Hello, ladies and gentlemen. Thank you for standing by for Neo Incorporated's First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen only mode. Today's conference call is being recorded. I will now turn the call over to your host, Mr.
Rui Chen, Director of Investor Relations of the company. Please go ahead, Rui.
Thank you, Rachel. Good evening and good morning, everyone. Welcome to NIO's Q4 2020 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted at the company's IR website. On today's call, we have Mr.
William Li, Founder, Chairman of the Board and CEO Ms. Steven Feng, Chief Financial Officer Ms. Danny Qu, VP of Finance. Before we continue, please be kindly reminded that today's discussion will contain forward looking statements made under the Safe Harbor provisions of the U. S.
Private Securities Litigation Reform Act of 1995. Forward looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in certain filings of the company with the U. S.
Securities and Exchange Commission. The company does not assume any obligation to update any forward looking statements, except as required under applicable law. Please also note that Niu's earnings press release and this conference call include discussions of unaudited GAAP financial measures as well as unaudited non GAAP financial measures. Please refer to NIO's press release, which contains a reconciliation of the unaudited non GAAP measures to comparable GAAP measures. With that, I will now turn the call over to our CEO, Mr.
Wei Liang Li. Wei Liang, go ahead, please.
Hello, everyone. Thank you for joining NIO's 2020 Q1 earnings call. In the Q1 of 2020, NIO delivered an aggregate of 3,838 years 8 years 6. Starting from April, our sales and deliveries have witnessed a solid recovery. We delivered a total of 3,155 ES8 and ES6 in April, representing a robust 105.8 percent month over month growth.
We are extremely proud that since October 2019, NIO ES6 has outperformed others and ranked as the top selling SUV in China auto market for 7 consecutive months. It is the only electric vehicle among the top 10 best selling luxury midsize SUVs. Due to the impact of COVID-nineteen, the overall passenger vehicle sales in China has warmed by 41% year over year, yet our Q1 deliveries decreased only by 3.8% compared with the same period of 2019. Our bucking the trend performance is mainly attributable to the end to end direct sales business process and the cloud based service system. Our products and the service system have withstood the arduous test during this unprecedented outbreak and won wide recognition from the market and users.
On April 19, the all new ES8 commenced deliveries to users. It boasts over 180 improvements with the MEDC range reaching up to 580 kilometers. With further enhancement on its comprehensive competitiveness, the all new ES8 has received rave reviews across the board from the users and media after the deliveries. As the novel coronavirus outbreak has been brought under control in China, since April, our business operations have started to return to normalcy in every aspect, including supply chain, manufacturing, sales, services and R and D. The supply chain and manufacturing have gradually recovered from the pandemic.
In the meantime, our R and D activities are picking up speed and the offline sales network is also bouncing back. Starting from April, we have been continuously exploring innovative sales channels, leveraging the advantages of both online and offline platforms. In 2020, we have opened 44 new new cities around China, we will continue to open more efficient and flexible new spaces to increase our offline touch points and the community presence. Since late April, our daily new order rate has already returned to the level before the outbreak. In light of the normalization of supply chain and production, we are confident to deliver 9,500 to 10,000 ES8 and ES6 in total in the 2nd quarter, reaching an all time high in our quarterly deliveries.
As for the gross margin, along with the strong recovery of quarterly deliveries, reduction of battery pack and other bond costs, optimization of manufacturing expenses and efficiency and the steady rise of the average selling price, we expect overall gross margin to substantially improve and the vehicle gross margin to reach over 5% in the Q2 this year. Significantly improved. In the Q1 2020, the company SG and A has dropped by 45.1% from Q4 2019 and operating loss has decreased by 44.4% quarter over quarter. In the second quarter, the SG and A and R and D expenses will increase to some extent, but considering our gross margin improvement, we are still confident to reduce operating loss. Next, I would like to share with you the latest progress on 2 important tasks in the 2nd quarter.
Battery as a Service,
First, the progress on the innovative business model of battery as a service. It is widely acknowledged that we have always been working on the chargeable, swappable and upgradable battery service model based on the separation of a vehicle and battery, that is BaaS. BaaS can lower the initial purchase price and enable users to continuously upgrade to the battery and enjoy better power replenishment experience. NIO owns more than 1200 battery swap related patents on the vehicle battery pack, battery swap stations and the cloud services solutions. To date, we have deployed 131 battery swap stations in 50 8 cities nationwide and completed over 500,000 battery swaps cumulatively.
