Q2 2021 Badger Meter Inc Earnings Call
Ladies and gentlemen, welcome to the Badger meter second quarter 'twenty 'twenty, 1 earnings conference call.
At this time all participants are in a listen only mode. After the Speakers' remarks, there will be a question and answer session to ask a question. During the session you will need to press star 1 on your telephone.
If you would like to withdraw your question press the pound key.
As a reminder, today's conference is being recorded it is now my pleasure to turn the conference over to Karen Bauer, Vice President of Investor Relations corporate strategy and Treasurer. Please go ahead Ms Bauer.
Good morning, and thank you for joining the Badger meter second quarter 'twenty 'twenty 1 earnings conference call on the call with me today are Ken backwards, Chairman, President and Chief Executive Officer, and Bob <unk>, Chief Financial Officer.
The earnings release and related slide presentation are available on our website quickly I will cover the safe Harbor for reminding you that any forward looking statements made during this call are subject to various risks and uncertainties. The most important of which are outlined in our press release and SEC filings on today's call, we will refer to certain non-GAAP financial measure.
Right.
Our earnings slides provide a reconciliation of the GAAP to non-GAAP financial metrics used finally during this call we will refer to core results for various financial metrics. For example, core utility water sales car means so it doesn't need a financial metric excluding the impact of the recent Afghan and ATI acquisition, we built.
This reference point is important for year over year comparability with that I'll turn the call over to Ken.
Thanks, Karen and thank you for joining our second quarter earnings call I Couldnt be more pleased with the dedication and execution demonstrated by our team supporting our customers and delivering record sales on the face of widespread supply chain inflation on logistics challenges.
Our strong order momentum from the first quarter continued into the second and even with that strong execution. Our backlog reached another record high as we exited the second quarter.
Our 2 water quality acquisitions, Essakane and a T. I delivered strong top line performance above our expectations with solid EPS accretion.
Overall, it was a great quarter due in large part to the activity in the trenches day in and day out.
I'll talk about the current environment and our outlook later in the call, but for now let me turn the call over to Bob to go through the details of the quarter.
Thanks, Ken and good morning, everyone. As you can see on slide for total sales for the second quarter were $122.9 million compared to the Corona virus impacted trough of $91.1 million in the same period last year, an increase of 35 per cent.
Overall utility water sales increased 38 per cent.
Excluding the approximately $12 million of sales from Essakane and ATI acquisitions core utility water revenues increased 22% year over year.
Comparing back to the pre Covid impacted second quarter of 2019 core utility water sales increased 11%.
As Ken noted, we continue to experience robust orders, however, supplier allocations of certain electronics and other components, along with logistics challenges again limited manufacturing output and deliveries.
We did experience growth in overall meter sales and Beacon software as a service revenue and we benefited from strategic value based pricing actions, we exited the quarter with another record high backlog, which bodes well for our sales expectations moving forward.
As anticipated the flow instrumentation product line sales rate of change returned to growth with a 22% year over year improvement stabilizing demand trends across the majority of global end markets and applications as well as an easier comp influence the increase.
We were pleased with the operating profit margins generated in the quarter in light of the significant and varied inflationary forces. The quarter's operating margin was 15, 2% an increase of 130 basis points year over year.
Gross margin for the quarter was 48% an increase of 150 basis points year over year margins benefited from favorable acquisition mix as well as the higher volumes and positive product sales mix, namely higher SaaS revenues, along with favorable value based pricing realization.
Combined these drivers tempered the cost headwinds from higher brass and other component and logistics inflation.
Taking a closer look at copper prices have settled back down into the $4.30 range after escalating to about $4.80 earlier in the quarter. This.
This is generally in line with our most recent year over year headwind estimate, which was approximately $7 million to $8 million on a full year basis on mitigated.
As our margins demonstrate we have executed well and implementing appropriate pricing mechanisms to offset this inflation and we will continue to actively monitor pricing in light of the inflationary pressures.
Turning to SCA expenses, the second quarter spend of $31.4 million was sequentially in line with the $31.6 million from Q1, 'twenty 'twenty, 1 and represents an increase of $8.2 million from the prior year.
You may recall the prior year included the benefit of various cost reduction actions taken at the onset of COVID-19, including temporary furloughs.
