World Kinect (WKC) Q1 2025 Earnings Call

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DATE

Thursday, Apr 24, 2025

CALL PARTICIPANTS

Michael Kasbar: Chairman and Chief Executive Officer

Ira Birns: Executive Vice President and Chief Financial Officer

Braulio Medrano: Senior Director of FP&A and Investor Relations

RISKS

North American liquid land fuel business faced headwinds, impacting volume and margins in Q1 2025.

Marine segment experienced a 14% year-over-year volume decline due to lower bunker fuel prices and reduced market volatility.

Uncertainty in global shipping markets, partly due to evolving trade policies, affected marine segment performance.

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Q1 2025 Consolidated Volume: 4.2 billion gallons, down 5% year-over-year.

Q1 2025 Consolidated Gross Profit: $230 million, a 9% year-over-year decline.

Aviation Q1 Performance: Volume up 2% to 1.7 billion gallons; gross profit increased 7% to $116 million.

Land Q1 Performance: Volume decreased 6%; adjusted gross profit declined 19% to $79 million.

Marine Q1 Performance: Volume down 14% year-over-year; gross profit declined 26% year-over-year.

Q1 2025 Operating Cash Flow: $114 million.

Q1 2025 Free Cash Flow: $99 million.

Share Repurchases: $10 million (non-GAAP).

Q2 2025 Gross Profit Guidance: $235 million to $244 million.

Full-Year Adjusted Tax Rate Guidance: Revised to 22%-24% from previous 22%-25%.

SUMMARY

World Kinect Corporation reported mixed Q1 2025 results, with strong performance in Aviation offset by challenges in Land and Marine segments. The company completed the sale of its UK land business, resulting in a $110 million one-time non-cash pretax charge. Management emphasized ongoing portfolio optimization and cost reduction initiatives aimed at improving profitability and reducing earnings volatility.

The UK land business sale, completed in April 2025, will remove approximately 375 million gallons of annual volume, primarily concentrated in Q4 and Q1.

A $15 million non-GAAP restructuring charge is expected to yield about $30 million in annualized cost savings, with full quarterly run-rate anticipated by Q3 2025.

Management noted potential opportunities in Q2 related to the Mediterranean ECA standard change effective May 1, which could create supply-demand imbalances in the marine segment.

"we built a resilient and agile operating model that enables us to adapt quickly to changing market conditions as it has in the past." stated Ira Birns, emphasizing the company's ability to navigate near-term challenges.

INDUSTRY GLOSSARY

ECA: Emission Control Area, a designated zone where stricter environmental regulations apply to marine vessels.

Bunker Fuel: Fuel used by ships, typically referring to heavy fuel oil used in marine diesel engines.

Cardlock: Unmanned fueling stations designed for commercial fleet vehicles.

Full Conference Call Transcript

Operator: Thank you for standing by, and welcome to World Kinect Corporation's First Quarter 2025 Earnings Conference Call. At this time, participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again. I would now like to hand the call over to Braulio Medrano, senior director of FP&A and investor relations. Please go ahead.

Braulio Medrano: Thank you, Latif, and good evening, everyone. Welcome to World Kinect's First Quarter 2025 Earnings Conference Call, which will be presented alongside a live slide presentation. Today's presentation is also available via webcast on our Investor Relations website. I'm Braulio Medrano, senior director of FP&A and investor relations. With us on the call today is Michael Kasbar, chairman and chief executive officer, and Ira Birns, executive vice president and chief financial officer. And now I'd like to review our safe harbor statement. Certain statements made today, including comments about our expectations regarding future plans and performance, are forward-looking statements that are subject to a range of uncertainties and risks that could cause results to materially differ. Factors that could cause results to materially differ can be found in our most recent Form 10-K and other reports filed with the Securities and Exchange Commission. We assume no obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. This presentation also includes certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures is included in our press release and can be found on our website. We will begin with several minutes of prepared remarks, which will then be followed by a question and answer period. At this time, I would like to introduce our chairman and chief executive officer, Michael Kasbar.

