Q2 2022 Aaon Inc Earnings Call
Good day and welcome to the Aegon, Inc. Second quarter 2022 earnings Conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one. Please note. This event is being recorded I would now like to turn the conference over to Joe Mondello with director of Investor Relations. Please go ahead Sir.
Thank you operator, and good afternoon, everyone. The press release announcing our second quarter 2022 financial results was issued after market close today and can be found on our corporate website and dot com joining me on the call. This afternoon is Gary fields, our president and CEO and Rebecca Thompson, our CFO and treasurer shortly.
I'll be handing the call walk through Rebecca for to go through the second quarter results. Gary will then provide further insight on the quarter along with commentary on our outlook and then we'll open up the call for Q&A prior to that though we begin with our customary forward looking statement policy during the call any statements presented dealing with information that is not here.
<unk> is considered forward looking and made pursuant to the safe Harbor provisions of the Securities Litigation Reform Act of 1995. The Securities Act of 1990, 333, sorry, and the Securities and Exchange Act of 1934, each as amended as such it is subject to the occurrence of many events outside advanced.
And that could cause <unk> results to differ materially from those anticipated.
Well aware of the inherent difficulties risks and uncertainties in making predictive statements. Our press release and Form 10-Q that we filed this afternoon detail some of the important risk factors that may cause our actual results to differ from those in our predictions. Please note that we do not have the duty to update our forward looking statements and with that I'll turn it over there.
Rebecca.
Thank you Joe I'd like to begin by discussing the comparative results for the three months ended June 30th 2022 versus June 32021, net sales increased 45, 1% to $208 8 million from $143 9 million. The edition of basic sales of 24.
$6 million was the largest contributing factor to our growth as noted in our earnings release revenue synergies from this acquisition have materialized faster than expected and are expected to have significant growth in the coming year. Another contributing factor to the total sales increase was the growth of our Aon coil products segment.
Realized or get organic unit volumes at the segment increased 43, 3% due to the new manufacturing capacity added to our Longview, Texas facility in early 2021, as well as strong market demand for the electric powered split systems. This facility produces.
Our gross profit increased 12, 5% to $47 4 million from $42 1 million as a percentage of sales gross profit was 22, 7% compared to 29, 3% in the second quarter of 2021. The contraction in gross margin was primarily due to higher cost of materials.
While the cost of some materials have stabilized we continue to see volatility in the cost of a component part and we continue to experience supply disruptions that create additional cost to the business.
On a positive note gross margin improved sequentially throughout the quarter as we worked through lower priced backlog and began to see some of our higher price backlog hit the production floor. While we expect supply disruptions will continue through the second half of the year, we believe pricing will offset those costs and helped drive gross margin expansion in the second half of.
The year.
Selling general and administrative expenses increased 59, 4% to $26 9 million from $16 9 million in the second quarter of 2021.
As a percentage of sales SG&A increased to 12, 9% from 11, 7% in the second quarter of 2021, excluding.
Excluding basics SG&A expenses increased 25, 6% and total 1.5% of sales down 20 basis points from a year ago. We continue to do a good job of controlling these expenses, particularly and in the inflationary environment. We are in.
Income from operations decreased 18, 9% to $20 5 million or nine 8% of sales from $25 2 million or 17, 5% of sales in the second quarter of 2021.
Our effective tax rate increased to 28% from 18, 3%. The company's estimated annual 2022 effective tax rate excluding discrete events is expected to be approximately 25%.
Net income decreased to $15 9 million or seven 6% of sales compared to $20 6 million or 14, 3% of sales in the second quarter of 2021.
Diluted earnings per share decreased by 21, 1% to 30 cents per share from 38% per share.
Turning to the balance sheet, you'll see that we had a working capital balance of $191 2 million versus $131 3 million at December 31, 2021.
Unrestricted cash totaled $17 6 million at June 32022.
Our current ratio is approximately 2.4 to one.
Capital expenditures for the first six months of the year were 27.2 million. We now expect capital expenditures for the year to be approximately $73 3 million.
The reduction from our previous guidance of $100 4 million due to our existing facilities finding ways to increase capacity under the current square footage, allowing us to push out some of our other capacity expansion projects.
The company had stock repurchases of $6 9 million during the six months ended June 30th 2022.
