Astec Industries - Earnings Call - Q1 2025

Executive Summary

• Strong Q1: net sales $329.4M (+6.5% y/y), GAAP diluted EPS $0.62, adjusted EPS $0.88, adjusted EBITDA $35.2M with adjusted EBITDA margin 10.7% (+460 bps y/y).
• Beat versus consensus: EPS $0.88 vs $0.46*, revenue $329.4M vs $320.4M*, and adjusted EBITDA $35.2M vs $22.0M*; sequentially, revenue softened from Q4’s $359.0M high while margins remained healthy.
• Guidance maintained: FY25 adjusted EBITDA $105–$125M (ex-TerraSource; reiterated) and management confirmed the range excludes tariff impacts; dividend maintained at $0.13/share.
• Strategic catalyst: definitive agreement to acquire TerraSource for $245M; expected accretive to margins/EPS, aftermarket-heavy mix (~60% of 2024 revenue) and $10M run‑rate synergies by end of year two, closing targeted early Q3 2025.

Values retrieved from S&P Global for consensus estimates (*)

What Went Well and What Went Wrong

What Went Well

• Infrastructure Solutions delivered net sales of $236.0M (+16.7% y/y) and segment operating adjusted EBITDA margin 18.2% (+550 bps), driven by strong plant demand and solid aftermarket.
• Profitability and cash generation improved: adjusted EPS $0.88, adjusted EBITDA $35.2M, and free cash flow $16.6M (116% of net income) on disciplined working capital management.
• Strategic M&A announced: “TerraSource adds significant growth and value creation opportunities including new markets, aftermarket parts and accretive margins” — CEO Jaco van der Merwe.

What Went Wrong

• Materials Solutions net sales fell to $93.4M (‑12.7% y/y) amid contractor/dealer financing constraints and fewer conversions; adjusted EBITDA dollars were flat and margins only modestly higher (5.6%).
• Backlog contracted to $402.6M (‑28.1% y/y) with Infrastructure down to $276.4M and Materials to $126.2M, reflecting industry normalization and order timing.
• Tariffs present margin risk: management sized potential COGS exposure at 4%–10% if no actions taken, cannot reprice backlog, and will rely on pricing/procurement levers to mitigate.

Transcript

Steve Anderson (SVP of Administration and Investor Relations)

Thank you. Good morning, everyone. Joining me on today's call are Jaco van der Merwe, our Chief Executive Officer, and Brian Harris, our Chief Financial Officer. In just a moment, I'll turn the call over to Jaco to provide his comments, and then Brian will summarize our financial results. For your convenience, a copy of our press release and presentation are posted on our website under the Investor Relations tab at www.astecindustries.com. Turning to Slide 2, I'll remind you that our discussion this morning may contain forward-looking statements that relate to the future performance of the company. These statements are intended to qualify for the safe harbor liability established by the Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions.

Factors that can influence our results are highlighted in today's financial news release, and others are contained in our filings with the U.S. Securities and Exchange Commission. As usual, we ask that you familiarize yourself with those factors. In an effort to provide investors with additional information regarding the company's results, the company refers to various U.S. GAAP and non-GAAP financial measures, which management believes provide useful information to investors. These non-GAAP measures have no standardized meaning prescribed by U.S. GAAP and are therefore unlikely to be comparable to the calculation of similar measures for other companies. Management does not intend these items to be considered in isolation or as a substitute for the related GAAP measures. A reconciliation of GAAP to non-GAAP results is included in our news release and the appendix of our slide presentation. Now, turning to Slide 3, I'll turn the call over to Jaco.

Jaco van der Merwe (President and CEO)

Thank you, Steve. Good morning, everyone, and thank you for joining us. Today is a very exciting day for the Astec family for two reasons. First, our team delivered exceptional results for Q1. Second, we are happy to announce we signed a definitive agreement to purchase TerraSource. TerraSource is a market-leading manufacturer of materials processing equipment and related aftermarket parts, serving complementary crushing, screening, and separation markets. We will talk more about TerraSource in a few minutes. Let me start on Slide 4 by telling you more about our Q1 results. I am pleased to report we experienced another strong quarter for net sales, adjusted EBITDA, and adjusted earnings per share. This is in line with our plans to deliver consistency, profitability, and growth. Adjusted EBITDA of $35.2 million increased $16.3 million, or 86.2%, over the Q1 of 2024.

