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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Fox Factory Holding Corporation's First Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded.
I'd now like to turn the conference over to your host, Vivek Bhakuni, Director of Investor Relations and Business Development. Thank you, sir. You may begin.
Thank you. Good afternoon, and welcome to Fox Factory's First Quarter 2021 Earnings Conference Call. I'm joined today by Mike Dennison, our Chief Executive Officer; and Scott Humphrey, our Chief Financial Officer and Treasurer. First, Mike will provide business updates. Then Scott will review the financial results of the quarter and then the outlook followed by closing remarks from Mike. We will then open the call up for your questions. By now, everyone should have access to the earnings release, which went out today at approximately 4 or 5 Eastern Time. If you have not had a chance to review the release, it's available on the Investor Relations portion of our website at investor.ridefox.com. Please note that throughout this call, we will refer to Fox Factory as Fox or the company. Before we begin, I would like to remind everyone that the prepared remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. Such statements involve a number of known and unknown uncertainties many of which are outside the company's control and can cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors and risks that could cause or contribute to such differences are detailed in the company's latest Form 10-Q and in the annual report on Form 10-K filed with the Securities and Exchange Commission. Except as required by law, the company undertakes no obligation to update any forward-looking or other statements herein, whether as a result of new information, future events or otherwise. In addition, where appropriate in today's prepared remarks, and within our earnings release, we would refer to non-GAAP financial measures to evaluate our business as we believe these are useful metrics that better reflect the performance of our business on an ongoing basis. Reconciliations of these non-GAAP financial measures to their most direct comparable GAAP financial measures are included in today's press release, which has also been posted on our website. And with that, it is my pleasure to turn the call over to our CEO, Mike Dennison.
Thank you, Vivek, and good afternoon. We appreciate everyone taking the time to join us for today's call. For our first quarter results, I'm proud to report the highest quarterly revenue in our company's history, powered by record-breaking performance in both divisions. The credit for this success can be attributed to the dedication, agility and adaptability of our incredible team, which continues to maneuver through the endless challenges associated with the current environment. Our team has executed remarkably while making sustained continuous improvements operationally. This consistent performance also reflects the continued strength of our leading brand portfolio and our team's commitment to deliver high-performance products to our valued customers while still managing dynamic supply chain realities. Turning to the numbers. Our first quarter sales were $281.1 million, an increase of 52.5% compared to the first quarter of last year. From a profitability perspective, we reported non-GAAP adjusted earnings per diluted share of $1.05 versus $0.52, an increase of over 100% compared to the first quarter of 2020. This staggering top and bottom line performance is further evidence that our customers can and do differentiate our premium brands from that of our competitors. The foundational drivers of our robust performance can be attributed to our expanded portfolio of high-performance products, which continues to deliver on quality, engineering and service that consistently resonates with the end consumers. Another competitive advantage behind our performance is our team's ability to effectively operate under the current dynamic supply chain environment. We recognize the unprecedented demand growth and continue to make necessary investments in products, people, technology and while continuing to build operational discipline and a strong balance sheet. Starting with Specialty Sports Group, product sales were up 85.5% compared to the first quarter of 2020, making this SSG's highest revenue quarter ever. As I mentioned in the last earnings call, we continue to capitalize on the extended rider base during this unprecedented restocking cycle by leveraging strong OEM and supplier relationships. Our commitment to innovation to create performance-defining products speaks for itself as we had yet another record quarter for shock and for unit volumes. Needless to say, we had several supply chain issues from shipping container availability to other logistical challenges. However, our team members demonstrated strong execution by successfully controlling costs and managing operations to meet our OEMs' expectations, thus helping our customers manage evolving backlog and order trends. In addition, our SSG team adapted to an accelerated time line to complete all model year 2023 sell-in tools nearly 6 months ahead of the typical schedule and empowering our sales team to potentially capture additional market share. Looking forward to the rest of 2021, the demand projection remains very strong. However, we are cognizant of the growing supply chain challenges. Therefore, we continue to work closely with our suppliers and OEM customers to identify opportunities for further collaboration and