Q3 2022 Latham Group Inc Earnings Call
Welcome to the laser group third quarter 2022 earnings conference call. All participants will be in 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 on your telephone keypad to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Nicole BRCA.
<unk>.
Investor Relations representative please.
Please go ahead.
Thank you and welcome to life in Q3 of fiscal 2022 earnings call earlier. This morning, we issued our earnings press release, which is available on the Investor Relations portion of our website, where you can also find the slide presentation that accompanies our prepared remarks.
On today's call are lengthens, President and CEO , Scott Rydzewski and CFO Robert Mcmillan following their remarks, we will open up the call to questions.
During this call the company may make certain statements that constitute forward looking statements such statements reflect the company's views with respect to future events as of today and are based on our management's current expectations estimates forecasts and projections assumptions beliefs and information.
These statements are subject to a number of risks that could cause actual events and results can differ materially.
Risks and other factors are set forth in the company's earnings release posted to our Investor Relations website and will be provided in our Form 10-Q for the third quarter of fiscal year 2022.
The company expressly disclaims any obligation to update or review publicly any forward looking statements, whether as a result of new information future events or otherwise, except as required by applicable law.
In addition, during today's call the company will discuss non-GAAP financial measures, which we believe could be useful in evaluating our performance.
Conciliation of adjusted EBITDA to net income calculated under GAAP can be found in our earnings press release and will be included in our Form 10-Q for Q3 2022, I'll now turn the call over to Scott for Jackie.
Good morning, everyone and thank you for joining <unk> third quarter earnings call today, I will review highlights from the third quarter and spend some time discussing what we're seeing in the macro environment as well as the actions we have taken as we look ahead.
Rob will then review, our Q3 and year to date financial cost reduction actions and revised fiscal year 2022 guidance.
We were really pleased with our team's ability to drive another quarter of growth amid an increasingly difficult macro backdrop with Q3 net sales up 17% year over year to 189 million and adjusted EBITDA of 17% to $42 million.
We delivered nice top line growth across our product portfolio, we drove year over year improvement in North American fiberglass production and substantially return to normal lead times across our non fiberglass product portfolio.
We also continue to realize the benefits of our pricing actions, which offset inflation, although not at a magnitude to hold year over year gross margins.
As we look to the fourth quarter and the remainder of the year. We are revising our guidance for fiscal 2022 to reflect current market conditions.
Our wholesale distribution partners continue to destock package boule inventory levels.
Service dealer demand through existing supply. This is resulting in continued volume declines in our packaged food products in Q4. Additionally, while interest in pool ownership remained strong some homeowners are taking more time on that purchase decisions and establishing installation dates and what are the current macroeconomic environment.
We've responded to these dynamics with immediate actions to reduce our costs, including one optimizing our production and shift schedules to implemented a workforce reduction with a focus on retaining our top talent and three taken advantage of strides we have made to improve production efficiency over the last few years, which.
It is now, allowing us to streamline our cover and liner manufacturing footprint with the closure of our Bossier City, Louisiana facility.
We expect these actions to generate annual operating expense savings of approximately $12 million in fiscal 2023.
This coupled with our expanding lean and value engineering initiatives will allow us to continue to execute on other value added cost reduction initiatives moving forward.
At the same time, we continue to execute on our top line growth initiatives that we believe will drive our business over the long term. This includes a focus on our efforts to drive consumer awareness of fiberglass schools generally purchased ready leads for our dealers.
Continue to expand our fiberglass manufacturing capacity.
Our direct a homeowner strategy and lead generation engine remain competitive advantages for us and our critical pieces of our strategy to drive demand and awareness of fiberglass and the Lincoln brand.
We remain an important resource for homeowners throughout their <unk> journey, thanks to investments in our digital tools, including our augmented reality app lighter visualize her tool website blog, my leatham platform and the pool cost estimate are weak.
We continue to see the benefits of these initiatives and driving traffic to our website increasing downloads of our my Leaseman pool cost estimator tool is ultimately translated into leads for our dealers. We believe there is tremendous untapped demand of U S homes, a lot of pool today, we have launched targeted regional marketing campaigns.
In select regions, where dealers have capacity and are looking to further build our pipeline into 2023.
Fiberglass has been an important driver in our ability to outperform the market included in down years, even in 2022, which is broadly expect it to be a down year for North American pool installation, we expect to deliver fiberglass unit growth.
