Key Tronic - Earnings Call - Q3 2025

Executive Summary

• Q3 FY2025 revenue was $112.0M, down 21% year over year (vs. $142.4M) and slightly below the pre-announced range; GAAP EPS was -$0.06, improving from -$0.21 YoY as gross margin expanded to 7.7% from 5.7%.
• Management withdrew revenue and EPS guidance due to tariff volatility; no Q4 FY2025 guidance was provided, citing demand paralysis and cost uncertainty from rapid tariff changes.
• Cost actions drove margin resiliency despite lower volumes; non-recurring items included ~$0.8M severance in Mexico and ~$0.7M balance sheet adjustments; adjusted EPS was -$0.05.
• Strategic capacity expansions in Arkansas and Vietnam, plus new program wins (including an energy resiliency program that could exceed $60M annually when fully ramped) are positioned as medium-term catalysts.

What Went Well and What Went Wrong

What Went Well

• Cost reductions improved gross margin to 7.7% (from 5.7% YoY); operating margin held flat despite revenue compression, reflecting streamlining and headcount reductions across regions.
• New business momentum: wins in telecommunications (~$12M), pest control (~$6M), energy (~$7M initially in Arkansas), consumer ($2–$5M in Arkansas), and a ~$1M design contract potentially scaling to $5–$15M; “These initiatives reflect...customers rebalancing their contract manufacturing”.
• Working capital progress: inventories trending more in line with revenue; nine-month operating cash flow improved to $10.1M vs. $6.1M prior year.

What Went Wrong

• Revenue fell 21% YoY to $112.0M, with management citing “rapid, unprecedented changes in tariffs” causing delays, higher costs, and demand reduction; demand hesitancy and “business paralysis” persisted into Q4 planning.
• Q3 non-recurring costs: ~$0.8M mandated severance (COGS) in Mexico and ~$0.7M balance sheet adjustments (approx. $0.3M COGS / $0.4M OpEx), weighing on profitability; interest expense remained elevated ($2.6M in Q3).
• Guidance risk management: withdrawal of Q4 guidance and earlier Q3 guidance, reflecting tariff uncertainty and potential impacts on pricing, margins, and customer ordering behavior.

Transcript

Operator (participant)

Today, and welcome to the Key Tronic Q3 Fiscal Year 2025 Investor Call. Today's conference is being recorded. After the presentation, we will begin the question-and-answer period. At this time, I'd like to turn the call over to Tony Voorhees. Please go ahead.

Tony Voorhees (CFO)

Good afternoon, everyone. I am Tony Voorhees, Chief Financial Officer of Key Tronic. I would like to thank everyone for joining us today for our investor conference call. Joining me here in our Spokane Valley headquarters is Brett Larsen, our President and Chief Executive Officer. As always, I would like to remind you that during the course of this call, we might make projections or other forward-looking statements regarding future events or the company's future financial performance. Please remember that such statements are only predictions. Actual events or results may differ materially. For more information, you may review the risk factors outlined in the documents the company has filed with the SEC, specifically our latest 10-K and quarterly 10-Qs. Please note that on this call, we will discuss historical, financial, and other statistical information regarding our business and operations. Some of this information is included in today's press release.

During this call, we will also reference slides that accompany our discussion. The slides can be viewed with the webcast, and the link can be found on our investor relations website. In addition, the slides, together with the recorded version of this call, will be available on the investor relations section of our website. We will also discuss certain non-GAAP financial measures on this call. Additional information about these non-GAAP measures and the reconciliations to the most directly comparable GAAP measures are provided in today's press release, which is posted to the investor relations section of our website. For the third quarter of fiscal 2025, we reported total revenue of $112 million compared to $142.4 million in the same period of fiscal 2024.

The revenue for the third quarter of fiscal 2025 was adversely impacted by the worldwide economic disruptions and uncertainty caused by the recent escalation and fluctuations in global tariffs, which resulted in delays, increased costs, and reduced demand from many customers. For the first nine months of fiscal 2025, total revenue was $357.4 million compared to $440.4 million in the same period of fiscal 2024. Gross margins were 7.7%, and operating margins were a -0.4% in the third quarter of fiscal 2025, compared to 5.7% and a -0.4%, respectively, in the same period of fiscal 2024. The year-over-year improvement in gross margins for the third quarter of fiscal 2025 reflects cost-cutting and headcount reductions over the past three quarters.

