Insight Enterprises - Earnings Call - Q2 2021
August 5, 2021
Transcript
Speaker 0
Good day, and thank you for standing by. Welcome to the Insight Enterprises Incorporated Second Quarter twenty twenty one Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. I would now like to hand the conference over to your speaker today, Ms.
Glynis Brine, Chief Financial Officer. Please go ahead. Thank you, Pasha. Welcome, everyone, and thank you for joining the Insight Enterprises earnings conference call. Today, we will be discussing the company's operating results for the quarter ended 06/30/2021.
I'm Glynis Brine, Chief Financial Officer of Insight, and joining me is Ken Lamnick, President and Chief Executive Officer. If you do not have a copy of the earnings release and the accompanying slide presentation that were posted this morning and filed with the Securities and Exchange Commission on Form eight ks, you will find them on our website at insight.com under our Investor Relations section. Today's call, including the question and answer period, is being webcast live and can be accessed via the Investor Relations page of our website at insight.com. An archived copy of the conference call will be available approximately two hours after completion of the call and will remain on our website for a limited time. This conference call and the associated webcast contain time sensitive information that is accurate only as of today, 08/05/2021.
This call is the property of Insight Enterprises. Any redistribution, retransmission or rebroadcast of this call in any form without the express written consent of Insight Enterprises is strictly prohibited. In today's conference call, we will be referring to non GAAP financial measures as we discuss the second quarter twenty twenty one financial results. When referring to non GAAP measures, we will refer to such measures as adjusted. Non GAAP measures to be discussed on today's call include adjusted selling and administrative expenses, also referred to as adjusted SG and A adjusted earnings from operations adjusted earnings before interest, taxes, depreciation and amortization, also referred to as adjusted EBITDA adjusted diluted earnings per share including the benefit of the note hedge on our convertible debt and also adjusted return on invested capital.
You will find a reconciliation of these adjusted measures to our GAAP to our actual GAAP results included in either the press release or the accompanying slide presentation issued earlier today. Also, please note that unless highlighted as constant currency, all amounts and growth rates are discussed in U. S. Dollar terms. As a reminder, all forward looking statements that are made during this conference call are subject to risks and uncertainties that could cause our actual results to differ materially.
These risks are discussed in today's press release and in greater detail on our most recently filed periodic reports and subsequent filings with the SEC. With that, I will now turn the call over to Ken. And if you're following along with the slide presentation, we will begin on Slide four. Ken?
Speaker 1
It's good morning, and thank you for joining us today to discuss our second quarter twenty twenty one operating results. I want to start off by thanking our teammates for the Harmony heart and most notably the hunger they've shown through the first half of the year. Through these values, are executing on the strategy that will help us and our clients accelerate into the technology of tomorrow. While supply constraints continue to be a challenge during the quarter, we remain focused on executing on our financial and operating priorities for the year and supporting our clients' inventory needs.
During the second quarter, I'm pleased to report that our business saw double digit top line growth across all major categories of net sales. Gross margin was 16.4%, strong performance given compression of margins due to increased hardware net sales. Adjusted earnings from operations increased 6% and drove adjusted return on invested capital to 13.6%, up from 12.1% in the second quarter last year. Hardware booking trends continued strong throughout the second quarter. Given the ongoing supply constraints and longer lead times required for hardware orders, we're supporting our clients by helping them forecast their inventory needs, ensuring they're well positioned in the queue for fulfillment in amounts necessary to meet those needs.
As a result, we exited the second quarter with further elevated backlog from levels at the start of the quarter. We expect about 50% of this backlog will ship in Q3. We're pleased to see the pipeline for future sales build to healthy levels for the second half of the year and into 2022. Clients continue to focus on business agility and continuity by leveraging cloud solutions. Our clear strategy and deep expertise delivering digital solutions allowed us to grow cloud sales of SaaS and Infrastructure as a Service high double digits in the quarter.
This drove cloud gross profit to 22%, up more than 300 basis points year over year for the trailing twelve months. We're happy with our team's continued operational execution in the second quarter and our visibility to the second half gives us confidence in guiding net sales at the high end of our range as well as increasing our EPS guidance. As we help companies shift to cloud based solutions and modernize their infrastructure, we're also engaged in discussions around finding solutions that help clients incorporate emerging technology into the business operations. We believe these companies that maximize the value of IT and data will emerge as the new leaders. As the business and technology landscapes have drastically changed over the past fifteen months, we've been well positioned to address the greatest needs of organizations and to help them make sense of operations such as accelerating the intelligent edge and using artificial intelligence or AI and the Internet of Things to scale and leverage data to drive real time decision making, which is essential to achieving growth, cost savings and market differentiation.
