Q2 2022 Gentherm Inc Earnings Call
Greetings and welcome to <unk>, Inc. 2022 second quarter results conference call.
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Thank you and good morning, everyone and thanks for joining us today.
Jumped on earnings results were released earlier this morning, and a copy of the release is available at Jonathan Dotcom and <unk>.
Additionally, a webcast replay of today's call will be available later today on the Investor Relations section of Jenkins website.
During this call we may make forward looking statements within the meaning of federal Securities laws.
Eight months reflect our current views with respect to future events and financial performance and actual results may differ materially.
We undertake no obligation to update them, except as required by law.
Please see the earnings release, and its SEC filings, including the latest 10-K and subsequent reports for discussions of our risk factors and other risks and uncertainties underlying such forward looking statements.
During the call we may discuss non-GAAP financial measures as defined by S. E C regulation G.
Reconciliations of these non-GAAP financial measures to the comparable GAAP financial measure are included in our earnings release or Investor presentation.
On the call with me today are Phil I alert, President and Chief Executive Officer, and Battalion, versa, Chief Financial Officer.
During their comments, Phil and Matteo will be referring to a presentation deck that we have made available on our website at Jonathan Dot com slash events.
After their prepared remarks, we will be used to take your questions.
Now I'd like to turn the call over to Phil.
Thank you Jim Good morning, everyone and thank you for joining us today.
The second quarter presented one of the toughest operating environments for the automotive industry as well as for gender.
We faced the highest inflation in 40 years in the United States lingering Covid shutdowns, especially in China continued military conflict in Europe , and semiconductor shortages and other supply chain challenges.
I am proud of the <unk> team for the ongoing progress and stringent cost management and negotiating appropriate cost recoveries from customers, while maximizing performance towards customer needs.
We outperformed actual light vehicle production in our key markets by approximately 600 basis points in automotive and we achieved 9% growth in medical as customer demand for our products continues to grow.
I'm also pleased to share that we recently closed two transactions that will expand gen <unk> value proposition in both automotive and medical.
The acquisition of Alpha Myers automotive business makes gentler them, the largest global supplier of thermal and pneumatic seeding comfort for the automotive industry.
In addition, the acquisition of <unk> medical expands gentler medicals access to large and rapidly growing markets, including private label opportunities through <unk> innovative and complementary patient temperature management devices.
I'd like to welcome the colleagues from Altmeyer and document to the Gen Therm family.
Now turning to the automotive highlights on slide four.
In the second quarter, we launched our automotive solutions on one nine different vehicles across 15 Oems.
Including Acura Alfa Romeo Audi BMW, Cadillac, Great Wall, Honda and Mercedes Benz.
This represented one of the highest number of vehicle and program launches in recent years.
We continue to see momentum for our Ccs solution, although I C E and electric vehicles.
In the second quarter, our Ccs solutions were launched on the Alfa Romeo Tonala BMW X five China.
Cadillac lyric luxury E V also in China.
The Ford Ranger, and Everest, Mazda, CX 50, and range Rover sport.
And battery performance solutions, we achieved an important milestone and launched our first proprietary cell connecting solution that utilizes the mechanical structuring process for the new plug in hybrid BMW seven series.
This innovative tinfoil solution enables more design flexibility weight reduction and added functionality to cell connecting boards, while simultaneously lowering costs.
In addition, our unique manufacturing process is more environmentally friendly than competitive alternatives and.
In fact, the Fraunhofer Institute conducted an independent study recently, the estimates and over 90% reduction in greenhouse gas emissions when comparing the mechanical structuring process with the chemically etched solution.
In addition, we are proud to be honored by Honda as a top north American supplier for the third consecutive year.
This recognition reflects our commitment to developing innovative solutions and our team's dedication and commitment to quality and operational excellence.
Now on to slide five where you can see that in the second quarter, we secured $600 million in New program awards on a pro forma basis, including one.
190 million secured by Altmeyer in the second quarter prior to acquisition closing.
This is the announcement of the Altmeyer acquisition, our customers have resoundingly expressed support and excitement to see Gen. Therm further expand our value proposition beyond thermal and comfort health wellness and energy efficiency.
The pipeline of opportunities for the combined company remains strong.
I'm also pleased to announce that we recently received our second climate a sense award from a global OEM for our software driven micro climate platform using an algorithm based on thermal physiology. This.
This award will be on a battery electric version of our popular SUV launching in 2025 and is a strong validation of the progress we're making with this OEM.
