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SUP Superior Industries International

Participants
Clemens Denks VP, Treasury
Majdi Abulaban CEO and President
Timothy Trenary EVP and CFO
Gary Prestopino Barrington Research
Mike Ward Benchmark
Richard Phelan Deutsche Bank
Call transcript
Operator

Good day and welcome to the Superior Industries' First Quarter 2021 Earnings Teleconference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Clemens Denks. Sir, please go ahead.

Clemens Denks

Thank you. Good morning everyone and welcome to our first quarter 2021 earnings call.

During our discussion today, we will be referring to our earnings presentation, which, along with the earnings release, is available on the Investors section of Superior's website. I'm joined on the call by Majdi Abulaban, our President and Chief Executive Officer; and Tim Trenary, our Executive Vice President and Chief Financial Officer.

Before I turn the call over to Majdi, I would like to remind everyone that any forward-looking statements contained in this presentation or commented on today are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Please refer to slide two of this presentation for the full Safe Harbor statement and to the company's SEC filings, including the company's current annual report on Form 10-K for a more complete discussion of forward-looking statements and risk factors.

We will also be discussing various non-GAAP measures today. These non-GAAP measures exclude the impact of certain items and therefore, are not calculated in accordance with U.S. GAAP. Reconciliations of these measures to the most directly comparable U.S. GAAP measures can be found in the appendix of this presentation. With that, I'll turn the call over to Majdi to provide a portfolio and business update.

Majdi Abulaban

Thanks. Thanks Clemens and good morning everyone. Thank you for joining our call and thank you for your long-standing partnership and support of Superior.

Before I start today, a few words with perspective from my side.

We are very pleased with the results we will share with you today.

As I stated in the last earnings call, we're very excited to have a business built for profitable growth as the industry recovers.

Our first quarter results are actually a testament to what we have established for ourselves. With that, I will start on slide five with the highlights for the quarter.

For the first quarter, we have again delivered strong performance, delivering growth above market, expanding profitability, and achieving solid cash generation.

Our teams continue to execute against our value creation roadmap, capitalizing on secular trends with our portfolio of innovative technologies.

As OEMs are adopting strategies to advance electrification, CO2 reduction, and vehicle differentiation, we realize a 17% increase in value added sales and deliver 39% growth in EBITDA and solid cash from operations. Further, we delivered on a favorable product mix as well driven by our disciplined portfolio strategy and strong execution, despite supply chain disruptions affecting our customers.

During the first quarter, we also benefited from an OEM mix shift towards premium vehicles as OEMs managed through supply chain constraints. Tim will provide more detail on that in a moment. That said, we are confident that we have positioned Superior for consistent growth above market in the high single-digit range for the foreseeable future. Highlighting our product positioning actually is the fact that 19-inch and greater wheels in this quarter represented over 43% of our shipments compared to less than 30% in 2019. I will discuss some other portfolio drivers in a later slide that I think you will find interesting. These results underscore our operational capabilities and our portfolio strength, a combination of which has positioned Superior for continued profitable growth well into the future.

Moving on to slide six, we remain committed to executing our strategy to deliver shareholder value. When I first introduced this strategy, we were actually squarely focused on stabilizing the business. Once we completed that, we moved rapidly into driving operational excellence as across the business, which has been tremendously successful. This discipline resulted in improved gross margins, specifically in our North American operations, expanded EBITDA margins globally, and an accelerated drive to realize synergies across the entire company, especially between our two regions, North America and Europe. This improved profitability translated into enhanced cash flow generation and a stronger financial position.

In addition to improving margins and cash flow, we are well-positioned to drive consistent profitable growth as you have witnessed over the last several quarters.

We continue to develop our portfolio of bringing new sophisticated technologies to market, enabling us to secure additional new business wins, and further expand our customer base.

As we continue to make progress along this roadmap, our results clearly demonstrate that our strategy is working, creating incremental shareholder value with each step. Slide seven showcases a major achievement from executing the strategy I described on the prior slide, driving efficiencies and enhancing profitability. Year-over-year, the EBITDA margin of our North American operations expanded more than 500 basis points despite facing stiff headwinds, including the temporary shutdown of our Mexican facilities in February, due to power outage, supply chain constraints, and volatile customer demand. We look forward to maintaining this trend of margin expansion as the year continues, driving our strengthened portfolio and continued execution of our Operational Excellence Initiative.