Adjusted EBITDA margin of 10.7% increased 460 basis points, and adjusted earnings per share were strong at $0.88. Although our backlog of $402.6 million moderated sequentially by 4.1%, we were encouraged by improved implied orders. In our infrastructure solutions segment, strong net sales for the quarter were primarily driven by capital equipment and healthy aftermarket part sales. We continue to see strong demand for asphalt and concrete plants, which was partially offset by softness in the demand for mobile paving and forestry units. Capital equipment sales in our materials solutions segment continued to be challenged by high interest rates and further dealer inventory destocking activity, while aftermarket part sales remained stable at healthy levels. We were encouraged by the sequential double-digit improvement in our materials solutions backlog and implied orders, and we expect to see restocking activity resume in the second half of the year.

Order intake momentum continued in April. Free cash flow of $16.6 million was 116% of net income and was generated due to increased profitability and continued focus on working capital management. For the full year 2025, we are maintaining our expectations for adjusted EBITDA in the range of $105 million-$125 million, excluding the impact of tariffs. On the topic of tariffs, we all know this is a very fluid situation. I will share more details on tariffs on Slide 7. On Slide 5, we provide a brief update of the state of our industry. As you know, America's infrastructure is foundational to our national economy, global competitiveness, and quality of life. The 2025 report card for America's infrastructure provided by the American Society of Civil Engineers highlights the need for continued infrastructure investment.

Before recent legislation like the 2021 Infrastructure Investment and Jobs Act, many of our infrastructure networks had been neglected for decades. According to the report, America's roads improved to a D+ rating in 2025 versus a rating of D in 2021. Although signs of progress have been made, the need for improvement to our roads is substantial. America's more than 4.1 million miles of public roadways form a vital network facilitating the movement of people and goods. Of that 4.1 million miles, 39% are in poor or mediocre condition. Bridges received a grade of C. Many bridges are approaching or having exceeded the 50-year life they were designed for. Of the 623,000 bridges across the U.S., only 44% were deemed to be in good condition, 49% in fair condition, and 7% are in poor condition.

Continued maintenance and upgrades are essential for these bridges to withstand the higher traffic volumes and vehicle weights they need to support. As you know, Astec is a niche industry player focused on the rock-to-road sector. We have strong brand recognition in the infrastructure sector, which is largely comprised of aggregates and road and bridge construction. Needed improvements to our infrastructure provide long-term stable demand for our equipment, aftermarket parts, and digital solutions. Slide 6 shows our booth at the 2025 World of Asphalt AGG1 Show and Conference held last month in St. Louis, Missouri. Meeting with customers and interacting with our employees reminded me why I love working at Astec. We have great products, industry-changing technology, and, more importantly, the best team in the industry. As I walked the show and looked at other providers, I feel Astec is well-positioned to win.

We also invite you to mark your calendars for the 2026 ConExpo Trade Show to be held in Las Vegas, Nevada, on March 3rd to 7th, 2026. We are excited about the new products and technology we will display at this show. On Slide 7, we show proactive actions we are taking to mitigate risk associated with the new tariff environment. Our OneAstec procurement team is requiring suppliers to provide support for any price increases, and we are actively negotiating all purchases. We have initiated additional pricing actions and will continue to assess the situation to protect margins. We continue to practice deal sourcing and resourcing. We are managing supply chain alignment and will reshore to the United States when feasible. We are continually managing our manufacturing footprint.

As you know, this is a dynamic situation that can change quickly, but the Astec team is diligently tracking the current and potential impact of the tariff environment. I'll also mention this is a great time to be an American manufacturer. On Slide 8, we show our backlog information. Overall, our backlog declined slightly on a sequential basis but remained healthy, supported by growth in implied orders. Current backlog levels in the infrastructure solution segment are a combination of strong invoicing for asphalt and concrete plants, dealers ordering equipment closer to desired shipment dates, and internal operational excellence efforts to increase facility throughput. That said, we have experienced some softness in orders for mobile paving products, and the market for forestry products is currently slow. In our materials solution segment, backlog grew $12.1 million, or 10.6%, due to increased order activity.

