Q4 2020 Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Q4 2020 TESSCO technologies Inc. earnings Conference call. At this time, all participants are in listen only mode.
After the speakers presentation, there will be a question and answer session to ask a question. During this session. You want me to press Star one on your telephone if you require any further assistance. Please press star Zero I would now like to hand, the conference over to your your speaker today, David Calusdian from Sharon Merrill. Thank you. Please go ahead.
Good morning, everyone and thank you for joining TESSCO is Q4 2020 conference call joining me today, our Sandeep Mukherjee.
TESSCO as President and Chief Executive Officer, and Eric's bottleneck the company's CFO.
Please note that management's discussions today will contain forward looking statements about anticipated results and future prospects forward looking statements involve a number of risks and uncertainties and tesscos results may differ materially from those discussed today information concerning factors that may cause such a difference can be found and tesscos public disclosures, including the.
Companies, most recent form 10-K, and other periodic reports filed with the Securities and Exchange Commission.
That introduction I'd like to turn the call over to Sandy.
Thank you David Good morning, everyone and thank you all for joining us.
On behalf of qualified ESCO I want to send our well wishes to all of you. During this challenging time, we hope that you and your families are healthy insane.
Since the beginning of the spending our number one priority has been the health and safety or foreign employees customers and our suppliers.
Also keenly focused on the integrity of our operations continued delivery of our product and services the sustainability of have supply chain, our liquidity and financial flexibility.
That's what was an essential business as defined by the department of Homeland Security and remains open so hot customized and provide support to our nation's communications infrastructure needs.
We are providing critical equipment and Viking services to fill the urgent needs of telecom companies service providers emergency responders law enforcement defense and security personnel as well as housing private entities that support these groups throughout our name.
Yeah.
In addition, several of our customers have asbestos support them and providing BP easier for their crews and their employees.
Our utilizing our supply chain resources.
Of course masks and Sanitizers blobs goggles and disinfecting wipes.
We have received the first shipment of the scare in mid April and began shipping it immediately to our customers.
We're very proud to be playing a role into recovery process. During this pandemic.
Most of foreign operations workforce outperforming go duties remotely and the transition to remote work has been seamless.
That's cool distribution centers remain open and we have taken measures in accordance with Guzman and public health requirements to reduce risk.
Be members, we need to be physically present in our facilities.
I will now provide more detail on the effects of corporate 19 on our results in Q4, and our expectations as to how the pandemic may impact each of our business is going forward.
Let me start without retail segment.
The primary impact of Corbett 19 has been on our retail segment.
Which had been already down throughout fiscal Twentytwenty.
In Q4, we saw significant over at 19 impact on sales and margins due to temporary closure of many retail customer locations and substantially reduced foot traffic and other retail stores as a result to shelter in place directors.
Although most of the tier one carriers corporate stores have been temporarily closed you took over 19, our retail customer base is predominately comprised of independent gathering of stores and we continue to receive purchases from some of these independent dealers. This is particularly occurring in the Midwest and.
Areas that are not as densely populated.
On past calls we have discussed our efforts in the airport retail channel.
This business was abruptly halted like over 19.
With airport traffic down significantly.
Some airport retail stores have been temporarily closed due to slower foot traffic.
We expect continued uncertainty as to when retail stores will return to pre pandemic purchasing levels. As a result, we have increased our accounts receivable returns and inventory reserves.
The best manage the business in this environment, we're taking the following aggressive actions.
Number one we have reduced our fulfillment and delivery expenses by consolidating orders as much as possible.
Our distribution center staffing is down significantly as we are using our flex workforce to limit expense.
Number two we have further tightened our inventory management discipline and are being very conservative in our purchasing.
We're ensuring that we have a strong levels of inventory on hand for our core skew offerings and eliminating slower and lower performing skews.
And number three we have reduced our retail SGN a expenses in park true temporary far lose a far workforce, while still maintaining our ability to respond to our customer and our supplies needs.
