Q2 2020 Houghton Mifflin Harcourt Co Earnings Call
Ladies and gentlemen, thank you for standing by welcome to the whole Linhart second quarter Conference call.
Time, all participants are in listen only mode.
For the speakers presentation, there will be a question answer session.
What's the question during the session will need to press star one.
[music].
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I would now with the and the conference over to Brian Chapman Senior Vice President Investor Relations. Thank you. Please go ahead Sir.
Thank you and good morning, everyone.
Before we begin I would like to point out the slides referred to on today's call can be found on the Investor Relations section of our website at HMH CEO dotcom.
A replay of today's call will be available until August 15th 2020, and the webcast will be available on our website for one year.
Thank you was also filed earlier this morning, along with our second quarter 2020 earnings press release.
Before we discuss our results I encourage you to review the cautionary statement on slide two four customary disclosures.
Further information can be found in our regular FCC filings.
In addition, please refer to the appendix and our slide presentation for a reconciliation of our non-GAAP measures to the most directly comparable GAAP measures, which is also posted to the HMH Investor Relations website.
This morning, Jacklovich, HMH, as President and Chief Executive Officer.
Joe Abbott H. majors, Chief Financial Officer will provide a company update as well as an overview of the company's second quarter 2020 results.
After our prepared remarks, we will open the call to questions.
During the Q1 <unk>. Please limit yourself to one question plus one follow up you may get back into the queue. If you have additional questions.
Now I'll turn call over to Jack.
Thank you Brian good morning, everyone.
Today I'd like to talk like shared with you our perspective like covert Nike continue disruption in education.
And how that is driving increasing demand for eight you're making digital solutions.
Calibrating, our digital first pinnacle strategy.
First I'd like to share my thanks to our each major employees.
Her being solutions oriented customer focus during this extraordinary period.
Our fantastic team has enabled us to continue providing vital resources.
Educators.
<unk>.
In teachers.
When they need and most.
Clearly this has been an extraordinary time for the world.
Indication and currently to me.
It's continued to navigate the Coke 19 in Florida.
Supporting the increasing growth digital demand, while streamlining our operations and capital structure.
Last quarter, we shared with you six drivers.
Why we're so confident.
Our strong position for the future.
Let me repeat them again today.
First our financial strength.
Certainly our ample capital liquidity and strong balance sheet as Joe will point out later, we paid off our revolver and in addition, the decisive actions we took march stripping our liquidity position during our seasonal trough in cash inflows.
Second.
We remain resilient.
And no position to support all of our stakeholders and big furlough for employees and restoring 100% of their pay.
And we focused on their safety with all employees working virtually save our with warehouse personnel.
Third each major remains a trusted partner for customers. We've continued our comprehensive support efforts, including a number of scope summer school solutions as well and resources for teachers.
For the fall.
The back to school period, the fourth point.
We're driving market demand, whether a school district goes back to school remotely we're in person.
We will have the resources required to support them.
Yeah.
The markets moved to digital as bad it will continue to be accelerated.
The pandemic has placed a spotlight on the digital divide and districts are watching to I'm sure. All students have it be computing device.
And Internet connectivity.
The result is greater demand for digital solutions.
Finally, each in each will emerge even stronger post pin debit would they did go first connect offering well near term. We are seeing funding pressure is driven by a downturn. The economy. We're also seeing teachers embrace technology as the primary means.
Through which the in educating their students.
For a company that is focused on providing all of its products and services and won't connected digital platform.
And then because actually serve to accelerate our strategy.
My name is a pandemic accelerating digital first nothing strategy.
Two reasons.
First coping Nike has pushed her industry to anyone who wants to get to device ratio.
Look inside of the slide you can see what happened pretty pandemic to April 2020.
8% growth in one to one initiatives in elementary schools.
18% growth in middle schools in 20% growth in high school all in one book.
Why the grows.
When kids were sent home in March linear does not have been tools necessary for remote learning a computer and internet connectivity.
Since then districts across the country responded with major investments in computers in Internet connectivity.
Once a limiting factor to digital learning.
Soon each student well access to a computer for learning in person for remotely.
And H is prepared to intercept educator demand digital solutions.
I would just be digital is not in though.
You need one platform helps the teacher support all students with plots that connects with one another to simplify and streamline the user experience for teachers and students.
Let me see something that is plainly obvious.
