Q2 2022 World Fuel Services Corp Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
The conference will begin shortly.
Raise your hand during Q&A, you can dial star one one.
[music].
Okay.
Ladies and gentlemen, thank you for standing by and welcome to the World Fuel services second quarter 2022 earnings Conference call. My name is Michelle and I will be coordinating the call. This evening during the presentation, all participants will be in a listen only mode.
After the Speakers' remarks, there will be a question and answer session and instructions on how to ask a question will be.
Given at the beginning of the Q&A session.
A reminder, this conference is being recorded I would now like to turn the conference over to Mr. Glenn <unk> World Fuel's.
Vice President Treasurer, and Investor Relations. Mr. <unk>, you may begin your conference.
Thank you Michelle good evening, everyone and welcome to the World fuel Services' second quarter 2022 earnings Conference call. This is Glenn <unk> and I'll be doing the introductions on this evening's call alongside our live slide presentation.
This call is also available via webcast to access this webcast or future webcast. Please visit the world fuel services website and click on the webcast icon.
With us on the call today are Michael Katz, Bart Chairman and Chief Executive Officer, and IRA Burns Executive Vice President and Chief Financial Officer.
By now you should have all received a copy of our earnings release, if not you can access the release on our website.
Before we get started I would like to review World Fuel's Safe Harbor statement.
Certain statements made today, including comments about world Fuel's expectations regarding future plans and performance are forward looking statements that are subject to a range of uncertainties and risks that could cause world fuel's actual results to materially differ from the forward looking information.
Description of the risk factors that could cause results to materially differ from these projections can be found in world Fuel's. Most recent Form 10-K, and other reports filed with the Securities and Exchange Commission World fuel assumes no obligation to revise or publicly release the results of any revisions to those forward looking statements.
In light of new information or future events.
This presentation also includes certain non-GAAP financial measures as defined in regulation G. A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures is included in World fuels press release and can be found on its website.
We will begin with several minutes of prepared remarks, which will then be followed by a question and answer period.
As with prior conference calls, we ask that members of the media and individual private investors on the line participate in listen only mode.
At this time I would like to introduce our chairman and Chief Executive Officer, Michael Katz Park side.
Thank you Glenn.
Once again, the resilience of our business portfolio and the agility of our people drove a strong outcome in the second quarter.
As we mentioned last quarter Super Backwardation impacted commercial aviation, which continued throughout the second quarter, but.
But we pivoted quickly as we indicated we would materially reducing this risk going forward and our business aviation activity generally performed well.
Firstly high prices and continued volatility were extremely favorable for our marine business, where we achieved record results. Our marine team did an extraordinary job of servicing our clients and managing the business and finally, our land business performed well across the board with Flyers Energy U K, Brazil.
In our world Kinect business, all delivering solid results.
As I've said many times, we see the energy transition as a global imperative and are focused on continuing to expand our suite of energy and digital solutions to continue to deliver critical support to our customers suppliers and stakeholders in meeting net zero objectives.
There's been a significant increase in demand for renewable energy and in response, we continue to build out our platform in key areas, such as renewable fuels as well as wind and solar energy solutions.
We've been at the forefront of sustainable aviation fuel for many years, but wondering about 30 million gallons to date and during the second quarter. We became an authorized branded distributor of nasty sustained believe aviation fuel commonly referred to as Seth.
With this relationship we were able to bring staff to Paris, Le Bourget Airport in France last month.
We also recently partnered with W. P D Europe , a developer and operator of wind farms and solar parks in 28 countries on a wind project in Finland, where we will manage the wind farms power output.
These are only a few of the many examples of how we are participating in the energy transition and transforming our offering with innovative energy and digital solutions.
What our customers need help developing our carbon reduction plan devising strategies to reduce energy use we're sourcing renewable energy our broad offering of sustainable solutions are available to support. These critical initiatives. We're proud of our team at World Kinect and are excited about the growth opportunities. This offers.
Across all of our businesses in the future.
While the macro environment is fraught with a confluence of market and geopolitical risks and a more active regulatory dynamic I believe we are placed better than ever to profitably grow our global energy and logistics business in court conventional activities and build greater value growth and return it.
Sustainable businesses and offerings, including those I just mentioned.
Our focus has always been and will continue to be delivering a complementary set of products and services that delivers value for our customers suppliers and partners with an increasing number of digital solutions.
