REV Group, Inc.
Q1 2021 Earnings Call Transcript

Published: 10 Mar 2021

[Operator:]

Greetings. Welcome to the REV Group Incorporated First Quarter 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. I will now turn the call over to your host Drew Konop. Please go ahead.

[Drew Konop:]

Thank you, Stacey. Good morning, and thanks for joining us. This morning we issued our first quarter Fiscal 2021 Results. A copy of the release is available on our website at investors.revgroup.com. Today's call is being webcast and a slide presentation, which includes a reconciliation of non-GAAP to GAAP financial measures is available on our website. Please refer now to Slide 2 of that presentation.

[Rod Rushing:]

Thank you, Drew and good morning, everyone, that's joining us on today's call. I will begin with an overview of the quarter's consolidated performance and then I'll move to commercial and operating highlights achieved within the quarter before turning it over to Mark for our segment financial details. We're very pleased to report our best first quarter adjusted EBITDA performance since our IPO in 2017 with over 200 basis points of margin improvement versus our first quarter of last year. These results reflect the commitment of our employees through our building a culture of continuous improvement, combined with the changes that we've made over the last nine months. First quarter net sales are $554 million, were up 4% versus last year quarter driven by increased sales in F&E and recreation segments, and partially offset by softness in school bus and municipal transit markets, which were impacted by COVID-19 related demand headwinds in the first quarter and throughout much of 2020. However, the quoting activity has picked up over the past few months and we expect school bus end markets to respond favorably as more people have access to vaccines that are now available and this will likely lead to reopening of schools next fall. First quarter adjusted EBITDA of $23.2 million increased 105% versus $11.3 million a year ago and it also reflects 210 basis points of the consolidated margin improvement. The structural cost out actions and restructuring over the past year as part of our operating model, review are delivering bottom line improvement. These calls to actions combined with our building of operational excellence capabilities and implementing our cadence of operational reviews have realized opportunities to drive away stout and operate more efficiently.

[Mark Skonieczny:]

Thanks, Rod, and good morning, everyone. Please turn to Page 5 of the slide deck as I move to review our segment level performance. Fire & Emergency first quarter segment sales were $281 million, an increase of 36% compared to the prior year. This includes approximately $62 million of sales attributable to our acquisition of Spartan ER that was that occurred on February 1 of last year, making this the final year year-over-year comparison that will include inorganic activity. Excluding Spartan, organic segment sales were up 6% as legacy Fire and ambulance throughput increased, despite lingering COVID-19-related disruptions. The disruptions we are currently experiencing are more limited and generally within a handful of geographies that have stricter quarantine policies, tighter labor markets, or regional outbreaks. The mix of ambulance shipments improved within the quarter with more high content units being delivered, offsetting a reduction of lower price band units. Within the fire division, our businesses were able to realize price increases that were within their longer duration backlogs. Over the last several weeks, businesses within the segment have experienced improved customer inspection and delivery acceptance. However, the on-site visits have not yet returned to a normalized level. F&E segment adjusted EBITDA was $10.2 million in the first quarter 2021 compared to $1.7 million in the first quarter 2020. The increase was primarily the result of improved profitability in both the Fire and ambulance divisions. Productivity improvements at our largest ambulance plant contributed greater bottom line profitability, which resulted in the ambulance division EBITDA margin that was 180 basis points better versus the prior year quarter. Our largest Fire plants productivity also significantly improved year-over-year, as its lean practices and pricing discipline are taking hold with margins increasing over 800 basis points versus the last year's first quarter. The new management team that arrived last year has installed a regular cadence of operational reviews, kaizans and pipeline of cost reduction project to support future improvements. Total F&E backlog was $1 billion, up 26% year-over-year. This includes backlog acquired in the Spartan ER acquisition, strong ambulance order intake over the past year and then return to regular fire truck order patterns over the past several months. Organic Fire orders increased 28% and ambulance orders increased 5% versus the first quarter last year. We expect this level of backlog to support mid-single digit organic growth for the segment in Fiscal 2021 and the momentum and converting sales to EBITDA to continue with year-over-year and sequential EBITDA margin improvements throughout the year.

