Q2 2024 Thermon Group Holdings Inc Earnings Call
Greetings and welcome to the third <unk> Group Holdings incorporated second quarter 'twenty 'twenty four earnings conference call.
At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Yvonne Salem, Vice President of F. P N E and Investor Relations. Thank you you may begin.
Thank you Latanya good morning, and thank you for joining us today fiscal 'twenty 'twenty four second quarter conference call.
Earlier. This morning, we issued an earnings press release, which was being put.
It's been you know with the SEC on form 8-K.
And it's also available on our Investor Relations section of our web.
Additionally, the slides for this conference call can be found in our IR website under news and events I are coming to our earnings conference call Q2 'twenty.
During the call we will discuss some items that do not conform to generally accepted accounting principles.
We have reconciled those items to the most comparable GAAP measures in the tables at the end of the earnings.
These non-GAAP measures should be considered in addition to and not a subject or measures of financial performance reported in accordance with GAAP.
I would like to remind you that during this call we may make certain forward looking statements regarding our company.
Please refer to our annual report and most recent quarterly reports filed with the SEC for more information regarding forward looking statements.
Including the risks and uncertainties that could impact our future.
Our actual results may differ materially from those contemplated by these forward looking statements and we undertake no obligation to publicly update any forward looking statement.
Whether as a result of new information future developments or otherwise, except as may be required by law now I would like to introduce our president and Chief Executive Officer.
When he saw opening them.
Well, thank you Rod and good morning, everyone and thank you for joining us today.
I'd like to begin today with a quick overview of storm Hong for those of you who may be new to the story.
The world leader in providing safe reliable and innovative mission critical industrial process heating solutions to customers in 85 countries from facilities our forecast.
Our technology is agnostic and many of our solutions enable the energy transition decarbonization and electrification.
Approximately 1400 employees have a best in class safety record and are dedicated to creating long term value for our stakeholders by executing our strategic plan, which I'll cover in more detail on the next slide.
Turning now to slide four I'm, sorry modest strategic pillars.
We're generating sustainable value by implementing our long term strategy that is based on three pillars first.
Profitably growing our installed base.
De carbonization, Digitization and diversification and third disciplined capital allocation.
We have developed a large global installed base over the last 69 years by providing our customers with mission critical industrial process heating technology and solutions.
These solutions typically represent less than 1% of the initial capital cost of the process facility.
All are critical to ensuring safe reliable and efficient operations.
This enables us to increase recurring revenues and realized growth across our traditional in market verticals, while expanding margins through operational excellence.
In addition, we're driving growth through our long term strategic initiatives.
The carbonization Digitization and diversification.
We are a key enabler of the energy transition through electrification and decarbonization of industrial.
Our innovative solutions drive energy efficiency facilitate a circular economy and help our customers achieve their sustainability goals.
Through our digital solutions, we also help our customers to optimize maintenance through enhanced controls and monitoring.
Our core technologies, plus our de Carbonization and Digitization solutions are supporting our efforts to diversify our end markets with a goal of having approximately 70% of our revenues come from outside of the oil and gas.
By the end of fiscal 2026.
Underpinning our first two strategic pillars is our commitment to disciplined capital allocation strategy.
Our strong balance sheet allows us to reinvest in our business to drive organic growth and positions us well to pursue inorganic growth through highly strategic bolt on acquisitions that meet our financial objectives.
Yeah.
On slide five you can see that we're continuing to progress our end market diversification strategy with approximately 64% of our trailing 12 months revenue coming from diversified end markets.
We've seen significant success in the food and beverage end market with revenue growth of 219% over the last year.
We also continue to capture share in the rail and transit market, where revenue was up 26% year over year and in the commercial market, where revenue was up 16%.
Of particular note is the 92% year over year growth in the renewables market, which is also a testament to the ways that Fairmont is enabling the energy transition.
The expansion in the.
Renewables market reflects increasing activity across alternative fuels hydrogen and ammonia.
Additionally, we're well positioned to support our traditional end markets and upstream and downstream oil and midstream gas should the energy transition take longer and additional investments would be needed to support demand.
We are well positioned to meet their needs.
Yeah.
Turning now to slide six on driving diversified order growth.
Despite continued high oil and gas prices orders from diversified end markets continued to outpace orders from the oil and gas sector.
