Nature's Sunshine Products Inc (NATR) 2020 Q2 法說會逐字稿

Okay. Good afternoon, everyone, and thank you for participating in today's conference call to discuss Nature's Sunshine financial results for the second quarter ended June 30, 2020. Joining us today are Nature's Sunshine CEO, Terrence Moorehead; CFO; Joseph Baty; and Executive Vice President and General Counsel, Nathan Brower. Following their remarks, we'll open the call for your questions.

Before we go further, I would like to turn the call over to Mr. Brower as he reads the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Nathan, please go ahead.

Thank you. Good afternoon, and thanks to all of you for joining our conference call to discuss our second quarter 2020 financial results. I'd like to remind everyone that this call is available for replay via telephone dial-in through August 20 and via our live webcast that will be posted in the Investor Relations portion of our website at naturessunshine.com. The information on this call may contain certain forward-looking statements. These statements are often characterized by terminologies such as believe, hope, may, anticipate, expect, will and other similar expressions.

Forward-looking statements are not guarantees of future performance. And the actual results may be materially different from the results implied by forward-looking statements. Factors that could cause results to differ materially from those implied herein, include but are not limited to, those factors disclosed in the company's interim report on Form 10-K under the caption, Risk Factors, and other reports filed with the Securities and Exchange Commission. The information on this call speaks only as of today's date, and the company disclaims any duty to update the information provided herein. Now, I'd like to turn the call over to the CEO of Nature's Sunshine, Terrence Moorehead. Terrence?

Thank you, Nate. Afternoon, everyone, and thank you for joining today's call. I hope you're all staying safe and healthy during these challenging times as we continue to deal with the unprecedented uncertainty caused by the global effects of COVID-19, the economic, turmoil, and social unrest. Having said that, it's good to be here with all of you today to discuss our second quarter results and share our progress on some of the initiatives that we'll be implementing in the back half of the year. With me today is our Chief Financial Officer, Joe Baty, who's going to walk you through our financial results in greater detail, but I'm going to kick things off today with a brief summary of the business.

So let me begin by saying that our team here at Nature's Sunshine is doing well, and we continue to stay focused on moving the business forward. I'm very pleased with our second quarter performance, especially given the challenging operating environment. Overall, we had another solid quarter. Despite delivering a 2% decrease in revenue on a local currency basis. We made significant progress in several key markets like NSP U.S., which saw revenues increase for the second consecutive quarter, up 3% in local currency. Central Asia and Europe was up 14% on a local currency basis, and China was up 39% in local currency. I'll come back and talk about these markets a bit later. We also continue to see positive results on the bottom line due to our cost reduction initiatives with a 45% increase in operating profit and a 21% increase in adjusted EBITDA, delivering almost $10 million for the quarter.

We're committed to continuing to make progress in this area, and our restructuring initiatives are expected to deliver more than $4 million in annualized savings. Stepping back to look at our performance over the first 6 months of the year provides good insight into the momentum we're building, but it also normalizes some of the timing issues related to shipping buying patterns that we saw in the first half of 2020. During this period, we've seen a 2% increase in revenue on a local currency basis, driven by NSP U.S. up 5%; China, up 15% and Central and Eastern Europe, up 34%, all on a local currency basis. We also saw strong profit increases in the first half with a 20% -- 26% increase in adjusted EBITDA, delivering over $19 million for the first 6 months of the year.

Clearly, we're building momentum in a very challenging environment, and our team has stayed the course, navigated the increasingly complex environment, and worked tirelessly to ensure we continue to make progress on our business transformation without disruption. I can't overemphasize how impressed I've been with our team's ability to adapt, collaborate and overcome obstacles at every turn. And I want to give special thanks and recognition to our shipping, manufacturing and quality teams that have continued to keep our manufacturing and distribution facilities fully operational throughout the pandemic, which has allowed us to meet the increasing demand for our products and continue to serve our incredible distributors without interruption. Of course, the health and safety of our employees, distributors, and customers is our top priority.

So while some state and local restrictions related to the pandemic have been listed, we're still strictly following and in many cases, exceeding CDC guidelines and continue to have the preventative and protective measures in place that we discussed during our last call, including regular deep cleanings, daily temperature scans, education on hygiene practices, isolating workgroups, limited interaction and access to common areas, increased hand sanitizing stations, and requiring masks and gloves for all employees in our facilities. Consumers are counting on us now more than ever and everyone at Nature's Sunshine is dedicated to navigating these unprecedented times, and we remain committed to delivering the highest quality products and services in the market.

