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spk01: Hello and thank you for standing by. Welcome to the Franklin Electric Report's second quarter 2022 sales and earnings conference call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. It is now my pleasure to introduce Chief Financial Officer Jeff Taylor.
spk08: Thank you, Andrew, and welcome everyone to Franklin Electric's second quarter 2022 earnings conference call. With me today is Greg Singstack, our chairperson and CEO. On today's call, Greg will review our second quarter business highlights, and I will review our second quarter financial performance in more detail. When we are through, we will have time for questions and answers. Before we begin, let me remind you that as we conduct this call, will be making forward-looking statements within the meaning of the Private Securities Litigation and Reform Act of 1995. These statements are subject to various risks and uncertainties, many of which could cause actual results to differ materially from such forward-looking statements. A discussion of these factors may be found in our company's annual report on Form 10-K and in today's earnings release. All forward-looking statements made during this call are based on information currently available and, except as required by law, the company assumes no obligation to update forward-looking statements. With that, I will now turn the call over to our chairperson and CEO, Greg Singstack.
spk07: Thank you, Jeff, and thank you all for joining us. We gained momentum in the second quarter, leveraging strong demand around the globe in a normal seasonal uptick, resulting in record results, including the highest consolidated net sales, operating income, and EPS for any quarter in Frank Electric's history. It requires tremendous teamwork and commitment to deliver these results, and I want to thank our global team, whose execution and dedication drove these results. Let me cover a few highlights for the quarter before I talk about each business segment. First, demand remains strong across the company's markets, with all three businesses experiencing strong double-digit top-line growth organically, which reflects the growing need for our water and fueling system products. Our backlog has remained elevated at approximately $290 million, essentially flat for the prior quarter. Another bright spot this quarter and a testament to our team's discipline was the sequential margin improvement we delivered, with operating margins expanding in all three businesses as a result of price catching up with inflation, improved operating leverage, and a team's relentless focus on the cost controls, especially in the SG&A. Free cash flow improved during the second quarter, driven primarily by higher net income as working capital stabilized. As mentioned in previous calls, we are purposely carrying higher levels of inventory to mitigate ongoing supply issues and longer lead times. We're planning to reduce our inventory levels by year-end, resulting in greater cash conversion in the back half of the year. Turning to our segments, in water systems, we experienced overall revenue growth of 26%, operating income growth of 42%, and operating margin of 15.8% for the second quarter. Organic growth was 27%, led by pricing actions and strong end market demand across all major product lines of groundwater pumping, surface pumping, the water equipment, and water treatment. In the U.S., organic growth for water systems was 30%. Outside the U.S., water systems organic growth was 23%, with strong growth in all regions of the world. End markets for water systems remain strong, driven by strong commodity and crop prices, dry weather in the United States and other regions of the globe, food scarcity driving growth in agriculture, and a secular trend created from the population migration to rural areas within the U.S. We have not experienced a noticeable decline in U.S. residential demand to date, but we are monitoring this end market closely. We believe these positive trends combined with the stability of water systems due to the high-level replacement demand will continue to drive the business going forward. We reached the one-year anniversary of the Puronix and AquaSystem acquisitions in the water treatment during the second quarter. Our integration activities are going well. We have successfully integrated our U.S. water treatment business on our common ERP system. Operational integration activities continue on schedule. The performance of the water treatment business is exceeding our expectations, and there is more opportunity to grow and optimize this business. Our fueling systems business also had a solid quarter, producing overall revenue growth of 19%, operating income growth of 41%, and operating margin of 30.3%. Organic growth was 21%, due in part to robust demand for infrastructure build-out in the U.S. Looking forward, we expect continued strong demand in the U.S. as major marketers invest in new locations and industry consolidation progresses. Outside the U.S., we expect future investment in new locations and developing regions, as well as a greater focus on vapor recovery, environmental management, and monitoring. Specifically, our revenue in India is growing with what we believe will be a multi-year vapor recovery and fuel station infrastructure buildup. Globally, geopolitical tensions have highlighted the need for an expansion of agriculture, mining, and energy infrastructure as pressures arise from recent conflicts have impacted food, material, and energy supplies. As a result, we believe we will continue to see strong demand within both our