We are keenly focused on serving our customers and performing for our suppliers. During these unprecedented times.
Our fiscal year 2021 investments will largely favor our better performing commercial business.
Let me now done through our commercial segment, beginning with our bar and integrator business.
Our revenue was down slightly year over year with covert 19, having a modest effect on our results.
The covert impact relates primarily to non essential projects being delayed.
For example, one off our largest national service provider customers I suppose born nearly 800 nonessential projects.
We've also heard from customers that while they continue to get inquiries about large venue installations. They do not have to staff to visit the project sites in blessing for deployment and for implementation.
Our next like these are likely to remain on hold until the effects of the pandemic are significantly reviews.
In addition projects for oil and gas industries are also likely to remain down throughout fiscal year 21.
At the same time during the pandemic, we've seen growth in projects related to food transportation healthcare E learning and solutions to enhance remote work.
Additionally, we have supported the surge in hospital capacity needs, providing a rapid deployment get that consistent ventev enclosures with an antenna and I tried part month. This solution allows for quick and easy installation in makeshift environments and enables hospitals to extend their life I coverage.
As I have shared on previous calls we've taken actions to improve the performance of our hot an integrator business over the long term first and foremost we are reengaging with the end user community and reestablishing our relevant on a sector by sector basis.
The first sector, we focused on with utilities, we have invested in top sales and engineering talent, who have a deep understanding of the utility sector and that has resulted in Tesco being included in several new projects. We've now seen two consecutive quarters of year over year growth in this sector.
Building upon our success with utilities, we have hired additional sales talent, which specific experience working with the federal government and with large government integrators.
Encouraged that we have already built a strong pipeline in this sector.
On our last call I discussed that one of our growth strategies was to focus on our ventas infrastructure business.
During Q4, we continued to be successful with Ventas infrastructure products being included in project installed by out of our customers. I. Previously mentioned that we had won an award to provide vented enclosures within integrated antenna for one of the largest paper manufacturers in the U.S. with over 100.
70 warehouses in Q4, we provided products for the second phase of this three phased project.
We also continued with the second phase rollout for one of the largest grocery store chains in the U.S., we're supplying a custom ventas ventana that will be placed in all store freezers. We expect this project to be completed in the third quarter fiscal 2021.
Our partnership with two of the world's largest embarks also remained strong one of these theme parks will be working with us on a custom design for mounting brackets.
We are adapting our quick access ventas feeling bracket for small form factor antennas for a new attraction. We expect these solutions will also have strong demand from other customers.
We recently signed two key OEM agreements.
The first was with Cisco, where we will embed their gear into our enclosures and power systems, and then focus on selling this full solution to Vars and end users. This program offers inventive the resources needed to accelerate product development increased speed to market and deliver value within in house.
And product offering integrated with Cisco's quality and reliable aiotv products. This will help our customers determine the right products for their deployments develop integrated solutions that address their needs and deliver a connected aiotv enabled solution very quickly through this program Vince.
Yes can offer our customers, a turnkey solution, including accessories software and services.
The second OEM agreement is with region, where we are manufacturing or ruggedized enclosure for harsh environments, such as mining and oil and gas applications.
This agreement enables us to embed region active equipment into inventive enclosure that can be sold as a turnkey solution.
Looking ahead for fiscal year 21, we will continue to focus on public safety Das Wi Fi six and the utilities and federal government sectors. We are taking strategic actions to adapt our regionalization strategy to be far more surgical and create more intimate coverage with our customers.
Let me now talk about our carrier segment.
We did not see any significant impact from covert 19 on the public carrier market in Q4.
We do not expect a major impact in fiscal 2021.
In fact, Q4 was the largest revenue quarter for the public carrier market in our company's history.
Our strong relationships and increasing market share with book it can't be tough contractors as well as with Verizon and its contractors were the primary reasons for this record quarter.
