Q4 2024 United Homes Group Inc Earnings Call - Q&A
Good morning, My name is Andre and I will be your conference operator today at.
Audra: My name is Audra, and I will be your conference operator today.
Audra: At this time, I would like to welcome everyone to the United Homes Group fourth quarter 2024 earnings call and webcast. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise.
At this time I would like to welcome everyone to the United Homeschool fourth quarter, 'twenty 'twenty four earnings call and webcast.
Today's conference is being recorded.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, though will be a question and answer session.
Audra: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again.
Like to ask a question during this time simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star one again.
Erin Reeves-McGinnis: At this time, I would like to turn the conference over to Erin Reeves-McGinnis, General Counsel. Please go ahead.
Speaker Change: At this time I would like to turn the conference over to Erin reason again as General Counsel. Please go ahead.
Erin Reason: Good morning, and welcome to Unitedhealth group fourth quarter of 2024 earnings call.
Erin Reeves-McGinnis: Good morning and welcome to United Homes Group's fourth quarter of 2024 earnings call. Before the call begins, I would like to note that this call will include forward-looking statements within the meaning of the federal securities laws. United Homes Group cautions that forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time. These risks and uncertainties include, but are not limited to, the risk factors described by United Homes Group in its filings with the Securities and Exchange Commission. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and you should not place undue reliance on these forward-looking statements.
Erin Reason: Before the call begins I would like to note that this call will include forward looking statements within the meaning of the federal Securities laws.
Speaker Change: I didn't have a group caution that forward looking statements are subject to numerous assumptions risks and uncertainties, which change over time.
Speaker Change: Risks and uncertainties include but are not limited to the risk factors described by Unitedhealth group and its filings with the Securities and Exchange Commission. Accordingly forward looking statements should not be relied upon as representing our views as of any subsequent date and you should not place undue reliance on any forward looking statements.
Erin Reeves-McGinnis: We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events, or otherwise, except as may be required under applicable security laws.
Speaker Change: We do not undertake any obligation to update forward looking statements to reflect events or circumstances. After the date. They were made whether as a result of new information future events or otherwise, except as may be required under applicable securities laws.
Erin Reeves-McGinnis: Additionally, reconciliations of non-GAAP financial measures discussed on this call to the most directly comparable GAAP measures can be accessed through the company's website and in its SEC filing.
Speaker Change: Additionally, reconciliations of non-GAAP financial measures discussed on this call to the most directly comparable GAAP measures can be accessed through the company's website and in its SEC filings.
Jamie Pirrello: Hosting the call today are United Homes Group's Interim Chief Executive Officer Jamie Pirrello, President Jack Micenko, and Chief Financial Officer Keith Feldman. With that, I'd like to turn the call over to Jamie. Thank you, Erin. Good morning and thank you for joining us today as we review our results for the fourth quarter and full year of 2024. We will also highlight the strategic initiatives we're focusing on to enhance our financial and operational performance and scale our operations in key markets across the South.
Jamie Pirrello: Hosting the call today are Unitedhealth group interim Chief Executive Officer, Jamie Pirrello, President Jackman, Thank go and.
Jamie Pirrello: And Chief Financial Officer, Keith Feldman with that I'd like to turn the call over to Jamie.
Jamie Pirrello: Thank you Eric.
Jamie Pirrello: Morning, and thank you for joining us today.
Jamie Pirrello: Our results for the fourth quarter and full year of 2024, we.
Jamie Pirrello: We will also highlight the strategic initiatives, we are focusing on to enhance our financial and operational performance and scale of our operations in key markets across the southeast.
Jamie Pirrello: I joined United Homes Group in the fall of 2024 and immediately set about determining what our company's strengths were and the areas in which we can improve. Over the last six months, I've learned that we have an incredible opportunity to build something great at United Homes. We have many of the key elements in place for a successful production home building operation, namely a strong presence in several markets with great long-term housing fundamentals, a product focus that caters to the highest growth segments of the market, which are millennial and Gen Z buyers, and a land light operating model that offloads much of the risk and upfront capital requirements associated with owning and developing land.
Speaker Change: I joined United owns group in the fall of 2024 and immediately set about determining what our company's strengths work.