Recently, we were named NVIDIA's 2020 Software Partner of the Year. As an advanced technology partner, we use their technology to support organizations and utilize a deep learning to gain a competitive advantage. Our technical consultants and engineers help clients modernize their infrastructure to support cutting edge AI, machine learning, and deep learning solutions tailored to individual client needs. One example of a type of AI that allows computers to understand and label images is computer vision. Computer vision uses advanced analytics to analyze, understand and respond to digital images.
Each solution is tested and validated at our in house AI proof of concept lab utilizing the client's data sets and the latest generation of AI ready platforms, including the NVIDIA DGX system to reduce risk and ensure smooth deployments. If you recall, we were recognized in Q4 twenty twenty as the Forrester New Wave for computer vision consultancies as a strong performer, highlighting their expertise in computer vision solutions. As companies move to a more digital way of life, we've established the expertise and proven strategies to guide organizations through digital first business practices. As technology has the potential to radically transform industries, we know it's important to better understand the awareness, adoption and perceptions of these new technologies. This drove us to commission IDG to conduct a survey of business and IT leaders on their perceptions of computer vision.
Survey results indicated that the overwhelming majority of respondents agree that computer vision has incredible potential to transform key areas of business. This technology uses predictive analytics to improve security and employee safety to detect defects during production and manufacturing and improve customer experiences. For example, we recently worked with a printer ink manufacturer to use computer vision to count pallets with a quick snap of photos, enabling people including those with disabilities to take on greater warehouse responsibilities while creating more accurate inventory counts. Similarly, we've helped a steel company through computer vision identify hazardous materials before they inadvertently land in the smelter to be recycled. I've discussed before the pandemic accelerated technology and our ability to pivot and meet clients where they are today, while helping them prepare for tomorrow, has been instrumental in making us the technology partner of choice for our clients.
Our success is rooted in differentiation from our competition through our company values, industry expertise, diverse solution offerings and our ability to create meaningful connections. It is in these connections that we showcase our ability to meet clients' needs through the use of multiple solutions. For example, our technical consultants designed a greenfield data center to support a client's current infrastructure. During the evaluation process, our consultants identified opportunities for the clients to modernize their out of date applications by utilizing our digital technology experts. Working with our client, our architecture team developed solutions that fit the environment.
The data center solution includes a new hyper converged infrastructure, Dell core switches, VMware rightsizing the Microsoft licensing, and networking infrastructure deployment services through the data center architecture team. The client will also benefit from Insight managed one call support services, We started off as a single solution ended up as a multi phase approach with us providing services across our solution areas. Additionally, the client requested that we evaluate their security strategy. Believe the strategic investments we made in our go to market solution areas over the last several years position us well to execute our business goals. Our solution teams are key to achieving our long term priorities and driving value for our shareholders.
Given our strong execution bringing cloud and digital solutions to our clients, we're proud to announce we improved 49 spots in Fortune's twenty twenty one ranking, 500 Fortune 500 rankings currently at number three sixty. We were only one of 11 providers globally to be recognized in the Gartner Magic Quadrant for Software Asset Management Services, and we earned four of Microsoft's most prestigious awards after a record setting year. Before I turn the call over to Glynis, I'd like to acknowledge our teammates who were recently recognized as top leaders in their respective fields. Glynis was recognized among the top 100 women leaders in technology in 2021 by women we admire and also honored as one of Phoenix Business Journal's most admired leaders. Our chief information officer, Jeff Shumway, was named global CIO of the year by Arizona CIO.
And his 16 teammates were recognized with CRN Women in the Channel Awards, and four of those have been named to CRN's Power 60 solution providers. At Insight, we're proud of our commitment to embrace diverse backgrounds, appreciate diverse skill sets and respect additional viewpoints. Embracing diversity is important to our corporate culture and our focus in this area was recognized in Forbes 2021 America's Best Employers for Diversity. We have so much to be proud of at Insight, proud of our brand, our culture and our values and especially our teammates. I'll now hand the call over to Glynis to review the details of our financial performance.
