Balchem Corporation Price & Performance (BCPC)

Thank you. Good morning, everyone. Thank you for joining our conference call this morning to discuss the results of Balchem Corporation for the quarter ending 12/31/2024. My name is Martin Bengtsson, Chief Financial Officer, and hosting this call with me is Ted Harris, our Chairman, President and CEO. Following the advice of our counsel, auditors and the SEC, at this time, I would like to read our forward looking statement. Statements made in today's call that are not historical facts are considered forward looking statements. We can give no assurance that the expectations reflected in forward looking statements will prove correct and various factors could cause actual results to differ materially from our expectations, including risks and factors identified in Balchem's most recent Form 10 K, 10 Q and eight K reports. The company assumes no obligation to update these forward looking statements. Today's call and commentary include non GAAP financial measures. Please refer to the reconciliations in our earnings release for further details. I will now turn the call over to Ted Harris, our Chairman, President and CEO.

Thanks, Martin. Good morning, and welcome to our conference call. We were very pleased with the financial results for the fourth quarter of twenty twenty four, which capped off another strong year for Balchem. We delivered record fourth quarter consolidated sales, adjusted EBITDA and adjusted net earnings with year over year sales and earnings growth in all three of our reporting segments. I am particularly pleased with the ongoing strength in our Human Nutrition and Health and Specialty Products segments, both of which achieved record fourth quarter sales and earnings from operations, as well as the significant sequential improvement and modest year over year growth delivered in our Animal Nutrition and Health segment. Before we get into more detail on the quarter, I would like to reflect for a few minutes on some of the significant accomplishments the Balchem team achieved over the past year. Overall, 2024 was another strong year for Balchem. We achieved record full year sales of $954,000,000 growing 3.4% compared to the prior year with strong sales and earnings growth in both the Human Nutrition and Health and Specialty Products segments. We also delivered record earnings from operations of $183,000,000 an increase of 14.9% and record adjusted EBITDA of $250,000,000 an increase of 8.4% from the prior year.

In addition, we generated strong free cash flow of $147,000,000 allowing us to further pay down our debt and reduce our leverage ratio on a net debt basis to 0.6 times. We also made very good progress on our strategic initiatives. We have continued to innovate and launch new or enhanced products to support our growth. Our Human Nutrition and Health segment brought three innovative new products to market. The first is K2 Vital Delta Fermented, which is a specialty vitamin K2 from fermentation in a patented microencapsulated form. The second is Viticholine Proflo, which is an enhanced formulation of our existing Viticholine, specifically designed for inclusion in multivitamins. And the third is Optifolin Plus, which is a patented choline enriched bioactive reduced folate ingredient that supports cellular health at all stages of life. These product launches will add to our existing offering of minerals, nutrients and vitamins and enable us to bring even more value to our customers, while simultaneously supporting our vision of making the world a healthier place. Our Animal Nutrition and Health segment also launched a newly developed product, AminoSure XL, which is a next generation rumen protected precision release lysine designed to consistently, reliably and economically meet the lysine amino acid requirements of lactating dairy cattle.

ImmunoSure XL offers leading performance when considering feed stability, lysine content and bioavailability and is a great addition to the Animal Nutrition Health segment's portfolio of high performing encapsulated products focused on optimizing dairy cow productivity and sustainability. We have also made progress on building consumer awareness for some of our market leading brands. VitaCholine, Balchem's market leading brand of the essential nutrient choline, became a proud partner of the New York Jets, a major professional NFL sports team. And K2 Vital, Malcolm's market leading brand of the specialty vitamin K2, just recently partnered with the Bayern Munich women's soccer team to further drive awareness and increase focus on women's health. These partnerships, in addition to our increased social media presence, is indeed helping to build awareness and drive market penetration for our brands. We also made significant progress in 2024 on our 2,030 sustainability goals to reduce both greenhouse gas emissions and water usage by 25%. We were extremely pleased to report out in our sixth annual sustainability report that we are already tracking ahead of our 02/1930 goal on greenhouse gas emissions reductions. In 2024, Balchem successfully reduced water withdrawal by approximately 15% compared to our 2020 baseline, showing substantial progress toward our water usage reduction objective.

