Q2 2023 Quaker Chemical Corporation Earnings Call
Greetings welcome to Quaker how in second quarter 2023 earnings Conference call.
Question and answer session will follow the formal presentation.
If anyone should require upgrade your assistance during the conference. Please press zero on your telephone keypad.
This conference is being recorded.
Over to Jeffrey snail, Vice President of Investor Relations Mister style, you may begin.
Thank you.
And welcome to our second quarter 2023 earnings Conference call.
Joining us today.
President and Chief Executive Officer.
Our executive Vice President and Chief Financial Officer, and Robert Trump, Our General Counsel.
Comments relate to the financial information released after the close of the U S market yesterday August 1st 2023.
Press release and accompany slides can be found on our website.
Prepared commentary and discussion during this call may contain forward looking statements, reflecting the company's current view of future events.
[noise] effect on Quaker houses operating and financial performance.
These statements involved uncertainties and risks, which may cause actual results to differ the company is under no obligation to provide subsequent updates to these forward looking statements.
Presentation also contain certain non-GAAP financial measures and the company has provided reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures in the appendix of the presentation materials, which are available on our website.
Digital information please refer to our filings with the S E C.
It's my pleasure to hand, the call over to Andy.
Thank you Jeff said good morning, everyone.
In the second quarter, we once again executed well advancing are key strategic and.
Financial objectives.
<unk> on our stated commitments despite persistent macroeconomic challenges.
We drove another consecutive quarter of double digit increases and adjusted EBITDA non.
non-GAAP earnings per share it generated strong operating cash flow.
These results underscore our commitment to executing on what we can control.
Preserving a strict focus on prioritizing value added services and solutions for our customers.
I continue to be pleased with the financial and operational performance over the last several quarters.
I'm confident we have the right strategy to capitalize on the momentum we have both.
Net sales in the second quarter increased one per cent to $495 million. This.
This year over year improvement in net sales was primarily driven by executing art value based pricing initiatives, which were implemented to offset the continued inflationary pressures impacting our cost to serve.
Volumes decline compared to the prior year and were similar to the prior quarter, we continued to improve our competitive position with new business wins at higher levels of value training at the top of our longterm range and offsetting volumes, we've declined due to our margin improvement initiatives.
Market conditions, primarily in steel in general industrial continued to be solved.
Are diversified portfolio and emphasis on profitable growth through new business wins has provided resilience in this challenging environment.
Taken together are volumes are tracking directionally in line with the specific customers and markets and regions research.
We have made very strong progress on our gross margin journey.
Gross margins of 35.9% improved more than 500 basis points compared to the prior year and more than 100 basis points compared to the first quarter of 2023.
The pace of the recovery in our margins reflects the actions we put in place to manage our portfolio as well as a modest improvement in our basket of raw materials and positions us well for an eventual recovery in our markets.
Despite the persistent and challenging macroeconomic backdrop, we have made significant progress once again, improving the profitability of our business, while balancing customer relationships and the longterm growth aspirations of our business.
Our focus is clear delivering for our customers by investing in innovation capabilities and tools, while also balancing the cost to deliver that value and our customer intimate model.
In the second quarter, we generated adjusted EBITDA of $80 million and one dollar and 93 cents of non-GAAP diluted earnings per share.
A double digit increase compared to the prior year.
Our financial results are primarily driven by the recovery and our gross margin and the team's execution managing the business through the ongoing uneven and complex market environment.
We generated $78 billion of operating cash flow in the second quarter and $116 million in the first half of 2023.
We also remained focused on strengthening our balance sheet.
Year to date, we have paid down approximately $73 million of debt and announced our 14th consecutive annual increase in our dividend highlighting.
Highlighting the confidence in our cash generation capabilities.
These results in the second quarter and first half of 2023 represent a strong start to the year.
Turning to our segments, we delivered improved margin performance and all of our segments on a year over year basis.
Volumes declined at all segments, and where most pronounced in the Asia Pacific and he may have segments because of softer and market conditions and are targeted margin improvement initiatives.
We continued to strengthen our portfolio focusing on the products services and solutions that yield the greatest benefit for our customers.
We are confident our approach enhances our ability to grow profitably with our customers, especially as underlying demand recovers from current lower levels.
All segments delivered a double digit increase in earnings compared to the prior year driven by an improvement in margins.