The S. T. A run rate includes both the Essakane and a T I along with the higher level of acquired intangible asset amortization and is in line with our ongoing expectations of normalized SBA leverage and 25% to 26% range over time.
The income tax provision in the second quarter of 2021 was 25% slightly higher than the prior year's 24, 3% rate.
In summary, EPS was 48 cents in the second quarter of 2021, an increase of 45% from the prior year's EPS of <unk> 33.
Working capital as a percentage of sales was 24, 3% on par with the prior quarter end inventory.
Inventory increased due to the manufacturing output constraints as well as commodity inflation as described earlier free.
Free cash flow of $11.9 million was lower than the prior year. The result of higher cash tax payments and the increase in inventory on.
On a year to date basis free cash flow conversion of net earnings is sitting at 147%.
As we noted in the press release and in our 8-K, a few weeks back we entered into a new 5 year credit facility in advance of the September 30th expiration of the prior facility.
We took the opportunity to upsize the facility to $150 million and to add additional flexibility in the form of leverage covenants and an accordion feature among others. Our strong cash flow combined with our borrowing capacity provides us with ample liquidity to fund our ongoing capital allocation priorities with that ill turn the call back over to Ken.
Thanks, Bob turning to slide 5 we updated the chart, we introduced last quarter with actual second quarter data.
Given the number of different variables at play in both the current year and prior year Comparables. We think this chart can be helpful. In understanding the uneven results, we have and will continue to see in our sales.
The robust growth rate, we experienced this quarter. Excluding the acquisitions was the result of continued strong order rates as well as the record high backlog with which we started the quarter.
Not surprisingly it was also due in part to the easier comp from the most significantly COVID-19 impacted second quarter last year.
As we enter the back half for the year, the strong order momentum and record high backlog log will be supportive of our growth outlook.
The third quarter, we'll see a difficult comp both in terms of sales and profitability based on the post Covid lockdown recovery in both manufacturing output and orders last year.
Our supply chain team continues to work tirelessly tirelessly are playing whack a mole with the varied electronic and other components shortages, while we don't expect to be back to normal we do expect further backlog conversion as the year moves ahead.
We are very pleased with the results from the last 2 water quality acquisitions. This quarter contributing just over $12 million of revenue in the quarter, our pro forma growth rate in the double digits.
Their underlying performance along with the integration work underway to establish and cross trained sales resources.
And harmonized product offerings within water quality validates our confidence in the underlying strategy of combining water quantity with quality in order to accelerate our customers' digital transformations.
In summary here on slide 6 the step change in order rates for the past several quarters confirms the fundamental market demand for intelligent water solutions to monitor manage and support operational efficiencies throughout the water distribution system.
We are uniquely positioned with a full line of smartwater offerings, encompassing both water quantity and quality to serve utility and industrial customers alike.
Our record backlog is 1 of those good problems to have and the challenge we expect will persist for some time as we migrate through the second half of the year and beyond.
Electronic and other component suppliers are making good progress in restoring and building capacity. However, the rate of recovery is fluid and we will continue to be uneven until inventory levels are able to be to fully meet demand.
Despite the component availability inflation on logistics challenges. Our teams are working hard to build supply chain resiliency and actively communicate the suppliers and customers to proactively manage expectations.
Our effective sourcing strategies market, driven innovation and operational agility are supporting badger meters profitable business growth and delivering value for shareholders.
Lee I want to highlight several additional ESG related disclosures that we've added to our website..1 is an outline of how badger meter works to align our ESG efforts with the United Nations Sustainable development goals, notably goes 6.3 and 11 that focus on water health and safety and sustainable cities.
Second is the Standalone SaaS be focused report, providing annual metrics and other information for 2020, which is cross reference to G. III.
Badger meter continues to advance its ESG journey as we work to understand and mitigate the most material and impactful risks of climate change and preserve and protect the world's most precious resource.
To close out our prepared remarks, I want to welcome back to the office many of our remote work employees, who returned this month, adding to the teams of dedicated employees in production and are in it.
On our support staff, who never left I want to thank all of our colleagues for their agility and consistent and dedicated efforts to serve our customers.
With that operator, please open the line for questions.
Thank you at this time I would like to remind everyone in order to ask a question Press Star then the number 1 on your telephone keypad again that is star then the number 1 on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.
Yeah.
On the first question coming from the line of Nathan Jones with Stifel. Your line is open.
