Q3 2024 Superior Group of Companies Inc Earnings Call
Speaker Change: Good afternoon everyone. Welcome to the Superior Group of Companies 3rd Quarter 2024 Conference Call. Well, that's today our Michael Benstock, Chief Executive Officer.
Speaker Change: and Michael Chief Financial Officer.
Speaker Change: As a reminder, this conference call is being recorded. This call may contain forward-looking statements regarding the company's plans, initiatives and strategies, and the anticipated financial performance of the company, including but not one-to-two, sales and profitability.
Speaker Change: Such statements are based upon management's current expectations, projections, estimates, and assumptions. Words such as expect, believe, anticipate, think, outlook, hope, and variations of such words and similar expressions identify such forward-looking statements.
Speaker Change: Ford looking statements involved known in unknown risk and uncertainties that may cause future results to different material from those suggested by the Ford looking statements.
Speaker Change: Such risks and uncertainties are further disclos in the company's periodic finalings, with its securities and exchange commission, including Benon Limited II, the company's most recent annual report on Form 10K and the quarterly reports on Form 10Q.
Speaker Change: Shareholders, potential investors, and other readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein.
Speaker Change: and our caution not to place undue reliance on such forward-looking statements. The company does not undertake to update the forward-looking statements, except as required by law. And now, I'll turn the call over to Michael Benstock. Please go ahead.
Michael Benstock: Thank You operator and welcome everyone to today's call. I'm going to start with third quarter financial highlights and then discuss our three business segments
Michael Benstock: After that, I'll hand it over to Mike, who will walk us through a more detailed financial discussion as well as our outlook for the rest of the year. When Mike is done, we'll open the call for your questions.
Michael Benstock: Our overall third quarter performance improved versus the second quarter as well as the year earlier quarter with top line growth and greater profitability.
Michael Benstock: While we still sense some hesitancy on the part of customers, given the uncertainty that's existed all year around inflation, interest rates, the presidential election, and geopolitical conflicts, we achieved the acceleration over the first half results that we spoke about on our Q2 call.
Michael Benstock: You might recall that we contemplated the benefit of the revenue shift into the third quarter resulting from the second quarter supply chain issues. We continue to execute internally to make the most of these still somewhat soft market conditions.
Michael Benstock: We are proud to say that these are the highest quarterly revenues ever achieved in our core products and services. The only other time we have ever slightly exceeded this was in Q2 2020 when our revenues were largely made up of PPE in response to the early stages of the pandemic.
Michael Benstock: EBITDA of $11.7 million was up 26% from $9.3 million and our EBITDA margin expanded a full percentage point to 7.8%.
Michael Benstock: Putting this all together, our third quarter diluted EPS rose to 33 cents from 19 cents a year earlier.
Michael Benstock: Going forward, our financial strength will allow us to continue our strategic investments to capitalize on the compelling growth opportunities within our three very attractive end markets.
Michael Benstock: Before turning to a discussion around our segments, I'll reiterate what I mentioned on prior calls. From a big-picture standpoint, Superior Group Company still has a very small but expanding share of three large, growing, and highly fragmented end markets.
Michael Benstock: We are intelligently investing in our people, services, products, and technology to continue to take more than our share of new customers, with an emphasis, as always, on excellent retention of existing customers.
Michael Benstock: Now let's shift to our business segment, starting with healthcare apparel.
Michael Benstock: Our third quarter revenue was up 11% versus the prior year quarter, benefiting from growth in our online channels, both wholesale and direct to consumer.
Michael Benstock: despite continued soft market conditions in the wholesale channel of our business selling to healthcare apparel retail stores. Our third quarter revenue also benefited from the timing of revenues as compared to last year due in part to the supply chain issues in Q2 that we already mentioned.
Michael Benstock: The increase in our gross margin percentage of more than 300 basis points was partially offset by an increase in SG&A as a percentage of sales of 200 basis points.
Michael Benstock: While the SG&A rate was at its best level so far in 2024, the rate did increase year over year, mostly due to sales and marketing investments to drive awareness of the Wink brand and to support our online channels, as well as continued investments in top talent.
Michael Benstock: As a result, our EBITDA and our healthcare apparel segment of $3.8 million was up from the year ago $3.1 million.