We expect further progress with our margins both from cost and efficiencies, while balancing initiatives to drive profitable growth.
As we look ahead, there is a considerable amount of uncertainty in the second half demand environment and limited visibility.
We anticipate a continuation of the current difficult and even market environment in the third quarter with customer and regional differences.
We expect adjusted EBITDA in the third quarter will be similar to the second quarter translating into another quarter of solid year over year earnings growth.
Additionally, we anticipate gross margins in the third order will remain relatively stable as we balanced pricing with the raw material environment and our costs to serve.
We also expect another quarter of solid cash generation further delevering, our balance sheet and strengthening our financial position.
Switching to the full year, we are focused on advancing our strategy contemporizing the organization and enhancing the value we provide to our customers.
The current uncertain and uneven backdrop is likely to persist through the end of the year.
That said, we have made solid progress on our financial objectives, including delivering a considerable improvement in our margins translating into expectations for strong earnings growth and cash flow and 2023.
We have built momentum in our business investing in targeted profitable growth initiatives and positioning the company to deliver any market environment.
Quicker how it is built on a foundation of earning value through a differentiated customer intimacy model.
As a leadership team we are energizing the organization to enhance our processes to efficiently and effectively drive deeper engagement.
This will enable us to better deploy the quality of our broad and leading portfolio and realized even more value for customers.
Our growth culture is healthy and we continue to make progress with our key profitable growth themes <unk>.
Defectively leveraging our global scale invest.
Investing to deploy digital tools and analytics across our platform.
And leading and sustainability.
We are also committed to our long term enablers for profitable growth and we will be vigilant and the current and uncertain environment. Prior.
Prioritizing investments and actions to meet the long term needs of our company and our customers.
Moving forward and building on our foundation, we are refining the organization taking advantage of our global scale.
This has for example help to improve our operating performance and the you may a segment, despite weak and market activity in the region.
These actions, including the cost and operational improvement initiatives underway are heightening, our competitiveness and advancing the intimacy of our model.
This is essential as we more exactly and efficiently delivered what customers already value and also advanced new opportunities like cross selling and targeting new global growth areas.
We're also being more thoughtful with data as part of our Digitization focus.
To deepen our relationships with new and existing customers and suppliers.
As I highlighted last quarter, we are making progress with our fluid trend software platform.
Which will help transform how we deliver customer intimacy in the future and further expand our value proposition.
In April we held a global event to advance efforts on energy management.
As well as reducing waste and water consumption at our sites.
Enforcing our drive to lead and sustainability for our company, our customers and our communities.
Recently, we invested in solar energy at our site in India.
Covering 80% of their energy use and eliminating approximately half of that sites greenhouse gas emissions.
Additionally, our R&D and commercial teams continue to partner with customers to expand and deploy our portfolio of sustainable solutions, enabling our customers to intern achieve their goals.
These important initiatives are driven by our overall strategy and will help us grow with new and existing customers expand our markets and lead our industry to a more sustainable.
In summary, there is clear positive momentum at Quaker Hal.
We are making progress on our financial and operational priorities.
We have a strong market position and are fully committed to this industry, which has attractive longterm growth characteristics.
We are supporting our customers as they transition to pursue new opportunities and tackle the secular challenges impacting their businesses.
Including pursuit of new applications, managing labor and skill shortages addressing increasing demands on costs and productivity and delivering on their own sustainability objectives.
The quality of breath of our product technology and solutions portfolio is unparalleled and we are uniquely positioned to earn value for and with our customers.
We are also prudently investing to advance our growth initiatives, our people and our innovation pipeline.
This includes developing our talent supply chain of digital capabilities to redefine how we most effectively and efficiently delivered customer intimacy for today and for the future.
We remain fully committed to unlock your potential including the earnings power and the cash flow generation of the enterprise.
Lists of the operating environment.
I am confident in our strategy, our leadership and our people and have continued conviction that we will execute and achieve our goals.
With that I'd like to pass it over to Shane to discuss the financials.
Thanks, Sandy and good morning, everyone.
In the second quarter, we delivered net sales of $495 million, which was a 1% increase compared to the prior year.
This increase was driven by an 11% increase in price a mix, but offset by 10 per cent decline in volumes.
Similar to recent quarters, the primary driver to our net sales was an increase in our selling prices.
The decline or a volumes was primarily driven by softer market conditions. The ongoing war in Ukraine, and the wind down a previous tolling on volumes, we divested as part of the combination.
