Q3 2024 Hamilton Beach Brands Holding Co Earnings Call
Thank you for standing by my name is Ian and I will be your conference operator today. At this time I would like to welcome everyone to the Hamilton Beach Brands holding company Q3204 earnings conference call.
All lines of employees stop mute to prevent any background noise. After the speakers remarks, there will be a question in answer session. If you would like to ask a question during this time, simply press star, follow the number one on your telephone keypad. If you would like to withdraw your question, again press star one. Thank you.
I will now hand things over to Louan Nabhan
Head of Investor Relations.
When you may begin your conference.
Thank you, Anne. Good morning, everyone and welcome to the third quarter 2020-24 earnings conference call and webcast for Hamlet-Bitch Brands Holding Company.
Yesterday after the stock market closed, we filed with the SEC R410Q for the quarter ending September 30, 2024, and we issued our third quarter 2024 earnings release.
Both documents are available on our corporate website.
Speaker Change: Our speakers today are Scott Tidy, President and CEO, and Sally Cunningham, Senior Vice President, Chief Financial Officer and Treasurer.
Our presentation today includes forward-looking statements. These statements are subject to rift and uncertainties that could cause actual results to differ materially from those expressed in either our prepared remarks or during the Q&A.
Additional information regarding these risks and uncertainties is available in our 10Q, our earnings release and our annual report on form 10K for the year ended December 31, 2023.
The company disclaims any obligation to update these forward-looking statements, which may not be updated until our quarterly conference call, our next quarterly conference call, if at all.
Speaker Change: The company will also discuss certain non-gap measures. Reconciliation for regulation G purposes can be found in our earnings release.
and now I will turn the call over to Scott.
Scott Tidy: Thank you, Lou Anne. Good morning, everyone, and thank you for joining us. We are pleased with our third Carter results, and I look forward to discussing our strong performance. Before we get to that, I would like to address our recent leadership changes.
Scott Tidy: I'm excited and deeply honored to be here for my first call as President and CEO of our company. A role to which I was appointed by our Board of Directors October 1.
This leadership change of the result of a thoughtful, long-term succession plan. Last month, our former CEO, Greg Trepp, who was with us today announced his retirement effective year-end.
To ensure a smooth transition, Greg stepped down the CEO and board member, September 30th, and will continue to support us in an advisory role for the rest of his time with the company.
It is my pleasure to recognize and thank Greg for his outstanding leadership over his 28 years with our company.
especially the past 15 years as CEO. Under his leadership, he built a fantastic global team and cultivated our good thinking culture, which champions innovation.
Speaker Change: Together, we have achieved notable successes, including growth in sales and market share for Hamilton Beach and Proctor Salix, a strong presence in the premium and commercial markets.
Speaker Change: Advances in e-commerce, the creation of a global home healthcare solution's business, and important advances with our strategy to leverage partnerships and acquisition.
Greg's leadership has positioned us strongly for the future and we're incredibly grateful for his contributions. And now I'd like to ask Greg to say a few words.
Greg: Thank you Scott. It's truly been a privilege to spend most of my career with the remarkable company, especially in the role of President and CEO.
This transition is part of a well-planned leadership succession.
Greg: Scott was appointed President in February and took on the CEO Roll-Hawktober.
Over the past few months, we worked closely to ensure a seamless transition. God brings 31 years of expertise with our company. This strategic focus in deep knowledge of our business, people and values make him the ideal successor.
I have full confidence in Scott.
Our senior management and our global team to carry forward our mission and build upon what we've accomplished together.
Speaker Change: Hamilton Beach's strengths come from our commitment, our committed team, a good thinking culture with his focus on innovation and customer satisfaction. These qualities make me very optimistic about our company's future.
Speaker Change: I want to thank our team. The board directors, our customers, suppliers, and business partners for their trust and support.
It's also been rewarding to engage with our institutional shareholders since we became a public company in 2017.
Speaker Change: The past several years Scott has participated in our quarterly earnings calls and many of the investor conferences that we have attended. I know Scott, Sally, and Lou N will continue building those relationships.
In closing I congratulate Scott as well deserve promotion in which everyone continues to success. Back to you Scott.
Thank you Greg for your kind words and your unwavering support. We all wish you a wonderful retirement. Now I'll turn to our financial and operating performance. I'll provide a high level overview and Sally will cover the details before we open it up for questions.
Scott Tidy: We are pleased with the financial results we have delivered this year. For the first nine months, our revenue grew 5.3% compared to the same period last year.