As noted in prior quarters, we expect demand for materials solutions products to pick up in the second half of the year. Our implied orders and book-to-build trends are shown on Slide 9. We are pleased to report consolidated implied orders rose on a quarter-over-quarter and sequential basis. The infrastructure solutions segment continued to generate solid numbers. We were especially pleased with our materials solutions segment, which posted an increase in implied orders for the second consecutive quarter and posted a book-to-build ratio of 113% for Q1. With that, I will now turn the call over to Brian to provide additional comments on our Q1 financial results.

Brian Harris (CFO)

Thank you, Jaco, and good morning. Our consolidated financial results are highlighted on Slide 11. The demand for Astec capital equipment and aftermarket parts continued as net sales grew 6.5% over the prior year Q1 and increased 2% for the trailing 12 months ended March 31, 2025. We were pleased to generate an adjusted EBITDA of $35.2 million in the Q1, which compared to $18.9 million in the Q1 of last year. Adjusted EBITDA margin reached 10.7%, a 460 basis point increase over the prior year. Adjusted EBITDA and adjusted EBITDA margins benefited from volume, pricing, and mix, as evidenced by a 320 basis point increase in gross margin. Adjusted selling, general, and administrative expenses were relatively flat at approximately $63 million for the quarter but improved by 130 basis points as a percentage of net sales.

Q1 adjusted earnings per share of $0.88 compared very favorably to $0.34 of earnings per share posted in Q1 2024. On a trailing 12-month basis, we increased net sales, adjusted EBITDA, adjusted EBITDA margin, and adjusted earnings per share. This is in line with our commitment to provide consistency, profitability, and growth and shows the actions we have taken are gaining traction. Moving on to the infrastructure solution segment shown on Slide 12, we generated higher net sales for the quarter due to strong domestic capital equipment performance. Aftermarket parts were slightly lower in the Q1 but remained at favorable levels. For the trailing 12 months, net sales in infrastructure solutions increased 10.7%. Segment operating adjusted EBITDA dollars and adjusted EBITDA margins were positively affected by volume, pricing, and operational excellence initiatives and expense management. Both posted solid increases on a quarter-over-quarter and trailing 12-month basis.

The materials solution segment is shown on Slide 13. As previously noted, net sales for the quarter, along with the trailing 12 months, were negatively impacted by lower capital equipment sales resulting from the influence of high interest rates and dealer destocking. Aftermarket part sales declined slightly but remained at healthy levels. Despite lower sales revenue, we have been able to control costs and achieve improved adjusted EBITDA margins. Moving on to the Q1 adjusted EBITDA bridge on Slide 14, we were pleased to report adjusted EBITDA of $35.2 million, an increase of $16.3 million over the Q1 of 2024. Favorable volume and pricing were the primary drivers. Proactive OneAstec procurement efforts helped contain inflation, and manufacturing efficiencies also contributed. On Slide 15, we show adjusted EBITDA of $128.1 million on a trailing 12-month basis.

This was an increase of $34.4 million, or 36.7%, driven by increased volume, pricing, mix, and expense management, partially offset by inflation and manufacturing inefficiencies and other period costs. On Slide 16, you can see we maintain a strong balance sheet with ample liquidity. We ended the quarter with cash and cash equivalents of $90.1 million, available credit of $148.8 million, for a total available liquidity of $238.9 million. Our free cash flow in the quarter of $16.6 million was 116% of net income. These results were driven by profitable sales and sound working capital management. I'll now turn the call back to Jaco.

Jaco van der Merwe (President and CEO)

Thank you, Brian. Turning to Slide 17, we are very pleased to announce we have entered into a definitive agreement to acquire TerraSource. This is our first step towards growth through a significant strategic acquisition. Moving to Slide 18, let me share our strategic rationale for adding TerraSource to the Astec family of products. As you will see, TerraSource and Astec are a strong fit. TerraSource provides market-leading process equipment and aftermarket parts and services. They will strengthen our materials solution segment. Astec and TerraSource have complementary portfolios of products and technologies that will provide a meaningful synergy opportunity. Astec's international footprint will be enhanced. Our two companies are a strong cultural fit. On Slide 19, you can see TerraSource products and services align well with the Astec rock-to-road value chain. TerraSource has assembled century-old brands that will flourish under our strategic ownership.

