Standard Motor Products - Earnings Call - Q1 2025

Executive Summary

• Strong beat vs consensus: Q1 revenue $413.4M vs $394.4M consensus and non‑GAAP diluted EPS $0.81 vs $0.44 consensus, driven by Nissens contribution, robust Temperature Control pre‑season orders, and margin expansion from cost actions and lower factoring costs; adjusted EBITDA margin rose 350 bps to 10.4%. Consensus values from S&P Global.*
• Maintained FY25 outlook ex‑tariffs (mid‑teens sales growth; 10–11% adj. EBITDA margin) and reiterated plan to pass tariffs through to customers; Q1 had no material tariff P&L impact (cash timing only).
• Segment trends: Vehicle Control +3.7% with low single‑digit POS growth; Temperature Control +24.1% on front‑loaded pre‑season; Engineered Solutions −11.2% but improved profitability mix; Nissens $66.2M with 17.3% adj. EBITDA margin, above mid‑teens expectations.
• Balance sheet and liquidity: Net debt $600.3M; leverage 3.75x EBITDA (sub‑3.5x pro forma for full 12 months Nissens); seasonal cash use in Q1 from AR/inventory build; dividend $0.31 declared (payable Jun 2).
• Stock reaction catalysts: magnitude of beat, Nissens outperformance vs plan, tariff pass‑through clarity, and resilient non‑discretionary demand backdrop; potential near‑term debate on pre‑season pull‑forward and tariff margin rate compression.

What Went Well and What Went Wrong

• What Went Well

  • Broad‑based beat and operating leverage: adj. EBITDA up to $42.8M (10.4% margin) from $22.9M (6.9%) with about half the gain from Nissens and half from legacy segments, aided by cost containment and lower factoring.
  • Nissens above plan: $66.2M sales; 17.3% adj. EBITDA margin (better than “mid‑teens” full‑year expectation); confident in $8–12M run‑rate cost synergies in 24 months.
  • Positive aftermarket demand and POS: Vehicle Control sales +3.7% with low single‑digit POS growth; Temperature Control +24.1% on early pre‑season orders and strong sell‑through.

• What Went Wrong

  • Engineered Solutions softness: sales −11.2% on customer production slowdowns, though mix improved profitability; management expects lumpiness until cycle recovers.
  • Tariff uncertainty: outlook excludes tariff impact; near‑term risk of margin rate compression during timing lag between cost and pricing pass‑through, though management plans dollar‑for‑dollar recovery.
  • Seasonal working capital drag and higher debt: Q1 cash from ops −$60.2M on AR/inventory build; net debt $600.3M and 3.75x leverage, though pro forma <3.5x.

Transcript

Operator (participant)

Good day everyone and welcome to the Standard Motor Products first quarter 2025 earnings call. At this time, all participants are in a listen only mode. Later you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the Star one on your telephone keypad. You may withdraw yourself from the queue by pressing Star two. Please note today's call will be recorded and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Tony Cristello, Vice President of Investor Relations. Please go ahead.

Tony Cristello (VP of Investor Relations)

Thank you, Chloe, and good morning everyone.

Thank you for joining us on Standard Motor Products first quarter 2025 earnings conference call. With me today are Larry Sills, Chairman Emeritus, Eric Sills, Chairman and Chief Executive Officer, Jim Burke, Chief Operating Officer, and Nathan Iles, Chief Financial Officer. On our call today, Eric will give an overview of our performance in the quarter and Nathan will then discuss our financial results. Eric will then provide some concluding remarks and open the call up for Q and A.

Before we begin this morning, I'd like.

To remind you that some of the material that we'll be discussing today may include forward looking statements regarding our business and expected financial results. When we use words like anticipate, believe, estimate or expect, these are generally forward looking statements. Although we believe that the expectations reflected in these forward looking statements are reasonable, they are based on information currently available to us and certain assumptions made by us and we cannot assure you that they will prove correct. You should also read our filings with the SEC for a discussion of the risks and uncertainties that could cause our actual results to differ from our forward looking statements. I'll now turn the call over to Eric Sills, our CEO.

