Diamond S Shipping Inc.
Q2 2020 Earnings Call Transcript

Published:

  • Operator:
    Good morning, ladies and gentlemen, thank you for standing by and welcome to the Diamond S Shipping Second Quarter 2020 Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. [Operator Instructions]. I would now like to turn the conference over to your speaker today, Craig Stevenson, Chief Executive Officer. Please go ahead.
  • Craig Stevenson:
    Good morning, and welcome to Diamond S' second quarter 2020 earnings call. Thanks for dialing in this morning. Before we begin the call, we'd like to draw your attention to our forward-looking statements disclaimer. We will be making certain statements about the future events that may or may not happen in the manner which we describe. Please read Page 2 in its entirety for a disclaimer about forward-looking statements. Please turn to Slide 4 for a review of our operating performance. In the second quarter of 2020, our spot crude fleet earned approximately $44,215 a day, while our spot product fleet earned approximately $19,000 a day, which includes our MR tankers earning $19,425 a day. All-in TCE, which includes spot and time charters, was $40,600 a day and $18,000 a day in our crude fleet and our product fleet respectively. At Diamond S, we look at operating earnings of our fleet which we calculate as TCE less OpEx less G&A. We think it's important to highlight given the various ways these expenses get classified in our industry. The crude fleet generated $32,500 a day of operating earnings, while the product fleet which includes our Handysize vessels generated about $10,600 a day. Our reported net income was $45.7 million or basic EPS of $1.15 per share. EBITDA was approximately $84 million and we repaid about $40 million in our revolving loans. On the lower half of the slide, you can see spot earnings volatility during the year as well as spot rates for 2019 and the 10-year range. So far in the third quarter, we booked approximately 59% of the spot revenue days at an average rate of $25,700 a day in the crude fleet and approximately 55% of the revenue days in our product fleet at approximately $11,000 a day. The DSSI fleet is approximately 20% booked on time charters. The details of those time charters can be found in our Appendix. On Slide 5, the global pandemic has led to significant crude oil demand destruction. While the chart on the left shows OpEx latest estimate of a 10% decline from 2019 to 2020. The market environment remains highly uncertain and actual decline may be higher than that. The storage play which we talked about in the last quarter was short-lived, and anticipated. Refinery capacity is still at 70% utilization. Global inventories which are estimated to be at an elevated 80 days of forward-demand is an additional headwind. In the short-term, we expect to see some seasonal impacts to demand. We continue to see restraint on the tanker supply side as the graph on the right hand side of Page 5, shows an order book at 20-year lows with little supply growth across all tanker types. This is a bullish long-term signal. With a low order book combined with eventual demand growth is positive, particularly since demand will likely be driven from the Far East, while the production growth is largely in the West. Also, we believe to the extent that pandemic continues to linger into 2021, owners of older tanks will have tough decisions to make whether to put the vessels through another shipyard. Which brings us to the next slide, Slide 6, where we present a chart that shows 7% of the Suezmax and MR fleet is older than 20 years of age. These percentages will increase at the start of the New Year. There has not been a good deal of ordering this year and we believe the supply growth will remain low not only due to the increasing age of the fleets and scrapping, but also the uncertainty of the regulatory environments and technology on new building tonnage. Tanker demand growth, as shown at the bottom of Page 6, has been modified downward but it is forecast to rebound in 2021 both in crude and product tank. While the demand for the crude oil and refined petroleum products is not expected to rebound to 2019 levels, in 2021, we expect to see incremental benefit from longer haul voyages both in crude and products. On Slide 7, we show in a graph asset values relative to the 10-year average both for Suezmaxes and MR fleet. We believe there is continued disparity in value of older tonnage, particularly on the crude side, which provides for upside potential for Diamond S and our shareholders. We expect a large fleet of middle-aged vessels can generate much better cash flows than smaller younger fleet, especially considering the amount of capital employed to purchase assets at today's prices. This is certainly amplified by the lower bunker prices today. I'll turn it over to Kevin, our CFO, to go through the financials.
