Earnings Call Transcript - CUBE Q2 2020

Operator, Operator

Good day, and welcome to the CubeSmart Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. Please note this event is being recorded. Now, I'd like to turn the conference over to Josh Schutzer, Senior Director of Finance. Please go ahead.

Josh Schutzer, Senior Director of Finance

Thank you. Hello, everyone, and good morning. Welcome to CubeSmart's second quarter 2020 earnings call. Participants on today's call include Chris Marr, President and Chief Executive Officer, and Tim Martin, Chief Financial Officer. Our prepared remarks will be followed by a Q&A session. In addition to our earnings release, which was issued yesterday evening, supplemental operating and financial data is available under the Investor Relations section of the company's website at www.cubesmart.com. The company's remarks will include certain forward-looking statements regarding earnings and strategy that involve risks, uncertainties and other factors that may cause the actual results to differ materially from these forward-looking statements. The risks and factors that could cause our actual results to differ materially from forward-looking statements are provided in documents the company furnishes to or files with the Securities and Exchange Commission, specifically, the Form 8-K we filed this morning, together with our earnings release filed Form 8-K and the Risk Factors section of the company's annual report on Form 10-K. In addition, the company's remarks include reference to non-GAAP measures. A reconciliation between GAAP and non-GAAP measures can be found in the second quarter financial supplement posted on the company's website at www.cubesmart.com. I will now turn the call over to Chris.

Christopher Marr, President and CEO

Thanks, Josh. Good morning, everyone. I will begin by recognizing our 3,100 teammates across the country. We've had to change the way we do business, but along the way our mission has been our guide and together, we've been simplifying challenges, creating innovative solutions and delivering unparalleled service. Tim will provide insight into the second quarter results. From a high-level perspective, rentals hit the bottom in April, rates in May, and both began to recover in June. Even July was our first month of what we would consider more normal pre-COVID operations. I will focus my comments on trends we observed post the end of the second quarter. Positive year-over-year demand trends, which began in June, continue to show strength in July, with same-store move-ins up 3.8% over July of 2019. We resumed our normal lean process in June and made significant progress in addressing our past-due customers in July. We expect to conclude the process substantially at the end of August, certainly by the end of the third quarter, at which point we anticipate our receivables returning to more normal pre-COVID levels. Our July same-store vacates were down 7.7% year-over-year, partially reflective of the status of our auction process, but also reflective of continued increases in length of stay. Our same-store year-over-year net effective rents for new customers shifted into positive territory in July, up 2.5% on average for the month compared to July of 2019, and ended the month up approximately 7% compared to the last day of July 2019. As we noted in our press release, we resumed more traditional pre-COVID operational processes by the end of June. During the month of July and into early August, rate increase letters were sent to all of our customers, including those remaining in our portfolio for whom we had paused the process in mid-March. We anticipate that the rent roll will be fully caught up with rate increases by the end of the quarter. We continue to innovate at a rapid pace, reaping the benefits of investments we have made in our technology stack, revenue management, and marketing automation. SmartRental, our online contact-free experience, accounted for approximately 25% of our rental volume during the quarter. We remain cautiously optimistic. Our industry has been and remains very resilient. We are keeping a watchful eye on customer behavior in light of continuing uncertainty around government stimulus, the opening and closing of schools, and the varying impact the pandemic is having in each region of our country. We believe that the breadth of our need-based customers, the quality of our portfolio, the strength of our balance sheet, and the investment we have made in our people and our systems will continue to create value for all of our stakeholders. Thank you. And with that, I'll turn the call over to Tim.

