Champion Homes, Inc.

Good morning and welcome to Champion Homes, Inc. first quarter fiscal 2025 earnings call. The company issued its earning press release yesterday after the close. I would like to remind everyone that today's press release and statements made during this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from the company's expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release and in the company's filings with the Securities and Exchange Commission. Additionally, during today's call, the company will discuss non-GAAP financial measures, which it believes can be useful in evaluating its performance. A definition and reconciliation of these measures can be found in the earnings release. I would now like to turn the call over to Mark Yost, Champion Homes President and Chief Executive Officer. Please go ahead.

Thank you for joining our earnings call today, and good morning, everyone. I am pleased to be joined by Lori Huff, our EVP and CFO. On this call, I will first go over the key points from our first quarter, then discuss our progress in the second quarter so far, and conclude with thoughts about the balance of the year. I'm pleased to report that the positive momentum we carried from our fourth quarter has not only continued, but strengthened, primarily due to the traction of our strategic initiatives. Our first quarter results reflect good execution across our business, notably in enhancing our customer channels, advancing the integration of regional homes, and realizing the early benefits from our champion financing joint venture. These achievements are closely aligned with our strategic focus, which are increasingly critical in addressing the rising demand for affordable housing amid limited supply. The quarter showcased robust growth, with home sales climbing 33% year-over-year to reach 6,705 units. Additionally, organic sale orders increased 60% year-over-year, underscoring strong market demand. This growth was supported by our strategic acquisition and improving activity in our retail, builder-developer, and community channels. Demand in Canada remains soft as inflation and economic uncertainty is weighing on the consumer sentiment and enthusiasm for new home purchases in that market. Sequentially, our first quarter saw notable increases in revenue of $91 million alongside growth in our backlog of $89 million, bringing our backlog to a total of $405 million as of June 29th, driven by improved demand. Backlog lead times were on average 11 weeks versus 9 weeks at the end of the March quarter. We are steadily increasing our production rates at our plants to address this backlog. The acquisition of regional homes continues to overperform expectations, successfully integrating and targeting to hit the higher end of the $10 to $15 million synergy range by the end of fiscal 2025, well ahead of expectations and schedule. Champion Financing, our collaboration with Triad Financial, has gained significant momentum recently. Over recent quarters, we've launched new floor plan financing options for our independent dealers and consumer financing programs for selected national products and locations. The early outcomes from these initiatives have been very encouraging, bolstering our confidence that we can provide customers with a comprehensive and appealing home buying solution. This success underscores our commitment to enhancing financing accessibility, further propelling our growth in the manufactured housing market. I'm also excited to announce that following our annual shareholder meeting, we have changed our corporate company name to Champion Homes Inc. This marks another milestone in our direct consumer journey and emphasizes our commitment to expanding our market presence and enhancing shareholder value through a cohesive and dynamic brand strategy. We are focused on leveraging the Champion Homes flagship brand as a catalyst for growth and commercial excellence for years ahead. Altogether, these strategic actions, along with the pace of order growth, support our commitment to strengthening our market position and delivering on our promise of providing accessible, comprehensive housing solutions and creating value for our shareholders. As we move into our second fiscal quarter, demand from retailers and builder developers remains solid, reflected in steady ordering patterns that have continued to drive growth. We're also ramping up production in response to these increased orders from community partners. Looking forward, we believe our top-line performance for the second quarter is estimated to be flat or possibly down sequentially due to the impacts of weather events that could delay production and or the timing of shipments. Despite these challenges, we are focused on maintaining our high standards of quality as we scale production. While traditional new home construction has softened with higher inventory levels and reduced orders, we are seeing a rise in demand. This increase is attributed to more affordable pricing and enhanced quality positioning our homes as an attractive choice for many home buyers amid the current economic conditions. Such contrasting trends underline the distinct market dynamics influencing different segments of the housing industry and the favorable outlook for housing at the middle class price point. The integration of these solutions have improved our capture rate of our channel partners and end consumers. The positive feedback at recent events and the early successes of Champion Financing demonstrate the effectiveness of our strategies, sparking considerable market interest and opening new growth avenues within the housing market. I will now pass the discussion over to Lori, who will delve deeper into our quarterly financial performance.

