Q2 2020 Uni-Select Inc Earnings Call
Net doom in vain peers up my picking the best small saumen because.
Cut out because I feel yaki that he had tickets don't enviable.
Operating guess don't apiece. So it's what are still could really fun.
The best Monday <unk>. So that's why it's evolution that don't fit the likelihood that Jewish no shipped is FL should a big Amy Synnex.
Good morning, ladies and gentlemen, thank you for standing by and welcome to the Uni Select Inc. Twentytwenty second quarter Conference call.
This time all participants are in the listen only mode. After the speakers presentation. There will be a question and answer session. That's a question. During the session you will need to press star one on your telephone. Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero I will now like to starting to come.
Conference over to your Speaker today, you always you know chief legal officer, and corporate Secretary Uni Select please go ahead.
Thank you Julie good morning, everyone and thank you for joining yard for do you like second quarter Conference call.
Good thing this morning for Brent presenting <unk> CEO of units elected president and CEO of getting again automotive group.
<unk> Executive Vice President and Chief Financial Officer.
Following their comments, we'll open the call for questions.
Please note that all documents referred to.
It's called including this webcast presentation can be found on our website at any select dot com indie investors section.
As noted on slide two I would like to remind you about to caution regarding forward looking statements, which apply to our presentation in column.
Oh, I'm, sorry, expressing U.S. [laughter], except as otherwise specified.
With that let me turn to call over compressed.
Thank you Laurie.
Morning, everyone and thank you for joining.
Our second quarter is the first quarter that we report the full impact Workover 90.
As expected our results are significantly lower than the same period last year.
What are better than our initial expectation.
First I would like to thank our team members for the countless hours and sacrifices maiden past few months, we're proud of how the entire organization successfully came together and implemented the actions required to deal with the impacts of the pandemic.
We are especially thankful to our customers members and supply partners as we recognize they too have been adjusted to the there's new norm.
We trust the updates we provided have been beneficial to the financial market.
Overall, our actions resulted in a much better financial performance than we had first anticipated and we continue to see encouraging signs of recovery in each of the business units.
Today I will provide a quick overview of the market conditions, an update on our Cowen 19 measures with key take away for the second quarter. The status of our continuous improvement plan. Following my comments, Eric will review, our profitability and financial condition.
And we will provide an outlook based on the visibility that we have as of today, let's turn to page four please.
As you know the automotive aftermarket is an essential services industry with that said it is it is and has been affected by the pandemic and the U.S. The CCC reportedly repairable automotive insurance claims were down 35% for the second quarter of 2020.
Compared to the same period last year. However, we have seen a mark month over month improvement from April to June.
Well April was down over 50% May was down 34.5% and June was down 25.7 half of the impact from the peak. Our performance are finished master mirrors the industry trends at this point.
Turning to Canada. According the desk of research of Roland Berger.
Total miles driven and April were down 35% and 4% in June.
CAG has been the least impacted them has remained strong through this period, we're monitoring the forecasted miles driven as they are expected to be reduced by up to 14% and 2020. According to NR can international transport Yeah.
And the UK the impact from the pandemic hit hard initially but has been the quickest to recover in fact, according to the UK government Statistics Office Road traffic was down 33% of normal levels in April 50% in May and 69% in June.
And we have seen our revenues were down accordingly as well.
While the industry is certainly impacted.
We are seeing signs of recovery.
As a containment measures have been lifted the market is recovering we have it and we have adjusted our actions accordingly.
Please turn to page five for covert 19 update.
Recall that on the onset of colder 19 in March we quickly and proactively implemented implemented measures to minimize the impact on our operations.
We put in place stringent protocols for social distancing and hygiene precautions to safeguard our team members our customers in supply partners.
We have also implemented temporary measures for business continuity, we furloughed approximately 50% of our workforce, we reduced work hours by 20% or salary reduction for most team members.
We temporarily closed about one third of our stores across the network and the stores that remain open we're operating at reduced hours.
We also implemented a cash preservation plan to ensure maxim liquidity and financial flexibility.
We tightened the management of working capital and non essential expenses reduced capital expenditures and customer investments and the board of directors reduces from numerous option and suspended the dividend.
As of June Thirtyth, we're pleased to report that more than 80% of our company stores were opened and operational while 12% of our stores were operating in reduced hours and 3% were limited.
Activities for Central services. In addition, 30% of our our team members were temporarily furlough and about 10% of our team members were working for a reduced schedule.
