Kaiser Aluminum Corporation (NASDAQ:KALU) Q2 2025 Earnings Call Transcript

Kaiser Aluminum Corporation (NASDAQ:KALU) Q2 2025 Earnings Call Transcript July 25, 2025

Operator: Greetings, and welcome to the Kaiser Aluminum Corporation Second Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kim Orlando with ADDO Investor Relations. Thank you. You may begin.

Kimberly Orlando:

ADDO Investor Relations: Thank you. Hello, everyone, and welcome to Kaiser Aluminum’s second quarter 2025 earnings conference call. If you have not seen a copy of our earnings release, please visit the Investor Relations page of our website at kaiseraluminum.com. We have also posted a PDF version of the slide presentation for this call. Joining me on the call today are Chairman, President and Chief Executive Officer, Keith Harvey; and Executive Vice President and Chief Financial Officer, Neal West. Before we begin, I’d like to refer you to the first 4 slides of our presentation and remind you that the statements made by management and the information contained in this presentation that constitute forward-looking statements are based on management’s current expectations.

For a summary of specific risk factors that could cause results to differ materially from the forward-looking statements, please refer to the company’s earnings release and reports filed with the Securities and Exchange Commission, including the company’s annual report on Form 10-K for the full year-ended December 31, 2024. The company undertakes no duty to update any forward-looking statements to conform the statement to actual results or changes in the company’s expectations. In addition, we have included non-GAAP financial information in our discussion. Reconciliations to the most comparable GAAP financial measures are included in the earnings release and in the appendix of the presentation. Reconciliations of certain forward- looking non-GAAP financial measures to comparable GAAP financial measures are not provided because certain items required for such reconciliations are outside of our control and/or cannot be reasonably predicted or provided without unreasonable effort.

Any reference to EBITDA in our discussion today means adjusted EBITDA, which excludes non-run rate items for which we have provided reconciliations in the appendix. Further, Slide 5 contains definitions of terms and measures that we will be commonly used throughout today’s presentation. At the conclusion of the company’s presentation, we will open the call for questions. I would now like to turn the call over to Keith Harvey. Keith?

Keith A. Harvey: Thanks, Kim, and thank you all for joining us today. Turning to Slide 7 for our second quarter update. I’m pleased to report that Kaiser delivered second quarter results that exceeded our expectations, leading us to increase our full year EBITDA outlook. While favorable metal pricing provided a positive tailwind, our performance reflects deeper strength in our underlying business fundamentals, which continue to improve across the board. Importantly, our performance in our key end markets remained in line with our projections, and we sustained margin levels above 19% in the first half of 2025. roughly 180 basis points stronger than in the prior year same period. Continued strong pricing and an improving product mix were the primary drivers of strength, along with our persistent emphasis on enhancing operating efficiencies and cost management.

We remain focused on our long-term goal for our consolidated businesses to deliver mid- to high 20% EBITDA margins, and we expect continued progress towards that goal to become increasingly evident as we advance through demand cycles and bring our investments fully online over the next several quarters. It’s important to note that our working capital requirements, especially those tied to metal pricing, came in above what we anticipated when we originally provided guidance in February. Neal will speak in more detail shortly, but based on current projections, we now expect free cash flow for full year 2025 to be between $50 million and $70 million. Meanwhile, customer sentiment was impacted by tariff-related uncertainty during the quarter, particularly in our Automotive segment.

That said, conditions moderated late in second quarter, and we saw improvements in overall demand. We do recognize, however, that the broader policy and geopolitical landscape remains fluid and continues to introduce pockets of volatility in ordering patterns throughout the business. Given this uncertainty, especially as it relates to tariffs, we continue to believe the impact of projected tariff levels will continue to have a neutral to slightly favorable impact on our earnings. Let’s now turn to our growth strategy. As we look ahead, we continue to make meaningful progress on our strategic initiatives at our Trentwood and Warrick rolling mills. These 2 platforms represent a significant portion of our total conversion revenue dollars and the outlook across our aerospace, packaging and general engineering end markets continues to be strong.

