Good morning, ladies and gentlemen, and welcome to the Patrick Industries, Inc. Second Quarter 2020 Earnings Conference Call. My name is Donna, and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Ms. Julie Ann Kotowski from Investor Relations. Ms. Kotowski, you may begin.

Good morning, everyone, and welcome to Patrick Industries second quarter 2020 conference call. I am joined on the call today by Andy Nemeth, President and CEO; and John Forbes, CFO. Certain statements made in today’s conference call regarding Patrick Industries and its operations may be considered forward-looking statements under the securities laws. There are a number of factors, many of which are beyond the company’s control including without limitation, the disruption of business resulting from unforeseen events such as the COVID-19 pandemic and its impact on economic conditions, capital and financial markets, and our operations, which could cause the actual results and events to differ materially from those described in the forward-looking statements. These factors are identified in our press releases, our Form 10-K for the year ended 2019 and in our other filings with the Securities and Exchange Commission. We undertake no obligation to update these statements to reflect circumstances or events that occur after the date the forward-looking statements are made. I would now like to turn the call over to Andy Nemeth.

Thank you, Julie Ann. Good morning, everyone, and thank you for joining us on the call today. First and foremost, I would like to welcome John Forbes, our interim CFO and current member of our Board of Directors. John is doing a fantastic job as expected and his leadership has been energizing and engaging as we pursue our tailored and disciplined search for a permanent CFO. John will review our second quarter financial results later during the call. Before we cover the details of our quarterly results, I want to provide an update on our efforts to mitigate the impacts of COVID-19 on our business and prioritize the safety and protection of our team members, their families and our communities as well as the overall impact to our business since our last call in late April. We've been working very diligently during these unprecedented times to maintain a safe environment for all of our talented and dedicated team members, while also prioritizing our goal of striving to take care of our customers at the highest level. With the majority of our workforce returning to production in early May, we established and implemented extensive back-to-work safety protocols to protect our team members and facilities in alignment with both CDC and state guidelines. We are adapting and evolving with operational best practices and continuing to position ourselves to maintain a flexible and nimble operating platform. While some restrictions have eased and our customers have returned to robust production levels, we remain focused and attentive to our disciplines team member safety and organizational goals. Our leisure lifestyle markets experienced an unprecedented wholesale production shutdown of more than five consecutive weeks on the RV side of the business and between one and five weeks on the Marine side of the business during the quarter…

Thanks, Andy. Our consolidated net sales for the second quarter decreased 31% to $424 million primarily due to the lost shipping days and temporary shutdowns of certain of our facilities, due to the COVID-19-related business disruptions within our end markets in April and early May. This was followed by a strong resurgence in the back half of May and throughout June in all our end markets, particularly RV and Marine reflecting the relaxation of many stay-at-home restrictions by various states as well as an increase in consumer demand. Revenue from our leisure lifestyle markets, which is comprised of RV and Marine decreased 39% with RV and Marine revenues down 40% and 34% respectively. RV content per unit decreased 2% to $3,086 per unit and estimated marine content per unit decreased 13% to $1,439 per unit. During the second quarter, our RV and marine content per unit was negatively impacted by OEMs curtailing production in April and early May, but continuing to ship finished goods during the suspension of operations in support of the ongoing resilience in retail in these markets as dealers continued to deliver the retail units to customers. Excluding the impact of the lost RV production days, we estimate our content per unit was flat during the quarter. Our customers lost production days that negatively impacted our content per unit also impacted our organic growth as was most prevalent in our RV market sector, but was also felt in both the marine and MH markets. Revenues from our housing and industrial markets decreased by 12% in the quarter with MH revenues down 18% versus the prior year and estimated MH content per unit increasing 16% to $4,529 per unit. Gross margin in the second quarter was 17.4%, decreasing 100 basis points compared to the prior year. The gross…

Thanks, John. We're prepared to stay ahead of the dynamic macro environment with disciplined execution. Our proven flexible and nimble business model, cash-on-hand, strong cash flows and no near-term debt maturities position us well to navigate through these dynamic economic times. We remain confident in our ability to quickly pivot and execute on our strategic plan through a variety of economic scenarios. We feel our end markets are very well positioned to be the main beneficiaries of lifestyle changes and adaptations that are ever-evolving as this pandemic continues down its current path. We have the ability and resources to continue to flex up with our customers and invest in our infrastructure and working capital to support their projected growth needs. The combination of our operational and financial foundation, customer-first performance-oriented culture and the talent and dedication and passion of our more than 7,000 team members will continue to position us to execute on our strategic plan, as we strive to consistently exceed our customers' expectations. Our overall goal of increasing long-term shareholder value by serving our customers at the highest level, reinvesting in and protecting our talented and dedicated team members, dealing ethically and responsibly with our business partners and supporting our local communities remains our highest priority. This is the end of our prepared remarks. We are now ready to take questions.

