Q3 2020 Douglas Dynamics Inc Earnings Call
[music], ladies and gentlemen, thank you for standing by and welcome to the Douglas Dynamics' third quarter Twentytwenty earnings Conference call.
At this time all participant lines are in English and the only know after the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone. Please be advised that todays call is being recorded if you require any further she's just please press star zero.
I would now like to hand, the conference over to your Speaker today, Sarah Lauber C. F. L. Thank you and please go ahead ma'am.
Thank you welcome everyone and thank you for joining us on today's call before we begin I'd like to remind you that some of the comments made during this conference call, including answers to your questions will constitute forward looking statements.
These forward looking statements are subject to risks that could cause actual results to be materially different.
Those risks include among others matters that we have described in yesterday's press release and in our filings with the FTC.
[music] joining me on the call today are Bob Mccormick, our President and Chief Executive Officer.
In a moment Bob will provide an overview of our performance then I'll review our financial results after.
After that well open the call for your questions.
With that I'll hand, the call over and above.
Thanks, Sarah good morning, everyone.
Before I discuss our quarterly performance I wanted to highlight two important topics.
First we're very pleased that the vast majority of Douglass employees have remain healthy since we came back to work in May we've.
We've had a handful of isolated cases at some locations.
And people who have tested positive have contracted cobot outside the workplace.
Okay says we have really responded quickly and we've avoided any large outbreaks at this point.
Going into the winter months, we're likely to have more positive test, especially as cases expand across the country. We.
We do remain vigilant working to ensure no one left their guard down our protocols are effective and were ready to handle any outbreaks that occur.
Additionally, I'd like to take this opportunity to welcome Lisa Rojas pockets to our board.
Lisa has a proven track record of leadership with greater than 30 years of experience across a diverse set of industries.
[music] she focuses on marketing strategic planning and data analytics at Cigna American family.
Sure Rich and Ford Motor company, bringing in valuable experience in the years ahead, we're looking forward to having her as part of our team.
At the same time, we'd like to recognize Jim Packard for his numerous contributions to Douglas dynamics, Jim will review retired from the board at the end of his current term at the 2021 annual meeting.
We are grateful for his contributions and guidance over the past decade and wish him all the best for the future.
[music], Okay, turning to the results for the quarter in short we are pleased with our results.
All of our facilities operated throughout the quarter, all being under pandemic conditions attachments performed well with a strong finish to the pre season solutions rebounded from the second quarter shutdowns and executed well all things considered.
Let's talk about the segments in more detail first attachment.
We had a solid quarter actually outperforming third quarter 2019, with revenue EBITDA and EBITDA margin all in the Crazy.
If you recall.
We saw a late start to pre season and dealers were understandably conservative with their orders given the uncertainty that existed in April and May and the below average snowfall in recent winters. We've.
We hope to see dealer order strength and as we got closer to the end of Q3 and the beginning of the retail selling season, and that's exactly what happened.
This led to an approximate 50 50 ratio between second and third quarter pre season shipments compared to previous expectations of a 50 545 split.
And the prior year split of 60 40.
Even with the uptick in Q3 orders field inventories are down to prior year at the end of September another positive that will influence demand as the retail season begins.
It is worthy to note that land scrapers are relatively strong financial position right now because they were able to work all spring and summer and this may translate into early retail activity as well.
On the product front to have done before we launch. This spring has been well received we are optimistic about the long term potential for this product.
Another positive news the health of our dealer credit remains in good shape.
Elections are coming in as expected and we are pleased that the financial health of our dealer network remains on par with previous years.
Overall, we are and encouraged by the trends and are well positioned heading into the snow season.
Of course, we are now keeping a close eye on the weather channel and our ability to deliver products during the snow season remains as strong as ever.
In short our attachment segment continues to prove its resilience once again and our team is executing its operational plan flawlessly as we've come to expect.
Turning to solutions as we discussed during our call last quarter.
Many of our agenda facilities are in the east coast and mid Atlantic areas that were particularly hard hit early during the pandemic.
After a difficult second quarter, we saw Q3, quoting and order activity increase across the board.
In fact incoming orders October year to date 2020 at is yet to have just surpassed the same period in 2019, which was a record year.
Considering everything that has happened this year, we're very.
Encouraged by this development and I want to commend. These is you had a sales team that has worked strategically to adapt and engineered this dramatic rebound in a very challenging market environment.