Sequentially, our sales declined slightly at approximately 1%, which was due to a slight decline in both volume and price index.
Gross margins in the second quarter, or 35, 9%, which represents an increase of 540 basis points compared to 34, 34% in the prior year and 120 basis points compared to 34.7% in the first quarter of 2023.
This improvement reflects continued execution on our pricing actions as well as a modest decline in our overall raw material costs, which remain elevated.
Looking at our SG&A, excluding one time items, we had an increase of $8 million or 8% compared to the prior year period at $2 million sequentially.
This is primarily reflects the year over year inflationary impact on our labor costs, the timing and levels of our annual incentive compensation as well as impacts due to foreign exchange.
For the full year 2023, we continue to expect <unk> to high single digit inflation on our labor costs, which is net of the targeted cost actions we are implemented.
We remain on track with these targeted cost and operational efficiencies, which we expect will be implemented by the end of 2024.
Overall, we delivered $80 million adjusted EBITDA in the second quarter, which is an increase of 37% compared to the prior year.
Our adjusted EBITDA margins expanded to 16.2%, which was a 430 basis point increase compared to the prior here and a 40 basis point increase compared to the prior quarter.
These improvements reflect the progress we've made advancing our strategy and balancing our near term priorities with long term profitable growth initiatives.
Switching to our segments the milk.
This delivered year over year sales growth, primarily due to a double digit increase in price index, partially offset by a modest decline in volumes, which was generally in line with our underlying markets.
Our media net sales declined modestly compared to the prior year as a double digit increase in price of mix was more than offset by declines in volumes due to a continued soft demand environment.
Foreign currency with a slight tailwind for this segment.
Net sales in Asia Pacific also declined compared to the prior year is increases in price and mix, where more than offset by decline in sales volumes.
Also foreign currency was a single digit headwind to the Asia Pacific segment.
The overall volume drivers for each of our geographic segments were relatively consistent.
And market conditions in the second quarter were softer than the prior year also are volumes were impacted by our value based pricing actions, which were offset by new business wins as well as the expiration of the total agreement as part of the combination and the impact of the ongoing war in Ukraine and are in the segment.
Sequentially net sales increased in Asia Pacific, but at a slower pace than expected net sales were consistent with the prior quarter in the Americas and the declines in India.
We delivered double digit year over year increases in operating earnings and all of our segments, primarily due to our margin recovery efforts.
Overall performance was strong in the first half of 2023, and we are well positioned for future growth.
Below the line.
Our interest expense was higher in the second quarter compared to prior year and was flat sequentially.
Our cost of that in the second quarter was approximately 6%, which was largely in line with where we exited the prior quarter.
Are accepted tax rate, excluding non-recurring and not four items was approximately 27% in the second quarter, which was consistent with our expectations as well as our forecast for the full year 2023.
Our second quarter gap diluted earnings per share or $1.63 and a non-GAAP diluted earnings per share $1.93.
This represents a 46% year over year increase which was primarily driven by the improvement in our operating earnings.
Switching to liquidity, we generated $78 million cash from operations in the second quarter, we're off to a strong start with cash flow generation and conversion in the first half of the year generating $116 million of operating cash flow.
This represents a year over year improvement of $125 million due to our stroll earnings and an improvement in working capital efficiency.
Also during the second quarter, we invested $11 billion in capital expenditures.
$8 million in dividends and reduced our gross debt by approximately $60 million.
A capital allocation priorities remain consistent.
Capital through dividends further strengthen our balance sheet and invest both organically and inorganically to continue to grow the business.
For full year 2023 are anticipated Capex spent remains unchanged at approximately 1.5% to 2% of net sales.
We are committed to sustainable increasing our dividend last week, our board approved the dividend increase of approximately 5%, which represents our 14th consecutive annual increase which highlights the conviction and our cash flow generation.
Overall, a balance sheet liquidity remains strong.
At the end of the second quarter was $696 million in our net leverage ratio improved to two three times adjusted EBITDA compared to 2.7 times at the end of last quarter.
We have ample opportunities to drive both organic and inorganic quote we will remain prudit with these investments balancing the macroeconomic environment with our overall short and long term outlook the company and shareholder returns.
To summarize we executed well in the first half of 2023, we delivered strong earnings growth and cash flow and it continued uneven macroeconomic environment.
