Good morning, ladies and gentlemen and welcome to the Distribution Solutions Group Third Quarter 2022 Earnings Conference Call. At this time all participants have been placed on a listen-only mode. And the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host Steven Hooser. Sir the floor is yours.

Good morning, ladies and gentlemen, and welcome to the Distribution Solutions Group third quarter 2022 earnings call. In conjunction with today's call, we have provided a Q3 earnings presentation that has been posted on the company's IR website at investor.distributionsolutionsgroup.com. Joining me for today's call is Bryan King, DSG's Chief Executive Officer and Chairman; and Ron Knutson, DSG's Executive Vice President and Chief Financial Officer. During the call, they will be providing an update on the business from an operational and financial perspective. Additionally, Brad Wallace, LKCM-Headwater Partner and DSG Advisor as well as operating company CEOs, Cesar Lanuza, Russ Frazee, and Bob Connors will be joining for the Q&A session. Please note that statements on this call and in the press release contain forward-looking statements concerning goals, beliefs, expectations, strategies, plans, future operating results and underlying assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those described. In addition, statements made during this call are based on the company's views as of today. The company anticipates that future developments may cause those views to change. And we may elect to update the forward-looking statements made today, but disclaims any obligation to do so. Management will also refer to non-GAAP measures and reconciliations to the nearest GAAP measures can be found at the end of the earnings release. The earnings press release issued earlier today is posted on the Investor Relations section of our website. A copy of the release has also been included in a current report on Form 8-K filed with the SEC. This call is being audio webcast on the Internet via a Distribution Solutions Group Investor Relations page on the company's website. A replay of this teleconference will be available through November 17, 2022. Now with that, I'd like to turn the call over to Bryan King. Bryan?

Thank you, Steven. And good morning, everyone. We appreciate your interest in Distribution Solutions Group and we are excited to share the results for our fiscal third quarter. Please refer to our supplemental Q3 earnings presentation that is provided on our website to follow along with our prepared remarks. And we will start on Slide 4. DSG represents a best-in-class Specialty Distribution Solutions Company operating in three separately managed high touch value added marketplaces. We offer customers both replenishable industrial parts and products as well as specialized products. We also provide outsourced solutions for companies to help solve their labor shortages and supply chain management challenges. We have a unique offering of products, services, and solutions. Our competitive advantages are compelling to customers, and are important to manufacturers, OEMs, and businesses that need specialized products and solutions in their industrial and commercial industries. We're very proud of our leadership teams and their DSG colleagues as they work collaboratively and executed this third quarter, their second quarter together consistent with our underwriting objectives in pulling these businesses together. For our combined companies on a comparable basis, sales grew 46% to $347 million consisting of organic growth to 15% and acquired revenue of 31%. We generated nearly $35 million of adjusted EBITDA for the quarter and achieved our target of 10% of sales for adjusted EBITDA margin. We are encouraged by these results as all three operating companies are performing at or above our expectations. While DSG does not currently provide formal guidance, we are not currently seeing softness in our businesses and the demand environment remains strong as we enter November. We want to remind investors Q4 seasonality lower and we have four less operating days this year. That said all three operating companies reported strong Q3 results with meaningful progress…

Thank you, Bryan, and good morning everyone. Turning to Slide 7, we're excited this morning to share with you the third quarter results of Distribution Solutions Group. Briefly let me comment on the required GAAP accounting presentation before we discuss our results. Also, as Bryan mentioned, we posted our Q3 2022 financial results presentation on the IR website for DSG. As a quick reminder, the combination of the three operating companies is required to be treated under GAAP as a reverse merger. From an accounting perspective, Gexpro Services and TestEquity acquired the stock of Lawson Products as of the April 1 2022 merger day. A few items to keep in mind as we review the Q3 results. The third quarter 2022 results include all three operating companies for the full quarter. The year-to-date GAAP information for 2022 includes Gexpro Services and TestEquity for the first six months and given the merger date of April 1 only includes Lawson Products from April 1 to September 30. The comparative GAAP information for 2021 only includes Gexpro Services and TestEquity as the predecessor company for the accounting [indiscernible]. For ease of comparing these results, the slides that we are using for the conversation this morning are adjusted for the pre-merger activity of Lawson Products. We also heard from many shareholders on the lack of visibility of prior-quarters. So we're now presenting trailing five quarters of adjusted sales and adjusted EBITDA on a combined basis. Let me summarize the third quarter results. On a combined basis, we reported strong top line and bottom line results across the three principal operating companies. As Bryan mentioned, we reported total sales growth of 46% with organic sales growing 15.4% through both price and volume. Today in 2022, we have closed on four acquisitions, for a total of…