So on the demand side, we feel much better today than we did a few months ago.
However, the ramp up of Oems and component suppliers will still be unpredictable in the near term, especially as we see a second wave of Cobra cases across the country.
This is certainly true with chassis availability for class four through six trucks.
Well OEM production continues to ramp up we do believe chassis availability for class four through six trucks will be a challenge for the balance of the year.
However, it is worth remembering that we have a long track record of being the number one recipient the pool chassis was from our largest OEM partner.
Additionally, the number of chassis has received has almost doubled since our acquisition of the Jana confirming that our OEM partners have been supporting our growth plans.
I'll close with this statement on chassis.
Our competitors would give anything to be in the same position as did yeah.
Moving on to Hendersons municipal snow and ice control business, where our team turned in a good quarter.
As expected availability for class seven and eight chassis is much improved with lead times declining to just nine to 12 weeks at the moment.
After being closer to nine to 12 months in recent years. This is certainly great news.
On the incoming order front, we are clearly paying attention to how the municipal customers are dealing with tax revenue challenges.
To date, we haven't seen and don't expect to see orders being canceled.
It is important to note that Henderson has built a strong backlog over the past two years as we set new records for incoming orders in both 2018 and 2019.
We'll be working our way through a portion of that backlog and we'll continue to monitor the sales cycle and commentary from our municipal customers.
As a reminder, historically snow and ice control budgets are the last thing to be cut to ensure public safety and to ensure comments can continue we.
We will keep you posted on the municipal order trends as we turned the corner into 2021.
All in all we are continuing to make our way back from a difficult second quarter and remain confident in the long term future growth prospects at work truck solutions.
Looking ahead, despite the challenges that weve encountered in 2020, our commitment to returning value to our shareholders has not wavered.
We remain fully committed to our dividend, which was paid as usual, let you ended the quarter.
We have increased our dividend many times over the past decade during good times and bad.
And I envision this being true for many years to come.
When it comes to M&A, we know the limited list of Blue Chip companies that we would talk to if they became available and we receive information on other deals on a regular basis, although far fewer this year because of the pandemic.
We will continue to build relationships will conduct due diligence on the logical opportunities that are presented but don't see major deals on the horizon.
[music], you've heard me say on many occasions, we will exit stronger than we entered it.
As we near the end of the year, it's worth taking a moment to reflect on that statement and call out some of the successes in 2020, which helped position Douglas to achieve its long term profitable growth objectives.
There are certain areas, we were able to accelerate.
First as we mentioned last quarter, Sarah and her team were able to secure an excellent new debt deal in June.
Providing us the financial flexibility to support and grow the dividend.
Invest in future growth initiatives, all while creating an up enough dry powder to execute strategic acquisitions down the road.
Next well March and April were tough we are.
We're extremely proud of our response to the pandemic from the rapid decisions. We made in March to the planning and execution of our safe return the work plan.
If there was a silver lining to this situation. It was that we were able to demonstrate our commitment to our people.
Looking after them before during and after the shutdowns, which helped accelerate our cultural transformation in solutions.
Also investments in vertical integration remains on track and were not slow down significantly by the pandemic.
These investments will support key long term growth initiatives in a post pandemic environment.
Finally, as I mentioned earlier, we're very pleased that the order pace at the agenda has already met and will surpass the prior record year.
Given this took place on the eastern Seaboard in what was a major pandemic hotspot region. The turnaround has been nothing short of remarkable.
However, because of the pandemic and other factors out of our control. There are also areas areas, we weren't able to address as thoroughly as we originally planned for.
For example, following our success at the Rhode Island, Rhode Island facility last year, we had plans in 2020 to significantly expand our Dms efforts in solutions to several other facilities.
Obviously these plans were correct curtailed due to covert travel restrictions on the east coast.
We are poised and ready to execute these plans as soon as the business travel restrictions are lifted.
Overall I couldn't be more pleased with the way we are executing in an uncertain environment. Our teams are doing an outstanding job and we'll continue to do so.
At its core our business model is built to adapt the dynamic external conditions made the necessary adjustments to overcome these challenges and utilize our continuous improvement mindset to get better every day.
Well, we exit the pandemic stronger than we entered absolutely there's no doubt about it.
There are a lot of reasons to be excited for our growth prospects over the long run we continue to push toward our long term goals to deliver shareholder value in the years to come.
