Q2 2020 Kaiser Aluminum Corp Earnings Call
Kaiser aluminum second quarter 2020, <unk> earnings conference call. At this time, all participants are any listen only mode. After the speaker presentation. There will be a question answer session to ask a question. During the session you will need to press star one on your telephone.
Please be advised that todays conference maybe recorded if you acquire any further assistance. Please press star zero.
I'd now like to him to conference over to your hopes Melinda Ellsworth Madam you may begin.
Good afternoon, everyone and welcome to Kaiser aluminum second quarter in first half Twentytwenty earnings Conference call. If you have not seen a copy of our earnings release. Please visit the Investor Relations page on our website at Kaiser aluminum Dot com.
We have also posted a PDF version of the slide presentation for this call.
Joining me on the call today, our Chief Executive Officer, and Chairman, Jack Hockema, President and Chief operating Officer, Keith Harvey.
Senior Vice President and Chief Financial Officer meal well.
Vice President and Chief Accounting Officer, John for Hewitt.
Before we begin I'd like to refer you to the first three slides of our presentation I'd remind you that the statements made by management and the information contained in this presentation that constitute forward looking statements are based on management's current expectations.
For a summary of specific risk factors that could cause results to differ materially from those expressed in forward looking statements. Please refer to the Companys earnings release, and reports filed with the Securities and Exchange Commission, including the Companys Annual report on form 10-K for the full year ended December 31 2019.
And form 10-Q, four the quarters ended March 31, 2020 on June 30 2020.
The company undertakes no duty to update any forward looking statements to conform to stick with the actual results or changes in the company's expectations.
In addition, we have included non-GAAP financial information in our discussions reconciliations to the most comparable GAAP financial measures are included in the earnings release hands in the appendix of the presentation any reference in our discussion today to EBITDA means adjusted EBITDA, which excludes non run rate.
<unk> items for which we provided reconciliations in the appendix.
At the conclusion of the company's presentation, we will open the call for questions.
I'd now like to turn the call over to Jack Hockema Jack.
Thanks, Melinda welcome to everyone joining us on the call today.
I want to begin today by acknowledging our recently announced executive succession plan. Following a multiyear planning process I will step down the CEO on July 31, and key Carvey will assume the role of president and CEO of Kaiser aluminum, while I'll remain on the board of directors as executive Chairman.
Keith and I've worked together for the past 25 years, developing and implementing the culture and the strategy that have position Kaiser is the highly respected industry leader it is today.
He was at full responsibility for the operations of the company as President and COO since 2015 and during that time. He is focused on building a strong and deep management team as we work through a planned transition for him to assume the additional duties of CEO.
Keith is highly respected within the industry and the company and the announcement of a strong internal candidate as CEO has been met with enthusiasm by our customers and employees alike.
Confident of Qiss ability to lead the company to continued growth and I congratulate him on his new position.
Turning to slide six as we communicated during April earnings call and through extensive investor engagement. Since then our business model is predicated on maximizing opportunities during the expanding economy as well as being well prepared for unexpected economic adversity.
To that end recognizing the cyclicality of our end markets and inevitable economic downturns are ongoing financial strategy focuses on management of liquidity and debt leverage we manage our liquidity to provide funding for sustaining and strategic investments and dividends through the full business cycle.
And really additional capital raise we completed in late April we have approximately $1 billion of liquidity, which provides a strong safety net as well as positioning us to capitalize on attractive investment opportunities.
As a key element of our financial strategy. We also seek to maintain leverage at or below a ratio of two times net debt to normalized EBITDA.
In order to find attractive strategic initiatives, we would allow greater than two times leverage, but only if we have a clear plans to de lever to two times or less.
Turning to slide seven our capital allocation priorities are unchanged our top priority continues to be organic investment with the change in demand for commercial aerospace plate. The 375 million dollar Trentwood expansion project has been placed on hold until market conditions justify the expansion.
As noted during our first quarter earnings call, we temporarily curtailed capital spending to phone only critical sustaining projects, while we assess the implications of cobot 19.
With approximately $1 billion of liquidity, we're positioned to be proactive in funding attractive organic investments to further enhance efficiency and advance our competitive position.
Our second priority is or inorganic investment where our strategy remains unchanged. We are constantly on the look out to acquire businesses that we understand that are complimentary to our existing portfolio and that can be acquired at a price that creates long term shareholder value.