Additionally, we did not see any supply chain delays with equipment or crew shortages in Q4, and neither appeared to be issues in the construction projects ahead of us.
As I mentioned last quarter. We recently won an award with a large tower company that will effectively doubled our business with them.
We followed that when in Q4 with awards for enhance rose with some of the largest tough contractors.
On the key reasons. These customers cited for awarding us more business is the demand planning capabilities, we provide that differentiates tesco from our competitors.
As further evidence of our strong relationships in this market. We have received information from some of our largest customers that they are prioritizing tesco for payment and will be dramatically improving their payment terms to us.
On past calls we have discussed the opportunity that we see for Tesco from the Fiveg build out.
I'd like to note that the strong spend that we are seeing in the carrier market today is not predominantly fiveg rather it is related to our customers shoring up networks enhancing the capacity and speed of rural networks, and Interspersing four point fiveg with small cell buildouts and testing to ensure that there and.
No coverage gaps.
Our customers have told us that they are still refining their fiveg bill of materials and that the ramp in spend will not happen until late calendar Twentytwenty early 2021.
Even without significant near term Fiveg spend we expect continued strong growth in this sector in the coming quarters, and then additional growth, resulting from Fiveg in calendar year 2021.
Note that this growth comes at lower margins. So we expect to see some margin erosion in this segment.
To summarize while we're disappointed by our overall results due to a weak retail market that was significantly affected by the pandemic.
We can take a lot of positives out of the quarter.
We achieved record results for our carrier business saw continued positive momentum in our venter infrastructure business and very good traction in Nevada and integrator market.
We've also made steady progress with each of the initiatives I outlined last quarter to improve tesscos performance for the long term.
Moving improvements to our balance sheet.
I'll come back to discuss that progress as well as update you on the steps we have taken towards our long term vision after Eric reviews, our financial results for this quarter.
Eric.
Thank you Sandeep and good morning, everyone.
Sandeep shared we did have some nice positives and quarter, primarily in the public carrier market.
There were overshadowed by two large charges in the week regional market that were significantly impacted by the cobot 19 pandemic.
Starting with the topline revenues totaled 128.2 million compared with 145 million in the fourth quarter fiscal 2019, and $139.6 million and the sequential third quarter.
Gross profit for the quarter was 17.2 million compared with $28.3 million for the same quarter fiscal 2019.
Gross margin was 13.4% of revenue for the fourth quarter compared with 19.5% in the fourth quarter last year.
The decline in gross profit and gross margin early result of several items.
First retail sales were down 43%, primarily result of retail store closures lower foot traffic due to covert 19.
The resulting gross margin associated with these sales was also down due to customer mix and additional returns.
Second we recorded an incremental $4.7 million of inventory in returns reserves related to the uncertainty caused by covert 19. This is primarily a function of the retail market.
Finally, the public carrier market represents a larger percentage of overall sales this quarter as we continue to grow market share in the sector.
But it does come at lower than historical margins.
As DNA expenses were essentially flat year over year as are ongoing expense control initiatives and productivity enhancements were partially offset by higher covert 19 related accounts receivable reserves of about 1.5 million.
In the fourth quarter fiscal 2020 loss before income taxes was 19.6 million compared with earnings before income tax of point $8 million a year ago.
This fourth quarter loss includes goodwill impairment charge of 9.1 million.
It also includes 6.1 million an incremental reserves associated with the over 19 pandemic.
Despite the difficult fourth quarter, we continue to maintain a healthy balance sheet.
We ended the year the balance on our line of credit was 26 million down from 29 million at the end of the third quarter.
Well, we expect some timing related ebbs and flows on our balance sheet in this new fiscal year, we expect to bring down the levels of inventory and accounts receivable associated with our retail segment.
Additionally, certain provisions of the carriers Act will allow us to realize close to a 5 million dollar tax refunds in fiscal 2021.