Now, I'd like to talk a little bit more about our regional performance and share some of the highlights from our second quarter results. Starting with North America. We're very pleased with our performance, especially given the challenging operating environment brought on by COVID-19. The economic downturn and the long-term negative sales trend of our U.S. business. Overall, sales were flat for North America. However, as I mentioned earlier, NSE U.S. saw a 3% increase in revenues on a local currency basis. Growth in the U.S. was driven by improved field fundamentals and increased sales across all categories, which is extremely positive and consistent with some of the growth trends we saw across the supplement industry as a whole. Of course, this is a significant milestone because it's really the first time in a long time, certainly, that we've been able to capitalize on the overall market growth.

We think this is a result of shifting consumer sentiment and engagement with our brand, along with increased interactions with our sales team, but clearly, it's a positive development as the team prepares to launch a series of new initiatives as part of our transformation. I'll come back and talk about the transformation a little bit later, when I walk you through our progress on our global growth strategies. Turning to Asia, where the pandemic hit us earliest and hardest, we continue to be negatively impacted by the ongoing impact of COVID-19. In the second quarter, revenue decreased just over 4% on a local currency basis, which is much better than we expected, given the restrictions on group meetings, the extended closure of our offices, training facilities, and sales centers, and the cancellation of key incentive programs.

Throughout the region, our team has been forced to adapt to the day-to-day challenges in market, increasingly using remote meetings and sales tools to -- while implementing new incentive programs to drive engagement. As I mentioned earlier, China was the first market in Asia to show signs of improvement, delivering 39% revenue growth in local currency per quarter. Growth was partially driven by an overall increase in demand for supplements, but most of the growth came from increased distributor activation and new customer acquisition. Japan also had delivered solid performance with revenue growth of 4% on a local currency basis. Since the start of the pandemic, our Japanese distributors have increased their use of online and remote sales tactics and during the second quarter, they were more effective to driving customer activation.

While we're pleased with the progress in China and Japan, it's still too early to make any forward-looking assessments. In Korea, revenue decreased almost 20% on a local currency basis, driven by government restrictions on meetings and events and the mandatory closure of our state of the art business center. As a reminder, our Korean business is a high-touch market that's historically relied on meetings, events and experience-based incentives to motivate and drive distributors. Fortunately, the investments that we made in 2019 in digital technology and remote ordering have allowed us to move forward and keep our people engaged. It's also important to remember that we have excellent fundamentals in Korea and expect this business to be a growth driver once the market fully recovers. In the meantime, the team is using webinars, Zoom calls, digital and social media tools to keep people engaged.

In Europe, we continue to see improved performance despite the debilitating effects of COVID-19 and the collapse of the Russian ruble. Still, revenue increased 4% in the region on a local currency basis, driven by continued gains in Central Eastern Europe, with a 9% growth in Russia and a 44% growth in Poland. Strong field fundamentals and a more developed online presence helps the management team overcome the external market challenges and mandated closure of our retail locations throughout the region. Market closures and business restrictions in Continental Europe led to negative sales that offset gains in Central and Eastern Europe. To help drive engagement moving forward, the team has introduced an attractive promotional immune pack and re-launched one of their key products, which should combine to help drive sales as markets reopen.

In Latin America, we've also been significantly impacted by COVID-19 as mandatory curfews, the suspension of public services, and the mandatory closure of our retail outlets have combined to slow market growth. As a result, second quarter revenue declined 16% in local currency. Moving forward, we would expect to see improved performance in LATAM m due to a revitalized new product development program and the introduction of online ordering capabilities across the region. Again, once the market restrictions are lifted, we believe these changes will start to have a positive impact on the business. So to sum up our performance, I just want to reiterate how encouraged we are by the first half sales trends, especially in several of our key markets and the continued improvement in our bottom line.

Even though we're still in the early phases of our transformation, it's a good indication of the opportunity that lies ahead. With that said, I'd like to spend some time updating you on our transformation plans for the second half of 2020. As you know, our transformation is built around our 5 strategies. Brand power, field energy, digital first, Manufacturing, Inc.; and finally, what we call the right stuff. We've prioritized North America and LATAM as key markets to spearhead our transformation plans due to the changing consumer dynamics, their untapped market potential, and their long-term negative sales trends that we've experienced in these OBUs. We'll be launching a series of breakthrough initiatives in both OBUs and I'd like to walk you through some of the key changes that we'll be implementing starting in late Q3.

