Matson - Q1 2024

Transcript

Moderator (participant)

Good day, and thank you for standing by. Welcome to Matson's First Quarter 2024 Financial Results conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Justin Schoenberg, Director of Investor Relations. Please go ahead.

Justin Schoenberg (Director of Investor Relations)

Thanks, Liz. Joining me on the call today are Matt Cox, Chairman and Chief Executive Officer, and Joel Wine, Executive Vice President and Chief Financial Officer. Slides from this presentation are available for download at our website, www.matson.com, under the Investors tab. Before we begin, I would like to remind you that during the course of this call, we will make forward-looking statements within the meaning of the federal securities laws regarding expectations, predictions, projections, or future events. We believe that our expectations and assumptions are reasonable. We caution you to consider the risk factors that could cause actual results to differ materially from those in the forward-looking statements in the press release, the presentation slides, and this conference call.

These risk factors are described in our press release and presentation and are more fully detailed under the caption Risk Factors on pages 13-25 of our Form 10-K, filed on February 23rd, 2024, and in our subsequent filings with SEC. Please also note that the date of this conference call is April 30th, 2024, and any forward-looking statements that we make today are based on assumptions as of this date. We undertake no obligation to update these forward-looking statements. I will now turn the call over to Matt.

Matt Cox (Chairman and CEO)

Thanks, Justin, and thanks to those on the call. I'll start on slide three. Matson's off to a solid start for the year, with ocean transportation performing better than expected and logistics meeting our expectations for the first quarter of 2024. In ocean transportation, operating income was roughly flat year-over-year, reflecting an improvement over our outlook provided in late February. Our China service experienced healthy demand coming out of a more traditional post-Lunar New Year period, with higher year-over-year freight rates but with lower year-over-year volume. We had lower year-over-year volumes in Hawaii and Alaska, and in Guam, the volume was flat year-over-year. In logistics, operating income declined year-over-year due to continued market softness and transportation brokerage. As a result of the performance in the first quarter and expected improving demand for our CLX and MAX services, we are raising our full-year outlook.

For 2024, we now expect consolidated operating income to be modestly higher than the $342.8 million achieved in 2023, with a higher contribution from ocean transportation than in our previous outlook from February. Joel will go into more detail on our updated outlook later in the presentation. I will now go through the first quarter performance of our trade lanes, SSAT, and logistics. So please turn to the next slide. Hawaii container volume for the first quarter decreased 1.7% year-over-year due to lower general demand. Tourist arrivals in the first quarter were comparable year-over-year, despite the continued impact to Maui tourism from last year's wildfires. For the full year 2024, we expect volume to approach the level achieved last year. Please turn to slide five.

According to UHERO's first quarter 2024 economic report, the Hawaii economy is projected to grow modestly in 2024, underpinned by low unemployment rate and increasing construction activity. Construction jobs are projected to increase due to large federal and state contracts and home building on Oahu. Tourism is projected to increase modestly as the industry continues to recover from the Maui wildfires last year and the gradual return of international visitors. While UHERO projects modest economic growth in 2024, our outlook is a little more cautious, reflecting feedback from our retail-related customers that saw tepid demand for consumer goods in the first quarter and expect to see this sluggish environment continue in the near term. Moving to our China service on slide six. Matson's volume in the first quarter of 2024 was 4% lower year-over-year, with lower volume for both CLX and MAX.

We achieved average freight rates that were higher year-over-year. Please turn to slide seven. Our China service experienced healthy demand coming out of a more traditional post-Lunar New Year period, with a gradual recovery of volume after factories reopened and workers returned, compared to a more accelerated increase in volume experienced post-Lunar New Year last year. The rampant volume in the post-Lunar New Year period met our expectations, but our freight rates in the post-Lunar New Year period were higher than we expected. Currently, in the Transpacific marketplace, we continue to see steady U.S. consumer demand. For 2024, we expect improving demand for CLX and MAX services in 2024 as compared to 2023. We also expect average freight rates to be higher than the 2023 levels.