Speaker 0
Thank you, Ken. In the 2021, we executed well against our strategic and financial priorities posting continued growth across our business one year out from our lowest point of the pandemic in Q2 twenty twenty. We accomplished this while continuing to invest in strategic areas to scale and support our future growth. Moving on to Slides twelve and thirteen for consolidated results. Our net sales in the second quarter were $2,200,000,000 up 13% in U.
S. Dollars and 10% in constant currency compared to the 2020 across all categories. Gross margin was 16.4%. In light of increased hardware net sales, which compressed our margins, we saw only a 10 basis point contraction year to year. SG and A expenses were up 10.5% year over year in constant currency and 14.2% in U.
S. Dollars. As a percentage of net sales, adjusted SG and A was 12.1%, up 30 basis points year over year, but in line with our expectations for the quarter. As a percentage of net sales, SG and A on a GAAP basis was 12.4%, up 10 basis points year over year. For the full year, we continue to expect adjusted SG and A as a percentage of net sales will be 11.7%.
Adjusted earnings from operations was $97,700,000 up 6% year over year compared to a 19% increase on a GAAP basis. And adjusted diluted earnings per share was $1.91 and $1.58 per share on a GAAP basis. Results for each of our operating segments were as follows. Let's start with North America operating results on Slide 14. Net sales were $1,800,000,000 in the second quarter, up 14% year over year due to increase in software licensing sales, hardware sales driven by devices, networking and storage solutions and services driven by cloud solutions.
Similar to last quarter, as a result of supply constraints and extended product lead times, we're entering the third quarter with higher backlog. Gross profit of $279,000,000 in North America was up 14% year over year and gross margin was 15.8% compared to 15.9% in the prior year. North America's adjusted SG and A increased 16% year over year to 11.7% of net sales, driven by increases in overall teammate headcount and variable compensation due to higher gross profit attainment and also new variable compensation plans implemented January 1. SG and A as a percentage of net sales on a GAAP basis was 12.2% in the second quarter. For the full year of 2021, we continue to expect adjusted SG and A as a percent of sales will be 11.3 Adjusted earnings from operations increased 8% year over year to $72,000,000 for the quarter.
On a GAAP basis, earnings from operations increased 23% year over year to $64,000,000 Moving on to EMEA on Slide 15. Net sales in the second quarter decreased 4% year over year in constant currency to $417,000,000 while gross profit decreased 3% year over year, also in constant currency. These results were against a strong compare in the prior year, where EMEA saw growth in both net sales and gross profit year over year. When combined with operating leverage from lower SG and A, this led to adjusted earnings from operations of $20,000,000 in the current quarter, a decrease of $2,400,000 in constant currency. Moving on to APAC on Slide 16.
Net sales of $52,500,000 and gross profit of $14,300,000 in the second quarter increased 2411%, respectively, year over year in constant currency due to higher sales across all categories. We made investments in the business resulting in a 14% increase in constant currency and SG and A and this led to adjusted earnings from operations of $5,000,000 in the quarter, up 6% in constant currency. Moving on to our tax rate. Our effective tax rate for the 2021 was 25.4% compared to 26.2% in the prior year quarter. The lower effective tax rate was primarily due to foreign rate adjustments, offset in part by an increase in the state income tax base.
Turning to the details of our second quarter cash flow performance on Slide 17. Year to date through the 2021, we primarily invested in our operations generating cash flow of $5,000,000 compared to $498,000,000 during the same period last year. This decrease year to year is due to changes in partner mix and net sales growth with our inverted cash cycle, which resulted in lower cash from operations generated in the 2021 compared to the 2020. In addition, there were discrete items in 2020 that contributed the majority of the variance, approximately $280,000,000 This consisted of partner payment deferrals and a large customer advance payment in the prior year with no comparable activity in the current year and deferred and in some cases reduced federal and other taxes to COVID-nineteen relief measures in the 2020. We previously disclosed an expectation that cash flow from operations would normalize in 2021 as our business grows.
We now expect cash flow from operations will range between 125,000,000 and $175,000,000 as a result of double digit hardware growth experienced in Q2 and expected to continue in the 2021, higher inventory to support client deployments as well as changes to the partner mix in our with our inverted cash cycle. In the 2021, we invested approximately $17,000,000 in capital expenditures, mainly related to technology investments. We also increased received $27,000,000 in net proceeds from the sale of three buildings in Tempe, Arizona and our property in Woodbridge, Illinois. Lastly, we used $50,000,000 to repurchase shares of our common stock. We now have remaining authorization of $75,000,000 The guidance we're providing does not include the impact of any additional repurchases.
