Q3 2020 Haynes International Inc Earnings Call
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Good day, ladies and gentlemen, and welcome to your Haynes International Inc. third quarter fiscal Twentytwenty financial results call. All lines have been placed in listen only mode and the four will be open for questions and comments following the presentation.
If you should require assistance throughout the conference. Please press star zero to reach a wide operating.
At this time it is my pleasure to turn the floor over to your host David Van Bibber controller, and Chief Accounting Officer.
The floor is yours.
Thank you very much for joining us today.
With me today or make sure President and CEO Haynes International Indian modeling, Vice President and Chief Financial Officer.
Before we get started I would like to read a brief cautionary note regarding forward looking statements. This conference call contain statements that are forward looking within the meaning of the private Securities Litigation Reform Act of 1995 and section 20, when he of the Securities Exchange Act, making 34.
The words believe anticipate plan and similar expressions are intended to identify forward looking statements.
Although we believe our plans intentions and expectations regarding or suggested by such forward looking statements are reasonable.
Such statements are subject to a number of risks and uncertainties and we can provide no assurances such plans intentions or expectations will be achieved.
Many of these risks are discussed in detail in the company's filings with Securities Exchange Commission in particular form 10-K for the fiscal year ended September Thirtyth 2019, and form 10-Q for the quarter ended June Thirtyth 2020.
The company undertakes no obligation to publicly update or revise any forward looking statements whether as a result at new information future events or otherwise with that let me turn the call over to Mike.
Thanks, Dave Good morning, everyone.
The current economic environment, resulting from the Cobot 19 pandemic, along with the significant drop in aerospace demand or certainly not would any of us expected at the beginning of our fiscal year.
However, I'm pleased that our team was able to immediately pivot to focus on cash generation as the economic issues with a pandemic became apparent.
Our bottomline focused efforts over the past two years was 18% gross margins right before the pandemic it positive cash flow over the past year.
And at least a 20% reduction in our breakeven point compared to the prior fiscal years.
Our goal worst the first in gross margin percent in our slice of the industry was within reach.
These successful actions along with the fact that we have strong liquidity stemming from a carefully managed balance sheet.
To assist us in writing out disturbs store and position us for profitable growth once in aerospace recovery begins.
The drop in our business has been significant.
Looking forward to seeing the first signs that the aerospace industry is bottom.
And a recovery is ahead of us.
As you can see by our results for the quarter, we saw a drop in revenue $31 million or 28% sequentially and $45 million were 36% compared to third quarter last year.
These reductions in revenue match with the recent aerospace news that we've all seen an experienced specifically of note from this news or the following four items first commercial aircraft builds in 2020 are projected to dropped 40% to 50% versus 2019.
Next leap engines, the workforce engine for single while commercial aircraft were mid last year projected at over 2300 engines to be shipped in 2020.
That number for 2020 is now estimated to be less than 900 engines a drop in short term builds of at least 60%.
In addition, this rapid drop in short term demand has resulted in excess inventory throughout the aerospace supply chain.
We're estimating that 612 months of excess inventory may exist in some areas of the supply chain.
Finally in addition to the significant changes in demand. We're also seeing our customer show very conservative ordering patterns for cash management reasons, even where demand does exist.
As far as our results the volume drop is causing a significant impact on our margins direct charges are hitting the piano from expenses incurred related to under absorption.
This concept is simple despite our success in significantly dropping our breakeven point at these abnormally low volumes, we simply cannot spread the fixed costs load, we have over significantly less produce pounds and remain profitable.
We can't Overcapitalized inventory with these costs and therefore, they are required to be directly expensed as period cost.
It's important to note that these direct charges are not additional or unusual charges, but are normal operating cost most of whats your fixed that were put in place to support the projected higher production volumes, Dan will provide further details on this and his financial update.
In addition to the significant changes in demand, where responsibly, reducing inventory as we prioritize significant cash generation during this time.
This strategy further decreases the no volumes and all of our facilities.
We reduced inventory by 1.7 million pounds in Q3.
Which is very significant when compared to our volume shipped a 3.2 million pounds in the quarter.
This added to our absorption fixed cost coverage issue.
Beyond the direct charges noted we are encouraged by the positive impact that our price and cost work of had and driving down our projected breakeven point.
In addition, we continue to work to lower our expenses to minimize the impact of or Unabsorbed costs, but we are facing a difficult period due the historically low production volumes.
