RDW 2022Q2

Greetings, and welcome to Redwire’s Second Quarter 2022 Earnings Conference Call. My name is Kevin, and I’ll be your operator for today. At this time, all participants are in a listen-only mode. We will take questions at the end of this presentation. As a reminder, this conference is being recorded. It's now my pleasure to introduce today’s call, Nicole Taylor, Vice President, Financial Operations and Investor Relations. Ms. Taylor, you may begin your conference call.

Thank you, Kevin, and good morning, everyone. Welcome to Redwire’s second quarter 2022 earnings call. I’m Nicole Taylor, Vice President, Financial Operations and Investor Relations. With me on the call are Peter Cannito, Chairman and Chief Executive Officer; Andrew Rush, President and Chief Operating Officer; Jonathan Baliff, Chief Financial Officer; and Chris Edmunds, Senior Vice President and Corporate Controller. We hope that you have seen our earnings release, which we issued this morning, and it is posted in the Investor Relations section of our website at redwirespace.com. Let me remind everyone that during the call, Redwire management may make forward-looking statements that reflect our beliefs, expectations, intentions or predictions of the future. Our forward-looking statements are subject to risks and uncertainties that are described in more detail on slide two. Additionally, to the extent we discuss non-GAAP measures during the call, please see slide three, our earnings release, or the investor presentation on our website for the calculation of these measures and GAAP reconciliations. With that, I would like to turn the call over to Pete. Pete?

Thank you, Nicole. Starting with our agenda, you can see we will start with a quarterly update from myself, then I will turn it over to Andrew, who will give some operational highlights for the quarter, and then he will be followed by Jonathan Baliff, our new CFO, who will be giving the financial highlights. After we end our presentation, we will open the floor for Q&A. I also like every opportunity to point out Redwire hardware, so as you can see, this beautiful picture of the International Space Station. On the right-hand side, you will see our rollout solar arrays that were deployed last summer, a remarkable technical achievement with our customer at NASA and our partners at Boeing, and we're very proud of that. Starting with the market overview, market demand remains strong despite the broader macroeconomic environment and this is primarily due to geopolitical competition for dominance across all segments of the space industry. There is a space station that is currently being deployed by China. We continue to have geopolitical space races with Russia, and this is driving a lot of demand in the industry. And it can't be underscored enough that this is a decade-long trend. This is not just a trend that is going on this year and will go away overnight; this is a decade-long race for competition in space and that is driving a lot of demand across our industry, across all of the different segments, and we're going to talk about that further on in the brief. On the commercial side, commercial space adoption has proven a little bit slower than expected, but the capability development outlook is still very strong. There are a lot of plans on the drawing board for extraordinary space capability. We are partnering with a number of commercial entities. And although it is proving to take a little bit longer for some adoption rates and for some of these organizations to get their capabilities out, which does have an impact on near-term revenue, the plans are still there, and the capability is still in high demand. So this will attract future growth. But in the meantime, our long-term government contracts across the civil and national security segments that are primarily with government entities give us the financial strength required to remain patient while we wait for commercial space to reach its full potential. Of course, there are some interesting developments that occurred in the last quarter, most notably the Russian threat to leave the ISS. That has increased the momentum behind commercial space stations such as Orbital Reef, of which Redwire is partnered on with our partners, Blue Origin and Sierra Space. This is creating many new high-value opportunities for Redwire. Anecdotally, it just so happened that the Russians made this announcement that they later retracted during the International Space Station R&D conference in Washington. The buzz that it created on the floor was extraordinary, and it really just underscores the imperative for a commercial space station. In the next decade, we will see the development of these commercial space stations, and that’s a huge demand driver for some of Redwire's unique capabilities. Moving to Slide 8, a couple of key takeaways that will be discussed in greater depth throughout the brief. One is that our demonstrated heritage on early-stage programs is creating much larger opportunity. We are establishing numerous cohorts on very large programs, and this is because of the heritage that we've been able to demonstrate in the past. I started out the presentation by pointing out our rollout solar arrays on the International Space Station. That is one example of how that deployment and our proven heritage has garnered increasing demand for other organizations who need the same capability. The result is that revenue momentum in the second quarter is up 14.2% compared to the year prior and is up 11.7% sequentially. This is a result of this virtuous cycle created by our performance leading to more contracts in higher-growth product lines. We have many high-probability bids in the pipeline, some that are actually equal to or greater than our total revenue for 2021 in terms of total contract value. That just underscores the tremendous amount of opportunity there. We're executing