Michael Kasbar: Thank you, Braulio. Good evening, everyone, and welcome to our call today. Just over a year ago, we laid out a strategic roadmap to improve profitability and reduce earnings volatility. That included streamlining our portfolio and reducing our fixed cost structure to better position World Kinect for sustainable growth and enhanced resiliency in an increasingly volatile marketplace. As we assess the first quarter of 2025, while we face some macroeconomic headwinds in parts of our business, I am pleased that we have accelerated our progress towards achieving many of the strategic and operational objectives we had outlined. Our aviation business carried strong momentum from 2024 into the first quarter of 2025, delivering a healthy year-over-year increase in both volume and gross profit. The marine segment generated an earnings contribution generally consistent with the last three quarters, although lower than in the first quarter of 2024 when both bunker prices and market volatility were higher. In our land segment, the North American liquid land fuel business was negatively impacted by both market trends and broader economic conditions, which impacted our volume and margins. Nonetheless, it is in this business that we are most aggressively executing our platform consolidation, cost reduction, and capacity rightsizing initiatives in a planned and orderly way. We expect the benefits of these actions to contribute to profit improvement by the second half of 2025, establishing a more focused and ratable growth vehicle for many years to come. To this end, following the sale of our Brazilian business announced in December, we recently finalized the divestment of our UK land business as the latest step in our efforts to reshape our land portfolio. I want to thank all of the employees of this business for their dedication over the years and wish them well. Our UK land business has had a long and proud tradition of serving its loyal customer base, but unfortunately, the heavily weather-dependent, asset-intensive nature of this business is inconsistent with our strategic objectives, and this sale will allow us to redirect capital and management attention to the core business activities that better fit our desired portfolio. In previous quarters, I have emphasized the value of our portfolio diversification, not only across various industrial and transportation sectors but also within our geographic diversification. Significant uncertainty exists today regarding the manner in which changes in trade and tariff policies may ultimately impact international markets. But we have consistently demonstrated that World Kinect's broad geographic footprint positions us well to participate in any shifts in the global movement of people and products. I'll wrap up my comments by emphasizing that first, we remain committed to our strategic and operational objectives. And second, we'll do this by leveraging our demonstrated expertise in last-half-mile distribution solutions. I look forward to reporting our continued progress over the balance of this year. And now I'll turn the call over to Ira for his financial review.