You can't snapped a core curriculum book, where they supplemental book.
You can however.
Good to core solution with a digital supplemental solution.
Exchange data to personalize instruction and death measures to can progress automatically in one place.
Product views on the platform.
That's a powerful and seamless value proposition for our customers even for shareholders.
For our customers. It takes system. We're also our solution stand on their own barb better together.
Your first shareholders, it's they shift away from a business model based on one time purchases a print materials to subscription based model generates recurring revenue from our customers to come back to each of age because they're pleased with the outcomes they achieved with our solutions.
Okay.
[laughter] this digital first concerted strategy.
It's one we've been building toward and the global pandemic has accelerated.
For example, this quarter, we again experienced continued significant increases in.
In both SaaS billings and usage of our platform.
Key indicators are strong demand for a fast growing digital business.
That's billings grew 127%.
Moving on to 76% growth, we shared last quarter.
Our AD platform usage increased 486% from June 2019 June 20 to 40 with doing assignments up from 7 million.
41 million.
We also continued our street notable connected wins in Q2.
The digital first connected strategy has been important markets signal.
Educators want convenience.
They want connection wouldn't need him through with teaching and learning takes place.
Ill.
An increasing number of district nationwide.
Opting to connect each roommates did go products and solutions across core intervention supplemental ear professional learning in teaching and learning.
This is what we mean when we take all the it's an age and providing integrated solution to our customers.
That's exactly what we're seeing nationally.
Where we had 100% attach rate of services for into literature in open territory.
It's conducting strides also drove share gain territory as evidenced by the close we report data.
And we also achieved 98% attach rate likable in Texas in the first half the 20.8.
Both of these examples demonstrate age you mentioned the ability to leverage strengths of our core footprint.
Yeah into extensions and capture a greater share of that $276 per student spend each year.
We also feel confident in our ability to continue expanding our footprint nationwide.
Because the industry recognizes folk outcomes, but each unique products and services can deliver in teaching and learning.
That continued into the second quarter, notably we received the S. <unk> a Codie award.
To be true in ridable <unk> innovative connected solution.
The progress, we're making on our digital transformation.
Good such confidence.
If we don't ideally suited to meet the unprecedent needs a students and teachers during this global pandemic.
This call for instance, according to the North West Evaluation Association.
[laughter], 80% of students nationwide.
We'll return to schools, having experienced some form of learning was.
And this is Dick exacerbated for students living in a hyper neighborhoods, who were disproportionately affected by the pedantic with limited access to technology.
[noise] enter HMH growth measure our digital computer adapted this.
Which provides insight into how much loss has occurred for each student.
The teachers can part of the tide in part getting structure.
Teachers are being asked to do more with less.
According to Ed week half of teachers today are still not coffee their ability to use attack for effective instruction.
They need help and we can provide it.
That's not least damages also brought into focused.
Changing teaching environment with roughly half districts nationwide, having announced intentions.
We'll begin school this fall, but hopefully we're in a hybrid model.
That makes the services, we provide to support in person or both vary that much more critical.
Last week, we announced the launch of each an age anywhere.
Hey, SAS based solution designed to support education leaders or navigating a lot of uncertainty right now.
Do we start school remotely or in person.
Britain model.
What if we change in a month or two.
Each major April their work in all these environments.
Risks the decision regarding content and platforms for back to school 20 2021.
[noise] remote during this past spring failed in park.
All of the park platforms teachers and students needed to interface with.
Causing a teacher to assign work in a number of different ways and having students go to different places to get their schoolwork, beating the chaos as frustration for all concerned.
Eight you meet anywhere is one platform to support all subjects all students all teachers anywhere.
Person remote or hybrid model for instruction.
So that's what we mean by digital first.
Hey, what's even better is that we have the strategy in place to get it's there. It's just about going faster moving more impact for students and teachers in greater returns for shareholders.
You heard me address how we're doing that three ways.
Catching and extending the core or how do you play next generation digital coupons and extensions programs or we need every school foundation for our gross.
[noise] delivering integrated solutions.
Acceleration in our SAS City Hills platform usage.
It was what our customers increasingly want integrated products and solutions are connected on one platform.
And finally, achieving operational excellence.
You are intensely focused on streamlining our organization and aligning our core processes and investments toward digital first connected strategy.
With that I want to pass it to Joe who will discuss in more depth.
