Canadian Solar Inc. (NASDAQ:CSIQ) Q1 2023 Earnings Call Transcript May 18, 2023

Canadian Solar Inc. misses on earnings expectations. Reported EPS is $0.14 EPS, expectations were $0.48.

Operator: Welcome to Canadian Solar’s first quarter 2023 earnings conference call. My name is Melissa and I will be your Operator for today. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Isabel Zhang, IR Director at Canadian Solar. Please go ahead.

Isabel Zhang: Thank you Operator and welcome everyone to Canadian Solar’s first quarter 2023 conference call. Please note that we have provided slides to accompany today’s conference call, which are available on Canadian Solar’s Investor Relations website within the Events and Presentations section. Joining us today are Dr. Shawn Qu, Chairman and CEO; Yan Zhuang, President of Canadian Solar’s majority-owned subsidiary, CSI Solar; Dr. Huifeng Chang, Senior VP and CFO; and Ismael Guerrero, Corporate VP and President of Canadian Solar’s wholly owned subsidiary, Recurrent Energy, formerly Global Energy. All company executives will participate in the Q&A session after management’s formal remarks. On this call, Shawn will go over some key messages for the quarter, Yan and Ismael will respectively review the highlights of the CSI Solar and Recurrent Energy businesses, followed by Huifeng, who will go through the financial results.

Shawn will conclude the prepared remarks with a business outlook, after which we’ll have time for questions. Before we begin, may I remind listeners that management’s prepared remarks today, as well as their answers to questions will contain forward-looking statements that are subject to risks and uncertainties. The company claims the protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management’s current expectations. Any projections of the company’s future performance represent management’s estimates as of today. Canadian Solar assumes no obligation to update these projections in the future unless otherwise required by applicable law.

A more detailed discussion of the risks and uncertainties can be found in the company’s annual report on Form 20-F filed with the Securities and Exchange Commission. Management’s prepared remarks will be presented within the requirements of SEC Regulation G regarding generally accepted accounting principles, or GAAP. Some financial information presented during the call will be provided on both a GAAP and a non-GAAP basis. By disclosing certain non-GAAP information, management intends to provide investors with additional information to further analyze the company’s performance and underlying trends. Management uses non-GAAP measures to better assess operating performance and to establish operational goals. Non-GAAP information should not be viewed by investors as a substitute for data prepared in accordance with GAAP.

Now I would like to turn the call over to Canadian Solar’s Chairman and CEO, Dr. Shawn Qu. Shawn, please go ahead.

Shawn Qu: Thank you Isabel, and hi everyone. Welcome and thanks for joining us today. Now please turn to Slide 3. We had a very strong start to the year in what is typically a seasonally soft quarter. We delivered 6.1 gigawatts of module shipments in Q1 worth $1.7 billion in revenue and also a solid gross margin at 18.7%. Importantly, this was one of the strongest quarters in Canadian Solar’s history in terms of underlying net profit. Our team has done an excellent job in executing on our long term strategy. We continue to build on our technology, brand and customer relationships. This is further strengthening our leadership position and driving high quality, profitable growth. I am very thankful to my global team for their focus and outstanding work.

Please turn to Slide 4. Canadian Solar is a Canadian company listed in the U.S. with a global manufacturing base predominantly in Asia. We proudly support customers across the world in their decarbonization efforts as we work to make a more sustainable world for future generations. This is our core motivation. We have developed some of the most technologically advanced and competitive clean energy solutions and we care about doing business ethically, sourcing our materials responsibly and treating our employees fairly. We thrive in open and competitive markets where our renewable product commands a premium as we leverage our competitive advantages, strong brand and long track record. For example, we are strongly committed to the U.S. market where we have been building our long term partnerships.

We have delivered some of the most iconic projects in the U.S. market, such as the 1.4 gigawatt hours Crimson storage project in California. We are also excited about the 100 megawatt solar virtual power purchase agreement we recently signed in Texas with a consortium of five industry leaders in their respective fields, and now we are also investing in U.S. manufacturing, further contributing to local communities. Over the past week, we have been reviewing the most recent U.S. IRA guidance on domestic content. As an initial assessment, we think it is encouraging that the guidance promotes investment in clean energy capacity across the supply chain and provides incentives to both the demand and supply of clean energy. Our position is to continue to support and deliver value to our customers.

