Q1 2022 Kaman Corp Earnings Call
Ladies and gentlemen, thank you for standing by and walk through the Command Corporation Q1, 2022 earnings call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer.
Session, who asked a question during the session you did press star one on your telephone if you require any further assistance. Please press star Zero I would now like to turn the call over to your host Gary Barry you may begin.
Good morning, welcome to demand first quarter 2022 earnings call conducting the call today are Ian Walsh, Chairman, President and Chief Executive Officer, and Jamie Coogan, Senior Vice President and Chief Financial Officer.
Before we begin please note that some of the information discussed during today's call will consist of forward looking statements.
Fourth our current expectations with respect to the future of our business the economy and other future events.
Include projections of revenue earnings and other financial items statements on plans and objectives of the company or its management.
Statements of future economic performance and assumptions underlying these statements regarding the company and its business.
The company's actual results could differ materially from those indicated any forward looking statements due to many factors the most.
It's important to US which are described in the Companys latest filings with the Securities and Exchange Commission, including the company's first quarter 2022 results included on Form 10-Q, and the current report on form 8-K filed yesterday evening together with our earnings release.
We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in applicable SEC rules and regulations reconciliations to the company's GAAP measures are included in the earnings release filed with yesterday's 8-K.
Finally, we posted an earnings call supplement on our website, which provides additional context on our financial performance and our outlook for 2022.
Can find this presentation at Www Dot command Dot Com slash investors last quarterly earnings call.
Now I'd like to turn the call over to Ian Walsh.
Thank you Carrie and good morning, everyone. It's nice to have you all of US today for our first quarter 2022 earnings call.
I'll start by providing highlights on the quarter, and then share some operational and business updates along with some perspective innovations in each segment before passing the call over to Jamie for more detailed discussion of our financial results.
Results for the first quarter were in line with our expectations with lower sales earnings and EBITDA relative to both last quarter and the first quarter of 2021.
This was primarily due to the timing of key Mac sales and mix of J P. F sales gross margin for the company increased 120 basis points to 32% driven by the significant improvement in year over year sales and margins for the engineered products segment overall, we remain on target to meet our guidance for the full year.
Our first quarter, we saw strong demand across our commercial business and general aviation markets led by meaningful order intake for our bearings springs and seals contacts products in fact sales to Boeing and Airbus were higher for the third quarter in a row, a solid indicator that airline demand is rebounding.
These order increases have contributed to a 23% improvement in our backlog for engineered products since the beginning of the year.
The activity seen in the first quarter is encouraging and gives us confidence in the higher sales and improved margins, we anticipate the balance of the year.
One of our strategic pillars is to become the best in class in what we do every day is a function of deploying more training and executing against our operational excellence model.
I am pleased with the efforts of our highly capable leadership team and workforce to implement the model, which is grounded in rigorous lean and six Sigma tools.
We have worked to improve many of our value streams inside several of our business units such as our targets for safety quality delivery and cost out while improving our working capital.
In fact, we have seen promising progress at one of our structures segment sites, where we've achieved double digit EBITDA margins for the third quarter in a row.
There is still significant progress we made as we focus on delivering improved performance.
Now, let me highlight the performance for each of our segments and also share some of their respective innovations that will continue to help us grow organically.
Our engineered products segment delivered outstanding results with year over year sales adjusted EBITDA and margin growth in the first quarter, driven by our seals springs and contacts products.
This strength in medical and industrial demand is expected to continue in 'twenty 2022, and we have increasing confidence and incremental recovery in commercial aviation.
Our employees continue to provide innovative solutions have pushed the boundaries of application engineering materials science to meet the needs of our customers.
One six such technology in our engineered products segment is there a miniature bearings for turbo molecular pumps. These highly customized bearings provide superior precision and quality for customers in high Tech industries, where ultra clean environments are required such as those used in production of semiconductors and solar panels analysis using laboratory equipment and Apple.
Acacia of surface coatings.
They are a superior solution for applications that had challenging aspects such as those with high vacuum high vibration linear thermal dissipation or low dry power.
Can we add aspires to be the global leader in this highly profitable and specialized market within this decade.
We talked last quarter about our proprietary titanium diffusion hardening process, which provides the benefits of titanium alloys like extending service and proving hardness and durability and wear characteristics for a wide range of end markets outside of aerospace and defense. Our team continues to make meaningful progress exploring a variety of medical industrial applications for this technology.
