Q1 2025 Standard Motor Products Inc Earnings Call
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Speaker Change: Good day, everyone and welcome to the standard motor products first quarter 2025 earnings call.
At this time all participants are in a listen only mode.
Speaker Change: Later, you will have the opportunity to ask questions. During the question and answer session you.
Speaker Change: You May register to ask a question at any time by pressing the star one on your telephone keypad you.
Speaker Change: You may withdraw yourself from the queue by pressing star two.
Speaker Change: Please note today's call will be recorded and I will be standing by should you need any assistance.
Speaker Change: It is now my pleasure to turn the conference over to Tony Crystal O Vice President of Investor Relations. Please go ahead.
Tony Crystal: Thank you Chloe and good morning, everyone. Thank you for joining us on standard motor products first quarter 2025 earnings conference call.
Tony Crystal: With me today are Larry cells Chairman Emeritus.
Speaker Change: Eric Sills, Chairman and Chief Executive Officer, Jim Burke, Chief operating Officer, and Nathan Iles, Chief Financial Officer.
Speaker Change: On our call today, Eric will give an overview of our performance in the quarter and Nathan will then discuss our financial results. Eric will then provide some concluding remarks and open the call up for Q&A.
Speaker Change: Before we begin this morning, I'd like to remind you that some of the material that we'll be discussing today may include forward looking statements regarding our business and expected financial results.
Speaker Change: When we use words like anticipate believe estimate or expect these are generally forward looking statements. Although we believe that the expectations reflected in these forward looking statements are reasonable. They are based on information currently available to us and certain assumptions made by us and we cannot assure you.
Speaker Change: You that they will prove correct.
Speaker Change: Should also read our filings with the security and Exchange Commission for a discussion of the risks and uncertainties that could cause our actual results to differ from our forward looking statements.
Speaker Change: Now I'll turn the call over to Eric Sills, our CEO.
Eric Sills: Thank you Tony and good morning, and welcome to our first quarter earnings call. It's good to be with you today.
Eric Sills: I'll start my prepared remarks, reflecting on our performance in the quarter and will then turn my attention to the current business climate, how we're viewing it and how we are responding.
Eric Sills: Overall, we are very pleased with our performance in the quarter as both the top and bottom lines exceeded our expectations for.
Eric Sills: Sales were up nearly 25% and while much of the growth was due to the inclusion of our recent Netherlands acquisition, excluding <unk> sales were up nearly 5%. So we feel the year is off to a good start.
Eric Sills: So had strong results in terms of profitability similar to the sales story, while the Nissan business provided some of the expansion or other segments. Also showed strong gains we generated a $20 million increase in EBITDA and a 350 basis point lift in EBITDA margin.
Eric Sills: Let me discuss each business separately in terms of our performance how we view the basic dynamics in this space and how we differentiate ourselves to capitalize on our strengths.
Eric Sills: I'll start with North American aftermarket the largest part of our business comprised of two operating segments vehicle control and temperature control. Both of these segments set all time records for first quarter sales.
Eric Sills: The vehicle control sales increased three seven to seven 7% in the quarter continuing the growth trend we are enjoying for the last several periods.
Eric Sills: We believe this is due to a combination of market dynamics and our relative strength in the marketplace.
Eric Sills: All of the macro trends continue to be favorable the car park is growing and the aging and as times get economically challenging consumers tend to delay in new car purchases and instead maintain the ones that.
Eric Sills: Car owners may forgo a discretionary purchases or delay maintenance work, but the majority of what we sell our heart failure products, which are non discretionary in nature and typically cannot be deferred.
Eric Sills: Additionally, most of our products have professionally installed and technicians stick with the brands They trust.
Eric Sills: Therefore, not only has demand remains strong from our customers importantly, they are reporting positive sell through of our products in the quarter as well.
Eric Sills: Our other aftermarket segment temperature control is off to a very strong start.
Eric Sills: We exited last year with robust numbers and that trend has continued with sales in the quarter up 24% over last year.
Eric Sills: We see a few drivers here first off the segment enjoys the same macro tailwind as described the vehicle control stable addressable market non discretionary products and strong brand equity as.
Eric Sills: As such the quarter was marked by solid customer sell through with customer P. O S up high single digits over last year.
But as the seasonal business at the beginning of the year tends to be driven by preparation for the upcoming season.