Importantly, we believe that this guidance removes a policy overhang from the customer standpoint; as a result, we think this will help them make more informed decisions and move faster in executing their growth plans. Please turn to the next slide. Finally, let me comment on the CSI Solar carve-out IPO. The full financial audits are being completed and I have final on the numbers. We expect the updated CSI Solar prospectus to be published on the Shanghai Stock Exchange website soon. We hope the IPO can be completed over the next few weeks before the end of the second quarter. With that, let me now turn over to Yan, who will provide more details on our CSI Solar business. Yan, please go ahead.

Yan Zhuang: Thanks Shawn. Please turn to Slide 6. In Q1, the CSI Solar division delivered 6.1 gigawatts of solar module shipments and $1.7 billion in revenue. Gross margin expanded to 18.5%, which represents 110 basis points improvement in profitability quarter-over-quarter and almost 400 basis points improvement year-over-year. At the operating profit level, our improvement is even more significant. Our operating profit grew over five times year-over-year with operating margin almost touching 10% during the seasonally soft Q1. I have to say that I’m quite proud of our teams for having achieved this, and it was not easy. Let me go over some key drivers and market dynamics. Please turn to Slide 7. On the solar module business, costs continue to come down, particularly input costs.

Polysilicon is the main driver of the decline, although as we expected, polysilicon prices are coming down gradually. On the manufacturing cost side, our processing costs are also coming down, although slower as the expansion of our upstream manufacturing in ingots, wafers and cells is mostly going to happen in the second half of the year. With greater vertical integration, we expect to further optimize our costs and gain greater control over our supply chain. On the market side, we see significant demand up from customers across nearly all channels and regions. Customers and projects that were held up over the past couple of years due to price inflation are starting to come back, given the stronger project economics. This means we’re starting to see module prices come down, although also gradually given the strong demand and steady trajectory in polysilicon pricing.

All these are contributing positively to our margin even though there are many moving parts. Note that prices remain divergent between the U.S. and the rest of the world, which follows a similar trend to what we see in Europe, as shown on the chart in the middle. Below the gross margin line, unit shipping costs continued to decline for us, helping drive operating leverage and further expansion in operating profitability. By now, I think we have pretty much reached the bottom in terms of shipping cost declines. We now expect unit logistics costs to remain relatively stable going forward, so that means while it will grow with volumes, the unit cost should remain relatively unchanged. Please turn to Slide 8. Moving onto our utility scale storage business, as we previously communicated, the first half of 2023 is expected to be a relatively small contributor to our utility scale project deliveries as we transition from a white label third party product to our own manufactured proprietary battery storage product.

From a development and execution standpoint, our team is preparing for a busy second half of the year led by deliveries of our SolBank product. The fact that leading carbonite prices have fallen by over 60% since the peak in Q4 of last year is also a demand driver. On the commercial side, our teams have been actively signing new contracts. Our CSI energy storage team expanded our contracted revenues from approximately $1 billion at the end of January to $1.3 billion at the end of March, and this number continues to grow led by our deep understanding of the market and long term customer relationships. For example, yesterday we announced a follow-on transaction with Aypa Power, a Blackstone portfolio company. We are expanding our relationship with Aypa Power from 490 megawatt hours to 850 megawatt hours, and we are expanding from an initial project in California to more projects in Texas.

This is typical as most of our customers are repeat clients that come back to us after a successful initial collaboration. Since we started our turnkey energy storage business, our execution has been one of the best in the industry. Please turn to Slide 9. On the residential energy storage side, we continue to make good progress on our EP Cube product. We are delivering significant growth and continue to capture new contract opportunities. The EP Cube is an all-in-one LFP-based residential energy storage solution with integrated high grade inverters. The product is both AC and DC coupled with an AC efficiency of just under 94%. A single system can deliver 7.6 kilowatts of continuous power with solo PV and has a storage capacity from 10 kilowatt hours up to 20 kilowatt hours.