I'd like to take this time to congratulate our global team for winning this important follow on award.
Climate sense is a critical part of our long term strategy and continues to gain interest from global Oems for significantly reducing power consumption and increasing range and extreme temperatures all while providing best in class passenger comfort.
We won multiple Ccs awards in the quarter, including platform wins on the next generation Dodge Charger Challenger and Jeep Cherokee.
The great Wall way X power pick up and Salon Mecca Dragon EV.
The Honda passport.
And Nissan Murano.
Toyota Camry, Sequoia and tundra as well as the X paying EV.
In the second quarter. We also received 17 steering wheel heater awards across 12, Oems five of which were hands on detection enabled.
These included a new E P crosswalk crossover coming from Buick too.
Two models from great wall for models from Volkswagen.
New EV crossover coming from Ford.
As well as multiple models from one of the largest global electric vehicle manufacturers.
Importantly in the second quarter, we won several conquest Ccs and seat heat awards from a large tier one seat manufacturer displacing the competition.
Validating our strong position as the leading independent provider of thermal solutions.
We continue to transform our product lines, including our cable business to create value for electric vehicle applications I'm.
I am pleased to share that we want a high voltage cable award for a Porsche EV and the follow on high voltage Cable award for our hydrogen fuel cell electric semi truck in the second quarter.
Also in the second quarter. The Altmeyer team won a significant pneumatic comfort award with BMW on several new E V based in car vehicle models.
Albemarle was also awarded a significant regional volume expansion by one of the largest global electric vehicle manufacturers.
In addition to this long time EV customer Altmeyer has secured their position as a pneumatic comfort supplier of choice for European Oems for their EV platforms, including the BMW I 20, and I three the Mercedes Benz E U E and Eqm's platforms, and the Volkswagen I D five to name a.
Q.
We're excited to offer more compelling and high value solutions across complementary customer relationships, leveraging the combined technologies teams and capabilities.
Gentler sees an opportunity to integrate the highest performing comfort and wellness solutions and the most space efficient manner, which is especially important for electric vehicles that demand compact integrated designs.
As we continue to bring innovative solutions to our customers get them is well positioned to significantly increase content per vehicle as electric vehicles expand in the market.
Now, let's turn to slide six for a discussion of our medical business.
Earlier. This morning, we announced that we closed the acquisition of Dutch and medical a developer and manufacturer of patient temperature management solutions for numerous Chinese and international customers.
Dr. Chin is an existing supplier for Jim or medical with whom we have developed a strong relationship over many years.
This acquisition provides enhanced access to high growth markets, including private label opportunities through <unk> innovative and complementary patient temperature management devices.
Dr. James products have regulatory approvals in many countries, including China, the United States and Brazil.
Now, let me share some highlights for the second quarter met.
Medical revenue grew 9% ex FX year over year.
During the quarter.
<unk> delivered warm air and filtered flow patient warming systems to the United Nations' Development program.
The United Nations Development program in conjunction with the World Bank provide humanitarian aid to developing countries.
We also continue to see solid demand for our flagship products like control winning a large award from Ascension via Christi, St. Francis Medical Center in Wichita, Kansas.
Now let me summarize.
Our results for the quarter reflect the extremely challenging operating environment our industry is facing.
I would like to thank our global team for diligently adjusting our business operations to minimize the impact of supply chain disruptions and inflationary pressure, while continuing to deliver for our customers.
In automotive, we outperformed actual light vehicle production at our key markets by approximately 600 basis points.
We secured $600 million of New awards on a pro forma basis from automakers around the world as the largest global supplier of thermal and pneumatic comfort.
With that I'll turn the call over to Matteo for a little more color on the financial results and I'll come back to wrap up before Q&A.
Thank you Phil let me turn to slide seven and focus on the items that most significantly impacted our second quarter results.
So for the quarter total revenues decreased by 2% compared to the same period of last year.
And if we adjust for the impact of FX, our overall product revenue increased by 3%.
Starting with your automotive segment automotive revenues were 249 million corresponding to a 2% decrease compared to the prior year period.
Adjusting for foreign currency translation automotive revenue increased by 3% and this compares to a 3% decline in the actual light vehicle production in our key markets of North America, Europe , China, Japan and Korea.
And as Phil just mentioned, our automotive organic revenue outpaced the light vehicle production volume by approximately 600 basis points.
When comparing second quarter revenue by product line with the results achieved the prior year.
