Newsfilter article unlocker

Hello, and welcome to the Aztec Industries First Quarter 2026 Earnings Call. As a reminder, this conference call is being recorded. It is my pleasure to introduce your host, Steve Anderson, Senior Vice President of Administration and Investor Relations. Mr. Anderson, you may begin. Thank you, and good morning. Joining me on today's call are Yaku Fundamurba, our Chief Executive Officer, and Brian Harris, our Chief Financial Officer. In just a moment, I'll turn the call over to Yaku to provide his comments, then Brian will summarize our financial results. For your convenience, a copy of our press release and presentations have been posted on our website under the Investor Relations tab at www.aztecindustries.com. Turning to slide two, I'll remind you that our discussion this morning may contain forward-looking statements that relate to the future performance of the company, and these statements are intended to qualify for the safe harbor liability established by the Private Securities Litigation Reform Act. Factors that can influence our results are highlighted in today's financial news release, and others are contained in our filings with the U.S. Securities and Exchange Commission. We also refer to various U.S. GAAP and non-GAAP financial measures, which management believes provide useful information to investors. These non-GAP measures have no standardized meaning prescribed by U. S. GAap and are therefore unlikely to be comparable to the calculation of similar measures of other companies. We do not intend these items to be considered in isolation or as a substitute to the related GAAP measures. A reconciliation of GAAP to non-GAAP results are included in our news release in the appendix of our slide presentation. And now, turning to slide three, I will turn the call over to Yaku. Thank you, Steve. Good morning, everyone, and thank you for joining us. On slide four, we highlight our first quarter and trailing 12-month performance. Net sales for the quarter increased 20.3% and stood at approximately $1.47 billion on a trailing 12-month basis from a combination of organic growth and inorganic contributions. Adjusted EBITDA for the quarterly was $30.3 million with an adjusted EBITDAR margin of 7.6%. On a trailing 12-month basis, adjusted EBITDA and adjusted EBIDDA margin were 136 million and 9.2% respectively. Positive free cash flow afford us opportunity to invest in organic and inorganic growth opportunities. And in the first quarter, we generated 32.6 million of free cash floor. Our infrastructure solution segment continues to see healthy demand for asphalt plants and concrete plants, and the outlook remains positive. Challenging markets for forestry and mobile paving equipment persisted. However, we are pleased to see a recent uptick in backlog for these products. The total segment backlog increased $37 million, including $17 million contributed by CWMF, which joined ASTEC on January 1st. The backlog for material solutions increased $110 million, or 87%, from a balance of organic and inorganic contributions. Given the stability of federal funding, healthy state budgets, and incremental business from data centers and onshoring activities, we expect positive multi-year demand for aspect products in both segments. Parts and service sales increased 24 million or 19.7% versus the first quarter prior year and remained at approximately 37% as a percentage of total sales for both periods. Q1 profitability was lower than planned, reflecting a combination of timing effects and near-term cost pressures from tariffs, freight, and sales mix. Overall expenses were also impacted by the ConExpo trade show that occurs once every three years. We are, however, encouraged by increased backlogs in each segment, and we expect better quarters ahead. As such, we are maintaining our full year 2026 adjusted EBITDA guidance range of $170 million to $190 million. On slide five, we reiterate our dedication to creating value for all stakeholders by delivering consistency, profitability, and growth. Driven by our aspect built to connect way of doing business, we create consistency through our constant interaction with customers, execution of our operational excellence initiatives, and the delivery of superior products to our customers. As our historical adjusted EBITDA margin in the middle column shows, we have increased profitability in each of the last three years. Growth provides scale, and scale enhances profitability. We are making strides in growing aftermarket parts and service sales, consummating acquisitions, developing new products, and leveraging the technology and digital connectivity we bring to the market. Our plans to grow are well underway, and we are excited about our future. On slide six, we provide an update on the integration of our most recent acquired companies. On July 1, 2025, we acquired TerraSource, which boasts the flagship brands of Gunlock, Jeffrey Raider, Pennsylvania Crusher, and Elgin. And effective January 1, 2026, we welcomed the dedicated employees of CWMF to the Aztec family. Both organizations are highly respected and our strong culture fits for Aztecs. We are off to a great start. Many integration processes are now complete, including the seamless addition of new employees to our payroll, benefits, and email systems. We have successfully integrated all finance functions and have aligned all sales therapies. Additional implementations completed or in process include