Q1 2022 Interface Inc Earnings Call
And those described in our most recent annual report on Form 10-K filed with the SEC.
The company assumes no responsibility to update forward looking statements.
Management's remarks during this call also refer to certain non-GAAP measures reconciliations of the non-GAAP measures to the most comparable GAAP measures and explanations for their youth are contained in the company's earnings release and form 8-K furnished with the SEC today.
Lastly, this call is being recorded and broadcast it for interface.
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After our prepared remarks, we will open up the call for questions now I'd like to turn the call over to Laurel Hurd CEO .
Thank you Christine and good morning, everyone I'm thrilled to be here at interface and for the opportunity to speak with you today by.
My first day with the company was April 18th after a strong first quarter results were in and as we entered into Q2 with strong momentum and now I'm joining a great company with an amazing reputation a strong team and a fantastic future I'm eager to lead the company for our next phase of growth, while continuing to advance our purpose and our sustainability journey.
I want to thank Dan for his stewardship of the company for the past 39 years, and especially for navigating the past two years to deliver solid financial performance during an incredibly challenging macro environment.
Before I hand, the call over to Dan and Bruce for the quarterly results, let me share a little bit about what brought me here in my background I was.
Its drawn to interface because of its reputation and leadership in design sustainability and innovation as I started to work closely with the leadership team and have met many interface colleagues across our Americas and <unk> businesses. In my first three weeks I can see that we have the right fundamentals in place and were prime to accelerate our success as we reach the other side of this global.
Pandemic.
I come to interface with 30 years of experience in sales product innovation brand development and general management.
The past 22 years at Newell brands, most recently, leading both they're writing and baby business units I was responsible for a $3 billion P&L a portfolio of iconic brands, including sharpie, almost and graco and a complex global supply chain.
Over the years has come from developing a strong culture and amazing team, having clarity of strategy and excellence in execution with a focus on results and winning as a team.
As part of my Onboarding schedule I've already met many of you and for those of you have not met I look forward to connecting with you as well.
I also look forward to working closely with you as we continue to drive interface forward and reach our full potential with that I'll now turn it over to Dan and Bruce to discuss first quarter results Dan. Thank.
Thank you Laurel.
Glad you are here.
Good morning, everyone. Let me jump right into our results. We delivered strong first quarter 2022 results with sales up 14% and the broad based growth across products and segments. We also had a strong adjusted gross profit margin down only 55 basis points versus Q1 of last year despite ongoing.
Supply chain challenges high input cost inflation and COVID-19 related disruptions.
I'm, so grateful for the hard work and dedication of our entire team.
Because of our team's strong execution paired with pricing and productivity gains we mitigated over 1000.
Basis points of input cost inflation headwinds that we experienced in the quarter. Our topline growth continues to be strong and our backlog continued to grow as we closed out the quarter, our backlog was up 16% since the beginning of the year.
And 29% year over year.
Orders were also strong in the quarter.
Orders in the Americas were up 11% year over year and in Egypt away they were up 26% on a currency neutral basis.
This gives us further confidence that the commercial office market is recovering and that we're positioned for growth as we come out of the global pandemic.
The investments we've made in our selling organization and product innovation are bearing fruit, we're growing in our key market segments and we're taking share.
Healthcare is up 23% corporate office is up 21% education is up 19% and multifamily residential is up 12% and we're seeing strong demand for our carbon neutral carbon negative products, which set us apart from the competition more and more our customers are focused on the carbon footprint of their.
They look to us to provide high design high quality products with the lowest carbon footprint on the market. We are the only manufacturer offers carbon negative carpet tiles when measured cradle to date without relying on the offset as a result, many global customers, including multiple fortune 100 customers have turned to interface.
To help them achieve their own carbon reduction goals.
Also choose us because they know our environmental decorations are made with integrity.
Phase one of a few building product manufacturers and currently the only global foreign company to have our 2030 greenhouse gas reduction targets validated by the science based target initiative.
We also continue to innovate on the product side. This quarter, we launched our new collection and the rigid core L boutique category to provide a maximum durability option with easy maintenance and installation. We also launched the first collection of carbon negative area rugs grew floored again measured cradle to grave.
As our first carbon negative product offerings and the residential side of our business and we introduced a healthcare collection of carpet tile LDC and vinyl sheet called desert escapes, which aims to connect health care facilities with the natural world through an integrated cohesive design.