I am enormously proud of our global team and the grit that they've shown over the last few years and continue to demonstrate as we further fortified our global diverse energy solutions offerings, we are encouraged and animated by the continuing opportunities and runway, we see for our business.
Before I turn over the call to IRA for a financial review of the quarter I wanted to give a very special thanks to Jeff Smith, and our digital and business teams for their tremendous effort and teamwork and shutting down our last F 22 data centers, which will make us a cloud first business. This will increase our resiliency.
And give us virtually unlimited scalability.
IRA why don't you take it from here.
Mike and happy birthday.
Before I review, our second quarter results. Please note that the following figures exclude the impact of non operational items highlighted in our earnings release. These items principally include acquisition related expenses and integration costs related to the Flyers energy acquisition, which in aggregate were $1 $4 million after tax and.
The second quarter.
You can find the breakdown of the nonoperational items on our website and on the last slide of today's webcast presentation.
So I'm not sure I could think of a quarter, historically, which better demonstrated the resiliency of our business and the value of the diversity of our business model and this past quarter.
Simply put we delivered solid results, even though our aviation business continued to be significantly impacted by severe market pricing backwardation throughout most of the second quarter, given the principally contract oriented nature of our aviation business.
However, these volatile market pricing dynamics drove our spot oriented marine business to record results in our land segment, which on the back of the recent Flyers energy acquisition has become a larger and more ratable piece of our broader business delivered very strong results as well.
Now, let's continue with the financial highlights.
Sustained high fuel prices and increasing volume drove consolidated revenue to a record $17 $1 billion in the second quarter up more than 140% year over year a.
A year to date, putting us just under $31 billion in revenue that we posted for the full year in 2021.
William again grew year over year across all our business segments with commercial aviation passenger volumes recovering to approximately 85% of pre pandemic levels.
Adjusted second quarter, net income and earnings per share or $26 million 41 per share respectively.
Adjusted EBITDA for the second quarter was $76 million, an increase of 31% compared to the second quarter of 2021 again, despite the significant negative degradation related impact the aviation results this past quarter.
With regard to segment volumes, our aviation segment volume was one 8 billion gallons in the second quarter, an increase of 33%.
Sorry, Mike is getting a birthday called <unk> and.
An increase of 33% compared to the second quarter of 2021 the.
The year over year volume increase resulted principally from the ongoing recovery in commercial passenger activity.
Volume in our Marine segment for the second quarter was $4 9 million metric tons, an increase of 6% year over year.
As evidenced in the past and then again during this past quarter during times of elevated fuel prices constrained credit and rising interest rates, we become a more critically valued counterparty, which increases our success rate and contribute to profitable volume growth.
Our land segment volume was $1 5 billion gallons or gallon equivalents during the second quarter, that's an increase of 19% year over year.
Year over year volume increase was principally driven by volume associated with the Flyers acquisition.
Consolidated gross profit for the second quarter was $253 million Thats up 37% year over year and represents the highest level of quarterly gross profit since the first quarter of 2020.
In terms of aviation gross profit the fundamentals of our aviation business remains strong with commercial passenger aviation continuing to recover from the pandemic and business in general aviation and cargo activities, all posting solid results versus last year. However.
However, the segment second quarter gross profit declined to $53 million, which is down 40% year over year, driven principally by the impact of severe market pricing backwardation and to a lesser extent the exit from Afghanistan last year.
As a reminder, we began experiencing the impact of severe pricing backwardation in the latter half of the first quarter.
Ken This is when future forward prices began trading significantly below spot oil prices.
During the second quarter backwardation became increasingly severe and continued through much of the quarter.
Our team is now successfully renegotiated sufficient customer contracts to minimize related risk going forward, while still backward dated market conditions.
We experienced in the second quarter have now reverted much closer to historical norms.
As we look ahead to the seasonally strong third quarter and with the backwardation issue generally behind US we expect aviation gross profit to rebound significantly.
With results expected to be up year over year, despite the discontinuation of the Afghanistan business last year.
The Marine segment performed extraordinarily well benefiting from record high bunker fuel prices have increased level of price volatility as well as our credit constrained marketplace.
This resulted in quarterly gross profit of $78 million, an increase of 244% year over year and the highest level of marine quarterly gross profit in the history of the company.
Kudos to the global Marine team for such absolutely fantastic performance with solid results across all sectors and geographies.
For the third quarter, we expect marine results to again materially exceed the prior year, however, with bunker fuel prices somewhat lower quarter to date. It is unlikely that the third quarter will be as strong as the second quarter.