product branding and the identification of cross-selling and procurement opportunities. We are also assessing manufacturing optimization and sharing of best practices and product designs. Our joint teams work well together, and we anticipate many benefits in 2026. Please turn to slide 7. As you know, ASTEC is well positioned to capitalize on the robust road construction and aggregate sectors across the United States, where approximately 80% of our revenues are generated. Steady federal funding for U.S. infrastructure provides stability for our customers, and in turn, AStec and our stakeholders. In 2022, Congress passed the Five-Year Infrastructure Bill valued at $347.5 billion. According to the American Road and Transportation Builders Association, 261 billion or 75% of those funds have been allocated as of February 28, 2026. formula funds for highways and bridges have enabled more than 116 and 500 new products across our country. Additionally, the total value of state and local government transportation contract awards was $152.2 billion in 2025, which was up from $132.4 billion in 2024. This was a new record. The existing five-year bill is set to expire on September 30, 2026. The renewal of the bill has bipartisan support. This is evidenced by the stance of key members of the House Transportation and Infrastructure and the Senate Environment and Public Work Committees. Transportation Secretary Sean Duffy summarized it well when he said, It is one of the unique spaces in government where we work together because safety is not a red or blue issue. It's an American issue. Congress has recently finalized transportation funding legislation for the rest of fiscal year 2026 and is focused on passing a timely, comprehensive surface transportation reauthorization bill. Sector developments such as these benefit ASTEC, a company dedicated to the rock-to-road industry. Continued improvements in infrastructure supports ongoing demand for our equipment, parts, and digital solutions. Our strong reputation in aggregates, as well as road and bridge construction, drives steady growth. On slide 8, we show first quarter implied orders and book-to-bill ratios. Organic results exclude the impact of the CWMF acquisition, and orders prior to the first quarter of 2025 exclude the impacts of the TerraSource acquisition. Implied orders of 397 million compared to a strong fourth quarter of 465 million. On a year-over-year basis, implied orders increased $85 million, or 27.2%, from a combination of organic and inorganic contributions. Book-to-bill ratios in each segment exceeded 100%. On slide 9, we are pleased to report that our backlog grew to $549 million, compared to $403 million for the same period in 2025. This was an overall increase of $146 million, or 36%. The backlog in infrastructure solution segment increased 37 million, or 13%, primarily due to increases in asphalt plants, mobile paving, and forestry equipment, and a $17 million contribution from the newly acquired CWNF. Backlog in the material solution segment increased $110 million, or 87% over the same period the prior year, from a combination of legacy and inorganic contributions. To recap, our backlog is the total amount of confirmed orders supported by signed contracts. We are pleased with the order activity in both of our segments. And now, I will turn the call over to our Chief Financial Officer, Brian Harris. Thank you, Jakko, and good morning. I'll now discuss our consolidated results for the first quarter, provide segment-specific details, and review our liquidity and leverage. Our financial performance for the third quarter, and on a trailing 12-month basis, is presented on slide 11. Consolidated net sales for the quarter increased 20.3% compared to the same quarter the prior year and grew 11.5% on a trailing 12-month basis. Most of the growth was attributable to the legacy material solutions business and inorganic growth in both segments. Parts and service represented 36.9% of net sales, which compared to 37.1% in the first quarter of 2025. As Jaco mentioned, first quarter expenses from the ConExpo trade show and freight duty and tariff expenses impacted first quarter profitability and margins. As a result, operating adjusted EBITDA declined $4.9 million versus the same period the prior year. For the trailing 12 months, adjusted EBIDDA grew $7.7 million, or 6%. Adjusted EBITda margins for the quarter and trailing month period declined by 310 basis points and 50 basis points, respectively. Based on the aforementioned factors, adjusted earnings per share for the quarter were 54 cents compared to 91 cents in the first quarter of 2025, while down only slightly on a trailing 12-month basis. Moving to our infrastructure solutions on slide 12, net sales in this segment were $237 million for the first quarter of 2026, compared to $236 million for the same period in 2025. Our newly acquired business performed as expected, while their contributions were partially offset by legacy equipment volumes that measured to a strong performance the prior year and shortfalls related to timing differences. For the trailing 12-month period, net sales of $858.4 million were down 1.5% compared to the prior year. Segment operating adjusted EBITDA for the infrastructure solution segment was $34.8 million for the first quarter of 2026 compared to a strong same-quarter comparison in 2025. The $8.1 million difference resulted primarily from higher exhibit and promotional costs, along