Speaker Change: The areas in which we can improve over the last six months I've learned that we have an incredible opportunity to build something great 90 homes we.
Speaker Change: We have many of the key elements in place for successful production homebuilding operation, namely our strong presence in several markets with great long term housing fundamentals, our product focus that caters to the highest growth segments of the market, which are millennial and gen Z buyers and a land light operating model that off loads much of the risk and upfront capital requirements.
Speaker Change: Associated with owning and developing land.
Jamie Pirrello: These are essential building blocks for the kind of home builder we want to be, a high growth, returns-focused builder with significant presence in the Southeast.
Speaker Change: Our essential building blocks for the kind of homebuilder, we want to be a high growth.
Speaker Change: Turns focused builder with significant presence in the southeast.
Jamie Pirrello: One of the first things we did was take a hard look at our existing product. After a thorough analysis of our sales pace, gross margins, and competitive environment, it became clear that our product had become stale or was missing the mark. Beginning in the fourth quarter, we set about updating our floor plans and refreshing our homes to be more in sync with the wants and needs of today's buyers. The initial response to our refreshed product has been very positive. We started permitting our refreshed product in November, and we have seen strong sales so far from these redesigned plans.
Speaker Change: One of the first things we did was take a hard look at our existing product yes.
Speaker Change: Thorough analysis of our sales pace gross margins and competitive environment. It became clear that our product to become stale or was missing the mark.
Speaker Change: Beginning in the fourth quarter, we said about updating our floor plans and refresh their homes more in sync with the wants and needs of today's buyers.
Speaker Change: The initial response to our refreshed product has been very positive.
Speaker Change: Permitting a refreshed product in November and we have seen strong sales so far can use redesign plans.
Jamie Pirrello: We are selling a large number of refreshed plans as pre-sales, requiring significantly less discounting as we sell the homes before completion. As a result, we're seeing improved gross margins on our new plans as compared to our older product design.
Speaker Change: We are selling a large number of refresh plans as pre sales requiring significantly less discounting as we sell the homes before completion as.
Speaker Change: As a result, we are seeing improved gross margins on our new plans as compared to our older product designs.
Jamie Pirrello: Another area of opportunity was to improve our direct construction costs, since our direct costs as a percentage of sales price were high compared to industry average. We set about re-bidding all of our direct cost categories with no less than three vendors per each. To effectively compete and maximize gross margins, we must ensure we're getting the best price possible. This is an essential function for any business looking to keep costs down, improve profitability, and especially for an organization where familiarity and entrenched relationships can lead to costs drifting higher over time. Home building is a scale business, and if you're not taking advantage of your size to lower costs, you're leaving money on the table.
Speaker Change: Another area of opportunity was to improve our direct construction costs since our direct cost as a percentage of sales price were high compared to industry averages. We set about re bidding all of our direct cost categories with no less than three vendors for each two.
Speaker Change: Effectively compete maximize gross margins must ensure we're getting the best price possible. This is an essential function for any business looking to keep costs down and improve profitability and especially for an organization with familiarity and entrenched relationships can lead to cost drifting higher overtime.
Speaker Change: Homebuilding is a scale business and if youre not taking advantage of your size to lower cost you're leaving money on the table.
Jamie Pirrello: While we are still in the initial stages of this direct cost rebidding process, I can share that there have been significant wins due to this process.
Speaker Change: We are still in the initial stages of this direct costs from the bidding process I can share that.
Speaker Change: Have been significant wins due to this process.
Jamie Pirrello: Our company and our industry face headwinds as we set about achieving our goals. You find the market to be competitive with most builders sacrificing gross margin per volume. This has compelled us and the rest of the industry to use mortgage incentives to offset the higher financing costs and lower monthly mortgage payments. While this has proven an excellent sales tool when competing with the existing home market, it has also significantly affected our gross margin. Completed inventory continues to run high across the industry. Our competitors have been offering substantial price discounts to move completed inventory. We are doing the same.
Speaker Change: Our company and our industry faced headwinds as we set about achieving our goals.
Speaker Change: We find the market to be competitive with most builders sacrificing gross margin for volume.