  • Kevin Kilcullen:
    Thanks, Craig. With $45.7 million in net income and $1.15 earnings per share, second quarter of 2020 was the third consecutive quarter record earnings for Diamond S. Both our crude and product fleets generated substantial cash flows in the quarter producing $40 million to $45 million of EBITDA respectively; more than double the results from the comparable period in 2019. On the TCE basis for the second quarter, the spot crude fleet earned $44,000 per day; spot products fleet produced approximately $19,000 per day. Time charters booked in prior periods at lower rates brought the quarterly TCEs down on both fleets. As we discussed on last quarter's call, our Crude TCE was negatively impacted by six stranded voyages whereas our Suezmax vessels were used to defacto float and storage. Our commercial team estimates this may have cost us as much as $15 million in net revenue and over $10,000 in TCE for the period. We understand this problem was faced by many owners but with 55% of our spot fleet hung-up on these voyages, we believe, we were disproportionately impacted. For the third quarter of 2020, we have 59% of spot crew days booked at 25,700 per day, 55% of product spot days booked at 11,000 per day. Overall third quarter product bookings have been weighed down by the Handysize vessels which were averaging just over $8,000 a day, and by us positioning voyages as our vessels deliver into the Norient Product Pool. Given the right outlook for the remainder of the quarter, we do expect to be below cash break-even levels for the third quarter. Cash flow generation in the second quarter though was strong. We used the earnings generated by the fleet to reduce our outstanding debt, including paying down our revolving credit line by $40 million. These amounts can be redrawn for liquidity purposes or to take advantage of market opportunities in the future. Turning to the next slide, and getting into the balance sheet, the story for the quarter continues to be deleveraging. With scheduled amortization and the revolver paydowns, total debt is now $768 million, which puts net leverage on the fleet at approximately 41% based on broker values as of June 30, 2020. Working capital employed in the business declined slightly in the quarter primarily as a result of lower bumper prices. The liquidity situation at quarter-end is strong with approximately $128 million free liquidity available from the company after restricted cash and bank required minimum balance. Our debt financing is entirely low cost senior secured ship loans from a syndicate of major international shipping banks. During the quarter, we entered into interest rate swaps, so we fixed approximately 25% of our future floating LIBOR exposure at just above 50 basis points locking in a cost of debt on this amount just over 3%. Moving on to the next slide and a refresh on CapEx. We're reiterating the same guidance that we've previously provided regarding the cost of CapEx events. I will note that recent projects have come in at the high-end of the ranges provided given the difficulties associated with the global pandemic. Three dry docks were completed in the second quarter and we expect two more in the second half of the year. In addition, we completed one scrubber installation in the quarter and have subsequently completed another in the beginning of the third quarter. The longer-term CapEx outlook has shifted as we believe that five ships initially planned for dry dock and BWTS installation in 2022, we will now enter the shipyard in 2020. Additionally, we now expect the final Suezmax scrubber installation associated shipyard work to commence in 2021 rather than the fourth quarter of 2020 as originally planned. Moving on to the next slide, given the global uncertainty, I will then refresh our guidance on certain key cost items. Daily OpEx is expected to increase on both fleets in the second half of the year, as we accelerate through changes where possible and opportunistically stock and store our vessels. Depreciation and amortization remain the same as previous figures. On G&A, we expect 3Q and 4Q of 2020 finish in the $7.5 million to $8 million total G&A range, as we have one-time costs related to overhead reduction in conjunction with the movement of ships into the pool. We will however see the benefit of these moves in 2021, and our quarterly G&A should decline to an average below $7 million per quarter. Off-hire guidance has also changed for the fourth quarter. As I mentioned on the last slide, the final scrubber shipyard has been pushed into next year. I will now turn the call back to Craig for summary.
