Superior Industries International Inc. (NYSE:SUP), a leading manufacturer of aluminum wheels, held its First Quarter 2024 Earnings Call, outlining the company's strategic moves and financial performance. Despite a decline in net sales due to the deconsolidation of their German operations and lower unit sales, the company remains optimistic about the future.
Superior Industries confirmed its full-year guidance for 2024, expecting a significant uplift in profitability as it completes its European transformation and shifts production from Germany to Poland.
Key Takeaways
- Superior Industries exits high-cost German operations, moving production to Poland.
- Anticipate a significant profitability increase with a strengthened competitive footprint.
- Q1 2024 saw a decrease in net sales mainly due to the deconsolidation of German operations.
- Full-year net sales for 2024 projected to be between $1.38 billion and $1.48 billion.
- Adjusted EBITDA for 2024 is expected to be $155 million to $175 million.
- Company plans to refinance its senior unsecured notes, evaluating opportunities in the capital markets.
- Transfer costs from Germany to Poland estimated at $20 million to $35 million in cash costs.
- Discussions on refinancing and capital structure are ongoing, with potential inclusion of preferred equity.
Company Outlook
- Superior Industries expects to exit 2024 with an improved run rate of approximately $190 million in adjusted EBITDA.
- The company is focused on deleveraging and strategically investing in finishing and light weighting capabilities.
- Unlevered free cash flow is projected to be in the range of $110 million to $130 million for the full year.
Bearish Highlights
- Net sales decreased in Q1 2024 compared to the previous year, affected by the deconsolidation of German operations and lower unit sales.
Bullish Highlights
- The European transformation is expected to drive significant improvement in profitability.
- Company maintains a strong competitive position with an accelerated adoption of its portfolio of technologies.
Misses
- The deconsolidation of the German facility SPG and lower unit sales contributed to the decline in net sales and adjusted EBITDA in Q1 2024.
Q&A Highlights
- Cash costs for the transfer from Germany to Poland will not affect adjusted EBITDA but will impact cash flows.
- Refinancing discussions are ongoing, with a focus on completing the process promptly.
- The company aims to deliver value for stakeholders throughout 2024 and beyond, with a positive outlook on the second half of the year.
In summary, Superior Industries is navigating through a period of transition with a strategic focus on improving its cost structure and competitive edge. While facing headwinds from the deconsolidation of its German operations, the company is poised for a stronger performance in the latter half of 2024, backed by its European transformation and refinancing initiatives.
InvestingPro Insights
Superior Industries International Inc. (SUP) has been navigating a challenging market, as reflected in their recent earnings call. In light of the company's strategic moves and the financial data reported, here are some InvestingPro Insights that could provide additional context for investors.
InvestingPro Data indicates that Superior Industries has a market capitalization of $107.38 million and a negative adjusted P/E ratio for the last twelve months as of Q1 2024, standing at -1.51. This suggests that the market has yet to price in future earnings potential, likely due to the current lack of profitability. The company's revenue for the last twelve months as of Q1 2024 is reported at $1.32 billion, with a gross profit margin of 8.13%, signaling efficiency challenges in converting sales into profit.
From the perspective of stock performance, SUP has experienced a large price uptick over the last six months, with a 37.41% total return. This could indicate investor optimism about the company's future prospects, despite the recent operational challenges.
InvestingPro Tips highlight that Superior Industries is trading at a low revenue valuation multiple, which could attract investors looking for undervalued opportunities. Moreover, the company's liquid assets exceed short-term obligations, suggesting a degree of financial stability in the near term.
Still, analysts do not anticipate the company will be profitable this year, and the company has not been profitable over the last twelve months. Moreover, SUP does not pay a dividend, which might be a consideration for income-focused investors.
For those seeking a more comprehensive analysis, there are additional InvestingPro Tips available on the platform. For instance, there are 7 more InvestingPro Tips accessible for Superior Industries on https://www.investing.com/pro/SUP, which can provide deeper insights into the company's financial health and market position.
Investors interested in leveraging these insights can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enhancing their investment research with valuable data and analysis.
In summary, while Superior Industries is optimistic about its strategic direction and future profitability, the InvestingPro Insights suggest a mixed financial picture that investors should consider carefully. With the company's focus on improving its cost structure and the promising signs of stock performance, the latter half of 2024 will be crucial in determining whether these strategic moves will translate into a stronger financial standing.
