Good afternoon, and welcome to the Latham Group Second Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Casey Kotary, Investor Relations Representative. Please go ahead.

Thank you. This afternoon, we issued our second quarter 2024 earnings press release, which is available on the Investor Relations portion of our website, where you can also find the slide presentation that accompanies our prepared remarks. On today's call are Latham's President and CEO, Scott Rajeski, and CFO, Oliver Gloe. Following their remarks, we will open the call to questions. During this call, the company may make certain statements that constitute forward-looking statements which reflect the company's views with respect to future events and financial performance as of today or the date specified. Actual events and results may differ materially from those contemplated by such forward-looking statements due to risks and other factors that are set forth in the company's annual report on Form 10-K and subsequent reports filed or furnished with the SEC as well as today's earnings release. The company expressly disclaims any obligation to update any forward-looking statements, except as required by applicable law. In addition, during today's call, the company will discuss certain non-GAAP financial measures. Reconciliations of the directly comparable GAAP measures to these non-GAAP measures can be found in the slide presentation that accompanies our prepared remarks, which can be found on our Investor Relations website. I'll now turn the call over to Scott Rajeski.

Thank you, Casey. Good afternoon, everyone, and thank you for participating in today's call to review our second quarter and first half 2024 results. We will also discuss our business outlook for the rest of the year. We effectively managed through soft business conditions in the second quarter, drove substantial year-on-year gains in profitability and strengthened our competitive position. And as you've seen from our release, this performance, together with our announced acquisition of Coverstar Central, enabled us to increase our adjusted EBITDA guidance for full year 2024 by $15 million. In terms of this quarter's key takeaways. First, market conditions played out in line with our original expectations for an approximate 15% decline in new pool starts this year. This is what we planned for and what our guidance for full year sales was based on. Our pool start forecast reflects a strong process, including the unique visibility that Latham has given our strong relationships with dealers and contractors in the field. Second, we substantially outperformed net profitability, achieving a 400 basis point year-over-year increase in adjusted EBITDA margin, despite lower sales volume, driven by our restructuring programs, production efficiencies from our lean and value engineering programs, ongoing cost containment and lower raw material costs. And lastly, we continue to build upon our leadership in fiberglass pools, which have shown relative strength in the first half of this year, thanks to their significant advantages over concrete pools. In addition to our second quarter activities, we recently effectively deployed capital by completing an accretive acquisition that is expected to expand our margins, accelerate the sales of our automatic safety cover product line and provide opportunities for us to increase fiberglass pool market penetration. As you can see, we have a lot to talk about this quarter. I will begin by reviewing our progress on the three key priorities we called out when we provided full year 2024 guidance in early March. The first priority we noted was to continue to drive awareness and adoption of fiberglass pools and automatic safety covers, which we view as key long-term growth drivers for Latham. I am pleased to report that year-to-date fiberglass pool sales, while down year-on-year, showed relative strength and continue to represent the majority of our in-ground pool sales. Our market intelligence indicates that fiberglass pools have gained share year-to-date and are increasingly being recognized for their cost efficiency, fast and easy installation and eco-friendly advantages over concrete pools. These advantages, together with our industry-leading service levels and best-in-class lead times, are strengthening our ability to attract new dealers. In the second quarter, we continued to