Q3 2021 Acushnet Holdings Corp Earnings Call
Yes.
[music].
Good day, and thank you for standing by.
Some to the acoustic Holdings Corporation third quarter 2021 earnings Conference call. At this time, all participants are in a listen only mode. 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 today's conference is.
Being recorded.
If you require any further assistance. Please press star zero I would now like to hand, the conference over to your speaker today Sondra Lennon VP of SPN, eight and Investor Relations. Please go ahead.
Good morning, and thank you for joining us today for our question that holdings third quarter 2021 earnings Conference call.
Joining me. This morning are David Maher, our President and Chief Executive Officer, and Tom Pacheco, Our Chief Financial Officer.
Before turning the call over to David I would like to remind everyone that we will be making forward looking statements on the call today.
These forward looking statements are based on <unk> current expectations and are subject to uncertainty and changes in circumstances.
Actual results may differ materially from these expectations for.
For a list of factors that could cause actual results to differ please see today's press release, the slides that accompany our presentation and our filings with the U S Securities and Exchange Commission.
Throughout this discussion, we'll be making reference to non-GAAP financial metrics, including items, such as revenues at constant currency and adjusted EBITDA.
Explanations of how and why we use these metrics and reconciliations of these items to a GAAP basis can be found in the schedules in today's press release.
Slides that accompany this presentation and in our filings with the U S Securities and Exchange Commission.
Please also note that when referring to segment and regional year on year sales increases and decreases we will refer to sales in constant currency and please also note that when referring to year to date results or comparisons we will refer to the nine month period ended September 30th 2021 and the comparable nine month.
Period with that I will turn the call over to David.
Thanks, Sandra and good morning, everyone.
As announced in today's earnings release of course, just continues to build terrific momentum across our businesses as our team effectively navigate the current supply chain environment.
Global golf market fundamentals are healthy demand across our titlist, Portugal, you can choose brands is strong.
Of course, there's talented associates and committed trade partners are doing great work to keep pace with this demand.
While operationally, we benefit from vertical integration and geographic diversity within our supply chain.
Company wide commitment to the health and wellbeing of our associates.
Now getting right to our results third quarter revenues of $522 million increased 8% versus last year.
We're up 25% compared to 2019.
Titleist golf clubs gear. Unfortunately, led this growth with clubs unfortunately, each posting double digit gains.
Golf balls were up almost 40% versus 2019 down 3% versus last year.
Ill ability was tight throughout the quarter.
The company's growth and strong top line performance contributed to adjusted EBITDA of $70 million in the quarter, which as noted on our last call reflects incremental supply chain costs and investments throughout our business.
Year to date, the cushion sales exceed $1 $7 billion and were up 45%.
Well ahead of 2019 levels.
Each of our businesses is a great shape and strong demand is driving healthy growth, while we manage types availability in just about every product category.
And year to date, adjusted EBITDA of $333 million is up 80%.
These results fortify the company's strong balance sheet and provide us with great flexibility to invest in future growth opportunities.
And execute against our capital allocation priorities.
Now turning to slide five and a review of our business by segment.
As noted title this golf ball sales were down 3% in the quarter and up 37% year to date.
We are pleased with the performance and momentum of the title this golf ball business.
Title this ball count across worldwide tours is a leading 73%.
More than seven times, the nearest competitor and.
And our teams are doing a good job leveraging this pyramid success into strong demand across regions.
And we are enthused about the recent launch of our new Probie, one golf balls with radar capture technology or RCT.
She has been developed by our team to optimize the indoor user experience with Trackman devices.
While not a large volume opportunity. This product offers a good example of how the companys unwavering commitment to golf ball R&D.
Can enhance the golfer experience and further position titlist as the golf ball innovation and performance leader.
As discussed on our prior call golf ball production levels have been limited by raw material shortages.
And we expect this dynamic will continue resulting in tight availability for the foreseeable future.
And similar to last year, we have recently converted production lines to support the launch of new titles golf ball models in the first quarter.
As you would expect the timing of this transition becomes a balancing act as we seek to both satisfy at once demand while also building inventories to support upcoming launches.
Moving to title this golf clubs sales were up 12% for the quarter and 52% year to date with our highest growth coming in the U S and Japan.
The global launch of our New T series Irons in August was comprehensive and successful a testament to the good work by our product development and operations teams to advance plan and execute in this dynamic environment.