Full transcript - Superior Industries International (SUP) Q1 2024:
Operator: Welcome to Superior Industries First Quarter 2024 Earnings Call. We are joined this morning by Majdi Abulaban, President and CEO; Tim Trenary, Executive Vice President and CFO. My name is Alan. I’ll be your coordinator for today’s event. Please note this call is being recorded and for the duration your lines will be on listen-only. However, you will have the opportunity to ask questions at the end. [Operator Instructions] Call will start with Tim Trenary. I’ll now hand over to, Tim Trenary.
Timothy Trenary: Good morning, and welcome to our First Quarter 2024 Earnings Call. During our call this morning, we will be referring to our earnings presentation, which along with our earnings release is available on the Investor Relations section of Superior’s website. I am joined on the call by Majdi Abulaban, our President and Chief Executive Officer. Before I turn the call over to Majdi, I remind everyone that any forward-looking statements contained in this 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 2 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 complete discussion of forward-looking statements and risk factors. We will also be discussing various non-GAAP measures today. 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 the presentation. I now turn the call over to Majdi, to provide a business and portfolio update.
Majdi B. Abulaban: Thanks, Tim, and thanks everyone for joining our call today to review our Q1 2024 results. I will start on Slide 5. I am pleased to share with you today that the Superior team has delivered on our announced strategic action in Europe as planned. In the first quarter, we successfully exited our high-cost German operations and relocated production to Poland. Now in my almost four years experience in automotive, this stands out as a one of a kind level of execution in manufacturing transformation in a challenging market. One carried out with precision and teamwork, with outstanding collaboration with our customers and with no disruptions or impact on deliveries. This will not only provide a significant profitability uplift, but has also advanced our local-for-local footprint to 100% low cost manufacturer. In addition, we are well-positioned to deliver value to our OEM customers seeking localized derisk supply chains. With this milestone of the transformation completed, we expect to exit the year with substantially improved earnings power along with a strengthened competitive footprint that no other supplier can offer. Looking at our broader operating environment, industry production declined 2% in our markets and production at our top customers actually declined 8%. While value-added sales and adjusted EBITDA were pressured in the quarter due to lower volumes as well as lumpy customer recoveries. In fact, and encouragingly, we saw more than 400 basis points sequential margin improvement in adjusted EBITDA on similar volume and value-added sales to Q4 of last year. Tim, will provide more color on this. I would further note that our results in the quarter on a year-over-year basis have been temporarily, distorted by the transformation. The transfer of wheels to Poland impacted content, cost absorption and volumes. For example, high-value wheels in Germany are temporarily deconsolidated from our figures until we complete the transfer to the Polish facility. We were also impacted by costs associated with the reorganization of our European administration and logistics functions. We anticipate these factors to dissipate in the coming quarter. Our team continues to do an exceptional job with continued focus on cash generation through working capital management and capital prudence. Despite the actions in Germany, which require temporary safety inventory that is being drawn down as we speak and contraction of supplier terms, our net debt of $439 million remains a near historical low. Further, we maintained ample liquidity and we’re also gaining traction with our pursuit of refinancing and capital structure solutions. We are affirming our guidance for 2024 despite declining industry volumes for the full-year. In this regard, as we previously stated, we are on-track to see significant improvement in margin in the back half of 2024. Slide 6 highlights the significant uplift in profitability that results from the completion of the European transformation. Our guide assumes $165 million in adjusted EBITDA generation in 2024 at the midpoint. However, with the transformation having been completed in the first half, we expect an improved run rate of approximately $190 million in adjusted EBITDA upon exiting 2024. This significant improvement will be driven largely by low cost wheel manufacturing at our Polish facility. We will also achieve cost savings via consolidated administrative functions in Europe and overall improved utilization in Poland. Turning on to Slide 7, which highlights the progress of our European transformation in more detail. As we ramp-up production in Poland, we will be closing the margin gap between North America and Europe in the second half of the year. We expect to see approximately a $23 million to $25 million in annualized EBITDA uplift. We also anticipate a cash benefit as we continue unwinding $12 million in safety stock, while recovering $15 million in supplier terms. We will transfer benefit from higher cost absorption and improvements in our Polish