<unk> in markets, such as orthopedic surgery weapon accessories, and even formula one racing.
Additionally, our ball steel business continues to break internal records relative to their growth and market expansion with their proprietary candidate close springs in seals and applications from the F 35 joint strike fighter to Neuromodulation therapies used in the human body.
Our precision products segment continues to transform.
Can we pivot to new technologies and markets regarding GPS, we expect lower sales and impact of mix over time.
We continue to focus on filling our Dcs funnel and are pursuing several meaningful opportunities that are expected to increase our backlog and extend the life of the program as we've said during prior quarters, we anticipate offsetting the reduced volume with organic growth in other areas of our business as well as accretive acquisitions.
We've increased our R&D investment within this segment, primarily for ear for air vehicles and are making substantial progress on our autonomous logistics technologies cargo UAV unmanned aerial system and came ex tighten their whole system.
We're working closely with the U S government and are pleased with the recent support of $7 million in new funding for our autonomous logistics system as part of the 2022 government funding package.
We are on track for a demonstration of a full scale cargo UAV unmanned aerial system the second half of the year.
This purpose built fully Thomas medium lift logistics vehicles designed to provide cost effective cargo hauling empty easily deployed inside of the standard clinics box.
Our initial addressable market is the U S military and special operations command and.
And longer term the vehicle can be used in a wide range of commercial applications, such as servicing oil platforms search and rescue humanitarian relief and middle mile delivery for logistics companies were.
We are continuing to seek initial orders for this program for a military customer and we are evaluating several partnerships with other commercial companies.
Our structures segment continues to focus on strengthening the operating margins is seeking new more profitable work scope.
That fits our core capabilities.
For the quarter were lower than both last quarter and the first quarter of 2021, However, we expect sales and margin to improve over the course of the year.
As I mentioned, we have seen positive signs of improvement and one of her size and believe there is significant opportunity for further enhancement.
Our team in Jacksonville for example continues to make noble progress on the consolidation from four manufacturing plants down to two in order to optimize capacity manufacturing floor space and flow during the quarter, our Vermont facility expanded their medical imaging program through our new partnership with a major new medical equipment manufacturer in our Wichita.
<unk> was recently awarded a prototype contract for sophisticated composite panels to demonstrate our capability for the next generation satellite Communications company.
Looking ahead, we feel confident that the commercial aerospace market is rebounding.
We're seeing durable demand in key end markets, especially in aviation medical and industrial which are expected to benefit our high margin engineered products segment.
Precision products will continue to transform we are streamlining the organization, improving our processes and advancing new product development efforts and precision manufacturing sophisticated measuring equipment and fully autonomous flight.
Our structures segment is focused on getting healthier, where we'll begin to see the benefits of our operational excellence model.
We are enthusiastic for several of our new innovations as we position the company for best in class performance.
Lastly, we remain disciplined in our approach to M&A and capital allocation. We are in our 52nd consecutive year of dividends and in April we announced a new $50 million share repurchase program, replacing our prior authorization. Our first priority for this program is to limit future dilution from the issuance of shares under employee stock plan.
<unk>, a new compensation structure, we remain focused on making strategic investments and now he optionality for share repurchases, coupled with the continuation of dividends puts command in a great position to execute on the path that provides highest return for our shareholders.
Now I'll turn the call over to Jamie for a more detailed discussion of our financial results.
Thank you Ian and good morning, everyone.
Today, I would like to discuss our first quarter results for 2022 and provide an update on our outlook for the year on.
On a consolidated basis, our net sales in the first quarter were $158 million compared to $175 million in the fourth quarter of 2021 and $172 million in the first quarter of 2021.
The decline of seven 9% year over year was largely due to the timing of K Max aircraft sales lower sales on our E. Each one Z and composite blade programs and mix for our J P. F program. This.
This was partially offset by increased sales in the commercial and medical markets for our bearings springs seals and contacts products.
Adjusted EBITDA in the first quarter was $12 $2 million or a margin of seven 7% compared to $23 $6 million or a margin of 13, 5% in the fourth quarter of 2021 results were impacted by lower volumes of our bearings sold into military and commercial applications as well as sales mix for our <unk> program.
For the year over year comparison, adjusted EBITDA decreased 29% and margin declined 230 basis points. The decrease resulted from the timing of K Max aircraft sales unfavorable K, Max blade exchanges and J P. F sales mix, partially offset by strong sales of our bearings springs seals and contacts into the commercial aviation.