We also completed in August of last year several important capital projects that collectively were designed to allow us to reach our water usage goal within the next year or so, well in advance of the 02/1930 goal. Balchem's approach remains unchanged as we continue to focus on our two main objectives, providing innovative solutions for the health and nutritional needs of the world and at the same time, operating with excellence as strong stewards of our stakeholders. And lastly, in December, we announced another increase to our annual dividend, taking the dividend from $0.79 to $0.87 per share, a 10% increase year over year. This most recent increase marked the sixteenth consecutive year of double digit growth of our dividend, which once again reinforced our commitment to our long standing dividend strategy. All in all, another strong year, both financially and strategically for Balchem. Now regarding the fourth quarter of twenty twenty four. This morning, we reported record fourth quarter consolidated revenues of $240,000,000 which was 4.9% higher than the prior year quarter. GAAP earnings from operations for the fourth quarter were higher by 23.8% versus the prior year. And we delivered record quarterly adjusted EBITDA of $63,000,000 an increase of 13.4% with an adjusted EBITDA margin of 26.2%, up 200 basis points from the prior year.

Consolidated net income closed the quarter at $34,000,000 an increase of 26%. This quarterly net income translated to diluted net earnings per share of $1.03 on a GAAP basis, up $0.21 or 25.6% compared to the prior year. On an adjusted basis, our record fourth quarter adjusted net earnings were $37,000,000 an increase of 19.3% from the prior year, which translated to $1.13 per diluted share. Overall, another very strong quarter for Balchem, which as I said earlier, capped off another strong year for us. I'm now going to turn the call back over to Martin to go through the fourth quarter consolidated financial results for the company and the results for each of our business segments in a little more detail.

Thank you, Ted. As Ted mentioned, overall, the fourth quarter was another strong quarter for Balchem with solid sales growth and strong earnings from operations and adjusted EBITDA growth. Our fourth quarter net sales of $240,000,000 were up 4.9% driven by growth in all three segments, Human Nutrition and Health, Animal Nutrition and Health and Specialty Products. Our fourth quarter gross margin dollars of $86,000,000 were up 15.1% and our gross margin percentage was 36% of sales, up three twenty basis points compared to the prior year, primarily due to a favorable portfolio mix. Consolidated operating expenses for the fourth quarter were $39,000,000 up 6.1 compared to the prior year. The increase was primarily due to higher transaction costs, higher compensation related expenses and an increase in outside services, partially offset by lower amortization. GAAP earnings from operations for the fourth quarter were $47,000,000 an increase of 23.8. On an adjusted basis as detailed in our earnings release this morning, non GAAP earnings from operations of $52,000,000 were up 16.6% compared to the prior year. Adjusted EBITDA was $63,000,000 an increase of 13.4% compared to the prior year with an adjusted EBITDA margin rate of 26.2%. Net interest expense was $3,000,000 a reduction of $2,000,000 compared to the prior year, driven primarily by lower outstanding borrowings.

We continue to use our strong cash flows to pay down debt and we reduced our debt by $37,000,000 in the fourth quarter and ended the quarter with net debt of $140,000,000 with an overall leverage ratio on a net debt basis of 0.6 times. Our effective tax rates for the fourth quarters of twenty twenty four and 2023 were 24.519.9% respectively. The increase in the effective tax rate from the prior year was primarily due to an increase in certain foreign taxes. Consolidated net income closed the quarter at $34,000,000 an increase of 26%. This quarterly net income translated into diluted net earnings per share of $1.03 an increase of $0.21 or 25.6% compared to the prior year. On an adjusted basis, our fourth quarter adjusted net earnings were $37,000,000 translated to $1.13 per diluted share, an increase of 18.9% from prior year. We continue to translate our earnings into cash and fourth quarter cash flow from operations were 52,000,000 and we closed out the quarter with $50,000,000 of cash on the balance sheet. As we look at the fourth quarter from a segment perspective, our Human Nutrition and Health segment generated sales of $147,000,000 an increase of 6.8 from the prior year.