invest in innovation with the addition of the Astoria 14 to our best-selling Astoria fiberglass pool collection. This new model is designed to fit narrower outdoor spaces and offers a full relaxation experience, complete with a built-in spa and tanning ledge, features that are especially appealing in the sand states. The plunge pool category is seeing increased demand as these models provide the homeowner with space-saving, lower-cost options that are ideal for aquatic exercises and rehabilitation, as well as for social gatherings. We are capitalizing on the popularity of this product line with preparations for a vinyl plunge pool launch in the spring of 2025. Our offering will include four models, providing consumers with a choice of features designed to meet their budgets, a quick installation timeline, and style preferences for a broad range of consumers across North America. We also moved ahead with the rollout of Measure by Latham, the only tool in the marketplace that simplifies the pool measurement and quoting process for pool liner and cover installers, while ensuring their accuracy. This tool continues to meet with a very positive response from our dealers and contractors, and our objective is for all of our dealers to have it with all the functionality in place ahead of the 2025 pool building season. Another key accomplishment for Latham was the accretive acquisition of Coverstar Central, which was completed on August 2nd, and which we further detailed in a separate release today. Coverstar Central is Latham's exclusive automatic safety cover dealer in 29 states, in the Northeast, Southeast, and Midwest, including Texas. We have partnered together for almost 20 years and view this transaction as mutually beneficial in several ways. First, we expect the vertical integration of this product to expand our adjusted EBITDA margin by approximately 140 basis points on an annualized basis. Second, with an integrated sales and marketing strategy and our combined resources, we expect to accelerate sales growth of this excellent product, which can be fitted on all types of in-ground pools. Our automatic safety covers provide unparalleled safety and offer significant resource savings that can result in up to a 70% reduction in both pool heating costs and chemical usage. Third, we see opportunities to leverage the long-standing relationship that Coverstar Central has developed with the 400-plus pool builders they serve to drive further awareness and adoption of fiberglass pools. And lastly, with this transaction, we are bringing a dedicated and talented group of business professionals and industry experts to Latham who share our commitment to superior customer service. The Latham team is happy to welcome our new team members from Coverstar Central. Oliver will provide additional financial details on the acquisition a little later in this call. I just would like to comment that we were very pleased to have the capital available to pay for the transaction with cash on hand, which reflects how effectively we are managing through this industry downturn. The second priority we outlined was to continue to gain additional operating efficiencies to our value engineering and lean manufacturing initiatives. I am pleased to report that these initiatives are leading to significant structural cost benefits that will have a long-term positive impact on Latham's margin profile. Amongst the many first half achievements are a 27% year-on-year reduction in production time across our North American fiberglass plants and labor efficiencies of 8% in our safety cover and vinyl liner manufacturing facilities. Our third key priority was to maintain a strong financial position. Oliver will provide details on the success of our financial strategy in a moment. I would like to congratulate the Latham team on the discipline they have shown in our tremendous accomplishments in improving our cost structure, driving productivity gains and reducing working capital needs. Through these actions, Latham has the operating and financial flexibility to remain resilient in the current soft industry environment, while maintaining the resources to invest in organic growth initiatives and consider other accretive acquisitions that position Latham for accelerated profitable growth when pool starts to revolve. With that, I'll turn the call over to Oliver, our CFO, for a financial review.

