Q3 2021 Forestar Group Inc Earnings Call
Good afternoon, and welcome to force Star's third quarter 'twenty 'twenty 1 earnings conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder, this conference.
Is being recorded I will now turn the call over to Katy Smith director of Finance and Investor Relations for for SAR.
Thank you Paul and welcome to our call to discuss our results for the third quarter of fiscal 2021 before we get started today's call includes forward looking statements as defined by the private Securities Litigation Reform Act of 1995.
Oh, there's for sure believes any such statements are based on reasonable assumptions. There is no assurance that actual outcomes will not be materially different.
All forward looking statements are based upon information available for star on the date of this conference call and we do not undertake any obligation to update or revise any forward looking statements publicly.
Additional information about factors that could lead to material changes in performance is contained in for storage of annual report on form 10-K, and its most recent quarterly report on form 10-Q, both of which are filed with SEC.
This afternoon's earnings release can be found on our website at Investor day for started Dot com and we plan to file our 10-Q early next week.
After this call we will post an updated investor presentation for Investor Relations site under events and presentations for your reference now I'll turn the call over to Dan Bartok Rcs.
Thank you Katie.
And good afternoon, everyone.
In addition to Katie and I am pleased to be joined on the call today by Jim Allen, Our Chief Financial Officer, and Jessica Hansen D. R. Horton Vice President of Investor Relations.
The fourth of our team delivered an outstanding third quarter, we have built our team quickly and they have done an amazing job of executing on on development projects and identifying attractive investment opportunities.
We accelerated our development activities last year and now that those lots are beginning to deliver and has put us in a position to capitalize on the significant market demand for finished lots.
This resulted in significant revenue growth and margin margin expansion, creating meaningful value for our shareholders.
Our development teams and contractors continue to execute solidly positioning us for long term profitable growth.
We have delivered over 11000 lots to homebuilders the fiscal year to date and enabling us to increase our expected deliveries for fiscal 2020.1 to between 15000.516000 lots.
Executing on our plan is delivering measurable results our third quarter gross profit margin increased 610 basis points year over year to 17, 8%.
Several factors contributed to this quarters gross margin improvement.
The demand for developed lots remains incredibly strong as homebuilders bolster their inventory positions to meet sales demand.
This combined with our strategy of pricing lots of closer to the time of delivery and labor.
And for start to take advantage of favorable market conditions, when setting finished lot prices and select markets.
We also made further progress and delivering more of lots from for star source projects and we continued to reduce our exposure to lot banking.
We are committed to a returns focused business model, our high turnover low risk manufacturing strategy led us to achieve a 10% return on equity for the trailing 12 months ended June 30 of 2021.
This was a 390 basis point improvement year over year, and our fifth consecutive quarter of <unk>.
ROE improvement.
We expect to continue to increase our returns on equity and inventory as our platform gains additional maturity and scale and our <unk>.
Team captures increased share and their respective markets.
Jim will now discuss our third quarter results in more detail.
Thank you Dan.
And the third quarter for Starz net income increased 56% to $15.8 million or <unk> 32 per diluted share compared to $10.1 million or 21 per diluted share and the prior year quarter.
For the quarter revenues increased 76% from the prior year to $312.9 million.
We sold 3858 residential lots during the quarter and increase of 91% year over year.
The average lot sales price for the quarter was 80000 and $700.
86% of lots sold in the quarter were from development projects up from 77% and the same quarter in 2020.
Lots of the D. R. Horton during the quarter represented 96% and for Staar's total lots sold down from 98% and the third quarter of fiscal 2020.
We sold lots to 8 builders other than D. R. Horton during the third quarter of this year up from for builders and the same quarter last year.
Sam.
Our pre tax income and the third quarter increased 105% for.
The $21.1 million for the pre tax profit margin of 6.7%.
As previously announced during the quarter, we refinanced our 8% senior notes due in 2020.4.
The 385% senior notes that mature in 2026.
As a result of the redemption, we recognized a loss on extinguishment of debt of $18.1 million. However, the refinancing transaction resulted in substantial interest savings.
Excluding that $18.1 million charge, our pre tax income increased 281% for $39.2 million and our pre tax profit margin improved 670 basis points to 12, 5%.
And the third quarter, our gross profit margin and increased 610 basis points to 17, 8% from 11, 7% and the prior year quarter.
