Euroseas Ltd. (NASDAQ:ESEA) Q1 2025 Earnings Call Transcript

Euroseas Ltd. (NASDAQ:ESEA) Q1 2025 Earnings Call Transcript June 20, 2025

Operator: Thank you for standing by, ladies and gentlemen, and welcome to the Euroseas Conference Call on the First Quarter 2025 Financial Results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasos Aslidis, Chief Financial Officer of the company. [Operator Instructions] I must advise you that this conference is being recorded today. Please be reminded that the company announced their results for the press release that has been publicly distributed. Before passing the floor to Mr. Pittas, I would like to remind everyone that in today’s presentation and conference call, Euroseas will be making forward-looking statements. These statements are within the meaning of the Federal Securities Laws.

Matters discussed may be forward-looking statements, which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. I kindly draw your attention to Slide #2 of the webcast presentation, which has full forward-looking statement, and the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. And now I’d like to pass the floor to Mr. Pittas. Please go ahead, sir.

Aristides J. Pittas: Thank you. Good morning, ladies and gentlemen, and thank you for joining us today for our scheduled conference call. Together with me is Tasos Aslidis, our Chief Financial Officer. The purpose of today’s call is to discuss our financial results for the 3-month period ended March 31, 2025. Please turn to Slide 3 of the presentation for our quarterly financial highlights. For the first quarter of 2025, we reported total net revenues of $56.3 million and the net income of $36.9 million or $5.29 per diluted share. Adjusted net income for the quarter was $26.2 million or $3.76 per diluted share. Adjusted EBITDA for the period was $37.1 million. Please refer to the press release for the reconciliation of adjusted net income and adjusted EBITDA.

Our CFO, Tasos will go over our financial highlights in more detail later on in the presentation. As part of the company’s common stock dividend policy, our Board of Directors declared the quarterly dividend of $0.65 per common share for the first quarter of 2025. The dividend will be payable on or about July 16, 2025 to shareholders of record from July 9, 2025. Since initiating our share repurchase plan of up to $20 million in May 2022, we have repurchased 463,000 shares of our common stock in the open market for a total of approximately $10.5 million. We remain committed to a disciplined and opportunistic capital allocation strategy and intend to continue leveraging the repurchase program in the manner that enhances long-term shareholder value.

Please turn to Slide 4, where we discuss our recent developments and operational highlights. We recently signed an agreement to sell [ Motor/Vessel ] Marcos V a 6,350 TEU intermediate containership built in 2005 to an unaffiliated third party for total consideration of $50 million, with delivery expected in October 2025. The vessel was originally acquired in Q4 2021 for $40 million with an attach time charter at $42,000 per day for three years, followed by a fourth optional year at $15,000 per day, which was exercised by the charter. Upon completion of the sale, we expect to recognize a gain exceeding $8.5 million or $1.2 per share. Our actual cash return of the project is, of course, significantly higher. On the charter in France, we continued to strengthen our forward cover by securing several high-value multiyear charters.

Notably, Motor/Vessel Monica was fixed for 24 to 26 months at $23,500 per day until at least May 2027. The Motor/Vessel Rena P was started for 35 to 36 months at $35,500 per day until at least July 2028. And Motor/Vessel Emmanuel P was fixed for a period of 36 to 38 months at a daily rate of $38,000 until at least September 2028. Additionally, Motor/ Vessel EM Hydra was extended until at least May 2027 at $19,000 per day. These pictures reflect our continued ability to secure long- term employment at highly attractive levels, providing strong cash flow visibility while reducing exposure to market volatility. Operationally, Motor/Vessel Diamantis P and Motor/Vessel EM Hydra well prepared, resulting in no higher periods of approximately 23 and 22 days, respectively.

Diamantis P is one of the vessels that was upgraded and then contributed to Euroholdings and subsequently was sold. The Hydra which suffered the crane breakdown has to undergo extensive repairs and face significant downtime. The repair costs are covered by Hull and Machinery underwriters and we intend to claim any of private exceeding 14 days through a loss of prior insurers. We experienced low commercial off hire during the quarter. Please turn to Slide 5. On March 17, we successfully completed the spinoff of Euroholdings, a new entity comprised of three subsidiaries of Euroseas owning our three oldest vessels. Motor/Vessel Aegean Express, Motor/Vessel Joanna and Motor/Vessel Diamantis P. The spin-off was executed. We are at pro-rata distribution of Euroholdings shares to Euroseas shareholders at the ratio of one Euroholdings share for every 2.5 Euroseas shares held, representing approximately 5% of Euroseas net asset values.