Timothy Martin, CFO

Thanks, Chris, and thank you to everyone on the call for your continued interest and support. Picking up on Chris' comments, we do find ourselves feeling cautiously optimistic. Interestingly, as we report second quarter results, we find ourselves in a similarly strange position as last quarter. When we reported first quarter results, the numbers we were reporting seemed stale and not particularly reflective of the environment we were in, at the time since the impacts of the pandemic were front and center, but the first quarter results didn't include much of the impact. Now, as we report second quarter results, the current operating environment feels much more positive, certainly than April and May when we were seeing what we hope was the worst of the impact on storage fundamentals. Overall, for the quarter, we reported FFO per share of $0.41, same-store revenue growth of negative 2.2%, same-store expense growth of 2.4%, and same-store NOI growth of negative 4.1%. Last quarter, we adjusted several of our operating practices by stopping our lean sales and pausing on our rent increases to existing customers, among other things. Throughout June and July, we began methodically resuming normal operations in those areas, but of course, it's not as simple as flipping a switch and things reverting back to normal as there are notice periods that need to occur prior to the financial impact. So, as we resume those practices, the positive impact of doing so will be partially evident in the latter part of the third quarter and then looking a lot more normal in the fourth quarter. Of course, all of that assumes macro conditions don't reverse, and we don't go back to a more restrictive environment as a result of COVID-19. Our store teams and district managers have done a great job working through our delinquent accounts as well as various levels of lean sales, as we had a lot of work to do with the backlog created from pausing in April and May. As a result of those efforts, we're in really good shape with our collections and our receivable balances. A couple of different ways people have been looking at that, someone asked for an update on how the current month's collections are trending; that doesn't always work all that well in our sector, but on last quarter's call, we were talking about April collections, and we told you at the time that we collected 93% of April rents compared to ultimately collecting 98% of April rents in 2019. This year, that 93% grew and grew, and as of today, we've collected 97.6% of April rents, pretty much right on top of last year. So, the answer to the question for July is that as of today, we've collected 95.6% of July rents, again compared to about 98% ultimately collected last year. Of course, we fully expect that as the weeks continue, our July rent collections will continue to grow and ultimately will likely end up being very similar to last year. Another way to think about collections is to look at accounts receivable balances, and from that perspective, things also look very healthy. As we look at AR balances less than 30 days, and AR balances less than 60 days and compare those levels to last year at the same time, our comparable balances are actually slightly better than they were last year. The final thought on collections and delinquencies, then from an occupancy standpoint, since we paused on customer lean sales, our occupancy levels have been slightly inflated by those cubes that normally would have been subject to the lean sale process. That incremental occupancy was 90 basis points at the end of June and was down to 40 basis points at the end of July. So that's another good indicator that we're trending back towards normal. Trying to provide some color there and details that I know some of you were looking for, but in short, collections, AR balances, write-offs, none of those are of concern to us. In fact, they really speak to the quality of the cash flows in our sector, the quality of the self-storage customer, and the high levels of customer diversification in our business. In the second quarter, from an external growth perspective, we closed on two acquisitions for $65.7 million, and during the quarter, we added 27 stores to our third-party management platform. As detailed in our earnings release last evening, given the volatile macro environment and continued uncertainty of potential future economic disruption caused by COVID-19, we have decided not to reinstate guidance at this time. There simply remain too many unknowns and uncertainties to factor in to provide a range of estimates per our normal practice. From a balance sheet perspective, we remain very healthy and are well positioned not only to have the capacity to meet our near and medium-term commitments, but we have plenty of capacity, financial flexibility and access to attractive capital to support pursuing external growth opportunities, if and when we identify attractive investments that will allow us to continue our history of creating long-term shareholder value. At quarter end, our leverage levels remain conservative at 39% debt to gross assets. Our debt to EBITDA was 4.9 times and our fixed charge coverage ratio was 5.6 times. Thanks again for taking the time to join us for today's call. At this point, let's open up the line for some questions.

Operator, Operator

And we will now begin the question-and-answer session. Our first question today will come from an analyst with Bank of America. Please go ahead.

Unidentified Analyst, Analyst

Hi everyone, thank you for taking my questions. So I just want to start off with those units up for the lean sales. I was wondering if there are certain markets that those are mostly concentrated, just trying to figure out the delta between you guys and your peers?

Timothy Martin, CFO

So it's pretty universal as we stopped lean sales across the entire portfolio. And as we began to resume the lean sales it was pretty programmatic, and certainly varied a little bit market by market, and there are different requirements in each market as it relates to notice periods and the like. But generally speaking, we've started the process across the entire portfolio and we expect to have things pretty much wrapped up in August; some will slip into September, but by the time we get to the end of the third quarter, we expect to be in good shape across the country.

Unidentified Analyst, Analyst

Got it. And so there are not many markets that are still restricting you from proceeding with this?

Timothy Martin, CFO

No.

Unidentified Analyst, Analyst

Okay, got it. And then just anything on the SmartRental other than just 25% of rental volume. What feedback have you gotten from customers? Anything else you can tell us about that program?