operations. And in addition, we are continuing to improve our overall cost structure in Europe by consolidating aftermarket warehouses and rationalizing overhead. We are making progress in our conversations with key customers regarding further cost recoveries for labor and energy inflation. This is in addition to costs already recovered associated with the transformation. Lastly, we feel good about the current portfolio we have in this region in Europe, now that we have exited underperforming programs. Turning on to Slide 8, with an overview of our current operating environment. As I mentioned earlier, industry production in our regions is down 2%, while production declines with key customers such as GM and Audi are more pronounced. This coupled with volume volatility, higher dealer inventories and unfavorable production mix has created a challenging backdrop. Now, despite these challenges, we feel good about the position we have created for our business through our successful transformation. The tailwinds including industry preference for localization and our portfolio differentiated technologies, which are aligned with consumer preference for larger and lighter premium wheels will continue to play out. Further, we see further growth tailwinds at the average age of the USA car parks is at historical lows. Slide 9 provides an overview of Superior growth compared to the industry in the quarter. In addition to industry production declining 2% in our markets, production of our top customers declined 8%, which was driven by launch delays and software issues at these OEMs. Our value-added sales adjusted for foreign exchange and deconsolidation was down 6%, which is generally in-line with our customer mix. The impact of deconsolidation of our German operations and lumpier customer recoveries have also impacted our value-added sales. Moving on to Slide 10, which highlights the accelerated adoption of our portfolio of technologies. Larger and lighter wheels with premium finishes continue to make up a larger proportion of our launches. This will further drive content growth in the future and more technology applications. We’re also highlighting a few launches in the first quarter, including the exciting Porsche (ETR:P911_p) Spyder and the GM Honda (NYSE:HMC) EV. The right side of the slide highlights the historical trend with long-term content per wheel growth of 31% since 2019. I’d like to conclude with Slide 11, which I shared with you during our last call, a powerful illustration of our competitive position, unmatched capabilities in many ways, strong market leadership. We are a leader in Europe and we are a leader in North America with the most diversified customer-base in the wheel space. We are with the winning OEMs in both regions. Unrivaled manufacturing leadership, no other supplier can offer a 100% low cost and local footprint, and finally, unparalleled technology and portfolio leadership, the broadest and most comprehensive portfolio in the industry. So, we are excited about where we are. We have executed on a key milestone that has now culminated in a business that is well-positioned for long-term profitable growth. And, behind all this is a team delivering exceptional execution. I’d like to thank them all for their hard work and effort and for their results. Now, I will turn the call over to Tim, to provide more detail on our financial results. Tim?
Timothy Trenary: Thank you, Majdi. Recall on August 31 of last year, we announced some important strategic action, the continuation of our local-for-local manufacturing footprint optimization strategy and the transformation of remaining 6% of our manufacturing footprint to a more competitive cost structure. More specifically, our production facility in Werdohl, Germany, otherwise known as Superior Industries Production Germany or SPG, entered Protective Shield Proceedings, a German court-administered reorganization process. Generally Accepted Accounting Principles require that SPG’s statement of operations and balance sheet, beginning with the commencement of the proceedings, be deconsolidated from Superior Industries’ financial statements. Accordingly, the income statement of SPG is excluded from the first quarter 2024 financial results as is the balance sheet of SPG as of the end of the quarter. The deconsolidation affects the year-over-year comps. More specifically, in the first quarter of 2023 approximately 255,000 wheels were produced at SPG. The associated net sales and value-added sales were $34 million $21 million respectively. Year-over-year first quarter 2024 financial results and therefore adjusted EBITDA, capital expenditures and working capital benefited from the closure of the facility. Adjusted EBITDA was $3 million more, Capital expenditures and working capital were $1 million and $15 million plus, respectively. We signed the step change benefit of the transfer of wheels from Germany to Poland at $23 million to $25 million annually. Capital expenditures should be approximately $10 million less per year. Superior Europe variable contribution margin should approach that of Superior North America. We expect the cost to complete the wheel transfer to be $20 million to 35 million. Let’s look at the quarter on Page 14, first quarter 2024 financial summary. Net sales decreased $316 million for the quarter compared to $381 million in the prior year period. Normalization of the cost of aluminum and deconsolidation of SPG accounts for