The strategic progress we've made.
And our results for the second quarter.
Thanks, Jack and good morning, everyone.
In the second quarter, we began to see our markets stabilize after the impact of the pandemic in Q1.
As Jack said, well students teachers and districts administrators are still getting a handle on what the upcoming school year will look like.
We fully expect and are preparing for back to school could be an important demand driver as it is each and every year.
Let me share with you how we've seen the market began to stabilize over the last few months.
In April school closings were still affecting the market.
With administrators focused on quickly getting their students transitioned to a remote learning environment.
By May we saw the market beginning to improve as our customers begin to acclimate to their new routines.
Just began to return to planning for the next school year.
In June we saw the sequential month over month billings growth that we expect every year as ordering for next fall begins to ramp up.
June purchasing activity was more concentrated around our digital solutions that enable removed learning a trend we fully anticipate accelerating for example, we've already seen a number of school districts, including Los Angeles, San Diego two of the largest districts in the country announced their students will return to school. This fall in an online before Matt.
[laughter]. According to an education week surveys, enabling U.S. school districts over 50% of already announced they will be going back to school normally only or hybrid environments.
Sequential month over month billings growth continued in July.
Again, consistent with our historical seasonal billings pattern and demand for digital solutions has increased as well as Jack mentioned, we launched HMH anywhere another important way, we're meeting that demand by helping to de risk the difficult decisions. Our customers are facing in an uncertain back to school environment.
No. The pandemic has impacted our results here today, we have not let up on executing our strategy and have made great progress this quarter.
As Jack mentioned, we extended our market leading share in Texas literature, with a strong connected solution featuring into literature Ridable and literacy solutions.
As of now we have taken about 34% market share with about 95% of the market having made their decision in Texas.
More importantly, as Jack mentioned, our attachment rate of ridable into literature sales in Texas. This year was an impressive 98%.
Which demonstrates the power of our single platform to deliver learning outcomes across the entire spectrum of student needs.
We delivered very strong digital growth, increasing both our SaaS billings in AD platform usage for the trailing 12 month ended June thirtyth.
We have flipped 99% of in person professional development amongst the higher margin virtual sessions.
We reduced our costs in the second quarter, which enabled us to mitigate the temporary pressures on our billings and enabled us to deliver strong adjusted EBITDA margins.
And our actions in March this year building on our transformation effort. We commenced in October 2019 help reduce our seasonally use of cash.
We have fully repaid our revolving credit facility now that we have moved into the cash flow generated portion of our year.
So let's move now to an overview of our financial results for the quarter.
Our total company billings for the quarter were $297 billion.
192 million from last year's quarter.
No that even before the impact of the Kobin 19 pandemic, we faced a difficult comparable this year as we transitioned from the peak adoption your 2019.
So our expectation from mid cycle year in 2020.
To better illustrates the impact of the pandemic on our results also point out that our billings were only down 75 million compared to the second quarter of 2018.
It was a trough year the adoption market.
Despite the decline in billings. However, we generated positive free cash flow in the month of June resulting from a cost reduction and containment actions over the last nine months.
Our education segment delivered billings of $262 million in Q2.
This was driven by core solution billings of 151 million.
We expect the majority of billings from the this year's Texas literature adoption to occur in Q3.
Extension billings were $111 million strong growth in supplemental intervention.
Loss that behind them.
Services billings.
For HMH books in media billings in Q2 for $35 million in this segment showed impressive resiliency.
It was down just 10% for the quarter.
Well sales in print books have been impacted by book store closures nationwide. We're pleased that our E book sales were up 19% in the second quarter.
Moving to the consolidated financial results are net sales were 251 million in the second quarter and 441 million for the first half.
Net loss from continuing operations for the second quarter was 38 million an improvement of 6% compared to Q2 2019.
Adjusted EBITDA for the second quarter declined to 36 million, but notably our adjusted EBITDA margin improved compared to the second quarter a year ago. Despite the decline in that sales this year.
Given the operating leverage in our business. This is a remarkable result that was driven by the cost reduction in containment actions, we've taken over the last nine months.
Our free cash flow and the second quarter was a usage of $61 million, a 52% improvement compared to the second quarter last year.
Our year to date cash usage of $248 billion was a 27% improvement compared to the same period last year again due to our October restructuring the decisive actions we took in March.
Partially offsetting an increase in net working capital was a reduction in total capital expenditures.
