Q3 2025 Lakeland Industries Inc Earnings Call
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Hi.
Speaker Change: Good day, and welcome to the Lakeland Industries Fiscal 2025 Third Quarter Financial Results Conference call.
Speaker Change: On this call. We will also discuss financial measures derived from our financial statements that are not determined in accordance with U S GAAP, including adjusted EBITA, excluding FX and adjusted EBITDA, Excluding FX margin I.
Speaker Change: A reconciliation of each of the non-GAAP measures discussed on this call to the most directly comparable GAAP measure is presented in our earnings release.
Speaker Change: A press release detailing these results crossed the wire. This afternoon and is available in Investor Relations section of our company's website IR Dot Lakeland Dot com.
At this time I would like to introduce your host for this call Lakeland Industries', President and Chief Executive Officer, and Executive Chairman, Jim Jenkins, and Chief Financial Officer, and Secretary Roger Shannon.
Speaker Change: Mr. Jacobs the floor is yours.
Speaker Change: Thank you operator, and good afternoon, everyone. Thank.
Speaker Change: Thank you for joining us today to discuss the results of our fiscal 2025 third quarter ended October 31 2024.
Speaker Change: For those of you new to the Lakeland story and our strategy, we are a global manufacturer of personal protective equipment.
Speaker Change: Errol and accessories with a head to toe portfolio, our premium fire service brands and mission critical industrial PPE.
Speaker Change: Our management team is implementing strategies to accelerate growth and margins within the global file fire turnout gear and industrial PPE markets with acquisition focus on the fragmented fire industry.
Speaker Change: Near term our strategy is to leverage our leading market position in fire protection premium brands and accretive M&A to accelerate profitable growth in the higher margin 2 billion dollar fire protection sector and the largest global markets.
Speaker Change: Our long term strategy is to grow both our fire services and industrial PPE verticals that are strategically located company owned capital light model, focusing on operating and manufacturing efficiencies to achieve higher margins with positioning to grow faster.
Speaker Change: The end markets served.
Speaker Change: These strategies and this experienced management teams execution of them are translating into strong financial performance with fiscal year 2025 guidance equating to at least 28% year over year top line growth with positioning for mid to high single digit organic growth ahead, we.
Speaker Change: We are well capitalized with a strong balance sheet and expanding free cash flow growth to fund our fire services acquisition strategy and initiatives above current guidance.
Speaker Change: Importantly, our tenured new management team has successfully executed a similar strategy to Lakeland.
Speaker Change: Turnaround and efficiency focus that accretive acquisitions and synergies to accelerate growth and create value.
Speaker Change: Lakeland fire and safety is mission critical product portfolio includes North American and globally certified turnout gear safety helmets fire boots particular, blocking goods and fire gloves for our fire services segment.
Speaker Change: Our industrial segment includes a wide range of high quality safety products, including chemical suits, PPE and disposable Coveralls high performance F. R.
Speaker Change: And woven garments and safety boots.
This slide shows our global head to toe fire services portfolio comprised of five premium brands that combined operate and serve our customers on a global scale.
Fire products are available globally through strategic distribution partners across 78 countries with a focus in the three largest regional markets for firefighter turnout gear, North America, Germany and Australia.
Speaker Change: Our Eagle brand has a strong presence in the middle East as does LHC in Egypt in Asia.
The third quarter was marked by robust sales led by our head to toe fire services segment to a growing geographic customer base with a 61% sequential and 245% year over year increase our focus on this segment is driven by a growing global market with a highly fragmented competitive set without a dominant player virus.
Speaker Change: Service this business has better visibility and margins as compared to other segments and we believe <unk> can become a top three competitor to our strong family of brands acquisition strategy and superior lead times and customer service.
Overall, the quarter met our expectations as robust organic and inorganic fire services growth was supported by a rebound in U S sales and ongoing European Asian, and Latin American growth.
Speaker Change: As well expanding opportunities in Latin America with sales leadership in Asia, and unexpected large fire services shipment in Europe contributed to our results.
Speaker Change: To summarize we saw we saw strong net sales in the third quarter, increasing 45% to $45 8 million.
Speaker Change: Led by a 245% increase in fire service products gross profit increased 39% to $18 6 million due to strong revenue growth and organic margin improvement.