We are well positioned within our various and markets are focused on driving long term profitable growth.
While we expect the significant uncertainty and tepid demand environment to persist through the end of the year. We are confident in the earnings power of the organization committed to our strategy and excited by the momentum we have bills.
With that I'll turn it back over to him.
Thank you Shane the positive momentum in our business as evidence and the entire Quaker hunting team is very focused on executing for our customers and our company.
With that we'd be happy to address your questions.
Thank you I think I would like to ask a question. Please press star one on your telephone keypad.
<unk> indicate your line into my question Q, You May press Star Count as seen with ice cream of your question finally.
And stop participate changing speaker Clinton that it may be necessary to pick up your headset before.
<unk>.
Our first question is from Mike Harrison, Let's see part research. Please proceed.
Hi, good morning.
One of my one of my.
Was hoping that you could talk a little bit about what you're seeing in volumes. It sounds like things were sequentially pretty flattish, but in terms of that 10% year on year decline I'm curious what were you seeing in terms of underlying market performance.
How much of the impact was may be related to these stocking and what was the impact of some of the value based initiatives square it sounds like maybe your strategically walking away from some business, where you're not getting appropriate margin performance.
Yeah. Thanks, Mike.
Really good question you write sequentially, we've actually had some decent stability here now for a couple of quarters, but of course, when you looked on a year over year basis. There's some components that explain the differential you're seeing their first I'd start off with just tough comps in particular in China in the second quarter.
Last year, there were still the rolling Lockdowns happening, which was really playing havoc with with some of our customer order patterns and he may really the impact of the war had not.
Fully.
Developed and we had not made our decision to to exit from Russia. So those components are a little bit different our underlying markets. We believe are down mid single digits. It depends a little bit based upon particular market segments. There are some that are improving some better that are kind of soft and then within our customers themselves.
There's been a little bit of unevenness, I would say to order patterns as they are trying to manage their cash in their inventory. So while we have good visibility to exactly what our customers are needing as I go down their supply chain.
They're they're trying to manage that a little bit better I'd also highlight that we still had a little bit of lingering tolling business from the combination that was in last year's numbers to your question, though we have been using the value based pricing to really make sure that we're earning the value from our customers and that has created.
Mid single digit kind of turn for us, but we're actually offsetting that and cumulatively, our new business wins at much higher levels of profitability.
Have have played through so we feel like we've got the right strategy, there and we're balancing it appropriately so none of all of that we believe we're in line with what's going on in our underlying markets, which again are a little bit uneven.
Pretty complex environment.
And we're not seeing any indication of a significant shift or fundamental shift going forward.
Alright, and then the the price mix number came in a little bit higher but I think some of US. We're looking for just curious from this 11% a year on year level, how would you expect back to trend in the second half assuming that Ross R. C.
Bill coming down a little bit and and maybe putting some pressure on that pricing number.
Sure My Uhm, so you're right in the second quarter.
We did see some progression, obviously and gross margins as we've talked about this is a journey.
And it won't be a linear journey as we move towards our long term expectations.
To get back to the pre pandemic actually expected levels, we did see some modest raw material using in the second quarter, Although I would highlight still very high levels were talking in low single digit.
Adjustments, we held price relatively well and we did have some mixed impacts where we gained some higher margin business and some of the business that churned was was lower margin business. So.
Kind of as we as we anticipated and as we look forward to the journey continues so we're constantly balancing the value will providing for our customers and the way, we do our pricing and that value and use we're still driving towards those long term expectations. We have work to do and I would highlight that it's not just price.
So while while we target getting the value for the services. We provide we also have opportunities to improve our efficiencies to improve our new business wins again at the higher levels and.
Continue to work to get to our long term goals, but it won't be linear and in the third quarter. We think given all the dynamics, it's gonna be pretty similar to what we saw it in second quarter.
Alright, and then I guess just in terms of thinking about EBIT staff for the third and fourth quarter. You said Q3, it should be pretty similar I'm curious what are some key.
<unk> drivers that could take that to be higher or lower sequentially and then I guess as we think about the second half really trying to understand what your views are and expectations are on gross margin trajectory.
A really really nice step up in Q1.
Another sequential step up here in queue too.
Is that something that we should expect to continue as we get into the second half.
And drive that EBITDA, even higher in queue for than than you expect in Q3. Thanks.