In addition, the pandemic helped us identify further opportunities to accelerate our transformation.
From those we're driving a number of initiatives and each of the business to improve the overall efficiencies in conjunction with the business where the businesses. We have formed a continuous improvement team that focuses on identifying and implementing these various initiatives.
Let's turn to page six we made great strides in our cash management and access to liquidity in the second quarter, we successfully refinanced our debt.
Given us access to additional liquidity and more flexible financial terms and conditions. We also managed our inventory and receivables and we have been able to lower our total net debt by 24 million in Q2, despite the revenue headwinds brought on by the pandemic.
It will provide more details on this in a moment.
What remains uncertain as to how long the recovery will last we will continue to monarch, two announcements or the government and adjust to the dynamic market conditions to ensure we remain our leadership position in each of the businesses.
The automotive aftermarket.
And industry has been a resilient in the past and we're convinced that it will would be no different this time.
Let's turn to page seven.
In Q2, given the actions we put in place on the onset of the pandemic and the pace of recovery, our second quarter results were better than expected as stated.
Consolidated sales for the second quarter were down 34% to 303 million from 456 million last year. The adjusted EBITDA amount of $15 million from 36 million last year. Despite these results we generated 35 million of cash flow from the operations. We ended the quarter with 431.
In stores our network at the same level as last quarter. The overall results were impacted by lower sales due to the Coburn 19, which directly impacted our gross margin and absorption of fixed cost and addition, they were impacted by the expected revenue decreased from the integration of the company stores in the last 12 months.
Additional revenues excuse me additional reserves for obsolescence and bad debt, both which totaled about 6 million more than last year as well as a lower incentives due to the optimization of inventory.
However, since April we are showing encouraging signs of recovery.
Were steady growth month over month, while sales were down about 50% in April at the end of June were 85% over the same level that they were in the same month last year.
Throughout the difficult operating environment for all of US we maintained our market share and we continue to drive continuous long term improvements and to all three business models.
Let's turn to page eight please.
And the second quarter, we accelerate or a continuous improvement initiatives. These initiatives are based on long term approach to further improve productivity and the efficiency of all segment.
While ensuring the customer needs or remain our focus our main objectives of the plan or to ensure that our customers are served to the highest standards that operations and service models are positioned to meet the long term demands and expectations of the market in which we operate.
We will continue to be a strong market leader, while ensuring that safe and healthy environments for all parties.
We expect the newly implemented continuous improvement plan to generate between 28 to 30 million an annualized savings by the end of 2020.
The execution of the plan started in June.
And we're well positioned for the recovery in the post the growth post KOVA 19.
At the end of June we generated about half were 14 million of the annualized cost savings is important to note the.
The realized realize annualized savings of the second quarter are based on the first quarter 2020 operating run rate.
Again, we would like to thank our Martin Currie manufactured channel partners for their collaboration support.
And certainly our customer success and safety are and will remain our primary focus.
With that I'd like to turn the call Air for financial review Eric.
Thank you breadth and good morning, everyone.
Please turn to page 17 for consolidated profit.
The second quarter, we reported a loss of 24.2 billion 57 cents per share versus a profit of 6.3 million or 15 cents per share last year.
Adjusted earnings for the quarter, we're a loss of 9.7 million or 23 cents per share versus a profit if that point 4 million.
25 cents per share that too.
The decrease in adjusted earnings was mainly attributable to lower adjusted earnings before tax and a different income tax rate.
Should be noted that our Q2 results do not include any benefits from the Canadian CE WB program, but is expected to be in Q3.
Now, let me comment on our capital on page 18.
Recall that our second quarter cash flow from operation is typically neutral to positive.
We're able to maintain the seasonality trends given it a facebook.
Where our revenue were impacted by 34% compared to the same period last year.
We generated 34.9 million of cash flow from operation in the second quarter versus 97.2 that.
This positive cash flow was mainly due to our cash preservation plan.
We continue to optimize our adventure yet finish messer as well as in the other segments, which improve our working capital by about 73 million year over year in fact since the beginning of the year reduce our inventory level, approximately 140 million, which a minimum of a 100 million should be considered permanent reduction going forward.
In addition, with emphasis on the collection of receivables, we improve our working capital by other 51 million year over year.
However, these cash inflow were more than offset by the timing of fables as we had highlighted last quarter and lower operating results.