Turning on to slide eight, as we have said many times, we are in a unique position to address the attractive secular trends that we believe will support growth for years to come. OEMs have clear mandates towards electrification, fuel efficiency, and aerodynamics, as well as consumer preference for larger diameter wheels with premium content. The previous us efforts to maintain this leadership from a technology perspective, has driven both significant content increases and growth over market. More specifically, looking at the key print, we have seen our wheels utilizing these technologies significantly grow as a percent of our portfolio.

Importantly, our customers recognize the value of these technologies affording us upcharges between 15% and at times actually more than 50% compared to a base level wheel. These technologies have also created a significant competitive advantage over some of our competitors as many premium customers demand these capabilities to do business with them.

As we continue to innovate and develop our portfolio of premium technologies, we expect to further solidify our leadership position and capture long-term growth. To that end moving on to slide nine, I am pleased to say Superior has been named as a finalist for the Prestigious PACE Award for our PVD Technology, which offers an environmentally-friendly, highly durable alternative to chrome.

In addition, this technology offers an average mass reduction of over 10 pounds per vehicle, which improves vehicle efficiency and reduces CO2 emissions. It is a proven technology that was launched on the Ford F150 last year and actually won a -- four Global Excellence Award.

We are honored to be in the final group considered for the PACE Award and see this as a testament to the outstanding work of our teams, further underscoring the innovative market leading technology we offer our customers.

Moving on to slide 10, here you see some of the exciting product and customer first we launched in the first quarter, both in North America and in Europe. In North America, we launched content on the VW Atlas, the Dodge Ram, and the Nissan Micra. The Atlas launch actually is our first with Volkswagen in North America, consistent with our strategy to grow with European OEMs in this region and leveraging the relationship we have with VW in Europe. The Dodge Ram launch is the first platform which features our matt-finish technology. In Europe, we launched content on the Volvo XC60 and XC40, the Land Rover Defender, and the Range Rover Sport. The latter of which marked our first 23-inch wheel using our Flow Forming Lightweighting technology.

Before I turn over the call to Tim, let me quickly discuss the current industry environment on slide 11. IHS forecasts, which have been reduced over the last eight weeks are still showing significant improvement for light vehicle production in 2021 versus last year. Having said that, the recovery to 2019 levels is still underway.

As a reminder, we have taken a conservative market recovery outlook in our last guide.

So, effectively, IHS guidance has now closed the gap to our original outlook.

Our underlying market assumptions of our full year outlook remain intact. We remain confident that the industry recovery will continue for some time to come.

However, we are currently monitoring the ongoing semiconductor shortages and other supply chain challenges, which may result in highly volatile customer demand throughout the year. We're also following continued COVID restrictions that are primarily affecting the European end market. With this in mind, we are maintaining our full year guidance.

For the full year, we anticipate delivering adjusted EBITDA in the range of $160 million to $180 million and cash flow from operations in the range of $110 million to $130 million.

Our focus will continue to be on enhanced profitability and driving cash generation. In closing, I am very pleased with our strong results in the first quarter and I'm confident that our growth over market momentum and enhanced margins will continue to support EBITDA growth and cash generation. The enhanced cash position and additional financial flexibility stemming from the recent extension of our revolving credit facility will enable us to invest more in the business, continue to deleverage our company, and deliver enhanced value to shareholders. I would like to thank our entire team for their hard work and I also would like to complement our outstanding leadership team in executing on our strategic plan to drive these results. With that, I will turn the call over to Tim. Tim?

Timothy Trenary

Thank you, Majdi and good morning everyone.

The first quarter of 2021 was another quarter of outstanding financial performance for Superior and another quarter of sequential growth above market for the company.

As reflected on slide 13, value added sales adjusted for FX increased 17% in the first quarter compared to the prior year period. This represents 19% growth over market. Superior's growth over market continues to be driven by the company's sale of larger diameter wheels with premium content. This shift in product mix was boosted in the first quarter as our customers generally preserved limited supplies of semiconductors for their more profitable vehicles; the larger and premium vehicles and therefore, shifted production accordingly. These vehicles are disproportionately equipped with larger diameter wheels with premium content.