substantially all of this $65 million decline or $52 million. Value-added sales decreased to $172 million for the quarter compared to $203 million in the prior year period. The deconsolidation of SPG and foreign exchange accounts for $21 million of this $31 million decline. Adjusted EBITDA was $31 million. The associated margin expressed as a percent of value-added sales, 18%, more to follow momentarily. For the quarter, net loss was $33 million. The first quarter 2024 year-over-year sales bridge is on Page 15. As I just mentioned, value-added sales declined $31 million compared to the prior year quarter, reflecting deconsolidation of SPG and lower unit sales. To the far right, aluminum cost passed through the customers was down $34 million because of the lower cost of aluminum, the consolidation of SPG and lower unit sales. On Page 16, first quarter of 2024 year-over-year adjusted EBITDA bridge. Adjusted EBITDA for the quarter decreased to $31 million compared to $45 million in the prior year period. The adjusted EBITDA margin for the quarter was 18% compared to 22%. Lower unit sales partially offset by favorable product mix, and to the far right, lower recovery of cost inflation from customers, partially offset by lower conversion costs, are the primary reasons adjusted EBITDA decline. The impact of foreign exchange and [middle timing] (ph) on the quarter compared to the prior year period was deminimis. An overview of the Company’s first quarter 2024 unlevered free cash flow is on Page 17. Cash flow from operating activities was $4 million for the quarter compared to $39 million in the prior year period. Lower earnings of $29 million, $14 million of which is higher non-cash taxes and lower sources of cash provided by trade payables of $16 million and other assets and liabilities of $7 million are the primary reasons for the decline in cash flow from operating activities. Cash used by investing activities for the quarter were $7 million compared to $16 million in the prior year period. Capital expenditures were lower in the first quarter of 2024. Cash payments for non-debt financing activities were $5 million comparable to the prior year period. Unlevered free cash flow for the first quarter of 2024 was therefore $8 million, a decrease of $26 million compared to the prior year period, primarily because of the lower cash from operating activities offset in part by fewer capital expenditures. An overview of the Company’s capital structure as of March 31, 2024, may be found on Page 18. Cash on the balance sheet at quarter end was $191 million, funded debt was $630 million at quarter end and net debt was $439 million. Deleveraging the balance sheet and therefore unlevered free cash flow remains a top priority. Superior’s debt maturity profile as of March 31, 2024 is on Page 19. The revolving credit facility was undrawn at quarter end. We are in compliance with all loan covenants. The senior unsecured notes mature in a year. The Company has engaged an independent financial advisor to advise on refinancing of the notes. In conjunction with our advisor, we are evaluating refinancing opportunities in the capital markets. It’s too early in the process to discuss the capital structure this process might deliver. The full-year of 2024 financial outlook is on Page 20. For the full-year 2024, we expect net sales in the range of $1.38 billion to 1.48 billion and value-added sales in the range of $720 million to $770 million. The sales reflect the impact of having addressed underperforming parts of the wheel portfolio thereby optimizing the profitable utilization of our manufacturing capacity and light vehicle production in our markets generally consistent with IHS forecast. We expect adjusted EBITDA of $155 million to 175 million. However, because of the Europe transformation, we expect to exit 2024 with adjusted EBITDA of approximately $190 million. We anticipate the cost inflation, especially labor and energy will persist. However, we have ongoing dialogue with customers to recover in wheel price their fair share of inflation. We expect to deliver unlevered free cash flow in the range of $110 million to $130 million, highlighting the cash generating power of the enterprise. Finally, we expect approximately $50 million in capital expenditures as we strategically invest in our business, in particular, in finishing and light weighting capabilities. We modeled tax expense of approximately $30 million for the year. The tax provision for the year reflects the impact of $18 million of tax restructuring charges in the first quarter. In closing, the strategic action to close SPG and transfer wheel production to Poland is expected to be significantly value accretive to the Company. We’re very pleased with our teams involved in this transaction, especially our operations and commercial teams. This concludes our prepared remarks. Majdi and I are happy to take questions. Alan?
Operator: Thank you. [Operator Instructions] We will take our first question from Michael Ward, Freedom Capital. Your line is open. Please go ahead.
Michael Ward: Thank you. Good morning, everyone.
Majdi B. Abulaban: Good morning, Mike. How are you doing?
Michael Ward: Doing okay. Thank you. Majdi, you talked about a couple of things with the European transformation. So, operations were deconsolidated. When will they be put back in your numbers?
Majdi B. Abulaban: You mean, when will the transfer of wheels begin to show up in our numbers, correct?