Let me begin with brand power, where we plan to accelerate and deliver the full rollout of our updated branding that includes a new packaging, consumer-facing assets and brand imagery. We'll also introduce a new unboxing experience to improve affinity and create a premium customer experience. To bring all of this together and reposition Nature's Sunshine in the hearts and minds of consumers, we'll also be launching our new Force of Nature digital campaign designed to improve consumer awareness and drive activation. In this campaign, we'll reestablish Nature's Sunshine as an industry pioneer and herbal expert, emphasizing the power of our brand through new messaging and lifestyle intrigue. Campaign details are still under development, and we look forward to introducing our unique platform to a significantly larger consumer base from these efforts.

Finally, we're also going to start more aggressively marketing our hemp-based line of CBD products sold under the qemp brand. And if you remember, qemp is the combination of 2 words, quality and hemp (inaudible) care. Our plan is to use our extensive head-to-head testing that shows qemp is superior to all other top brands of CBD currently on the market, to build a powerful campaign. Based on our research, we believe qemp is the best CBD on the market, offering better performance, better quality, and better transparency than any other brand. As such, we're developing a campaign to help build our market share. Turning to field energy. Our focus will intensify as we update and contemporize the distributor and consumer experience. One of the most important changes we'll be implementing is the launch of a new membership program for customers.

We call the program Premium Membership, and for small annual fee, premium members will enjoy exclusive savings on all full priced products, additional savings off all sale items, early access to promotional events, private sales promotions, and free shipping. The Premium Membership program is an important first step in defining and differentiating how we treat distributors versus customers as it becomes increasingly important for us to strengthen our customer focus and deliver programs that will make our brand more attractive to each group. Another important initiative is the launch of a new subscription program designed to support therapeutic benefits and increase customer retention. We call the program Subscribe and Thrive.

And this will be a significant change to how we engage with customers in the future. Today, too many of our customers end up being onetime buyers, and our goal is to help those customers get the full therapeutic benefit from our products. As such, Subscribe and Thrive will become the default purchase option on our new website and will offer the lowest possible price for our products, free shipping, and a free 1-year premium membership. Of course, we want the program to be as consumer-friendly as possible, so we've made sure that there's a one click, cancel, pause and change button so that customers can customize their Subscribe and Thrive experience to meet their needs. Subscribe and Thrive is one of the most important and most powerful ways that we can support our consumer's wellbeing because opting for a consistent supplement routine is the best way to maintain a healthy lifestyle with Nature's Sunshine.

Of course, one of the most important developments is the launch of our new health plan that gives distributors an updated and more flexible earnings plan with improved growth potential. The new plan is based on significant research and more clearly aligns with today's relationship driven distributor that values stronger rewards for customers for driving customer growth and encouraging customers to share Nature's Sunshine with others. In addition to the exciting new programs initiatives to support distributor growth, the new comp plan will now offer distributors 4 ways to earn. The first way to earn is by selling our industry-leading products and serving customers. The second way to earn is by identifying new qualified distributors who would be interested in selling our products and serving customers.

The third way to earn is by identifying qualified distributors in other geographies to sell our products and serve customers. This is made possible by moving from 11 unique comp plans that we had in the past to a single plan for North America and Latin America. And finally, with the introduction of new sharing tools and an innovative affiliate program, the fourth way to earn is by encouraging customers to simply click and share our products with other consumers, through the easy and convenient social media sharing tools that will allow them to receive benefits of their own. The new sharing tools and affiliate program will allow distributors to expand their influence in exciting new ways and even earn across new geographies if they'd like to. Obviously, we want to accommodate the increasingly demanding needs of today's distributors.

So in addition to introducing an updated digital platform that I'm going to talk about next, the new plan also allows distributors to be paid within about 30 minutes of the customer transaction instead of having to wait until the end of the month to get paid. Moving to digital first. We will formally launch our new website with new features, added functionality, and updated design. As I mentioned earlier, we'll also be introducing new sharing tools for customers, distributors, and affiliates with a host of new shareable assets to help promote customer growth. Distributors will also have access to a new set of back-office tools and a fully replicated website that will allow them to create and build their own digital business opportunity. This is just the first step in our digital transformation, but it's an important one, since this new platform allows us to more effectively manage distributor transactions.