Thank you. [Operator Instructions] Our first question today is coming from Brett Andress of KeyBanc Capital Markets. Please go ahead.

Hey, good morning. So Andy, obviously a nice recovery in the end markets here lately. Just curious, if you can share any insight on the production schedules in July and August for the OEMs? I think you said, high double-digits for the third quarter on shipments, but just any more color there would be helpful?

Sure. Yes, we've seen continuing tailwinds building on the RV side of the business as it relates to production schedules. The leaning out of the dealer inventories have been significant as we noted and we've continued to see the production rate schedules increase through June, through July into August. And our expectation is really through the third quarter and into the fourth quarter at this point and then positioning it for the restock for the 2021 model season. So right now units are in very high demand. Production run rates are continually getting increasing. So we've seen that really through this point in time and expect strong production run rates here for Q3 and Q4.

Got it. And then, I guess just building off of that into retail. I think you said 2Q RV retail was down 15% to 20%. I guess, I'm just curious what you've seen here more recently in June and July? Really just trying to tie that to your flat to low single-digit wholesale outlook?

Yes. Retail has continued to increase as well from all of our touch points. Right now one of the things that we're dealing with is just getting units to dealers is that we've gone through the stimulus package here. A lot of dealers are independent contractors. And so we're getting them back. And we've seen a little bit of buildup on the yards, but at the end of the day, we're hearing it again that REITs continue to be in high-demand and retail continues to grow.

Got it. I mean, any stab at kind of what maybe June, July -- what I guess 3Q retail could look like against that wholesale?

Hey, Brett, this is John. RVIA information on June retail was plus 10.8%.

And, of course, we're still in July, so we don't have that information yet. But all indications are July will be a very strong retail month as well. We're expecting -- what I would tell you, Brett, is that we would expect high single to low double-digit increases in retail through the third quarter based on what we're hearing.

Appreciate it. Thank you.

Thanks.

Thank you. Our next question is coming from Scott Stember of CL King. Please go ahead.

Good morning, guys and thanks for taking my questions.

Good morning.

Good morning.

Obviously, demand is strong across the board right now. People are just buying everything it seems like. But what's the mix right now, particularly within RVs that you're seeing? And how could that affect your content in the back half of the year?

Sure. This is Andy. Mix is still consistent with what we've been seeing as it relates to low-end units on the travel trailer side, entry level, consistent with the new buyers that are entering the space today. So what we would tell you is, on a mix, from our perspective, there's upside as units get contented upwards. And so, the more content we see, the more we'll benefit. There's been no change in the mix from a negative perspective and anything we'll get additional content as the mix shifts. We've also heard, through our channels and checks as well, that motorized production rates are picking up as well. So we're optimistic about kind of across the spectrum, as it relates to the buyers that are in the space today.

Got it. And just regarding costs, I know, you said that there were some extraneous COVID costs of $0.12 in the quarter. And you've also had some other meaningful cost cuts. What happens to those COVID costs as we go forward in the back half of the year? And from a cost perspective, what sticks from what's been cut, what's structural and what's not?

Right. So, a couple of things. First of all, as it relates to the $4.5 million on, call it, one-time COVID and other-related expenses, that's not an ongoing costs that we will incur going forward. We've implemented COVID protocols across our operating spectrum. We're used to that. At this point our team members have gotten used to those protocols. There's a little bit of inefficiency in there, but I don't expect it to be material. And then, as it relates to kind of our fixed cost structural adjustments that we made, we implemented about $35 million of fixed cost adjustments across the platform during Q2. We are going to be reinvesting some of those back in, but our expectation is that we're also going to be able to retain a lot of that cost adjustment as well. So a good estimate is probably 50% of those right now, as it relates to what we'll need to reinvest back in the business, if we continue to see the aggressive run rate that we're experiencing. And we fully expect to see those run rates continue at this point in time. But we will be able to retain some of the $35 million that we implemented.