As of September 30th approximately 74% of our year to date orders were from diversified end markets.
33% year over year, while orders from oil and gas end markets were down 13% year over year.
As I mentioned on the previous slide about 64% of our trailing 12 months revenue is from diversified end markets compared to 74% of orders year to date, indicating that demand continues to accelerate across these diversified end markets.
We're seeing increased demand for our solutions in rail and transit hour and petrochemical end markets as well. Additionally, approximately 10% of our bookings year to date are related to decarbonization and electrification across a wide range of end markets.
On slide seven you can see two recent examples of how we're putting our decarbonization strategy into action.
During the second fiscal <unk> during the second quarter of fiscal 2024, 11% of incoming orders and 7% of revenues were related to decarbonization opportunities with our pipeline now growing to over $150 million.
Here, we have two exciting examples of emerging opportunities in the hydrogen economy.
The first example detail star months' contribution to the first comprehensive been scalable clean hydrogen energy complex in Canada.
The project in Edmonton, Alberta, as part of an accelerated program that supports Canada's 2030 greenhouse gas emission reduction targets as well as their 2050 net zero emissions goals.
Across this site Fairmont supplied a wide range of solutions across multiple product lines, we're supplying environmental heating products for for the job site and unit heating.
The energy complex requires Fairmont electric heat tracing as well as emerging and circulation products from our process heating product lines.
The completed system will also use digitization and predictive analytics through our Genesis network.
After the facility is up and operational the storm on products and solutions will be fully powered by energy generated from the clean hydrogen power plant.
The second example, highlights our focus towards emerging deep carbonization markets. In this case Fairmont provided a series of unique solutions for the production of sustainable aviation fuel.
<unk> partnered with a refiner to provide a heating system to produce sustainable hydrogenated biofuels for commercial jets with the goal of reducing the overall admissions from aircrafts.
In addition to providing cleaner burning fuels, our customer wanted to reduce scope one emissions by implementing electric alternatives for heat inputs that would have traditionally been hydrocarbon fire.
Additionally, the refiner refinery needed electric options for more precise startup control and turned down to increase yield.
To meet these goals Starmine developed an electric heating foundation to be used for all critical services and processes throughout the refining process.
To support the future growth of this sustainable aviation fuel supply. We also standardize the design of our solutions and product mix to enable rapid future scalability.
These two examples illustrate the breadth and depth of our Mas electric heating solutions and our unmatched expertise industrial process heating that make us uniquely positioned to provide the heating technology needed to enable the new hydrogen economy.
Turning now to slide eight and our second quarter fiscal 2024 results.
This quarter the Fairmont team generated record revenue of $123 7 million, an increase of 23% year over year, driven by strong growth in U S Europe and Asia.
We had double digit growth in year over year revenue from Opex activity associated with recurring maintenance our profitability continued to grow with adjusted EBITDA of 26, 5% year over year to 27 7 million.
This was largely due to volume growth price and productivity.
Adjusted EBITDA margins increased approximately 60 basis points driven by leverage on our fixed cost base.
Free cash flow improved by $1 $9 million year over year due to improving dsos.
Adjusted EPS was <unk> 49 per share an increase of 30% over the prior year period.
Finally, our bookings grew at an impressive 22% year over year and the book to Bill ratio was <unk> 94 times in the quarter.
Year to date, our book to Bill continues to be positive at one times.
And bookings on a trailing 12 month basis are now $489 million.
With that I'd like to turn the call over to Kevin for a more in depth review of our financial results Kevin.
Thank you Bruce turning to the Q2 fiscal 2024 financial performance on slide nine.
The global thermal team continued to deliver strong results in the second quarter customer demand remained healthy we reached $116 million in incoming orders in the quarter up 22% year over year demand remains strong across U S and Latin America, while spending was flat in Canada.
In terms of our end market orders, we saw the most growth in the chemical and petrochemical sector during the quarter with customer demand expanding across the renewables food and beverage rail and transit and markets trailing 12 month orders reached $489 million, which we believe supports our updated full year revenue guidance range.
Revenue in the second quarter was $124 million a year over year increase of 23%, primarily driven by the growth in renewables power and food and beverage end markets in the quarter.