A gross profit margin expanded by 480 basis points to 25.9% compared to 21.1% last year. Operating profit almost doubled in net income increased 19.2%.
Let me now discuss the third quarter of this year compared to the same period last year. For context, let me remind you that in last year's third quarter we saw post-pandemic normalization of business conditions and trends.
Scott Tidy: For that turnaround, our strong team had managed through an extraordinary operating environment that expanded several quarters.
Pandemic Driven Challenges included a Stork Surge in demand. This ruptures across the supply chain and spiking, then falling product and container cost.
Early last year, we were still working through the remnants of that environment. By the third quarter-hover, most suppliers have returned to normal, lead times. Shipping transit times have returned to normal, and other parts of our business had normalized.
As we said previously, compared to the first half of this year, we are now cycling more challenging comparisons.
At the same time, in the third quarter, we delivered revenue growth of 2%. And our gross profit margin expanded by 190 basis points compared to the same period last year.
In fact, our gross profit margin is expanded year over year for five consecutive quarters.
In the current quarter, operating profit and net income were impacted by two non-cash items.
Hi, Ernstson of Compensation expense due to stock price appreciation and one time ancient termination charge. Both items are favorable for the whole term.
Scott Tidy: Our stock price increased 77% for shareholders while resulting in increased equity and sin of cop, comp, and SGA this quarter.
The termination of our overfunded US pension plan resulted in a reclassification of historical losses in the net income. While also realized 13 million of surplus assets that will increase our free cash flow in 2025 and 2026.
Overall, we are very pleased with our third quarter results despite these events. We have good momentum and we finish the year as we head into 2025. And we are reaffirming our outlook for the full year 2024.
Our revenue growth in the third quarter and year-to-day reflects the success of our strategic initiatives. We're focused on expanding our sales of innovative value products that can command premium prices and improve our margins.
Scott Tidy: Innovation is the core of our success, with our industry leading research and development, with introduced numerous products that address consumer needs from refreshes of existing products to entirely new product solutions as we work to delight our consumers.
This year we are launching more than 40 new platforms across a wide variety of high demand categories.
Scott Tidy: Spanning coffee, blending ovens, grill, slow cookers, catles, mixers, garment care, and many more. Each new product aims to maximize innovation by offering unique consumer benefits.
Scott Tidy: Our innovation pipeline is robust and supports all the markets in which we participate. Our team has done an outstanding job securing placements and promotions for our new products across a broad range of customers and channels. This success has enabled us to gain market share across North America overall.
I'll now provide some brief insights into our key markets and how our strategic initiatives are driving growth.
First, our focus on driving our core brains, Hamilton Beach and Procter Salaks in North America.
Our strong portfolio is anchored by these well-known brands. In the third quarter, we introduced numerous innovative products that won placements with key customers.
Scott Tidy: and the industry's largest category, coffee, we launch the Flex Brew 5-1 coffee maker and new espresso makers.
catering to the demand for high quality experiences at home.
In Belending, we offer new models like the Versel Hamilton Beach, the Rean1 electronic kitchen system, does the work of three separate appliances, traditional kitchen cylinder, a food process, and a personal smoothie blender.
We are also released the Hamleton Beach to Frost and Go, programmable slow cooker that makes life easier for safely defrosting frozen meat and cooking it to perfection.
For consumers who want to cook multiple ways but don't want to a cluttered countertop, we offer the Hamilton Beach 911 Searing Slow Coverage, which combines nine cooking options in one versatile appliance.
Concier, brown, saute, roast, steam, keep food warm, slow cook or use, like a rice cooker to prepare rice and whole grains. These new slow cookers are well received by both retailers and consumers.
Scott Tidy: Countertop ovens with air frying continue to be a fast growing segment. The new versatile Hamilton Beach digital air fry toaster oven.
Designed to be powerful for faster cooking, you can choose from six cooking functions, bake, boil, toast, air fry, dehydrate and convection.
Our new products are selling well and we receive favorable responses from retailers and consumers.
Next, I will discuss our initiative to gain share in the premium market, which represents about 40% of the total industry as growing faster than the overall market.
Hamlet of Beach is increasing its participation in this key market. Through own brands like Western and multi-year agreements with licensed brands, we're expanding into new premium categories in gaining share.
Our chief premium Dharma care products, continuing to enjoy strong sales and growth.