We'll finally have a system that will allow us to link customer transactions to their responsible distributor in order to ensure that we're fully supporting our distributors, customers' growth efforts. Turning to Manufacturing, Inc. Our plan continues to focus on taking our industry-leading quality and reliability to the next level. Last year, we received our USDA organic and ISO 9001 certifications, which further widened the quality gap between Nature's Sunshine and the competition. And this year, we'll upgrade our kosher certification and secure additional ISO certifications that will further demonstrate our commitment to manufacturing excellence.

As I mentioned earlier, we'll also introduce free shipping and an improved unboxing process to improve the customer experience in partnership with our supply chain team. Finally, our Right Stuff strategy will continue to focus on streamlining processes, aggressively managing expenses and proactively evaluating organizational effectiveness to improve operating margins. Of course, in light of recent current events, it's becoming increasingly apparent that another important aspect of having the right stuff is to ensure that we're building an organization that embraces and champions diversity, inclusion, and equality. As such, we are launching a 6-part educational series that we call Stronger Together that focuses on educating our employees on how to create an open and inclusive work environment.

We're doing everything in our power to be a positive influence in our community, including launching a college scholarship program and a series of internships targeting employees and minorities in our community. In summary, we've made significant progress bringing our plans to life and look forward to launching the new initiatives in late Q3. Of course, as we partner with our incredible distributors to move the business forward, we want to make sure they have ample time to adjust to the new initiatives and that we fully support them throughout our journey. To help move everyone forward, we've created a 12-month bridge program designed to ensure that our distributors have an opportunity to be successful in the new world without the fear of financial risk.

The bridge is a unique program that demonstrates our unwavering commitment to our distributors and our steadfast belief in their ability to assume the leadership roles that made Nature's Sunshine an industry pioneer almost 50 years ago. We'll be in a better position to talk about the potential impact of each one of these initiatives and the new proposition during our November call. But right now, given the environment, it's still too early to comment. So with that, I'd like to turn the call over to Joe Baty, our Chief Financial Officer, who will walk you through our financial results for the second quarter in more detail. Joe?

Thank you, Terrence, and good afternoon, everyone. Net sales in the second quarter were $87.3 million compared to $90.7 million in the same quarter last year. On a local currency basis, net sales decreased 2% year-over-year. Unfavorable foreign currency exchange rate fluctuations impacted net sales by approximately $1.5 million compared to the prior year. Net sales in Asia were $32.8 million compared to $35.2 million in the year ago quarter. The decrease was primarily attributable to the effects of market shutdowns brought on by the COVID-19 pandemic.

On a local currency basis, net sales in China increased 39% and Japan local currency sales increased 4%, and in South Korea, sales declined 20%. Future results may continue to be negatively impacted by the pandemic and fluctuating foreign currency rates. Net sales in Europe increased 3% year-over-year to $15.5 million or 4% growth in local currencies. The increase in net sales reflects growth in Central and Eastern Europe, including strong performance in Russia and despite of it, effects of pandemic related market shutdowns. North America net sales were $34.5 million compared to $34.6 million in the year ago quarter.

As Terrence mentioned, the slight decline reflects the softened demand we experienced in April as a result of the fear based buying trends in the early days of the pandemic, which has since recovered, as customers begin to replenish their supplies and return to more normalized purchasers. The approximate 3% growth we experienced for NSP U.S. during the second quarter supports this statement. We believe the various strategic and ecommerce enhancements we are launching in the coming months will set us up nicely to capitalize on the solid demand for resurgence coming from the U.S. market. Net sales in Latin America and other were $4.6 million compared to $5.9 million in the year ago quarter, with the decrease primarily due to the substantial shutdown of certain LATAM markets. Gross margin was 73.6% compared to 73.7% in the prior year.

Volume incentives as a percentage of net sales were 33.4% compared to 34.5% in the same period last year. The decrease was driven by change in market mix, including China growth and the effects of various global market shutdowns due to COVID-19. Selling, general and administrative expenses were $28.5 million, down from $31 million in the prior year. The 8% decrease was primarily due to savings from restructuring activities in the U.S. and Latin America, decreases in travel and event related costs as a result of COVID-19 and an unusual VAT refund in 2020. As a percentage of net sales, SG&A expenses decreased 150 basis points to 32.7% compared to 34.2% in the same period in 2019. Excluding the impact of $0.4 million of restructuring expenses in the prior year and $0.1 million of VAT related income this year, SG&A expenses were 32.8% of net sales compared to 33.8% in the prior year period.