Eric Sills (Chairman and CEO)

Thank you Tony and good morning and welcome to our first quarter earnings call. It's good to be with you today. I'll start my prepared remarks reflecting on our performance in the quarter and will then turn my attention to the current business climate, how we're viewing it and how we are responding. Overall, we are very pleased with our performance in the quarter. As both the top and bottom lines exceeded our expectations for sales. We were up nearly 25% and while much of the growth was due to the inclusion of our recent Nissens acquisition, excluding Nissens, sales were up nearly 5% and so we feel the year is off to a good start. We also had strong results in terms of profitability. Similar to the sales story. While the Nissens business provided some of the expansion, our other segments also showed strong gains.

We generated a $20 million increase in EBITDA and a 350 basis point lift in EBITDA margin. Let me discuss each business separately in terms of our performance, how we view the basic dynamics in the space, and how we differentiate ourselves to capitalize on our strengths. I'll start with the North American aftermarket, the largest part of our business comprised of two operating segments, Vehicle Control and Temperature Control. Both of these segments set all time records for first quarter sales. For Vehicle Control, sales increased 3.7% in the quarter, continuing the growth trend we've been enjoying for the last several periods. We believe this is due to a combination of market dynamics and our relative strength in the marketplace. All of the macro trends continue to be favorable.

The car park is growing and aging and as times get economically challenging, consumers tend to delay new car purchases and instead maintain the ones they have. Car owners may forgo discretionary purchases or delay maintenance work, but the majority of what we sell are hard failure products which are non discretionary in nature and typically cannot be deferred. Additionally, most of our products are professionally installed and technicians stick with the brands they trust. Therefore, not only has demand remained strong from our customers, importantly they are reporting positive sell through of our products in the quarter as well. Our other aftermarket segment, Temperature Control, is off to a very strong start. We exited last year with robust numbers and that trend has continued with sales in the quarter up 24% over last year. We see a few drivers here.

First off, the segment enjoys the same macro tailwinds described in Vehicle Control, stable addressable market, non-discretionary products, and strong brand equity. As such, the quarter was marked by solid customer sell-through with customer POS up high single digits over last year. As a seasonal business, the beginning of the year tends to be driven by preparation for the upcoming season. We therefore receive preseason orders from the majority of our customer base, and this year we saw a lot of those ship in the first quarter. As you know, the segment's success is determined by the selling season, which typically begins towards the end of the second quarter. We look forward to a long hot summer. Next, let me discuss our Engineered Solutions segment, where we serve various global end markets with products for new vehicle and equipment production.

The softness from last year has continued and sales were down 11.2% as opposed to the aftermarket. This segment can be more impacted by cyclical trends and as some of our customers are experiencing downturns in their end markets, they are reducing their production schedules and thus their purchases from us. Importantly, while the top line was down, the customer and product mix has been favorable and therefore the segment profits were up from last year. How do we view this business and our position within it? We believe that while there can be volatility quarter to quarter, the longer term trends are favorable. The markets are global, large and diverse and we are starting from a small base. We are now gaining market exposure as a highly capable producer with a broad portfolio of products which is leading to new business awards.

Therefore, the future for Engineered Solutions remains bright, both in its own right and as an excellent complement to the aftermarket. Lastly, I'll speak about our newest part of our company, Nissens. This was the first full quarter of ownership and we are delighted with how it performed. Both sales and profits exceeded our expectations. Nissens has a strong position in the market for many of the same reasons as described here. In North America they have a broad offering of professional grade products with a brand that is well known and well regarded. As Europe is a highly DIFM market, Nissens does very well. Importantly, the more we work with the Nissens team, the more we know that we are a perfect fit. Together, we see complementary go to market strategies, product portfolios and cultural alignment.

We have global customers that we either share or are introducing to each other. We are finding excellent means of collaboration leading to significant synergies, all while providing business and geographic diversification. We see a great future together and look forward to keeping you abreast of our integration status. Okay, having given a rundown of the quarter, I'd like to now spend a few moments talking about the current business environment, how we are thinking about the potential impacts and what we believe differentiates us in a way that will provide a competitive advantage. The topic on everyone's mind obviously is tariffs. Needless to say, we are in a fluid situation, so it's impossible to state with certainty how it will play out.