[Rod Rushing:]

Yes. Thank you, Mark. And I just like to start by saying first off, again, we want to thank our employees for the work they're doing and the changes that we've put in the business here. They've responded to it remarkably and we very much appreciate the their efforts and what they've done. I'd like also to ask you to please remember to save the date of April 15 for our Virtual Investor Day, and we use the registration link attached on the presentation deck today for that. The link will also be posted on our investor website page, if you choose to do so in the future. The agenda for the morning will include a brief introduction to the REV group, our history and the segments that make up those and also are new to this story. We will give more detail on the tools we are using to drive results across our business organization. It's been historically referred to as the REV business system. Finally, we provide intermediate financial targets that we expect to achieve within the structure and process that we put in place over the past year and continue to deploy. We won't take your entire day. We have planned to do this two hours with prepared remarks and we'll have 45 minutes of questions. I want to again, thank you all for joining the call today. And now we'll open it up to the operator for any questions that you might have.

[Operator:]

Thank you. At this time, we will be conducting a question-and-answer session. Our first question comes from Mig Dobre with Robert W. Baird. Please go ahead.

[Mig Dobre:]

Thank you. Good morning, everyone.

[Rod Rushing:]

Good morning, Mig.

[Mig Dobre:]

Appreciate all the color on each segment. I guess I'd like to talk a little bit about foreign emergency. In your slides, you had pretty nice order increase in both Fire and ambulance. I'm looking for a little more context around what do you think is driving the growth here? Obviously, with COVID and with some pressure on municipal budgets, this has been an area of concern of potentially seeing weaker demand. So maybe you can comment on Fire specifically? And then also, obviously, really good growth in ambulance. What's maybe going on there?

[Rod Rushing:]

I think throughout the COVID period, we had issues, we are all kind of trying to figure out exactly what the short-term, midterm and long-term impacts were going to be to these municipal markets. And we saw periods of I'd say where things were delayed, a lot around people who want to get together to approve things and whatnot and certainly on the receiving end we've talked about in our calls, people come into our plants to accept and inspect vehicles. But you know, the coming out of the fourth quarter, we've just continued to see demand going back to what I would say is more of a historical norm. And I think I'm certain, at least on the inventory side, the COVID funding, the extension of that initial funding that really came out for another year. And now with the new bill being passed, there's some momentum I guess, to offset deficit, but also provide funding access to these to these municipalities. And we're still trying to understand the full nature of that, obviously, but I just think that we're working through a process here that's kind of first time for everyone to go through. And the reality is, it's we're probably returning back to more of a normal in terms of orders. And we're speaking about order intake. On the execution side, it's just us been able to convert maybe a little bit better than we have in the past. But on the order side, we see good order intake and we see good bidding activity and we talked about it even you didn't ask about school bus, but we see bidding activity in that and improving as well. So I think we're optimistic about coming through this and the benefit these vaccines are built are going to offer and hopefully returning to a normal in the U.S. here. So, Mark, if you want to add to that.

[Mark Skonieczny:]

No, I think that's right. So obviously, maybe with our backlog, it gives us a momentum here to execute on there for the remainder of the year, but obviously the pipeline is what we're looking at here and as Rod said and as I said in my prepared remarks, we see are seeing bid activity that has normalized and on the ambulance side, it's actually been heightened with the CARES Act as Rod referred to. So we are seeing heightened activity in there and with the extension obviously, what the new announcement holds and the new bill holds, I think is only a tailwind for us from that perspective.

[Mig Dobre:]

I see. Okay, that's helpful. If we can talk a little bit about margin here, you're pretty clear about expecting improvement. But I'm just sort of wondering if I'm looking at your overall guidance, by my math, it seems to imply about 25% incremental margin on the top line growth you're baking in. As you looked at Fire and Emergencies specifically, do you think the segment should have higher or lower incremental margins relative to company overall? And as because like we talked in prior quarters, there's so many moving pieces here -- your internal improvements, incremental volume, pricing seems to be better. So some color here would be helpful.

[Rod Rushing:]

Yes. I think as we move in, we've been pretty transparent with the improvements that are needed on the Fire business specifically. So we would expect to see those incremental margins continue to improve throughout definitely on a year-on-year basis as we've highlighted, especially on our Ocala, which we've talked about multiple times in the E1 business, and as we continue to focus on the other activities, as well as the integration of Spartan as we move to look at that and vertically integrate some of the chassis opportunity, we will see some margin expansion there from that perspective. So I think we'll see year-on-year incremental as we continue throughout the year.

[Mig Dobre:]

But do you think you're going to be higher than the overall company in the segment specifics ?

[Mark Skonieczny:]

Yes.

