Q4 2024 Douglas Dynamics Inc Earnings Call
Speaker Change: Good day and welcome to the Douglas dynamics fourth quarter 'twenty 'twenty four earnings conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing this Turkey followed by zero.
Speaker Change: After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on a touchtone phone and to withdraw your question. Please press Star and then two.
Speaker Change: Please note that this event is being recorded.
Speaker Change: I would now like to turn the conference over to Nathan Elwell, Vice President of Investor Relations. Please go ahead Sir.
Speaker Change: Thank you Mitch.
Speaker Change: Welcome everyone and thank you for joining us on todays call well, we begin I would like to remind you that some of the comments that will be made during this conference call, including answers to your questions will constitute forward looking statements.
Speaker Change: These forward looking statements are subject to risks that could cause actual results to be materially different.
Speaker Change: Those risks include among others matters that we have described in yesterday's press release.
Speaker Change: In our filings with the SEC.
Jim Janet: Joining me on the call today are Jim Janet Chairman and interim President and CEO.
Speaker Change: Sarah Lauber executive Vice President and CFO, and Mark I'm getting drunk C O our president of book.
Speaker Change: Jim will provide an overview about performance followed by Mark discussing our segment results.
Speaker Change: Today, I will review, our financial results and guidance for the year before we open the call for questions.
Speaker Change: With that I'll hand, the call over to Jim. Please go ahead.
Speaker Change: Yeah.
Jim Janet: Thank you Nathan the fourth quarter of 2024, it was positive in two what began as a challenging year.
Jim Janet: Consolidated results improved across all metrics when compared to the prior year, primarily due to strong growth in the solutions segment and increased margins new catchment segment.
Jim Janet: There were quite dramatic differences in the circumstances are two segments faced.
Jim Janet: Which was reflected in their results.
Jim Janet: However, the common denominator between attachments and solutions was the grit and determination as shown by our people and addressing the challenges we have faced in recent years.
Jim Janet: After several tough years following the pandemic the solutions segment entered 2024 with strong momentum.
Jim Janet: I am pleased to say continued throughout the year.
Jim Janet: I want to congratulate the leadership team.
Jim Janet: Henderson and agenda for producing a record annual performance and showing everyone what great things we're capable of.
Jim Janet: Well done to everybody at our to Janet and Henderson operations.
Jim Janet: Well there is no doubt it has been a tougher year in attachments. We are just as proud of what we've been able to produce under the circumstances.
Jim Janet: Hard work completed in 2024 to streamline our operations.
Jim Janet: And adapt to recent weather patterns is already paying off.
Jim Janet: We operated efficiently in a tough environment and delivered improved margins compared to last year.
Jim Janet: A crucial part of that success was the cost savings program, which exceeded expectations in 2024.
Jim Janet: Given the circumstances, our teams performed extraordinarily well and we couldnt have asked them for more.
Sarah: Sarah will talk to capital allocation in detail later.
Speaker Change: But I will just say that the dividend remains our priority and we are maintaining the current dividend in 2025.
Speaker Change: With a lot of hard work completed last year, our balance sheet is strong and provides us with additional options moving forward.
Speaker Change: When it comes to M&A, there have been no change in our approach.
Speaker Change: Over the long term, we hope to find companies with complex attachments that need to be professionally up fit onto work trucks.
Speaker Change: With strong brands growth potential and a good cultural fit.
Speaker Change: With our operating results and a strong balance sheet. We are now in a position where we could consider looking at small medium sized acquisitions, if we find the right opportunity.
Speaker Change: Having said that we will maintain our disciplined approach and we arent actively pursuing any deals at this time.
Speaker Change: Finally, I want to give a quick update regarding our leadership I'm pleased to say that the recent management transitions have been smooth. Thanks to the combination of our excellent internal team plus our planning and preparation.
Speaker Change: In addition, we just appointed a highly qualified new precedent of work truck attachments, Chris Bernauer, which mark will discuss further.
Speaker Change: The next step is to conclude our search for a new permanent CEO Ari.
Speaker Change: Our intention remains the same to have a new CEO named in the first half of 2025.
Speaker Change: The search process has been thoughtful and diligent and we believe we are close to having the right person in place.
Speaker Change: Okay, I'm going to hand over the call to our C. O O Markman Gendron Budd asked to walk you through several topics. This morning.
