Q4 2020 Culp Inc Earnings Call
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Good day ladies.
Sorry.
Fourth quarter.
Today's conference is being recorded.
Yes.
I'd like.
Please go ahead.
Thank you good morning, and welcome to the Cops conference call to review the company's results for the fourth quarter in fiscal 2020 year.
As we start let me say, but this morning's call will contain forward looking statements about the business.
Natural condition and prospects that the company.
Forward looking statements or statements that include projections expectations or beliefs about future events or results or otherwise, they're not statements of historical facts.
The actual performance of the company could differ materially from that indicated by the forward looking statements because of various risks and uncertainties.
These risks and uncertainties are described in our regular FCC filings, including the company. That's recent filings on form 10-K and form 10-Q.
You are cautioned not to place undue reliance on forward looking statements made today and each such statements speak only as of today, we undertake no obligation to update or to revise forward looking statement.
In addition, during the call the company will be discussing non-GAAP financial measurement.
A reconciliation of these non-GAAP financial measurement to the most directly comparable GAAP financial measurements is included as a schedule to the company 8-K filed yesterday and posted on the company's website at <unk> Dot com.
A slide presentation with supporting summary financial information is also available on the company's website as part of the webcast of today's call.
With respect to certain forward looking free cash flow information the comparable GAAP and reconciling information is not available without unreasonable effort and its significance is similar to the significance of historical free cash flow information, which is available in the company's 8-K filed yesterday and posted on the company's website.
With that I will now turn the call over if call Chief Executive Officer, a fault. Please go ahead Sir.
Thank you drew good morning, Thank you for joining us today.
I would like we welcome you to the coal quarterly conference call with analyst and Investor.
With me on the call today, or Ken Bowling, Chief Financial Officer of coal and board Chumley doesn't the bar upholstery fabrics business.
We also brink Saxon executive chairman of the company dialing then remotely.
I will begin the call with some brief comments and plan will then review the financial results for the quarter in the full year.
I will then I'll update you on the strategic actions in each of our operating segments.
Not to that Kim overview, our first quarter fiscal 2021 business outlook.
We will then be happy to take your question.
The ground economic disruption caused by the carbon 19 pandemic.
Significantly affected our performance for the fourth quarter in fiscal 2020.
It's a fourth quarter began we were executing well on our strategic initiatives and generating momentum in our businesses.
However, the impact to the cover 19 pandemic began to materialize in the second half of March because retail stores across the country closed and many of our customer shutdowns or limited their operations for several weeks.
Despite the challenging conditions all of our employees around the world has done enough standing job servicing our customers.
Supporting essential services throughout the spend analytics.
Hi, I'm extremely proud of their hard work and dedication, especially in our efforts to work cross functionally critical need ensure we are well positioned at the economy continues to recover.
The measures we've taken in recent weeks combined with our teams are agility innovation in Brazilian gives me confidence in our ability to navigate the environment we're facing.
To increase our market share and to emerge stronger because our business conditions improve which we are already experiencing.
We cannot think our 1400 fluff pulp, especially it's enough for their courage and effort during this time.
The safety of our employees remains our top priority.
We entered this theory, the sound balance sheet and acted swiftly and decisively to adjust their plans and enhance our cash position.
Including the strategic sale of our ownership interest in the luxury.
The sale allowed us to focus on our core businesses. During this unprecedented environment, while also maintaining a strong working relationship with the luxury going forward, but allows us to preserve a beneficial sales channel for our core products.
At the same time has continued to execute our product driven strategy and focus on innovation and design creativity in both of our business segment.
By the challenging conditions.
As a result of the measures we have taken we ended the fourth quarter with a net cash position that was stronger than the into the third quarter, even with these limited operation.
Although the ongoing impact in duration of the self and economic crisis remains unknown.
Our business doesn't improve materially since the into fiscal 2020.
Well, we are encouraged by positive sales trends and reports of consumer spending in the home furnishing sector.