a classic land and expand strategy. We have deep customer relationships and a long history of working with marquee customers in the industry. We now have proven heritage on a number of critical IP protected product lines, and this is leading to more and larger opportunities for our products. As you can see, our pro forma adjusted EBITDA in Q2 2022 was negative $4 million compared to $2.1 million in Q2 2021 and compared to negative $4.7 million in the first quarter. So our EBITDA is improving, but we are making a significant number of investments, impacting our EBITDA. Our research and development has grown from roughly 3% of revenue in 2021 to almost 5% of revenue year-to-date. As a result of these dynamics in the first and second quarter, we are revising our guidance for the remainder of the year, and we now expect revenue to be in the range of $165 million to $175 million for the year. This is compared to our previous estimate of $165 million to $195 million. We are guiding towards the lower part of the range, which reflects anywhere from 20% to 27% revenue growth for the year, which we believe is healthy. We are estimating pro forma adjusted EBITDA to be in the range between negative $2 million and $3 million, as we continue to make investments and work towards achieving operating leverage associated with additional scale. The investments are starting to show signs of paying off; our investments in business development and innovation drove Q2 2022 book-to-bill performance to $1.68 billion. Redwire expects to achieve positive adjusted EBITDA in the second half of 2022, driven by this increase in revenue and a change in contract mix with higher gross margins. Moving to slide nine, I’ll provide a high-level overview of some of the market trends by industry segment. We continue to see strong growth opportunities in the national security segment, including 40% growth in the Space Force, which is growing faster than the DoD budget top line. So in national security, which is a growing area, space, in particular, is an even faster-growing area. This provides us additional confidence in the demand for our sector, driven by geopolitical competition extending well beyond just the US market. Many European nations are also planning to invest heavily in space in the future. In the civil side, we see a trend towards increasing commercial dependency. I already mentioned an imperative on the civil space side for a commercial space station, but there are also successes, such as commercial crew that drive new public-private partnerships increasing demand for commercial services in the civil space segment. Commercial space, though high in volatility, has accelerated growth potential as many of the new commercial business models prove themselves. Moving to the next slide and diving deeper into some dynamics specifically tied to Redwire. One very exciting dynamic over the last two quarters is that Redwire is providing critical components to the fastest-growing programs in the national security markets, including working with the Space Development Agency on their tranche strategy. We have built a history on many classified programs and continue to make investments in security infrastructure including personnel, facilities, contracts, and robust security processes and policies. Importantly, this serves as a significant barrier to entry for competitors, who are trying to work with these customers. Redwire's history, capabilities, and supporting infrastructure give us a competitive advantage, and we continue to invest in this area to expand our ability to execute against a robust national security pipeline. In the national security sector, we are positioned to capture many high-end bespoke portions of the market including power and radio frequency systems, digital engineering sensors, cameras, and large deployable structures, all of which are high-growth, high-demand areas for the national security customers. Therefore, we feel that our product line is well positioned for what the national security sector is buying. As we discussed last quarter, our recent success pertains to the Link-16 antennas for the FDA architecture. The net result is large multiyear contract awards in 2022 with high probabilities of follow-on work. For those familiar with the DoD sector, being baseline and established at the beginning of a program leads to very strong revenue as the program grows into production phases. The DoD will continue to invest in space, and our technologies are based on many of these high-priority programs. Moving to the Civil side, the plans for commercial stations in LEO are accelerating due to competition from the Chinese and the uncertainty in the Russian partnership on the ISS. Redwire is particularly positioned with our on-orbiting manufacturing and leading space biotechnology solutions as one of the few companies with proven capability to outfit future commercial LEO destinations. This decade-long development cycle between now and 2030 is enabling organizations to invest in key Redwire capabilities. We can be patient as we develop next-generation technologies while continuing to provide our heritage technology on the ISS through 2030. This gives us visible revenue streams in the near term while we await future commercial revenue streams to gain steam. We're excited about the Artemis I launch scheduled on August 29. Redwire provides the cameras for the Orion capsule as part of the Artemis program. We're proud of our participation in that program. Additionally, NASA is preparing to award a second human landing system contract, and we are positioned to play a major role on multiple teams as a key supplier. There is a race to the moon, establishing a permanent presence ultimately to Mars, creating additional demand for our capabilities, especially as an industry leader in IP-critical technologies like 3D printing in space. Moving to Slide 12, in commercial