All right. Great. And just last question. I know that recently you've talked about getting back to that 30 to 50 basis points of op margin expansion. Could you talk about your ability to get there in the back half of the year and heading into next year?

Yes. We firmly believe that we will be able to get there in the back half of the year and into next year. And so, we're very optimistic about our ability to grow our margins, especially, with our fixed cost structure where it's at, with the adjustments that we've made so far. And then, certainly with the industry run rates that we're seeing today, we believe that our fixed cost structure is in a really good spot and our team is very flexible and nimble to be able to support that. So we believe we absolutely can grow our operating margins.

Got it. That’s all I got. Thank you.

Thank you.

Thank you. Our next question is coming from Daniel Moore of CJS Securities. Please go ahead.

Andy and John, good morning.

Good morning.

Good morning.

Andy, I was typing as fast as I could. Could you repeat the expectations by end market for Q3 and the full year? I know, RV wholesale shipment is up high double digits in Q3 and then maybe go from there real quick?

Sure. RV wholesale, up high double digits, Q3 flat to down, low single digits for 2020 full year. Marine wholesale, up low double digits for Q3, down high single to low double full year on the wholesale side. MH, up high single to low double digits in Q3, up mid-single for the year. And then, on our industrial markets, down mid-single for the quarter and down mid-single for the full year.

Perfect. Appreciate it. And just a point of clarification. Post Q1 you suspended buybacks and M&A, obviously, given uncertainty in the environment. Is that still the case, as we look back into the back half of the year, particularly on the M&A side?

No. We have pivoted to strategic at this point in time, given the strength in our markets, the visibility, the confidence across our checks, across our entire platform. We're dusting off our acquisition models at this point in time and we're certainly looking at strategic CapEx to support the expected continued growth in each of our markets, to make sure that we've got capacity to grow with our customer base, especially as they continue to grow. So we have made the pivot too strategic.

Got it. Perfect. And then, do you have a rough estimated decline in overall inventory levels for Marine in Q2? And maybe an update on where we stand in relation to historic levels over the last five, 10 years?

Yes. Marine inventories are definitely low at this point in time. There's been -- Marine came into 2020 with a little bit higher inventory. And so, we saw Marine trail RV as it relates to kind of the significant recovery by about three to four weeks, but it is absolutely caught up with RV, as it relates to expectations. We think there's probably been between 30,000 and 50,000 units taken out of the channel over the course of the last 18 months on the Marine side of the business. And so, Marine is extremely well positioned. We're hearing tremendous dealer demand for new units out there, both on the RV and Marine side.

And given Q2 is typically the 40% of the year, do you see that shifting -- seasonality shifting into Q3 this year, given the early shutdowns and slow start to the season?

A little bit. I think when you think about the timing of the production slowdown, or shutdowns as it relates to COVID, just coming out of the spring in particular in the aluminum side of the business on Marine, retail continued to flow and dealers adapted very quickly. And so, I think, we're going to continue to see strong retail, as we see those new consumers move into marine. But I don't know you'll see a material shift. I think that, again, boats retailed very well during Q2 as well did RVs. So there's a little bit of movement, but I wouldn't say that it's overly significant.

Okay. And on the content side, do you expect to return to growth in both RVs and boats and content per unit basis, as we get into Q3 and the back half?

We do.

Okay. Lastly for me. In terms of gross margins, do we see that getting back to flat or even up in Q3 on a year-over-year basis? Or do you expect ongoing headwinds in, be it raw material, labor, social distancing challenges, et cetera, maybe tempering that?

We would expect to see improvement on the gross margin level, especially, with the cost reductions that we've done to really position our business. We've retained our core talent. We're in a really good spot to leverage the volume increases As materials move and fluctuate, we'll move with those. And pass along, price increases or decreases, as we see the material markets move. We'll probably see a little bit of labor headwind. Labor is certainly getting tight, as it relates to the tremendous demand that we're seeing. And we're working through that. But from an overhead perspective, we're in a good spot. And we would expect to increase incremental margins.

That’s it for me. I appreciate the color very much.

Thanks.