Christopher Marr, President and CEO

We would expect there is a segment of the customer base who understands the product, feels comfortable with the space requirement that they have, and is used to a self-service experience. They are enjoying SmartRental as a way to meet their needs. Clearly, we have another tangible segment of the customer base who are either first-time users of our product, unsure of the space need, or just like to have that interaction. So we're able to serve at both ends of the spectrum. We will continue to innovate SmartRental, adding features. We're adding features almost weekly. I think it's been very helpful in terms of thinking about times where, for example, on a Sunday afternoon or early evenings, where customers may drive up when the office is closed, but there is a QR code on the door that they can scan and go through the rental process at their convenience. So it has been helpful. I think what this is going to look like someday when we return to more normal levels, I think you're always going to have a significant segment of the consumer who likes a more traditional process as opposed to the self-service model. So, we will continue to provide them with both ends of the spectrum.

Unidentified Analyst, Analyst

Understood. And then just following up on that. Has that helped you in terms of your marketing spend? Is that in any way going to benefit you in the future considering marketing spend continues to be really high?

Christopher Marr, President and CEO

I don't know whether you can draw a straight line between SmartRental and marketing spend. I think they are independent of one another, certainly complementary in terms of being able to attract a customer for whom contactless is a search term that they choose to use. But I think they are largely independent of one another.

Unidentified Analyst, Analyst

Okay. Got it. Thank you.

Timothy Martin, CFO

Thank you.

Operator, Operator

And our next question will come from Smedes Rose with Citi. Please go ahead.

Smedes Rose, Analyst

Hi, thanks. I was just wanted to ask, now that you've put back in place rent increases for existing customers, you said for pretty much across the board. Just any change in the way you're thinking about the degree of the rent increases, it's kind of pre or post-pandemic, or is it just in line with where you would have been regardless?

Timothy Martin, CFO

Hey, Smedes. Thanks for the question. Yes, we are still programmatically looking at rate increases to existing customers in a very similar way to what we would have done pre-pandemic. Lessons learned over many, many years, even going back to the global financial crisis, is that all of our data, all of our testing suggests that those levels of consumer behavior simply don't change as a result of continuing to push those rate increases. Again, in the high single-digit range. Of course, history doesn't always repeat itself. We have the tools and the systems to monitor behaviors very closely, and if we were to see something that would give us some type of evidence that the consumer wasn't behaving the same way they had in the past, we can certainly be extremely nimble and adjust accordingly. But to date, we haven't seen any evidence, nor does our intuition suggest that we won't.

Smedes Rose, Analyst

Okay, thanks. And then I was just wondering, I don't know if you may not really have a good read on this. I mean, do you think that the $600 unemployment benefits on top of state benefits helped your existing customers, or do you think for the most part, maybe they are not really in that category and it's sort of less of an issue if that goes away or changed meaningfully? I don't know if you have any way to have any kind of thoughts on that, curious if you do.

Christopher Marr, President and CEO

Yes, Smedes, just purely anecdotal. I think at the margin it certainly was helpful for folks who had that additional cash. Again, I think across the customer base, it is so diverse and there are such different segments of both the country geography, as well as economically, that I can't imagine having it or not having it is a material impact on our customer.

Smedes Rose, Analyst

Okay. Thank you.

Operator, Operator

And our next question will come from Todd Thomas with KeyBanc Capital Markets. Please go ahead.

Todd Thomas, Analyst

Hi, thank you. Tim, thanks for the detail around the collections and the impact the delayed auctions had on occupancy and everything. What was the bad debt expense, or the reserve in the quarter that impacted the income statement? And how do you expect that to trend in the third quarter as you work through the backlog of auctions? Do you expect it to be larger or smaller relative to 2Q?

Timothy Martin, CFO

Well, I expect the impact from bad debts to decline, but I mean of course it's all in a net revenue reporting structure right? So we only report revenue on cubes that are rented where we expect that we'll ultimately be able to collect it. During the second quarter, we experienced a period of time with a delay in the lean sales that we had that portion of our occupancy that we didn't believe would ultimately pay given historical trends. If you get that far behind and are subject to typically to a lean sale, we view that rent as ultimately not collectible. So we don't record it by way of reserving against it, and netting down our revenue. Certainly, I think the levels of that will decline as we've caught up now or are catching up with the lean sales. I don't think the impact to the trajectory of revenues, or the growth in revenues has any direct bearing on the write-off amount, right? It's all net revenue presentation. As things improve, the impact from write-offs, the improvement in collections is helpful, but we don't disclose the exact amount. The impact of it is certainly going to decline here as we return to normal.

