ALLETE’s (ALE) CEO Al Hodnik on Q3 2015 Results – Earnings Call Transcript

By | November 3, 2015

Scalper1 News

ALLETE, Inc. (NYSE: ALE ) Q3 2015 Results Earnings Conference Call November 3, 2015 10:00 AM ET Executives Al Hodnik – Chairman, President and CEO Steve DeVinck – SVP and CFO Analysts Chris Turnure – JP Morgan Paul Ridzon – KeyBanc Brian Russo – Ladenburg Thalmann Jay Dobson – Wunderlich Operator Good day ladies and gentlemen and welcome to the ALLETE Third Quarter 2015 Financial Results Call. Today’s call is being recorded. Certain statements contained in this conference call that are not descriptions of historical facts are forward-looking statements, such as terms defined in the Private Securities Litigation Reform Act of 1995. Because such statements can include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those discussed in filings made by the company with the Securities and Exchange Commission. Many of the factors that will determine the company’s future results are beyond the ability of management to control or predict. Listeners should not place undue reliance on forward-looking statements, which reflect management’s views only as the date hereof. The company undertakes no obligation to revise or update any forward-looking statements or to make any other forward-looking statements whether as a result of new information, future events, or otherwise. For opening remarks and introduction, I’d now like to turn the conference over to ALLETE President and Chief Executive Officer, Alan R. Hodnik. Please go ahead, sir. Al Hodnik Good morning everyone. Joining me today is ALLETE’s Chief Financial Officer, Steve DeVinck. I am pleased to report that ALLETE earned $1.23 per share for the quarter on net income of $60.4 million, a 27% increase over the third quarter of 2014. Higher income at ALLETE Clean Energy and at Minnesota Power were primary drivers of the earnings increase for the period. Our strategy continues to gain traction, with regulated operations delivering well on the broad foundation of our financial results and the energy infrastructure and related services businesses providing solid complementary earnings in the quarter. Based on our earnings through the first nine months of the year, and our expectations for the fourth quarter, we are increasing our full year earnings per share to a new guidance range of $3.35 to $3.50 per share. Steve will walk you through the financials in just a moment. But before he does, I would like to update you on ALLETE’s progress on several fronts and also provide a few observations regarding ALLETE’s Clean Power plan relative positioning and on the status of Minnesota Power’s Taconite customers. We have been answering our nation’s call to bring about cleaner energy forms for several years now. While we do not have all the details of the recently released clean power plan fully sorted out, and knowing full well that next steps at various state levels will greatly influence final outcome, we believe ALLETE’s regulated businesses and our energy infrastructure and related services businesses are reasonably well positioned. ALLETE, as you know, sees its geographic positioning in mineral rich Minnesota and next to wind rich North Dakota and hydro rich Canada as most strategic. ALLETE Clean Energy, an established clean energy player, is already contributing to ALLETE’s bottom line, including the Thunder Spirit outcome this year. Minnesota Power, through its Bison investments owns and operates the largest wind farm in North Dakota and has the necessary landowner relations and transmission to expand it further. The Great Northern Transmission initiative effectively marries high quality North Dakota wind to run at River Canadian Hydro, all of it carbon free, and soon poised to be delivered on a new $300 million to $400 million 500-KV transmission line to Minnesota and the Upper Midwest. Minnesota Power is significantly less carbon intense than it was a few years back, and while there are much to do with the transition in details to work on through the clean power plan, including Minnesota’s framework for compliance, we believe it’s energy forward integrated resource plan positions it well relative to the CPP and relative to future growth for ALLETE. ALLETE Clean Energy is already well established with a significant portfolio of carbon free wind generation, all under contract, and is in the process of completing a large wind project in North Dakota, from Montana Dakota Utilities. The CPP may provide additional opportunities for ALLETE Clean Energy, as other energy companies seek solutions to reduce our carbon footprint through contracted renewable energy deliveries or the construction of renewable generation facilities. I am very excited about the potential for U.S. Water Services, which we acquired on February 10th of this year. U.S. Water has been successfully integrated into the ALLETE family, and provides integrated water solutions to industrial customers throughout the United States. When reflecting upon climate related issues such as water scarcity, water conservation and water reuse, we believe U.S. Water is well positioned and will continue to build on its demonstrated track record