Thanks, Mark, and good morning, everyone. I'll begin by reviewing our financial results for the first quarter, followed by a discussion of our balance sheet and cash flows. I will also briefly discuss our near-term expectations. During the first quarter, net sales increased 35% to $628 million compared to the same quarter last year, with U.S. factory-built housing revenue increasing 40%. The number of homes sold increased 36% to 6,538 homes in the U.S., compared to 4,817 homes in the prior year period. U.S. home volume during the quarter was supported by additional retail and manufacturing capacity resulting from the regional homes acquisition that contributed approximately $151 million to net sales during the quarter. The average selling price for U.S. homes sold increased by 3% to $91,700 due to a higher mix of retail units sold. On a sequential basis, U.S. factory-built housing revenue increased 18% in the first quarter compared to the fourth quarter of fiscal 2024. We saw sequential growth primarily in the community and retail sales channels. On a sequential basis, the average selling price per home increased 2% primarily reflecting the higher mix of retail units sold during the quarter. Average selling prices exceeded expectations for the quarter as we saw healthy demand across most markets and wholesale price stability. Capacity utilization was 58% compared to 57% in the sequential fourth quarter of fiscal 2024. Current utilization rates primarily reflect the increased capacity brought online through recently opened plants. Canadian revenue during the quarter was $21 million, representing a 24% decline in the number of homes sold, which was partially mitigated by a 5% increase in the average home selling price. The average home selling price in Canada increased to $124,500 due to a shift in product mix. The reduction in sales volume can be attributed to a combination of factors, including higher interest rates and economic uncertainty in key markets that have tempered buyer enthusiasm of new homes. These conditions are anticipated to continue to impact the housing market dynamics in these regions in the near term. Consolidated gross profit increased 27% to $164 million in the first quarter, and our gross margin contracted by 170 basis points from 27.9% in the prior year period. The lower gross margin was primarily due to lower wholesale average selling prices on new homes sold and changes in product mix to homes with fewer or lower cost options. In addition, margins were impacted by the effect of purchase accounting increases to the carrying value of the finished goods inventory that was acquired with the regional homes acquisition, which had a negative 50 basis point impact on consolidated growth margin during the quarter. We expect this purchase accounting impact to continue in the near term as we sell off the remaining finished goods inventory acquired. On a sequential basis, gross margin came in better than anticipated due to the increase in captive retail unit sales, stabilization of average wholesale selling prices, lower input costs, and synergy capture from the regional homes acquisition. SG&A in the first quarter increased $38 million to $109 million. The increase is primarily attributable to the regional homes acquisition In addition, we incurred a charge of approximately $8 million in the first quarter related to the change in fair value of the earn out related to the acquisition. It's important to note that the maximum earn out amount of $25 million remains unchanged. On a sequential basis, SG&A increased due to the acquisition related earn out charge and variable costs related to higher revenue and profitability. Net income for the first quarter decreased 11% to 46 million or 79 cents per diluted share compared to net income of 51 million or earnings of 89 cents per diluted share during the same period last year. The decrease in EPS was driven by lower gross margin and higher SG&A, including the impact of the regional homes acquisition. Adjusted net income per diluted share was $0.91, excluding the fair value adjustment for the regional earn-out accrual and the company's share of ECN's calendar first quarter loss of $1.2 million. As a reminder, we record the impact of our equity investment in ECN's common shares on a one-quarter lag. The company's effective tax rate for the quarter was 22.5% versus an effective tax rate of 25.2% for the year-ago period. The effective tax rate was positively impacted by an increase in recognition of tax credits related to the sale of energy-efficient homes. Adjusted EBITDA for the quarter was $75 million compared to $67 million in the prior year period. Adjusted EBITDA margin was 11.9% compared to 14.4% in the prior year period, which was impacted by lower gross margin and higher SG&A. With demand returning and the stabilization of wholesale product mix, we feel gross margins have returned to more normal levels. Going forward, we expect gross margins will be impacted quarter to quarter by fluctuations in wholesale unit volume sold through our captive retail operations versus independent channels. As of June 29, 2024, we had $549 million of cash and cash equivalents and long-term borrowings of $25 million with no maturities until 2026. We generated $85 million of operating cash flows for the quarter compared to $75 million for the prior year period. The increase in operating cash flows reflects higher adjusted net income and more favorable working capital changes versus the prior year, partially offset by the growth in our independent dealer floor plan receivables. In the quarter, we leveraged our strong cash position and returned capital to our shareholders through $20 million in share repurchases. Additionally, our board approved the replenishment of our $100 million share purchase authority, reflecting confidence in our strong cash generation. I'll now turn the call back to Mark for some closing remarks.