with increases in freight, duty, and tariffs. For the trailing 12-month period, the difference in segment-adjusted EBITDA was $12.6 million, for a decline of 9.1%. Adjusted EBIDDA margins stood at 14.7% for the quarter and the 12- month periods, respectively. A Materials Solutions segment is shown on slide 13. We were pleased to see the continued resurgence of our Materials Solutions legacy products during the first quarter. Net sales included organic and inorganic contributions and combined for an increase of 65.9 million, or 70.6%, over the first quarter in 2025. For the trailing 12-month period, net sales increased $164.8 million, or 36.3%. Segment operating adjusted EBITDA for the materials solutions segment was $8.9 million for the first quarter of 2026, compared to $5.2 million for this same period in 2025. This was an increase of $3.7 million, of 71.2%. For the trailing 12 months, operating adjusted EBITDA increased 22.1 million, or 59.6%. Increases were primarily due to the impact of net favorable volume and mix and favorable pricing. As with the infrastructure solution segment, higher exhibit and promotional costs, freight, duty, and tariffs were partial offsets. Adjusted EBITDA margin remained at 5.6% for the first quarters of 2025 and 2026, respectively, and grew 140 basis points to 9.6%, on a trailing 12-month basis. Moving to slide 14, our balance sheet remains strong and is supported by substantial liquidity. At quarter end, we had $73.4 million in cash and cash equivalents, along with $194.1 million in available credit, resulting in total available liquidity of $267.5 million. Including a draw on our revolving credit facility of approximately $70 million for the purchase of CWMF, net debt to adjusted EBITDA suited approximately 2.3 times and is within our target range of 1.5 to 2.5 times. We have the capacity for continued organic and inorganic growth. As we have previously stated, our 2026 outlook entails the following anticipated full-year ranges, adjusted EBITDA of $170 million to $190 million, an effective tax rate between 25% and 28%, capital expenditures between $40 million and $50 million, depreciation an amortization of $55 to $65 million, and the following quarterly ranges, adjusted SG&A of $70 million to $80 million, interest expense approximately $7 million. I will now hand the call back to Jaco. Slide 15 provides an overview of the key investment highlights for ASTIC. ASTic has earned a reputation as a reliable provider of internationally recognized brands and high-quality solutions for our customers, and we take pride in this legacy. Our team maintains strong engagement with customers. From recent discussions, we've observed that customers remain optimistic about ongoing activity in the construction market. We are pleased our commitment to operational excellence is delivering results, and we anticipate further improvement going forward. We are confident our initiatives in manufacturing and procurement of boosting efficiency, which will lead to ongoing gains in adjusted EBITDA. Several exciting opportunities are fueling our growth, including the expansion of our recurring aftermarket parts and service business, which remains a key focus for the ASTEC team. The development of strong pipeline for innovative products, stability associated with the multi-year federal highway program, along with strong state and local funding for infrastructure projects in the U.S. market, opportunities for growth in both established and emerging international markets, and strong inorganic growth opportunities consistent with our financial objectives. As Brian noted, our strong balance sheet gives us flexibility to invest in growth initiatives and manage our leverage efficiently. Moving on to slide 16, we are excited about our 2026 Investor Day to be held on May 13, 2026. We invite you to join us for this virtual event, which will begin at 8 a.m. Eastern Daylight Time. During the presentation, we will share more about who we are, our next year of growth, industry mega trends, our Build to Connect way of doing business, Reasons to Invest, and our 2030 Financial Targets. With that, operator, we are ready for questions. At this time, if you would like to ask a question, press star 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. And your first question comes from the line of Steve Feranzi with Citico. Your line is open. Morning, Jaco. Morning, Brian. Appreciate all the detail on the call. Jaco, I guess when I look through the numbers and we, you know, we obviously expected the higher costs related to ConExpo. But, I mean, the surprising number to me was the gross margin. You covered a couple of reasons for it, and it was particularly sought in the infrastructure solution side. Yeah, can you sort of give us the buckets on how much of it was inflationary freight pressures versus mix versus timing, et cetera, or were there any efficiency letdowns in the quarter? for for is we definitely saw um a different mix this quarter compared to you know what we saw as a very strong q1 last year um we did see um a lower uh asphalt plants and and parts business during the quarter, which obviously pulled down margins a little bit. When we look at this business, and we've talked about this a lot in the past, that if you have one or two plans move out from one quarter to the next, it can make a pretty big difference. If you take a breakdown there, capital and parts, we saw a reduction in both of those. Now tariffs