Eric Sills: We therefore received pre season orders from the majority of our customer base and this year, we saw a lot of those ship in the first quarter.
Eric Sills: But as you know this segment success is determined by the selling season, which typically begins towards the end of the second quarter. So we look forward to a long hot summer.
Eric Sills: Next let me discuss our engineered solutions segment, where we serve various global end markets with products for new vehicle and equipment production.
Eric Sills: The softness in the last year has continued and sales were down 11, 2%.
Eric Sills: As opposed to the aftermarket this segment can be more impacted by cyclical trends and some of our customers are experiencing downturns in their end markets. They are reducing their production schedules.
Eric Sills: Their purchases from us.
Eric Sills: Importantly, while the top line was down the customer and product mix has been favorable and therefore the segment profits were up from last year.
Eric Sills: So how do we view this business and our position within it we believe that while there can be volatility quarter to quarter the longer term trends are favorable.
Eric Sills: The markets are global large and diverse and we are starting from a small base. We are now gaining market exposure is a highly capable producer with a broad portfolio of products, which is leading to new business Awards. Therefore, the future for engineered solutions remains bright both in its own right and is an excellent complement to the aftermarket.
Eric Sills: Lastly, I'll speak about our newest part of our company lessons.
Eric Sills: This was the first full quarter of ownership and we are delighted with how it performed both sales and profits exceeded our expectations.
Eric Sills: <unk> has a strong position in the market for many of the same reasons as described here in North America. They have a broad offering of professional grade products with a brand that is well known and well regarded and is Europe is a highly D. I F M market, Michigan does very well.
Eric Sills: Importantly, the more we work with the <unk> team. The more we know that we are a perfect fit together, we see complementary go to market strategies product portfolios and cultural alignment, we have global customers that we either share or introducing to each other we are finding excellent means of collaboration leading to significant synergies all while providing.
Eric Sills: Adding business and geographic diversification.
Eric Sills: We see a great future together and look forward to keeping you abreast of our integration status.
Speaker Change: Okay haven't.
Speaker Change: Having given a rundown of the quarter I'd like to now spend a few minute moments talking about the current business environment. How we are thinking about the potential impacts and what we believe differentiates us in a way that will provide a competitive advantage.
Speaker Change: The topic on everyone's mind, obviously is tax.
Speaker Change: Needless to say we are in a fluid situation. So it's impossible to state with certainty how it will play out but as things currently stand we believe that our commitment to being a basic manufacturer with a concentration in North America gives us a level of protection and an advantage over other players.
Speaker Change: A few decades ago, when the aftermarket began seeking low cost regions. Most companies chose China, we chose Mexico.
Speaker Change: Fast forward to today over half of our sales in the United States comes from product manufactured in North America, mostly Mexico, but also the U S and a bit in Canada.
Speaker Change: As our Mexican and Canadian products, our U S. M C. A compliant they remain tariff free.
Speaker Change: While we do incur some tariffs on components used in our U S production. It is nominal in terms of our total cost structure.
Speaker Change: And while the balance of our products are imported from elsewhere only about a quarter of all U S sales are from China with the rest being from Europe, and other lower tariffs countries.
Speaker Change: We are currently heavily engaged in our mitigation efforts from a cost containment perspective, we are working upstream with our suppliers to reduce prices and to relocate to lower tariff regions and we are leveraging our footprint to optimize our supply chain, including deferring imports into the U S until the products are needed.
Speaker Change: But most of our tariff recovery through pricing actions.
Speaker Change: While we do believe that our tariff exposure will be lower the money. It is our full intent to pass them through to our customers at our cost as we have in the past.
Speaker Change: Lastly, going back to the notion of our products being non discretionary they tends to be priced in elastic, meaning we would not anticipate any degradation in demand.
Speaker Change: It's also worth reminding you that due to our two newest segments engineered solutions and lessons, we have seen nice geographic diversification. The U S. Now represents about 70% of our sales down from about 90% a few short years ago.
Speaker Change: So again, while we are in a complex and challenging business environment, we feel good about our position relative to others and in our ability to navigate it.
Speaker Change: With that I will turn it over to Nathan to review the numbers.
Nathan Iles: Alright, Thank you Eric good morning, everyone.
Nathan Iles: As we go through the numbers I'll first give some color on our results for the quarter by segment and at the consolidated level. I'll then cover some key cash flow metrics and finish with an update on our financial outlook for the full year of 2025.