Or personal lines were negatively impacted by unfavorable foreign exchange translation supply chain shortages as well as the COVID-19 outbreak in China.
Now, let me provide a little more color by protein line, excluding the FX impact.
Sitting with heaters revenue increased 15% year over year, primarily due to the start up production over the new programs, including the Tesla model y.
P. P. S revenues increased 9% year over year due to higher volume of cell connecting board products with BMW.
Ccs revenues increased 3%, primarily due to the new launches and growth with Ford.
Automotive cables revenue decreased 9% due to lower sales with Bosch.
T theater revenues decreased 1% due to lower production volume on several models, especially with Asian Oems such as F. W. Nissan and Toyota.
Yeah.
Other automotive revenue more than doubled year over year due to higher sales of heat or interiors and favorable cup holders.
Electronic revenue decreased 30% due to strategic shipment holds when several low margin non automotive customers as we continue to rationalize our product and customer portfolio to improve profitability.
Moving to the medical segment revenue increased by 6%, 9% ex FX.
And by higher sales of warm air and UV trio products.
Turning next to gross margin.
Gross margin rate for the second quarter was 23%.
And this compares to 30% in the year ago period.
The 700 basis points decrease was primarily driven by higher costs incurred to mitigate the impact of the supply chain disruptions.
Early in the form of premium freight and spot buys.
Inflation associated with wages material and freight cost is.
As well as the negative impact of foreign exchange, primarily due to the depreciation of the euro and the Korean won compared to their daughter.
These were partially offset by cost recoveries and negotiated lower annual price reductions from customers.
Moving to operating expenses, which were $51 6 million in the quarter compared to $47 5 million in the prior year period.
The current year second quarter amount included $4 2 million of restructuring and acquisition expenses and this compares to last year's second quarter, when we incurred approximately $2 9 million or restructuring and acquisition expenses.
If we adjust for these expenses in both periods operating expenses were $47 4 million up from $44 6 million in the second quarter of last year.
The year over year increase of approximately 6% was driven by higher SG&A, primarily due to merit increase as well as higher project related R&D expenses as we continue to execute on the high level of program launches implement electronics redesign to mitigate the impact of the semi con.
Doctor shortages.
And invest in climate sense and battery performance solution.
Adjusted EBITDA of 21 4 million declined by approximately $22 million from the prior year period.
And finally adjusted diluted earnings per share in the quarter was 25 cents per share compared to 85 cents per share in the second quarter of last year.
Our effective tax rate in the second quarter was approximately 36% higher than our prior quarter rate of 27% primarily due to the unfavorable impact of the global intangible low tax income on foreign earnings.
Okay.
Okay.
Moving to the balance sheet on slide eight our cash position at the end of the quarter was approximately $157 million down from $178 million at the end of March.
The 21 million sequential decrease was the result of 13 million negative free cash flow, primarily due to the temporary higher working capital.
All of these effects.
We closed the quarter in a net cash position of 120 million, especially on hand exceeded the gross debt and as a result, our net leverage ratio was negative zero point 99.
On June 10, we completed the refinancing of our credit agreement with <unk>.
Extended the maturity of the credit agreement through June 2027.
In addition, the new facility increases our borrowing capacity from 475 million to 500 million and provides greater flexibility when our covenants.
Yeah.
Based on the trailing 12 month consolidated adjusted EBITDA ended June 30.
We had approximately $357 million over the remaining availability on our line of credit.
And the total available liquidity as of June 30 was $514 million.
As Phil mentioned earlier, we recently closed the Oscar Mayer and dodging transactions and these two transactions were funded through a combination of our existing cash balance and the revolving credit facility.
The drawdown of the revolver in July was approximately 200 million and.
And we expect our net leverage ratio to continue to be below our target of 1.5. After funding. These two transactions.
Now, let me turn to slide nine for our 2022 guidance, which includes the completed acquisition of US Meyer as of August 1st and they completed the acquisition of <unk> medical as of July 15.
Yeah.
Our performance in the first half of 2022 is below our original expectation due to the extremely challenging operating environment mentioned earlier.
That said, we continue to expect an improvement in the second half of the year for both revenue and adjusted EBITDA margin is a result of higher volume and the positive impact from the pricing actions that we.
Be negotiating with our customers.
We now expect product revenues for the year to be in the range of 1.15 to 1.25 billion.
Assuming FX remains at the current levels.
And we expect light vehicle production in our relevant markets to grow at a low single digit rate in 2022 versus 2021 which is somewhat less optimistic compare to the latest IHS forecast.
