Good morning, ladies and gentlemen, and welcome to the Modine Manufacturing Company's Third Quarter Fiscal 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question- and- answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Ms. Kathy Powers, Vice President, Treasurer and Investor Relations. Please go ahead.
Good morning, and thank you for joining our conference call to discuss Modine's third quarter fiscal 2023 results. I'm joined on this call by Neil Brinker, our President and Chief Executive Officer, and Mick Lucarelli, our Executive Vice President and Chief Financial Officer. We will be using slides for today's presentation, which can be accessed either through the webcast link or by accessing the PDF file posted on the Investor Relations section of our website, modine.com. On slide three is our notice regarding forward-looking statements. This call will contain forward-looking statements as outlined in our earnings release, as well as in our company's filings with the Securities and Exchange Commission. With that, it is my pleasure to turn the call over to Neil.
Thank you, Kathy. Good morning, everyone. I'm pleased to announce another strong quarter with sales up 12% and adjusted EBITDA up 36% from the prior year. Mick will go through our financial results in more detail. Before that, I would like to provide an update on our transformation, focusing specifically on our 80/20 activities as we make progress towards our strategic goals. It was actually on this call two years ago, my first with the company, that we began outlining our vision for the new Modine and the role that 80/20 would play. The initial steps were to simplify and segment the organization and align the teams around specific strategies for each market vertical. Once those steps were complete, our leaders began creating a high-performance culture driven by prioritizing and focusing our resources on our best returning opportunities.
All of these activities were done in preparation for driving focused and sustainable growth. As I mentioned last quarter, the Climate Solutions segment was the first to launch 80/20 and is well along in its journey. The best example of this is in data centers, which was the initial pilot for our 80/20 initiatives. Fast forward to where we are today. We couldn't be happier with our progress. We stood up the data center organization and immediately began expanding our manufacturing capability to bring our existing products to new markets. Our new chiller plant in Virginia is now up and running. We have shipped our first products off the production line early last quarter. This is an important step for us as it allows us to be a full system supplier of data center products in North America with local production capabilities.
In addition, throughout the Climate Solutions segment, we are sharpening our commercial acumen by identifying and developing relationships with our top sales prospects and by providing our best customers with exceptional service in order to strengthen existing relationships and drive brand loyalty. We are strengthening our distribution model and simplifying our product offerings through SKU reduction for better focus. This is leading to improvements across our business. Our segment-adjusted EBITDA margin this quarter of 14.2% is more than 300 basis points better than last year. Its run rate is tracking well towards the two-year target range set at our Investor Day this past June. Our Heat Transfer Products group was a large contributor to this improvement. This team has simplified their business by reducing SKUs and fine-tuning their pricing model.
Given the level of improvement in this business, they are now focusing on growth in key markets, particularly within the European heat pump market, where we will be increasing manufacturing capability. The rapid adoption of heat pump technology in Europe is providing a clear tailwind for this business. This glimpse at areas of the business where 80/20 is furthest along demonstrates the effectiveness of our initiatives and the impact they are having. It is also a positive indicator for areas of the business that are in early innings of the 80/20 process. While I'm very pleased with the traction and the rate of improvement within our Climate Solutions segment, we are far from done. We will continue to drive 80/20 throughout the organization beyond the commercial team, through the supply chain, and to the factory floor in order to improve our efficiency and further simplify our business.
We are creating focus factories with incremental capability and capacity created by eliminating low-margin product lines. We are also returning to new product development, filling our gaps or improving technologies where warranted. Please turn to slide five. In our Performance Technologies segment, we formally launched 80/20 in the latter part of 2022, and we are well along the way in training the workforce. We have our leadership team in place, and we are working through the segmentation process. Although most of our contracts in the Performance Technologies segment allow us to pass through metal prices, we have generally not been allowed to pass through increases in other costs, which have hurt our margins over the past several quarters. We have started to make major gains in this area, however, and have reached agreements with several key customers.