We reported a 45% increase in operating income to $6.6 million or 7.6% of net sales compared to operating income of $4.5 million or 5% of net sales in the prior year period. Excluding the previously mentioned unusual items relating to restructuring and VAT related income, we generated $6.5 million of operating income or 7.4% of net sales for the third quarter compared to $4.9 million or 5.4% of sales in the prior year period, primarily related to SG&A savings. In addition, as Terrence mentioned earlier, we have been able to improve bottom line leverage as a result of streamlining processes and prudently managing costs across the business through our Right Stuff strategy. Adjusted EBITDA, as defined in our press release as net income from continuing operations before income taxes, depreciation, amortization and other income or loss adjusted to exclude share-based compensation and certain noted adjustments increased 21% to $9.7 million in the second quarter of 2020 as compared to $8 million in the second quarter of 2019.

This increase was driven primarily by the aforementioned cost savings from reduced travel and event related expenses and ongoing restructuring activities. Net income attributable to common shareholders for the quarter increased significantly to $5.8 million or $0.29 per diluted share as compared to $2.7 million or $0.14 per diluted share in the year ago period. Turning to liquidity. We had cash and cash equivalents on June 30 of $70.3 million with $5.4 million of debt. For the first 6 months of 2020, we generated $14.4 million of cash from operations as compared to using cash of $1.1 million in the comparable prior year period, with the increase primarily due to change in working capital, including payment timing of certain current liabilities.

Overall, we are pleased with our balance sheet strength and liquidity. Although we recognize that the COVID-19 pandemic and related impact on future financial results remains uncertain, we believe our strong liquidity puts us in a favorable position to mitigate unexpected impacts in the future. Accordingly, we remain committed to maintaining and continuing to improve our overall cash and liquidity position. Before opening the call to your questions, I wanted to echo the sentiment shared by Terrence. While there remains much work to be done at Nature's Sunshine, we are quite pleased with the progress we have made so far and look forward to continued strong results from our global growth initiatives. Now, I will turn it back over to the operator for Q&A. Operator?

(Operator Instructions) We'll go to our first question from Steven Martin with Slater.

Can you hear me?

Yes, we hear you. Little shaky.

Let me take you off -- is that better?

That's great. Thanks.

So I know you don't like giving any forecasts but you've now come through the bulk of the pandemic, can you -- in broad strokes, talk about what you're expecting for the back half?

I wouldn't necessarily say we've gone through the bulk of the pandemic, based on the trend line that we're seeing in the marketplace. But I'd say we are -- I'm excited about the strategies that we have in place. I think there are -- that I outlined. I'm excited about the key markets that we mentioned that are of going in the right direction as well. We still have to get through the implementation of these strategies and get them kind of landed successfully. But we've got great distributors. They're focused. I think we've got the best distributors in the world. Our practitioners in the U.S. business are some of the smartest, most capable, most loyal people out there, and they are just -- and I know that for a fact. We've had some meetings with some other outside experts, and they're so impressed as I have been with our people. So Steve, I think we're doing everything we can to keep the momentum going and to build the foundation for growth for the future. But again, I still view there being a lot of uncertainty in the markets around the world, especially in Asia, especially in LATAM, even here in the U.S. But again, we're trying to give ourselves a chance to win and a chance to compete.

Well, you know I'm not going to let you off the hook quite that easy. So when you look at the monthly progression of sale, I assume April was the worst of the 3 months. Is that a fair assumption?

It's Reasonably. Directionally, it's a reasonably fair assumption. But I wouldn't say, Steve, not to jump ahead. But I wouldn't say that it's -- the trend line is -- shows substantial upward movement over the quarter. There is an upward trend over the quarter, but not dramatic.

With respect to SG&A, there were a lot of ins and outs this quarter. And when you look at SG&A for the -- and I know you've got a lot of initiatives kicking in, in the third quarter. And you had the VAT and you didn't have meetings. Give us some parameters on where SG&A should be. You were at $31 million for the first quarter. You were at $28.5 million for the second quarter. Within that range, what should the third and fourth quarter look like?