Mattress fabric segment and our hope is perfect segment of Boston has those things better than expected increases in order shipments and output for the first 18 the fiscal 2021.
We've also continued our intense focus on liquidity and outperformed our expectations for the first they need the fiscal 2021.
Without incurring any cash burn during this period.
It is likely to the covered my team and then it will continue to have some impacts on our business to at least the first half of fiscal 2021.
Foreign additional shutdowns as result of the virus.
We believe business will continue its solid return to the first and second quarter fiscal 2020, more and we will benefit from pent up demand and increased consumer attention.
The home environment and overall comfort.
Our cash position is strong.
And as a result of these factors, we recently repaid all outstanding borrowings, which had previously drawn down under our credit facilities during the fourth quarter.
We're also pleased to announce that our board of directors declared a quarterly cash dividend, let's turn to have centsper share payable in July.
Importantly, the board will continue to evaluate the appropriateness of the current dividend rate going forward in light of economic conditions and the company's performance in the upcoming quarters.
With the strength of the company's balance sheet, we are confident in our ability to whether it be ongoing disruption over the near term and emerge from this crisis and they preferred position.
We're excited about the significant improvement we expect for the first quarter fiscal 2021, as we continue to execute our product driven strategy and demonstrates the resilience and strategic advantage of our global platform and stable supply chain.
I'll now turn the call over to Kim who will review the financial results for the quarter and also the full year. Thank good as mentioned earlier on the call we oppose to slide presentations to our Investor Relations website. They cover key performance measures. We've also posted our capital allocation strategy.
I also want to note that the silver ownership interest in the luxury during the fourth quarter resulted in the elimination of her home accessories segment.
So the financial results for this segment are excluded from the reported financial performance of our continuing operations through fourth quarter insisted nearly 40 year and presented as a discontinued operation for these periods and for all prior periods of comparison.
Here's a summary of the financial results for the fourth quarter, which were severely affected by the disruption caused by the cobot 19 Pan Jeremy.
Net sales were 47.4 million down 29.3% compared with the prior year.
On a pretax GAAP basis, the company reported a loss from continuing operations of 18.4 million compare with pre tax income from continuing operations of two later for the fourth quarter of last year.
Adjusted pre tax loss from continuing operations non gap for the quarter was 4.7 billion, excluding 13.7 billion or noncash asset impairment charges associated with goodwill and certain intangible assets, which I'll discuss in more detail layer.
This compares with adjusted pre tax income from continuing operations again non gap for the fourth quarter last year of 2.5 million, which excluded a nonrecurring charge of 500000 dollar.
Net loss for the quarter was 27.8 million or $2, a 26 cents per diluted here, which includes the noncash asset impairment charges I mentioned earlier as well as a net loss and they continue to offer our discontinued operation of 8.7 million associated with the luxury.
This compares with a net loss of 1.5 million or 12 cents per diluted share for the prior year period, which includes the nonrecurring charge I mentioned earlier and a net loss for a discrete discontinued operation of point 4 million associated with the luxury.
In connection with the Companys annual impairment assessment of our goodwill and certain other intangible assets, we determined that impairment indicators existed as a result of the material impact on the Companys financial performance and the significant decline stock price and market capitalization arising from the cobot 19 outbreak.
This resulted in a 13.7 million noncash asset impairment charge during the quarter, which 11.5 made related to the mattress fabric segment and 2.2 million related to the culture driving segment.
For fiscal year 2020, net sales were 256.2 million down 8.9% as compared to previous year.
Pre tax loss from continuing operations was 7.7 million compared with pretax income from continuing operations was 12.7 billion for fiscal 2019.
Adjusted pre tax income from continuing operations non gap for the year was $6 million, excluding the noncash asset impairment charges noted earlier.
This compares to the adjusted pre tax income from continuing operations again non gap for the prior year, a 15.5 million, which excluded restructuring and related charges or credits and other nonrecurring charges, resulting in a net charge was approximately 2.7 million.