space, we're offering platform-agnostic technologies as a diversified portfolio, allowing us to gain a foothold with several key commercial entities across the industry. This diversification hedges the volatility associated with the commercial space segment. Interestingly, Redwire is establishing itself as a key player in the supply chain of many key commercial space providers. Indeed, we are transforming customer struggles with supply chain issues into a positive opportunity for Redwire as they seek to strengthen their supplier bases. Many companies have reached out to us to co-invest in developing products that are critical to their future plans where they believe the supplier base is weak. This will ultimately lead to additional highly sought-after subsystems and critical components added to the Redwire portfolio based on proven customer demand. Beyond being a key supplier, we continue to demonstrate new potential markets. We announced the first sale of our space-manufactured optical crystals. In some cases, we are a critical supplier, and in others, we are market makers. Specifically in the area of space-based manufacturing and biotechnology, we are market makers, reported especially on our biotech partnership with Eli Lilly showcasing significant interest from major companies in the pharmaceutical industry regarding future potential for space biotech.products. We’ve discussed the imperative for a commercial space station like Orbital Reef, which is gaining significant momentum, and we have a number of IP-driven products that are critical to the platforms' success. Moving to Slide 13 to cover our strategic positioning, we are increasing our near-term investments to achieve higher revenue and profitability as we seek to gain operating leverage. Jonathan will cover that in his segment as well. We're focused on operational efficiencies and financial resiliency to endure uncertain economic conditions. Our heritage, deep customer relationships, long government contracts, and ability to work in classified domains allow us to be patient as we watch commercial markets develop over time. We are gaining many toeholds and improving our penetration in multiyear programs with high production potential, leading to more rapid scaling in later phases of those programs. Customer satisfaction and execution success is a vital catalyst for follow-on opportunities, part of our land and expand strategy, contributing to significant momentum in our pipeline, which Andrew will discuss in greater detail. Ultimately, Redwire’s products and services are flight-proven, strategically diversified, positioning us well for the future. To expand further on that, I will now turn it over to Andrew, who will cover operational highlights for the second quarter.

Thanks, Pete. We are always proud to highlight missions that we're a partner and enabler of. So here on Slide 14, we see the NASA and Johns Hopkins Applied Physics Lab mission, the double asteroid redirect test spacecraft. This was launched this year and is powered by our rollout solar arrays and also uses our navigation components and is on its way to demonstrate the ability to kinetically impact an asteroid and change its trajectory. It's a really remarkable mission that we're proud to be a part of. Moving to Slide 15, I'd like to walk through some of our operational highlights and project achievements. These will carry over to the next few slides in more detail. First, in quarter two, we continued deliveries of products and services for multiple national security, civil, and commercial space customers including for multiyear, multi-ship set missions and satellite constellations. Our operational successes have enabled additional projects and expanded work scope via cross-selling of products and services. Our teams increased on-time delivery, including for large solar programs and navigation component projects. These operational successes have driven revenue growth and improved gross margins. Sales in the quarters have improved, and we will discuss this more in a moment. But as a preview, as Pete mentioned, our book-to-bill ratio in quarter two was 1.68, which was up from 0.45 at this time last year. In order to fulfill our customer needs now and in the future, we are also continuing to make infrastructure investments to expand production capacity and increase execution efficiency. Finally, let me point out the image on this slide; those are members of the Archinaut One extended structure additive manufacturing team presenting a one-third length test print. Light software and flight-like avionics made this team a major assembly integration and test milestone as this first-of-its-kind mission moves closer to launch. We are incredibly proud of their progress. Moving to Slide 16, our teams have continued to deliver for our customers throughout this year, enabling a wide variety of NASA, national security, and commercial missions to proceed. We delivered deployable structures on antennas supporting national security missions. We delivered Roll-Out Solar Arrays for integration by a commercial customer as well as an important NASA mission. We also turned over multiple satellites worth of navigation components for utilization on several missions. Additionally, we delivered camera systems and wiring harnesses for human-rated and robotic spacecraft. We prepared our BioFabrication facility for launch to the International Space Station later this year to continue pathfinding commercial 3D bioprinting in space. In addition to the previously mentioned progress on Archinaut One, we've also provided digital modeling and simulation services to satellite constellation operators. Notably, on-time deliveries improved in quarter two, yielding more consistency in revenue generation and a tailwind for follow-on work. Quarter one of this year faced challenges from vendor performance delays and subcontracting. I'm pleased to report