Each investment is foundational to the next phase of Kaiser’s margin expansion, which we anticipate will continue to improve in 2026. Starting with the Trentwood Phase VII investment. The project is advancing on schedule, on budget and its completion remains closely aligned with supporting the growing demand for both aerospace and general engineering plate products in 2026 and beyond. We expect the additional production capacity to come online early in the fourth quarter of this year. Next, I’ll turn to an update on our new coating line investment at our Warrick rolling mill. We have moved to the material qualifications phase of the start-up process, albeit later than initially planned. And while the line is not yet running at full slated capacity, we expect continued improvement in line speeds and customer qualifications throughout the remainder of the year.

Accordingly, we now anticipate reaching our full run rate in late fourth quarter of this year and expect the revised timing of qualifications to have a slightly negative impact on our second half 2025 packaging shipments and conversion revenue dollars outlook, which I will discuss later in the call. Above all, I want to reaffirm our unwavering commitment to quality and being a best-in-class supplier for coated products. The equipment we’ve deployed at our Warrick operations is instrumental to maintaining our position as North America’s leading coated supplier for aluminum packaging solutions. While we are all anxious for the new capacity to become fully available, we will not compromise on our standards or bypass any critical steps during the qualification phase with customers.

Finally, I’m proud to share that we finalized one of our key outstanding multiyear packaging customer contracts for coated products. This agreement reflects not only the confidence our customers place in us, but also the strength of the underlying market and our leadership position within it. In summary, operations continue to improve. We are strengthening our position in our key markets, and we continue to invest for long-term value creation. With that, let me hand the call over to Neal for further detail on our second quarter results. Neal?

Neal E. West: Thank you, Keith, and good morning, everyone. I’ll now turn to Slide 9 for an overview of our shipments and conversion revenue. Conversion revenue for the second quarter was $374 million, an increase of approximately $5 million or 1% compared to the prior year period. Looking at each of our end markets in detail. Aerospace and high-strength conversion revenue totaled $127 million, down $6 million or approximately 5%, primarily due to a 4% decline in shipments over last year. As previously discussed, prior year disruptions in commercial aircraft OEM production patterns have impacted the aluminum supply chain, which is now moving through a destocking period. Importantly, demand for our other aerospace and high-strength applications, including business jet, defense and space has remained strong.

Packaging conversion revenue totaled $130 million, up $11 million or approximately 9% year-over-year on improved mix of higher value-added products. Shipments for the quarter, while up 8% sequentially, declined 3% over the prior year, primarily due to the mix shift in product deliveries as we continue to ramp the new roll coat line and qualify products for customers. As discussed, the underlying demand for our products remain strong, and we are working closely with our customers as we move through this transition. General engineering conversion revenue for the second quarter was $86 million, up $3 million or 3% year-over-year on a 5% increase in shipments. Broader market factors, including reshoring opportunities, continue to create a favorable operating environment in the general engineering end market, driving higher demand and solid pricing for both our long and plate products.

And finally, automotive conversion revenue of $32 million declined 4% year-over-year on a 15% decrease in shipments, primarily due to tariff-related customer uncertainties affecting the automotive industry. The lower demand has been partially offset by improved pricing and product mix. Additional details on conversion revenue and shipments by end market applications can be found in the appendix of this presentation. Now moving to Slide 10. Reported operating income for the second quarter was $38 million, an increase of approximately $2 million from the $36 million in the prior year quarter. As a reminder, the second quarter of 2024 included operating non-run rate charges of approximately $9 million, primarily associated with restructuring charges.

After adjusting for the operating non-run rate charges, our second quarter 2025 adjusted operating income was down $7 million from the prior year quarter. Our effective tax rate for the second quarter was 22% compared to 23% in the second quarter of 2024. For the full year 2025, we continue to expect our effective tax rate before discrete items to be in the low to mid-20% range before taking into account any impact related to the new tax bill recently signed into law. Additionally, we anticipate the 2025 cash tax payments for federal, state and foreign taxes will be in the $5 million to $7 million range. Reported net income for the second quarter was $23 million or $1.41 net income per diluted share compared to net income of $19 million or $1.15 net income per diluted share in the prior year quarter.