Now, let's turn to the middle of the P&L, we made great progress in improving efficiency through the business are focused hiring efforts have improved production and productivity in our U S. Manufacturing. So we can meet the increasing demand that we're seeing in our order book as a result of these efforts production in the U S has returned to near pre Covid levels.
As you think about the rest of the year input cost inflation will continue to be a challenge we expect to continue mitigating inflation with additional productivity and pricing initiatives.
Our gross profit margin was down year over year. In Q1, we are very proud. It was only down 55 basis points on adjusted basis. It remains a top priority for us return to our target gross profit levels once raw material and freight costs stabilize.
In the meantime, we're making every effort to mitigate the impacts of this inflationary environment.
Q1 was a very strong quarter and one that we are very proud of I want to thank the entire interface team for their continued commitment to provide the best products in the industry with the most environmentally friendly attributes.
Also want to thank our customers for their continued support and the trust they put in US each day to deliver great solutions with revolutionary technology with that I'll turn it over to Bruce to go through the financials Bruce. Thank you Dan and good morning, everyone first quarter net sales increased 13, 7%.
The $288 million organic sales, which excludes the impact of currency translation was 16, 8%.
Sales in the Americas were up 23, 3% driven by the recovering commercial market and our continued progress in taking share.
And <unk> sales were up four 1% in currency neutral sales were up 10, 4%.
Orders were up in both regions, including an 11, 4% increase in the Americas, and a 26, 3% currency neutral increase in <unk> compared to the first quarter of last year.
First quarter gross profit margin was 37, 1% down 84 basis points versus the prior year period, and as Dan mentioned adjusted gross profit margin was 37, 9% a decrease of only 55 basis points from the prior year period, despite over 1000 basis points of input cost inflation.
<unk> that we incurred in the quarter.
For the past two years, we have focused on building earnings power by making structural changes to our SG&A.
Total SG&A expense was $78 5 million or 27, 3% of net sales, which was down from $79 3 million or 31, 3% of net sales in the prior year period.
Adjusted SG&A expense for the first quarter was $78 6 million or 27, 3% of net sales compared to 77 5 million or 36% of net sales in the same period last year.
First quarter 2022, operating income was $27 4 million up 62% compared to $16 9 million in the prior year period.
Adjusted operating income was $30 6 million up 54% versus adjusted operating income of $19 9 million in the first quarter last year.
Fully diluted earnings per share was 22 up 83% versus 12 in the first quarter last year and adjusted earnings per share was 28 per diluted share up 65% versus 17.
In Q1 of last year.
First quarter, adjusted EBITDA increased 36% to $42 9 million in the first quarter of 2022. Please.
Please refer to our press release for reconciliations of our GAAP to non-GAAP numbers.
Turning to our balance sheet and cash flows the company used $17 $7 million of cash from operations in the first quarter of 2022, as we return to a more customary seasonality in our business or our operations typically use cash in the first half of the year and generate cash in the back half of the year.
Liquidity at the end of the quarter with $359 million comprised of $76 million of cash and $283 million of borrowing availability.
Inventory was $319 million up 20% since the beginning of the year as we increased raw materials work in progress and finished goods to accommodate increased demand.
Our balance sheet remains strong net debt our total debt minus cash on hand was $445 7 million at the end of the first quarter and the last 12 months of adjusted EBITDA was $180 9 million and our net leverage ratio was two five times calculated as net debt divided by adjusted EBITDA.
We can continue to have confidence in our strong balance sheet and our capital structure.
Depreciation and amortization totaled $10 7 million in the first quarter of 2022 versus $11 9 million in the prior year period.
Capital expenditures were $4 8 million in the first quarter of 2022 compared to $5 2 million in the first quarter last year.
Now turning to our outlook, we continue to grapple with a high inflationary environment significant levels of disruption in the global supply chain.
The COVID-19 related shutdowns, particularly in Asia and macro economic uncertainty.
The company monitors the situation it is anticipating following.
For the second quarter of 2022, net sales of $350 million to $360 million.
Adjusted gross profit margin of approximately 33% to 34%.
Adjusted SG&A expenses of approximately $85 million.
Adjusted interest and other expenses of approximately $8 million and adjusted effective tax rate of approximately 29% and fully diluted weighted average share count at the end of the second quarter of approximately $59 4 million shares.
And for the full year of 2022, we anticipate year over year net sales growth of approximately 10% to 12% adjusted gross profit margin of approximately 35% to 36%.
Adjusted SG&A expenses that are approximately 25% to 26% of net sales.
Adjusted interest and other expenses of approximately $31 million, an adjusted effective tax rate of approximately 27% and capital expenditures of approximately $30 million.
