Q2 2023 XPEL Inc Earnings Call
Greetings and welcome to the expel Inc. Second quarter two.
2023 earnings call at this time, all participants are in a listen only mode and a question and answer session will follow the formal presentation.
If anyone should require operator assistance during the call. Please press star zero on your telephone keypad.
Please note. This conference is being recorded I will now turn the conference over to your host Mr. John Nesbit of IMS Investor Relations, Sir you may begin.
Good morning, and welcome to our conference call to discuss <unk> financial results for the second quarter of 2023 on the call today, Brian <unk>, President and Chief Executive Officer, and Barry Wood ex Bell Senior Vice President and Chief Financial Officer will provide an overview of the business operations and review the company's financial results immediately after the.
<unk> comments, we will take questions from call participants I'd.
I'd like to take a moment to read the safe Harbor statement. During the course of this call we'll make certain forward looking statements regarding <unk>, Inc, and its business, which may include but not.
But are not limited to anticipated use of proceeds from capital transactions expansion into new markets and execution of the company's growth strategy such statements are based on our current expectations and assumptions, which are subject to known and unknown risk factors and uncertainties that could cause actual results to material.
Differently from those expressed in these statements. Some of these factors are discussed in detail in our most recent Form 10-K, including under item one a risk factors filed with the Securities and Exchange Commission. Thanks, Bill undertakes no obligation to publicly update or revise any forward looking statement, whether a result of new information.
Future events or otherwise, okay with that I will now turn the call over to Ryan to go ahead Ryan.
Thank you John and likewise, good morning, everyone welcome to the second quarter 2023 call, but clearly and obviously Q2 was another great quarter for us record revenue gross profit EBITDA and net income.
For the quarter grew 21, 9% to $102 2 million, so as our first ever quarter, where we exceeded 100 million in revenue, which is a great symbolic milestone for us, especially for those of US who were here when we had a.
Quarter was $3 million in revenue so great quarter.
The U S region had another.
Solid quarter revenue growing 23% compared to Q2 2022 to $59 1 million that was up sequentially, just under 16% and about 15% over our previous high quarter for the region, which was Q3 of last year, New car inventories have continued to improve benefitting our dealership surge.
<unk> business and our OEM production has improved with the Oems that were attached to so that's helped the OEM business and the new car sales overall have performed well in spite of interest rates, which is good for the business overall and good for the aftermarket.
You can probably illustrates some element of pent up demand from the past few years, which many had expected.
Why was another good month for new car sales. So we see that momentum continuing you know I think it's fair to say that we're probably off the fever pitch from a year ago in the aftermarket, but it's really not showing in our results. So all that to say that if we were one year ago. I think you would see even better results, we see today, but hard to pick.
Part of what's happening in the business. So we're very happy with it.
All of our regions really excluding China had record or near record quarters in the case of Latin America.
And in most cases these record revenues significantly exceeded their previous odd for example, the continental Europe finished at $9 7 million for the quarter, which was just under 22, 22% higher than the regions previous high.
China performed consistent so our expectations for the quarter as we've talked about I think in the last call revenue was up two 5% over Q2 2022 we thought maybe it'd be down single digits, a little bit better than that but not not not significant but obviously that was an easy comp.
China as we were in the throes of the challenges in the prior year. So.
That's all to be expected sequentially, China was up 22% to $8 1 million, which like I said is where we expected the macro news out of China, Hasnt really changed much I think it's still mixed for those of you sort of following yet and so our outlook for the region for the rest of the year hasn't changed and that we expect a sequential quarterly increases in Q3 and Q.
For the total year, our total revenue for the year relatively flat to last year, but that improving performance as we go through the year and in the back half of the year like we've been talking about now for a few quarters.
Well as I mentioned previously we're in the process of.
Putting our corporate team in in China.
For better visibility to assist the distributor and also afford more Asia because positioning in general to give the whole region, where we're focused but inclusive of China and demonstrating you know what we think we can grow in China by doing that in China. The timing of the China orders versus deliveries will be important in terms of how the final two quarters of the year.
Shakeout.
That's a continuing dynamic for us where we have larger deliveries that can shift from one period to another.
As part of the sell in versus sell through dynamics that we don't have elsewhere in the world well expectations for new car sales seem to be mix for the rest of the year really when talking about the U S market, if we take a rather conservative view of that.