This has led to incremental improvements in EBITDA margins over the past two quarters. Our product groups in this segment have a clear understanding of their priorities. In our Advanced Solutions Group, which includes our EV systems business, we continue to build our order book with one additional production order during the quarter in the last mile delivery space, increasing our peak annual revenue estimate to nearly $140 million. In our liquid cooled business, we are moving in the right direction, identifying the strategic initiatives with a keen focus on improving the efficiency of operations and those plants that are not currently meeting our expectations. Our air-cooled business has the heaviest lift ahead and has a number of key initiatives underway. One major area of focus has been the genset market, where we are building a strong book of business that will help us reach our financial targets.
The key here is prioritization, using 80/20 to capture the greatest opportunities. I have tremendous faith in this team. They have negotiated key commercial improvements. They are rationalizing product lines and reducing complexity. They are improving their cost structure by relentlessly focusing on supply chain optimization, and they are introducing quoting filters to ensure that new programs meet our financial criteria. We are already seeing the improvements in their results and expect to see incremental benefits from our 80/20 actions in fiscal year 2024. None of this is easy. In fact, it's quite difficult, but it's a critical step in our transformation of our business in hitting our financial targets. I'm optimistic that we will finish our fiscal year on a strong note. I'd like to turn the call over to Mick, who will review our results for the quarter and provide segment financial updates.
Thanks, Neil, good morning, everyone. Please turn to slide six to review the segment results. Climate Solutions had another exceptional quarter with higher sales volume and excellent earnings growth. Revenue was up 9% over the prior year and up 15% on a constant currency basis. Data center sales were up 68% or $16 million on strong demand from our North American customers. As Neil mentioned, we shipped our first chillers in the North American market this quarter. HVAC&R sales were up 3% or $2 million, driven by higher sales of indoor air quality products to the school market and increased sales of commercial refrigeration coolers. This was partially offset by some weakness in the heating market and 80/20 product rationalization. Sales of Heat Transfer Products increased 2% or $3 million from the prior year.
There was a modest growth across our global markets for coil products, but we're seeing some softening in demand from residential HVAC customers. Adjusted EBITDA increased 48%, including a 370 basis point margin improvement to 14.2%. Earnings and margin improvements were primarily driven by higher sales volume and benefits from our 80/20 initiatives. The Climate Solutions segment is far along on its 80/20 journey, and we are clearly seeing the anticipated margin improvement. In Q4, we expect data center and HVAC&R in our markets to remain strong, but anticipate ongoing weakness in the heating market and lower sales of Heat Transfer Products. Please turn to slide seven. Performance Technologies also had a strong quarter with sales up 13% or $36 million.
Revenue was up 19% on a constant currency basis, benefiting from volume growth in all product groups along with improved commercial pricing. Advanced Solutions sales were up 17% or $5 million with continued growth in our electric vehicle product sales. Liquid cooled product sales increased 10% or $11 million due to solid growth in North American and European commercial vehicle sales, partially offset by softness in Asia tied to COVID-related shutdowns in China. Lastly, air-cooled product sales increased 15% or $21 million, primarily due to strong demand in the off-highway and commercial vehicle markets. Adjusted EBITDA increased 48%, resulting in an 8.1% margin and a 200 basis point improvement. As anticipated, we experienced a small positive net impact of material costs this quarter. Aluminum and copper have been trending lower.
Stainless steel prices have been increasing to partially offset that favorability. SG&A was higher than the prior year, but declined 30 basis points as a percentage of sales. As Neil discussed, the Performance Technologies segment is still in the early stages of its 80/20 journey, but progressing very well. Adjusting our commercial agreements to better recover costs is key to margin improvement, and the team's progress is evident in our results this quarter. We continue to see strength in most of our end markets and expect further gains in both revenue and earnings in our fourth quarter. Let's review the total company results. Please turn to slide eight. Third quarter sales were up 12% or $58 million, driven by gains in both Performance Technologies and Climate Solutions. Revenue was up 18%, excluding a negative FX impact of $30 million.
In the quarter, the main revenue driver was higher volume of approximately $74 million, resulting in a volume growth rate of 15%. Gross margin improved 250 basis points due to the higher volume and pricing, partially offset by the net impact of other inflationary cost increases. SG&A increased $8 million from the prior year, primarily due to higher employee compensation-related expenses, professional fees, and certain variable costs. As a reminder, last year's operating income was higher due to a large reversal of previous asset impairment charges related to auto divestiture activities in prior years. I'm happy to report that adjusted EBITDA increased 36% or $14 million. This re-represents a 170 basis point improvement in the fourth consecutive quarter of year-over-year margin improvement. Adjusted earnings per share of $0.48 was $0.17 or 55% above the prior year.