Sure My so yeah on the EBITDA basis.
To start off with the beginning it's still kind of a complex environment with a lot of unevenness as I indicated some some markets up some down and the visibility is a little more clouded than I would even indicated in normal time so that.
That complexity kind of continues if we think about our regional segments.
Ana in Asia has been a little slower and the recovery than I think any of us anticipated and we don't see any significant movements, although we're cautiously optimistic that that could improve as we move forward.
We had a little bit of Lumpiness between Q1, and Q2 that has now kind of even out but at very low levels compared to historical rates and of course in the third quarter. We have the challenges of some of the August vacation time that occurred in the mail.
And the Americas, we've been fairly resilient when we think that that continues again, there will be some segments that are improving and some that are soft.
But none of that is we think are gross margins are gonna be stable as we continue we'll keep working on that journey to to improve but it's not going to be linear and as I indicated that that will that will move forward as as we go through the year.
None of that is we expect similar earnings in the third quarter and continue to generate strong cash flow. So we see a continuation of some of the pattern we've seen in the second quarter.
That sounds good.
Yeah. Thanks, Mike.
Our next question is from John Tallaght Tang, let's see T. S. Cantonese. Please proceed.
Hi, guys. Good morning, and thank you for taking my questions.
Hi, John .
But on the gross margins heading in Q3.
That's a function of lower seasonal volume, maybe an uncertainty in the macro and not not in your town plateau.
Your ability to drive value price and next is that correct.
Well I would say are the.
The journey going forward is always gonna be around balancing the value, we're adding against the cost to serve with our customers. We use a value and use approach with our customers on their total cost of ownership and will continue to do that we still think there is room to go overall to get towards our long term expect the targets.
But pricing won't be the only way that we get there we're going to continue to work on the mix with our new business wins and drive some efficiencies and as I mentioned before the key thing is this is not going to be linear it will be a progression towards our goal.
But we're pleased with the fact that we have significantly improved our profitability and we're going to build our growth off of that.
Got it now you've done a great job so far.
She had a question for you just great cash conversion in the quarter should we expect more upcycling forward or was that gonna stabilize more to a more normalized paces and look out there.
Yeah. Thanks, John .
I mentioned in the script the strong conversion was based off of obviously good earnings as well as working capital inflow.
Maybe.
Maybe you just described we do anticipate similar EBITDA. So therefore similar earnings free you know from a working capital perspective.
Do you think there's more work to be done on all receivables payables as well as inventory that said, we still want to be in a position to provide value to our customers and making sure. We have continuity of supply and so we'll continue to focus on that working capital efficiency in January cash flow accordingly.
Okay. One more from me just given the performance on the castle and reduce leverage our are you gearing up to be more aggressive and capital allocation to the cross prospects M&A or anything of that that they might be out there.
Yeah. Thanks shot I'll I'll take that I mean, our capital allocation has not changed our strategy remains that find the best value for our shareholders as we've talked about before we are long term dividend provider and we've just in fact at the board approve an increase in that dividend.
Going forward, we're working on our debt pay down we've paid about $70 million year to date on that we continue to invest in the business itself on our growth themes around contemporizing, the business and drive in our scale and our Digitization and sustainability, but then of course <unk>.
Grow through M&A as a complement to all of that and.
And will continue to work or those opportunities in particular, where we've been very successful to take advantage of our model and our service capabilities by adding technology or a channel or geography play.
To serve more of our customers and more valuable way so.
We've made significant improvements on the balance sheets and I feel like we're in a good position available to execute against that capital allocation strategy.
Okay, great thanks to any kind of <unk>.
Hi, Joshua.
Our next question is from Lawrence and Alexander only Caffeine's. Please proceed.
High standards one for Lawrence.
You you guys mentioned, you kind of down with your mortgage. So I was wondering if your usual market share gains are being offset by the volume losses from price hikes, and if that's going to kind of continue.
Yeah. Thanks for the question. So we've always been balancing those new business wins as we've historically indicated we want to be operating in gaining 2% to 4% over whatever our underlying business is doing we've actually been pretty successful I'd stay in near the top end of that range. It is being offset though here in the short term with.
Some of the value based pricing, where we've chosen not to continue supporting some business that was at lower margins, but cumulatively were stolen that ahead on that and we believe that will continue to widen that spread as we go forward.
Okay and then.