Thank you, Lori. The future looks exceptionally promising for our company, especially in the context of the broader housing market. While traditional new construction is facing challenges, we are seeing strong demand from retailers and builder developers, revitalized ordering volumes from our community partners, and a persistent need for affordable housing solutions. We believe these factors position us well for sustained growth and success. Moreover, with our strategic expansions into builder as a service with digital platforms and consumer retail, along with innovative financing solutions, we are set to expand our growth and enhance stakeholder value. Before we move on to the Q&A session, I would like to extend a warm welcome to our new general counsel, Laurel Kruger. Laurel brings a wealth of experience and proven leadership to our team, making her a fantastic addition. Additionally, I want to express our heartfelt thanks to Bob Spence for his invaluable contributions to the company. We wish him a well-deserved and enjoyable retirement. And now, operator, please open the lines for questions and answers.

At this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star 2. And we'll move first to Greg Palm with Craig Hallam Capital Group. Your line is open.

Yeah, good morning. Thanks for taking the questions, and congrats on the good results here. I'm just curious if you kind of look back on the quarter, give us a little bit of color around maybe where you saw some of the outperformance on relative to initial expectations. We'll start there.

Yeah, I think orders, Greg, were probably stronger than we anticipated in the quarter. You know, I would say what we expected was a little bit more kind of I'll call it fragmented demand, certain markets, certain geographies better than others. What I think really surprised during the quarter was the consistency of order demand and the strength of it. So in other words, we saw order demand across all of our channels. So between builder developer, between retail builder developer communities, All of them saw year over year order growth between 40 and 60%. We saw geographies that were balanced. So all of our geographies, whether it's the South, Central, Northeast, everywhere except Canada, we saw consistency of order rate strength in the kind of 20 to 70% type range across all of our geographies. So every geography was strong. distribution channel was strong so I think that was a pleasant surprise during the quarter overall and then you know our team did a very good job on the retail side selling and regional homes and the acquisition there combined with the flywheel of financing is really starting to over perform our expectations on the acquisition side yeah okay that's great and I

You mentioned fiscal Q2 guidance consistent to maybe a little bit below. It's surprising a little bit just given kind of the quarter-ending backlog. So I guess the question is, is there some built-in conservatism around potential weather events this quarter, or is it based on kind of what you've seen in July and maybe spots like Texas? Maybe just give us a little bit more color there, please.

Yeah, I think it's a little bit looking at potential timing and deliveries, you know, with tropical storm or hurricane tropical storm Debbie and some of the impacts that could have on delivery timing as we go into August and September timing. So it's really just an anticipation of where the storms headed and how that's going to affect delivery timing in certain geographies. Greg, I think order pace continues to be strong through July. So it's really more of a timing issue of how we think through that piece.

Yep. Okay. I'll leave it there for now. Thanks and best of luck. Thank you.

We'll move next to Daniel Moore with CJS Securities. Your line is open.

Thank you. Good morning, Mark. Morning, Lori. Morning, Dan. I'll start with maybe just the cadence of demand. You know, from your prepared remarks, it sounds like traditional retail, you know, steady at a higher level as we move into fiscal Q2. Is that correct? And, you know, are you seeing, you know, kind of continued strength or build there on the retail side?

Yeah, retail, I think, has been, you know, building through the quarter still very, very strong. Like I mentioned a few minutes ago, actually we've seen strength in actually all of our channels. So they've actually been all kind of scaling up on the order growth side. I do expect retail to soften a little bit with the weather conditions. Probably in some of the East Coast markets for a few weeks, but other than that, just customer demand has been exceedingly good.

Got it. And maybe just a little bit more color on the community side. Last quarter, I think you described one or two more builder developers that you signed on. How are those conversations going? And is that recovery gaining momentum versus, let's say, 90 or 180 days ago?