did affect them a little bit to a lesser extent than what we've seen on the MS group so we are managing that going forward. I think I mentioned in prior calls that we moved really quickly when it came to pricing when all the tariffs and those came to the plate. So some of that is maybe just timing, catching up to the pricing. We also have, you know, additional pricing that is in the pipeline that should mitigate this in the quarters to come. Because, yeah, I mean, you probably know the follow-up question, which is, you know... Given the numbers in Q1, your confidence level to hit those full-year targets, given the year-over-year difference. If it's pure mix and the timing is you're going to be more plant and parts heavy and 2Q and you've got the pricing in, I get it. I'm just trying to see if there's anything else here that should be cause for concern. Now, look, I mean, look at backlog. We're very encouraged by strong backlog. clock. We have another positive book-to-bill quarter, which is always nice. We have definitely additional pricing in the pipeline. We're continuously evaluating the cost that's coming from these macro trends. We are also very encouraged about the work our teams are doing to improve our quality cost and our operational efforts. So, Steve, we obviously, you know, still confident. That's why we kept the guidance for the full year. And, you Know, with that strong backlog, we feel that we have the opportunity to achieve that. So given the, I mean, we saw the, how much of the order shift sequentially with seasonality? From an invoicing point of view or a bookings? The implied orders, the reported implied orders. Do you owe that to seasonality and timing? Yeah. I mean, if you look at implied orders for IS, quarter over quarter, it was pretty flat. Obviously, we have CWMF and that number now. Right. And on MS, quarter over quarter, that's where we saw the biggest variance. Now, you know, those came on top of Q4, which is typically our strongest bookings quarter. You know, but overall backlog, if you look at the backlog and the book-to-bill ratio, both positive in MS and in IS. So, you know, that's why we like to give, you know, the annual guidance and not try to guide on a quarterly basis. Understand. We know we're going to have these quarterly fluctuations. If you could just touch on synergy realization, where you are with integration of the acquisitions and potential synergy realization over the next multiple quarters. Yeah. Yeah, we are very, very happy with the way the integrations are going. From a Synergy point of view, the realization is coming through the pipeline now pretty quickly. I will say the synergies on the CWMF acquisition is coming in, you know, faster than what we saw on PSG just because, you know, it's so close to home. We do business with a lot of the same suppliers, so we're pretty positive there. But the number that we gave, the three full synergies on PSG, we're very confident that, you know, over the next 12 months we're going to realize those. And if I could get one more in, in terms of obviously you've been generating much stronger parts and aftermarket numbers. some of that's from the acquisitions, but I know that was a priority when you became CEO, Jaco. Where are you in that progress, and is there a lot more to go, or do you feel like you've achieved a lot of what you wanted to? Yeah, no, in my mind, there's a lot more to go. During Q1, which is typically a strong past quarter for us, we were close to 37% parts and service. You know, next week we're going to have our investor day where we're going to talk about our aspirations there. Okay. But we still see significant opportunity to improve that mix. Okay. Thanks, Jaco. Thanks, Brian. Your next question comes from the line of Stephen Ramsey with Thomas Research Group. Your line is open. hey good morning uh thanks for taking my questions i wanted to start with obviously the topic of the day demand data centers you cited strong demand from this market i'm curious if you could ballpark how much of a contributor that was in the quarter and maybe compare that to the last year and then maybe go through your success here if it's following your customers versus intentional initiatives to capture this demand. Yeah, Steve, morning. Good question. You know, the data center demand and actually some of the other demand around chip factories and things like that is obviously something that we are keeping a very close eye on. If you look at our backlog for the MS group, it's up significantly year over year, and even during the quarter, it increased nicely. So, Stephen, we see the benefit from that. It is a little bit difficult for us to track it specifically just for data centers or other, you know, unshoring. What I will say is obviously our customers that provide aggregates to these markets are very close to these markets. They typically, you know, enjoy the business if they work in a 30 or 50-mile radius from where the construction goes, and we enjoy business with all of those customers. So, you know, we see cases where customers need to increase output, some cases as much as 10 times what they did in prior years just to deal with the demand that's coming from these data centers. So we don't have a specific number there, Stephen. We are looking at a way to try to track that. But I think if you look at the big aggregate suppliers, you know, they are very outspoken about the effect this has. And obviously, you knows, we