Michael Benstock: Let's move on to our branded product segment, which also achieved revenue growth of 11% compared to last year. The revenue increase was mostly driven by increased volume with existing customers, including the revenue shift discussed earlier, as well as the addition of many new customers.
Michael Benstock: Overall, the business has played out as indicated on our prior call.
Michael Benstock: Similar to the second quarter, demand trends were reasonably solid, even though there's still a fair amount of customer caution.
Michael Benstock: In addition to the top-line growth, during the quarter, our gross margin expanded 160 basis points, and we were also able to reduce SG&A as a percentage of sales by 180 basis points.
Michael Benstock: As a result, our EBITDA was up more than 50% over the prior year to $10.7 million and our EBITDA margin expanded more than 3 percentage points.
Michael Benstock: Next up is contact centers, our highest margin segment, which had a 4% year-over-year sales increase driven by new customers, partially offset by lower sales from existing customers.
Michael Benstock: Our investments in talent and satellite offices to support future organic growth are reflected in our healthy win rate and pipeline of new business, but are also currently affecting our gross margin SG&A. As a result, our EBITDA was $3 million versus $4.1 million in the prior year period.
Michael Benstock: Our longer-term strategy for contact centers is to grow our customer count catering to small and medium-sized enterprises.
Speaker Change: In addition to significantly launching and growing our sales team and increasing our marketing spend, we're also deploying the very latest technology to benefit the customer experience, enhance our efficiencies and competitive edge, and to profitably grow over time. With that, I'll turn it over to Mike, who will take us through our third quarter results in detail and update you on our full year outlook. Mike?
Mike: Thank you, Michael, and thanks everyone for being on today's call.
Mike: Taking a look at what drove this performance, healthcare apparel revenues were up 11% to $33 million and branded products revenues were up 11% to $93 million.
Mike: As we expected, the timing of revenues due in part to the supply chain delays we referenced last quarter benefited our third quarter results for these two segments.
Mike: Both healthcare apparel and branded products saw stronger growth margins.
Mike: top 310 and 160 basis points respectively, benefiting from cost of goods favorability associated with healthcare production at our Haiti manufacturing facility during the quarter, as well as favorable sourcing mix and pricing within branded products.
Mike: Turning to SG&A, versus the prior year we were able to hold expenses almost flat as a percent of sales, up just 20 basis points to 34.9%.
Mike: Our SG&A expenses were $52 million, up from $47 million a year earlier, primarily driven by increases in employee-related costs.
Mike: commissions, marketing investments within healthcare apparel, professional fees, and satellite office expansion and bad debt expense for contact centers.
Mike: Moving to the EBITDA line, our third quarter grew to $11.7 million, up from $9.3 million in the year-ago quarter, representing a full percentage point expansion in our EBITDA margin as previously mentioned.
Mike: On a segment-by-segment basis, our healthcare apparel EBITDA margin expanded 110 basis points to 11.4%, driven by higher growth margins, partially offset by investments in marketing and talent.
Mike: The branded product EBITDA margin was up 330 basis points to 11.6%, benefiting from both expanded growth margins and operational leverage on the top line strength.
Mike: However, contact centers, our smallest segment, saw an EBSL margin decline from 16.8% to 12.1%, driven by increased agent costs and the aforementioned investments in talent to drive the pipeline for future growth.
Mike: Moving further down our income statement, our third quarter interest expense was 1.6 million dollars, improved from 2.5 million dollars in the prior year period.
Mike: driven by a $36 million reduction in our weighted average debt outstanding, as well as a 110 basis point decrease in our weighted average interest rate.
Mike: Our net income for the third quarter also improved to $5.4 million, up from $3.1 million in the third quarter of 2023. This equated to $0.33 per diluted share, up from $0.19 in the year-ago period.
Mike: These results include $6.3 million in share repurchases during the quarter, which I'll touch on in a moment.
Mike: Our operating cash flow remained strong, having generated $24 million year-to-date, and our net leverage ratio for the third quarter was 1.6 times trailing 12-months covenant EBITDA.
Mike: an improvement relative to two times at the end of 2023 and 2.9 times a year earlier.
Mike: We ended the quarter with roughly $3.7 million remaining under our buyback authorization and continue to view our shares as a compelling value.
Mike: Now turning to our outlook, we're reaffirming our full year 2024 expectations.
Mike: which reflects the acceleration over our first half results that we mentioned last quarter.