NIO's innovative business model based on the separation of battery and vehicle has won wide recognition from the users and the industry. In April, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the National Development and Reform Commission and the Ministry of Finance jointly issued the latest new energy vehicle subsidy policy, which clearly stated to encourage the development of battery swap technology and innovative business models based on the separation of battery and vehicle. With the NIO policy, NIO is the only premium EV brand with products priced over RMB300000 yet still receiving the national EV subsidy. Based on the latest published policy, we will speed up the development of that products and service solutions, which are planned to release to users in the second half of this year. As the time goes on, we believe our competitive edge enhanced by bets will become more self evident.
Last but not least, I would like to share with you the progress of NIO China project. On April 29, NIO entered into definitive agreements with a group of strategic investors. Under the agreement, NIO will inject its core businesses and assets in China into NIO China, including vehicle research and development, supply chain, sales and services and NIO Power. The strategic investors will invest in aggregate of RMB7 1,000,000,000 into NIO China. In addition, NIO will invest RMB4.26 billion into NIO China.
Upon the completion of the investment, NIO will hold 75.9% of controlling equity interest in NIO China, while the strategic investors will collectively hold the remaining 24.1% and NIO China will be a subsidiary of NIO. The strategic investments in NIO China is another important milestone of NIO for its long term growth. With the investment, NIO will have sufficient funds to product and the technologies of smart electric vehicles and offer services exceeding users' expectations. The launch of a new China headquarters in Keusai will enable NIO to improve its operational efficiency and to sustain its growth and competitiveness in the long run. The transactions are proceeding well according to plan.
We're fully confident Thank you for your support. With that, I will now turn the floor over to Stephen to provide the financial details for the quarter. Stephen, please go ahead.
Thank you, William. I will now go over our key financial results for the Q1 of 2020. And to be mindful of the length of this call, I encourage listeners to refer to our earnings press release, which is posted online for additional details. Our total revenue in the Q1 was RMB1.37 billion or $193,800,000 representing a decrease of 51.8 percent quarter over quarter and a decrease of 15.9% year over year. The decrease in total revenues quarter over quarter was due to decrease of vehicle deliveries during the COVID-nineteen operating in China.
Our total revenues are made of 2 parts, vehicle sales and other sales. Legal sales in the Q1 were RMB1.36 billion or US177.3 million dollars representing a decrease of 53.2 percent quarter over quarter and a decrease of 18.2 percent year over year. Weibo sales accounted for 90 2% of total revenues in this quarter. Other sales in the Q1 were RMB 100 and 16,400,000 or $16,400,000 representing a decrease of 29.2 percent quarter over quarter and an increase of 21.2% year over year. The decrease in other sales over last quarter was attributed to decreased revenues derived from the home chargers installed and accessories sold, which were in line with the decreased sales vehicle sales in the Q1 of 2020.
Cost of sales in the Q1 was RMB1.54 billion or $217,400,000 representing a decrease of 15.4 percent quarter over quarter and a decrease of 16.8% year over year. The decrease in cost of sales compared to the Q4 of 2019 was mainly driven by the decrease of delivered volume of ES6 and ES8 in the Q1 of 2020. Gross margin in the Q1 was negative 12.2%, compared with negative 8.9% in the Q4 of 2019 and the negative 13.4% in the same quarter of 2019. The decrease of gross margin compared to the Q4 of 2019 was mainly driven by the decrease of vehicle margin in the Q1 of 2020. More specifically, vehicle margin in the Q1 was an active 7.4% compared with active 6.0% in the Q4 of 2019 and an active 7.2% in the same quarter of 2019.
The decrease of vehicle margin compared to the Q4 of 2019 was mainly driven by the decrease of production and delivered volume of ES6 and ES8 in the Q1 of 2020. R and D expenses in the Q1 were RMB522.4 million, representing a decrease of 49.1 percent quarter over quarter and a decrease of 51.6% year over year. The substantial decrease in research and development expenses was primarily attributed to the COVID-nineteen outbreak that caused the significant reduction of design and development activities. SG and A expenses in the Q1 were RMB848.3 million, representing a decrease of 45.1 percent quarter over quarter and a decrease of 35.7% year over year. The decrease over the Q4 of 2019 was primarily attributed to some one off expenses incurred for the optimization of our self-service work structure in late 2019 and the COVID-nineteen outbreak that caused the significant decrease on marketing and promotion activities as well as the decrease of activities in business support functions in the Q1 of 2020.