During times of economic distress, there may be acquisition opportunities and we're positioned with financial flexibility to consider attractive opportunities.
Our third priority is the regular quarterly dividend, we consistently test our long term ability to sustain and increase our dividend and we have evaluated a multitude of scenarios for the cobot 19 economy.
And all possible scenarios that we envision we have confirmed that the current dividend is sustainable.
Our fourth and last priority is share repurchases, which we curtailed at March share repurchases deploy excess liquidity beyond what is required for organic and inorganic investments as well as dividends.
In addition, it projected leverage exceeds two times normalized EBITDA, we would seek to de lever before repurchasing shares.
While the Cobot 19 economy is an unwelcome development, we're confident in the long term prospects for the company and are well positioned to capitalize on opportunities to further strengthen our prospects for long term profitable growth.
We have successfully navigated challenging market conditions in the past emerging stronger and better positioned to compete and we believe we will do so again when this market rebounds.
We'll now turn the call two keys, who will review the current state of the business second quarter results in our outlook Keith.
Thank you Jack.
Our second quarter results reflect the impact of covert 19 on each of our end markets in varying degrees as we initially noted during our first quarter earnings call.
Demand for our commercial aerospace applications declined as Boeing and Airbus temporarily halted production and curtailed deliveries while demand for defense applications remains.
While conditions for our service center customers were challenging as many of their customers temporarily shut down during the quarter, Our general engineering business remains strong.
Demand for our high performance Kaiser select products, along with a solid support from our long term customers help create additional pool for our products in the second quarter.
In addition, with lower aerospace shipments, we shifted capacity to meet demand for general engineering plate.
Partially mitigating the impact of lower demand for other general engineering applications.
Demand for our automotive applications significantly eroded during the second quarter as virtually all North American automotive Assembly plant plants temporarily shut down due to the cobot 19 concerns.
Although most automotive manufacturers resumed operations in June restarts were slower and on even throughout the supply chain as facilities continue to deal with restart issues.
As we began experiencing lower demand during the quarter, we leveraged our business model by aggressively flexing cost and the operating capacity at our facilities.
Although there is often a lag between these flexing actions and the related savings are highly variable cost structure allows us to react quickly and appropriately flex costs through all cycles.
Despite the decline in end market demand pricing has hailed as the industry response has generally been to reduce operating levels to match demand.
As Jack noted, we manage liquidity to ensure we maintain a recession tested safety net in order to sustain capital spending and dividends through all business cycles, including periods of unexpected economic adversity.
With total liquidity of approximately $1 billion, we will continue to maintain our capital allocation priorities, including our regular quarterly dividend. The most recent that was just announced at 67 cents a share which will be paid in August.
Before I turn the call over to Neal to provide more color around our second quarter results I want to acknowledge our employees who have continued to work safely.
Following the protocols, we've established for minimizing the spread of the virus, while continuing to perform at a very high level of customer satisfaction in terms of quality and delivery.
Hi, thank them for their dedication and commitment in this very challenging environment.
I will now turn the call over to Neal to discuss second quarter results in more detail deal.
Thank you.
Value added revenue of $175 million in the second quarter 20 point decline approximately $35 billion were 17% compared to prior quarter.
24% lower.
Reflecting lower demand profiles are at Marcus due to the impact of that 19.
Aerospace value added revenue decreased 15% from the prior year second quarter on a 25% year over year decrease in shipment was predominantly reflects the production suspension of commercial aerospace at Boeing and Airbus is another key well, but value added revenue per pound reflects a slight increase due to customer mix.
Automotive value added revenue decreased approximately 58 compared to second quarter last year, 50% reduction incident.
As noted earlier, our automotive shipments were significantly impacted during the quarter as virtually every north America automotive manufacturer separately.
Right.
General Engineering value added revenue was up 1% year over year on a 7% reduction in shipments.
Looking solid pricing and Mitt.
The decline in shipments is primarily results related disruption call back over 19, well value added revenue per pound.
And product mix.
For the first six months and 2020 total value added.
Approximately 9% at 14% lower shipments, reflecting lower demand for our aerospace and automotive applications in the second quarter.
Turning to slide 12.
EBITDA for the second quarter 20, plenty of $34 million declined from $40 million in a prior year quarter, primarily reflecting approximately 1 million dollar sales impact lower demand.