Scott Tidy: New Products Include Irons and Garmin Steamer's. And the Fast Growing Garmin Steamer category, we have introduced the Chey, Vide Scarmant Steamer, which is the perfect companion for maintaining wrinkle-free clothes at home we're on the go.
This compact and lightweight steamer is designed for easy travel and with powerful steam capabilities, it quickly removes wrinkles and heats up in just 35 seconds.
We are pleased with our partnerships for Clorox True Hepat Air Pure Fires and Brita Counter-Top Electric Water Filteration Systems.
Scott Tidy: This year we introduced a new Clarox Ultra Air Purifier, which can treat very large spaces and features and ultraviolet light. We have also introduced a Clarox Counter-Tops deem sanitizer and a Clarox humidifier.
Our newest premium brand is New Milk. Our new milk plant-based milk makers enable consumers to create a variety of fresh milk on demand.
This new product aligns with current consumer trends towards health here, sustainable options, and positions us to meet the growing demand in this category.
by expanding our presence in the premium market through brand partnerships and innovative product offerings. We are well positioned to significantly grow our market share and increase our revenue in this high potential market.
Next, our strategic initiative to lead in the global commercial market. The global commercial market is a multi-billion dollar opportunity with significant growth potential. This market represents a key area where we see substantial upside, especially as we expand our footprint internationally.
We are investing in higher margin products designed for use in commercial food service and beverage operations as well as for hotel amenities.
Commercial Markets offer strong, profit potential, and our initiative aligns with increasing demand for durable high performance equipment.
and the other, are growth strategy, including several key components.
First, we're driving product innovation that meet the unique needs of our commercial customers.
Scott Tidy: Second, we are partnering with medium and large restaurant chains across the world to develop customized products that accommodate their current and new menu offerings.
Scott Tidy: Third, we are increasing sales with our existing customers and by adding new ones, including in the hospitality space and with cruise ship operators.
Scott Tidy: and Fourth, we are leveraging our partnerships with companies like Bartesian and New Milk to expand our reach in influence and the global commercial market.
Our company is particularly strong and heritage categories such as Belenders and Drinkmakers.
We are investing in advanced technologies in these categories. Our Hamilton Beach Summit Edge Belender offers best in class performance, while our Shaveer Belender's offer large batch-belending solutions.
We're expanding into the back of the house or food proper Kate for food preparation categories with new equipment like our big rig immersion blenders to streamline the food prep processes, reduce prep time and minimize waste.
Internationally, we see Europe, Asia, Africa, and India is presenting significant growth opportunities.
We are focusing on increasing our market share and expanding our footprint in these diverse and dynamic geographic markets. We are optimistic about our potential for the global commercial market to provide significant opportunities for revenue growth and margin expansion in future years.
Scott Tidy: Next is our newest initiative, which is to accelerate the growth of Hamilton Beach Health.
Scott Tidy: More recently, we have become a provider of connected devices and software aimed at home healthcare management, reflecting our commitment to innovation and improving lives.
We began to explore this market about five years ago and created our Hamilton Beach Health brand in 2021.
Scott Tidy: The Home Health Market Opportunities Being Driven by Demographics.
and particular in the aging population and need of at-home services, as well as increased chronic medical conditions for people of all ages.
Knowledge is making it possible to develop home healthcare management tools, including remote therapeutic monitoring systems. Excuse me, and February we acquired Health Beacon.
Bringing us the smart sharp spin, which is designed to increase adherence to medication regimens and support safe sharp disposals.
Our revenue model here is subscription based, offering re-accurring income at higher margins.
Scott Tidy: We are making investments in health beacon as part of their startup phase. The integration is going well. Revenue is increasing quarterly and we expect health beacon to contribute to operating profit in 2025.
Ruth Plans include adding new patients with existing specialty pharmacy customers, attracting new specialty pharmacies, and increasing the number of conditions that are treated using the system. We are adding a new specialty pharmacy on January 1st, and we are in promising discussions with several others.
Hamletomich Health is also exploring additional collaborations to further expand our focus on providing home healthcare management solutions.
In closing, our accomplishments over the first nine months of the year are rewarding to see.
and we're positioned well to carry this momentum forward.
Scott Tidy: We believe our incremental placements.
Plant Holiday Promotions, New Products, Increased Market Share, Position Us Well for Holiday First, Stop with the...
Scott Tidy: Deezer.