Which we haven't seen in the results, but some are talking about it along with uncertainty in terms of China deliveries our expectations for Q3 revenue will be right around or slightly above Q2. However.
However, if the business remains more robust like the first half of the year and the <unk> the timing of the China deliveries are favorable then we would expect Q3 to be higher than Q2 revenue by several million dollars. So I think theres. Some some uncertainty as to the timing of that still for the rest of the year, but it should be solid either way and our estimated total Daniel.
Growth for the year right now is around 22%. So we're still in that 20% to 25% range and that difference plus or minus to that is probably going to be a the timing in terms of China as I just mentioned so still set up they have a really good year.
Our international expansion remains a top priority and a priority for reinvesting our cash that we're generating we've had tremendous wins in Australia since acquiring our distributor are that the business is now two to three times larger than it was obviously off of a small base, but in under a year and we plan to take our labor programs to Australia within the next year. So you kind of see.
All facets of our business, we think are for the most part equally applicable in all regions of the world. So well labor is really kind of dominated the U S and Canada, we see no reason to limit it in that way.
Other points in Asia, Latin America, India also use your priority markets for us for deeper investment and engagement using everything we learned in the other markets, where we've gone direct in China.
It is a particularly interesting comparison, especially when looking at strategy for a market like India. So this is an area of tremendous work for us and we actually expect to reorganize the company in a substantial way around these priority markets sort of in the next the next half a year. So we see tremendous opportunity in these and in a lot of these <unk>.
Markets are there's a core business that is where president the business comes to US and then obviously you have to work much harder after that core but that core exists and it's a very healthy thesis for why we should invest and be direct in many markets in the world.
We had a nice gross margin performance in the quarter gross margin coming in at 43% I mean, very pleased with the gross margin initiatives that we've had in the results.
We continue to see reductions in material costs for some of our products, which is one of the biggest contributing factors to this gross margin expansion along with our channel mix, where we're growing and more profitable channels, and then product mix, where some of our new products are higher gross margin.
We've also been a good partner to our suppliers and that's benefited us in the gross margin line in terms of negotiating discounts and other concessions.
The global supply chain continues to recalibrate, and we sort of get out of the position that everyone's been in over the past two years. So that's a contributing factor as well.
It means it remains possible that we'll finish the year a bit higher than our forecast of 42%.
But we're still holding to that you are not necessarily expecting to end. It at 43, although it is possible. We do have expectations of driving gross margin incrementally higher from that 42% in the next years and this is in part based on the future revenue mix, we've got an increasingly complicated mix of revenue each with their own drivers.
And that's going to be a driver of what that sort of terminal gross margin can be but we do see it going higher than where it is kind of over the next 24 months I would say.
We continue to see great leverage in the business during the quarter EBITDA growing 35% to $22 4 million net income growing 32, 3% to $15 7 million. These are both records for the company EPS was <unk> 15 cents a share for the quarter and as Barry will mention later, excluding costs related to our dealer conference which was.
Very expensive, but also very amazing in the quarter, which was out of period and that is compared to the prior year EPS would have been 61 cents for Q2, so really good number there.
This year, we've really been investing heavily.
In our team.
Specifically software technology product and marketing are really in the sort of SG&A line item and this is to deliver new products and new services over the coming years. So I think you're seeing the overall growth of that cost structure, but we're more than offsetting it with gross margin improvement and some of that SG&A growth is actually.
Benefiting the gross margin profile of the businesses, we operate better but some of it is just the net investments, which was offset by the incremental gross margins. We're generating so either way. We found this could be an important year to double down on our investment in these key areas to set us up for the future and we've not altered.
Any of those plans that we had coming into the year looking at the macro or anything else. So you're really seeing sort of this whole level of investment for us. Some of it is probably shifted towards the back half of the year, our second quarter on just with timing of new hires and things that we talked about that on the on the first quarter call, but that just reflects the tie.
<unk> and scaling the head count and scaling those physicians more than it does a lack of desire or change.
The change in decision to make those investments.
Barry will talk more about later, we generated almost $27 million in operating cash for the quarter, our inventory levels not growing like they were a days on hand are reducing modestly through the year and then some of the just timing issues timing items with the other elements of working capital. We saw in the first quarter sort of reverse. So I think that you know this has been a big question.
Over the past few years as we've seen these inventory levels ramp and the question of well you know did they keep growing or how much do they come down and.