As we noted in our release our board of directors made the decision to suspend tesscos dividend to further strengthen the company's cash position as we continue to monitor and address the effects of the covert 19 anaemic.
Let's see if people describe momentarily and the commercial segment, we are well positioned in our industry and we look forward to further enhancing our offer in the value and experiences we provide our customers.
As we enter fiscal 2021, we continue to focus on taking actions to improve profitability over the long term.
Oh, no turn this back to Sandeep to discuss our strategy to drive Tesscos growth plans indeed.
Thanks, Eric.
Over the past two quarters I have discussed our near term business initiatives that are focused on enhancing our customer experience improving our sales disciplines upgrading our forecasting and inventory management capabilities and advancing our ecommerce website.
We have continued to make progress on each of these initiatives through the use of tools and software to assist inefficient and accurate order processing improved pipeline visibility and are now able to quickly evaluate and resolve issues.
The enhancements we have made to our website I've also been very well received by both our internal teams and our customers.
This has resulted in increased activity and positive results in terms of users sessions and organic searches.
As a result of these near term actions, we have expanded existing relationships with several of our customers.
In each case Tesco has been able to provide a reliable supply chain and lower total cost of operations and savings. This has resulted in our customers' ability to reduce their spend by optimizing inventory and having better management of their demand planning processes.
A wide array of industry, leading supply chain services has been implemented by Tesscos program management team and our customers described these as being best in class. We're very proud of these results.
As we execute on these near term initiatives. We're also focused on the future specifically the three strategic pillars I outlined on last quarter's call.
Number one regaining our competitive advantage in the core distribution business number two industrializing, our ventev operations and number three investing in value added and managed services offerings.
We're very excited to announce to executive hires that are important to the execution of these three pillars.
Well left we appointed Eddie Franklin as our SVP of sales.
He joins us from Synnex Corporation, where he served in a number of executive sales leadership positions. Most recently, leading teams responsible for driving multibillion dollar public sector and regulated industries business I'm confident that Eddie will help further define our sales strategy and drive ins.
Leasing revenue productivity and profitability.
We also appointed fat low as our VP and general manager of Ventas.
Prior to joining Ventas had was the head of small cell solutions and development for the Americas at Air span networks prior to their span that spent 16 years at Samsung electronics.
That's proven track record will help ventas capitalize on new technology opportunities and create unique and innovative solutions for our customers.
We continue to move forward with building, our software and managed services offerings more to come on back in future quarters.
Despite the challenges of covert 19 and outperformance in the retail segment I remain convinced that TESSCO is uniquely positioned to capitalize on the growth leverage the technology changes and help simplify the complexity that continues to drive our industry.
As we enter fiscal 2021, our focus is on taking actions to improve profitability over the long term.
The covert 19 pandemic currently makes forecasting results for fiscal 2021 very difficult.
However, we're optimistic that we will grow our carrier market business in fiscal 2021 that our business fundamentals will get stronger as the year progresses and that we will be in a much better position to return to profitability as we enter fiscal 2022.
Eric and I would be happy to take your questions.
Thank you as a reminder to ask a question you will need to press star one on your telephone.
Hi, Your question press, the pound or hash key please standby will be compiler culinary roster.
And again to ask a question that star one on your telephone keypad. Our first question comes from the line Megi Nolan from William Blair. Your line is open.
Good morning.
I'm, hoping you can elaborate a little bit on how the product and solution offerings have resonated with the bars integrators in this environment.
Is there any kind of long term strategic changes that need to me you need to be taken.
And how Tesco can really differentiate that the business in this environment.
Hey, good morning, Maggie this is Andy thanks for the thanks for the question.
We are excited about a number of things in in our var, an integrator business many of which we saw evidence of this quarter, So first and foremost.
Effectiveness are far regionalization strategy and adapting that too as we have discussed in prior quarters that is beginning to bear fruit.
