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spk01: Good morning, ladies and gentlemen, and welcome to the Modine Manufacturing Company's first quarter fiscal 2022 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. As a reminder, this call is being recorded. I would now like to turn the conference over to your host, Ms. Kathy Powers, Vice President, Treasurer, and Investor Relations.
spk00: Good morning, and thank you for joining our conference call to discuss Modine's first quarter fiscal 2023 results. I'm joined on this call by Neal Brinker, our President and Chief Executive Officer, and Mick Luccarelli, our Executive Vice President and Chief Financial Officer. We'll be using slides for today's presentation, which can be accessed either through the webcast link or by accessing the PDF file posted on the investor relations section of our website, modine.com. On slide three is our notice regarding forward-looking statements. This call will contain forward-looking statements as outlined in our earnings release, as well as in our company's filings with the Securities and Exchange Commission. With that, it's my pleasure to turn the call over to Neal.
spk03: Thank you, Kathy, and good morning, everyone. As most of you are aware, we held our first Investor and Analyst Day in June, and hopefully you had a chance to review those materials. Before launching into our quarterly results, I'd like to spend a couple minutes highlighting the key themes and messages from the event. During our Investor Day presentations, we outlined our strategy for unlocking value in Modine, demonstrating our plan to transform our company for a sustainable future. The actions we are taking largely fall into three main categories. The first of these is focusing the organization. Many of these actions are well underway and are forming the basis for our transformation. This includes making 80-20 a core part of our DNA, building a high-performance organization, and simplifying and segmenting the business. We are clearly seeing the results of these actions in our results this quarter. Next, we are moving on to the perform and deliver and accelerate profitable growth phases of our strategy. By moving to a more decentralized organization, we introduce a high level of accountability and empowerment. But in order to drive results, we will have a disciplined cadence and a review model with 80-20 at its core. This will allow us to maximize our share of target markets while simultaneously simplifying our product offerings and improving our operating margins. All of this, along with growth through product development, geographic expansion, and targeted M&A, will help us achieve our financial targets. Based on what we are delivering this quarter, particularly within our climate solution segments, we are well on our way. Now I'd like to briefly update you on the strategic progress we're making within each segment. Please turn to slide five. In our climate solution segment, we are making significant progress against our goals. Much of the early work in this segment has involved building out the organization, providing resources where necessary, and developing strategies to improve and grow. Our three product groups, of HVAC and refrigeration, data centers, and heat transfer products all have teams in place and are executing on a well-defined strategy fueled by strong drivers and targeted markets. In our HVAC and refrigeration, we continue to see strong demand for our heating products for warehousing, distribution center, and greenhouse projects, and we're outperforming our competition with service and are gaining market share. Preseason stocking orders are up more than 10% from the prior year, And we've onboarded nine new distributors. We are also continuing to expand our distribution network within the U.S. for our indoor air quality products, onboarding strategic reps in states where we previously lacked coverage. This is critical for allowing us to increase our share of this market targeted at school ventilation, a market supported by significant government funding opportunities. In IAQ, we are also simplifying our product offering while renewing our focus on product development. Our engineering teams are developing the next generation of school products, focusing on a continued compliance with ever-increasing regulations and new refrigeration requirements. Simplifying our business and reallocating resources will allow us to build a strong new product pipeline to drive future growth. Two recent examples include our work on a new adiabatic gas cooler and new range of CO2 unit coolers with expected prototypes later this year. In data centers, our order book remains strong, and we are continuing to make progress on our North American expansion. In fact, our current order book is rapidly filling capacity at our new U.S. chiller facility in Virginia. As evidence, I would like to highlight the significant order from CoreScale that we announced last month. This is a very strategic relationship for us, demonstrating that we can provide a full system solution for the U.S. data center market, including state-of-the-art testing facilities. This is a huge win for Modine, further validating our strategy to expand in the U.S. data center market. Heat transfer products, formerly known as the coils business, was an early adopter of 8020, and they are clearly driving significant margin improvements. HTP is also benefiting from the strong growth in the European heat pump market, fueling record revenues from our Serbian manufacturing location. Capturing our share of this growing market is a major goal of our European business, And we're not only ahead of our plan, but are implementing initiatives to further increase our share. Overall, I'm very pleased with the performance of this segment and