We've said that we'd be very happy if they stayed flat or came down modestly. So long as we saw some reduction in days on hand, and I think youre seeing that now and so you're seeing this trend that's consuming massive amounts of cash in the inventory reverse to where we're generating lots of cash even without reducing inventory and AR in a dramatic way.
One thing we know that we don't want to do in this business is to run out of inventory because the wheels fall off the wagon quickly that happens so it couldn't be happier about that we do expect that to continue going forward.
Our acquisition pipeline is full we're we remain very active on this end and as we get asked are we do expect to be able to utilize all of this cash to reinvest in the business and primarily on these acquisitions and to a lesser much lesser extent on them.
Some additional capex that that we think can drive further gross margin performance, but given the small scale of the acquisitions that make up most of what we consider which limits the sort of existential risk to the company. We're looking at these acquisitions on an equal footing to internal reinvestment in the business because from a practical and financial standpoint Theres little.
Difference in acquisition strategy predicated on much larger belts, we would have a different calculus, because it would be a completely different game. So in any event, we do expect to be able to use this cash certainly at the next 18 to 24 months without issue.
Speaking of one area, we've been investing in adapt nexstar, our new version of our data platform, we'd be completely migrated to the new platform by the end of Q3 and then all the new features that we're adding which are related to the business operations pricing marketing. These will all our own.
Being released in this new platform obviously.
Customer responses has been great and we really see this as an important tool to help our customers increase their profitability to give them the confidence to grow and reinvest in their businesses and then to allow us to serve them better part of what we're doing here is just it's just setting ourselves up to success can be the absolute best partner to them in.
Addition to what we can do for their business up so really great quarter for us.
Thanks to our whole team everyone pushes really hard here and there's never a downhill mint and have delivered outstanding results and I'm thankful that Oh, I'm thankful to all of you and to all of them are for for all of your contributions so with that I will turn it over to Barry and then take questions. Barry go ahead.
Thanks, Ryan and good morning, everyone. Just a couple of comments to add on revenue.
Product line perspective, combined paint protection film in Cutbank revenue grew 16.7% in the quarter and was up sequentially a little over 14% our window film product line revenue grew 28, 7% corner over quarter to $20 3 million, which represented 19, 9% of our total revenue.
Which was a record for quarterly Robyn window film revenue and just about.
So just a little under 29% higher than our previous high.
Included in our window film product line is our architectural window film product branded as vision <unk>.
Revenue for the vision product grew a little under 52% to $2 4 million, which represented approximately 12% of total window film revenue and two 4% of overall Robyn. So so really good performance there.
Our OEM business had a nice quarter with revenue growing a little over 62% versus Q2, 2022 to $14 3 million, which was up sequentially 22, 5% versus Q1.
Our fusion ceramic coating product revenue, which is included in our other revenue line grew a little over 81% quarter over quarter to 1.8 million and represented just under 2% of total revenue for the quarter.
Finally, our total installation revenue combining product and service grew 31, 5% in the quarter and represented 16, 9% of total revenue and on a year to date basis total revenue grew 28%.
Our Q2 SG&A expense grew a little over 38% $23 8 million and represented 23, 3% of total revenue and as Ryan alluded to included in our Q2 SG&A was approximately $1 5 million of net costs for our annual dealer conference held in April which was out of <unk>.
For comparative purposes, as our 2022 conference was held in Q1 2022 now.
Normalized for that SG&A would have grown approximately 29% for the quarter.
Representing approximately 22% of total revenue.
And Brian talked about the good leverage we saw in the quarter and that was even with the dealer conference net costs factored in.
P. S was 57 cents per the corn on a year to date basis EPS was <unk> 98 cents.
And if you normalize for the dealer conference in the quarter dealer conference costs, EBITDA would have grown 39% quarter over quarter and net income would have grown approximately 42%.
On a year to date basis, EBITDA grew 36% to $39 5 million and net income grew 37, 9% to $27 2 million.
Cash flow from ops for the quarter was $26 7 million, which was obviously a very solid cash flow performance as we discussed on our last call. We expected positive impacts to our operating cash flows as our inventory levels normalized and we certainly saw that in Q2, we saw a nice improvement in our cash conversion cycle for the core.
Order, owing mainly to our improved inventory days on hand, and we ended the quarter and a net debt zero position, which is a function of our strong cash flow in a corner.