Revenue from large projects was $36 million up 54% versus the prior year, while revenue from small projects and maintenance and repairs totaled $88 million up 14%.
On a trailing 12 month basis, 76% of our revenues were derived from customer opex.
Adjusted EBITDA for the second quarter was $28 million up 27% year over year with adjusted EBITDA margin expansion of approximately 60 basis points on.
On a trailing 12 month basis, adjusted EBITDA was $105 million, representing a year over year increase of 35% with adjusted EBITDA margins increasing to 22.0%.
Adjusted diluted EPS was <unk> 49 per share in the second quarter of year over year increase of 30%.
Quick modeling note. We are currently estimated at 21 cents per share impact from amortization in fiscal 2020.
Through the first half of our fiscal year, we have delivered profitable growth by continuing to execute our strategic plan and an uncertain macroeconomic and geopolitical environment.
Simultaneously controlling our fixed costs and investing in the future.
On slide 10, we will cover the updated balance sheet.
We ended the quarter with cash at $31 million, which represented a year over year decrease of 4%.
Total debt for the quarter was down 23% to $111 million.
This decrease combined with the sizable growth in adjusted EBITDA over the last 12 months resulted in a net debt to adjusted EBITDA ratio 0.8 times compared to one four times in the prior year period.
Working capital was $160 million in the quarter, an increase of approximately 3% primarily due to the combination of strategic inventory deliveries and the seasonal inventory build in advance of the winter months offset by the decrease in accounts payable.
Working capital as a percentage of trailing 12 month sales was lower coming in at 33, 6% at the end of the quarter, mainly driven by improved collections activity.
Turning to cash flow net income in the second quarter was $15 million up 34% year over year.
Opex spend was $3 million free cash flow was zero point $6 million, reflecting normal pre heating season inventory bills and our ongoing investments for strategic growth.
Particularly around incremental capacity for our process heating business.
We expect cash generation to improve significantly in the third and fourth quarters, driven by increased volume and the consumption of finished goods inventory during the heating season.
We are very pleased with our strong performance in the first half of fiscal 2024.
You need to produce solid growth across our end markets regions and financial metrics as.
As we look ahead to the second half of fiscal 2024, we are well positioned to deliver profitable growth and we are prepared to manage a wide variety of economic scenarios.
Finally, I would like to thank the global pharma team for their hard work dedication to our customers and commitment to delivering long term value for our shareholders.
I'll turn it back over to Bruce.
Well, thank you Kevin.
I'd like to turn now to slide 11.
As we look to the back half of our fiscal year, we're raising our full year revenue and earnings guidance for fiscal 2024.
This revised guidance balances the positive growth, we continue to see in the first half of our fiscal year, while acknowledging the ongoing macroeconomic and geopolitical uncertainty and potential impact of global monetary policy.
In light of this we continue to be prudent with spending while investing for growth.
We are raising the lower end of our revenue guidance from 462 million to $478 million and increasing the upper end from $488 million to $498 million, which at the midpoint.
Represents 11% organic growth year over year.
GAAP EPS is now expected to be in the range of $1 59 per share to $1 69 per share, which represents 64% growth at the midpoint.
Adjusted EPS guidance has been raised to $1 84 per share to $1 94 per share, which at the midpoint represents 21% year over year growth.
Turning now to slide 12.
I'm pleased to invite you to join US for Thermos first Investor day, which will be held on Tuesday November 14th in person in New York City or via webcast.
Joined Kevin and me plus other members of the senior leadership team for more in depth in depth detail about our long term strategy financial outlook and live Q&A.
Hope you'll be able to join us.
As we wrap up today on slide 13, we'd like to leave you with the following messages.
<unk>, a leading global brand that provides mission critical process heating technology and solutions to a variety of diverse end markets.
Our operational excellence innovative products and differentiated solutions are significant competitive advantages and create sustainable value for our customers and shareholders.
Our large global installed base with longstanding customer relationships drive a resilient aftermarket franchise that generates high margin recurring revenue.
Through our existing technology, we believe that we're well positioned to capitalize on the vast opportunity associated with the energy transition and de carbonization through the electrification of industrial.
Our healthy balance sheet with low leverage and high gross margins as well as our capital light business model enabled Fairmont remained resilient across economic cycles and provides significant optionality.
I'd like to end today by thanking the entire thermal and team for their outperformance.