the focus of this team. We will continue to work on simplifying our product offerings across our verticals, while also striving to over-serve our top customers and identifying those new customers with the highest potential. Please turn to page six. We are focusing much of our energy in the PT segment with an 80-20 phase rollout plan. We are working on segmenting our business and setting up our internal organizational structure to support the product groups I outlined during the last earnings call. Air-cooled components, liquid-cooled components, and advanced solutions. This is a new approach for us, shifting from a market focus to an organization built around technology. As we work through the 80-20 process and evolving our organizational structure, we continue to reallocate resources. For example, We have fewer employees supporting our legacy business and more supporting our high-growth EV business. The restructuring of our European business is in progress, and we are starting to see the benefit from these cost-saving actions. As a reminder, we previously announced a plan to reduce our SG&A costs by approximately $20 million. This process is well underway, and we expect to see early benefits in the second half of the fiscal year. In our advanced solutions business, which includes our EV systems and components business, We are seeing strong development activities for zero emissions mobility, driven by government and business commitment to aggressive climate goals. This is creating opportunities for us, particularly in Europe and Brazil. In response, we are investigating expanding production of our eVantage battery thermal management system into our existing footprint in Europe, well ahead of our previous plans. We're also heavily involved in pursuit activities with three OEs for the last mile delivery applications. Although we are certainly focused on growth and advanced solutions business, the focus of the rest of our vehicular business is on simplification and margin improvement. We are building new organizational structures and teams to focus on our air-cooled and liquid-cooled businesses. In addition, we are updating and analyzing the underlying data, which is critical to creating detailed 80-20 action plans. I'm encouraged by the progress with these groups, and I look forward to reporting back as things accelerate. In addition to 80-20, the performance technologies team is focused on a number of operational improvements. Some examples include an emphasis on scrap reduction, and we're starting to see encouraging results in some of our key plans. We have also implemented major initiatives to reduce packaging costs, which have skyrocketed in the past year. This involves consolidation of SKUs to reduce costs and lower setup costs, and taking advantage of preferred suppliers for inventory management and quantity discounts. We are also improving our plants throughput, which has become a more significant issue due to supply chain disruptions and labor shortages. We are also using 80-20 to address the most critical items, including enhanced training, clearing roadblocks, and capacity allocation. Last, COVID-related shutdowns in China impacted our production levels and continued into Q1 as well. That being said, we are starting to see recovery as operations resume this quarter. and it appears that the markets are cautiously rebounding. The actions we are taking today are designed to provide for future profitable growth as we shift away from certain markets and double down on others. There are strong secular drivers for these businesses, similar to our climate solutions business, that will drive the need for high-tech solutions for thermal management and electrification and in other areas such as energy production. This, coupled with the hard work we are doing to improve the cost structure, and our air-cooled and liquid-cooled businesses are expected to produce meaningful margin expansion in the near future. Now, I would like to turn the call over to Mick, who will review our results for the quarter and provide segment financial updates.
spk07: Thanks, Neil. Please turn to slide seven. Climate Solutions had an exceptional quarter with solid revenue growth and outstanding earnings improvement. Revenue was up 18% over the prior year. Sales of heat transfer products increased nearly 23 million, or 19%. In addition to strength across the North American markets, we're also benefiting from the strong European heat pump market. Data center sales were up 40%, or 7 million, as we continue to see strong demand from both the hyperscale and colocation markets. HVAC and R sales were up 11%, or 8 million, with solid preseason stocking sales and heating, and continued growth in school products. Adjusted EBITDA increased 91% from the prior year, resulting in a 13.3% margin and a 510 basis point improvement. The earnings and margin increases were driven by several factors, including higher sales volumes, commercial pricing initiatives, and operational improvements. SG&A declined as a percentage of sales by 90 basis points, but was slightly higher than the prior year, mainly due to higher commissions. As previously stated, Climate Solutions was the first business segment to implement 80-20. Based on the last two quarters, it's clear we're beginning to see the benefits and look forward to continued improvements. Sales in the performance technology segment were up 2% or $7 million. Volume was relatively flat versus the prior year, as the positive pricing impacts were partially offset by negative foreign exchange rates. Within the segment, advanced solutions sales were up 18%, as we continue to benefit from growth in our coatings and electric vehicle product sales. Air-cooled product sales increased 8%, primarily due to higher pricing. Liquid-cooled sales declined 