Underscoring Titleist golf clubs strikes and momentum titlist was the most played driver hybrid iron and wedge. This past season on the PGA tour, where more winters titlist equipment than any other brand.
The title is club business is in great shape, and while the fourth quarter will be down as we comp against last year's Tsi driver launch, we think the business is well positioned for the future.
Our title. This gear segment continues to grow and gain share with sales up 4% in the quarter and 33% year to date.
Sell through of our 21 line has been excellent and while availability has been impacted by factory shutdowns in Vietnam, We're seeing the situation began to stabilize as vaccination rates climb.
Moving to foot Choi you see year to date sales of $462 million are up 42% on the year and 18% for the quarter.
This growth is led by the success of key footwear franchises premier Hyperflex and traditions across all regions.
And the FJ apparel business is tracking ahead of expectations led by accelerated growth in the U S and Korea and great response to our seasonal collections.
And rounding out the acoustic portfolio. We are pleased with strong performances in growth from titlist apparel in Asia, and our shoes golf business in the U S and Europe.
Now turning to slide six and a review of our key geographies as you see all regions are healthy and posting strong year on year gains with growth ranging from a low of 30% in EMEA.
Most 50% year to date growth in Japan.
Cushing its business in the U S, which represents about half the global golf market opportunity is up 45% on a year.
Year to date rounds of play have increased in all regions with the three largest markets of the U S, Japan, and Korea up between 8% and 15% through September.
Now looking forward, we are optimistic about the health of the game and its underlying fundamentals golfer engagement levels are high and our trade partners are successfully adapting to golf's evolving new normal.
Our titlist foot choice and huge product development pipelines are in great shape, and we look forward to launching a comprehensive range of new products over the next several months.
And while we are confident in our team's ability to proactively manage supply chain complexities.
We anticipate that the current environment of raw material shortages disrupted production schedules longer component lead times.
And increased freight cost will continue for the foreseeable future.
That said, we're enthused that many of our supply partners are investing in their infrastructures, which will ultimately benefit or cushion and supply chain capabilities.
Looking to the long term accelerated investments in our digital infrastructure over the past year are leading to continued expansion of our global beat a b and D to C capabilities. These investments will drive improved service levels shorter lead times and enhanced user experience for our trade partners and it means youre golfers.
Similarly, the transition to our centralized U S distribution center as well downfield and will over time provide faster and more cost effective fulfillment for a wide range of acoustic products.
And our $125 million capital investment and support of golf ball manufacturing innovation and customization is underway.
And we are optimistic about how this initiative will position the title this golf ball business for future success.
In closing we are confident that a cushing it is structured and well positioned to capitalize on this vibrant golf market.
And that our focus on the game's dedicated golfer and proven track record of product innovation and supply chain management will support the company's long term growth objectives.
Thank you for your time this morning, I will now pass the call over to Tom.
Thanks, David and good morning, everyone.
I would like to start by thanking our associates for their exceptional efforts to keep pace with demand and to navigate various supply chain complexities, which have resulted in another strong quarter for our Cushing it.
Starting with income statement highlights on slide nine consolidated net sales for Q3 were $522 million up 8% compared to Q3, 2020 and up 7% on a constant currency basis as demand for all our products continued in our supply chain operated at a high level despite continuing.
Challenges.
These are very solid results considering that Q3, 2020 was up 16% compared to 2019 on the strength of increasing demand after the COVID-19 related closures in Q2 2020.
Gross profit for the third quarter was $269 million up $17 million or 7% versus 2020. However, gross margin was 51, 5% down 70 basis points.
The increase in gross profit comes primarily from higher sales volumes and higher average selling prices during the quarter, mainly entitled Golf clubs and foot Joy footwear and apparel.
But were partially offset by higher inbound freight costs across all segments and higher raw materials and manufacturing costs, primarily entitled Golf balls. These.
These higher costs also drove the declines in gross margins.
SG&A expense in Q3 was $200 million up $46 million or 30% compared to 2020, and R&D expense was $15 million up $4 million compared to 2020.
The increase in SG&A was from higher selling and distribution expense as a result of the higher sales volumes during the quarter.
Higher G&A expense, primarily from higher employee related costs and increased investments in our information technology platforms.
And higher advertising and promotional costs.