Or produce pounds and our Kokomo mill in Q3 declined 33% from the pounds produced in Q2 and declined 40% from the pounds produced in last year's Q3.
We have quickly responded to this downturn one of our first actions was a 10% reduction in executive team and board of director cash compensation.
We have also offered incentives for a voluntary separation program for employees.
Gone through a salary reduction enforce and implemented reduced hours at certain locations.
Our team is taking the actions design the actions designed to reduce our year and you're asked you an expense by at least 20%.
We've also continued layoffs and our operations and continue to work.
When our variable cost reduction throughout all of our facilities.
We want to be prepared whenever volume does return to reignite the positive margin and earnings momentum that we had generated over the past year.
A few final thoughts.
Our company our industry and our country are encountering very difficult times at the same time I'm encouraged by what the future may hold frames.
My experience in this industry tells me not to draw negative conclusions about a company at the low points or to think that the good times would never end when in periods of peak demand both can lead to false conclusions and actions.
Even though these are difficult times I believe firmly that's a future for Haynes is bright what I do not know today is the timing of any recovery.
We continue to monitor all the key indicators, so that we are well.
We're an upturn.
The reason for my optimism about the long term future Haynes are as follows and I'll quickly cover nine points here first we have strong liquidity.
Next we are projecting positive cash flow for the balance of the year. Despite very low revenues. In addition, pre cobot 19, we took our gross margin from high single or low double digits to 18% and we see even more potential for profitable growth once our volume returns.
Our past price and cost work are real and we proved how they could result in bottom line improvement.
We've invested what we needed to to position this company for the projected long term aero demand.
Future Capex needs will likely be below depreciation for at least the next three to five years.
In addition, I believe that are alloy an application development work is second to none in our industry.
We continue to focus and bring in orders for high value differentiated applications and products.
We remain very very close to our customers.
Continue to be impressed with the death of our customer relationships.
Also our business model is very well suited for recovery, we plan to continue to provide customers with a smaller quantities. They need as we come out of this tough period, and we will continue to perform the value added operations for our customers such as piece cutting and just in time inventory.
Finally, the past Aero growth was steady and very strong.
It took a pandemic to stop the momentum.
Revenue passenger miles will eventually begin to improve when it does I'm expecting the same pre pandemic fundamentals to drive arrow growth in our future.
Now, let me turn call over to Dan for more details on our specific markets and on our financial results then.
Thank you Mike last quarter, we estimated that overall volumes could be sequentially lower by 15% to 30% this quarter.
James actually declined sequentially by 26.7% to 3.2 million pounds. This is a sequential decrease of 1.2 million pounds.
And a corresponding decrease in revenue of nearly $31 million.
Third quarter sales to the aerospace market accounted for 50% of our revenue at $40.4 million. This is a decrease of roughly 32% sequentially from Q2, and a decrease of 39% from the same period last year.
The pandemic has had significant effects across the aerospace industry with announced reductions in commercial aerospace build schedules combined with a reduction in repair maintenance and overhaul activity.
Complicating the demand situation includes the elevated amount of inventory throughout the aerospace supply chain.
The significant number of undelivered new planes already built.
The significant number of parked planes taken out of service and the cash preservation mode occurring with many customers in the supply chain, resulting in very conservative order entry trends.
Backlog dollars in aerospace decreased sequentially from Q to Q3 by 22%.
Third quarter sales to the chemical processing market accounted for 15% of our revenue at $12.1 million.
This is a decrease of 23% sequentially from Q2, and a decrease of 43% from the same period last year.
Volume was down primarily due to decreased demand caused by covert 19, but also due to low oil prices with the impact of chemical companies delaying capex spending.
Backlog dollars in CPI decrease sequentially from Q to Q3 by 4%.
Third quarter sales to the industrial gas turbine market accounted for 17% of our revenue at 13.7 million.
This is a decrease of 18% sequentially from Q2, and a decrease of 14% from the same period last year.
The decrease is attributable to conservative purchasing methods due to covert 19, combined with small and medium frame engine build slowing due to the oil industry slowdown.
Our share gain initiatives continue.
However, given the current economic conditions shipments are not yet consistent quarter to quarter.
Backlog dollars and industrial gas turbines increased sequentially from Q to Q3 by 6%.
Third quarter sales to other markets accounted for 14% of our revenue at $11.2 million. This is a decrease of 12% sequentially from Q2, and a decrease of nearly 29% from the same period last year.