Thank you, Ron. Turning now to Slide 13. We accomplished what we set out to accomplish since merging the businesses in April. The teams are working well together. And I would say that we have achieved more than we expected by September 30 with much more expected in front of us. Let me highlight a few of these areas as an acknowledgement of the strong successful effort in shared accountability by our colleagues throughout DSG. We've enhanced our go-to-market strategy for the three businesses and importantly, expanded our channels to market. As I mentioned briefly, we've rolled out an incentive program for our sales team to support ambitious cross-selling goals for our largest strategic accounts for DSG. And we have pipeline leads and wins to support our growth initiatives. Also, maybe quite differently than you typically hear on earnings calls like this. We've operationalized LKCM headwater and our operating partner team mostly retired C suite distribution executives at each of our operating companies. There is not a management fee for this work, as is typically done by other groups and consultants. As this support team, in collaboration with the management teams are fully in line with investors and shareholders to improve financial and operational performance. Generate cash flow and build long-term enterprise value through stock price appreciation. Turning to Slide 14. Third quarter results demonstrated our ability to report strong growth organically and by acquisition and to drive substantially adjusted EBITDA with a 10% margin. We believe that DSG has the best operating leaders in the industry, and they are working hard to grow sales, improve margins, and generate cash flow. We remain confident about the opportunities to further scale the business and drive margins structurally higher, leverage the working capital investment and generate accelerating level of free cash flow off of each dollar of revenue and generate cash. We believe our MRO OEM and TestEquipment products, services and solutions provide customers with a comprehensive set of industrial, distribution and supply chain support that are increasingly being reaffirmed by our customers and vendors daily in the marketplace. Thank you for your time today. And now we would like to open up the line for investor questions. Operator?

Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] Thank you. Our first question is coming from Ken Newman with KeyBanc Capital Markets. Please go ahead.

Hey, good morning guys.

Good morning, Ken.

Good morning, Ken.

So I guess we'll start on the demand side here. Obviously, you're seeing that you're not seeing any evidence of customers delaying projects or pushing orders out? I'm not, I know, you're not ready to guide to 2023 or you're not, you're not guiding at all. But I'm curious if you have any color on just how much of your current backlog provides visibility into the following year at this point?

Well, on the MRO side, it's more demand driven. And, we don't usually keep a backlog but we are seeing consistent activity levels with what we've seen throughout this year. On Gexpro, we're more tightly aligned with the OEMs. And Bob might have more perspective on exactly what he's saying. But across most all of our verticals, with the exception of renewables, demand has stayed consistent and elevated. Renewables has been impacted throughout the year. And we've been waiting for the inflation, tax or the inflation, congressional, whatever they're calling it the country inflation, but the production tax credit extension, that should reaccelerate that one vertical from kind of the depressed levels that we've experienced this whole year. In markets, Bob on your end-markets, would you want to comment on it?

And the best way to look at it is five of the six vertical markets are up double-digits going into Q3. So we're seeing nice tailwind in aerospace and defense and consumer industrial. A nice lift in transportation. Technology, where we are seeing headwinds is sustained headwinds is renewables. And we anticipated that, as Bryan said, the Inflation Reduction Act has been extended. So we know that the wind and renewables market over the next 10 years is going to be well positioned for growth. So to Bryan's point, we're well versed in operating and tailwind and headwind environments. And if you know, going forward into '23, we see some cautionary headwinds. We'll adjust accordingly.

Okay. And then obviously, organic growth…

It may be helpful just because this is so on everybody's mind. To probably let Cesar speak about Lawson, in the end market demand that he's saying. I mean, we're seeing an acceleration in SKU activity. And we've had actually good solid demand increase at Lawson. But I think that there's no topic that's on any of our minds more than what end markets are doing right now in demand. So why don't we let Cesar and Russ each answer your question as well. So there's they can speak about their end markets so that we can got to get that out there for everybody to understand what we're seeing. Cesar, wanted to say something about Lawson's end-markets as well.