<unk> and medical markets.
Now I'd like to walk through each of our segments beginning with engineered products.
<unk> to the fourth quarter volume decreased in the first quarter, primarily for bearing products, serving military and commercial aviation end markets. Adjusted EBITDA for the first quarter was $17 $3 million with a margin of 21, 2% year.
Year over year results improved significantly with higher demand in medical and industrial markets adjusted EBITDA increased more than 50% and margin increased 520 basis points sales and gross profit improved on seals springs, and contacts for aerospace and medical applications and sales were higher for aftermarket parts. This was driven by the <unk>.
<unk> of COVID-19 on commercial aerospace end markets, primarily in the first half of 2021 the.
The demand for our spring steals and contacts as well as for bearing products has improved significantly against the backdrop of the ongoing economic recovery. Looking ahead. We expect continued strength in these markets in 2022 order intake during the quarter was robust with a backlog increase of 23% since the beginning of the year. The development we are.
Seeing an order rates gives us confidence in the outlook for the full year.
Now moving to our precision products segment.
Compared to the fourth quarter results decreased in the first quarter due to lower sales and associated gross profit for our <unk> programs adjusted EBITDA for the first quarter was $4 $4 million with a margin of nine 3%.
Year over year year over year results for this segment declined from an adjusted EBITDA of $14 $1 million and margin of 23, 3% in the first quarter of 2021, primarily due to lower <unk> sales unfavorable K Max blade exchanges and GPS sales mix. Additionally, we increased R&D spend for new technologies.
Primarily cargo UAV as we've discussed on prior calls we are managing our current J P F pipeline and looking to secure additional Dcs orders in the near term we continue to make progress in R&D efforts with our patented height of burst sensors, and we are developing new sensor infusing technologies for our existing family of safe and armed devices.
Yeah.
Now moving to our third segment structures.
Compared to the fourth quarter results decreased in the first quarter, primarily due to lower sales volume in our <unk> <unk> program adjusted EBITDA for the first quarter was $289000 with a margin of 1%.
Year over year results declined from an adjusted EBITDA of $1 $2 million and margin of 3%, mostly due to lower sales in our age onesie and composite blade programs. This was partially offset by improved volumes and margins in our Rolls Royce program.
We are beginning to see improvements for our structures segment as our team applies our operations excellence model best practices from the process will continue to be applied throughout the organization and we will identify opportunities for further operational enhancements are long standing aerospace customer relationships with Sikorsky and Boeing are important to us and we will continue to leverage those.
As well as utilize our technologies for additional medical imaging solutions in order to drive improvements in the financial performance for this segment.
On a consolidated basis gross margin was 32% for the first quarter, a 120 basis point increase over the first quarter last year, we benefited from higher quarterly profitability for our seals Springs and contacts in our engineered products segment, and we will continue to focus on driving improved performance through lean initiatives and cost reduction efforts.
In addition, we were able to pass a certain amount of cost increases as it relates to inflationary pressures and remain mindful of the impact that these will have on us going forward.
SG&A increased $1 $6 million compared to the first quarter of 2021% to $39 7 million or 25, 1% of net sales.
As we discussed on prior quarter calls, we continued to manage cost and seek opportunities to increase efficiencies across our organization.
Diluted earnings per share were <unk> 14 for the quarter compared to 33 in the fourth quarter of 2021 and 29 in the first quarter of 2021.
On an adjusted basis diluted earnings per share were <unk> 15.
Compared to <unk> 48 in the fourth quarter.
The decline in quarterly earnings per share from the first quarter of 2021 was primarily within our precision products segment with an impact from J P. F of <unk> 17 per share and increased R&D spend for this segment of <unk> <unk> per share.
These reductions were partially offset by strong performance from the engineered products segment, which resulted in an increase of <unk> 14 per share.
During the quarter, we had cash usage of $1 million. However over the last 12 months, we've generated free cash flow of $30 million driven by strong cash collections and improved working capital management as a function of our focus on operations excellence.
Now I'd like to discuss our outlook for 2022 as.
As we mentioned on the fourth quarter earnings call. We expect the cadence of earnings to be weighted towards the second half of 2022, our results for the first quarter with art were in line with our expectations with lower sales and margin for our K, Max and <unk> programs, partially offset with strong sales into medical and industrial end markets and improving aerospace demand we're maintaining.