The results of the third quarter of fiscal 2025 also included government-mandated severance expenses in Mexico during the quarter of approximately $0.8 million and approximately $0.7 million in balance sheet adjustments for inventory and estimated collections from customers. In the coming quarters, we anticipate margins to be strengthened by additional cost reductions and improvements in operating efficiencies resulting from our strategic cost-savings initiatives. As production volumes increase and our recent operational adjustments take full effect, we expect to see greater leverage on fixed costs, enhanced productivity, and a more streamlined supply chain, all contributing to stronger financial performance. That said, the significant tariffs on China and potential tariffs on Mexico and Vietnam create significant uncertainties about costs and our margin performance in coming quarters.

Our net loss was $0.6 million or $0.06 per share for the third quarter of fiscal 2025, compared to a net loss of $2.2 million or $0.21 per share for the same period of fiscal 2024. For the first nine months of fiscal 2025, our net loss was $4.4 million or $0.41 per share, compared to a net loss of $0.8 million or $0.07 per share for the same period of fiscal 2024. The increase in year-to-date net loss is primarily related to the large reduction in revenue, partially offset by the reduction in costs made during the fiscal year. Our adjusted net loss was $0.6 million or $0.05 per share for the third quarter of fiscal 2025, compared to an adjusted net loss of $2.2 million or $0.20 per share for the same period of fiscal 2024.

The adjusted net loss was $3.5 million or $0.32 per share for the first nine months of fiscal 2025, compared to an adjusted net loss of $1 million or $0.09 per share for the same period of fiscal 2024. See non-GAAP financial measures in our earnings release and the appendix to the slide deck for additional information about adjusted net loss and adjusted net loss per share. Turning to the balance sheet, we ended the third quarter of fiscal 2025 by reducing inventory by approximately $16 million or 14% from the same time a year ago. These improvements in inventory levels primarily reflect our strategic initiatives aimed at inventory reductions. We're pleased to see our inventory levels continue to become more in line with our current revenue.

At the same time, the state of the worldwide supply chain still requires that we drive demand for parts differently than in historical periods. Many of our customers have revamped their forecasting methodologies, and we have significantly modified and improved our materials resource planning algorithms. As a result, we should be better equipped for future disruptions in the supply chain and more able to react to changes that may occur with current and future tariff implications as we continue to manage inventory more cost-effectively. During the third quarter, we also reduced our total liabilities by a combined amount of $34.3 million or 14% from a year ago. Our current ratio has remained relatively flat and was 2.7-1, compared to 2.8-1 from a year ago.

At the same time, our accounts receivable DSOs were at 92 days compared to 85 days a year ago, reflecting reductions in net sales at higher rates than reductions in receivables. Operating cash flows were $10.1 million for the first nine months of fiscal year 2025, up from $6.1 million for the same period in fiscal 2024. This reflects our ongoing efforts to manage working capital. Total capital expenditures to date in fiscal year 2025 are about $3 million, and we are expecting CapEx for the full year to be approximately $6 million-$8 million. A significant part of this year and early next year's capital expenditures will be related to our planned expansions in Arkansas and Vietnam.

While we're keeping a careful eye on capital expenditures, we plan to continue to invest selectively in our production equipment, SMT equipment, and plastic molding capabilities, utilize leasing facilities, as well as make efficiency improvements to prepare for growth and add capacity, particularly in our Vietnam and U.S. locations. Moving further into fiscal 2025, we are pleased to continue to see our new programs ramping and cost and efficiency improvements from our recent overhead reductions taking hold. At the same time, we face great uncertainties related to tariffs, which we believe are causing increased costs, production disruptions, and reduced demand for many customers. Although we expect the new tariffs to increase costs for both Key Tronic and our customers, the current economic and political climates are too unpredictable to provide an accurate estimate at this time.

After careful consideration of all relevant factors, we have decided not to provide revenue or earnings guidance for the fourth quarter of fiscal 2025. We expect to see growth in our U.S. and Vietnam production, have a strong pipeline of potential new business, and remain focused on improving profitability. Over the longer term, we believe that we are increasingly well-positioned to win new programs and profitably expand our business. That's it for me, Brett.

