Broadwind, Inc.
Q4 2019 Earnings Call Transcript

Published: 27 Feb 2020

[Operator:]

Greetings. Welcome to the Broadwind Fourth Quarter and Full Year 2019 Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] Please note that this conference is being recorded.I will now turn the conference over to our host, Jason Bonfigt, Chief Financial Officer. Thank you. You may begin.

[Jason Bonfigt:]

Good morning and welcome to Broadwind fourth quarter and full year 2019 results conference call. Leading the call today are CEO, Stephanie Kushner; COO, Eric Blashford and I am Jason Bonfigt, the company’s CFO.We issued a press release before the market open today detailing our fourth quarter and full year results. I would like to remind you that management's commentary in responses to question on today's conference call may include forward-looking statements which by their nature are uncertain and outside of the company's control. Although these forward-looking statements are based on management current expectations and believes actual results may differ materially. For discussion of some of the factors that could cause actual results to differ, please refer to the Risk Factors section of our latest annual and quarterly filings with the SEC.Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during our call in our press release we issued today. At the conclusion of our prepared remarks we will open the line for question.With that, I'll turn the call over to Stephanie.

[Stephanie Kushner:]

Thank you, Jason and welcome to everyone on the call. Our fourth quarter results came in line with expectations, capping off our strongest annual performance since 2016.Orders were robust in 2019, more than double the prior year, with a book to bill ratio of 1.24. We finished the year with backlog of $142 million, up 80% year-over-year. The majority of the increases in our heavy fabrication business, where both the tower product line and the industrial fabrication business book expanded significantly.Alongside the evident growth in wind, we continue to expand our business across a diverse range of industry and customers throughout the year, including those in shipbuilding, mining, solar farms and even wave energy.Fourth quarter revenue of $49 million was up 81% from the prior year with big growth in Tower volume. Demand for Gearing to support fracking remains subdued. Although we are seeing some resurgence in early 2020.Our Heavy Fabrication segment was up 76% year-on-year for the full year. We've ramped up our production to meet strong multi-year demand for towers, while dedicating specific satellite plants and production base to support our growing industrial fabrications product line.Fourth quarter gearing revenue was down 30% due to the pullback in frac gearing. But notably we remained profitable at the lower production volume because margins were higher and we continue to benefit from the process improvement and cost reductions that have been implemented in recent years.The Gearing segment posted record total operating income for 2019 of $3.2 million, 9.2% of revenue and EBITDA of $5.6 million, 16% of revenue. Industrial Solutions, previously Process System, had flat revenue, but significantly improved EBITDA. The delivery of a $700,000 order to support solar farm installation represented a notable entry point into a new entity.Broadwind’s total adjusted EBITDA of $1.8 million was in line with Q4 guidance and sharply above a weak 2018. I'm proud of the way our Tower business overcame supply chain chaos during the second half of the year and continued to deliver its project 100% on time.The working capital management programs and incentives we put in place a year ago also strengthened our balance sheet. We had available liquidity of $19 million at year end, including $2.5 million of cash.In December 2019 the federal government announced a one year extension of the production tax credit that will provide a 0.015 per kilowatt hour subsidy for new wind projects commenced in 2020 and either completed by the end of 2024 or which are in continuous construction and completed beyond 2020. This tax credit extension provides a boost for onshore wind over the near term and we expect will help the industry to bridge to the emerging offshore wind industry.We were also encouraged to see that the US Tower Trade Coalition received a second favorable preliminary ruling on trade litigation. The challenged towers imported from Vietnam, Korea, Indonesia and Canada. These preliminary tariffs which ranged from a low of 6% to a high of 68% in the case of Vietnam will discourage imports. A favorable final determination due later this year will ensure a level playing field and allow U.S. tower manufacturers to increase production and sale.In closing as this is my final conference call as CEO, I'd like to say that I am deeply grateful for the opportunity to have served our employees. customers and shareholders during my tenure. As we announced last week, I will continue to support Broadwind as the incoming chairman of the board. I'm delighted to turn the reins over to Eric Blashford whose appointment as CEO is effective March 1st. The company is in good hands as we transition into a stronger more profitable future. Thank you.

