Reliance - Earnings Call - Q2 2025

Executive Summary

• Q2 2025 net sales were $3.66B, up 5% q/q and 0.5% y/y, with record second‑quarter tons sold; diluted EPS was $4.42 and non‑GAAP EPS $4.43, up ~18% q/q but down vs Q2 2024 due to margin dynamics.
• Average selling price per ton rose 6.1% q/q, well above guidance; non‑GAAP FIFO gross margin was 30.6% and non‑GAAP LIFO gross margin 29.9%, slightly below internal expectations due to inventory cost/replacement cost misalignment and pricing that peaked in April then declined.
• Wall Street consensus for Q2 2025 was EPS $4.705* and revenue $3.680B*; RS delivered EPS $4.43 and revenue $3.660B, a modest miss on both; Q1 2025 had been a beat vs consensus*.
• Management guided Q3 2025 non‑GAAP EPS to $3.60–$3.80 with tons sold down 1–3% q/q and ASP down 1% to up 1%, citing seasonal slowdowns and tariff uncertainty; dividend of $1.20/share was declared.
• Capital allocation remained active: $80M repurchases, $63M dividends, $88M capex in Q2; net debt‑to‑EBITDA ~0.9x supports continued flexibility.

Values with asterisk (*) retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

• Record second‑quarter tons sold (+4.0% y/y) and ASP +6.1% q/q, doubling the high end of guidance; management highlighted “resilience of our proven business model” and market share gains supported by domestic sourcing and value‑added processing.
• FIFO gross margin expanded q/q to 30.6% despite mixed pricing; non‑GAAP EPS rose 17.5% q/q to $4.43, with cash from operations of $229M funding capex and buybacks.
• Non‑residential construction demand improved, supported by data centers, energy infrastructure, manufacturing, and public infrastructure; aerospace defense/space demand remained strong.

Selected quote: “Our record second‑quarter tons sold once again significantly outperformed the industry due to our unparalleled scale, access to domestic metal and breadth of processing capabilities.” — Karla Lewis, CEO.

What Went Wrong

• Pricing peaked in April and declined through the quarter for many carbon products; inventory cost exceeded replacement cost, pressuring gross margin vs internal expectations.
• Tariff uncertainty led customers to hold back purchases, limiting pass‑through of mill price increases and keeping gross margin “under some pressure” into Q3.
• Semiconductor demand remained depressed due to supply chain inventory; stainless pricing declined modestly; Q2 diluted EPS down vs Q2 2024 ($4.42 vs $4.67).

Transcript

Speaker 7

Welcome to the Reliance second quarter 2025 earnings call. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question-and-answer session will follow the formal presentation. You may be placed into the question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to your host, Kim Orlando, with Addo Investor Relations. Kim, please go ahead.

Speaker 6

Thank you, Operator. Good morning, and thanks to all of you for joining our conference call to discuss Reliance's second quarter 2025 financial results. I am joined by Karla Lewis, President and Chief Executive Officer; Steve Cook, Executive Vice President and Chief Operating Officer; and Arthur Ajemyan, Senior Vice President and Chief Financial Officer. A recording of this call will be posted on the Investor section of our website at investor.reliance.com. Please read the forward-looking statement disclosures included in our earnings release issued yesterday and note that it applies to all statements made during this teleconference. The reconciliations of the adjusted numbers are included in the non-GAAP reconciliation part of our earnings release. I will now turn the call over to Karla Lewis, President and CEO of Reliance.

Speaker 3

Good morning, everyone, and thank you all for joining us today to discuss our second quarter 2025 performance. Our solid financial results once again demonstrated the resilience of our proven business model in a volatile environment. Our operating teams continue to excel in providing value to our customers and increasing our market share while effectively managing their businesses through ongoing market uncertainty. Our record second quarter tons sold compared to last year once again significantly outperformed the industry average volume by seven percentage points, which we attribute to our unparalleled scale, access to domestic metal, and breadth of processing capabilities. Importantly, we maintained a gross profit margin within our sustainable range of 29%-31%.