Our land segment delivered gross profit of $122 million in the second quarter, that's up 66% year over year, principally as a result of the recent Flyers acquisition, which continues to outperform our expectations additional.
Additional highlights included strength at our UK operation, which delivered strong results in what is traditionally represented a seasonally low quarter for them.
And year over year growth in our commercial and industrial and retail activities.
Our world connect business also continues to perform well with a growing suite of products and services to support our customers' decarbonization efforts.
And with a robust pipeline of related investment opportunities. There are clearly more growth opportunities ahead in this space.
Land gross profit should be up materially year over year in the third quarter driven by the impact of Flyers, but also continued growth in our broader land business, but should experience a sequential seasonal decline principally driven by our U K operations.
Core operating expenses were $197 million in the second quarter, that's up 5% sequentially, principally driven by higher operating expenses associated with increased business activity during the second quarter.
We expect core operating expenses to be in the range of $198 million to $204 million in the third quarter.
Bad debt expense in the second quarter was $2 $6 million, we continue to manage our accounts receivable exceptionally well as volume growth and higher fuel prices have increased the size of our overall receivables portfolio to a record level.
Adjusted EBITDA was $76 million in the second quarter, representing an increase of 31% year over year. Despite the aviation Backwardation impact. This was our best quarterly performance since the pandemic began.
Our interest expense was $25 9 million in the second quarter significantly higher than recent run rates.
Principally related to rapidly rising interest rates as well as increased borrowings under our credit facility and increased activity under our trade finance facility, both associated with growing volumes and high fuel prices throughout the quarter.
Based upon the current interest rate environment and funding requirements, we expect our level of interest expense to be in the range of $24 million to $27 million in the third quarter.
Significant foreign exchange volatility during the second quarter also resulted in a few million dollars of foreign exchange losses during the quarter.
Moving on to tax.
So over time, we had been required to establish tax valuation allowances in jurisdictions, where cumulative losses precluded our ability to utilize certain deferred tax assets.
This was exacerbated by the pandemic.
Coming out of the pandemic as profitability has been increasing in many of the countries, where special allowances where necessary it should enable us to reverse these allowances over time.
In the second quarter, one such reversal drove our quarterly tax rate down significantly and was the principal contributing factor leading to a negative effective tax rate for the quarter.
For the third quarter, our effective tax rate should return to a more normalized mid twenties level and for the full year inclusive of any allowance reversals, we expect our effective tax rate to be in the range of 17% to 20%, which is down from 26% in 2021.
Despite a 14% sequential increase in average fuel prices and higher volumes during the quarter, we generated operating cash flow of $43 million.
As a result of our efforts to expand the size of our banking facility. While also increasing the capacity of our trade finance facilities, our liquidity position remains strong supporting our growth initiatives for the second half of the year and beyond.
We repurchased just over one 5 million shares of our common stock during the second quarter increase.
Increasing year to date repurchases to more than 2 million shares.
And we have now repurchased nearly 15 million shares over the past 10 years, demonstrating our continued commitment to drive additional shareholder value through both buybacks and dividends.
In summary, despite the backwardation degradation related challenges in aviation, we delivered solid results in the second quarter.
Core aviation activity continues to rebound from the pandemic, our marine business delivered absolutely fantastic results at our land business, including Flyers and energy also had a very strong quarter.
In addition to our core fuel natural gas and power business activities with expanding renewables offerings and a growing suite of additional carbon reduction solutions offered by world connect we are very excited about the future.
All of our customers around the world are at some stage of their decarbonization journey, and our product and service offerings in support of their sustainability efforts should provide growing opportunities for us going forward.
We also continue to maintain a strong balance sheet with a solid liquidity profile, providing sufficient capital to support organic growth and value, creating investments. While also returning capital to our shareholders again through share repurchases as well as dividends.
With that I'd like to turn the call back over to our operator, Michelle to start the Q&A session. Thank you.
To ask a question you will need to press star one on your telephone please standby, while we compile the Q&A roster.
Okay.
And our first question comes from the line of Ken Hector with Bank of America. Your line is open. Please go ahead.
Great. Thanks, Good evening, Michael and IRA and Glenn just on the maybe just kind of go over the aviation backwardation.
Is this because of your your inventory levels that you had to go back and address the contracts IRA you mentioned, you've gone back to the customers and reshape the contracts, maybe you could walk us through that.