Good morning, everyone on.
Nathan Good morning Nathan.
I guess I'll start off by talking a bit further into the supply chain and logistics challenges.
I think you guys commented that it.
It decides in sales out of.
At this quarter.
Sitting in backlog now can you talk about.
How much you revenue you think got deferred out of the second quarter into the back on what your expectations for for catching that up.
Completely.
Yeah Nathan.
As you know there's the supply chain situation on logistics, certainly not confined to just ask pretty dynamic all the way across and you know we don't typically sized backlog obviously, we've talked about at the last couple of quarters, because we find it.
So significant enough that we should mention it but ER, but we're not going to size that out at the bottom line is.
Supply chain challenges are going to continue to persist our team is doing a great job. We think this will continue to be a challenge throughout the year, but we do expect that that.
And that we will perform very well throughout the cycle.
So do you think that Youll have caught up with all of these backlog by the end of the year or do you think this is something that's going to carry on into next year.
Yeah, you know I think it's possible that as kind of carryover into next year.
Every day, you're seeing companies larger than us like G. M shutting down production for 2 weeks in certain things and we're certainly not in that situation, but.
Yeah, I guess I'd like to be more optimistic, but I think on being more realistic to say that it's likely to drag into next year.
Oh, I said, it's about planning for the western on it for the best.
What other what are the biggest pain point is the electronic part of it.
On a truck availability shaping what are their biggest pain points are.
For bad Gerry with only a day supply chain Todd This is going on I'm on it.
Yeah, well it can depend on the day. So so sometimes it's logistics because COVID-19 is still an issue in several parts of the world and trying to move products and manufacturing challenges.
At times, it's been plastics, 1 you had the deep freeze in Texas at.
At times its semiconductor chips at times its electronics, so that that's why we're being.
Somewhat cautious with the commentary on this isn't 1 specific supply chain or logistics challenge, it's it's a it's pretty wide ranging.
Okay fair enough I'll pass it on that thanks.
Yeah.
We have our next question comes on the line of Andrew <unk>. Your line is open.
Hey, guys. Thanks for taking my question.
Matt.
Can you talk about you mentioned in the quarter with these supply chain challenges what would you what's your revenue have been higher.
Otherwise, our and by how much exactly if so.
Yes, so I'm certainly not going to say how much but the fact that we're.
That we had sequentially strong growth year over year strong growth and we went out of our way to tell you that we built on top of an already record backlog I think is pretty clear to indicate we could've done more without the supply chain challenges, but.
We're not yeah, we're not going to size it.
The story coming out of Q2 is very similar to the story coming out of Q1, which is very much record order intake, but supply chain challenges impacting that that backlog, we didn't size kind of the carryover from Q1 to Q2 or Q1 into later years, but you guys did a pretty darn good job for <unk>.
<unk>, where we'd come in at from a consensus standpoint so.
Yeah, we're not going to size it but yeah. Your conclusion is accurate we could've done better were it not for those things and really the dynamics are very similar to where we sit at June is where we said at the end of March.
Yeah, Yeah, I mean, it's still exceeded what I was estimating and I think that.
Well going forward as it is the issue more that.
Moving to lead sales on the table sort of or is it more navigating these costs as they come back or I guess, what are your bigger problem here.
For both.
Okay.
I mean, I think it I think realistically, it's both but I would I would put the priority on navigating the supply chain challenges that are evolving by the day. So well you know I think if you asked me do I feel more comfortable now sitting here on <unk>.
In the middle of July than where we were when we talked in April I think so but that literally is evolving by the day and week given the varied contributing factors here. It's not just 1 supply component, it's not just 1 supplier or 1 element. It's it runs the.
Full gamut.
So I think that the next 6 months is going to be all about navigating that now obviously with that comes the challenge of costs certainly we've seen it from the copper perspective, given what I've I've talked to you, but it's other it's other cost categories as well.
Including resins and logistical costs and we're doing everything we can in the trenches every day to offset that and I think the last 2 quarters of margin performance speak to that but we you know we haven't absorbed we haven't absorbed through the P&L. The full you know high cost aspects of the copper peak or the recent increase in resin. So.
I think while we're very optimistic about what the second half.
It looks like I think we're just being realistically cautious in this inflationary environment. When we haven't absorbed the peak through the P&L to just suggests that it's not all Sunshine and Roses.