Moving to cash flow metrics. Please turn to slide nine. Free cash flow was relatively flat in the third quarter. Working capital remains somewhat elevated as we are working through global supply chain challenges. Year-to-date, free cash flow is at $33 million. This includes the negative impact of $13 million of cash payments, primarily for restructuring activities, including the European headcount reductions announced last year. During the quarter, we repurchased 100,000 shares for a total of 300,000 shares on a year-to-date basis. Net debt of $308 million was slightly higher than the last quarter end, partially due to a negative FX impact. Our cash balance was $82 million with a leverage ratio of 1.6, which improved slightly from last quarter. As we look to Q4, we expect stronger free cash flow, mostly due to reduced working capital.
Let's turn to slide 10 for our fiscal 2023 outlook. We are confirming our outlook for fiscal 2023 revenue growth at 6%-12% despite the negative impact of foreign exchange has had this year. We have slightly reduced the sales outlook in HVAC&R and tightened the range for Heat Transfer Products, mostly due to some weakness in heating products and coils that are sold into the residential market. We slightly lowered the high end of the ranges for sales of liquid and air-cooled products. We are also holding our outlook for fiscal 2023 adjusted EBITDA to be in the range of $190 million-$200 million, representing an increase of 20%-26% versus the prior year. We look to Q4, we'll have difficult comparables in Climate Solutions.
In particular, the year ago period had extremely high sales and margins in heating and coil products. Given that we raised our guidance last quarter and the current economic uncertainty, we're taking a relatively conservative stance on the next quarter. That said, and based on our year-to-date results, we are clearly trending towards the high end of our guidance range. To wrap up, we're pleased with the third quarter results and our business leaders continue to execute on planned improvements. We remain on track with our transformation and progress towards our long-term margin targets presented in our Investor Day last June. With that, Neil and I will take your questions.
If you have a question at this time, please press the star and then number one key on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star, then two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment please while we poll for questions. Our first question comes from Matt Summerville with D.A. Davidson. Please proceed with your question.
Good morning. This is Will Jellison on for Matt Summerville today. I wanted to start out by asking you about the data center business as we head into your fiscal year 2024. and what your observations are with respect to both hyperscale and colocation markets in North America as well as Europe, and whether or not you still feel comfortable with the level of growth that you've expected from these businesses up to now?
Hi. Good morning, Will. This is Neil. Thanks for the question. Yes, in short, I do feel comfortable with where we're at. I particularly feel comfortable because of the position that we have with our expansion of factories in not only in the U.K., but in Continental Europe as well as in North America. We're seeing a lot of opportunity as we've expanded our product line. We've seen a lot of opportunity as we've taken very specific strategic customers that we want to grow with and over-serving those customers. In short, yes, I'm still confident with where we're at and where we're trending in the data center side.
Great. On the Performance Technologies side, it sounds like you had one incremental customer win within last mile delivery, but I'm wondering if we could get a broader picture about the go-forward funnel of interested customers and any other notable wins you've had in the EV thermal management space.
Yeah, that's a great question, Will. Certainly an area of focus for us and where we see a tremendous amount of opportunity for growth considering where we were two years ago. Our engagements have increased from 100 engagements in September to roughly 120 last month. We have gone from 18 wins to 19 wins. Our prototypes have increased from 56%- 58%. Our peak award last quarter when we made this announcement was $95 million. We're up to $140 million today. We're continuing to solve critical applications in terms of battery thermal management for our customers. We've looked at specialty vehicles
In a meaningful way, we've also pivoted towards some wins on the last mile delivery vans. We've expanded our commercial base, and we've also expanded our product portfolio as well. We recently put out a press release with our L-CON, which is another version of battery thermal management system that's for harsh applications and tough environments that gets us into additional specialty vehicles. The group continues to grow. We continue to invest. We're adding more resources, more capital, and we're pleased with where we're at with the funnel today.
That's great. Thank you, Neil.
You're welcome, Will.
Our next question comes from Stefanos Crist with CJS Securities. Please proceed with your question.
Hey, good morning, Neil and Mick. Thanks for taking my questions.