The decrease of R and D expenses and SG and A expenses were also attributed to the improvement of operating efficiency resulting from our operation optimization and cost control efforts. Loss from operations in the Q1 was RMB1.57 billion, representing a decrease of 44.4 percent quarter over quarter and a decrease of 40% year over year. Share based compensation expenses in the Q1 were RMB32.4 million, representing a decrease of 36.8 percent quarter over quarter and a decrease of 72.9% year over year. The decrease in share based compensation expenses over the Q4 of 2019 was primarily attributed to the continuous decline in the number of employees and impact of part of the share based compensation expenses being recognized by using the accelerated measures previously. Net loss was RMB1.69 billion in the Q1, representing a decrease of 40.9 percent quarter over quarter and a decrease of 35.5% year over year.
Last, attributable to NIO's ordinary shareholders in this quarter was RMB1.72 billion, representing a decrease of 40.5 percent quarter over quarter and a decrease of 35% year over year. Basic and diluted net loss per ADS in the Q1 were both RMB 1 point 66 or $0.23 per ADS. Excluding share based compensation expenses and accretion of redeemable non controlling interest to redemption value, non GAAP adjusted basic and diluted loss per ADS were both RMB1.60 or RMB0.22 per ADS in the 1st quarter. Our balance of cash and cash equivalents, restricted cash and short term investment was RMB2.40 billion as of March 31, 2020. And now for our business outlook.
As William mentioned, for the Q2 of 2020, the company expects deliveries to be between 9,510,000 vehicles, representing an increase of approximately 147.5 percent to 160.6 percent from the Q1 of 2020, an increase of approximately 167.4% to 181.5% from the Q2 of 2019. The company also expects the total revenues of the Q2 of 2020 to be between RMB3.37 to RMB 3.53 billion or between RMB 475.7 billion to RMB 4 and $99,100,000 This would represent an increase of approximately 100 and 45.5% to 157.6% from the Q1 of 2020, an increase of approximately 123.3 percent to 134.3 percent for the Q2 of 2019. This outlook reflects the company's current and preliminary review on the visitation and market condition, which is subject to change. Now, this concludes our prepared remarks. I will now turn the call over to operator O to facilitate our Q and A session.
Operator, let's start the Q and A session, please.
Ladies and gentlemen, we will now begin the question and answer Your first question comes from the line of Tim Shao from Morgan Stanley. Please ask your question.
Hi, Whelan, Steven, Jade and Tim, congratulations on the solid progress and thanks for taking my questions. So just two quick questions. First is about Volkswagen's strategic move of purchasing a big stake in JAC. Although we know the deal might take place at the parent level and shouldn't have any immediate impact to your current partnership with JAC, But we're just concerned about the long term collaboration with JAC or that would urge NIO to reconsider the capacity expansion plans or alternative manufacturing partner? That's the first question.
And my second question is about our agreement with the Hefei Investors. According to the details here, I think the new Han Kui needs to apply for IPO within 4 years and complete the deal within 5 years after the initial investment. So could you please share a little bit more color regarding the potential listing? What's the current progress, the updated schedule and any expectation from you or any thoughts? That's my question.
Thank you.
Thank you for your question. Recently, we do hear a lot of market speculations about the in-depth cooperation between Volkswagen and JHC. To be honest, we don't really know much about the details. Although JC has also issued some comments about speculation. But if we are going to have more automakers located in Hefei, I think this is a good news for us because this is going to be beneficial for the development of the supply chain and the production capacity in Hefei.
Our cooperation with JAC is a win win cooperation. So if JAC is going to work very closely with Volkswagen, which we're not really sure. But if this is the case, we think this is not going to affect other manufacturing. If they are going to work very closely together, we think this is very beneficial for other cooperation with JV. In terms of the question on the NIO China, from the strategic perspective, NIO China opens the RMB financing channel for NIO.