improvement. Now shifting to our Powered Vehicles Group. We posted a record revenue quarter as PVG grew 35% compared to the first quarter of 2020. A key contributor to this performance was a robust demand for our aftermarket products, including increasing dealership penetration of our outfitting business and the ongoing robust demand for our Powersports products. Growth in our PVG automotive OEM business was lower than our long-term target as a result of supply chain challenges faced by our customers and the typical model year changeover at one of our major OEM customers. We see the current supply chain shortage as a byproduct of the current OEM environment with the demand generally moving into backlog versus lost business. I am also proud to report that we had fewer COVID cases in our North American facilities compared to the fourth quarter of 2020, which also enabled us to increase productivity. Our ongoing Georgia factory transition remains on track. We are closely monitoring our margins and the duplicative costs associated with that transition for any lessons learned as we continually look to identify opportunities for margin expansion. As we have previously stated, we expect to see margin improvements in the latter half of this year. Turning to our Powersports OEM partnerships. As you are aware, the Powersports industry has been experiencing significant growth. To capitalize on this growth, Kawasaki introduced the Teryx KRX featuring our Fox 2.5 PODIUM live valve shocks with internal bypass. In addition, Polaris launched 2 new snowmobiles, the INDY XC and the Switchback XC, featuring our high-performance Fox QS3 shocks that offer easy pre-ride adjustability and deliver outstanding performance on and off the trail. This is our first major Polaris snowmobile spec win. Moving on to our accomplishments in the racing world, which is beginning to return to a more normal environment. One of the biggest races of the year, King of the Hammers, took place in Q1. Fox continued its winning legacy with wins in the grudge match with the top 3 podium spots. The top 2 unlimited truck in the T1 Desert challenge and a top 5 suite of Every Man Challenge, including wins in both the 4,800 and 4,500 classes. In addition, Ford Performance unveiled their new Bronco 4600 race vehicle, which will run in the ULTRA4 stock class. The Bronco 4600's competition tuned high-performance off-road stability suspension features Fox coil-over shocks with remote reservoirs and a Fox pneumatic bump stop on all 4 corners. In closing, I am very pleased with the exceptional results and a great start to the year. We recognize the pandemic is still not over and the lingering risks are challenging us in many new ways every day. However, I feel very confident that our performance-defining products are complementary and diverse set of businesses will help us continue to deliver strong performance in 2021. And with that, I'll turn the call over to Scott.
Thanks, Mike. Good afternoon, everyone. I'll begin by going over our first quarter financial results and then review our guidance. Sales in the first quarter of 2021 were $281.1 million an increase of 52.5% versus sales of 184.4 million in the first quarter of 2020. The Specialty Sports Group delivered an 85.5% increase in sales in the quarter compared to the same period last year driven by high demand in both the OEM and aftermarket channels. Our Powered Vehicles Group delivered a 35% increase in sales compared to the first quarter of 2020 primarily due to higher growth in the Powersports business and a full quarter SCA, which we acquired in March of 2020. Looking sequentially, SCA revenue grew over 40% compared to Q4 of 2020. Excluding the impact of the SCA acquisition, revenue in PVG increased 8.8% year-over-year, driven by strong demand in the aftermarket channel.
Fox Factory's gross margin was 34.8% in the first quarter of 2021, a 410 basis point increase from 30.7% in the prior year period. Non-GAAP gross margin also increased by 410 basis points to 35% versus Q1 of 2020. The increase in gross margin during Q1 was driven by a shift in channel mix, primarily from a full quarter of SCA in the results as well as lower COVID-related costs this year, offset by duplicative costs due to the Georgia facility transition. Total operating expenses were $52.1 million or 18.5% of sales in the first quarter of 2021 compared to $45 million or 24.4% of sales in the first quarter of last year. The increase in operating expenses on a dollar basis was primarily due to the inclusion of a full quarter of SCA's operating expenses and higher employee-related costs, including incentive compensation. At the end of Q1 2020, we drastically reduced our bonus accrual for the year due to pandemic-related shutdowns. The increase in operating expenses was partially offset by lower acquisition-related costs. Looking at non-GAAP operating expenses as a percentage of sales, our non-GAAP operating expenses decreased by 60 basis points to 16.1% compared to 16.7% in the prior year period. Looking at OpEx in more detail. Sales and marketing expenses were up by $4.8 million, primarily due to a full quarter of SCA costs and increased personnel costs primarily driven by higher sales commissions and incentives. In addition, R&D costs were up by $1.9 million to support future growth and product initiatives. G&A expenses were down approximately $2 million, driven by lower acquisition-related costs. For the first quarter, our effective tax rate was 9.5%. This rate is lower than our previous long-range guidance of 15% to 19%, primarily due to excess