Nathan Iles: First looking at our vehicle control segment, you can see on the slide the net sales of $192 3 million in Q1 were up three 7% with the increase driven by steady demand for our products.
Nathan Iles: Vehicle controls adjusted EBIT in the first quarter increased to 11, 6% up 120 basis points from last year.
Nathan Iles: The increase in adjusted EBITDA was driven by a higher gross margin rate, mainly due to higher sales and lower factory expenses as a percent of sales, which was mainly the result of timing of collections during the quarter.
Nathan Iles: Looking at temperature control net sales in the quarter for that segment of $88 9 million were up 24, 1%.
Nathan Iles: The first quarter benefited from a strong start to preseason ordering which started earlier this year than last and also good sell through.
Nathan Iles: As we always note the first quarter is not indicative of how the full year will turn out in a weather dependent business like temp control, but we were pleased to get off to another good start.
Nathan Iles: Temperature control as adjusted EBITDA increased in Q1 to 10, 6% as higher sales volumes led to a higher gross margin rate and improved operating expenses as a percent of sales in the quarter.
Nathan Iles: Sales for engineered solutions segment in the quarter were down 11, 2%, but this softness was expected as we continue to see slower production schedules at our customers as they react to softness across the various markets customer demand can be lumpy overtime, particularly in certain markets, but we expect to continue to win business to offset these market headwinds.
Nathan Iles: Despite lower sales adjusted EBITDA for engineered solutions in the quarter of nine 7% was up from last year, driven by a better mix of products sold as well as the benefit of a stronger U S dollar versus the Mexican peso, which helped to lower our manufacturing costs in the quarter.
Nathan Iles: To wrap up on operating segments, Let me talk a little about this since automotive. This was our first full quarter of ownership and this since added $66 2 million of net sales in the quarter and $11 5 million of adjusted EBITDA.
Nathan Iles: The business is performing as expected and exceeded our earlier estimate of mid teens EBIT percent business coming in at 17, 3% for the quarter.
Nathan Iles: <unk> continues to grow its sales across Europe, and gross margin has been good as well.
Nathan Iles: First quarter also benefited from some favorable currency movements.
Nathan Iles: To summarize and put it all together across our four segments for Q1 consolidated net sales increased 24, 7% and adjusted EBIT increased to 10, 4% of net sales while non-GAAP diluted earnings per share were up 80% versus last year.
Nathan Iles: Turning now to cash flows cash used in operations for the quarter of $60 2 million was up from cash used of $45 7 million last year.
While we always use cash during Q1 and the first half of the year due to seasonal working capital needs. The higher cash usage. This year was primarily the result of increased accounts receivable and inventory balances related to sales growth in the quarter.
Nathan Iles: Our investing activity show capital expenditures of $9 1 million, which includes $3 $5 million of investment related to our new distribution center.
Nathan Iles: Financing activities show payment of $6 8 million of dividends as well as borrowings for the year of $79 1 million, so far which were used mainly to fund our working capital needs.
Nathan Iles: Our net debt of $600 3 million at the end of Q1 was higher than last year. After borrowings made for the acquisition.
Nathan Iles: Finished Q1 with a leverage ratio of 375 times EBITDA, but accounting for a full 12 months of EBITDA from nuisance leverage would be less than three five times.
Nathan Iles: Before I finish I want to give an update on our sales and profit expectations for the full year of 2020.
Nathan Iles: As we noted in our release this morning, while tariffs have introduced a level of uncertainty into the macro environment.
Nathan Iles: Those aside we are affirming our prior outlook as our business continues to perform well.
Nathan Iles: As a reminder, we expect to see net sales percentage growth in the mid teens percentages for the full year.
Nathan Iles: And adjusted EBITDA margin to be in a range of 10% to 11% of net sales with both measures including growth from Nissan automotive as we'll have 12 months of results versus two months in 2020.
As I said, our 2025 outlook does not include any impact from the recently announced tariff actions whatever the impact is in our business, we plan to address higher cost by passing them through in price dollar for dollar.
Nathan Iles: We'll update our guidance as necessary in future quarters, when theres greater clarity regarding the situation.
Nathan Iles: To wrap up on the financial side, we're very pleased with our sales and earnings growth in the first quarter.