Okay.
Adjusting for approximately 400 basis points over fixed pressure year over year as well as the acquisition impact the midpoint of our guidance implies an organic growth rate of approximately 9%.
We now expect adjusted EBITDA margin rate in 2022 to be in the range of 10% to 12%.
We are lowering the adjusted EBITDA margin rate guidance, primarily as a result of the second quarter performance.
As well as the expected continuation of customer demand fluctuations due to the supply chain disruptions.
Ongoing semiconductor shortages continued FX headwinds higher inflation and acquisition impact.
We are taking aggressive actions to mitigate these challenges, including the appropriate cost recoveries from customers price increases planned productivity improvements as well as strong hiring and spending controls.
At the midpoint of our guidance, we expect to improve EBITDA margin rate by over 400 basis points in the second half of 2022 compared to the first half level on an organic basis.
Our updated guidance assumes approximately 100 million of revenue and high single digit EBITDA margin rate from the two acquisitions.
We now expect our tax rate to be in the range of 29% to 31% due to the geographic earnings mix and the off market acquisition.
We continue to expect capital expenditures to be in the range of 50 to 60 million. However, this amount and now includes the forecasted spending for asthma.
Yeah.
While we are not yet providing guidance for 2020 three we.
We do see a path to return to high teens EBITDA margin rate once the supply chain disruption stabilize along with a forecasted production volume growth in 2023.
The previous success from our fit for growth program and our experienced management team will enable us to deliver even in this unprecedented environment.
And with that let me ask Phil to summarize.
Thank you Matteo.
Let me summarize our quarter that on one hand reflected an extremely challenging environment, but on the other hand demonstrated continued strong execution of our focused growth strategy.
Although we had expected the supply chain disruptions, including semiconductor shortages to ease in the second half of 2022, our current outlook indicates continued supply chain challenges and semiconductor shortages for the remainder of the year.
While the difficult market conditions are expected to continue our team is laser focused on executing on our plan to return to high teens EBITDA margin rate through price negotiations with our customers productivity and aggressive cost management.
In spite of the unprecedented near term headwinds and challenges we are executing at a very high level against our long term strategic growth roadmap.
This is evidenced by closing two strategic acquisitions.
Winning our second climate since award securing $600 million in new business awards, expanding our product portfolio for electric vehicles and continued above market growth.
With that I'll turn the call back to the operator to begin the Q&A session.
Thank you.
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Our first question is from the line of Luke Young.
Beth Please go ahead.
Hi, good morning, Thanks for taking my questions.
Start this morning, I was hoping you could help us to better understand the sequential gross margin walk this quarter. Both in terms of the more discreet items that Matteo mentioned in the prepared remarks as well as in you call. It qualitative commentary that you might have Phil and I'd, especially be interested in your perspective on China Lockdown really.
It impacts in the chip spot market and what impact that had in the quarter and what you see coming.
From here.
Good morning, Luke.
So let me maybe start by just walking through.
Year over year, what happened in the gross margin for the quarter and then I'll give you the sequential perspective. So overall you saw a 700 basis points deterioration.
In the gross margin rate year over year, and 400 basis points.
Driven by the supply chain disruptions.
And here I am including the premium trades the spot buys.
The higher.
No cost and we have seen in some of the regular trade lanes, particularly those that come from Asia into North America.
Material and wage inflation was about 200 bps effects, so, particularly the impact of the euro and the Korean won compared to the U S. Dollar was about 120 bps and then we continue to face loss productivity, which accounted for about 120 bps of negative margin.
Due to the continued volatility.
They were seen in the releases of the Oems in tier ones.
And these were partially offset by some premium freight recoveries as well as the the positive price that we had this quarter, particularly thanks to the cost recovery of the <unk>.
Coming from the customers. So overall, if you look at it.
Where we are is the gross margin I would say about 300 basis points.
He is actually what I would call the transitory impact, which here I'm, taking all the supply chain disruptions are net of the net recoveries. When you look at it sequentially. So what happened in the second quarter versus the first quarter really you have two key impacts here higher inflation, particularly on the material side.
Accounted for about 70 bps and this was pretty much a widely expected.
FX accounted for.
At 40 bps.
And this was less than expected as we have seen a deterioration of the couple of currencies that I just mentioned higher than what we had forecasted.
So that's kind of how you walk the sequential second quarter versus the first quarter.
And then look on the China side are about $13 million of lost revenue.