Brett Larsen (President and CEO)

Thanks, Tony. The rapid, unprecedented increases and decreases in tariffs have significantly impacted both our business and our customers. As previously announced, we're underway with the build-up of new production capacity in both Arkansas and Vietnam. At the same time, we have continued to streamline our Mexico operations with further headcount reductions to enhance efficiency, building on similar actions in recent periods. The sudden increases and decreases in tariffs have unfortunately impacted production across all of our facilities, especially the tariffs on Chinese components. Clearly, these global tariff wars are outside of our control and will similarly impact all other manufacturers as well. We are doing our best to work with suppliers and with our customers on options for manufacturing their products from different locations.

To manage this process efficiently, we have been proactively expanding our production footprint in strategic locations to better serve our customers and improve flexibility offered to our customers in choosing which locations to build their product. Our expanding footprint enables us to offer improved mitigation options, particularly when our customers consider the varying implications of current and future potential tariffs. We're excited to have announced plans to add, as previously discussed, additional capacity in key regions. In the U.S., we're expanding our clean tech, cutting-edge manufacturing operations in Arkansas. We expect to invest more than $28 million in our new flagship manufacturing and research and development location, which we believe should create over 400 new jobs in the next five years. We're delighted to be enhancing also our operations in a region where we have maintained a long-standing presence and a strong team and can benefit from a business-friendly environment.

Our U.S.-based production provides customers with outstanding flexibility, engineering support, and ease of communication. In Vietnam, we have ample space in our current facility to more than double our manufacturing capacity. Our Vietnam-based production offers the high-quality, low-cost choice that was associated with China and Mexico in the past. In coming years, we expect our Vietnam facility to play a major role in our growth. We anticipate that these new facilities in the U.S. and Vietnam will come online during fiscal 2026 and enable us to benefit from customer demand for rebalancing their contract manufacturing and mitigate the severe impact and uncertainties surrounding the tariffs on goods and critical components manufactured in China and in other locations. Our customers are very excited about our plans to increase our production capabilities in the U.S. and in Vietnam.

These initiatives reflect both the long-standing trends to move more of their production away from China, as well as de-risk the potential adverse impact of tariff increases and geopolitical tension. At the same time, we are seeing a sustained trend of wage increases in Mexico. As it has become clear that these changes in the base cost of Mexican production are long-standing, we have continued to streamline our operations in order to be more cost-competitive in the market. Our improved cost structure in Mexico is anticipated to lead to new programs and growth over the longer term. During the third quarter of fiscal 2025, we continued to win new programs in telecommunications, pest control, energy storage, medical technology, and temperature-controlled shipping solutions. Despite the many uncertainties and disruptions in global markets, our strong pipeline of potential new business underscores the continued trend towards onshoring and dual sourcing of contract manufacturing.

We expect that global tariff wars and geopolitical tensions will continue to drive OEMs to re-examine their traditional outsourcing strategies. Over time, the decision to onshore production is becoming more widely accepted as a smart long-term strategy. The combination of our flexible global footprint and our expansive design capabilities continues to be extremely effective in capturing new programs. Many of our large and medium-sized manufacturing program wins are predicated on Key Tronic's deep and broad design services. Once we have completed a design and ramped it into production, we believe our knowledge of the program's specific design challenges makes that business extremely sticky. We anticipate a continued increase in the number and capability of our design engineers in coming quarters.

We also continue to invest in vertical integration and manufacturing process knowledge, including a wide range of plastic molding, injection, blow, gas-assist, multi-shot, as well as PCB assembly, metal forming, painting and coating, complex high-volume automated assembly, and the design, construction, and operation of complicated test equipment. We believe this expertise will increasingly set us apart from our competitors of similar size. While the global tariff policies are creating major logistical challenges for us, our suppliers, and our customers, we believe geopolitical tensions and heightened concern about tariff and supply chains will continue to drive the favorable trend of contract manufacturing returning to North America, as well as to our expanding Vietnam facilities.

We believe these tariff challenges were a significant factor in component delays and reduced demand for many of our customers, which hammered our growth and profitability in the third quarter of fiscal 2025 and continued to disrupt our business even in the fourth quarter. Nevertheless, we continue to rebalance our manufacturing across our facilities in the U.S. and Vietnam. We are, however, excited to see the results of right-sizing our operations and the increased generation of cash flow over recent quarters. We're moving forward with a strong pipeline of potential new business, and we're seeing significant improvements in our operating efficiencies. Over the long term, we remain very encouraged by our cost reductions made over the past 18 months to become more market competitive. Our increasing cash flow generated from operations, enhanced global manufacturing footprint, and the innovation from our design engineering team.