In line with our smart, profitable growth initiative, our strong performance generated sequential increases in non-GAAP pre-tax income in excess of 15% and non-GAAP earnings per share of $4.43, an increase of more than 17% compared to the prior quarter. Our capital allocation framework remains unchanged, and our long-term focus continues to guide both our growth and stockholder return strategies. Reliance generated $229 million of cash flow from operations in the second quarter. Our strong cash flow continues to support investments in advanced value-added processing equipment, organic growth, and accretive acquisitions that position Reliance for growth in all market environments. Our 2025 capital expenditure budget remains at $325 million, with over 50% dedicated to growth projects. Our expected total cash outlay for 2025 is expected to be in the $360-$380 million range, reflecting carryover projects from prior years that will be completed this year.

Our second quarter results include benefits from our 2024 acquisitions, and we remain in a position of financial strength to execute on M&A opportunities that align with our discipline criteria. We continue to see new acquisition opportunities despite continuing macroeconomic uncertainty, and we will maintain our focus on pursuing opportunities that expand our geographic footprint and the value-added metal processing solutions we offer our customers, align with our emphasis on smart, profitable growth, and complement our strong gross profit margin profile. We also remain committed to returning capital to our stockholders. We returned $143 million to our stockholders in the second quarter in dividends and share repurchases, and we have repurchased over 1.2 million shares year to date at favorable prices. In summary, I'm pleased with our strong operational execution in the second quarter, particularly given the rapidly changing trade environment.

Our resilience reflects both the strength of our business model and the unwavering dedication of our team, whose commitment to safely delivering industry-leading solutions continues to expand and deepen our customer relationships. While we anticipate some weakness in the third quarter, we remain confident in our ability to grow amid ongoing market uncertainty and take advantage of improved demand and pricing environments as we emerge from these highly uncertain times. Encouraging trends in our key end markets, including signs of reshoring activity, are creating additional tailwinds as we look ahead. Moreover, our longstanding practice of primarily sourcing our metal from domestic mills and operating in the U.S. provides a strong competitive advantage in the current trade environment. Our focus remains firmly on long-term success with a disciplined approach to value creation for all Reliance stakeholders.

I'll now turn the call over to our COO, Steve Cook, who will review our demand and pricing trends.

Speaker 2

Thanks, Karla, and good morning, everyone. I'd like to start by thanking our dedicated team for driving operational success across the board while upholding the highest safety standards. I'll now turn to our demand and pricing trends. Our second quarter tons sold decreased 0.9% compared to the first quarter of 2025, in line with our outlook of down 1% to up 1%, even when considering the effect of demand pulled forward into Q1 due to tariff activity. Compared to the second quarter of 2024, our tons sold increased 4%, significantly outperforming the service center industry's year-over-year decline of 3.1%, as reported by the MSCI. Our increased shipments are attributable to market share gains as a result of our smart, profitable growth strategy and continued investments in organic growth.

Our second quarter average selling price per ton sold increased 6.1% compared to the first quarter of 2025, doubling the high end of our expected range of up 1%-3%, reflecting the strong tariff-driven momentum for both demand and pricing near the end of the first quarter. Pricing for many carbon and aluminum products peaked in April but then declined for the remainder of the second quarter. Stainless pricing declined modestly in the quarter as these products were less sensitive to trade policy in the short term. As Arthur will expand upon shortly in reviewing our outlook for Q3, pricing for most products has remained steady entering the third quarter. Next, I will review notable trends within our key end markets and products, beginning with non-residential construction. Carbon steel tubing, plate, and structural products, which we predominantly sell into the non-residential construction market, represented roughly one-third of our Q2 2025 sales.

Compared to last year, shipments for all three products were up in the second quarter. Improved demand for Reliance's products was driven by Reliance's scale and geographic diversity that allowed the company to benefit from heightened data center construction and related infrastructure, as well as publicly funded infrastructure projects such as schools, hospitals, and airports. Our general manufacturing business, which also represented roughly one-third of our total sales in Q2 2025, is highly diversified across geographies, products, and industries. Shipments increased year over year, and shipments related to rail and ship-related transportation projects and heavy construction equipment were particularly strong in the second quarter, demonstrating Reliance's ability to capture share even in challenged manufacturing markets. While shipments to consumer products and industrial machinery markets also improved year over year, demand in those markets remains comparably softer than other manufacturing sectors.