As part of our cash conversion plan, we kept our capital deployment to a minimum.
The second quarter, we continue to invest modestly in Capex and merger.
Pay dividends and also pay down debt.
Note that the dividends paid in April was the last one paid as all future dividends have been suspended in order to provide more financial flexibility.
We generated $12.9 million of free cash flow for the quarter compared to 32.1 billion last year.
Variation is primarily due to the decline in margins mainly in relation to the lower volume rebates associated with the impact to pull the Nike as well as higher interest payments on long term debt.
Turning to page 19.
On May 29, we successfully secured new credit facility, providing access to additional liquidity with more flexible financial terms and conditions.
The new 565 million unsecured credit facility, which will material at June Thirtyth 2023 consist of $350 million revolving credit facility and $250 million term facility.
These new facilities increase our total available liquidity by an additional 100 million to about 215 million.
They also provide a more favorable covenant structure and more latitude to manage our business on it occurred cosmetics.
As at June Thirtyth way 20, our outstanding total net debt stood at 444 million, including 94 million of I pressed lease obligation.
Decrease of 24 million versus the 468 million and 96 million respectively pretty materially.
We're very pleased that even in this difficult operating environment, we were able to reduce our debt level on an absolute basis from the quarter from last quarter.
Obviously, given the decrease in profitability. The same can be said for leverage ratio. When you exclude I have 16 lease obligation total net debt to adjusted EBITDA stood at 3.6 time versus 3.18 times port on the same period last year.
Having said that we were in compliance with all our bank covenants.
Based on our assumption that expectation, we believe that our current liquidity and future cash flow in countries will be sufficient to meet or operating financial and capital needs.
Turning to page 24 the outlook.
We are seeing encouraging fines and are working on the assumption that demands will continue to progressively improve in Q3 and be back to more normalized sometime let norm normalized levels sometime in the back half of 2021.
However, there remains significant uncertainty going forward from the implication of the pending mix and it is difficult to estimate or predict at this time the potential impact in this context, let me provide you with some color on what we see for the balance of the year with the visibility we have.
July consolidated sales continued to hold an improved sequentially over June which is a good thing, but it is hard to determine at this point if it is tangible or just a question uptight.
More importantly, we expect to encounter in Q3, some temporary supply chain issues as manufacturers are challenged with the spike of reason demands.
This issue to be subset to subside itself by the end of third quarter, but it could temporarily impact some of our sales.
In general we expect the aftermarket to recover more rapidly than they are refinish market has lower miles driven at a significant impact on claims.
More specifically, we expect finish master ourselves to recover on a regional basis as opposed to on international bases. As there is an increase in coven 19 cases and selected states that have returned to lock down measures and thus are experiencing a decline collision repairs and once more.
Furthermore, national and MSR sales are recovering faster than the independent market.
CAG second quarter 2020 sales include pent up demand. However, we expect miles driven gets you to recover in Q3 20 on the back of normal seasonality. It is also important to point out that the refinish market in Canada is experiencing similar trend as in the U.S.
Finally recall that in second half of the year is always a softer period, but TPH.
However, the marketing Q4, 20 is expected to get a boost from the ministry of transport required testing, which was postponed to October from April two two recorded 19 that could offset some of the usual.
Not completely seasonality.
With regards to cancers improvement plan, we expect the bulk of the remaining announced savings to be realized in Q3 individual amount lift in Q4 as a reminder, these savings are based on our Q1 run rate.
After that it continues improvement journey will continue as part of the ongoing culture and benefit for the long term.
We will continue to focus on our cash met had been in this period of reduced demand for the balance of the year, we will manage capital investment in working capital prudently with increased sales. We now expect our cash outflow in Q3 to be lower by approximately $25 million to $35 million on our total account payables compared to the second quarter.
As it relates capital expenditure and customer investments, we are in the process of relaunching certain initiatives as each business recovers.
For 2020, we now expect the investment in capital expenditure between 16 to 18 million and approximately 50% to 60% where do we invested in 2019 for merchant members and incentive to customers.
Taking into account all these variables, we expect our total net debt level at the end of the year to be similar to last year.
We are confident that we had a solid financial plan to address the current price and sufficient liquidity to meet our current operating and capital need.
This completes the financial review of the second quarter I will now I'll turn the call overage rent because.
Thank you are in conclusion, we are pleased with Q2 performance in light of the global crisis, and our team's ability to execute.
