Q2 2020 Standard Motor Products Inc Earnings Call
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Hi.
Good day, everyone and welcome to todays standard motor products second quarter earnings call.
At this time, all participants are in listen only mode.
Later, you live the opportunity to ask questions. During the question and answer session you.
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Please note this call we recorded and it is now my pleasure to turn the call over to Larry Sills. Please go ahead.
Thank you and.
Welcome everyone to our second quarter conference call and thank you so much for attending.
With me today.
Eric Sills.
<unk> and CEO.
Jim Burke Chief operating officer.
They said the iOS Chief Financial Officer.
And myself, Larry Sills executive Chairman.
The agenda for today.
Well start with Eric who we view the key highlights of the quarter.
Then Jim will go into further detail on our operations and then they said, we'll give more details we view the numbers.
And then we'll move over to QNX.
So, but let us begin I'd just give us a nascent for the a forward looking statement and then we'll go from there. Thank you and welcome.
Right.
Okay. Thank you Larry.
Let me begin this morning, I'd like to remind you that some of the material there will be discussing today may include forward looking statements regarding our business and expected financial results.
When we use words like anticipate believe estimate or expect these are generally forward looking statements. Although we believe that expectation for what you. In these forward looking statements are reasonable there based on information currently available to us and certain assumptions made by us and we cannot assure you that they will prove correct. You should also read our filings with the securities and.
[noise] change commission for a discussion of the risks and uncertainties that could cause our actual results to differ from our forward looking statements I'll now turn the call over there.
Well. Thank you may send and good morning, everybody and we appreciate you joining us this morning for our second quarter earnings call.
I'd like to start todays call with an enormous thank you to all of our employees Needless to say this has been a very difficult time and our people truly rose to the occasion.
Throughout the period, our employees remain committed to helping us navigate unique circumstances and did sell that skill compassion and dedication.
I'm, especially proud of all of our front line employees those in our factories distribution centers, who continue to show up day. After day, we could not have done it without it.
From the beginning our industry was deemed essential we therefore continues to operate through out the crisis.
As such we needed to assure that we had staple work environment as possible.
Outlets measures are in place with Jim will discuss in his remarks, and thus far they have proven very effective.
Turning to business when we last spoke to you on our first quarter earnings call. We were wrapping up April worst month companies seem in back.
The country was a near complete locked down and you reported that our April incoming orders were down 30% to 40%.
We also told you that there were signs of improvement, especially with our customers Pos which is always a leading indicator glass.
We're pleased to say that business did in fact begin to bounce back.
May I saw a week over week improvement and by June sales of return to normal levels.
So while the quarter as a whole was well below 2019, the trend was quite favorable and we entered Q3 very healthy waterpark.
Customer Pos was even more favorable.
We reported that throughout April our customers Pos was tracking substantially better than or what is to us as they reduced their inventory.
We also stated that after bottoming out their Pos had begun to leave out just trends continue.
Within both engine management and temperature control customer Pos was favorable to last year for the entire corridor and showed sequential improvement month over month.
On our last call. We told you that while we entered the pandemic with a very healthy balance sheet, you're taking prudent measures to reduce cost and conserve cash. We also told you that we strongly believe business would be a temporary situation that while the business world with surely entering a very difficult time, the auto care industry tends to be more resilient.
As a nation, we rely very heavily on their hundreds of millions of vehicles and that they would eventually be returning to the roads and nondiscretionary repairs would resume.
Therefore, we announced that we would only cut back on items that would have no long term impact on our strategy or outgrowth class.
The largest amongst these core cutbacks, where a temporary suspension of our dividends and stock buyback programs and a reduction in compensation for senior executive Board of directors.
But again, we did not cut items that would hurt us in the long.
We chose not to lay off any of US salaried staff. We're very pleased that we made that decision for example, while our 200 plus salespeople were unable to call on customers, we kept them productive.
We turned our award winning training department on them on boarding them with literally over 100 set a webinars.
Now that they're back on the road there equipped with the most extensive knowledge base imaginable.
Also chose not to reduce spending on capital projects for new equipment into it.
Our engineers all remain highly engaged to route and our pipeline of projects has continued.
Finally, I would like to wrap things up by talking a bit about the future.
In the near term, we entered the third quarter in good shape business has picked up substantially and it has been a hot summer, which is always a good thing for our temperature controlled.
The longer term also remains quite right.