Our continued ability to outperform the industry across key product groups, shipping to general manufacturing applications, highlights the versatility and competitive advantage of our diversified business model in a fluid macroeconomic and policy environment and our ability to grow with new and existing customers. Aerospace products comprise approximately 10% of our Q2 2025 sales. Demand for commercial aerospace was stable compared to the first quarter of 2025 and the second quarter of 2024. Demand for defense-related aerospace and space programs remained consistent at strong levels. We primarily service the automotive market through our toll processing operations, which are not included in our tons sold. Our tolling business, which represented approximately 4% of our Q2 2025 sales, saw processed tons stay relatively consistent with both the first quarter of 2025 and the second quarter of 2024, supported by our capacity expansions.

The semiconductor industry remained under pressure in the second quarter due to ongoing excess inventories in the supply chain. In summary, I thank our team for executing effectively and safely through dynamic operating conditions. The breadth and depth of our value-added processing capabilities, high-quality products, and reliable customer service continue to win Reliance's new customers and increase our market share. Reliance's long-term dedication to domestic metal sourcing, along with our industry-leading scale and strong balance sheet, makes us a highly attractive partner to our mill suppliers in all market conditions. I will now turn the call over to our CFO, Arthur Ajemyan, to review our financial results and outlook.

Speaker 3

Thanks, Steve, and thanks, everyone, for joining us today. Our second quarter operating performance was strong, with shipment levels in line with our guidance despite some demand pulled forward into Q1 and higher than anticipated average selling prices. Our second quarter non-GAAP earnings per diluted share of $4.43 demonstrated strong growth of 17.5% compared to the first quarter of 2025. In a mixed pricing environment that reflected the following dynamics. Pricing for many carbon steel products peaked in April and retreated through the balance of the quarter, resulting in the cost of our inventory on hand exceeding replacement costs. At the same time, shorter product lead times starting in March and continuing through May accelerated our receipt of higher-cost material. These factors contributed to non-GAAP FIFO gross profit margin realization that was slightly lower than expected, increasing moderately from 30.4% in Q1 of 2025 to 30.6% in Q2 of 2025.

FIFO non-GAAP gross profit margin also rose by 20 basis points to 29.9% in Q2, with both quarters including $25 million of FIFO expense. For the full year 2025, we are maintaining our FIFO estimate of $100 million of expense. As of June 30, 2025, the FIFO reserve on our balance sheet was $485 million, which remains available to benefit future period operating results and mitigate the impact of potential declines in metal prices. Turning to expenses. Our second quarter and six-month period, same store non-GAAP SG&A expenses were up 6.2% and 3.1% respectively compared to the same periods in 2024, reflecting the impacts of inflationary wage adjustments, increased variable warehousing and delivery expenses associated with increases in our tons sold, and higher incentive compensation related to increased FIFO profitability.

On a per ton basis, our same store non-GAAP SG&A expenses increased only 2% compared to the second quarter of last year and actually declined 1.7% over the first half of 2025 versus the same period in 2024, demonstrating the operating leverage achieved through our organic growth strategy. I'll now address our balance sheet and cash flow. We generated $229 million in operating cash flow in Q2 despite over $100 million investment in working capital, mainly due to higher metal costs. We used that cash to fund $88 million in capital expenditures, pay $63 million in dividends, and repurchase $80 million in our shares at an average price of $265 per share. Year to date, our repurchases have reduced our total shares outstanding by 2%. We still have approximately $1 billion available under our $1.5 billion share repurchase plan that we refreshed in October 2024.

As of June 30, our total debt was $1.43 billion, including a $48 million reduction in borrowings on our revolving credit facility during Q2. Our leverage position remains favorable, with a net debt-to-EBITDA ratio of less than 1 providing significant liquidity to continue executing our capital allocation priority. Moving on to outlook for the third quarter. Looking ahead, we anticipate demand across our diversified end markets to remain stable in the third quarter. Subject to normal seasonal patterns, which reduce our shipping volumes due to planned customer shutdowns and vacation schedules, as well as ongoing domestic and international trade and economic policy uncertainty. Accordingly, we estimate our tons sold will be down 1-3% compared to the second quarter of 2025. More importantly, up 3-5% compared to the third quarter of 2024.