And I should also mention here that we're certainly not opposed to some modest leverage especially for deals with very favorable valuations like we've been able to do in the past. So we will continue to optimize our capital structure as we go forward and we're in a very strong financial position to continue to execute on our strategy.
So another really good quarter for us and we look forward to closing out the second half strong and with that operator, we'll now open the call up for questions.
Certainly the floor is now opened for questions if you'd like to join the queue to ask a question. At this time you May press star one on your telephone keypad.
Do ask if listing on speaker phone. This morning, they can pick up your handset while asking your question to provide optimal sound quality once again that'll be star one on your telephone keypad at this time, if you'd like to join the queue to ask a question. Please hold the moment, while we poll for questions.
And the first question. This morning is coming from Steve Dyer from Craig Hallum. Your line of Lai. Please go ahead.
Thank you congrats guys another another very good quarter.
Clearly over the last couple of years your ability or the desire from dealers to preload. This on inventory.
Talking primarily about paint protection film, but I suppose also a windows 10, maybe in some instances that was obviously a big driver.
Are you seeing kind of with with inventory sort of a little bit more normal or are you still seeing the same appetite to do so or any changes there.
Yeah.
Yes, Steve.
You know, we're really not and if you look at paint protection film. The vast majority of that for US is has not been pretty low and it's actually a relatively small percent owing to.
The level of aftermarket sales that they drive that the windows business is slightly more preload focused in terms of what we what we've seen.
But we've not seen that trend change and in fact, we've seen an interesting in pre loading maybe continue or even accelerate in some cases as the market adjustments and sort of the the freewheeling nature of the business over the past two years.
As with the surety of inventory as it has become more challenged in the and the the margins just aren't quite there like they were so we haven't seen that change but.
But we're not overly exposed to it and you know I think our approach in terms of.
Working with dealerships and in our whole aftermarket network working with dealerships that we really want to meet them, where they are and for summer preload option is good for some that's not the right answer and then they may want to sell it on the backend and then in some cases they want to do both so I don't see that as a huge driver for us or a huge.
Risk at this point.
That's great.
Are you seeing just I guess over the last couple of years cobalt inventory changes et cetera.
Any change in how much of the vehicle clients or customers are wrapping I know, sometimes it's put into like a certain package with a you know front of the hood and front bumper and back to the the mirrors or something like that but any sort of larger change in how much they're.
Robin.
Well, there's no question that we've seen the average coverage as we would call. It continued to increase now that the product for paint protection film you know even on a high end vehicle was once just part of the Hood and what that does is it leaves a line that's not visible unless the cars dirty or theirs.
Some you know contrast, and see it but that's actually a a you know a common objection to the products over time, we've seen that coverage increased to covering the full hood and that type of thing and so we're really trying to strike a balance between offering smaller coverage to get more people.
Introduced the paint protection, though at a lower price point, while simultaneously trying to push for that increase coverage.
Because we actually think it will increase customer adoption, because you're taking away effectively the last objection to the product even if it wouldn't be price price focused so we're kind of doing both things at once but.
In terms of our strategy, but the net effect is that that coverage and the amount of the vehicle covered has continued to increase on average over time, and we would expect that to continue.
Yeah.
Got it okay.
And maybe I missed this I don't think so but any sort of update on your progress on the OEM front.
Yeah, we had good we had good.
Growth in OEM I think very covered it I think we were like 60 60 something percent growth over the prior year.
You know this continues to be an area of interest for the programs we have had.
It had been growing I would I would call them all successful at this point.
And you know our approach to this is that this is a complementary piece to the rest of the market one that's bringing new consumers into the fold for paint protection film, but we also want to see any of these programs that are done that they are done successfully and that they're not too ambitious and so we've been pretty good at managing that so I would say everything that we've done.
<unk> has been a successful most during some types of discussions for expansion, which is what we want start small and expand and then we've got a I would say a full pipeline of additional opportunities you know the sales cycle on these types of things is much longer than the rest of our business. So this is kind of looking out six to 12.
Even 18 months, but we expect that to grow as a as a part of the business and ultimately be beneficial to.
Driving the rest of the business you know the the attach rates are low enough and the awareness is still low enough that you know this is not a and exercising cannibalization of one segment of the market to the other this is growing attach rates and then maybe more importantly, growing awareness for for future purchases of the channel.
That's great that's helpful explanation.
That's all I have thanks, guys. Good luck.
Thanks, Steve.