Now I'd like to pass the call to Sarah Thanks.
Thanks, Bob.
Overall, our financial performance for the quarter reflects a sequential improvement and general business conditions as people got back to work following the shutdown in the spring.
Both our customers and suppliers are gradually ramping up production and continued to adapt their operations to the new codified associated with a pandemic.
While we continue to provide comparisons on a year over year basis, given the dramatic changes over the past year, the sequential changes from the second quarter, our perhaps more important.
All things considered we're generally pleased with the resilience of our performance this quarter.
From a consolidated perspective, we generated third quarter net sales of 133.8 million and gross profit of 36.7 million compared to net sales of 141.9 million and gross profit up 39.9 million during the third quarter of 2019.
We recorded GAAP net income of 9.2 million or 39 cents per diluted share compared to 12.4 million and 50.
Three cents, respectively and 2019.
On an adjusted basis, we generated net income of 9.8 million and 42 cents per diluted share compared to adjusted net income of 12.8 million and 55 cents per diluted share.
Similarly, we generated consolidated adjusted EBITDA of 23.1 million compared to 25.1 million and the corresponding period of the prior year.
As DNA expenses, including amortization expense were 19.2 million approximately 800000 lower than the third quarter of 2019.
The decline in its DNA was due to lower discretionary spending.
Including travel advertising and promotion all as a result of our income protection plan.
Interest expense was 5 million for the quarter, which was higher than the 4.3 million incurred and nothing carried on the prior year <unk>.
The increase is primarily due to higher interest paid on our term loan.
The increase in principle balance from our January financing.
But somewhat offset by lower revolver in trip a 300000.
The result of decreased short term borrowings when compared to the prior year.
The effective tax rate was 26% for the quarter higher than the 20% range for the third quarter of 2019 due to the release of reserves for uncertain tax positions last year.
Now, let's turn to the earnings information for the two segments.
Within our work truck attachment segment, we generated net sales of 76.9 million compared to net sales of 75.6 million a 2% increase was primarily attributable to strong as to the pre season period.
Adjusted EBITDA was 20.2 million during the third quarter higher when compared to adjusted EBITDA of 18.7 million recorded in the prior year due to slightly higher volume.
When we last spoke in August we anticipated that our pre season orders would be approximately 50 545 split between the second and third quarter.
With the pre season now concluded we were closer to a 50 50 overall between the two periods as those late orders came in.
This compares to a 60 40 split between the second and third quarter and 2019.
Well dealer inventory remains relatively low and in line with our expectations. We believe that some of the order activity we've already seen.
Have pulled from the fourth quarter and dealer felt more comfortable about the economy in September compared to the spring.
That brings us to work truck solutions, where we reported net sales of 56.9 million and adjusted EBITDA of 2.9 million compared to net sales of 66.2 million and adjusted EBITDA of 6.4 million in the same period last year.
The decline in both net sales and adjusted EBITDA is primarily due to lower volumes tied to the gradual fragile operational ramp up of customers and suppliers. Following pandemic related shutdown combined with the ongoing class or let's say chassis supply.
Right.
Turning to the balance sheet and liquidity figure.
Net cash used in operating activities. During the first nine months of 2020 was 27.1 million compared to 21.2 million for the same period in the prior year.
Free cash flow for the first nine months of 2014 was negative 36.5 million compared to negative 29 million. During the same period in 2019 in line with our expectations.
These changes are both primarily attributable to less favorable operating results, partially offset by favorable changes in working capital of 26.1 million.
The largest favorable change in working capital was a decrease in accounts receivable, mainly driven by a higher a our balance at the start of the year combined with relatively lower sales through the first nine months of 2014, when compared to last year.
As expected we saw a 3.3 million increase in inventory and 93.7 million at the end of the quarter when compared to the third quarter of last year as we built inventory in anticipation of potential supply chain constraints related to the pandemic.
Accounts receivable at the end of the quarter were 123.2 million compared to 153.2 million at the end of the third quarter last year.
Due to the aforementioned lower sales so far this year when compared to last year.
Capital expenditures for the first nine months of 2020 totaled 9.5 million higher than the 7.8 million incurred in the first nine months of 2019, but in line with expectations as we continue to invest in long term gross profit that.