All of these initiatives have increased our potential for profitable growth. This concludes the formal portion of our presentation. Tony and I will now be pleased to answer your questions.

Operator (participant)

Thank you. If you would like to signal with questions, please press star one on your touch-tone telephone. If you're joining us today using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that will be star one if you would like to signal with questions. The first question will come from Bill Dezellem with Titan Capital.

Bill Dezellem (President and Chief Investment Officer)

Thank you. First of all, let me apologize. I am traveling, and so if I'm not asking questions as I might, that's my excuse. First of all, would you please walk us through the five new business wins that you discussed and share the dollar amount that you anticipate each to be, number one? And then number two, if there are any interesting insights that any of those program wins will provide us or that are informative, share those with us if you can, please.

Brett Larsen (President and CEO)

No, absolutely. Bill, probably the first one is a $12 million telecommunications program that will be manufactured down in our Mexico facility. It is the first of what we're hoping is many programs from a fairly large conglomerate. This will be the first order from them. We're hoping to ramp that towards the second quarter of fiscal 2026 and be in full production by this time next year. The second one was as well a fairly large Fortune 500 company that is allowing us to start building some pest control devices. We've been chasing this one for quite some time. Excited about this opportunity. It's about a $6 million opportunity that will be in Vietnam. Hoping that we actually land some additional programs from this customer at other of our Key Tronic facilities as well. The third is in energy combined right now.

It's about a $7 million program to be placed in our new facility down in Arkansas. It's currently in the development design stage. Not expecting any meaningful production for at least six months on this one, but excited about the opportunity for this and definitely is helping nearshore some of their intent to manufacture in the U.S. Where am I at? That would be the third. The fourth is a consumer product, roughly $2 million-$5 million. That as well is in Arkansas. The fifth is kind of unique, that's a design contract, which is starting out to our design and engineering folks, roughly around a $1 million contract. Once that goes into production, that could be easily a $5 million-$15 million program, which will definitely disrupt a little bit of the market that they're hoping to penetrate.

Capitalized, and I think that's a good demonstration that our design team continues to be a sales channel for future production.

Bill Dezellem (President and Chief Investment Officer)

That's very helpful. Thank you. You mentioned a couple of Fortune 500 companies. That's a little bit unusual compared to what we are accustomed to hearing. Maybe you're just sharing something different, or maybe that is unique. If it is unique, would you walk through kind of what maybe has changed?

Brett Larsen (President and CEO)

Yeah, Bill, I'm not sure if that's unique. We deal with a variety of different size divisions and companies within Fortune 500 conglomerates. What's great, though, is once you get your foot in the door, once you become a known supplier or an approved vendor, it really does open the door for a lot of cultivating not only within that division, but other sister companies as long as you're able to perform and do well. Those are very exciting for us because those really kind of are an open door to additional opportunities down the road.

Bill Dezellem (President and Chief Investment Officer)

Great. Thank you. Given the uncertainty in the macro environment, would you please discuss—I believe it was a $60 million prospect that you had—sorry, it was a win that you had, not a prospect—that you had in the past that you anticipated would be ramping at some point in the coming quarters. What impact, if any, the macro environment volatility is or is not having on that?

Brett Larsen (President and CEO)

That's a unique program. I think it is not going to have an impact on that. I think one of the reasons they chose to go with Key Tronic was not only our design capabilities, but then also our global manufacturing footprint. Initially, we were planning to build it in one location. With the uncertainties of tariffs, we have now moved to a new location. That is actually going to start generating income in our first quarter of fiscal 2026. It will be a ramp, but I am still expecting that at some point to still approach that $60 million. They have recently received a fairly large award from a very well-known utility, and I think that will just continue to grow. I think that is a bright spot, and we are expecting that to have some revenue in our first quarter of fiscal 2026.

Bill Dezellem (President and Chief Investment Officer)

When would you expect that to be ramped to its full $60 million?

Brett Larsen (President and CEO)

How did I know you were going to ask that, Bill? My expectation is that it's going to take probably 12-18 months to get there.