In addition, favorable foreign exchange enhanced value added sales in the quarter. On slide 14, you'll find the regional breakdown of unit shipments, net sales, and value added sales for the quarter compared to the prior year period. Wheel unit shipments in the first quarter were 4.5 million, a 5% increase compared to the prior year period.

All of this increase in unit shipments was in North America and as much as Europe's shipments were essentially flat year-over-year. Net sales increased $358 million for the quarter compared to $301 million in the prior year period. This 19% increase reflects the increase in value added sales, favorable foreign exchange, and the rising cost of aluminum. Value added sales increased to $207 million compared to $170 million in the prior year period, a 22% increase before adjustment for foreign exchange.

The first quarter we reported net income of $13 million or diluted earnings per share of $0.18 compared to a net loss of $190 million or a loss of $7.84 per diluted share in the prior year period. This was largely the result of a non-recurring non-cash impairment charge of goodwill and other definite live intangibles related to the acquisition of our European operations in 2017. Net income in the first quarter of 2021 includes a $0.8 million tax provision, which differs from the statutory rate primarily due to valuation allowances, the release of an uncertain tax position, and the mix of earnings among tax jurisdictions. Slide 16 is a bridge of adjusted EBITDA from the first quarter of 2020 to the first quarter of 2021. Adjusted EBITDA increased to $55 million for the quarter compared to $40 million in the prior year period. This almost 40% increase was primarily driven by favorable product mix, a stronger euro, and improvement in operational performance, partially offset by the timing of customer recovery, rise in aluminum prices, and a cold weather precipitated power outage in Mexico. All four of our Mexican facilities were idled for six days this past February.

First quarter cash flow is described on slide 17. Cash flow from operating activities was $18 million compared to $31 million in the prior year period. The decrease was primarily driven by increased working capital to support higher sales, partially offset by growth in earnings and lower cash taxes. Cash used in investing activities decreased to $11 million compared to $14 million in the prior year period. The difference reflects the timing of capital expenditures, not a change in our capital investment strategy. Cash used by financing activities was $4 million compared to cash provided by financing activities of $189 million in the first quarter of 2020. This change was primarily due to drawdowns on the revolving credit facilities in Europe and North America in 2020 due to the uncertainty associated with the emerging pandemic and proceeds from the European equipment loan in 2020. We paid $3 million in preferred dividends during the quarter, drew $2 million on the European equipment loan, and made payments on funded debt of $1 million.

Taken together, we generated $3 million in free cash flow in the quarter. The company's capital structure is outlined on slide 18. Funded debt was $603 million at quarter end; cash on hand $154 million. Net debt was therefore $477 million, $14 million less than the prior quarter and $65 million less than the prior year period. Free cash flow remains a key objective of Superior.

As of March 31, 2021, liquidity including cash and available amounts under our committed revolving credit facilities was $379 million. The company's debt maturity profile is depicted on slide 19. On May 3rd, we amended and extended the U.S. revolving credit facility. The new commitment of $132.5 million with a step down to $107.5 million in May 2022 will mature in October 2023, two and a half years from now. We believe this facility is more than adequate considering the increased earnings power of the company and our enhanced cash position. Furthermore, we are in discussions with our European banking partners regarding expansion of the European revolver. More to come on that soon. There are no near-term maturities of funded debt. The term loan matures in 2024 and the senior notes in 2025.

We are in compliance with all loan covenants. Significant liquidity is available to the company in the form of cash and available amounts into the revolving credit facilities. Deleveraging the balance sheet remains a top priority for Superior.

Our full year 2021 outlook to be found on slide 20. Notwithstanding Superior's outstanding financial performance in the first quarter, we do not intend to change 2021 guidance at this time, given the uncertainties associated with possible OEM supply chain disruption, especially the availability of semiconductors and the possible associated impact on our customer's vehicle production schedules. Furthermore, COVID-19 continues to be disruptive in Europe. Having said that, we remain confident in our ability to continue to generate profitable growth as we execute our strategic priorities. With respect to industry production volumes, we continue to expect a recovery to pre-COVID levels over time and believe wheel unit shipments will be in the range of 16.9 million to 17.7 million this year. Net sales will be in the range of 1.3 billion to 1.37 billion, and value added sales will be in the range of 740 million to 780 million, resulting in adjusted EBITDA of $160 million to $180 million. The sales outlook assumes industry production recovery in 2021 in the mid-teen percentage range across our global footprint, an increase in aluminum prices, and a continuing shift to larger diameter wheels with premium content. This guidance includes an estimate of the impact of the semiconductor shortage on the industry and therefore, our sales and the previously described temporary shutdown of our Mexican operations as a result of the power outage in February. With respect to cash flow from operations, we expect to be in the $110 million to $130 million range for the year.