Todd Thomas, Analyst

Are you able to sort of book, and how much above average levels it was in the quarter?

Timothy Martin, CFO

Yes, I would say that our delinquencies to ultimately that we didn't think we were going to collect would have gone from around 2% to somewhere between 2.5% to 3%. So then the write-offs, then that would come from that, if you do the math, is that write-off then would have been up just north of 50%.

Todd Thomas, Analyst

Got it. That's helpful. And then I was also wondering if you could give us an update on ICAP. I believe there were some pending legislation trying to loosen up the regulations to get new developments in ahead of the July 1 deadline, or maybe some other possible changes. Can you provide an update on what's happening there?

Christopher Marr, President and CEO

Yes. The update that I can provide you is certainly there is a lot of discussion. There are many impacted parties who had things in the planning stages, or who had made investments either in real money or in a lot of time, and they are very interested parties in trying to get some levels of exceptions to the line that was drawn. I don't have anything to update you on any formal action that has been taken as a result of those efforts. We certainly believe that the legislation that was passed ultimately is passed, and medium to long term wouldn't expect that that would be reversed. Anything that's done in the short-term to make a handful of exceptions is too early to tell and would just be conjecture.

Todd Thomas, Analyst

Okay. And then have you started to see developers begin moving outward from New York City, maybe looking to explore an uptick, I guess an activity around New Jersey or Westchester, maybe Long Island? And then, also just in terms of New York MSA exposure. I was just wondering if you could also comment on conditions there, were they sort of consistent with what you laid out for the improvements that you saw in the second quarter, and into July, or do you think that conditions in New York could intensify a little bit, or weigh further on revenue growth in the third quarter?

Timothy Martin, CFO

I'll take the first part of that and then Chris can chime in. As it relates to developers and where their focus is even before the ICAP legislation took hold, we were already seeing folks that were in the area start to look further out, as the supply that has come into the Boroughs has been supply that frankly over time is going to be entirely justified. The levels of square footage per capita in the Boroughs is still extraordinarily low relative to any other market. That said, the attractive opportunities were picked over and so those who have development platforms in the Boroughs were already starting to look outside of the Boroughs to continue to find opportunities to develop our product type. Certainly, the ICAP legislation is going to enhance that and perhaps accelerate folks looking in different places, but it was already underway. For color on performance, Chris, if you want to jump in?

Christopher Marr, President and CEO

Sure. New York, both the MSA and the Boroughs, July was a fabulous month. In fact for the MSA, it was exceeding what I quoted nationally. Rentals were up 7%, net effective rents to new customers were up just about 5%, and occupancy was up 150 basis points. For the Boroughs specifically, rentals were up consistent with the same-store portfolio in that three plus percent range, net effective rents for the new customers were up much higher than what we had seen in the rest of the country, 5.8% for the month of July and that really ranges from the Bronx at just about 7% to Queens being up only a couple of basis points. It performed both as an MSA and the Boroughs themselves, really, really well in July and we're excited about that continuing on here into August.

Todd Thomas, Analyst

Thank you.

Timothy Martin, CFO

Thanks, Todd.

Operator, Operator

And our next question will come from Ryan Lumb with Green Street Advisors. Please go ahead.

Ryan Lumb, Analyst

Thanks. Actually to stay on a similar topic in New York there. We've heard anecdotal reports of residents in New York packing up, and going elsewhere either temporarily or maybe more long-term as the city faced worsening case count in the second quarter. Any color around some of the flight out of New York in the second quarter? Did any of that turn into storage demand? Any color you can provide there would be great.

Christopher Marr, President and CEO

Yes. I may be wrong, but I think this little company called Facebook just rented 750,000 square feet of office space in New York City. I'm not sure if I read that correctly. But I think the demise of New York as it has been for a hundred years is premature. From our customer base in the outer Boroughs, Brooklyn, Queens, the Bronx particularly, I think the storage needs will remain solid.