We do, however, anticipate pricing will stay relatively consistent with current levels throughout the third quarter, which will result in our average selling price per ton sold to be down 1% to up 1% compared to the second quarter, largely driven by lower prices for carbon steel products, partially offset by higher prices for certain aluminum stainless products. As a result, we anticipate our FIFO gross profit margin will remain under some pressure in Q3. Based on these expectations, we anticipate non-GAAP earnings per diluted share in the range of $3.60-$3.80 for Q3, inclusive of quarterly LIFO expense of $25 million, or $0.36 per diluted share. This concludes our prepared remarks. Thank you again for your time and participation. We'll now open the call for your questions. Operator.

Speaker 2

Thank you. We'll now be conducting a question-and-answer session. If you'd like to be placed into question queue, please press Star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star 2 if you'd like to move your question from the queue. One moment, please, while we pull up for questions. Our first question is coming from Martin Englert from Seaport Research Partners. Your line is now set.

Speaker 0

Hello. Good morning, everyone.

Speaker 5

Morning, Martin.

Speaker 0

Good morning. Question on the guidance. Within the guide, you noted that FIFO gross margins expected to remain pressured. Is that meant to imply sequential weakness or rather a continuation of levels comparable to Q2?

Speaker 5

Hey, Martin. Q3, if you recall, for Reliance and in our industry, typically there is some demand weakness just due to normal seasonal patterns. During July and different summer months, not only do a lot of the big OEM-type customers shut down for scheduled maintenance, that flows down to more of our customer base through their subs. We also see in some of our smaller customers, which make up a big portion of our customer base, they will oftentimes shut their locations down here and there during the summer for their employees to take vacations. Nothing, in our view, out of the ordinary. We probably guide it, I think, from a demand standpoint, a little stronger in Q3 than we do typically from the seasonal slowdown. It is still year over year stronger. We have been trending; our demand has been stronger in our year-over-year quarters all year so far.

We feel good about it. On the pricing side, we can talk a little more, but in Q2, we would say it was a little atypical from our normal cycle. If you recall, at the end of Q1, we talked about some potential demand pull forward into Q1, and there were price increases. Prices had good momentum when we spoke to everyone in April and gave our Q2 guide. Prices kind of peaked out, especially on a lot of the carbon products in April, and then we saw prices decline. We had some gross profit margin compression in Q2. Typically, in a rising price environment, we would expect that to expand, which was in our guidance. We might be a little more hesitant going into our Q3 guide now.

Although on the pricing side, there is weakness in a couple, most products we think are fairly steady, and we see upside. Aluminum prices did increase in Q2 and hold because of some of the tariff-related impact on their input costs. We expect that to continue to flow through in Q3, as well as a base price increase on stainless near the end of Q2. There is a little lag to work that in. Overall, we did imply some continued pressure on gross profit margin in Q3. Primarily, it is just very uncertain out there. The tariff uncertainty, we believe, has been holding back some of the buying by many customers throughout the space. We think once that gets unlocked, we feel very good about where we in the industry will go for the rest of the year or at whatever point tariffs get resolved.

Okay. More generally, just a more conservative tone given or more conservative guidance overall. Based off of how second quarter transpired and given some of the uncertainty out in the market. Is that a fair characterization?

Speaker 3

That is fair. We can only guide to what we see and what we believe is happening in our business. We, unfortunately, can't control what consensus or other expectations look like out there for us and whether or not they're in line with what we see happening in the market.

Okay. You did touch on this, but I want to see if there is any more that you would like to highlight. What customers have been saying about the tariff environment, the impact on their business. Anything else that you have been seeing or observing about them?

Yeah. I think we just. I would say what's a real positive for us, Martin, is we continue, especially in our kind of non-res construction business, we continue to see new activity. The types of projects we do, some of the smaller projects, that space for us remains active. We're not saying it's growing, but it is not declining. Our management teams selling into that space are very confident and upbeat about what's going on in those markets. Certainly, data center is a strong pull there. At Reliance, with the breadth of the different products we sell, we're not just selling into the kind of foundational construction of the data center buildings. We have a lot of different products that also go internally into the data centers and the electrification of that. That's a real bright spot out there.

Overall, schools, hospitals, airports, we continue to see a lot of activity in that space.