As you can see in the picture on this slide, we designed the product in a Lego-like manner such that we can effortlessly add more EP Cube stacks, up to six in parallel. This means the largest system can reach 45 kilowatts in output power and nearly 120 kilowatt hours in energy storage. This is more than enough for most high load households. Importantly, each of the cubes weigh less than 70 pounds, which makes the physical work of transportation and installation much easier. The commissioning of the EP Cube is designed to be seamless using a mobile phone app with step-by-step instructions. A first time installer could do it within 30 minutes and much faster in subsequent installations. In addition, we offer one of the strongest warranties in the market with at least 80% capacity up to 10 years, or 6,000 cycles.

Our distributor and installer network have embraced our new solution and we expect to achieve around 100 megawatt hours in shipments in 2023. We will be showcasing the EP Cube again at the Intersolar Conference in Munich next month, and I encourage you to see it for yourself. Now let me pass it onto Ismael. Ismael, please go ahead.

Ismael Guerrero: Thank you Yan. Please turn to Slide 10. First, let me say a few words on the rebranding of our global solar and network energy storage project development business. In April, we rebranded our business from Global Energy to Recurrent Energy. Recurrent Energy was previously our North American utility-scale development business. Going forward, it will encompass our entire global development and services businesses. The goal of this rebranding was to strengthen our brand as one of the world’s largest clean energy development platforms and unify under a strong brand. Moving onto our quarterly performance, Q1 was a small quarter for us, as expected due to the timing of project . We monetized around 5 megawatts of projects in Japan and delivered $20 million in revenue with a 36% gross margin.

As we talked about on the prior call, we are now proactively holding projects longer term in certain markets such as Europe and the U.S., where we believe we can capture higher value in the long term as a donor and operator, so we continue to transition from developing and selling projects, which is inherently lumpy. While we’ve had a few smaller quarters recently, we are in the process of closing a major project sale. As a result, we expect Q2 to be the largest quarter of the year for Recurrent Energy. Shawn will provide more color on the guidance. Next slide, please. As of March 31, our total pipeline stood at 25 gigawatts for solar and 47 gigawatt hours for battery storage projects. This number is unchanged from three months ago not because we’ve ceased to originate and develop our near pipeline but rather because we have redundancy in our pipeline that reduces the weight of the Latin America region and increases the weight of the EMEA region, where we added half a gigawatt of solar development pipeline in the last two months.

Our pipeline is large and mature, especially given the 14 gigawatts of solar and gigawatt hours of battery energy storage interconnections. We are being increasingly selective on how we our portfolio and how we add the most value. We are also focusing our resources towards executing these projects and moving projects from advanced pipeline to backlog and construction. Please turn to Slide 12. Longer term, as we’ve discussed, our strategy is to retain greater asset ownership in select markets, such as North America and Europe, to increase the revenues generated through recurring income such as power sales, operations and maintenance, and asset management income. This is partially reflected on the shifting of resources towards execution of projects as opposed to the pure development and sale model.

This means that instead of monetizing the projects in North America and Europe in a series of one-off transactions, we will monetize these assets over a 30 or 40-year period. This gives us higher visibility on cash flows as 70% to 80% of these cash flows are fully contracted, including the energy storage projects. It also means that in the short term, we may see lower revenues; however, the aggregate value retained by Recurrent Energy will be larger and more sustainable than under the previous model. We should start seeing the positive impact as these projects are built out and start operating in 2024 and 2025. Now let me pass it onto Huifeng, who will go through the financial results in greater detail. Huifeng, please go ahead.

Huifeng Chang: Thanks Ismael. Please turn to Slide 13. In Q1, we delivered $1.7 billion in revenue, up 36% year-over-year. Gross margin was 18.7%, a sequential increase of 100 basis points driven by lower manufacturing costs that were partially offset by lower margin average selling price. Selling and distribution expenses in Q1 declined by 30% quarter-over-quarter after 24% sequential decline the previous quarter. As Yan mentioned, shipping costs declined further. At this point, we don’t think there is much room for further declines but we expect the unit cost to remain relatively stable. General and administrative expenses declined by 12% quarter-over-quarter due to opex efficiencies and the absence of impairment costs. Overall, total operating expenses were down 19% in Q1 sequentially after a 22% decline in Q4.