do business with all of those companies, and that's where we see the benefit. We have seen some uptick in our industrial heating space that is in the infrastructure group, you know, also supplying to data centers, but to a much lesser extent than what we've seen on the material solution side. Okay, that's very helpful. And I wanted to think about order activity from the perspective of market share and how your orders are comparing to the marketplace. Do you feel like you're tracking the market, or do you feel like you are gaining share overall, or just any pockets of strength within orders? um yeah so i i will say we we don't feel that we're losing market share anywhere you know obviously we have various product lines that is in our portfolio um we feel very good about our product portfolio that we have and i mean you joined us on the stage for ConExpo, we were very encouraged by the reaction from the market on all the new products that we showcased at ConExfo. And when you have new products, the positive flow through typically results in you taking some market share. We have, over the last year or two in the material solutions side, put a renewed focus on large system sales and we are definitely seeing the positive momentum from that product line and we believe that will continue. Maybe one last comment, the work that we're doing on our digital platform we are definitively seeing positive reaction from our customer base we are talking and growing that business significantly through especially our major customers transitioning to one platform and in various examples, they've chosen us to be that platform provider. That will have a positive effect in the future on equipment sales. It will have a positive impact on our parts and service sales. Okay, that's great. And then last one for me, you had very strong free cash flow in the quarter. It appears like much of that was working capital driven. If you zoom out and look forward, can you give a general view on free cashflow conversion out of EBITDA? Thanks. Yes, this is Brian here. Thanks for the question. Yes, look, I think that's going to continue to be pretty strong. You're right that in the quarter we did benefit from working capital movement. Our inventory was actually down quite a bit from the year-end position. A lot of that is in raw material, but raw material and finished goods were both down. We had Q4 is always a big sales quarter, so we had some good cash collections in Q1 as well. I think that trend, there's a bit of seasonality in the business, so working capital will move up and down during the course of the year. But I think the underlying efficiency of our working capital, our working capitals certainly improved in the quarter, and we expect to see that continue. We have a pretty strong operating cash flow in the court and in the balance of the years, so I think conversion ratio will be good. that's great thank you all thank you again if you would like to ask a question press star 1 on your telephone keypad and we'll pause for just a moment your next question comes from the line of David McGregor with Longboat Research your line is open Yes, good morning everyone Good morning I guess my first question was for Brian and just wanted to go back to the whole discussion around price-cost and I think we're very clear in your prepared remarks about the timing of price traction versus the emerging cost inflation you use FIFO costs on your balance sheet so you've got some pretty good visibility I guess on what's coming up here over the next couple of quarters Can you just talk about, you know, what you see coming in the backlog versus the pricing initiatives you have in the marketplace today and how that should play into 2Q or second half? And obviously, you've left the guidance unchanged, so you're expecting some kind of recovery. I'm just trying to get some sense of cadence or timing around those margin dynamics. Yeah, look, I think if you go back to that Q1 of 2025, we had a gross margin of over 28%. If anything, that was a little bit of an outlier when you look at Q1 historically. And that was because we got ahead of the game. We talked about this before on pricing. And so the tariff situation cost didn't really begin to materialize until April and beyond. So we had a strong comp in Q1 of 2025. tariffs kicked in this quarter to a greater extent we did we felt you know cover a lot of the underlying inflation outside of tariffs with our pricing initiatives we've got more pricing that we can implement here in the balance of the year and we're very careful about making sure that we try to anticipate those costs when we quote and the price that we quote that's in our backlog should accommodate our anticipated inflation and tariff increases that are coming. Obviously, freight and duties related to higher diesel and hydrocarbon costs are another factor that's certainly affecting things in the short term and has a little bit of uncertainty in the balance of the year. But we're trying very hard to make sure that when we price our products in the market that we're taking that into account. Right. So just to try to summarize on this, is this something where we're still going to see some year-over-year margin pressure in 2Q before it's fully normalized in the second half? You know, it's possible, but I think Q2 is going to emerge with stronger margins in the first half. It's going to be a little bit harder in the third quarter than we saw in the