Finally, capital expenditure should approximate $75 million, a portion of which is carry-over through 2020. A significant portion of this spend is for investments in our wheel finishing capabilities as we continue to develop our capabilities and advanced our portfolio of wheeled products. That concludes our prepared remarks. Majdi?

Majdi Abulaban

You want to open -- closing remarks or later?

Clemens Denks

All right. Very good. Thank you, Tim and Majdi.

Let's go ahead with the Q&A session please. Katie, please go ahead.

Operator

Thank you, sir. [Operator Instructions] Thank you.

Our first question will come from Gary Prestopino with Barrington Research.

Gary Prestopino

Hey, good morning, everyone.

Majdi Abulaban

Good morning Gary.

Timothy Trenary

Hi Gary.

Gary Prestopino

A couple of questions here. Number one, are you continuing to see in the early stages of Q2 here, the OEMs favoring production of more of their high end models versus their lower end models due to the chip constraints?

Majdi Abulaban

Yes, Gary, obviously, all of those OEMs as they have come up with their earnings reports have stated and same with us that they continue to face challenges with microchip shortages and actually Q2 is continuing that momentum and recovery, possibly, Gary in the second half, but it remains to be seen.

So, with limited resources, limited supply, it goes without saying they continue to stay focused on the platforms that offer the highest profitability and the highest content and we expect that to continue.

Although Q2 would demonstrate even more pressure on that front, but the allocation to higher content of vehicles will continue.

Gary Prestopino

Okay.

So, that's why I was trying to get out of the cadence -- I think answered the question, the cadence of what to expect going forward, at least if it goes along the predictions of what the OEMs are saying, is Q2 is going to be somewhat challenged, but they're thinking that Q3 and Q4 some of this will light up, is that kind of the way you're looking at it?

Majdi Abulaban

That is correct. And that's really what IHS has signaled. They plowed off a lot of the recovery into the second half. They've downgraded Q2 and upgraded second half, which is consistent with what we're hearing from customers.

Gary Prestopino

Okay. And then just another couple of questions here. 19-inch wheels or greater, were they at about 40% in Q4 in terms of your units and they increase to 43%?

Majdi Abulaban

That's about right.

Gary Prestopino

Okay.

So, 40% to 43%.

Okay, good. And then, in terms of -- between your European operations and new North American operations, have you closed that gap on adjusted EBITDA margin, but I think there was a big gap there at one time, has it closed to the point where it's equilibrialized or could you maybe give us some direction there?

Timothy Trenary

Gary, its Tim. By and large, as a consequence of the actions that were taken shortly after Majdi arrived at the company, were specifically structural cost changes -- step changes, if you will, in the cost structure in Mexico, including the shifting of the Fayetteville operations down to Mexico. That step change has, by and large resulted in margins as between Europe and North America which are now very, very similar.

So, that's the long answer to your question. The short answer is yes, the gap is closed.

Gary Prestopino

Okay. Thank you.

Operator

Thank you.

Our next question comes from Mike Ward with Benchmark.

Mike Ward

Good morning everyone. I'm wondering you can help me with something.

Majdi Abulaban

Good morning Mike.

Mike Ward

So, Majdi if I got this right, so you see all these stories and then you see the videos online about some of these vehicles, like at Ford, in particular, that are largely produced sitting in parking lots. They got the wheels on them, but they're maybe missing one chip.

So, they haven't been gated yet by Ford. How does that work with you? Are you getting the revenue? Are they paying you in cash? Is it considered a sale?

Majdi Abulaban

No, it's absolutely considered a sale. The short answer.

Mike Ward

Okay.

Majdi Abulaban

As they parked -- waiting for chips, it is a sale.

Mike Ward

Right. It is a sale, okay.

Now, does that create a backlog? I know you guys get pretty consistent schedules and I know they're doing their best to allocate the chips to the most important vehicles and things like that. And I think the rule of thumb is basically, when you get these 30, 60, 90-day type schedules from the vehicle manufacturers, the 30-day schedules are pretty much 99%, 100% in mind, is that where the pressure is coming? You're getting cutbacks at the last minute or they just given you cautious build schedules going out 60 to 90 days more longer term?