Speaker Change: Yeah, Thanks, Jim before I talk to our results at each segment I want to highlight the important announcement that we made yesterday.
Speaker Change: Following an extensive search we have recruited and hired our top candidate Chris Byrne, our as president of work truck attachments Chris.
Speaker Change: Chris is a dynamic leader, who has had a successful career consistently delivering strong financial and operational performance.
Speaker Change: He joins us with over 30 years in the manufacturing sector, where he gained extensive experience in many disciplines, including engineering product development sales and marketing and dealer engagement <unk>.
Speaker Change: <unk> and the automotive motorcycle and marine sectors.
Speaker Change: In addition to delivering operational and financial results, Chris brings a strong reputation for creating positive and collaborative cultures, which fits perfectly with our approach here at Douglas.
Speaker Change: He starts later this week and will be based here in Milwaukee reporting to me.
Speaker Change: Chris is the ideal candidate for this role I'm thrilled to have them on board and I'm positive his perspectives will be invaluable in the years ahead.
Speaker Change: Now as I transfer my work truck attachment responsibilities to Chris in the coming weeks and months I will continue working closely with Jim Sara and other senior leaders to help chart. The course for our company in 2025 and beyond.
Speaker Change: Now turning to the results in work truck attachments.
Speaker Change: Let's start with our favorite topic the weather.
Speaker Change: Well Windsor is far from over we feel comfortable saying that the 'twenty 'twenty four 'twenty five snow season will be better than the previous year, where snowfall was approximately 40% below the 10 year average.
Speaker Change: And while snowfall was down from October to January when compared to the 10 year average we have seen more activity so far in February.
Speaker Change: In General this is certainly looked like a more typical winter across the country and should be a reminder, that winter is a concept isn't over and that weather will continue to move in cycles.
Speaker Change: That said snowfall. This winter has been very regional in nature.
Speaker Change: It has certainly been positive to see above average snowfall in some of our markets, but we still haven't seen enough snow in core markets like Chicago, New York and Boston.
Speaker Change: We don't yet know how this snow season will turn out and while overall snowfall and likely to return to average it is shaping up to be better than last year.
Speaker Change: With the more frequent snowstorms in a more typical winter unfolding dealer sentiment is positive.
Speaker Change: And our inventory checks with dealers at the end of January confirm that while inventory levels remain above average they continue to fall and our dealers remain on a strong financial footing.
Speaker Change: Of course, the lengthened equipment replacement cycle based on the lower snowfall over the past several years will remain a near term factor and we will continue to diligently analyzed trends and end user demand.
Speaker Change: Importantly, the 2020 for cost savings program has driven an increase in profitability.
Speaker Change: And in addition, our finished goods inventory is in excellent shape as we have been planned and purposeful in our production scheduling throttling back when needed being extremely nimble and responding to our dealer specific requests.
Speaker Change: We continue to optimize our business and have proven once again that we know how to manage through tough times.
Speaker Change: We've done this while remembering to look at the medium to long term as we know the impact of low snowfall is temporary.
Speaker Change: Today, our operations have been adjusted to match market conditions, leaving us well positioned to drive volume as demand ramps up.
Speaker Change: Overall I'm proud of our progress over the past 12 months I want to commend our team in work truck attachments for really managing the business extremely effectively.
Speaker Change: We will remain optimistic yet cautious and we'll be ready to ramp up and take advantage whenever and wherever snow drives demand.
Turning to work truck solutions, where the teams exceeded our expectations delivering impressive top and bottom line growth for the year.
Speaker Change: The overall operating environment improved in 2024, and we delivered the third consecutive year of top and bottom line growth.
Speaker Change: That being said it took our team's ingenuity to navigate a changing marketplace, we maximize performance and delivered significant year over year growth returning us to pre pandemic levels of profitability.
Speaker Change: We want to thank our solutions team for improving their results once again.
Speaker Change: Commercial demand in solutions includes both areas of strength and areas of softness and as we mentioned last quarter, we are focusing more attention on sleep business opportunities where the supply of chassis are continuing are currently the strongest.
Speaker Change: Demand in backlog from municipal customers remains robust with large multiyear municipal contracts that we will deliver in 2025 and 2026 and there are pockets of capacity expansion that we are investing in for the longer term.