So we're very happy to enter the definitive agreement with a group of investors. According to our preliminary research, we believe the new China meet the requirement to go public in China, but we will make this dynamic decision based on the market situation. Our strategy is NIO Inc. Is going to hold to the controlling stake in NIO China for the long term. According to our previous press release, NIO Inc.
Has the redemption rights and the warrants on the NIO China project. So overall speaking, NIO Inc. Can have the long term controlling stake in NIO
China. Not past the annual report.
According to our previous annual report, we have the right for the redemption and the warrants on the NIO China.
Yes. Actually, if you refer to the annual report that the company filed in early May, they have filed the investment agreement for the strategic investment in NIO China. According to that, NIO Inc. Has the warrant to purchase more shares for NIO China. And also, we have the repurchase rights of the shares for the strategic investors for partial of their shareholdings in the future.
Yes. Thank you. Thank
you.
Thank you.
Your next question comes from the line of Bin Wang of Credit Suisse. Please ask your question.
Thank you. Hi, everyone. I actually got 3 questions. Number 1, about the order. If you recall, in last quarter, you already provided order in the past 30 days.
So right now can you provide from now in the past 30 days how much order you'll receive? And what's the order flow? Because there was a local news flow in the end of April, but the last week you got 2,000 orders. That's why I want to get a number what's the order in the past 30 days as number 1. Number 2 actually is about gross margin in the second quarter.
You mentioned the vehicle gross margin will go to about 5%. Can you provide guidance for overall gross margin, not just the vehicle, but also including everything? We that the gross margin overall will be turned positive in the Q2? That's my second question. And my last question is about the potential risk came from the U.
S. Industry. Think about recent China U. S. Position, you actually have some news flow to worry about all the Chinese companies may have some delisting risk.
So do you have any alternative plan, say, to invest in Hong Kong or actually your China may have prepared for a stable IPO? And what's your I mean, the alternative plan if you have to be delisted in the U. S? Thank you.
Thank you for your question. Actually, since the late April, our order growth rate has returned to the level before the outbreak. Our current order growth momentum is actually quite strong for the last 30 days because we had the live streaming event and other activities. So at this moment, I cannot disclose the specific number of the orders we received in the last 30 days, but what I can say now is that the order growth momentum is very positive. In terms of the gross margin, we believe that the vehicle gross margin can be over 5%.
But for the overall gross margin, because we have implemented a series of efficiency improvement and cost control measures, So our estimation is it should be over 3%.
Now, Zhengfei Gong, this Rongmi, thank you for
your question. I would like to answer your question about the impact of the new seller view on NIO Inc. We have noticed that a few Chinese companies have achieved the diligence in exchanges of the U. S. And U.
K. Such as Alibaba. Looking forward, we will actively and closely monitor the changes and the trends of the markets and adopt plans that best serve the interest of New Inc. Investors and shareholders. I take that our comments to your question.
Thank you, Wang Bin. Okay. I have a very quick about the first one. Can I know right now you're actually under the supply or actually it's overcapacity, which means if too much demand, what's the maximum monthly supply volume? What's the number of maximum capacity right now?
In fact, a lot of users or actually many users have been waiting for the deliveries. For example, users of the ES8 and ES6, it will be even longer for the users of the ES6 ES6. In the Hefei plant, under one shift, the monthly production capacity should be around 4,000 units with 15 GPH. And this means that the workers will need to work around 10 hours every day. But because of some supply chain partners in our supply chain, they have some constraints on the production capacity, which means the production capacity for those supply chain partners is around 3,400 to 3,500.
So although we still have some capacity in our own soy plant, but the overall capacity in the supply chain is limited. We understand many users have been waiting for the vehicle deliveries. That is why we would like to boost the capacity in the overall supply chain system, which means our partners will also need to increase their production capacity. This requires systematic efforts across the supply chain. According to our plans, around August September, we should be able to increase the monthly production capacity to around 4,500 to 5,000.
The production capacity increase, but we would like to strike a balance between the order growth and our production capacity increase considering the strong momentum on the demand side.
Your next question comes from the line of Lei Wang of CIDC.
This is Wang Lei speaking from CICC. Thank you. Congratulations on business through on deliveries. I have 2 questions, if you don't mind. So, we have achieved a historical low SG and A and R and D expenses in the 1st quarter.