From China of course some.
A normal percentage fallout from expected margin.
Okay. Thanks for that and then fill a follow up question now staying with margins, but looking forward. Your guidance would signal that this is the bottom for margins in 'twenty two at least if we look first half versus second half, which would seem to include gross margins of course can you just speak to your level of comments.
And that this is in fact, the bottom or said differently. What do you see as the potential risks from here, but maybe more importantly, the margin levers I know price as mentioned in the prepared remarks, there's one item.
Yeah, I mean, there's always a caveat that we we do see this as a.
Kind of turning the corner if you will from this from this quarter from Q2.
We are watch obviously, we all have to watch closely.
Any you know unforeseen COVID-19 or supply chain.
Or you know worst case scenario recessionary impacts to demand, but based on everything we're seeing now.
We actually see some stabilization heading into the back half of the year.
Unfortunately, it's not as much stabilization as we had hoped for.
When we issued our.
Previous guidance.
But that said we definitely are.
We're working very well with our customers to create a path to a better recovery.
Yeah look we've taken a and maybe a different approach than others, where we.
Waited until there was a lot of clarity on inflationary pressures in the market before we aggressively started addressing our customers and I think that actually is going to turn out to be a good move because we're getting pretty good support.
For many customers on setting some pricing.
Cover a freight recovery et cetera are headed into the second half, but it's still going to be a process, that's going to take more than a quarter or two to get there, but we do expect some nice momentum on that in the second half and then of course add to that expected.
Revenue increase in the back half and I think that gives us a good a good feeling about steady improvement.
And then if I could sneak in one more lastly, I just wanted to ask on the climate sensitive word first just whether you can clarify whether this is with your existing customer or with a new customer and then second maybe just as importantly, what would you see your learnings where with this.
The award is you continue to pursue other awards at the development contract customers. Thanks, Tom.
Sure Yes. It was a follow on with the original customer that we won our first to work with.
Obviously, we're we couldn't be more excited about it.
From a learning standpoint.
It's the number one execution yeah. Obviously, we won the award and we've been very very focused in investing heavily on.
Executing the program, but secondly, it's being adaptable and flexible to the requirements of future models and if you go back to some discussions we had with you over the last several quarters. We really have tried to create a platform approach for climate sense that is scalable flexible and adaptable.
<unk> two different levels of implementation and that really paid off in the second award for us and as we are addressing new customers.
That's that's really going to help us that's going to allow us to be.
Much more nimble in how we implement climate sense for those customers.
Yeah.
Great. Thanks for that I will go ahead and leave it there.
Thank you thanks Luke.
Thank you.
Our next question comes from the line of Matt Koranda with Roth Capital. Please go ahead.
Hey, guys. Good morning, Thanks for taking the questions.
Just on the core outlook.
If I strip out the acquisition it looks like you took up maybe about $70 million of the midpoint for organic revenue guidance and finally 9 million out of EBITDA. So just wanted to see if you could discuss the revenue assumptions.
Margin assumptions, a little bit more detail so how much of the.
The lower revenue guidance due to lower production expectations versus incremental FX feed us clarify that and then on the margin front.
Is the assumption that it's all coming out of lower automotive products and therefore, we have a decremental margin to take out maybe.
Maybe just discuss sort of the flow of margins in the second half with a revised organic items.
So Matt let me so first of all on the on the revenue side really nothing major has changed compared to our prior guidance other than the other than the FX right, which came in obviously a little worse than what we thought back in April and is it just a function of the euro and the Korean won which we.
We're not expecting the situation to improve in the interest of linear.
In terms of in terms of the margin side, what I would say is if you look at that and I'm talking organically right.
Right now so I'm, excluding India the two transactions.
We basically the EBITDA margin.
At the end of the first half, it's about 9% and the midpoint of our guidance implies a second half.
EBITDA margin of about 13%. So you really have basically a 400 basis points improvement sequentially on the margin side.
And if you look at the drivers of that really two things number one.
We have incremental volume. So we are expecting the second half revenue to be about 10.
10% to 11% higher than the first half excluding FX.
And then the second item is we are you know.
Counting on the positive impact of the price negotiations and we have been having with customers as well as our productivity at the factories and can you repeat the second part of your question.
Yeah actually I think he covered.
He covered the two elements of the question, yes. Thank you for that.
Actually I have a follow up on that though would you remind us when the benefits of the customer negotiations start to flow through the P&L or when can we start to factor those into the margin rate.