You've mentioned that.
Softness across the board, but others are just kind of pointed to auto for one as as having still shrank does he still some restocking I was wondering if that particular market is is still performing well or if it's kind of down with the rest.
Yeah. Thanks for sure there are some pockets of softness and as we indicated as I indicated in the script steel and in general industrial is still relatively soft for us around the world. We are actually seeing some improvements and automotive an arrow and our grease business.
Continues to be pretty pretty positive as well. So it's a mixed bag that part of that complexity in the unevenness that I keep referring to but we're actually seeing some positive now these are still off of some relatively low basis, and we're pretty pretty pleased about the position. We have now as the recovery occurs in these.
Markets, we're going to be in a great position to be able to support our customers.
Alright, Thank you very much.
You're welcome.
As a reminder to star one on your telephone keypad, if he would like to ask a question.
Our next question is from to Antar sandwiched default. Please proceed.
Yeah, Thanks, and good morning.
You've touched on it a little.
Morning.
You've touched on this a little bit already but maybe just more specifically in China has there been anything, particularly surprising about the price plasticity that you've seen there or is that just something you expect from this market in general or more attributable to something more unique about your customer mix there.
Yeah, I don't think there's anything significantly unexpected I think just a little disappointment, but things have an improved more quickly.
Again, we saw a pretty with all the rolling Lockdowns in all of the supply chain interruptions, we saw a pretty soft second half.
Within Asia, and particularly in China last year, and that's just really not we're covered.
We we've been doing a pretty good job I believe on balancing the new wins that we're going after at much higher levels of profitability and trading off some volumes, we're constantly trying to strike that right balance.
I think we've done a pretty good job on that so China's been actually relatively stable now.
Or for the last couple of quarters. So we think we've we've managed that churn pretty well.
Okay. Now that's helpful. Thank you and then you know kind of back to the the market share conversation you know, obviously took a pretty big back seat during the supply chain crisis, and you know you're trying to get back on track with that but we are in a softer demand environment. So you just kind of speak about what opportunities you see there whether it's a cat.
That shop, or if it's gonna be kind of us.
Study trend back towards your targeted plus two 4% levels and then just kind of how do you think about balancing that against any kind of you know SG&A costs required to bring in new customers.
Sure. Thanks, that's it so.
The way the way I would would think about this is we've actually been operating closer to the top end of that range. Even during this period. It's just been masked by some of the volume losses due to the strategic pricing that we're doing so we haven't lost that focus we continue to pick up a new business and and it's at higher levels of profitability.
We're going to keep the team continuously focused on that and as things stabilized in the market recovers I think we're going to be in a great position. We're doing a really nice job to have just penetrating our customers I think we're finding more opportunities to add value as they are dealing with more and more complexity in their business and that's really allowing us to serve more of their knee.
And take advantage of the full capabilities of Quaker House.
When you think about SG&A I think we're always gonna invest for supporting the value.
That our customers need at the same time, we're gonna look at how we are how we efficiently take advantage of our capabilities and make sure we deliver that value in the most optimized way. So I think we're balancing those things to really make sure. We continue to take advantage of that long term strategy you about performing our market.
Excellent. It's good to hear and then just a quick one on did you did you did I.
Can't do it digitalization [laughter], it's too early that you're piloting now if you're willing to talk about them a little bit you know would you characterize the tools that are being piloted currently as ones that would be targeted to your larger more sophisticated customers are are these tools that you believe would be kind of.
Readily applicable to smaller operations.
Sure. So as I mentioned I think in the previous quarter, we've been deploying our fluid trend capability within our own laboratories as we're developing.
As well as with targeted customers. It's a it's a different group we have multiple segments in multiple applications that we are working with customers.
As I indicated a lot of our focus today is on the monitoring capability, what's the goal and subsequent phases to start getting more into the control and the optimization of customers operations and use of our products.
But we're we're going at it in a targeted way, but not in an isolated way, we're looking at different segments of different applications and making some progress.
Early days.
Alright, alright. Thanks.
Thank you.
Yeah I have no further questions at this time I'd.
And I'd like to turn the conference back over to Andy for closing comments.
Yeah. Thank you very much and I appreciate everybody's time, we're very excited about the future and appreciate your continued interest in Quaker <unk>. Please reach out to Jeff. If you have any follow up questions. Thank you.
Thank you. This will conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.
[music].