Shareholders' equity per diluted share is $9.09 at June 32022, compared to $8 68 at December 31 2021.
I'd now like to turn the call over to our CEO and President Gary fields.
Good afternoon.
Overall, we're happy with second quarter results improved production rates at record levels for the second straight quarter.
Ship, the most amount of product in any quarter in company history at the same time, our backlog still increased modestly from the end of the first quarter.
Demand remains strong and we continue to book slightly more than we are producing.
This positions us well heading into the second half of the year.
Another positive is that our lead times relatively stable throughout the quarter.
Still remained well below industry average.
Today in early August were still booking orders for shipment in 'twenty two I don't think anyone else in the industry is saying that.
Gross margins were a little lighter than we were anticipating price cost with it was the biggest headwind to gross margins in the quarter difference between pricing of the equipment, we ship versus the cost of materials and wages was the largest of any quarter in recent inflationary cycle.
The good news is that it began to shift in a positive way in June and we expect it will continue throughout the rest of the year.
Pricing of orders in the backlog is much greater than the pricing is.
The orders that were shipped in the first half of the year.
Furthermore, raw material prices have turned down since peaking earlier in the year. So we continue to expect substantial margin expansion in the second half of the year.
We continue to face issues with supply chain.
However, we're doing a very good job managing these challenges.
To recognize our operational team for reaching record production rates for a second quarter in this environment is certainly very commendable.
The flexibility of our test of manufacturing operations and engineering team provide us an advantage as we were able to quickly adapt to supply chain shortages better than most others in the industry.
We expect this environment will be with us for a while.
But if and when things normalize we will definitely see operational efficiencies.
Because of.
The learning curve that we've gone through.
As I mentioned at the top of my commentary demand continues to remain strong.
Organic orders in the first half of the year were up approximately 60%.
Total backlog continues to grow on a sequential basis and organic backlog at the.
End of the second quarter was up 164% from a year ago. Furthermore June and July booking were strong everything we're hearing from our sales channel partners as demand remains robust on a micro level activity remains strong. This is also consistent to what we're seeing on a macro level.
The Dodge momentum index, which measures the number of construction projects in the planning stages and is a 12 month, leading indicator for nonresidential construction spending was that a 14 year high in its latest reading.
The architectural billing index also a leading indicator for nonresidential construction spending remains above 50, indicating architectural billings continue to grow.
The latest Abi report also sided that backlogs amongst architectural firms are currently at seven months, which is extremely high in a historical perspective.
The pipeline of projects in the industry is strong and we're seeing that in non res starts and spending data.
For us the strength remains very broad based across all the verticals we sell into.
That all said, we're aware of what is going on in the economy with rising interest rates higher wages supply chain labor shortages and we're prepared to deal with slowdown. If one comes however at this time, we're not seeing it in the channels we monitor.
I want to shift my focus to basics for a moment.
This is an area of our company, we're seeing tremendous growth and I'm very proud of how this acquisition has progressed since closing on the deal in December .
Through the first six months of the year. The deal has been accretive to earnings in the second half is shaping up even better.
The data center, and clean room, and markets, which make up the vast majority of their sales are extremely strong pipeline of projects extends out multiple years, giving them a tremendous amount of visibility.
Since acquiring the business the revenue synergies have even surprised me.
From the end of 'twenty, one to the end of the second quarter backlog at basics has increased nearly threefold.
Furthermore, subsequent to the end of the second quarter the business booked a single order were $16 $2 million.
We plan on leveraging the capacity in our new facility in long view to manufacture this product for the basics for this specific customer.
This will not only help leverage overhead cost associated with this facility, but it will position us better from a strategic regional manufacturing perspective.
It's quite expensive to ship product from Redmond, Oregon to the East coast.
Now, we can better attack that region from a pricing standpoint.
When we build it in the.
South central in Longview, Texas Theres other projects in the pipeline that are significant size that we are have commitments for and looking forward to getting a firm purchase orders secured on those soon this will help maximize basics chance of winning future work using this long view facility to regionally.
Assist us in and deliveries.
I want to touch briefly on our parts business parts still make up a small percentage of sales at just 7%, but it's something we've been focusing a lot on.
Both internally and with our channel partners, we've been having great success parts sales in the second quarter were up 32%.
That was a quarterly record for the company.