Speaker Change: We remain confident in our growth strategy and expanding market opportunities and fire services and industrial safety products. Our commitment remains unwavering and I am excited about the remainder of this fiscal year.
Looking ahead to fiscal 2025 based on our existing backlog and our outlook for the remainder of the year. We are maintaining guidance for 2025 fiscal year. Please note that these expectations include the announced jellied boots specific helmets and LHC group acquisitions, we remain confident in our global sales platforms and ability and Ernie.
Speaker Change: The ability for the last quarter of year, and we are reaffirming expectations for fiscal year 'twenty five revenue of at least $165 million. Additionally.
Speaker Change: Additionally, we reaffirm our expectations for fiscal year 'twenty five adjusted EBITDA, excluding FX to be at least $18 million.
Speaker Change: With that I'd like to pass it over to Roger to cover our financial results and provide an outlook for the rest of the year.
Roger: Thanks, Jim and Hello, everyone.
Roger: Looking at our third fiscal quarter of 2025, Lakeland delivered sales of $45 8 million compared to $31 $7 million for the third quarter last year.
Roger: Organic revenue comprised 70% of our total sales.
Roger: What are your 5% of our Q3 revenue from our recent acquisitions.
Roger: On a consolidated basis for the third quarter of fiscal year 2025, domestic sales were $15 4 million or 34% of total revenues and international sales were $34 million or 66% of total revenues.
Roger: This compares with domestic sales of $15 1, million% to 48% of the total and international sales of $16 6 million or 52% in the third quarter of fiscal 2024.
Roger: During the third quarter of fiscal 2025, the company saw sales growth in North America, Latin America Asia and Europe.
Roger: Organic revenue increased seven 3% to $34 million for the third quarter of fiscal 2025 compared to $31 $7 million for the third quarter 2024, showing the results of our focus on efficiencies.
Roger: Gross profit for the third quarter of fiscal 2025 was $18 6 million, an increase of $5 2 million or 38, 9%.
Roger: Year to $13 $4 million for the third quarter of fiscal 2020 vision.
Roger: Gross profit as a percentage of net sales decreased to 46% for the third quarter of fiscal 2025.
Roger: 42, 2% in the third quarter of fiscal 2024.
Roger: Gross margin performance declined in the third quarter of fiscal 2025, due to lower margins from LHC and Jolly, particularly driven by the amortization of the step up in basis of acquired inventory.
Higher inbound freight expense in anticipation of fourth quarter sales.
Roger: Organic gross margins increased by two.
Roger: 200 basis points to 44, 2% for the third quarter of fiscal 2025 compared to 42, 2% for the third quarter fiscal 2024.
Roger: Operating expenses increased by $8 million or 82, 5% from $9 $7 million for the third quarter fiscal 2024 to $17 $7 million for the third quarter of fiscal 2025.
Roger: Operating expenses increased due to inorganic growth acquisition expenses nonrecurring expenses and increased organic SG&A operating expenses, primarily professional fees.
Roger: Operating profit was $800000 for the third quarter of fiscal 2025.
Roger: Compared to an operating profit of $3 $6 million from the third quarter of fiscal 2024 due to the previously mentioned impacts.
Roger: Operating margins were one 8% for the third quarter of fiscal 2025 compared to 11, 4% for the third quarter of fiscal 2024.
Roger: Net income was <unk> 1 million or one cent per diluted earnings per share for the third quarter of fiscal 2025 compared to net income of $2 6 million or 34 cents per diluted share for the third quarter fiscal 2024.
Roger: Adjusted EBITDA, excluding FX for the third quarter of fiscal year, 2025 was $4 7 million, an increase of <unk> 2 million or four 9% compared to $4 5 million for the third quarter of fiscal 2024.
Roger: The increase in adjusted EBITDA, Excluding FX was driven primarily by margin improvement in our organic sales mix and contributions from jollity HD, partially offset by higher SG&A expenses.
Roger: On a trailing 12 month basis liquids TTM revenue as of Q3 fiscal 2025 is a $151 $8 million.
Roger: This is an increase of $29 4 million or 19% versus the Q3 FY 'twenty for TTM revenue total of $122 4 million.
Roger: On a trailing 12 month basis Lakeland TTM adjusted EBITDA, excluding the impacts of FX as of Q3 fiscal 2025 was $14 $7 million.