Nathan Iles: It's still early we started the year well with earnings up across all segments, which really shows the ongoing strength of our business. Thank you for your time I will turn the call back to Eric for some final comments.
Eric Sills: Thank you Nathan so to close let me spend a moment, reflecting on how we're viewing things.
Eric Sills: We're coming off not just a strong start to the year, but several quarters in a row of strengthening performance and we feel we have good momentum.
Eric Sills: The World now finds itself in unchartered territory with an uncertain and fragile economic climate. So the question becomes how well positioned are we to navigate it.
Eric Sills: We believe that we have many structural underpinnings that will provide us with a relative advantage.
Eric Sills: Within North America, the majority of our businesses and an industry known for its resilience in turbulent times.
Eric Sills: Historically, the aftermarket has been able to mute the impact of economic downturns and in fact tends to outperform.
Eric Sills: The car park, usually agents during these cycles as new car sales can become depressed and motorists have no choice, but to make the necessary repairs to keep their cars operational.
Eric Sills: While we believe the tariffs will likely lead to some inflation, our non discretionary parts by definition will still be indeed.
Eric Sills: Furthermore, S&P has spent the last century investing in operational excellence and we tend to do better than most during tough times.
Eric Sills: Manufacturing footprint provides structural advantages beyond cost income beyond cost implications in a tariff environment. It's also provided supply chain stability.
Eric Sills: As we look back to the challenges coming out of the pandemic Lockdowns we outperformed.
Eric Sills: Operating our own factories, rather than overly relying on third party sources, we were better able to control out, but and by being less reliant on China, we were less impacted by shipping container disruptions and as a result, we are better able to service our customers.
Eric Sills: Beyond that we have now expanded our business outside of the U S and believe that geographic diversification will also help us to dampen the impact of the turbulence, we're seeing domestically.
Eric Sills: The integration of <unk> is on track to yield significant synergies with teams working on product line expansion on both sides of the ocean to fuel growth as well as savings programs focused on combined resources and best cost sourcing.
Eric Sills: Add to that various other cost reduction programs being pursued throughout the enterprise and tackling at all with the best group of people to make it happen we feel good about the future.
Eric Sills: And with that I'll turn it back to the moderator and we'll open it up for questions.
Speaker Change: Thank you at this time, if you would like to ask a question. Please press star and one on your telephone keypad.
Speaker Change: You may withdraw yourself from the queue at any time by pressing star two.
Speaker Change: Again that is star one.
Speaker Change: We will take our first question from Scott Stenberg with Ross Your line is open.
Scott Stenberg: Good morning, guys and thanks for taking my questions.
Speaker Change: Good morning, Scott.
Speaker Change: Eric If I heard you correct, you said that Pos.
Speaker Change: POS and vehicle control was up.
Speaker Change: In the quarter could you maybe.
Speaker Change: Besides that up a little bit and I know it had been flattish as of late have you guys seen an acceleration or anything to point to.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Correct on both points coming out of it but much of last year was relatively flat in the first quarter of this year, we did see.
Speaker Change: Positive gains in the in the low single digits now of course, that's an aggregate number combining all of our customers.
Speaker Change: Our major customers, but yeah. It was low single digits in the quarter.
Speaker Change: Okay got it and then regarding tariffs I know, there's a lot of moving pieces here, but there has been some talk about some relief for imported foreign auto parts.
Speaker Change: Not sure if that's just referring to OEM based parts or does that.
Speaker Change: Have you guys been able to clarify whether that means that there'll be some relief.
Speaker Change: Notably for Chinese parts for the aftermarket.
Speaker Change: So I assume you're referring to the announcement that just came out in the last 24 hours.
Speaker Change: Yes, we're still reading of it but it does appear that it's much more geared towards relief for the automakers.
Speaker Change: And so at this point again, we're still reading it, but we're expecting that to have minimal impact on us.
Speaker Change: Okay.
Speaker Change: Then last question on this is obviously a great contribution there in the quarter.
Could you just give us an idea I know that you didn't own them last year, but on a pro forma basis. It sounds like they are growing faster.
Speaker Change: Then the core business organically and any cross pollination.
Speaker Change: Wins or good stuff that you've seen early on.
Speaker Change: Yes, okay. So in.
Speaker Change: In terms of of their growth our performance you're right, we didn't known them a year ago. So we're not showing that comps, but what I would say is that they continue to show growth and to perform very well in that market.