As things currently stand, we believe that our commitment to being a basic manufacturer with a concentration in North America gives us a level of protection and an advantage over other players. A few decades ago, when the aftermarket began seeking low cost regions, most companies chose China, we chose Mexico. Fast forward to today. Over half of our sales in the United States comes from product manufactured in North America, mostly Mexico, but also the U.S. and a bit in Canada. As our Mexican and Canadian products are USMCA compliant, they remain tariff free. While we do incur some tariffs on components used in our U.S. production and it is nominal in terms of our total cost structure, the balance of our products are imported from elsewhere.

Only about a quarter of all U.S. sales are from China, with the rest being from Europe and other lower tariff countries. We are currently heavily engaged in our mitigation efforts from a cost containment perspective. We are working upstream with our suppliers to reduce prices and to relocate to lower tariff regions, and we are leveraging our footprint to optimize our supply chain, including deferring imports into the U.S. until the products are needed. Most of our tariff recovery is through pricing actions. While we do believe that our tariff exposure will be lower than many, it is our full intent to pass them through to our customers at our cost as we have in the past. Lastly, going back to the notion of our products being non-discretionary, they tend to be price inelastic, meaning we would not anticipate any degradation in demand.

It's also worth reminding you that due to our two newer segments, Engineered Solutions and Nissens, we have seen nice geographic diversification. The U.S. now represents about 70% of our sales, down from about 90% a few short years ago. Again, while we are in a complex and challenging business environment, we feel good about our position relative to others and in our ability to navigate it. With that, I will turn it over to Nathan to review the numbers.

Nathan Iles (CFO)

All right, thank you Eric. Good morning everyone. As we go through the numbers, I'll first give some color on the results for the quarter by segment and at the consolidated level. I'll then cover some key cash flow metrics and finish with an update on our financial outlook for the full year of 2025. First, looking at our Vehicle Control segment, you can see on the slide that net sales of $192.3 million in Q1 were up 3.7%, with the increase driven by steady demand for our products. Vehicle Control's adjusted EBITDA in the first quarter increased to 11.6%, up 120 basis points from last year. The increase in adjusted EBITDA was driven by a higher gross margin rate, mainly due to higher sales and lower factoring expenses as a percent of sales, which was mainly the result of timing of collections during the quarter.

Looking at Temperature Control, net sales in the quarter for that segment of $88.9 million were up 24.1%. The first quarter benefited from a strong start to preseason ordering which started earlier this year than last and also good sell through. As we always note, the first quarter is not indicative of how the full year will turn out in a weather dependent business like Temp Control, but we were pleased to get off to another good start. Temperature Control's adjusted EBITDA increased in Q1 to 10.6% as higher sales volumes led to a higher gross margin rate and improved operating expenses as a percent of sales in the quarter. Sales for Engineered Solutions segment in the quarter were down 11.2%, but this softness was expected as we continue to see slower production schedules at our customers as they react to softness across their various markets.

Customer demand can be lumpy over time, particularly in certain markets, but we expect to continue to win business to offset these market headwinds. Despite lower sales, adjusted EBITDA for Engineered Solutions in the quarter of 9.7% was up from last year driven by a better mix of products sold as well as the benefit of a stronger U.S. dollar versus Mexican peso which helped to lower our manufacturing costs in the quarter. To wrap up on operating segments, let me talk a little about Nissens Automotive. This was our first full quarter of ownership and Nissens added $66.2 million of net sales in the quarter and $11.5 million of adjusted EBITDA. The business is performing as expected and exceeded our earlier estimate of the mid teens EBITDA percent business coming in at 17.3% for the quarter.

Nissens continues to grow its sales across Europe and gross margin has been good as well. First quarter also benefited from some favorable currency movements. To summarize and put it all together, across our four segments for Q1 consolidated net sales increased 24.7% and adjusted EBITDA increased to 10.4% of net sales while non-GAAP diluted earnings per share were up 80% versus last year. Turning now to cash flows, cash used in operations for the quarter of $60.2 million was up from cash used of $45.7 million last year. While we always use cash during Q1 and the first half of the year due to seasonal working capital needs, the higher cash usage this year was primarily a result of increased accounts receivable and inventory balances related to sales growth in the quarter.