We expect to continue to proactively mitigate the significant inflationary environment, we're in with price increases and productivity initiatives.
We will also continue to assess and activate opportunities to leverage our SG&A dollars globally. Our strategy is working and we are winning in the marketplace. We thank you for your continued support as we leverage our brand continue to optimize our cost structure and continue taking share.
And with that I'd like to turn the call back to Dan for concluding remarks.
Thank you Bruce and thank you everyone for participating in our first quarter 2022 results interfaces seemed strong and consistent growth in orders and sales as discussed during today's call and we look forward to continuing momentum we're seeing in our results and in the marketplace. We expect great things for the world.
Our new CEO and I am staying on as chairman I'm excited to see where she takes our great company next with that I will open it up for questions operator.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad. Your first question comes from the line of Keith Hughes from Truest. Your line is open.
Thank you a couple of questions on the results.
Could you give us a feel in the quarter what were what was price.
What did units contribute to the growth.
Hi, Keith this is Bruce good morning.
As we mentioned we had about 1000 basis points of inflation that we incurred in the quarter.
And we offset that similarly with pricing with productivity. There are some pockets of higher pricing around the globe and there were some pockets of higher productivity.
But we're pulling both levers and getting great results to offset this inflation. So it's a very similar outcome around pricing productivity and our units are obviously up.
As you can see by the volume that we had.
So of the 17% excluding currency round numbers I mean were looking at six seven points of unit growth is that roughly right.
That sounds around right, yes, okay.
Now the orders.
Europe , well above sales trends, even excluding currency.
Quantum suitable surprising given what's going on Europe . So if you could provide some commentary there and then also orders in the United States, which are a little bit below the sales growth what do you see the trend.
Americas.
It's interesting.
The business just continues to accelerate and by the way the orders have continued to be strong as we move through Q2.
In Europe , specifically, we had a haircut from from from currency. For example, if you look at the revenue line, we had about a 600 basis point haircut from FX translation in Q1, it'll be similar in Q2.
But but as you mentioned the orders are very strong our backlog continues to build and despite all the stuff going on in Europe in our business.
Very strong similarly in the U S. We have seen we haven't seen anything letting up we continue to have very strong orders and a lot of strong momentum as we move through Q2, so far and as we're entering into Q2. So we're very bullish on our strong Q2 and I'm a strong year in about the numbers that we're seeing in the business.
Yeah.
Yes.
Yeah.
Hey, This is Dan I think one thing Thats really happening is the office market is really starting to come back for us, particularly in the United States.
Okay. So I think youre not alone, but that sounds great.
And final question on the.
I understand why the gross margin is going to be what is the second quarter with raw material inflation.
<unk> had in the second half of 2022 do you think you will be even.
On cost or is there still going to be some margin drag that goes into the third quarter. As you know what we know today on inputs as you drive out.
Keith This is Bruce.
As we think back a couple of quarters ago, and the fed just talking about temporary inflation. We had hoped that we'd see that we would see by now some.
Some give on that and we'd start seeing some relief. Unfortunately, we have not seen that yet.
The freight costs are still up but raw materials costs are still up.
That inflationary momentum continued through Q1, so it will take some time for all of that to flush through the P&L. If you think about the timing of buying raw materials to building inventory to actually having that inventory release into the P&L.
We our current hope is that towards the latter part of the back half of the year is that we will start seeing some relief on that but Meanwhile, we're not sitting back.
We are absolutely pulling hard on two big levers to offset that one is pricing and one is productivity because we know that we need to make sure that we protect our margins as we move through the year.
Keith I would I would think of it this way.
Actually believe unless you see a lot more stuff happening out there in the marketplace related to input costs is that the.
Second quarter should be our bottoming out and then you should start seeing improving in the second half of the year.
Okay.
Excellent job on SG&A, that's all from me. Thank you.
Thank you Keith.
Our next question comes from the line of Samuel Dar cash from Raymond James Your line is open.
Good morning, Dan Bruce Laura how are you.
Hey, Jim.
Okay.
Dan I wanted to again say.
How terrific it's been working with you all these years I've learned an awful lot from you.
Every minute and best of best of luck and wishes with your next chapter.
And and Laurel, obviously, congratulations on being named to the post.
Two questions if I could.
Laura This is probably this is patently unfair given you've only been on board for us.
I wanted to get at least an initial sense.
Of your thoughts as to two significant strategic areas going forward for the organization.
The first would be.