Wavering commitment to safety and dedication to meeting our customers' needs.
As we look ahead to the second half of fiscal 2024 and beyond I'm eager to see what we can accomplish together as we continue to deliver sustained profitable growth and value for our shareholders.
Latanya, we'd like to now turn it over to you to take questions.
Thank you at this time, we will conduct a question and answer session.
If you would like to ask a question. Please press star one on your telephone keypad.
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All participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys once again Thats star one at this time, one moment, while we poll for question.
Our first question comes from Brian Drab with William Blair. Please proceed.
Hi, good morning, Thanks for taking my questions I, usually don't spend time.
On the on these conference calls congratulating management, but I mean.
I just wanted to point out a.
12 out of 12 of 12.
12 out of the last 12 quarters, you guys have beat consensus revenue estimate so very impressive and congratulations and.
Okay. Thanks, Brian.
Yeah well.
It's really impressive execution so congrats.
And I will be at the analyst day. So looking forward to that I was wondering if you actually regarding the at the analyst day can.
Can you.
Perhaps give any sort of preview of not numbers, but like what what.
Investors analysts can expect there maybe will you be laying out some longer term financial goals.
Yeah well.
Brian What we'll do is we'll be focused still on our kind of our 2026 objectives, but we will do a deep first of all you'll get to meet the broader management team that.
That's really behind driving these results.
I think that's a great opportunity and we will be taking a deeper dive on really talking about our strategic objectives as well as our financial goals and providing more detail around just what is the path to achieve and so I really look forward to you attending and hope other exit.
The thing and perspective investors will join us as well.
Okay, Great Alright.
It seems like you're.
With this quarter that you're ahead of schedule and getting that mix too.
It would be more diverse the revenue mix to be more diversified.
You know getting I guess the goal is to get to 70% are non oil and gas are 70% diversified as you say.
How are you thinking about that longer term goal and it seems like maybe maybe you could go beyond 70 with today's report.
Yes so.
That's a great question I'd like to kind of start and say we were guiding to a 65% to 70% range. So now we're kind of targeting more towards that 70% because we think we can get there by 2026 and certainly.
As we begin to approach that 2006 time allowed in achieving that 70% goal.
We will further extend that so to look at.
Where we'd like to go and just overall diversification.
Our end markets.
And then speaking of end markets food and beverage you reported outstanding growth during the quarter can you talk a little bit about that segment of the business and remind.
Remind us where you're seeing the most success what types of projects, what geographies and how is the outlook there and runway for that type of growth to continue potentially.
Yeah, so in food and beverage.
First of all.
Great thing about that is geographically, it's extremely diverse I mean, it's really global.
And we actually if you think about the mix of our business in the eastern hemisphere, particularly across Asia.
We actually see a much higher mix of more diverse end markets, including food and beverage than we do kind of maybe in some of the traditional oil and gas end markets that we see more in North America and Western Europe.
We see first of all it began is really began with a focus on that end market. The expansion of our product portfolio really gives us.
More opportunity than just heat tracing, but as we look at emerging heating.
And boilers and steam and other things like that it really gives us an opportunity to build a much larger more sustainable position. So.
Certainly the 219%.
It was really strong growth, it's on a fairly small base, but we feel like we've got a lot of room to run there just given the size of the market.
And in and kind of our existing share. So we feel good about progress, we're making there and the increased focus with our our front end sales teams.
Okay, maybe I'll ask just one more before I pass it on but.
A few years several years ago, you made the.
Focused effort to diversify the product portfolio and get get into the process heating.
Spanned the addressable market.
Relative to the historical focus primarily on heat tracing.
<unk>.
Are you seeing.
The growth in the orders coming in.
In terms of process heating versus heat tracing.
Are they both.
Growing at the at the same rate or are you having more success in one area or the other at this point.
Well first of all we're seeing growth really across all of the product portfolio, but I will say that as we look at process heating the growth. There is almost <unk> that of the heat tracing business and we see that really in a number of <unk>.
Areas, but particularly as you look at the opportunities around energy transition into carbonization, Theres, some really big opportunities for that process heating business.
Some of the areas of investment we've talked about this year is really expanding our capacity.
To be able to increase production in those product lines and we've made some really great progress we hope to exit.