Thanks, Bryan. Like you've heard from Bryan earlier, our MRO market, we continue to see the demand flowing through our different end markets that we serve, which is very diverse industries. We're serving a lot of industrial waste management companies, utilities, fleet, automotive, you name it. So we continue to be very sticky with our customers and play a significant role when it comes to labor shortages. And as we've been growing our business, the piece that we continue to feel strong about it is our approach for new customer acquisition and increasing the share of wallet, across the board. But when it comes to seeing any type of softness across the different end markets, we're not seeing any significant or major signal right now. But as you heard from everybody, we're very cautiously coming into 2023.

I think that your end markets are all performing. But we're all kind of everybody is looking at the end markets and kind of wondering what we might see. But we aren't saying it, Russ, you've got the business with the strongest backlog. Indications, why don't you speak about your end markets?

Our end markets have remained steady throughout the years steady to growing. We've seen a little softness in the beginning of the year in aerospace and defense. But that seems to have stabilized a bit. Technology can be lumpy. And we're seeing that as it's going forward. And that's mainly due to supply chain. But we're not seeing any indications from our customer base right now on anything significant softening in the market, we continue to build a significant backlog due to the lumpiness in the technology sector as well.

That's all really great color and appreciate all that. My follow up here is really on the price side, obviously, organic growth was strong across all the three segments. I'm curious if you just kind of help us understand how much price was taken in the quarter, any color on what price cost was across the three segments? And then maybe also, how much do you expect from a carryover benefit as a carryover benefit from pricing actions that you've taken so far this year into 2023?

I will turn it to you, Ron but I just would say that one of the things that we've really prided ourselves now for really 30 years in distribution investing is staying really nimble on pricing, particularly when you get an opportunity to raise prices due to inflationary pressures. And we had spent a lot of time studying in the 70s and 80s, which I alluded to earlier, how inflation can be, can work to the advantage of cash flow on a normalized working capital cycle for distributors. And that led us in our desire to compound money and distribution businesses that kind of led us to distribution over our longstanding investments in banks and in financial institutions, just had a higher return on invested capital profile, especially on incremental dollars in particularly in inflationary cycles. When normalized for the increase in working capital that you have to step into, as you're replacing inventory with higher dollar cost inventory. And receivables that are, so I think that that Ron and his team was set up well for it as were each of our companies going into it, we talked about whether or not we were going to roll into an inflationary cycle. And so we started taking some price actions pretty early, and we've continued to take them. We've had to work where we have contract pricing to make sure that we're getting you know that we're working collaboratively with our customers that are longer standing, larger customers where we have some contracting elements with them. That's more probably over Gexpro with Bob's business than it is and others. But even there, we've been able to be very constructive in being able to list our pricing consistent with on a percentage basis with our cost of goods sold. We're getting more flow through were we expect to continue to get more flow through on that. And we've got some more pricing actions that we've got prospectively in front of us. And we've taken a little bit this year or this quarter. Ron, why don't you speak that where specifically you've taken it? Are you seeing the other verticals take it?

Sure. Yes, thanks, Bryan. So in terms of how large the price increase was for each of the businesses, can -- within the deck we laid out the organic sales and to Bryan's comments, really all three companies took price increases and realize benefits throughout the quarter. For Gexpro Services, organic sales were up about 14%, about half of that about 7% of that was price. TestEquity organic was up about 17%. And about -- again about half of that 8% was price. And then on the Lawson side, we were up about 17% organically and our volume was up about 5%. So that's call it 12% on price and mix. And to Bryan's comment, I think that particularly within the Lawson business, we've been throughout 2022, I would say catching up a bit, versus 2021. So I think that's why a larger portion of our increases price related than the other three operating companies. We have continued, I think all three organizations that continue to see cost increases come through from our supplier base. I will say what we saw in the last Lawson side in October, tempered itself a little bit. So maybe that's a good sign moving forward. But at this point, all three companies, and you can see this in the margin, gross margin percentages, are staying ahead of those vendor costs increases. So certainly there is some of that that's going to spill into 2023. In terms of price, certainly any actions taken throughout the year, we'll get the full-year effect for next year. But right now, we're anticipating that, even though October was made a little bit softer from a vendor cost increase that that those will continue to move into 2023 as well.