As of June 3021, we had over $1,000,000,000 available under our ABL facility and we have ample capacity to fund future growth. At the end of the second quarter, we had a cash balance of $108,000,000 of which $76,000,000 was resident in our foreign subsidiaries. We had $484,000,000 of outstanding debt including our senior convertible notes at the end of the quarter compared to prior year cash balance of $154,000,000 and total debt of $437,000,000 Moving on to liquidity on Slide 18, we're exiting the quarter with a leverage position of 1.3 times debt to cash flows or EBITDA, which is well within our comfort level. Under our ABL agreement, our primary compliance covenant is a fixed charge coverage ratio, which includes trailing twelve month EBITDA coverage over capital expenditures, taxes and cash interest. As of June 30, we are at 4.5x the minimum requirement of 1x, and we're confident we can support our capital requirements and liquidity needs.
Moving on to our full year cash full year guidance on Slide 19. Today, we're increasing our previously issued guidance for 2021. We expect to deliver net sales growth at the high end of our previously stated guidance, which is between 4% to 8% over the prior year. We now expect adjusted diluted earnings per share the full year of 2021 to be between $6.75 and $6.9 which includes an expected $06 impact of the share repurchase already completed. With this outlook assumes interest expense between 25 to $28,000,000 and effective tax rate of 25 to $26,000,000 for the full year, capital expenditures of 65 to $75,000,000 including the build out of our new corporate headquarters, and an average share count for the full year of 35,500,000.0 shares.
This outlook excludes the following acquisition related intangible, amortization expense of $32,000,000 the noncash convertible debt discount and issuance costs reported as part of interest expense of approximately $12,000,000 and assumes no acquisition related or severance restructuring expenses. I will now turn the call back to Ken.
Speaker 1
Thank you, Glynis. I want to thank our teammates across the world for not making Insight one of the best places work, but also making us the technology partner of choice for our clients, helping to maximize the value of technology today and accelerating for tomorrow. Currently, analysts expect high single digit growth across hardware, software and services sales. While it remains unclear how the COVID variants could impact the year, we believe we are well positioned to compete in the areas our clients need including improving the workforce experience, modernizing their data centers, securing their critical platforms and realizing their opportunity to go digital. In closing, I announced my retirement from my last call.
The board continues to make progress in the evaluation of internal and external candidates in the search for my replacement. It's a very critical search for insight, and I'll continue to work with the board to identify the new CEO. I remain committed to leading this team until the right successor is appointed. That concludes my comments. Thank you again for joining us today.
I'll now open up your line for questions.
Speaker 0
And your first question is from the line of Kathryn Huntley with Raymond James.
Speaker 2
Hi. This is Catherine on for Adam. Thanks for taking our questions. Can you please talk about PC demand specifically digging into notebooks? Are there any signs of supply catching up with demand?
We have started to hear that Chromebooks specifically has been slightly alleviated in supply. And just wondering if you heard the same.
Speaker 1
Yeah. Thanks, Catherine. Yeah. Definitely on the Chromebook front, there's no question that supply has caught up pretty significantly there from where it was a quarter ago. Expectations are, of course, you'll still see with the new infrastructure bills coming, still, you know, increased spending and demand.
But we do believe it go more towards a normal cycle in the education market for Chromebooks. But no question that there's significant more availability for Chromebooks, not the same situation on the Windows platforms. Those still continue to be more in tighter supply. I'd say it's not a panic situation by any means. I think it's been well managed by the suppliers in regards to the IC shortages.
We're seeing certainly slight increases in ASPs because of that as well. And of course, we're very much encouraging our clients to give us more advanced lead times and bookings for that. So we're seeing that come into play. So certainly tight. I think it's going to be, as you've seen, tight for the next four quarters in that regard.
But I think it's been, I'd say manageable, at this stage.
Speaker 2
Okay. Thank you for that color. And then you also highlighted cloud, but can you highlight other areas of consumer spending and how they're changing as the year progresses?