Good morning.
Good morning, Stef.
I just want to touch on the implied guidance for Q4. At the high end, it's implying about $53 million of EBITDA. Can you just remind us of the Q4 last year and just the year-over-year comparison and how to think about that? I know you touched on it on the call, but maybe just a little more detail there.
Yeah. Hey, Stef, it's Mick . Let me give you a little bit more color because there's a lot of moving pieces. As you already mentioned, we're holding guidance, but we're very confident in our ability to hit that top end of our range. With regards to PT or Performance Technologies, we expect that they'll have another good quarter with both sequential and year-over-year growth, really good continued progress from Performance Technologies. We're anticipating that Climate Solutions' earnings will be up slightly from Q3, they do have some pockets of difficult comps. Last year, we had a really strong heating season and heating results from both volume and pricing. We also had a record I talked about last year in the coils, so Heat Transfer Products area, in terms of volume price in the 80/20 activities.
As we flip ahead to this year, we see a little bit of softness in for the coils, our HTP area, where products are going into residential applications. Plus, some of our OE customers are leaning out their inventory a little bit. This winter hasn't really cooperated from a heating season, so the general heating market is down a little bit from last year. Last but not least, in Q4, we're planning on a little bit higher SG&A, mostly tied to incentive comp and last year their incentive compensation was very, very low. As we look forward, we're really trying to take a cautious view. We think we have an opportunity to exceed our guidance if volume's hold in Q4.
Even looking out into the next fiscal year, Neil just covered our Climate Solutions order books are quite strong. We feel really good about the upcoming year, and we're still holding to our fiscal 2024 targets we laid out on our Investor Day. I hope all of that kind of helps address that. Let me know if you have more questions.
No, that's great color. Thank you so much. I just want to move on to free cash flow. Can you just talk us about working capital, in particular inventory levels and how you view those closing out 2023 and then going into next year?
Yeah. For most of the year, probably like a lot of other companies you follow, we've had higher working capital. Most of that is primarily due, as you mentioned, to inventory. It's taking us some time to lean that out and the supply base is slowly improving. Neil's talked on previous calls about some components that in the peak were 52-week lead times, so it'll take us a little bit of time. I would say, for sure we've been carrying at least a $20 million-$30 million excess in inventory, and we're still up quite a bit over that from pre-COVID levels. In Q4, we expect, I mentioned, to have positive cash flow much improved, mostly driven by the working capital improvements. As we go into next year, I think we're good from a working capital standpoint.
A little too early to give you guidance on that side, but we'd expect as revenue and earnings grow, we'll do our best here to continue to manage working capital down to where we were for quite a long time pre-COVID.
Sounds good. Thank you, for taking my questions.
Our next question comes from Brian Sponheimer with Gabelli & Company. Please proceed with your question.
Hi. Good morning, everyone. I guess I want to go back to just the outlook. It seems from your commentary, and the numbers really bear it out, there's really positive momentum everywhere in the business. You and your team are doing a fantastic job. You know, pursuant to a question that was asked before, fourth quarter guidance at the high end implies basically a similar quarter to the one that you just had. It seems to me that there's just so much momentum, and I know you've spoken to being at the high end. Does that basically take the low end of the guidance just completely out of the picture, Mick?
Yeah. Hey, Brian. Yeah, I mean, we feel very confident that based on where we are nine months to date, as you point out, and where we see the year, that we're going to come in at the very high end of our guidance. The opportunities to exceed it, really if Our EDI or order rates remain solid in Q4 on our vehicular customers. The data center business is going to have one of its strongest quarters of the year in Q4, and those can be a little bit lumpy as far as when actual shipments go out of those. Those would be a couple of the drivers that we would see that allow us to actually overdrive our forecast.
Yes. That makes sense to me. I want. Just in regards of, or with regards to your balance sheet, you know, I think the reaction today probably has some algo creating aspect to it given the headline EPS and the year-over-year comparison. You know, the balance sheet is at 1.6x lever. You're going to take another $20 million out eventually in working cap and all you're really doing is really positive from a momentum perspective. Where down the line would you start to consider something like a buyback, where you can really be opportunistic on a day like today? Where would that start to enter your thinking, Neil?