We're in a good position with CLX and MAX, and our primary focus with these two services is to consistently demonstrate the speed and reliability that our customers have enjoyed. Please turn to the next slide. In Guam, Matson's container volume in the first quarter of 2024 was flat year-over-year. In the near term, we expect continued improvement in the Guam economy, with low unemployment rate and a modest increase in tourism. For 2024, we expect container volume to approximate the level achieved last year. Please turn to the next slide. In Alaska, Matson's container volume for the first quarter, 2024, decreased 5.1% year-over-year, primarily due to one less northbound sailing compared to last year. Adjusting for one less sailing, northbound volume was roughly flat, and overall Alaska volume decreased 1.7%.

In the near term, we expect continued economic growth in Alaska, supported by a low unemployment rate, jobs growth, and a lower level of inflation. For 2024, we expect Alaska volume to approximate the level achieved last year. Please turn to Slide 10. Our terminal joint venture, SSAT, increased $2.2 million year-over-year to $0.4 million. The higher contribution was primarily due to higher lift volumes. In 2024, we expect the contribution from SSAT to be higher than 2023, due to an expected increase in lift volumes. Turning now to slide to logistics on slide 11. Operating income in the first quarter came in at $9.3 million, or approximately $1.6 million lower than the result in the year-ago period. The decrease was primarily due to lower contribution from transportation brokerage.

For 2024, we expect challenging business conditions for the transportation brokerage to continue, and as such, we expect operating income to be lower than the level achieved in 2023. I will now turn the call over to my partner, Joel, for a review of our financial performance. Joel?

Joel Wine (EVP and CFO)

Okay, thanks, Matt. Now on to our financial results on slide 12. For the first quarter, consolidated operating income decreased to $1.8 million year-over-year to $36.9 million, with ocean transportation declining $0.2 million and logistics declining $1.6 million. Ocean transportation operating income in the first quarter experienced higher vessel operating costs, including fuel-related expenses and the timing of fuel-related surcharge collections, partially offset by higher freight rates in China. As Matt noted, the decrease in logistics operating income was primarily due to a lower contribution from transportation brokerage. We had interest income of $8.8 million in the quarter, an increase of $0.6 million year-over-year, due to higher interest rates on our cash and cash equivalents and CCF cash deposits and investments in fixed rates and fixed-rate U.S. Treasuries.

Interest expense in the quarter decreased $2.3 million year-over-year due to the decline in outstanding debt in the past year. Net income increased 6.2% year-over-year, and diluted earnings per share increased 10.6% year-over-year, with the difference between the two due to a 4.7% increase, or decrease in the diluted weighted average shares outstanding. Please turn to slide 13. This slide shows how we allocated our trailing twelve months of cash flow generation.

For the LTM period, we generated cash flow from operations of approximately $450.4 million, from which we used $46.2 million to retire debt, $214.2 million on maintenance and other CapEx, $53.6 million on new vessel CapEx, including capitalized interest and owners' items, offset by $20.9 million withdrawn from our capital construction fund, $14.2 million on other cash outflows, while returning approximately $207.3 million to shareholders via dividends and share repurchase. Please turn to slide 14 for a summary of our share repurchase program and balance sheet. During the first quarter, we repurchased approximately 4.4 million shares for a total cost of $48.9 million, including taxes.

Since we initiated our share repurchase program in August of 2021, through March of this year, we have repurchased approximately 10 million shares, or 23% of our stock, for a total cost of approximately $804 million. As we have said before, we are committed to returning excess capital to shareholders and plan to continue to do so in the absence of any large organic or inorganic growth investment opportunities. Turning to our debt levels, our total debt at the end of the first quarter was $430.5 million, a reduction of $10.1 million from the end of the fourth quarter.

Last, on April 19th, 2024, Matson received a federal tax refund related to the company's 2021 federal tax return of $118.6 million, as well as $10.2 million in interest income earned on the tax refund. The tax refund was placed into cash and cash equivalents and is expected to be used for general corporate purposes. With that, let me now turn to slide 15 and walk through our outlook for the full year and the second quarter of 2024. For the full year 2024, we expect year-over-year growth in ocean transportation operating income, and for it to be higher than the outlook from the February earnings call based on the performance of ocean transportation in the first quarter and the expected improving demand for the CLX and MAX services.

Absent a significant change in the trajectory of the U.S. economy, we expect trade dynamics, trade demand dynamics across most of our trade lanes in 2024 to be comparable to 2023, as consumer-related spending is expected to remain largely stable. For logistics, we expect challenging business conditions for transportation brokerage, which we expect to lead to lower year-over-year business segment operating income. As a result, we now expect consolidated operating income to be modestly higher than the level achieved in the prior year, with quarterly seasonality patterns similar to 2023.