Our guidance for the full year the strength in the medical industrial markets and increase in orders for our engineered products segment give us confidence in our performance for the remainder of the year with that I'll now turn the call back over to Ian for closing remarks.
Thanks, Jamie.
Demand has a solid foundation with a talented leadership team and workforce and a game plan for improving our processes and performance we.
We will continue to challenge ourselves to achieve greater in these top quartile performance in the near future.
The lower cost basis that we have been targeting will drive significant improvement in margin as we increase sales improvement in demand in the medical industrial and aerospace end markets is promising and we will take advantage of that opportunity to win more profitable programs and expand our market share.
Command is a solid strategy and is well positioned to deliver on our priorities as a reminder of our overarching strategy and continue to focus on three strategic pillars first we will grow our business through innovation accelerating investments in our products facilities and people second we will continue to be disciplined in our approach to accretive M&A and capital allocation.
Third we will continue driving operations excellence until we are best in class executing on this strategy will lead us to top quartile financial performance in our segments.
All are aimed in improving EBITDA margin free cash flow conversion and return on invested capital that lean to exceptional shareholder returns.
I'd like to thank all of our dedicated and talented employees around the world, who are making our vision become a reality and helping each and every one of our customers to achieve greater with that I'd like to open the line for questions. Operator can we have our first question. Please.
Ladies and gentlemen, if you have a question or a comment at this time. Please press. The Star then the one key on your Touchtone telephone. If your question has been answered or you wish to move yourself from the queue. Please press the pound key.
Again, ladies and gentlemen, if you have a question or comment at this time. Please press. The Star then the one key on your Touchtone phone.
Our first question comes from Steve Barger with Keybanc capital.
Hey, good morning, guys.
Hey, good morning.
Sorry, I jumped on the call a little bit late so I missed some of the prepared comments, but.
Just wanted to talk about.
Some of the guidance to hit the midpoint of the revenue guide you need to average $190 million per quarter for the rest of the year. So do you expect revenue to still ramp sequentially. So you're ending the year above 200 million or are you putting up three more.
Similar quarters to each other or just trying to get a sense for how you see the year progressing.
Yeah, Steve we see the year ramping sequentially as we as we drive sales higher in the back half of the year to be above that 200 and the back half.
Would you expect.
Yeah.
A modest sequential increase in the <unk> and then much bigger quarters in the back half or what's the magnitude just to kind of level set expectations.
That's fair to say, Steve for sure and again.
I remind you that you know again, the timing of J P up deliveries over the course of the year will also impact the revenue cadence in earnings cadence as well, but just to kind of keep that in mind as well okay.
And just thinking about the segments I mean coming in 13% topline on engineered is certainly good to see do you expect that that is a strong double digit revenue contributor through the year.
Yes, Steve I do we've got a high degree of confidence in the performance so far of that group.
You know we ended the year with record backlogs, it's really focused on execution. This year and they know how to do that and we continue to really kind of see improvements kind of month to month, along that so we do anticipate higher margins there for sure and just to add to that I mean, the prepared remarks, we talked about backlog for that segment being up 23%.
From year end, so we've seen about a $40 million increase in backlog and engineered products, which is higher than what we had initially planned for that business. The order rates are filling in very nicely.
Or for that segment over the course of the over the course of the first quarter and we're seeing some strong signals.
In the first part of the second quarter here that that will continue.
Yeah, Yeah yeah.
And Jamie when I had dialed in I just heard you talking about the structures segment and I think you said that.
There were tangible signs of improvement or something to that effect, what I mean that that didn't necessarily flow through into results. This quarter from a financial standpoint can you talk about either one of you just about what youre seeing in structures, that's giving you confidence in sequential improvement.
Yeah, I mean again, we took a number of restructuring efforts at the end of our.
Last year, we continue to take those efforts continue to proceed through the first quarter and into the second quarter of this year, which includes a number of items, including facility consolidations.
And some workforce right sizing relative to capacity. So therefore, we're better situated.
We're seeing those come through again in pockets and you know Ian had some some commentary in his prepared remarks in his section and I'll pass it over to him to maybe briefly on that real quick.
I think there's three kind of key.
Categories. If you will about what we're really looking forward and seeing in structures side. One is the operational excellence piece I mean, as I mentioned last year, we really focused our effort.