Second we have much more intimate relationship between our sales support structure, our sales and our customers. So we get to get a better understanding of their actual needs. So from a fundamentals perspective I'm happy with the progress we have made and out of that exercise I mean, the following our purchase.
Studies have have come true. So first I'll talk about inventive as I described during the call. There's a number of customizations, both environmental anaesthetic that our customers are looking for that we are able to provide from my vantage perspectives. There's a number of projects we are already executing.
More in the pipeline that.
We will talk about in coming quarters.
Second we are seeing a lot of progress with Aiotv not just at a.
Academic level, but very purpose to environments.
Oil and natural gas mining several other verticals that have unique requirements and we're pretty excited with the partnerships we talked about during the call with Cisco and with region that'll help us address these opportunities and bringing our total solution to to the market.
I hope that helps Maggie answer your question.
Okay. Thank you.
And as we think about the the carrier markets.
Do you think that five key gets pushed out further than that kind of the expectations even laid out just given perhaps.
Heavier spending that you've seen us late at the carrier market.
We still believe that the timing for.
Pickup of intensity is later this calendar year into early 2021 calendar, we're seeing evidence of some spend roughly 10% to 15% to our existing revenues come from Fiveg. So it's not that it's completely absent we see evidence of that build out but from a.
Real intensity perspective, it's towards the end of the year.
Calendar year matters.
Got it.
On the supply chain it doesn't sound like you've seen any supply constraints yet.
In our you're preparing for a scenario in which you do see some do you anticipate that those are coming in the future and how are you managing that and managing inventory as well.
So obviously, we are keeping a very close eye on a tight rein on this we have established regular cubic yards and deep dives that go all the way through the supply chain, both from our supplier perspective, as well as from a customer perspective.
So we have routine cubic yards to understand how our customers are forecasting and how and why they are putting those forecasts in place and then use that to play back into our supply chains and our supplier to ensure business continuity, so I'm not concerned.
I'm speaking more of the commercial business retailers and if in a different situation from a from our commercial business perspective, I'm comfortable with the supply chain situation as it exists today, obviously, there's a lot of uncertainty with the pandemic and in order to manage understand.
Mitigate you know we have established these routine cubic yards, but I just mentioned.
Hey, guys. Thanks for taking my question.
Thank you Manny.
And our next question comes from the line of Tim calls from Capital Management Corporation. Your line is open.
We'll see a public carriers improving their payment terms to you.
What do they get in return.
It really they're doing not as good partners of Tesco there isn't.
Quid pro quo or anything like that it's just that.
There.
Keeping us is first in mind and want to make sure that were.
Assisting them in their needs, but theres nothing.
We're not giving them better pricing or anything like that as part of an arrangement.
So there are just recognizing your important to them.
That's right.
Okay public carrier business can be.
Volatile and with Fiveg in key Lady.
And deployment till the end of the year.
Hello.
What are the reasons why you're optimistic that.
The public carrier.
Revenue for you will continue to grow.
During this year.
Good morning, Tim This is Andy follow I'll take that one and ask Eric too.
Phil in anything that he wants to so from a we're optimistic about a volume perspective.
In this business segment going forward, our volume can come in two aspects. One is increased spend which is the fiveg aspect that you mentioned the second is by improving our market share and what we have been doing.
Very evidently and I'm actually very happy with the progress in this segment. We have one you agree with new contract, we have new agreements in place and we have improved our market share. So we will get we expect a bigger share of existing spend and we anticipate that you know with working with all of the other.
Romans that I discussed during the Oh, we will be able to maintain that market share and hopefully grow.
Eric anything you want to add to that.
No I think you turn key pieces there.
Then does that address your question.
Yes. Thank you.
And again, if he'd like to ask a question that star one on your telephone keypad. Our next question comes from the line Bill Dullum from Titan Capital. Your line is open.
Thank you Oh can we start with the that the 6.1 million dollar charge split between S. DNA and in your Cogs.