Ira Birns: Thank you, Michael, and good evening, everyone. Before we begin, as always, please note that our non-GAAP results reflect several adjustments to our GAAP results this quarter. Reconciliations are on our Investor Relations website and also in today's webcast presentation. Our first quarter non-GAAP adjustments totaled approximately $60 million or $48.4 million after tax. Approximately $45 million of the non-GAAP adjustments relate to the sale of our UK land business, which we completed earlier this month. As you are aware, earlier this year, we announced the sale of our business in Brazil, which was underperforming and also faced unique country risks. As part of our strategic journey to continue sharpening our portfolio of business activities in our land segment, along these lines, in early April, we have now also sold our UK land business, which is principally focused on the heating oil market, which has certainly changed as Mike mentioned, as weather trends and the energy landscape in the UK have evolved over time, making it more challenging to generate acceptable returns in that market. The total one-time non-cash pretax charge associated with this sale will be approximately $110 million. Since this transaction closed shortly after quarter-end, we needed to record approximately $45 million of this amount as an asset impairment in the first quarter, with a balance of approximately $65 million to be recorded in the second quarter. Similar to Brazil, a significant portion of the overall charge in this case, approximately $55 million, relates to cumulative unrealized foreign currency translation losses previously included within shareholders' equity, which will be recorded as part of the second quarter charge. With these two moves completed, our land liquid fuels business is now effectively concentrated in North America, where we have greater scale and opportunities for operating leverage and significant growth potential over time. And a clearer path to achieving enhanced returns in land and our broader financial targets across the business. By streamlining our portfolio, we are better positioned to execute against our strategic priorities and focus on business activities that better align with our long-term vision. I would also like to take a moment to thank all of our UK land employees for their hard work, dedication, and contributions throughout the years. We wish them continued success in their next chapter. The remaining $15 million of the non-GAAP adjustments in the first quarter relate to restructuring activities during the quarter. We remain committed to strengthening our long-term financial performance, and these targeted restructuring actions, which span across the business, including corporate and back-office functions, are aimed at further improving our cost structure and driving increased profitability and returns. While these actions are always difficult, they do align with our broader effort to drive greater operating efficiencies and operating margins in our business. Now let's turn to our first-quarter operating results. And as a reminder, these results exclude the non-GAAP adjustments I just reviewed. Consolidated volume was 4.2 billion gallons, down 5% year over year. And consolidated gross profit declined 9% from last year's first quarter to $230 million. The year-over-year decline in gross profit was principally driven by weaker-than-expected results in our Land segment and was also impacted by the sale of Avenode, which closed in the second quarter of 2024. This was partially offset by a solid year-over-year increase in gross profit in our core aviation business. Now I'll provide some additional details for the quarter to help explain these movements within each segment. In the first quarter, Aviation volume was 1.7 billion gallons, up 2% year over year, and gross profit was $116 million, that's a $7 million or 7% year-over-year increase driven by an increased profit contribution from our airport operations in Europe, strong inventory results more broadly, and increased profitability in general aviation. I should note again that aviation gross profit increased 7% year over year despite the impact of the sale of Avenode, which had contributed approximately $10 million of gross profit in last year's first quarter. As we look to the second quarter, Aviation volume and gross profit should be similar to what was a very strong quarter in the second quarter of 2024. Of course, in the current uncertain economic environment, things can change quickly. So while we are comfortable with this forecast based upon what we know today, we will be paying close attention to the market and our customers' potentially evolving requirements. While there has been recent dialogue on declining demand in the market, thus far, this seems generally limited to domestic leisure travel with no real signs of weakness abroad. In the first quarter, land volumes decreased 6% year over year, principally related to the sale of our operations in Brazil and the exit from certain operations in North America during the fourth quarter of last year. Land adjusted gross profit in the first quarter was $79 million, that's a 19% decline year over year. The year-over-year decrease was principally driven by weakness in our core North American fuel business, where industry trends and economic headwinds impacted both volume and margins in the first quarter. While our first-quarter land