We continue to enhance our fiberglass leadership position through capacity initiatives and model lineup expansion and by deepening and expanding our dealer relationships. We continue to make great product great progress on the construction of our new Kingston, Ontario facility.
Which remains on track to begin production in 2023.
We also recently acquired fiberglass pool manufacturing assets in Central Oklahoma, which will replace lost fiberglass manufacturing capacity in Odessa, Texas and place our production closer to strong consumer markets in the region.
The addition of these two facilities will allow us to reduce freight costs.
And our lead times and tap into large markets that are right for fiberglass conversion.
We will remain diligent with staffing plans and have the flexibility to manage manufacturing capacity to match demand.
As we've discussed by relapses share of U S pool install sits well below more mature markets like Australia, where fiberglass is a 70% share of the market as we drive awareness of the esthetics durability and value proposition of fiberglass versus guidance. We believe we can increase fiberglass is representation of U S schools.
<unk> overtime and drive long term growth related though.
In summary, we have delivered strong year to date performance. Despite the challenging macro environment as market conditions evolve we have taken actions to prudently manage our cost while continuing to make targeted investments to drive our future growth. We believe this balanced approach will enable us to maintain our industry, leading position and emerge stronger from the current environment.
Alright.
With that I'll turn the call over to Rob to review our results in greater detail.
Thank you Scott and good morning, everyone. Today, I will review, our third quarter and year to date results, then I'll provide a bit more detail on our continuous improvement culture and cost reduction plan.
All of them by a review of our revised fiscal 2022 guidance.
Note that all comparisons are on a year over year basis, compared to third quarter and first nine months of fiscal 2021.
Starting with Q3, we are proud of our team's ability to deliver another quarter of growth while operating in this challenging environment net sales for the third quarter.
We're $189 million up $27 million or 17% year over year by product line net sales for inbound some inflows increased 22% to $102 million covers increased 18% to $52 million and liners increased 4% to $35 million.
The $27 million increase in third quarter net sales was driven by pricing as volumes were relatively flat versus prior year, while fiberglass pool volume grew nicely versus prior year. It was not enough to offset the continued softness in our package tools driven by Destocking in the wholesale distribution channel.
We generated $59 million of gross profit in Q3 up $8 million or 15% due to an increase in net sales and a $1 million year over year decrease in non cash stock based compensation expense.
Q3, gross margin decreased 40 basis points to 31, 1%, excluding noncash stock based compensation expense gross margin decreased about 120 basis points to 31, 5% driven by pricing that offset inflation, but not enough to maintain last year's gross margin.
As well as negative fixed cost leverage which was partially offset by operational efficiencies from the build of inventory to return to normal lead times.
Selling general and administrative expenses decreased to <unk> $27 million compared to $48 million in Q3 of 2021. This was primarily driven by a $19 million decrease in noncash stock based compensation expense, excluding non cash stock based compensation expense.
SG&A decreased $2 million or 9%.
Adjusted EBITDA increased to $42 million up $6 million or 17% and adjusted EBITDA margin remained flat at 22, 3%.
Net sales for the first nine months of fiscal 2022 were $588 million up about $96 million or 20% year over year. This net sales growth was primarily attributable to our pricing actions to address inflation.
By product line net sales for in ground pools increased 14% to $326 million covers increased 30% to $123 million and liners increased 24% to $139 million.
Gross profit increased to $197 million up 22% from $162 million in the prior year gross margin for the first nine months of 2022 increased to 33, 5% compared to 32, 9% for the prior year period.
Excluding about $4 million and noncash stock based compensation expense gross profit increased $32 million and gross margin decreased 20 basis points to 34, 1%.
The 20 basis point decrease in gross margin, excluding noncash stock based compensation expense was driven by similar factors that impacted Q3 results.
Selling general and administrative expenses decreased to $113 8 million compared to $175 million in the first nine months of 2021. This decrease was primarily driven by a $60 million decrease in noncash stock based compensation expense.
Excluding non cash stock based compensation expense SG&A increased $4 million.
Or 5%.
Adjusted EBITDA was $139 million for the first nine months of 2022 up 23% from the prior year period, and adjusted EBITDA margin increased 70 basis points to 23, 6% from the prior year period.
Okay.