Market demographics continue to show favorable Tailwinds, yes, staffed with the best talent to the industry and our relationships with our customers are very strong.
But while business has gotten back on track the nation is far from out of the crisis.
Kogan cases remain high as does unemployment.
Therefore, we take nothing for granted we will continue to operate our business with the same tear and prudent says we have for the last 100 years and as such we know that we will emerge from this crisis a stronger company the world when we entered it.
With that I will turn it over to Jim Burke.
Okay. Thank you Eric.
I will provide a general overview.
Of operations addressing employee of facility health and safety, our supply chain update and our efforts on cost reductions and cash conservation.
First from the onset of this pandemic, our first priority was and remains the health and safety over 4500, plus employees across 19 facilities.
We have implemented very stringent protocols at our facilities, including temperature checks before entry stepped up daily cleaning and weekly deep cleaning mandatory use of P.P.E.
Facility modifications for perf protective barriers staggered work shifts for social dispensing and office and staff functions moved a remote work from home.
In addition, most importantly, we were totally transparent with our employees would electronic alerts to communicate any positive cases and contact tracing we held regular scheduled townhall video meetings to keep our employees fully informed.
As an essential business, our frontline heroes in manufacturing and distribution worked through these very challenging times. We think these employees for their dedication to S&P and our customers to keep a central vehicles rolling.
[noise] next I will review, our supply chain and challenges from the initial 30% to 40% volume reductions at April to a significant rebounding customer Pos levels in May and June.
Overall from a materials perspective, we are in reasonable shape as our vendors have been very helpful meeting our needs. However business rebounded so quickly, but we are working as fast as we can build and distribute our products on a timely fashion to match our customer demands.
We are adding labor with new hires and temporary agency staff. In addition to working overtime and weekends to keep up.
Looking at our temperature control business. It is no surprise throughout the U.S. So we are experiencing a hot summer. This year preseason ordering was very light following a mild 2019 summer season.
Volume has picked up in June and based on current ordering patterns, we should have a solid third quarter in our temperature control business.
Lastly, I will touch on our efforts to reduce spending in light of the lost volumes in the first half of this year.
Eric already discussed reductions in director compensation and executive pay.
But in addition, we thoroughly reviewed all discretionary expenses to eliminate or the first spending in 2020 German does pandemic.
Cost reductions were implemented throughout the organization related to TNT shown expense advertising professional fees salary new hires excluding engineering to support our make first by strategy.
In addition provisions for incentive pay were significantly reduce based on the Pandemics impact on our first half results.
We plan to maintain these reductions through the balance sitting here. We will also assess lessons learned during these difficult times and look for longer term savings as we learn to do business in this new environment.
Partially offsetting some of these savings are incremental cove, it expenses to keep our employees on facilities safe.
In closing I want to thank again, all our employees, especially our frontline heroes for everyone's cooperation and efforts journeys unprecedented times. We ended this pandemic with a healthy balance sheet and a well seasoned management team. We are pleased with our performance to date and assure U.S.
Team remains laser focused ultimately exit this pandemic healthy with a bright future towards our long term outlook. Thank you for your attention I'll now turn the call over at the Nathan.
Alright, Thank you Jim.
Looking at the piano consolidated net sales in Q2, 2020 for 247.9 million down 57.2 million or 18.8% versus Q2 last year.
Our first half consolidated net sales were 502.2 million down 86.7 billion or 14.7%.
As a reminder, we acquired the public business from Stoneridge on April Onest of 29 team and our sales in the first six months include incremental sales from policy of 9.5 million.
By segment engine management net sales in Q2, excluding wire and cable sales were 142.8 million down $39 million were 21.5%.
For the six month engine management sales without wire and incremental Pollick sales were down 60 million or 16.8%.
The lower sales for the quarter and first six months were primarily due to the general economic slowdown due to the coated 19 pandemic, but the greatest impact seen in the months of April and May before a rebound to sales levels in line with 2019 during the month of June as their noted earlier.
Wire and cable net sales in Q2 were 34.7 million down 5.8 million or 16.1% and for the first half were 67 million down 6.4 million or 8.7%.
Temperature control net sales in Q2, 2020 were 72.4 million down 12 million or 14.2% and for the first half sales were 123.8 million down 29.5 million or 19.2%.
Net sales in the quarter were primarily impacted by the endemic and followed the same pattern across the bonds is the engine management segment, while sales for the first six months were mainly impacted by very high pre season orders in 2019 that did not recur in 2020, as we've said before the timing of pre season orders can vary from year to year and typically are not indicative of how.
