightly bit? And are there different elements in that gross sales of 6% to 9% exterior of Dacthal? After which simply any coloration for timing from a historic standpoint form of as you reregister this by means of the EPA, I do know that is form of unknown, however your sense of timing for Dacthal coming again on…
Eric Wintemute
So we submitted the revised label this week. It’s a pretty restricted label. We anticipate EPA to reply pretty shortly. We have been in robust negotiations and discussions with EPA now for effectively over a 12 months and we predict we have form of reached the place we’ll be. After which we mentioned pathways of further data and information that will probably allow us to get again a minimum of a few of the market that we’re not going to have definitely within the short-term. So the timing of that, some items could also be comparatively fast, however others may very well be in that one to 3 12 months time line relying on the scope of the research after which the timing for assessment. So far as scope, that is a couple of $15 million product. And we had about one third of that within the first quarter. And so what we have accomplished is we have simply made the belief we’re not going to promote something extra for the stability of the 12 months and we’ll issue that — we’ll have a a lot clearer image of what ’25 goes to appear to be quickly, definitely earlier than we provide you with ’25 numbers. And if something had been to alter for ’24, we might definitely regulate it. However at this level, we’re not anticipating something materials right here within the stability of the 12 months. So far as…
Scott Fortune
Comply with-up on that — so far as popping out of the registration course of, does that place us even stronger to form of be an even bigger marketplace for you or how do you have a look at that when you get by means of the method right here for the competitors and the chance for Dacthal?
Eric Wintemute
Effectively, Dacthal was rising properly for us. It is a very, very area of interest herbicide form of for chilly crops and onions. I do not assume we see going again into the onion market with the chilly crops. And so sure, we have no assurance that we’ll get again any vital quantity of that. However we actually need to form of wait and see. Once more, this has been an extended course of. We have been discussing with EPA, had an excellent name this week, however we’re ready to listen to again from them their evaluation of what we simply submitted.
Scott Fortune
After which one final one for me. Any updates on form of — I do know the expansion form of merchandise for you, particularly Inexperienced Options, we have seen a variety of generic strain from China in that house, particularly impacting Latin America. However the progress that you have seen for this 12 months and anticipate in ’24, are you able to form of spotlight the Inexperienced Options facet and the continued product adoption out of your standpoint?
Eric Wintemute
So Inexperienced Options had been up 14% this quarter. And many of the areas had progress. And in order that appears to be going effectively. Now we have further alternatives for product growth as we proceed to have firms coming to us and saying, hey, along with your market entry, would you form of distribute this product and that product? So various firms there. We did enroll on a precision plant, a protein known as [Herpen] for the Chinese language market. I am undecided how huge that can be. However it is a product that has been round for fairly some time. I do know had it at one time. However sure, we see good progress in that phase as adoption for inexperienced merchandise continues to construct. In order that’s form of the piece on Inexperienced Options.
Operator
Our subsequent query is coming from the road of Chris Kapsch with Loop Capital Markets.
Chris Kapsch
Sure, I’ve a pair. Simply as a follow-up on the Dacthal dialogue. Eric, if I keep in mind appropriately, was this the product that you simply talked about you’ve got been in discussions with the company for over a 12 months. If I keep in mind appropriately, that additionally manifested in disruption to your sourcing the AI for this explicit product. And I believed that the end result of that was that you simply got here to a decision. So it is slightly stunning to listen to this cautious stance in reregistration now. I am simply questioning what are the dangers related to getting this to a positive end result? And the way are you managing that?
Eric Wintemute
Sure. So two completely different points. One was provide and we did not have provide for a 12 months. And in order that we have now resolved and we have now really two provide sources. So the provision facet was definitely taken care of. On the reregistration course of, a distinct path with EPA. And we’re not essentially in settlement on their evaluation. However slightly than push that additional with them, we went so far as we predict we are able to go for proper now and we imagine we have submitted a revised label that they need to settle for, however that can be definitely a discount of the market that we have had. So so far as — sure, the timing is form of as I anticipated, we have completely different phases of items that we want to reinstate and first piece, as I discussed, I feel can be comparatively quick. The following two form of run between one and two years after which possibly between two and three. And I am undecided that we’ll wind up doing all of it. We’ll assess the market and as we get additional data from EPA.
Chris Kapsch
And the prices related to these [Technical Difficulty] research and reregistrations, is that simply type of regular course of enterprise and factored into your R&D spend, your regular R&D spend?
Eric Wintemute
That is appropriate.
Chris Kapsch
After which so simply interested in this 12 months’s type of the temper of the growers and the tendencies within the Midwest. And we got here off of what was described associated to a different firm I observe, as probably the most delicate winter in like 25 years. And so typically when that occurs, there’s the infestation of the bugs is bigger. So I am curious in case you — if there’s any proof that was the case for corn rootworm strain this season? Are you seeing any indications that you would have an uptrend in demand to your [Technical Difficulty] pesticides?
Eric Wintemute
I will let Bob add some coloration, however I will simply say in speaking with my individuals, sure, there are moist circumstances, notably in — so planting at this level is possibly within the 50% vary with the south there, however there’s giant components of the corn and soybean markets that haven’t been planted but. So it’s an prolonged interval. However Bob, your coloration?
Bob Trogele
I’d say, Chris, the temper has been very cautious by the growers within the Midwest within the U.S. I feel there’s been this previous week, slightly little bit of a pickup within the July corn and soybean pricing, which individuals are locking into that and averaging out higher in the event that they’re doing ahead pricing and contracting. So the strikes picked up. So I feel there’s extra optimism on the market. However you do have pockets proper now the place individuals had been planting — somebody advised me this morning, a grower advised me, it was like April 16th, he had about 90% of his planting accomplished. And since then, he hasn’t been capable of get again within the subject as a result of it has been moist. So 10% to go. That is an extended window of not — of cease and go. So it is slightly little bit of that, however that is novel for the ag markets, climate is climate.