7%, due in part to the impact of the COVID lockdowns in China and negative foreign exchange in the quarter. As Neil mentioned, we're starting to see some progress in China, and we expect these sales to recover. As anticipated, Earnings were negatively impacted by several factors, including higher material costs and ongoing supply chain disruptions. Adjusted EBITDA declined by $4 million, resulting in a margin of 5.6%. Unfortunately, raw material costs have remained significantly higher than a year ago. As previously discussed, we expect to recoup the majority of raw material costs through pass-through agreements on a lagged basis. In addition, we are actively addressing other unprecedented inflationary items in the supply chain with our customers. We're also working to lower our cost structure. The previously announced restructuring actions are having a positive impact on SG&A, which was down 2 million from the prior year, including a positive foreign exchange impact. As discussed last quarter, We anticipated that Q1 would be a difficult comparison, especially because of the higher material costs. Going forward, we expect to benefit from sequential margin improvements and easier comparables. First, we'll continue to benefit from higher prices as our pass-through agreements take hold. Next, we expect the year-over-year material cost comparison to be less of an impact. Last, and most importantly, our key metals costs have declined significantly over the last several months. In addition to the costs and pricing, the performance technology segment is beginning to make progress with regards to 80-20. As Neil discussed, the segment started after climate solutions, but we anticipate that we'll begin to see positive results from 80-20 later this year. Now let's review the total company results. Please turn to slide nine. First quarter sales were up 9% or 46 million driven by strong gains in climate solutions. Revenue was up 15% excluding a $27 million negative FX impact. The main growth drivers of revenue were materials recovery and other pricing of 41 million and higher volume of 32 million. We were pleased to report that adjusted EBITDA increased 27% or 9 million. This represents 110 basis point improvements. Conversion of the higher sales volume plus improved pricing accounted for the majority of the earnings increase, continuing a positive trend from last quarter. During the quarter, commodity metals, freight, and packaging increased from the prior year, but we were generally able to offset the majority of these costs through pricing recovery. SG&A declined 3 million primarily due to lower environmental charges and a decrease in strategic reorganization and automotive exit costs. Adjusted earnings per share of 32 cents was 12 cents above the prior year. Momentum from our various 80-20 actions have resulted in significant year-over-year improvement. Furthermore, the recent declines in raw material costs should bode well for the remainder of the fiscal year. Before moving on, I'd like to point out that we had 2.7 million in Q1 earnings adjustments. There was a 1.5 million charge primarily related to previously announced plans to implement targeted headcount reductions in the European vehicular business. The remaining 1.2 million was for environmental charges related to a previously owned U.S. manufacturing facility. Now moving to cash flow metrics, please turn to slide 10. We generated $4 million of positive free cash flow in Q1. This includes $5 million of cash payments, primarily for restructuring activities and strategic reorganization costs. As noted last quarter, we're anticipating positive free cash flow in fiscal 23, driven by earnings improvements and working capital management. This also includes approximately 20 million of anticipated cash restructuring payments, mostly tied to our cost reduction plans in Europe. I'm happy to report that we repurchased 100,000 shares this quarter as part of our share repurchase program and plan to repurchase a similar level of shares each quarter over the balance of the year. As a reminder, our program is currently focused on offsetting the dilutive impact of incentive compensation programs. Net debt of $330 million as of June 30th was slightly lower than the end of the prior fiscal year, improving $3 million. Our cash balance was $59 million as of June 30th. And we finished the quarter with a leverage ratio of 2.1, which is within our targeted range, and lower versus the prior quarter. Now let's turn to slide 11 for our fiscal 2023 outlook. As you all know well, the economy remains volatile with many factors to consider, including ongoing inflationary pressure and labor, materials and overhead, plus rising energy costs, supply chain shortages, and the Ukrainian conflict. While balancing these factors with a very strong first quarter, we're reaffirming our guidance this quarter. We anticipate revenue to be up 6 to 12% in fiscal 23, with sales increasing in most end markets. We also anticipate that adjusted EBITDA will be in the range of 180 to 195 million. This represents an increase of 13 to 23% versus the prior year. Given the strong start to the year, however, We currently expect our results to be towards the top end of the range. We'll further reassess our full year outlook and the associated range after Q2. To wrap up, we're pleased with the first quarter results, especially in several key businesses that are beginning to demonstrate 80-20 improvements. Neil and I are very encouraged by the revenue and margin outlook for our climate solution segment. In addition, we expect full-year margin improvement in performance technologies as we recover from significant material cost increases and benefit from 80-20 actions that are currently underway. With that, Neil and I will be happy to take your questions.