Thank you, Scott, and good afternoon, everyone. I am pleased to report on our second quarter financial performance, which reflected the benefits of actions we have taken to effectively manage through a soft inventory environment. Also, I'm pleased to provide further insight into the financial impact of our Coverstar Central acquisition. Please note that all comparisons that I'll discuss today are on a year-over-year basis compared to second quarter and first half of 2023, unless otherwise noted. Net sales for the second quarter were $160.1 million, compared to $177.1 million, down $17 million or 9.6%, reflecting the impact of continued challenging macroeconomic conditions on new pool starts and a return to a normalized quarterly sales cadence. As Scott mentioned, we continue to track to our forecast of a 15% decline in new pool starts for 2024. The sequential improvement in our absolute sales numbers from Q1 to Q2 reflects the expected seasonal improvement as we enter peak pool building season. Across our product categories, in-ground pool sales declined 10.6% in the second quarter, liner declined 7.2% in the quarter and covers were down 11.3%. Gross margin expanded by 470 basis points to 33.1% in the second quarter despite lower sales. This meaningful increase was primarily driven due to the impact of previously announced restructuring projects, continued progress on our lean manufacturing and value engineering initiatives and our cost containment programs. We also saw a benefit from lower material costs due to supply optimization in addition to modest levels of deflation in line with prior expectations. SG&A expenses decreased to $26.6 million, down $3.6 million, primarily due to a $4.3 million decrease in non-cash stock-based compensation expense as well as $4.1 million from our cost containment initiatives and restructuring projects, which more than offset our increased spending on initiatives designed to position Latham for meaningful and profitable growth as pool starts recover, as well as increased performance-based compensation. Net income was $13.3 million or $0.11 per diluted share, more than double the net income of $5.7 million or $0.05 per diluted share for the prior year second quarter. Adjusted EBITDA of $34.5 million increased $3.5 million or 11.2% from last year's $31 million, exceeding our expectations, and our adjusted EBITDA margin expanded to 21.5%, a 400 basis point improvement over 17.5% in the prior year period. This outperformance was driven by improved gross margin as well as our focus on expense management. We have fully implemented our previously announced restructuring programs with a total annualized impact of $24 million, which contributed $2 million in savings in the second quarter. Now turning to our first half year-over-year results comparison. Net sales were $270.8 million compared to $314.8 million, reflecting the impact of continued challenging macroeconomic conditions on new pool starts and a return to normalized quarterly sales cadence. Net income was $5.4 million versus a loss of $8.7 million. Even with lower first half sales, we were able to increase adjusted EBITDA by 11.4% to $46.8 million from $42 million. The adjusted EBITDA margin increased 400 basis points to 17.3% from 13.3%. This outperformance was driven by improved gross margins from our restructuring programs, lean and value engineering initiatives, our focus on expense management and lower raw material costs while continuing to invest in our future growth. Turning to our balance sheet and cash flow statement. We continue to maintain a strong financial position with cash of $90.8 million at the end of the quarter after the repayment of $19.6 million of debt year-to-date. Net cash provided for operating activities was $52.4 million in the second quarter and $17.9 million for the first half. This includes an additional benefit of approximately $15 million from inventory reduction beyond our usual seasonality to further improve inventory efficiency. Total debt for the period was $282.4 million, with a net debt leverage ratio of 2.1%, and our capital expenditure were $4.5 million for the second quarter of 2024. CapEx is in line with our guidance of approximately $5 million per quarter and our CapEx expectations for the rest of the year remain unchanged. Scott reviewed the Coverstar Central acquisition from a strategic business perspective. From a financial viewpoint, this acquisition represents an accretive transaction that is expected to add $20 million of net sales and expand our total company adjusted EBITDA margin by approximately 140 basis points on an annual basis as we vertically integrate our automatic safety cover line in the acquired geographies. As Scott mentioned, we were very pleased to be able to source the approximately $65 million purchase price from internally generated funds. This speaks to the success we have had in improving our cost structure, driving productivity gains and increasing working capital efficiency and our confidence to continue generating cash despite soft market conditions. Moving on to our outlook. While we are maintaining our macro forecast for an approximate 15% decline in new pool starts for the year, we are pleased to increase our 2024 guidance. Our revenue guidance range for 2024 increases by $5 million to $495 million to $525 million. This increase represents the expected five-month contribution of the Coverstar Central acquisition. In addition, we are increasing adjusted EBITDA guidance by $15 million to a range of $75 million to $85 million. $12 million of this $15 million increase is a function of our better margin performance, reflecting the success of our ongoing lean manufacturing, value engineering and cost containment programs, with the remaining $3 million, representing the expected 2024 contribution from the Coverstar Central acquisition. As a reminder, our guidance for the remainder of 2024 also reflects the normal modest seasonal slowdown in the second half of the year, impacting both sales and margin levels versus the first half. We also note that year-over-year comparisons will become more difficult, as the year progresses, given the relatively better performance in the second half of 2023 as the cumulative impact from our cost savings initiatives and other discrete items positively impacted second half 2023 results.