Michael Ward: Okay. So, now but it’s deconsolidated, so it’s out. So, you took those numbers out and when will they start showing back up in your numbers, yes?
Majdi B. Abulaban: They will begin to start showing up in Q2 and they will fully stabilize in Q3. Tim?
Timothy Trenary: Yes. That’s right.
Michael Ward: Okay.
Timothy Trenary: So, the financial results of the German facility SPG are out forever, Mike. So, now what we’re doing as we transfer that production over to Poland, the benefit will show up in our existing, in our remaining financial results.
Michael Ward: Okay, got it.
Majdi B. Abulaban: The benefit is the revenue as well, and if you recall when we talked previously, the German facility had an outside number of wheels that are much, much higher content. So, that will show up as well and that will feed to our content overview.
Michael Ward: Okay. And so, and then the $20 million to $35 million of cost to complete, that’s just showing up on some of these revenue numbers or is that actual how does that, how do we see that?
Majdi B. Abulaban: Yes. Those are restructuring by and large restructuring or other charges associated with this activity. So, you will see that in yes, so they are not reflected in adjusted EBITDA. We set them aside.
Michael Ward: Okay. That’s fine. German production was down, I think 8% in the first quarter. And, you mentioned about your key customers and everything else. Was there something going on in Germany in January and February particular and what are your customers telling you for the rest of the year?
Majdi B. Abulaban: Yes, Mike, I mean the VW I mean this is public information, I’m not giving you anything proprietary here. So, the whole VW Group was down significantly, in fact Audi just by themselves production wise were down 26%. Now, it’s really a combination of factors, right? The major factor is disruption. The second one is, if you look at the launch cadence of the whole VW Group, especially Audi and Porsche, it’s quite front loaded. Then you’ve got this other factor dynamic on China and the imports of Porsche and high-end vehicles into China has been challenging for them. And, the last piece is obviously no secret that the Chinese are taking share in Europe. That’s not the major driver, but that’s part of it as well.
Michael Ward: Okay. So, now the schedules they’ve given you though, is that what gives you confidence in that, the stronger second half?
Majdi B. Abulaban: That’s correct. If you look at IHS, like Europe is supposed to be down in the first half. Probably Q2 is similar to Q1, a little bit better, but you’ll see them beginning to wrap up in the second half and largely again in my view because the supply chain disruptions will have been passed, but also the launches that I mentioned earlier. So, in the second half, you’ll see a little bit of growth versus prior year in both Europe actually and North America.
Michael Ward: Okay. So, in some respects, the timing of your transition was fortunate with German being down?
Majdi B. Abulaban: Actually, that’s an excellent point. I mean, like I said in my script, Mike, this is no simple undertaking. We have 550 people currently. These are the most complex wheels we manufacture in the world. They’re Porsche wheels, they’re Audi wheels. Our customers have been absolutely impressed with the execution. In fact, the Porsche gentleman that was in our facility stated that it’s the first time he’s ever seen such a reorganization, well not disruption. So, you hit the nail on the head, Mike. It’s an exciting story, but it’s really a measure of the capability of this team at Superior and our ability to execute.
Michael Ward: So, the second half, you get the combination of production coming back online, low cost facility, getting rid of the inventory, so two, three, four things start to really set up nicely late 2024 into 2025. That’s why you’re looking at it.
Majdi B. Abulaban: That is well said.
Michael Ward: Well, thank you very much. Good luck with it.
Majdi B. Abulaban: Thank you, Mike.
Operator: We will take our next question from Gary Prestopino, Barrington Research. Your line is open. Please go ahead.
Gary Prestopino: Hi, good morning, all.
Majdi B. Abulaban: Good morning, Gary.
Gary Prestopino: Couple of questions here. First of all, I noticed that you didn’t give units by region produced, unless I’m missing it. There’s a lot of information on both the press release and the deck. Do you have that handy or is that something you’re not going to be?
Majdi B. Abulaban: Gary, you’re asking a very important question. Gary, you’re asking a very important question. As we have now completed our transformation in Europe, our focus has always been, Gary, on content. I cited an example where the suburban wheel could be 5x a central wheel, right? So, our focus really is not on how many wheels we make, it’s on making the right wheels, the wheels with the right contents and right technology and the right returns. So, that’s why you’re seeing us back off content, back off putting units in the forefront. But, if you go to the queue, you’ll find the information there.