Timothy Martin, CFO

It seems Chris has lost audio. Regarding the trend of people relocating temporarily, there have been various articles discussing this phenomenon, which certainly has some substance. This describes a type of customer looking for temporary storage for their belongings. I believe most of these customers will seek storage while their work situations stabilize and they return to the office. Many of them will likely come back, and their need for temporary storage will diminish. They will probably secure new apartments at lower rates, and things will revert to normal. The timeline for this is uncertain; it could take a few months or even six to nine months. Regardless, this represents another type of customer in need of our services, and we are pleased to serve them.

Ryan Lumb, Analyst

Sure, understand. And then we heard from PS Business Parks, which caters primarily sort of smaller tenants, smaller businesses, some weakness among small businesses. Can you provide any additional color around maybe the health of your small business customer?

Christopher Marr, President and CEO

Yes, I'm sorry, myself on disconnecting there. What we're seeing across the portfolio is that the majority of our small business customers continue to rent, and they are continuing to be current on their rent. We are seeing, as we did during the great recession, unfortunately, the return of the customer whose small business or restaurant elected to close, and they have inventory, or they have restaurant equipment that they own, and they want to store with the belief that coming out on the other side of this, they will resume business. So, we are starting to see those customers coming into the portfolio much as we did during the great recession.

Ryan Lumb, Analyst

Okay. Great, thanks guys.

Timothy Martin, CFO

Thank you.

Operator, Operator

And our next question will come from Michael Mueller with JP Morgan. Please go ahead.

Michael Mueller, Analyst

Yes, hi. I was wondering, can you talk a little bit about the spread between move-in and move-out rates during the quarter? And how that looked compared to, I guess, a year ago?

Christopher Marr, President and CEO

Yes, I'm trying to put my fingers on it here. The gap widened a little bit from last year. Mike, if you had another question, I'll try to pull that number for us. Apologies, I just don't have it right in front of me.

Michael Mueller, Analyst

Actually, that was it. Some stuff that New York...

Christopher Marr, President and CEO

Yes. Hey, I've got it. I think the difference between move-in and move-out for the quarter was down about 21%, which would have been compared to about 9% in the second quarter of '19.

Michael Mueller, Analyst

Got it. Okay. And any early commentary of how that's trending in Q3?

Christopher Marr, President and CEO

No, not at this time. I don't have any update.

Michael Mueller, Analyst

Okay. That's it. Thank you.

Timothy Martin, CFO

Thanks.

Operator, Operator

And our next question will come from Samir Khanal with Evercore. Please go ahead.

Samir Khanal, Analyst

Yes, good morning everybody. I guess, Chris or Tim, can you talk a little bit about the third-party management platform? I mean, have you seen private owners want to be part of that whole platform here as they navigate through the environment? And I guess, how should we think about that platform's growth over the next several quarters?

Timothy Martin, CFO

Yes, I think it continues to be a business that the inbound calls continue. Our pipeline of management contracts to bring on over time here continues to develop and looks pretty healthy. It's a combination of existing open and operating stores, many of which are stable, and you have the owners who for a magnitude of reasons recognize and continue to recognize the value of a large platform like ours; the sophistication from a business intelligence revenue management perspective, the sophistication from a marketing perspective, and the power of having an operating platform—and the ability to navigate through the crazy world that we find ourselves in here over the last few weeks as far as being able to react quickly to create the ability for customers to find new online in a no-touch way, and they manage through all of it. It's a heavy-intensive operating business that we're in and working through everything over the last couple of months, our team has just done such a fantastic job of adjusting, and I think if you're a small owner, you look at that and you say, wow, I can't compete with that. So, you certainly have folks from that perspective. You also have, while the development cycle is getting late, there are still new stores being delivered, and many of those new stores are going to find a home in our management platform, or one of our peers' management platforms, because again, their expertise as a developer is not in running our business and running a store. They need help, and they're going to come to a large player for that help. So, we continue to see inbound calls —we continue to —our business development folks are busy. There's certainly a lot of interest.

Samir Khanal, Analyst

Okay. And I guess my second question is around the transaction market. Sorry if I missed this, but is there any color that you can provide? I know at the beginning of the year, things were starting to pick up, and then you hit the impact from COVID, and there was a bit of a pause there, but I'm hearing that things are starting to pick back up again, those certainly from seller and buyer perspectives. Any color on that and cap rates and pricing would be helpful.