of customer growth, customer retention and reoccurring revenues. Minnesota Power is making significant progress on two large capital projects in support of their Energy Forward plan, namely the Boswell Unit for environmental retrofit and the Great Northern Transmission line. Relative to Boswell Unit 4, the generating unit is now up and online as planned, and the environmental upgrade project nearly complete. Minnesota Power is on schedule with approximately $207 million spent through the end of the third quarter, on a total project estimate of $260 million. We expect to complete the upgrade in the first quarter of 2016. Customer billing rates for the environmental improvement rider were approved by the Minnesota Public Utilities Commission in an order dated August 24th, 2015. Regarding the Great Northern Transmission line, the U.S. Department of Energy and the Minnesota Department of Commerce, recently issued the final environmental impact statement. The issuance of the FEIS clears the way for a route permit decision by the Minnesota Public Utilities Commission in early 2016. As part of the project, Manitoba Hydro must also obtain regulatory and governmental approval related to a new transmission line in Canada. In September, Manitoba Hydro submitted the final preferred route and EIS for their transmission line in Canada to Manitoba Conservation and water stewardship for regulatory approval. Upon receipt of all applicable permits and approvals, construction of the Great Northern Transmission line is expected to begin by 2017 and to be completed in 2020. On the large power customer front, Minnesota Power’s customer that serve the steelmaking industry, continue to be challenged by elevated levels of steel imports and low steel prices. In August of this year, Cliffs Natural Resources temporarily idled its United Taconite Plant in Eveleth, Minnesota, citing high levels of inventories, lower demand from its customers, and the high rate of imported steel. At that time, Cliffs indicated the idling provided an opportunity to start reworking the plant, to produce a fully fluxed taconite pellet. That new product will replace a flux pellet, now made at Cliffs Empire operation in Michigan, which is scheduled to shut down in late 2016 or early 2017. In the third quarter of 2015, United States Steel Corporation returned its Minntac plant to full production. Minntac is the largest pellet producing facility in Northeastern Minnesota. The smaller United States Steel Keetac plant, which has been idled all summer, remains idle. As disclosed last quarter, Minnesota Power’s large power customers, which include those customers I just referenced, nominated at approximately 80% of full demand level for September, and approximately 90% of full demand levels for the fourth quarter. These power demand levels are fully reflected in our updated earnings guidance. Minnesota Power also serves a large base of wholesale customers, and I am pleased to report that in September, Minnesota Power amended its wholesale electric contracts, with 14 wholesale municipal customers, extending the contract terms for those customers through December 31, 2024. I will have some additional comments after Steve walks you through the quarterly financial results. Steve? Steve DeVinck Thanks Al and good morning everyone. Before I begin, I encourage you to refer to the 10-Q we filed this morning, for more details on the quarter. I would like to point out, that we have updated our reportable segment presentation this quarter. We will now present three reportable segments, regulated operations, ALLETE Clean Energy and U.S. Water Services. For the third quarter of 2015, ALLETE reported earnings of $1.23 per share on net income of $60.4 million and operating revenue of $462.5 million. This compares with $0.97 per share on net income of $41.6 million and operating revenue of $288.9 million in 2014. This year’s quarterly results included acquisition transaction fees of $0.02 per share related to an acquisition at ALLETE Clean Energy. Earnings from ALLETE’s regulated operations segment, which includes Minnesota Power, Superior Water Light and Power and our investment in the American Transmission Company, were $43.8 million compared with $40.9 million in 2014, an increase of $2.9 million. This year’s results reflect increases in production tax credits and power marketing margins, partially offset by increased depreciation and interest expense. Operating revenue from this segment, decreased $5.6 million or 2% from 2014, primarily due to lower fuel adjustment cost recoveries, partially offset by higher power marketing prices. Fuel cost recoveries were down due to lower fuel and purchase power expenses, resulting from lower purchased power prices and fewer kilowatt hour sales. Despite a 1.1% decrease in kilowatt hour sales, electric sales revenue increased $5.4 million, due in part to higher contracted power marketing sales prices. In addition, revenue from industrial customers did not necessarily decline in proportion to the decline in kilowatt hour sales, as power nominations for the quarter were similar to the same period in 2014. On the expense side, transmission services expense increased $2 million