This portfolio includes well-known and respected brands that include Gundlach Crushers, Peninsula Iron Works, Jeffrey Rader, Pennsylvania Crusher, and Elgin. Their products and services are used in soft rock, rare earth, and other minerals, dewatering and recycling applications used in diversified end markets. On Slide 20, we show information highlighting the size and scope of TerraSource. The company has over $150 million in annual revenue, approximately 400 employees, and a diverse network of manufacturing, sales, service, engineering sites, and channel partners. TerraSource will be part of our materials solution segment and will strengthen our business through scale and product portfolio expansion. TerraSource has developed market-leading positions that are complementary to our crushing, screening, and separation applications, a globally integrated platform with end-to-end capabilities, an attractive recurring aftermarket parts business, a portfolio of high-performance industry-leading brands, and a strong executive leadership team that will join Astec.

Additional points are shown on Slide 21. Of note, over 50% of the company's 2024 revenue was derived from aftermarket parts and components. Equipment sales and rebuilds represent 37% and 11% of sales, respectively. As you have heard me say over the past two years, we are passionate about providing aftermarket parts for our customers. We will continue to grow this business. By geography, TerraSource is well balanced, with 55% of revenues being in the United States and 45% generated in the rest of the world. The addition of TerraSource provides us attractive international growth opportunities. TerraSource also has diversified end markets. General industrial products and services comprise approximately one-third of revenue, while metals and mining and energy and power each account for approximately one-quarter of revenues. The remaining 15% of TerraSource revenues are generated by forestry products. On Slide 22, we provide a transaction overview.

Let me summarize the key points. The purchase price will be $245 million in cash on a cash-free, debt-free basis. The net purchase price after approximately $15 million of tax benefits is expected to be $230 million. The purchase price represents a 2024 adjusted EBITDA multiple of 5.9 times adjusted for expected tax benefits and including run rate synergies. Annual integration synergies of $10 million are expected to be recognized by the end of year two. Additional upside is expected by cross-selling products to existing and new customers. We will finance the transaction with existing cash on the balance sheet and external financing in the form of a term loan aid. Initial net leverage is expected to be two times and between one and one-and-a-half times by the end of 2026. Our strong balance sheet allows for additional inorganic opportunities while keeping leverage below two and a half times.

We expect adjusted EBITDA to be accretive from day one with significant synergy opportunities. TerraSource is expected to provide EBITDA margin expansion and improved free cash flow. The closing is subject to customary regulatory considerations and closing conditions, and we anticipate closing in the early part of Q3 2025. Turning to Slide 23, our Astec investment highlights are summarized. Astec continues to be a trusted source of globally recognized brands and a high-quality solution for our customers. Customers continue to cautiously display favorable sentiment as they are encouraged by the level of activity in construction markets. Likewise, we are encouraged by a high level of aftermarket sales, which validates equipment in the field is being used. As previously discussed, tariffs present an element of uncertainty. However, we are taking proactive measures to mitigate their impact.

We were also encouraged by the cautious customer optimism expressed at the recent World of Asphalt AG1 Show last month, and attendance at our booth was strong. Our operational excellence efforts will continue to gain traction with many of the benefits yet to come. Manufacturing and procurement efforts are driving efficiencies, and we are seeing positive adjusted EBITDA trends. Our business has several growth drivers, including our exciting new product pipeline, a growing recurring aftermarket parts business, stability provided by multi-year federal and state funding for interstates and highways, expansion opportunities in current and future international markets, and inorganic growth opportunities that are strategically aligned to meet our financial criteria. A strong balance sheet provides ample liquidity to fund growth and manage leverage, highlighted by today's announcement to acquire TerraSource. With that, operator, we are now ready to take questions.

Operator (participant)

Thank you. Ladies and gentlemen, we will now begin the question and answer session. At this time, I would like to remind everyone to ask a question. Please press the star button followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. One moment, please, for your first question. Your first question comes from the line of Steve Ferazani of Sidoti. Please go ahead.

Steve Ferazani (Senior Equity Analyst)

Jaco, Brian, appreciate all the detail on the call. Obviously, second straight really strong quarter. Got to ask, why not raise guidance here given some of your commentary? Implied orders were good. You said MS, you expect to see better orders by the second half. Obviously, margins are much better. Did you pull forward anything from 2Q? Anything that would indicate why not raise here?