Timothy Martin, CFO

Yes, I think part of it is just seasonal. Many folks on the selling side want to at least get partway end of the summer busy season and see their occupancies tick up or get a little bit of pricing power before they come to market. So I think there are two things happening. One, you're getting to the front point of the year where you have a little bit more activity in the normal year. And then of course we're starting to get a little bit more clarity on operating performance, and the impact on rates and the like as a result of the pandemic. Certainly, activities picked up a little bit. Pricing remains very strong from a seller's perspective certainly on an open and operating stable property. There is an awful lot of capital that's interested in those types of assets. Certainly, not just the REITs; there is an awful lot of private capital that is looking to invest in our sector, given the strength of the cash flows in our sector. Certainly, on a relative basis to a lot of other product types, storage remains a very attractive asset class. So there is an awful lot of interest, which is keeping cap rates down. I think no surprise, but the potential area that we could find some opportunities that might be a little bit more attractive on a risk-adjusted basis are stores that are in some stage of lease-up. If you're seeing some of those opportunities, I would say there is still quite often a pretty big disconnect between buyer and seller expectations, that the seller is still looking to put out a package that shows the dream as they rate it, and the lease-up in the pace of lease-up will continue to be what they thought it was when they built the store. On the buyer side, people are being a little bit more cautious and perhaps a little bit more realistic on their underwriting. Whether those trades find a mark where the buyer and seller can meet, we'll see how things play out.

Samir Khanal, Analyst

Any idea as to how far off in pricing buyers and sellers are off right now?

Timothy Martin, CFO

It's just wildly going to differ from deal to deal. We've been disconnected by as much as 20%, 30% sometimes, but what's interesting is somebody will pop up and pay what the seller is looking for. It only takes one buyer to make the transaction.

Samir Khanal, Analyst

Got it. Okay, thanks so much for that.

Timothy Martin, CFO

Thank you.

Operator, Operator

And our next question will come from Ki Bin Kim from Truist Capital. Please go ahead.

Ki Bin Kim, Analyst

Thanks, good afternoon. I just wanted to tie up some data points on your ECRI program. If you never stopped it in 2Q, what benefit would that have provided?

Christopher Marr, President and CEO

It would have been better.

Ki Bin Kim, Analyst

Any kind of better color to that in terms of what that would have meant?

Christopher Marr, President and CEO

That wasn't clear enough for you. We didn't quantify that. I mean, as we've talked about in the past, we haven't quantified the components of the revenue growth down to that level. I will tell you that it is, as we are modeling things out back in late March and looking at the potential impact of all kinds of different things, rate increases to existing customers, move-in volumes, effective rates to new customers, write-offs, delinquencies—when you go through all of those variables, I can tell you that the pass-through increases to existing customers in that three to nine month period of turning those off was the single biggest impact to revenue growth year-over-year, because if you're doing that consistently as we have been for years, and then you stop, it's a pretty big drag on earnings growth. Without giving you a number because we're not going to disclose it, I can tell you that in the range of things that could impact our growth, it was certainly the biggest one.

Ki Bin Kim, Analyst

Okay. And other rental income, I'm assuming there's best of registration fees, late fees. How much did not charging customers late fees impact that trend? And as the business returns back to normal should I just expect that to normalize by the end of the year?

Timothy Martin, CFO

Yes. The majority of the amount that's down year-over-year was attributable to late fees. A little bit early in the quarter would have been on administrative fees, things that are associated with customers moving in. Move-in volumes were down, of course. That had a little bit of impact, but you hit the big one, which was when you stop charging late fees; that was the biggest driver of the variance in that line.

Ki Bin Kim, Analyst

Okay. And just high-level, do you think was there a different customer segment, or customer using storage for different reasons that made a pronounced impact in July that might have contributed to the kind of higher rental activity?

Timothy Martin, CFO

It's just anecdotal stuff. We have hundreds of thousands of customers who all come to us. Again, as I talked about earlier, the beauty of the business is there are so many different needs that create demand for our product. It would be anecdotal at best anything that I would provide there from a color perspective.

Ki Bin Kim, Analyst

Okay. Thanks.

Timothy Martin, CFO

Thanks, Ki Bin.

Operator, Operator

And this will conclude our question-and-answer session. I'd like to turn the conference back over to Chris Marr for any closing remarks.

Christopher Marr, President and CEO

Okay. Thanks, everybody, for participating in our call. Please continue to stay safe. We wish you all the best, and we look forward to speaking to everyone on our third quarter earnings call. Take care and have a great rest of your summer.

Operator, Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.