Yeah Okay.
Maybe just 1 last broad line given.
Environment and everything.
Talked about.
Well now that you are working through the M&A seems to be going well. It actually came in a little bit higher than I would have expected in terms of the revenue contribution.
And you've got your you've got your arms around this M&A.
Are you still willing to move forward with more M&A and maybe even add some leverage given given where rates are for the time being to do a larger deal here.
Or is it the environment.
For the lead on that for the time being.
Well you know financially we're in great shape to be able to to advance any of our M&A strategies and organizationally I couldnt be more pleased with how we've gone through the acquisitions of <unk> and ATI. I mean, obviously are funneling process found 2 extremely great assets great companies.
Throughout the diligence process.
Our badger meter employees in combination with <unk> and ATI have done a great job on the integration the performances there so from a financial point of view and from an organizational point of view I feel really good about our opportunities to execute our M&A strategy. So.
I Wouldnt say that were paused, but at the same time, we've got a disciplined process and we'll we'll make the right M&A decisions at the right time.
I think to the leverage question no question. The the word on the street as we talk about it with investors as you know we have a comfort level, that's much higher than the leverage ratio that we sit at now are we always talk about it you know 1 on a half to 2 times or 2 you know type.
Type of leverage ratio comfort level.
It's just more about timing and timing and pacing I think if you look at the debt agreement that we just signed recently it signals all the right things in terms of expanding the facility, having a leverage covenant, that's a notch higher than where it was historically and I think that that should signal a realignment and aligned with that for.
Sophie.
Alright, thanks, guys.
We have our next question comes on the line of culinary Atlanta with Morgan Stanley. Your line is open.
Yeah. Thanks, I was hoping maybe you could provide a little bit more context on the on the orders Youre seeing certainly sounds like pretty robust across the board, but I'm curious if you could frame if there were any.
Meaningful changes versus say pre COVID-19 or just.
Versus versus history in general.
Just any sort of notable mix shift within your customer base any sort of changes in customer sourcing strategies as a result.
Of the pandemic.
I wouldn't say that there have been any significant shifts I mean, we're seeing a broad base across across the portfolio.
You know it's.
A really strong environment, we're executing really well and the profile is primarily the same.
Okay. That's helpful and I guess just on the other side of it you certainly had some supply chain constraints that are effective shipments is is that disproportionate to any type of product and.
And basically what I'm driving with this is is there a is there a mix effect that we should be thinking about for margins as supply chains up and you're able to ship.
Across the board.
Yeah without getting specific into which products. It was more impactful in the utility product line than it was in flow instrumentation.
Okay Fair, maybe just just 1 last 1 to pivot to the higher level a little bit here.
There was some concern more so I would say last year around around municipal budgets.
Had support for the government.
Things are looking better, but I'm just curious if you can give any high level thoughts around around customer sentiment.
How do you think.
Budgets are likely to evolve over the next couple of years here, yes.
Yeah. So so throughout this entire process I really couldn't be more proud of our of our sales and marketing teams on how close they stayed the customers to understand how budgets, we're going to develop so we were a little bit more optimistic than I think others in the market that that we would get through the budget cycles in that spending would still be what would not be.
Dropping if you will would be strong and we saw that as we crossed.
On July of 2020, the budgets remained intact, we saw it as we got through January when when the new budgets came through and you know.
We're we're optimistic that as we hit another key budget cycle here in July of 2021 that that's going to be fine as well so from a budget point of view.
We were always on the more optimistic side and I think we've been we've been right from the outset on that I think the other encouraging factor is the the order rate or the demand environment that we saw in Q1, and we're certainly happy with and then now in Q2, even even stronger that's happening in an environment with a rumored infrastructure plan on the sideline and so.
You know I think we're very encouraged by the fact that that to US is a signal that the budgets are healthier than maybe some expected a year ago and even with the rumor of money falling from the Sky people are still spending money. So that's that's encouraging as well.
I could add to that it also speaks to the point that we talk about often on how smart metering is so critical for the water.
The water distribution that our customers spend on that.
We're out cycles.
Yes, it makes sense thanks for all the color.
We have our next question coming from the line of Hassan does that mean flatter asset management. Your line is open.
Good morning, gentlemen.
Couple of questions wanted to start with on the inventory can you give an update as much as possible as to what is causing the buildup of inventories is it like finished goods is at work in progress.