Total opex fell to 10.1% of total revenue. As we had previously guided, we are starting to see operating leverage with economies of scale and a normalizing logistics cost. Net foreign exchange and derivative loss in the first quarter was $13 million, mainly driven by the weaker U.S. dollar. Total net income was $107 million with net income attributable to Canadian Solar shareholders of $84 million or diluted EPS of $1.19. Now turning to cash flow and the balance sheet, next slide please. In Q1, we generated approximately $16 million in operating cash and spent around $230 million in capex. Our full year 2023 capex expectation remains unchanged at approximately $1.5 billion. We ended the period with a healthy cash balance of $2.1 billion and total debt of $3 billion.

Our leverage as measured by net debt to EBITDA excluding restricted cash was stable at 2.8 times. Lastly, let me make a couple housekeeping comments on the CSI Solar IPO. We expect to incur a one-time IPO-related stock incentive expense contingent upon the successful completion of the IPO which we expect to occur in June, next month. The full year impact is expected to be approximately $50 million, or approximately $40 million after allocation to non-controlling interests. Also note that with the successful completion of the CSI Solar IPO, net income attributable to non-controlling interests will increase given that minority investors in CSI Solar will account for a greater ownership share. Please consider this in your models as the delta between total net income and net income attributable to Canadian Solar shareholders will be greater after the IPO.

Now let me pass it back to Shawn, who will conclude with our guidance and the business outlook. Shawn, please go ahead.

Shawn Qu: Thanks Huifeng. Let’s turn to Slide 15. For the second quarter of 2023, we expect solar module shipments by CSI Solar to be in a range of 8.1 to 8.4 gigawatts, including approximately 68 megawatts to Recurrent Energy projects. Total revenue is expected to be in the range of $2.4 billion to $2.6 billion. Gross margin is expected to be between 19% to 21%, reflecting further margin improvement from low costs, a higher contribution from Recurrent Energy, partially offset by slightly lower solar module ASPs. For the full year of 2023, we reiterate CSI Solar’s total solar module shipment guidance to be in the range of 30 to 35 gigawatts. CSI Solar’s battery storage shipments are expected to be between 1.8 to 2 gigawatt hours, reflecting this year’s transition from white label to own manufactured products, as explained by Yan earlier.

We expect full year 2023 revenue to be between $9 billion to $9.5 billion, towards the upper end of our previous guidance range. As we come out of a challenging market period, our business and outlook are strong as we continue to focus on our long term market position to deliver sustainable and profitable growth. With that, I would like to open the call to your questions. Operator?

Q&A Session

Operator: Thank you. Our first question comes from the line of Colin Rusch with Oppenheimer. Please proceed with your question.

Colin Rusch: Thanks so much, guys. It’s a two-part question related to polysilicon pricing and availability. You’ve got a pretty wide range of shipment guidance for the year. Just wanted to understand how much of that is supply related and how much of that is considerations around demand. Then, would love to understand the margin trajectory as poly prices continue to go lower – you know, how much incremental leverage you think you actually have on the margin side.

Shawn Qu: Hi Colin, thanks for the question. I will get Yan to answer this question. Yan?

Yan Zhuang: Hey Colin, this is Yan. You have two parts of the question. One is the volume, the shipment volume range. For that question, I would say we actually have a pretty high capacity utilization rate for the year, so with our volume guidance, it is more about available effective capacity. On the margin side, with the silicon price going down as we expected, and we still believe the same way that silicon price will continue to go down but in a gradual manner, and module price will also go down, but we believe that module price will go down at a slower pace than the supply chain cost, so we are confident that over the course of the year, our margin will continue to improve. We’re confident on this whole year’s performance on the margin side.

Colin Rusch: Okay, thanks so much. Then just on the sales side and how to think about that expense, how much of that sales expense is fixed and how much is variable at this point, and how should we think about that fixed sales expense on a go-forward basis?

Yan Zhuang: Are you talking about the sales of our ?

Colin Rusch: Yes, on the opex line.

Yan Zhuang: Shawn?

Shawn Qu: Yes, so ahead, Yan.

Yan Zhuang: Sorry. Yes, the sales expense is actually–we believe is going to actually on the downside trend, because the shipping cost has reached to a low level, and also with the volume increase Q-to-Q, we believe will help us dilute some part of the overhead and expenses, so we don’t expect any upside on the sales and distribution expenses.

Colin Rusch: Okay, I’ll try to clarify that offline. Thanks a lot, guys.

Operator: Thank you. Our next question comes from the line of Philip Shen with Roth MKM. Please proceed with your question.