Bill Dezellem (President and Chief Investment Officer)

Great. Thank you. Appreciate the comments.

Brett Larsen (President and CEO)

Thanks, Bill.

Operator (participant)

As a reminder, if you would like to signal with questions, please press star 1 on your touch-tone telephone. Again, that is star one if you would like to signal with questions. Our next question will come from George Bellas with MKH Management.

George Bellas (Analyst)

Hello, Brett. Hi, Tony.

Brett Larsen (President and CEO)

Hey, George.

George Bellas (Analyst)

Quick question about the two unusual items that you guys flagged out. The seventh in Mexico, is that in cost of goods sold?

Brett Larsen (President and CEO)

It is.

George Bellas (Analyst)

Okay. The other 0.7, it seems to be partly cost of goods sold, partly OpEx. Would that be right as well?

Brett Larsen (President and CEO)

Yeah.

George Bellas (Analyst)

What would be the mix?

Brett Larsen (President and CEO)

I would say it's about $400,000 in OpEx, $300,000 in cost of goods.

George Bellas (Analyst)

Okay. So then if we sort of do an adjusted gross profit, we have to add back roughly $1.1 million. So you get to roughly $9.7 million and an adjusted gross margin of roughly 8.6%, I believe. 8.6%, 8.7%. That is on a significantly drop in revenue over the last few years. Where could your gross margin go as you grow and, let's say, get back to $140 million?

Brett Larsen (President and CEO)

George, I think that is as well part the silver lining of seeing some reductions in revenue. While it's hammered our profitability during this fiscal year, I think the reductions that have been made to date and are currently being made will only further improve anticipated improvements in gross margin. Another way, as you've mentioned, with incremental revenue, once you have your fixed costs covered, once you've hit the break-even point and you're adding additional revenue above and beyond that, you should have an incremental margin well above the 10%.

It's tough for me at this point to project what that could be, but I will say that what we've done over the last 18 months has enabled us to, with some growth, if we're able to actually achieve some revenue growth as we hope and expect, not hope, we anticipate and are driving towards, that'll have a robust impact gross margin. My expectation is that we should exceed 10% gross margin at some point.

George Bellas (Analyst)

What's the revenue required to exceed 10% in your view?

Brett Larsen (President and CEO)

That's largely dependent on a whole litany of factors. It's tough to just give you a dollar amount with the uncertainty in tariffs. Will we be required to get some pricing decreases? There's just a whole litany of things, but if all things were the same, another $20 million of revenue, at least on paper, would generate somewhere near 10% gross margin.

George Bellas (Analyst)

Overall, then the entire operation is at 10%?

Brett Larsen (President and CEO)

Yeah.

George Bellas (Analyst)

Yeah. Okay. Okay. Good to know. Is there a way to look at the revenue and the revenue change and try to put that in various buckets, meaning reduced demand from existing customers, churn, new revenue from new customers? Is there a way to sort of break that down? Is that a useful exercise maybe? I do not know. I think it is. Is there any way you can add some color to that?

Brett Larsen (President and CEO)

Yeah. I guess there has definitely been a step function in reduction in demand from existing customers, but kind of offsetting a portion of that have been new program wins. That's the case each and every quarter. It seems like within the last 12 months, there's been a significant reduction in existing customers well beyond what we've seen historically. Of course, internally, we analyze that and try to determine what are we doing wrong or is this just some bad circumstances of a macroeconomic environment. It's across the board. There's a few that we probably should have done a better job earlier on to ensure that we'd get the incumbent or the new generation of that device or program. Some of it was end of life, and really the demand has continued to decrease over time.

There's a few in there that we've actually asked for us to no longer manufacture because they were difficult to work with, and we saw some risk, some financial risk. It is a whole number of items, but I will tell you the last 12 months, definitely, we've seen more historical reduction of existing program revenue than what we typically see.

George Bellas (Analyst)

Right. As you look at that, it doesn't feel like it's something that you have done or something you have missed in particular?

Brett Larsen (President and CEO)

No.

George Bellas (Analyst)

You feel like it's more reduction among your customer base or?