Turning to our balance sheet as of October one 2022, we had cash and cash equivalents of $31 million.
Total debt of $313 million and our net debt leverage ratio was one seven times.
Net cash generated by operating activities was $5 million for the first nine months ended October one 2022.
Compared to $29 million in the prior year period with the year over year change, primarily driven by investments in working cap.
Mainly inventory to return to normalized lead times, the embedded impact of inflation on inventories and elevated inventory levels, primarily associated with packaged pools.
Capital expenditures totaled $12 million in the third quarter of fiscal 2022 compared to $6 million in Q3 last year driven by the increased investment in fiberglass capacity, most notably the Kingston, Ontario manufacturing facility project.
Capital expenditures totaled $29 million in the nine months ended October one 2022 compared to $19 million in the prior year period.
Yeah.
As an organization, we promote a culture of continuous improvement and the variable nature of our cost structure enables us to act quickly and decisively to adjust how we manage our business throughout 2022, our operations team has been hard at work embedding lean and value engineering disciplines into our manufacturing processes.
Yeah.
Which have resulted in not only a number of discrete cost savings initiatives or projects, but also the discipline to continuously improve our efficiency of our manufacturing processes over time.
As Scott mentioned earlier, given current market conditions. We're also taking several deliberate actions to reduce structural cost across the company. These cost reduction efforts, both strengthen our ability to weather a challenging market while funding investments in our lead generation engine and fiberglass efforts to drive growth over the long.
Hall.
As a result of these actions, we expect to incur approximately $2 million in total charges for employee severance and related costs and fixed asset and facility related expenses.
We expect to recognize these charges in the fourth quarter of 2022 and into the first quarter of 2023.
We expect to generate annual expense savings of approximately $12 million in fiscal 2023.
Turning to our guidance based on the seasonality of our business and current market conditions. We have issued a revised outlook for the full year fiscal 2022 of net sales of about $685 million to $700 million, representing 9% to 11% year over year growth.
Adjusted EBITDA of about $140 million to $145 million, representing flat to 4% year over year growth and capital expenditures of about $40 million $45 million.
Updated top and bottom line guidance reflect continued sell through of our wholesale partners existing package pool inventory, resulting in volume declines in this product category as well as soft softer homeowner demand as the macro environment extends their timeline to place new orders and schedule installations.
<unk> dates.
Our revised capital expenditure guidance reflects our continued commitment to investing in fiberglass capacity, primarily reflecting investments in our Kingston, Ontario facility as well as a pullback on non fiberglass spend as we look ahead, it's worth highlighting seasonality trends as we look out over the next few months now.
Uprising, our peak sales quarters surround warm weather months, mostly in Q2 and Q3 <unk>.
Conversely, the winter months in Q4, and Q1 represent lower sales periods over the past few years extended lead times and supply chain challenges somewhat moderated the impact of seasonality.
On our results with these issues largely resolved our updated guidance reflects both the return to normal seasonality as well as current market conditions.
We expect our fourth quarter of 2022 to be the lightest quarter of the year consistent with historical seasonality of the business Scott.
Scott I'll turn it back to you for closing remarks.
Thanks, Rob we have secured our position as the leading consumer brand in the residential pool market with unparalleled geographic reach and scale.
We have transformed our industry with our director of homeowner model and have made strides in driving the awareness and adoption of fiberglass, we have strong confidence and conviction in our strategy, which we believe positions us to capitalize on attractive underlying trends of our industry.
We benefit from ongoing migration to the suburbs and continue to work from home in 2020 about 95% of our net sales came from purchases of pools and other products in existing homes that have been built more than one year prior meaning the majority of our sales are not tied to new housing starts and the housing market cools.
As people stay in their current homes longer we made benefit from continued investment in repairing remodeling and renovating the backyard.
We cater to attractive homeowner demographics higher income individuals and families with higher home equity value. We also offer products at different price points. They can easily address a range of homeowner styles and budgets.
We hold the leading position across all of our subcategories, including those that generate recurring revenue opportunities. We estimate that about 180000 to 200000 vinyl liners and about 100000 to 120000. All season covers must be replaced every year in the U S and the installed base.
To grow we expect our recurring revenue opportunities for these products will also increase over time.