or 17% from 2014, primarily due to higher MISO related expenses. Operating and maintenance expense decreased $1.4 million or 2% from the same quarter last year, primarily due to lower salary and wage expenses. Depreciation and amortization expense increased $5.1 million or 18% from 2014, primarily due to additional property, plant and equipment in service. Interest expense increased $1.1 million or 9% over the same quarter in 2014, primarily due to higher average long term debt balances. Income tax expense decreased $4.1 million or 31% from 2014, primarily due to increased production tax credits, as a result of the completion of the Bison 4 Wind Energy Center in December of 2014. Before I move on from the regulated businesses, I want to emphasize that we continue to focus on cost containment at Minnesota Power. Despite known operating and maintenance expense increases for the 200 megawatt Bison 4 Wind Facility, placed in service at the end of last year, insurance and healthcare costs, as well as interest rate driven defined benefit plan expense increases, I am pleased regulated operations, operating and maintenance expense is lower than 2014. We are reducing cost at Minnesota Power, to reduce rate increases per customers, improve our return on equity over time, and manage through the impact of temporary cyclicality facing our customers in taconite mining. I will now share a few highlights from our ALLETE Clean Energy segment. Net income from this segment increased $12.7 million over the same quarter of 2014. Net income in 2015 included $12.3 million after tax or $0.25 per share, due to the recognition of earnings from the development and construction of a wind facility, under the percentage of completion method of accounting. The development and construction of the wind facility is expected to be completed in December of 2015, and will be sold to Montana-Dakota utilities for approximately $200 million. The third quarter of 2015 also reflects an additional $1.3 million related to the operations of wind energy facilities acquired late last year and earlier this year. In 2015, net income also included $900,000 of after-tax expense or $0.02 per share for acquisition costs relating to the acquisition of Armenia Mountain in July of 2015. Operating revenue increased $144.3 million from 2014, primarily due to $135.9 million related to the MDU project. Acquisitions late in 2014 and earlier this year also contributed to the increase. As you will recall, ALLETE acquired U.S. Water Services on February 10th of this year. U.S. Water is a leader in integrated water management to a growing number of industrial and commercial customers throughout the United States. For the third quarter of 2015, U.S. Water had net income of $1 million on total revenues of $36.1 million. Net income included $600,000 of after-tax expense relating to purchase accounting for inventories and sales backlog. The total impact of this purchase accounting adjustment is $2.5 million after-tax and is expected to be fully recognized by the first quarter of 2016. The corporate and other segment, which includes results from BNI Coal, ALLETE Properties and other miscellaneous corporate income and expenses, reported a $2.2 million increase in net income from the same quarter in 2014, primarily due to lower state income tax expense. ALLETE’s effective tax rate in the third quarter of 2015 was 19.3% compared to 24.4% for the same period last year. The reduction is primarily due to increased production tax credits. We anticipate the effective rate for 2015 will be approximately 20%. ALLETE’s cash flow continues to be strong. Year-to-date we generated $254.6 million of cash from operating activities, and we carried a 47% debt-to-capital ratio at quarter end. As Al mentioned earlier, ALLETE’s full year’s earnings guidance has been increased to a range of between $3.35 to $3.50 per share, which reflects ALLETE Clean Energy’s stronger project management performance on the MDU Wind project, along with lower operating and maintenance expense at Minnesota Power. ALLETE’s full year earnings guidance includes the impact of lower power nominations for Minnesota Power’s large power customers. Our guidance excludes acquisition transaction costs and the impact, if any, of pending regulatory outcomes. Just to note, if we were to exclude the projected ALLETE Clean Energy fee for the MDU development project, we expect to be within our original guidance range of $3 to $3.20 per share. Al? Al Hodnik Thank you, Steve. I am quite pleased with our financial and operational performance year-to-date. Looking ahead at the remainder of 2015, we will report the results of our taconite customer nominations for the first four months of 2016, around December 1st. Consistent with the past several years, we will initiate our 2016 earnings guidance in mid-December. I will make a couple final comments on the new customer front, before we take your question. Essar Steel Minnesota continues to report progress on its construction activity, with recent statements of Essar indicating that more than 700 construction workers are on the site, along with another 125 permanent positions at Essar’s Nashwauk and Hibbing offices. Essar