Our investing activities show capital expenditures of $9.1 million which includes $3.5 million of investment related to our new distribution center. Financing activities show payment of $6.8 million of dividends as well as borrowings for the year of $79.1 million so far, which were used mainly to fund our working capital needs. Our net debt of $600.3 million at the end of Q1 was higher than last year after borrowings made for the acquisition. We finished Q1 with a leverage ratio of 3.75 times EBITDA, but accounting for a full 12 months of EBITDA from Nissens leverage would be less than 3.5 times. Before I finish, I want to give an update on our sales and profit expectations for the full year of 2025.

As we noted in our release this morning, while tariffs have introduced a level of uncertainty into the macro environment, setting those aside, we're affirming our prior outlook as our business continues to perform well. As a reminder, we expect to see net sales percentage growth in the mid-teens percentages for the full year and adjusted EBITDA margin to be in a range of 10%-11% of net sales, with both measures including growth from Nissens Automotive as we'll have 12 months of results versus 2 months in 2020. As I said, our 2025 outlook does not include any impact from the recently announced tariff actions. Whatever the impact is in our business, we plan to address higher costs by passing them through in price dollar for dollar. We will update our guidance as necessary in future quarters when there's greater clarity regarding the situation.

To wrap up on the financial side, we were very pleased with our sales and earnings growth in the first quarter. While it's still early, we started the year well with earnings up across all segments, which really shows the ongoing strength of our business. Thank you for your time. I'll turn the call back to Eric for some final comments.

Eric Sills (Chairman and CEO)

Thank you, Nathan. To close, let me spend a moment reflecting on how we're viewing things. We're coming off not just a strong start to the year, but several quarters in a row of strengthening performance, and we feel we have good momentum. The world now finds itself in uncharted territory with an uncertain and fragile economic climate, so the question becomes how well positioned are we to navigate it? We believe that we have many structural underpinnings that will provide us with a relative advantage within North America. The majority of our business is in an industry known for its resilience in turbulent times. Historically, the aftermarket has been able to mute the impact of economic downturns and in fact tends to outperform.

The car park usually ages during these cycles as new car sales can become depressed and motorists have no choice but to make the necessary repairs to keep their cars operational. While we believe the tariffs will likely lead to some inflation, our non-discretionary parts by definition will still be in need. Furthermore, SMP has spent the last century investing in operational excellence and we tend to do better than most during tough times. Our manufacturing footprint provides structural advantages beyond cost implications. In a tariff environment, it has also provided supply chain stability. As we look back to the challenges coming out of the pandemic lockdowns, we outperformed by operating our own factories.

Rather than overly relying on third party sources, we were better able to control output and by being less reliant on China, we were less impacted by shipping and container disruptions and as a result we were better able to service our customers. Beyond that, we have now expanded our business outside of the U.S. and believe that geographic diversification will also help us to dampen the impact of the turbulence we are seeing domestically. The integration of Nissens is on track to yield significant synergies with teams working on product line expansion on both sides of the ocean to fuel growth, as well as savings programs focused on combined resources and best cost sourcing. Add to that various other cost reduction programs being pursued throughout the enterprise and tackling it all with the best group of people to make it happen. We feel good about the future.

With that, I'll turn it back to the moderator and we'll open it up for questions.

Operator (participant)

Thank you. At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star two. Again, that is star and one. We'll take our first question from Scott Stember with Roth. Your line is open.

Scott Stember (Executive Director and Senior Research Analyst)

Good morning guys and thanks for taking my questions.

Eric Sills (Chairman and CEO)

Morning, Scott.

Scott Stember (Executive Director and Senior Research Analyst)

Eric, if I heard you correct, you said that POS and Vehicle Control was up in the quarter. Could you maybe size that up a little bit? I know it had been flattish as of late. Have you guys seen an acceleration or anything to point to?

Eric Sills (Chairman and CEO)

Yes, correct on both points. Coming out of much of last year was relatively flat. In the first quarter of this year we did see positive gains in the low single digits. Now of course that's an aggregate number combining all of our customers, all of our major customers. Yeah, it was low single digits in the quarter.

Scott Stember (Executive Director and Senior Research Analyst)

Okay, got it. Regarding tariffs, I know there's a lot of moving pieces here, but there's been some talk about some relief for imported foreign auto parts. Not sure if that's just referring to OEM based parts or does that have you guys been able to clarify whether that means that there will be some relief, notably for Chinese parts for the aftermarket?