[Eric Blashford:]

Thank you, Stephanie. And good morning to those joining us on the call. Beginning on slide six. Order activity reached a multi-year high in 2019 with total orders up more than $138 million year over year to $222 million, as we continue to capitalize on improved demand condition within the U.S. onshore wind market.While total wind energy installations increased by approximately 9% in 2019 to 9 gigawatt, Wood Mackenzie projects total installation to grow to 15 gigawatts in 2020, driven mainly by increased activity ahead of the PTC phaseout.Further, as Stephanie mentioned earlier, a trade case was filed against tower importers from several countries, alleging that towers are being imported at less than fair value. As a result of the stronger demand environment and this trade case, we recorded $152 million of tower orders in 2019, most of which will replace by our customers to secure 2020 production slots.Absent any anomalies that we have in 2016, were a three year framework agreement with a major tower customer triggered record orders, we expect that our future orders will be a better representative of annual revenue. The yearend backlog is up 48% and our plants are not operating at vastly improved utilization levels as a result.Moving on to Slide 7. Fourth quarter consolidated sales were $49.3 million, up from $27.2 million, due primarily to improved plant utilization in our heavy fabrication segment both for towers and industrial fabrication. This was our fourth consecutive quarter of exceeding the $40 million per quarter guidance we committed to early this year.Full year sales increased to $178.2 million, a 42% year over year change, again driven by increased plant utilization, the expansion of our customer base into new markets and increased content within our existing customers.Fourth quarter gross margin expanded to 8.1%, up from negative 1.9% in the prior year quarter, again due to improved operating leverage, a more profitable product mix in each of our non-tower product line and better operational performance in each segment.During Q4, we manage through a temporary period of lower margin tower contracts, which weighed on our margins. These tower contracts were executed in 2018 at a time when unfairly priced tower imports were surging into the market. As we move into 2020, we expect margins to improve as the majority of this lower margin contracts were fulfilled in Q4 and further efficiencies should be realized due to increases in production volume.Full year gross margin was 8.6% percent or $15.4 million compared to 2.4% in the prior year. Operating expenses as a percent of sales, excluding onetime items was managed down to 9.2% in Q4 2019 from 15% in the prior year quarter and we expect to manage our operating expenses near these levels throughout 2020.We generated $1.8 million EBITDA in Q4, a $3.5 million increase year over year and for the full year we generated $7.2 million EBITDA compared to a $1 million loss in the prior year. Each of our segments contributed positive EBITDA during the fourth quarter and for the full year.We reported a net loss of $0.09 per share in the fourth quarter versus a net loss per share of $0.79 in the prior year period, due mainly to a non-cash $0.49 per share element in the prior year. The current year quarter included a $0.05 charge related to the accelerated amortization of the Red Wolf training, in conjunction with Broadwind's rebranding initiative.Turning to slide eight and nine. We renamed our heavy fabrication segment in Q4 to coincide with our rebranding initiative. Within this segment, we include tower and industrial fabrication product line. These product lines are produced in both our Manitowoc and Abilene plants.We booked $21 for industrial fabrication orders in 2019, 37% increase year-over-year and up from an annualized run rate of approximately $5 million several years ago. We have been adding machine capability to support OEM and aftermarket customer demand for a large scale fabrication which are used in demanding applications and environments, in mining, construction, material handling, shipbuilding and other industrial markets.One of our significant customers is currently installing a large staging pad adjacent to our plant in Manitowoc to facilitate barge shipments with barge fabrications. This investment positions our facility well to take advantage of our deepwater port and access to the St. Lawrence Seaway.For the quarter heavy fabrications revenue was $37.6 million compared to $12.1 million in the prior year. Our plant utilization increased to 75% in Q4 following near shutdown levels in Q4 2018. The management team rebuilt the business in 2019 with good commercial progress and improved operational performance.Industrial fabrication sales rose to over $5 million in revenue in Q4, an 18% increase year over year and demand for Tower strengthened throughout 2019, leading to over 900 sections produced, a 72% year over year increase.Q4 EBITDA was $2.4 million compared to a loss of $1.3 million in the prior year. The improvement was primarily driven by higher demand, more consistent product growth through our plants. However, supply chain challenges persist, specifically on Tower internal components, which are sourced globally. These supply chain challenges manifest themselves in our margins when the final production process assembly is sub optimized.Full year EBITDA for the segment improved by $5.6 million to $6.7 million. Full year orders were $179.7 million, up from $28.6 million in the prior year, a majority of these orders replaced by our tower customers to support 2020 production and included in the 2019 orders is the addition of two material contracts from new customers, including an order from a turbine OEM that we have not produced for in several years in order to support the repowering of a wind farm.Our backlog ended at $120.3 million due to higher activity levels in our tower product line and a doubling of our industrial fabrication backlog. Book to bill was $1.4 in 2019. We have 65% of our 2020 production in backlog. The best visibility we've had in several years.Turning to slide 10. Our Gearing business performed well in 2019, generating $3.2 million of operating income and a 16% EBITDA margin. Operational improvements, pricing action and an improved product mix led to a $3 million EBITDA improvement year over year and $3.5 million less of sales.Q4 sales declined from $10.9 million in 2018 to $7.6 million in 2019, driven primarily by a reduction of oil and gas frack years. In Q4 oil and gas shipments declined by $5 million.Throughout 2018 and into early 2019, oil and gas frack market was rebuilding its supply chain and locking in production slots in the face of long lead times to support a significant increase in horsepower demand. This market has been historically volatile and is quickly moved into a more challenging environment.These challenges now include more frack fleet utilization, cannibalization of equipment and an overall low CapEx environment. Uncertainty of the timing of the recovery remains, but over time we expect demand to improve as