Demand was impacted from the effects of the cobot 19, pandemic and lower oil prices.
Decreases were largest in the flue gas desulfurization automotive and oil and gas markets.
Backlog dollars in other markets increased sequentially from Q2 to Q3 by almost 5% during the quarter.
Third quarter other revenue accounted for 4% of our revenue at $3.2 million. This is a decrease of 55% sequentially from Q2, and a decrease of 54% from the same period last year.
Total conversion sales decreased sharply due to the covert 19 pandemic.
Overall, the steep drop in volumes compressed gross margins significantly this quarter.
Especially challenging is reducing spending commensurate with reductions in production volume in this environment a.
Spending does not decline in line with production volumes than margin compression occurs.
In the third quarter, we charged to 5.9 million directly to cost of goods sold for fixed and semi fixed overhead spending that did not decline commensurate with the abnormally low production levels.
Which per generally accepted accounting principles could not be capitalized into inventory.
Also impacting the gross margin percentage was fixed period cost spread over a lower volumes.
We also incurred charges to cost of goods sold due to adjustments in inventory reserves and severance costs related to workforce reduction measures.
And finally additional margin compression occurred due to nickel prices dropping since the beginning of our fiscal year. The let me Nichols 30 day average price at September Thirtyth 2019 was $8.02 per pound compared to June 30, 20 $25.76 per pound.
SGN any including research and technical expense was 10.7 million in the third quarter. This is 1.1 million lower than the second quarter. This year, primarily due to significant cost savings undertaken which I will outline further in a moment.
Some actions were taken during the quarter and some actions were implemented after June thirtyth.
The actions, which occurred in Q3 included a cost to implement of approximately 200000 separation expenses and SGN a.
As Mike mentioned, our target is to reduce SGN aimed by more than 20% year over year.
Nonoperating retirement benefit expense in the piano was $1.7 million, which nearly doubled compared to last year's Q3 of 900000 due to the lower discount rates, we discussed in previous quarters.
Interest expense was slightly higher this quarter.
Due to the draw on the revolver, which occurred in mid March.
Our effective tax rate for this quarter was impacted by evaluation adjustment of nearly $1 million related to state R&D tax credits that are not expected to be realized prior to their exploration.
All of that resulted in a net loss for the quarter of $8.1 million.
Cost reduction initiatives have been executed in both Q3 and Q4 and they include the following five categories number one.
Limited, 10% reduction in salaries of all members of the executive team and cash compensation to the board of directors.
Discontinued monthly accruals for management incentive compensation.
In addition implemented a global hiring freeze and eliminated annual merit increases for old salaried employees.
Number two.
Furloughs implemented for certain production maintenance and salaried employees.
Number three.
Offered voluntary separation programs implemented involuntary reductions in force and decisions not to replace open positions all of which eliminated roughly 162 positions both in salary and production positions, which represents roughly 12.6 million in annual.
Salaries wages and fringes.
Number four requiring salaried employees to take one week of unpaid time off during the fourth quarter fiscal 2020. This represents a roughly 8% reduction in that quarter.
And number five significant focus on reducing discretionary spending as well as reviewing and prioritizing capital expenditures.
Focused on reducing inventory, which has and is expected to continue to generate cash.
We will continue to evaluate cost reduction initiatives going forward.
Backlog was 174.6 million at June Thirtyth 2020, a decrease of 30.1 million or 14.7% from 204.7 million at March 30, Onest 20.
Outlook for the quarter.
The company continues to see elevated uncertainty across all its markets, especially in the aerospace market with announced reductions in commercial aerospace build schedules combined with higher inventory levels in the supply chain.
The company expects revenue in the fourth quarter fiscal 2020 to be comparable to the third quarter fiscal 2000.
And the company expects to continue to generate cash from cost reduction initiatives, along with inventory reductions.
Earnings for the fourth quarter cannot be reliably estimated during this time of unprecedented market and economic conditions caused by cobot 19.
Further adverse market conditions may result in additional charges to earnings in future periods, including expenses for unfavorable fixed cost absorption impairment charges and valuation reserves on inventory or taxes.
Moving on to look would it be cash increased by 13.1 million over the third quarter driven by inventory reductions.
Total liquidity was approximately $155 million with cash at June Thirtyth, 2020 at 65.5 million and approximately $90 million available on the credit facility.
Our strategy continues to be cost reduction initiatives and reducing inventory levels in order to increase our cash flow from operations.