officials reiterated their commitment to completing construction of the facility and beginning production of taconite pellets by the end of 2016. As you know, Minnesota Power will provide electric service to the Nashwauk Public Utilities Commission for the 110 megawatts of new electric load under contract. PolyMet expects the release of the final environmental impact statement in the federal register and Minnesota Environmental Quality Board Monitor some time this month. Following publication, the final environmental impact statement requires an adequacy decision by the Minnesota Department of Natural Resources, as well as records of decision by various federal agencies, before final action could be taken on the required permits to construct and operate the mining operation. PolyMet has stated it could be online by early 2017, and Minnesota Power has a 10 year 50-megawatt contract in place to serve this mining operation. I am fully confident that ALLETE remains on-track to meet our long term earnings growth objective of 5%, which also supports a sustainable and growing dividend. I look forward to 2016, as we continue to execute our long term strategy. At this point, I will ask the operator to open up the lines for your questions. Question-and-Answer Session Operator Thank you. [Operator Instructions]. And the first question is from Chris Turnure with JP Morgan. Please go ahead. Chris Turnure Good morning guys. Al Hodnik Good morning, Chris. Chris Turnure I was wondering if you could give us a little sense of magnitude, and give us some perspective on the muni contracts that you recently re-signed until the middle of next decade. Just kind of how big are they, how much do they mean to you, and how do they work structurally? Are they fixed price deals that you guys are just going to lock down for how many years, or are they variable and you pass-through fuel expenses, etcetera? Steve DeVinck Yeah, this is Steve. So we are obviously pleased with that extension and our customers are as well. And it is slightly different. There is a fixed demand piece, which covers our fixed charges, which has a modest cap and floor [ph], and there is an energy piece that is variable, and the variability in that does provide some protection to the company for changes in fuel and purchase power prices. It also provides variability for changes in environmental regulation, that the company may have to comply with. So all-in, it’s a nice 10-year extension, we feel good about wrapping those customers up, and we feel good about the pricing that it’s good for them and good for us. Chris Turnure Okay. And do you have a sense of the percentage of total gross margin at the utility business, that it is [ph]? Steve DeVinck We have not historically disclosed customer gross margins by customer class. Chris Turnure Okay. And then, if we kind of strip out the impact of any changes to electric load, kind of into next year and into 2017 as well. Can you just give us your latest thoughts on rate based growth there and earned ROE? Steve DeVinck Yeah. So in terms of our ROE, we expect this year to be somewhere between 8% and 8.5%. Next year, excluding the impacts of a rate case, should we file a rate case, we would expect anywhere between 8% and 9%, depending on industrial load. With respect to our rate case, we have stated that our strategy is to improve Minnesota Power’s return on equity over time, through cost containment and more clarity on load growth. We remain committed to that plan. We are pleased with cost control efforts to-date, most of which will impact 2016 and 2017, even though we are beginning to see some of the benefits in 2015. Clarity on load, both existing and potential new customer, will evolve over the remainder of this year into early next year. Our current regulatory framework does not allow for recovery of temporary, short term reductions in industrial sales. Recovery of longer term or permanent loss of industrial sales can be pursued in a general rate case. Consistent with our Energy Forward strategy, we have a commitment to one-third coal based generation in our energy supply mix. With the completion of the Boswell Unit 4 environmental retrofit project, we will be seeking a life extension of the Boswell station, consistent with the remaining useful life of the environmental retrofit. We anticipate filing a depreciation life extension in the near future. The annual benefit is anticipated to be approximately $20 million in reduced annual depreciation expense. The ultimate outcome of depreciation related filings will have a significant impact on the timing of our next general rate case proceeding. We will also be filing a proposal to implement recent Minnesota legislation regarding competitive rates for large industrial customers. Decisions on this revenue neutral rate design change, will also impact the timing of our next rate case. Chris Turnure Okay. Can you just give a little bit more color on that depreciation item, and the potential timing of that, and when you are thinking you will hear a regulatory outcome? Steve DeVinck Yeah. So we intend to file that here relatively soon. I would expect that we will have a regulatory decision on that some time