benefits related to stock-based compensation and the release of our excess tax reserve, offset by an increase in valuation allowance of foreign tax credits. Adjusted EBITDA increased by 93.1% to $60.4 million for the first quarter of 2021 compared to $31.3 million in the same quarter last year. I want to congratulate our team on our best EBITDA quarterly performance ever. Furthermore, adjusted EBITDA margin expanded 450 basis points to 21.5% compared to 17% in the first quarter of 2020. The increase in EBITDA margin is primarily due to the impact from higher sales, better product mix and the positive impact of SCA on our results. On a GAAP basis, net income attributable to Fox in the first quarter of 2021 was $38 million or $0.90 per diluted share compared to $8.3 million or $0.21 per diluted share in the prior year period. Non-GAAP adjusted net income was $44.5 million, an increase of approximately $24 million or 117% compared to $20.5 million in the first quarter of last year. We delivered $1.05 of non-GAAP adjusted earnings per diluted share in the first quarter of 2021 compared to $0.52 in the first quarter of 2020. Now focusing on our balance sheet. For the first quarter, which ended on April 2, 2021, compared to our 2020 year-end on January 1, 2021, we ended with cash on hand of $291.5 million. Accounts receivable was $137 million compared to $121.2 million. Inventory was $166.5 million compared to $127.1 million. Prepaids and other current assets were $55.8 million compared to $87.9 million. Accounts payable was $121.7 million compared to $92.4 million and total debt outstanding was $387.4 million compared to $389.6 million. And our first quarter net leverage ratio on a pro forma basis was approximately 0.8x. The changes in inventory, accounts receivable and accounts payable reflect higher sales as well as the timing of vendor payments. The decrease in prepaids and other current assets was primarily due to the timing of chassis deposits for our upfitting business. Our net property, plant and equipment increased to $170.8 million as of April 2, '21 compared to $163.3 million at the end of 2020. The increase reflects investments in our new manufacturing facility in Gainesville, Georgia. Between the cash we have on hand and the borrowing capacity under our credit facility of $250 million, we are confident that we have the liquidity and financial strength to manage through any ongoing economic uncertainty while continuing to proactively execute on our long-term strategic objectives. Now turning to guidance. We are raising our guidance for both our second quarter and full year 2021. For the second quarter of 2021, we expect sales in the range of $275 million to $295 million and non-GAAP adjusted earnings per diluted share in the range of $0.95 to $1.05 per share. For the full year 2021, we expect sales in the range of $1.11 billion to $1.16 billion, and non-GAAP adjusted earnings per diluted share in the range of $3.70 to $4 per share. I'd also like to note that we're not providing guidance on GAAP EPS as it cannot be provided without unreasonable efforts due to the difficulty of actually predicting the elements necessary to provide such guidance and reconciliations. For the full year 2021 tax guidance, we expect tax rate to be closer to the lower end of the previously provided range of 15% to 19%. As I mentioned last quarter, we plan to update our guidance on each earnings call for the remainder of 2021 as we gain clarity into the supply chain issues and post-COVID economic recovery. With that, I'd like to turn the call back over to Mike.
Thank you, Scott. I'm very excited about our early momentum in 2021. The tectonic shift created in the consumer demand by the pandemic seems more tangible than just a transitory bubble. The demand for our products in both PVG and SSG continues to be strong. We expect the challenges related to the supply chain and commodity price inflation to continue, but we believe we have processes in place to mitigate the majority of these headwinds. I am hopeful that pandemic-related challenges will continue to subside in the foreseeable future as vaccinations progress here and around the world. Our team has quickly incorporated those lessons learned from the past year into delivering 3 consecutive quarterly revenue records. In addition, to further extend our competitive edge and delay the foundation for the next phase of growth, we are bolstering our management team. We have created 3 new positions to amplify and complement our existing organization. First, we've promoted Tom Fletcher to be the President of PVG Business and Corporate Strategy. Tom brings a wealth of engineering, sales and strategic experience, which will extend PVG's leadership team and allow Rich Winters, President of PVG, to focus exclusively on the operational and supply chain fundamentals of the business. Second, we promoted Jackie Martin to be the new Chief Purpose and Inclusion Officer as she aims to elevate inclusion, diversity and engagement as well as ESG. She will also lead change management and workforce development efforts at Fox. And finally, we hired Toby Merchant to be our new Chief Legal Officer. Toby has a wealth of experience in both the public and private sectors on a variety of matters ranging from corporate governance, securities as well as domestic and global acquisitions. Thus, I feel very confident about our team, our plans, and our execution capabilities to deliver maximum value to our shareholders, our consumers, partners, and employees. I would now like to open the call for questions. Operator?