Thank you. Our next question is coming from Craig Kennison of Baird. Please go ahead.

Hey good morning. Thanks for taking my question. I think many have been asked already. But going back to your wholesale forecast for RV and for Marine, it feels a little more conservative, than what we've heard from some other OEMs. Do you think that's a function of maybe a more conservative retail forecast? Or are you concerned at all that, just the OEMs may struggle to fully ramp up production to meet that shipment demand?

I think that there is tremendous retail demand out there, today. We could be a little bit conservative in our estimates, as it relates to wholesale. We're going to continue to do everything that we can to flex, with the manufacturers. I think the manufacturers on the wholesale side have been extremely disciplined, as it relates to managing their business. They've got capacity from a plant perspective. And we're feeling plants coming back online. So from our perspective we see the opportunity and optimism out there. We want to make sure that again, we're positioned well to be able to take care of that. So I think, our estimates are again in the fairway if you will. But I think, there's definitely upside as well with the strong demand, that we're seeing.

That helps. And then, with respect to labor, I imagine you've got a few challenges here. One, you've got to watch COVID trends in Elkhart, especially to make sure your workforce is safe. Two, there are some federal programs that do provide some unemployment compensation. I'm wondering if either of those trends is a headwind for you.

We think the unemployment benefits and that piece will be a tailwind if you will, depending on where the stimulus package comes out. But I think that was a game changer from our perspective, the overall stimulus package and keeping the consumer in really good spot in Q2. But we do not see the unemployment benefits decreasing as a headwind if anything again I think it will help. We are seeing definite -- without question labor tick up not as a percent necessarily but the need for labor in the area. And so again, we're going to work through that at this point in time but we don't see a lot of headwinds. I think that, we're going to do everything that we can to work through that situation. And like I said, we're going to invest in some strategic automation. And capital expenses over the next six months to make sure that we're not only positioned for the back half of this year, but for the 2021 season that we expect coming.

Thanks. And finally could you comment on, just your M&A pipeline in RV and Marine in particular or any other segment? I mean, you're generating a lot of cash. You've got a really strong balance sheet. Curious, what the flavor of deals looks like? I mean are your targets more interested in selling now given this could be a minor peak in demand? Or are they less willing to sell because they see better long-term trends?

We have a full pipeline of candidates, that we continually talk to and we're engaged with. Given the nature of the V-shape curve, especially in leisure lifestyle we're truly able to carve out the impact of COVID-19. And the shutdowns on both of those two markets, in particular. So we're able to really take a look at normalized run rates to really get a feel from a valuation perspective. And so I think, with our candidates we maintain a solid dialogue. We're excited about the potential that's there. And we haven't seen a rush to the table as a result of COVID-19 and companies coming and saying "Hey, I'm tired of this. I want to come and be acquired." We've seen more, I think again because of the V-shape curve there's opportunity out there and excitement for what's headed for the future. So at this point in time we feel really good about our pipeline and our candidate pool.

Perfect. Thank you.

Thanks.

Thank you. Our next question is coming from Tim Conder of Wells Fargo. Please go ahead.

Hey Andy, I just wanted to follow-up on a couple of items here, following on to Craig's questions and your statements on labor. So tight -- getting tight labor just given the sharpened rebound in demand, but I guess, are you seeing -- maybe digress here a little bit into what's going on in Washington. But is the existing unemployment things or I should say just expired, was that maybe a headwind to getting labor back, maybe again the proverbial people making more not working than they did. And then, how do you see what's happening on the proposals to help or hinder or not change, the current labor tightening that you're experiencing there?

We do believe it was a headwind in Q2. I think -- but when you look at it from both sides I think it was instrumental and very dynamic and game changer to keep the consumer and our employee base, in a really good spot. So…

Right.

…as much as it was a headwind to get labor, I think again it reinstall confidence and their ability to be in a really good spot coming out of this. So again I think it's -- I don't want to look at it as a tailwind going forward. But it's certainly not a headwind if there's a change in the unemployment benefit package going forward on the downside.

Okay. So supported consumers as needed in the past, but maybe made it a little tougher on labor especially in Q2. …

Correct.

…But maybe that's kind of normalizing out here in Q3 hopefully, from the policy perspective. Okay. Okay. So you talked about again good visibility into demand, as you're meeting the needs of your customer base as they ramp up production to refill pipeline channels. From your seat, what do you see -- when do you see, the channels in RV for the industry normalizing at the dealer level? And the same question I guess for, Marine importantly.