first. Okay. Good. I guess second question, maybe for Jaco, you know, How much of a catalyst do you think a highway bill reauthorization will be to just order releases? And I'm just trying to get a sense from your conversations with your counterparts in the marketplace if you sense that people are maybe holding off on purchase orders until there is a bill in place. Yeah. Yeah, David, I mean, you know, I will tell you, obviously everybody knows that there's a lot going on in the world right now. You know, our industry has been hit with, you know, inflationary pressures around, like Brian just said, fuel prices. You know that is obviously something. But, you now, a highway bill, I will say for smaller players in the market, typically a highway bill gives a lot of confidence because, you kno, if you're going to buy an asphalt plant, you want to know that there's going to be three to five years of good funding available. Our industry has gone through significant customer consolidation as you guys know and I think our bigger customers are better managing their CapEx through different cycles and are maybe less prone to cut spend without the clarity of an infrastructure bill. Now, what I will say is we are very involved with our trade organizations. We're very involved talking to the respective people involved in creating the highway bill. You know, just this morning, actually, I received a note from our team at NAPA, the National Asphalt Paving Association, And they think that the first language around the bill could be published as early as the 18th of May. So we're looking forward to that. We know that there's discussions taking place right now. We know, like we said in the prepared remarks, this is something where government actually works together very well. So we are positive that we're going to see a bill. Hopefully it comes sooner than later. But, you know, the good thing is that funding is available for the full year this year. So our customers are busy. They have a lot of work. You know, a highway bill that's focused on roads and bridges, I think, will be a nice injection for, you know, 27 and beyond. Right. That's a great color. Thank you for that. Next question I just wanted to ask you around the whole notion of price analytics. and you've been investing in price analytics here. I'm just trying to get a sense of, you know, where we are in that journey from a margin development standpoint. Do you feel like you're still in the early innings of the kind of the efficacy of that investment? And I guess at a point in time where we're really trying to sort of wrestle through price cost here, you Know, this is a pretty key part of the story. So I guess that's where you are on this. I will say from a process point of view we're probably in the best state that Aztec has been in for many years now on the flip side is obviously the variability right now is big so our teams are continuously looking at movement in prices that we buy versus what we sell for. Our procurement team is very actively renegotiating as tariffs change. I mean, as you guys know, there's actually some of the tariffs that should start to lower over coming periods. And, you know, getting that then back from suppliers is key focus for us. So, David, yeah, we feel that we have a good process in place, but, you Know, the amount of variability that's happening on a daily basis is definitely challenging for the team, but at least we have a team, we have a process, and it gives us much better outlook than what we had before. I wanted to ask you about Aztec Signal. You talked about ConExpo. There was a good reaction there to the new product rollout. Just try to get a sense of what kind of reaction you got specifically to the Signal platform and from that reaction, what's your sense of sort of the ability of that technology to accelerate replacement cycles? Yeah, we're very excited about that, David. I mean, we are investing significantly in further developing the platform. We're investing in additional manufacturing capability. Next time when you're in Chattanooga, we'll show you that. But we think that this is just starting. We have a really good platform. It's going to provide a lot of benefits both to us and our customers in the future. So, you know, overall reception has been really positive. So we'll talk quite a bit more about Signal during our investor day next week as well. Great, great. And then last question, Brian, where do you see the balance sheet leverage at year-end based on the guidance you've got right now? Yeah, David, I think if you take the midpoint of the guidance, we should end somewhere around about 1.7 times. Got it. Thanks very much. Thank you. Thank you, Bill. And now I'll turn the call over to Steve Anderson, Senior Vice President of Investor Relations. Thank you for that. We appreciate everyone's participation in our conference call this morning, and thank you for your interest in Aztec. As today's news release states, the conference call has been recorded. A replay of this conference call will be available through May 20, 2026, and an archived webcast will be able to view it. The conference call is available for 90 days. The transcript will be valuable under the investor relations section of the Aztecs Industries website within the next five business days. This concludes our call, but as always, feel free to contact me with any additional questions. Thank you. Have a good day. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.