That's mainly attributed to the various outbreaks, I believe. Can we have your guidance on the operating expense for the next few quarters? That was the first question. And the second question is about the deal again, because as the last day of the Q1, we have cash and equivalents around like RMB2.4 billion, while we should ingest about like total RMB2.5 billion cash before June 2020. Do we need to issue the new comfortable bonds or issue the new private placement?
This is Danny. Regarding the first question, in Q1 2020, we have seen expected results from the cost control efforts, including the organization optimization and some restructuring initiatives. And expenses in Q2 and going forward, I think, will increase quarter over quarter compared with Q1 due to more R and D and marketing activities being performed in Q2. But considering our gross margin improvements, we are still confident to reduce the operating loss, and we expect trend to continue in 2020. Yes, that's all for question 1.
Okay. So, Wang Lei, for your second question, yes, you're right. We have RMB2.4 billion on our balance sheet and we will inject RMB2.4 billion into new China. So first of all, we still have some cash as is in our balance sheet unused from the previous SEB, which can inject it to NIO China as part of the investment from NIO Inc. And then we will closely monitor the market and determine future financing plans to support our further cash injections.
And yes, that's all. So, I want to follow-up
On the OpEx, because we have roughly $500,000,000 monthly OpEx in the Q1. And what's the estimation on the absolute dollar amount for the next few quarters, like $700,000,000 sounds like a reasonable one or even lower?
Operating expense wise, as I mentioned, I think there will be an increase in Q2 since the more R and D and the marketing activities. Yes. But generally, the operating loss, I think, will continue to be reduced. So the exact number
I don't think that we are supposed to give the guidance of the absolute dollar amount of the expenses for the current quarter. But our goal is to reduce the operating loss through the gross margin gain as well as the efficiencies through controlling the operating expenses.
Your next question comes from the line of Fei Fang of Goldman Sachs. Please ask your question.
Hi. Congratulations on the strong results. My first question is about vehicle margin. How would you guide vehicle margin to progress beyond Q2's 5%. Are we still tracking towards double digit vehicle margin by the 4th quarter?
That's the first question for me. Second question is how many of your cars were sold in new house versus new space in the Q1 and also in April? Thank you.
Okay. The first question about the vehicle margin, we still expect the gross margin to expect double digits in by the end of 2020 with further decrease in BOM cost, including the battery package and also sales of more product with higher gross margin and continued optimization of our
cost.
In terms of the first question for the gross margin, we still would like to keep our guidance regarding the double digit gross margin by the end of this year. At this moment, we are still quite confident to achieve this objective. With respect to your second question, I would like to say that at this moment, most of the vehicle sales happen in the new houses and the online channels. This is mainly because the new houses are located in those big cities. But we believe new spaces are going to play a very important role in the future, especially in terms of the channel expansions in the Tier 2 and the Tier 3 cities, and it's going to play a very bigger role in the Q3 for the channel expansion in those lower tiered cities.
Overall speaking, currently 70% of the vehicle sales are through the new houses and the online touch points.
Your next question comes from the line of Lee Minh Shen of Bank of America. Please ask your question. Of Bank of America. Your line is now open.
Thank you. Hi, William. As you mentioned, Tim, thank you for your time and congrats for the good results. So I have some questions. My first question is that when will you start to deliver EC6 and also decide the price?
And also when will you start to shift the 100 kwatt battery with your cars? And will there be any meaningful spec change, for example, like a driving range improvement and also increase your weight or overall the weight will be maintained at a similar level compared to your current 84 kwad bottles. The reason I'm asking is because I also want to know that you start to use some more advanced cell to pack battery to improve the battery density so that the horsepower can be maintained or even improved even if you use a bigger size battery? My third question is regarding your cooperation with Hefei government. So besides the investment from Hefei, I believe Hefei will also give you more support from other financial aspects.
So could you elaborate on more support and cooperation from Hefei government? Thank you.
Our plan is to start the deliveries of the EC6 in September and the delivery of the 100 kilowatt hour battery pack in the 4th quarter. For the battery pack, the current battery pack will upgrade within the same size. The weight will not change, but the power density will improve. In this case, it's not going to an impact on the performance of the vehicle and this is one of the parameters and the criteria in our technology development. This is a very important endorsement to our technical competence because within the same battery pack sites, we can upgrade the battery from the 70 kilowatt hour to 84, and this year, we're going to ship the 100 kilowatt hour battery pack.