Yeah. So we started to see some of the Venezuela benefits of those already in the in the second quarter actually if you.
Matt.
The second quarter, we actually generated positive price, which is over at all unusual for our business generally generally price is always a 2.5% drag for us and that's a combination of the cost recoveries as well as some of the initial impact of the price negotiation and then the red.
First with Japan, India in the second half.
And but overall, we are expecting the positive impact of price on an annual basis to be between 100, and 150 basis points improvement on the margin of the company.
But Matt it's it's it's a journey, it's not like we're going to be done in the second half I mean, it's more where we're now in the early innings I would say are starting to see it flow through the second half it'll it'll rise and then expect to see even even more recoveries.
And help heading into 2023.
Okay great.
Hey at that guys and then.
On the bookings environment.
We'd like to discuss sort of the more generalized environment before we dig into climate science is there any way to breakout.
Well Meyer contributed in that the run rate that you guys cited.
Because it doesn't look like it's picked up quite a bit and just trying to get a sense for organic activity versus the acquisition and then maybe if you still if you could just speak generally about sort of the appetite.
For new programs that Oems it seems like it has picked up.
Yeah, Yeah, if you break it out it was about $410 million orgs.
Organic new awards from the <unk> side, and then $190 million coming.
Coming out of altmeyer in the quarter.
And.
Overall environment. So just talk about organically first definitely increasing activity no doubt about that still somewhat constrained.
Given the environment in the market.
Yeah.
Oems are still quite busy handling semiconductor shortages, we've definitely still seen some vehicle delays.
So, but but overall quite a bit of improvement.
You know, where we are seeing a lot more wharf is on the EV side.
So that tends to at least.
Our perception is.
The wins are shifting a lot more attention there and may be delaying some ice's decisions a little bit in lieu of that.
On the Altmeyer side.
Some really impressive wins as we called out.
With BMW, a large EV manufacturer and a few others.
And there and you know while.
With executed by Altmeyer, our indications are some of those awards kind of tipped the balance in favor of altmeyer. After the announcement of our acquisition as I mentioned before we've gotten resounding feedback that our customers are really excited about that combination.
And just looking forward.
And we certainly see a lot of opportunities not just with altmeyer existing customers, but more importantly, with customers that are currently gen therm customers that altmeyer does not supply.
So we'll be.
Putting a lot of emphasis in our.
And our growth activities in that front.
Okay helpful color, Phil Thank you and then just.
Lastly on the climate sense Award.
I think it was a follow on I guess.
Hard question to answer maybe but.
Is it are we more likely to see additional awards with this customer before we see an entirely new award from a new OEM.
And maybe just speak to the potential of sort of additional follow on awards beyond this one with that existing clients since a customer you have.
Well I've always said that there are three there in sequential order of importance three focus areas for climate sense. One is execution of the project so that we get.
Our strong first go to market secondly was winning follow on board with that one customer because what better way to grow then you have to prove the.
The performance and the value proposition of climate sense with that customer and you know the second win with them.
On a more popular EV SUV was certainly valid a validation of that.
And then of course, you know I think that all feeds into winning with new Oems, which you know that first win with an OEM is the harder is the harder nut to crack if you will.
But.
I think this validation is going to help us and we.
We continue to work with other customers on the development projects and continue to see good momentum so.
It's hard for me to say, which one is going to be next but.
We're focusing our efforts, where we think those opportunities exist.
Okay fair enough I'll leave it there guys. Thank you.
Thank you Matt.
Okay.
Thank you.
Ladies and gentlemen, if you wish to ask a question. Please press star one.
Again, a reminder, ladies and gentlemen.
If you wish to ask a question. Please press star one.
Since there are no questions in the queue I would now like to turn the call back to Mr. Phil.
Hello for closing remarks.
Great. Thank you everyone for joining our call today, Uh Huh say I'm very proud of the hard work and commitment of the talented global <unk> team to overcome the significant industry headwinds that we faced and deliver on our strategy.
As I've consistently shared in the past we remain very focused on operational execution innovation and cash flow generation I'm extremely excited about uniting the innovative expertise the talent and the complimentary global customer base of both Altmeyer and Dr. Chen with gender.
I have no doubt that these two transactions will further improve <unk> competitive advantages and position us well to deliver significant long term shareholder value.
We appreciate your interest and support and look forward to keeping you apprised of our progress.
Thank you. This concludes our conference for today.
You may now disconnect your lines.
Okay.
Yeah.
Okay.
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