  • Craig Stevenson:
    Yes, thanks, Kevin. Before we open it up to Q&A, we'd like to briefly summarize our priorities to this unprecedented market environment to give a sense how Diamond S is positioned and our management philosophy. First, commercial scale is critical, while we're happy with the size of our fleet. In June, we announced a strategic partnership with NORDEN whereby 28 of our MR2 product tankers will be commercially managed by the Norient Product Pool, including ships owned by Norient and others the pool manages around 150 tankers, and is one of the largest MR tanker operators in the world. We believe this significantly enhances our commercial side without forcing consolidation of assets. We're certainly in the position to grow our fleet, but will only do so under certain circumstances. We of course focus to maintaining our low cash break-even levels, which are highly competitive in both crude and product fleets, maintaining a lean profile, strong operating leverage in good markets, and equally important acts as a buffer in the weak markets. And this brings us to our balance sheet. As we stated earlier, we repaid $40 million outstanding under our revolving loans in the second quarter. The net effect is to reduce our running expense, while simultaneously increasing our liquidity. Heading into what we expect will be a soft patch in the market due to the impact of COVID-19; we have total liquidity of $185 million. We also have very limited CapEx requirements for the balance of this year. While we expect some challenges ahead as the tanker market is impacted by the global pandemic, we believe Diamond S is well-positioned with strong liquidity, modest leverage, industry-leading break-even levels to support the downturn and prepare for when the markets return. With natural limitations on fleets fly and the need for tankers due to regional imbalances of oil, we expect the tanker market to return to fundamental supply/demand once we work off current excess inventory build. Diamond S remains exposed to the volatility in the stock market, and will utilize disciplined capital allocation in order to maximize our return to shareholders, while maintaining a healthy balance sheet. With that, I'd like to open up the call to questions. Operator?
  • Operator:
    Thank you. [Operator Instructions]. And your first question comes from the line of Ben Nolan with Stifel. Please go ahead.
  • Ben Nolan:
    Great, thanks gentlemen. So my first question relates to the shift of the 28 MRs into the Norient Pool, really a couple of questions around that. Number one is appreciating that some of your vessels are commercially managed by capital. But I'm curious why 28; I mean, is that all that you were able to do or were there some limitations on age or something else? I'll stop there. I guess, you might answer now.
  • Craig Stevenson:
    Yes, there's -- it's not an age issue. It's -- it's the original transaction that we did with capital -- capital managers of ships, so we did as many MRs as we could 28.
  • Ben Nolan:
    Got you.
  • Kevin Kilcullen:
    I think, one other MR that's on the time charter that we could put into pool when it comes up -- once it comes up.
  • Ben Nolan:
    That's it. So when you were thinking about making that decision, I assume you sort of compare their historical performance versus your historical performance. I'm curious if you can maybe quantify at least sort of anecdotal rationale or spread in terms of sort of how that that pool has done relative to sort of how you were performing or how maybe we think about, where -- where those may hopefully perform in the future relative to how they've done in the past?
  • Craig Stevenson:
    Yes, it's interesting. So we have what I would say an extensive process that we reviewed all of the top performers that that actually have pools that you can access. And so, it was a very thorough analysis, little bit more complicated than you think because they all sort of function a little differently. But I can say to you that in tough years, the outperformance actually tightens a little bit but when markets are really strong, it's -- it's even more dramatic enhanced performance. And so in a tough year, it's more like, we felt like it was $1,000 a day but it can be well over double that in strong markets. And so it was incredibly compelling. I mean, if you think about it, in a bad year, so you get $28,000 a day more and soon to be $29,000 a day more in a bad year, but in a good year, you could double that per day. And so along with the G&A savings, it's an enormous benefit to the company. And so we're very happy with that. We believe in every aspect of our business that scale is super important. Yes, better knowledge upon which to make decisions and over time, you will just outperform what you would otherwise do.
  • Ben Nolan:
    Okay, that's, that's very helpful, Craig. And just to sort of cap out the pool thing, that the rate thus far on the MRs in particular in the third quarter, a little bit lower than our board has thought. And I think, Kevin, maybe you had said that there was a little bit of an impact on switching, and you said, is it possible to maybe quantify that at all?
  • Kevin Kilcullen:
    Yes. I mean I think of the 28 ships, I think we've delivered to-date 25. And so we've got a few more that are going to be delivering to Norient. There is a handover that has to occur. And so I think that's what you're alluding to but --
  • Ben Nolan:
    Right.
  • Craig Stevenson:
    I think we can also probably tell you that our ships that have delivered into the pool, hence note that they have all delivered post the extremely strong earnings environments. So these are all voyages that have been booked in -- in the inventory drawdown cycle we're in now, those are averaging somewhere in the 12s. So --
  • Ben Nolan:
    Okay.
  • Craig Stevenson:
    Yes.
  • Ben Nolan:
    All right. That's -- and last for me, Craig, you'd mentioned Afra, one of the things you had mentioned that you guys felt like you were probably more negatively impacted in those from some of the demurrage stretching that have been going on. We've heard a little bit that they've been perhaps a little recapture of that that maybe the market is really weakened, you still have ships that are still kind of been unable to or not discharged. And so the demurrage rates have been in excess of where the current stock market is. Curious, is that anything you've been able to benefit from or it was just not material enough to matter?