Yeah. Hey, Brian. It's Mick. I'll go first if Neil wants to add anything. I think, back to, you know, the previous question, where have we been on cash flow. We've been a little bit lumpy this year, primarily driven by working capital. If as things stabilize here and we expect to see that working capital stabilize in Q4, and next year we'd anticipate, based on the targets we've set to have even better cash flow. At that point, I think, Brian, when we've got the relatively stable quarter- to- quarter free cash flow, and as you pointed out, we wanted to really work our leverage ratio down this year, I think a full point.
We're at a point then when we enter, you know, 2024 here, 2023, calendar 2023, our fiscal 2024, is the point where we can look at both acquisition opportunities, but also in between there opportunistically look at buybacks when needed.
Appreciate that. Just one more anecdotal really quickly if I could. [CNH had a pretty significant strike at one of their facilities in Racine. Were you able to do any hiring from workers that may have gotten tired of being on strike? Any opportunity there that you were able to take advantage of from a labor perspective?
That's a good question, Brian. This is Neil. Not that I'm aware of. We do very little manufacturing in Racine. It's primarily our R&D center for testing and development. Most of our manufacturing footprint in the United States is, you know, in Tennessee, Rhode Island. It's in Missouri. It's in locations outside of the Wisconsin area. That's a fair point.
Understood. Best of luck.
Thank you.
Our next question comes from Steve Ferazani with Sidoti & Company. Please proceed with your question.
Morning, Neil. Morning, Mick. I do want to run through a couple of more specific questions on guidance. As I'm trying to match up your previous presentation just to see the shifts on revenue. When I look at Climate Solutions, the only real change I see here is HTP. You actually raised the lower end. HVAC and refrigeration down very modestly, but, you know, I'm in New York, and we haven't had winter. I mean, we've skipped it. I know the groundhogs said six more weeks, but how much of an impact is that when parts of the country are just skipping winter this year?
Yeah. I think, and Neil, correct me if I'm wrong, our market data says pockets of, the heating market's 20% or 30%.
Yeah
... down.
Yeah.
We're gaining share. We're nowhere near that. The magnitude of what you're describing from really a lack of a cold snap or winter, it's really impacted heating, both commercial and then you see a little bit decline too where people have heaters on a residential application and new home starts.
Yeah. I'd also add, Steve, that we're also believe that there's a distribution with a little overweight in terms of inventory, and we're going to start to see some of that work itself out. Certainly colder temperatures would help that work it out faster. Again, at the rate where we see the industry and where we're at, we know that we're gaining market share in the heating side of the business.
Great. If we end up with a really warm winter, does that carry over into stronger next year? Is it weather dependent? If you didn't replace stuff this year... I guess new home starts will impact that as well, right?
As well as market capture as we continue to build out our distribution.
Yeah. Steve, we've had years where, it's as Neil said, the channel. So, the good and the bad of it will be is based on the winter. If a lot of distributors stop restocking, they will sell remainder of the year what they have on. We'll address that as we head into next season, heating season. You're right. Some years you enter a winter with a really lean inventory channel, and that can help quite a bit regardless of actual weather.
Got you. That's helpful. Then on HTP, where are you with the, I believe it was Serbia where you're building the pump facility?
Yeah, that's correct. We're still working through the final negotiations there with the land holder. We've recently started to work the process to secure equipment, and, you know, as you know, Steve, we currently do manufacture there in Serbia and two plants. This is a third additional plant to continue to build out the capacity to support the European heat pump market.
Would it be fair to say that that number could have been different based on the timing that your demand is overwhelming supply still? Is that fair?
Yeah, we're continuing to win orders. Our order book is building quite healthy in regards to that very specific technology, hence the need for that additional factory.
Mm-hmm.
I don't have in front of me exactly which quarter it is next year that we're back online, but we will have production in that third facility.
Just briefly touching on liquid cooled and air cooled, we know that automotive production is starting to pick up. China's starting to reopen. I was a little bit surprised that you've reduced right now on those. We know from hearing from ag and construction, there's supply chain constraints, but the order books are still really strong in that area. I'm just a little bit surprised on the, on the modest reduction there.
Yeah. Our commercial vehicle and off-highway order book is healthy. We're confident in terms of the EDI and the messaging that we're getting back. On the auto side of the business, it's been more unpredictable, hence where we-
Okay
... we hedged a little bit there on the automotive side.