[Mig Dobre:]

Got it. And last question. I'm going back to columns here and the ED platform that you're starting to build. It seems to me like this product is based on the F450 chassis. Would this have applicability for ambulances as well? Or is that not something that you're contemplating? Thank you. I'm sorry, maybe rephrase the question to make sure I understand specifically what you asked.

[Mig Dobre:]

Yes. Your school bus product, the EV product. That based on a Ford F450 chassis and I know that you're using these types of chassis in ambulances as well. So, I'm wondering if at a point in time, we should be expecting a BV ambulance product out of you as well.

[Rod Rushing:]

I would say that all of our busine1s units have development in EV space and they're all in somewhat different places in terms of the partnerships we're working through and how we're doing the kind of the co-development. We're working with an integrator on the Collins offering. And when you think about the requirements for a school bus versus the requirement from loading, they're quite a bit different. So you have to have a different process to go through for an ambulance. Now, we do have work going on there in our LEV business development work on the electric side that we're working on and we also have some work in our other ambulance businesses that's more around idle mitigation, and those types of things. So all of our businesses have the transferability from one to the other. There will be lessons learned, but there are in these early stages of electrification and development; some of these are more of a grassroots. How do you make it work for the application? Because the used cases are very, very different in these vehicles from one segment to the other. But there are learnings I'm sure that will transfer. So that's kind of how to think about it, it's that you got to think about the end use and the design of that purpose. You might be working with the same integrator but it'd be a different set of requirements.

[Mig Dobre:]

Sure, that makes sense. Thanks for taking my questions.

[Rod Rushing:]

Yes.

[Operator:]

Next question comes from Stephen Volkmann with Jefferies. Please go ahead.

[Stephen Volkmann:]

Good morning, guys. Maybe just to build off Mig's question there. Are you willing to give us some kind of a range as what you think F&E segment margins could exit the year at? Just so we can get a sense of how you think this builds?

[Rod Rushing:]

I would say maybe probably not from that perspective. Obviously we'll be up year-on-year, but specifically where we're going to exit the exit rate, you know, there's still a lot of work we have to do here from a margin accretion, we're confident that we're going to be in the 25% to 30% incremental margin there. But, you can probably model off of that, but, you know, we will exit, obviously higher than our 2020, so if you model that in that growth and those incremental off of the revenue base, I think you would get, obviously, closer to the mid-single digits as what we've said. Our last paired remarks of it -- sort of earmark around there -- mid-single digits for there versus the 3.5 that we exit last year.

[Stephen Volkmann:]

Right. Okay. And, and longer term, as you start to see the benefits of all the stuff you guys are doing. Is there a margin target that that kind of makes sense? Can this be a double digit margin business over the next two or three years or something?

[Rod Rushing:]

Sure, I mean, that is our goal that their stated goal to get there. And you know, as we continue to progress through the portfolio and look at these brands, and the operational cadence that we're building here, we definitely see that as a double digit opportunity. And, you know, we've proven that we can do that in the past, so that continues to be our goal here to reach that.

[Stephen Volkmann:]

And then, maybe one more just switching to RV actually margin performance, quite good there. But it feels like you were saying that's where the biggest kind of COVID-19 related issues were, please correct me if I'm miss reading that, but it feels like once those COVID-19 issues kind of pass through the chain, there should be some pretty significant near-term upside to that margin.

[Rod Rushing:]

Yes, definitely from that perspective and specifically, we didn't highlight it here. But we did get hit pretty dramatically, just like our bus business that got hit in California. Our lance business, which is our business, which I quoted here was significantly impacted in the quarter, so that is a well performing double digit business that was down from the perspective of being able to produce so they have the backlog. All of our businesses have the appropriate backlog to build off of so that is one as well as our class A Decatur, which is indicator has been hit significantly with the COVID. I would say more than even Alcart where some of our competitors are and where we are positioned as well. So we're also ramping up that facility. So as the line rates improve the ability to get people, new hires, not to mention the people that are absentee because of COVID-19, we've been hit relatively hard. So well, we expect to see productivity improvements at our class A as well as our lance going forward and our B's and C's business have operated very, very well. And I think you've heard you know, with RV business from a supply chain perspective been hit pretty hard, industry wide, but we've done a nice job managing the supply disruptions within that business.

[Stephen Volkmann:]

Great. And do you think those supply disruptions fade as the year progresses, and I'll pass it on. Thanks.