Yeah, but one and a half million of that is a shannay related they are and 4.6 or so.
Is related to inventory, which is.
Okay, 1.5 and 1.6.
4.6.
That that adds a lot better just 6.1, thanks [laughter].
No. There's no question [laughter] I thought it was a trick answer.
[laughter].
So.
Let me ask from a big picture perspective.
Oh well is the is the wireless network holding up we're performing during this period, where we're also distributed and and.
I would suspect using using the bandwidth more than we historically have.
For Bill good morning, I'm trying to thing.
You know what perspective, we use to answer your question.
I mean, the best I can we can do is too.
Shared with you examples and evidence of.
What our customers are doing and our customers are primarily constructing these networks the intensity of that I think you see in our results that we participate and so you can perhaps.
Big from that that the effort from the service providers to keep shoring up networks to make sure things are available shifting capacity from highway coverage to rural areas, increasing coverage and capacity and where people are.
I mean that is certainly picking along right. So that is one evidence. We can give you second from an innovation perspective, you know do get capacity and coverage in areas, where people are we see a lot of evidence around environments specific antennas aesthetics driven antennas for pro.
Slide better in building small cell coverage, we see evidence of that so from a construction perspective, there were very encouraged and we see evidence that all systems.
Our on a are moving along from if your question was quality of coverage.
So how well the systems are holding up I'd that is really not an analog we track with our our business and I'd be addressing that more from a as an as an observer I'll refrain from doing that but I can I can elaborate if you have more questions from our lands that we bring to this part of the business.
Well and Cindy I was thinking that just given that youre, but you do have a little more of a lens into this and then.
Then the rest of this is no we'd likely are only experiencing what our or a.
Small radius that we would operate in geographically is experiencing.
So I guess, if you had some qualitative comments.
Just what you're hearing.
Do you sense that there is that there are bottlenecks that that are needing to be worked out and that's part of the activity that you're experiencing today.
Or is the fact that side he is being.
Not accelerated indicate to us that tier.
Thats, a networks tend to be performing pretty well and and not a need a the immediately accelerating or expanding their bandwidth.
Bill I can try to give you.
Yeah on based on the evidence, we're seeing and what we're hearing from our customers.
No one point that you might be able to elaborate and make me conclusions from is that we hear from our customers that end users given that they're not as mobile and working from home and a large part of the workforce has shifted to shelter in place that the wide fight networks are.
Being utilized more and more and so there's more intensity in terms of backhaul in terms of wired backhaul to provide the capacity that is needed and this is perhaps been a shift from you know.
Traditionally mobile.
Utilization.
This has allowed our customers to shift.
Their spend into areas, where mobile coverages needed and we are we primarily have a wireless plans. So hopefully that is helpful. The second thing. We have seen you know is far large venues and large convention centers, which have been converted to make sure.
Hospitals are being used for other purposes, a lot of the wireless construction projects. There have been put on hold now. These are not project from our perspective that have gone away. These are simply delayed. So that's another dynamic that we have oh, we have seen during this pandemic.
Beyond that I have to go to the violent integrator segment.
Oil and gas there's been a slowdown but in most of the other verticals you know the construction intensity has not Wayne.
Okay. Thank you Sandy.
Then would you. Please discuss your comments that you continue to win share in the into carrier market and I know you did get the one specific example, with a major tower company that you're doubling your business no with them are there other other anecdotes or specifics that you can that can share relative to this.
Yeah, I wouldn't draw your attention build to the.
For the comments I made on the ATM D. and ATM de Dup vendors, we have improved our market share in two ways. We have increased market share with some dark vendors and we have established agreements with new ones I'm not able to share the specific names with you.
Given the confidentiality of these arrangements, but that's one place we have expanded the second place. We have expanded is also with horizon and their contractors, where we have also won new agreements that I'm not able to share names with but that has given us an uplift on our business and then finally.