In the extreme circumstances and look forward to the new opportunities with our continuous improvement plans.
While we are adapting to the new norm a strong emphasis is being put on the various sales initiatives in each of the businesses.
The actions, we have and will take will not only benefited us in second quarter, but will position us positively for the long term.
I would like to thank our team members again for their commitment to adapt to execute.
For our customers, our suppliers and shareholders for their support.
This concludes our presentation, we're now ready to answer your questions. Julie If you open the line too.
Q as a reminder, if you like to ask the question Press Star one.
Phone to withdraw your question.
Keith Please hold while we compile the question.
Your first question comes from the line of Southwest will love what would the shutdown. Please go ahead.
Yes, good morning, gentlemen, congratulations for a strong core.
Thank you. Thank you Jeff So I appreciate the indication for net sales performance in June. So this is very helpful to them to see that trend, but I was wondering if you could help us understand the ALD sales that progress in July and maybe on the on that segment our segment. Please.
So I would categorize it in the automotive as a whole we've continued to see marked improvements in both the automotive segments I would see the refinished business, both in Canada, and the us or slaughter recovery as Eric mentioned.
[music].
It's very much in line with what we're hearing and seeing from the industry with both our paint manufacturers as well as.
The market, but we're certainly in line with the paint we don't believe we've lost any market share.
But it's just a slower trend than than current currently with the automotive side.
Okay, Great and then.
Jerry on the coming you just said about the recovery, India or two parts market. What did the strategy you said that the Canadian segment will recover maybe faster than in the UK in Q3, and then maybe a switch in Q4 add to that boost fund the ministry of sense for high required.
Well look I think breaking in business.
You're right that it's probably the business that will have the strongest sales performance compared to the two other businesses in Q3.
No I do want to caution everybody that there is seasonality in those businesses than that seasonality will remain with us in Q4 in the cake business and remember that 40 be.
Early in the back half of the of the of the year right. So.
On the back of that.
We do we think thats, the administered and transport in the UK by pushing the.
And at the Reinspection through Q4 from the April.
Delays will have a bit of a bump in our in our revenue, but not to offset the full amount of these in the seasonality in the UK.
So it's a bit of a balance a balancing act so they've got to think about and as we pointed out we don't expect finish master to recover the same speed.
It's going to take a little bit lager for for that business to recover.
From our perspective.
Okay, great. Thanks for your color and then one last for me.
You mentioned the supply chain issues that are expected to potentially impact sales in Q3 I was wondering if this.
This situation was more related to that.
Total bart's or it's across the board. Thank you very much yet so a very fair question I would tell you we're seeing a more in the automotive sector on the part side than the pain, but I would tell you we are seeing some issues on the pain to be transparent.
We do believe is really driven by the sheer spike in demand and the recovery of the automotive side of the businesses.
From our key manufacturers were working very much collaboratively with them on and we do we do believe it's a short term issue.
And is there any anyway to quantify what might be the potential impact in Q3.
I don't always in percentage of sales already said too early to death.
Your your latter statement is correct. It's just too earlier quite frankly, we're we've experienced in the last.
Probably two to four weeks and.
Well there can I try to be very transparent with you guys and give you.
As much relevant information.
As we see through the process.
We felt it.
Viable to sort of signal that right now, but we don't have any quantify quantitative.
Impacts at all.
Perfect. Thank you very much the fog.
Thank you to also.
Thanks.
Your next question comes from the line of Jonathan Lumber with BMO capital markets. Please go ahead.
Good morning, Jonathan.
Good morning.
Just picking up on the supply chain issues.
I mean, the auto parts businesses carried quite a bit of inventory on the warehouses is there any way to sort of.
Size the portion of skews that could be affected or is it really across the board.
Well, we see it and we see it is segments with specific manufactures and when it really happens it depends.
We carry over we catalog over 3 million skews and 500 manufacturers.
So you're right. It's is it has a very broad base, but when you look at it.
Right now and we just we're monitoring it we've got teams on at full time to make sure that because through Q2, we had excellent fill rates our supply chain was very strong.
And we were able to lower inventories without sacrificing any any supply chain.
Compromise and so we're just.
We're cautious about.
The recovery of that in our growth back in Q3, but it's too early to tell.
Jonathan at this point.
Can you comment on the July accelerates or it's too early to say.
[music].
I would tell you that were were down slightly.
From where we were in Q2.
Not alarming at any moment, but certainly.