Our industry has faced no shortage of challenges over the last several years, we have grown stronger from each one thanks to the dedication and support for our talented employees and dealers. We are pleased with our ability to continue to deliver year over year growth in the first nine months of 2022, and our balanced approach to aligning our cost structure, while continuing to execute.
Our direct a homeowner and fiberglass conversion strategy position, giving us confidence in the long term prospects for our business. Thank you for your time today and interest in late them. We will now open the lines of questions.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad. If you were using a speaker phone. Please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two and please limit yourself to one question and one follow up.
At this time, we will pause momentarily to assemble our roster.
The first question comes from Matt Bouley with Barclays. Please go ahead.
Questions.
No. It's a you know not not necessarily guiding to 2023 here you know, but given where we are in the year and sort of what you're hearing from your customers and backlogs are I'm curious if you know if you could kind of speak to what you're planning for in terms of industry volumes, you know hi, how are you budgeting.
2023 at this point, obviously, we can take Q4 and.
Annualize that but you know.
Short of us of us taking that approach and I'm curious if you guys can kind of walk us through a little bit of how to think about next year. Thanks.
Yes, good morning, Matt on the Sky, it's too early to really predict what tool starts for 2023 will look like and we're not really here to provide guidance for 'twenty. Three I think what we can say is you know that the headwinds. We are currently navigating in Q4, we expect those will persist into 2023, and I think everyone needs to remember.
The seasonality of our business as well with our Q4 and Q1 typically being the two lightest quarters with the strength of our sales comment in Q2 and Q3.
Okay.
I appreciate that and then.
You mentioned fiberglass unit volumes are clearly outperforming you.
You know what the what the overall industry is doing in terms of new pool starts this year.
Curious if you can kind of outline or maybe give us a history lesson on sort of how fiberglass performed.
Back when when new pool starts came down than in the prior recession and the big recession.
And maybe if you if within that sort of outline just where we are on the cost of fiberglass versus competing materials today. Thanks guys.
Yes, so look not none of US were here back in the two thousands and what I'd say, Matt is the business is completely different now than it was then we've spent a lot of time focusing on fiberglass educating a whole more of the consumer expanding our base of production and distribution in north.
Again, Australia, New Zealand and I think what we what we can save as we look back over the last five years.
And I think we've shared this in a few investor presentations fiberglass has outperformed the market in all cycles, whether it was a wet rainy season down season like we saw a few years ago and I think let's just take it to the president fiberglass will show growth nice growth this year in 2022.
Many people are predicting that as a down market for 2022. So we continue to stay bullish on fiberglass material conversion story and the economics still hold that we've shared with you guys over the last few years you know fiber.
Fiberglass still has the.
Lower upfront cost versus a concrete pool comparable size and then that that gap expand over the total cost of ownership of that pool.
<unk> are still in the 25% to 30% upfront annual 35 to 40 over over the long term from from lower maintenance of the pool.
Great well, thanks, Scott Rob Good luck guys.
Thanks, Matt Thank you.
The next question is from Rafe <unk> with Bank of America. Please go ahead.
Hi, good morning, Thanks for taking my question.
Alright.
I just wanted to if I look at the Decrementals.
And the guidance it looked like it was sort of in the 40% range in terms of the <unk>.
EBITDA reduction relative to the sales reduction how do we think about that.
In 2003.
If volume continues to decline.
How should we think about the decremental margins next year, and then how does that the $12 million of annualized cost savings.
Yeah. Thanks, Ray I'll take that so we're not giving guidance for 2023, as we said but.
If you think about the seasonality in Q4 itself, it's really more about the volume.
And where we are again seasonality peak quarters, being Q2, and Q3, and then less less volume relatively in Q1 and Q4.
Yeah.
Is there anything sort of.
Near term that that's pressuring margins more than you would anticipate for next year.
Well I think.
I mentioned two things in our gross on a gross margin. One is our price still remains ahead of inflation, which is good but we haven't been able to maintain the same margin rates. So I think there's that underlying pressure with inflation and what's happening there.
And then the second piece is again, it's more volume related but our fixed cost leverage I talk about a little bit.
In terms of Q3 and that certainly is a dynamic in Q4.
Okay.
And then just.
In terms of material cost have all raw material costs have come down what would you expect a lower PVC and some of the.
Lower raw material cost to flow through into your margins.
Okay.
Yeah, I mean, well some costs have come down we tend to have fairly specific supply.