From a tower.
Neutral host perspective.
You have I cited one example, without sharing names for the same reason, but we are increasing.
Our intimacy and our share with other manufacturers as well.
Other tower companies as well.
What's the magnitude of the impact that you would anticipate from the Sir.
From the east carrier win and their contractor wins.
So this quarter was a was a record quarter.
For us, we expect to be able to.
Continue this intensity bill absent any significant or surprising issues from over 19, you know crew shortages other things that have sometimes held this market backs I'm I'm not addressing those now if all of those situations where the remain the way it is.
I expect double digit growth in the carrier segment for us.
Great. Thank you and I may switch to the bar business.
And actually I'll, even SK retail so to address the question.
For both of them independently.
We have heard as a number of companies that have talked about a bottoming.
There are.
Their activity in April timeframe, and then growing a growing from from there what do these experienced with retail.
And the end of our business have you seen them bottom and and if so at what point did you see each of them bought them then and how strong is the is the uptick from the from the low point.
So these are somewhat different markets bill if it's okay, I'll address them separately and potentially retail of us.
Thank you so I want to tackle retail funds.
So retail was not just a I mean, everybody talks about a march phenomenon with a with a shelter in place directives that significantly slowed foot traffic down the retail experience goes back to January for US. If you remember at that point in time, the U.S. economy with still taking and.
Retail was normal if you will however, the supply chains were affected because of the pandemic in China. So there wasn't effort from our customers ourselves you know to ensure business continuity inventory continuity. So that was the January dynamic.
Now fast forward to March when a lot of the U.S. was beginning to get affected at that point demand began to dry up.
We see that continuing that continued through April we're seeing some evidence of uptick right very minimal, though you know nothing I can you know I can say that used to say we are out of it or we're going to be out of it have we seen bottom that was your question.
The honest answer is we don't know right, which is why as Eric described during his narrative no. We have been extremely cautious within reason and taken the reserves that we have so that's the retail environment as it exists today from a bar and integrator perspective.
Then the spend build is driven by various industry verticals.
We talked about oil and gas that is not related to the pandemic as other dynamics playing a role in the market and we're seeing a slowdown we expect that slowdown to continue for for a while beyond that in federal government. You know in utilities, we really don't see you know signal.
Terrific and you know downturn, what we do see is.
Aspects of projects getting impacted I talked about the large venues or this is not necessarily for you know var, an integrator, but take the Javits Center for instance, we had projects that were lined up there and we were supplying inventory in assets as the Javits Center was re.
But for us to help with makeshift hospitals and other health care.
Activities those projects were put on hold we see that phenomenon in venues.
Large stadiums you know across the board we don't believe these projects go away.
I believe these projects were put on board and eventually come back.
I hope that helps your bill.
Thanks, Sandeep I appreciate it.
We had no further questions in queue at this time I will turn the call back over to management for closing remarks.
Thank you. Thank you operator.
I want to make for quick points in closing.
First and foremost I want to tank the Tesco team.
For their attention for their care for their dedication as we transition from.
Robust office environment into a remote work arrangement.
That transition as I said earlier has been seamless and I'm, especially grateful to the enthusiasm and to the lean forward and thus.
Our whole team.
I want to especially thank God distribution center colleagues. These are themes and people who had to braved the pandemic and be on premise at our distribution centers.
I want to thank them for their efforts towards business continuity and I know that our customers and our suppliers share those tanks as well.
Second I want to thank our customers and our supplier partners for especially this end to end planning that we received a question on having visibility into demand into projects and then being able to play back the same into our supply chain the openness and partnership.
And trust that we have seen across the board.
Has been remarkable and I want to thank our customers and our supplier partners for doing so and for your Prost and your confidence in desktop.
Finally, I want to thank all of you for joining us on this call. Please stay healthy. Please stay safe I look forward to speaking with all of you next quarter. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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