Yeah. So the community channel, I would say, is healthy. It's not robust. They're coming back. in kind of a, you know, sequential manner. So not all of them are back, but it's healthy, good demand overall. You know, we anticipate that to continue to pick up over time. The builder demand, you know, was probably a little bit of a shining star for the quarter. It was our highest sales channel. You know, builder is up 40% year over year. So we saw strong growth in builders. Followed by retail, organic retail was up like 27% during the quarter. So both of those channels as far as sales deliveries were up considerably. We signed up many, many new builders during the quarter. So that pace of new builder sign up is accelerating. It's a multiple of what we signed up last quarter and previous quarter. that gain traction at an accelerating rate, which is good to see.

Excellent. And then you discussed early on kind of managing that weeks of backlog. I'm just trying to understand. It sounded like you would be ramping production to make sure backlog doesn't get too much higher, but kind of how do you think about where we are today? Is that a comfortable level? You know, would you like to let them continue to build a little bit? Any thoughts there?

Yeah, I think getting backlogs to, you know, 8 to 12 weeks is normal. I think given the, you know, timing of the year, given the election cycle, all those things and the volatility on that, it's generally better to be a little bit on the higher side of backlog than lower, just given, you know, uncertainty what the Fed's going to do and other things. But we continue to monitor the order pace. And as I mentioned, our backlogs have grown even since our June end, quarter end. So, you know, we've seen continued order pace accelerated, which is surprising for July because of the holiday. Usually the July holidays, you know, order pace slows down and it's been strong through July thus far. So I think, you know, increasing production to ramp through that. is going to be important so we don't have too long of backlogs overall for our customers.

Makes sense.

And then, Laurie, appreciate the color. It sounds like we're back to a quote, you know, kind of new norm, you know, with obviously fluctuations around the mix. But 26%, a reasonable, you know, kind of place to think about over the next quarter or two from a gross margin perspective.

Yeah, Dan, you know, the growth margins are going to, we're going to expect to see them impacted quarter to quarter by the fluctuations in wholesale unit volume sold through our captive retail versus independent channels, as well as our wholesale product mix, single wide versus double wide in option content. So hard to predict based on all of those different variables, but could fluctuate by 100 or 200 basis points.

Got it. That's it for me. I'll jump back with any follow-ups. Thank you. Thank you, Dan.

We'll move next to Mike Dahl with RBC Capital Markets. Your line is open.

Hi. Thanks for taking my question. I see the progress here. Lori, I want to stick with the margins. I feel like a quarter ago, I think the near-term guidance was for a gross margin that was kind of in the mid-23s, and now we're sitting here at 26. I'm calling that normal, you know, 250 basis points. That's a pretty material difference over a short period of time in terms of how to think about near-term expectations. You mentioned now a few times the mixed impact. You also mentioned the input costs in your opening remarks. Can you maybe just buck it out? You know, I'm interested specifically in terms of what some of the lower wood products cost impacted the margins and how that's expected to flow through the next quarter or two as well. And then maybe just put some, you know, if you can put some quantifiable buckets around the other pieces, that would be helpful as far as what actually drove the 2Q upside back up to this 26, or 1Q upside, yes.

Hi Mike, thanks for the question. Yeah, we're not going to really bucket the components. I would say that, you know, going forward, the retail versus wholesale product mix and how much is going through our captive retail versus directly to independence is certainly going to impact margins. as well as option content going forward. During the quarter we did see the option content kind of level off, so we stopped the decline that we had been seeing of less features and options and lower priced features and options that we had been seeing in prior quarters. So we feel comfortable that we've hopefully hit a trough in that mix component, but we are seeing a great deal of mix in single-wide versus double-wide at the wholesale level, and from quarter to quarter, how much is flowing through captive versus independent. So unfortunately, I can't give you a clearer answer other than there's variability.

Okay. I guess then just as a follow-up to that, 2Q question, you do have backlog that gives you some indication of mix. And, Mark, you called out some of the weather potentially impacting retail dynamics in the quarter. So, based on what your expectation is for the near-term mix of shipments in 2Q, you know, calling it 100 to 200 basis points, fluctuation quarter to quarter, I appreciate that can be the range, but can you help us understand more specifically for 2Q where you'd expect to fall out against that?