Raw materials, just wanted to get a color on the inventory side.
Yeah, Yeah. So Hassan first if it was finished goods we would have shipped them. So so we're more in the mode of as we're trying to play through as I referred to with the the whack a mole analogy is you get some buildup because you might have built they are built up your components to build an assembly of our package of sorts and then you don't get a components so that.
Inventory build is there I'll, let Bob talk more about the copper step up on and it's also an issue.
Look at the current quarter increases primarily being timing and think of that as you know copper. Obviously has has escalated significantly and that's a high that's about high but it's a it's a component of the 1 of the larger components of our inventory on that just being at a higher cost is inflating inventory and then to what Ken alluded to earlier you know, we're obviously trying to.
Stay ahead of the supply chain game, and if you have 1 component holding up other things. It doesn't mean you stop buying the other things and that's why you've got basically in the quarter an increase in inventory I think as we move forward.
We've got a we were going to have higher working capital to support.
You know this this increased demand level that we've talked about in terms of of our of the order trends that we've seen and so I would expect as we move forward in the second half to have working capital Unfortunately, being a a free cash flow headwind, but I think we've been signaling that for quite some time.
Okay. My next question is Ken or Bob Your primary facility on the manufacturing wise is in Mexico and has that facility have been impacted by any chance in terms of work interruptions or anything else from Covid I just wanted to get an update on that factory in Mexico.
Well, so so a year ago right. We had several challenges as everyone did when when Covid was really raging throughout the U S and Mexico.
But I certainly we're not seeing any impacts currently at all on on that front.
Okay, and when you guys talk about value based pricing you. Obviously, how you already laid out very helpful. The cost side. So when we think about the value based pricing can you.
Give some color as to how much price increases you have been able to pass through and again I don't need an exact number but other companies have given like orders of magnitude like is it like a mid single digit single digit high single digit just wanted to understand from a top line perspective, how much price increases you have been.
Both to pass through.
Customers so far this year order of magnitude.
I appreciate the effort, but I'm sure you knew I wouldn't answer that so.
So from a pricing point of view, what what I think you need to understand is this is not a pricing initiative. While we're talking about here is business excellence processes like anything else. So so we're doing I think a very effective job at understanding the value that we provide for customers and getting the right amount of price for it there is a second lever.
For 2 getting.
Business excellence around pricing and it's also winning at least our fair share of new business. So so for us it's a 2 factor.
It's making sure that we both grow and grow profitably. So I'm really proud of the work that's been done.
As we've said in other quarters, not a copper surcharges on anything else. Its just the just the way that we do business. So we're proud of what we've put through.
But no I mean, we're not going to size it out and per sensor anything because it's frankly, it's not that simple. It. It's not like this is a a price increase that youre spreading peanut butter across across product lines.
We have our next question coming from the line of Robert Nathan with Baird. Your line is open.
Oh, yes, good morning.
Bob you'd made the comment just in discussing some of the inflationary impacts.
<unk>, not yet absorbed or seen the peak yet in some of those.
Mike do you expect.
To see that.
Do you have on.
Frame in mind or yes, so I would think of those very much.
So when I when I say that I'm not trying to predict forward look I'm talking about what's occurred in the history on and how that is realized in our P&L. So I think you can expect that I'll I'll use copper as an example, copper hit $4.80 I think in the May time frame. So I would expect that to come flowing through the P&L in the third quarter. So.
So we're not when I make that statement, we haven't seen that peaked I'm, primarily speaking to copper in resins and that's more of a third quarter event.
Okay.
And then I just had a question on the acquisition performance.
We were pleased as well a little bit above our expectations.
Can you noted those growing double digits is that.
Kind of growth rate I mean can we.
Hang our hat on that going forward.
How comfortable are you around that kind of a double digit growth rate or is there some seasonality in that business as well that we need to be aware of.
Drop into the P&L.
I'll go first but I can see Bob wants to get in on this 1 too but the first thing I'd caution you still is it is kind of the the.
The law of small numbers I mean, they can it can move pretty quickly. When you were talking about percentage of growth. We're absolutely bullish that these businesses were growing high single digits before we acquired them, we believe in the synergy aspects of bringing them together.
We're extremely pleased with the first.