Moreover, the 32% growth was against a comp of 42% growth realized in the second quarter 'twenty, one so compared to two years ago parts sales were up 88% this past quarter.
Parts generate very good gross margins for the company. So growing this business will continue to be a strong focus for us.
Before finishing up and hand off the call for Q&A I'd, just like the update you on our capital investment plans.
I'm sure you noticed Rebecca said that we reduced our capex budget for 'twenty two by 27%.
Compared to what we were previously targeting.
This by no means is an indication of slowing growth.
Has that been saying demand is robust and we do not see material signs of a slowdown. Moreover, we continue to target double digit organic sales growth for the next several years.
The fact is we are regularly challenge the team to look at ways of increasing production capacity and maximizing efficiency in our existing facilities.
In recent history, we've done a great job with this and we continue to do so I want to commend the group that calls themselves space force, they've reallocated hundreds of thousands of square feet in our all of our facilities for this.
So the reduction in our 'twenty to 2022 capex budget is merely is finding ways to increase capacity in our existing space. When I assure you. We are regularly monitoring our capacity versus our growth projections, making sure that we've got adequate room for growth.
With detailed plans over the next several years to increase capacity. So we're able to continue to absorb the robust growth that we anticipate we just took a little pause on it right now because we've discovered additional capacity in the existing facilities. So in closing I want to reiterate we feel very good as we head into the second half of the year.
Size of the backlog and most important this is very important the profitability of the backlog. We've got two price increases that we have not yet realized in the first two quarters of the year that are just right here with this in Q3 and Q4 this positions us for robust sales and earnings growth bookings remained strong through July pipe.
<unk> remains very positive so barring a severe recession our outlook for the foreseeable future has never been stronger I want to finish by thanking all of our employees sales channel partners and customers. Your support is immense and very much appreciate it.
So now I'll open it up for Q&A.
And we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two.
The first question today will come from Julio Romero with Sidoti <unk> Company. Please go ahead.
Good afternoon.
Hey, good afternoon, Gary Good afternoon Rebecca.
Yeah.
So I wanted to start on the sales growth in the second quarter, the organic growth of 28% I appreciate you, giving us the 10%.
Volume number I was hoping.
You could expand on how much of the remaining 18%, we can attribute to price versus mix.
Yeah.
Well I don't have it broken out exactly that way the mix I didn't really see.
Too much difference here.
So looking at total sales.
I think it was almost not quite even between organic growth pricing and the acquisition. The three of them are very very close to equal percentages.
Okay No I appreciate that.
Turning to basics would love to hear you expand on the strategic benefit of manufacturing that product in Longview, and what geographic regions are you looking at potentially play offence in.
All this this is something that when we were looking at the acquisition I described to the board too.
Two things that I believed would occur one was that there were clients that really appreciated basics knowledge and abilities, but they just didn't have enough foundation under them. If something was to go wrong. They didn't have a disaster recovery plan that made sense.
Particularly because they didn't have a dedicated additional facility.
So I knew.
In my heart that when we got this company would have in the financial backing of the.
The mother ship of Aegon that these companies would be more comfortable but also having additional manufacturing facilities, we had space both in Tulsa and long view that we can dedicate to manufacturing basics products.
So this first opportunity came up.
The salesman actually worked for my former company that.
Was that before.
When I was with for 30 years.
He contacted us and said that he had a hyperscale data center client that he had been doing business with 15 years that had used a on equipment some of their ancillary areas, but never in our core data Hall and now that we had basically wanted to explore that so we we all met in Redmond, Oregon, everything went really well.
Coming out of that was that the majority of their facilities are in the Midwest and the east. So we explored the possibility I'd already started preparing.
An area of the new.
Our building in Longview to manufacture this kind of equipment and made the commitment to them that the timing was going to be good that we could build disorder. There. So when you look at the whole breadth of the order not the $16 2 million, but the whole thing that they.
Have committed to US then we were able to save them a significant amount in freight.
A load of freight to go from Redmond, Oregon to this project is about.
I think it was a $8400 versus $4000 going from Longview to this plant so they say 4000 and $400 per truckload.
And.
It it takes.
You can put two of these units on one truck.
It's considerable it's considerable now they have multiple facilities in the Midwest and the east.
That they are.
Oh.