This strategy is driving our expectation of an increasing cash balance in Q4 fiscal 2000.
Capital spending was 7.1 million compared to our depreciation level of 14.6 million in the first nine months of fiscal 2000.
The forecast for capital spending in fiscal 2000 is between nine and 10 million to allow for maintaining reliability within our operations.
In conclusion.
Looking forward, we continue to see significant demand challenges ahead, which are expected to result in comparable revenue levels next quarter.
Despite these challenges we continue to feel that we are well position to whether this potentially prolong downturn, because our ongoing efforts to reduce cost and reduce our breakeven point.
Our expected continue inventory reduction leading to cash generation.
And our solid liquidity position.
Mike with that I will now turn the discussion back over to you.
Thanks, Dan.
Short term these are tough times for everyone in the aerospace industry. However, we gain confidence as we look at the long term view and as we see our core competencies leveraging future value such as developing new alloys, and new applications, our unique no manufacturing capabilities and our value added.
Service Center processing.
Seeing beyond this pandemic is important and we're well positioned to get there with that Christie, let's open the call for questions.
Thank you Sir the floor is now open for questions. If you have a question. Please press Star then one on your telephone keypad.
A question has been answered you may proceed with one to remove yourself from the Q.
Again, ladies and gentlemen, if you have a question or comment.
Please press Star then one on your telephone keypad.
And our first question will come from Steve O'hara with Sidoti. Please go ahead.
Hi, Good morning, Thanks for taking my question how are you good.
Morning, Steve Good morning, So I guess, obviously tough quarter with.
You know volumes dropping and things like that I guess.
You talked about revenue being in line with Threeq and Fourq you would you see the same types of.
Margins.
Or maybe.
No margin impact so as you had in the third quarter or is the third quarter.
Adjustment things like that did they kind of help smooth that process out or do you have to do it again in the fourth quarter based on the volumes.
Steve a couple of things. So we are looking for the bottom of the aerospace decline and we're looking for improvement.
In whenever it may come in Cpis NIGC. So this is a a business right now as many in the aerospace were almost all in aerospace our that is going to be with very low volumes and with low volumes is going to come direct charge.
What we've been encouraged by when you look at our pricing, where we're year on year still up in pricing. So our teams done a very good job with that.
We're also encouraged by our efforts on the cost reduction side and Dan detail that that being said low volume is going to lead to direct charges.
And therefore, we will continue to.
To encounter difficult time at least for the next quarter and then we'll see beyond that Dan and anyone that.
Yeah, I mean, it's obviously quite a challenge with variable costs are a bit easier to manage as you can imagine, but the fixed costs I was quite challenging and many of our costs are kind of semi fixed as well so when volume drops this significantly.
Spreading those fixed costs over those low volumes can be challenging so it has.
As time goes on we'll we'll do what we can to reduce those fixed costs as best we can but it's really except to keep up with volume reductions at this level, but I'm pleased with the traction that we had gotten so far on our cost reductions and we'll just keep pushing that as the quarters go forward.
Okay, and then maybe just a follow up on the inventory. So do any of these actions you know change any of the cost of goods sold profile in future periods or is this something that's just kind of a onetime thing I guess I'm just wondering would it lowered the cost of India.
Tory as you sell it in future periods.
No it would not I mean this is the fact that the.
Cost cannot be over capitalized into inventory. So what is capitalized into inventory is kind of normal levels are normal amounts. So you know as that inventory gets sold that I'll look.
Like a normal cost of goods sold so thats what were.
Obviously avoiding is over capitalizing. So later when that inventory sold you've got a real squeeze on the margin we're getting squeezed on the margin now which is the proper way to do it so.
So that when the product is sold and it looks like a normal.
Normal gross margin when it's sold.
It's an interesting time for us because obviously are volumes are way down, but we feel very strongly we can responsibly also reduce inventory.
As our business levels of down, which which further complicates the issue with absorption in our plants, but it's obviously obviously the it's obviously the right thing to do as we focus on generating cash.
Okay, and then maybe just.
One last follow up if you.
In terms of the cuts in the adjustments you've made so far.
You know what types of volumes are you.
You know kind of ready to deal with next year.
I I understand you don't.
Fixed costs are fixed I guess, you know in the short run, but the long run.
I think a lot more cost of variable I guess.
So you can you just talk about the cuts you've made so far I mean, I know you don't want to cut too much or too deeply.
But how that prepares you for the potential outcomes next year.