spk01: If you have a question at this time, please press star and then the number one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press star one again. Our first question comes from the line of Matt Somerville of VA Davidson.
spk04: Hey, thanks, Esther Lynn. A couple questions. First, can you guys maybe speak a moment to how we should be thinking about the quarterly earnings cadence, maybe the front half and back half weighting, if that's easier? And the reason I ask, I understand there's some seasonality in your business, but you're going to have more of these material pass-throughs rolling through. So I guess maybe talk about what I just asked in the context of how we should be thinking about the material pass-through, you know, how that phases in as well. And then I have a follow-up.
spk06: Yeah. Hey, Matt, good morning or good afternoon.
spk07: Yeah, as we look at the year, you know, and clearly on the positive side, one real strong element here with Q1, And when we came out of a real strong Q4 with climate solutions and the old CIS segment, we really outperformed on the climate side, which can typically be a more quiet quarter for us seasonality-wise. So that's the positive news and really good there. As we look at the full year run rate, clearly our guidance, we now feel like we're trending towards the high end based on that strong Q1. If we look at that guidance, we're definitely planning to have a margin improvement from last year in the full year run rate above Q1. So I think two things I'd say is we see revenue going up from the Q1 level probably more level loaded across the last three quarters. The increase will be due, you know, partly seasonality in our heating business will help, plus, as you mentioned, pricing. So a little bit higher revenue, not pretty level loaded through the last three quarters. And then a sequential margin improvement in each of the next three quarters. So we see a little bit of a jump in Q2 probably a slightly larger increase in Q3 and then one more increase in Q4 from an EBITDA margin. Hope that helps.
spk04: Yeah, it does. Thank you. Can you maybe give a little bit more color on how that $20 million of restructuring savings phases in? And then can you also comment on what the COVID-19 mandated sort of lockdown impact would have been on revenue and profitability for you guys during the quarter and whether or not all of that has been recouped at this point. Thank you.
spk07: Yeah, I'll go first, Matt. Neil can add any color on the situation in China. So the restructuring program, the headcount reduction plan in Europe, we're coming to... more final stages as far as the legalities of that program. And the targeted savings that he said was about 20 million. We think based on the timing of how the program actually works and how the severance program kicks in from a timing, we could get a little bit of benefit, maybe a quarter's worth this year. and then the full, call it the full $20 million next fiscal year. So we're planning to get a portion of it this year. I think for now I'd only feel comfortable saying maybe a quarter, and then the full benefit beginning next year. From a China standpoint, I would estimate at least $10 million of a negative revenue impact from COVID-related shutdowns I'll just pause, see if Neil wants to add any color to what's happening over there.
spk03: Yeah, and those are orders, Matt. Good question. Thanks. This is Neil. Those are orders that were pushed into the following months. So between $5 and $10 million in April, May. The plants were shut down in China for a few weeks, and then we were back running at limited levels because of the COVID impacts. So there's been some starts and stops based on
spk02: our plant shutdowns, but we expect a recovery here in the coming weeks.
spk06: Got it. Thanks. I'll get back to you.
spk01: Your next question comes from the line of Steve Ferrazani with Sidoti and Company.
spk08: Morning, everyone. I wanted to ask about progress with data centers, particularly given the opening of the new Virginia facility. And it looks like you're up 40% year over year in the first quarter, but you're guiding for 50 to 60%. How much of that is the ramp at Virginia? And can you talk a little bit about what the new facility adds for you?
spk03: Yeah, good question, Steve. This is Neil. Thanks for that. So we've made great progress with the ramp up of the facility in Virginia and Rockbridge. The team has worked diligently with our LEEDS facility with the transfer of manufacturing capabilities. We're in the process of standing up our testing facility, state-of-the-art testing facility in Rockbridge, and we've already started taking orders at a rate that have outpaced what my expectations were. So we're looking at filling the factory in the next couple years where we're at with the order rates and the intake rates that we're taking them today. And as you know, that's a different product for us in North America. That's the chiller products. So this is a nice complement to the products that we already offer in North America, and this is in addition to. So very pleased with where we're at with Rockbridge. The volume that we'll start to see, we'll have in the back half of this year, will be low, but that will start to ramp up significantly next year as we start to see these orders transfer or transpire into actual sales and revenue.