6 to 8 months of having these 2 companies here and we think they'll perform in that high single digits. Some quarters, maybe a little higher some quarters, maybe a little lower but but through the through the cycle, we feel really good about it.
Yeah. The only thing I would add is as you know with with respect to the second quarter results as a whole related to the acquisitions I would just caution you that there is a bit of backlog timing and again.
Again on a relatively small basis, but a discreet projects so I.
I would expect that to that level that absolute level of revenue dollars to moderate.
In quarters going forward, but still fair.
Very little seasonality and I would think of it as high single digit growth that you could baked in going forward.
Okay, great and it for.
Fair to assume that.
Those businesses relative to your other utility businesses would be less exposed to some of the supply chain.
<unk> as well or is that a fair statement.
It's not a fair statement I mean, we've seen challenges our challenges there as well.
I again, I think it was pretty broad based I'm I'm I'd be surprised if other people you're following aren't talking about it too.
No no. They definitely are yeah, it's common common issue for sure.
Alright, alright.
Very good. Thank you thanks for the question.
<unk>.
Again in order to ask a question simply press Star then the number 1 on your telephone keypad again that is star then the number 1 on your telephone keypad.
Our next question comes from the line of Ryan Connors with Boenning and Scattergood. Your line is open.
Hey, great. Thanks for taking my question and congrats on a great result.
Thanks Ryan.
1 thing that you didn't mention much in your prepared remarks, I only briefly in the Q&A, which has been prominent in the last year as this infrastructure stimulus.
Stimulus package in.
I suspect that's partly because there's certainly doesn't sound like a market at this point, that's that needs federal support but whats your view there I mean, what would you about Bob you mentioned money falling from the Sky in for.
We might actually get that it looks like if you look at the news.
What would that do to the market I mean would that will we be looking at on an overheated situation. We would would you and peers have to build new factories at that point I mean, what's the view on stimulus and do you even wanted or needed at this point.
So I'll go first and then I'm sure Bob on some thoughts on those 2 so so if you recall I. It may have been end of Q2 early Q3, the things that I thought were really important where vaccination and we're there for people to be able to actually go out and do the work.
And low interest rates I thought it would be really positive.
On stimulus for us.
It can only be positive right unless that condition, we've talked about before where it's just rumored and it doesn't happen that can sometimes be a delay but that wasn't the case. This time, we've seen really robust order growth for the last 3 quarters, while people knew there would be infrastructure.
So for US we sit here and think about $55 billion for water infrastructure and the bipartisan Bill still again, we believe in the fact that AMRI is a really strong proposition for for using those funds shovel ready projects are usually priority with our infrastructure free AMRI and wheat.
Feel really strong about that water quality delivering clean safe drinking water is a big deal. That's why we wanted to get into it we think we could see some positivity there. So it isn't that we don't want it we wouldn't have to build factories I mean, we've got.
We've got a very strong manufacturing model.
Supply chain challenges I can't imagine would get easier if we keep throwing money into the market, but in terms of manufacturing capacity were fine.
Okay.
And then the other question kind of big picture, because you've been very comprehensive so far on the call. So this is bigger picture, but this issue of price and price expectations in the market I mean, a lot of the talk about inflation.
As consumers.
Consumers and in this case.
Businesses kind of expecting in realizing that we're in an inflationary environment and expecting price increases and therefore, maybe acquiescing to them.
Easier than they would have in the past is there any evidence of that that customer expectations are customers or just a little easier about taking price than they used to be or no.
Well, so so 2 things on that I mean, I I wanted to be clear when we're talking about value based pricing, we're not trying to go out and grab every nickel that we can affordability of water to us is still an important thing on our minds as we talk to our customers.
They are accepting the market is still rational.
So so that's why I tried to use the word <unk>.
You based pricing rather than pricing initiative, because that's really what we're doing here and but but the market is still rational and understanding of the challenges that are driving the costs out.
Okay.
Got it thanks again for your time.
Yeah. Thanks Ryan.
Thank you there are no further.
At this time I will now turn the call back over to Karen Bauer.
Thanks, everyone for joining our call today for your planning purposes, our third quarter call is tentatively scheduled for Friday October 15th I'll be around all day to take any follow up questions. You have then good luck to our marquee box Tonight chair of the Dear. Thank you.
This concludes today's conference call. Thank you for participating you may now disconnect.
Thanks.
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