Steve, as I think you know, we don't give that level of guidance. We don't give much guidance at all, as you know. But I would say directionally, let me just say, from an overall standpoint, we're pleased with the favorable trends we're seeing, even with the ins and outs in SG&A. We clearly have an initiative to reduce SG&A as a percent of sales going forward. And that initiative was launched back a couple of years ago, and we're starting to clearly see some of the benefits of that even with, again, some of the ins and outs related to the pandemic. But I'd tell you in regards to the second half is you can't look at any given quarter and somehow measure SG&A because there can be adjustments, fluctuations due to the level of events or that type of activity that's going on. And obviously, in the second quarter, there wasn't much of that activity. The third quarter, there may be a little bit more. So that in and of itself may lend itself to potentially some uptick as a percent in SG&A. At the same time, there's still a lot of uncertainty as to how exactly sales will play out in Q3 and Q4. So while there may be, from a dollar standpoint, some uptick, it doesn't necessarily mean that as a percent of sales that you would see a meaningful increase.

I'm going to try it a different way. Looking at cost of goods sold and SG&A as baseball games. Where are you in terms of ringing the costs out?

Not using the new double-header format of the major leagues where those are 7-inning games. Using a typical baseball game analogy, I would say, we're in the sixth seventh inning. Let me just jump to the operating income or EBITDA margin, Steve, frankly. Obviously, we have a lot of initiatives. You're seeing the significant improvement in operating margin and EBITDA margin, but we're not done yet, okay? The longer-term pool and targets north of where they currently are. So to use, again, in reference to your baseball analogy, are we in the seventh inning stretch? I don't think so. But we're also past the fourth, fifth inning, okay? All right.

Well, at the end of the day, you've done a great job taking the costs out, and I appreciate the sixth, seventh inning analogy. What really is going to drive the margin is top line growth because it's still -- you've done a great job with sort of flattish kinds of revenues. But the real -- I think the real leverage into double-digit margins is going to come when you can translate all this -- all what you're doing into topline growth. And along that line and changing subjects, if you can't get LATAM up and running or functioning better soon, time to cut your losses. Too much attention, too much time, too much money for a market that just at the end of the day, I don't think there are too many countries there that are too screwed up. So let me ask one last question, and I do this every quarter. You're now up to $70 million. You were worried a year, a year and a half ago about consistent cash generation. I would say your cash generation is pretty damn consistent. If you have a back half of the year equivalent or approximately equivalent to the first half of the year, you're going to be looking at $90 million of cash. You're going to be -- you have no debt. You've got 20 million shares outstanding. And I know you have some very smart people on your Board, and I'd like to know when somebody is going to do something with respect to reinstating the dividend or buying back stock or buying a slug of stock from your Chinese investor or something, but it is not productive at the end of the year to be sitting with $90 million worth of cash. And I hope your Board members and control shareholders are listening.

Yes. It would be inappropriate for us to kind of, I guess, comment on anything that the Board hasn't announced. But again, right now, in this environment, our strategy is to -- and as you know, we have our one facility here in Spanish Fort serves our business around the world. And so kind of in a COVID sensitive world, we are holding onto our cash and being cautious and being -- playing it safe right now. But again, I think we're having -- let me just say, we're having all the appropriate discussions at the Board level. Joe, would you like to add anything to that?

No, I think that sums it up. Steve, it's a fair question. But clearly, given the situation, and the uncertainty -- well, I hope what you touched on earlier that maybe we're past the fifth or sixth inning on the pandemic. I don't know whether we are or we aren't, frankly. So -- and until we see a little more light at the end of that tunnel. As I noted in my comments, I believe our current position is to maintain and continue to build on our liquidity such that we'll be very well positioned if some unfortunate situation does arise. Having said all that, again, it's a fair comment for a question, and those conversations will continue to take place at the Board level.

Well, rest assured, I'm going to continue to ask the question.

(Operator Instructions) At this time, this concludes our question-and-answer session. I would now like to turn the call back to Mr. Moorehead for closing remarks.

Okay. Well, again, once again, I want to thank everybody for listening to today's call. We look forward to speaking to you again in the future on our third quarter results. But again, in the meantime, stay safe, and thanks for all your support, and thanks for joining us. Have a great day.

Thank you.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.