Speaker Change: <unk> high mortgage rates continued to negatively impact affordability. This has compelled us and the rest of the industry can use mortgage incentives to offset the higher financing costs and lower monthly mortgage payments.
Speaker Change: While this has proven an excellent sales tool when competing with the existing home market. It is also.
Speaker Change: Inefficiently affected our gross margins.
Speaker Change: <unk> inventory continues to run high across the industry, our competitors have been offering substantial price discounts to move completely completed inventory we are doing the same.
Jamie Pirrello: We expect our rebidding process and new product designs to positively impact the pressure on gross margins for mortgage incentives in this country.
Speaker Change: We expect a re bidding process and new product designs to positively impact the pressure on gross margins for mortgage incentives and discounts.
Jamie Pirrello: While there are a number of challenges causing uncertainty for our industry in the short-term, we believe the long-term outlook for home building at United Homes remains positive. The supply of existing homes for sale remains below historical levels in our markets, while the shortage of new housing remains a positive for UH. We are in some of the best markets in the country in terms of job creation, in-migration, and overall quality of life, all of which are critical factors that drive the need for new homes.
Speaker Change: While there are a number of challenges, causing uncertainty for our industry in the short term. We believe the long term outlook for homebuilding 90 homes remains positive.
Speaker Change: The supply of existing homes for sale remains below historical levels in our markets, while the shortage of new housing remains a positive for UHD.
Speaker Change: We are in some of the best markets in the country in terms of job creation in migration and overall quality of life.
Speaker Change: Which are critical factors that drive the need for new homes.
Jamie Pirrello: To sum up, we are making progress on several initiatives that will drive revenue growth and improve gross margins, all leading to improved profitability. The market remains very competitive. 2025 is going to be a pivotal year for our company, and I'm excited about the opportunities ahead.
Speaker Change: To sum up we are making progress on several initiatives that will drive revenue growth and improved gross margins all leading to improved profitability.
Speaker Change: The market remains very competitive 2025 is going to be a pivotal year for our company and I'm excited about the opportunities ahead with that I'd like to turn the call over to Jack who will go into more detail about our performance Jack Thank.
Jack Micenko: With that, I'd like to turn the call over to Jack, who will go into more detail about our performance. Thank you, Jamie. Good morning to everyone. United Homes ended 2024 on a strong note, posting year-to-year growth of 7% for new home deliveries and 19% for net new home orders in the fourth quarter. successfully continue to reduce our inventory of HVACs during the quarter, bringing the wait for a fresh start to the spring selling season and the further rollout of more of our refreshed products. Our teams did an excellent job closing homes in a timely manner.
Jack: Thank you Jamie good morning to everyone.
Jack: <unk> ended 2024 on a strong note posting year on year growth, 7% for new home deliveries, 19% for net new home orders in the fourth quarter.
Jack: We successfully continued to reduce our inventory of aged specs during the quarter clearing the way for a fresh start to the spring selling season and the further rollout of more of a refreshed product. Our teams did an excellent job closing homes in a timely matter I want to thank.
Jack Micenko: I want to thank them for their hard work and focus on getting people into their homes by year-end.
Jack: And for their hard work and focus on getting people into their homes by year end.
Jack Micenko: New homes starts to decline 26% year over year in the fourth quarter, partly as a result of our product redesign, but also as a result of strategic shift back to a more balanced approach to our operations. We believe the combination of improved cycle times and the opportunity to offer a degree of customization to our buyers has made the build-to-order model more attractive in today's market. While we've highlighted the improved gross margin profile of the refreshed product lineup to date, it's interesting to note that over half of the early sales of this refreshed product have come in the form of presales, allowing us to build a backlog for coming periods.
Jack: New home starts declined 26% year over year in the fourth quarter, partly as a result, the product redesign.
Jack: As a result of strategic shift back to a more balanced approach to our operations.
Jack: The combination of improved cycle times and the opportunity to offer a degree of customization of our buyers is made the build to order model more attractive in today's market. While we've highlighted the improved gross margin profile of the refreshed product lineup state. It's interesting to note that over half of the early sales of this refreshed product will come in the form of pre sales, allowing us to build up.
Jack: Backlog in coming periods.