Euroholdings began trading on the NASDAQ under the symbol EHLD on March 18, 2025 as a separate company. Since the spinoff, it has had an average share price of around $5.6, roughly a 44% discount to NAV, with another daily trading volume of 70,000 shares. The company’s NAV as of March 31, 2025, was approximately $10.05 per share. The spinoff allows Euroholdings to operate independently with its own management and board, while enabling Euroseas to focus exclusively on its younger, more efficient fleet and growth strategy moving forward. Please turn to Slide 6. The company has a fleet of 22 vessels, including 15 feeder containerships and a 7 intermediate containerships with a cargo capacity of approximately 67,000 TEU and an average age of under 13 years.

Additionally, we expect delivery of our 2 intermediate containership new buildings in the fourth quarter of 2027, each with a capacity of 4,300 TEU which will further increase the size and reduce the average age of our fleet. Please turn to Slide 7 for further update on our fleet employment. We continue to benefit from strong [indiscernible]. For 2025, approximately 97% of our available investment days have already been secured at an average rate of $28,250 per day, providing strong visibility into this year’s earnings. Looking ahead into 2026, we have already recovered approximately 67% of our available days at an even higher average rate of $31,600 per day. This level of coverage achieved through a disciplined chartering strategy, which is neither too defensive nor too aggressive, significantly enhances our revenue stability and then allows us to optimize our revenue stream across the market cycle.

Moving on to Slide 9. We go over the market highlights for the first quarter of 2025. In the first quarter of 2025, one year time charter rates remained strong supported by tight vessel availability and sustained demand across all size segments. A significant portion of the container fleet has been fixed problems. And in early June, charter rates have continued to trend up growth, remaining at historically elevated levels. Compared to Q4 2024 average charter rates have increased by 10% for feeder vessels and by 4% for Panamax and post-Panamax vessels. Looking at the broader market landscape, 2025 is shaping up to be an interesting year, marked by heightened geopolitical risk and shifting global trade dynamics. Ongoing wars and political tensions continue to disrupt traditional trade routes while rising protectionism has introduced further in efficiencies.

As a result, forecasting remains challenging as we will discuss later on in this presentation. The average second price index rose by approximately 4.5% in Q1 2025 compared to Q4 2024, supported by limited vessel availability and competitive fleet expansion efforts among buyers. New buildings pricing moved largely side rate in Q1 2025 compared to the previous quarter. So those still at hugely elevated levels. Demand for new vessels remain strong, particularly for fuel efficient and network design, yet ordering has decelerated slightly due to limited shipyard capacity, rising material costs and macroeconomic uncertainties. Meanwhile, the idle fleet excluding vessels under repair, has continued to shrink, standing at 0.19 million TEU as of June 2025, 0.6% of the global fleet, roughly nonexistent.

This reflects tight tonnage availability and robust fleet utilization. Recycling activity also remained subdued year-to-date with just 9 vessels totaling 5,000 TEU for demolition. However, with approximately 25% of the sub-8,000 TEU fleet over 20 years old, we anticipate the scrapping volumes could rise should the market conditions softens. Scrap prices eased slightly to $470 per lightweight ton in Q1 2025. And lastly, the global containership fleet expanded by 3.3% already year-to-date, not accounting for high investment reactivations. Please turn to Slide 10 for our broader market overview, focusing on the development of 6 to 12 months’ time charter ratio with the past 10 years. As really stated in the graphs on this slide, containership charter has continued the strong upward momentum in the first quarter of 2025, fueled by limited vessel availability and sustained demand across fleet [ rates ].