Brett Larsen (President and CEO)

The biggest point that I think we gleaned out of that is we needed to make sure that we were competitive from a cost structure in the market. That also has driven us to be far more efficient, reduce some headcounts, and make sure that we remain market competitive, particularly down in Mexico. I think that was something we definitely learned from this. The others were equally driving some more U.S. manufacturing capabilities. Similarly, in Vietnam. I think as well, making sure that we're a part of the design function of our customers. That definitely makes that business far stickier. If you're helping them with designs, you're seeing the next generation well before they may be out quoting that out on the market with other CMs.

George Bellas (Analyst)

Yeah. Interesting. Okay. Maybe a final question on working capital. You guys have done a lot of progress this year, but it seems like there's still a lot of progress that could be done. If you look at inventory and AR, do you expect—I mean, I think hopefully you will have some revenue growth, so that will have an impact on both of that. How much better can you perform there? Maybe on the inventory, what percentage of the BOMs of your customers do you manage or is managed by your customer, and does that make a real big difference?

Brett Larsen (President and CEO)

Predominantly, all of our customers' bill of materials are managed by Key Tronic. There are a few components here or there, some custom mechanical or something. Sometimes we'll get that consigned by our customers. I would say over 90% of the bill of materials are managed by Key Tronic. Now, do we anticipate some incremental improvement in working capital? Yes. That'll be largely dependent as well on how quickly we are able to ramp revenue in a positive direction. I think the goal to have inventory at four turns is something that we're continuing to drive towards.

George Bellas (Analyst)

What is the churn? How do you calculate the churn right now?

Brett Larsen (President and CEO)

Tony, do you know what the specific terms are? But roughly, you should have an inventory at any given point between raw materials, WIP, and finished goods of about a quarter's worth of revenue.

George Bellas (Analyst)

Right. Okay. Great. Thank you.

Operator (participant)

Our next question will come from Sheldon Grodsky with Grodsky Associates.

Sheldon Grodsky (President)

Hello, everybody. It's been quite a struggle here for Key Tronic for the last couple of years. Let me ask a quick question since I'm in the camp of investors who think that we might be slipping into a recession in the near term. You have a new credit agreement, and you're doing a major expansion at this time. Are you concerned? Do you have leeway under the credit agreement if you continue to have disappointing quarters, do you think, or are there hair-trigger provisions that might put you into early defaults if you have small losses?

Brett Larsen (President and CEO)

Sheldon, with that, I'm glad that we were able to refinance some new debt a few quarters ago. It is largely dependent on availability, not necessarily the profitability of the company. Right now, there's ample availability. We're continuing to drive debt down. We're expecting that as well over time. Cash is far less of a concern right now than it was, say, a year ago. We've got a good, strong relationship with the new debtors and have a line of sight of continuing to provide for all of the expected CapEx. No, that is not—while it's always a concern, it's definitely not the same level of concern where we were a year ago.

Sheldon Grodsky (President)

Okay. Obviously, you've had declines in revenues recently for a variety of reasons. I mean, effectively, you're already in a recession, just going based on the gross numbers, the top line. Does it feel like things are picking up from that, or just it's so crazy that you can't tell very much of anything from your customers anymore? I mean, I understand if you use the term in the press release that—where was it? You were talking about paralysis or hesitancy and business paralysis in many of our customers' businesses. Is that getting better or worse now? I mean, do you have a sense that people can live with it?

Brett Larsen (President and CEO)

Yeah. Sheldon, there definitely is a hesitancy to make business decisions in uncertainty. We've definitely seen that over the past few months. There appears at this point to be somewhat of a balancing of that, and is this chaos now the new normal? I don't know. I will tell you we have definitely seen within the last few months some hesitancy to move forward on projects that should have already been started and even some new business programs that we would have anticipated to have already building some production. Equally, we're trying to manage and look at our customers' inventories. I see some going up. I see some coming down. For a large part, I think we have developed ourselves to be able to survive on far less revenue, and we can continue to do that as necessary.

I'm expecting actually some growth even in light of a potential recession in next fiscal.

Bill Dezellem (President and Chief Investment Officer)

Okay. Let's hope you're right. Okay. I'll let some of those get on.

Operator (participant)

That does conclude the question-and-answer session. I'll now turn the conference back over to Mr. Larsen for any additional or closing remarks.

Brett Larsen (President and CEO)

We appreciate the time today. Tony and I look forward to discussing next quarter's results a quarter from now. Thank you.

Operator (participant)

Thank you. That does conclude today's conference. We do thank you for your participation. Have an excellent day.