This year with basically about 50%.
An increase in our capacity around process heating so that we can really supply the growing demand.
For really the transition from traditional hydrocarbon fired heaters to electric.
Technology.
And Brian This is Kevin if I could just add in if we think about heat tracing versus process eating or those diversified end markets versus oil and gas.
As we go into this expanded addressable market, it's not just the top line growth, but it's the bottomline profitability as well.
Generally see those those gross margins in those addressable markets that we're targeting as add if not slightly better from a profitability perspective as well. So it's growing it's attractive and clearly the products that we're providing our customers are creating value for them given the growth we're seeing in the vessels.
Okay. Thanks, Tom I'm going to pass it on but I might come back on.
In a minute.
No problem. Thank.
Thank you.
Once again, ladies and gentlemen to ask a question at this time. Please press star one on your telephone keypad.
Once again to ask a question at this time. Please press star one on your telephone keypad, we have a follow up from Brian drab with William Blair. Please proceed.
I was trying to be polite, but you never know.
[laughter].
Kevin that was good detail good comment on the margins there.
Important one.
Okay.
Are you looking at the.
Gross margin.
The trajectory here for the balance of this year.
Yes.
I'll just leave it at that for now.
Yes, John this is kind of a short term and then a longer term component to that I think when you know when you look at the balance of the year, we don't necessarily give that gross margin guidance, if I could talk about the quarter specifically for a second it's really about the mix at the end of the day.
We're continuing to see price outweighed cost rates, so managing that value gap with <unk> team continues to execute on that front and if you look at the mix of the business clearly the large projects overdrawn, a little more faster this year and we had some really nice wins, particularly in the power segment down in Texas here related to the winter innovation.
Hurts that are driving the growth there, but again it really nice margins, even though its project base, that's still attractive margins for us so that mix. However, as you guys know is slightly dilutive on the projects versus the maintenance and repair side of things and then even if you look at it geographically.
In the U S.
EMEA and APAC, Canada, just growing but not quite at that same rate, that's a little bit dilutive as well as we think about.
The the geographic geographical dispersion there.
Last thing I'd mention just on margins, we look at the margins in backlog really closely and that continues to trend well. So if we kind of think about where we are today versus where we can go in the future the.
The combination of growth in these diversified markets, where there is margin expansion of the operational excellence program.
We're underway that Robert I was going to talk more to the investment community about during Investor day continuous improvement we feel like we've really got a few levers in front of us that can still continue to drive gross margin gross margin improvement in the future.
Okay. Yeah, that's really helpful. I guess I'll leave it at that.
That for now and calculator today. Thank you.
Thanks, Brent Thanks, Brian.
Our next question comes from Jon Braatz, with Kansas City Capital. Please proceed.
Good morning, everyone.
Good morning, Jonathan.
Bruce.
On the sort of the renewal your renewable front and in your diversification efforts, obviously theres been a lot of noise recently over the last you know.
Three or four weeks about higher interest rates and maybe the impact on some of these programs.
<unk>, maybe cutting back spending and so on so forth when you look at sort of the the project pipeline.
Pipeline out there.
Have you seen any any movement, and and and and and the pipeline.
Activity because of higher interest rates you have you seen anything that would suggest that our that maybe there was some.
Softness in and the opportunities ahead in your diversification efforts.
Yeah, John first of all that that's a great question.
Actually kind of seen a bit of the opposite most recently.
I wanted to highlight the 92% growth in just the renewables opportunities we're seeing.
Those are some some significant.
Investments that we are seeing growing the thing that I think stands out most is a year ago I might have told you that kind of hydrogen was going to be.
An opportunity, but it was several years out.
The thing is we booked over $9 million this quarter.
In hydrogen opportunities alone.
These are projects that are funded that are moving ahead.
And we're really seeing a lot around.
Energy fuels, particularly renewables this sustainable aviation fuel there is global opportunities around this weather hydrogenating, those fuels and making those from Biofuels.
So that they are sustainable.
We're seeing some big investments in their <unk> and ammonia.
So I've been actually really surprised and pleased that just the.
The rate of investment there and I think.
Ones that were seeing move ahead are economically viable projects.
I think some of your other areas where.
There may be more reliance upon government subsidies, particularly maybe around wind and solar power type projects I think those certainly.