Partially offset by $5 million lower major maintenance costs in addition to reductions and overhead and other.
During the second quarter, we incurred approximately $1 billion entertaining and prevention costs associated with coal that 19, and we anticipate ongoing quarterly costs approximately $250000 related to fire prevention.
EBITDA margins for the second quarter was approximately 20% compared to roughly 23% prior quarter, driven by lower bar and operating leverage.
EBITDA for the first half point plenty of $94 million declined $10 million.
In the prior year period.
Reflecting a reduction of EBITDA second quarter 2023 reasons previously discussed.
EBITDA margin of 24% in the first half 20 funding is comparable to prior period, driven by our record, 27.4% first quarter 2020, EBITDA margin and the drag on margins in the first half of 2019.
Planned and unplanned downtime at Trentwood and lower automotive business over in transition.
Turning to slide 13.
Reported operating income for the second quarter 2020 was approximately $5 million.
Adjusting for $17 million non run rate charges.
Operating income for the second quarter, 2020 was approximately $21 million compared to $35 million in a prior quarter, reflecting the items previously mentioned and the million dollar a year over year increased depreciation expense.
The $17 million and non run rate charges in the second quarter, primarily reflects a $12 million for future for severance and benefit costs as we flex our cost structure and reduce our operating level to align with lower demand along with an additional $2 million reserve increase for environmental issues associated with ongoing.
Historical PCB.
Reported net loss for second quarter, 2020 was $7 million or 41 cents loss per diluted share.
Adjusting for the non run rate items adjusted net income for the second quarter was $6 million compared to $23 million in a prior quarter, reflecting the lower the impact of lower operating income and an increase of $5 million of pre tax interest related to our recent bond offerings.
Adjusted earnings per diluted share to second quarter declined to 36 cents from $1.40 cents in the prior year period.
Reported operating income for the first half 2020 was $50 million.
Adjusting for the $17 million in non run rates are first half 2020 operating income was $68 million down from $80 million in a prior period.
Line, primarily reflects the decrease in EBITDA previously discussed.
Reported net income for the first half 2020 was $23 million per dollar 41 cents per diluted share.
Adjusting for the non run rate items.
This happens as an income was $36 million compared to $53 million in the prior year period.
Adjusted earnings per diluted share for the first half point plenty was $2 in 27 cents compared to $3.24 for first half of 2019.
The effective tax rate for the quarter was impacted by discrete issues during the period, including an increase in states have an oil valuation and an adjustment for non deductibility of executive compensation.
The effective tax rate for the 2020 years is projected to being a low to mid 30% range due to the same items.
We expect our Twentytwenty net cash past via cash refund of approximately $11 million related AMC monetization.
Capital spending totaled $11 million for the second quarter and $32 million or first half a point.
As we limited capital spending in the second quarters all existing products.
During the first half to 2020, we returned $34 billion or cash to shareholders in the form of share repurchases in dividends.
As a reminder, we suspended our share repurchase program in her remarks.
Uncertainties relating to the Anda.
In April we further strengthened our liquidity and financial flexibility between $350 million, 6.5% senior unsecured notes that mature in 2025.
At June Thirtyth cash totaled approximately $711 million, reflecting the additional capital rate.
Borrowing availability on our Undrawn revolver revolving credit facility was approximately $282 million, providing us with ample liquidity of $1 billion.
And now I'll turn the call back over to discuss our book.
Thank you Neil.
Turning to slide 15.
Moving on to each of our business segments. As we noted on our first quarter earnings call. We anticipate full year 2020 value added revenue for our large commercial aerospace and defense applications will be down approximately 15% to 20% from our record.
Full year 2019 results.
Combined these two businesses represent approximately 50% of our total value added revenue.
As we previously noted value added revenue for our large commercial aerospace business is expected to be down 20% to 25% from the prior year.
With sales volume heavily weighted to the first half of 2020.
Demand in the commercial aerospace market has been significantly impacted by Cobot 19, as air travel has slowed dramatically and by continued delays and recertification of Boeing 737 Max.
As we look beyond 2020.
We expect that passenger traffic will recover and subsequent growth and aircraft builds will continue.
However, as both Boeing and Airbus have noted it could be two to four years before demand returns to the record levels similar to 2019.
We will begin discussions with Boeing and Airbus in the third quarter as to their expected needs in 2021.