We're just concern with the if our acceleration continues that could be estimated some but.
That's all.
Thank you.
And how do you see.
Payroll and benefits changing into Q3, I believe you have applied for.
Government support programs like the CE WB.
Im just curious if you have any any.
What size of benefit you might be.
Yeah, the Jonathan it's Eric I think that.
From the third the second and third periods under the program.
In Canada, we expect the amount to be roughly in about $4 million Canadian.
I would actually.
Accounted for in Q3.
We're in that process as we speak and we've been very diligent to ensure that were within the boundaries of the programs.
Theres been a lot of.
Guidance and rules issued over time on this four reps.
We want to be prudent to make sure that we we followed in context of what the regulator warrants.
So that's a that's on its really and as it relates to the west we don't expect any real tangible benefits in the UK there there will be some.
But it's a bit or the also for the UGI.
Okay. Thank you and.
Brent circling back to your comments on refinish market I.
I believe the industry is talking about.
That being 80% of prior year levels at the end to end of June is that consistent with what.
You're seeing in the U.S.
Well I would tell you that everything we've seen as you know, it's probably in that 20, 25% to 35% range.
In June.
It is on the if you're looking at manufacturers of the CCC reports.
And we believe we're certainly in line with that with what we indicated.
By month finished masters trended.
I'm, sorry, I wasn't clear I was speaking to the exit rate.
Okay. So I mean, I think everybody's expecting it to be in that I would argue.
Our guideline is probably 15 to 25.
And Twentys, probably a safe number in the middle.
But and so were but where is dynamically as Eric mentioned is happening by region instead of a global.
So it depends on the density, California in the west as really being impacted again with the cobot impacts and were very dense in California as you know.
So we're monitoring the sensitivity this I mean dynamically everyday.
Every day.
But clearly as is not a fundamental flaws.
Of the business is just the sheer demand issue right now.
Okay. Thanks can you remind us how.
You see the.
Multi customer requirement implemented on Q4 boosting demand in the UK and.
Yes, sure give us idea of what impact us might have thank you.
Quantifying it is.
Suffered but what I can tell you is the administrative transport suspended Vincent minute 30 inspection back in April because of the coated.
Postponed those inspection basically to Q4, so we would expect a bit of a pent up demand linked to that in Q4.
Obviously someone that drove his car needed a repair in the meantime got the inspection that at the same five right. So thats, where the is not willing to say that everybody did not have their car inspected.
Because if you had a repair to be done probably did infection at the same time.
What do we believe that Jonathan is some of the them as I should add materializing due to a has been pushed to Q4 because of administers transport Minister inspection.
Sure, let us should help the seasonality in that case, but I do want to caution everybody that there will still be darwinian seasonality the UK.
Thanks, Thats clear ill pass the line.
Thank you.
And your next question comes from the line of sterile young with TD Securities. Please go ahead.
Good morning there.
So first question, obviously quite a bit in noise in the quarter I was wondering if I could get that maybe a little bit more detail what the margin profile look like.
To go month by month, but sort of exiting the quarter, because you're taking a lot of costs and obviously sales have recovered. So just sort of what run rate margin might look like at current levels.
Yes look I think it's a you're right that there is noise in the quarters simply because we had a lot of to our employees that were on further during the quarter. So that's why we're trying to make a distinction between the run rate of Q1 and the cost actions taken in how we foresee those cost actions reflect against the Q1.
Operating run rate.
The $14 million cost out that we took and towards the end of June those should be looked in the context of their Q1 run rate cost and it's a lot of those employees where either on for a low.
Or reduced hours right. So I think front from a modeling standpoint, you need to look at from that perspective, and as we said we expect to crystallize. The second portion of our savings right that will range between 28 that $30 million on annualized run rate to be materializing into into Q3 and quite frankly.
You should all be done by mid August or most of it will be done by mid August is our expectations.
In terms of what the overall operating in run rate look if you take that the 28 that $30 million operating costs on annualized basis, knowing that there was 40 crystallized in July and June sorry, and the balance will be done in Q3, I think that gives you had a said the pretty good said so the operating expenses.
Anyway.
The key variable quite quite frankly, there are always on the topline right I think we've done what.
Yes.
Offsite I think we've done a pretty pretty good job and extensive job at all aspect.
And now we know we're well positioned to to manage the business with the current revenue level and I hope that the revenue will will rebound further into next six months.