The increase was driven by higher sales within both the food ingredients and solutions businesses and the nutrients business. Our Human Nutrition and Health segment delivered quarterly earnings from operations of $34,000,000 an increase of 33.9%, primarily due to the aforementioned higher sales and a favorable mix. Adjusted earnings from operations for this segment were $36,000,000 an increase of 21.8%. We were very pleased with the overall performance of our Human Nutrition and Health segment, delivering another strong quarter of growth. We continue to see healthy demand in our Nutrients business as well as an improved demand picture in our Food Ingredients and Solutions businesses. Our portfolio of nutrients, ingredients and formulation capabilities and technologies are well positioned and we believe we will continue to see our Human Nutrition and Health segment perform well as we head into 2025. Our Animal Nutrition and Health segment generated quarterly sales of $58,000,000 an increase of 0.3% compared to the prior year. The increase in sales was driven by higher sales in the ruminant species markets, partially offset by lower sales in the monogastric species markets. Animal Nutrition Health delivered earnings from operations of $6,000,000 an increase of 7.2% primarily due to a favorable mix with higher ruminant sales partially offset by higher operating expenses.

Fourth quarter adjusted earnings from operations for this segment were $6,000,000 an increase of 6.5%. We were pleased to see our Animal Nutrition and Health segment return to growth in the fourth quarter following a period of challenging market conditions. We believe the first half of twenty twenty four was the low point for our Animal Nutrition business and we've seen encouraging sequential improvement in the second half of twenty twenty four. This improvement is primarily due to the healthier dairy market conditions and continuing strength of our flagship rumen protected choline brand, ReAssure, further supported by the commercial launch of our AminoSure XL product, which has been well received by our customers. We believe the Animal Nutrition and Health business has good momentum exiting 2024 and is well positioned to deliver solid growth in 2025. Our Specialty Products segment delivered sales of $33,000,000 an increase of 6% compared to the prior year due to higher sales in the Performance Gases business. Earnings from operations were $10,000,000 an increase of 15.9% versus the prior year. The increase was primarily driven by the aforementioned higher sales and favorable mix, partially offset by higher operating expenses. Fourth quarter adjusted earnings from operations for this segment were $11,000,000 an increase of 11.2%.

We are very pleased with the performance of Specialty Products in the fourth quarter, both from a sales growth and margin perspective. We believe our Specialty Products is in a great position to deliver year over year growth again in 2025. So overall, the fourth quarter was another very strong quarter for Balchem. I'm now going to turn the call back over to Ted for some closing remarks.

Thanks, Martin. We are very pleased with Balchem's financial results reported earlier this morning for the fourth quarter and the full year of 2024. Q4 '20 '20 '4 was the twenty second consecutive quarter in which Balchem delivered year over year adjusted EBITDA growth as we continue to show an ability to deliver results in a variety of market conditions given our strong market positions and our value added portfolio of products. We continue to watch the ever changing geopolitical and macroeconomic environment closely, particularly relative to the impact that significant tariffs could have on complex global supply chains. While it is too early to tell what specific impacts will be felt, a significant uncertainty still exists. We believe we are relatively well positioned to effectively manage through this new global trade environment and remain confident in the long term growth outlook for Balchem as a whole. I'm excited about twenty twenty five and I believe the company is well positioned to deliver both top and bottom line growth on a full year basis, while further advancing our important growth initiatives. I will now hand the call back over to Martin, who will open up the call for questions. Martin?

Thank you, Ted. This now concludes the formal portion of the conference. At this point, we will open up the conference call for questions.

Our first question comes from Bob Labick with CJS Securities. Please state your question.

So I want to start off with Human Nutrition and Health. Obviously, very consistent and strong growth there. I was hoping you touched on this a little bit. Maybe you could dive a little deeper into the contribution from nutrients versus food ingredients, the key drivers for each and kind of the outlook for each of those sub segments?

Sure. Yes, Bob. We really were extremely pleased with Human Nutrition and Health performance really in 2024 that continued in Q4. And most of 2024 really relied on very strong growth in our Nutrients business. And as we talked about modest growth in the Food Solutions business. And what we really saw as the year progressed and particularly in Q4, somewhat slowing growth in the Nutrients business, still very healthy and growth that we feel really good about, but a return to healthy growth in the Food Ingredients Solutions business. So we delivered little over 5% revenue growth in the Nutrients business in Q4. And in the Food business, it actually was a little over 7% growth. So that came together to deliver a little under 7% for the whole business. But we really feel good about both those businesses. And they started to perform toward the end of the year as we had indicated. We saw the normalizing of demand in the food business earlier in the year and then a return to healthy growth. It's just some standouts within each of those within the nutrients business. I would say our K2 business particularly performed very well in Q4 as it really has all year, but really a standout quarter, which I think is exciting.