How or whether the European carpet tile business fits into the overall portfolio.
And then secondly.
Whether you believe interface should bring its lvg supply in house and self produce or retained a third party sourcing model.
I know you're early on but at least.
Pluses and minuses of each alternative would be helpful at a high level.
Sure so weeks here.
I'll I'll.
I'll give you an early view, which is just that I was over in Europe last week and was really impressed with the team there and as Bruce said Theres strong momentum. So im encouraged by what I see now early days feels like.
I like what I see there, but but obviously a lot more to learn with respect to <unk> I don't know the answer to that yet I know im really impressed with the business that the team has built and the success and the momentum that we're seeing from that from a sourcing model of bringing that in house I think there's more to learn on that.
Got you and obviously, we'll be looking forward to your your.
Answers after a deeper dive.
The second question.
Dan Bruce.
Free cash flow conversion.
This year expectations, I think originally or at least a few months ago, you were kind of estimating around 80 or $90 million or so of free cash flow.
After the first quarter.
Both seasonality and what youre seeing out of inventories and costs, what's the what's a good.
Place to think about free cash flow for the year.
Sam This is Bruce we're not coming off that number.
Our cash flow, whereas still anticipating a strong cash flow year, so what youre seeing in Q1.
You are very conversant with is that in Q1, we typically use cash because we pay bonuses taxes and insurance.
And so.
So we.
We're very confident that the business is going to have a strong cash flow year as previously previously discussed and as previously described.
Yes.
And at what point, if I could sneak another one and I apologize you're at two five turns of leverage now at.
At what point does the capital structure.
Get where you would feel comfortable.
Deploying that cash flow towards the stock itself.
Yes. This is Dan I would say that Thats always on the table to look at that balance sheet in that two five turns we wanted to and.
And we will take it under consideration every board meeting so maybe buying back stock.
Very helpful and again, Dan Best Best wishes on your next chapter.
We actually grew up together in this business.
Okay.
Hey, Mike.
We both have multiple scars on our backs to show for it that's right.
Okay.
Sure.
Your next question comes from the line of Kathryn Thompson from Thompson Research Group. Your line is open.
Hi, Good morning, Thank you for taking my questions.
Sure.
Circle back on just on the end market segments multifamily healthcare education and office.
First focusing on office.
Hearings it teams.
In this earnings season.
Some others for an improvement in <unk>.
<unk>.
Once again remind us split.
John in terms of the.
The outlook for auto insurance, which youre seeing orders, but also a little bit more color in terms of.
Trends youre seeing in that office sector specifically.
And I'll take a stab at answering a question and then maybe pass it over to Dan for more color. We are continuing to see acceleration in the office market. It was a 21%.
This quarter.
And we aren't seeing we aren't seeing the orders stop we're seeing a lot of different companies that are either they're looking at their space and they're saying we need to redo this space to make it.
Two accommodated for a post COVID-19 environment, where they were as saying they want to spruce up their space.
To get their employees to come back and see something new and fresh.
Also with a lot of the customary turnover that happens around leases, we're seeing refresh leasing space and so there's just a tremendous amount of activity and change going on in corporate office.
And it's every permutation that you can think of and of course, all that is great for our business.
Yes, Catherine let's say that globally, not just a U S phenomenon, it's globally actually.
Okay.
Most of that was renovation work, it's not big office work, Yeah, correct its not.
We're not seeing a lot of new construction side interrupt you Dan.
To be a lot of R&R work around the world.
Yes.
Okay and you also noted that.
<unk> multifamily was up 12%.
Yes, correct.
Correct again, another strong another strong segment for us.
And.
Maybe give more color in terms of sequential trends you're seeing there.
And your thoughts and the outlook for the full year for multifamily.
Okay.
Well I gathered a small very small part of our business to be honest with you. We're getting the common areas were not getting the ship.
The areas are the big areas.
Mitch it's growing for us our outlook, probably will grow with the market 12%.
Okay.
Catherine I would I would think of that space for us has grown double digits. This year, just with all the activity that's out there.
Okay, and then finally on health care and education and any additional color you can get on those segments market segments.
I'll take a stab at it Kathryn and I will pass it over to Dan Boy Education is theres, just so much tremendous.
The momentum behind education and.
And part of that is that there has been a huge amount of government spending has been allocated towards doing education related R&R work and a lot of that hasnt, even been released yet and a lot of those projects haven't even started yet so we see.
Continued double digit growth run HN.