Okay great.
And then you made a comment on CMS. So it was our activity levels are coming back faster I'm. Just wondering if you could maybe give a little bit of color on on some of the market dynamics and how things are playing out your customer base in terms of.
The mom and Pops versus Dsos.
So.
I'll, let it ill, let Eric answer a in just a moment I would just say from a on the traditional side.
We saw them to be very consistent throughout the co would.
Period, It was the msos that actually contracted probably more in the national accounts.
Being larger and scope.
And more of a production type of business, we've certainly seen them on as a reopened.
To to come back to their market share.
Growth in they've done it faster than and quite frankly, I think we expected.
Not bad news is good news.
But it is it is just a trend within the sector. So we.
We still remain.
Dominant supplier to both channels and.
And that was just.
A flavor in the quarter.
Yes, I think would that Brent I alluded to the pain manufacturers I've been the.
Also seems like very similar things that we've seen.
And the.
Sorry there.
Yes.
So the the.
The traditional segments as Brent said was treated fairly constant in the quarter, but it's the is the variation that the national account level, where we saw higher decrease at the beginning of the quarter and all your pickup towards the end of the quarter.
I believe one of the painting Matrinch also indicated that they did not experience or thought significant bankruptcy at the independent level.
And we havent seen any specific trend at this point.
So we'll see an infill obviously, we're monitoring the situation.
Okay, and then at the at the distributor level.
You've seen any competitive shifts or changes or is there any expectations for further consolidation that might change that competitive dynamics as we.
Shipped through turn it back into cobot.
I think it's a little early to tell that that dynamic at this point.
I think consolidations inevitable in all three business segments overtime.
This is a matter to your question when.
So.
Okay.
And then just one quick one when you say activity levels are back at 85%.
With that the kind of.
The last week of June or exiting or is that and is that consistent with what you're seeing now.
Well.
When you're at where we're seeing this I think you have to thinking more about the month than that week.
Because we don't we'd over the report on a week by week basis quite frankly.
We do track that's on a week by week basis, but dark on it was more towards the month.
Okay, great. That's it thanks, thanks, guys and congrats on the good results. Thank you very much.
Again, if you like to ask a question press Star one on your telephone Keypad. Your next question comes from the line of Secretary Eversheds National Bank Financial. Please go ahead.
Thank you morning, everyone. Congrats.
Thanks.
Morning's I agree.
Apologies in advance and disconnected for awhile.
Good question, sorry, I've been asked my apologies.
Are there any stores that you were able to reopen that were subsequently shut down again, what's happening in states.
No, we don't but where we have seen is having to flex hours with any given stores.
And obviously you with the with the U.S.
Market.
It would certainly not at an impossibility that could happen because I agree because as the.
Pandemic.
Has the impact of knowing we've seen some markets clothing, and shutting down but right now so far we've done rider is to reduce hours specific stores if that warranted.
And we will continue to flex if need to be.
In the seating for the congrats reopening in stores throughout July.
The sorry, delaying broke a little bit.
We see.
Up further progress in store reopening.
Yeah, we we are reopening certain stores and we'll continue to reopen certain stores. We've done that in July and there's a few that will open in August.
But also obviously as part of our plan and restart chicken restructuring plan. There is certain stores that will not reopened.
And we'll announce that to the market that those are being permanently shutdown.
Understood.
Do you feel will walk us through the potential supply chain issues, and maybe put a price tag on the impact.
It's too early to to determine the impact to supply chain.
The supply chain disruption that we may or may have in the businesses at this point.
I would you say that we're proactively managing that with our supply partners.
And helping them with everything we can from forecasting too.
Alternate suppliers or supply chain alternatives for our customers in the meantime.
If if it's needed.
So at this point, we don't have any real color.
It's just something that we're living through day to day part of the dynamic recovery of the Covance.
But.
And last one from.
Any impact from government grants for eating out among.
[music].
Yes, there was about 700000.
Dollars of subsidies and our overall results as I pointed out I agree the CW b.
Our not in our Q2 results benefited from that is expected in Q3, two to two in about $4 million media.
With that.
Hello.
Okay and there are no further questions at this time I will turn the call back over to their presenters for closing remarks.
Thank you Julie.
Thank you for joining us today and thank you for your support.
We will continue to update on our progress and we look forward to our next quarterly call with you.
Thanks and be safe.
This concludes today's conference call you may now disconnect.
[music].