The year will turn out to the temp control segment.
Our consolidated gross margin in Q2, 2020 was 26% versus 29.1% last year down 3.1 points and for the first half it was 26.8% versus 28.3% last year down 1.5 points.
By segment engine management group gross margin in the second quarter was 26.7% down 2.6 points from Q2 last year and for the first six months. So 2020, it was down 1.1 points to 27.5%.
Temperature control gross margin in Q2, 2020 was 22.8% down 3.9 points from 26.7% last year.
For the first six months it was down 2.2 points to 23.1%.
Margins at both divisions were impacted by lower sales volumes and unfavorable cost absorption due to lower production volumes.
Consolidated SGN expenses in Q2 were 48.3 million down 12.2 million from Q2, 19 and came in at 19.5% of sales versus 19.8% last year.
For the first half Sta spending was 104.2 million down 16.3 million at 20.7% of net sales versus 20.5% last year.
Well restaurant expenses reflect lower distribution and accounts receivable factoring costs you have a lower overall sales, but also the impact of cost reduction plans put in place as a response to the economic slowdown caused by the pandemic.
Our consolidated operating income before restructuring and integration expenses and other income net in Q2, 2020 was 16 million or 6.5% of net sales down 2.8 points from Q2 2019.
For the first six months was 6.1% of net sales by 1.8 points from last year.
As we know what our GAAP to non-GAAP reconciliation of operating income our performance resulted in second quarter 2020 diluted earnings per share a 52 cents versus 92 cents last year and for the first half diluted earnings per share of 95 cents versus $1.49 in 2019.
The decrease in our operating profit for the quarter in first six months was due to lower sales in both the engine management and temp control segments, partially offset by lower SGN a expenses across the company.
Looking now at the balance sheet accounts receivable at the end of the quarter for 184.5 million up 49 million from December 19, and up 5.1 billion from June 2019.
The increase in our accounts receivable reflects the timing of sales during the quarter and in particular, the very strong sales we experienced in the month of June.
Inventory levels finished the quarter at 353.3 million down 14.9 million from December 2019, and down 21.9 billion from June 2019.
The decrease from both year ended June last year, primarily reflects the sharp recovery in sales we experienced in June after having lower production levels in April in response to lower customer orders.
Our cash flow statement reflects a 900000 use of cash in operations in the first six months in 2020 as compared to a 19.5 million use of cash last year.
Lower level of cash use during the first six months in 2020 was driven mainly by an increase in cash generated from working capital helped by lower inventory balances, resulting from the timing of changes and production sales during the quarter.
During the first six months, we continued to invest in our business and used 9 million of cash for capital expenditures, which was higher than the 7.6 million used in the first six months of 2019.
Financing activities included 5.6 million of dividends paid an $8.7 million of repurchases of our common stock both of which occurred during the first quarter of 2020.
Financing activities also included 34.3 million of increased borrowings used to fund or operating requirements as well as or other investing and financing activities.
Lastly, I want to talk a little further about our borrowing activities at the beginning of the second quarter. We took several precautionary measures to increase our cash position and make sure. We had ample liquidity as part of these measures. We made a drawdown of 75 million from our revolving credit facility with the support of our banks and lending partners.
As we began to see an improvement in our business during the second quarter, the higher sales and improvement in cash flow, let us to repay the 75 million drawdown.
To remind everyone our credit agreement as an asset base revolver, and we have the ability to borrow and repaid as business conditions may warrant.
As such we continued to have ample liquidity and we finished the second quarter with 22 million of cash on hand, and 146 million available under our revolving credit facility.
Finally, while we made the repayment on our revolver, we still remain cautious about the months ahead, as Eric and Jim mentioned and our other cash conservation measures remain in place.
Thank you for your attention and I will now I'll turn it over to the moderator open up the call for your questions.
At this time, if he would like to ask a question. Please press star and one on your Touchtone phone.
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Once again that is star and wine to join the question Q.
And our first question comes from Daniel Embryo from Stephens, Inc.
Please go ahead.
Yes, Thanks, good morning, guys and congrats on the quarter.
Thanks, Good morning, good morning, Daniel.
No wonder start on the on the expense side, you know really impressive cost control as you know down 20% I think in the past you guys instead of about 80% fixed so really impressive control. There can you help parse out you mentioned the lower rates are helping to finance costs of the receivables program is there any way to help parse out how much.