And while we are optimistic that improvements in shipments will occur next year. It is too early to provide specific outlook at this time.
Our defense business remains solid and on track to continue to improve during 2020.
We are well positioned on all aircraft models, including but not limited to the F 35 joint strike fighter legacy programs, such as the F 18, the F 16, and Efifteen fighter Jets as well as various rotary aircraft programs such as the V 22, Osprey and the should.
CH 47 helicopter.
Turning to slide 16.
As I briefly mentioned in my earlier remarks, virtually all our automotive customers resumed operations in June and expect to continue to operate through the typical summer hiatus.
To meet demand requirements.
In response, our automotive focus facilities have also ramped up production to meet this resurgence in demand.
In addition, we recently secured several contracts with key customers for a number of new automotive programs.
We anticipate these and other new programs previously awarded will begin to ramp up in the second half of 2020, and we'll continue to drive growth in 2021 and beyond.
As we look to the second half of 2020.
We anticipate demand for our automotive applications will rebound from the weak second quarter 2020.
Value added revenue returning to a pay similar to the first quarter of 2020 as customers returned to more normal operations and new program launches reserve.
Turning to slide 17.
Value added revenue for our general engineering applications in the second half is expected to reflect normal seasonal demand weakness.
Challenged by the impact of Cobot 19, many north American Oems are developing strategies to secure and shorten supply lines by accelerating the reassuring of their manufacturing parts suppliers and requesting domestic supply for the raw material needs.
Hi, there select Rod bar and plate products and our expansive network of long time Service Center partners uniquely position us to capitalize on these opportunities as they develop.
Turning to slide 18.
We continue our planned exits of noncore applications and expect shipments to decline to an annual rate of $4 million in 2020, as we allocate capacity to more strategic extrusion applications.
Turning to slide 19, and a summary of our outlook for the second half of 2020.
As we look at the second half we expect total value added revenue will be down approximately 10% to 15% from the second quarter and EBITDA margin to be in the mid teens.
Aerospace and high strength value added revenue is expected to be down in the second half of 2020 versus the first half.
We expect a strong rebound for automotive in the second half with value added revenue on par with the pace set in the first quarter of 20.
And in General Engineering, we expect normal seasonal demand weakness as compared to the first half of the year.
Our second half 2020 outlook for value added revenue and EBITDA margin anticipates, a weaker third quarter than the fourth quarter due to the timing of aerospace sales and approximately $4 million of higher major maintenance cost related to the timing of planned projects.
As previously noted in April we began limiting capital spending to critical sustaining projects only.
However, with greater visibility into our end markets and significant liquidity.
We will begin to be more proactive and our capital spending.
We have decided to resume spending on a number of good return organic investment opportunities to further support our automotive growth and enhance and enhance efficiencies throughout our operations.
We anticipate that capital spending for the full year 2020 will now be approximately $50 million to $60 million.
As we've stated in numerous discussions around inorganic growth opportunities.
We will continue to adhere to the same disciplined approach as in the past.
Employing the same filters, we apply and evaluating prior potential acquisitions.
One we feel that must be a business that we understand is compatible with our existing businesses.
It must have a winning strategy and be capable of achieving a defensive.
Competitive position.
We will not overpay, we will only pay a transaction price consistent with creating long term shareholder value.
And we must meet our liquidity safetynet and leverage guidelines.
Turning to slide 20, and a summary of our comments today.
Our second quarter results reflected the environment and conditions with which we had to operate as cobot 19 impacted demand in each of our end markets.
We properly executed on our strategy and aggressively flex cost and operating levels to align with changes in business conditions.
Despite the decline in demand.
Pricing held well as the industry has generally responded to lower demand by reducing operating levels.
We expect second half value added revenue to be down approximately 10% to 15% from second quarter with resulting EBITDA margin in the mid teens.
We intend to begin relaxing our earlier hold on capital spending and will become more proactive with planned investments to support new programs and automotive and other efficiency projects, while continuing to fund critical sustaining capital projects at our facilities.
We have a proven solid business model.
As Jack noted our model is predicated upon being well prepared for unexpected economic adversity, and our experienced managers ability to flex operations and execute well in all market conditions.
As the balance of 2020 becomes clear.
We are all well positioned with approximately $1 billion of liquidity.
Providing a strong safety net and the financial flexibility to position for the recovery in our key markets.