water and fueling segments. Our U.S. distribution business delivered another strong quarter with overall revenue growth of 32%, operating income growth of 46%, and an operating margin of 12.2%. driven by solid demand in the U.S. groundwater market, price realization, and the acquisition of Blake equipment at the beginning of the year. The distribution team continues to deliver superior results, underscoring the segment's role as a major growth driver for our company. Our capital allocation strategy remains unchanged. We will continue to invest in our business organically and inorganically, while at the same time returning cash to shareholders through share repurchases and dividends. However, given we are always actively looking for strategic targets, the strengthening of the U.S. dollar may make investments opportunities outside the U.S. more attractive. We will continue to remain prudent and efficient in our approach to capital allocation. We will stay focused on driving returns for our shareholders. The operating environment for our company remains stable during the second quarter, not much better and not much worse, but continues to offer challenges from a supply perspective. Additionally, inflationary cost pressure is persistent, and a team is actively managing all of these. We foresee these headwinds continuing at some level throughout the year, depending on material input and geography. However, we expect the supply chain to begin to improve in the back half of the year. Turning now to our outlook, we expect to carry the momentum from our strong first half into the second half of the year. Our open order balance or backlog remains high, and we continue to experience strong demand globally in our core markets. As a result, we are updating and raising our 2022 revenue and earnings for share guidance. Our new 2022 full-year revenue guidance is $2 billion to $2.15 billion. Our new earnings per share before restructuring is in the range of $4 to $4.20 per share, reflecting an increase in the midpoint of our prior range of $3.63 for our current range of the midpoint of $4.10. I will now turn the call back over to Jeff.
spk08: Thanks, Greg. Overall, it was a record second quarter for the company and our operating segments. We established new quarterly company records for consolidated revenue, operating income, and earnings per share. Our fully diluted earnings per share were a record for any quarter in the company's history at $1.26 for the second quarter of 2022 versus 83 cents for the second quarter of 2021. Consolidated sales were a record $551.1 million compared to 2021 second quarter sales of $437.3 million an increase of 26%. The increase from acquisition-related sales was $34.4 million, while organic growth contributed 23%. Sales revenue was negatively impacted by $19.4 million, or about 4%, in the second quarter 2022 due to foreign currency translation. Water system sales in the U.S. and Canada were up about 38% compared to the second quarter of 2021. due to acquisition-related sales, price, and volume. In the second quarter of 2022, sales from businesses acquired since the second quarter of 2021 were 12.9 million. Water system sales in the US and Canada grew 30% organically in the second quarter. Sales of groundwater pumping equipment increased by about 38%, and sales of all surface pumping equipment increased by about 22%, all due to strong in-market demand. Water system sales in markets outside the US and Canada increased by about 9% overall. Sales revenue decreased by 17.1 million, or about 16%, in the second quarter of 2022 due to foreign currency translation. Outside the US and Canada, water systems organic sales increased by about 23%, driven primarily by higher sales in the Europe, Middle East, and Africa markets. The company also had higher sales in the Latin America in Asia Pacific markets. Water Systems' record operating income was $49 million in the second quarter of 2022, up $14.4 million, or about 42% versus the second quarter of 2021. And operating income margin was 15.8%, an increase of 180 basis points. The increase in operating income was primarily due to higher sales. Operating income margin improved due to leverage on fixed costs from higher sales, price realization, and cost management. Distribution achieved record second quarter sales of 191.1 million this quarter versus second quarter 2021 sales of 144.8 million. In the second quarter of 2022, sales from businesses acquired since the second quarter of 2021 were 19.6 million. The distribution segment organic sales increased 18% compared to the second quarter 2021. Revenue was from higher selling prices and strong demand in all regions and product categories. The distribution segment operating income was a record for the second quarter at 23.3 million compared to the second quarter 2021 operating income of 16 million. Operating income margin was 12.2% of sales and distribution primarily because of revenue growth. Fueling system sales were a record 86 million in the second quarter 2022 and increased 19% versus the second quarter 2021. Sales revenue decreased by 1.5 million or about 2% in the second quarter due to foreign currency translation. Fueling system sales in the US and Canada increased by about 20% compared to the second quarter 2021. The increase was primarily in pumping systems and piping. Outside the U.S. and Canada, fueling systems revenues decreased by about 6%, and sales increases of 3% in the rest of the world outside of China were not enough to offset lower sales in China. Fueling systems operating income in the second quarter was $26.1 million, a new quarterly record. compared