The impact that wasn't the quarter versus how much of the 30 Bips of leverage was driven by some of the cost removal and then as you move to the back half you know how each of those factors continues into Threeq and Fourq you.
Yes. So so Daniel you know as you said, we've mentioned the past our S. United costs are in that 75%, 80% range, a fixed and the other variable or the factoring receivable costs are obviously part of that that variable bucket.
I'd I'd say without getting into too much detail about you know rates and other things you know the bigger impact on the factoring costs is really the sales levels.
And the dip there in the quarter.
The if you look at sort of that 70, 580% fixed number that we've thrown out before or any other difference in savings that you see in the TNL was really the result of this cost reduction efforts that Jim mentioned as well as would be lower sort of compensation incentives that were going to have this year just due to the results that were experiencing.
Got it that's helpful. And then Eric are you guys mentioned during the comment supply chain in a good day, obviously trying to meet demand can you update US who is your different manufacturing facilities, obviously parts of Europe, we're doing better so we'd like an update to here kind of on how Poland is progressing and where are you guys are running.
Any kind of capacity constraints.
Okay, Stephen as Jim Burke.
Yeah speaking in general for the for all of our facilities and then you specifically carved out a Poland or you know.
As you can imagine back in March and April it's a totally different story from where we are today at that point, we were trying to understand the what was happening would orders how long it was going to less than the look into match up production with sales volumes, it's a totally different story now.
We are.
We are working to meet demand, it's as Eric pointed out the throughout the second quarter demand has picked up.
Sequentially month to month all of our facilities are are running a full scale at the moment now we are experiencing you always have some disruptions in there with some co vid contact tracing in that.
But we are all of our facilities to match them in Poland, specifically is doing quite well, we're very pleased with the with the operations.
The thankfully we have had to reduce the incidence of any covert type cases are there in our area within Poland and the you know that business there keeps up a good bit with both the f. the market for the U.S. and globally for Oh, yes, so that business is doing.
Quite well.
Thanks, Jim unless one from me if I could squeeze it in making you touched on the balance sheet you got to pay down that that's what gives you flexibility.
How are you thinking about past employment here and are you seeing any additional M&A opportunities out there in the market as maybe some of your smaller competitors are struggling.
Yeah, I think all them I'll hand that went over to Jim day, North Sea covers most or M&A efforts.
Right and again, Okay. Stephen yes, so we paid down the debt and we have the flexibility to draw run at as a Nathan explained earlier that's there.
From an M&A standpoint, we have a formal team that's in place of evaluating opportunities on a regular basis. So.
During this pandemic, a while things seem to have tightened a little bit in their between the available opportunities, where we still staying abreast. Many of them are we wind up developing over time, what relationships that are there. So.
I would say that we're pleased with pilot fully integrated we continue to look and evaluate opportunities going forward.
And you know as something if anything or we'll we'll announce but at this point now we're still dealing with the you know the coal that.
Incidence and NAV, so nothing eminent I would say.
Alright, Thanks, guys best of luck on board.
Thank you.
And our next question comes from Scott Stember from C.L. King. Please go ahead.
Hi, good morning, Thanks for taking my questions that congrats on a very good quarter.
Thanks, Scott good morning.
Eric I think if I heard you correct you said that in June orders as well as Pos retail was running up.
Dimensionalize that how that was running as other exit run rate.
Just just to give us an idea what we could be looking for.
In the third quarter.
So let me separate.
The two different metrics.
Good question customer sell through versus what the ordering from us So we.
Hi exited the quarter.
In terms of what they're ordering from us roughly flat to into it I think the term I used in my prepared statement was normal back to normal type levels and so that is what we saw coming out of Ah Ah coming out of a quarter with what they're purchasing from us, but again, some very good indications of a strong orders coming in.
Third quarter.
In terms of their sell through their Pos.
They were really.
Exceed in previous years Pos.
In a off three areas. It gives you a little bit of.
Breaks down between the three a division and also it's always important to couch. This in that we don't get information from all of our customers with just get it from a enough to say that we believe it is representative and Directionally, but you can't necessarily Robert that percentage in say the best everybody.
But what we did see within engine management.
As we said April was down double digits.
June was up double digits.
I don't want brings them to basically flat year to date.
The interesting phenomenon as in wire and cable and I think you can see this nation was given you the breakout of of.
Our revenues and wire versus engine why are actually slightly outperformed Benjamin we're seeing that Pos level as well and I think we're seeing this is a bit as an influence that you're hearing some of the big retailers discussing as well that.