On those businesses initially with the operations excellence deployment gaming training up to speed and and.
And all the projects line that we're now tracking very carefully and we're seeing a lot of improvement. So for example, we're seeing shifts in metrics, whether its cycle time reduction of 50% gross margin improvements rights to targeted for some businesses like we mentioned.
In the 90% improvement the second part of it is program management.
We've had programs legacy programs that we've restructured and talk to their customers and gotten fixed and we won the third part is winning new really profit more profitable programs. We talked about the satellite program, which is fantastic we've talked about some new medical applications, which is great.
In Vermont.
Has had the third quarter of double digit EBITDA and that's a business that routinely as has performed at that level and higher so it's really nice to see that recovery, but those guys. So that kind of gives us strong confidence in where we're headed with the structures business, which is to really get those folks healthy and I've talked about before in the structures business. It should be in the high single digits low double digit.
Type of performance.
Yeah are those programs you just mentioned what you had referenced in the press release last night, when you talked about expanding into more profitable complex structures businesses.
Absolutely I think too we.
We talk about pricing and other things and structures businesses are longer term programs and things like that and it's harder to pass along price so winning new programs at better margins is outstanding.
And that's something that the team has done a really nice job working hard at.
And again, I think youre going to see some some nice recovery there in the short term with those businesses.
Alright. Thanks.
Yep Thanks, Steve.
Our next question comes from Seth <unk> with J P. Morgan.
Hey, thanks, very much and good morning.
Hey, good morning, Seth.
Morning.
I joined a little a little bit late so I apologize if.
This came up during the discussion.
But when we think about the precision products business and we think about the.
Environment for global Defense spending now.
How do you think about the opportunities there on.
Safe and arm and.
Is that is that landscape kind of change.
Changing at all.
Specifically with regard to J P F.
And is it something that.
Maybe going to evolve slowly over time or something where.
It's already something where you have been having discussions.
Yeah. The landscape you know as everybody knows has definitely changed.
We're we're seeing the same demand signals from the defense Department on systems that are quote certified that are high <unk> levels, whether it's stuff in development or existing systems.
And in reference to J P. F. I think we've we've had some inquiries and we've made some inquiries just to make sure they understand our capacity and our throughput and ability to respond it's really hard to predict quite frankly, if and when and how that will all play out but we are definitely involved in those and those communications.
And we've made those direct inquiries as well so let them know that we stand ready to support them if needed.
And so we'll see what happens.
And on the international side.
Yeah on international side as well I mean, it's it's ironic I think you know put in is becoming the best business development person for the entire defense Department.
As well as on the on the international side, and so and let me give you. Another example, like when you think about what's happening over there it's not just J P F.
Some some really nice inquiries, we've already talked to several customers relative to programs that have the K. A 32 helicopter that's no longer supported and looking at where our K Max can play a role not just on the commercial side, but also we've had requests from the defense department and relative to our K Max tightened autonomous capability.
There are some things didn't work just don't know how they're all going to play out yet.
Alright, okay, Okay cool and.
Moving onto test structures, and maybe stepping back a little bit from the near term in order for structures to be kind of what.
What you wanted to be is there a certain scale that.
That that that that business has to has to reach or is the current size and the current programs.
Program content.
Sufficient.
So.
I'll tell you right now that the capability that we have an aero structures business is not scale dependent and what I mean by that is we are more specialized and highly complex structures and so I can give you examples whether it's winglets CH 47, hiseq composites tight dimensions on refueling probes at satellite panel.
<unk>. This is the type of work that we do very well and depending on the long term arrangements or period performance, that's going to drive much higher margin. So it requires more engineering requires more work more tolerance is that's what we specialize in it's not the big standard build to print type of composite work.
I think the scale matters.
So I think the teams whether it's their cost structure, which is SG&A is very strong and very you know I think high performance. There, it's really about driving those programs in which we've mentioned a few of those and executing against them, which the team is doing.
Okay, Okay, Okay and then.
If I could sneak in a last one.
It looks like based on the release that the.
The sequential decline and engineered products EBITDA.
It was driven.
Largely due to a decline in bearings for military and commercial Aero.
Boeing and Airbus It seems like.
Sales were up.
And so the implication is that it was either in commercial air are outside of Boeing and Airbus are on the military side and maybe if you could talk about.
Where that sort of total aerospace bearings commercial and military how that migrates through the year since it seems like Thats a key driver of profitability.