The improvement was primarily due to increased margins on lot sales from development projects, which was largely driven by capitalizing on the strong demand for finished lots.
We continue to expect fluctuations and our gross and pretax margins due to the quarterly mix of our lot deliveries and the timing of tract sales.
SG&A expense as a percentage of revenues for the third quarter was 5.4% and <unk>.
And of 90 basis points from 6.3% and the prior year quarter.
We remain focused on efficiently managing our SG&A expenses as we build on our platform to support our significant growth.
We believe we will continue to manage our business and a mid single digit SG&A percentage.
Eddie.
For started underwriting criteria for new development projects includes the minimum 15% annual pre tax return on inventory and a return on the initial cash investment of 36 months during the third quarter, our investments and lots land and development totaled $400 million of which roughly 40%.
The land and 60% was for land development.
For the fiscal year to date, our investments in lots land and development totaled $1.2 billion.
We now expect to invest at least $1.6 billion and lots land and development for the full year of fiscal 2021.
For starters lot position at June 30th increased 91% from a year ago to 96600 lot of.
Of which 64200 lots of and and 32004 hundred lots are controlled through purchase contracts of.
64200, and walnuts, 33% or under contract the Sony Derek Horton, representing at least $1.6 billion of future revenue.
And another 28% of our and lots of subject to a right of first offer to D. R. Horton under the Master supply agreement.
Lot for space for SAR continue to grow as a percentage of the companies and lot portfolio.
And supporting long term improvement and our gross margin.
Of the companies and lot position at June 30th, 51% or sort of spiked for start up from 34% a year ago.
We are continuing to target of 3 to 4 year and inventory of land and lots of Jim.
For STAAR remains focused on maintaining a strong balance sheet with ample liquidity and modest leverage we.
We ended the quarter with $470 million of liquidity, including $120 million of unrestricted cash and $350 million of available capacity on our revolving credit facility.
Total debt at June 30 was $704 million and our net debt to capital ratio at quarter and was 37, 8%.
As previously announced during the quarter, we amended our revolving credit facility to increase the facility size to $410 million and extended the maturity date from 2022 to 2025.
At June 30 of stockholders' equity was $970 million and our book value per share increased to $19.58 up 11% from a year ago Dan.
Looking ahead, we remain confident and the outlook for our business and continued execution of our strategic and operational plan supported by favorable market tailwind across our diverse national footprint positions for star for further success.
For starters uniquely positioned to gain market share through housing market and the economic cycle and the highly fragmented lots of development of industry.
Based on our results for the fiscal year to date and current market conditions. We now expect to deliver between 15000.516000 lots of generating approximately $1.3 billion of revenue and fiscal 2021.
And are now expecting our pre tax profit pre tax profit margin for the full year of fiscal 2021 to be and the range of 11, 5% to 12%.
Excluding this year's $18.1 million of loss on extinguishment of debt.
Additionally, we expect our tax rate for the full fiscal year to be approximately 25%.
Which does imply a tax rate of approximately 26% for the fourth quarter.
Before we turn to questions I'd like to remind everyone of for Starz investment highlights.
We are of a unique lot manufacturing business model.
It's very different for the typical land developer we have no on entitled Land.
We are focused on developing lots for the affordably priced housing market.
We have a seasoned the management team that is experienced and consolidating market share and and navigating through market cycles.
We have a strong balance sheet and on liquidity position with low net leverage.
We have been increasingly profitable and are managing our business to a mid single digit SG&A percentage.
And most importantly, we have a unique competitive advantage due to our relationship with D. R. Horton the nation's largest builder is.
And as highly strategic relationship allows us to expand our platform nationally while minimizing risk.
To summarize we are continuing to execute on our plan and are positioned for continued success.
Paul at this time, we'll now open up the line for questions.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star 1 on your telephone keypad income.
Information tone will indicate your line is and the question queue. You May Press Star 2 if you would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up of your handset before pressing the star keys.
1 moment, please while we poll for questions.
Thank you. Our first question comes from Ryan Gilbert with <unk>. Please proceed with your question.
Hi, everyone. Thanks for taking my questions.
First question is just on I guess, the overall market and Dan I'd appreciate any color or detail you can add.
On the demand that youre seeing from homebuilders I think that there's been some concern and the market that.
Homebuyer demand is leveling off a bit and it.