And going forward. Thanks at this point for the short term we've got to consider revenues about where we are now so what we're doing both on the salaried side and on the variable side is making the cuts we have to to try to squeeze the difference between our volume drop in our cost dropped to try to improve that as much as possible.
And so we are continuing to look at what our volumes are and then we need daily to try to match up with those volumes are up with what our cost structure is and try to improve that going forward. The other thing that we want to make sure. We're prepared for is one of these days.
There, we don't know when obviously there will be improvement in this market as a vaccine comes and we want to make sure we'll be prepared for the upturn. So we're always looking at that also.
Okay. Thank you very much. Thank you. Thanks, a question here.
And as a reminder, ladies and gentlemen, if you would like the question or have a comment. Please press star then one on your telephone.
And our next question comes from Michael Lifelock with Keybanc.
So Michael.
Hey, guys good morning.
I just wanted to get your take on what you're hearing within the arrows supply chain.
In light of some of these cuts from Boeing and Airbus This week.
Specifically on wide body platforms, but.
So what was the supply chain, where they anticipating some of these cuts or could this could this drive activity even lower.
It's concerning.
Whether you're talking about continued delays with a 777.
And the GE NYNEX engine, which by the way we have to proprietary engines on that as we understand is being pushed out further which which obviously is not a good sign but the other thing that's happened is and I'll take the workforce engine that I mentioned on single, while the leap engine okay.
Forecasts that we had seen in mid 2019 for leap engine production. In 2020 was 2300 engines 20, 360 engines whatever the numbers and now you know when we put this script and the information together we were looking at only 900 and now that number is 800, so it's two things.
Not only a two thirds cutting the number of engines being built but its inventory that exist within the supply chain. So.
Certainly we're looking for the first did a good news, Michael but we certainly haven't seen yet.
Yeah that that makes sense. Thank you.
And on the share gain initiatives you touched on those are these longer term negotiations, where you recognize the increase share in the future.
Or are you actually seeing this in the near term more in the expense of price at the expense of price no not not at the expense of price the share gain that we have I've talked about and focused on is in power generation and 92 and.
What's really interesting in Argentina members is even though our volume in our revenues are down year on year and sequentially.
Our backlog is up I don't have the number in front of me between 25, and 30% year on year backlog and what we're seeing with that is not only.
Finally land based gas turbines demand equals supply as opposed to taking it out of inventory.
But we are seeing positive growth because of share gain that we have begun to experience we have begun to ship.
It's where the significant company out there and it will help us not only now but as we go into the future.
Okay and then just lastly from me we've seen some of your customer than peers cut their dividends I'm. Just wondering if that's something you might be considering two to adjust your dividend given the the uncertainty in lack of visibility in the near term.
I'll start by talking about where we are in cash generation.
Obviously, we reduced our inventory in the past quarter by 16 million. Despite the very low sales and generated cash of about 13 million and our plan is to continue.
Our cash generation well into next year or through next year that being said, we're committed to our dividend and we realize the importance of it to our shareholders. So at this point no change in the policy.
Obviously, given the market we're continually evaluating at the board level this ever changing economic environment, and if conditions warrant us to reconsider we certainly leave that door open you can be confident that will make thoughtful decisions regarding all capital allocation. During this impressive environment. So we need to continue to understand where this market is we know.
We continue to understand where the market is going how long it will take to begin to see recovery.
And how.
How successful and I believe it will be very successful or cash generation capability will be.
Got it. Thanks. Thank you. Thank you.
And we have a follow up question from Steve O'hara with Sidoti. Please go ahead.
Yes, thanks for taking the follow up a I guess just kind of along lines of the.
Inventory in supply chain and.
Potential recovery.
So I guess I'm just wondering what.
The.
Industries recovery might be and whats the timeline for your recovery would be.
Given the inventory in the supply chain.
Does that delay youre recovery.
You know I guess, if we get back to you know kind of let's say 20 nineteens volumes.
You know in 2022, which seems like a long shot I'm, not saying that would happen, but I guess.
How long before you get your margins back to where they kind of should be based on.
The way you've kind of started running the business.
Oh first thing I think that has to happen Steve as we've got understand where bottom is in and we believe we're approaching the bottom.
But we also think based on all the news out there if we take an honest look we're not going to see an uptick for at least another six months.
With all the airframe manufacturing is pulling down the production rates and again, we're all waiting for the first piece of good news, we haven't seen it.