Content development spending was 35 million in the first half 2020 compared to 56 million for the same period last year total capital expenditures were 59 million for the first up 2020 compared to 74 million for the first half last year down 20%.
We've made progress in key areas to give us great confidence in our financial position as we approach the back half of the year in a more stable market environment.
First as I mentioned, we've generated positive free cash flow in the month in June as our billings began to stabilize in light of resuming purchase activity.
Second regarding our liquidity, we have repaid the $150 million that we preemptively drew earlier this year.
Now do you know in past years, we've drawn liquidity from our asset backed revolving credit facility during the second quarter NPD back in mid month.
This year proved to be no exception throughout our seasonal liquidity trough. This year. However, we made we maintain our cash balance above the $150 million drawn from our revolver demonstrating that the entire amount we drew.
As precaution or.
Third we've lifted our furlough, which indicates our comfort with our current liquidity position at the same time and this is the fourth take away. We also know that realizing our digital first connected vision requires further operational streamlining and acceleration of our ongoing transformation.
One of the steps we have already initiated.
As an early retirement offer to certain qualifying employees.
We're also deep into the next leg of our value innovation analysis. Following the same framework, we utilized and shared with you in our Investor Day last October.
We'll update you on the results of this analysis by the fourth quarter.
Fit as we look to the remainder of the year, we feel optimistic about demand recovery and we are seeing the resumption of the usual seasonal billings pattern with sequential month over month growth in both June and July and finally.
So we lifted the furlough in July.
We continue to estimate that our breakeven level of billings in 2020 is in the range of $1.23 billion to $1.28 billion.
It was we said before this scenario range does not constitute billings guidance on our part.
But we think it may be helpful and quantifying the significant improvement in our cash flow generation capability, resulting from our work so far.
And we will be looking to improve upon that capability through our continued value innovation approach. So taken together what all this means is that from a capital liquidity and balance sheet perspective, we are in very good shape.
And we're making the necessary moves now that will ensure we can capitalize on the emerging opportunity afforded by our digital first connected vision that you've heard so much about today.
And with that I'll hand, it back over to Jack for some closing remarks before we move into Q.
Thanks, Joe before we move to Q1 day I like to leave you with these key points.
We're in a strong financial position.
That enables us to navigate the near term challenged environment and captured longer term opportunities.
You're supporting all our stakeholders and remain a trusted partner to our customers and they wrestle with neufeld challenges.
How are these in education.
The market is improving we.
We see back to school driving greater demand and recovery.
Finally, a pandemic has accelerated the market shift to digital.
Long term benefits despite near term pressures.
HMH will emerge even stronger with a digital first conducted offering.
Well positioned to capitalize on or accelerated market opportunity.
We look toward the updating you on continued progress next quarter with that let's get right to your questions.
As a reminder to ask a question there need to press star one on your telephone.
I would try your question. Please press the pound Kate please standby what we've compiled she when a roster.
First question comes from.
Bill Warmington with Wells Fargo. Your line is open.
Yes.
Good morning, everyone.
I don't Hey, Bill.
So first question I wanted to ask about was billings so historically.
70, 75% of billings would come in in the June and July range.
And.
This year it sounds like.
Because of the shutdown around co bids you're you're potentially seeing the shift of billings from Q2 and two Q3.
Plus you also have it sounds like higher demand for digital so it's going to ask a some thoughts around Q3.
Billings.
You know potentially could they be flat with Q3 billings and 2019.
Hey, Bill it's Joe it's difficult for us at this stage to make that call a and as you know we typically don't provide guidance on the quarters and we were not cutting guides for the year, what you said, though about the shift.
From Q2 to Q3 is accurate and I think the question about the possibility of a flat.
Year over year.
Just keep in mind, there as you're thinking about that last year was a peak of the stated adoption market with some outstanding performance in the state of Texas that we had that sets us up a pretty difficult comparable.
For us even even ex pandemic, but I think you're right to think about it in terms of a general timing shift.
To the latter part of the year.
Got it and then I'm also trying to understand the connection between the.
The increased demand for sure digital the the greatest SaaS billings.
And how that's going to play out ultimately and.
Fillings main.
When does it actually start to move billings needle for the speak.
Yeah, Yeah as Jack.
Joe normally take that Yeah go ahead.
Yes, I think the important saying that we're highlighting.