Mike: largely driven by our strong third-quarter results. Therefore, we continue to expect revenues in the range of $563 million to $570 million in full-year earnings per diluted share in the range of 73 cents to 79 cents.
Mike: With that operator, Michael and I would be happy to take questions. If you could please open the lines.
Speaker Change: We will now begin the question and answer session. To ask a question, you may press star, then one, on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.
Speaker Change: And our first question comes from Kevin Stank with Barrington Research. Please go ahead.
Kevin Stank: Good afternoon.
Kevin Stank: Good afternoon, Kevin. I wanted to start off by just asking about
Speaker Change: some supply chain delays and some of that revenue being pushed out from the second quarter into the second half of the year. Would you kind of characterize the benefit to the third quarter here from that pushed out revenue still kind of what in the few million dollars range?
Speaker Change: Hi Kevin, this is Mike. Yes, as I mentioned last quarter, we estimated that impact to be about a few million dollars and that in fact was the case all largely received here in the third quarter.
Speaker Change: Okay, and you mentioned still some customer hesitancy, although maybe some modest improvement in sentiment.
Kevin: maybe if you could just...
Kevin: a little bit more into what you're hearing from your customers.
Kevin: in terms of
Kevin: their outlooks and their spending plans and
Kevin: you know, if things kind of start to improve now that we're post-election or any other factors that you might want to touch on there.
Speaker Change: Okay, you know you have to take it by business segment, so we'll start off with the branded products.
Speaker Change: and we're hearing much the same that we were hearing last quarter. Demand is edging up.
Kevin: We had a very nice third quarter, obviously, in branded products.
Kevin: But still, you know, the uncertainty, I mean, hopefully after last night and this morning,
Kevin: and Michael B platform.
Kevin: and there's always a few surprises in the fourth quarter. Sometimes very good surprises, like last year we had a stupendous fourth quarter. So there could be those kind of surprises this year, again in fourth quarter. We're in brand-new products, we're going up against some pretty tough numbers.
Kevin: None of this is really an excuse for...
Kevin: Michael Koempel, Michael Benstock
Kevin: But, you know, I say it over and over again, the market's huge and we have a lot of
Michael Benstock: We don't manage the business from a quarter-to-quarter basis, we have a much more long-term view of the business. And we think that there's going to be some real growth in our future with some of the great strategies that Jake and team and our branded products has put together.
Michael Benstock: When you get to health care apparel...
Michael Benstock: We're seeing all of the different channels that we sell in are doing quite well except for brick and mortar. The trade accounts are definitely seeing a slowdown of traffic in their stores as things move to more digital channels.
Michael Benstock: But, you know, we've seen soft consumer spending during this election season in our consumer-facing business and, again, you know, that's mostly in the retail distribution. They're cautiously optimistic. You know, we just went to a show last week where it's a retailers'
Michael Benstock: the URA, it's the Uniform Retailer Association show where we were the bell of the ball. Everybody was really excited about all the newness that we brought to the market with our new team, we were inundated with people walking into our booth, while the rest of the show was pretty quiet. So we believe that demand will return post-election.
Michael Benstock: I know you're going to ask me this question but I don't answer it now and that's on the industrial laundry side of our business. We've really seen no discernible difference in that business. That business is going along just fine.
Michael Benstock: Now on the, I don't think the contact centers.
Michael Benstock: It's not a buying and replenishment type of business like the other businesses are. But we have seen slow decision making. We said it before, our pipeline is really robust.
Michael Benstock: direction.
Michael Benstock: You know, the Fed certainly is going to make a move.
Michael Benstock: and Joe Biden.
Speaker Change: Okay, excellent. That's excellent insight. And you mentioned some slow decision making and contact centers, but I think you had also referenced just
Speaker Change: some lower revenue from existing customers. I mean, there's, again, I guess, is that just due to the overall hesitancy in the market environment, maybe an option?
Michael Benstock: Customers have taken out a few seats or maybe what's going on there.
Speaker Change: I think it's a combination of a lot of things. One of the things we haven't spoke much about is we're constantly on the
Speaker Change: as customers, they are looking for more cost-effective solutions.
Speaker Change: for many, many years, and still, the near shore that we provide is a very cost-effective solution. But we know that we might have to go further away than near shore.