Majdi Abulaban

Mike, I will tell you a testament to the execution of this team. And I'm on the call every week, sometimes every day with the team as they try to manage through volatility.

So, your statement in a fire world is correct, stability. But our schedule change almost on a daily basis. And our team -- I mean, the growth over market story of 19%, Mike, is market -- it’s the strategy taking hold. We said we want to be on premium vehicles. We said we wanted to -- with larger wheels, electrification on the marquee, lightweighting.

Our lightweighting volume, Mike is, is twice what it was just 12 months ago.

So, the strategy is taking hold, but on top of it is a team that is responding to customers in an unbelievable way to shift their mix, to satisfy their production needs. And that has manifested itself in these growth numbers we're sharing with you.

Mike Ward

Yes, because in the past that would have been hugely disruptive to performance.

Majdi Abulaban

Yes, yes.

Mike Ward

Any insights you can give on what's going on in Europe? I mean it looks like the economies are reopening. Are you seeing that reflected? I'm guessing that, particularly, as the markets a lot more shut down in that first quarter that we're going to see some pretty substantial type increases as we get into Q2, Q3, are you seeing that reflected in your orders from your customers?

Majdi Abulaban

Yes, I mean, overall, Mike, the recovery in Europe was always viewed as one that will be slower than that of North America. Europe is not going to reach 2019 levels for four sometimes, and we came into the year knowing that North America will be stronger than Europe and it continues to be.

Now surprisingly, if you look at Q1, the European market was down 1% year-on-year, while North America was down 4.5%.

For us, the story in Q1 is consistent with that. Actually, North America was up 27% in revenue and our revenue in Europe was up 7%. Both regions are operating from our standpoint at significantly growth above market. The outlook is -- continues to be -- in the year you'll see North America at 20% and IHS got Europe at 14%. We think it may still be in the 10% range. But we are seeing the recovery hold as we expected before we issued our earnings call.

Mike Ward

Listen, I really appreciate the feedback and thank you.

Majdi Abulaban

You're welcome.

Operator

Thank you. [Operator Instructions] Our next question comes from Richard Phelan with Deutsche Bank.

Richard Phelan

Yes, thank you very much. I just had two questions.

The first is a little similar to some of the other comments about the cadence here in terms of your guidance. Obviously, the adjusted EBITDA in quarter one was great and represents sort of one-third of the full year guidance at the midpoint. And I recognize that you sort of qualified this -- conservative or reflecting the concerns regarding the slowdown. I guess, if I look at Q2 last year, adjusted EBITDA was in fact negative $4 million.

So, barring a disastrous production from your customers in terms of the slowdowns, I would assume that even Q2 could still beat last year, which was significantly impacted by Q2.

So, the first question is really how much of this underperformance is in your guidance for adjusted EBITDA for the year concentrated in the second quarter? And then the second question is really related to your refinancing, I guess with the improvement in that leverage, you mentioned that you're talking to the banks about the European revolver, you've obviously made progress in the U.S., any thoughts on the bond refi prospects? And what actions you might with respect to the preferred in conjunction with that? Thank you.

Timothy Trenary

Okay, Richard, its Tim. Thank you for your questions.

First of all, with respect to the guidance, let me just start by saying just to be clear that we do not anticipate any sort of -- performance in Q2 of this year to be anywhere near that of last year. I mean last year was an anomaly.

So, no, we do not -- we don’t expect to perform really fairly well in Q2.

Here's how I think about the remainder of this year and the guidance. And by the way, it's just impossible to know for sure, so we're just acting out of an abundance of caution and I think being conservative and not changing our guidance.

Here's how I think about it by quarter. In the first quarter, notwithstanding all the difficulties that the customers had with supply chain and we had to some extent with respect to our operations in Mexico and the power outage, all of that sort of get covered up, if you will, by this this mix shift, this favorable mix shift in Q1 and frankly, our company's ability to manage that, the operators ability to manage that effectively and therefore, the company's ability to convert on those sales. That's what gave rise to this 40% improvement in EBITDA and 330 basis points better margin.