And we see that as having a very very long tail just given the fact that there's so much R&R work to do and Theres. So much government money that has been allocated in that direction.
<unk> of course, we're benefiting from macro trends.
You are well aware of particularly in the U S.
And again another another strong vertical for us, where we're extremely well positioned and I think if I go back to the Nora acquisition you might remember they were nor is very strong in healthcare and so we're seeing a lot of traction around Nora revenue in healthcare and then.
And then revenue synergies, where we're getting other business, we're getting well Nora is in there we're getting business.
Carpet and <unk>, because we already have those relationships and we already are in there.
Doing a lot of the other all the other work that we would've gotten with through the <unk> business.
Okay. So I think it's fair to say.
The mattress segment.
Thanks.
<unk> trends.
For the quarter versus last year.
Could you repeat that.
Got it.
Yeah.
Okay.
One additional question I wanted to follow up on is just.
And the consequences from the top.
Ukraine and Russia.
How is that impacting your business and kind of obvious or less obvious ways.
I'll take a stab at that Dan and then have you weigh in so as we mentioned.
<unk> business is around $8 million in revenue annually and around $2 million profit annually, we bought $1 billion in assets. There. So clearly that business is at risk with the with the war there.
The good news is that its immaterial relative to the total company, but our our hearts and minds and prayers go out to the people and what they're going through through that conflict.
<unk>.
The supply chain disruption in Europe around this is real and.
So and I think we baked that into our guide.
Based on everything that we know today clearly, it's an evolving situation that moves every single day in every single week, but.
There is an energy crisis going on in Europe , where energy is up.
Particularly natural gas and.
Which affects us in our affects our business and so.
That's something that we baked into our thought process around around GP for the rest of the year.
So we're watching really really closely and that will all.
Ill go back to what I mentioned earlier to the extent that we are incurring inflationary pressure as a result of that we are not going to sit still we're going to make sure that we're leaning forward to offset those costs with higher pricing and productivity.
Okay great. Thank.
Thank you for taking my questions Best of luck, Dan Great working with you.
Yes.
You can keep that.
Thank you.
Your next question comes from the line of David Macgregor from Longbow Research. Your line is open.
Okay.
Yes, good morning, everyone.
Dan maybe I can just.
Sentiments to those expressed by Sam so nicely earlier.
It's been a pleasure working with you good luck.
I guess I wanted to just start off with.
Yes, it's really been great day, and thank you for everything I wanted to start off with just asking about the commercial LPG business and just supply channels availability.
You mentioned in passing in your press release that you gained share we said in the carpet tile business that extended the LDP.
By channel, providing you with maybe a little bit of a share gain advantage here versus some of the product.
More coming out of China, just if you could talk about <unk>.
It'll be too slow right now.
Any advantage you feel you may be achieving.
So I'll take a stab at it and then I'll hand, it over to Dan for some work.
Color around it I got to tell you. The <unk> business continues to remain very strong growing double digits.
All of our data says that we are absolutely taking share.
<unk>, a leading our top three provider of <unk> in the commercial space and when you think about David is that we grew that business from zero only a few years ago. We're just so pleased with the progress that we've made there and the differentiation of our product and the ability of our selling organization to sell the differentiator is around.
<unk> <unk>, having the greatest recycled material of any other <unk> out there as well as the other product differentiation that we bring and we've also done some great design around <unk> that also differentiates our products. So that business is doing really well and.
We're going to continue putting the pedal down we have not had.
Our suppliers has been great around producing it there have been some fits and starts around freight and shipping from time to time, but what we've done to offset that because we've invested a little more working capital to make sure that we've got the products that we need when our customers need it so that we can manage lead times effectively.
And when you mentioned carpet I would also say that we believe that we're all of our data says we're taking share in carpet.
A lot of momentum around carpet and that business is doing quite well as well.
<unk>.
Remind me on the commercial Obeche, that's coming out of Korea isn't it.
Correct, Yes, that's where our manufacturers to correct to Korea.
And so I guess just getting back to my original question is that providing you with assured me some kind of a competitive advantage in terms of just having a better flow of product or is it significantly different.
Yeah, David I think the supply.
Fly from Korea is a lot better there from China as well, but you don't have somebody right.
So yes, it's a competitive advantage that we are in Korea versus China that's for sure.
Okay.
Second question was just.
I guess with respect to the commercial markets overall, and I'm just thinking back over the years, where you've seen some of your competitors subsidizing your commercial business with the.
The residential business of course.