So with the strength in demand, we believe that inventories in both markets have been overcorrected. And there is tremendous demand out there on the retail side to keep up with what was already a strong demographic playing into leisure lifestyle. But then, you add the new consumers that have entered the channel as well in both of those two markets. And so it's -- if anything its emboldened the opportunity for the long-term, as it relates to correction if you will to getting back to a place of balance and normalcy. And at this point in time, based on our math, there's definitely some catch-up to be made as it relates to wholesale production catching up with retail and positioning retail, especially for the 2021 model season if we continue to see this strength in retail demand, which we fully expect at this point. And so again there's quite a long runway as it relates to visibility subject to these demand conditions.

Okay. So potentially it's going to be in 2021. Is that a fair statement before you get channels normalized in maybe early 2021 in RV and maybe a little bit longer in marine?

I think it could go based on our numbers and our calculations on turns and retail demand just depending on where retail lands this year I think it goes well into 2021.

Okay. Okay. Okay. And then lastly, you mentioned that you're making some strategic capital investments as well as looking at strategically for M&A. But on the capital investment side, how do you see -- I guess at this point, you mentioned what your CapEx is going to be this year. Do you see that CapEx number going up a little bit to enable you to meet that level into 2021 demand of your end customers?

Not at this point I think our $30 million to $35 million is appropriate. We've identified several projects where we see some potential bottlenecks building that will alleviate that. And again I think we're really planning to make sure that we're in the best position to be able to support the growth heading into 2021. So I think our $30 million to $35 million is a reasonable estimate certainly at this point in time. And we've got projects identified.

Okay sir. Congrats. Thank you.

Thank you.

Thank you. Our next question is coming from Steve O'Hara of Sidoti. Please go ahead. Steve O’Hara: Hi, good morning. How are you?

Good morning.

Good morning. Steve O’Hara: Just, I guess, maybe just in terms of the strong retail demand. Curious about your thoughts but maybe I missed it in terms of how sticky you think these new entrants in the industry is? And maybe what -- in terms of new buyers, what your thoughts are there? I mean, how much of this demand improvement is? New buyers or existing buyers wanted to get ahead of production shutdowns and things like that. And are these let's say the new side of the buyers are they less apt to be lifetime RV-ers where as opposed to in typical times people usually buy two to three in their lifetime or as other options open up like international travel and things like that?

Sure. So what we're hearing consistently across all our checks is that the new -- the new buyers are certainly a tailwind to the already strong buying population that was there already and going to be buying units. And so the new buyers are active. We think it's pretty sticky especially when you look at all the situations that are certainly impacting the next six months and possibly next 12 months as it relates to COVID, you look at domestic and international travel restrictions, you look at, kind of, where things are going to be at for the fall as it relates to education in schools and fall sports. Really the recreational leisure activity from our perspective is ideally positioned to support the consumer as an avenue. And so we think that it feels very sticky. We think that again with our checks what we're hearing is that the manufacturers and the dealers believe this is a real opportunity to engage with those new consumers and really make sure that it's a very positive experience for them to make sure that they come back into the channel. So what we've heard is tremendous focus and attention to knowing that there's new buyers entering and there's tremendous opportunity to keep them long-term and upgrading units and consistent with what we've seen in the past as it relates to upgrade cycle. So we're not touching the consumer at that level, but again certainly supportive of all the initiatives that the manufacturers and the dealers are putting in place today. Steve O’Hara: Okay. That's helpful. And then maybe just lastly, in terms of M&A and your outlook there. I mean, can you just talk about maybe by market or where you're focused on? Is it still in marine? Is it -- or is there another adjacent market that you guys could attack? Or just, kind of, some comments there. Thank you.

Certainly leisure lifestyle like I've talked about is ideally positioned. So RV and marine we're very excited about. We're very excited about our industrial model, which we think is in its infancy as it relates to our single and multifamily opportunities that are out there from a geographic perspective. And then as well, I think with manufactured housing and the strength that we see there and the opportunities we're excited about those opportunities too. So we've got a full pipeline of candidates across all four market sectors. And again I think really as we look to pivot here and have pivoted, again we're very optimistic about really all four market sectors, leisure lifestyle certainly though I would tell you with the tremendous demand that we're seeing today and the runway very excited about. Steve O’Hara: Okay. And maybe just one more follow-up to that, I guess GDP obviously contracted quite a bit in the second quarter as expected more or less. Can you just talk about maybe your feeling for how long a large consumer discretionary industry can outperform the typical economy or Main Street economy maybe? And how important is that to kind of normalizing and kind of getting back to normal?