Income from operations for the quarter was $52 million.
Interest expense for the quarter was $1 $1 million and our effective tax rate was 28% compared to 18, 1% in 2020.
As a result of a change in the mix of our jurisdictional earnings and the impact of a one time discrete benefit which was recorded in the prior year.
Net income attributable to Cushing at holdings was $39 million.
Our Q3, adjusted EBITDA was $70 million.
Moving to our results for the first nine months of 2021 consolidated net sales were $1 7 billion up 45% compared to last year and up 41% on a constant currency basis.
Gross profit for the first nine months was $914 million up $305 million or <unk> 50 per cent compared to the first nine months of 2020.
Gross margin was 52, 9% up 180 basis points from the prior year.
SG&A expense for the first nine months was $586 million up $149 million or 34% and our R&D expense was $40 million up $5 million or 14% compared to 2020.
Operating income for the first nine months was $282 million.
Interest expense for the first nine months was $6 $6 million and our effective tax rate was 23, 1% compared to 21, 6% in 2020.
Primarily because of changes in the mix of our jurisdictional earnings.
Net income attributable to a cushion at holdings for the first nine months was $205 million and adjusted EBITDA was $333 million.
There is a reconciliation of net income to adjusted EBITDA for Q3 in the first nine months of 2021 in our earnings release as well as in the appendix of the slide presentation.
Moving to slide 10, our cash and liquidity position is strong and continues to improve.
At the end of Q3, we had about $319 million of unrestricted cash on hand total debt outstanding was approximately $320 million a decrease of about $57 million from Q3 of last year.
And we had $386 million of availability under our revolving credit facility.
Our leverage ratio was <unk> seven times at the end of Q3 down from one eight times at the end of Q3 2020.
Consolidated accounts receivable at the end of Q3, 'twenty, one was 300 million up $32 million from Q3 of the prior year due to higher sales.
Our accounts receivable aging remains very healthy and Dsos were 53 days down eight days compared to the prior year.
Consolidated inventories were $325 million.
Far lower than our optimal levels, but up 7 million from Q3 of the prior year with increases in golf balls and clubs and foot joy, partially offset by decreases in gear titles to apparel and shoes.
Dsos were 117 days at the end of Q3 compared to 170 days at the end of Q3 2020.
Cash flow from operations was $280 million for the first nine months of 2021 up $113 million compared to last year.
The increase comes mainly from higher net income partially offset by changes in working capital.
Looking to capital expenditures, we have spent $19 million during the first nine months of 2021 compared to $15 million last year.
We now expect our capital expenditures for full year 2021 to be in the range of $40 million to $45 million as the receipt of some purchases has been pushed into 2022 as a result of supply chain challenges.
Turning to slide 11, our capital allocation strategy and priorities have not changed investing in the business with a focus on product innovation golfer connection and operational excellence is still our highest priority and we continue to pursue acquisition opportunities that align with our focus on premium performance products that appeal to them.
<unk> golfers.
We believe these investments will advance our long term strategy and drive growth at a favorable return.
We also continue to focus on generating strong cash flow and returning capital to shareholders.
On September 17th we paid our previously announced Q3 dividend, which totaled $12 million.
And I am pleased to announce that today, our board of directors declared a <unk> 16, and a half cent per share dividend payable on December 17th to shareholders of record on December 3rd.
Which would also represent unexpected cash outflow of approximately $12 million.
And during Q3, we repurchased approximately 242000 shares for a total of about $12 million, increasing our year to date purchases to approximately 742000 shares for a total of about $30 million.
Reinforcing our commitment to return capital to shareholders holders our board of directors recently increased our share repurchase authorization by $100 million to a total of $200 million.
We now expect to repurchase up to an additional $50 million worth of shares by the end of 2021, making the full year total up to $80 million.
Moving to slide 12, our outlook for the full year 2021 has improved.
For our Cushing it products continues to be strong.
And while we have raised our forecast for the balance of the year. Our outlook continues to be governed by supply chain challenges, which are causing higher raw material costs and material and component shortages across all of our businesses.
These supply chain challenges are impacting our ability to meet demand and a resulting in further production disruptions and increased costs.
And we continue to face escalating inbound freight costs, which we expect to continue well into 2022.
We now expect our reported sales for full year 2021 to be in the range of 2.08 to $2. One 1 billion up about 30% at the midpoint compared to 2020.