And we're expecting obviously without a slow recovery and our revenue passenger miles.
We believe the sector will be down for at least 24 months more likely 36, and I'll go back to something Dave Calhoun from Boeing said recently, we said it will take two to three years for travel to return to 19 levels and additional few years beyond that for the industry's long term growth trend to return so.
This is this is tough it is still a bit hazy I think it's a very fair question and I think we have to continue to understand what's happening in the world related to vaccines in what how that will drive revenue passenger miles. So I think it's a question. We've got to continue to ask as we go forward, but we certainly don't see anything short term, which says there's going to be an uptick anytime soon.
Okay No that's there.
And then I mean.
There's any.
Lets say the recovery.
Hi, maybe maybe.
You wouldn't be fair to say that you guys have additional levers to pull.
If necessary a either if the.
Slow environment kind of drags on.
Continues to drag on or gets worse over time, I mean, other additional levers you guys coupled to kind of preserve cash and liquidity and things like that sure and again, you've seen our inventory levels. As we went into this so we've got a significant amount of inventory and what we continue to work on his shorten.
In our lead times, and improving reliability and so the number one lever for us is becoming very reliable and significantly shrinking or lead times, which will allow us to continue to generate cash given the amount of inventory that we have in addition to that in addition to the positions Dan talked about in the 12 or $13 million and in costs through people we can.
Thank you to work on our variable cost to manufacture we were last quarter somewhere between five and 600 basis points better in gross margin and that was pricing and it was cost momentum variable cost momentum doing things differently, obviously I'd be a little foolish to talk about we're in a good pricing environment now, but we still have a.
Finally on on the on the variable cost side, we continue to focus on improving yields and improving our cost of manufacturer. So.
Yes, there are definitely levers out there both from the on the cash side.
And on the cost side.
Okay. Thank you very much.
I just can say one thing I might add to that is just our.
Our structure with a mill and service centers, having service centers in an environment like this when customers.
As things start to get better theyre going to order more and they may order smaller quantities.
And be very conservative in there and they're ordering patterns when we have product in the service Center weekend.
You know ship those smaller quantities versus the mills, who will will shift just full milk quantity. So it's a bit of an advantage for us as we're coming out of a downturn. So we'll be well positioned for for that went into occurs.
I think Dan that is a great point as you look at.
Coming out of this whenever that may be I think air customers are going to be very conservative continue to be very conservative on cash side and we are mill set has their own distribution center that can cut pieces for customers that can provide just in time inventory. So it really our business model works well as far as short lead time out of a distribution center.
Cut pieces doing things for the customers that otherwise they may have done.
And you know limiting the amount of metal customers to buy so really helps us great point, Dan. Thank you.
Okay, and then just maybe a sorry, one more follow up I think you guys had some shutdowns in the quarter.
And I mean, I would assume there wouldn't be any shutdowns in for Q.
You know unless maybe there is an outbreak or something like that I mean, obviously.
You're not producing enough. So you have to shut down to preserve costs I don't know.
But.
What's need.
Is there a beneficial impact of not having to shut down for some period of time.
Okay going into the fourth quarter that wasn't in the third quarter. It all yeah.
Thanks to the question we shut down.
At the end of March because there seem to be so many unknowns and we were concerned.
About our employees health and safety and we wanted to get a handle on this and that's what we did and obviously that shutdown extended into the quarter. We're now reporting on a taken down steel mills, and then bringing them back up is not the best thing in the world, but we did put safety first we do not anticipate another shutdown, however, I will say that.
When we look at what's happening in the country right. Now we are tubing plan is in Louisiana, and I believe I heard yesterday. The highest per capita infection rate right now is in Louisiana or at least one of the highest so we're watching it very carefully we have no shutdowns plan, but we'll continue to look at what's best for our employees as we go forward.
Yeah.
Alright, Thank you very much for the call. Thank you.
Thanks.
And the remainder ladies and gentlemen, if you would like.
Please press star one on your telephone coupon.
And I'm showing no questions from the phone lines at this time, so I'll turn it back over to make sure for any closing comment.
Thanks Christy.
Thanks to all of you for your time today and thank you for your interest and your support of Hanes.
Please be safe, we mean that sincerely and our thoughts are with you in your families. During this very unusual time that we live and we look forward to updating you again next quarter take care be safe everybody Bye bye.
And that does conclude today's teleconference. We thank you for attending you may disconnect. Your lines at this time and we have a great day.
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