In addition to this full-year operating income outlook, we expect the following for the full year: depreciation and amortization to be approximately $180 million, inclusive of $27 million for dry dock amortization, interest income to be approximately $45 million, and interest expense to be approximately $8 million, other income to be approximately $7 million, an effective tax rate of approximately 22%, and dry docking payments of approximately $35 million. The interest income outlook we are providing is based on current CCF deposits and cash and cash equivalents invested at current short-term government money market rates, as well as the CCF fixed rate portfolio yielding 4.53%. This outlook includes the $10.2 million in interest income received on April 19th, 2024, with respect to our federal tax refund.

For the second quarter of 2024, we expect ocean transportation operating income to be moderately higher than the $82.4 million achieved in the second quarter of 2023, and logistics operating income to be lower than the $14.3 million achieved in the second quarter of 2023. As such, we expect consolidated operating income in the second quarter to be modestly higher than the prior year. We expect interest income to be approximately $18 million, including $10.2 million of interest earned on our 2021 federal tax return that I mentioned before. Moving to slide 16, the table on the slide shows the CapEx projection for 2024 to 2026. This outlook remains unchanged from what we provided on our fourth quarter call in February.

Again, milestone payments for new vessel construction are expected to be paid from the Capital Construction Fund, which already covers two-thirds of the remaining obligations. I will now turn the call back over to Matt.

Matt Cox (Chairman and CEO)

Okay, thanks, Joel. Matson had a solid start to the year. We have a great balance sheet and are well-funded on our Aloha Class new-build program, as Joel just described. We are positioned well in all of our markets to capitalize on opportunities as they arise. So far, 2024 is shaping up to be another good year for Matson. And with that, I will turn the call back to the operator and ask for your questions.

Moderator (participant)

As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jacob Lacks with Wolfe Research.

Jacob Lacks (VP and Equity Analyst)

Hey, Matt. Hey, Joel. Thanks for your time.

Matt Cox (Chairman and CEO)

Thank you.

Joel Wine (EVP and CFO)

Thank you.

Jacob Lacks (VP and Equity Analyst)

Higher year-on-year second quarter ocean EBIT implies a pretty big sequential ramp from 1Q. Is that all volume or is there pricing there, too? And then, any way you can give us a bit of a sense of what you're thinking when you say up modestly for consolidated EBIT in the second quarter?

Matt Cox (Chairman and CEO)

Yeah, Jake, let me answer part of it, and then I'll turn it over to Joel for his comment. So I think what we're seeing, Jake, is we said this in our prepared comments, a more traditional first quarter. And by that, I mean a little bit longer period of ramping back up after the Lunar New Year holiday. And in some ways, 2024 was the first year since the pandemic that we saw kind of a longer period as the factory workers went to their home provinces and didn't need to rush back to fill orders. And so in some ways, it feels like this is gonna be our normal moving forward seasonality. And so traditionally, the first is the weakest quarter in our business.

I think we're returning to that, but we saw nice volumes coming out of, you know, from the Lunar New Year period as volumes started to ramp back up. We also noted in our commentary that freight rates will be higher than they were in the year ago period. So all in all, separate from the comment that Joel made below the line on interest income, which was this, interest on the tax refund, that's a one-time benefit, we are expecting to see ocean transportation be better, and I'll let Joel comment on the specific wording there.

Joel Wine (EVP and CFO)

Yeah, Jake, on when we say modestly, we just mean a little bit more. You know, it's meant to be just nothing more than regular plain English, so not dramatic. And then when we say the word moderately, that's a little bit more than modestly. So that's how we use those words.

Jacob Lacks (VP and Equity Analyst)

Okay, makes sense. Last quarter, when we spoke, you mentioned you hadn't seen any real impact from the Red Sea disruptions with spot rates remaining elevated. Is that still the case, or is some of that starting to bleed through to your business?

Matt Cox (Chairman and CEO)

Yeah, I would say, I'll answer the question more generally, and then I'll answer it specific to our business. But I think what we have seen is that the carriers that have traditionally used the Red Sea and the Suez Canal, most of that capacity now has gone, as you know, around Africa. Like, and what we have there has been additional capacity deployed on all those trades in order to accommodate the longer transits. I would say that's been relatively painless from a customer's supply chain perspectives. Of course, the transits are longer, but from a delivery, from a port deployment, and whether that's cargo that's destined for the Med or Europe or the U.S. East Coast, via that. So we haven't really seen much disruption, as an industry.