Maybe the there's a sense of that might be bleeding back into the.
The land market, although from your results that certainly doesn't seem to be the case. So just any color that you could give us for details on on.
And on demand from homebuilders would be would be helpful.
Yes, as it relates to what the home builders are seeing as I don't really have that strong the visibility as to whether they really they're really seeing a falloff in demand.
I know is that they have a hunger for lots and that seems to be at this point of at least.
Amortization of.
Our number of finished lots that we have on our inventory actually went down this quarter, even though we delivered.
Strong the lot deliveries.
And as fast as we can deliver and they're buying them and.
Obviously based on our guidance for the rest of the year, we expect fourth quarter to be of record breaker for so.
At this point, we're not seeing any lack of demand from homebuilders that wanted by of loss I think 1 of the constraints is the ability to get lots of the build houses on.
Yeah.
Okay, great. Thank you second.
The second question's just on on 2022.
I think you've discussed.
And like a 20% sustainable growth rate.
And with no additional capital needed on the on the balance sheet going forward.
And thats kind of how I've been thinking about 2022.
But you know your land banks up 91% year over year. So it seems like you have the lots and place to do better than 20% growth. So do you think you can can produce ahead of that growth rate in 2022 word for it.
And any color on 2022 would be helpful. Yes, yes at this point, it's probably too early to give any real guidance for next year, Although we thought about it and a lot of preparing for this call and I'm not backing off that 20% I feel very good debt, we will be able to hit that 20% growth rate based on the loss that we have under development per.
Day.
Obviously the market conditions are strong right now and we hope that those continue but at this point I feel really good about that 20% guidance Ryan.
And I said next quarter, we're going to try to tighten that up and give you some better color going forward.
Okay, Great and then last 1 for me and just on pricing and it looks like your average selling price was pretty flat sequentially from the second quarter I'm, assuming that's mostly mix, but maybe you can just talk about what youre seeing and the market in terms of finished lot price appreciation and how that compares to pricing of undeveloped lots.
It is mix.
We're definitely seeing some some pricing power I think that showed up and the margins as you remember last quarter, we probably.
The guidance is down for the rest of the year and we were able to overachieve on that.
We are definitely seeing strength, but we really again and look at every project and on a project by project basis and think about the returns that we're trying to achieve and really looking at velocity and making sure that as we as we believe there is pricing power there were being very careful not to the <unk>.
And for that affordability of the housewife package.
And I felt really good about the quarter.
And again, obviously better than we probably anticipated for the quarter and pricing power. We really are looking forward to seeing with the future brings as we say we have a lot of lots under development right now.
Okay, great. Thanks very much.
Thank you. Our next question comes from Anthony <unk>.
And Mary with Citi. Please proceed with your question.
Good afternoon.
Can you can you talk a little bit about what drove the change and what delivery guidance I guess a thousand units at the midpoint.
How much of the raised guidance was 3 <unk> deliveries above maybe your internal expectations versus sort of the outlook for the balance of the year.
Yes, I don't I don't know that I have a specific number of what was delivered and third quarter versus fourth quarter, I think there's probably more driven by fourth quarter expectations.
There's been a lot of talk and the market at least from our perspective of delays and being able to get certain materials. There has been.
Potentially delays and getting projects completed.
We are very careful and making sure what guidance, we gave we're comfortable with.
As the as this quarter has unfolded and we see where we're at on deliveries for next quarter.
It made us comfortable and raising that guidance.
Feel really good about what we're seeing for the next quarter.
Okay, and Thats very helpful. And then in terms of just sort of hitting the higher or lower end of guidance.
Do you think it's mostly a function of demand materializing on the part of the builders or maybe just timing or is it sort of those maybe labor permitting material related bottlenecks debt.
And in terms of the kind of driving the greatest risk to the upside and the downside yes.
I think the risk of upside versus downside is really and the delivery side, we have not seen any falloff in demand for lots of if anything I think the demand has increased and once again has given us a little bit of pricing power. So I think it's pretty it's predominantly based on the ability to complete those projects that we see is hitting substantial completion of this quarter.
And being able to deliver those lots.
Okay. That's very helpful and maybe just 1 quick follow up in terms of the cycle times. It seemed like you were able to sort of accelerate cycle times in the wake of the pandemic because of some looseness in the labor markets obviously.
Probably tightened quite a bit in terms of the cycle times and.