Thank you. Your next question is coming from Jeff Van <unk> from B Riley <unk>. Your line is live. Please go ahead.
Hi, Good morning, everyone. Just wanted to touch on gross margin from that running really strong there and just wondering if you could speak a little more about the long term outlook for gross margin the driver you're seeing around that.
Can you touch on what you're seeing with some of the new products that have higher margin.
And then also a lot of.
Apologize a lot of questions in one question here.
New dealer software as part of that discussion and perhaps.
Maybe also if you could just delve more into the service revenue component.
Sure Jeff Yeah. So you know what we've seen in terms of gross margin, it's really broken into a couple of buckets.
One is the channel mix, so like I mentioned, just as an anecdote the business in Australia, that's now growing much faster than it was since we bought it and also at a much higher gross margin. So we're seeing growth.
In geographies and elements of the channel with higher gross margin.
And then as we've added new products.
Some of our sub product lines with paint protection film in terms of our ultimate fusion product or elements of our architectural film line or coatings line and things like that these products are accretive to gross margin so as they become a larger percentage of revenue.
We're benefiting from that.
And then more broadly speaking.
The service revenue tends to be accretive to gross margin as well so you've got the channel mix and you've got the product mix and then simultaneously we've been working very hard on the supply chain elements across all of our products in terms of the actual the bill of material cost of the products and then also the answer.
Blurry costs that go into gross margin that are related to you know, making buying shipping converting whatever it might be.
Excuse me the all of our products and so all three of those things are driving it you know the the last item.
In terms of managing the bill of material cost and other components of cost of goods is probably the most consequential it at.
Present.
Of course.
The room to run and so as we get in next year and year after.
Part of where what we don't know is relatively speaking you know what do we see in terms of the growth in the different geographies and what do we see relatively speaking in the product lines and so that that makes it a little harder for us to pin that down, but I kind of think we've got we've got three.
Avenues to win in terms of continuing to increase the gross margin beyond the fiscal year 'twenty three.
Really only need two out of three to work in order to be able to do that so well, we don't know exactly what that means I think it sets us up pretty well to do that and you you asked about the software the DAP software.
Our software for US years ago was was not inconsequential portion of our revenue and obviously that's changed as the business has grown you know one of our questions and objectives as we as we do continue to enhance that platform is can we get the software revenue growing from that again.
You know there are payments revenue or ancillary revenue, we can get from that to where it is not only helping our customers and helping the business, but it's also another source of high.
Margin revenue.
I think a little bit premature to try and characterize that but that's an obvious conclusion robby's question to draw from thinking about about what we're doing so that will be a factor too and I think you had one last question, but I don't remember what it was just.
I know that that's okay.
Actually just wanted to follow up on the on the software.
What kind of feedback are you getting from dealers on the benefits that they're saying to their business.
Well I think it's I think what the feedback we're getting now is you know Wow. This is great. This is the largest investment largest set of teams as we've ever seen ex they'll do even if we've been Uh huh.
Our customer for a long time, so they are clearly noticing the change and they're noticing our investment and something that's very important to us I think that's probably the extent of the feedback that we have and you know it is probably going to take a little bit longer to get the feedback that says hey, I used I use sort of the playbook.
You guys have instituted here on how to run my business and I've seen my business grow as a result, that's the outcome that we want but I would probably check back in a year for that type of story to start to come through.
Okay fair enough.
And then one thing that we've noticed is that some dealers we talk a lot about pre loading a P. P. F. <unk> noticed that some dealers are train loading ceramic coating more.
Wondering what you're seeing there.
Well I think it's similar to the the broader question on pre loading you know you have.
Some dealers that like that as a as a business model and some that don't and then of those that do they might like it for one type of product or another ceramic coating being one or window to being one or pay protection being one could depend on their prior experience or their customer base or what what lines they're carrying.
So that is an element of it and I think the maybe part of the broader pushed there is that you know these are real tangible products that we're selling that provide demonstrable value.
And they arent predicated upon having a warranty or insurance attached to them to be useful.
And in many respects in our view that makes them better products and a lot of the other things that are sold are preloaded. So that's kind of the the underlying thesis and then obviously from the retail dealer standpoint, we've got to show them. They can make an equal or greater amount of money doing this or get more consumer acceptance, but I think youre seeing that happening.
And we expect that to be.
The case across the product line everything we're doing and then you know anything we might add in the future.