After adjusting for nonoperating non-run rate benefit of approximately $3 million net of tax related to insurance settlements associated with prior year claims, adjusted net income for the second quarter 2025 was $20 million or $1.21 adjusted net income per diluted share. This compares to adjusted net income of $27 million or $1.63 adjusted net income per diluted share in the prior year period. Now turning to Slide 11. Adjusted EBITDA for the second quarter was $68 million, down approximately $6 million from the prior year period. Our second quarter 2025 results benefit from positive sales momentum, reflecting an increase in price and improved mix of higher value-added products. This was offset by higher operating costs, primarily associated with start-up expense on a fourth roll coat line and timing of certain major maintenance projects as compared to the second quarter of 2024.

As we continue to move through the startup of our new roll coat line at Warrick and complete the Phase VII investment at Trentwood, we expect operating costs to stabilize and improve. Now turning to the discussion of our balance sheet and cash flow. On June 30, 2025, total cash of approximately $13 million and approximately $525 million of borrowing availability in our revolving credit facility equated to a strong liquidity position of approximately $538 million. There were $33 million of borrowings under our revolving credit facility as of the quarter end. As a reminder, our senior notes interest costs are fixed at $48 million annually, and we have no notes maturing until 2028. As of the end of the second quarter, our net debt leverage ratio increased 30 basis points to 4.2x from 3.9x at the end of the first quarter.

Turning to capital allocation and free cash flow. We generated cash flow from operations of $16 million during the second quarter with our capital expenditures totaling $44 million. For the full year 2025, we expect — continue to expect capital expenditures to be in the range of $120 million to $130 million, including some remaining costs for the fourth coating line project at Warrick and completion of our Phase VII expansion at Trentwood. As we entered the year, we anticipate a free cash flow for the full year 2025 of approximately $100 million. While we have successfully reduced the total pounds of inventory, which was a significant contributor to our projections, recent trade policy actions and the material impact that has had on our working capital utilization have led us to revise our expectation.

As such, we are now projecting to generate approximately $50 million to $70 million of free cash flow for the full year of 2025. Finally, on July 15, we announced that our Board of Directors declared a quarterly dividend of $0.77 per common share, reinforcing the confidence in our long-term strategy to drive increasingly profitable growth and maximizing shareholder value. I’ll now turn the call back over to Keith to discuss our outlook. Keith?

Keith A. Harvey: Thanks, Neal. As we continue throughout the year, we’re encouraged by the momentum we see across our business and the clarity we’re gaining in our markets. Let me now walk you through our outlook by end market. Starting on Slide 13 with aerospace and high strength. The pace of commercial aircraft deliveries stepped up again in the second quarter. We’re seeing continued signs that the supply chain is recovering. And while select areas such as engines and interiors are still experiencing disruption, those pockets are steadily moderating. Aluminum inventory at the customers remain elevated in the channel for now, but as build rates ramp, we expect that inventory to be absorbed rapidly. Demand in defense, space and business jet remained consistently strong throughout the quarter.

Longer term, we believe Kaiser’s positioning remains highly advantaged as a leading global supplier of aluminum products to these end markets and our capital investments support the durability of that leadership well into the future. Accordingly, our outlook for both shipments and conversion revenue remains unchanged from February for a projected decline of approximately 5% to 7% year-over-year due mainly to inventory destocking underway in the large commercial jet supply chain. Let’s move on to packaging on Slide 14. We are refining our outlook for packaging conversion revenue to increase year-over-year by approximately 15% to 20%, while shipments are expected to decline approximately 3% to 5% year-over-year. I want to be very clear, this adjustment is driven entirely by the commissioning time line for our new coating equipment and underperformance from our coating converters who have struggled to meet their commitments to us through the first half of the year.

We expect improved performance in all areas as we progress into the second half of the year. As previously discussed, North American demand far exceeds available supply, and that dynamic is expected to continue well beyond 2025. Our team remains fully committed to accelerating increased capacity throughput from our value stream to meet the growing needs of our customers well into the future. Turning now to general engineering on Slide 15. Our performance continues to be strong. Shipments are up mid-single digits and pricing remains solid, supporting growth in conversion revenue. While tariffs are not directly impacting our volume, we are seeing some month-to-month variability in order patterns as customers adjust to the implications of the Midwest premium.