Jack Micenko: This should also have a positive impact on our margins going forward, given the stronger profitability associated with options. Of course, we'll continue to have a number of specs in our communities for buyers looking for a quick move in.
Jack: Should also have a positive impact on our margins going forward given the stronger profitability associated with options and upgrades, but of course, we'll continue to have the number of specs in our communities. The buyers looking for a quick move at all.
Jack: Another highlight from the quarter was the capital markets transactions, we executed in December which refinanced the outstanding debt on our convertible notes, thereby reducing the company's leverage by $10 million and lowering our cash interest expense by 320 basis points.
Jack Micenko: Another highlight from the quarter was the capital markets transaction we executed in December, which refinanced the outstanding debt on our convertible notes, thereby reducing the company's leverage by $10 million and lowering our cash interest expense by 320 basis points. The potential dilution from the convertible note on our share count is also reduced by about 30%.
Jack: Central dilution from the convertible note on our share count has also reduced by about 30% we gained a valuable strategic shareholder Kennedy Lewis as a result of the transaction.
Jack Micenko: We gained a valuable strategic shareholder in Kennedy Lewis as a result of the transaction. We remain committed to improving our balance sheet, so we continue to execute on a long-term strategic initiative.
Jack: We remain committed to improving our balance sheet, we continue to execute on our long term strategic initiatives.
Jack Micenko: Our community count fell to 46 active communities at year-end, and while we're happy to close out communities, we know our growth depends on increasing our community count going forward. sales pace, our sales per month per community increased 2.5 in the fourth quarter. We have 11 communities planned to open in the second quarter 2025 and another 15 plan to open in the third quarter. As for some preliminary commentary on the first quarter to date, consistent with what you've heard from others, our January net new orders were lower than last year. However, February bounced back, and the first week of March has been consistent with trends seen in the back part of February.
Jack: Our community Count fell to 46 active communities at year end, while were happy to close out communities. We know our growth depends on increasing our community count going forward.
Jack: Our sales pace or sales per month per community increased two 5% in the fourth quarter we have.
Jack: <unk> planned to open in the second quarter 2025, and another 15 planned to open in the third quarter.
Jack: As for some preliminary commentary on the first quarter to date and just what you've heard from others. Our January net new orders were lower than last year. However February bounce back first week of March has been consistent trends seen in the back part of February.
Jack Micenko: Unusually heavy snow across all of our markets during the third week of January impacted traffic which in turn impacted our sales activity. Fortunately, with our high backlog conversion rate each quarter, the softer January will impact March closer. Overall, I'm pleased with the steps our company's taken to build on the foundations already in place and to address the areas where we can improve. I agree with Jamie that United Homes is in a great position to capitalize on the strong housing fundamentals in our markets, really scale our operation throughout the year. We're in an envio position, having essentially all of our land controlled by option agreements and have set the course for better profitability through the redesign of our product, cost savings initiatives we've implemented, and improvements to our capital.
Jack: Unusually heavy snow across all of our markets. During the third week of January impacted traffic, which in turn impacted our sales activity.
Jack: Unfortunately, with our high backlog conversion rate each quarter softer January will impact March close.
Overall I'm pleased with the steps our company has taken the build on the foundations already in place to address the areas, where we can improve I agree with Jamie United homes is in a great position to capitalize on the strong housing fundamentals in our markets really scale our operations throughout the southeast.
Jack: We're in an enviable position, having essentially all of our land control by option agreements and have set the course for better profitability to the redesign of our product cost savings initiatives, we implemented improvements to our capital structure as a result renal domestic about the long term outlook for our company.
Jack Micenko: As a result, we're very optimistic about the long-term outlook for our company.
Keith Feldman: With that, I'd like to turn the call over to Keith, who will provide more detail on our financial results. Thank you, Jack and Jamie, and good morning. For the fourth quarter of 2024, net income was $0.7 million, which included a change in fair value of $38 million, primarily related to the accounting for potential earn out, which will fluctuate on our financial statements each quarter based on our ending stock. The earnings will be settled exclusively in common shares upon reaching certain stock price hurdles and will never result in a cash expense for the company. Fourth quarter net income also included a reported loss on the extinguishment of our convertible notes totaling $45.6 million, which was predominantly non-cash in nature since the loss amount was settled in excess.