to 18.5 million in the second quarter of 2021, driven by higher sales. The second quarter 2022 operating income margin was 30.3% compared to 25.6% of net sales in the prior year. The increase in operating income was primarily due to higher sales. Operating income margin improved due to leverage on fixed costs from higher sales, price realization, and cost management. The company's consolidated gross profit was $189.3 million for the second quarter 2022, an increase from the second quarter 2021 gross profit of $152.2 million. Gross profit as a percentage of net sales was 34.3% in the second quarter 2022 versus 34.8% in the second quarter 2021. The gross profit increase was primarily due to higher sales. In the second quarter of 2022, the gross profit margin percent was nearly flat, down 50 basis points. As realized price actions are more than offsetting, inflationary costs increases. However, supply disruptions are causing higher transportation and manufacturing costs. Selling general and administrative expenses were $108.3 million in the second quarter of 2022, compared to $100.5 million in the second quarter of 2021. SG&A expenses from acquired businesses were about $7.6 million. Excluding acquisitions, SG&A expenses were basically flat the last year. SG&A expenses of percent to sales is lower by 330 basis points due to great cost control across the company. In the second quarter of 2022, we had unfavorable discrete events of about $2.5 million, reducing income below operating income. These events primarily related to an indirect tax dispute settlement in a foreign jurisdiction and a change in income tax rate for a local jurisdiction. The effective income tax rate for the second quarter of 2022 was about 22%, and before the impact of discrete events was about 21%. The effective tax rate for the second quarter of 2021 was about 19%. and before the impact of discrete events was about 20%. The increase in the effective tax rate was primarily a result of net unfavorable discrete events recorded in the second quarter as compared to net favorable discrete events recorded in the prior year quarter, primarily from tax benefits on share-based compensation. The effective tax rate for the full year 2022 is projected to be about 21% before the impact of discrete events. We recognize the majority of our peer companies report adjusted earnings while we continue to report gap earnings both before and after restructuring expense as defined by gap. However, as our annual non-cash amortization has increased significantly over recent years due to the increased level of intangible assets coming mostly from our acquisitions in the water treatment space, we're providing additional information on this incremental expense. For 2022, non-cash amortization of acquisition-related intangibles is approximately $17 million or $4.3 million per quarter. Moving to return of capital to shareholders, yesterday the company announced a quarterly cash dividend of 19.5 cents that will be paid August 18th to shareholders of record on August 4th. Additionally, the company purchased about 130,000 shares of its common stock in the open market for about $9.8 million during the second quarter of 2022. At the end of the quarter, the total remaining authorized shares that may be repurchased is approximately 424,000. This concludes our prepared remarks. We'll now turn the call back to Andrew for questions.
spk01: Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone. Please stand by while we compile the Q&A roster. And our first question comes from the line of Matt Somerville with DA Davidson.
spk05: Thanks. Good morning. Maybe first, Jeff, Greg, Well, organic growth across each of the three businesses, obviously very impressive. I was hoping maybe you could parse out a little bit when you look across the three, how much is being driven by volume and price, and then whether or not in the second quarter you were in parity with sort of price cost or whether maybe you actually had begun to realize the favorable spread there. And then I have a follow-up.
spk08: Yeah, good morning, Matt. Thanks for the question. I think on the first part in terms of price volume, let me just give price volume in general in aggregate versus splitting it out for each of the businesses. So we had strong double-digit organic growth in all three segments leading to strong double-digit organic growth for the company as a whole. Price is certainly the bigger factor there, and I would say it's in that 60-40 price volume to two-thirds, one-third price volume in general. So price is leading the way, but we have strong volume growth as well.
spk05: And then, Jeff, I had a second part to that question, whether or not at this point in the second quarter you are, Franklin, sort of in price-cost parity, or whether maybe you've now begun to realize the favorable spread therein.
spk08: Yeah, Matt, I think in the second quarter, we actually gained some ground on the price versus cost equation. It fluctuates a little bit quarter to quarter. As you know, we were a little bit behind in the first quarter. I think we caught some up in the second quarter on our price versus our inflationary costs overall for the company. So gained a little ground.
spk07: Matt, to Jeff's earlier prepared remarks, we saw the Jeff's point of where price got ahead of material input costs, but relative to the logistics costs and operational costs of having interruptions at the factory due to supply chain issues, those costs have not been covered yet. We're covering that through the strong growth and operating leverage we're getting, both above and below the gross margin line.