As of June 13, 2025, the 6- to 12-month time charter rate for 2,500 TEU containership reached approximately $35,000 per day, more than three times the historical medium of $11,000 per day and significantly above the 10-year average of about $20,500 per day. This trend of elevated rate is consistent across all vessel sizes, underscoring the sector’s market reference. Please turn to Slide 11. The IMF April 2025 update presents a more cautious global economic outlook, revising its global GDP growth forecast for 2025 downwards to 2.8% from 3.3% projected just 3 months ago in January. Global growth in 2026 is expected to add up modestly to 3%, but still lower than the 3.3% expected reduce. In the last weeks, the world has experienced an even larger conflicts in the Middle East with more aggressive tensions rising between Iran and Israel.

The World Bank cut it’s forecast growth for 2025 down to 2.3%, noting increased trade tensions and policy uncertainties. The revision from both institutions reflects mounting downside risks intensified by the United States announcements of multiple targets of major trading partners and sectors and the new war erupting in the Middle East. These global tensions and heightened policy uncertainty have faced the outlook for the remainder of 2025 and 2026. According to IMF projections, the United States projected growth rate has been reduced by nearly 1% to 1.8% for 2025 and 1.7% in 2026 from the previously expected 2.8% and 2.1%, respectively. The other advanced economies have also taken a beating compared to previous expectations, with Europe’s growth forecast at just 0.8% this year and 1.2% next year.

Many European countries continue to face subdued domestic demand, manufacturing weakness and the lingering effects of the energy short. U.S. government policy remains largely in focus these days to the direct impact of tariffs and possible [ counterpart ]. Of course, this has the potential to have even wider implications. Global inflation continues to trend downwards, but the pace that is slower than what was expected in January with headline inflation expected to end at 4.3% in 2025 and 3.6% in 2026. With notable upward revisions for advanced economies and slight down on the revisions for emerging markets and developing markets. However, the near term path to price stability remains uneven. Persistent services and rate inflation in several economies, coupled with rising protectionism and demographic headwinds may delay full conversion to target inflation levels.

As a result, central banks are expected to maintain a more cautious approach to monitor the policy, than has previously been [ sold ]. Emerging markets remains a primary drivers of global growth. India is expected to expand by 6.2% and 6.3% in ’25 and 2026, respectively, fueled by strong investment, robust agriculture and the dynamic services sector. Similarly, the ASEAN-5 countries are also projected to both credit days. In China, growth has been revised downwards to 4% in both 2025 and 2026. As in addition to the Trump-induced effect, tractional challenges, particularly around weak domestic consumption deflationary pressures and instability in the product sector. Turning to the demand outlook, Clarksons latest estimate from May 2025 projects global containment rate to grow by 2.2% in 2025, a notable afterward revision from a negative 0.2% to the March forecast.

As they have then predicted much more aggressive unwinding of rerouting within 2025, which is something that now seems unfeasible. This tight vessel availability — this reflects a more resilient environment than previously anticipated. Rerouting is now expected in 2026, depending on the outcome of the current geopolitical situation. Turning on to Slide 12, where you can see the total fleet age profile and containerships order book. The containership fleet is relatively young with most vessels under 15 years old and only 12% of the fleet over 20 years old. As of June 2025, the order book as a percentage stands at a very high 29.4%. Turning on to Slide 13. We go over the fleet age profile and order book only for shifting the 1,000 to 3,000 TEU range, the sizes we mostly operate in.

With a much older fleet, the order book here stands at just under 5% as of June 2025. According to Clarksons, the new building delivery for federal intermediate size containerships is expected to remain limited over the next several years. From 2025, deliveries for vessels under 3,000 TEU are projected to amount to just 2% of the existing fleet. This already modest growth is expected to slow even further to 1.3% in 2026, followed by 1.9% in 2027, and up to now just 0.5% in 2028 and beyond. In July 14, we discussed the different supply outlook for the two containership subsegments, with a particular focus on the feeder and intermediate size vessels under 8,000 TEUs. The global order book remains heavily concentrated on the large vessels, servicing main lane routes with significant capacity growth expected in that segment.

However, feeder intermediate vessels, which are essential for regional distribution faced a very different supply outlook. Their order books are extremely limited, and the existing fleet is relatively old with a large percentage of vessels over 20 years of age. These aging units are prime scrapping candidates particularly as environmental regulations tighten. As a result, it is quite possible that the fleet capacity for feeder and intermediate containerships may actually decline even as the overall containership fleet continues to grow. This evolving supply backdrop supports a structurally tight markets in our operating segments with favorable indications for best utilization and charter rates moving forward. Moving on to Slide 15. Turning to the broader outlook.