In terms of our cooperation and development in Hefei regarding NIO China, We will work together with Hefei government and other related departments to work out the specific policies. We believe we should be able to get some preferential and supportive policies.
Thank you.
Thank you, William. Sorry, I got one more quick question. So maybe it's still early, but for the year end NIO day, will you consider to launch another new product or pursue a previous guidance that the sedan launch probably will be postponed to 2021 or 2022. So in this year end, there is no possibility to launch sedan or other new models. Thank you.
Thanks for your question. I understand everyone is looking forward to the new day and our new product launch. This actually proved we have a very high product development and R and D efficiency because starting from the new day in 2017, we launched our new product every year on the new day. Of course, we don't want to break this transition, but at this moment, we cannot disclose the specific details.
Got it. Thank you, William.
Thank you.
Your next question comes from the line of Jiajie Shen of JPMorgan. Please ask your question.
Hi, William and Stephen. Yes, hi. It's Nick Lai from JPMorgan. Thank you for taking my question. I know that we have a few minutes only left.
So 2 very simple high level questions. The first one on the cash flow, can you walk us through on the cash flow, yes, in terms of and outflow? You mentioned earlier in the Q1, we issued roughly about $435,000,000 CB. That's roughly about RMB 3,000,000,000. But at the same time, for the investment in NIO Inc, the first two installments due in June, we need to invest altogether RMB 2,500,000,000.
And on top of that, presumably, at each quarter, the cash burn is somewhere about RMB 1,500,000,000 to RMB 2,000,000,000. So if you can provide some number or guidance on the quarterly cash inflow and also that would be appreciated. And should we assume with all the investment maybe in the next 1 year, we probably don't need to go to the market and raise funds again? So that's a cash flow related question. And the second simple question is really on volume.
I remember in the 2019 results, we had about 5,000 units of backlog order. Can you give us an update of that number by Q1? And also 2Q, the guidance of 9,500 to 10,000 units of delivery, is it split between ES8 and ES6 similar to Q1? Then lastly, on e66 new model, how should we think about the volume? Will it be similar or close to ES6?
Thanks.
Okay. So thank you for your question. This is Jade. I'm going to answer the first question that you have. Yes, as of the end of the first quarter, we did have about RMB2.4 billion as cash on our balance sheet.
Thanks to the CVs that we have raised in the Q1, which has supported our operating cash needs and also that the rest of the money that we have right now definitely can be injected from New Inc. To New China for the installment as the investment we need to make in New China. So as for the future plans of the cash injection, we are going to monitor the market very carefully and see what's the best time and appropriate method to raise the capital in the future. And we definitely will get sufficient cash to support our future business development and expansion. So that is on the cash side.
And on your second question regarding the orders, I think William can answer some on that.
At this moment, we cannot disclose the specific number of the order backlog. But according to our data, the current backlog, it should be over 5,000 just like you mentioned. In terms of the product mix of the ES8 and ES6, as you know, the starting price of the ES8 is 110,000 more than that of the ES6. So it's quite natural that ES6 has higher volume compared with the ES8. But after we start the delivery of the ES8, we also need some time to ramp up the production, the sales and the deliveries to the users.
According to our current data, the percentage of the ES8 and ES6 should be 1, 2, 3, and this is because of the specific market
segment.
For the year 6, because we haven't released the specific pricing yet, We still need some time to understand what should be the pricing strategy for the EC6 and what is our target user group for the EC6. So we will need to understand those specific information to have a clear picture for the market demand. At that time, we also need to make a dynamic decision based on the production capacity, competition landscape and other project strategy to determine the pricing. At this moment, we have received some intention orders, but because we haven't released the pricing yet, so we cannot receive the non refundable orders at this moment.
Yes. That's very helpful.
Thank you.
As there are no further questions now, I'd like to turn the call back over to the company for closing remarks.
Thank you again for joining us today. If you have any questions, just feel free to contact us through the contact information provided on our IR Web site. This concludes the conference call. You may now disconnect the line. Thank you.
Stay safe.