Got it. And then just one more here. I mean can you just talk a little bit about how you think about the M&A strategy. Obviously, correct me if I'm wrong, but it sounds like Bryan, that you are -- you're cognizant of the macro uncertainty, we've seen you going to shift some capital back towards share repurchases, and then back towards internal growth initiatives. But you also talked pretty positively about the pipeline being full. Just to clarify, I mean, with interest rates rising, and just with the leverage profile that where it is today. Should we assume that it's not the top priority for capital deployment in the near-term? Or is that an unfair statement?

I don't want to say that it's an unfair statement, but also don't want to anchor expectations around us being aggressive around acquisition such that we'd be in any way reckless with a business that we believe longer-term. We're going to continue to compound a lot of value as partners with the public shareholders. So there are very attractive tuck-in acquisitions that are in our queue right now that we're working on actively, and we think will be revenue accelerating for our core. So doing something for financial engineering purposes alone is absolutely not our objective. But this is not -- I cringe to roll-up term. I always have even gone back into the 90s. If there's not a deliberate reason to make an acquisition where you think it makes the financial and long-term sustainability of your core better, then there's not a real reason to go out lay off that capital because like I tried to talk about our in the prepared remarks, the incremental returns on invested cash capital -- on invested capital and working capital is are so high in distribution businesses that you can compound your business very attractively, most attractively through capital invested in working capital, or in internal initiatives. And so we have no shortage of those opportunities right now on the platform that we pull together, but there are some key elements that we think are going to continue to bind some of what we've got together. Tighter and also allow for the organic slope of revenue growth to be accelerated from where it might be otherwise. Sometimes that's acquiring key customers that you think you can -- were the sales cycle is really long. I know, in Bob's business in Gexpro Services, those lead cycles are long. And so if you can…

Helpful color. Thanks.

Thank you. Our next question is coming from Kevin Steinke with Barrington Research. Please go ahead.

Good morning, Kevin.

Good morning. In the prepared comments you mentioned Lawson Products exploring some new channels to market. I don't know if you could expand on that at all.

Cesar, you're probably best to tackle this.

Thanks, Bryan. Hi, Kevin.

Good morning.

Elaborating a little bit more on Bryan's node. When you think about it, we got a 90,000 active customer base and we go-to-market one single channel right now with our field rep, are there every day for our customers. But as we think through the future in terms of better looking for ways to better serve our specific needs of our customers with such a diverse customer base that we have within A segments and different end markets, but both sides as well, we're very carefully working with a field in our sales team to develop different testing in different ways to continue to become stickier, and being able to allow our more precious time for our sales team to be in front of customers. So that's something that you continues, you continue to hear us talking more and more about it over the next coming quarters as we continue to develop these different ways or alternative ways of serving different customer sites.

Okay, thank you.

I would also add, one of the things that has been most exciting for us has been the ability to look into how for instance Gexpro Services tight relationship with their OEM customers is pulling Lawson's MRO and some of the TestEquity EP engineered procurements solutions into those engagements. And so that's in some ways, that's another channel expansion to market for Lawson, because it may require, it really does require a different way to service those accounts, because Gexpro Services already has people embedded inside of those OEM facilities. And so the Vendor Managed piece of it can be picked up by Gexpro Services, and their colleagues, even though the product and the revenue is going to be hitting on Lawson's top line. So I hope that's helpful.

Yes, that is absolutely. Thanks for the color. You obviously had some nice adjusted EBITDA margin expansion there in the quarter, but you did call out higher compensation and health care costs. Can you just maybe elaborate on that a little bit more and how meaningful that was?

Yes, Kevin, this is Ron. Good morning. So on the compensation side, that was really more variable in line with our organic growth in sales. So, it was sizable dollar amount just to support for the sales team and support the higher organic growth 15% that we saw for the quarter. On the health care costs across three companies was about 60 bps on our margins. So all in it was about a $2 million increase in our costs just in the third quarter. And so what we saw, I would say is across the three companies, probably higher claims coming in the first quarter seem to settle down a little bit in the second quarter, and then jumped on us a little bit again, in the third quarter in particular, within the Lawson business was the probably the biggest driver of that. So yes, to answer your question about 60 bps on our net margin just on the health care alone.