Eric Sills (Chairman and CEO)

I assume you're referring to the announcement that just came out in the last 24 hours, and we're still reading the details of it, but it does appear that it's much more geared towards relief for the automakers. At this point, again, we're still reading it, but we're expecting that to have minimal impact on us.

Scott Stember (Executive Director and Senior Research Analyst)

Okay, and then last question on Nissens, obviously a great contribution there in the quarter. Can you just give an idea? I know that you did not own them last year, but on a pro forma basis, sounds like they are growing faster than the core business organically and any cross pollination wins or good stuff that you have seen early on.

Eric Sills (Chairman and CEO)

Okay. In terms of their growth or performance, we did not own them a year ago, so we are not showing that comps. What I would say is that they continue to show growth and to perform very well in that market. The trends that we have been speaking about, probably prior to the acquisition of being in that, you know, outperforming the European aftermarket, that trend did continue in terms of wins since the acquisition. We are still in the earlier stages of that. Nothing is showing through the P&L. We do have, as I said, teams working on building out each other's catalogs.

Really the way we see 2025 as being the preparation year as we add the coverage, put inventory in place and whether that's adding SKUs to existing categories, for example, you know, they have compressors that we don't have, or vice versa, or it's entirely new product line expansions, a category that they heretofore did not have, or vice versa. That work is happening this year where we would expect to see any sales lift really in 2026. We are talking to each other's customers and we do believe that there are opportunities there as well, but nothing to report at this point that you're going to start seeing.

Scott Stember (Executive Director and Senior Research Analyst)

Got it. That's all I have for now. Thank you.

Eric Sills (Chairman and CEO)

Thank you, Scott.

Operator (participant)

We'll take our next question from Bret Jordan with Jefferies. Your line is open.

Bret Jordan (Managing Director)

Hey, good morning, guys.

Eric Sills (Chairman and CEO)

Morning.

Bret.

Bret Jordan (Managing Director)

When you look at the tariffs and you look at the competitive product for you out there, whether it's Wells or whether it's OE alternative, you know, in Temperature Control or Vehicle Control, how does your tariff exposure and production footprint stack up? I guess sort of the, your relative price value versus the competition in this current tariff environment, have you gained ground in the sense that you're more North American and more of your competition is import or have the OEs gained ground because they're getting relief on import and they are North American as well?

Eric Sills (Chairman and CEO)

We believe that in general, our footprint is favorable to the competition, obviously, yet to be seen how the competitors look to address it in the marketplace. We believe overall we have a structural advantage. Whether it's against the pure play aftermarket guys that you're referring to or against any of the tier ones, we see ourselves being at a structural advantage.

Bret Jordan (Managing Director)

Okay. On the Nissens business, could you talk about just European aftermarket trends, you know, what they're seeing in POS and the general health of the aftermarket on that side of the ocean.

Eric Sills (Chairman and CEO)

As we look at the overall market in Europe, you're hearing some of the similar things from the big players over there as the distributors are reporting here, which is, you know, you're seeing some softness in certain categories, but you know, hard failure items and more DIFM type items tending to outperform. You see a lot of similar trends there, which Nissens is well positioned to take advantage of, and we believe that they should stand to continue to outperform over there, the general aftermarket trends.

Bret Jordan (Managing Director)

Okay. I guess one last question just sort of on this, the cadence of this year's outlook. Did you think you saw a lot of pull forward in Q1 orders that people were trying to bring inventory in ahead of who knew what was going to be on tariffs the next day and that that will have drawn from Q2 and we did sell out before we replenish or do you think it's strong sequentially through the year?

Eric Sills (Chairman and CEO)

We do not believe that we have seen any pull forward in trying to beat the tariffs. We have not seen any evidence of that. We do believe, and I think we basically alluded to this through our comments, that on the Temperature Control preseason, which have nothing to do, the timing of that has nothing to do with tariffs. We get those orders in really mostly towards the end of the previous year and start working on them. Those often can ship either towards the end of the first quarter or the beginning of the second quarter in any given year. This year they were a little bit more front loaded. We would expect to see kind of an offset on the preseason portion of Temperature Control. Beyond that, we have not seen any customer behavior that suggests they are trying to get ahead of the tariffs.

Bret Jordan (Managing Director)

Okay. One final question. As you think about the retailers' treatment of these tariffs, are you hearing from them that they're pretty open to your passing them through, or is it a tough negotiation because they're concerned about just sort of the price shock on the consumer?