that many of those challenges have been overcome, driving increases in quarter two revenue compared to quarter one while setting a strong second half of this year. Supply chain pressures do remain, but we are exploring ways to strengthen our supply chain by expanding our vendor base and building strategic partnerships. Redwire is poised to continue delivering on this momentum in the second half of 2022. Moving to Slide 17, these operational successes have driven performance improvement in quarter two compared to quarter one. In particular, as Jonathan will detail in a few minutes, our revenues were $3.9 million higher in quarter two of this year compared to quarter one, and our gross margins increased by 3.3% over the same period. In addition to these financial improvements, operational successes are leading to expanded opportunities for new orders and programs. Both new and existing customers are increasing their orders with us; many are expanding Redwire’s workshare not only by pursuing products traditionally procured from us but also engaging Redwire for other products and services they previously procured elsewhere. For some, Redwire is truly becoming a one-stop space shop. In quarter two, we were also successful in expanding multi-shipset, multiyear programs and establishing beachheads with new constellations. These are clear signals that our business development and operational success is driving future performance growth. Moving to slide 18, I’d like to discuss in more detail our backlog and sales pipeline. Our total backlog is a key business measure consisting of three elements: contracted backlog, awards in negotiation, and additional scope to complete existing contracts. Our total backlog consists of a diverse set of products and services, which protects against downside exposure from any single product or service. Between quarter one and quarter two of 2022, our contracted backlog grew from $137.3 million to $162.1 million, representing an 18.1% increase. This growth in contracted backlog was driven by our team's doubling of bookings made in quarter two relative to quarter one. Specifically in quarter two, we contracted $61.6 million in new work compared to $30.4 million in quarter one of this year. This strong bookings performance led to a reduction in the awards and negotiation elements of total backlog, resulting in an overall reduction of total backlog from $273.9 million to $251.7 million over the same period. As I will discuss shortly, our robust sales pipeline provides confidence in future total backlog growth. Furthermore, the percentage of our total backlog that is now fully contracted increased from 50.1% to 64.6%, boosting our confidence in performance for the second half of this year and into 2023. As previously mentioned, our book-to-bill ratio improved to 1.68 for quarter two, compared to 0.5 this time last year. For comparison, our book-to-bill ratio for quarter one of 2022 was 0.93. This improvement in book-to-bill ratio and increase in contract backlog provides a tailwind for execution moving into the second half of 2022. Year-to-date, we have booked over $90 million in new work. Turning to our sales pipeline, we believe its robustness will drive increased sales momentum and a larger total backlog. Our total pipeline consists of approximately $3.5 billion across roughly 500 opportunities. Of that total pipeline, $556 million is currently submitted to customers as proposals and awaiting their decision. This is up from $249 million in submitted bids at the end of quarter one of this year. Out of these $556 million in submitted bids, $264 million, or roughly 47%, has estimated selection dates in 2022. Additionally, our team is working on another $83.1 million in proposals that have selection dates in 2022. The time between selection and contract or authorization to proceed varies from customer to customer, averaging between one month to three months. Our pipeline is a healthy mix of national security, civil, and commercial space opportunities, which increases its resilience against macroeconomic forces while providing many opportunities for accelerating growth. Our high visibility into our near-term pipeline lends us confidence in seeing bookings and total backlog growth in the second half of 2022 and into 2023. Moving on to slide 20, let’s discuss the steps we are taking to ensure we have the capacity to continue to deliver for our customers as we scale. As a high-growth space company, we are making and will continue to make investments in physical and operational infrastructure to increase our operating leverage and profitably deliver quality products and services on time. In quarter two, we commissioned approximately 30,000 square feet of new design and production space. These facilities expand our capacity for RF antenna production and deployable structure production in Colorado, and robotics and mechatronics production in Europe. Looking to the future, we are on track to complete a new 40,000 square foot facility to provide expanded solar production for our Rigid Panel Solar Array lines and Roll-Out Solar Array products in California. These facilities will enhance throughput capacity for all array sizes and types while enabling construction and testing of larger solar arrays. Beyond physical investments, we are also unifying our processes and workflows to enhance operational efficiencies. Importantly, these investments support proven technologies and product lines, informed by customer demand signals to yield strong returns. They are not just ‘build it and they will come’ investments. Our physical and operational infrastructure investments are currently bearing fruit, evident in our increased revenue and gross profit. They bolster our ability to meet increased demand from our sales momentum in the second half of 2022 and beyond. With that, I'll hand it over to Jonathan to review our financial highlights.