Speaker Change: And.
Speaker Change: So the trends that we have been speaking about prior to the acquisition of <unk>.
Speaker Change: Being in that that.
Speaker Change: Outperforming the European aftermarket that trend did continue in terms of wins since the acquisition. We are still in the early earlier stages of that so nothing that's showing through the P&L.
Speaker Change: Do have as I said teams working on building out each other's catalogs.
Speaker Change: So really the way, we see 2025 as being the preparation year as we add the coverage put inventory in place and whether that's adding skus to existing categories. For example, they have compressors that we don't have or vice versa, or it's entirely new product line expansion as a category that they have.
Speaker Change: Therefore, it did not have heretofore did not have or vice versa that work is happening this year.
Speaker Change: Where we would expect to see any sales lift really in 2026.
Speaker Change: We are talking to each other's customers and we do believe that there are opportunities there as well, but nothing that nothing to report at this point that youre going to start seeing.
Speaker Change: Got it that's all I have for now thank you.
Scott Stenberg: Thank you Scott.
Speaker Change: We will take our next question from Bret Jordan with Jefferies. Your line is open.
Speaker Change: Good morning, guys.
Speaker Change: Morning, Brad when you look at the tariffs and you look at the competitive product for you out there, whether it's wells or whether it's OE alternative.
Speaker Change: Temperature control or vehicle control.
Speaker Change: How does your tariff exposure and production footprint stack off I guess sort of the euro relative price value versus the competition in this current tariff environment.
Speaker Change: Have you gained ground in the sense that you are more north American in more of your competition is import or have the oes gained ground because theyre getting relief on import and they are.
Speaker Change: North American as well.
Speaker Change: Yeah, we believe that that in general our footprint is favorable to the competition.
Speaker Change: Obviously, yet to be seen how.
Speaker Change: Competitors look to address it in the marketplace, but we believe.
Speaker Change: Overall, we have a structural advantage whether it's against.
Speaker Change: The pure play aftermarket guys that you're referring to our or against any of the tier ones.
Speaker Change: We see ourselves being at a structural advantage.
Speaker Change: Okay, and then on the <unk>.
Speaker Change: <unk> business could you talk about just European aftermarket trends, what theyre seeing in Pos and the general health of the aftermarket on that side of the ocean.
Speaker Change: So as we look at the overall market in Europe now you're hearing some of the similar things from the big players over there as the distributors are reporting here, which is you're seeing some softness in certain categories.
But you know heart failure items add more D. I F M type items tending to outperform so you see a lot of similar trends, there, which <unk> is well positioned to take advantage of.
Speaker Change: And and so.
Speaker Change: We believe that that they should stand to continue to outperform over there the general aftermarket trends.
Speaker Change: Okay, and then I guess one last question on this.
Speaker Change: Cadence of this year's outlook.
Speaker Change: Did you think you saw a lot of pull forward in Q1 orders that people were trying to bring inventory in ahead of who know what was going to be on tariffs. The next day and that that will have drawn from Q2, and we ended the sell out before replenish or do you think it's.
Speaker Change: Strong sequentially through the year.
Speaker Change: Okay.
Speaker Change: We don't believe that we've seen any pull forward and trying to beat the tariffs what we.
Speaker Change: We have not seen any evidence of that we do believe in and I think we.
Speaker Change: Basically alluded to this there are comments that on the temperature control preseason, which have nothing to do with the timing of that has nothing to do with tariffs we get those orders in really mostly towards the end of the previous year and start working on them. Those often can ship either towards the end of the first quarter or the beginning of the second quarter in any given year. This year they were a little bit more.
Speaker Change: Frontloaded. So we would expect to see kind of an offset on the preseason portion of temperature control, but beyond that we haven't seen any customer behavior that suggests they're trying to get ahead of the tariffs. Okay. And then one final question as you think about.
Speaker Change: Retailers treatment of these tariffs are you hearing from them that they are pretty open to you are passing them through or is it tough.
Speaker Change: <unk>, because they're concerned about just sort of a price shock on the consumer.
Speaker Change: Well certainly everything is a negotiation, but we are we are in communications with all of them and we believe that our approach to it where there's a car.
Speaker Change: A sharing of <unk> by us working upstream on mitigation efforts.
And an expectation that they would take on the balance.