And we expect full year adjusted EBITDA to be in the range of 305 million to $325 million up about 35% at the midpoint.
These expectations assume no significant worsening of the impact of the pandemic, including incremental closures of global markets or additional supply chain disruptions.
At the midpoint this outlook implies fourth quarter sales of $368 million down $53 million compared to 2020, and an adjusted EBITDA loss of $18 million down $66 million compared to 2020.
The decrease in sales comes primarily from lower volumes and golf clubs as we comp against last year's Tsi metals launch in Q4.
Sales for the rest of our segments for Q4 are expected to be flat to slightly down compared to 2020 as supply chain challenges are expected to further limit our ability to meet strong demand.
The decrease in adjusted EBITDA comes primarily from lower gross profit on the lower club sales volumes and lower gross margins from higher inbound freight and higher raw materials and manufacturing costs.
Additionally, opex will be up about $19 million compared to 2020.
From higher advertising promotion and selling costs as we are investing to take advantage of the current industry momentum.
And from higher associate related costs.
In conclusion, our Cushing it delivered another strong quarter in Q3 led by tremendous execution by our associates and trade partners.
We have again raised our full year 2021 financial goals and we are confident in our ability to execute our long term strategies and to deliver a solid long term total return for our shareholders.
With that I will now turn the call over to Sondra for Q&A.
Thanks, Tom operator could we now open up the lines for questions. Please.
At this time, if you would like to ask a question. Please press Star then the number one on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.
Your first question comes from the line of Daniel <unk> of Stephens incorporate.
Yeah, Hey, good morning, guys and congratulations on the quarter.
Thanks Danielle.
I wanted to start one on the sales growth I guess in the release you talked about price increases on foot jewelry and some of the golf gear gear. You can provide some color on just how units are tracking in your ability to meet meet that demand on that side of the business and then as you look to the fourth quarter and beyond which categories.
Being the biggest lack of availability on the unit side.
And what is your ability to continue to take up price to offset that.
Oh, Okay, Daniel I'll I'll get into that so so.
It is it really the highest level.
All of our categories are constrained to some degree.
From an availability standpoint, as it relates to the fourth quarter.
You know the biggest constraints are in golf balls, and that's really twofold, that's raw materials, one, but that's also our decision to stop producing current models to begin producing.
And building inventory to support our first quarter launch so.
You've got a couple of factors at play there.
The club side of our business as we've said all along and we typically like to run custom.
Custom club lead times at about two days, which which are you know.
Among the industry best that's not been the case for quite some time as is.
As you know so we continue to we continue to have a pretty good backlog of custom club inventory that were orders that were working through.
As it relates to price I think the best that's the best way to think about pricing looking forward is to maybe illustrate what's what's happened in 'twenty one.
Our preference our preference is always.
He has to use to think about pricing first and foremost from up in innovation golfer performance enhancement.
<unk> and we think we've done that but of course, we are dealing with with cost inflation.
Throughout the business, but if you look at if you look at how we're thinking about price and how we've responded to price in the back half of 'twenty one.
We've taken increases in some areas, but but but not all examples would be.
Our iron launch.
Golf bags and I think that's that's the right way to think about how we look at pricing going forward into 'twenty. Two we will look at it on a case by case basis.
We will take some price increases, but again it'll be specific to each product group.
And won't be sweeping.
Sweeping approach too.
Total business, but.
I mentioned, what we've done in the second half we took a price increase on probably one of the first half so clearly the environment, whether it's from a supply versus demand comparison number one or.
Raw materials labor cost distribution cost.
Element number two.
Would would support the reality that hey, there will be some price increases.
In 2022 again in some parts of the lineup at all.
Particularly related to that I guess, one of your private competitors. It seems that they have taken up price intra launch on clubs, which is.
Something you guys Havent done yet that's something that you think the consumer could handle or would handle this environment or how do you guys think about intra launch.
Price increases on hard goods.
Yeah, we really it's been our practice for many many years to really attach price increases to new product launches and that we believe is in.
Our best interests, and we don't we don't see any deviation from that approach going forward.
Again, I understand the rationale behind it why it may happen, but again our approach has always been.
Again think of any price changes with new product launches.