Jaco van der Merwe (President and CEO)

Yeah. No, Steve, just to answer the last part, no, we didn't pull anything forward. If you look at the range that we provided, it still gives some upside from the midpoint, about $115 million. I think the one thing that maybe kept us from raising, obviously, there is some uncertainty around the tariffs from two sides. One, obviously, from a cost point of view. The next one is customers just sitting on the sideline for two or three months to see what the outcome of tariffs will be. On the tariff side, I think a couple of things from our side. We have a really strong team that drives this discussion for us right now. I feel that our team has been very proactive in terms of understanding the potential impact for us, looking at price adjustments.

Of course, this is potentially the best time to be a US manufacturer. But there is still a little bit of uncertainty on how that will all play out.

Steve Ferazani (Senior Equity Analyst)

Yep. Makes sense. How you're positioned now, given the current tariffs that are in place, if you pass through, is it still reasonable to think there'll be a lag where your margins may trend lower and then come back up as you catch up on some of the equipment costs?

Jaco van der Merwe (President and CEO)

Yeah. Yeah, Steve, as I mentioned, I think our team have learned a great deal during COVID, and we've got good internal models now to simulate the effect of these things that we maybe didn't have during COVID. Our team were very proactive. When the first tariffs came around, we saw an artificial bump here of steel pricing, and we took immediate action on that. On things like parts, there will be almost immediate flow-through if we see significant part changes. I feel that the team has done a really good job here. Obviously, there's always risk, especially with having backlog that goes into two or three quarters in the future. On some of our equipment, like our concrete plants, we are giving deliveries well into the first part of next year. We believe we've taken appropriate action, but as you know, it's a highly fluid situation.

If there's significant increases announced here recently, obviously, we're going to have to take some more actions.

Steve Ferazani (Senior Equity Analyst)

Okay. Appreciate the thoughts on that. If I could turn to the acquisition, you noted it'll fit within Material Solutions, which has been your underperforming side. Can you indicate how TerraSource has been performing? I know the end markets are different. You have more geographic diversification, and I certainly appreciate much higher aftermarket exposure. Can you give us some indication on how TerraSource has performed in the last couple of years versus your legacy Material Solutions?

Jaco van der Merwe (President and CEO)

Yeah. I just want to highlight one significant difference here. If you look at TerraSource product portfolio, they have a much smaller exposure to the mobile crushing and screening market. That is typically equipment that goes through rental fleets and then converts. Most of their products are part of larger fixed installations. They have been less affected by what we've seen on the historical or the traditional MS side. The other thing here is they have a significant part of their business are aftermarket parts. I mean, you can see about 60-63% is parts and service, and that's also where the majority of the gross margin comes from. These guys have assembled here a portfolio of legacy brands that I will say maybe did not fit with their previous owners, and they've done a really good job to put them back on the map.

The growth will come from the huge install fleet that they have. With our ability to support with our manufacturing around the world, we feel that these guys will perform really well in the future for us.

Steve Ferazani (Senior Equity Analyst)

Great. Thanks, Jaco.

Jaco van der Merwe (President and CEO)

Okay.

Operator (participant)

Your next question comes from the line of Mig Dobre of Baird. Please go ahead.

Mig Dobre (Senior Research Analyst)

Thank you. Good morning. Just a quick clarification, making sure that I heard this correctly. In your prepared remarks, the guidance that you've reiterated today, that excludes any impact from tariffs. Did I hear that correctly?

Jaco van der Merwe (President and CEO)

That is correct at this point in time, Mig.

Mig Dobre (Senior Research Analyst)

Okay. I am a little bit confused in terms of kind of how you're talking about tariffs because we do know that there are some that are in place, right? Steel tariffs are certainly in place. We've seen steel prices move higher in the U.S. as a result. I would imagine that within your supply chain, there are certain portions of it that are impacted right now by the tariffs that are in place. Maybe reiterating the previous question, based on what you know today, is there a way to size the impact, recognizing that maybe that changes three months from now?

Jaco van der Merwe (President and CEO)

Yeah. Depending on the product, with the information that is available right now, we modeled this that there could be anything between 4% and 10% impact, depending on exactly what product we have. Now, remember here, about a third of our product or our sales is from parts, and we are going to focus on flowing through that to our customers. From a steel point of view, we source all our steel in the U.S. We do not import any steel. Of course, there was a little bit of a bump on local steel prices after the initial announcement. That has moderated quite a bit. We did implement some price increasing very early on to take care of that. Our procurement team was also really quick to go out and do some forward buying on steel.