Okay. Within the commercial aero supply chain, I believe you noted an inventory overhang. Is there more detail that you can share there or expected duration around the issue?

Yeah. I mean, I wish we had a perfect answer to that, Martin. We have to watch what happens in the space. We are seeing some products where it appears the supply chain has worked through, and there's some activity, buying activity from our customers buying from us. At a fairly moderate level at this point, I do believe Boeing's build rates did increase recently. Once that starts to flow through the supply chain, we do anticipate seeing more activity levels. Our guide for Q3 was pretty flat with what we saw in Q2.

Thank you. Our next question today is coming from Katya Jancic from BMO Capital Markets. Her line is now live.

Speaker 1

Hi. Thank you for taking my questions. Maybe starting on the market share gains, can you talk a bit about what gives you the ability to really gain market share and how are you thinking about over the next few quarters? Is this expected to continue?

Speaker 3

Hi, Katya. If you go back a few quarters, even through most of last year, we have been picking up market share. The important thing for us, we talk about smart profitable growth, means we're picking up market share but also maintaining our gross profit margin. We're not just chasing business out there. We're going after good business. We think there is room to continue to do that. I think the Reliance teams win that new business because of the superior customer service that our people provide to our customers, especially in uncertain markets where customers want to buy more frequently, our next-day delivery model. The level of processing that we can provide to our customers, the quality of our products.

I think that high-touch customer service model is, and the way that we're structured, decentralized, so our people can react quickly to opportunities that they see in the market and really focus on those customer relationships with our broad footprint. I think those are all positives that allow us to gain that market share.

Speaker 1

There is a lot of uncertainty still right now in the market. Does this increase the potential acquisition opportunities? Is there more potential deals that are coming to the market? How does the valuation look?

Speaker 3

We have seen an increase in Q2 over Q1. We had talked, I think, starting last year, going into the presidential election, that we had seen some pullback in acquisition activity, which we attributed to uncertainty around that. With all the trade uncertainty, that had continued. In Q2, we did see an uptick in the number of deals in the market. We are pleased to see that. Oftentimes, if there is uncertainty and owners of companies do not think they will get the valuation they would like to, they pull back. I think, for whatever reason, we are seeing more of them come to market at this time. Sometimes people get tired of the uncertainty. If they are near retirement age, they may choose to exit. We are pleased to see that increased activity from a valuation standpoint.

For the most part, we believe that seller expectations more closely align, at least with the way we at Reliance look at some of the opportunities. There are still some deals out there where valuation expectations are still higher than our view going forward. We are pleased to see more opportunities for us to look at. We continue to actively look at those opportunities. If and when we find good companies that are the right fit, we believe for Reliance at the right value, we are excited to execute on those opportunities.

Speaker 1

Thank you.

Speaker 3

Thanks, Katya.

Thank you. Next question is coming from Mike Harris from Goldman Sachs. Your line is now live.

Speaker 9

Yeah. Thanks. Good morning, guys, for taking the question here. Carlos, just to follow up on the earlier question around the gross margin pressure in the third quarter. It sounded like, and I want to just make sure that I understood what you said, that you guys were being conservative kind of based on the second quarter results. I am just curious. I mean, based on your current visibility, and I am not asking for a guide beyond the third quarter, but if you had to guide, do you have the visibility that you would have confidence to speak to margin? I am trying to get a sense for whether or not this pressure is limited to perhaps the third quarter, or could it extend beyond that?

Speaker 3

Yeah. Hi, Mike. It's hard to answer. We hope we're being conservative. But with our model, we won't know until we get there. Again, we do think the environment was a bit unique in Q2. With the trade uncertainty, it continues to potentially be a bit unique in Q3. The tariffs and the unknown around the tariffs gave our suppliers an opportunity to increase prices on some products. On the other side, our customers also were facing that uncertainty and were holding back on buying. Our more normal pattern of being able to pass through those price increases at time of announcement was not as successful as it has been in some prior periods. I think our customers, again, are still uncertain, and if they can hold back on buying, they were.