spk08: Great. If I want to turn for a second to cash flow on the balance sheet, clearly the cash balance gets strengthened. I'm just a little confused by the addition of $12 million in debt. I don't know if that's for geographical reasons where the cash is located, if you could address that. And also, starting up the share repurchase, is that going to be a focus of cash flow, or how should we think about cash flow usage this year?
spk07: Yeah, Steve, the The cash and debt is really quarter to quarter, as you said, really an issue of where the borrowing was needed in a quarter and where cash sits and our ability in any period to move it, relocate it. So we really are tracking to the net debt, which was down about 3 million. And to your point, it was really operational tactics of where some debt went up or where cash went up. And from a share buyback, We're planning to probably purchase it relatively immaterial from a cash flow, about 100,000 shares a quarter right now as part of our program to offset any anti-dilutive program tied to any incentive compensation. So that's the way we're thinking about it right now for the balance of the year.
spk08: When I think about some new segments, just housekeeping question, they don't CIS, you know, if I do the math, it looks like there's about 5 or 6 million that might have moved that didn't necessarily go HD and auto rate into performance. Is there anything big there you can talk about that you moved from one segment to the other rather than just matching up HD and auto into one and building HVAC into CIS and the other?
spk07: Yeah, for the most part, Steve, it is collapsing CIS and ATRAC and auto and HDE. The one moving piece that you see in there is we have a coding business. It's relatively small. That was part of CIS. That went to peak performance technology. So why your math is slightly off is we put codings in the advanced area under performance technologies.
spk08: Okay, that makes sense. And if I could just squeeze one more in, you know, as we're in the later stages of earnings calls, certainly some industrials that we cover have noted, given the geopolitical issues of the China shutdown, the Ukrainian conflict, they saw at least some material spike in material prices that's then going to flow through the P&L in the September quarter that could pressure margins next quarter. as well as just in general component shortages at least not getting better but getting worse. See if you could address those two pieces.
spk07: I'll go, Neil, from the metals, and I'll let Neil add the logistical on the rest of the supply chain. For us, one of the things we're encouraged about is, About three months ago or so, we saw the spike in key metals for us, aluminum, copper, steel are big ones. So right now, Steve, we have a little bit of an opposite situation in a good way. We've since 331 or March 31, copper and aluminum are down about 30%. And stainless steel and other forms of steel, probably more in the last month, are down a similar amount. So early to claim victory for the full year, but for the visibility we have, that's really good for materials we're flowing through our plants. I'll let Neil comment just about other supply chain challenges about getting parts.
spk03: Yeah, Steve, no, it's a good question and a fair question because the disruption in the supply chain continues. This has been going on for quarters. if not a couple of years now as we recover from the pandemic. But we've taken some strategic positions in inventory across multiple geographies and across our key plants. So there has been an increase in inventory to combat this, especially as we've seen some of our supply chain increase their overall lead times. We do have a key components watch list. There are a few, around 10 components that could potentially impact this. in a meaningful way, and we have them on a daily management process. So we balance expediting freight or working directly with a supply chain with how we take strategic key positions with our inventory, and I've been pretty pleased with how the organization and how the company's rallied around that thus far.
spk06: Thanks, Neal. Thanks, Mick.
spk02: Sure.
spk01: Once again, if you would like to ask a question, please press star, then the number one on your telephone keypad. Your next question comes from the line of Brian Spunheimer with Gamco Investors.
spk05: Hi, good morning, everyone. I just had a quick question. You mentioned on the performance side, EV sales rising. Can you quantify that as to what the EV sales were? I understand it's a low base and you're really kind of just getting started on this journey, but just to put it into numbers would be helpful.
spk03: Yeah, no, that's a great question, Brian. This is Neil. Thanks for that. You know, last quarter when we talked about EV and where we stood, we talked about our pursuit and what we're engaged with customers. That number was 75. That's up to 93. So we've increased our engagement level with customers. Our prototypes last quarter was at 46, and today we're at 54. And that is what we see from that is 12 program wins. And that will equate to roughly $70 million at full production run rate.