Scott Tidy: Welcome to Summer Spending Remains Restrain due to the challenges in the economy. We offer a broad line of products with valued luxury price points and we anticipate solid sales for the holiday. We expect to deliver a very good performance for the year 2020-24. And now we'll turn on our discussion over Sally.
Great, thank you Scott, good morning everyone. I will start with our third quarter, 2024 results compared to the third quarter of 2023.
As you've heard, you're pleased with our search quarter results.
Sally Cunningham: We experienced revenue growth and growth's profit expansion, even as we are starting to cycle over the more difficult comparisons that started in the third quarter of 2023.
Sally Cunningham: Hallever operating profit and net income, based headwinds from non-cast expenses.
Including Increased Equity and Seneca Expense.
The Disaster Appreciation.
and the one-time pension plan termination expense that was reclassified from accumulated other comprehensive income.
Scott Tidy: [inaudible]
Starting with revenue, total revenue in the third quarter was a 156.7 million, a 2% increase over last year's third quarter.
The increase was driven primarily by favorable product mix, as well as higher volume, partially offset by expected average price decreases.
Scott Tidy: Most of the growth was in the U.S. consumer market, which benefited from the incremental and new placements that Scott Scott.
Revenue also increased in our Mexican consumer market while revenue decreased in our Latin American and Canadian consumer markets.
Scott Tidy: Our global commercial market experienced a decrease in revenue due to soft international markets, especially China.
Offs them included in the third quarter was $1.2 million of new revenue from our health-beacon acquisition.
While the contribution to Total Revenue is small at this point, it has grown every quarter this year and is expected to grow in 2025.
Scott Tidy: Gross Profit, totaled $43.9 million, compared to $40.1 million.
Gross Profit Margin expanded to 28%, compared to 26.1%, and last year's third quarter.
The 190 basis points expansion in gross profit margin in the current quarter was due to favorable product mix and lower product cost.
Scott Tidy: In every quarter of this year, we have delivered above prior year quarter and above our historical range.
Scott Tidy: Our team is set in effective jobs keeping our growth profit margin strong while remaining competitive in the marketplace.
Selling General and Administrative expenses increased at $33.1 million. Compared to $25.6 million in the third quarter of 2023.
The increase was primarily driven by higher employee-related expenses, including $2.9 million of increased non-cash equity incentive compensation due to the significant appreciation of our stock price in the third quarter of 2024.
Scott Tidy: The addition of 1.8 million of health-beacons SGNA and the absence of a $900,000 non-recurring insurance to recovery in the prior year. Our team has done a good job managing the expenses that are worth an arc in control.
Creating Profit was $10.6 million, compared to $14.4 million a year ago. The decrease reflected the higher SGNA expenses partially offset by our expansion of gross profit margins.
I want to reiterate Scott's comments that health beacon is still in start mode and the integration is progressing as planned and we expect it to contribute to operating profits in 2025.
Net Interest expense was $59,000, and compared to $592,000 a year ago.
Scott Tidy: T2 both lower debt levels and lower interest expense.
Pension Termination Expense in 2024 was a one-time, non-cast charge of $7.6 million. We laid it to the reclassification of historical, unrecognized losses from other, accumulated other, comprehensive income.
Our Board approved the termination of our overfunded US-to-fun sentient plan in 2022. And as expected, we finalized the termination in the third quarter.
The resulting surplus assets estimated at $3.3 million, will be deployed over the next few years to fund other existing employee retirement benefits.
This is a big win for us as we expect to use the, as we expect this planned use of surplus assets, will free cash that would otherwise have been used for this purpose, thereby increasing free cash flow in 2025 and 2026.
and come tax expense with $700,000 compared to $2.8 million a year ago. Due to the tax benefit of the pension plan termination expense of $1.9 million.
Net income, inclusive of the pension plan termination impact, was $1.9 million, or 14 cents per diluted share. Compared to net income of $10.3 million, or 74 cents per diluted share a year ago.
Scott Tidy: The impact of the pension plan termination expense to the current period was $5.7 million or $41 per deleted share.
Scott Tidy: Now turning to our balance sheet and cash flow.
For the 9 months ended September 30, 2024, NetCash provided by offer and activities with 35.2 million.
Scott Tidy: which is reflective of normalized post-pandemic working capital.
This amount compared to $68.7 million for the same period last year, which was higher than normal due to the benefit of a significant reduction in post-pandemic.
Scott Tidy: Driven Access Imensory.
Networking Capital in the current period provided $20.3 million. Compared to $64.3 million.