spk06: Got it.
spk05: And then I think, Greg, you maybe mentioned in your prepared remarks that you think some of the supply chain issues you've been dealing with maybe start to get better in the second half of the year. Can you talk about what you're maybe seeing kind of day-to-day that's leading you to that conclusion?
spk07: Thank you. Yeah, we have this backlog, which again, historically, up until a year ago, really didn't talk about backlog. We've talked more about open orders at the end of the quarter, but we also have what we're tracking past due and of that backlog, which is a sizable portion of it. And we're seeing where the past due is peaked out in, say, the May timeframe, June, and we're beginning to see some positive, directionally positive move on our past due, and I think that's some indication that we're beginning to get critical components that we can build out products. You know, we've got 99 and 100 pieces you need for a particular product, and we're starting to get that 100th piece. That gives us cause for optimism. We're also mindful, Matt, and I think maybe this is where you might be headed, is that we talk about the availability of electronic components, and the good news is that we're now down to only 50-week lead times. So, I mean, it's still tremendous lead times on some key components, and that's going to carry into, if it's 50-week lead time, it's going to carry into 2023. But we generally are seeing... little bit more positive than negative surprises coming out of the supply chain at this point.
spk08: Matt, let me just add a little bit there in terms of it's an opportunity to give some credit to our operations and supply chain teams and the work that they're really doing to manage through all of these issues that are arising on a daily or weekly basis. And really, they've been working to build resiliency in the supply chain. They've been working on securing supply with existing suppliers. We've been qualifying second suppliers in some cases for critical materials. And all of that effort is over time working to hopefully improve our situation in the supply chain. But it's really a lot of hard work and effort that's being put in by those operations and supply chain teams to get that accomplished. And that doesn't mean that we're still not without risk in the second half of the year. We still have areas where we need improvement, but we're working on those very aggressively as well.
spk01: Understood. Thank you, guys. Thank you. And our next question comes from the line of Mike Halloran with Baird.
spk02: Hey, good morning, guys. It's Pez on for Mike. Good morning. Good morning. Quickly, I was hoping we could double-click in on water systems. Could you maybe talk about the trends separately across groundwater, surface pumps, sub-pump, and treatment, please?
spk08: Yeah, I think you heard in our prepared remarks that we have very strong growth in groundwater. We've seen that continue not only in the second quarter but in the first half. I would tell you that We're seeing that in all of the key end markets there. Residential continues to be strong. Agricultural continues to be strong in the groundwater space. On the surface pumping space, I'm going to include our large dewatering pioneer pumps in that. We've seen very strong demand in large surface pumps in the first half of this year. That continues. The backlog for our pioneer business increased in the second quarter over the first quarter, so that's certainly a strong driver there, as we also see strong demand in other surface pumps. In the sump sewage and effluent, some of the condensate pumps, those have been challenged from a supply chain perspective, so they continue to be strong. In-demand continues to be strong.
spk06: improvement on our supply issues there to improve that overall. Excellent. That's really helpful.
spk02: And maybe lastly, just a quick note on treatment.
spk07: Again, the water treatment, we've stood up all the U.S. businesses on our common ERP platform. That gives our team great visibility across and begin to do better analytics. We have our Canadian operation yet to do. Of course, we got slowed down by COVID, but now that's opened up. We got that scheduled to happen back after this year. The treatment business is doing well. It's ahead of its margin profile. As we get these businesses onto one system and we continue to grow the top line, we get that leverage that we've seen across all of our segments in the quarter.
spk06: So we're very pleased with the platform, very pleased with the progress, and we look forward to continued growth both organically and inorganically in that space. Great. Thank you. I'll jump back in queue.
spk01: Thank you. And our next question comes from the line of Walter Littag with Seaport Global.
spk03: Hey, thanks for morning, everyone, and great quarter. I wanted to follow up a little bit on Matt's questioning about the gross margin and maybe just go one step further. It sounds like with the, you know, electronics still 50 weeks out and some supply chain issues that, you know, I guess, you know, in the back half of the year, do you get, you know, the gross margin, the gross profit margin, you know, kind of flat year over year? And then at what point do we start seeing improvement to, you know, to gross margin? Do we have to get the supply chain logistics issues behind it?