early next year. Chris Turnure Okay. And it would take effect to write away and hit your — or help your 2016 number potentially? Steve DeVinck That’s what we will be seeking. Chris Turnure Great. Thanks a lot guys. Al Hodnik Thanks Chris. Operator Your next question comes from Paul Ridzon with KeyBanc. Please go ahead. Paul Ridzon Just to follow-up on that depreciation; so you would keep that benefit until your next rate case? Steve DeVinck Hi Paul, it’s Steve. We would keep approximately two-thirds of that. Approximately one-third of that would result in customer rate reductions through our current cost recovery rider we have for the Boswell 4 environmental retrofit. Paul Ridzon Kind of switching gears, what are your latest thoughts on appetite for the Florida real estate, where does that stand? Steve DeVinck No material changes in activity at ALLETE Properties. We do expect we had a small sale in the third quarter. We had another small sale in October, and we expect to have some sales in the fourth quarter of this year. We do expect ALLETE Properties to have a modest loss this year, somewhere probably around $1 million or so. Paul Ridzon Any early look at what 2016 could look like? Steve DeVinck No. Other than — we are pleased with the progress we are making on our cost control efforts at Minnesota Power; I will say that, and of course we will be issuing guidance here in the middle of December, as we normally do. Paul Ridzon I did not see as one of the drivers of Minnesota Power current cost recovery. I’d imagine, there is probably some incremental capital at Boswell 4. Do you have much of that added to the quarter? Steve DeVinck I do. It was a significant driver year-to-date. It was just less material for the third quarter. And the reason for that is, as we ramp up capital expenditures, including as we ramped up during 2014, the difference year-over-year is more material earlier in the year than later in the year. So you will see in our 10-Q for our year-to-date results, current cost recovery rider revenue was more of a material increase. Paul Ridzon Did that goal extent into the fourth one, that phenomena? Steve DeVinck Yes. Paul Ridzon Okay. And then finally, was there — Essar should ramp up by the end of 2016, is that new language? Al Hodnik This is Al, Paul, good morning to you. I don’t think that’s new language. We are taking that rate from there, public statements, so they haven’t changed their views on where they are at with their construction schedule, they would be producing some pellets by late-late in the 2016 timeframe, off into early 2017. So that’s directly from them. Paul Ridzon Okay. Thank you for the update. Al Hodnik Thanks Paul. Operator And the next questioner is Brian Russo with Ladenburg Thalmann. Please go ahead. Brian Russo Hi, good morning. Al Hodnik Good morning Brian. Brian Russo The $0.12 sense increase in the midpoint of your upper end revised 2015 guidance; could you kind of break that down, as to what — maybe incremental margin on the wind project, versus your previous disclosures and reverse the O&M cost controls or anything else driving that $0.12 increase that might be sustainable versus kind of one time? Steve DeVinck Good morning Brian, this is Steve. Very roughly it’s about 50-50, equally split between those two components. Brian Russo Okay. So $0.06 on the wind farm and $0.06 on O&M? Steve DeVinck Very roughly, that’s in the ballpark. Brian Russo Okay, great. And then, correct if I am interpreting this wrong, but when you look at the 10-Q subsidiary disclosures for U.S. Water, for the nine months to $86 million in revenue, $1.5 million in net income, but then we could — I guess, theoretically add back $2.5 million of amortization of intangibles, which would be completed by the first quarter of 2016. So kind of a normalized starting run rate for net income for the nine months is more like $4 million? Steve DeVinck So your concept is right. The number is slightly up. The $2.5 million is for the entire amount, which will be amortized from the date of acquisition through the first quarter of next year. Year-to-date, the amount is in our 10-Q, and it was somewhere around $1.5 million. Brian Russo Okay. Got it. So nine months adjusted income, excluding the amortization is $3 million? Steve DeVinck Correct. Brian Russo Okay, great. And remind us, what’s the revenue growth rate on U.S. Water? Steve DeVinck Well, we do expect a good significant growth at U.S. Water, both organically and also through the ability to have some strategic tuck-in acquisitions periodically and over time, in the purchase price range of say $10 million to $50 million. So we are excited about it and expect good growth. Brian Russo Okay, great. So just to be clear, after the first quarter of 2016, we should start to see more meaningful earnings contribution from U.S. Water to the consolidate earnings stream, correct? Steve DeVinck So purchase accounting requires the identification of intangibles. Some intangibles have a very short amortization life; and what we are pointing out with the inventory and sales backlog are those intangibles that have a relatively short life, and you hit on that, that’s $2.5 million throughout the first year