results were certainly weaker than expected, our strategy of sharpening our land portfolio of business activities, as evidenced by the sale of our business in Brazil and the UK, and driving greater efficiencies in our core land business has not changed. As we've indicated in the past, our journey to build a more profitable and resilient land platform is prone to bumps along the road, but we remain confident we are moving in the right direction and should deliver improving results, margins, and returns as we look forward. Looking to the second quarter specifically, we expect land gross profit to be up year over year, despite the impact of the recent Brazil and UK divestitures. Again, with greater improvement expected in the second half of the year, as we continue to drive more efficiencies in the Land North American platform. First-quarter marine volumes were down 14% year over year, and while marine gross profit was up 4% sequentially, it declined about 26% year over year. The year-over-year decline in volume and gross profit principally relates to lower bunker fuel prices and reduced volatility compared to the first quarter of 2024, as well as growing uncertainty related to rapidly evolving and generally unpredictable trade policies. As evidence of the impact of such uncertainty on the broader market, volume in Singapore, the world's largest bunker fuel hub, dropped to its lowest level of nearly two years in the first quarter, principally tied to a decline in tanker and dry bulk activity. Looking to the second quarter, expect marine gross profit to be down modestly year over year, assuming continuing uncertainty in the global shipping market. Although it is important to note that the upcoming change in the Mediterranean ECA standard, which goes into effect next week on May 1, could lead to short-term supply and demand imbalances and even logistical challenges. These factors could provide some upside opportunities over the balance of the second quarter. Despite a level of uncertainty in some of the markets we serve, we expect second-quarter consolidated gross profit to be in the range of $235 to $244 million. And as a reminder, these numbers now exclude the Land UK business we just sold. While we came up a bit short of expectations for consolidated gross profit, adjusted consolidated operating expenses were $178 million in the first quarter, below the guidance provided last quarter and down 6% year over year. For the second quarter, we are expecting adjusted operating expenses of $175 million to $179 million, representing another year-over-year decline. Impacted by both our recent divestitures as well as the restructuring activities during the first quarter. Interest expense was $23 million in the first quarter, down a little over 20% year over year and consistent with the guidance provided last quarter. For the second quarter, we expect interest expense to be in the range of $24 million to $27 million. Our adjusted effective tax rate in the first quarter was 15%. This was positively impacted by discrete tax benefits and that drove our rate below our full-year guidance range of 22% to 25%. We now expect our full-year adjusted effective tax rate to be slightly lower than originally projected, somewhere in the range of 22% to 24%. During the first quarter, we generated operating cash flow of $114 million and free cash flow of $99 million, demonstrating our ability to deliver strong cash flow even during periods of market uncertainty. We also repurchased $10 million of shares during the first quarter, reiterating our continued commitment to enhancing shareholder value through both buybacks and dividends. In closing, I'd like to leave you with a few thoughts. Our Aviation segment delivered solid year-over-year results driven by strong results across the business. While our Land segment experienced weakness in our North American fuels business, now that we have exited both Brazil and the UK, which required significant management attention and continued investment, we're able to more fully focus on our core domestic land market. We have continued to position our land business for sustainable growth with significant opportunities remaining to scale and improve operating efficiencies. Additionally, our relatively low North American market share highlights the potential for meaningful growth opportunities in this business looking forward. Marine delivered results generally in line with expectations despite an elevated level of uncertainty in the accentuated by a rapidly evolving trade policy. We took actions to further rightsize our cost structure by reducing headcount during the first quarter, immediately improving operating efficiency. We generated strong operating and free cash flow results this quarter while also repurchasing $10 million of shares, demonstrating our continued commitment to enhancing shareholder value. While the broader macroeconomic environment remains uncertain, we built a resilient and agile operating model that enables us to adapt quickly to changing market conditions as it has in the past. And in closing, our strong balance sheet, disciplined working capital management, and heightened focus on operational efficiencies position us well to navigate near-term challenges while also making progress towards our broader financial targets. Thank you very much. I would like now to turn the call back over to our operator, Latif, to open up the Q&A session.