Net loss for the year was 28.7 million or two hours and 33 cents per diluted share, which includes a noncash asset impairment charges as noted earlier as well as a net loss images discontinued operation of $17.5 million associated with the luxury.
This compares with net income of 5.5 million or 43 cents per diluted share for the prior year period, which includes the 2.7 million net charge as noted earlier and a net loss from a discontinued operation of 6 million associated with the luxury.
Really 12 month adjusted EBITDA for fiscal 2020, with 13.9 billion were 5.4% of sales.
Now I'll make a few comments about our taxes the effective income tax rate associated with our continuing operations.
3.8% for the fourth quarter and 43.7% for the fiscal year, Despite our significant pre tax loss from continuing operations.
The mix of our pretax earnings from continuing operations adversely affected our effective income tax rate.
As we had higher income tax rates associated with the pretax income earned by our board operations in China in Canada as compared to a lower income tax rate on our us pre tax loss.
Additionally, the current mix of taxable income led to a significant increase and the effective income tax rate that is associated with our global intangible those low tax income were guilty pack, which represents a USA income tax on foreign earnings.
Importantly, during the fiscal 2020 year, we did not make any U.S. income tax payments due to the realization of the company's us federal net operating loss carry forwards and immediate extensive use of capital expenditure.
However, we did have an income tax payments during the year totaling $5 million associated with our foreign operations located in China in Canada.
Notably the US Treasury Department and internal revenue service have issued newly proposed regulations that could provide us with some future relief from the guilty tax under the proposed guilty high tax exception Lexus.
However, the proposed regulations that have not been finalized and could change.
Now, let's take a look at our business segment for mattress fabric segment now sit net sales for the fourth quarter at 23.4 million down 38.5% compared with last year's fourth quarter.
Operating loss for the quarter was 2.8 million compared with operating income of 2.7 billion a year ago.
As we have noted our sales and operating performance for the fourth quarter end year were significant asked the effected by the unprecedented disruption from the cobot 19 pandemic.
Additionally, prior to the colder 19 operate our results for the year were affected by container disruption in domestic mattress industry related to low price imports that moved from China to other countries.
For the upholstery fabric segment sales for the fourth quarter with 44 million down 17.3% from the prior year period.
Our operating income for the fourth quarter was 5.5 million compared with 1.8 me a year ago with operating income margin of 2% compared with 6.1% last year.
Operating performance was primarily affected by the material declines sales is actually with the disruptions from the cobot 19 and Dennis.
Here are the balance sheet highlights.
While the broad shutdowns and disruption caused by the Coburn 19 help create a near term hit near term headwinds and uncertainty we maintained a sound financial position in the fiscal 2020.
As of the every year, we reported 77.1 million in total cash and investment and outstanding borrowings totaling 38.4 million.
Our net cash position of 38.7 million.
We are maintained its position despite the rapid decline in sales by taking prompt action to manage our cash position during the fourth quarter.
In doing so we ended the quarter with net cash above our net cash position at the as a third quarter, even with limited operations.
During the year, we spent 4.6 million for capital expenditures and returned 6.8 million shareholders and regular dividends and share repurchases.
We had cash flow from operations of 5 million and free cash flow of 1.5 million for the year, which were negatively affected by the coated 19 disruption.
As mentioned earlier, we are now once again debt free after repaying the Burns previously outstanding at the end of fiscal 2024th quarter.
Our current financial position through the first eight weeks of fiscal 2021 reflects an improved total net cash position as compared to the ended the fourth quarter fiscal 2020.
We also recently amended our credit agreement through increased flexibility regarding our financial maintenance covenants due to the impact of the co. The 19 pandemic with that I'll turn the call back over to it.
Thank you Ken let me start with some comments on the mattress fabrics segment.
The disruption from covered 19 significantly affected our results for the fourth quarter and for the year.
We experienced a rapid drop in demand beginning in mid March as customers in retail stores, beginning closing or substantially limiting their operations.