Eric Wintemute
With regard to the corn rootworm pressures. So Aztec, underneath a point of counter in power, are primarily utilized in that heavier strain corn rootworm space. We have not actually participated within the form of delicate to mid-corn rootworm strain. However we have now a brand new merchandise that we put out a few years in the past, however we simply have not had sufficient materials. We make it internally, however demand has gone sooner than we have been capable of produce. However we had good manufacturing and gross sales within the first quarter up till — I feel we had been up till April 17 to 18 or no matter we had been promoting product. And we’re constructing stock now for form of the fourth quarter as a result of we do have — we did have a stronger demand than what we had provide. However we’re pondering we are able to form of dramatically improve. And that is, once more, it is a liquid materials. So it form of competes with bifenthrin in that market. And in order that’s an upside for us going ahead. Way more acreage coated are handled for a gentle to medium corn rootworm strain than heavy strain.
Chris Kapsch
After which final query. So your herbicide impression is commonly used type of to enhance a few of the workhorse broad-spectrum herbicides. And simply curious like given what had occurred with the worldwide provide chain and the provision chains with glyphosate globally and the spike in these costs and type of exterior demand for various herbicides, I am curious how that is performed out now that type of every little thing has form of normalized by way of pricing and availability and a few of the money from crop herbicides? After which how that impacts your impression gross sales? And the way does that play out in your steering and expectations this 12 months?
Eric Wintemute
I imply, I feel you recall that herbicides had been form of a glut that costs had been excessive in ’22 and got here down in ’23 and there was a excessive stock and excessive worth on the market, appears to have improved. But when I look — bigger friends, first quarter was not good for them. So I feel there’s in all probability nonetheless some hangover into that herbicide market. We do not have the form of giant bulk scale, though we do have impression with glufosinate as a product. And so sure, once more, impression has been extra a tank combine associate than a principal horse. But it surely seems improved versus final 12 months.
Chris Kapsch
Is there any method to quantify that, the development? Like what’s factored into your outlook on that specific product? After which I will go away at that.
Eric Wintemute
So we had been up about — sure, we had been nearly even to final 12 months. I feel we had good fourth quarter gross sales versus the prior 12 months. It seems like we’re about even within the first quarter. After which second quarter seems — sure, second quarter seems significantly stronger than final 12 months’s second quarter.
Operator
[Operator Instructions] Our subsequent query comes from the road of [Andrew Lester] with [Harley Capital].
Unidentified Analyst
If I am studying it appropriately, and forgive me if I am off by this, 18 months in the past or 24 months in the past, you sounded very optimistic. You laid out some thrilling time strains and knowledge. And even within the final 12 months or so once more, you sounded very clear on methods to reinforce worth to board refreshers, all types of issues that we’re pointing to as milestones to result in considerably higher outcomes. However after I hearken to you as we speak, you sound very tentative, equivocal and actually unsure and in search of actually a extra vital enchancment with out quantification for like a 12 months from now. Is {that a} truthful learn? Have you ever develop into way more cautious about your prospects?
Eric Wintemute
Effectively, I’d say that we’re pointing in direction of enchancment with — by means of the transformation course of, however that has an expense of remodeling now it is onetime expense. However sure, as we have talked about earlier than that we have grown by means of acquisitions of firms since 2017 and we didn’t get the advantage of incorporating these the best way we wished to and hampered definitely throughout COVID, however the course of now’s that we put underway is to get all of the techniques on the identical web page in order that we are able to do higher administration and the place we deploy working capital and enhance the standard. And as I mentioned, we’re — our goal right here, I feel we’re possibly 11.5% of EBITDA to gross sales. What we’re wanting by means of this transformation course of is to enhance that EBITDA margin to 15%.
Unidentified Analyst
If I have a look at issues, it is a follow-up, on a type of extra mercenary foundation as a shareholder, I am in all probability down over 40% previously 12 months. How do you assume or when do you anticipate issues to translate into higher fairness efficiency?
Eric Wintemute
Effectively, I feel we’re up slightly over 14% up to now this 12 months. As we talked about final 12 months, we had been hit with two provide points that basically harm us. One was our greatest insecticide and the second was the provision of Dacthal that we talked about. So we have improved the sourcing or the sourcing on each of these. Now we have ample materials of Aztec going ahead. And in order that was actually a success to fourth quarter of ’22 and definitely to the ’23 and we had been unable to fulfill demand. Provide-wise, we’re in a distinct place and we’re again to transferring Aztec and now Index and Pressure and SmartChoice again up into the corn market. So I suppose — I imply, I have a look at what — the place our friends have been discussing. They forecasted downsides in Q1 and that turned out to be the case. We did have enhancements in Q1. And so sure, we have made the forecast primarily based upon the very best that we are able to see at this level.
Operator
[Operator Instructions] Girls and gents, it seems we have now no further questions right now. So I might like to show the ground again over to Mr. Wintemute for any further closing remarks.
Eric Wintemute
Okay. So thanks for — all for listening in as we speak. Slide updates as we have now them, however I suppose the following scheduled time can be our shareholders’ assembly, which I imagine is June 6 or 7. 6, sure. Okay. Thanks and have night. Bye.
Operator
Girls and gents, this does conclude as we speak’s teleconference. We thanks to your participation and it’s possible you’ll disconnect your strains right now.