The container shipping market in the remainder of 2025 is expected to be faced by three major sources. The possible rerouting of vessels away from the Suez Canal, the pending outcome of U.S. trade tariff decisions and the escalating Iran and Israel conflict depending on it’s [indiscernible] or it’s intensity. It seems unlikely that these issues will be resolved soon. So we now expect the market to remain relatively strong in the resilience throughout the year. As we need to form a company strategy, we have to make several assumptions as to how things will develop in 2026. We thus assume that the routing will probably be a 2026 event. Similarly, tensions within the Middle East will hopefully be alleviated within 2026, too. And finally, the impact of U.S. tariffs will not be as severe as originally announced.

Based on these main assumptions and the high order book, particularly in the larger sector, it will be logical to predict that there will be a correction in the market in the next couple of years. With this in mind, we proceeded to secure as long as employment as we could in extremely high end regarding current market. However, the latest escalation in the Middle East geopolitical framework may result in the market to continue being disrupted and strong for much longer. We will see. Finally, on the other front of shipping and certain of shipping uncertainty, we continue to worry about the energy condition on how this will affect our markets. The process is progressing growth at a slower pace than initially expected, but technical and economic constrains persist.

The recent shift of the U.S. administration stance on climate policy may delay adoption further, but it is unlikely to reverse the broader decarbonization already underway in the sector. Currently, eco-efficient vessels are increasingly combining premium charter rates as demand for sustainable transport solution strengthen. Now please turn to Slide 16. The left-hand side graph shows the cycle of the one-year time charter rate for 2,500 TEU containership over the past 10 years. As of June 13, the one-year time charter rate for 2,500 TEU containerships stood at $35,000 per day. This, despite being below its peak, is still extremely high and revolving and much higher than historical average on median. Similarly, though, both new building and [ second hand ] prices have also increased in the past year and also remained significantly above historical average [indiscernible].

In this environment of high prices and high charter rates, we continue to be trying to identify opportunities that could further enhance shareholders’ value. We feel that Euroholdings is one such example as the current valuation of Euroseas and Euroholdings combined has outperformed all the other similar listed companies in our universe since Euroholdings started trading alone on March 18. And with that, I will pass the floor to our CFO, Tasos Aslidis, to go over our financial highlights in further detail.

Anastasios Aslidis: Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. As usual, over the next 4 slides, I will give you an overview of our financial highlights for the first quarter of 2025 and compare those results to the same period of last year. For that let’s turn to Slide 18. For the first quarter of 2025, we reported total net revenues of $56.3 million, representing a 20.6% increase over total net revenues of $46.7 million during the first quarter of last year. We reported a net income for the period of $36.9 million as compared to a net income of $20 million for the first quarter of 2024. Interest and finance costs for the first quarter of this year amounted to $4 million, which after deducting capitalized reputed interest income of $0.1 million produced by the self-financing of the predelivery payment for the two vessels we took delivery in January and also interest income of $0.5 million resulted in total interest and finance costs net of $3.4 million as compared to interest and other financing costs net of $1.3 million for the same period of 2024, during which period, we have deducted from the interest income due to the self financing of new buildings of the predelivery installments of new buildings of $1.4 million and interest income of $0.5 million again.

The increase of our interest expense in this quarter is due to the increased amount of debt and compared to the same period of last year. Adjusted EBITDA for the first quarter of 2024 — ’25 was $37.1 million compared to $24.6 million achieved during the first quarter of 2024, primarily as a result of the increased number of vessels we operated on average during the period and also on the lower drydocking expenses we incurred in this quarter compared to the same period of last year. Basic and diluted earnings per share for the first quarter of 2025 was $5.31 basic and $5.29 diluted, calculated on about 7 million basic and diluted weighted average number of shares outstanding compared to basic and diluted earnings per share of $2.89 and $2.87, respectively, for the first quarter of last year, again, calculated on about 6.9 million and 7 million weighted average number of shares outstanding.