Due to government mandated disclosure requirement near the end of March we shutdown facilities in Canada in Haiti for several weeks.
We also reduced our production schedules and furloughed workers that are USS guarantees to alignment with severely reduced demand, while aggressively cutting cost delaying non essential capital expenditures and reducing inventory.
Despite these challenges we quickly pivoted to re purpose are available operations to produce basemat betting covers and fabrics for health care operations and consumer health.
This allowed us to support much needed release tougher as an essential business and keep mitt and keep as many workers if possible employed.
Additionally, in the face of travel restrictions and cancel trade shows we also leveraged our reimagine coal compassion.
Which is a threed image rendering capability to continue showcasing our products and support our customers to virtual designed collaboration.
For the first day weeks for fiscal 2021, we've experienced steady increase in demand as government restrictions have been lifted and customers in retail stores that started to resume operating.
We have now dramatically increased our production schedules and returned from spent and returns substantially all of our previously per load workers to meet the increased demand.
We've also reduced inventory by approximately $5 million during this period.
Additionally, we are pleased with a swift returned to pre cover 19 favorable demand trends for our class sewn mattress cover business.
Is there appears to be continuing growth trend for online Fox setting.
Across the mattress fabrics division from fabric to cover near working collaboratively with new and existing customers to develop fresh innovative products in our fishing level platform continues to support our fabric and cover business with established production capabilities in the United States, Haiti and Asia.
We expect our building expansion in Haiti to be completed during the second quarter, which will provide additional capacity and enhance our ability to produce cover.
We're also encouraged by the recent antidumping duty petitions filed with the US International Trade Commission and use department of Commerce against seven countries from days and unfair trade practices as well as itcs preliminary determination, allowing these petitions to go forward.
If successful we believe the proposed relief feed thought would benefit the domestic mattress industry and in turn the favorable for our business, especially with our significant level platform for sewn covers.
Now I'll make a few comments on the upholstery fabric segment.
Our results for the fourth quarter fiscal 2020 reflect the material decline in sales and severe disruption from the cover 19 pandemic.
We began fourth quarter on track for strong sales and a solid operating performance.
The first six weeks in the fourth quarter were consistent with our expectation with our Asian supply chain operating of fall out front, our beginning of March.
Following the previous government mandated shutdown in China associated with that Congress outbreak.
However, orders and shipments declined significantly begin in the second half of March is most of our us customers and retailers shutdown or substantially limited their operations due to the pandemic.
Despite these challenges our team of associates as quickly responded to the new operating environments to support the needs of our customer for travel restrictions and events cancellations, particularly adapted by developing virtual showcase presentations.
That allowed us to continue represented in our products to customers.
For the full year, especially considering the negative impact of cover 19, we were pleased to achieve a solid year of annual sales and operating income performance.
Throughout the year, we executed our product driven strategy with the continued focus on innovation and creative design. This supports our diverse customer base and helps customers differentiate themselves in the marketplace.
Our strong platform and Asia, including cut and sew capabilities in Vietnam as well as our stable long term supply relationship continues to support our business and enable us to meet challenging customer demand.
Our line of highly durable stain resistant mysmart fabrics remains popular with both new and existing customers.
We also remain excited about the demand trends for Mysmart of all our line of sustainability fabric between the use of recycled yarn along with the same stain resistant performance.
We are continuing to develop new generations of performance products, featuring new finishes and technologies to further expand this product offering.
Additionally, we continue to see growth and our hospitality business throughout the year, which was less affected by the cover 19 construction during the fourth quarter due to orders already impressive.
Read window products, our window treatment and installation services business provided a meaningful contribution for the year, including the fourth quarter as the continued operation.
Phil existing project orders and reallocated a portion of this operation the office of face math for healthcare workers.
However, while we remain pleased with diversification offer by hospitality business, we recognize the ongoing pressure and hospitality industry as a result of cover 19.
Importantly, the core market of our read window product.