It was a little more difficult that even though the mills made some price announcements to get the market to accept those. That is why we think once there is more certainty and we get the tariff, the trade unknowns behind us, our people in the field feel very confident about their ability to get in the market, the strength of their customers. We believe it's temporary, and we want to get back to our more normal pattern. I think also in Q2, again, March, April, mill price increases, costs going up, and then we saw the pressure and prices started to come down May and June. Also, supplier lead time shortened, so we were getting the higher-cost metal more quickly. We're working through that in Q2 and Q3. Again, as I mentioned earlier, we are positive on the price increases on aluminum and stainless flowing through and holding.

It just takes a little time to get those in, which we expect to happen through Q3.

Speaker 9

Okay. Thanks. That was very helpful. I guess just one more here. It looks like you guys have continued to gain meaningful market share versus the field. I was just wondering if perhaps you could share your thoughts on, as we look forward, what does that pace look like? Maybe speak to the sustainability of the gains going forward.

Speaker 3

Yeah. I mean, we think that they are sustainable, Mike. Again, as I mentioned in the prior comments. Reliance has always prided ourselves. We do not pride ourselves here at corporate. It is pride based on what our people out in the field are able to do every day in servicing our customers. We think that model allows them to win the new business, that it will continue to allow them to grow that business. We refer to our smart profitable growth initiative. We are, from a corporate level, over the last couple of years, we have been setting targets with our teams, incentivizing them to grow their volume. There was a period of years where our volumes were actually declining at Reliance. We are pushing our teams to grow their volumes. We have invested a lot in value-added processing equipment and facilities.

We want to get better utilization out of all of those investments. It is a push from us, but it is a balanced push that they also have to maintain. Our sustainable gross profit margin range of 29%-31% and hopefully grow that as we move into the future, but also grow their tons, which is helping us from an operating leverage standpoint as well as we push more tons through our investments.

Speaker 9

Okay. Thanks a lot. I'll get back in queue.

Speaker 3

Thanks.

Thank you. Next question today is coming from Alex Hacking from City Airlines. He's now live.

Speaker 4

Yeah. Thanks, morning. I just had one question, which was on the aluminum business. Domestic US aluminum prices are up 30%-40% this year, I think, with the Midwest premium at $0.70. Your shipments still seem pretty robust. How are you seeing acceptance of these significantly higher prices with your customers? Thanks.

Speaker 3

Thanks, Alex. Steve, do you want to address that?

Yeah. Alex, the aluminum prices have gone up fast and furious, and they've leveled off a little bit in the second quarter. We are passing along the increases to our customers. And we're being aware of their businesses. They are accepting the increases. The level, whether it's stainless or aluminum, they've been rather outsized from our mill suppliers. We think that it's a matter of timing. As the year goes on, they'll be pushing into the market more and more.

Yeah. Alex, I would just add, at Reliance, whether it's in different periods, there's been maybe more of a highlight on nickel surcharges or the aluminum, the Midwest premium. We really look at our cost as an all-in cost. That's how we go to market and base our sell prices on the all-in cost. We're treating the Midwest premium the same.

Speaker 4

I guess just to follow up, I mean. Are you seeing customers at all sitting back saying, "I want to wait for a trade deal with Canada to see where the Section 232 ends up before I pay a $0.70 Midwest premium"? Or does their business requirements effectively just compel them to keep buying even at these prices?

I mean, Alex, our customers who are purchasing aluminum from manufacturers, whatever the end use is, they're going to be paying a higher price. They may just buy a little bit less and a little more frequently, which is what benefits our model of next-day delivery for the most part and having breadth of inventory all over the country. It is a little bit shocking in some cases for them. I think that this uncertainty with tariffs and higher prices will benefit Reliance.

Okay. Thanks so much.

Thank you. We have reached the end of our question-and-answer session. I'd like to turn the floor back over for any further closing comments.

Speaker 3

All right. Thank you, operator. Thank you again to all of you for joining our call today and for your continued support of Reliance. We would also like to thank the entire Reliance team for staying safe, operating safely every day, and continuing to service our customers at the highest level. As we mentioned in our comments, we are confident in Reliance's continued ability to perform well in all markets. We will get through this temporary uncertainty here and come out of that very strong. Before we end the call, I would like to update everyone that in August, we will be participating in Seaport Research Partners' annual summer investor conference. In early September, we will be participating in the Jeffrey Industrials Conference in New York City. We hope to meet with many of you there. Thank you and goodbye.

Thank you. That does conclude today's teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.