Taking advantage of opportunities as they present themselves to further advance our competitive position.
I will now open the call for questions.
As a reminder to ask a question you will need to press star one when your telephone again, that's star one on your telephone to ask a question to withdraw your question press the pound key please standby, while we've compiled acuity roster.
Our first question comes from the line of Josh Sullivan of the Benchmark Company. Your line is open.
Hey, good afternoon, Jack Neil Melinda.
Yes.
Just on the transition of the aerospace capacity over the general engineering side, how much more room is there to go.
And the general engineering market there additional aerospace transition just as we look at the back half the year with Arrow volumes.
Thanks for the weaker.
Well, we actually are seeing some pretty good demand there Josh.
Couple of markets in particular as the automotive business comes back course opportunities for tooling plate and other applications provide us an opportunity as well as semiconductor which has held up very well and shows continuing strength in the second half of the year you may recall in 19, we actually were able to ship capacity.
From GE to more aerospace.
That flexibility at Trentwood is really served us well in these two particular markets in the in the in the fact that we're able to ship that capacity fairly quickly and meet demand if one market wayne's versus another so we think that those opportunity will continue in the second half.
And of course the outlook in 2021, we'll get to that later, but we.
We think we're positioned to take care of any of those and I mentioned in my in my covered remarks earlier, we are seeing some reassuring beginning to happen.
In the North American opportunities and as those happen and with the products in the and the service center relationships. We have we're really well positioned to take advantage of those.
In what verticals are those reselling efforts. The is it semiconductors are there any other ones to call out.
Well semiconductor is part of that but we're seeing that in the automotive supply line and really through the service center customers and that's really where big indicator came to us really in the middle of the second quarter a lot of supply lines had been disrupted.
Just because of what was brought on by covert 19, some of the issues that have taken place with tariffs and other things and we believe that's continuing to drive a resurgence of that reassuring. So as automotive progresses and others. We believe more and more of that is going to focus on domestic supply.
And then just on the of its been a good gentlemen, flexing costs here, but what inning do you think your end.
How much more do you think you can go on that that cost plus.
Well if you look at the second quarter. It was interesting for US first we flex aggressively on the automotive side.
And as as we know the automotive.
Assembly plant shutdown early in the quarter and so we flex a large percentage of our operations early on and then as we know a couple of months later all of those came back on so we flex again to respond to that demand. So we we not only brought back majority of the.
The workforce that participate in those markets, we actually have with some of these new opportunities I mentioned, we're bringing back more employees than we had prior to the outages due to coded 19.
So so we're probably unless we have a second wave we may be in the in the third quarter, there and automotive is Steve if you move over and reflect on the aerospace side, we had some fairly decent demand in the second quarter.
And so while we did flex some of our operations. There we still had a fairly good demand that we had to meet.
With our outlook in the second half.
We have room to flex operations, there and and are and will do so as demand warrants.
We might and then just one leg quarter.
Correct.
Got it.
And then just to follow up that on the automotive side can you comment on what it looked like in June I mean, its anyway to frame. It in terms of lead times are just just how aggressive was the automotive supply chain and.
Picking up in demand.
Well it was fairly quick.
In the and although it was quick.
Not only that we have to bring back to the employees to to begin that so we had an extensive re training to get used to that but we also had retraining to how to work safely in a covert 19 environment.
So so that started fairly quickly and as I mentioned a lot of the end users there were fits and starts to their returning.
So June was a was a chaotic month.
But now we're sort of in a group through July.
We have a better outlook of what the second half looks like and so we've ramped up and gone accordingly, there. So so June was a transition month for us, but its happy to be back we see good strong demand there and and hopefully we'll see that continue as we go forward.
The other promising news on that side, there's a resumption of planned launches that had been temporarily put on hiatus and and so with those.
Happening in the second half and continuing into 2021, we really see good growth there.
For us.
Okay. Thank you.
Thank you.
Yeah.
Thank you. Our next question comes from a line of Curt Woodworth of Credit Suisse. Your line is open.
Yes, Hey, Jack in key Hope you guys are well.
Thank you good morning, Curt good morning.
First question as on on Aerospace.
The fact that you still saw a decent demand into Q, it's somewhat surprising just given.
The OEM shutting production as well as could be continued delays and 737 Mac. So.