cannibalization can only occur for so long. Despite these headwinds, we have taken share in this market during the past year, which has helped compensate for the overall softness in that market.Orders declined on a year over year basis from $41.6 million to $25.5 million in 2019, driven primarily by lower oil and gas and the absence of a large wind aftermarket multi-year order in the prior year.From a revenue perspective, aftermarket wind gearing, mining, steel and other industrial markets each improved in 2019. Importantly, the product margins in these industries are typically higher due to less foreign competition and growing our customer gearbox product line has been a key focus for us, as margins typically are healthier due to the nature of an engineer product and an increase in our content. We grew this product line by 28% in 2019.Turning to slide 11. We renamed our Process System segment in Q4 as part of our rebranding initiative to Industrial Solutions. Within the Industrial Solutions segment, we provide supply chain solution, inventory management, kitting an assembly services.We primarily serve the combined cycle natural gas turbine market, although we are expanding into other market. Q4 sales was flat year over year and up to $14.7 million for the year, an 18% year over year increase. We achieved our third consecutive positive EBITDA quarter.Following good commercial progress, targeted price action and operational improvement actions taken earlier in the year, we improved EBITDA by $1.6 million year over year, ending the year at $400,000.As a result of the company's rebranding initiative, we accelerated the amortization and the value of the Red Wolf tradename by recording a non-cash $900,000 charge in Q4. Our orders were up 25% year over year, driven by the solar ordering Q4 and growth in natural gas turbine content.This growth was driven by the following item, our primary gas turbine customer recovered share in 2019 back to 2017 levels. We are also encouraged by the positive momentum in global, gas turbine the market, as industry orders of large turbines increased by nearly 50% year over yearAdditionally, we have had success improving our share within our primary customer to provide overseas natural gas turbine content. And lastly, we expanded our customer base, supporting the next two dominant gas turbine OEM, as a result our year over year backlog has risen to $7.7 million, up nearly 25%.Turning to Slide 12, operating working capital at 12/31/2019 was $5.6 million or 35 of sales. Along with Q3, this represents a low point for our business over the past several years. Our cash conversion cycle initiative was effective in 2019. We held cash conversion training events for over 100 employees, driving the connection between daily decision and actions to improve cash flow.Cash conversion declined to average 29 days 2019 compared to 45 days in 2018. This focus will continue in 2020 and will remain a key element of the broader organization independent compensation program.Our DSO declined to 34 days at year and 2019 from 59 days in the prior year. This was driven by improved receivables management and the introduction of additional cash for financing programs from our customers.Days and inventory declined to 64 days from 75 days in the prior year, as we liquidated low cost steel plate that we procured at our customer's request in 2018. Inventory turns are approaching a much healthier six turns.Customer deposits have also been a driver of past working capital fluctuation. Overall customer deposits were flat in the current year, but they have been volatile historically and typically follow order patterns from our customers. We expect this volatility to continue in 2020.Total liquidity which is cash on hand and availability under our credit line remains flat sequentially at $19 million EBITDA improvement year over year on $3.5 million less of sales.Q4 sales declined from $10.9 million in 2018 to $7.6 million to 2019, driven primarily by a reduction of oil and gas frack years. In Q4 oil and gas shipments declined by $5 million. Throughout 2018 and into early 2019 oil and gas frac market was rebuilding its supply chain and locking in production slots in the face of long lead times just reported significant increase in horsepower demand.This market has been historically volatile and has quickly moved into a more challenging environment. These challenges now include more frac fleet utilization, cannibalization of equipment and an overall low CapEx environment. Uncertainty of the timing of the recovery remains, but over time we expect demand to improve as cannibalization can only occur for so long.Despite these headwinds, we have taken share in this market during the past year, which has helped compensate for the overall softness in that market. Orders declined on a year over year basis from $41.6 million to $25.5 million in 2019, driven primarily by lower oil and gas and the absence of a large wind aftermarket multi-year order in the prior year.From a revenue perspective, aftermarket wind gearing, mining, steel and other industrial markets each improved in 2019. Importantly, the product margins in these industries are typically higher due to less foreign competition.In growing our customer gearbox product line has been a key focus for us, as margins typically are healthier due to the nature of an engineer product and an increase in our content. We grew this product line by 28% 2019.Turning to slide 11. We renamed our Process System segment in Q4 as part of our rebranding initiative to Industrial Solutions. Within the Industrial Solutions segment. We provide supply chain solution, inventory management getting and assembly services. We primarily serve the combined cycle natural gas turbine market, although we are expanding into other market.Q4 sales was flat year over year and up to $14.7 million for a year, an 18% year over year increase. We achieved our third consecutive positive EBITDA quarter. Following good commercial progress, targeted price action and operational improvement actions taken earlier in the year, we improved EBITDA by $1.6 million year over year ending the year at $400,000.As a result of the company's rebranding initiative, we accelerated the amortization and the value of Red Wolf training by recording a non-cash $900,000 hour charge in Q4. Our orders were up 25% year over year, driven by the store ordering Q4 and growth in natural gas turbine content.This growth was driven by the following item, our primary gas turbine customer recovered share in 2019 back to 2017 levels. We are also encouraged by the positive momentum in global, gas turbine the market, as industry orders of large turbines increased by nearly 50% year over yearAdditionally, we have had success improving our share within our primary customer to provide overseas natural gas turbine content. And lastly, we expanded our customer base, supporting the next two dominant factors we expect EBITDA to be between $12 million to $14 million in 2020 and for the company to be profitable.I'll turn the call over to Eric Blashford to provide an update on our strategy and market.