And where they stand now are they stable improving maybe deteriorating just any any color you can give there.
As compared to where they were 6 months ago, we are definitely seeing cycle times extend.
And again, you're right, we were able to kind of accelerate cycle times. When we really stepped on the gas earlier last year when when a lot of people were not.
And you know it is and it's really and lots of things its delivery of certain materials is the ability to get inspections of the ability of.
A little bit of spend whether I would hate to use weather, but it's been a pretty rainy season and certain parts of the country.
So were definitely seeing and extension, but probably back to more of what was normal for roughly a year ago or a year and a half ago first but definitely from earlier this year.
Okay. That's helpful I'll turn it over.
Thank you. Our next question comes from Depot Ragavan with Wells Fargo Securities. Please proceed with your question.
Hey, good evening, Dan and Jim and Katy.
And for taking my question, just following up getting kind of get a little bit more clarity on the kind of growth youre experiencing.
But also trying to manage your operations for debt level of growth.
Yeah.
Are there any new challenges the kind of cropped up this quarter, you mentioned, a little bit of the cycle time, but.
The labor it seems like it should be more of the challenge just given the way of growing.
And just curious anything new.
That actually cropped up this quarter and the challenges and if you can generally talk about how you're managing for this kind of growth, especially with regards to operations and that'll be pretty helpful.
Yes, I guess I'll start with the second question. The second part of your question first you know we have been planning for our growth for quite a while and rhythm of staffing up pretty considerably we've almost doubled on our head count from a year ago and real.
And preparing for the volumes that we have today so from a labor standpoint for for Star itself. I think we're very well positioned for to continue to execute on our business plan.
And then obviously, we will need to continue to add staff as we continued on the growth path.
And as it relates to our operators and getting projects completed.
And again.
To some extent I feel very fortunate we're not really seeing delays any delay is really related to.
For the contractors not being able to get people on the jobs to complete the jobs.
We are hearing that theyre, having more turnover where people are operators are moving to another operator for a couple of extra dollars an hour, but <unk> been able to replace those people, but we feel good about that probably the 1 thing that I would say.
Last quarter I was talking about we're hearing about.
The shortages and material, we are starting to experience some delays and getting things like fittings for the foot PVC pipe together, we have seen some delays related to kind of accrete allocation and I've been able to get full day pours and on certain projects for you you kind of limited the amount of concrete you can for so I think some of the things of that.
And that last quarter, we were hearing about we are starting to see some impact of but nothing that at this point has been dramatic.
And I think we're trying to stay ahead of the curve and we're making sure materials are ordered earlier in the process and would have normally been appropriate and.
And part of it is relying on and really good contractors and our customer base is strong.
And our contractor base of strong and we've we've aligned ourselves and I think some of the best people and the various markets. So that has I think been very beneficial for us.
Okay. That's helpful.
My second question is on the lot price increases.
And it's kind of flattish, but still the trajectory is not down of insect and it's already at 80 K.
Is this is this where you're starting to see it stabilize a bit at this point and time or you think theres enough of the.
Backdrop is still pretty strong demand wise and theres still of supply imbalance. So I think in all fairness and expectation is lot prices.
Still more to run.
And then on stabilizing here, but for.
From your from your side are you taking any steps are you undertaking any measures to keep the.
Lot pricing average log pricing under was set and affordability threshold how are you thinking about that.
Well, we think about it on the project by project basis, we really look at sales velocity that the builders are experiencing and those projects or and in the case of of New project. What we think of the comparable project and we tried to make sure that we're balancing price versus velocity.
At this point, even with the average sales price of a little over $80000.
Still think of it keeps us and that affordable price points and.
And interesting factors are even though our average is the 80000, our median prices closer to 70000 and so over half of our lots that we sell are under $70000, which again I think really sets us up well for that for that affordable price House a day.
But yes as far as trying to manage it is probably where we spend a significant amount of time and is on a project by project basis, as we're setting prices and the.
And and trying to negotiate appropriate pricing is making sure that we're keeping velocity to keep our returns on.
Alright, and my follow on.
And any updates on how July is trending so far just curious and I'll leave it there. Thank you.
As far as July and again, we're issuing our guidance today for the full year.
Again, and implies a record breaking quarter for us and lot deliveries.
And so at this point.