Eric Sills (Chairman and CEO)

Certainly everything is a negotiation, but we're in communications with all of them and we believe that our approach to it, where there's a, you know, there's a sharing of it by us working upstream on mitigation efforts and an expectation that they would take on the balance. We feel good that the process that we develop going back to, you know, 2018, 2019 tariffs will be sticky and that will build with them a program that says, look, I think we're in a very volatile time. I don't think the tariffs as they stand today are going to continue to be what they are. I think we're going to continue to see movements up or down, hopefully down, and we'll develop processes with our customers that allow us to adjust accordingly.

As long as we continue to be fair and rational, we believe that our program will be well received.

Bret Jordan (Managing Director)

Great. Thank you.

Eric Sills (Chairman and CEO)

Thank you, sir.

Operator (participant)

We'll move next to Carolina Jolly with Gabelli. Your line is open.

Carolina Jolly (Senior Research Analyst)

Great. Thanks for taking my questions. Morning. Any, just a quick clarification question. Any current impact from tariffs in first quarter?

Nathan Iles (CFO)

Yeah, hi Carolina, it's Nathan. No, we didn't really see any impact of tariffs from new tariffs that is that came in in 2025 in our Q1 numbers. Obviously a little bit of cash flow impact is that the tariffs are paid up front but as you know, the cost has to work its way through the inventory and so any cost impact comes later in the year.

Carolina Jolly (Senior Research Analyst)

Okay, perfect. Thanks for that. Then second, the quarter came in pretty strong, definitely above our estimates. Can you kind of discuss, given that you maintained guidance, any benefits you saw in the first quarter that you do not necessarily expect to roll through? I know you discussed the pre buy and everything, but anything else?

Nathan Iles (CFO)

Yeah, I think as Eric mentioned about preseason ordering and temp control. Right. You kind of have to look at that segment certainly as a first half year-over-year. There was a little bit of selling ahead of this time last year for that segment. You know, that plays into keeping the guidance where it was certainly as that was an outsized impact on the quarter. I think just coming out of first quarter with all the uncertainty around tariffs and how we'll deal with them, how others will deal with them, felt like it was good to keep our guidance where it was then update accordingly as we go through the year.

Carolina Jolly (Senior Research Analyst)

Thank you.

Operator (participant)

We do have a follow up from Scott Stember with Roth. Your line is open.

Scott Stember (Executive Director and Senior Research Analyst)

Yeah, just following up on the facility move that you guys are undergoing in Kansas. Can you maybe talk about the status of that, costs related in the quarter, whether the total cost for the year have changed and any synergy updates.

Jim Burke (COO)

Okay. Hi Scott, it's Jim Burke. Yes, we're right in the midst of updating Shawnee with the installation, the automation that we've put in there currently. Just to refresh everybody's memory, we plan to move into the Shawnee facility to move the top moving numbers from our Virginia Lewisville facility. Risk of all avoidance, top A and B numbers and also then shed the facility that we have in Edwardsville, Kansas. We've implemented an automation project that's there and that's in testing at the moment.

We'll be moving more product in shortly, in mid 2025 and then it'll be complete our plan by the end of 2025 with the Temperature Control product that's moving in there. Regarding the costs within the quarter, I'll let Nathan respond.

Nathan Iles (CFO)

Yeah, hey Scott, it's Nathan. You know, going back to when we started the startup for the warehouse coming out of 2023, really, we talked about something like a $6 million-$8 million incremental cost startup range and then that would come down over time. We're kind of still seeing that in that same range. You know, in the quarter a couple million dollars related to the warehouse and then as we get fully operational later this year, we can update more on how that cost is looking.

Scott Stember (Executive Director and Senior Research Analyst)

Got it. Thanks again.

Operator (participant)

It does appear that there are no further questions at this time. I would now like to turn the call back to management for any additional or closing remarks.

Eric Sills (Chairman and CEO)

Thank you. We want to thank everyone for.

Participating in our conference call today. We understand there's a lot of information presented and we'll be happy to answer any follow up questions you may have. Our contact information is available on our press release or investor relations website.

We hope you have a great day.

Thank you.

Operator (participant)

This does conclude today's program. Thank you for your participation. You may disconnect at any time and have a wonderful afternoon.