I'm not an economist, but I think what I can say at least is what we see is, when we look at again, the opportunity that's there for the leisure lifestyle markets and especially in this environment with the pandemic going on and the overhang that's likely to be there for a longer period of time, the consumers' ability to social distance and still be able to enjoy leisure activities, these two markets are ideally positioned for that. And so, that's one of the reasons I think that we have confidence across the industry as it relates to the long-term demand projections that are ideal. And again, so I think that we would believe that there's opportunity to perform. And then again the stimulus packages that have been in place and even hopefully the upcoming stimulus packages that will be put in place will continue to keep the consumer in a good spot. And so, we feel very optimistic about those markets. I can't really comment on whether or not it can exceed GDP or not how long we'll do that, but I can tell you that certainly what we see and what we're hearing today is tremendous optimism and excitement and then enjoyment of the leisure lifestyle activities that we're engaged with.

Okay. No, that’s helpful. Thank you, very much.

Thank you.

Thank you. Our next question is coming from John Lovallo of Bank of America. Please go ahead.

Hey guys. Thank you for taking my questions as well. The first one, SG&A absolute dollars have declined on a year-over-year basis for two consecutive quarters. I mean, would you expect that trend to reverse in the third quarter as volume picks up and some of the investment is reengaged?

We're going to add a little bit of investment on SG&A. But a lot of that -- we flex our business model very, very quickly. And we're high variable cost business model even in the SG&A side. So, our expectation is that we're going to continue to leverage that. But I wouldn't expect it to go up materially. We do have incentive compensation that will move in incentive packages. Again, as we flex variably with upticks in demand and profitability, but again I think we'll be able to keep it in check.

Okay. That's helpful. And then on the housing side, demand certainly has accelerated nicely. Are you seeing any change in the mix of buyers? So, is it still kind of being led by the first time buyer? Or are you seeing any change there?

We haven't seen a lot of change in that mix. There's still -- there's demand and lack of inventory on the stick-built side and then certainly on the manufactured housing side, we think that demand should continue to pick up especially with the migration that we've seen from urban to rural which was the opposite if you will heading into 2020. We saw the consumers migrating into the urban areas and we've seen that really shift as a result of COVID and some social unrest that's been taking place. And so, we think the MH for both first-time buyers and those looking to separate a little bit and make sure that they've got the opportunity to do that, we think there's opportunity there.

Great. And then one more if I can. On the industrial side, can you just remind us of the exposure there to maybe hospitality and some of the other end markets that have been outsized -- affected in an outsized way by COVID?

We are -- we've seen a heavier mix of our business shift towards residential housing on the industrial side of our business. And so, we've got commercial and hospitality opportunities out there. Those have paused a little bit during this time frame. But I wouldn't say that it's been a material impact on our industrial business. What we've seen is, the strength in residential as well as the do-it-yourself and home improvement model has definitely been very, very strong. So we've not seen erosion as it relates to the hospitality piece of our business.

Okay. Thank you, guys.

Thanks.

Thank you. Our next question is coming from Brett Andress of KeyBanc Capital Markets. Please go ahead.

Hi. Just a quick follow-up. For your 3Q RV outlook, I'm learning this morning that high double digits means different things to different people. Can you just maybe broadly bucket that for us? Is that plus 20% to 30%? Is that higher or lower? Just any kind of guardrails there.

So, let's say that's plus 18% to 25%.

Got it. Thank you.

Thank you. At this time, I'd like to turn the floor back over to Ms. Kotowski for closing comments.

Thanks, Donna. We appreciate everyone for being on the call today and look forward to talking to you again at our third quarter 2020 conference call. A replay of today's call will be archived on Patrick's website, www.patrickind.com under Investor Relations. Now, I'll turn the call back over to our operator.

Ladies and gentlemen, thank you for your participation. You may disconnect your lines at this time and have a wonderful day.