Scott Tidy: The 2024 period benefited from our continued focus on working capital management, which led to improvements in day sales outstanding and day payable outstanding.
The Change and Metcash provided by operating activities reflects the networking capital changes partially offset by adjustments to net income for the non-cash, stock compensation and pension termination expenses.
Capital expenditures were $2.3 million in both the current and prior year periods.
During the nine months ending September 30, 2024, we allocated cash flow to fund the acquisition of health beacon for $7.4 million.
and to return value to shareholders to the quarterly dividend and share repurchases.
Year to date, we have paid $4.7 million in dividends and we purchased shares totaling $9.3 million at prevailing market prices.
On September 30, 2024, NetDead, or TotalDead, minus cash and cash equivalents, and highly liquid short term investments, with $22.5 million.
Comparative $49.7 million at the end of the prior year period.
Scott Tidy: are revolving credit facility expires on June 30, 2025.
We have not yet completed our refinancing of the facility. And accordingly, all amounts of standing have been classified as current liabilities on the balance sheet.
Based on the status of the refinancing and our history of successfully refinancing our debt, we believe it is probable that the facility will be refinanced before its maturity.
We believe funds available from cash on hand, the facility, and operating cash flows will provide sufficient liquidity to meet our operating needs and commitments.
Scott Tidy: Now let's be turned to our outlook, which has got said we are reaffirming. We continue to expect full year 2024 revenue to increase modestly and operating profit increasing significantly as compared to the full year 2023.
Speaker Change: I'd like to add a little more color to our outlook. As Scott discussed, starting in the third quarter of 2023, and each quarter since, we have reported revenue growth in gross, profit, margin expansion as demand, price, and cost and normalized.
Speaker Change: and because of the favorable impact of our focus on cost management and continued progress with our strategic initiative.
As we move into the back of 2024, our growth comparisons are cycling the normalized results that begin in the third quarter of 2023.
For the full year 2024, the retail marketplace for small kitchen appliances is expected to be modestly below 2023.
Speaker Change: We expect to outpace the industry as a result of our continued progress with our strategic initiatives.
As we discussed in our last call, the revenue grows we achieved for the first half of the year, the stronger than our expected revenue grows in the second half due to the year over year comparisons.
Moving to operating profit, grossing the first half of this year was stronger than the gross we have estimated for the second half. Again, as we cycle over the expanded grits that started in the third quarter of 2023.
Scott Tidy: and the fourth quarter we expect operating profit will continue to be impacted by higher SGNA.
Scott Tidy: Despite this impact, we continue to expect the operating profit to increase significantly in 2024 compared to the full year 2023. Based on expanding growth profit margins.
We expect that gross profit margin in the second half of 2024 will be comparable to the second half of 2023.
I'll also comment on cash flow for the year ended December 31, 2023, cash provided by operating activities, less cash used for investing activities, with an outside $83.5 million.
which included the significant impact of our focus on networking capital improvement, particularly the reduction of pandemic-driven access inventory.
Our normalized cash from operating activities, less cash used for investing activities, is in the $25 million to $35 million range.
We expect to end 2024 in the upper end of that range.
That concludes our prepared remarks. We will now turn the line back to the operator for Q&A.
Thank you, as a reminder to ask a question, please press star, followed number one on your telephone keypad. Once again, that is star, followed number one.
Scott Tidy: The End
Speaker Change: Our first question comes from the line of Adam Bradley with AGB Capital. Your line is open.
Hi, Sally and Scott congrats on another great quarter. I've been a cheerholder for several years and I've just been really pleased with the profitability expansion, especially recently.
So I wanted to ask, yeah, yeah, I'm a good job, guys.
and Scott welcome. Yeah, thank you. Looking forward to your leadership as a shareholder.
So I have some detailed questions about the P&L that help understand and inform the forward looking.
Okay. If I start at the gross margin level, there has been significant expansion as you all highlight, and that has been great.
The SG&A line, especially the last Recorder's, has expanded as well. You identified 4.7 million here in the remarks of the equity compensation and health beacon.
That explains a good amount of it. If I take that out, we're still seeing, you know, like, this quarter, for example, about 12% you are RRFG and A-growth.
So that is not my question. My question, though, is...
How correlated is the SGA expense change to that of gross margin?
Scott Tidy: Rather than sales, because specifically sales are growing at a, you know, low to mid single digit rate. But I'm sorry, gross profit is expanding at a very high rate as is S. F. E. A.