Gary Prestopino: Okay.
Majdi B. Abulaban: But in terms of growth and focus, I think the focus in my opinion, Gary, should be on sales and value-added sales. That’s what we should focus on, but it’s available.
Gary Prestopino: Okay. That’s fine. I just wanted to make sure that’s something you hadn’t pulled back on because I still think it’s important that you use those numbers. And, then if I look on Page 5 here of the deck, just to understand what’s going on. You talk about the impact from deconsolidation of the German production facility, high-value wheels, I guess that were produced in Germany, in the quarter as you transferred everything, it really disrupted production, and there’s and that’s why we have an impact --
Majdi B. Abulaban: No, no, Gary. All I’m saying here is that our numbers in the quarter do not include those wheels. So, what I’m saying is the numbers you see for the quarter here, they do not include when you go to the queue and you ask about the number of wheels we produce, you’ll see that those wheels about [125,000] (ph) in Germany are not included in that data. And, that distorts our growth. That’s all we’re saying. And, then when you consider that those [some 200,000] (ph) wheels are significantly higher content in wheels, then that also distorts our content per wheel and our value-added sales.
Gary Prestopino: Okay. It’s not included in what you’ve put out here as the --
Timothy Trenary: Gary, it’s Tim. If I may, if I can turn your attention to, Page 13. So, this will help you with the disruption in the year-over-year comps. In 2023, the first quarter of 2023, for example, the quarter, can you hear me, Gary? You’re not coming in, Gary.
Operator: We will take our next question from Mehmet Dere, Deutsche Bank (ETR:DBKGn). Your line is open. Please go ahead.
Mehmet Dere: Hey, guys. Just two quick questions on the --
Majdi B. Abulaban: Hey, Mehmet.
Mehmet Dere: Hey, just on the cost of $20 million to $35 million for the transfer. Just wanted to clarify, is that cash cost? If so, when is this going to be in the cash flow statement? Because you said you put them aside and it will not show up in the adjusted EBITDA?
Timothy Trenary: Right. They are all cash costs at the end of the day. And, we are at the very end those cash costs, there’s very little yet to spend. You can get some idea of the impact of those. And, then if you look at the reconciliations to the GAAP measures, net income to adjusted EBITDA by period will give you some indication of what those the magnitude of those costs by period. So, yes, when I said setting it aside, I just said for purposes of discussing adjusted EBITDA, we set them aside, but they do affect our cash flows, obviously.
Mehmet Dere: Okay, great. And then well, as I asked also in the previous calls about the refinancing process as you also said you’re too early in the process to discuss the cap structure, but you dropped the narrative there where you said in the previous presentation that the refinancing of the notes is likely to involve preferred equity. Have you just is there a reason for the change in the wording? Or can you give us some color there?
Majdi B. Abulaban: No, not really. I don’t know exactly how the refinancing of the notes will -- may have any impact on other elements of the capital structure. So, the discussions are ongoing. There’s we have a complicated capital structure for our company. There’s, as you know, four stakeholders, the preferred equity, the secured debt, the term loan, the unsecured notes and of course, our banks revolving credit facility. So I don’t know exactly how all those pieces will come together as we focus on the unsecured notes. And, yes, the preferred equity could very well be a part of the transaction in some form or fashion.
Mehmet Dere: Okay. And on the timing, since the bonds are becoming current in a few weeks of time, is it likely that you guys will be waiting for the second half of the quarter since volume is coming back and you will recap the German operations in Poland?
Majdi B. Abulaban: No, no. I would say that we are proceeding as rapidly as it’s prudent and practicable. And so, we would like to get it accomplished sooner rather than later. We are not targeting any specific point in the back part of the year for sure. And frankly, we’d like to get it done sooner rather than later to be honest with you.
Mehmet Dere: Okay. Thank you.
Majdi B. Abulaban: Gary, are you back?
Operator: I’m sorry, Gary’s line is disconnected. There are no further questions on the line. So I will now hand you back to Majid Abulaban for closing remarks.
Majdi B. Abulaban: Thank you. Thanks everyone for joining our call today. Again, to the Superior team, thank you for your continued hard work and commitment to the success of our business. We look forward to continue our momentum to deliver value for all stakeholders throughout 2024 and beyond. Have a great day everyone.
Operator: Thank you for joining today’s call. You may now disconnect.
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