spk05: Okay, that's terrific. Thinking about the EV solutions that you have planned, is there anything from a technology standpoint that's either adjacent or complementary that you want to either build in-house or buy through M&A?
spk03: Yeah, that's a good question. So we're actively thinking about that all the time. I mean, as we work through this process, This group that's been carved out, it's stood up, and we're in the incubation phase moving into growth. It's a mix of vertical integration as well as inorganic targeted acquisitions to make sure that we can control the technology. So there are areas that are in our current battery thermal management system today that we are looking towards both of those avenues. So, yes, those are both actively. And then adjacencies, we're also looking at the electronics cooling package. We do that as well and how we can continue to complement our battery thermal management system with our electronics cooling package. As you know, a lot of the products and a lot of our OEs that require a BTMS have a lot of electronics. They're very complicated and sophisticated pieces of equipment. And with that, those electronics need to be cooled as well. So we're working to make sure as we work with our OEs and our customers to how they can understand how Modine solves the thermal management equation for them, not only for the battery, but for the electronics on board as well.
spk06: Right. Thank you very much. Thank you.
spk01: I am showing no further questions. I do apologize. Your next question comes from the line of Matt Somerville with DA Davidson.
spk04: Thanks. So, I have a couple follow-ups. Just so I make sure I understand this, in performance technologies, in dollars, how much unabsorbed inflation, what was the unabsorbed inflation impact in Q1? And over what time, I mean, because your input costs are coming down, that's going to flip. And I guess I'm wondering when that flips into the positive. Is that by your fiscal Q3? Yeah.
spk06: Hey, Matt, it's Nick. So,
spk07: Total company this quarter, we were a little bit favorable on, call it, net economics, material inflation. Clearly, on the climate side, we overperformed there, and we were net positive through pricing and other actions. We were pretty close to neutral, a little negative, I would put it. plus or minus the 3 million range for PT negative or performance technologies. And it is that combination of lag on pricing. And we still had the high materials in our factories in Q1. We should, you know, we talked last year, you know, it's continued to decline. In the Q2, Q3 timeframe, it should start to flip. And it just, as you said, a combination of material pass-through agreements coming in while we're seeing some relief in raw material costs with obviously a big impact then in Q4.
spk04: And how much of that goodness is in your current EBITDA guidance? Because algebraically it's hard to come up with much of that goodness being in your guidance today.
spk07: Yeah, when we, it's a fair question, when I talk about guidance and all the factors going in, I think clear tailwind after Q1 from climate, we've got a tailwind right now on materials. That is pushing us to that high end. Neil and I would like to get through Q2, reassess both supply demand from the economic side, you know, from volume, and then make sure we see stability in these metal prices before thinking about adjusting guidance. So I think short answer to your question is we've built a good portion of this into our, you know, our comments today. A LITTLE EARLY, EVEN RECENTLY THERE'S BEEN A LITTLE SPIKE UP IN SOME METALS. I THINK THERE'S AN OPPORTUNITY SET FOR US. WE'D LIKE TO GET THROUGH Q2 AND THEN FURTHER REASSESS.
spk04: THAT MAKES SENSE. AND THEN JUST ON SLIDE 11 IN CLIMATE, HEAT TRANSFER DOWN 5 TO 10% FOR THE YEAR AFTER BEING UP 19 IN Q1. Is that related to a tough, a really tough back half comp, or what's driving that?
spk06: Yeah.
spk07: So when we talk about that Q4 and Q1 outperformance, one of the things Neil and I and the team have been going through has been a heavy, heavy, heavy focus around 80-20 in the heat transfer product. And we've tried to take a conservative approach, Matt, that we will lose some business. And one of the things that surprised us, Q1, and you saw that volume increase. So we're trying to take a conservative approach and assume we will have some business that will lose through 80-20. I would say clearly and back to guidance, we'll reassess halfway through the year. It's also an opportunity set if those customers and programs remain sticky.
spk06: Understood. That's all I have. Thank you, guys.
spk01: I am showing no further questions at this time. I would like to turn the conference back to Kathy Powers.
spk00: Thank you and thanks to everyone for joining us on the call today. You'll be able to access the replay of this call through the website in a couple of hours.
spk01: We hope you all have a great day. Thanks. This concludes today's conference. You may now disconnect.
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