It's been a bit of a shift towards the iwai, which tends to move into the older technologies and the product categories that do it yourself or is able to work with so we've actually seen wire and cable, which historically is down 70% category.
Outperforming we think thats a temporary situation.
But but that has been an interesting dynamic with the older technologies, which wire include.
Temperature control.
You have to look at this and seasonal nature of the categories. So April and May are still largely irrelevant. It really has to do with June in terms of the quarter and June was hot on so their sales up were not definitely in double digits and that trend does continue into the third quarter.
And just to make sure when you're talking double digits for June in engine management temperature trial were talking Pos.
Pls that is correct, okay got it.
Moving on to the gross margins.
Mentioned that.
Yes. This is a good problem. They have a business is ramping up very very fast and it seems like.
Your I was having a hard time, but do you have to go through some extraneous means to keep up with demand.
How does this pathway.
On your gross margin targets last quarter, you give us an updated gross margin targets again, maybe you could give us that and tell us how some of these revamping or restart of business.
At that.
Okay, Hi, Scott This is Jim Burke.
I'll jump in there as it impacts the the facilities there so.
Business as we said there has picked up and our manufacturing facilities are are running up pretty well full steam were actually oh looking to a higher in Ed Ed heads.
And where possible we're trying to be able to staff up with temp agency employees also.
Our our margins within temperature control and Oh say, we're very pleased with the margins the performance that we had within the second quarter. So we're at the engine management at 26.7.
And staying on engine management going forward our targets there was to be over in back to the 30% level over 30% going into next year.
We expect to progressively move forward on these numbers to 26, seven an improved for the balance of the year as our facilities are running that we believe volume will be picking up temperature control. We were at that held up pretty good we have talked about that dropping down 22.8.
There are the facilities are a manufacturing's running full steam there we've had very strong demand. So we should be a.
Doing much better in the and absorption there. So we envision this getting back within that a 25% to 26% range and again all of 2020 is you know where does everything play out yet with this pandemic are still long range, what's more important is.
We think engine management is 30% plus going into 21 and temperature control, the 25, 26% and and look to move off of beat those numbers.
Got it and if I could just ask one last question you talked about some of the cost cuts in the quarter in management compensation.
Is there a timeline of when that will come back online or.
At this point that you guys planning for that to be.
To be gone for the remainder of the year.
Uh huh.
I'll take that Jim.
So in terms of the the.
Discretionary cost controls that that Jim.
I spoke to in his remarks, we're going to continue to with that belt tightening.
Throughout the year as as we continue to say, we're not going to do anything that's going to hurt the business. The we're going to continue to be.
Uhhuh go I guess would be the word on those types of cost controls as it relates to executive comp on director compound has announced that will continue through the balance of the as well the other big numbers.
Which I spoke to the temporary suspension of the dividend cash.
The stock buyback.
These we don't have a set timeline on when you will continue to evaluate discuss it with our board we looked at on a continuous basis, but we do not have a specific time that we said that we're going to.
Renew those programs.
Got it that's all I have thanks for answering my questions.
Thank you Scott is that.
And our next question comes from Bret Jordan from Jefferies.
Please go ahead.
Hi, good morning, guys.
Uh huh.
On the comment about why are being more of a D.R. why category I guess do you have a feeling sort of anecdotally what percentage of your mix goes to DIFM versus the ROI in this quarter.
It's a great question, Brett and I wish I had a ready answer for you we lose some visibility once our customers purchase it has to their end consumer.
We think that there has been somewhat of a modest shift it's gonna be certainly more selling categories. We read the do it yourself or has the capability.
But we do think just.
Some of those indicators some of the older technologies does suggest that there has been somewhat of a temporary shift and I think you're certainly hearing what the large retailers say in the same things in their cost.
Right, Okay, and then I guess I'm a payable programs did you see anything in the quarter, obviously during the shock as far as that either availability of factoring programs. Other rates charged for factory for factoring programs and I guess, you know how does that available today as you see order books picked back up back up.
Yeah, Brett this is Nathan we we didn't really see any changes in the supply chain financing programs are factoring programs that you mentioned.
The banks and the customers both continued to support those programs. So really nothing to report on that front.
Okay, and then one last question I guess.
With the when some of the age heavy duty businesses, you've seen you expanded into in the acquisition how was that the demand profile passenger vehicle parts versus heavy duty parts in the quarter.