Excluding the effect on the net income for the quarter of the unrealized gain or loss on derivatives, the amortization of below market time charters acquired. Depreciation due to the increased value of the below market time charters acquired. And more importantly, the gain on sale of the vessel we sold, the adjusted earnings per share for the quarter ended March 31, 2025, would have been $3.76 basic and diluted compared to adjusted earnings of $2.67 basic and $2.66 diluted for the same period of last year. Let’s turn to Slide 19 to review our fleet performance. Again, as usual, we will start our review by first examining the utilization rates for the period of this year compared to last year. And again, as usual, our utilization rate is broken down to commercial and operational.

During the first quarter of 2025, our commercial utilization rate was 100%, while our operational utilization rate was 99.2%, Aristides explained the reasons compared to 99.8% commercial and 99.9% operational for the same period of the previous year. On average, this quarter, we operated 23.68 vessels earning an average time charter equivalent rate of $27,563 per day compared to 19.6 vessels for the first quarter of 2024 earning an average $27,806 per vessel per day. Our total operating expenses, including management fees, G&A expenses, but excluding drydocking costs, were for the first quarter of 2025, $7,511 per vessel per day compared to $7,963 per vessel per day for the same period of last year. If we move further down on this table, we can see the cash flow breakeven rate, which takes also into account drydocking expenses, interest expenses and loan repayments.

Thus for the first quarter of 2025, our daily cash flow breakeven rate was $13,062 per vessel per day compared to $17,171 per vessel per day for the first quarter of last year, a big part of the difference having to do with lower loan repayments and lower drydocking costs. At the bottom of this table, we can also see our common dividend expressed on a per vessel per day basis. Our dividend for the first quarter of 2025 equates to about $ 2,118 per vessel per day compared to $2,328 per vessel per day in the corresponding period of last year. Let’s now move to Slide 20 to review our debt profile. As of March 31, 2025, our total outstanding bank debt stood at $244 million, with another interest margin of approximately 2.04%. Assuming a 3-month SOFR rate of 4.31%, this translates to a cost for our senior debt, our only debt, of 6.35%.

Taking here also into account our interest rate swaps were approximately 8.2% of our debt has been swapped for a fixed rate of a little lower 3.41%, makes our blended cost of debt effectively down to 6.3%. We expect loan repayments for the rest of the year of approximately $18.4 million plus a $7 million balloon, thus inducing the outstanding debt by the end of this year to about $230 million. In 2026, scheduled loan repayments are expected to total $19.5 million with no balloon payment due. In 2027, we anticipate making $16.8 million in loan payments alongside the $20 million of balloon payments, resulting in total expected scheduled debt repayments in 2027 of about $36.8 million. I would like to draw your attention now at the bottom of the slide, where we present our cash flow breakeven level for the next 12 months and also we break it down with components.

Overall, we expect a cash flow breakeven level to be around $12,673 per vessel per day, a level that, as you can realize, is significantly below the other daily earnings of our fleet. To sum up my presentation, let’s move to Slide 21 and review some highlights from our balance sheet. As from March 31, 2025, we had cash and other current assets of about $106.4 million, while we have made advances for our two new buildings close to about $18 million. In addition, our assets include the book value of our ships, which stood at $524.2 million resulting in total book value of our assets and our balances of about $648.8 million. On the liability side, as I mentioned earlier, we had debt of $244 million, which represents about 38% of the book value of our assets.

We also had other liabilities that amount of about $25 million that amounted to about 4% of the book value of our assets, leaving us with a book value of shareholders’ equity of about [ $877 million ] or $64.8 per share book value. However, it is important to mention here that the market value of our fleet, adjusted for the charters that we have is significantly higher than its book value. We estimate that at the end of March 2025, the charter-adjusted value of our fleet to be $144 million higher than its book value, thus resulting in net asset value per share for our company in the range of $74 to $75. And despite the recent increase of our share price during the last two weeks, which is trading between $40 and $45 per share, it is evident that our stock trade is a significant discount to our net asset value, highlighting the substantial upside of our sales and the prospective gains for our shareholders and investors.

With that remark, I would like to turn the floor back to Aristides to continue our call.

Aristides J. Pittas: Thank you very much, Tasos. Let us open up the floor for any questions we may have.

Q&A Session

Operator: [Operator Instructions] Our first question is from the line of Mark Reichman with NOBLE Capital Markets.

Mark La France Reichman: The first one is just would you please provide your latest estimate for scheduled off-hire days for the remainder of the year?