Operator: As a reminder, to ask a question, you will need to press 11 on your telephone. To remove yourself from the queue, please press 11 again. Our first question comes from the line of Ken Hoexter of BofA. Please go ahead, Ken.

Ken Hoexter: Hey. Great. Good afternoon, Michael and Ira. You know, maybe just talk a little bit about the UK sale. Right? So ever since you bought it, we've always heard about the volatility, particularly in the first quarter, fourth quarter. So the first quarter has already passed. So how do we think about land volumes? I don't know if you can give us some numbers, what's being pulled out and obviously, what we should think about. Was it flat to profit? Was it is this gonna be accretive getting rid of it? Maybe walk us through some of the factors there.

Ira Birns: Great question. So always being prepared that you can. Volume in that business in 2024 was just under 375 million gallons. So obviously, that was more heavily tilted towards Q4 and Q1. But, you know, the number is about 375 million on an annual basis. And in terms of your accretive question, which is a good one, it is accretive because in 2024, if you use it as a proxy, that business was generating an operating loss. And while we did generate some profit in the first quarter, our forecast for the rest of this year was not as rosy. So it's an immediate benefit to the P&L. Immediately improves Land's operating margin, and it's just, you know, what was becoming a bit of a distraction in a difficult environment with weather trends. We, you know, it hasn't been last time you were in the UK for the holidays or, you know, December or January, it hasn't been really cold there for a very long time, so that's, you know, certainly impacted the heating oil piece of that business, which is what we always relied on in the winter. So we, you know, we made the move to move on, get some, you know, get some cash out of it. That business also was a piece of our CapEx. We're, you know, continually upgrading the physical infrastructure. There's something we also don't have to do anymore. So it brings our CapEx run rate down a little bit as well.

Ken Hoexter: So about am I right about 6% of your overall volumes for ground?

Ira Birns: That's about right. Yeah.

Ken Hoexter: Yeah. So but it's not clearly, it's not evenly spread. Right? So it's, you said, heavily weighted. Is there a number you could provide in terms of distribution or, you know, it's not 20% on each one?

Ira Birns: You know, it actually is fairly, I would say maybe it's, you know, 60% in Q4 and Q1 and 40% of the volume in the other two quarters. Fourth quarter last year was a bit on the weaker side, so that, you know, that was even made it a bit more even than normal. But historically, I would say, you know, 60 some odd percent of the volume was script throughout the fourth and first quarters. With the balance in the weaker summer months where we, you know, we didn't have the heating oil activity.

Ken Hoexter: So can you remind me what you paid for the business and what cash? I know you're taking the write-off, but what do you get that you can now redeploy after the sale?

Ira Birns: Thanks for asking. We paid a bit north of, you know, many moons ago, a bit north of $150 million. It's fair to say that we did generate a significant amount of cash flow over the years in that business. The first several years, we actually did very, very well during COVID. During that unique time period, that business performed very well. We're getting somewhere in the neighborhood of $50 million plus today. So not, you know, not a phenomenal number, but it's $50 million in the bank. And we, you know, we cut off the need to continue investing in that business going forward.

Ken Hoexter: So is that something you take that cash, redeploy it in additional land-based facilities in the US? Or how should we think about kind of this?

Ira Birns: In the short term, it repays debt, but, obviously, it does increase our available liquidity and capital to focus on investing in the US. So, yes, that's a reasonable statement or, you know, or in other parts of our business.

Ken Hoexter: Okay. And then maybe just if I could wrap up before handing over to Ben. The aviation obviously, a strong quarter. You mentioned not only the 1.7 billion in gallons up 1.5%, but really gross profit, I guess, really was a lot stronger than anticipated. Can you just help me understand what drove that? Is that pricing and increased demand? Is that more passenger flying? What is driving the aviation profitability?

Ira Birns: Yeah. We continue to, you know, the mix of that business has continued to evolve over time. The European assets that we have where we're selling fuel on airport at a hundred or so locations, most of them in Europe, there's some in Canada as well, have been performing very, very well. You know, that's a different go-to-market. It's our last-half-mile piece of the aviation business. So that business performed well from both the volume and a margin standpoint. There's more sustainable product going into those markets today, so that contributes a bit to margin as well. And our general business and general aviation business is performing very well, which is more spread throughout the world, including the US. So really, you know, we did, you know, proud of the team. We just performed very well across the entire business, taking advantage of market opportunities and increased our margins a bit. And our volumes a bit as well.

Ken Hoexter: Wonderful. Appreciate the thought and time. Let me turn it back to you. Thanks.

Operator: Our next question comes from the line of Ben Nolan of Stifel. Your question, please, Ben.

Ben Nolan: Yeah. Thank you, Albert, and thanks for Ken, for putting me in there. So I wanted to, Ira, Mike, I wanted to ask a little bit about I'm having trouble getting my head around what was happening in the land segment. You said that there was a 6% decline in volumes associated primarily with the sale of the Brazil business. But then you also how volumes were down as a function of industry trends, and that also was a big contributor to the decline in gross profit. But then you're expecting 2Q to be similar to what it was last year, although it seems like, I don't know, it seems like if anything, industry trends are more opaque now. Can you maybe walk me through how you're just thinking about all of that?