  • Craig Stevenson:
    Yes, Ben, we have Mike Fogarty who is at the commercial side of the business and let me let him have a stab at that.
  • Michael Fogarty:
    Yes, hi Ben. The voyages that we're talking about the six voyages that were impacted were fixed on demurrage rates that in absolute terms were quite good and at or maybe above what the quarter was booked at. But when you had that tremendous spike in Suezmaxes in all of the crude where the voyages went to, the TCEs went to $100,000 a day; we missed -- we missed earning those high paying voyages because we were stuck on demurrage. And now that the market has completely turned, and we're at a much lower rate, call it, $15,000, $20,000 a day for Suezmaxes, those voyages have finished unfortunately, so we kind of got a double whammy with it, we were stuck on these lower paying voyages missing the spike. And then while you wouldn't mind being on $40,000 a day demurrage right now, those voyages have unwound. So we were just very unfortunate timing has happened to us.
  • Craig Stevenson:
    Hey Mike, I think you need to agree that inordinately long demurrage and that is very unusual length of demurrage, forget about the rate.
  • Michael Fogarty:
    Yes, yes, and it's a good point, Craig it was more that the ships were being used for unintended purposes when we entered those voyages for extremely long periods of time at a demurrage rate basically used for storage without using net worth.
  • Ben Nolan:
    All right. Well, that's very helpful. I'll turn it over, good to hear from you, Mike. Thanks guys.
  • Craig Stevenson:
    Thanks Ben.
  • Operator:
    And your next question comes from the line of Omar Nokta from Clarksons Platou. Please go ahead.
  • Omar Nokta:
    Hi, thank you. Hey guys, just maybe following up a little bit on the discussion, but on a separate side of it with the pool, you're integrating the products into Norient here this quarter. How do you think about the Suezmax fleet and how you commercially manage that? You do have critical mass; you've been able to achieve pretty strong rates over time. How do you feel about that business segment and the thoughts of establishing a larger pool for those ships?
  • Craig Stevenson:
    Yes, I mean you think like we did and the virtues of scale, just give you an advantage each and every day. And to think that you can be sort of an island outside of that and consistently perform against people that have a lot more market share than you do. It's just tough. And so I would tell you that there's a limited amount of resources that we have within -- within Diamond. The most important thing we did is to conduct an analysis of who the best person to go with on the product side. But quite frankly, I mean the Suezmax side is the next -- next issue that you look very, very closely and all there are opportunities to consolidate in a pooling way rather than in a balance sheet way.
  • Omar Nokta:
    Okay, thanks, Craig. So potentially more to come on that frontier in the medium-term potentially.
  • Craig Stevenson:
    Yes, I would say so.
  • Omar Nokta:
    Okay, cool. And then maybe just separate topic. Obviously you've got the very strong liquidity you mentioned $185 million. How do we feel about the share buyback in the broader context of a near-term weakness and some uncertainty over say the next few quarters before we head into 2021, 2022 with the lower order book?
  • Craig Stevenson:
    Yes, I mean that's a tough call. I think -- I think the nervousness is about the near-term cash burn. And once we get through that near-term cash burn, and as Kevin indicated earlier, we have reduced CapEx it is something that we will absolutely give a lot of consideration to.
  • Kevin Kilcullen:
    Yes, we continue to think that the share buyback is the highest and best use of capital, assuming we are comfortable with the liquidity situation. And really, we've been pretty consistent about this since the beginning of the pandemic. It's just the uncertainty as to when and if things return to pre-pandemic levels, particularly on the demand side and what that means for tankers in the intermediate term. Long-term, as Craig said, we're really bullish, just how long does it take to get there. I don't think anybody really knows and if somebody is espousing a very strong opinion on when it happens, they're most definitely, probably not telling you the truth. So that uncertainty that has made as be cautious, and we will continue to be cautious, at least in the near-term.
  • Craig Stevenson:
    Yes, that makes sense, makes sense to be prudent and prepared for -- prepared for weaker periods.
  • Omar Nokta:
    Cool, I'll leave it there. Thanks guys.
  • Craig Stevenson:
    Thank you, Omar.
  • Operator:
    And your next question comes from the line of Liam Burke with B. Riley. Please go ahead.