Now, in Q2 and Q3, again, nobody knows for sure, but depending on who you want to believe, it looks like Q2 from the standpoint of OEM production schedule difficulties will be the worst quarter. It's already started a little bit here in North America, we're seeing it in the facility closures with many of our customers and the call-offs on the production. But there's reason to believe that that may subside in Q3, okay.

So, a little rough going here in Q2 perhaps, especially in North America, nothing, nothing, nothing like last year, but there's some lower production levels and perhaps subside in Q3.

Now, what may happen in Q4, is that to the extent the assemblers, the OEMs had to throttle back production in Q2 and perhaps Q3, and because inventories are low and will be -- maybe even lower after this, we may see a supercharging, if you will, of volumes in Q4.

So, what I've just laid out here is a scenario that, frankly, if it comes to pass, could result in year for our company, which is much better than the guidance that that we have out there right now.

So, roundabout way of saying is the fact that we haven't changed our guidance is just out of an abundance of caution, because of the uncertainty, notwithstanding the scenario I just laid out, which really be quite favorable for the company.

Richard Phelan

Okay. Thank you.\

Timothy Trenary

Okay. And in terms of our capital structure, Clemens, who's here with me today, is our Treasurer and he is in conversations with our European banking partners.

As you may know, we have a €60 million facility over there and -- listen Clemens, I'm just going to let you give them firsthand knowledge on where you're at with that.

Clemens Denks

Thank you, Tim. Yes, so in regards to the European revolver, we have initiated discussions. And I think I'll leave it with -- we expect that to close out successfully in the near future. I don't want to put a specific date on that. And then the broader question you asked about the bond refinance? I think for us, it's actually the broader question is about the overall capital structure. And clearly, we are also in discussions with our banking partners about this topic.

We have been -- it obviously, is a continuous dialogue.

We are aware of the especially levered markets being very supportive. Having said that, you actually decided to bond for us. This is not just the bond; it's the overall cap structure.

So, I think your point is valid, but I think it's going to take us also a moment to actually gather all the different bits and pieces together and move forward.

Richard Phelan

Okay, great. Thank you so much.

Clemens Denks

Thank you.

Operator

Thank you.

Our next question comes from James [Indiscernible] with Credit Suisse.

Unidentified Analyst

Hi, and thank you. Congratulations on your results.

Just following on from your last question, when you think about your capital structure and ways you can optimize it. How are you thinking about that with strong results gives you clearly more optionality? Are you thinking about maybe moving some debt off the capital structure, moving towards a more a more senior secured type of structure? Yes, that'd be my first question. Thank you,

Timothy Trenary

James, its Tim.

First of all, I think to further a little bit on Clemens' point here, there was no immediate need to make any dramatic changes to the company's capital structure. We did as you know, adjust the revolver here in North America and we intend to do the same with Europe. Having said that, to your point, what this company is all about at this point ever since Majdi assembled his team here is about improving financial performance of the company. And therefore the free cash flow that results from that and from that, the deleveraging of the balance sheet which this company has had a fair degree of success in doing through driving EBITDA performance, notwithstanding the pandemic last year, but especially with respect to management of working capital on the balance sheet.

So, what we've been about is, is improving performance, increasing free cash flow, and therefore, deleveraging the balance sheet. And what that will do if we pay attention to that and if the leveraged finance markets stay strong and there's every reason to believe that they will, we'll put ourselves in a position to make any appropriate changes -- long-term changes to the capital structure at the appropriate time.

Unidentified Analyst

Makes sense. Thank you. And second question is what was the factoring balance at the end of the quarter?

Timothy Trenary

The factoring balance, if I recall correctly, was $106 million in outstanding receivables factor.

Unidentified Analyst

Great. Thank you. That’s all for me.

Timothy Trenary

Thank you.

Majdi Abulaban

Thank you, James.

Operator

Thank you. This concludes today's Q&A. I would now like to turn the call back over to Majdi for closing remarks.

Majdi Abulaban

Thank you. In closing, we are excited about the momentum we have created by executing our portfolio of technologies and establishing our performance culture that Tim referred to.

We have a business built for profitable growth as the industry recovers.

While challenges persist in the market, we have proven that we can manage through a very volatile operating environment and respond in a way that protects all of our stakeholders and deliver tangible value to our shareholders. I wish you the best and I thank you for joining us today. This concludes our call.

Operator

Thank you. Ladies and gentlemen, this concludes today's teleconference.

You may now disconnect.