Bill is the tremendous growth that we're seeing demand for a SaaS based solutions, which as you know is a recurring revenue.
And you know it goes without saying that there's still the fast pace.
Billings represents a relatively small percentage of our overall mix.
But I think are really good kind of leading indicator as to where the businesses moving as more and more of our business is digital and more and more of it becomes a recurring.
So that's that's kind of the way we think about it from an investment standpoint is moving more and more for our business model to recurring overtime and so we're very excited about the growth that we're achieving with the SaaS based solutions right now.
And it looked like.
Share continues to be very strong in the Texas law I just wanted to ask their if you could remind me what what is the share going to be for.
The entire adoption and then are you finding that that's helping to drive.
Adoption in either other adoption stage or an open territory.
Yeah, I think the good news for the first half of this years overall.
While the market is down.
Our share is.
Holding really well and then as you point out in Texas, we have a leading share in the Texas adoption with most significant to US is the proof point of our strategy.
The 100% attach rate of course solution to services, 96% too.
To be extensions product white label, and I think that's a good kind of encapsulation of the strategy that we're executing nationwide to leverage that core installed base to cross sell into extensions and capture greater share that $276 per.
First Jim per year spent so we feel really good about that you're talking about.
Share is that if you look at open territory.
EPA has reported that it's about down 15% year to date.
Actually down less than that which which suggest.
Gaining share.
Open territories. So I think despite team top line pressures that we're seeing as resulted pandemic. We're so we're feeling pretty well from a shelf prospectus.
Huh.
And then the a and b extensions market.
We were surprised to see a extensions down more than the core and I wanted to ask especially with the high attach rates and I wanted to ask whether it was really a year over year comp issue or whether or something else going on within extensions.
Yeah, sorry, do I take that yeah, I will so so there is a comparable issue there certainly are regimens had a.
Record year last year, and very very strong performance also in that Texas adoption, which of course didn't recur.
The products.
Products that we're still not adoption of course, we're focused more on the.
On the lower grade levels and they wouldn't have had that opportunity for Texas. This year set. So there is a bit of comparable on that but I would say generally.
What you've seen in the extensions is very very strong performance in our supplemental and intervention product lines you've seen.
Much of that gross in the SaaS billings is is a is in those areas like all of it is.
And second I'd I'd, just point out that generally speaking we see.
We see the third quarter as a much more important overall quarter in a normal year for for extensions.
This year would be no excess exception in fact due to some of the later decision, making that we've seen out there in the market I would.
I expect that the third quarter dynamics going to be more important for for extensions as well.
This year.
Got it so a what one more question on the digital side.
You mentioned, 50% of schools returning this to class a this fall in a remote format.
Are you seeing.
[music].
Any type of.
I'm sorry.
Really late surge and.
Demand for the digital products, especially from.
Schools that normally wouldn't be buying at this point in the cycle.
Yes, Great question Bill I mean, as you know that we'd have providing our products in both print and digital form for some time now I think this new solution. We offered a last week was really.
In response to the very topic you raise net is when we do in a remote learning environment versus in person.
Environment in the approach we took is used the same platform.
Whether you're in a remote learning and you're doing video conferencing, where we're going to actually integrate with whom will integrate our platform with.
Microsoft teens, Google meet so you can do the video conferencing, but if you go back to school, where you start in person you would that be every same platform. So you don't have the discontinuity of trying to do something virtually and then find yourself in a different modes instruction using different sets a different set.
Solutions. So we are seeing obviously as you can seats in the gross and.
And usage on our platform, we are seeing increased demand for digital solutions and.
I would say that you talked to our sales organization, mostly a discussion there having right now we as customers are about outfit and with our digital solutions for.
An uncertain school year.
I think 50% actually starting with no is probably a low number now.
Yeah, I think given where we are right now, we'll probably see something north of 50% of the school district starting remotely.
Got it alright, I know at long on the questions appreciate your patience.
Thank you very much thank you bill.
Thank you. Our next question comes from George Tong of Goldman Sachs. Your line is open.
Hi, Thanks, good morning.
You indicated that you're starting to see a resumption of seasonal purchasing behaviors can you elaborate on purchasing activity a bit more in the quarter exiting the quarter in both California and Texas.
Yes, George Joe in Texas, as I as I pointed out in the remarks, there were about 95% of the way through that adoption and.