And then Tom just the financial one on the guidance you just gave some helpful color at the end there I guess in the third quarter gross margins only down 65 basis points is remarkably impressive given the cost pressure was there any one time benefit in the quarter and then as we look at the fourth quarter Guide you just gave US the pieces I think you said 18 million cost, but it seems to me.
<unk> gross margins and were in the mid 40% to 40% to 45 range in the fourth quarter I guess it'd be backing into the guide correctly and then any color you can help us quantify that.
What's driving that 700 basis points.
Margin pressure in the fourth quarter.
Sure Daniel.
In terms of Q3 gross margins no there weren't any one time.
Items, there so that the performance was really based on on our sales volumes and our.
Some of the price increases that we've taken as David mentioned, we still have as you probably expect we still have pretty significant headwinds from.
From freight which.
Impacted us in Q3 and will impact us in Q4 and into <unk>.
And into 2022.
And in terms of Q4, we do expect our gross margins to be down from Q4 of 2020 and 2019.
I don't think we're expecting them to be down quite as much as as you suggested.
No.
More a little bit higher than that and you know most of the most of that decrease is really just coming from from volume.
There was a pretty.
Sizeable decrease in our sales volume compared to last year, primarily because of the law.
Last year, we had the tsi metals launch.
So volume is clearly the largest piece there, but we are expecting about it.
$9 million hit from freight in Q4 compared to 2020, and then the rest would just be sort of that that pricing cost inflation, we're seeing as a result.
Some of the raw materials and other supply chain issues.
Got it that's helpful I'll hop back in queue.
Thank you Danielle.
In Q4 21.
And the demand environment is much stronger than it was in 2019 and some of our supply chain constraints.
Are making it difficult for us to meet that demand. So I think the demand environment is is much stronger, but when you take into account some of our some of our constraints. We're just not able to meet all the demands that's out there.
Great. Thank you.
Okay. Thank you operate our next question please.
Your next question comes from the lineup Anna Laskin of Jeffrey.
Hi, Good morning, Thanksgiving a question I got to step back could be lost through how the corner Programmes places expectation.
More of a function of supply chain being alaskans came in thier, when you're concentrating the guy.
<unk> on the T T color with it a better than expected blown environment.
Yeah, I had a but much much more of a former and that it was it was a.
Our outlook for the third quarter really your outlook for the second half.
<unk> was really built around supply chain and what we thought we could get out of our supply chain. So is that improved our ability to meet demand improved so that not a lot of change from a demand standpoint demand has been strong all year. It remains strong, albeit seasonally adjusted but the third quarter played out largely because our our supply chain.
Across all categories across all segments.
Delivered more than we anticipated and part of that is is the very good work by our team.
But a lot of that too comes from better results better performance from our supply partners from our raw material partners et cetera.
Got it thanks, and then thanks for testing on the ball availability I got.
<unk> you know my team, it's difficult to say when that will rectify, but you know how long could you know the channel backfill benefit expands and that.
I, just like a 2022 and beyond hump, maybe mid 20th 22, I'm just trying to think about televised.
Uhm dynamic well if you know of course, it's it's a moving target.
He would we would anticipate based on our you know what we know today and that's driven off the.
The forecast were provided from our our supply partners around raw materials.
We would expect channel inventories took to remain tight well into 2022 and can't at this point put up.
Put a more definitive timeline on it but we respect inventories across the golf ball spectrum.
To be tight we're at a point now when the industry is making more than we sell to gear up for for spring launches in in the beginning of the 22 season.
But I would expect to see I would expect to see inventories remain lean through through the heart of 22.
As I've said before we're confident that we'll we'll have enough product out there to meet consumer demand, but again, you just couldn't see ilene Ilene channel inventory environment.
Great. Thank.
Thank you Ana upgrade our next question please.
Your next question comes from the lineup Casey Alexander.
Accomplish point research.
Hi, good morning.
Hi, I have a question in your presentation. The one of the things that you didn't really talk about was market shares and I'm wondering if if you know not all supply shortages are are created equal and it seems to me that the suppliers don't want to.
Bad time, they don't want a shaft their biggest customers. So are are the supply chain shortages.
You're navigating it I think better than most allowing for some market share gains against the competition, who who may even be having more trouble with supply chain shortages and you are.
Casey good good question everybody's everybody's you know battling for available raw materials supply and.
We think we're doing a pretty good job part of it's part of it's tied to where we are seasonality from a from a launch kaden standpoint, and and that would apply to our to our competitors as well.