Broadly speaking, both plate and long products have shown robust activity, making the first half of 2025, one of our strongest periods since 2018, aside from the unusual activity in the post-COVID environment in the 2021, 2022 period. Looking ahead to the second half, we expect continued strength in shipments, supported by a favorable mix shift toward plate products, which is a positive for conversion revenue. We continue to expect full year shipments and conversion revenue to be up year- over-year by 5% to 10%. Finally, turning to automotive on Slide 16. Our outlook for the remainder of the year remains steady. Industry build rates have fluctuated with tariff developments, starting the year with expectations of about 15.7 million units. Current build rates are expected closer now to the mid-14 million range.

Despite the macro uncertainty, Kaiser’s exposure is concentrated in key platforms, particularly SUVs and light trucks, where demand has remained healthy. As a result, we expect our second half shipments and conversion revenue to hold steady compared to the first half of 2025. Now turning to our summary outlook on Slide 17. In summary, the outlook for our end markets remained intact despite the uncertain operating environment. Based on first half results, our total conversion revenue guidance for 2025 remains unchanged at a 5% to 10% year-over-year improvement. However, our margin performance is slightly better than we initially anticipated. And as a result, we’re raising our full year EBITDA outlook by 5% versus our outlook in February to now reflect growth of 10% to 15% year-over-year.

This marks a strong step forward and reflects both solid execution and a resilient market backdrop, along with favorable tailwinds provided by sharply rising metal prices to date. Importantly, 2025 will be a turning point for Kaiser towards meeting our long-term conversion revenue and EBITDA margin goals. And this is without fully benefiting from the targeted investments and strategic positioning we’ve pursued over the past several years. With momentum accelerating for full deployment of our investments in 2026, along with continued strength in our end markets, we look forward to showcasing the full potential of these businesses in the years ahead. With that, I will now open the call to any questions you may have. Operator?

Q&A Session

Operator: [Operator Instructions] Our first question comes from the line of Bill Peterson with JPMorgan.

William Chapman Peterson: I have a few questions here. Maybe first starting with packaging. I guess what’s driving the delay in the commissioning? And what’s giving you confidence in the current target? I guess, is the sole driver of lower packaging guidance? You mentioned, I think, some coating delays. I’m just trying to get a sense for the shipping new guidance you’re providing.

Keith A. Harvey: Yes. Thanks, Bill. What we’re seeing is what you might imagine is typical start-up issues on a fairly complex large piece of equipment. We have got the equipment in line. We have begun the qualification periods. But qualifications are quite important here. They’re typically a 3-phase type process before you’re fully qualified and you can open the line up for regular runs. Of course, we’ve got multiple different coatings that we’re trying to qualify at the same time. And then you’re debugging that equipment, which is we’re just getting it up to rate. So all of that has caused us to say, hey, we’re still looking for full outlook here at the end of the year, but that ramp-up is taking a little longer than expected than what we discussed in February.

I’ll come on the back end of that and say, look, demand continues to be very strong, and we’re moving through those processes. But we expect volume on packaging is going to be down about [ 3.5 million pounds ] or percent on the volume piece and the conversion revenue is still going to be up 15% to 20%. Now we’ve also — I mentioned in my comments that we’ve had some underperformance by some of our converters that their performance hasn’t been as we expected. And so therefore, that’s added on to some of our misses and some of our revisioning of our reoutlooking of our volume output for the year. We have expected recovery coming on there. We need it. The market is strong, and we expect all that, as I said, to improve in the second half of the year.

William Chapman Peterson: Okay. And then, as mentioned that the aero inventories are beginning to rightsize, but yet inventories are still elevated. I guess at this stage, what visibility do you have here? I guess, when do you see or foresee the destocking coming to an end? We’re hearing obviously kind of positive news flow from the commercial aerospace side in terms of their own ramps, but I wanted to get a sense for when you think this destocking thing will run its course.

Keith A. Harvey: Yes. Well, on that front, Bill, we continue to welcome the good news that comes from the large jet manufacturers. Obviously, they’re continuing to ramp. That ramp is consistent and holding. We’re hopeful for another ramp increase announcement toward the end of the year. Obviously, the faster we ramp up, the more healthier the supply chain will be and that inventory bubble can dissipate. Right now, we’re on track for what we expected for the year. I expect 2026 to be in much better shape. And I think we’ll have some more visibility on that. That won’t be necessarily reflective in our third quarter outlook, Bill. Trentwood is going down for the bulk of the quarter and a good bit of that impact could be shipments.