Speaker Change: We feel good that the process that we develop going back to 2018, 29 tariffs will be sticky and that will build with them. A program that says look I think we're in a very volatile time I don't think the tariffs as they stand today are going to continue to be what they are I think we're going to continue to see movements up or down hopefully down and we'll develop processes with our <unk>.
Speaker Change: Customers that allow us to adjust accordingly, so as long as we continue to be fair and rational we believe that that will our program will be well received.
Speaker Change: Great. Thank you.
Speaker Change: Thank you Sir.
Speaker Change: We'll move next to Carolina Jolly with Gabelli Your line is open.
Carolina Jolly: Great. Thanks for taking my questions.
Speaker Change: Just one thing.
Speaker Change: Good morning.
Speaker Change: Just a quick clarification question any current.
Speaker Change: <unk> from tariffs and in first quarter.
Speaker Change: Yeah, Hi, currently it's Nathan no we didn't really see any impact of tariffs from new tariffs that as that came in in 2025, and our Q1 numbers.
Speaker Change: Obviously, a little bit of cash flow impact as the tariffs are paid upfront, but as you know the cost has to work its way through the inventory and so any cost impact comes later in the year.
Speaker Change: Okay perfect. Thanks for that and then second quarter.
Speaker Change: Quarter came in pretty strong definitely above our estimates.
Speaker Change: Can you kind of discuss given that you maintained guidance.
Speaker Change: Any any.
Speaker Change: Any benefits you saw in the first quarter that you don't necessarily expect.
Speaker Change: You roll through.
Speaker Change: And I know I know you discussed the pre buy and everything but anything else.
Speaker Change: Yeah.
Speaker Change: Yeah, I think as Eric mentioned about preseason ordering in temp control you kind of have to look at that segment certainly as a first half year over year.
Speaker Change: So there was a little bit.
Speaker Change: Selling ahead of this time last year for that segment.
Speaker Change: That plays into keeping the guidance, where it was certainly as that was an outsized impact on the quarter.
Speaker Change: And I think just coming out of the first quarter with all the uncertainty around tariffs and how we'll deal with them or others will deal with them.
Speaker Change: It was it was good to keep our guidance where it was.
Speaker Change: Update accordingly, as we go through the year.
Speaker Change: Great. Thank you.
Speaker Change: And we do have a follow up from Scott Stenberg with Ross.
Speaker Change: Your line is open.
Scott Stenberg: Yes, just following up on the facility moves that you guys are undergoing in Kansas can you maybe talk about the status of that.
Costs related in the quarter.
Whether the total cost for the year have changed in any synergy updates.
Scott Stenberg: Okay.
Scott Stenberg: Okay, Hi, Scott, It's Jim Burke.
Speaker Change: Yes, we're right in the midst of update and Sean.
Scott Stenberg: With the installation the automation that we've put in there.
Speaker Change: Currently.
Speaker Change: Well just to refresh everybody's memory, we plan to move it into a shiny facility to move the top moving numbers from our Virginia Lewisville facility risk avoidance top A&P numbers and also then shed the facility that we have in Edwardsville, Kansas.
Speaker Change: Okay implemented an automation project, that's there and thats in testing at the moment will be moving more product in.
Speaker Change: Shortly.
Speaker Change: In mid 'twenty, five and then it'll be complete our planned by the end of 2025 with the.
Speaker Change: Temperature control product Thats moving in there.
Speaker Change: Adding the.
Nathan Iles: The costs within the quarter I'll, let you can respond, yes, hey, Scott, it's Nathan so going back to when we started.
Nathan Iles: The startup for the warehouse coming out of 2023, really we talked about something like a $6 million to $8 million of incremental cost.
Nathan Iles: Startup range, and then that would come down over time.
Nathan Iles: Still seeing that in that same range. So in the quarter a couple of million dollars related to the warehouse and then as we get fully operational later this year, we can update more on how that cost is looking.
Nathan Iles: Got it thanks.
Speaker Change: And it does appear that there are no further questions. At this time I would now like to turn the call back to management for any additional or closing remarks.
Speaker Change: Thank you and we want to thank everyone for participating in our conference call today, we understand there's a lot of information presented and we will be happy to answer any follow up questions. You may have our contact information is available on our press release or Investor Relations website. We hope you have a great day. Thank you.
Speaker Change: This does conclude today's program. Thank you for your participation you may disconnect at any time and have a wonderful afternoon.
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