[Eric Blashford:]

Thanks, Jason. Welcome to everyone on the call. On March 1st, I have the privilege of assuming leadership of Broadwind as the company's incoming CEO. In the years leading up to this plant leadership transition, I've been fortunate to work closely with Stephanie and our Board of Directors, together we've developed a long term strategic plant for our company, one that positions us with profitable growth in the years to come.Central to this growth strategy is to carefully invest in the right people and process, so we can capture the new and existing market opportunities that are uniquely qualified to serve. We've made early progress on this plan, and as we continue to execute we believe we'll create value for our shareholders.Today, Broadwind is a leading precision manufacturer of structures, equipment and component, serving the clean tech and other specialized industrial application. We've made some great progress in improving our position within the wind energy space, while expanding into other market.However we will stay disciplined in pursuing opportunities where our unique value proposition and experience position us to win. Our strategic focus is supported by a number of tactical priority, diversification of our products markets and customers is vital to our long range plan and we're dedicating a lot of attention to these effort.Additionally we experience good operational leverage when our plants are running at higher volume, so we're expanding our manufacturing capabilities and taking continuous improvement actions to optimize throughput.And finally our company wide focus on cash conversion and prudent balance sheet management will ensure that we have the resources available to capitalize on growth opportunities when they arise.Moving on to our priority. First let's discuss the heavy fabrication segment, which includes two primary product line towers and industrial fabrication. In that business our top priority is to sell all remaining 2020 power capacity as we expand our customer base for both new onshore towers and repowering project.We’re also developing our offshore tower market strategy to address that growing market. We’re unique among all domestic tower manufacturers and that we are very capable plant in Minnesota Wisconsin where some investment we can produce and ship by barge a large tower sections required for offshore turbine installation, all the way to the east coast.We're expanding our engineering and supply chain organization to address both our increasing industrial fabrications product line and on improving towers volume. We recently added a second large machine center at our Manitowoc plant to expand our capabilities to meet increasing demand.Additionally we’re focusing our quality teams on a zero defect initiative to improve throughput of our production line. In our Gearing segment we are accelerating our end market diversification beyond oil and gas and continue to expand our custom gearbox business factors – we expect EBITDA to be between $12 million to $14 million in 2020 and for the company to be profitable.I'll turn the call over to Eric Blashford to provide an update on our strategy in the market.