And it's certain we haven't really seen much routing other than very much on the margin. There were a few countries like Vietnam or places in Southeast Asia that can look at if, if cargo is destined for the East Coast, but that's been, you know, I would say, single percentage changes in routing. So it, it continues to be relatively small in terms of its impact on Matson.

Jacob Lacks (VP and Equity Analyst)

Got it. That helps. And then as we think about SSAT, it was slightly profitable in the quarter, it contributed around $4 million in fourth quarter. Is there any reason why this can't sort of, I mean, clearly, there's Lunar New Year affecting volumes in the first quarter. Is there any reason it can't get back to four-quarter profitability levels, as we progress through the year?

Matt Cox (Chairman and CEO)

Yeah, I think we're going to see continued improvement in SSAT. I think that it's probably going to take us into 2025 before we see a more normalized level of profitability. I'm speaking to full year profitability rather than any individual quarter. We've seen improvement. I think we believe we've hit bottom from the volume perspective, and we're going to see steady improvement from here based on our views of the market on the U.S. West Coast. So, it's probably just going to take a little bit longer than some of our other businesses that have recovered more quickly.

Jacob Lacks (VP and Equity Analyst)

All right. Thanks for the time.

Matt Cox (Chairman and CEO)

Okay, thank you.

Joel Wine (EVP and CFO)

Thank you, Jake.

Moderator (participant)

Our next question comes from the line of Daniel Imbro with Stephens.

Daniel Imbro (Managing Director and Equity Research Analyst)

Yeah. Hey, good evening, guys. Thanks for taking our questions.

Matt Cox (Chairman and CEO)

Oh, you're welcome.

Daniel Imbro (Managing Director and Equity Research Analyst)

I want to also start maybe on the demand side for ocean. I think you sound a little bit better than others, maybe on U.S. demand and kind of what you're hearing. I'm curious how much of that's with your existing customers. Is this more of a secular shift from air freight to expedited ocean that you think you're seeing with your shippers? And then, you know, how does the growth of new, maybe e-commerce players, or just any change in your customer outlook that's kind of informing that demand view? Because I think the slides said you expect better pricing and demand year-over-year.

Matt Cox (Chairman and CEO)

Yeah, sure. Let me take a crack at that. So I would say that, if you look at. Let me start by talking about macro supply and demand factors that inform the Transpacific trade, and then I'll talk about Matson specifically. So if you look at volumes coming into the West Coast, we're seeing improvement year-over-year. We've seen growth year-over-year in those volumes. And partly is, in our view and in talking to our customers, the U.S. consumer continues to hang in there. The economy is still plugging along. We and absent some, you know, significant disruption that we don't foresee, we're going to continue to see strong and steady consumer demand.

So if you, if you use that as the starting point, you see volume growing year-over-year on the U.S. West Coast for all of the international ocean carriers. Those are positive. I think on the international ocean side, not specific to Matson, you've seen rates that are higher than the previous year. But if you pivot to Matson and look at some of the fundamentals that will drive our expedited market demand, we see the fundamentals continue to be very much in place. And what are those? And we've described those previously. Of course, the macro, U.S.

Consumer demand is a significant factor, but if you look at healthy and expensive air freight markets, continued growth of e-commerce, healthy customer inventory levels, meaning no big overhangs of inventory, normal adjustments for late orders, production problems, all of those factors go towards what we believe to be continuing strong demand in our CLX and MAX service, our two expedited services. So our position was, and continues to be, if we can be the fastest and second fastest and most reliable carrier, we're going to get the lion's share of this expedited market and give us reason to be confident in raising our outlook somewhat.

Daniel Imbro (Managing Director and Equity Research Analyst)

Helpful. I appreciate the overview. And then maybe, Joel, on the cash flow side, I just wanted to follow up. Looks like obviously maintenance and other CapEx is going to drop off pretty materially the next couple of years. Just kind of curious, with most of the new vessel payments already funded, what are your capital priorities for the accelerating free cash flow, and how do you anticipate maybe the cadence of that spending, whether it's buyback or debt paydown or what, what have you?