Speaker 1
Yeah. I would say that, certainly cloud has continued to accelerate, as we've all seen in many, many areas. And, you know, we're pleased that, you know, as we mentioned, this now represents 22% of our gross profit dollars coming from these infrastructure and SaaS cloud solutions in the market. So that continues to be an area of focus and services solutions for us. So no question that's continuing to accelerate.
You'd already touched on, of course, the the notebook migration that continues to move very, very fast as well. And we're seeing the infrastructure spend start to increase as well as people are starting to invest into the data centers and into the, you know, private infrastructure. And then, of course, security is continuing to be very, very robust with all the things that we're seeing with the continuation of cyber attacks and so forth. So those are key areas. And then as I mentioned in my script notes, of course, all companies really becoming more digital.
So we see continued acceleration there, very, very high demand on all of our, you know, 1,500 software solution architect solutions, very, very high demand on their skills and what they're doing to really help clients modernize.
Speaker 2
Thanks.
Speaker 0
Your next question is from the line of Matt Sheerin with Stifel.
Speaker 3
Yes. Good morning, everyone. Ken, I I wanted to just follow-up on on the last question regarding, particularly on the hardware side, the demand, situation, both from you talked about backlog, being up, bookings being up. How much of that is related to the client devices like notebooks versus infrastructure, servers, storage, networking?
Speaker 1
Yeah. Certainly, what you'll see if you look at NPD data is what they'll show is, Matt, is that, you know, all the categories were up substantially in the second quarter. The only one that declined really was desktops. And, of course, as you know, that's been migrating more towards notebooks. But when you look at the notebook acceleration, it more than covered any of the decline that we saw in desktops overall.
So good to see, you know, that that's been going on, you know, the notebook migration and and volumes have been going up dramatically over the last year. But it was good to see the infrastructure type of spending to also start to increase from a revenue point of view as well as very much from a bookings point of view. And of course, we're talking networking, storage, as well as servers. So that was, that was positive to see that continue to trend, and the current booking rates are continuing, in that same vein here as we as we look at q three.
Speaker 3
Are you seeing supply, issues on the infrastructure side of things as well?
Speaker 1
Yeah. Not nearly to the same degree as we're seeing certainly in the notebook side of the equation, but definitely starting to see constraints there on that as it goes through the system. So there's no question that that's, again, encouraging our clients to give us more advanced booking rates in regards to that. But, yeah, that's definitely starting to impact some of that as well.
Speaker 3
Okay. And then on on ASPs, you talked about, I think, notebook ASPs. But are you seeing ASPs increase in other areas? And is that changing the thought process for customers in terms of configuration, expanding your budgets, that sort of thing?
Speaker 1
Yeah. We most of the ASP increase, I think, mostly occurred on the notebook front. I think we'll see another, you know, maybe 1% increase here in in q three in that space, but pretty small increase in ASPs. And then for the most part, it's really been a little bit of increases on the infrastructure side, again, depending upon the supply constraints. And obviously, their costs are going up.
But I'd say it's been pretty minimal at this stage as far as seeing those kind of any kind of ASP increases on the infrastructure side. It's been pretty pretty minimized.
Speaker 3
Okay. Alright. Thanks very much.
Speaker 0
Your next question is from the line of Vincent Colicchio with Barrington Research.
Speaker 4
Yes. Thanks for answering my questions. Nice quarter, Ken. In what areas of the business are you experiencing the most of wallet share gains?
Speaker 1
I'd say as far as where we're seeing the the the share gains, again, the areas that are that we're very focused on is in the area of, helping our clients dibble to transform. So all aspects of that were really and, again, our competition there primarily really is the Accenture's of the world. You know, that that area is you know, those are really our primary competitors in that space, Capgemini, those type of not our traditional competitors that you're used to. So that area continues to certainly accelerate. Associated with that as we're helping our clients in that space, of course, is leading to cloud transformation with our clients as we help them modernize.
So that again continues to grow very nicely. As I mentioned, now it's 22% of our gross profit dollars coming from the cloud. So that along with the associated services are very, very big. And then I'd say, you know, the security aspects, as I mentioned earlier, continue to accelerate. So those those would be, you know, very key areas.
Speaker 4
And where do you think we are in the public sector and and education cycle? It's been strong for quite some time. Is this, you know, do you think it's gonna it'll wind down at some point in near future?