Yeah, I know that good good question, Seth and you know as.
As we dug in a little bit into the details there it really is real round some regional.
Regional sales regional aircraft sales.
For the bearings technology that came down we had some larger packages go out in the fourth quarter of last year to support some.
Some of the higher volumes, we are seeing in regional aircraft at the end of last year on the military side I think it is just timing over the course of the year relative to do anything else.
We did reference the fact again that backlog for that product is up and the order rates are up significantly.
In a number of areas across that business. So we still feel really good about where that business is going and we do expect even on the bearings side that could be a little bit more back half weighted realm.
Relative to two.
First half of 2022.
Great great. Thanks, very much guys.
Thanks, Ed.
Our next question comes from Steve Barger with Keybanc capital.
Thanks, Yeah.
Do you expect that any of these new structures programs that you talked about will benefit revenue this year or in general how long does it take to recognize revenue once you get an inquiry from say a new medical program for some product yeah.
Yeah, It's a mix I think some of those some of those opportunities will will realize this year because they've been in work quite frankly since even last year others like me talking about satellite program. That's just coming in now and if you know if we win the larger program, which we felt very confident we will that's starting in 'twenty three and beyond.
Got it and so I guess as you think about what you can see in backlog with new programs coming in do you expect structures will be up on a year over year basis for revenue for 2022.
For this year, yes, we do.
Okay. So all three segments should be positive.
Correct.
And that's a that's a great way to think of it.
And looking at Slide 15, you highlighted these many bearings for turbo molecular pumps, what is the size of that market opportunity.
And who are the like is there a lot of competition in that space or is this something that's kind of new and being developed.
It's been in work.
With our team and again you know what's really nice about this segment. These are miniature very sophisticated complex parts naturally the development cycle around these as longer so we've been working with all these customers for several years to develop this technology.
Certain applications addressable market quite frankly, I don't I don't have that off top my head, but it's a fairly substantial market just by the nature of what these pumps do because it crosses medical as well as industrial.
And again, the sophistication of the size that the miniaturization of it is really what we specialize in so it seems very excited about this potential opportunity with the turbo nuclear pumps.
Yeah.
Understood and Jamie I think you said there was a $1 million use of cash this year, but your.
Your guidance is 40 to 50, and I know that you've talked about buying stock to offset share creep, but is there a view right now around capital allocation as it relates to buyback.
Versus and maybe you've talked about this in the prepared remarks, but where are we in kind of in the M&A pipeline cycle.
Yeah, so as it relates to capital allocation again, we were going to.
We are still focused on organic growth right, so making investments in the base business to drive organic growth, we are focused as well on accretive M&A transactions.
Going to continue to support the dividend and again the share repurchase authorization. It really is designed to offset share creep relative to the plans right. You may recall, we we did revamp our executive compensation structure recently to make it equity based and better aligned with the long term views of the shareholders.
Inherently also increase the number of shares that we issue under that plan.
Given the cadence of shares we aren't expecting to make a material amount of purchases I would say this year. We've done we've done a number of purchases under our prior program that put us in a good position relative to some of the initial awards underneath those plans, but we would expect that to going forward to be able to offset that using the authorization we receive from the.
<unk>.
Got it and just.
Circling back to the M&A side of things like has the pipeline increased or diminished have you seen books come across your desk that were interesting, but you just couldn't get across the finish line. Yeah. It's been a focus for a long time, obviously, we haven't seen any activity. So what any more color you can give on on how that process is unfolding.
Process is the same.
I'll start by saying when we got together certainly when I joined we really took a hard look at our criteria and we revamped that.
And ensure that with the board and they were very excited about kind of how we're really targeting certain things. The activity last year was was decent multiples were high as we talked about.
And it kind of slowed down at the end of last year and what we're seeing now is more increased activity more sims and ships coming across our desk and we were evaluating those and we'll we'll keep you guys posted as things unfold.
Alright. Thanks.
Again, ladies and gentlemen, if you have a question or a comment at this time. Please press. The Star then the one key on your Touchtone telephone.
And I'm not showing any further questions at this time I'd like to turn the call back to Kerry beer for any closing remarks.
Thank you and thank you all for joining the call today, we will be having our call for the third quarter.
Later or sorry for the second quarter later this summer and we look forward to talking with you then.
Considering the meeting adjourned.
Hello, Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.
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