We were building this product, but the other thing is as these products relatively simple, it's very custom design, but once you build the first one and then you just repeat hundreds if not thousands of times to build this this product well that fits the long view manufacturing culture, very very well and this also allow.
Those basics to free up that space had they built it in Redmond, they would've used up that space there, but red man has the capability of building much much more complex equipment for some of their other customers. So this was just beneficial all the way around.
Great I appreciate that color anyway to think about.
Where you are with capacity utilization at Longview.
With the commitment we have from this client plus two other clients that are similarly positioned that are in very late stages of discussion. This could put the long view the new Longview facility at close to 100% utilization for 23 and 24.
One of our clients is talking to us about exclusively delivering to them in 'twenty four they want to secure that capacity.
So if we secure these clients that again I'm very hopeful.
The where we're in the late stages of negotiations with them.
Then that would.
Pretty much tapped out what that building could do but that leaves space in Tulsa that we can use we we have a good amount of space here that we've.
We could build the same product of course Redmond.
Can still build it so we're not tapped out in growth just that one facility might be well when we built that building.
We started in production there February of 'twenty 'twenty. One so we really finished at about January one 'twenty one.
We built it with three sides, where permanent tilt walls in one side that was a temporary metal wall.
And the idea was that when we saw.
That we were going to use up the capacity or get close to it then we can double the building. So we're well prepared we could probably stand that up in about 18 to 20 months.
And if we secure these other orders before the end of the year, which is very likely that we will then will very likely start construction on the other half of that building right away. So that we don't end up at 100% utilization before we get the new building finished.
Great. Thanks, very much I'll pass it on.
And again, if you would like to ask a question. Please press Star then one our next question will come from Brent Thielman with D. A Davidson. Please go ahead.
Good afternoon Brent.
Hey, good afternoon.
Gary good to hear.
Gross margins would be coming back here nicely in the second half.
Just trying to get a sense on the quarter itself.
Just relative to the first quarter, you were down that down a bit, especially looks like and that sort of core <unk>.
Business is there a way to kind of bucket you know what's the difference in terms of the quarter on quarter comparison, because I would've thought you'd see a little better comparison note that the first quarter.
Yeah, It is actually fairly vivid.
The price increase that we put into effect January 1st.
We had so much pull forward on that that we ended up with almost two full quarters of production needs and so we had let's say a fixed price through the first two quarters. There was no real appreciation of the significance of the price. It was on the plant floor, but we continued to have materials increase.
Freight being one of them components being the other two throughout the quarter. So I think our our labor.
Our annual Labor increase went into effect right at the very first of the second quarter. So that was significant because we have a normally we have an annual labor adjustment across the board on the company.
This past year, we had labor adjustment first part of Q4.
Because cost of living was going up so much we wanted to make sure we secured our people.
So I'm I'm not remorseful about that for this reason how many manufacturers if you talk to that a got a head count that's plus 20% versus a year ago now.
Not a lot.
So you know the this one key issue that we spent more money on our labor, but that allowed us to get this production which helped.
With the absorption of some overhead, but it did come at a penalty.
Right about.
Probably the second week of June we started getting this higher priced.
Hmm.
Work on the plant floor.
And so we saw good good significant improvement in June and that's why we're quite confident that we've got this improvement because our costs are relatively stable starting.
Starting in second quarter they stabilized.
And they have not worsened any but our sale price is going up considerably you know that January 1st price increase was 8% just by itself and then we had one in late March that was 7%.
I don't think Q3 will get anything material in that 7%, but it'll be vastly built on the 8%.
Which very little of Q2 was built on that 8% price increase.
Is that help you kind of yeah.
They're really helpful. Gary I appreciate that.
On June I mean, where you are you're closing in on the sort of target gross margins that you talked about just closing it out quite that way.
Sure.
Not quite there you know Q Q3 has a remote chance of being there, but it's it's probably going to be.
I would anticipate it not quite reaching in Q3, but Q4, it's absolutely going to reach in and.
Towards the upper end of that range actually.
Yep.
And Gary I noticed in the Q you made a mention that in the margins looked great at 86 that they've been able to kind of reprice, some or all of their backlog what what is it about that business and its ability to do that.
Well I can't necessarily do in the core.
The core business is.
Our clients provide a purchase order to us for fixed cost at the advertise price of the day, it's effective.