And then within the food business, our encapsulated products continue to perform extremely well. We really saw growth across all of our product lines within the food business in Q4, but the encapsulates business performed particularly well in Q4. So all in all, we feel really good about the human nutrition health performance in Q4 and the full year.

Okay, great. And then obviously a nice recovery, as you said, in ANH and particularly after the tough start. Are we at a kind of is Q4 run rate like a normalized level until European mono gastric gets resolved and returns? Is there still more growth in ruminant? And any update on the European monogastric situation would be great too.

So maybe I'll take an early stab and Martens can chime in. You're right, we really were pleased with the animal nutrition and health recovery, I think is the right word. Obviously, we struggled in the first few quarters of the year, but we've strung together three consecutive improving quarters with being able to achieve year over year growth modest as it was in Q4 was an important milestone. And I think we had indicated on the last call that that would not happen until Q1 of twenty twenty five and it happened as far as we're concerned a quarter before we thought it would. But the sequential improvement, up 10% was really good to see and then the modest year over year growth. I would say no. I don't think that this is the new kind of base level. We do see ongoing growth in the ruminant business, while the monogastric business will stay probably flattish for subsequent quarters here until the European situation is resolved. But we do see more growth in the ruminant space. And there are a couple of things going on there. One is just generally speaking, the dairy market is quite healthy right now.

And dairy farmers' margins are vastly improved from a year ago and a couple of years ago. So they're back making healthy returns. And while there are obviously macroeconomic factors at play that could impact that somewhat tariffs being one, of course, even the GLP-one drugs and kind of reduced intake of cheese and so forth is another factor out there. But everything we see for the foreseeable future is that the dairy market is going to be relatively healthy. And so that's good for our business. That will be growing. That helps our business. But the other thing we really rely on in the dairy space or the ruminant space for us is our ability to penetrate the market with our technologies. And we feel really good about the momentum that we have. And partly that is aided by a healthier market environment, but partly that is on our shoulders to be doing the right things in the marketplace, bringing the right products and technologies, bringing the right science behind those products and successfully converting nutritionists, if you will. And I think we have good momentum there as well. And then of course, we did launch a new product in the second half of last year and that's being very well received.

And we think that there's we've only had that on the market for a little over a quarter. And so there's clearly upside with that product. So when you kind of add those three things together, we do see the overall ruminant business growing quite nicely for us next year on top of, let's say, flattish monogastric performance. So we do think that we can continue to see some sequential growth in ruminant and certainly year over year growth in the Animal Nutrition and Health segment next year.

And then just I'll just pass along the mic now. I'll get back in queue. Thank you very much.

Okay. Thanks, Bob. Thank you, Bob.

Thank you. And our next question comes from Ram Selvaraju with H. C. Wainwright. Please state your questions.

Hi. Thanks very much for taking my questions and congrats on a strong finish to 2024. Just a couple of quick ones for you, Ted. Firstly, I was wondering if you could comment on specific marketing and promotional strategies you expect to employ over the course of the coming year to really push the vidakolin ProFlow product? And secondly, you had alluded to this in kind of your closing remarks that you continue to be watchful with respect to the potential impact of tariffs. I was just wondering if you could provide us with any kind of regional granularity and in particular kind of the nature and degree of potential exposure that Balchem may have to tariffs applied specifically in either Mexico or China? And then very quickly for Martin, I just wanted to ask about the comment that you made regarding foreign tax impact and if you expect any foreign tax impact going forward that might meaningfully change your effective tax rate outlook. And lastly, I don't know whether this is indeed the case. I don't think it is, but I just wanted you to confirm. In the animal health business, do you have any exposure to the impact of the bird flu prices?

Thank you.

Okay. We'll try to remember all of those, Ram. And thanks for your opening comments. I'll kick things off and not necessarily go in the order that you said. But let's talk about tariffs for a second. And obviously, along with everyone in kind of the corporate boardrooms, we're closely monitoring the developments of the new administration and trying to understand where this all goes. As I said in the prepared comments, overall, we really believe we're relatively well positioned relative to any tariffs that could come about. And of course, there are positives that can happen relative to tariffs and negatives. And as we add all of those up based on our flows, we feel as though it could be sort of a net neutral situation to slightly favorable for us. We do see a lot of competition in our markets from China. And so additional tariffs there competitively could be positive. But you kind of asked for just some specific numbers. And you also you have to think about it from what do we source and how much is coming from these various countries and then how much do we sell into them. So just to give you a couple of you mentioned China and Mexico.