[Eric Blashford:]

Thanks, Jason. Welcome to everyone on the call on March 1st. I have the privilege of assuming leadership abroad when the company's incoming CEO. In the years leading up to this planned leadership transition, I've been fortunate to work closely with Stephanie and our board of directors. Together, we developed a long term strategic plan for our company one that positions us for profitable growth in the years to come.Central to this growth strategy is to carefully invest in the right people and process, so we can capture the new and existing market opportunities that are uniquely qualified to serve. We've made early progress on this plan. And as we continue to execute we believe we'll create value for our shareholders.Today Broadwind is a leading precision manufacturer of structures, equipment and component, serving the clean tech and other specialized industrial application. We've made some great progress in improving our position within the wind energy space, while expanding into other market.However we will stay disciplined in pursuing opportunities where our unique value proposition and experience position us to win. Our strategic focus is supported by a number of tactical priority, diversification of our products markets and customers is vital to our long range plan and we're dedicating a lot of attention to these effort.Additionally we experience good operational leverage when our plants are running at higher volume, so we're expanding our manufacturing capabilities and taking continuous improvement actions to optimize throughput.And finally our company wide focus on cash conversion and prudent balance sheet management will ensure that we have the resources available to capitalize on growth opportunities when they arise.Moving on to our priority. First let's discuss the heavy fabrication segment, which includes two primary product line towers and industrial fabrication. In that business our top priority is to sell all remaining 2020 power capacity as we expand our customer base for both new onshore towers and repowering project.We’re also developing our offshore tower market strategy to address that growing market. We’re unique among all domestic tower manufacturers and that we are very capable plant in Minnesota Wisconsin where some investment we can produce and ship by barge a large tower sections required for offshore turbine installation, all the way to the east coast.We're expanding our engineering and supply chain organization to address both our increasing industrial fabrications product line and on improving towers volume. We recently added a second large machine center at our Manitowoc plant to expand our capabilities to meet increasing demand.Additionally we’re focusing our quality teams on a zero defect initiative to improve throughput of our production line. In our Gearing segment we are accelerating our end market diversification beyond oil and gas and continue to expand our custom gearbox business by adding sales resources, engineering resources and a third gearbox service repair location to serve the South Eastern market. So now we'll have centers to serve customers in the Midwest, the Northeast and the southeast region.Within the US industrial machinery sector, we’re focusing primarily on the material handling OEM and making good progress. That sector is expected to shrink slightly in 2020 before experiencing a multi-year growth cycle. However even though that sector is expected to weaken a bit, the addressable market is so large there is ample room for us to increase our position with existing customers as we are a new one.The construction sector is expected to retract about 9% in 2020 but some of the business we've enjoyed last year will be in-sourced by our customers. However, growth in other markets combined with customer expansion should more than offset this expected reduction in peak shape work.The turbines and power transmission sector includes natural gas turbine served by our industrial solutions business. But the total sector is expected to decline in the short term before recovering, we are expanding our position with our primary customer which in turn is also growing its market share. Additionally we are now providing content for turbine made by the other two primary OEMs in that segment, once again this is evidence that our customer, product and market diversification efforts are working.We are a diversified manufacturer serving clean tech and other industrial application, our roots are in wind energy with customers to be in high precision and very high quality requirements for large and complex product. They are using these process capabilities to expand into the mining, oil and gas, power generation and material handling market among others.A multi-year revenue diversification plan has shown success, is gaining momentum. We entered 2020 with a strong backlog of $142 million on a very strong order intake. Our PTC extension and favorable preliminary trade case findings open the door for continued growth of the heavy fabrication business, these tailwind combined with a disciplined management of working capital and the overall balance sheet have us well positioned for growth in 2020 and beyond.With that, I will turn back to the operator to open the call for your question.