[Rod Rushing:]

It's hard to say in the RV. We've done a nice job on materials management group where it probably we've been able to contain within the quarter but the challenge is every month as you build these and you have furniture short is at the end of the line, you're waiting to build those out towards the end of the month. So we don't have the full completions as we would historically within that group on a week to week basis. But the team's done a nice job making sure we get completions by the end of the month and the end of the quarter. So we're managing within that supply chain within that cycle. But the expectation would be that these would improve as we go along here.

[Stephen Volkmann:]

Thank you.

[Operator:]

Next question Jerry Revich with Goldman Sachs. Please go ahead.

[Jerry Revich:]

Good morning, everyone and nice quarter. I'm wondering if you could talk about the electric vehicle opportunity for you folks. Can you just touch on if you folks have higher profitability per unit because of higher content on electric buses and potentially other electric products when they come down the line? Can you just calibrate us on how to think about profit per unit as we ramp up production over the next couple of years?

[Rod Rushing:]

Yes, first off as you can imagine, when you're a lot of these products are still I would talk in terms of end market demand. There are a couple exceptions, but vast majority are like in a prototype development, right? You're still developing these you're not at scale of production. So when you think about margins, contribution margin a day versus contribution margin when you are at scale, there's going to be a lot of maturing go out over time, as you streamline the processes, because you're actually, the labor content and amount of development in the product is different today. So our margins are -- I would say, at par are par plus, today, I think with one of the few products that we have produced. And when, as we get demand, as we talked about in Collins, we will continue to improve efficiencies and streamline that the design. So I think that there's opportunity there to do better. But you know, these are mature end markets. So when you think about the impacts of EV long term, it's really substituting technology, you're not really shaping end markets. So the question is, how is the technology mature? And in the cost structure these days, and it change over time, it's going to drive our ability to capture additional margin. I think we're optimistic on that, from a technology standpoint, but we're early, I would say inside clear to understand what the end game is going to be like. On margins, as we get competitive platforms, from a chassis standpoint, to buy against and versus working with people to co-develop that's going to, that dynamic will change the industry, I think a lot and the pace at which that happens is going to play out by segment. What I mean by that transit is going to move different than commercial bus, it's going to look different than school, bus, ambulance, all these are going to move at a different pace. And so, as you see those mature and the competitors get lined out, that'll we'll be able to tell a better margin story going forward. But we're early in cycle there I think, from my perspective. Mark?

[Mark Skonieczny:]

I agree. I agree.

[Jerry Revich:]

On that note, obviously, increasingly complex, competitive structure across a broad range of traditional players plus potential new players, can you talk about where on the initial set of orders that have come out to the street so far, if you will, what your order share has been for EV products versus what would spend on unconventional? In other words, how would you characterize the competitive landscape for EV based school buses and transit buses versus what you had been used to seeing on nice side?

[Rod Rushing:]

Yes, I mean I don't know that anyone could accurately reflect where they're at in their market share against on a competitive EV standpoint, I think you'd have to have that conversation, as you suggested by segment. Mark made the comment that the Taipei school buses is lagging behind C and B, because of the, it's a gas bus. And so the diesel and the consumptions is greater than the B and C. So the markets less mature there. So the net amount of units being in the class type is lower. But I think, you know, relative, what we're seeing incoming orders that Mark mentioned, the pipeline that we bid, that I like our position relative to our peers, in terms in that space. Transit buses a bit different, it's probably a little bit ahead, our share probably there on that one's a little bit lower but and the other ones are such fledgling when you think about our truck enablance in RV, and there is really not really a conversation to have there because there is no real end-market right now in terms of people building and shipping electric vehicles in those segments.

[Mark Skonieczny:]

Right. Yes, I think in the terminal truck, as we've highlighted, I think that gives us a great opportunity with a great partner there and someone who has battery technology that they have as well. So I think we've partnered up with a great partner there and Heiser AL . So I think we're looking very good from a terminal truck perspective.

[Jerry Revich:]

Okay. And then in firing emergency, really strong performance this quarter, both from production and margin standpoint. If we apply just normal seasonality to your production schedule that would imply organic growth should be in the low teens, for the full year, which as somebody pointed out earlier is a pleasant surprise relative to municipal budgets that at least on paper feel constrained. I'm wondering if you just expand on the earlier discussion is the strength that you're seeing from both an order to standpoint and production standpoint relative to particular products that you're in or geographies that you're in? Or do you think that's a market wide phenomenon? And, what are you hearing in terms of the actual drivers of the big spending increase before fire trucks and ambulances when obviously, budgets are coming back in '21 but they certainly had a tough '20.