Speaker Change: The diversification process, we began a decade ago is helping us manage through tough times with both our <unk> and Henderson operations, producing a record year for solutions and improved results for the third year in a row.
Speaker Change: In summary, as we've seen in recent years, one segment has performed well while the other has been negatively impacted by market conditions, namely low snowfall.
Speaker Change: We will continue to manage through the short term challenges, while keeping our focus on the long term future to ensure that we have the best products in place to maintain and expand our market leading positions.
Speaker Change: Finally, I am looking forward to heading down to the MTA work truck show in Indianapolis next week. It is always a great opportunity to meet with our teams representing all of our brands.
Speaker Change: I look forward to meeting with partners and customers across all businesses at this important industry event as well.
Sara: That said I will hand, the call to Sara Thanks Bart.
Speaker Change: As Jim noted at the start of the call. It was a positive end to the year in both segments.
Speaker Change: To summarize the year work truck solutions produced a record year as the team to effectively manage their operations to deliver a fantastic result.
Speaker Change: At work truck attachments challenging market conditions continued and the team did an outstanding job of maximizing their profitability under the circumstances.
Speaker Change: In fact, both fourth quarter and full year consolidated results improved across all metrics.
Speaker Change: With that said, let me walk through the numbers for you and please note unless stated otherwise all the comparisons I will make today are to the full year 2023.
Speaker Change: Yeah.
Speaker Change: Net sales were essentially flat at $568 $5 million as lower sales of attachments for almost exactly offset by the increased at Alicia.
Speaker Change: On flat sales, we were able to increase gross profit of $146 8 million dollar by 9%.
Speaker Change: This drove a gross margin increase of 220 basis point to 25, 8%.
Speaker Change: These increases were based on the impact of the 2020 for cost savings program, plus improved price realization and throughput at solution.
Speaker Change: So 2020 for cost savings program was even more successful than anticipated within the year, producing pretax savings of more than $10 million.
As we've previously noted we expect the program to deliver annualized savings of $11 million to $12 million, which will drive nominal additional savings in 2025.
Speaker Change: I want to thank our teams that have done the difficult, but necessary work during 2024 to reduce costs and improve our profitability, allowing us to operate from a position of strength in 2025 and beyond.
Speaker Change: Selling general and administrative expenses increased approximately 16% to $91 $7 million.
Speaker Change: Mainly due to one time items.
Speaker Change: Including costs or the sale leaseback transaction announced in the third quarter.
Speaker Change: Severance costs related to the cost savings program and CEO transition costs.
Speaker Change: In addition, we experienced higher incentive based compensation due to higher earnings.
Speaker Change: The effective tax rate for 2024 was 24% compared to 18, 9%.
Speaker Change: Last year's effective tax rate was lower due to higher tax credits.
Speaker Change: Net income increased to $56 $2 million compared to $23 $7 million, mainly due to the one time gain from the sale leaseback transaction plus improved profitability across both segments.
Speaker Change: The sale leaseback transaction is nonoperational and nonrecurring and is excluded from all adjusted earnings.
Speaker Change: Adjusted EBITDA increased 16% to $79 $3 million.
Speaker Change: Similar to the gross profit margin. The actions we took in 2024 led to an increase in our adjusted EBITDA margin up 200 basis points from approximately 14% on flat net sales.
Speaker Change: Adjusted net income and adjusted earnings per share, both increased approximately 45% to $35 $2 million and $1 and 47, respectively.
Speaker Change: Finally, I'm pleased to report that our total backlog at the end of 2024 with $348 million.
An increase of $52 million, which was driven by strong municipal booking.
Speaker Change: Our backlog is within approximately 5% of their record level, but at the end of 2022.
Speaker Change: It is great to see the robust backlog continue into 2025, which gives us continued confidence in the pipeline of business flowing into a solution in the coming year.
Now, let's look at the results for the two segments.
Speaker Change: Starting with attachment we closed out the year with snowfall not at average level as we had hoped driving lower than expected sales.
Speaker Change: <unk> were down 12% to $256 million, while adjusted EBITDA only declined 4% to $48 $5 million.
Speaker Change: The highlight here is that adjusted EBITDA margin of 18, 9% improved 160 basis points largely due to the successful cost savings program, where we realized over $10 million of statement.