Oh, yes.
You had that has become somewhat of an emphasis for US recently, the biggest hit obviously being pollock, which brought $40 million of additional volume in that space for US you have to break it into the two components.
Well, we portion of a heavy duty versus the aftermarket portion.
We are portion followed a lot of the same trajectory that you're hearing about Oems that are which is Bob production got cut back on it is now rebounding, but but it did suffer the same types of things you're seeing from a lot of Oh, we and tier one players, but it is definitely bouncing back and similarly aftermarket.
I had a lot of the same dynamics that we're seeing in the general repair aftermarket where April is.
Significant retraction and then a relatively rapid rebound so really it.
If I could answer that much quicker by saying a lot of the same trajectory as our core business.
Okay, great. Thank you.
Uh huh.
And our next question comes from Robert Smith.
From the center for performance investing please go ahead.
Good morning wallet.
Good morning, and congratulations on the corner Am I commend you for all you've done in the half of your workforce.
Most of my questions have been answered I just have a couple more.
Uh huh.
Are there any a initiatives that you've been considering or one thing in the area.
From.
It's a great question, Robert and ER.
A relatively recent announcement was towards the end of last year was that we entered into a joint venture in a.
A company called see wide Jay in China, which is a manufacturer of electric compressors for electric vehicles small companies young company, but with great technology, and great promise and one of them and things that they were lacking whereas the horsepower that a company like standard could provide.
So that Dallas.
Oh, I believe to be our most significant foray into the into electric vehicle categories.
But even within our aftermarket programs here in the last week as you look at at the new items that we're bringing to market. They may not be it could be powertrain or be electric vehicle, but they are supplying products were all over that vehicles.
Active safety devices.
And the other electronic controls for the vehicle.
So we do see while there's.
Going to eventually be a shift.
At some point towards electric vehicles, what positioning ourselves to a to take advantage of it.
So it's kind of initial efforts are going to be the bedrock of where you're going are you going to explore other opportunities as well.
We'll certainly continue to explore and as it were played a relates to replacement parts, we need to keep an eye on the on what parts and assist them are failing that would fall within our logical product categories and because the vehicle population here in the U.S. is so small and relatively young we're still keeping an eye on.
On what those categories will be.
In.
Other area that where we've been emphasizing for the last several years, it's not electric vehicles, but it is alternative energy is our compressed natural gas injection program coming out about Greenville, South Carolina plant, which continues to.
Really get that some pretty good traction, especially in Asia heavy duty and so again, while a lot of our business is related to the conventional combustion engine. We are looking to see how we can evolve with automotive technology.
Yeah, that's encouraging given any comments about China is such a with everything that's been going around between.
And the United States and train isn't it.
Fourth.
[noise] also a great question I can always kind on you'd ask good strategic questions.
Well, certainly obviously paying close attention to some of the new geopolitical.
Tensions between us in China.
And so that we need to make sure that we stay abreast should anything happened right now.
We're pretty committed to our footprint over there.
Both for what it brings back as low cost products here for a north American aftermarket, but also heavily for strategic intent of having a footprint there to sell instead of fast growing Chinese market. So while we're paying close attention to those tensions.
At this point, we believe that.
That we're comfortable with our strategy, we'll keep an eye on it but we do think that the two countries are so well.
That unwinding that should that ever happened what will be a very long slow process.
Thanks for that and finally I just have a general.
Suggestion that you really.
Reconsidering the question about the.
Mention of the dividend and my.
My strong recommendation is that you reinstitute the dividend.
Soon as you possibly can.
And if business continues to recover.
During the remainder of the year toward the end of the are you consider paying an extra dividend to bring a.
The range for the year up to what it would have been.
That's my suggestion.
Okay.
We are all right.
Hi, Robert This is Jim Burke and thank you for the suggestion and where we continue to monitor the the full year and the and the outlook that we have there and obviously this will be always review data with our full board.
In our attempts to again, we said it would be temporary but we will we continue to monitor it as we progress throughout the balance of the year.
Yeah, I do I do believe that the balance sheet is strong enough to allow them to.
To make that happen. Thank you.
Okay. Thank you.
And it does appear that there are no further questions over the phone at this time.
Oh.
Okay with with that we want to thank everybody for joining our conference call today.
Enjoys the balance of the summer. Thank you.
Thank you very much everybody.
This does conclude today's program. Thank you for your participation you may disconnect at anytime.
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