Despite the pandemic a long term strategy, we outlined last year remains intact, we've been able to make good progress through 2020.
Our vertical integration initiatives remain on track and we should be in a position to talk.
About these projects more specifically as we progress through 2021.
Total liquidity, which is comprised of 14.3 million in cash and 79.6 million and borrowing capacity under our revolver was approximately $93.9 million at the end of the third quarter compared to $47.3 million at the end of the third quarter 2019.
Our higher liquidity relates to the June refinancing of our 375 million credit facility, which fortified our financial position and provides ample flexibility going forward.
We are comfortable with our current debt levels, maintaining a net debt leverage ratio of 3.7 times in comparison to the 2.5 times at the same point last year.
The increase in the ratio is due to the impact of the pandemic on our financial results.
Paying down our debt continues to be a priority and we will assess and make a decision on additional payment as usual all during the first quarter of next year.
As we are now more than six months into the pandemic, we can respond and say we've done a good job of curbing discretionary spending where appropriate.
No what I want to reiterate our commitment to funding our long term growth projects.
Despite the challenges that weve encountered throughout the year, our capital allocation priorities remain consistent.
In addition to returning cash to shareholders via our dividend and paying down debt. We will continue to invest in the business, while keeping a close eye on the market should one of our blue chip acquisition targets become available.
Finally, as you probably saw in our earnings release, we are not providing quantitative guidance that's corridor.
However, we can confirm the following.
Free cash flow is still expected to exceed the amount necessary on the dividend.
And attachment and timing location at the mouth of snowfall will influence result in art in that segment as it does every year.
And in the fourth quarter, we expect to produce a similar performance to the third quarter given some sales were already pulled into the third quarter.
[noise] solutions results will be impacted by customer confidence and the ability to operate with Barry pandemic, Richard Shannon In addition to chassis supply trends.
We expect a gradual recovery to continue and produced a sequential improvement from third quarter results.
Partly because the fourth quarter is traditionally solution largest corridor.
Of course these qualitative comments also assume that current macroeconomic economic conditions remain relatively stable in the coming months.
Given how rapidly the economic outlook is changing there too many unknown factors today to predict how 2021 will unfold with any type of accuracy.
At this point, we are not expecting an immediate return to the type of environment that allowed us to produce our record 2019 resolved.
However, we do know that as the situation improves in the years ahead, we will be able to we will be ready to take advantage of.
The conditions and deliver our growth potential.
Over the years, we have proven our ability to adapt our business and many different economic environment.
As we move into the last two months of 2020, we're focused on adapting to the changing environment executing on our near term plans and investing for the long term.
Also while 2020 has presented unique challenges.
We have adapted quickly and are pleased with recent performance improvement.
In short, we're well positioned for the long term and expect to emerge from this situation stronger.
With that I'd like to open the call for questions.
Operator.
[noise] as a reminder, ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone.
[noise]. Your first question is from Tim well, which from Baird.
Hey, Yeah, everybody good morning, Nice a nice results.
Thanks Sam.
Maybe just first question just on September I'm, just just wondering if you could add maybe a little bit of color on what you saw in terms of the order activity in attachment.
And maybe what drove that just stronger light truck sales or did you get more capital to the cash flow improve at the dealers instead, they just kinda preordered, a little more closer to the season just trying to understand.
You know kind of the drivers and based on your internal what what kind of drove that and I don't want to call pull forward, but better a better numbers in September.
It did.
Then going to going back to the going back to the pre season order period, which was right in the early stages of the.
Endemic we expected dealers to be conservative in their ordering and they were and yet as I as I said earlier, what we hoped would happen when you get to the.
Last half of the third quarter.
Orders typically are there leidos.
That they are at any point during the during the pre season, because everybody has already placed their stocking order in April may and the first part of June and so we typically don't expect a lot of activity during that period of time Tim.
But as I said, we hope.
That we'd see some increased stocking order activity late because dealers were conservative early on and and and and that's what we what we what we saw so we actually started fielding dealer calls at various points over the summer.
Remember the pre season period closes middle of June from an order perspective, and if people would call and say is it too late to add 100, plus to my order and we absolutely let them let them do that so there was some momentum building.
Later in the in the quarter at that point, not yet driven yet by retail activity Tim.
Because we're still in the green season to a large degree.
It's just more dealers feeling more and more comfortable about their lot in life and I'm wanting to bring those inventory levels back up to what you would do a decent place having said that.