As I sit here on July 20th I feel really good about July and I feel really good about the next 2 plus months ahead of us.
Thanks, So much I'll pass it on.
Thank you. Our next question comes from Truman Patterson with Wolfe Research. Please proceed with your question.
Hey, good afternoon, everyone and thanks for taking my questions.
The first just wanted to touch on your balance sheet and kind of spend going forward you know youre approaching that 40% net debt to total capital threshold your owned lots of over 64000.
And for years, 1 if you look at kind of 21 closings I guess going forward.
Assuming the development work takes up a decent amount of net working capital right are you all comfortable going above that 40% threshold.
Or should we just expect that Youre, a lot acquisition to start to moderate a little bit over the next we'll call. It 6 to 12 months.
You know our sales velocity should continue to accelerate so the.
Need to replace the existing lots will be there.
And as far as on my comfortable going over 40%, we're really managing to that 40% number it may trend over a little 40 for a while but all of it.
And will be to bring it back down and there's still about finding those projects that we believe fit our operating model and our underwriting requirements.
And frankly, it's also a little bit harder to find those with as much of the other people that are out there.
Trying to bid up the price of land, especially and those those smaller shovel ready projects. There may be just less of that fit our underwriting requirements today anyway. So I feel good about our pipeline I think that we're going to be very careful and making sure that we're only buying projects that we think of really good solid project.
<unk>.
But again, we're going to guide to that 40%, we're not real.
We don't look to exceed for you for very long or buy very much of that happens at all.
Okay. Okay, and then you all are finding of lots that are hitting your underwriting.
There's clearly some of what pricing power and the market right now very strong builder demand and in your markets. When I look back at the past couple of quarters gross margin and that 18% range. The same thing just looking at your guidance. It seems like it'll be at least and that you know and that range is it safe to assume just given.
Kind of the tailwind and the market that this is kind of a new normal that we should see at least maintain our out into 2022.
Or are there any big items that we need to think about.
We're still maturing our portfolio I think youre still going to see some fluctuations from quarter to quarter I Wouldnt take that 18% is a run rate.
I think that would have now done that at least for myself and I think maybe for you folks as well and show that we can actually hit 18% and more than just once.
This is really good.
But I wouldn't if it was me I wouldn't be betting that I'm going to do that every quarter for the next umpteen quarters.
Hopefully that will happen.
I can't say that it's impossible.
But you know the markets the market still the market.
Got it and make those pricing fit the market and we're really fortunate when you really think back.
A year ago, and we had those quarters.
For our first quarter of the year or maybe the last quarter. When we bought a lot of land. It was really outsized for us and was before all of these prices ran up.
So whether it was Walker just we were really smart people, but we bought a lot of land at a really good point and the market and.
And feel really good about the inventory that we have.
And Tim and as you've heard Dan and team and say over and over I mean, the focus is more on returns than it is gross margin and they reported a fifth consecutive quarter of improvement and in ROE and you know the.
The gross margin will be what it'll be based on market conditions, but theyre going to maximize our portfolio to drive the desktop simple return.
Okay. Okay fair enough and then just final 1 for me.
There's been a lot of talk already on the call about very strong demand and builders are basically short lots right now.
Just hoping you could give a little bit more more color are there any markets that you're scaling back investment.
And just any metros, where you perceive as a bit of a frothy land environment or are there any markets, where youre starting to see or hear builders pushed back a little bit or their appetite for lots of lot soften a little bit.
No I don't think Theres really anywhere, we're seeing a slow up and demand.
When we did our investor presentation ex gets published and and compare our map against the map last quarter, you'll probably see we have less exposure up in the Pacific northwest than we did before and again further and further increased exposure in Florida and in Texas again, So our focus has been and the markets that.
We know we can get velocity and are hopefully not us.
Governmental regulated governmentally regulated as the other markets, where we can have a more.
Annabelle and deliverable lot timeframe.
So.
And again, it's not for lack of demand, it's more from looking at opportunities and making sure that the projects that we are underwriting we can deliver on that.
So you will see a less allocation of our dollars on lots since of the Pacific Northwest right now.
Okay. Thank you and good luck on the upcoming quarter.
Great. Thanks, Tom.
Thank you. Our next question comes from Michael Rehaut with Jpmorgan. Please proceed with your question.
Hi, This is Maggie on for Mike Thanks for taking my questions.