Could be at risk.
Where payback periods, maybe maybe longer.
But I think the thing to reinforce here.
Is.
Is that.
We are our technology is agnostic and as we look at energy transition, we can all debate.
The pace at which this could occur but I think we all would agree that this is the direction the world is moving.
Could it take longer to transition our technology is there to meet the needs of increased investments that may be required to sustain production levels in hydrocarbons, so base basically enable.
Energy during that transition period, Conversely, if it moves more rapidly we're seeing our technology playing in these new emerging.
Energy alternative energy sources, and it creates a lot of opportunity for us there so.
Really feel very good about how we've positioned the business.
With our solution set and with our our customer relationships and market access to grow this business going forward.
So if I would summarize.
It sounds like.
You would characterize as this transition is sort of a win win situation for you whether it's whether access whether it goes rapidly are slowly it doesn't matter because youre covering all basis.
Absolutely yeah, okay. Okay. Good.
Secondly.
It sounded as if.
In your press release.
Seeing a little bit on <unk>.
And in Europe, our sales are I guess up year over year or some sales gains.
Europe has been weak.
For a while are you seeing.
Any any real changes there.
Do you see this.
The improvement in sales continuing in Europe.
Yes, we do see a positive trend there.
We are seeing.
The same in Asia as well so.
They were certainly Europe and Asia.
Slower than.
To respond kind of after COVID-19.
Asia, even lag to that and so we are seeing.
Some some positive signs of growth not only in just kind of the business and the incoming order levels, but also.
As we look to the pipeline of opportunities that we see going forward.
John maybe just to put a little more color there too I think when things were a little down and we took a pretty hard look at the channel, particularly in the eastern Hemisphere. The team has done a lot of really nice work over the last 12 to 18 months to focus there and we're starting to see some nice traction that's helping to drive that business forward I think Europe was up about 40% in the quarter I think APAC was 17.
Or so so we're seeing really nice growth in both of those environments and it's not just kind of waiting on large onetime projects, we're really doing a nice job managing the channel in those regions as well and Thats whats helping to drive the growth.
Okay. Good yeah.
Kevin you spoke about it earlier about our proven and free cash flow in the second half.
And I was sort of looking at thinking that maybe a free cash flow for the year would be around 75% of net income.
And I guess I don't want it.
So I don't want to put you on the spot but.
Or are you thinking that Oh, that's still.
It's still we're still a possibility to get that.
That level of free cash flow.
I think maybe I'll avoid the the relative percentage kind of answer, but I think when we look at where the business is today, particularly.
Particularly with the growth in the projects there is some timing differences on the accounting given we're in a percentage of completion mode. There.
You'll see it the other working capital there was about a I think a $10 million to $11 million negative in the quarter. All of that was Invoiced in October which is going to give us a chance to collect here in the third quarter. So there are a few of those unique things from an accounting perspective that are maybe driving a little bit of the cash the weaker this quarter it could be a little stronger next quarter I think it leaves them out we.
Feel really really good about the ability.
Ability to collect.
Inventory turns are starting to trend in the right direction, when we look at the velocity with which.
That is taking place.
And then certainly when we think about the PPO side of things, that's going and are trending in the right direction as well.
John It's just it's important to keep in mind the seasonality of the business.
Quarter is really where we've got that inventory built on a quarter over quarter basis, though its roughly flat right. We think we've got the right inventory in the right place at the right time to be responsive to customers there and so we try to look at that on a TTM basis that working capital as a percentage of sales over a little bit of a longer time horizon.
We're thinking about driving the productivity of the operational excellence in the business and keeping that factored in is important. So I think we feel pretty good about the back half in summary.
We've got to execute but the business is growing.
Be a surprise to anybody that theres, a little bit of a build of networking capital here as we continue to grow.
Okay. Thanks, Kevin that's it.
Thanks, John Great. Thank you.
Thank you at this time I would like to turn the call back over to Bruce <unk> for closing remarks.
Alright. Thank.
Thank you Latanya and thank you all for joining today and thank you for your interest in Fairmont, We look forward to updating you again at our Investor day and during our next quarter earnings call and enjoy the rest of your day.
Thank you. This does conclude today's audio teleconference and webcast you may disconnect. Your lines at this time and have a great day.
Okay.
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