This is an increase of <unk> five.
<unk> 5 million or three 4% versus Q3, FY 2004, TTM adjusted EBITDA, excluding FX total of $14 2 million.
Roger: On slide 10, we provide additional details driving the year over year changes in our gross margin percentage and adjusted EBITDA excluding FX.
Roger: Reviewing our performance, while we saw significant growth overall revenue growth overall, we continue to face some challenges that impacted our results yet we remain confident in our full year projections.
Roger: In the second quarter, both Jolly and Eagle had substantial our orders delayed to the late third and fourth quarters.
Roger: These orders began shipping in Q3 and further contributed to our results.
Roger: Sales results from our recent acquisition <unk>, which we acquired on July one as resumed and we are accelerating production in anticipation of delivering multi year back orders in the fourth quarter.
Roger: Revenue thrill HD Jolly to Pacific helmets were a combined $11 4 million and we expect those to accelerate as we deliver on open orders and new cross selling opportunities.
Roger: Looking at our organic business, we were again very encouraged by the growth in our Latin American operations.
Roger: With a 20% increase in sales year over year.
Roger: Latam now represents 11% liquids total sales and they continue to grow.
Roger: Our outstanding Latam team is continually identifying and capitalizing on new market opportunities and we expect further growth in that region.
We're working to expand our services offering.
Roger: Dana and we expect to introduce new industrial products from illiquid portfolio into that region going forward.
Roger: We've also recently put our Mexico sales operations under our Latin American management team and.
Roger: And we were optimistic that they can replicate their success in that country.
Roger: Even so our Q3 sales in Mexico were up 25% year over year.
We also saw double digit sales growth year over year in Asia.
Roger: We're very excited about the new sales leadership that we've put in place in Asia and we are encouraged about the growth we're seeing in both China, and new Asian markets outside of China.
Our European revenue, including equal Jolly and our recently acquired <unk> business grew by $11 2 million or 350% to $14 4 million.
We see very good sales opportunities in Europe and are committed to its growth trajectory.
Roger: Following the slowdown in the second quarter due to our line drive transition.
Roger: We were pleased to see our U S revenue rebound to $15 $4 million driven.
Roger: Driven by the continued growth in our Lakeland fire service business.
Our year over year U S revenue growth was $3 million or 2% our quarter over quarter U S revenue growth was $3 billion or 25%.
Roger: Regarding product mix for the third quarter, our fire services business grew $13 7 million or 245% versus the same period last year driven by our recent <unk> acquisition and organic gains in the U S and for vehicle as we start to see gains from our hedging strategy.
Our industrial product lines grew $3 million or one 1% over the same period last year led by our chemical products and high performance wear which grew 9% and 8% respectively.
Roger: While <unk> decreased 33% year over year.
Roger: Disposables represented 27% of the revenue for the quarter qualifier grew to 42% and chemical was 11%.
The remainder of our industrial products, including Fr High performance and high bids accounted for 19% of sales.
Roger: Now turning to the balance sheet Lakeland ended the quarter with cash and cash equivalents of approximately $15 8 million in long term debt was $31 1 billion.
Roger: This compares to $24 9 million in cash and $29 $5 million in long term debt as of July 31 2024.
Roger: The decrease in cash was primarily due to the build of inventory to deliver on the LHC multiyear backlog in Q4 sales orders Jolly as well as ramping industrial orders and $3 $4 million of debt repayment during the year.
Roger: The net increase in our long term debt was mainly related to the acquisition of LHC group in July partially offset by the previously mentioned repayments on our credit facility.
Roger: Okay.
Roger: Net cash used in operating activities was $12 $5 million in the nine months ended October 31 2024.
Compared to net cash provided of $3 $7 million of amendments ended October 31 2023.
Roger: The increase was driven by increases in working capital of $12 5 million.
Roger: Due to a build in inventory in preparation for forecast the increase in sales in the fourth fiscal quarter of 2025 in the first quarter of fiscal 2026.
Roger: Capital expenditures were $1 5 million for the nine months ended October 31, 2024, primarily for manufacturing equipment.
Roger: At the end of Q3 inventory was $72 7 million up from $67 9 million at the end of Q2, FY 'twenty five primarily due to LHC.
Roger: Eagle and organic sales expected to ship in the fourth fiscal quarter of 2025.