Okay, great to hear thanks for taking my questions I'll take the rest offline.
Thanks, Jeff.
Thank you. Your next question is coming from Tim Moore from behind Pin. Your line is live. Please go ahead.
Thanks, Brian and Barry a terrific continued execution in the EBITDA margin expansion in the first half was amazing.
Frame. My question is already asked but I have two remaining ones.
You know you're out your scale and operating leverage benefits have been phenomenal over the past few years and the gross margin expansion was very good. This year I just want to delve more into the gross margin potential beyond this year.
I know Ryan gave us little bit sneak peek in the prepared remarks, but.
Theory, I'm, just wondering with maybe half the gross margin expansion this year from.
Purchasing power and scale and you know is the other half may be it from the new products mix that Ryan was talking about and you actually lapped a lot of those ribena delayed startup costs you know in the first half of this year.
There were a bit of a drag last year. So I guess you know it was really kind of wondering should we think of 42% to 43% as the floor on gross margin or do you think it could dip a bit if china sell through accelerates.
The December quarter early next year, because the China margins are lower and a little bit dilutive.
Yeah, Tim How're you doing yeah, I think the you know to answer your first question the gross margin expansion.
Thus far obviously mix and product mix and a title played a part in that but it's been primarily.
You know the efforts we've made around the supply chain. So that's that continues to be the case and I think.
That as we go forward I don't know that we would expect.
Gross margin to dip are you know how high it can go remains to be seen but certainly we don't we certainly don't think that 43% as the as the cap by any stretch, but you know there'll be a lot of factors and as Ryan alluded to there you know we've.
There's there's no we have we feel good about our prospects there and it's hard to say at this point how high it will go.
And I think Tim I would I would add to that relative to China. As you know the the the good news bad news, but there was a point where China on a percent of revenue basis. You know it was much larger in so yes. It is a lower gross margin region for us, but as a percent of revenue with how the rest of the business has grown.
It's just not as impactful now even when we see that that rebound relative to.
Offset in AR.
In a substantial way this other work that's done so the the the risk of China fundamentally.
Altering margins at this point is pretty low and if it if that were to happen, which we don't think it would be a result of some spectacular performance out of China, which we would gladly take if that happened, but it doesn't seem likely that that's going to be the case.
Fair enough that's helpful color, Yeah, I remember it well it's been a couple of years I mean, I think it was 18% of sales a couple of years ago before the Lockdowns are no. That's good that's really helpful color and you know it seems like that is a permanent purchasing power and supply chain effort. I know you changed suppliers a bit last year that really helped and my my second and last question is.
Howard dealership services progressing you know I know you that small acquisition a couple of months ago I'm, just just on a high level.
Ryan It Barry.
Is the number one limiter luminaire to installation and distribution target acquisitions or dealership services.
Integration teams.
Clearly not your cash and liquidity, but obviously you have to spend a lot of your time on the core business and don't.
I don't want to get distracted so I'm just wondering you know.
Are there any limitations on the integration side for pick up in acquisitions.
Well I think that you know the the limitations, we have are probably less than that in that realm or probably less related.
Related to actually integrating an acquisition and more we're trying to.
Ensure that.
Everything we're already doing at the scale, we're doing it that we have the infrastructure to support it and to keep doubling down on that you know we've added we've added our head count has grown substantially as we've added the various programs that are more human capital driven and so because we do that in a decentralized way and add more countries. You know you just need more infrastructure to do that so.
I don't I don't perceive the actual integration of acquisition is a it's a limiting factor and I think for US we want the right deals at the right price and you know the the downside upside is doing the small deals that we do that sometimes you can get great deals and sometimes you can run into just a.
<unk>.
A wild pricing asymmetry, if you will given the profile of the seller and so we just have to be patient and flexible and you know if we if it doesn't work today you know we're still we're still there tomorrow.
But no I don't think the integration is holding us up and I just don't see an issue with deploying the cash we're going to generate is just just the matter of the timing of when that occurs.
Great and that that Australia acquisition, it seems like a grand Slam given how much you've already ground sales, but thanks and that's it for my question.
Thank you Tim.
Thank you there are no further questions in queue at this time I would now like to turn the floor back to management for closing comments.
Thank you all for joining us and thanks to our team for a great quarter and a lot of hard work to deliver these results were very appreciative of it and look forward to another quarter. Thank you.
Thank you. This does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.