Joel Wine (EVP and CFO)

Thanks, Daniel, for that. So, I mean, the debt paid, not much debt paid down because the debt that we have, the $430 million, $150 million of that is pretty attractively priced long-term private placements, around 3.2% interest expense fixed. And then the other $280 million is a very attractive Title XI at 1.2% fixed rate. So a really low fixed cost rate debt. It only amortizes $40 million a year, so we'll continue to do that. And so I wouldn't expect a lot of change with that overall program from a debt perspective. So, and you're right, the maintenance CapEx should be coming down. Most of that goes towards equipment replacement and our overall network of operations.

We don't have into the forecast a continued number of new engine projects or LNG projects. That really cycles through the next year to 18 months. So you're looking at a more normalized environment of regular CapEx for the company, putting aside the new vessels. So that does lead to a lot of free cash flow. And the prioritization there will continue to be primarily towards just a steady dividend policy. And we've raised dividend every year over 12 years as we've earned it. So we continue to use that as a tool to reward shareholders as we've earned the free cash flow over time. But then the majority of it would be going towards share repurchase, which is what we've been doing.

Absent any kind of large investments in M&A or organic opportunities, Daniel, that's that we would expect to continue that. That's all we've talked about, share repurchasing on a pretty steady basis for a long, long time, because that's the picture that we see.

Daniel Imbro (Managing Director and Equity Research Analyst)

And then just a clarifier on that. With the tax payment of $119 million you received, I guess, how much of the new vessel payments you need over the coming years is either pre-funded in the CCF, or is that covered? I'm curious how much is now just already accounted for as you look forward.

Joel Wine (EVP and CFO)

Yeah, we've paid about $100 million of the total $1 billion, so we have about $900 million more to go. And the CCF currently has about $606 million. So just rough order, that's about $300 million more that we would need to fund. We are earning, you know, interest at this cash investment rate. There's a lot of interest income that we'll earn over the next, you know, 24-36 months that will help. But then also, ultimately, over time, as we get into 2026, sometime in Q2-Q3 of 2026, we'll have probably used all the CCF funds to apply those towards milestone payments. And then around that time, we'll probably then put more money into the CCF to take care of the remaining milestone payments in 2026 and 2027.

And that'll be funds that'll come from our cash and cash equivalents on the balance sheet there today. So right now, we had $25 million of cash at the end of this quarter. We received $118 million plus the $10 million on interest, so that's $128 million. So around $160 million of cash and cash equivalents, plus the $600 million. So that leaves us at $760 million, and interest expense on that gets us up in the $800 million. So there's not that much more cash that needs to go into the CCF, but that will begin to happen in 2026, from a timing perspective.

Daniel Imbro (Managing Director and Equity Research Analyst)

Great. I appreciate all the color. Best of luck.

Joel Wine (EVP and CFO)

Thanks.

Moderator (participant)

As a reminder, that is star one one to ask a question. Our next question comes from the line of Ben Nolan with Stifel.

Ben Nolan (Managing Director and Senior Equity Analyst)

Thanks. So I've got a handful here, but first and foremost, I wanted to start. I know it's a big deal to finally get that tax refund after all this time. I was curious if you guys are, Joel, modestly or moderately excited to get that?

Joel Wine (EVP and CFO)

We are pleased to get it. Took a long time, Ben. I'll tell you. I mean, we also got the proper amount of interest income on that. It was per IRS rules of when we had filed for the refund and received all of that over two years. So it was nice actually also not to have any kind of back and forth on how much interest income was due. So I would say we're modestly pleased on both factors.

Ben Nolan (Managing Director and Senior Equity Analyst)

There we go. I've got a handful, but my first question, I guess, and it came up a little bit earlier. There are certainly segments of the transportation universe at the moment that are struggling, and there's areas like you guys seem to be doing fine. But I'm curious, in this sort of environment where, you know, again, that there's not everything is good for everybody, are you starting to see finally maybe some more opportunities for inorganic activity, you know, given that, you know, maybe not everybody want or can demand top dollar these days?

Joel Wine (EVP and CFO)

You know, it's a great question, Ben. We're seeing, I think, more companies potentially put themselves, you know, explore the market. And after a very slow M&A market and sellers really sitting on their hands for appropriate reasons as we're end of COVID and a very difficult transportation environment last year, some sellers are looking to test the market now. So we've seen an uptick in that, but there's also continues to be pretty high expectations for multiples. So it's tough to get those two things together. You know, the way you've heard us say many times, the way we look at it, though, is we don't we just want assets that fit our profile from a fit perspective.