And we hold to that.
Whereas basics, they're dealing with the end user itself most of the time, they're not going through a sales channel partner, that's going through contractor base.
It's just a different strategy of go to market. So you're much closer to the end user in basics business model that being said, they're able to set things in price because they have such a long duration for instance.
The $16 2 million dollar contract.
They do want it pretty quick.
Relatively as quick as we can build it which is going to be Q1 of 'twenty three oh, maybe a little bit of it in Q4 of 22.
But they have.
Committed to us all the way through what they need for 'twenty 'twenty four well, they're not writing purchase orders to us yet because we need to negotiate what that price is if we see an escalation in cost then we have a formula we've discussed with them about how we.
Very transparently.
So that we can maintain our margins well that's just the difference in dealing with the end user that's actually.
<unk> new equipment as opposed to.
A mechanical contractor that purchase it from our sales channel partner and sells it to a general contractor who sells it to an hour. So there's just two or three steps that are removed and basics process that allow that to happen.
I hope that's clear to the public I think too cloudy for it.
It's good yeah, no I appreciate it.
He's got some chip plant legislation and what that might mean for the company core basics, yeah. So Intel themselves have been a long time client of our basics and.
Some of there there are people there are other chip manufacturers as well were doing some clean room work with them now we're looking at more we're looking at doing you know make up their units and things for them.
Basically they'd like for us to do probably more than we can.
So that that is going to be where.
I was talking about some of these more complex equipment that are the Redmond facility is capable of building that were not capable of building in any of the legacy plants. So that's why moving some of the simple product.
We're building in Redmond to an a on plant is so sensible because it gives them manufacturing space and capacity for these very complex units.
These these makeup area units for Oh.
Chip manufacture their monstrous and they've got just an immense amount of piping and controls and I mean, they're they're like giant equipment rooms, they assemble in two or three pieces, maybe four pieces, sometimes and in Redmond. They have the ability to put that whole thing together in one piece on the plant floor.
So that they make sure everything fits and aligns and all of that we just can't do that in our other facilities.
Got it very interesting. Thank you for taking the questions and I'll pass it on.
And our next question will come from Jon Braatz with Kansas City Capital. Please go ahead. Good morning, Gary Good afternoon, Rebecca either how're, you pretty good pretty scary.
Did any of the supply chain issues that you have.
Pressure your volumes at all where you at times and unable to get some product out the door and wood wood volumes have been a little bit better in the second quarter.
Not significantly Jon the way it works.
Share this with you every day at a bit after six o'clock.
Our production our director of manufacturing sends me a report that how many units came off of what line. How many total units shipped and what the total dollar volume is okay. That's in the Tulsa plant.
And then I get the same thing from the Longview plant well.
We have expected dollars per day, and when I see it right on that I don't have any questions when I see it under that I, usually put a question Mark and then I get a report back that will say you know short some parts of this that and the other well then one or two days later I see a great big number coming in so they had you know some.
Number of units that were 99.9% completed waiting on this 110th of a percent part they couldn't send it to shipping so it wouldn't qualify for this report.
So I'm seeing things delayed two three days at the most okay, but I'm not seeing things weeks or months and.
And I get this report you know them.
Look at him here six O eight 622 six O. Four you know just after six o'clock every night and I I I, just eagerly anticipate that report and mostly mostly the numbers are what I expect and we've increased production even more in August than what we did in July increased.
Reduction over June .
In August has increased again now part of this is tempered by price because we're getting that 8% higher price on a lot of this so you know.
To go back and do some I call. It napkin math to get me back to see what my actual.
Volume growth is but but we're certainly getting volume growth two we've got more people on the plant floor, we've gotten them up to speed, where they're productive now and so you know that that's why we're very confident that we've turned the corner on the worst part of this and the other thing.
I don't know how much of this we described in the Q I think we described it.
We had an 8% price increase in January 7% in March but starting June 1st we are going up 1% per month and until further notice well. What this amounted to was once we got the 8% on the plant floor and got 7% on the plant floor I felt like that we had caught up and maybe even got a little ahead.
The price cost scenario with gross margin that we should be towards the upper end of our our range is my anticipation from everything that we're projecting well as that occurred I said well if we're at 9%.