Yeah, I think, Mike, if you look at the quarter, you know, depending obviously on the specific geographies that the weather comes in, you know, probably somewhere around 150 basis points would be, you know, a fair barometer to think about. You know, depending on how things shake out, it's a little too early to tell, to be honest with you, because it's just all the data coming in. But I think that would be a safe kind of area to be in.

My overall in the 1st quarter, we saw more captive retail sales than we were expecting and that we would expect to continue based on seasonality and the weather events that Mark is talking about.

So sorry if I can just respond to that one. So in terms of the captive retail mix, it's so understand that the weather could be a headwind. But as far as, you know, you've also built out that part of the business. So on a more go forward basis beyond the very near term, are you saying that one queue was elevated in terms of that captive mix, even relative to what you might expect later in the year?

Yeah. Got it. OK, thank you.

We'll move next to Philip Ng with Jefferies. Your line is open.

Hey, guys. I guess in an environment where the consumer is certainly weakening, especially the low end, a choppy tick bill starts environment is pretty impressive, the momentum you're seeing, guys. So I guess what's driving some of that pickup and activity in your perspective? and curious to get your latest thoughts on how channel rates have kind of been behaving with rates coming down lately.

Yeah, Phil, and good morning. I think, you know, overall we're seeing the customer base that's coming to retail and other channels is really looking for an affordable price point home, and I think we can fill that need. So really we're seeing that buyer who's disenfranchised with site builds and what they can get, the value trade-off for what they can get. And I think we're starting to see more and more of that. And that's really facilitated by a few things. Our direct consumer marketing programs and online shoppers have picked up significantly. So we're getting a much higher capture rate than we were before. That's allowing us to capture those customers. Additionally, some of the drivers with champion financing and obviously our retail footprint. And what we're able to do with the combination of those two is creating a flywheel momentum that we've got in that channel. So I think it really is. You're seeing customers amidst short supply and high costs come to a better alternative. So we're starting to see that momentum.

Any color on channel? rates of late? I mean, 30-year fixed rate mortgage has come down quite a bit in the last few weeks.

So the channel rates were relatively flat during the quarter, averaging around 9%. So they do have a tendency to lag the 30-year fix.

Okay. That's helpful. And then, Mark, you gave some color on perhaps 2Q being down sequentially due to the weather, but backlogs and orders sound pretty robust. Can you kind of help us think about sales, how that could progress seasonally through the rest of the year?

Yeah, so I think, you know, overall versus where our expectations were last quarter, Phil, I think we expect the second quarter, third quarter, and fourth quarter all to be higher than what we were thinking probably last quarter. You know, generally from second quarter or the first half of the year to the second half, We have more maintenance outages. So I think generally things are slightly down in the last two quarters of the year from just a time and holiday standpoint. So we'll watch orders as they come in and see how aggressively we ramp. But I think that's our take right now is first half is going to be stronger with this quarter's results and second quarter being higher, kind of in this flat to down from where we are today. and then third and fourth coming in stronger than we anticipated last quarter, but maybe slightly down from the first half just due to timing and production.

Mark, would you see a bigger normal seasonal bump in 3Q just given how 2Q's depressed due to weather, or that's not something you envision?

Yeah, I mean, we could. Phil, it's a little too early. I want to see how the election cycle and demand feathers out and how we kind of phase into backlog. I mean, obviously, if order rates continue at this pace, you know, then obviously we have to re-look at things and how aggressively we produce. But, you know, right now we're kind of keeping it slow and steady, ramping up the backlog with a little extra as we get into the election cycle and then, you know, feather that in for the second half of the year. And if orders come in and continue to come in at the pace they are, then we're going to have to rethink about getting more aggressive with ramping up top line.

Okay, super. Appreciate the call. Thank you.

We'll move next to Matthew Dooley with Barclays. Your line is open.

Hey, guys. Good morning. I want to go back to the discussion around the captive retail versus wholesale. you know, so, so obviously regional, uh, revenues were up, I guess, 40% or so sequentially and legacy champion was up more like 10%. Um, you know, so kind of thinking about the June quarter here, um, you know, presumably there's going to be geographic differences, of course. So I'm, and it sounded like you were a little surprised by how strong the captive retail business was overall. So, um, what I'm trying to get at is, um, What do you think drove the sort of better performance out of captive retail? Was it just geographic differences? Or as we think about the June quarter, I mean, is this really going to be kind of a typical seasonality that we now see for you guys owning this business that, hey, look, there is going to be a big kind of seasonal bump there in the June quarter? Thank you.

Yeah, good morning, Matt, and thank you. I think overall, a few things are driving the captive business. One, their geographies are strong. I will also say in those geographies, we are gaining share. So we've got good geographies and we're accelerating the gain of share in those geographies. So it's kind of a win-win on the captive retail. And a lot of that is coming from the acceleration of the synergies and bringing products from legacy champion plants to the regional retail locations and the success we're having with that expanded product offering and also to just the enhanced marketing the you know the culture of regional is phenomenal the people and leadership is phenomenal so I think overall we're just you know very pleased with that that acquisition and the integration and the teamwork between the teams in taking care of the customer So I think all of that has been very strong, which is why it was so healthy. If you remember the prior quarter, we had a lot of our shipments go into inventory, and now those are going through that funnel of retail and to the end consumer. So we had somewhat of a pickup there because of just the timing. If you recall last quarter, a lot of it was tied up and finished good inventory. Now it's actually a going through. So I do think there's always going to be a seasonal pickup in retail. In generally the, I'll call it spring, summer months, you usually have a great pickup in retail. I'll call it post tax return time. A lot of people use tax returns as a down payment. So you'll get a bump usually coming in there. And then as you get into the August, you know, September timeframe, normal seasonality starts to decline a little bit in retail, and then go through the holiday season where things are a little slower. So you will see seasonality, yes.

Got it. That's super helpful, Collier. Yeah, kind of a combination there of your initiatives and the seasonality there. Because then it goes back to the gross margin and ASP question. Is it crazy to think that, okay, as you do have you know, maybe a greater wholesale mix going into the, you know, latter half of the calendar year, that perhaps the ASP would then reflect that. So kind of this, you know, surprising improvement in this quarter. Maybe we could kind of see that give back a little in the second half from an ASP perspective. And Maybe just higher level. I mean, if there is going to be more seasonality in the business, should we also think that the gross margins, of course, will therefore be more seasonal than we have seen in years past? Thank you.

Hi, Matt. Yeah, your analysis of ASPs is spot on. So as that mix of wholesale versus retail shifts, we're going to see a shift in ASP along with, you know, the number of single-wise versus double-wise and the option content. So it all goes into that, all of that variability will impact ASPs and margins.

Okay. Thanks, Lori. Thanks, Mark. Good luck, guys. Thank you.

We'll move next to Jay McCandless with Wedbush. Your line is open.

Good morning, everyone. So with all these new different product types you're selling, builder, developer, parts, et cetera, could you maybe rank order from top to lowest? What are your highest to lowest gross margin sales between these different pieces and revenue sources in the business?

Yeah, Jay, the gross margins out of our wholesale, you know, our wholesale gross margins out of the plants are relatively consistent from product type to product type.

The fluctuations come with option content. Got it.

And then also just kind of you talked about the synergies from regional being at the top end of the range. I guess what's a good fixed SG&A number for us to use going forward just to kind of think about the new businesses y'all brought on and some of the other things that have been happening? And also, is there going to be a breakout at some point for Champion Financial, or how should we model that going forward?

So the synergy capture from regional is going to be primarily coming through the cost of sales gross margin line. And the SG&A, I would say, with the exception of the $7.9 million earn-out adjustment, we're kind of at the new normal for SG&A levels. And our SG&A runs, you know, around 35% variable. From a champion financing perspective, we have concluded with our auditors that we're going to be consolidating the joint venture. So the majority of that is going to be running through revenue with an offset to a minority interest line on the face of the P&L representing triad 49%. Okay.

That sounds great. It's all good. Thank you.

Oh, sorry, Jay. I just wanted to remind you that we record those results on a one-quarter way.

Okay. Thanks, Floyd. Appreciate it. Thanks, Jay.

And it does appear that there are no further questions at this time. I would now like to turn it back to Mark for any additional or closing remarks.

I want to thank everyone for your attention this morning. And we look forward to updating you on our progress on our fiscal second quarter earnings call. Thank you and have a great day.

This does conclude today's program. Thank you for your participation. You may disconnect at any time and have a wonderful afternoon.