So most a.
Lunch or those those decisions have been made so far.
Expecting the billings to come through in the third quarter or for that adoption.
And certainly or those orders that are going to come later, where those wins that come later, we would expect to be a bit later in the year as well.
As it relates to California, we have seen some of the typical pilots and some of the schedule pilots.
Push to the latter part of the year get delayed a bit.
We're expecting that some of that demand and some of those purchase decisions in California do get pushed out into year three of the California signs adoption typically.
As you know the year to which we're in right now the California adoption is the largest.
Expected that's still the case, we don't know what the full impact is going to be if someone is this a delayed purchase decision, making but we would expect the third quarter probably to be a bit bigger than than we normally see in California adoption there for the second quarter abysmal.
Got it that's helpful. And then looking between course solutions and extensions, but can you perhaps talk about where you expect the revenue recovery to be faster over the remainder of the year.
Yeah Okay.
Good question, George as Joe mentioned, a few moments ago.
Typically if you look at the phasing bar business.
Extensions lag a little bit.
Usually you get your core solutions in place.
First half of your into July.
And then as you go back to school and you saw us your kids.
You can determine how many of them acquiring intervention solutions.
How many are they.
Require a supplemental solution. So there is a bit of a lag in.
You know intervention supplemental and professional development so.
As we kind of go.
Into the third and fourth quarter, you'll see.
A greater percentage of the mix in extensions than you would.
Then you would see in core.
Got it that's helpful. Thank you.
Thank you.
A reminder, ladies and gentlemen that start to ask a question. Our next question comes from David Pang of Stifel. Your line is open.
Hey, good morning, everyone.
Jack up what do you touched on this earlier, but I was hoping you provide more of an update on the funding environment at the state and local level and then secondly Ford show.
Can you talk about how the billings might differ.
Under the different score we are putting plans. Thanks.
Yeah.
Yeah really good question instrument the funding environment, Let me take it in two parts one is current versus future.
If you look at K 12 funding, 90% of it is state and local funding.
And obviously.
Hi, enemies and tax receipts, but.
Budgets are going to be constrained, especially at the state level. So that's a bit of what we're experiencing right now budgetary pressures that schools are experiencing because of the amount of funding that comes from state local federal funding.
You May recall, we had would you care is that about 13, and a half billion of federal funding to K K 12 schools, but so that's kind of the current environment in terms of future. Obviously economy picks up then we'll see less funding pressure in K 12.
But importantly, right now.
The federal government is looking at additional funding for education.
The Senate in the White House.
Had.
Proposed I've been out.
70 billion in additional funding.
For K 12 that goes to the house now.
Which is obviously education friendly institution. So we kind of feel that that 70 billion worry me attached may may even be added too as you go forward guidance for a half trillion dollar industry, K 12 education getting a material amount of money.
I will say would be flowing into budgets.
At the end of this year and beginning of next year. So I think the future funding environment will be improved.
By the by the stimulus septic shock on that provided.
And David I think your second question was related to the impact on billing depending on on the scenario that plays out.
You know in a particular district or whether it's for mode or hybrid or in person and it's it's a difficult question.
So really pinpoint, but I would say that because we offer a solution that is.
A useful and actually sold a lot of challenges in any one of those environments, we really wouldn't expect that.
That there's much difference.
A.
Color customer in terms of they have a particular need we can solve it or we can help them solve it and and so we wouldn't expect much of a difference there in billings.
Clearly if you have districts that were unprepared for a return to school in a remote environment and now have.
Stimulus funds or other funds that they need to deploy it or to make sure that they are.
Prepared for that environment that can act as a spur demand.
We are seeing a lot of interest right now having just launched the h. image anywhere in the last two weeks and we're starting to see demand build quite a bit for that because of its unique ability to.
Offer.
Hey solution for really any eventuality there.
But as a general matter.
Wouldn't expect but there is a tremendous amount of of difference in our billings in.
Yes, even at the extreme so far in person versus full fully remote.
Thank you.
At this time, we have no further questions I'd like to hand, the conference back over to Mr., Jack once for closing remarks.
Great. Thank you thanks, everyone for joining us on today's second quarter earnings call.
We look forward to updating you again on the third quarter earnings call in early November.
Have a great day. Thank you.
Ladies and gentlemen, thank you for participating in today's conference you May now disconnect everyone have a wonderful day.
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