Roger: In the first quarter of fiscal 2026.
Roger: Year over year.
Roger: We saw a reduction in our organic inventory.
Roger: Versus the quarter ended October 31 2023.
With that overview I'll.
Roger: I'd like to turn the call back over to Jim before we begin taking questions.
Jim: Thank you Roger.
Jim: Ill conclude by saying that our visibility of high single digit organic growth communicated on our last call has come to fruition in the third quarter of fiscal 2025, and this was demonstrated by strong net sales growth driven by a significant 61% sequential and 245% year over year increase in our fire services line.
Jim: And rebounding global growth across Europe, Asia, and Latin America. This.
Jim: It is now clear based on these results and our reaffirmed outlook, but there are three main themes progressing very well with our near term and long term strategy.
First we believe our time to market and fire services faster than anyone else with respect to our competition and this is driving strength in our business.
Jim: We are well positioned in the three largest global fire markets and third our head to toe fire offering coupled with the highly competitive delivery speed to customers is a disruptive differentiator for our global sales team and because of this we believe we are positioned to take market share as.
Jim: As Roger previously mentioned, most mostly mostly all of our financial metrics metrics are trending in the right direction from our legacy business and we believe our recent acquired entities are also turning the corner as we begin to implement cross selling opportunities.
Negotiate favorable terms with vendors and consolidate operations to position the business towards cash generation.
Jim: We are now seeing those strategies bear fruit and the visibility in subsequent quarters as bright and working capital deployed in the third quarter is primarily due to inventory buildup in preparation for forecasted increases in sales in the fourth quarter of the year in the first quarter of fiscal 2026.
Jim: Wouldn't be a better time to be part of <unk> story, It's the foundation building realigned management and global sales teams are now positioned to drive growth market share penetration cash generation and most importantly shareholder value.
Jim: We look forward to seeing more.
Jim: Sharing more on our developing story next week at the Roth <unk> annual Deer Valley Institutional conference and benchmark companies 13th annual discovery, one on one Investor Conference.
Jim: With that we will now open the call for questions operator.
Speaker Change: Thank you.
Speaker Change: We will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Speaker Change: Press Star two to remove yourself from the queue for participants using speaker equipment and may be necessary to pick up the handset before pressing the star.
Speaker Change: Our first question comes from the line of Gerry Sweeney with Roth Capital. Please proceed with your question.
Gerry Sweeney: Good afternoon.
Speaker Change: Jim and Roger Thanks for taking my call.
Speaker Change: Hey, Jerry.
Speaker Change: So first question.
Speaker Change: It's probably going to a little bit longer winded and in depth, but I think you'll understand where I'm going with it. So we had the U S rebounding Jolly and Eagle is starting to get their legs underneath them, but then.
Speaker Change: We also have your guidance $165 million of revenue and $18 million of EBITDA.
Speaker Change: Obviously I think there is.
Speaker Change: Confidence going into the fourth quarter everything is going the right direction.
Speaker Change: Right.
It appears that either your revenue guidance of $165 million will have to be far exceeded or.
Speaker Change: Margins will have to chop off significantly in the fourth quarter to get that $18 million of EBITDA.
And I know, there's a step up.
Speaker Change: Basis of inventory et cetera, So could you give us a little bit more maybe granularity as to how we achieved this guidance with all of these operations.
Everything.
Accelerating into your sure Gary This is Roger.
Speaker Change:
Speaker Change: Youll recall in Q2, we talked about the negative impact to our gross margins into EBITDA.
Profit in ending inventory due to inventory builds that we have particularly in Vietnam and China.
Speaker Change: And our expectation is over the second half of the year.
Speaker Change: As inventory reduced.
Speaker Change: That property in ending inventory would be released.
Speaker Change: Q3, we did we did turn inventory shipments and recovery revenue.
Speaker Change: But at the same time, our our plants continue to operate very efficiently.
Speaker Change: Produce really kind of at high.
Speaker Change: High levels of capacity.
Speaker Change: For these orders that we still have visibility to some so because of that.
Speaker Change: There actually was no release of profit in ending inventory for the third quarter. It didn't it didn't hurt us like it did last quarter, but there was no benefit from it either because what was what was moved through.
Speaker Change: Sales of this inventory in Q3 was offset almost directly by the build in inventory.