  • Liam Burke:
    Craig, you've been balancing the fleet in terms of pooling and you just discussed Suezmax plan looked. Looking at the fleet, would you be more biased towards when the cash flow situation, cash situation stabilize to adding vessels or did the best thing as you look at your cap in the context, your capital allocation strategy?
  • Craig Stevenson:
    I will say that, we're in the summertime, in a normal year; summertime is the time that you think about selling ships and certainly not in the COVID-19 summertime. The most attractive thing you can do with your capital today is probably to sell a ship and buy back shares with the net proceeds from that sale and so the stocks are trading dramatically lower. I mean then -- then your NAV calculation would indicate the value of the ship is and so it's under 50% and so it is -- it's an incredible opportunity.
  • Kevin Kilcullen:
    Yes, we're much more likely to be sellers of some of the assets that we've mentioned in the past where we're looking at particularly the older assets that we own rather than buyers, as Craig said, doesn't make a whole lot of sense to us right into turn dollars and $0.50 by buying assets within DSSI.
  • Craig Stevenson:
    Around buildings -- the new building buying a ship on the water for instance would be far less valuable than buying back your shares at these levels, right. And so let people speculate on what your NAV is, but if you thought about selling a ship at that NAV level, you know it's an enormous incentive to buyback your shares.
  • Liam Burke:
    Fair enough. Kevin, you've gotten some nice interest rates on the swaps? Do you see any other opportunity to further tick down interest rates?
  • Kevin Kilcullen:
    Yes, we're always looking at it. And we'll continue to be opportunistic on that front. I think there might be an appetite to fix more of the forward exposure. Again, it's just where do you see the intermediate term outlook for the global and U.S. economy in their moment of time when it might be even more favorable to lock-in rates or would it be better to move now. We're certainly looking at it and would consider -- we would certainly consider swapping and fixing more of the forward exposure.
  • Operator:
    And your next question comes from the line of J Mintzmyer with Value Investor's. Please go ahead.
  • J Mintzmyer:
    Sounds like pretty good discussion so far about both the swaps for LIBOR interest rate and also for the repurchases debate on that. Looking a little bit at the swaps you did 25%. I know you just kind of alluded to more opportunities. Was there a specific reason for structuring it at 25% with that some sort of like tranche internally there, or is it just you're taking one step and then going to reassess going forward?
  • Kevin Kilcullen:
    Yes, that's exactly right. It was an opportunistic move where we like the levels available at the time. I think we'd be comfortable with fixing more of that board exposure but didn't really see the need to jump at it. I think the swap rates available to us remain in that same sort of level that we did back in April. A little bit higher maybe than you would think just by looking at the curves because we also have to buy in the zero percent LIBOR floor in our loans. So we continue to monitor that and certainly might make and take another chunk in the future.
  • J Mintzmyer:
    Yes, that definitely makes sense. You did a little bit of debt prepayment this past quarter. But now you don't really have any near-term maturities left there, it looks like most of it is really the 2024 chunks. Is there any plans to do any more, I guess debt prepayments or anything like that? Are you just going to write out the rest of those, term -- long-term loans?
  • Kevin Kilcullen:
    So there's a small loan on the joint venture that's due in August 2021. It's just because of the uncertainty and I think bank environment is a little premature to get started on that. The majority of our revolvers, we would with excess debt payments beyond the scheduled quarterly repayments, if there were additional capital, we would pay down those revolving loans so that we can re-borrow it in the future to move on opportunistic market opportunities or for liquidity purposes, if needed.
  • J Mintzmyer:
    Okay. Speaking of liquidity, you mentioned just a few minutes ago you mentioned that you can buy your shares back, at you said $0.50 for the dollar as an example. The NAV of course, depends on exactly what recourse you use, but it's very close to $20 a share, generally your shares are in the eights, right? So that's almost $0.40 on the dollar, at what point like how much liquidity you need, or what sort of target debt to assets ratio? What are those sort of triggers, so that you can start to correct that gap because I mean, that gap is enormous. I mean, if you could buy ships at 40%. If you could buy ships without valuation, everybody would be rushing into it. So at what point do we start to correct that stock valuation?