Jack: With that I'd like to turn the call over to Keith who will provide more detail on our financial results.
Jack: Yes.
Speaker Change: Thank you Jack and Jamie and good morning for the fourth quarter of 2024 net income was <unk> 7 million, which included a change in fair value of 38 million primarily related to the accounting for potential earn out which will fluctuate on our financial statements each quarter based on ending stock price. The earn out will be settled exclusively common shares upon reaching certain stock price hurt.
Speaker Change: And we'll never result in a cash expense of the company.
Speaker Change: Fourth quarter net income also included a reported loss on the extinguishment of our convertible notes totaling $45 6 million, which was predominantly noncash in nature since the loss amount was settled in equity.
Speaker Change: The benefits include reduced balance sheet and cash flow leverage converting our entire debt capital structure to floating rate and lower cash interest expense of approximately $4 million per year based on current rates.
Keith Feldman: The benefits include reduced balance sheet and cash flow leverage, converting our entire debt capital structure to floating rate, and lower cash interest expense of approximately $4 million per year based on current rates. For the year ended December 31, 2024, net income was 46.9 million, which included a loss and extinguishment of convertible notes, 45.6 million, and a change in fair value of 88.7 million, predominantly related to the accounting potential earned outliers. Revenue for the fourth quarter of 2024 was $134.8 million, compared to $116.8 million for the fourth quarter of 2023. Revenue for the full year 2024 was $463.7 million, up from $421.5 million in 2023.
Speaker Change: For the year ended December 31, 2024, net income was $46 9 million, which included a loss on extinguishment of convertible notes $45 6 million and a change in fair value of $88 7 million predominantly related to the accounting potential earn out liabilities.
Speaker Change: Revenue for the fourth quarter of 2024 was $134 8 million compared to $116 8 million for the fourth quarter of 2023 revenue for the full year 2024 was $463 7 million up from $421 5 million in 2023.
Speaker Change: Home closings during the fourth quarter of 2024 or 414 compared to 387 homes in the prior year's quarter.
Keith Feldman: Home closings during the fourth quarter of 2024 were 414 compared to 387 homes in the prior year's quarter. For the full year, home closings increased to 1,431 homes up from 1,383 homes in 2014. Average sales price during the fourth quarter of 2024 was approximately $324,000 for 413 production built homes compared to approximately $320,000 in the prior year for 338 production Net new orders for the quarter were 351 homes from 294 homes in the prior year period, and for the full year, net new orders increased to 1,399 homes from 1,296 homes in 2020. Backlog at the end of the fourth quarter stood at 157 homes, value at approximately 58%.
Speaker Change: Our full year home closings increased to four 1431 homes up from 1383 ounces in 2020.
Speaker Change: Average sales price during the fourth quarter of 2024 was approximately 324000.
Speaker Change: 413 production, Doug homes compared to approximately 320000.
Speaker Change: And the pioneer for 338 production.
Speaker Change: Net new orders for the quarter were 351 from 294 homes in the prior year period and for the full year net new orders increased to 1399 homes.
Speaker Change: From 1296 homes in 2023.
Speaker Change: Backlog at the end of the fourth quarter stood at 157 homes valued at approximately $15 3 million.
Keith Feldman: Gross profit and gross profit margin for the fourth quarter of 2024 were $21.8 million and 16.2% respectively. compared to 21.6 million and 18.5% in the prior year. adjusted gross profit margin was 18.1% for the quarter, down from 21.8% in Q4, 2020. The decline reflects headwinds from a competitive pricing environment and a continuation of strategic sales incentives to drive volume and optimize inventory. For the full year, gross profit was $79.8 million compared to $79.7 million in 2020. Gross profit margin declined to 17.2% from 18.9% due to higher cost of sales reflecting elevated incentives and amortization of purchase price accounting.
Speaker Change: Gross profit and gross profit margin for the fourth quarter of 2024 of $21 8 million and 16, 2%, respectively compared to $21 6 million and 18, 5% in the prior year period.