To the extent that that's occurring that works against you in that you don't have a residential business are you seeing any signs of that right now and does that come into play in terms of the British cost you reported in the second quarter.
First quarter excuse me.
I don't think so David I don't I don't I don't think they play the residential or commercial that way I think they think of this street business so to speak.
So I think I think from a pricing standpoint.
Everybody goes low, sometimes but it's pretty far out there from that standpoint.
Okay.
I don't think my last question for me.
I don't think we're trying to buy.
With the rest of it yes.
We've seen that in the past, but it's not happening right now which is good to hear.
And then.
Right. Okay, and then last question for me is just.
Yes.
Back to Keith's point about the SG&A, it's really been a tremendous.
Execution can you go into a little more detail around just exactly.
And unbundle that SG&A number for us and just tell us where youre, making the gains obviously youre seeing some inflation across the.
Across the cost structure, there, but obviously, you're making gains as well could you detail that for us.
Keith This is I'm sorry.
Sorry, David This is Bruce.
I would say it has started with the tone and tenor from the top.
And then that has filtered down to our regional presidents and our commercial area leaders that it's a very very strong focus on SG&A that we need to be making sure that every dollar that's invested there as a return.
And so I wish I could say, it's in one or two areas. It really isn't it's in every single corner of the business and we have really pushed this out across the globe that we need to have the organization focused on optimizing every dollar and we need to have the organization focused on zero based budgeting around ESG.
Ne and making sure that every dollar that we're spending in that area is a dollar of that is going to either reduce costs or bring a return to the business.
It really probably is 50 plus different things that comprises the strives that we've made there and we're not done yet we're going to continue as an organization to scrutinize all of our SG&A dollars because we know that's important and so we're really proud of the progress we've made and we're going to we're going to continue to keep a focus on it yet.
David David David I would say that we did some structural things around India around Latin America.
Closing the Thailand facility. So we took out probably 20% of our head counts that are structural to me.
Related to the SG&A area, we didn't we didn't cut any salespeople in that process I'm very proud of that part of it.
Yes, good to hear.
Is there any risk of that is just kind of the world normalizes here, there's expenses that return back into the P&L, maybe youre benefiting right now from <unk>.
Deferred expenses.
You guys feel you are at a steady state.
As you see our sales increase you have variable comp you realize that part of the equation.
Right.
The fact that as variable for sure and that Youre going to see some <unk>.
We go see our customers those are the two areas.
Yeah, I would say the third area, David and this is a good thing and as sample expense goes up the same.
Those are costs, but again, there isn't a strong emphasis and I want to publicly thank the team across the globe because I'm sure. They are all listening to this. Thank you. Thank you. Thank you to the team for your leadership around Scrutinizing every dollar of tenet is again it starts with tone and tenor at the top and it is and it is absolutely.
Being driven by our president and being driven by our commercial leaders to have a strong focus on SG&A and leveraging that line.
If I could squeeze one more in just maybe talk about the market acceptance on the carbon negative.
The progress Youre, making there.
Maybe if you could differentiate between spec channel versus the dealer channel in that response. Thank you Daniel Danny you want to take that one or do you want me to take that one.
It is showing up David in the spec market, it's not really showing up in the dealer market.
On the carbon negative with a carbon neutral products, but the reception and tremendous related to banking.
The products.
E C III calculator with gensler.
Ill say some data on that the take up of that calculator is really really.
Very nice, we're actually loving, what's going on with making carbon one number at a spec.
So it's it's moving the right way for us.
We're going to win in the marketplace as part of a negative for sure.
David If I can just regarding you back off if I could just piggyback off of Dan's comments. We are it is definitely a differentiator for us.
And one thing that I love about interface and about this great company is that our customers can see right through the Greenwashing noise.
Going on out there at times, we as Dan mentioned in our prepared remarks, we're one of the we are the only global foreign company that is having a green gas reduction targets valid validated by the science based targets initiative. So when we put numbers out there we stand by them with integrity and with action and our <unk>.
Customers.
Just a little bit of research can see you can see that and they can see through the greenwashing that's going on in the rest of the industry, which gives us a strong foothold in strong differentiation.
Thanks, very much everyone and congrats on all the progress.
Yes.
And there are no further questions at this time, Mr. Dan Hendrix, I turn the call back over to you for some final closing remarks, yes, well. Thank you all for listening to this call and I can't wait to hear Laurel and Bruce This call next quarter. Thank you all have a great day.
And this concludes today's conference call. Thank you for your participation you may now disconnect.
Yes.
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Yeah.
Okay.
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