spk08: Well, I think my first response to that is, Matt, we just delivered a record quarter. It's one of the highest gross margins we've seen in the company in years. And so to some extent, we want to enjoy the moment here. But certainly, we look at the back half of the year. You know, there's a lot of factors that come into play in the back half of the year, and many of those we've talked about. You know, these were all built into the guidance that we gave for the full year, which, you know, which really leads to the second half. But we do expect, you know, supply chains to see some slight improvement in the second half of the year. We also expect to see strong demand continue across, you know, across our businesses. We've seen very robust fraud-based demand up to this point. And we expect that, you know, that that will continue. On the inflation and price side, I mean, we still have inflation coming through as well. You know, we have prices coming through as well that are both built into our backlog. You know, other factors there in the second half of the year that could come into play on the margin. I mean, certainly there's a mixed component to it. If we see improvement on the electronic side, that should be favorable overall for our margin profile. But the offset to that is the large dewatering pumps for Pioneer will offset that because those are generally slightly – margins are slightly below what I would call the segment average. So multiple factors playing in there. We think we've – at least for where we are today, we've got a good view in the second half. You know, we're optimistic that demand's going to continue strong, and we're going to deliver a strong second half of the year.
spk03: Okay. All right, great. Yeah, I wasn't trying to take away from the record results, but, you know, the supply chain issue and inflation, you know, that's been quite a headwind, and I guess it's hopefully at some point it's, you know, through the system. You know, and so, yeah, understanding that demand is strong across the board, that's great. Maybe I can ask you this one. How do you guys think about the monetary tightening that's going on and how that might impact your businesses, especially around resi? You know, do you think that tightening is going to, you know, moderate some of the demand out into the future? How do you think that will play out?
spk07: You know, Walter, not an economist, but having been around Franklin for three decades, you think about, you know, I think what you're getting at is new housing starts and new installations. Being mindful that in the space of groundwater, just to make the math simple, if you have a million and a half new housing starts, maybe you're going to get a couple hundred thousand new starts with wells. But there are 13, 14 million wells installed in the United States. So new starts relative to the overall installed base is 2%. So at the margin, is there definitely no question that, you know, it's a lift when we see new housing starts, it's going to help us and it's going to be a lift also in our residential subsistence business. But from the standpoint of, you know, this large installed base, which is potentially getting utilized more actively now as people are moving into more rural settings, more work from home, just using their systems more. So they do wear out. I mean, they last for a long time, but they do wear out. So I think that no question that if there's a slowdown, you know, we'll be impacted like everybody else. But, you know, we have this resiliency because of our installed base in the U.S. in the residential side. And also, you know, with commodity price lift, if you expect that's going to continue, that's going to be good for our ag business. It's also good for mining to the degree that you're seeing Higher sustained oil prices. There's going to be more investment. Carbon is not going away. It's going to be more investment in oil sources than try to move away from dependency on Russia as a source for carbon. So we see a number of offsetting lifts, even if we see a slowdown in the United States. Now, again, geopolitical, we're going to get caught up like everybody else, but we're in pretty resilient markets. probably the largely water being the most kind of capital dependent, you know, where you see capital cycles and the residential probably being the least correlated. On the fueling side, we're seeing continued consolidation and investment by major marketers. New major marketers, many of them are public companies. Others have private equity behind them. The returns on having a C-store with a four-quart with gasoline, the returns are compelling. And they invest in technology, and that's good for us. And then with the case of our distribution business here, which is very much the U.S. centric, and therefore, you know, your question is very appropriate from that point of view, certainly we, you know, our leader of distribution have looked at other areas to expand in, you know, be it turf, be it treatment, be it wastewater, and be it commercial to, you know, again, grow beyond, you know, a residential focus. At the same time, we're talking to contractors, and contractors, you would often hear where they'd have work out, they'd line a site for a month or two. We're talking to contractors that work committed for a year or two. Can that disappear if the economy turns? Sure, but there's real underlying demand for their services and our products that we're seeing here, which gives us a level of confidence. Again, I'm not an economist, but it gives us a level of confidence that we're like we have in the past that will weather any slowdown or whether a slowdown occurs in a good way.
spk03: Okay, great. Okay, thanks very much.
spk08: Thank you, Walt. Appreciate your support.
spk01: Thank you. And our next question comes from the line of Conners with North Coast Capital.