First I was hoping to zero and a little bit on the gross margin this quarter.
You listed several factors are driving the upside demand.
And a lot closer of Liberty delivering more for.
Of course are sourced.
But I was wondering if you could.
And maybe rank order.
The the different drivers of that upside and.
And maybe give a little bit more color there.
Oh boy rank order and Thats tough 1.
I can say is its probably if I had the pick the top 2 it is for star sourced transactions, where we had.
And what we didn't price earlier in the transaction.
And it is and has the strong market demand, so we happened to be and our position.
Last quarter and.
And where we were delivering lots of it had been recently priced into the market strength for that but again that a lot of that is driven by horsepower source transactions versus builder of source transactions.
And then again and then and we're growing our portfolio and the all in that area and over 51 per cent of the lots that we own are enforced our source transactions.
Got it thanks and.
Second just on SG&A I know you spoke to.
And kind of a mid single digit range I know in the past you had talked about maybe being comfortable in.
And the kind of 5% to 6% range. So.
On the mid single digits, but as we look forward into 'twenty, 2 and kind of the next few years can you talk about.
The ability to take.
We continue to see some leverage on that line.
And how we should be thinking about SG&A.
Over kind of the more medium to longer term.
Yes, I think 5 percentage, that's pretty darn good rates and at least when I was brought up and I think that we can manage to that.
Yeah.
Is it going to be 6 of that going to be for I think youll see some variability quarter to quarter based on volumes.
Yes.
As far as can it be can it be leveraged further I think as our platform continues to mature and scale up I think that you will probably see some leverage but I don't know that I can quantify for that for you for that.
Got it thank you.
Thank you. Our next question comes from Alex Barron with housing Research Center. Please proceed with your question.
Yes, thanks for taking my question.
Was hoping you could.
Help me understand how sensitive are your prices on the lots relative to the home prices and.
Yeah.
In other words, if home prices start to move up as they have and the last couple of quarters, how quickly could you reprice your lots and.
The.
On the lots of price as a function of the home price or is there. Some other metric you guys are using thanks.
Yeah.
Well I think our as far as our ability to continue to move up lot prices is probably more based on the builders' margins than it is on the house price itself.
Obviously, you know they they they're trying to manage to a certain margin themselves and.
And and if I can squeeze some of that increased margin and out of it I will.
Yes.
As far as metrics.
And that we don't have any kind of true up based on a percentage of the house price that's not the way we're pricing and our lives we do our best to.
Trying to get a sense of what the market pricing is in an area, but really its focused on the project by project try and understand that balance between velocity and pricing.
And and hitting that number of where we're really maximizing our returns on our invested dollars.
Got it.
Thanks, and that's another 1 on the.
Cereals.
As you mentioned builders have been facing various.
Material supply chain issues, and I think I heard you mentioned concrete.
And I was curious if you could give us a sense, whether you guys are experiencing shortages of concrete and if so is it just in 1 market or is it pretty widespread across the country.
It is really and the only certain isolated markets and we're basically a couple of things that we're seeing.
Delays on and that is and some places we are seeing concrete allocations and where you're only allowed so much concrete per day as are allocating out of their various jobs.
But again, it's not widespread it's only in certain locations and the other thing that we're seeing and.
And again more delays on is the pipe fittings and that will pretty much get pipe.
What was the.
Fitting that put the.
Of the sections of PVC pipe together.
There seems to be a shortage of that by my understanding is a lot of that is being manufactured in India and because of some of the COVID-19.
And of issues in India that those factories have been either closed down or operating the only marginally which has created somewhat of a shortage for those fitting for at least for the.
From the suppliers that were getting things through but we've been still able to get them.
And we're trying we learned the order them earlier and the process, but in some cases, we have had some delays and getting them on job site, but again pretty isolated some of our contractors and moving for a more things and others some of them only buy to.
The kind of outfit your job so it isn't that widespread.
There are things that we're seeing.
Thank you very much.
Thank you for no further questions at this time I would like to turn the floor back over to Dan Bartok for any closing comments.
Thank you Paul and thanks to everyone on the for STAAR team for your focus and hard work it was a great quarter and we.
We look forward to working together to continue growing and improving our operations over the coming years.
We appreciate everyone's time on the call today, we look forward to speaking with you again in November the share of our fourth quarter results and our full year results. Thank you.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a wonderful evening.