Philip Shen: Hi everyone, thanks for taking my questions. Now that the domestic content outer guidance has been released, can you talk to us about your U.S. manufacturing plans? Do you expect to ramp up cell and module capacity, and can you talk to us about what’s the total capacity, timing, and any other detail around that? Then also as it relates to your utility scale module customers in the U.S., do you expect many of them to not pursue the domestic content ITC adder the complexities, or what do you think the impact of the guidance has been thus far with your customer base? Thanks.

Shawn Qu: Hi Philip, this is Shawn. Let me answer this question. Our plan for U.S. manufacturing, as we explained in the past, what goes through the order of solar module first and then the upstream cell order wafer. Now, with the release of the new guidance on the domestic content, I think we are still going to follow the same pattern, which is first solar modules, then either solar cells or solar wafers. We are pretty advanced in our U.S.-based solar module manufacturing plans already. I think in the next while, little while, we are going to make a clear announcement about that, so please stay tuned. Now the second question is about our customer. To tell you the truth, we are still waiting for our customer to come back with their reaction after this new guidance on the domestic content, but so far we haven’t heard any customer to back off from their purchase intentions for CSI U.S.-made solar modules yet, but we haven’t asked them what are they going to–how are they going to handle the domestic content.

That’s a question we are still waiting for our customer to give us feedback.

Philip Shen: Okay, thanks for that color, Shawn. Then shifting to the China IPO, it sounds like you’re expecting that to be finished in June. Was wondering if you could give us a little more color on how that process is going, is there risk that that could be delayed beyond June, and can you guys fund U.S. capacity expansion with China IPO proceeds? Thanks.

Shawn Qu: This is Shawn again. At this moment, we don’t see any particular risk of delaying the China IPO after June, behind June. However, as you know, IPOs are always–there’s always some possibility of unexpected events, even some market uncertainty, so we can’t say that for sure. Now, the second question, we are not going to fund the U.S. manufacturing through the proceeds from the China IPO. For any IPO or public fundraising in the stock market in China, you have to specify your project, and we have already specified the project. In other words, we have already specified how we are going to use the U.S.–no, use the proceeds from the China IPO, which will be for China projects and also for some of our operating cash requirements. The U.S. manufacturing plants are going to fund it with other sources of funding.

Philip Shen: Great, thanks for the clarity on that, Shawn. Then one final question, coming back to the domestic content adder and U.S. manufacturing in general. After you guys ramp up U.S. manufacturing, as you go through your cost structure, have you guys been able to determine what percentage of your overall U.S. expected module cost structure could be U.S. content versus non-U.S., and then what is your estimated cost per watt using Southeast Asia cell? Thanks.

Shawn Qu: Huifeng, do you want to handle this question?

Huifeng Chang: Hi Phil. First of all, our U.S. module factory will maximize the sourcing in the U.S. for all the components. Second, we are still working on the details to put all the cost and numbers of different components within the module. It’s still a moving part, and also we are talking to our customers. We have received very, very strong interest and forward orders for our module, but also many of our customers, they are willing to pay the forward payment to partially fund our manufacturing facility, so we look forward to the next few weeks, new developments, and also working with all other components manufacturers coming out of the U.S. and eventually to reach the goal towards U.S.-made solar modules. Thank you.

Philip Shen: Great, thank you Huifeng, thank you Shawn. I’ll pass it on.

Operator: Thank you. As a reminder, if you’d like to join the question queue, please press star, one on your telephone keypad. Our next question comes from the line of Brian Lee with Goldman Sachs. Please proceed with your question.

Miguel Robles: Hi everyone, this is Miguel on for Brian. My first question was just on the guidance. You raised the low end of the revenue guidance this year but you kept the module and battery shipment guidance unchanged. What’s giving you the confidence to tighten the range for the year – is it just better expected pricing, is it better timing on the projects business? Just hoping to get some color there, thank you.

Shawn Qu: Isabel, you’re our guidance master. Do you want to answer this question?

Isabel Zhang: Sure. Hi Miguel, this is Isabel. We had previously given a pretty wide range for the revenue guidance considering certain uncertainties on both the volume and pricing side. At this point, we’ve left the module shipment number unchanged, but overall we think that our ability in our confidence to reach the higher end of our previous guidance of $9 billion to $9.5 billion is much higher, and therefore that is the reason why we narrowed and increased the overall guidance range to the upper end of where we were before.