Speaker Change: So given that what we do see in Q4 as we have visibility to these orders that are shipping we are expecting a significant release of that profit in any inventory in.
Speaker Change: Q4, which will.
Speaker Change: In effect to what you just said increase that margin so there'll be the.
Speaker Change: The.
Revenue that were expecting still some very large orders in Q4, including this multiyear backlog yet.
Speaker Change: D.
Speaker Change: Because what we see from production from our facilities, we expect to release of a significant part of that property and the inventory, which will be accretive to EBITDA.
Speaker Change: Got it and if this is fair to say all of this.
Speaker Change: Inventory.
Speaker Change: Adjustments in releases this is pure accounting because.
Speaker Change: Of the acquisitions, you made correct. So what I'm really trying to say some of them apples to apples basis by the time you get all this released.
Speaker Change: You know.
Speaker Change: We should see cleaner clearer margin, it's just being.
Gerry Sweeney: Reallocate into different quarters is that fair yeah Gerry.
Speaker Change: When you do these acquisitions there is a lot of financial white noise, that's sort of there for a while.
Speaker Change: And then once you clean clear yourself through the I had this experience of Transcatheter sort of yourself through some of this stuff and then there is a.
There's a level of enormously that returns.
Speaker Change: Got it yeah, that's what I assumed I just wanted to sort of shine a light on it so.
Speaker Change: Okay, Alright, that's correct here, so I was hoping to hear an unexpected.
Speaker Change: <unk>.
Separately line drive.
Speaker Change: Obviously Q there was a little.
My worst side, you were your words, but maybe a little bit of friction and transitioning over the line drive Ah agreement, how is that playing out and.
Speaker Change: I don't think before basis.
Very well.
Speaker Change: Pipeline continues to grow.
Speaker Change: Formats quarter over quarter has improved.
Our sales reach.
Speaker Change: Salespeople are meeting with line drives regional salespeople weekly.
Speaker Change: There is a discipline that our global.
Speaker Change: Global VP of industrial sales has brought to that relationship.
Speaker Change: Our business development leader has also.
Speaker Change: <unk> been pushing quite aggressively.
Speaker Change: And I've been very pleased with what he has been doing as well so I couldnt.
Speaker Change: We were a little disappointed in that first quarter kickoff with them, but we're starting to really starting to see some momentum now.
Speaker Change: Got it that's fair and then one more question and I'll jump the line obviously.
Fire turned out to your big opportunity U S. I believe the biggest market I know you're.
Speaker Change: Looking at getting bigger into in the U S. Any thoughts on that or stay tuned could be yes. We have I think we've said this before we are actively pursuing opportunities in the United States.
Gerry Sweeney: We continue to run that out Gerry.
Speaker Change: Got it Okay. That's fair all right I'll jump back in line. Thanks, guys.
Speaker Change: Future.
Speaker Change: Thank you.
Speaker Change: As a reminder, if anyone has any questions you May press star one on your telephone keypad to join the queue and ask a question.
Speaker Change: Our next question comes from the line of Matthew <unk> with Maxim. Please proceed with your question.
Speaker Change: Hey, Thanks for taking my questions.
Speaker Change: He firstly.
Speaker Change: Can you just give us a little bit more color around the.
Speaker Change: Multiyear backlog.
Speaker Change: From the acquired game.
Speaker Change: Is it something that you think you can flush through predominantly this year is it something that youre working through well into next year and.
Speaker Change: I know, we talked about that last quarter, but how much of it is.
Speaker Change: Yes, still addressable to you.
Speaker Change: Yes.
Speaker Change: Yes, Matt Roger Thanks for the question. So we were we were pleased with the kind of the the.
Speaker Change: The beginning of shipments to start of shipments from LH D.
Speaker Change: The LHC, Australia did particularly well as did Hong Kong.
Speaker Change: If you recall from our previous conversations that <unk>, Germany was.
Speaker Change: <unk> was essentially doing was doing nothing.
Speaker Change: We're in some financial distress, where cash in advance or R. R.
Speaker Change: Worse with vendors.
Speaker Change: And this is a multiyear as you mentioned multiyear backlog has developed so.
Speaker Change: <unk>.
In the third quarter as you saw on their cash balances and our working capital.