Speaker 1
Yeah. I mean, there's there's no question you saw the the robustness of Chromebooks. And, just by looking at the amount of, supply that has caught up, I think would indicate that, you know, there'll be, I think, more of a moderation. And I think you'll get to more of a normal, sort of cyclical pattern here as the past year, there's there were, you know, amazing amounts of Chromebooks sold into the education market. So I would definitely expect that that would start to cool off to some degree.
But, you know, you will see that, you know, we'll we'll operate from a new base level of, of Chromebooks than we did before. But, certainly, I wouldn't expect the kind of acceleration we've seen over the last three quarters there, on the Chromebook side.
Speaker 4
Okay. Thanks for asking my questions answering my questions. Thank you.
Speaker 1
Sure thing.
Speaker 0
Your next question is from the line of Anthony Lebiedzinski with Sidoti and Company.
Speaker 5
Good morning and thank you for taking the questions. I joined the call pretty late, so I apologize if I asked questions that you may have already answered. You know, looking at the back half of the year, just how should we think about the, you know, gross margins? And, you know, I just wanted to get a better sense as to how should I think about that.
Speaker 1
Good. This one is Yes. Just
Speaker 0
So hi, Anthony. We said at the start of the year that we anticipated that our gross margins would be flat to slightly down as hardware grows. Hardware is going to be continuing to grow in the second half of the year. We were at 16.4% and that was down 10 basis points versus prior year in Q2, which did also include some hardware growth. So I would say we're still on track to kind of end up flattish to slightly down from a gross margin perspective for the full year.
Speaker 5
Okay. Thank you. And then I was just wondering if have you seen any changes lately in terms of your customer buying patterns given the delta variants that are out there and whether, you know, that could impact as far as it seems like some companies at least have talked about the delaying when people get back into the offices. And so as that happens, just wondering, you know, how should we think about the potential impact on your business?
Speaker 1
Yeah. So the Delta variant, and of course, there'll be other variants coming, I'm sure, as well. We haven't seen the impact. I think people have really become pretty resilient in adjusting to this, you know, this new situation. So we haven't really seen that.
Certainly, The US is in far better shape than other parts of the world. But when we look at, you know, our business in APAC, which of course is under a little bit more severe, you know, lockdowns when you look at Australia and New Zealand as they try to get to higher vaccination rates, We really haven't seen that business, you know, decline at all. They had a very, very solid quarter as you saw in our results in APAC. Europe, again, you know, closer to where The US is, but still having some issues on the variant. But, you know, markets are open, but we definitely haven't seen any any kind of change or pullback in that regard.
I think, as we know, most of the governments are trying to keep businesses open a lot more than they did certainly last year at this time. So far so good, Anthony, but we're watching that closely.
Speaker 5
Got it. Okay. And can you just also talk about broadly about performance of your different vertical markets? I know you touched a little bit on education, but anything else as far as what you're seeing in terms of the other vertical markets?
Speaker 1
Yeah. I think when you look at, you know, health care is starting to certainly, you know, rebound from, you know, some pretty depressed levels last year. I would say that the, the hospitality industry, including hotels, you know, airlines, cruise lines, Starting to certainly repair, but certainly not back to where, you know, we'd see in 2019. But certainly up from where they were last year, as there's hope and expectations for many of them that, you know, people will start cruising again. And But that I think is increasing, but not nearly to the level of 2019.
But everything we hear and as we discuss with these clients that they do anticipate that to improve certainly significantly over the next couple of quarters. When you look at the manufacturing sector, I think you you know, you see what's occurring there. That's been pretty well pretty well on a, you know, on good footing. So we see consistent growth there. Finance vertical, which is a big vertical, of course, for IT, continues to do well.
I think they're they've navigated pretty well throughout the pandemic, and we start to see that start to more open up. But I think there's no question as people get back more into offices, which the expectation was that would start to occur here in the early part of the fall. And now it looks like that could be pushed out a little bit. I think that will also lead to some acceleration once that gets on better footing. But overall, I'd say, as Glynis has commented in her her notes there, was the fact that we certainly do expect, you know, to be at the higher higher range of our our guidance of four to 8% growth for the year.
Speaker 5
Got it. Alright. Well, thank you very much, and best of luck.
Speaker 1
Thanks, Anthony. Thank you.
Speaker 0
At this time, ladies and gentlemen, that concludes our Q and A session. We do thank you for participating in today's call and ask that you now disconnect your lines. Hi.