spk04: Good morning. Thanks for taking my question. Greg, I hate to, you know, have you keep that economist hat on because I'm certainly not one either, but I wanted to kind of follow Walt's question with a similar question more on the resource and mining side. I mean, I know you cited tailwinds there, which we're on board with that. I guess dewatering does see some tailwinds with the resource tightness. It's an interesting cycle in that some of that resource tightness is geopolitical driven and shortages and so forth, but we are kind of also at a point where the Fed's hiking and maybe talking recession. So it's not sort of your typical mining resource cycle from a timing standpoint? How does that impact your outlook for dewatering?
spk07: Ryan, you've followed us for a number of years. Again, my view is that this is a supply. The inflation that's coming is a supply constraint. Some people take an analogy back to the end of World War II when gas were coming back to the United States. There just wasn't enough supply as opposed to demand or And also, you go back to the OA crisis when the whole basis for the housing expansion was more financially driven, not economically driven. But we have a real shortage of housing. And then turning to your question about resources, to the degree that we're going to be moving more to electrified world is that we're going to need more mining. And as you know, that's a real long cycle play. We saw that back in the earlier part of last decade, and we did really well in the environment. Now, when oil dropped in 2014 through the floor, so did our large e-watering business. And we've made some changes there to reduce our break-even points so that we could weather the capital cycle, because we're not so much a capital cycle business, and we got into it when we got into large e-watering and learned to deal with that, I think, in a little better way. But what's underlying is that to the degree that we're going to be doing less resource dependency on countries that are less favorable to the West and to the degree that we're going to be investing in electrification across the globe, that's going to be mining. And I think that's a multi-year situation, irrespective of what may happen in short term in the United States with the Fed and interest rates and the economy.
spk04: Got it. Okay. Well, that's helpful. And then my other was kind of big picture, Greg. It has to do with your treatment business and your sort of channel to market strategy. I'm just curious if you can brief us on how that's working out. I know some of the peers in that business have really talked up their partnerships with some of the big box, you know, home improvement players and so forth and said that that's really the key to unlocking that market. Can you just talk about how you guys are going about penetrating that market and what your strategy is there?
spk07: Sure, Ryan. We have a multi-channel strategy. So one thing, when you look at treatment and you look in the United States, really the well driller installer is the first person that's going to touch a pumping system. Many of them do not get into treatment. They enjoy and they realize, you know, good living off of drilling and installing, but some have found where treatment gives them, you know, repeat revenue. It gives them business in the off season. It's less, maybe has less ups and downs. So they're finding that interesting and we have access to that channel. Now, you know, we have that access to the channel through our own distribution and through other distributors, And our own distribution has other suppliers of our treatment products, and we respect the fact that our distribution business has to decide what's best interest for them. Being mindful they're owned by Franklin, but on the other hand, they're going to have other suppliers they're going to support. So that's a channel. You have the channel, too, of supporting plumbers and other installers that install treatment systems, and that channel has also been established. But then with the aqua systems, go-to-market strategies in between the idea of having the skilled individual necessarily going out to your house and selling you the system and or going to big box and then having to find somebody to install a system because I don't know about you, but I'm not maybe so inclined to try to install a board treatment system even though it's relatively straightforward in my own home. I'm going to hire a contractor. Aqua systems make that all seamless and very transparent. You can go, they advertise this clearly on the website. Everything's right there. You can pick and choose what you want. And we make that transaction as seamless to the customer as possible. And that's really the niche we're operating in, to the degree it's a niche. It's a big part of Aqua System's business. That's really what we're focused on is making it a really easy transaction for the consumer, for the customer to put it in. They don't have to worry about going to a big box and then finding an installer. And they don't necessarily have to invite somebody in their home to sell a system. So that's what we have with Aqua. With Pure Onyx, we have more of a model. It's more like maybe a collagen or a kinetical model. But the Aqua model is one we think we can repeat in new markets as well.
spk04: Hey, that's really helpful. It gives a better understanding of the business. Hey, thanks again for your time.
spk01: Thank you. Thank you, Brian. Thank you. And with that, I'll now hand the call back over to CEO Greg Singstack for any closing remarks.
spk07: We thank you for joining us this morning and we look forward to speaking to you after the end of the third quarter. Have a good week.
spk01: Ladies and gentlemen, this concludes today's conference call. Participating and you may now disconnect.
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