So it won’t necessarily be reflective that, that’s happening. But with us delivering less in the third quarter, that’s going to help that bubble as well. So at this point, I think that bubble is going to dissipate by the end of this year as expected. And if demand is as we expect in 2026 at this point, we should be well through that and the supply chain should be ramping up pretty rapidly to meet the increased demand.

William Chapman Peterson: And maybe before jumping back in the queue, kind of tying in some of your previous comments, how should we think about the cadence of EBITDA in the back half of the year? Will the third quarter be a trough based off what you mentioned about Trentwood and your prior comments around packaging?

Keith A. Harvey: Well, quite frankly, we’re seeing aerospace will be down slightly in the third quarter compared to the second quarter and even the first half run rate. It will be down slightly period-to-period, but we’re going to see that ramp come up on packaging to offset that. The conversion revenue will start to offset any of that. So I expected the trough in the second quarter. And our performance, and we mentioned the tailwinds from metal and then really the performance we had was better than we expected. So I believe the second half is going to look pretty much as we predicted when we talked about it in February. So we’re reiterating what the second half looks like, Bill, in this quarter.

Operator: Our next question comes from the line of Josh Sullivan with the Benchmark Company.

Joshua Ward Sullivan: Just a question on the aerospace inventory levels. At this point, is that inventory being held at the distributor customers? Or is it at the OEMs?

Keith A. Harvey: Well, I think the — earlier in the year, late last year, it was in both parts of the supply chain. But I think what we’ve seen through the first half of the year is that the service center side has been getting their balance sheet — I mean, not balance sheet, excuse me, but their supply base and their — it’s been more in line. So that there’s been — we’ve seen that reduction, and that’s been some of the impact we’ve been talking about. I think it currently resides at the OEMs. And the OEMs, as you recall, had been ramping up last year and it ran into a couple of headwinds themselves. So a good bit of that metal right now resides at the OEMs. And that’s why we keep getting more favorable outlook here as they continue those ramp rates. We know that they’re consuming more and more of that metal. And so that’s where we’re getting healthier in — at least in the second half of the year.

Joshua Ward Sullivan: Got it. And then just if we think about past cycles, destock to restock with aerospace, is that signaling that you’re getting? Is that similar to previous cycles? Or is there anything different necessarily about this cycle that we might want to think about as we ramp up?

Keith A. Harvey: No. I think it’s all around build rates, Josh. And as these things really start to ramp, we know they have the backlog. We know they’ve been ramping up their entire supply chains and their own productivity to meet higher levels. So it’s really, in our mind, as we’re looking forward, we see it ramping 2026 through the balance of the decade. It was the big reason for us to launch the next phased investment at Trentwood. And we think that’s going to come out at a very good time. Now if we get some tailwinds from semiconductor or continued GE, that’s just going to put that capacity in even a better position for us. So I think we’re in for — we’ve had a reset here in the last 12 to 18 months. And I think the next 3 to 4 years are going to be very strong and taxing on the supply chain in aerospace.

Joshua Ward Sullivan: Got it. And then just one last question on defense. The F-35 as far as the domestic rates, there’s some questions around that. Obviously, strong on the international side and then the overall question about drones and new programs coming in. How exposed are you to one program versus the other versus kind of the general trend in rising defense spending?

Keith A. Harvey: Well, first of all, we think the F-35 is — it takes a breather. This isn’t the first time to take a little breather, but with all the NATO allies and foreign build rates that have come online, they tend to just backfill just like Boeing did when China said that they weren’t going to take shipments for a while. They very quickly pivoted and filled the backlog with other demand. We see that going on with the F-35. And now whatever happens in the future always remains to be seen. We thought the F-22 was going to be much bigger than it turned out to be. What will be the F-47? Who knows? But one of the things that we’ve continually discussed from a Kaiser perspective, our positioning in that market has kept us in all of the available platforms, whether they were rotary or fixed wing.

And so, we’re still supplying metal towards F-16 builds that were supposed to be over 10 years ago. And we’re still seeing a nice healthy build rate. We’re seeing that on the F-15 and we still see long runway here for the F-35. So we’re — and there’s actually even been some discussion about bringing not just cargo but military cargo back at some rate. So we’re pretty well positioned throughout that chain. And what I do like about our positioning there, our capacity is also shared with strong general engineering for like semiconductor or space, which is — continues to build. So we have many offsets that can replace any short-term transitional type things that happen. And that’s why when you look at our — really our performance on aerospace, you see a very consistent quarter-to-quarter type run, and we can bring those continued growth investments we’re making to bear pretty quickly.