We buy a little less than $15,000,000 of product from China out of a total raw material purchasing of call it, let's say $400,000,000 So it's a relatively small amount. From Mexico, it's a fraction of that amount. So we do feel like it's those are manageable sizes of sourcing regions that may be recipients of tariffs that we could manage either through pricing or finding alternative sources. On the sales side, and here really what we're thinking about is retaliatory tariffs that could go on to products that we're selling in those regions. We sell very little less than $5,000,000 into China, so relatively small quantities. Mexico is around about that same amount, so not really significant. Canada is a bigger market for us. And so there is some concern that we would have there. That's in the order of magnitude of maybe 3% of our overall sales as a company. So not super significant, but you're starting to get up there. So we're watching the situation in Canada and thinking through ways to manage that. But when you kind of wrap it all together, generally speaking, what we sell in The U. S, we make in The U. S. Out of U. S. Products.

And generally speaking, what we sell in Europe, we make out of products that come from Europe. And again, that's what informs our comment that when you add it all together, we feel like we're in a relatively good position from a tariff perspective, but nonetheless something that we need to watch very closely. Going back to your first question about, Viticholine Proflo, we're excited about this product. As we've said, this is a product that's really formulated to be more included in multivitamins. And the history of viticholine really comes more from infant formula and then prenatal vitamins. And so getting viticholine part of the discussion around broader adult health benefits is important. And that's one reason we decided to sponsor an NFL team was to really be able to tell the story that this is not just an important nutrient for infants or children, this is an important nutrient for adults. And we really look back on that investment and feel really good about it. And I think the more that we can have vidicholine be talked about relative to being an essential nutrient for everyone and important nutrient for adult cognition and adult liver health and so forth, the more it will be included in multivitamins, which is the target market for viticholine pro flow.

So we're going to be continuing to do more marketing, probably not going to sponsor another NFL team, but we're going to continue that. That program actually was a three year program. So we're going to continue to do that. We feel really good about that, but you're going to see us increasingly on social media and other forums be promoting the broader health benefits of vidicholine, which we believe should lead to more inclusion in multivitamins where it is not included to a great extent today. So hopefully that answers your questions. And then Martin, so he's got foreign tax question and then the The bird flu. The bird flu. Yes, that's from the foreign tax question was a one off in the fourth quarter. So you should not expect that higher tax rate to continue as we move forward or be a new normal. So that was really a one off impact that had more of a call it fourfold percentage points impact to the fourth quarter tax rate. As it relates to the bird flu, that's certainly a big topic in the industry that's being disruptive to the value chain. We're seeing that as it ripples through in various places.

And it creates couple of different dynamics there. On the poultry side, they are able to replenish birds relatively quickly. So from that perspective, as they replenish the birds, we still sell into that. But it's still we do see sort of starts and stops in demands with certain customers as they get impacted by this. We sort of see also an impact to market pricing, right? So as the value chain gets a little disrupted, as supply gets a little disrupted, the price into retail remains elevated. You also see disruptions to egg supply and so on as you may have seen in the grocery stores you walk in and there's not a whole lot of eggs on the shelves for you to buy. But that always has an impact to prices. So the flip side of the coin is that for the producers, they're making pretty good margin right now on the production they have, meaning that they're selling at elevated prices, the feed input cost for them is not that high. So that our customers are making good money apart from or despite sort of the impact of the bird flu. And obviously, when our customers are healthy that also sort of helps in terms of selling product into them.

So it's sort of netting out a little bit. So it's having an impact, but it's not having that major significant impact where you really see a step change in either direction in terms of our demand. So that's how I would think about it unless something really intensifies or spreads much more widely than it is today. I would expect our demand to not be too significantly impacted as we sit here today.

Our next question comes from Daniel Harriman with Sidoti and Company. Please state your question.

Martin, good morning. Thank you so much for taking my call and questions. Just a couple of quick ones for me today. Obviously, margins were fantastic in the fourth quarter and really have been so all year. So I'm just curious to know what your expectations are for margins as we go through 2025. And wondering more specifically, is it fair to assume that you may have a little bit of margin pressure in the year as ANH continues to grow and maybe within HNH you're getting stronger growth from food ingredients versus minerals and nutrients? And then finally, just Martin, I was just wondering if you could update us on what you all are seeing in the M and A market in terms of deer flow that may be coming across your desk?