Scott Tidy: and what I'm really trying to get to is if we're if gross margins were to begin to normalize back to historic levels, what SGA would portions of SGA may also come down. Try and understand the relationship between your SGA costs and your gross profit line.
Um, you know, I think that's a good question. I mean, I think, I think, and, I think, and, I guess, you know, you have the ability to construct.
as needing an expanded you as you make investments.
So, certainly if we started to see construction in our gross profit margin, it would of course take a look at our controlable expenses and right-sized those as well. I do think you're seeing in our SGNA right now a couple things that are beyond our control with the stock price.
Appreciation. I think you're seeing some known investments that we're making, particularly in the health beacon, right? Like we knew that, you know, this first year was going to be, you know, a little bit of drain on the operating profit, but kind of permanent increase to SGNA, because that's the nature of buying another business.
Scott Tidy: But we feel like that business will be...
Contributing to operating profit in 2025. And then I think the rest of what you're seeing in there is just continued investments from the business as we're trying to continue to grow and pursue our strategic initiatives.
Speaker Change: Okay, great, thanks. Yeah, I'm the stock price. Let's uh...
Let's hope that can.
Speaker Change: and that's what that continues. Well, it's a good thing that thing. Yep. Well, I think your compensation, you know, that you can control ultimately in the number of shares that you do issue. But I think I think the answer to my question, so to summarize.
Some of it, some of the expansion that we're seeing in SGA is the result of expanded profitability and investment in new areas as well as some, okay great. I have a second question, I can ask it now or I can get back into the queue.
Go ahead, go ahead and ask us
So this gross margin expansion has been really great to see for two reasons.
Speaker Change: from my investor perspective.
One is that just on its face, it's great to see better profitability from what you're doing. Two over the last five or six quarters, it's been actually the result of higher unit volumes.
and your price has actually been a...
Speaker Change: Christ for you and it's actually been coming down for the for six quarters. Yep. So it's what you all highlight is that it's more mix and volume contributing to growth profit over price.
Can you, can you, how one question number one is how sustainable are the existing gross margins? Like you're hitting 28, I mean every quarter now it's been higher than previous for a little while now, on a rolling 12 months.
Basis, or so how much of it is sustainable and can you give a little more color on what is driving it a little more specifically? Is it investment in new areas?
Speaker Change: New product lines or versus extensions of older product lines just help us understand its sustainability and what's really driving it. I think it's key to your profitability so I think we need to know.
Okay Adam, I mean this is a scrap. So I think you brought up a couple of reasons why our gross profits have been improving.
Speaker Change: It is because of Nick's and also just from the cost decreases that we've had as we've gotten back into a more normalized time period.
Speaker Change: but as we talked about we've got a couple of strategic initiatives that are favored at higher gross profits.
as I indicated, we're really working hard to improve our market share in the premium market. In that space, you're going to find higher margins and you're going to find in the mass markets.
We've also improved our profits in the commercial space.
and you know as we bring on while it's still a small amount as we bring on the Hamilton Beach Health Business we think that those gross margins will be very healthy for us. So you know overall we're continuing to work on our mix.
Speaker Change: as we look at how do we want to be growing share in certain markets and so between offering just overall generally higher price goods to our retail partners.
and getting more market share in that more premium segment. That's one of the drivers that's been driving our Agarist Prophet.
Speaker Change: Thanks, how can the sustainability of this?
Yeah, I think we're very focused if you look at the 40-plus new products that we're bringing out. Our goal is to continue to keep pushing up our grocery's profits. And so, our teams here are designing and developing products.
You know that meet those consumer solutions though but at higher gross profits and we feel like that's a thing that we need to continue to do. We feel like they're space there and we have a lot of ability to continue to grow and drive more market share.
Alright, thank you. Well, great job. I know when I was lucky to history the company, it's always been good and stable and is now, you know, hitting a new level of profitability. So thanks for answering my questions and great job. Yeah, thank you. I appreciate your questions.
and there are no further questions at this time. I'll let the hand things back over to Scott Heidi for some clothesling remarks.
Thank you. As you've heard today, we are pursuing multiple avenues to continue to grow revenue, expand margins, and deliver strong cash flow. Our company is committed to increasing long-term shareholder value.
Scott Heidi: For the year 2024, we expect to deliver a significant increase in operating profit reflecting revenue growth and gross profit margin expansion. We look forward to finishing this year in a strong position. That concludes our report for today. Thank you again for joining our call.
Speaker Change: The