Okay, thanks for the detail. You've talked about in the past the goal of exiting 2022 with an adjusted EBITDA margin of greater than 10%. Is that something we should continue to think about? I know the fourth quarter is seasonally slower, generally lower, but just trying to think about how to think about the margin exiting the year?

Yes, Kevin, this is Ron again. So you're spot on in terms of seasonality. The fourth quarter is typically a little slower for us, really across the three companies. And generally three to four fewer selling days as well. In fact, we've had 60 selling days in Q4 of 2022 versus 64 in Q3, so it does cause a bit of a kind of deleveraging effect on us. But once we get past the fourth quarter again, I can't give you a specific number, on formal guidance for the quarter itself relative to the 10%. But as we enter into 2023, certainly, we're looking to expand those margins, really based upon the continual organic growth that we're seeing, the M&A that we've talked about, a lot of the initiatives that are taking place across all three companies in terms of sales expansion, as well as some cost opportunities that we're identifying as well, which we feel that more of those will be realized in in '23, than what are currently coming through the P&L in '22. So we feel really good about the first part of 2023, relative to margin expansion, again, understanding that Q4 softens up a little bit not dramatically, but just a little bit, and then we're off to the races again in the first quarter.

Okay, great, thanks for all the color. Appreciate it. I've got to jump on another call here. But I will catch up with you some more tomorrow. Thanks.

Sounds good, thanks Kevin.

Thank you, Kevin.

Our next question is coming from Brad Hathaway with Far View Capital. Please go ahead.

Good morning, Brad.

Hi, everyone. Hi, good morning. Thank you so much for the incremental financial disclosure and for the capital allocation discussion, that was a really helpful appreciate that. With regards to, I guess obviously, potential recessions are top of mind for everyone right now. And as we're all getting to know better the businesses that are included in the new DSGR, I would love to just maybe if we get to discuss qualitatively, kind of how Lawson but especially TestEquity and Gexpro kind of responded in a recessionary environment in terms of new kind of factors that impact demand volatility, detrimental margins, and things like working capital, just obviously, not necessarily numbers, but just maybe help us better understand some of the factors that influence how each, each of the three businesses behave in a downside scenario.

Sure, I'm going to start on it. And then I may ask others to participate. Brad, that one of the things that kind of big picture, we've invested so much money in working capital this year, mostly as we were bringing the companies together and the top end and trying to get to skew congruence, as I alluded to, that, I would say that, that we have the working capital in place. Notwithstanding inflationary pressures on it going forward to be able to either manage a larger revenue base, and watching our working capital intensity, come back down several percent -- 100 percentage points, or several 100 basis points, or being able to pull significant cash out of working capital, which is what we've been able to do historically, in these businesses, even across our distribution companies during softer periods, these instances, we were associated with them all during the COVID cycle. And so there was, a good bit of a good lens and the question you're asking, in terms of how they responded, you know how Lawson responded. So I'll speak to Gexpro, surprisingly, for us Gexpro during the COVID cycle actually grew, the top line activity outside of project revenue, which was, is non-contractual revenue was stable and grew through COVID during 2020. And so profitability actually improved as we were able to, you know, as a key supplier, we got some pricing on the gross margin side, and it flowed through the P&L as we continued to tighten up our growth initiatives during COVID. And so are we ran our P&L at Gexpro Services tighter as Bob did. And so it threw off more cash or threw off more EBITDA not to mention the fact that, the cash diversion, then was very attractive. We've invested a lot…

Yes, Bryan, I think, first of all, we're fortunate that we have decent executives leading these businesses. Just our experience with GE and Rexel over the past 30 years. I mean, first thing you do is you look at your customers and a recessionary environment, customers are asking you to help rationalize their supply chain, they want to go to fewer and fewer suppliers. So that becomes a strategic supply chain. They're looking for labor productivity. They're looking for value engineering, everything that that we excel at. So to me, when we walk into a situation that headwind environment, we just view it as an opportunity. Bryan had communicated earlier, you can still drive skew expansion, you can still drive wallet share, you can still drive new business development, you can still drive cross-selling. And we've identified over 120 new opportunities collectively for Gexpro Services, TestEquity in Lawson just mining the install base. So our thought process is we'll just reallocate resources and continue to expand to take share in a multi-billion dollar vertical market.