Speaker Change: It's important to know that some savings were accelerated into 2024, rather than 2025.
Speaker Change: The expectation of $11 million to $12 million in annualized savings has not changed.
Speaker Change: The good news is the attachments business is now right sized for the suppress demand we have seen recently and we're managing our production schedule efficiently to minimize additional working capital needs.
Speaker Change: We are cautiously optimistic that remained in wait and see mode until the snow season concludes and preseason numbers start to come in and we will update you on our first quarter earnings call in May.
Speaker Change: The Bottomline is we are in a great position to leverage the business as demand returns.
Speaker Change: And the solution segment, we closed the quarter with record sales and record adjusted EBITDA, primarily driven by strong municipal performance.
Speaker Change: So with three record quarters in a row solutions delivered a record year, bringing adjusted EBITDA margins to the low end of our long term target range.
Speaker Change: Back to pre pandemic level.
Speaker Change: Net sales grew 13% to $312 $5 million and adjusted EBITDA increased 76% to $39 million.
Speaker Change: With margins of nine 9%, a 350 basis point improvement.
Speaker Change: The performance this year exceeded our expectations and was driven by strong price realization and improved throughput.
Speaker Change: Congratulations to everyone at work truck solutions for the record results and a strong year from start to finish.
Speaker Change: Now, let's look at our balance sheet and liquidity.
Speaker Change: We are very proud of our cash generation for the year, well operating effectively in a low snowfall environment, let's walk through the detail.
Speaker Change: Net cash provided by operating activities increased 229% to $41 $1 million.
Speaker Change: Driven by higher earnings and a better working capital position.
Speaker Change: The primary drivers positively impacting working capital, where the timing of supplier payments on our accounts payable cash receipts from investment tax credits purchased in 2023 and reduced inventory levels in 2024.
Speaker Change: In addition capital expenditures decreased to $7 million to $7 $8 million as some investments were deferred.
Speaker Change: In 2025, we expect our capex to be on the high end of our targeted range of 2% to 3% of revenue.
Speaker Change: Okay.
Speaker Change: This leads us to a successful year of generating free cash flow of $33 $3 million, an increase of 31 $4 million.
Speaker Change: I do want to highlight the effect the sale leaseback transaction had on free cash flow and leverage.
Speaker Change: The transaction had an approximate $17 million negative impact on free cash flow, which related to taxes rents and fees, partially offset by reduced interest.
Speaker Change: However, the $64 $2 million received from the sale leaseback is included in cash provided by investing activities, which is excluded from free cash flow.
Speaker Change: Bottom line, we view this as a successful transaction netting proceeds of $42 million, which we utilize to delever to two four times at year end, which is back within our targeted leverage range during an elongated period of suppressed snowfall.
Speaker Change: We are now confident that with our current capital structure, we will operate well within our goal range of one and a half to three times in 2025.
Speaker Change: Turning to capital allocation, a fourth quarter dividend was paid as planned in December.
Speaker Change: The dividend remains our priority we are maintaining the current quarterly cash dividend of 29 and half cents per share for the first quarter of 2025.
Speaker Change: I just mentioned, we're comfortable with where our leverage is in 2025 and I also mentioned, we're expecting capital expenditures closer to 3% of sales.
Speaker Change: Which that allows us to start thinking about M&A as Jim discussed earlier.
Speaker Change: Yeah.
Speaker Change: At the end of 2020 for liquidity with strong consisting of $5 $1 million in cash and borrowing capacity of approximately $150 million under our revolver.
Speaker Change: Now, let's turn to our outlook for the year.
Speaker Change: As you saw on the release, we expect 2025 net sales to be between 610 and $650 million.
Speaker Change: Adjusted EBITDA is predicted to range from $75 million to $95 million.
Speaker Change: Adjusted earnings per share is expected to be in the range of $1 30.
Speaker Change: Just $2.10 per share.
Speaker Change: The effective tax rate is expected to be approximately 24% to 25%.
Speaker Change: And this outlook assumes we experienced relatively stable economic and supply chain conditions and that core markets will experience average snowfall in 2025.
Speaker Change: At the midpoint of our ranges, we assume projected higher volumes across both segments contributing to low double digit top line growth.