Speaker Change: to find
Speaker Change: Michael Koempel, Michael Benstock
Michael Benstock: over the next year.
Michael Benstock: Michael Koempel, Michael Benstock
Michael Benstock: And Kevin, this is Mike, I would just add, as it relates to existing customers,
Michael Benstock: From quarter to quarter, we could see increases or decreases. I certainly wouldn't look at the lower revenue from existing customers this quarter as any sign of a trend. In fact, we had added seats for existing customers.
Michael Benstock: the first half of this year. So, it's typical that there can be ebbs and flows in addition to, obviously, our focus on adding new customers going forward.
Speaker Change: Okay, that's helpful. Just lastly, so with you maintaining the guidance range and the strong third quarter revenue
Speaker Change: the you know the top end of the
Speaker Change: and just, I guess, customer hesitancy, you know, supply chain push forward in the third quarter, etc. Is that the way we should think about it?
Speaker Change: I think that's right, Kevin. You know, I think we certainly had some, I call it, tailwinds here in the third quarter. You know, you touched on the shift that we benefited from out of the second quarter, which...
Speaker Change: gave us.
Speaker Change: Again, as Michael mentioned, I'll say near record sales for the third quarter, so it would imply that we're
Speaker Change: in the fourth quarter going to be flat, flat to down sequentially. But again, that's also a tough comparison given the strong quarters that we had. But as Michael said, still comfortable within the guidance range.
Speaker Change: Okay, thanks for all the insight. I'll turn it back over for now.
Speaker Change: And the next question comes from Jim Sidoti with Sidoti and Company. Please go ahead. Hi, good afternoon. Thanks for taking the questions. It sounds like you were able to bring some new sales folks on board in the quarter. How long does it typically take for them to start to contribute?
Speaker Change: Yeah, what we were speaking of is new salespeople that we brought on for TOG and so
Speaker Change: You've got to keep in mind, Jim, that prior to about a year ago, we didn't have the sales force.
Speaker Change: at TLG. We built that business without a sales force.
Speaker Change: We use brokers, we use referrals, our website, word of mouth, and really we've been very, very fortunate that we have a sales force. My answer to you is, we don't know yet.
Speaker Change: because we don't know we know that we've had a salesperson who started with us not very long ago I think within
Speaker Change: six weeks had signed up a new customer.
Speaker Change: that's not typical, but if they come to us from the industry, which is where we're trying to hire them,
Speaker Change: and Mark Withee.
Speaker Change: The goal would be that they're paying for themselves very quickly, within six months, but certainly within a year they should be producing many times in revenue, at least, of what we're paying them.
Speaker Change: How would you describe your pricing power at this point? I know you put in a price increase about a year ago. Is that stuck and do you think you can continue to raise prices as your costs go up?
Speaker Change: It's an interesting question. For people who have never outsourced before, which has been largely how we've built our business, our pricing is just fine because it's considerably less than their costs in the United States, sometimes as much as 60-70% lower than what they're paying in the United States on a per hour basis.
Speaker Change: Think of all the other overheads they have
Speaker Change: So, for them, it's like stars in their eyes they can save that kind of money. For people who have been outsourced for a long time in different countries, it seems to me a more cost effective way.
Speaker Change: and are looking at us as an alternative because, you know, they've been recommended.
Speaker Change: that somebody has recommended us to them. You know, that gets more down to price, you know, nailing down the right price, which is, we want to be all things to all people, which is why I said earlier, we are going to find a lower-cost solution.
Speaker Change: who want a blended cost between a much lower cost and a near shore.
Speaker Change: And so it's price sensitive, you know, we're not without competition. We have a ton of competition out there. So we've got to be very, very price conscious. Up until now, it hasn't been as much of an issue because it's been smaller customers who have an outsource.
Speaker Change: But, you know...
Speaker Change: We're going to grow this business double digits, which is our intention, to get back to that again.
Speaker Change: You're talking about having to put on, you know, literally, you know, as you grow 3-4 years down the road, we'd have to be putting on a thousand people a year. You're not going to do that with 25C customers.
Speaker Change: So you've got to find a value proposition for larger folks as well.
Speaker Change: All right, and then a last one from me. It looks like you bought back about $6 million worth of...
Speaker Change: shares in the quarter.
Speaker Change: I think it was a ten million dollar buyback authorization. Do you expect to complete that in 2024?