So we'll see we see some decreases out there, but it's much elevated from where it was originally.
And we take that all into account as we look at our.
Pricing in our value proposition of where we are.
Okay. Thank you.
The next question is from Ryan Merkel with William Blair. Please go ahead.
Yeah.
Hey, guys. Thanks for taking the question.
My first question is just on maybe take us through the quarter and when did you start to see some of these pressures are really start to increase and then take that answer and help us think about how you thought about the <unk> guide what are some of the key revenue assumptions in there.
Yes, so good morning Ryan.
I think from promoter last together on the earnings call I think we saw.
Continued.
Destocking in the packaged food categories through the wholesale distribution channels over the last call. It 60 days or so and you know when you when we step back and look maybe the bigger macro environment kind of coming in.
The <unk> dynamic and maybe some of the headwinds heading into early 2023.
What we're seeing is really the homeowners starting to take a pause and delay their purchasing decision and delaying choosing the installation date. The good news is the demand is still there. The interest is still there we see it in our lead generation I am on the website interest for fiberglass pools of our products across the board there.
Or just not pulling the trigger as quickly as they had been historically as they kind of take a pause.
Yeah.
Okay.
Because it looks like in <unk> volumes are down sort of 40% and I'm just kind of wondering is the destock that youre seeing in the package pools is that the majority of it and when does that ease.
Yeah, I'd say the majority is is probably the destocking in the packaged food category. The other dynamic is as the safety cover season winds down right. We're seeing that slow here in <unk> versus a really nice <unk> we had.
And again.
Again, it's just that that delay in the purchasing decision at the homeowner level.
The what we've seen the last couple of years as you know dealers being able to fill those slots with pools as they head into the Thanksgiving and Christmas season, we're just not seeing that activity like we typically have because of that whole more pause.
Got it I'll pass it on thanks.
The next question is from Kenneth <unk> with Keybanc capital markets. Please go ahead.
Good morning.
Morning, Ken.
So.
If I'm hearing too.
Items that you're calling out for the.
Sales impact.
So if you could just clarify this.
Packaged just for everyone is referring to recover.
And Youre liners correct.
It was about 40% of your business.
So.
So you'll just emblematic side, yes.
Yes, just the metal stuff for the liners.
Yes, so Canada, when we say the packaged pool, but the destocking.
It's the panel components. So it's the polymer wall components steel wall components, and right and the staff.
That would go into the ground be assembled for which the final line of work go into so we keep kind of the liners and covers are off the sides. We think those stock products sold to the wholesale distributors.
Okay and thats in the half.
Oh go ahead, that's in the in ground segment. So we don't report on it separately.
<unk> pools is onsite, England.
Okay.
Right and just.
The.
Maggie and then there was the comment.
So.
Do you know how that since youre attributing that to inventory corrections do you have a sense of.
Right your cell.
Into the channel versus the PEO as of the channel is there any way for you to quantify that components.
Your headwind.
And I'm asking this in light of the separate question about sales, which as you are saying customers pausing.
Not pulling the trigger can you kind of quantify what that means in terms of.
Sales I mean should we infer that was all in the fourth quarter. So does that mean that they've gone from three.
Three to five months to something farther just because your business is still nave.
Nathan to most people I'm trying to have you guys expand on it so we can be better prepared thank.
Thank you.
Okay.
I can take a part of it which is.
We talk about seasonality and that coming back what has happened the prior.
Prior years, we've had supply chain issues.
And long lead times that tended to moderate the seasonality because we're through that and we don't have those now the real seasonality is coming in where.
There's just less activity in the winter months.
<unk> products.
And I think the drop back to the drop in for Q can alright. Thank you think of the majority of that coming in the in ground pool category, which is those packaged pool components and fiberglass.
As we see that slowdown of that buying decision and applied the both products right one getting pulled off the distributor shelves. The other would be coming out of our factories direct to the consumer.
So it's kind of more of that particular category than let's say liners <unk> covers.
Right, which are short cycle, but does that mean half of your sales deceleration of the destocking and half is <unk>.
Fiberglass as we try to think about.
What the core trend is.
And then Rabat seasonality I mean.
We're trying to discern what seasonality means because you've earned basically your guidance and EBIT dot already so does that mean that I mean.
One in <unk> naturally or weak weaker quarters should we assume that business.