Ira Birns: Yeah. So a lot to unpack there, but, you know, one thing, I'll start backwards from where you ended. Les. We don't have a really higher hurdle in terms of the second quarter last year. That was a relatively weak quarter. We'll do better than that. But again, Seth, that's consistent with the story considering the fact that the second quarter last year, you know, had some challenges as well. So there's a couple pieces to the pie similar to the general statements across the business. You know, economic uncertainty has affected certain types of customers and in different parts of the country. You know, as an example, there's some on the East Coast, in some of our cardlock business. We've had a few customers that simply disappeared during the first quarter. Either go out of business, you know, cease operations, in, you know, supporting different industries. On the West Coast, the story I try to tell hopefully, it tells better this time than I did a few quarters ago. As that market continues to evolve, and that's a big market for us, when I say continues to evolve in terms of moving more and more to renewable products, that has resulted in a reduction in supply of traditional fuels domestically. For major refiners in California that are retooling all their refineries to go to renewables. So it's just changing the dynamics of our ability to, in the short term, to optimize our supply position that's affected our margins in that part of the country. The team is constantly evaluating opportunities to improve our optionality within our own supply chain. But in the short term, that's affected margins more than it has volume. So there's a little bit of volume decline based on the economy pockets of customers, just not, you know, having the same, you know, position in the ecosystem as they may have had before. And then we've got some of those supply dynamics in California. At the same time, we're also working just optimizing our business overall in terms of, you know, the number of trucks we have, drivers, supply, you know, supply route optimization. That's something that the team is working on religiously every day that we see starting to pay dividends more in the second half of this year.

Ben Nolan: So you know, as we said, right, that business is still a work in progress. We've eliminated some of the big distractions in Brazil and the UK, and now we're doing everything we can to focus on driving both, you know, volume and operating efficiencies which improve our ability to generate a margin. In the domestic line of business. I think that covers the various facets of that.

Ben Nolan: That was helpful. I, yeah. I, those details. And certainly got me in the right direction. So I appreciate it. Also wanted to ask a little bit about subsequent on the land side, subsequent to some of the restructuring that you've done even over and above, I think it was over and above just the getting out of the UK and Brazil, but just in general, sort of, it sounds like you were cutting costs elsewhere. Do you think you're in a place where there can be a material step change in margins? Like, is it are you do you feel like where you're landing here is going to be, you know, substantially more profitable on a per gallon basis than where we had been?

Ira Birns: I would point you more towards operating margin than look. We're always trying to optimize the per gallon profitability, but what really counts at the end of the day is what drops to, you know, our operating margin. We've been kind of stuck in the same ZIP code somewhere around, you know, 25% for a while with a 30% target that we put out there. We had our investor day. I think between the divestitures, the restructuring activity, as you just said, above and beyond the exits that we did in terms of taking some cost out in the first quarter and continuing to, you know, to fine-tune the core land business, that's certainly helping us make progress towards that 30% target. We probably won't get the whole way there this year, but we should get, you know, we should make some healthy progress towards that number this year, which we didn't last year. And that, you know, that contributes to cash flow, contributes to, you know, EPS accretion, and improvement in returns. So that's certainly a possibility how much that step changes, in your words, you know, TBD. But we've certainly improved the odds of, you know, those needles moving in the right direction with the moves that we've talked about today and previously.

Ben Nolan: Okay. And then lastly for me, just as you look forward, anything ago first of all, another decent quarter here in terms of free cash flow. As we're looking out into subsequent quarters and given all of the moving parts here, anything that should be any different? Or should we think about the free cash flow or cash flow coming to you differently than the last several quarters or it's where we are is now kind of the way to think about it going forward?