With TestEquity, we've actually changed the structure of the company somewhat since the first recession with COVID. We've added product lines that will lower end product lines that people customers fill and to purchase even in a down cycle. And that mean frankly, we're increasing our business digitally, exponentially every year. So as we go to market digitally, that makes it much easier to get to the recessionary times.

Russ [indiscernible] are jumps in, you talk about, for Brad, we've added 3,600 SKUs 3,300 SKUs, in the last 90 days on our digital platform, part of kind of that investment in working capital in the last six months, that's taken place in test and in Gexpro Services and in Lawson, as well. Talk about the SKUs that -- kind of a little bit of the SKU perspective additions that you're done?

Sure, sure. I can start with that one. We basically through our digital platform, monitor what customers are looking for that we don't currently stock. And as we go through that, we expand our product lines, and we expand the stockable product lines as we go forward, adding new products to our digital platform. And that automatically increases the sales as customers look for those items that we have them and have them in stock. And that tends to increase our sales exponentially.

Yes, Bryan in our case on the Lawson side, very similar to what Bob described for Gexpro Services, we see these times as opportunities for us to continue to support our customers, because they're looking for partners who can help them to reduce their costs, save money. And that's where we chime in, that's where our team goes out there and help our customers to really drive through these difficult times, and shuffle our resources from one way -- from one place to the other, and leverage the cross selling opportunities that we have across the different portfolio companies today.

And Brad, you're familiar with Lawson's performance in just a couple of years ago, and 2020. So we had the ability to cash flows to Bryan's point in the cash flows remained really strong during that time period, on the working capital side, and from a cost perspective, as well. So we know, we know what levers to pull, in fact, our EBITDA margins were flat, even though from the previous year 19 to 20, even though sales fell off quite a bit. So, we know what levers to pull to make sure that we can still continue to deliver the financial performance.

Great, I remember the Lawson, is that correct?

I remember that.

You go.

I talked about this before, there's in these down cycles, our cash conversion off of EBITDA tends to be 100% or larger. And certainly in the '08, '09 downcycle, right, we bought off IDG ticket private in August of '08 and we're faced with a significant decline in revenue right afterwards, much more of a shock than, than I think any of us expect here, even in the worst scenarios. And so that '08 end of '08, we were deeply embedded in a lot of companies in their supply rooms and purchases declined. And we threw off a lot of cash at the same time as we were very tight on spending. And so we held EBITDA flat on significantly lower revenue, and our cash conversion coming out of working capital delivered the business significantly. And so we actually had much lower debt-to-EBITDA ratios during the trough of the recession than we had going into it in most all worked this model a lot of different ways. And all of my efforts on that would indicate that we would delever our working capital, should we go into a recession. So our EBITDA may come down or may, if assuming we aren't taking drastic cost cutting initiatives at the company levels but we're holding most of our costs flat, we take advantage of the synergy cost benefits that are still in front of us, and we have a decline on the top line. Cash ought to come out of the business at a level that would be consistent or greater than EBITDA.

Great, that's very helpful. Thank you. That was a very useful discussion. It's good. Good to learn more about Gexpro and TestEquity, especially because obviously we have more experience with Lawson historically. Thank you very much. I think, congrats on a great quarter and looking forward to continue to see what you're building here. So thank you.

Thank you, Brad for your support.

[Operator Instructions] Okay, there appear to be no further questions in queue. So I will hand it back to Bryan King for any closing comments.

Okay, thank you, operator. Thank you for those that participated today, we appreciate your interest in DSG. We're excited about where we are, we certainly are further along in many of our initiatives, and we expect it to be by September 30. The businesses are performing at or above how we imagined they would. And our visibility at this point in time continues to give us a lot of confidence in the near term, as well as the intermediate term. Although we appreciate and are respectful of the changing environment with interest rates and inflation. I want to particularly call out the effort of our management teams and their colleagues over the last six months. As we've been working together, there's been a tremendous amount of effort by everybody to get to where we are today. And we really appreciate our employees across DSG working as hard as they have to make the business teed up for the prospective year as profitably and successfully pulled together as it is. So thank you for everyone's efforts. And we look forward to talking to you either throughout this quarter please reach out to us or we will hear you, hopefully engage with you at the end of the year. Thank you everybody. Bye.

Thank you, ladies and gentlemen, and this does conclude today's conference call. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation.