Gildan Activewear Inc.

Ladies and gentlemen, thank you for standing by. And welcome to the Q2 2021 Gildan Active Wear Earrings Conference Call. At this time, all attendees are in a listen-only mode. Please be advised that today's conference is being recorded. After today's presentation, there will be a question-and-answer session. And to ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star zero. Thank you. Now, I would like to hand over the conference over to Sophie Argyri, VP, Investor Communications. Please go ahead.

Thank you, Ruel. Good morning, everyone, and thank you for joining us. Earlier this morning, we issued a press release announcing our results for the second quarter of 2021. We also issued our interim shareholder report containing management's discussion and analysis and consolidated financial statements. These documents will be filed with the Canadian Securities and Regulatory Authorities and the U.S. Securities Commission and are available on the company's corporate website. I'm joined here today by Glenn Chimamdi, President and Chief Executive Officer of Gildan, and Bob Harries, our Executive Vice President and Chief Financial and Administrative Officer. Momentarily, Rod will take you through the results for the quarter and a Q&A session will follow. Before we begin, I'd like to remind you that certain statements included in this conference call may constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve unknown and known risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. We refer you to the company's filings with the U.S. Securities and Exchange Commission and the Canadian Securities Regulatory Authorities that may affect the company's future results. And with that, I'll turn the call over to Rod.

Thank you, Sophie. Good morning to all, and thank you for joining us in the call today. This morning, we reported strong second quarter results, which, as anticipated, reflected a significant recovery from the height of the COVID shutdowns in the second quarter last year. We also delivered improved sequential performance, building from the solid start that we saw in the first quarter this year. Further, when compared to pre-pandemic levels in the second quarter of 2019, our results are showing that even though we have not seen a full top-line recovery, our back-to-basics strategy is unfolding better than planned. Benefits from eliminating redundancy and complexity in our business are driving solid sales performance, efficiencies in our operations, cost savings, and stronger profitability. Of course, this strong performance is supported by strong execution, and once again, our team demonstrated exceptional operating capability during the quarter by delivering on our targets while navigating through the challenges of a tight supply chain environment. In the end, we were able to deliver higher than anticipated sales of $747 million and adjusted operating margin of 19.9%, adjusted EPS of 68 cents, up 21% over the second quarter of 2019, and record second quarter free cash flow of $208 million. Given the strong recovery so far, the better-than-expected progress of our back-to-basics strategy, the company's prospects for continued free cash flow generation, and with our net debt leverage ratio now at 0.6, our board approved yesterday the reinstatement of our share repurchase program to buy back Over the next 12 months, up to 5% of the company's outstanding shares. So overall, another strong quarter. Now turning to more specific details on our results. As I just mentioned, for the second quarter, we generated sales of $747 million, up 225% over the prior year, driven by volume increases across all product categories and favorable product mix. Activeware sales came in at $597 million, up 354%, and sales in the hosiery and underwear category were $150 million, up 53% versus last year. Volumes were up in all markets and geographies, particularly in printables, driven by the strong recovery in POS and the impact of the non-recurrence of significant distributor inventory to stocking, which we saw last year, as distributors drew down their inventories during the COVID shutdown period. On the underwear and hosiery front, we saw double-digit POS growth, drive higher underwear unit sales during the quarter, as well as in hosiery products, which were particularly impacted by last year's store closures. Comparing the second quarter of 2019, which was a strong quarter, sales were down 7%, which we nonetheless think is encouraging when considering the impact of both lower imprintables net selling prices this year and product mix slightly unfavorable compared to 2019. Overall, imprintables POS was down approximately 8% compared to the same period in 2019, showing some further improvement from the 10% decline we saw going into the quarter, mainly due to improving trends in North America. Specifically, imprintables POS in North America was down in the single-digit range compared to the second quarter of 2019, while POS in international imprintables markets remained weak, down close to 30%. In retail channels, overall POS in the quarter was up compared to the same quarter in 2019. So overall, we were pleased with the top-line performance we delivered in this quarter, especially given the context of a tight supply chain environment where labor shortages in the U.S. are continuing to affect yarn supply and constraining our ability to completely rebuild inventory levels following the hurricane from last year. Moving to gross profit, we reported a strong recovery over last year generating adjusted gross margin of 30.5% in the quarter. While last year we had significant COVID-related costs and back-to-basics related charges in the second quarter of 2020 flowing through our numbers, we are now also seeing the favorable impact of product mix, lower raw material costs, and benefits stemming from our back-to-basics initiatives in our gross margin. This is evident on a sequential basis, with adjusted gross margin in the quarter up 240 basis points from 28.1%. after excluding the one-time USDA pandemic assistance benefit we received in the first quarter of this year, which impacted margins by 300 basis points. Likewise, our margin performance compared to 2019 pre-pandemic levels also improved meaningfully, even though sales have not yet fully returned to 2019 levels. Adjusted gross margin of 30.5% in the second quarter was up 270 basis points compared to 27.8% in the second quarter of 2019. The increase was driven primarily by lower raw material costs and back-to-basics cost savings, which more than offset lower imprintable net selling prices and slightly unfavorable product mix compared to 2019. Turning to SG&A, our SG&A expenses in the quarter were $80 million, up approximately $50 million over last year, driven primarily by increases in variable compensation expenses and volume-driven distribution costs, offset in part by back-to-basics cost savings. As a percentage of sales, SG&A expenses of 10.7% were down significantly from last year, as you would expect, and 80 basis points better than 11.5% in the second quarter of 2019. Adding up these elements, we generated adjusted operating income of $149 million, translating to an operating margin of 19.9% in the quarter. The significant recovery from the loss we posted last year was driven by the higher sales, strong gross margin performance, and SG&A leverage. Lower financial expenses driven by reduced average debt levels and the non-recurrence of fees related to debt facility amendments we made last year also offset the impact of higher income taxes. Consequently, we generated net earnings of $146 million or $0.74 per deleted share and adjusted net earnings just over $135 million or $0.68 per share compared to a net loss of $250 million or $1.26 per share and an adjusted net loss of $197 million or $0.99 per diluted share in the second quarter last year. Compared to 2019, stronger adjusted gross margin and SG&A performance drove a 360 basis point adjusted operating margin improvement in the quarter compared to 16.3% in 2019, which led to a 21% increase in adjusted EPS. Finally, from a cash flow perspective, we generated $208 million in the quarter, which was a record for a second quarter. up from $177 million last year and $26 million in 2019. The increase over last year was primarily due to higher operating earnings and included a net cash benefit of $18 million from insurance proceeds we received in connection to damages sustained from the hurricanes last year. These positive elements were partly offset by higher trade receivable balances driven by the sales increase, a lower drawdown in inventory compared to last year when our facilities were idled, and higher capital expenditures related to our manufacturing capacity. Our net debt position at the end of the second quarter was $363 million, down from $542 million at the end of March, and our debt leverage ratio fell to 0.6 times net debt the trailing 12 months adjusted EBITDA, which is now below our historical target leverage range and down from 2.1 at the end of the first quarter of 2021. Consequently, as highlighted at the beginning of the call, Given the strength of the results we are achieving and the free cash flow we are generating, we were pleased to announce this morning that in addition to the reinstatement of our dividend last quarter, we are now reinstating our share repurchase program, an important step given the emphasis we place on return of capital to shareholders under our overall capital allocation program. This sums up the key highlights of our results for the second quarter. In short, strong results driven by a number of considerations, which on balance give us reason to feel good about our outlook. On the positive side, we are encouraged by the recovery we have seen in North America so far, including the sell-through trends for our products, as well as the benefits we are seeing from our back-to-basics strategy. On the other side of the ledger, we remain cautious about certain factors, including the pace of recovery outside of North America, which currently is weak, Further, on the supply chain side, U.S. labor shortages continue to be a factor affecting yarn supply, although we have seen some improvement more recently. We're also seeing tightness in raw material inputs and broader transportation-related issues, which are creating inflationary pressure. Consequently, we can sum it up by saying we remain cautiously optimistic as the recovery progresses, confident that our people and our strategy are positioning us well to continue to move through this environment and capitalize on market share opportunities. as we fully utilize and grow our manufacturing capacity, deliver on our profitability targets, and create shareholder value for the long term. This concludes my formal remarks, and with that, I will turn it back to Sylvie.

Thank you, Rod. And with that, I will now turn it over back to our operator, Ruel, to begin the question and answer session. Ruel, go ahead.

Thank you, ma'am. And as a reminder, if you wish to ask a question, Simply press star, then the number one on your telephone keypad. Once again, that is star one on your telephone keypad. Your first question is from the line of Paul Lewis from CT Group. Your line is now open.

Hey, thank you, guys. I'm curious if you could talk a little bit more about the supply chain. Which pieces of the supply chain might be getting better versus worse? Where do you think you have visibility? And I'm curious how you're thinking about pricing. As you kind of absorb some of the higher costs, what do you think in terms of pricing power? Where do you have it? And what might be the timing on where and when you take price? Thanks.

Okay, I'll answer the question first on supply chain. So really where our restraint right now in our supply chain is mainly in our U.S. Yarn operations, as we, you know, brought back our production as we actually, you know, at the end of last year due to the hurricane, compounding with the labor shortages in the market, it's taken us a little bit longer to bring folks back to our facilities and get them up and running, which are now running at a better rate than they were before and continuing to improve. So we're pretty optimistic about the momentum we have as we go forward. And we're going to continue to, you know, add incremental capacity as we move into the year. Our current run rate, despite these supply chain restraints, is we're running at the same levels in the back half. Whereas we actually did Q2 as 19 levels. And, you know, during the year, we've repurposed a lot of the or all of the equipment from our Mexican operations. which will allow us actually to have a substantial increase in capacity, which we're working forward to. And our objective is to continue to increase our volumes as we move through the year and enter into 2022. As far as the pricing is concerned, look, we're going to leverage our back-to-basics strategy. I mean, although there are price inflations and we've streamlined our business and we have a lot of manufacturing efficiencies, obviously they're not large enough to offset the big spike in raw material and some of the transportation costs. So we will have to adjust price as we move into 2022. We'll leverage as much as we can from our operating efficiencies and then adjust the difference in price. I think the most important thing is that our objective is to maintain the 18% operating margins. So we'll balance those two out and just make sure that we're in line with our stated goals as we move forward into 2022.

Got it. Thank you. Good luck. Thank you.

Your next question is from the line of Vishal Shreddar from National Bank. Your line is now open.

We didn't hear the beginning of your question.

Oh, sorry. Just thanks for taking my questions. Can you hear me now? Yeah, we can hear you. Thank you. Okay, great. With respect to the 18% operating margin target, obviously, Gildan doing better than most would have thought it at this juncture and H1 tracking above those targets. I understand inflation is coming and I understand you intend to take price, but given that you're still tracking to that 18, should we think that H2 falls below that 18% operating margin level as inflation comes in and you kick in price towards the back end of the year?

Yeah, if you look at the 18%, which Glenn called out, which is really important to us, right? That's effectively what we're targeting as you look at the combination of our gross margin and our SG&A. We have done well in achieving that target. We thought we would get there when we got to 2019 levels, revenue levels, and we've achieved that earlier than we thought. But if we go into the back half of the year, Vishal, I mean, we will see pressure. We will see inflationary pressure in Q3, and we'll see it in Q4. both in all areas of the business, really. If you look at the raw materials, as we called out, we've got cotton prices going up. We've got transportation. So all of that's coming through. So as we go through the back half of the year, we'll see that flow through our margin. But I think we've achieved the 18% now, and our plan is to hold that 18% as we go forward. And I think you can assume that in 2021, that's a number we can deliver for you.

Okay. Jess, what are you seeing in the market right now, just given the pervasive inflation? Are your competitors, I'm talking specifically the in-principle wholesale market, are some of your competitors taking price at this juncture?

There hasn't been a price taken in the market so far this year. You know, our strategy is to continue to, you know, temperature and our low-cost manufacturing, our back-to-basics strategy. So, you know, what we'll do is we'll adjust, like I said, our pricing irrelevant of our competition because, you know, the thing that's happening is, look, we're taking share. I mean, the market hasn't recovered. We're doing well. We're very happy with our positioning. We have a lot of capacity that we're going to be bringing on as we move into 22 with the installation of all of our machines in Central America from our Mexican operations. So, you know, we're going to balance, you know, volume growth with operating margins and make sure that we have a good balance between those two, so not to knee jerk on price. We can probably take prices up a little bit higher if we wanted to, but I think we feel that, you know, maintaining a disciplined operating margin target as well as, you know, focusing on top-line growth is really what's going to create long-term shareholder value for us.

Okay, and maybe just the last one here, just given the the inflation coming in and the transportation challenge, the labor challenge. How would you reflect on the financial health of the wholesalers and their ability to accommodate all these pressures?

Well, I think that inflation is good for wholesalers. I mean, higher prices is necessarily – they're a short unit, so they make more money off higher prices. So it's necessarily a positive, I think, from a wholesale perspective. The thing is that it's not just the inflationary cost. It's actually the capabilities of doing businesses. Restaurants are closing because they don't have employees. That's really much more than a structural issue really than a financial one. I think that's what I think in the U.S. we have to be careful of is making sure that we can get employment. We've done a good job. We have to take salaries up and incentives for employees to come back to work. But we're in a good place right now, and we have good momentum. So the rest of our operations in Central America, we don't have those types of issues. I mean, employment is abundant, and, you know, there is some inflation, but it's more an input cost associated with manufacturing and power, electricity, transportation. But there's an abundance of labor in Central America. So our really focus right now is making sure that we get our yarn facilities up and running to support the capacity buildup.

Thank you. Your next question is from the line of Stephen McLeod from VMO Capital Markets. Your line is now open.

Thank you. Good morning. I just wanted to ask you about the labor backdrop and particularly as it relates to the yarn spinning business. You talk about it impacting your ability to rebuild inventories. Are there areas where demand is actually being unmet because of the labor shortages?

Well, we destocked the channel in Q2, basically, so that would probably be a good reflection of that. You know, we're leaving, you know, sales on the table, basically, and our inventories are relatively low. So, you know, demand is strong, and I don't think demand is this strong because of the comeback of the market. I think demand is also stronger because onshoring is also becoming a bigger factor. I mean... And I think that's also a big benefit for us as we look forward into the future is that there's more demand for our products. And the other thing I think also that we called out a couple of quarters ago is that, you know, we believe that the overall market has expanded as well, which is also, you know, I think going to drive demand in our channel. So, you know, things are looking pretty good in terms of demand side. And I think we're well-positioned. as we move out of this year, out of 21 into 22 to capitalize a potential upside in volume growth.

Okay. Okay. That's helpful. And then I'm just wondering if you're able to give any more sort of discrete color around how things are shaping up in the back half of the year in terms of your outlook section. In the past, you've given some directional indicators around POS and demand trends. Were you able to do that for Q3 and into Q4?

Yeah, look, I think, Stephen, you can see the way that POS improved in the second quarter. We called out how we started the quarter, how we finished the quarter. And, you know, obviously things are getting better as we move through the year. You know, as we look at the back half of the year, if you look at our sales overall, you know, we think that 2019 levels look pretty reasonable when we think about it. As Glenn said, we're running our capacity now at 2019 levels. So as we think of the back half, that's what we're focused on. As I said, the 18% margin overall for the full year. So I would say it's an improving environment, but it's not without risk, as we said when we opened up the call with our remarks overall. If you look at it, you know, probably you think about a comparison versus 2019. Q3 a little lower, Q4 a little higher, right, given the way that the supply chain is evolving. But, you know, that's about, I would say, the color we can provide right now as we sit here today.

Okay, that's real helpful. Thank you, Rod. Thanks, Len.

Your next question is from the line of Luke Hannon from Canaccord GMG. Your line is now open.

Hey, thanks. Good morning. First question for me is on capital allocation. You guys finished a quarter with a very clean balance year, which obviously inspired you guys to bring back the share buyback program. I'm just curious, though, if I just do a quick math, and I assume that you invest a little bit in inventory going forward, plus you... fulfill the NCIB, that still leaves you in a very clean position balance sheet-wise. So do you see any changes to your near-term capital allocation priorities?

Well, we are very happy with the balance sheet, effectively. I think over the last 12, 18 months, we've seen a significant strengthening of our balance sheet as we move through the COVID environment. We generated a lot of cash Last year, we're generating a lot of cash this year. So I would say we're very pleased about the balance sheet. As we look forward, we've got our target leverage range one to two times that we're working to. And we will target effectively capital allocation, capital return to put us inside that range. Again, we're like everybody else. We don't have a crystal ball and we have to be a little cautious as we move through the back half of this year into next year. given the overall broader situation. So we are very, very pleased with the state of the balance sheet. Obviously, we plan to generate cash as we move through the back half. We do plan to buy back repurchase stock, as we called out. And as we go forward, we'll basically be working to that range. Probably the low end of the range is where I would look, if you think about where we're going to sit as we move through the end of this year and into 2022. Okay.

Understood. Thanks for that. And then just quickly as well, in the press release you guys talk about in retail overall, POS was up during the quarter relative to 2019. I'm just curious if you can quantify that at all.

Well, on the retail side, I mean, effectively, we did see good strength in our POS overall. If you look at our underwear, POS has been really strong. I think I would say we're very happy with the way that underwear has performed overall. versus 20 versus 19. So underwear, very good. Activewear overall down a bit versus 19. But activewear, again, is doing well overall. And then hosiery, I would say hosiery is effectively, if you look at versus 2020, we were up very definitely. And if you look at 19, I'd call it flattish.

Okay, thanks.

The next question is from Chris Lee from Des Jarvis. Your line is now open. Hi, good morning, everyone.

Just wondering, Brian, if you can share with us a little bit more of what's driving the international weakness.

Well, you know, I think that my feeling is it's a little bit less of a... You know, in Europe, it's not a lifestyle market like it is in the North American market. It's a little bit more of a... a tourism market. And I think there's been lack of tourism, which is, I think, has affected the business a little bit because a lot of the T-shirts in Europe are sold in the tourism shops, etc. That could be possibly one. I think just the overall market there just hasn't, first of all, the size of the market is not as large as the U.S. And it's also maybe a little bit driven by the lack of stimulus in the market. I don't know, it's hard to say for us, to be honest with you, but it's down approximately 30%, but there's still a pulse and we're still optimistic that it's going to come around, but it's just taking a little longer, I think.

Okay, that's helpful. And then just shifting over to the US, I remember last quarter, I think you mentioned that the distributor inventory levels were about 40% below the 2019 level. I'm just wondering if maybe have an updated number for us on that side.

Well, we do stock again in the quarter, so we're probably more like 45 now, I would say.

Okay. That's helpful. Okay. Thanks very much.

Thank you.

Your next question is from the line of Brian Morrison from TD Securities. Your line is now open.

Thank you. Good morning. I want to go back to your inventory lean and your the yarn shortage, can you just provide some color on your view to source inputs relative to some of your peers? Because I presume you must have an advantage with your vertical integration. And then, furthermore, when you say the distributors – or, pardon me, are you gaining market share from this? And then with respect to your 45% comment, can you put a numerical value on that?

Okay. Forty-five percent went on the inventory?

On the inventory, yeah. So if you look at what we called out last quarter, we said it was over $100 million was effectively the way to think about the destock that occurred versus 2019. And then the further destock that we're looking at this quarter is probably another $30 million on top of that. So we're down probably $135 million, somewhere in that range, I would say, versus 2019. Okay. Okay, thank you.

As far as the supply chain is concerned, look, we're vertical, right? So we're one of the few people who, you know, make yarn, you know, manufacture yarn to a finished good. So, you know, our competitors are either sourcing yarn or sourcing fabric to manufacture their products. So, you know, that is, for us, is, you know, I think a strategic long-term advantage. You know, short-term, you know, what happened was is that the – you know, we nailed some of our factories in the hurricane at the same time as the labor shortage was happening, which we obviously didn't foresee. So it's taken just a little bit of time to, you know, get the folks back to run the plant, which we're making big progress on. I mean, it's been a grind. Hire three, lose two, and, you know, that type of situation. But it's not a lot of people because we don't have a lot of people in our yarn facilities. That's the crazy thing. But nevertheless, that's how tight employment is. So we're making progress, and we feel very comfortable as we move forward to continue to increase our overall volumes.

And to your point, Brian, about our vertical integration, we do feel that we're in a better position from a supply chain perspective than our competitors overall. So we don't feel disadvantaged in any way. Everybody's dealing with a very tight supply chain, and we think our team is doing a great job in this environment.

And also, there's a lot more inflation on sourced yarn, particularly in Asia, than there is in this hemisphere. I mean, pricing in Asia on yarns and fibers has gone up significantly relative to more of a stable cost structure, I think, in our hemisphere.

Yeah, so it's got to be an advantage. So I want to turn to, you call it POS at retail for imprintables. and that's offsetting other verticals that haven't returned yet. Can you just ballpark the size of your national account business and maybe the size of the opportunity you see as on-shoring, you know, you potentially see further growth in on-shoring?