[Rod Rushing:]

Yes, I think that, you know, first of all, I'd say that the intake activity has been very good. We mentioned that that's -- so that's good, the floor recording activity is very good. And if you try to think about what would change that momentum or that you think about, the first CARES Act got extended to the extent that has an impact municipalities or someone opening up, I think the larger municipalities, I would say, probably been a little more affected by COVID, just because they're the nature of COVID effectiveness, population densities in the larger cities had more to deal with there. And it's obviously impacted the municipalities. I think the second wave of funding, which we're still through this bill got passed, we're still working to understand the implications of that. But it's hard to argue that that won't be also beneficial to forward demand. Because one, there's money set aside, specifically related to the funding things that would like this would help us and also the relief that the states municipalities are going to have around budget deficits is also going to help them get after some things, infrastructure things and capital expenses that they want to get to as well. So we've got momentum, both from an intake and from an quoting, and everything I see, suggests that there's this there's more support for that momentum continuing and maybe even building but we're obviously watching it carefully. Because we're still at a time where we want to get optimistic and we want to believe we do know, we're optimistic about our ability to execute on what we have, we continue to be very positive on that. But there is some element of looking at the market to say, we want to get through this. We want these vaccinations to take hold, we want to see the immunity step up, we want to see communities returned to normal. And we think that's good for not only us, but everybody. So that's kind of like characterize them. If you've guys got any -- Mark, you're going to handle that?

[Mark Skonieczny:]

No.

[Jerry Revich:]

Okay, good. Well, I appreciate the discussion. Thanks.

[Operator:]

Next question; Courtney Yakavonis with Morgan Stanley. Please go ahead.

[Courtney Yakavonis:]

Greetings for the question. I just wonder if you can comment a little bit on the Brazil divestiture, I think that was entirely within foreign emergency. But can you just, remind us how big was it and if it's in any other segments and how the margins were relative to the baseline business? And then I think you also have some international operations in China. Just curious if there's any plans for that?

[Rod Rushing:]

Yes, I would say, Brazil is relatively small. So I would say wouldn't have a material impact overall, because obviously, the challenges that we've had in Brazil in that economy, so it's not going to have a material impact coordinates more around exiting that get rid of the focus, right, it was just a distraction, more than it was a core focus of ourselves. Getting out of that market, it was more of an upfitter. So it was just taking, fully built chassis, not chassis but units and updating them for ambulance, or police, you know, putting sirens and things like that on. So, you could argue it wasn't really in our core competency, from that perspective, more of a lower end upfitter operation, but I would say, it's not going to have a material impact to that segment.

[Courtney Yakavonis:]

Okay, great. Any thoughts on the China JV?

[Rod Rushing:]

Yes, we continue to look at that, you know our China JV is performing well, it does have an RV element to it. So China is also performing well, from an RV perspective. So we do have that JV is making money. As you probably know, Brazil historically has lost money for the company. So, you know, we still have to look at that area as an opportunity for us. Whereas South America, we then see that from a portfolio and its ability to get the double digit earnings.

[Courtney Yakavonis:]

Okay, great. Thanks. And then I think you guys, you know, suggested mid-single digit margins for SME, I think last quarter, you have suggested that recreation margins would step down, appreciate some of the comments on supply chain issues, mitigating there, but you did -- you were above that goal of -- I think 5% to 7% in recreation for the first quarter. I think you'd also talked about you know, Class A mix being an impact, but do you have any updated thoughts on your recreation margin targets for the year and then same question on commercial where I think you were targeting high single digit.

[Rod Rushing:]

Yes, I think the commercial will hold like we talked about the high single digits and then we can obviously talk on the on separate calls by recreation, we're probably seeing the upside to that mid-single there so we can walk through that but are probably in the higher this the six to eight, I would say that, again, there are supply chain issues there but as I referred to in the quarter, we probably would have done even a little better with it wasn't for the landside disruptions, because that is a well performing business. And that was significantly down in the quarter. So we see momentum in a class A and it really comes down to class A performance, be able to bring on new people to increase our line rates and make sure that we can build against our backlog. So it really comes down to that, which is what we talked about last quarter. So as we see momentum in class A will feel more confident than the creation of our margin going forward.