That process.
Where that is that done.
You mentioned not seeing the backwardation, maybe just walk us through the basics there.
Well, because just because of the structure of our of our supply contracts and our and our customer contracts.
<unk> highly unusual and unprecedented backwardation issue resulted in la.
Losses for us as we as we rolled.
Inventory futures every month.
What we were able to do.
Coming out of the second quarter going into the third quarter is reshaped the good thing for us is.
Very large percentage of those contracts actually.
<unk> over on the first of July .
So we're able to renegotiate enough contracts to pretty much eliminate the need for us to continue rolling those contracts. So we went up with a more balanced position if you will.
Therefore, despite the fact that the backwardation issue has resolved itself to a great deal because we went from being 30 40 50 backward dated to about five this morning.
We pretty much mitigated that exposure and we don't foresee that type of issue going forward because again, we no longer have the need to roll contracts for whether it be in a backward dated market or.
A more normal over the long term contango market, where where the curve is trending upwards.
And then.
Over to marine.
You had.
I mean, a huge gross profit per gallon when I think about you mentioned record levels.
Looking at.
It kind of a 15 dollar gross profit per metric ton.
A $50 $60, how should we think about that going forward is that something that.
We're done with the $7 level, given where fuel is it will stay in the teens double digits or how should we think about that.
Well for a good part of the second quarter Ken.
And it's crazy pricing environment bunker fuel.
It was on average.
There's a ton.
You may remember when we.
We have the IMO regulations kick in.
And people converting over to the more carbon friendly fuel.
That that was trading somewhere under $500 a ton somewhere between four and 500, we've never seen a $1000 a ton before we've always said that because marine is principally a spot business. Unlike aviation, which is heavily contract oriented as market price moves.
If you could kind of reset.
Your your go to market strategy daily hourly but by the minute.
And theres, a pretty tight correlation over the long term.
Between.
Between the underlying price of the commodity.
Margins in that business and therefore with prices.
At record highs, it's not surprising that our margins would have been so much stronger.
So to your second part of your question really depends on your views your market expectations of.
Where pricing May go prices are still high they're off a little bit I would say, they're down 5% to 10%.
From the average levels in the second quarter, so far in Q3.
So that's that's part one so it's tough to forecast one of the things I mentioned in my prepared remarks is we don't expect to repeat Q2.
Because of the extraordinary dynamics, but we're still going to have significant year over year growth.
As the market still remains tight and as you know Glenn reminds me part two to the story is in an environment like this where the underlying commodity is $1000 a ton.
Again at record levels. It makes it a bit tougher for certain players in the market to compete.
As you know you need you need a strong balance sheet and.
You need more capital to be able to.
To support your own working capital requirements at these levels.
We being the big 900 pound gorilla with a solid balance sheet.
We wind up generally outperforming in those scenarios, we generally become a much more valued counterparty because we're out there providing.
The amount of credit that are that our customers require and they value that more.
More than that.
They normally do in an environment, where prices are so significantly higher.
And then just one more.
Go ahead Michael.
Yes.
By the way happy birthday.
Is it today.
It is it is I couldnt think of anything better do.
Yes.
Net earnings season on my birthday, but this week this week.
And so I get until Saturday.
So.
IRA just in this environment you get.
Maybe how do you think about cash right you ended up buying.
Going back a sizable amount of stock this quarter.
I presume generating increasing amount of cash flow with these higher prices, but you also increase your accounts receivable as you extend more credit with higher prices. So maybe just walk us through your thoughts on the environment.
Your thoughts on flowing through to cash or maybe Thats a Michael question in terms of.
Thoughts on opportunities.
Well on the.
On the cash specific question.
We use some cash in Q1 as prices started accelerating.
Generally unavoidable, our business was growing year over year and prices were.
We're growing at the same time.
In the second quarter, even though prices grew significantly.
We're able to manage our balance sheet in a way, where we still generated cash.
Part of that was certainly helped by the phenomenal performance in marine.
So if you look forward you know we didn't generate a ton of cash flow, we generated $43 million of operating cash flow. If you go forward once prices are where they are if they're not increasing further or if they're going down. It provides an opportunity to generate even more cash because you don't have to increase your working capital level even for.
Further thus far this quarter prices are down a little bit I don't know if were going to sustain that we're still in a very volatile market, but we should do much better from a cash flow standpoint in the second half of the year that we did in the first half returning hopefully to kind of a more normalized quarterly level.