of our ownership. So that will go away. Brian Russo Okay. And would you be able to provide us with some sort of net operating income as a percent of revenues or some sort of financial ratio to help us model that going forward? Steve DeVinck Our disclosure will evolve over time, and I am sure you will appreciate one of the factors we have to take into consideration as competitive information and just the competition in total. So we will be evolving over time, but I am sure you can appreciate that we also have our eye on competitive information. Brian Russo Understood. Any update on the ACE project pipeline? Al Hodnik Well it continues to work off of a pretty healthy pipeline of opportunities. Some of that existing before, some that are likely to be generated, I think, as this CPP evolution continues in various states. Obviously, on the Upper Midwest has gotten slightly more challenged, with respect to CPP, in terms of what it has to do, and there are lots of things to play out, obviously, with the states and the way they do their implementation plans, and I suppose some litigation as well. But we think that the CPP overall is good for business for ALLETE Clean Energy over the long haul. And no specifics at this point in time to reveal on additional projects, but the pipeline is a reasonable pipeline of opportunities to sort out. Brian Russo Okay. And then just lastly, I think you mentioned a target ROE of between 8% and 9% in 2016. Is that before or after the depreciation study? Steve DeVinck That is before. Brian Russo Great. Thank you. Steve DeVinck Thanks Brian. Operator [Operator Instructions]. The next question is from Jay Dobson with Wunderlich. Jay Dobson Hey good morning Al, good morning Steve. Al Hodnik Good morning Jay. Jay Dobson Quick question to drill down a little into the cost savings at the utility. I recall you had sort of two distinct efforts going on sort of your ongoing — sort of shorter term efforts, and then a very specific longer term effort. Can you give us a little sense as to sort of the successes you have in there, and sort of what we are in the third quarter, is that more sort of the shorter term efforts, or is that the beginning of sort of the efforts or the fruits of the efforts that are going to bear in 2016 and beyond? Steve DeVinck Hi Jay. This is Steve. What we are beginning to see in 2015, is the beginning of our efforts, of which most of the benefit we will see in 2016 and 2017. We are driving efficiencies across the organization at Minnesota Power, without jeopardizing safety or reliability. We are getting efficiencies for example, in the use of our fleet. We are reducing headcount at Minnesota Power and seeing the related salary, benefit and employee expenses that come with that. And that’s so far in 2015, despite, and I mentioned this, known increases around some areas that were uncontrollable to us. So it’s a broad initiative covering the entire organization. I am pleased with where it’s at, and you will see more of an impact, as we move forward. Jay Dobson That’s great. Thanks very much for that clarity. And then to the tax rate that you saw? I mean, it sounded like that was all associated with PTCs and tax rates always move around, its actually moved up a little bit this year because of the Thunder Spirit game you have booked. But if we were to look out to 2016, appreciating, having given guidance, there is no reason to think without forecasting how the wind is going to blow, the PTCs or that benefit should cease in year end 2015? Steve DeVinck That’s correct. We expect to have very substantial production tax credits through the middle of the next decade. Jay Dobson That’s great. Thanks very much. I appreciate the clarity. Al Hodnik Thanks Jay. Operator Next, we have a follow-up from Paul Ridzon with KeyBanc. Please go ahead. Paul Ridzon First part, U.S. Water, you said that some of the depreciation of the intangibles would probably make it neutral for the first couple of years, but it sounds like that improves a little bit. Is that fair? Steve DeVinck Yeah. What we said is, it won’t have a material impact on 2015 earnings. But it’s probably in line with our expectations in terms of the intangibles. Paul Ridzon But once we have lapped to the first quarter, then we will start to see it get a little better? Steve DeVinck Yeah. And again it’s at $2.5 million, which will be fully amortized by the first quarter of next year. Paul Ridzon And have you set any O&M reduction targets that you can share? Steve DeVinck No. I can’t be that specific. Paul Ridzon Okay. Thanks again. Al Hodnik Thanks. Operator And I am showing no more questions in the queue. And we would like to turn the call back for any further remarks. Well, Steve and I want to thank you for your time this morning. We look forward to seeing many of you in the next week actually, at EEI Financial, and you know, on the road, when we come out to further share our story and success here at ALLETE. Thank you and have a good day. Operator Ladies and gentlemen, thank you for joining us today. This does conclude the program, and you may all disconnect. Everyone have a wonderful day. Scalper1 News

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