Retail inventories are still on the on the cloud side 10, 15% below a year ago.
And and we feel good about that as well. So you know all every everything is lining up.
For our dealers to be well positioned to start the season and for us to be well positioned to respond to it.
Okay. Okay. I appreciate all that that sounds that sounds great and then basically just switching over to solutions on the supply chain pressures. It doesn't really sound like anything's changed I mean, if anything.
I've been to eight chassis said, it really improves where where else are you.
Four to six where else are you seeing kind of acute supply chain pressure in that business.
You know it.
Knock on wood, if you have any wouldn't near you right.
We have been make what we yeah exactly we have been.
Please with the components suppliers are up to this point not.
Not to say that we don't have a few challenges here and there but by and large we have not had significant constraints that have held back our ability to build and ship work work trucks now I I put a big caution flag around that because as we enter the winter and we're seeing.
You know cobot cases increase we have no idea what the future holds from a shutdown perspective or from a supply chain perspective, but up to this point I think it speaks to the.
So the strength of our relationships with those suppliers and that the by and large and holding up their end of the bargain yeah, Tim I would add to that you know we do out of backlog in those businesses. So for US we can safely add to our inventory levels, which we have been doing.
That's because of the uncertainty Oh, you know what could happen to the supply chain.
Sure enough in the fall and the winter.
Okay, Okay that sounds good and then the last question I had just on.
On your vertical integration initiatives I think you said in your prepared remarks, you also talk a little bit more about that next year, but you know any sort of preview you could give us just in terms of maybe how meaningful contribution it was initiatives contributed 2021.
Yeah, I hear you hear the the way is the way to think about is this.
Rupert project, which we've been speaking about now for the better part of a year or 2020 was really the year of product design in capital investments to get the Greenfield facility.
To a point, where it can be producing product and you're right. We will we will speak to it.
In the in more depth.
As we round the corner into 2021.
I would I would suggest that this is a long term play.
And well there will be some impact in 2021, the greater impact will be certainly down the road in 2022 and beyond.
Okay, Okay, great well I'll hop back in queue and good luck on the rest of the year. Thanks.
Thanks, Tim.
Your next question comes from Ryan signals from Craig Hallum Capital.
Good morning, Congrats on the results and thanks for taking my questions.
I just wanted to dig in a little bit on the job so.
You'd mentioned in your prepared remarks that chassis or I believe you said double the supply from when you acquired that business two years ago.
You also mentioned year to date orders a record yes.
Yes, it seems like 2021 expectations are still for.
Some softness kind of across the business and down from 29 C level, So I guess.
We understand the supply dynamics given those two comments given the constraints you also mention for that segment.
Yeah, well, it's a couple a couple of things when you when you think about 2021 for the Jana.
Obviously, we went out of our way to send a signal about the strength of orders and what a terrific job that the team has done in this environment.
Similar to Henderson during the years of chassis constraints in 2018, and 19 Henderson was building record order books every year. The agenda is in the process of starting to do a similar thing.
That means that long long term.
We've got nothing to worry about okay.
Shorter term, we do have some in consistent supply with those chassis is what I wanted to remind people I'm actually glad that that that that that stuck with you.
You know it isn't that our our OEM partners haven't been paying attention or or are not supporting the jana and our and our growth initiatives. They have.
We're just growing at a at a pace that is faster than their ability to supply now obviously, the pandemic doesn't help that add all right, so but he's going through various stages of startup. So I think it's prudent.
As we look at 2021, we're going to keep the foot on the gas out in the marketplace in terms of getting new orders. It's it's it's prudent for us to plan for some inconsistency in chassis supply until.
So, we see a change and and and likely we're going to have some of these challenges certainly through the remainder of the pandemic or whatever that turns out to be but longer term, we're going to be just fine.
Gotcha and then.
We entered into a distribution agreement with John Deere support so attached or utility vehicle any color you can provide on that relationship and maybe what you guys. If anything were doing before versus going forward.
Yes, I had a few things for things for noticing that where we are excited about this opportunity I'll say I'll say two things it.
It is evidence of the success of our non truck strategy on the attachment side as you know we've got.
Market, leading 50% to 60% share in that space and so growth is difficult to come by on traditional pickup outage I want ice control products. So most of the growth in the industry as a curried in this non truck segment and this is John Deere partnership is evidence that the non truck segment for US is working having said.