I guess one of the questions I have is is what what was the driver of still somewhat decent demand into Q you had a competitor they reported yesterday and I think their volumes Ross close to 40% and then specifically for the Max.
I think we in the buy side, it's a hard time really understanding exactly how meaningful that platform is the Kaiser we know, it's it's a very material consumers of aluminum plate and sheet. So.
The degree to which that eventually recovers can you provide any.
Insight in terms of thinking about how that could potentially benefit you going forward.
Certainly.
Well the demand in second quarter of again, a lot of discussion with the.
The airframers have taken place throughout the year and and we of course, we had a record year in the for record quarter in the first quarter. The year. So there was continuing demand there, but but as as the cobot 19 began to impact and of course, the recertification did some delays there on the on the map.
Acts as you pointed out.
We saw that continue to two to slowdown.
I put it in the fact that really strong relationships. We have with these end users and they were we're in discussions with them almost daily onto their needs and onto the short term and the longer term I can tell you why a lot of our discussions have taken place on the shortages and the and the end.
Extension, maybe be required and and looking at shipments currently in 2020.
We've also had dialogue about the resurgence and they're concerned about capacity being available when they do come back. So so we're balancing that between us as partners and and I.
We're working with them.
Because it's not a short term play for us it's a long term.
So thats why we will seek we're working with them on shipments in 2020 and its partially the reason for slowing demand in the second half.
I think the Airframers are also working to help manage the inventory in the supply chain I mean, they've slowed production they've they've also been working with us is.
On shifting capacities, perhaps out later to manage that inventory channel. So I think.
The industry is working very well in managing that in some pretty challenging conditions.
With regard to your second point that occur on the Max will the Max is very important to Boeing obviously I think if you look at the backlog that currently exist there as that Max is at least 70% of their of their backlog. So.
And I know theres been a lot of discussion about some cancellations with regard to that aircraft.
But but their their backlog still remains robust and I think the industry is still supporting that that particular airframe very well and quite frankly with lower production levels and with the backlog that exist at both Airbus and Boeing we still have over 12000 planes, which are roughly seven or eight.
Irrs of production rate. So so we think long term all the conditions are still in place.
For a good solid.
Sequential growth in this business once we get pass these cobot 19 concerns.
Okay. That's that's super helpful.
And then similar question to what Josh was was asking in terms of the I guess displacing back into more GE from.
From an arrow and there is a pretty major a common alloy trade case ongoing with ending 17 countries and I know that you don't do a lot of common alloy products, but.
Clearly the outcome of that would be meaningful to kind of all.
Product so.
Can you quantify at all.
From a volume basis, how much you could say that into GE would you also be willing to try to even go into the more commodity spectrum just to get.
To achieve a certain target utilization rate at trentwood or is that not really feasible. Thank you.
Sure Kurt if that's not really a market that we would look at for the Trentwood facility. We're the largest domestic supplier of heat treat plate in North America, and and as our capacity becomes available.
Perhaps due to lower Aero shipments, we've seen our our distributor customers the be very.
Very pleased to come back and and take more volume from us and actually have re shoring and that concern of supply chains.
Disruptions has really been a catalyst I believe and keeping things very very possible for us on the GE side.
Great. Thank you very much vessel that.
Thank you Kurt.
Thank you at this time I'd like to turn the call back over to key target for closing remarks, Sir.
Thank you.
Before I hand, the call I want to formally acknowledge and thank Jack for his leadership and commitment to Kaiser aluminum our employees and our stakeholders over the past two decades.
Your impact on the company and each of US has been profound Jack and has prepared us well to move Kaiser into our next chapter.
In 2021.
As Kaiser aluminum, we will celebrate our 75th anniversary and as you've said with the strength of the company. We've built we're just getting started.
On a more personal note your mentorship to me over the last 25 years has meant more to me than I can effectively express here.
I am honored and humbled to assumed the role is Kaiser aluminum is next CEO and I look forward to continuing to work with you in your new role as executive Chair as we continue to execute our strategy and ensure Kaiser aluminum remains best in class.
In closing on behalf of Kaiser aluminum, our employees and our stakeholders I would just like to say thank you Jack.
You made a real difference to all of us.
With that thank you for joining us on the call today, we look forward to updating you on our third quarter 2020 conference call on October. Thank you.
Ladies and gentlemen, this concludes todays conference call. Thank you for participating you may now disconnect.
Great.
[music].