Joshua Ward Sullivan: Got it. Yes, C-17 would have some nice aluminum content on the cargo side.

Operator: [Operator Instructions] Our next question comes from the line of Abe Landa with Bank of America.

Abraham Raul Landa: Maybe starting off, you called out some costs, I believe, related to start-up charges. I think you said $17 million. I guess what’s embedded in there? Are those going to repeat in the second half and next year? And if so, what should we expect? And is that number added back to EBITDA or no?

Keith A. Harvey: It was added in the quarter, but we called that out because we think those are associated with, one, the start-up at Warrick related to the roll coat 4 line. So we expect those to continue to dissipate as we bring that line up. And then it was a timeliness issue. We had a number of furnace rebuilds that weren’t necessarily planned, but we had an opportune time to deliver those, and we did. So we went ahead and did those repairs while we continue to have some major maintenance throughout — every quarter through the year, we felt the need to call that out because we did have a spike in those costs for the quarter. But again, we wouldn’t expect those particular costs to reoccur for the balance of the year.

Abraham Raul Landa: It shouldn’t reoccur, but it was added back to the adjusted EBITDA number or it was not? Just to clarify.

Keith A. Harvey: Neal will take that.

Neal E. West: It wasn’t added back to the adjusted EBITDA at all. And we just highlighted that was a cost that impacted the quarter as compared to the prior year quarter.

Abraham Raul Landa: Okay. That’s clear. And then I know you kind of were talking about this earlier just on free cash flow guidance lower while EBITDA is higher, and I think you kind of mentioned that working capital. Can you just describe maybe in more detail like what’s driving that? What are the elements there? I mean is it tariff related or some other items in there? Is it metal lag effect? Kind of more color on that would be helpful.

Neal E. West: Yes. So we planned this year, and we anticipated in our outlook when we gave the outlook of $100 million of free cash flow, a significant reduction in some of our actions we were taking in inventory management. We did get our pounds of inventory down significantly. However, offsetting that the first of the year has been the rapid increase in metal prices, and that’s basically kept our dollar amount of inventory consistent even though pounds are down. So that basically picked up additional usage of working capital due to the tariff increases in metal prices.

Abraham Raul Landa: Do you have a rule of thumb of like for every $100 of Midwest transaction price equals x dollars of working capital, anything like that?

Neal E. West: No. we could talk, but we don’t have a rule of thumb because there’s multiple items that go into that, receivables and payables and working capital. So it’s not like one rule of thumb we can drop out there.

Abraham Raul Landa: Okay. And then I know there’s a lot of investments going on. I know you have that going on. You have kind of your metal sourcing strategy as well. I guess if we kind of — a lot of these things are going to be complete this year, I guess, how do we exit the year? How do we think about building the bridge to next year when all these investments are — have come through?

Neal E. West: I think we’ll give a better outlook as we get into the third quarter. We’ll give you a better outlook on how we’re looking out to exit the year. But I think we’ve given enough guidance on that over the last — outlook over that over the last quarter with the 300 to 400 basis point improvement on the margin that we expect as we exit with the roll coat line. And as operational efficiencies kick in, there’s probably another 150, 200 basis points with that. So all of that — we’ve laid that out, and we haven’t come off that guidance yet or that outlook.

Abraham Raul Landa: And is tariffs impacting your metal sourcing strategy? I know you said earlier kind of guidance or color on the potential impact on margins there.

Neal E. West: No, tariffs actually still neutral to positive for us. Again, we pass through that Midwest transaction price. So we’re not being really impacted by the run-up as we move that through with our metal neutrality pass-through side. So that’s not been a direct impact. And any other sourcing costs and that we’ve been pretty well able to offset with other actions we’re taking.

Operator: We have no further questions at this time. Mr. Harvey, I’d like to turn the floor back over to you for closing comments.

Keith A. Harvey: Thank you, operator. Look, we’re excited for the future at Kaiser, and we’re positioning the company for continued improving on our progress when we report our third quarter results in October. Have a good day.

Operator: Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.