Thank you, Oliver. We are very pleased with how well our teams executed amid soft industry conditions, gained traction from fiberglass pools, launched new products, drove cost savings and productivity gains throughout the organization, and, of course, completed an important acquisition that will drive incremental growth for our company. Latham is also pleased to increase guidance this year, and this is due to how well positioned we are in the marketplace, and how committed our leadership and team members are to meeting and exceeding our objectives, while ensuring the very best in customer service. In summary, this has been a period of considerable progress for Latham. Our priorities remain the same, and we are confident in our ability to continue to effectively navigate the current environment and emerge as an even stronger company. Operator, I would like to open the call to questions.

We will now begin the question-and-answer session. The first question comes from Tim Wojs with Baird. Please go ahead.

Hey, everybody. Good afternoon. Nice job on the margins.

Thanks, Tim.

Hey, to start off, Scott, I wanted to ask about the fiberglass business. It seems that the fiberglass division performed better than the overall company. Can you confirm that? Also, could you provide any quantitative details regarding the dealer interest in fiberglass as this downturn has continued for 18 to 24 months? I'm trying to understand if there have been more dealer sign-ups or any shifts within your current dealer base now that things have slowed down compared to the previous years.

Yes. So Tim, as we've said on the last several calls, fiberglass overall continues to outperform the total market in terms of new pool starts. Fiberglass for us internally outperforms in the in-ground pool category. It's that one we continue to see the ongoing penetration and adoption of fiberglass. So we're really happy with what the team's been able to do there and what our dealers have been able to do. And I think, right, it is a lower-cost product versus a concrete pool, so there's benefits to the consumer to making that switch. On the dealer front, the team has done a really nice job continuing to add new dealers, right? This has been a focus for us for the last 12 to 18 months. I think in an environment where maybe there's not as much demand as they've seen going back to the 2021-2022 timeframe. They do have a little bit more time to look at the product, trial the product, attend one of our boot camps, get educated on all the benefits of fiberglass, go through the training, see how our lead generation works. We can show how we can generate leads for them and then the full support we deliver with our footprint of the fiberglass facility the ability to ship pools quicker. And look, our lead times and our service are in phenomenal position where we can quickly turn pools to them. So I think we've seen a nice trend with new dealers sign up and those that have been with us for, let's say, more than one year progressing and growing their business with kind of the want and willingness to actually grow the business in an environment where pool starts are down overall.

Okay. That’s helpful. Thanks for that. And then just on Coverstar, can you remind us just how big the auto cover business is as a percentage of the cover business for you in total? And then, I guess how incrementally aggressive will you kind of be or plan to be on M&A? Just the weakness that you're kind of seeing in this downturn, I'm just kind of curious, if you're in a position to continue to do M&A if there's opportunities would kind of present themselves?

Yes. The auto cover business falls within our cover product category. While we haven't differentiated the numbers between the two categories, it's evident that auto covers are the dominant segment within our product lineup. It's important to recognize that, similar to fiberglass products, there's a lack of awareness and adoption in the market among dealers and consumers. This presents significant financial advantages and benefits for homeowners in terms of water conservation, energy savings, reduced chemical usage, and, crucially, safety, as the pool is inaccessible when the cover is in place. The auto cover category, along with our network of supporting dealers, effectively acts as an extension of the Latham team. They play a vital role in sales, distribution, technical support, and installation for builders and dealers, representing our company consistently. Over time, many have come to regard them as part of the Latham family, which they truly are. A key example is our partnership with Coverstar, Central, our largest auto cover dealer in 29 states, which will significantly enhance the awareness and adoption in this category, similar to what we've seen with fiberglass. Moreover, it will open doors for us to connect with numerous dealers who currently do not conduct business with us. This team is actively installing auto covers on a variety of pools, including concrete, competitors' vinyl, and fiberglass pools. This collaboration will enable us to share vital data to convert more dealers, increase cover installations on pools, and engage with over 400 dealers who are not currently purchasing Latham products, apart from possibly exposure to auto covers. We're truly excited about these developments. Regarding M&A, we will continue to assess the market for potential transactions that could enhance all our product lines. This approach has been intrinsic to our company and will remain a focus as we engage in discussions with potential partners when the right opportunities arise.

Okay. Okay. Thanks. Thanks for all that, Scott. I'll turn it back...

Welcome, Tim.

The next question comes from Ryan Merkel with William Blair. Please go ahead.

Good afternoon, guys. Mike Francis on for Ryan. A great quarter here. First thing I want to ask, can you give us some details of the factors that you gave as to what is the better gross margin? Anything you could quantify between all those factors would be great.

Sure. I'll gladly take that. So we are very pleased with our outperformance in Q2 here, posting EBITDA margin increase of 400 basis points on 10% lower volume. A couple of areas where that outperformance is coming from. One is cost management, cost controls continues to be a strong point here. We ended that at the end of Q1 as well. And that's really driving the right balance between minimizing the operating costs on the core while investing in future growth. And that's future growth investments such as lead generation, fiberglass conversion, marketing, digital transformation. The second area of outperformance is lean and value engineering. The programs are doing extremely well. The benefits are coming and are very visible in our P&L. As a matter of fact, they're coming a little bit earlier than we expected. And then I think the last point I would like to offer is material costs. And there's two components, deflation, I would say is roughly as expected and guided in prior calls. But then we are seeing benefits from what I called in my prepared remarks supply optimization, so over the last few quarters and coming out of COVID and supply chain shortages, we onboarded new suppliers and we are actively allocating business, let it be for better quality for supply availability and stability and also for economical reasons. And we saw some tailwind from that in the second quarter. Again, very pleased with a 400 basis point outperformance year-over-year on 10% lower volume.