  • Craig Stevenson:
    Yes, I mean, it's really your view of the near-term future and potential cash burn in the near-term future. And I think COVID-19 makes it super difficult to sort of anticipate that that return to normalcy, right. A year-ago, we basically had oil consumption at 102 million barrels a day and the most optimistic; I think is a 10% decline off of that. And so that that's a really big decline, right.
  • Kevin Kilcullen:
    J, I think we'll know a lot more in the fourth quarter of this year. Look, clearly look at some of the numbers that the analysts on the phone are putting out for us for the third quarter. It's no secret that I said in my remarks that we will be burning cash in the third quarter whether the fourth quarter comes in with a seasonal and normal winter market and the tanker basically returns to making, or at least comes out of the cash burn mode, I think makes us a lot more aggressive with potential uses of capital than we're now.
  • J Mintzmyer:
    Definitely understandable we'll cross our fingers and hope the market starts to normalize a little bit more. It is good to hear that you're clearly looking at the NAV and that you understand that it makes a lot more sense. If you were to allocate new capital, it makes a lot more sense to buy shares than to grow the fleet. I think a lot of analysts and other companies don't quite understand that. Thanks for your time gentlemen.
  • Craig Stevenson:
    Absolutely. It -- we emphasize that. Thanks, J.
  • Operator:
    [Operator Instructions]. Your next question comes from line of Randy Giveans with Jefferies. Please go ahead.
  • Randy Giveans:
    Hey just I guess first on a operational question, you operate in both the crude and the products tanker market, what kind of changes have you seen in terms of routes or values during this kind of inventory destocking period?
  • Craig Stevenson:
    Hey, Mike, that's a good one for you?
  • Michael Fogarty:
    Yes, sure. Good morning, Randy. Yes, one of the negative impacts with the destocking is obviously product is in areas where you can use it locally. And so your ton mile demand has fallen off in both the crude and the products. You're seeing the long haul crudes from the East -- from the U.S. Gulf going East have basically stopped. China is the supply basically mainly from the AG now on VOs, the only positive story there is that there is a lot of backlog. So you're getting delays. But the long haul crude from the West, whether it was West Africa, or the U.S. Gulf has basically stopped. So we're going to have to get through this unwinding period. It's going to be painful. It's happening, you're starting to see drawdown but we still have some work to do before you can get back to the normalized market. And the same is true for the cleaning. It's a much more complicated route structure. But basically the same is true for the cleaning that is for the crude, if you just don't have the ton miles demand right now.
  • Randy Giveans:
    Okay. And then looking at your scrubber. Now how many days of off-hire with the last one you done at and then for the 2021 scrubber is there -- there is opportunities to perpetuate defer that, if you want or are you committed to doing that with the drydocking or how should we look at that?
  • Sanjay Sukhrani:
    Hi, this is Sanjay, Randy. So we had one scrubber installed during the previous quarter. And that took about 48 days. We also have completed one scrubber installation in Q3 that took 51 days. In terms of these scrubbers that we're planning to install in the future, yes, we would ideally like to combine them with a special survey and also hopefully wait for the spread to open up a little bit. So, yes, we will be deferring the scrubber to Q1 and Q2 2021.
  • Randy Giveans:
    Okay. And then, I guess, one last question on kind of repurchases and whatnot, I know you want to focus on balance sheet for now. Is there a target cash balance or net-debt-to-cap desired before making those kind of decisions or is it just every quarter kind of seem like what the market cycle spending look like?
  • Kevin Kilcullen:
    Yes, we kind of look at it not on a fixed ratio basis but on a liquidity runway basis. And so what we do is take a look at our total cash and our amounts available on revolvers, and sort of back calculate how many quarters of liquidity we have in various rates scenarios. I think we'd like to keep on hand at least four to six quarters of liquidity available for an unforeseen prolonged downturn. Now, exactly how much you need depends exactly on what you think a downturn looks like. But for the third quarter, I think, Randy, if I remember your model, you have earning circa $20 million of cash or something in the third quarter. So that's more how we analyze whether we have excess capital and what to do with it.
  • Operator:
    And there are no further questions at this time. I will turn the call back over to the presenters for closing remarks.
  • Craig Stevenson:
    Okay, well thanks very much for your time today. It's certainly unusual times that we're in and we're conservatively managing the company today looking for opportunities. Thanks so much.
  • Kevin Kilcullen:
    Thanks everyone.
  • Operator:
    This concludes today's conference call. You may now disconnect.

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