So Daniel, I'll let Martin take both of those, but we'd like to just welcome you to the team. I look forward to working with you going forward. But Martin?

Yes. Thank you, Daniel. Maybe starting with the margins question. As you said, they've been very strong and healthy here in 2024 and has improved as we've gone through the year, which we were really happy to see for those that have been with us for a few years as we went through the inflationary period where we saw a bit of a margin squeeze due to the inflation, we were sort of foreshadowing that we expected to be able to bring that back to more normalized margins as we exited that period and came into a more deflationary period. So we're really excited and happy that we were actually able to do what we said and restore the margins and bring them actually to even higher levels than they were sort of pre that period. Going forward, as we think about the dynamics, obviously that impacts our margins, we have the portfolio mix, we have our input costs, primarily our raw materials, our pricing, etcetera. And it depends a little bit how you see the world evolving there. From an input cost perspective and raw materials, the sort of deflationary period that we've seen over the last call it twelve, eighteen months, I would say has plateaued and is turning into almost a slightly inflationary period again.

So that sort of tailwind from continued deflation, I think, is past us. And now I think we're more in a flat to slightly inflationary period and then we'll see how potential trade tariffs and so on impact that going forward. From a portfolio mix perspective, we obviously saw benefits to our margin rates of a strong H and H and particularly a strong Nutrients business, which is higher margin than the Food Ingredients and Solutions business. And while the Food Ingredients and Solutions business is coming back and growing nicely again, I still expect the Nutrients business to grow faster than the Food Ingredients business viewed over some period of time here. So I think from an H and H perspective that portfolio mix should not be necessarily dilutive for them going forward, but rather remain similar to where they're at. From an A and H perspective, Animal Nutrition and Health, the ruminant business is higher margin than our monogastric business. As we mentioned here earlier, we do expect the ruminant business to grow faster than our monogastric business. So there should be some tailwind there from A and H mix. And our Specialty Products segment will sort of remain very, very solid from a margin perspective.

So I think our portfolio mix will support a continued strong margin just based on what we see today. I think the wild card a little bit is really the potential tariffs and supply chain impacts and what that will do to sort of global supply and demand and whether or not we'll get into what we saw a couple of years ago with rapidly increasing input costs that we're going to have to turn around and effectively price through. And last time we were very successful in pricing that through to our customers. But as we did that, it was dilutive to margins even though we protected our margin dollars, but from a rate perspective it was dilutive. So that's maybe where I say the biggest risk to margins going forward. But otherwise, I think I would expect sort of our margin profile to be relatively healthy here going forward. M and A? Yes. And on the M and A side, the we're definitely spending a lot of time on the M and A. I would say from a deal flow perspective, there is an increased flow coming across our desks. And we are sort of have been and continue to actively engage where it makes sense for us to evaluate opportunities.

And we continue to do that. I would not call it a hot market yet where it's sort of a lot of quality assets that make sense for us to pursue. So I would still call it a little bit the early phase of what people are sort of expecting to be a more conducive M and A market going forward, but we're certainly not there yet. But if you think about it logically, there's sort of a pent up demand. There are a lot of assets that have not come to market for quite some time. And obviously, if you're someone who's thinking about selling, you want to have some stability in your performance and business before you bring it to market. And I think we're starting to reach that point where there's been sort of some time now where they've been able to show more stable results. I do expect it to pick up, but we're not quite there yet where it's a hot market with a lot of activity going on, but it's improving.

That's really helpful. Thank you so much. And Ted, I appreciate the warm welcome and congrats on a wonderful quarter and great year.

Great. Thanks, Daniel.

Thank you. There are no further questions at this time. I'll hand the floor over to Ted Harris. Thank you.

Great. Thanks so much. Once again, thank you all very much for joining our call today. We really appreciate your support and your time today. And we look forward to reporting out our Q1 twenty twenty five results in the April. In the meantime, we will be participating in the BNP Paribas Exane's Consumer Ingredients and Chemicals Conference in London on March 11. So we hope to see some of you there. I know some of you have already signed up and so looking forward to that. And thank you again for your time today. Take care.

Thank you. This concludes today's conference. All parties may disconnect. Have a good day.