Perpetuity is always going to have.
Very thin EBIT margins.
Our margins I think that's what people are trying to understand certainly myself here I appreciate it.
Yeah. So I think there is yes that was a little bit more helpful. Ken in terms of where you're going.
Again, let's just say the slowdown is the majorities.
In ground pools, and it's probably up roughly two thirds, one third split between that the destocking with the panels in distribution versus maybe just a slowing down of the homeowner decision on the fiberglass purchase in the last let's say.
Month, and a half two months of the quarter.
And again historically, if we look at this business with Q4 and Q1 being the widest quarters. They also historically been the lightest EBIT absolute EBITDA dollars quarters, and probably the weakest margin quarters.
Think about right as the volume dips off in your light quarters, you still have all of that fixed cost basis with our facilities, we try to retain a lot of our labor. So that when we come into Q1 right that season starts to ramp very quickly Q1, historically has been bigger than Q4.
We ramp up right distribution starts to take the products.
And opens in the South February March and everything ramps, so framed it up that way.
I can't remember if it was Matt are raised who asked the question about Annualizing <unk> going forward clearly you can't do that.
You got to kind of think of Q4 is the lightest Q1.
The second lightest in the bulk coming in the middle of the season Q2 Q3.
And I would just reiterate our overall.
Adjusted EBITDA margins the strength there.
And our ability so even though you have that seasonality. If you. If you think about what we've been able to generate and even the numbers.
In total we're talking about this year, it's quite positive.
Thank you gentlemen.
Youre welcome.
Again, if you have a question. Please press Star then one the next question is from Susan Mcclary with Goldman Sachs. Please go ahead.
Thank you good morning, everyone.
Susan.
My first question is thinking about price versus volume for next year. It clearly prices led a lot of the revenue growth that we've seen.
And in 2022, as we think about the forward quarters can you talk to the ability to see.
Again, the pricing that you realized and also how youre thinking about what will be the key drivers of the of the revenues next year between price and volume.
Yes, Susan it's Rob so.
Thanks for the question.
Really talking about 2023, now we're not prepared to do that.
It's just too early but what I would say is we're always looking at our value proposition and where are we in on price. We remain nimble to adjust that we do feel confident today, where we are we are ahead of inflation and we think our pricing has been.
Set appropriately so far.
Okay.
And when you think about the macro and the demand that you've been talking about can you speak to the ability to adjust at Kingston and some of your other facilities that are coming online too.
To be in line, but the demand environment.
Yes, so there's a lot of what we've been doing here in the second half of 2022 has been adjusting shift schedules at facilities production planned level trying to balance our production to the demand outlook.
And keeping inventories and when I say, a healthy position to maintain our industry, leading lead times and service levels as we look at at the Kingston decision, particularly.
We would like to get that facility up and running in online there is a great market in the Kingston.
Ontario with fiberglass pools the conversion we've done there.
It will help with lead times service and cost because we won't need to be shipping pool, the up into that market anymore. It will allow us to rebalance our focus on the other facilities in the U S and help our lead times there as we're driving leads and demand to our dealers.
And look at the new facility coming online, we can clearly ramp from a personnel standpoint, and how many days, we would fit out moulds and gone to kind of level of smaller capex decisions. So.
So we can be prudent with that one and similar to our decision to replace the Odessa, Texas manufacturing capacity right, we had a pretty significant hole in the southwestern part of the country shipping in from from other locations. This will give us the ability to attack it really great market.
And a good location lower the cost to serve for our dealers and really drive the conversion.
Right cool market there.
So I think we'll continue to balance and monitor we want to we want to stay focused on the long term as well right because we still believe in our long term growth rates on the outlook.
Lead generation all of the dealer sign ups, we've been doing and I think more importantly, the fact that we have seen fiberglass outperform all cycles of the market and broken up and down type environment.
Yeah.
Okay. Thank you.
Youre welcome.
This concludes the question and answer session I would now like to turn the conference back over to Scott for any closing remarks.
Thank you again for your time on today's call. We really appreciate your continued interest and support of laid them. We look forward to providing further updates on future calls and for everyone who has served our country with veterans day coming off just wish everyone. A happy veterans day, and I wanted to thank everyone for their service to our country and I Hope you guys all have a great.
Rest of the day.
Yes.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.