With that I will tell you that that this agreement just got finalized it's very early and we will have much more to say on this topic as we get into the first half of 2021.
[noise] I just one follow up on that without getting too specific do you think the utility segment can be a material contributor and Orbitz specific agreement.
And the 2021 and beyond.
And in the 2021 I don't think we should think about it that way.
Keep in mind that that you know when you when you sell a flower for Ah you TV Agb.
It is it is a much smaller piece of equipment nowhere near as complicated nowhere near as profitable so.
So even as we sell units we're.
We're going to see revenue and margin improvement.
But it isn't it isn't the same as selling one of our traditional units that doesn't mean, we're not excited about it.
I think the way that we're looking at is headed into 2021 is lets make sure we get the partnership kicked off appropriately, let's make sure that we're bringing the new dealers on in a in a fashion, where where we're accustomed to treating them like they ought to be treated and at some point in 2021, we'll have a better perspective.
On what 2022 and beyond could look like I would summarize it this way. It's a tremendous addition to an already extremely successful business.
But given the given the revenue and profitability of that business to begin with it's likely not to have a material impact longer term.
Great.
Hey, guys. Good luck.
Thanks, Brian.
Your next question comes from Chris Mcginnis with Sidoti.
One.
Hi, Thanks for taking my questions. So one bonds.
HM.
Who I'm talking about market share.
It was more about it.
In this environment, we're building to replenish quickly and then you've got the little bit more I know, there's not a lot of them.
Well they put in a difficult environment like this.
This is helping you in any way, maybe being smaller market share at least in snow and ice and then maybe you can take that same question and apply it to the attachment so the smooth well what was the other dynamic there given.
We have no strong multiple use that for our own them. Thanks.
Yeah, Chris. Thank you I mean, you know certainly you know you know Douglass business pretty well, we look at we look at any uncertain economic environment, whether its snowfall driven or whether it's economic driven obviously in 2020, you know pandemic driven.
They are all opportunities for us.
Shira mentioned, the fact that we've been prudent about cutting our costs and those sorts of things we absolutely scale. The business is back but boy. We look at these situations as an opportunity for us to not just exit stronger but that when everybody else is batten down the hatches in kind of hiding in the corner waiting for the headwinds.
The past a we look at it as an opportunity to better serve our customers and to be more responsive. So is there a possibility we can grab a little market share on the attachment side possible I hope. So it has it has happened before.
Solution side, I think I think similar opportunities exist.
Obviously, we've got a few chassis challenges with the class four through six but again, we're our teams are there our our learning.
Learning from the attachments group right and and they are focused on being more responsive in this environment.
So that our our end user customers.
Just to get a reinforcement of the value proposition from Douglas dynamics.
Cool.
With that I would have just one quick one on the cash flow and we didnt have the target for your run I guess, one thing you've seen improvement Matt is that really just around strong we're kind of end markets and all those are other.
Working capital, though you have the full maybe.
Maybe beat that number.
Yeah, Yeah, we mentioned, our free cash flow being greater than the dividend I would say that opportunity.
In the free cash flow for the year.
It's two fold middleby.
True, earning strong.
Strong fourth quarter finish what's you know for us to have a lot to do with with snowfall.
I am expecting working capital relatively flat for the year that would be the second area of opportunity I'm. Just if we are able to reduce our working capital it's not been something that we've been pushing hard to beat.
Because yeah, we want the inventory levels.
To be there for us when the when the Japanese are here and the ability to get those trucks out the door quicker, but there's always some opportunity that we may be able to execute on unreasonable.
I appreciate that thanks, and good luck in Q4, hopefully your loved ones.
[laughter] Thanks, Chris Thanks.
[noise], ladies and gentlemen, if you would like to ask a question at this time. Please press Star then the number one on your Touchtone telephone.
[noise] [noise] there are no further questions at this time I would like to turn the call back to Mr., Bob Mccormick, President and CEO.
[noise]. Thank you for your time today as always we appreciate your ongoing interest in Douglas dynamics, We hope that you and your families are staying healthy and we look forward to talking to some of you at the virtual Baird Conference next week.
I have a terrific day.
Ladies and gentlemen, this does conclude today's conference call. Thank you for participating you may now disconnect.
[noise] [noise] Oh.
[music].