Inflation rate that's almost you know that's what three quarters of a percent a year I'd like to stay just a little ahead of that I wanted to go up 1% a month, so I'm trying to I think where between the guardrails on the range of gross margin that we anticipate as our preferred range, we're going to end the year probably towards the higher end of that.
That range, but that 1% per month is going to keep us there from.
From now on out and you know, especially with materials steel copper and aluminum have all subsided and pricing components have not however motors compressors variable frequency drives you know all the electrical stuff, it's still going up but.
When you take it in total and I just did this analysis with our people earlier today were kind of flattish on material cost right now.
At this point in the game.
That's good good.
Couple of questions on basic when when you acquired basics you had expressed the hope that.
That is part of a.
You will be able to work with larger customers larger larger data centers number.
One question are you seeing that are coming to fruition and then secondly.
Basic who's doing sort of about $100 million in revenue something like that.
Given the strength of their business, what's happening in the long view.
How do you see that revenue potential now at basics relative to when you are when you acquired them.
Well, let's let's okay, let's do too that you had two questions. There so I'll bifurcate them. So the first one is as absolutely.
So this data center customer that gave us the $16 2 million dollar order for our basics product.
For 15 years, they've been buying a on for their ancillary areas, but they've never bought a on or.
Non affiliated for their core data Hall.
So we're still supplying them you know legacy a on equipment for their building pressurization and humidity control, but now we're providing them equipment for the core data Hall and that was the target that was the whole concept was that these these customers that we had had for.
You know many years, we had a very very small footprint the participation of their H P. A C needs and now we can take care of a huge tranche of their needs. So there's the first customer that signed up with this with basics as a result of that now we've got a Ma.
Multiple other customers that are in the same scenario those are some of the negotiations I feel very confident that we're going to have a favorable outcome.
Because they've been a on customers for many years been very very confident in and Oh.
Respectful of what Aon has done for them and we have a mutual respect for each other and now that we're in this business and we've proven that with basics. We can do this we're getting these opportunities now lets talk about the revenue synergy to it. So basics was what we will say you know roughly $100 million.
As anticipated revenue for 422, and I think that's still going to be relatively close I think they might be.
Right in that range as you saw they did oh.
They've done what nearly half that so far this year, what do they've done so far Rebecca 12 million no no for the year basics revenue Oh, I'm, sorry that was gross profit of $45 5 million or so so they've done 45, and a half and they're accelerating so they're probably going to end up you know just north of 100 million now when we build this.
Basics product in long view it wont go on basic P&L, because it's built on the Longview plant.
Well it'll go on their P&L, so we'll be giving commentary to that to show you what that is but right now the Longview plant is also growing tremendously well, what's our volume this quarter on Longview.
You you segment that out yeah, we do.
Should've been about 'twenty.
726, 27 million, whereas it.
Yeah.
While Rebecca is looking for that so the thing is as long as he has run it on pace to do 100 million, which is doubling their business.
This opportunity to build these computer room air handling units there is going to double that yeah. Okay.
41, 9% increase in units sold.
Yeah, but that still didn't give me the volume, but we're running at a pace to do just just right out of 100 million in long view in the legacy product and then.
This new product it won't have a material impact on 2022.
We're going to build prototype units for testing next week and we're going to.
Bring that owner yen to review those because there's two different ways that we've explored building at and from a cabinet.
Construction methods and.
We're going to make some decisions on it and then we'll probably get everything together supply chain wise and we might deliver some units in December but I don't really look to deliver too much before that.
They really don't need units until may of 'twenty three are theyre.
They're looking at how they can store and before that we'd like to materially build that order in January and February and then that that allows us to really get the year started building you know $8 million to $10 million a month of those kind of products. In addition to the $10 million or so of legacy products Yup yup, Okay. Okay, all right sounds great.
Gary Thank you very much thank you John .
There are no further questions at this time. This will conclude the question and answer session I'd like to turn the conference back over to the company for any closing remarks.
Alright, Thanks, Cole I'd like to thank everyone for joining on today's call. If anyone has any questions over the coming days and weeks we feel.
Feel free to reach out to myself.
Have a great rest of the day and we look forward to speaking with you in the future. Thanks.
Okay.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.
[music].
Okay.
[music].
Okay.
Okay.
[music].
Okay.
Right.
Yeah.
[music].
Yeah.
Yeah.
[music].