Speaker Change: Yeah, Jim, so as of the close of business yesterday, we had about $2.6 million remaining under our $10 million authorization. So we obviously continue to believe that our stock is a good value, and we'll certainly
Speaker Change: You know, manage the plant going forward and, and get it into the market where we feel like there are good opportunities, and, and continue to buy against the authorization, you know, as we as we deem fit. And obviously we continue discussions,
Speaker Change: with the board in the context of our overall capital strategy.
Speaker Change: to determine to what extent we may want to do more in the future. But again, that's ongoing dialogue that we have with our board on a regular basis. But again, we'll continue to monitor the share price and purchase as we see fit under the current authorization.
Speaker Change: Okay. All right. Thank you. That's it for me.
Speaker Change: This question comes from Keegan Cox with DA Davidson. Please go ahead.
Keegan Cox: Hi, Michael and Mike, how are you?
Speaker Change: Good, thank you. Thanks.
Speaker Change: I just had a question on the branded product segment.
Speaker Change: Hi.
Speaker Change: I think...
Speaker Change: What I would say is, a year ago, we saw a big downturn in our tech customers buying.
Speaker Change: And a lot of that has resumed now, so that's good news. And that's what was maybe dragging things down a year ago, even though the fourth quarter, we had a great quarter last year, but throughout the year, we were struggling a little bit. So.
Speaker Change: I think we're seeing a lot healthier customers out there today. There's still budgetary concerns and it's amazing to me how many people, we've done more RFPs than we've ever done before.
Speaker Change: But literally, we get to the finish line with some of these. And more so now than ever, they are coming back to us. These are our multi-million dollar bids coming back to us and saying, I ran this by my board and they asked me to defer it until next year. And that is very frustrating to Jake.
Speaker Change: Michael Koempel, Michael Benstock
Speaker Change: And I would add, Keegan, much like we just explained in the second quarter...
Speaker Change: We're continuing to see, you know, more orders, smaller order size.
Speaker Change: which, again, as we mentioned before, we think is actually, you know, an advantage to us because, obviously, we can work especially with new customers to grow that, you know, share of wallet over time.
Speaker Change: So continuing to see that trend, but to Michael's point, not a particular weakness or concern in any one particular industry.
Speaker Change: Awesome, and then just to follow up, you mentioned a little bit of sourcing favorability and pricing in healthcare apparel and branded products. I just wonder if you could give a little more color on that.
Speaker Change: Sure, I mean, in terms of pricing, you know, it's...
Speaker Change: It's an area obviously that we're always focused on and where we have opportunities to
Speaker Change: to push for higher pricing. We certainly continue to do that in the branded product space where.
Speaker Change: in particular in a promotional space where we're pricing order by order gives us that flexibility again to where we can take advantage of price where we have that opportunity.
Speaker Change: From a sourcing standpoint, we had some favorability in what I refer to as sourcing mix, where for some of our larger customers, we had
Speaker Change: higher margin based on the source of production in the quarter. So kind of a combination of product and sourcing mix working together which drove a higher margin for us here in the third quarter.
Speaker Change: and
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: The next question comes from David Marsh with Singular Research. Please go ahead.
Speaker Change: www.microsoft.com.ca
David Marsh: Hey guys, thanks for taking the questions. Just, I guess, one quick housekeeping. I mean, in terms of the shipping delays that you guys have experienced in Q2, I mean, would you say that they're completely resolved at this point, or are you still seeing a little bit of that?
Speaker Change: Good question. I'd say that we planned around a lot of them, you know, that adding time to our lead times to make things happen.
Speaker Change: so that they're less impactful to us.
Speaker Change: The Middle East conflict obviously is impacting Suez Canal traffic, residual delays from re-routing shipments to the West Coast network.
Speaker Change: Destined for the East Coast because of the strike. They had to be rerouted It's a little bit. I mean this I can name eight or ten other things that are that are impacting
David Marsh: Logistics side, it's not the factories.
David Marsh: It's logistic. In getting the container picked up in some of these countries it is becoming a very, very competitive environment, and prices have gone up accordingly. We will pay the price. We've contemplated some of that in our pricing already.
David Marsh: We've got to see what happens. There also was a huge shift.
David Marsh: Thank you.
David Marsh: sitting in the White House, which...