Miguel Robles: Okay, thanks. I appreciate that. Then just a follow-up question on the domestic content. I just wanted to touch a bit more on your interpretation today on that guidance. Regarding the details, it talks about various subcomponents, if you will, and helping customers meet a minimum threshold. For module assembly, if you were to do that in the U.S., how much would you have to set up in terms of new domestic supply for things like aluminum frames, glass, back sheets, and does it change at all how you’re thinking about setting up the manufacturing footprint in the U.S.? Thanks.

Shawn Qu: Hi, this is Shawn speaking. First of all, I want to make a comment. We are very open minded. We are looking into all possibilities. We are looking at all the subcomponents of the solar module, which includes solar cell but also includes other raw materials. We are actively assessing which components can be produced in the U.S. Now Huifeng, you want to share more color?

Huifeng Chang: Yes. Actually, for , all the materials such as aluminum frame and also the solar glass, relative to cell factory, it’s probably requires a longer period of time to receive all the permits, etc, while the materials are much easier to set up, especially solar glass and aluminum frame . We have glass factories, plenty of them in the U.S., and also a lot of aluminum related factories in the U.S., so we are not only seeing that all these manufacturers, they are moving into the solar supply chain, but also we are talking to them regarding partnerships, so it will be a much clearer road map after IRA guidance published earlier, so I think in the next few weeks, we’ll get a lot of–the answers will be much more clear. Thank you.

Miguel Robles: Okay, great. Thanks, I’ll pass it on.

Operator: Thank you. As another reminder, please press star, one if you’d like to join the question queue. Our next question comes from the line of Praneeth Satish with Wells Fargo. Please proceed with your question.

Praneeth Satish: Thanks. Maybe just one more follow-up on the domestic content guidelines. It sounds like now maybe you’re considering cell capacity in the U.S. after modules. Can you just maybe give us a ballpark of how long it takes to build a cell plant in the U.S., how the economics might compare to building it overseas? That’s my first question.

Shawn Qu: That’s a very good question. I think that the site selection and all the permitting will probably take half a year to one year, and then it will probably be another two years before we can bring in machines for a modern solar cell facility. In the good old days back 10 years ago or 15 years ago, sometimes we could just find an old semiconductor fab and then convert it into a solar cell facility, but now the solar cell manufacturing line has become so special; for example, the Cube diffusion machine or TECBD machine is , usually it contains six tubes arranged vertically, and each tube can take in the 200 10-millmeter wafers, and that machine is very high, then plus all the facilities below the ground floor and those above the machines, so the building and the facility becomes very special.

I don’t think any of the modern solar cell supply manufacturers are going to convert any old buildings for today’s solar cell line, so the building, facility and power supply, everything will probably have to be built from zero. Altogether, I would say maybe three years minimum to bring a state-of-the-art solar cell facility online, so it takes time.

Praneeth Satish: Okay, got it. That’s very helpful. Then maybe if you can help us understand roughly the capex that’s tied to the recent March 2024 expansions. How much of that capex will be spent in ’23 versus ’24? Is that included in your $1.5 billion of capex guidance for 2023, the portion that would be spent in ’23?

Shawn Qu: Yes, our new plan basically says we are going to build a 30 gigawatt new solar wafer facility. It’s an ingot wafer facility. I believe altogether, it will take just over RMB 10 billion, which is maybe about US $1.2 billion to $1.3 billion capex in total. Now, that money will be spread out in 2023, 2024 and some in 2025, because typical payment terms for the machines are two years after the machine delivery, so I would expect that capex to be spent in ’23, ’24 and also ’25.

Praneeth Satish: Okay, thank you.

Operator: Thank you. Ladies and gentlemen, that concludes our time allowed for questions. I’ll turn the floor back to CEO Shawn Qu for any final comments.

Shawn Qu: Okay, thank you. Thanks everyone for joining us today and also for your continued support. If you have any questions or would like to set up a call, please contact our Investor Relations team. Take care and have a nice day.

Operator: Thank you. This concludes today’s conference call. You may disconnect your lines at this time. Thank you for your participation.