Speaker Change: For Germany. There was there was a very fast ramp and a significant ramp of inventory build in production orders that are going on as we speak.
Speaker Change: We do still expect to ship those.
Speaker Change: A large percentage in that in the fourth quarter right now, we're thinking that we'll be shipping 80% to 90% of that multiyear backlog into Q4 and again that gives us.
Speaker Change: A high level of confidence in our Q4 revenue number.
Speaker Change: And and as importantly.
Speaker Change: The inventory will again start to come back down and as we make that sale and collect on those receivables that will get turned back into cash so.
Speaker Change: The team is working very hard on it.
Speaker Change: <unk>.
Speaker Change: With.
Speaker Change: The legacy <unk>.
Speaker Change: <unk> third party manufacturers as well as new parties that we've brought on from our relationships and it was a matter of.
Speaker Change: Just really basically heading to jumpstart them and bring them kind.
Speaker Change: Kind of back to life and we also Didnt mentioned this and that.
Speaker Change: In the script.
Speaker Change: Comments, but in the quarter, we made a very significant higher.
Speaker Change: At El HD, I think there were some some posts about it.
Speaker Change: But we brought an individual back.
Speaker Change: While shower cap to be general manager. He had worked for the company about 10 years ago. He left to go to the largest competitor in Germany and had been responsible for a very significant growth in their business. He saw lengthens acquisition and we were able to work with him on a return he started.
Speaker Change: On November one.
Speaker Change: Taking back over there so so again.
Speaker Change: We expect 80% to 90% of that backlog to ship.
Speaker Change: Before the end of our fiscal year.
Speaker Change: Got it.
Speaker Change: Thank you and my follow up in.
Speaker Change: Yes on the opportunity around services and.
Speaker Change: Bringing that.
Speaker Change: More of the.
More of your geographic reach.
Speaker Change: Something that you.
Speaker Change: You can see sort of thing.
Speaker Change: Comprehensive with and in that fiscal year or is it going to take a little bit longer to to work your way through those opportunities.
Speaker Change: I think so so we've already begun to look at.
Speaker Change: Like I said this on the last call sort of the Green fielding.
Or purchasing.
Speaker Change: Folks that are in that space.
Speaker Change: I know that in Latam for example, our Latam leader is putting together a business case to run out.
Speaker Change: Decontamination services business in that market she's been interacting actually I had a visit to Australia to meet with the Australia and <unk> people.
Speaker Change: So I think we will start seeing incremental gains in the service area for us.
Speaker Change: Can't really tell you at this point.
Speaker Change: How how how much or how significant thats going to be in fiscal 'twenty six but I can tell you that.
Speaker Change: Rapidly, becoming a priority because to be a leader in this space because it's it's it's.
Speaker Change: It is the future of this business, making sure that.
Speaker Change: Folks that are running into harm's way, both an interested buyer.
Fire environment, but but also are getting those contaminants on there.
Protective gear needs to be protected and there is there is I can tell you in Europe.
Speaker Change: And in Germany in particular, what I'm learning is that.
Speaker Change: Doing that correctly is important because theres actually criminal liability associated with brigade commanders in Germany, who don't do this correctly you don't have it done correctly. So.
Speaker Change: It's a growth area for us and we're trying to seize on those opportunities I just can't give you a number or.
Speaker Change: It would be a pure guesstimate at this point, but I know that that is something we are it is an imperative to us for next year to start running out.
Speaker Change: Perfect. Thank you.
Speaker Change: Thank you.
Speaker Change: We have reached the end of the question and answer session now I'll turn the call back over to Mr. Jenkins for closing remarks.
Speaker Change: Thank you operator.
Speaker Change: Thank you all for joining us on today's call I would also like to thank our customers and distributor partners worldwide.
Speaker Change: <unk> us with your lives on safety, our customers are heroes and we never take that trust for granted.
Speaker Change: So I want to thank our Lakeland team members across the company for their continued commitment and enthusiasm as we further delivered on our strategic initiatives this quarter.
Speaker Change: <unk> continued to experience significant growth in changed during this quarter and I appreciate the hard work from our dedicated team as we continue to execute our growth strategies.
Speaker Change: We are unable to answer any of your questions. Today. Please reach out to our IR firm MZ group, who would be more than happy to assist.
Speaker Change: Yes.
Speaker Change: And this concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.
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