[Courtney Yakavonis:]

Okay, great. Thanks.

[Operator:]

Our next question comes from Joel Tiss with BMO. Please go ahead.

[Joel Tiss:]

Hey, guys, how's it going?

[Rod Rushing:]

Good.

[Joel Tiss:]

Good morning. Just want to beat the dead horse on the margins, if we go to like ‘23 or ‘24 and we kind of get COVID. And production disruptions and all these other things kind of normalized is, you know, and maybe it is just too early. And it's not something you want to talk about. But you think that 25% incremental margins is still going to be about where we end up like other, there'll be other puts and takes, or you think that there's some pretty good upside to that? As we normalize way out, maybe it's ‘23 or ‘24.

[Rod Rushing:]

Yes, so Joel, maybe I would just ask if he could hold your patience say April 15, because that'll be obviously with us coming out with the near term guidance here that we will be providing midterm guidance for, or goals in the Investor Day on the 15th. So rather than take our Thunder away, since we provide a guidance today, where, Drew was happy to provide our midterm guidance, our aspirations coming up here in April 15. So we'll provide those then.

[Joel Tiss:]

Maybe another jumping the gun question to them. Can you talk a little bit about other portfolio changes that that you guys are thinking about making and also your debt to EBITDA starting to come down to pretty attractive levels, other things that you might want to add again, as we normalize in ‘22, or '23?

[Rod Rushing:]

I think, if you go back to original premise or thesis here that there is, we get our operational act in order. And I think we're making great progress there and get the debt numbers, you just talked about where we want them to be, there's still consolidation opportunity in the space is we're at adjacencies, that we can explore that now that we're operationally capable to go acquire things and operate, get those things to convert, I think that'll be something we'll look at. And this is all companies, you have a pipeline, who you think that is by tangents, and here's the segment you're in. And then there's other things that are more broad and more transformational that we would know, always be looking at as well. But I think, as we talked about for the very first earnings call is we're focused keenly on operations. We're now making progress; we're starting to take around commercials and use of capital opportunities, where you're going in. And I think that's, you know, we get the debt in the right spot. There are both inside the spaces we're in today, there's opportunity and there's opportunities more broadly as well. Now technologies and whatnot, there will always be open to so I probably leave it there. But I think that that's something that we're obviously looking at, and we'll talk a bit about that I think on Investor Day. And April 15, we'll give some views on our capital allocation. You're right, Joel, as we continue to produce this income and, again, as we said, it's all about producing income and driving down the cash, right, and our cash conversion. So that's our focus here as we exit ‘21. And we'll provide some that guidance on capital allocation strategy and the call in the Investor Day.

[Joel Tiss:]

Okay, great. And then just the last one, I blew two together, can you talk a little bit about pricing power and maybe price cost? And also, is the Spartan backlog a little bit more profitable than the segment average or a little bit less or any help there would be would be great. Thank you.

[Mark Skonieczny:]

The Spartan backlog we're still working through. We're still working through that, obviously, with the integration and you gets a little challenges there with obviously being a chassis supplier, right and providing intercompany through our own brands as well as to OEM so we're still working through that and the visibility to the backlog and then from a cost price that's one focus as Rod talks about on our commercial disciplines and making sure that we know what our costs are and how we're realizing price. So we continue to improve our visibility, but again, it's with some of the systems we have in place. We were still working through fully understanding what the backlog business adds on average in five or nine to 12 months. It's very important, obviously that makes sure that we're quoting things with anticipated inflationary factors as well cost downs, and make sure we don't give those away through the whole customer supply chain or value chain. So we're still working through that systematically. But it's definitely on our radar that we are able to deliver a positive cost price equation.

[Joel Tiss:]

Okay, great. I appreciate your time. Thank you.

[Operator:]

I would like to turn the floor over to Rod Rushing for closing comments.

[Rod Rushing:]

Okay, well, thank you. So in closing, I'd just say that one, I think we're very pleased with the progress we're making. Again, I'm very thankful the team for change we put on them and the way they've embraced it, and we have a lot of work to do, but I think the momentum is building. I appreciate the questions today and obviously, please note again, April 15, we look forward to that conversation as well, which will be a little bit more forward discussion around what we think the opportunity is. So with that, we'll end the call. And again, thank you for joining today.

[Operator:]

This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.