[Operator:]

Thank you. [Operator Instructions] Our question first question comes from Justin Clare with Roth Capital Partners. Please state your question.

[Justin Clare:]

Hi, everyone. Thanks for taking my questions. So I guess first off orders for heavy fabrication they seem to slow in Q4 relative to very strong order flow in Q2 and Q3. Just wondering if you could help us understand the slowdown. Do you expect this to be a brief pause and then how long do you think it would take before things kind of pick back up here?

[Jason Bonfigt:]

So to Justin, its Jason. Good morning. So we're in discussions with our customers to secure the rest of our 2020 production. And in the prepared remarks we did we did comment that we'd expect that to be kind of have that resolve of the next two to three months. So we'd expect to be announcing more orders shortly.

[Justin Clare:]

Okay. And then for your 2020 guidance, can you help us understand what utilization level you have assumed right now I'm estimating it could be around 75%?

[Jason Bonfigt:]

Within the US industrial machinery sector, we’re focusing primarily on the material handling OEM and making good progress. That sector is expected to shrink slightly in 2020, we're experiencing a multi-year growth cycle. However even though that sector is expected to weaken a bit. The addressable market is so large there is ample room for us to increase our position with existing customers as we are a new oneThe construction sector is expected to retract about 9% in 2020. Some of the business we've enjoyed last year will be in-sourced by our customers. However growth in other markets combined with customer expansion should more than offset this expected reduction in peak shape work.The turbines and power transmission sector includes natural gas turbine in a [indiscernible] by our Industrial Solutions business, but the total sector is expected to decline in the short term before recovering, we are expanding our position with our primary customer which in turn is also growing its market share.Additionally we are now providing content for turbine made by the other two primary OEM in that segment once again this is evidence that our customer product and market diversification efforts are working.We are a diversified manufacturer serving clean tech and other industrial application, our roots are in wind energy with customers to be in high precision and very high quality requirements for large and complex product. They are using these process capabilities to expand into the mining, oil and gas, power generation and material handling market among others.A multi-year revenue diversification plan has shown success, is gaining momentum. We entered 2020 with a strong backlog of $142 million on a very strong order intake. Our PTC extension and favorable preliminary trade case findings open the door for continued growth of the heavy fabrication business, these tailwind combined with a disciplined management of working capital and the overall balance sheet have us well positioned for growth in 2020 and beyond.

[Justin Clare:]

Okay. Got it. And then related to this or did you have more?

[Jason Bonfigt:]

Yes. One of the things which is kind of interesting is we are seeing a resurgence of in-sourcing into the U.S. as a result of trade wars and also this event. So we think that can also be beneficial to us in the overall U.S. manufacturing base.

[Justin Clare:]

Okay. Okay, great. And then in terms of the internals for the towers, I think you mentioned there was a margin headwind there. Can you quantify how big a headwind that might be?

[Stephanie Kushner:]

Basically what happens is that we start producing kind of out of sequence, so instead of having your towers blow right through the - right through the plant -- you're stopping you're pulling them off line and you're installing your internals later when they come in. I think in 2019 we had very little production that was just exactly in process as it should be.I think the impact that we're seeing is probably in the hundreds of thousands of dollars I don't think this bunch is a million dollars in the quarter but we look we're enjoying right now a much smoother production level.

[Justin Clare:]

Okay. Thanks very much for taking my question.

[Operator:]

Thank you. There are no further questions at this time. I'll turn it back to Stephanie Kushner for closing remarks.

[Stephanie Kushner:]

All right. Well thank you very much for your attention. As I'm moving off into retirement I have to say I'm really excited about the progress we've made with all of our core business processes. We've got a strong and capable manufacturing workforce which actually grew about 50% last year. We positioned ourselves with our branding change. We positioned ourselves in the market we're getting some good momentum with our diversification. And at the same time we've strengthened our competitive position in what is still our largest market for wind towers. I've got confidence in the management team, it's a strong team, we're well positioned for a multi-year revenue and earnings growth. So thank you very much for your attention.

[Operator:]

Thank you. This concludes today's conference on parties may disconnect. Have a great day. Thank you.