You haven't seen any major shift from where we were last quarter?
No.
Okay. Just a quick question on that. You're saying $140 million at peak production with EV. The last number I had written down was $90 million. Have you picked up? That one order wasn't $50 million, was it? Then just in general, how you think that production ramp might work as component shortages ease.
Yeah. that's incremental. if you combine all of the wins today in addition to that.
Mm-hmm
... other order that we won, we're seeing those forecasts increase as well. That's. It's an aggregate of.
Okay
... the trends that we see in that space. The team has done a really good job in terms of managing its inventory and managing our supply chain so that we can hit those targets. So much so that they've launched this new product that we put a press release out for, the L-CON BTMS, which actually has a different technology, and we're able to source the components where we need to source, not only locally, but we also do some of our own manufacturing for those components.
Great. Thanks, Neil. Thanks, Mick.
You got it. Thank you, Steve.
As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Tim Moore with EF Hutton. Please proceed with your question.
Thanks, and congratulations on the impressive EPS growth in the quarter and the continued execution of the 80/20 strategy. My first question is related to the evolution to full systems offerings with aftermarket maintenance packages, you know, for data centers, heating, indoor air quality in EVs. Do you have to ramp up hiring there and open any additional service locations near major customers?
Yes, absolutely. Thanks for the question, Tim. This is Neil. Certainly that's an area where we want to expand in North America. We have a very good service organization that supports our business in the U.K., as well as partnerships that we use in Continental Europe. That's an area where we're starting to put together plans on the service side to help support some of our largest customers, particularly in the Virginia, Northern Virginia area.
Great. That's helpful. Maybe just while we're on the Virginia topic, for your facility for the data centers, the free cooling chillers for North America, when do you think you might be ramped up to generate, you know, $100 million in sales run rate? Will that take another three or six months, or are you getting close to that?
Yeah, we produced our first chillers off that production line last quarter. We're ramping up our capacity there. We've added some additional capacity at the same time. We believe we have the ability to hit, you know, triple digits, and we put that out in the most recent press release that I believe was two years, was what? $150 million?
Yeah. $100 million.
$100 million?
For U.S. data center production, so that would include chillers plus the other.
Perfect
... products that we produce. That would be in fiscal 2024.
Does that help, Tim?
That does. No, it seems like you're on track for that. I just wanted to make sure that was going well. Just switching gears, you mentioned the Serbia, the third facility for heat pumps production. You know, how is your initial read for, you know, calendar 2023 for the demand for heat pumps from Europe and those incentives there? Are those still holding up, and do you think 2023 could be maybe as good of a year as 2022 was?
I do. We are seeing that demand, and we're picking up more customers. That's the reason why it's driven the capital strategy that we have in Serbia to continue to advance and build out the capacity there. The incentives are there. The motivation is there. With the traditional products that we sell into that space today, we've seen increase in sales and orders. As we continue to win new customers, large OEMs, to be honest, that are really helping us pull it through. The team has been very successful commercially in that space.
Great. That seems like an enduring trend for the next few years. Just my last question is around free cash flow. I know Mick got into this already, but just trying to wrap my head maybe around this March quarter free cash flow, the positive free cash flow guided. I just want to make sure that the working capital reduction benefit, as you unwind some buffer inventories, that should more than offset the restructuring and headcount cash costs. It sounds like you've already paid out $13 million in cash payments for the European headcount reduction. I was just wondering about the timing of maybe how much of a final payment you'd have to do in Europe?
Yeah. We would expect probably a few million of cash restructuring costs in Q4, nothing unlike we've seen for the full year. We'll probably be a little bit more than $15 million in cash restructuring. Yeah, we'd expect, you know, similar. You know, we talked a lot about the EBITDA in Q4, and then we expect the favorable working capital as the main driver of it.
Great. Thanks, Neil and Mick. That's it for my questions.
Thank you.
Thank you, Tim.
I am showing no further questions at this time, so I would now like to turn the conference back over to Kathy Powers.
Thank you. Thanks to everyone for joining us this morning. You'll be able to access the replay of this call through our website in about two hours. We hope that you all have a great day. Thanks.
This concludes today's conference. Thank you for your participation. You may disconnect your lines.