Thank you, Andrew. Let's review the financial specifics of the second quarter and the first half of 2022. As we turn to slide 22, our second quarter fiscal year 2022 revenues increased 14.2% year-over-year to $36.7 million. Our second quarter net loss was $77 million compared to a net loss of $15.9 million in the second quarter of fiscal year 2021. This net loss included the mark-to-market on our warrants and an $80.5 million non-cash impairment expense. Let's briefly address this non-cash impairment. During the second quarter, there was a decline in the company’s market capitalization, driven by general economic conditions including heightened inflation and rising interest rates. This triggered a test of goodwill, tangible and intangible assets. Based on this test, we incurred a pre-tax impairment charge of $80.5 million. These impairments did not impact Redwire's revenue, supply chain contracts, liquidity, or compliance with our credit agreement with Adams Street Partners. Our adjusted EBITDA loss of $4.1 million in the second quarter of 2022, which includes this non-cash impairment expense and several other non-cash and one-time add-backs, is detailed on page 33 of this presentation. One of the key themes for the second quarter is improvement over the first quarter in 2022 and a number of important commercial and operational areas already discussed. Redwire has demonstrated this financially, with revenues that were 11.7% higher sequentially, and gross margins that increased by 3.3% over the same period. The second quarter adjusted EBITDA loss of $4.1 million is 13.2% better than the $4.7 million adjusted EBITDA loss in the first quarter. Additionally, second quarter free cash flow, which we prioritize, was a use of $500,000, markedly better than the free cash flow use of $6.4 million in the first quarter of 2022. With a book-to-bill of 1.68, detailed on Page 32 of this presentation, we anticipate this trend will continue as we expect to achieve positive adjusted EBITDA in the second half of fiscal year 2022. However, a number of factors, which we'll discuss in the next few pages, including investments in business development, R&D, and public company costs, have impacted our adjusted EBITDA for the first half. Correspondingly, management is tightening our previously provided revenue guidance and now expects revenues to range from $165 million to $175 million. We also revised pro forma adjusted EBITDA to be between a negative $2 million and positive $3 million. Please turn to Slide 23 for further detail on Redwire's revenue growth. The year-to-date comparison for 2022 and 2021 shows revenues increased by $5.8 million or 9.1% for the six months ending June 30, 2022 versus the same period in 2021. Revenue increases are distributed among several customers with no single class predominant, similar to what was previously discussed by Pete and Andrew. These revenue increases are primarily attributed to our deployable and component lines of business, partially offset by certain other lines in previous years. On the right, our sequential 2022 quarter comparisons show an 11.7% rebound in our second quarter from the first quarter, driven by our deployable lines of business. The significance lies in the fourth quarter of 2021 showing a similar impact from this business line, while we faced headwinds in certain areas in the first half of 2022. Redwire is not inherently seasonal concerning revenue recognition; however, our organic acquisition of contracts can be uneven, best predicted by our current book-to-bill of 1.68, compared to 1.28 in the second quarter of 2021. Please see slide 24 for additional details concerning Redwire's adjusted EBITDA profile. For the year-over-year comparison for 2022 to 2021, adjusted EBITDA declined from $2.6 million to an $8.7 million loss in the first half of 2022, even with revenue increases during that same period. Our first half 2022 adjusted EBITDA was positively affected by additional revenue growth, contributing a $1 million positive, despite overall revenue remaining gross margin neutral. Yet, year-to-date gross margins contributed to a negative $4.9 million decrease due to a contract mix with lower gross margins and increased estimated costs to complete certain programs. The contribution demonstrates Redwire continues to invest in business development, R&D, and public company costs that expand size opportunities but impact first half 2022 EBITDA, especially in the first quarter. This adjusted EBITDA included cost efficiencies that management has implemented, balancing these efficiencies with investments. The sequential quarterly adjusted EBITDA improvement from Q1 to Q2 in 2022 shows operational leverage returning to the company. If we compare the 2022 Q1 bar to Q2, we see an opposite trend on the left chart. New contract wins, better contract mixes, and higher gross margins—much of it in our