David Marsh: then it was if, now it's when, and so there was a lot of pressure on a lot of factories as well as logistics companies to move product quickly, and a lot was reserved, which has created delays.
Speaker Change: And Dave, like we mentioned in the last call, we obviously made adjustments to our planning and our lead times when we began to see issues in the second quarter, so we wouldn't expect those delays to have a significant impact on us in the near future.
Dave: And just as a follow-on to that, I mean your inventory is down a decent amount from the end of the prior year and it's kind of you know one of the lower numbers you've had in a while. You know, do you have, do you guys have the inventory to you know to supply the orders if they come in and if they come you know kind of roaring back here in the fourth quarter?
Speaker Change: It's a great question. I'd say overall we do. With that said, of course, there's always...
Speaker Change: I would say pockets of inventory that we are chasing, that we have been chasing due to just changes in certain customer demand for a certain product. So we are overall in a good position and again just
Speaker Change: plug some holes in select products. But again, overall, we feel comfortable that we've got the inventory to fuel the fourth quarter.
Speaker Change: and, obviously, were...
Speaker Change: working toward our planning as we head into 2025 to make sure we're positioned appropriately as well.
Speaker Change: If we ran out of inventory in fourth quarter, it would mean we had the most incredible quarter imaginable. So, I don't know if I should say I welcome that happening or not, but that is the truth.
Speaker Change: Yeah, always be careful what you wish for. And then just lastly for me, just curious on, you know, kind of on the acquisition landscape, if you will. You guys have not really done anything.
Speaker Change: This year doesn't look like, but you know, I'm guessing there are some opportunities out there. Perhaps. Could you just talk about, you know, maybe order priority where you might try to pick up some assets if you can find some that are attractively priced.
Speaker Change: Bye.
Speaker Change: as we've said in the past.
Speaker Change: We don't speak about acquisitions before we deal with them, except to say we're always in talks with people.
Speaker Change: We want to do, and at least in the markets we serve, there aren't a lot of larger competitors. There's mostly smaller competitors, so we kind of pick and choose the size and the nature of the acquisitions we want to do.
Speaker Change: We are active.
Speaker Change: that would be very advantageous to us.
Speaker Change: Sounds good. Thanks guys. Congrats on the quarter.
Speaker Change: Thank you. Thank you.
Speaker Change: And the next question comes from, again, Kevin Stank with Barrington Research. Please go ahead.
Kevin Stank: Hey, thanks. I just wanted to sneak one more in here. So, in your earnings release, you mentioned ongoing growth-oriented investments.
Speaker Change: You know, SG&A year-to-date has been up as a percentage of revenue, although
Speaker Change: As you mentioned, it kind of flattened out here in the third quarter, just trying to think about the balance going forward, you know, do those
Speaker Change: both investments.
Speaker Change: continue at a similar pace to where they've been. You know, even if that continues...
Speaker Change: Do you think you can get some SG&A expense leverage, or does the pace of growth investment slow down here? Just trying to think about the SG&A line and potential leverage opportunity there as we go forward.
Speaker Change: Sure, I think for the balance of the year, Kevin, I think our SG&A rate will be pretty well in line with the year-to-date trend, you know, so I'd say here in the near term. I'd say overall, I would not expect significant increases in additional investments.
Speaker Change: you know, in each one of our segments.
Speaker Change: We talk a lot about talent and in particular investing in sales talent, Michael mentioned, in our contact center business.
Speaker Change: which obviously has been an incremental investment in this past year. We've been obviously making a lot more of a marketing investment now that we're in year two of our direct-to-consumer launch.
Speaker Change: So, I think we've made...
Speaker Change: some bigger investments this year that we would.
Speaker Change: expect to begin leveraging as we go forward.
Speaker Change: And again, we recognize that these investments have put some pressure on our rate in the shorter term.
Speaker Change: but we feel like we'll get leverage in and get, you know, top-line growth off of those investments as we shift into 2025.
Speaker Change: Okay, that sounds good. That's very helpful. Thanks a lot.
Speaker Change: And this concludes our question and answer session. I would like to turn the conference back over to Michael Benstock for any closing remarks.
Michael Benstock: Thank you everyone for being with us today. We of course look forward to providing our next update with full year results. Please reach out if you have any further questions. Enjoy the evening and thank you as always for your interest in SGC.
Speaker Change: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: [music]