Business is the vacation and leisure segment of the hospitality industry, which we expect to see less ongoing impact than the corporate sector.
Looking ahead, we are encouraged by recent sales trends through the first eight weeks of the quarter, which are better than anticipated.
Ken will now discuss the general outlook for the first quarter and fiscal 2021, and then we'll be happy to take your question.
At this time due to the continued economic impact was the Coburn 19 pandemic and the lack of visibility as to as duration and ultimate impact we are providing only limited financial guidance for fiscal 2021.
Although subject to unforeseen changes that may arise as a pandemic and its economic impact continue to unfold. We are encouraged by improving business conditions than expected sales and operating performance for the first quarter fiscal 2021 to be significantly improved as compared with the fourth quarter fiscal 2020 with operating and.
Come expected to be near breakeven and our net cash position expects to be comparable to our 38.7 million net cash position at the end of fiscal 2020.
With that we'll now take your questions.
Okay.
Okay.
You bet.
Paul.
Thank you good morning.
I appreciate you taking a few questions.
Yes, we have started you commented to use the word positive sales trends in your commentary and I was just curious as that positive in relation to the bottom end March April or positive year over year at some point here recently thank you.
Yeah, John Good morning. Thanks for the question go to chat with you and yes. That's a good question and kind of I'd say kind of both so we.
If you give you some more color we fall in both businesses in March and April sales levels.
40% minimum down and in some cases, a little bit more unfold the way, we're saying significantly improved as we look at it today, we're approaching what we're calling more normal sale condition for us.
So as you know if we think about a quarter. It started off a little bit slower has steadily building for the quarter and now we're approaching more normal sales condition.
So would it be fair to say Oh, not the remodel monthly or really focus on locally stuff that was April the month of April home down.
Close to 40% year over year.
Yes, Sir yes, there April was the bottom of the bottom.
For both business.
And then up could you comment on on the raw material that is polyester in particular and.
I appreciate your.
The fact, your inventories cycle from perhaps as quickly, but when do we start to see possibly some benefit from declining raw materials.
Yeah, John Thank you on Boynton, our distances is talking about that as you asking the questions and I have for sure we don't see any headwinds on that.
Refund is stable you're right. We do after you get through inventories and begin buying again paid to take advantage of some of the spot opportunities that are there.
I don't think we view that as a long time.
Tailwind, but we also don't see any headwinds in that it's stable.
Okay.
And I assume you're going to be.
Using or working capital into July quarter, and yet the Dell sounds like anticipate.
Change in.
In cash the cash position and.
While you may or may not breakeven there wouldn't be a profit. So just kind of curious about the short term puts and takes on cash generation and then maybe help us think about the house.
Your next 12 months or so thank you.
Yeah, John this is in.
Yeah. We started we ended the year with it at 38 point is 38 million roughly in net cash and then really during may was all the measures that we had taken the we began to build cash and and enforce that the with the inventory reduction.
That helped as well so we were able to no way combined the the product the benefit of the inventory reduction plus all the syndicate disease that we've put into place so that actually help build our cash position.
During that time, but as we as we look out, especially with the next month as business continued to improve we will use working capital and so that's where we think cash will kind of fall back to near are comparable to year end. So.
There were definitely some use of working capital, but at the same time.
What's helping to is that some of the extended terms.
We had negotiated with customers those are starting to roll off and.
And so maybe some customers will start discounting again, those terms will start to come into play so that will help maybe offset the impact of decreased inventory form.
Okay and then my last question is around Capex, I think lane, so somewhere around six or 7 million annually.
Long correctly, but.
Where where's the budget this coming year and you know in light of.
Sales coming back so quickly is your outlook changed on that are we going to still.
Keep a close to maintenance capex. Thank you.
Yes, John it's going again.
We said that maintenance capex it run anywhere from four to six maybe a little bit more depending on the year.
Right now we're prioritizing all of our capital expenditures certainly looking at the most the most the in places that are most need I think long term.