You know as a share as it relates to share with we don't we don't often get into share commentary I think the available data out there captures some channels, but not all so.
So we don't get too caught up in and share commentary.
We like our position right now across categories, and and and expect that you know our team is is gonna continue to to position the company to to take full advantage of of of whatever availability.
Is out there and I know our competitors are thinking about it the same way so tough.
Tough to really quantify its impact on share it at the.
At the product level, but you know as we look at our business up near 40% year to date, we certainly feel good about that performance in the context of a of a really constrained really constrained supply chain environment.
Okay. Thank you for that H E U I'm Gonna put you on the spot just a little bit if you could I know you haven't put out specific guidance, but if you could look forward a little bit into 22 understanding that we have to project into 22 and sort of help us contour how.
We're looking at 2022 in relation to 2021, I think that would be very helpful.
Yeah, and and been Great Fair Fair Fair question.
Not putting us on the spot, but I I'd say the following Casey.
You know this retails healthy Ah channel inventories Arlene consumer strong so.
And I'll add to that is noted we're very confident in our product plans for the first half of the year.
Of course, the planning process is far more complicated today than it typically would be given supply chain environment.
And as we balance raw materials component availability costing frayed at times et cetera et cetera.
I'm Gonna I'm gonna caveat of it and saying given the strength and momentum of our business. We we would expect growth in all segments next year and a normalized supply chain environment.
Ultimately however that as the plan comes it comes together it will be more reflective of the supply side than than any demand driven forecasts. So maybe.
Maybe the literal answer you were looking for but again from a demand standpoint from a market fundamentals standpoint, we really like what we see it.
It really is going to be a function of what can we what can we pull out of the supply chain.
Alright, great. Thank you for taking my questions I appreciate it thanks.
Thank you Kathy.
Great and next question please.
Your next question comes from the line of Joe answer Bellow Raymond James.
Hey, guys busy Adam one for Joe Congrats on the strong choir again, if I could you guys alluded to if I can just get I need to get some details for cute, but an update on just the estimated impacted culvert and supply chain headwinds. This year, just kind of putting it in a vacuum I know last year decided be roughly that.
75 to 80 million versus the second half of 2019, if I'm not mistaken.
I'm not sure if he does have an updated number there in terms of how basic change based on your four Q outlook now, but any update there would be helpful.
Yeah, I'm not I'm not certain I.
Recollect the numbers you just put out I'm not sure. We we put out a specific number as it relates to the the impact of supply chain on our on our results I mean, obviously there has been a significant impact both in top line and our ability to meet topline sales and demand that's out there.
[noise] and then also specifically things like the.
Incremental freight costs that we've we've quantified in the past, but I don't I don't think we've put out something.
Specific around the supply chain impact.
Gotcha Gotcha.
If I could squeeze in one more I know you guys may not sure to Colorado detailed Arounds played in 2021 and I think the last year you know the big driver a big driver was avid golfers by more is that still kind of what we're seeing this year or are you also saying last year's new golfers increasing their flag just in terms of decide trends, we're seeing women those those round place.
Wait data so far through September yeah. So so you know just starting point the game the games in in good shape facilities are busy really maybe answering this for the U S lens rounds around 8% over 20 in about 18% over 2019 year to date third quarter was.
Down about 5% compared with last year, which which you know I would say our year to date performance.
From around standpoint, probably better than anybody anticipated at the start of the year.
And and in full year round are on track this are packed or just to surpass last year's really.
Aggressive pace, so healthy outcome, given given COVID-19 realities, and I'll add to that the.
The fact that weather was more favorable than last year as to the composition.
We you know anecdotally you continue to hear that that it continues to come from from three sources right that the ads playing more of the late and choose who came back to the game because of Cobra to new entrants.
Best we can provide it's still probably at the half of it is half of their beat the incremental play coming from the habits.
Order from the new when a quarter from lightens.
Again, we will update that as we as we see.
More industry data come out at yours in but I think that's the right way to think about it for now.
It's really helpful. Thanks, a lot guys.
Great. Thank you Adam Adam Thanks, and thanks, everybody. We we appreciate your time and efforts to understand this.
This dynamic business environment, and we look forward to speaking again on the next call have a great have a great day.
This concludes today's conference call you may now disconnect.
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