Well, look, we're supporting the Nikes, the Adidas of the world. I mean, all of these companies are looking to particularly exit China, number one, I think is one of the big benefits, I think, and number two, look, they're trying to get closer to market. Both Our big brands and our retail partners basically are all looking to, you know, buy product locally. So large screen printers that service mass market retailers are growing their businesses, which has been a driving part of my success of our POS. So when we look at it, we sort of look at it holistically. And our POS, basically what Rod said, is slightly below 19. But I would say in July we're seeing, you know, closer to the 19 levels and improving. So every... month things just continue to get better and then the other side of our I think of our POS big opportunity is as you know gatherings occur and we're starting to see you know bigger orders in the market which were just non-existent up until now so all these things are encouraging but at the same time you know there there's a delta virus that's heading out and you know so we're cautiously optimistic but I think we're in a relatively good position and have good balance we have very low levels of inventory in our in our you know, our warehouses, our customer warehouses, and I think that global supply is tight. And one of the other reasons also why global supply is tight is that during the pandemic, particularly in raw materials and other factors, is that during the pandemic, you know, people idled equipment globally, right? So people looked at, for example, saying, you know, I've got so many plants and these ones are don't have the proper cost structure and their old equipment and they idle those facilities and they've taken capacity out of the market. So there's been a big reduction of capacity and then if you look at the equipment market today and buying new equipment, it's 12 to 18 months out, let's say, for example, which tells you that things are going to be tight for quite some time as people look to rebuild capacity. And so that's also a good sign in terms of where we think the So we're relatively, we feel, good position with our structure, our cost structure, as well as our operating structure.

Thank you.

Your next question is from the line of JSOLE from UBS. Your line is now open.

Hi, good morning. This is Mauricio Sterna on behalf of JSOLE. First of all, congratulations on the results and congratulations I want to ask a couple of things. First, on the pricing strategy, is there like a pricing gap that you have in mind in the imprintables business versus your competitors that you kind of like target? And on the other hand, you talked about inflationary pressure. Should we think that will mostly affect the cost of goods sold, or should we also see some that hitting the SG&A dollars in the second half of the year. Just thinking also because the SG&A dollars versus 2019, you know, they were like down 14% in the second quarter. Just thinking, is that like a level that we should think about for the second half or is there anything regarding inflation there? Thank you.

Okay, well, I'll answer pricing and Rod will take the other part of the question. As far as the pricing is concerned, look, we have a significant advantage on price in the market today. you know, this pricing inflation affects everybody. But the only caveat is that I think that we have, you know, positive manufacturing efficiencies coming through our back-to-basics strategy as we continue to streamline our operations. So, our pricing strategy will be a function of maintaining our operating margins at probably the 18% level and focusing on top-line growth. I mean, that's how we're going to balance it out. So, You know, we're really focused on making sure the calc line grows as we move forward into 2022, at the same time as delivering good financial results and targets that we set for the market.

And inflation on the SG&A line, the bottom line is yes. I mean, inflation is everywhere, and we expect the inflation to flow through anywhere where you have labor. For sure on the distribution side, we have upward pressure, and we see it elsewhere. So we do expect the labor to impact SG&A. That being said, we do believe we have our SG&A dialed in very well. If you look at where we were for the quarter and how we're traveling versus our overall SG&A target, which we had out there for some time, I think we're performing well. And we think that we will be able to manage our SG&A tightly as we move through the back half of the year, again, helping us overall to deliver that full year 18% number from an operating perspective. But inflation is everywhere. Everywhere you look, there's inflation.

Got it. Thank you very much, and congratulations.

Thank you. Your next question is from the line of Patricia Baker from Scotia Bank. Your line is now open.

Good morning, everyone. My questions on the quarter have been asked and answered, but perhaps you'd take this opportunity to provide us with an update of how things are going with the Bangladeshi facility build.

Well, we're continuing to move forward in Bangladesh as planned. We're still projected to start the plant at the end of Q4 in 2022 and be ramped up during the year of 2023 is really where we stand today. You know, we're maybe one or two months, I think, probably a little later than we anticipated, but it's still moving forward, and we feel comfortable. We'll deliver the plant at the end of Q422. Thank you.

Thank you.

There are no further questions. I'm sorry. There are no further questions. Presenters, please continue.

With that, I guess, once again, I'd like to thank everyone for their participation today, and we look forward to speaking to you soon. So have a wonderful day, everyone, and thanks.

Thank you.

And with that, this concludes today's conference call. Thank you for attending. You may now disconnect.