Terrific. And then the second one from me. Can you give an update on some of the refreshed and the new pool models that you discussed in the last quarter? And then also within that the fiberglass segment in particular, has there been a difference in demand trends between some of the more like higher price pools and the lower price? Thank you.

We continuously assess consumer interest in pools through our website interactions and dealer feedback. The trend shows a growing preference for rectangular pools with enhanced features. For instance, the Astoria collection comes equipped with a built-in spa, an expanded tanning ledge, and ample bench seating, making it a popular choice among consumers and dealers. Additionally, we're introducing pools in sizes of 12 and 14 feet, aligning with the trend towards smaller spaces. As backyards shrink, pools are increasingly seen as part of a broader entertainment setup, which resonates across the board. Our Great Malan cocktail pool, introduced a few years ago, continues to attract interest. Our automatic pool covers also fit seamlessly on these models, simplifying installation and providing added protection. We're launching a new range of vinyl liner plunge pools, which offers a basic option and more feature-rich models. This variety enables consumers to choose a more affordable yet aesthetically pleasing vinyl pool that mirrors our fiberglass offerings. Ultimately, we aim to address all market segments, from entry-level to large fiberglass pools. All these models are generally more cost-effective upfront compared to similar concrete pools, and their maintenance is significantly easier.

Perfect. Thanks, guys.

You're welcome.

The next question comes from Matthew Bouley with Barclays. Please go ahead.

You have Anika Dholakia for Matt today. Thanks for taking my question. I wanted to first ask on recent demand trends. I'm curious what you guys are seeing in terms of recent demands thus far in July? I know seasonally it's better this quarter, but if you can give any specifics on how it trended month-to-month that'd be really helpful. Thanks.

Yes, I think if we kind of just look back at 2Q when we were together the last time a quarter ago with 1Q earnings results, we talked about how we saw a significant uptick in demand in the market exiting March. That trend really continued and carried through all of 2Q. We never saw that big peak boom like you typically would see in May and June for the peak pool building season. I think that's the reflection of new pool starts being down 15% overall. But we just saw a nice sequential continued consistent order rate through the entire quarter. I would say that trend has continued through July, albeit, at a slightly lower rate, right, just because we are exiting the peak 2Q build. 3Q is still a big piece. We're just really entering the winter safety cover season here the next 30 to 45 days. So, I think demand is tracking exactly what we've said in the beginning of the year right. New pool starts down 15%, fiberglass outperform, nice growth with auto covers, and then the recurring revenue piece of the business with liners and covers performing kind of as expected. If we look at consumer demand right this is the big one we watch. The interest in pools is still out there and it's pretty big. We look at all the stats of time on website, interest in pools, accounts being signed up, leads being generated. All those metrics are really good indicators that the interest in pools is out there. The consumer is just on the sideline waiting to make that purchase. And look, our service level is operational in a really good position where when that demand comes and someone makes the decision, we can quickly satisfy the demand. In some cases, being able to turn the product in two or three days for a dealer if they can close a sale with a consumer who's ready to kind of make the purchase.

Awesome. Super helpful. Thanks. And then on my second question, I'm curious, if you guys can just talk a little bit about volume and pricing expectations for the year? Are you still expecting a flattish price? And if you could walk through 3Q 4Q cadence? Thanks.

Yeah. I want to say nothing has changed versus our guidance the last two calls. We generally see prices sticking in the market. That doesn't mean that, we run certain promotions or go for an increase in some of the categories. But overall net-net pricing is actually where we guided. And I would still say that overall it's flattish throughout the year comparing 2024 with 2023.

Thank you.

The next question comes from Andrew Carter with Stifel. Please go ahead.

Thank you, good evening. I have a question regarding the updated guidance. It appears that the $12 million increase in organic EBITDA is primarily due to the outperformance of gross margin for the quarter, which was previously guided to be flat but actually increased by 500 basis points. Could you provide an updated expectation for the gross margin for the year? Additionally, I recall you mentioning increased investments for recovery and incentive compensation. Have your assumptions regarding these items changed?