Cash flow and with our higher level of earnings.
That number which should be stronger compared to where we were the last couple of years during the pandemic when when earnings were depressed so.
Solid cash flow in the second half unless.
Yes, maybe I shouldn't use the word surprise, but unless in this crazy market.
It takes another couple of turns and all of a sudden prices are up 20%.
It makes it more difficult to generate cash in that environment.
In a tight price range environment, we should we should generate more cash in Q3 and Q4 than we did in Q2.
Great. Thanks for the time and thoughts appreciate it.
Happy birthday.
Thank you and our next question comes from the line of Ben Nolan with Stifel. Your line is open. Please go ahead.
Thank you.
And yeah happy birthday, there Mike.
I happen to know that all of the smartest people in the world are born in July so.
Happy birthday.
<unk>.
Yeah.
Yeah.
Just I wanted to sort of level set if I could for a second just to make sure that I understood everything correctly.
The aviation the aviation business, you're expecting for the third quarter to be at least as good as it was last year and then the other two businesses.
In some cases substantially better than they were last year is that is that correct. So gross profit across the board should be.
Youre expecting to be meaningfully higher than it was a year ago another quarter is that fair.
Oh year over year absolutely.
Okay.
So.
Hum.
I thought that's what you had said I was just making sure. So there's a few things that I'm curious about first the interest expense a lot higher.
I appreciate there's a lot more working capital as you were just talking about with Ken.
But but in.
In general.
Do you.
Do you chalk that up I'm trying to the marine business was phenomenal and so is the working capital primarily needed for that marine business and so as a function of that you're really able to pass on that cost of capital pretty effectively to your customers and maybe less so than the other businesses or.
Or am I, not thinking about that right.
Ben.
I think the <unk>.
Thing that you have to have.
You recall that there's sort of a banking element to what were doing I mean, we are a source of financing for.
Many of our customers so.
To a bank and a high interest rate environment.
Is favorable to us in that dimension, it's unfavorable in other dimensions, but I'll, let IRA take the rest of it.
Yes so.
Continuing on from what from what Mike just said.
I would say the principal amount of cash.
Needed to run the business in this high price environment and the incremental investment in working capital does come out of marine but aviation as well less so land land generally just the makeup of that business.
Just has kind of a much tighter cash flow and lower investment in working capital.
So.
To Mike's point.
Yeah, our interest expense went up but relative to the increase in marine profitability.
I hate to call it a rounding error, but.
In that regard it was a significant kind of in the ordinary course, because we're about $10 million up sequentially.
So again that's.
As you as you hit it on the head right, it's driven by a higher average borrowings in the <unk>.
Growing volume at a high price environment prices were up almost 15%.
In Q2 versus Q1.
And also with the fed move yesterday, and the one about a month ago, our average rates even though.
The fed made their move yesterday.
So for our LIBOR rates already factored most of that in weeks, leading up to that so our average borrowing cost is probably up about 150 basis points versus Q1.
We're coming off a long period of sustained near zero rates and of course, that's now changed I personally don't believe that's going to last for a really long time, not trying to be an economist but for now.
That level of interest expense that we incurred in Q2 will likely continue for the balance of the year Glenn sitting here is working hard to minimize that everyday but it's unlikely that it will be materially lower but again it's.
As Mike mentioned being.
Being a bit of a bank.
It's indirectly.
<unk>.
Contributing to.
Higher margins in many parts of our business, where we're making those underlying working capital investments.
Right Okay.
Makes sense.
And the last one for me and I'll turn it over but.
Increasingly there is concern about the possibility of a recession and I think thats.
All equity markets and I assume that's probably hit your own equity price a bit.
Can you maybe talk me through how you think the company is positioned how elastic or inelastic you might be to the potential of a recession or if if you.
Are you seeing that.
No.
As it relates to world fuel the company is different now than maybe it had been in previous previous cycles.
Well.
Certainly the <unk>.
Credit side of the equation and I think.
Yeah.
If COVID-19 didn't demonstrate.
Our risk management I don't know what what will.
We.
Sailing through it I guess is probably not the right word it was certainly not sunny days, but.
So.
Think that's pretty well known.
And then the.
<unk> ability.
In all of our.
Cost piece.
We've concluded.
Concluded a number of different things in terms of.
<unk> platform, we've got a significantly greater volume of activity going through the platform. So.
Our ability.
To modulate.
<unk>.