Adjusted gross profit margin was 18, 1% for the quarter down from 21, 8% in Q4 2023, the decline reflects headwinds from a competitive pricing environment and the continuation of strategic sales incentives to drive volume and optimize inventory churns.
Speaker Change: For the full year gross profit was $79 8 million compared to $79 7 million in 2023 gross profit margin declined to 17, 2% from 18, 9% due to higher cost of sales, reflecting elevated incentives and amortization of purchase price accounting adjustments adjusted gross.
Keith Feldman: adjusted gross profit margin for the full year with 19.9% down from 21.4% in the prior year as the company remained focused on maintaining competitive positioning in a dynamic market. SG&A expense in the fourth quarter of 2024 was $19.3 million. After adjusting for one-time transaction fees, severance expense, and non-cash stock-based compensation, adjusted SG&A was approximately $17.7 million, or 13.1% of revenue for the For the full year, SG&A expense was $74.7 million, and adjusted SG&A expense was $64.5 million, or 13.9% of revenue. As of today, we have 46 active communities down from 61 at the end of 2023.
Speaker Change: Profit margin for the full year was 19, 9% down from 21, 4% in the prior year.
Speaker Change: We remain focused on maintaining and competitive positioning in a dynamic market.
Speaker Change: SG&A expense in the fourth quarter of 2024 with $19 3 million after adjusting for onetime transaction fees and severance expense and noncash stock based compensation adjusted SG&A was approximately $17 7 million or 13, 1% of revenue for the quarter.
Speaker Change: Full year SG&A expense was $74 7 million and adjusted SG&A expense was $64 5 million or 13, 9% of revenue.
Speaker Change: As of today, we have 46 active communities down from 61 at the end of 2023.
Keith Feldman: As of December 31st, 2024, we control approximately 7,700 lots, which include a mix of owned options and land banked assets, positioning us to drive future growth and capture market opportunity. currently have approximately $60 million of liquidity and cash and availability are incredible.
Speaker Change: As of December 31, 2024, we can draw approximately 7700 lots, which include a mix of owned option and land banked asset positioning us to drive future growth and capture market opportunities.
Speaker Change: We currently have approximately $60 million of liquidity and cash and availability on our credit facility.
Keith Feldman: remain focused on execution, adapting to and evolving market conditions, and positioning UHU for continued success in 2025.
Speaker Change: We remain focused on execution adapting to evolving market conditions and positioning <unk> for continued success in 2025 and beyond that.
Keith Feldman: That concludes our prepared remarks.
Speaker Change: That concludes our prepared remarks, operator, please open up the line for questions.
Audra: Operator, please open up the line. Thank you.
Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in we would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question simply press Star one again.
Audra: We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.
Audra: We'll pause just a moment. and again that is star one for questions.
Speaker Change: Pause just a moment.
Speaker Change: And again that is star one for questions.
Speaker Change: And at this time, we have no questions in the queue I would like to turn the conference over to Jamie Pirrello for closing remarks.
Audra: And at this time, we have no questions in the queue.
Jamie Pirrello: I would like to turn the conference over to J.B. Pirrello for closing remarks. All of us at UHG would like to thank you for joining the call. We look forward to talking with you here at the end of the first quarter, which is quickly approaching, and we want to just again, thank you for your support and for all the efforts and the work of our hard people in what they're accomplishing today at UHG. So thank you and take care.
Jamie Pirrello: First of all over so you, which you would like to thank you for joining the call.
Jamie Pirrello: We look forward to talking with you here at the end of the first quarter, which is quickly approaching.
Jamie Pirrello: And.
Jamie Pirrello: We wanted to just again, thank you for your support.
Jamie Pirrello: For all the efforts and the.
Jamie Pirrello: Work of our hard people.
Jamie Pirrello: And what they are accomplishing today at USG. So thank you and take care.
Jamie Pirrello: And this concludes today's conference call. Thank you for your participation you may now disconnect.
Audra: And this concludes today's conference call. Thank you for your participation. You may now disconnect.
Jamie Pirrello: Okay.
Jamie Pirrello: Okay.
Jamie Pirrello: Yes.
Jamie Pirrello: Okay.
Jamie Pirrello: Yes.
Jamie Pirrello: Okay.
Jamie Pirrello: Okay.