A normal year would be six 8 million roughly as a as far as companywide.
But I would say right now we're just.
Being very cautious and prioritizing all of our Capex and looking at it and just taking a.
Cautious approach as we go throughout the first quarter.
Thank you good luck.
Thanks, John.
Our.
Yeah.
Okay.
Hey, good morning, or good afternoon, I guess, we'll close enough. Good afternoon, everybody. Thank you for taking my question I guess, the first thing I want to ask about it and Canada. What are you hearing from your customers are seeing their customers in terms of their inventory or are they back to you know holding on or backing up on it.
Story to free told at levels or do you see most bigger customers running a little tighter well thinner on their inventory levels right now.
I think bodies or physician I'll, let boyd comment on that to conceal he'll be close to that in the furniture side.
I don't I think inventory it's got.
Any down pretty good as business.
Came back strong and I don't think they've had opportunities to build a lot inventory yet and stopping people are still running fairly thin I ever it's easier to run the from safety stock levels that we haven't been able to build back to those as of yet Barclays comment. Yes, yes, we have other I would agree with that on the Oethree side of the business for sure I think it's.
A bit of progression just as we immediately were coming back from the shutdowns in the disruption there probably was some inventory in the pipeline, but I think with the pace of recovery.
Being what it has and probably beating expectations. There that inventory is being pulled down fairly fairly rapidly. So adult says that there is a lot of inventory left in the pipeline.
Okay. So that the the demand we're seeing in the last eight week to week over week better demand. It really is true kind of retail.
Performance year to sell through it's probably fair to categorize that right.
I think in the most recent weeks at least they involve dsos correct.
Okay. That's very helpful. I guess also to talk briefly just kind of on the cost structure in the margin profile clearly you know with volumes falling off here and magnitude margins that come down as expected, but we think out a couple of years. Yeah. I mean is there anything structurally that would prevent from getting back to kind of.
Actually the fact volume on that was the best again back to kind of the low double digit operating margins and an actor segment. So when incremental volume does return it should flow through pretty nicely.
Bobby Thanks for that question limits the way I would phrase that two years, we did I hear a lot of platform expansion over the last couple of years and we talk about it kind of repeatedly and are the nieces how much we've invested in the mattress fabrics business for.
Our North American platform.
Take advantage of the strength of our Canadian operations.
And then also on our cutting so business to really build a significant strategy.
United States, Haiti and Asia.
So we've done a lot of investment and we haven't had yet until maybe we're getting close to that we haven't had the chance to run at full steam.
The show what that platform can do so yes, there are committing to.
I can go out there arent long term headwinds to prevent us from getting back to what we would consider more normal margin.
Okay. That's helpful. And then I guess lastly, and just to make sure. We had our models for up right. A lot last years first quarter was a 14 week quarter correct.
Correct, yes.
Is it safe to say that sales provided by you know the 75 million divided by 14 are doing the extra week accounted for basically about 5 million worth of revenue.
I guess, that's probably the best way to do a Bobby it yeah.
Okay. That's helpful.
Tells us trying it out but okay perfect well appreciate a answer my question best of luck your own you know in the first for.
Thank you talked about it.
Okay.
Okay couple of market.
Yeah.
Good morning, guys. Thank you for taking my question.
More importantly.
Oh I Wonder if you did.
We'll circle back around on the on the question earlier about cash flows from just kind of thinking about your cash from operations for the full fiscal year. Obviously, you discussed the fact that you'll be using some working capital, but also you guys get implemented some temporary cost reduction initiatives to this last quarter and I wondered if you can kind of update us on.
Where that is right now have they been bought back are you going to be taking them in there and if you can kind of discuss any other major drivers or risk that you're kind of focused buys it really your cash from ops for for the fiscal year.
I can take a quick stab at that Marco. Thank you. This is the Evan I left can certainly comment as well.
Yes at the start of the pandemic period in March we took significant cost.
Out of both businesses, some temporary and some longer term our businesses are structured very differently.