Expense and looking at volume and margin I think we are in a far better place now than we ever have been before.
A lot of our systems build out.
It's been concluded.
Dialed back in a number of different areas.
I think our significantly greater now.
It's taken a long time to get to that point, but.
But I think we're all feeling confident we're feeling pretty poised with all of the things that we've been through with everything that the market.
Has thrown our way.
Recession sounds like.
Drizzle.
I think that this is an organization and the team that has been fired tempt tested fired tempered.
So.
I think we know what to do.
And for.
For those companies that may be a bit stressed we know how to support them as well.
So if anything.
As one of our investors was mentioning to IRA There's a company that's built for turbulence.
So we know we know how to operate in all sorts of different market environments.
So I don't know IRA if you have.
Do you want to add I'll try not to be repetitive to make but I kind of view.
The first half of 2020 as it is just a phenomenal example, I mean that was the recession of all recessions where.
Ah recessions when business slows down in 2020 business just stopped and I think we did an excellent job of.
Mitigating the volume and profit generation reduction by pivoting really quickly taking a lot of cost out of our business. We acted almost immediately or not almost we acted immediately and.
Obviously, it was impossible to mitigate the entire drop off but we certainly did.
Good of a job as I believe we could have in taking.
Variable costs down even some fixed costs out.
So.
We've demonstrated that in previous recessions as well.
Of course, along with a recession, you're probably going to have some decrease in activity, which will reduce our working capital requirements.
So we'd be getting some relief that way so you can.
Glass half full I would say that's one positive that would come out of that environment and the other thing. That's interesting is while we aside from the Flyers deal we haven't been.
Crazy.
Acquisitive of late but we have a solid balance sheet and we're still out there hunting for opportunities that make sense across all of our businesses land.
Sustainability related platform et cetera, and to be honest I think a lot of folks have gotten ahead of their skis for last couple of years and multiples have been.
Inflated in a recession could be a breath of fresh air in that regard getting folks a little more humble in terms of valuation it could it could lead to some.
Better opportunities for us.
Over the next few quarters.
As valuations will clearly come down so I think we've demonstrated pretty solid results on a relative basis in recessions in the past.
And.
Because our team is.
Phenomenally nimble.
Of course, you can't you can't do a lot about demand drop off but.
I believe again as I mentioned, we're critically valued counterparty in this credit constraint environment and I think we're a more valued counterparty in an environment where.
They're a recessionary tendencies, so and so.
Like where they have lower prices, which will also be salutary for cash for cash flow right.
Alright I appreciate it.
The color there thanks guys.
And you got another question.
Not a July birthday boats, if you will have to temper.
You can ask me now or September .
Mike.
If you have you may get out of me.
You were just you guys were just talking about the Flyers acquisition I know that when you had done that.
There were aspirations of.
Possibly finding others adjacent bolt ons and similar business areas.
Spanning the geographic footprint.
Any update on how youre thinking about that.
So playing off of what I just said.
Then.
Yes, we are still thinking about that.
There are a lot of opportunities that we're that we're looking at with all due respect to some of those people you know many of them.
Until very recently at least continue to have extremely high aspirations from a value perspective, so that that has resulted in maybe less activity or no.
No activity in the last few months than.
And then we would have hoped but I think that that may change. There are several things. We're looking at now that would be complementary to flyers and and.
In the broader land business so hopefully.
We will be able to execute on a few of those over the next few quarters and we continue as Mike and I have both.
Emphasize a bit more on this call.
A growing suite of products and services, we have supporting our customers with their <unk>.
Energy transition journey.
There are a lot of opportunities there frothy valuations in that in that area as well and hopefully those are about to become a bit more reasonable and we're certainly looking to.
Up to organically grow that business, but find strategic opportunities to accelerate the growth of that exciting piece of our business as well.
Alright.
Tapped out that does it for me I appreciate it thanks, guys alright, thanks, Ben Thanks for thanks.
Thank you.
I am showing no further questions and I would like to hand, the conference back over to Mr. Michael Katz bar for any further remarks.
Well, thank you too.
All of our investors.
On the call and especially to the team our global team, we've got the best Global team and we've been through a lot.
Always good to be here and we're excited about the future. We've got a great global platform. We've got a great suite of products and we've got great support from our customers and suppliers and partners. So we feel very lucky.
Thanks, very much and we look forward to reporting back in a quarter.
Stay healthy stay well.
This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great evening.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Yes.
Okay.
Okay.
Yes.