Speaker Change: While we are cautiously optimistic on volume we expect the work done in 2024 on our margin and contribute to stable to slightly improving year over year margin in each segment.
Speaker Change: Solutions remains in a strong position to replicate or improve upon 2024 result.
Speaker Change: Based on strong backlog trends combined with improved operating performance.
Again this year the largest assumption of our 2025 guidance relates to the continued elongated replacement cycle of snow and ice.
Speaker Change: Women in the field.
Speaker Change: At the midpoint, our guidance assumes that attachment demand in 2025 will approximate 2023 level.
Speaker Change: As always our range encompasses lower or higher demand level, depending on how we ended the snow season, the wear and tear on equipment and the sentiment of end users and dealers.
Speaker Change: We will have further information during the initial phase of our preseason order period, which starts in April which we will cover in our first quarter earnings call in May.
Speaker Change: To recap.
Speaker Change: From an operational standpoint earnings and margins grew unsuccessful and focused initiatives.
Moving forward, we're in a good position to leverage our operational strength and drive further earnings power over the long term.
Speaker Change: With that we'd like to open up the call for questions operator.
Speaker Change: Thank you.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
Speaker Change: If you are using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: Anytime Youre question has been addressed and you would like to withdraw your question. Please press Star and then two at.
Speaker Change: At this time, we will pause for just a moment to assemble our roster.
Speaker Change: And your first question today will come from Microsoft Ski with D. A Davidson. Please go ahead.
Speaker Change: Good morning, and thanks for taking my questions.
Speaker Change: Hey, Mike.
Speaker Change: So let's start off with some weather headlines.
Speaker Change: So there was a bit of a winter weather in the south and southeast U S last month.
Speaker Change: Areas that we normally see snow I was wondering if you were able to ship at least couple of units to those areas.
Speaker Change: Maybe help some of your dealers reduced their channel inventories.
Speaker Change: On a onetime basis for the big Snow we saw.
Speaker Change: Earlier this year.
Speaker Change: Yes, Mike This is mark I'll I'll certainly be happy to answer that question I would say in general to your point, we don't have a strong.
Speaker Change: Dealer presence in the deep south.
Speaker Change: That being said I'd point to a couple of things I think one is if you look at our <unk> line of products, we use a distribution model for that and it remains a bit more nimble. So our distributors can sell to independent dealers I think it's fair to say, we certainly saw.
Speaker Change: Product being sold in markets, where we traditionally wouldn't.
Speaker Change: G them being sold based on that snowfall the.
Speaker Change: The other thing that will <unk> experienced is opportunistic and very smart contractors in the north will actually head down to the south and they will have down during the snow storms and helped to remove equipment or excuse me ultra remove snow with their equipment.
Speaker Change: So it may not be a direct impact on dealer inventory, but it certainly helps but the usage of the equipment for eventual replacement.
Speaker Change: Got it that's great color. Thank you.
Speaker Change: I also wanted to turn to.
Speaker Change: The solutions segment, you mentioned some strong trends in municipal markets you update us on the on the private sector are you seeing large fleets. They're also makes a pretty big orders. There was all the growth focused on government related customers.
Speaker Change: I can take that one too as well, Mike where we're really seeing the growth right now across the across the businesses is in the municipal sector. Henderson is very strong with a with a strong backlog.
Speaker Change: John as well on the commercial side. We've noted we've seen a bit of a softness I think the teams are doing a great job looking at where that is what it is focusing on the areas, where we do have.
Speaker Change: What I'll call competitive capabilities with fleet sales really.
Speaker Change: <unk> the relationships with our with our dealers and doing doing well there.
Speaker Change: But yeah I would say overall on the municipal side, it's been strong in commercial.
Speaker Change: That's when the real area of focus for US Yeah, I would just add Mike, but when you look at solutions and you look at our guidance for the year at the midpoint that implies like mid single digit growth.
Speaker Change: We're seeing that more as Mark said on the municipal side and when you look at our backlog our backlog is really near record level. Those backlog that backlog includes multiyear contracts for our for our municipal customers. So that growth will span over 'twenty.
Speaker Change: Five and 'twenty six.
Speaker Change: Got it.
Sara: Maybe one last one for me from a balance sheet perspective Sara.
Speaker Change:
Working capital and free cash in 2025, given the operational obviously theres some weather dependent here, but.