Ira Birns: Sure. Look, you know, prices are now pretty low. We've had two really healthy quarters of cash flow in a row. I wouldn't count on us delivering $100 million of free cash flow per quarter. That would be about double our kind of forecasted run rate, you know, at Investor Day. So but, you know, our goal is to, you know, to deliver numbers in that ballpark. You know, could we outperform that this year with a strong beginning we had in Q1? I hope so. But I guess the one message is I wouldn't expect $100 million a quarter of free cash flow.

Ben Nolan: Got it. But, obviously, the goal is to try to deliver as much as we can on a quarterly basis while also making the right investments in the business that generate the returns that will drive profitability.

Ben Nolan: Alright. I appreciate it. Thank you.

Operator: Thank you. Our next question comes from the line of John Royall of JPMorgan. Your question, please, John.

John Royall: Hi. Good evening. Thanks for taking my question. So my first question is maybe you could give a little more detail on the restructuring actions in the quarter and just maybe the different buckets and how much savings you think will come out of each of the actions? And should we expect more charges in future quarters, or was this kind of everything in 1Q?

Ira Birns: Thanks for the question, John. So, you know, we took a $15 million charge, which is almost completely related to, you know, I kind of hate to say it because there's always a sad part to a story like this related to people. Right? And just driving efficiencies in the headcount side of the business. Right? It's as simple as that, and it's across the business. So it's, you know, people that are kind of in the unallocated corporate bucket, but also people in land aviation, marine. I would say a heavier concentration related to corporate and land, but there, you know, there was some element across the other segments. As will be disclosed in our 10-Q in the morning, that should result in about $30 million of annualized cost savings. We probably won't recognize the full quarterly run rate of that until the third quarter because some of those activities were, you know, still kind of underway and not fully completed by, you know, by today. So should you expect more? I, you know, can't tell you that at this point, but I also say that there's always opportunities. We are looking at some, you know, some specific, you know, opportunities to further reduce costs, but, you know, haven't completely nailed that yet. And when we're ready, you know, we'll share that. But in the very short term, the goal was to try to get whatever we thought was available and sensible done in the first quarter. So that project, if you will, is complete.

John Royall: Great. Thank you, Ira. And then my next question is on M&A. Maybe you could talk about how you see the opportunity set and the pipeline today for acquisitions. Does anything about the uncertainty in the current environment maybe make you pause on things like M&A until there's more clarity, or is it kind of more ordinary course right now?

Ira Birns: I would say, generally, it's ordinary course. You know, there's always, I would say the pipeline of opportunities has been pretty stable. It's not growing dramatically. It's not shrinking. We certainly are seeing a bit more, hope they're not listening, but sensibility on the side of sellers in terms of expectations. Which creates more opportunities. Right? Because we're never one, at least at this stage in our lives, to look to, you know, to overpay to, you know, to bring on some inorganic growth. The, you know, interest rate environment's been hanging a little higher. We're hoping that we'd be in a different place as of today, which would make, you know, that opportunity set stronger. That's taking a little longer than we thought. But, you know, there are opportunities. There have been some, as an example, without any specificity, where over the course of a courtship the sellers' facts and figures began to deteriorate. Right? So we've seen some of that as well. Which has put, you know, a potential deal or two on pause. But at the same time, you know, there are other opportunities that remain solid, and we should be able to execute on something, I would say, over the next twelve months.

John Royall: Thank you.

Operator: Thank you. I would now like to turn the conference back to Michael Kasbar for closing remarks. Sir?

Michael Kasbar: Thanks, Ken, Ben, and John for the questions. Good job fielding all of those. I'm remote now at the office. Look forward to talking to you next quarter. Can you hear me okay, or am I not coming through? Yeah. Okay. Fine. In any case, yeah, I'm remote, out of the office here. But thanks very much. Appreciate the support. We're highly focused on the agenda that we discussed a little over a year ago. And look forward to reporting back to you next quarter. Take care and stay well.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

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