Thank you for the question. The updated guidance is $12 million, reflecting ongoing performance, which is partially driven by Q2 while also being influenced by other factors. Additionally, there is $3 million in incremental impact from the acquisition of Coverstar Central. The three key drivers include cost management, lean value engineering, and material costs. We observed a positive contribution in Q2 and anticipate similar results for Q3 and Q4, along with the completion of restructuring projects now incorporated into our run rate. When we previously discussed gross margin guidance, we indicated flat gross margins. I would now revise that to expect an increase of a few percentage points. Last year, it was 27%, and the prior guidance was also 27%. I now project the gross margin for the year to be between 29% and 30%.

That's helpful. I'd like to learn more about Coverstar as you proceed with the acquisition. This is a unique situation since it's a dealer with exclusives. First, could you quantify your penetration in the markets, especially since it appears to be quite strong in the South? Additionally, what are the incremental dealer opportunities, and are there any risks related to channel conflicts, considering you work with other distributors? I assume you wouldn't be interested in distributing other products through them, possibly due to their lack of capabilities. Thank you.

Yes. So Andrew, Coverstar Central, you kind of think that they blanket kind of the central part of the U.S. from the South right up through the Canadian border some into the Northeast a little bit on a few of the states kind of Mississippi to the East Coast and through the sand states. First, there's not a lot of auto covers in the sand states on pools right? People are not putting covers on the pools. So similar like fiberglass a massive, massive opportunity for growth to drive the adoption and awareness there as we launch auto covers distinctly in those markets. A good penetration through a lot of the Midwest with this product and I think CoverStar Central has done a phenomenal job of growing their business over the years and working not only with dealers but also working with several of our distribution partners that are out there in this space. We don't see any conflict today. We don't see any conflict tomorrow based on how the model works. And that applies not only for CoverStar Central, but all of our other auto cover partners throughout North America. I think it is a very unique network in terms of how we go to business here. And like I said earlier, right, you got to almost view these guys as they're an extension of our sales force team. They're out there providing technical support for builders and dealers. They're actively promoting the product with very unique marketing opportunities and things these teams do. We've got a large auto cover dealer that runs all of the Canadian market for us based in Vancouver and again coming all the way into the Greater Montreal, Greater Toronto area. They're just great business partners. They're with us at all of our dealer conferences. They're with us at all of our pool shows. And like I said, they're an extension of the team. I think it just made sense at this point in time to take another step to just try to drive the awareness of this business. And more importantly, provide more growth opportunities because they do access a lot of dealers we don't touch today. And that's probably the exciting part not just the auto cover piece but what we can do with converting concrete dealers to fiberglass where they're putting covers on those pools for those dealers.

Thanks. I'll pass it on.

The next question comes from Susan Maklari with Goldman Sachs. Please go ahead.

Thank you. Good afternoon, everybody.

Good afternoon, Susan.

Good afternoon, Scott. My first question is can you talk a bit about the raw materials? I think that you mentioned in your remarks that you have seen some relief on that side. Can you just give a bit more color on that?

Sure. So we continue to see slight deflation. It's coming from selected resins and PVC film. Now sequentially probably deflation is less obvious versus year-over-year. As we did see in 2023, as I said in my prepared remarks some relief mid-year in terms of the raw material costs. And it's more the 2023 relief that we saw than anything sequential. We see overall the raw material basket for the last couple of quarters relatively stable. And again, our guidance remains unchanged for modest level of deflation again primarily driven by more 2023 versus 2024.

Okay. That's helpful. And then, you mentioned in your prepared remarks as well that you expect to see 140 basis points of margin benefit from the CoverStar deal as that is integrated and comes through, any thoughts on the timing of when we could start to see that? And how it will flow through over the upcoming quarters?

I believe that if I break down the 140 basis point comment as a full year figure while combining the businesses, the seasonality and timing for both sales and EBITDA closely align with Latham since we are operating in the same markets. On a pro forma basis, the 140 basis points of seasonality is roughly consistent with our seasonal patterns at Latham.

Okay. All right. Thank you for the color and good luck with everything.

Thank you, Susan.

This concludes our question-and-answer session. I would like to turn the conference back over to Scott Rajeski, for any closing remarks.

Yeah. Thank you for your time here this afternoon. We really appreciate everyone's continued support for Latham. Look forward to seeing you all at upcoming conferences and meetings at our next earnings call. I hope everyone has a great rest of the summer and has a safe summer as well. Take care, everyone. Have a good evening.

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