You might see a little bit of bump in working capital here in the next quarter. We are well covered now, Q2 and even partially into Q3. Yes, Mig, you're right. There is some risk. Once again, I feel like we've been very quick to react to this. I think the other thing here is we feel that we are well positioned as a U.S. manufacturer. As you know, a lot of our competitors import a lot of units to the States, and they will obviously see different levels of tariffs than what we are experiencing.

Mig Dobre (Senior Research Analyst)

When you are saying 4-10% impact, is that 4-10% of sales, or is it COGS or impact on margin? What does that metric refer to?

Jaco van der Merwe (President and CEO)

It really just shows the exposure that there is if we do nothing. Obviously, it's our ambition to make that neutral. That's the potential impact it has on COGS if we do nothing. We've already, as I mentioned, parts will flow through as we get increases from suppliers. We've already made some adjustments due to steel, and we are watching it. We know exactly what to do by product line if we see significant price changes from suppliers. The other thing is we are very focused. We have a really good tracking process here because we are going to push our suppliers to be very clear to show us where they actually get the product from, what is the effect on tariffs before we just accept price increases.

Mig Dobre (Senior Research Analyst)

Are you able to reprice your backlog?

Jaco van der Merwe (President and CEO)

No, we are not. Once again, as I mentioned, we've been very proactive. We feel that we are well covered this time compared to what we had during COVID, especially now that our backlog is down to a more normal level of that one to one and a half quarters or so.

Mig Dobre (Senior Research Analyst)

I see. The guidance excludes, obviously, all these effects. Given the fact that it excludes the tariffs, it is interesting relative to Q1, the way you're formulating the rest of the year, you have roughly 30% of your EBITDA, the midpoint generated in Q1, which is pretty rare. You normally have less than that. Normally, where we would see this sort of cadence is in years in which things are getting tougher from a margin perspective. I guess the way I would ask the question is, if all these uncertainties are excluded from the guidance, how should we think about how you see the year progressing in this outlook? Maybe more specifically in Infrastructure Solutions, you started with 18% EBITDA margin. I'm curious how you think about that as the year progresses, again, excluding tariffs.

Jaco van der Merwe (President and CEO)

Yeah. No, good point, Mig. We actually had that same discussion yesterday. We know that there's obviously a range here. We have a higher end of the range. If Q2 shapes up to be strong, obviously, that will be the ideal time to update guidance. We just felt that with the uncertainty we have right now, it was too early to raise the guidance.

Mig Dobre (Senior Research Analyst)

Final question for me, just to be clear on the acquisition. Can you tell us what the sort of year one, or maybe I should say trailing, 2024 EBITDA, annual EBITDA for this business was? Taking out all the synergies and all the other stuff around the multiple. Thank you.

Jaco van der Merwe (President and CEO)

Yeah. Yeah, Mig, we're probably not going to provide that guidance at this point. It's a little early. Obviously, when we get to report Q2 and we close the transaction, we'll be updating our guidance for the full year to include TerraSource in the numbers at that point. You can probably back into it a little bit, at least to get a ballpark range from the numbers we've disclosed with the purchase price, along with the synergies that we've identified, and the tax step-up benefit that we'll get. We're not going to provide a historical EBITDA number at this stage.

Mig Dobre (Senior Research Analyst)

We can do the math, but I would rather hear it from you so we make sure that it's correct. Thank you, though.

Operator (participant)

There are no further questions at this time. With that, I will turn the call back over to Steve Anderson for closing remarks. Please go ahead.

Steve Anderson (SVP of Administration and Investor Relations)

Thank you, Kevin. We do appreciate your participation in our conference call this morning, and thank you for your interest in Astec. As today's news release states, this conference call has been recorded. A replay of this conference call will be available through May 13th, 2025, and an archived webcast will be available for 90 days. The transcript will be available under the Investor Relations section of the Astec Industries website within the next five business days. This concludes our call. I'm happy to connect if you have additional questions later on. Thank you all. Have a good day.

Operator (participant)

Ladies and gentlemen, this concludes today's conference call. We thank you for participating, and ask that you please disconnect your line.