deployable components drives that gross margin. Contracts inherited in past acquisitions were priced with lower gross margins and did not represent the one Redwire effect; those are rolling off, making the second quarter of 2022 indicate a better reflection of Redwire's profitable potential. New contract wins are priced to reflect differentiated solutions with higher gross margins that will displace contracts rolling off. Lastly, our investments in operating expenses appear to be leveling off, leading us to be more efficient in the future and bring more operating leverage to Redwire, exemplified by the 14.5% sequential decrease in SG&A, which dropped from 63.7% as a percentage of revenue to 47.8% in the second quarter of 2022. Please turn to slide 25 to summarize the previous two slides and contextualize our 2022 guidance. Our revenue guidance is assessed based on actual revenue recognition as the year progresses, our total backlog and backlog quality that Andrew mentioned, and the size of contract pipeline opportunities with our book-to-bill trends helping quantify our guidance range systematically. Continuing Pete’s theme on revenue momentum, the preliminary second quarter sequential revenue improvement, and our 1.68 book-to-bill, facilitate a markedly better outlook for second-half revenue compared to the first half. However, various factors impacted first-half revenue, leading management to tighten the previously provided 2022 guidance range to $165 million to $175 million. Regarding adjusted EBITDA, we analyze guidance based on revenues, contract mix, gross margins, and the investments we've made in operating expenses over time. Continuing this revenue momentum theme, second quarter improvements signify that expectations for positive adjusted EBITDA in the second half are considerably better than the first half. That said, we still expect to face challenges in the first half affecting adjusted EBITDA, leading management to revise prior 2022 guidance for pro forma adjusted EBITDA to a range of a loss of $2 million to a positive $3 million. Please turn to slide 26 as we discuss free cash flow for the second quarter before concluding with liquidity. Free cash flow, computed as adjusted EBITDA less capital expenditures and changes in net working capital, provides a perspective on our unlevered free cash flow generation capabilities before non-cash items and certain one-off expenses. This measure remained consistent since last year's S-4 proposal, reflecting our improvement and intentions for future advancement. Most of the sequential improvement this quarter resulted from increased revenue and EBITDA that I mentioned previously, alongside expected second half improvements from similar factors. On the right chart, we show our available liquidity as of June 30, 2022, which totaled $25.9 million, comprising $10.9 million in cash and $15 million in available borrowings under our credit facilities. We maintained stability from the previous quarter. It's important to note the solid support from our shareholders and Adams Street Partners during the quarter. Our August 8, 2022 Redwire Fourth Amendment, details in our earnings release, suspends certain leverage ratio requirements as we move forward and indicates a support guarantee limited to $7.5 million from our shareholder. We have the critical liquidity we need to grow. So with that, I’ll hand it over to Pete for any concluding remarks.

Thank you, Jonathan. So in summary, we're building a foundation for near-term improvement and long-term growth. The first quarter and second quarter of the year were lower than expected, but Redwire is the type of company that you measure in years, if not multiple years, due to the lumpy nature of our revenue and the extraordinary pipeline we have developed as we continue to invest. Demand for our products and services is strong, driven primarily by a decade-long geopolitical competition for dominance in space. Our proven technology is not dependent on a 'build it and they will come' scenario. We are generating value-added products today and supporting hardware now. As mentioned, Redwire continues to invest in business development and R&D, which has expanded the size of our programs, impacting our adjusted EBITDA for the first half of 2022. Nonetheless, these investments are paying off; our second half revenue growth is underpinned by a significantly higher 1.68 book-to-bill combined with a change in contract mix and higher-growth margins, improving our outlook for the second half of 2022. As revenue and operating leverage improve sequentially, Redwire expects to enhance our financial outlook. We view positive EBITDA for the second half of the year and great momentum leading into 2023. With that, we'll turn it over to the moderator for questions.

Thank you very much, and have a good day.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.