I wouldn't say there's been a dramatic increase or even a very significant change in increase of the number of assets becoming for sale that fit our profile. In other words, the things that we're looking at is not greater number now, because we're trying to maintain the discipline of what we actually look at.

Ben Nolan (Managing Director and Senior Equity Analyst)

Got it. Okay, and then switching gears to China, you know, obviously, it's great to see more volume, more price, or in particular, more price. I'm curious, though, Matt, if you could talk a little bit to the competitive landscape. The, I know passenger airlines that are going back and forth from China, still, it's only like 20% of what it was pre-COVID. So would seem as though there would be plenty of demand for that expedited service, but port infrastructure is, you know, operating generally in the way that it should. Are you starting to see any other of your competitors kind of trying to test or mimic the kind of service that you guys have?

Matt Cox (Chairman and CEO)

Yeah, I think. And the way I'd answer that is, there is a developed secondary expedited market, and there are, I would say, three or four carriers that are not Matson, that will offer a discount to Matson's pricing, but above the generic ocean market. And so there are three or four, and those carriers have been in place. They continue in place. CMA is one that has been in the market for the last few years. We have Zim that was in the market, had left the market, and is back in the market. And then there's a couple of others that compete for the cargo that either can't get onto our service or that are sensitive.

They can take a longer transit on the margin, so not as good as Matson service, but a little bit cheaper than our rates. And so that market will be there. It has been there. It's not just us and then everyone else. There are gradations that exist in this market that's kind of developed over the last few years, especially going into the pandemic. And it reinforces our business strategy, which is, as long as we remain the fastest and second fastest and most reliable, we're gonna get the lion's share of that market. And so I think this is just the development of this in-between market, which we see.

You know, we watch it, but, we just continue to focus on our service dimensions, and the rest will take care of itself, is the way we're thinking about that.

Ben Nolan (Managing Director and Senior Equity Analyst)

Right. Okay. And then lastly for me, you guys, I think now have a handful of your assets that have the capacity to be able to use LNG as a bunker fuel. I'm curious if you're doing that, and if so, is it a sort of a fuel advantage and maybe another little way to enhance margins at all?

Matt Cox (Chairman and CEO)

Yeah. So the answer, Ben, is yes. We have a single vessel that has been delivered. We have two other vessels that are in the final stages or in intermediate stages of being converted. And then, of course, you know that there are three new vessels. When they arrive, they will all be LNG ready upon delivery. And so we have been taking bunkers, LNG bunkers, both in China and in Southern California. And the vessels are operating well on this alternative fuel. And we have other mechanisms that will allow us to continue to get fuel in places where we need it. That market is really expanding as the number of LNG vessels in the Pacific trade come into place

From a pricing, well, from a performance standpoint, we see it, of course, as a cleaner burning fuel, but we've seen it performing well in our engines and able to maintain our speed and other characteristics that's been positive. LNG is, at the moment, a bit more expensive than bunker fuels, although those will change from time to time. They were a bit lower beforehand. Prices have been risen, but LNG prices more recently has come off. So from a price standpoint, we have not seen a significant either penalty or cost advantage related to that. We also periodically will use other types of fuels that are like hydrogenated vegetable oils and clean diesel and other products, and we'll experiment with those.

Many of those are, we expect, through our existing fuel surcharge mechanisms, to be able to recover most or all of those higher costs. It's just part of our routine amount of our business that I know you know well. So I don't see it as, at this point, as a significant advantage nor a disadvantage in the market as we achieve our sort of, you know, climate emission reduction goals, along with the rest of the participants in our industry for which this is a priority.

Ben Nolan (Managing Director and Senior Equity Analyst)

Sure. All right. Well, I appreciate it. Thanks, Scott.

Matt Cox (Chairman and CEO)

Okay, Ben. Thanks.

Moderator (participant)

That concludes today's question and answer session. I'd like to turn the call back to Matt Cox for closing remarks.

Matt Cox (Chairman and CEO)

Okay, well, thanks for tuning in today. We look forward to catching up with everyone on our second quarter call. Aloha.

Moderator (participant)

This concludes today's conference call. Thank you for participating. You may now disconnect.