Anastasios Aslidis: Schedule you mean drydocking costs, are you talking?

Mark La France Reichman: Well, you’ve got the drydocking, but then you’re also — you’ve got the — you said — you mentioned you were going to retrofit one of your secondhand vessels with energy savings equipment. So I’m guessing that, that one will experience some off-time as well.

Aristides J. Pittas: This is the same…

Mark La France Reichman: But mainly — but mainly drydocking, yes.

Aristides J. Pittas: Mark, this is the same vessel. It’s the manual and our estimated stoppage time of 25 days is the period in which we envisage to complete this vessel survey and the retrofits. So — and that’s only vessel, I think that we have for drydock this year.

Anastasios Aslidis: The retrofit are being done as part of the drydock. So we — we don’t have an incremental. There is no incremental days for the retrofits to the best of our…

Mark La France Reichman: Great. Then the second question is on Page 15 of your presentation, I just wanted to kind of focus on the line where you say that we conclude that it’s probable that we’ll experience downward pressure in charter rates. Now obviously, you’re very well covered in 2025 and even into 2026. But I was wondering which of those three assumptions has the most bearing in your conclusion there? Is it the rerouting of the ships through the Suez? Is it the tariffs and economic growth? Or just if you could maybe just expand on that a little bit would be great.

Aristides J. Pittas: Okay. Rerouting of seats is a significant negative, because it reduces ton mile substantially. So if that happens, we reduced the ton mile, the effective supply of ships goes up. So that can be a significant negative, but of course, the imposition of tariffs and the drop in global trade is — can also be negative. However, the disruption that is caused by changing trade routes and the lines trying to optimize those routes Suez to have a little delays not higher than waiting times at port, that’s a positive if that happens. Generally, disruption is positive as also the effects of the war can be positive except if that leads to very significant drop in trade. So these are all very difficult things to analyze and make predictions upon I have to admit. And that’s why we took the much more cautious approach even before the war.

Mark La France Reichman: Okay. No, that’s helpful. And just one last question is that your total daily vessel operating expenses were down compared to the prior year. And I was just wondering if you expect those to decline further as the other 4 of the 9 new builds are reflected in operations.

Anastasios Aslidis: Yes. I think statistically, that probably is true as our — the composition of our fleet becomes on average [indiscernible] having more new builds incorporated for more time of the year. The blended average might come down a bit. But generally, our budget talks about roughly 2% higher OpEx compared to our previous budget.

Operator: Our next question is from the line of Poe Fratt with Alliance Global Partners.

Charles Kennedy Fratt: Tasos, could you highlight how much debt you’re going to pay off when you — when the Marcos V is actually delivered to the seller or to the buyer team?

Anastasios Aslidis: We actually — I think it’s about $8 million that has actually been already paid. [indiscernible] schedule at the end of the year of $7 million, but we actually paid a bit early the loan last this quarter. So the Marcos is debt free.

Charles Kennedy Fratt: Okay. So that net proceeds will be $50 million in the fourth quarter?

Anastasios Aslidis: So again, there what…

Charles Kennedy Fratt: The net proceeds of the sale will be $50 million in the fourth quarter.

Anastasios Aslidis: That’s correct. Yes, that’s right.

Charles Kennedy Fratt: Okay. Great. And then you still have some older ones pre 2010. Are you looking to enhance your fleet profile by selling some of the older vessels? Can you just talk about the S&P market following the sale of the Marcos?

Aristides J. Pittas: Aslidis, you want to…

Anastasios Aslidis: I think, we don’t plan to sell vessels while they’re on charter, but perhaps when the charters expire with time?

Charles Kennedy Fratt: Okay. That would — the Genesis piece off charter at the end of the year, is that — should we be thinking that — as thinking of that as a potential sales candidate?

Anastasios Aslidis: I think I would say that we are looking primarily to recycle the vessel, and we are putting our fillers in the market for that at this moment.

Operator: At this time, I will turn the floor back to management for closing remarks.

Anastasios Aslidis: If there are no other questions, then I’ll take the role of Aristides, and thank everybody for participating in our call. We’re looking forward to seeing you all in August when we’re going to issue our first half results. Thank you very much again, and enjoy the rest of your day.

Operator: This will conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.