Our upholstery fabrics business is a.
Pretty variable cost model, so sort of flows with where the business as we feel fine about that and our mattress fabrics business being much more fixed cost model because all the.
Capital expenditures passage of rebuilt here.
We have taken more permanent cost as a mattress fabrics business.
And both businesses have opportunities that we're finding.
With our virtual opportunities that will produce travel and other marketing expenses that will be a go for but we don't we don't see any costs out of morons. It can't be adjusted based on sales volume.
And can you want to comment more to that you're free no I think that covers it you know there are some certainly other costs that we talked about you know the executive pay cuts things like that that will have to evaluate.
In other programs to bring back and then there's just really looking at every line item to scores as far as controlling costs. So.
Yeah, we've taken a lot out, but we brought back some but obviously as we move forward, we're going to be watching cost very very closely carefully.
Okay. That's helpful. And then obviously, it's a very difficult environment for everybody operate but maybe if you can kind of update us on your your capital allocation decisions on how you're thinking about that this fiscal year.
Right now of course.
You know the main focus was to during this pandemic disruption was too focused on keeping the business going so we took the breadth of action I mean going back to stopping our share repurchase program.
We continue to pay the dividend we paid back in April repaid again.
So from a standpoint of our capital allocation strategy number one is invest in the business and ER.
Paid pay our debt down we did that also support the dividends we did that so all thats working as planned the board you know right now with the conditions are the way. They are the next step would be to look at any acquisitions, but right now the focus is more short term.
Term.
In looking at and making sure that we see what ahead of us and making sure we're prepared but I think as far as looking ahead. We we will just focusing on today and tomorrow, you know getting to getting the dividend paid.
Funding the operations being able to fund working capital growth keeping a very strong cash position, which is certainly helped us during this time and focusing on conservatism as we go forward. So.
What we've been doing has worked well during this time so.
No really no real reasons the change.
If marco to see about us add one feature that Ken with sand and he is right on to really since the beginning of this.
Period, we spent.
Tom every day and it's been our primary focus on building. So we want to have a fortress balance sheet and our number one priority is making sure that reserve.
Cash and liquidity position allow us to adjust or whatever.
The c., so as a critical discussion point for us.
Every day.
And we were proud of what we hope that another we have more work to do.
The stood and last question here just out kind of curious line, obviously that you're an ability to kind of travel on how your your face to face meetings with your clients, especially obviously that the clarient and trade shows and what have you.
More bid negatively affected everybody, but you seem to have been able to pivot candy virtual.
Type events for a brief virtual meeting just kind of wondering your thoughts there.
Just kind of given what you've seen thus far do you think that perhaps that kind of changes the dynamics of your businesses going forward when things start to have returned to normal or is that just something you think it on a temporary SEC.
Mark or this is you have on him on board to comment on this question too, but we have just amazing talent in our creative in design Department.
And yes, we always thought and probably still believes that there is no substitute for physical touch of our product and fee in the fabric slide.
And I have been blown away by the ability to redevelop to show these products virtually and I think that we do see.
That is deferring landscape going forward and bogeyman on top of the how you see it how do you see Sean upon in the future now let me put out.
Yes, but I would I would certainly agree with you I think going forward there will be a mix of both and while they're still the trade shows and markets will be an important he filed an update of the capabilities that we've now established with the virtual borrowings in the virtual representation of.
Our product.
Thats something that will be here to stay and we've gotten just very favorable reaction to our customer base as as we both gold ounces method.
Ah virtually I'm, showing our products and yes, I think it'll be a part of our.
Part of our methods going forward.
Doing that.
Got it. Thanks, Thanks, a lot guys I really appreciate Tom.
Thank you.
Okay.
Oh.
Okay.
Okay.
Okay.
Thank you operator and again, thank you to everyone for your participation in your interest in coal.
We look forward to updating you on our progress next quarter.
Yeah.
Thanks.
Oh.
Oh.
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