Speaker Change: Outside of that given the operational improvements that you've made particularly in the attachments to kind of be more nimble and quick with how you build and deliver.
Speaker Change: We'd be thinking of any major changes up or down in the in the inventory environment.
Speaker Change: On your books and twenty-five or somewhat stable there.
Speaker Change: When I look at free cash flow for 2025, what we expect is that our free cash flow will be at or better than where we landed for 2024 at $33 million that the biggest change is primarily in the higher.
Speaker Change: Capital expenditures that were affecting being closer to 3% of sales.
Speaker Change: And where we were in 2024.
Speaker Change: When I think about working capital I would say we are in a much better position you're right much more nimble, there's not nearly as much inventory to take out in the year and I expect that to be.
Speaker Change: Similar to <unk>.
Speaker Change: I'm, sorry, a little bit.
Speaker Change: Better are certainly better than 2024.
Speaker Change: It's just that stopped clock buffer there so it sounds like you mentioned.
Speaker Change: During your prepared remarks that there was a.
Speaker Change: P&L impact on the sale leaseback, so wouldn't that be going away as well.
Speaker Change: Free cash flow.
Speaker Change: When you include that it's kind of a.
Speaker Change: Possibly.
Speaker Change: Yes in free cash flow, we had a 17 million dollar impact that would go away, but then when you look at the capital expenditure, that's probably the that is by far the largest mover.
Speaker Change: And then.
Speaker Change: Yeah Kash.
Speaker Change: That's the largest mover.
Speaker Change: Okay outstanding.
Speaker Change: So much I'll pass it along.
Speaker Change: Yeah.
Speaker Change: And your next question today will come from Greg Burns with Sidoti <unk> Co. Please go ahead.
Speaker Change: Good morning.
Speaker Change: Okay, Greg you mentioned.
Speaker Change: I guess.
Speaker Change: Paul has been.
Speaker Change: Mark at a regional focus can you just remind us.
Speaker Change: Whereas like your.
Speaker Change: The most important markets are like you did mentioned the big cities, but where we're at when we think about the.
Yeah.
Speaker Change: Regional distribution of where snow is falling.
Speaker Change: Yeah, Greg, it's mark I'd be happy to take that.
Greg: With with with our three brands, we have a nice national footprint basically anywhere that it that it snows, but to your point exactly I mean, it's really we look at kind of where the major population centers are so as we think about it and this is very rough it's kind of anything east of the Mississippi and kind of north of it.
Speaker Change: Want to call it that you'll kind of tenant Tennessee.
Speaker Change: That's really the sweet spot so anywhere in the upper Midwest, Ohio Valley.
Speaker Change: The mid Atlantic.
Speaker Change: You know New York, New Jersey up into up into Maine, and then certainly we have a.
Speaker Change: Our strong presence in Canada as well so with some of the storms that we've seen recently no Ottawa Toronto getting getting hit with some sort of major snow that that certainly is very beneficial for up for us.
Speaker Change: Okay, and then when we look at the.
Speaker Change: The margin improvement that's been happening on the solution side of the business.
Speaker Change: I know, you're you're you're kind of at that low end of that double digit range or just right around it.
Speaker Change: For this year.
Speaker Change: But where do you think margins can go for that business is it going to be strictly volume based or do you have other.
Kind of.
Speaker Change: The efficiency programs that you're implementing to drive the margins on that business.
Speaker Change: Yeah, we we entered into the target range I would say in this year at the low end and the target range being double digit to low teens I would.
Speaker Change: Say by far the largest maneuver to get us into the 13% range is more throughput at both of the businesses, but that does not stop us from all the other initiatives that focus on margin improvement that will also help us get there.
Speaker Change: Okay. Thank you.
Speaker Change: Yeah.
Again, if you have a question. Please press star and then one please standby as we poll for questions.
Jim: Seeing no further questions. This will conclude our question and answer session I would like to turn the conference back over to Jim <unk> for any closing remarks.
Jim: Thank all of you for your ongoing interest in Douglas dynamics, and we're confident about the future potential of our company as we address the opportunities on the horizon and deliver improvements.
Jim: Thank you for your time today, and we hope to talk to all of you soon.
Jim: Hello.
Jim: Yeah.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Jim: Yeah.
Jim: [music].