[Operator Instructions] And we'll take our first question from Larry Solow with CJS Securities.
Great. Just I guess, the sort of -- you mentioned the sort of a tectonic shift. I think you called it. Certainly, with 85% growth in Specialty Sports, pretty tectonic indeed. Can you maybe just discuss -- it's the same drivers, I guess, but maybe delve into a little bit more. What are you seeing as sort of -- from e-bikes, any other new categories and lower price points? Is that helping you guys more? And are you even starting to see some maybe entrance back into the category that maybe didn't start on Fox that are maybe shifting already to a higher price point and better bike?
Yes, Larry, I think it's a bunch of things that are kind of lending itself to this dynamic that we're in right now. One real question is just the restocking, which continues to be a significant part of the process. Most of our distribution centers are empty. So what we build, we sell all the way through the channel to an end consumer. So we haven't really started that restocking process to get distribution centers back to some sort of realistic inventory levels. So we've got that going on.
At the same time, as a demographic of the consumer continues to change and grow led by e-bikes as I've talked in the past, the expansion of that product line in Europe and the U.S. specifically, as well as what I said before to you and others around e-SUV bikes, which are these new bikes that really kind of fit between a city bike and a mountain bike that can do kind of all things possible. The growth of that this year has been phenomenal. So it's not any one thing. It's a number of things that continue to drive the significant demand cycle, and we see this continue through '21 and a good portion of '22 at this point. So too early to call kind of '23, but for now, everything we see points to demand that's going to continue to outsize supply.
And your ability sort of to meet this demand. It sounds like that's a key competitive advantage. Are you taking material market share as you sort of leverage your relationships. And the rider base continues to expand so rapidly?
No. I do believe we're taking share. It's a little early to comment on shares specifically because that's really in process right now from model year 23, as you know. But I do believe we're taking share based on responsive to supply chain as well as product innovation. So we're going to leverage both of those 2 elements to try to maximize our OEM and distribution relationships. And I think so far, it's proving itself to work quite well.
Next question from Ray Jadrosich, Bank of America.
Just to start, your -- it's obviously a great quarter, but you're raising the guidance by more than you're beating by. Can you just talk about what's giving you confidence about the second, third and fourth quarter that you didn't see maybe 3 months ago that's giving you the confidence to raise guidance by a lot more than the beat.
Yes. I think a couple of things, Ray. I think the bike business continues to look strong. And as we said last quarter, there was a lot of uncertainty around supply chain and our ability to get chassis. And that we would update our guidance each quarter as the picture sort of became a little bit more clear. I think we've seen that. We talked in the in the prepared remarks about SCA being up over 40% sequentially versus Q4.
So we're -- we've been able to get chassis for our fitting business. As I mentioned, first, the bike business continues to look strong. And as Mike just said earlier, the restocking doesn't really feel like it's happening yet. We're still looking at meeting demand and not restocking shelves. And so we're gaining more confidence as we look forward for the rest of this year into our outlook. Is that helpful? Did we lose Ray? Okay, operator, next question maybe.
And we go next to Mike Swartz with Truist Securities.
Just had a few questions. One, pertaining to -- I mean, everything we've heard about the auto supply chain, the chip shortage and you're talking about a model year changeover that appears to be delayed now. So just in terms of the integration of the Georgia plant, is that holding things up? Or are you kind of on track there to gain some of the efficiencies and synergies we've talked about?
Yes. Mike, No, it's not holding us up at all relative to Georgia. We do kind of adjust the Georgia transition or timeline relative to product line moves, but that's really not an issue with any delays or chip shortages and really not a function of automotive at this point, it's really a function of Powersports, which you know is moving from Watsonville. So we feel pretty good about it. The chip shortage thing is obviously an ongoing challenge for us with for the automotive guys. And as you mentioned, it does kind of challenge some of the launch dates, but I still feel great about automotive for the full year. And I still think on a full year basis, it's at or above our long-term guide for PVG.
The next question from Jim Duffy with Stifel.
A couple of questions for me. I wanted to start on the specialty sports business and the inventory deficiency and distribution centers and so forth. Is there a way to frame the magnitude of the channel inventory deficiencies? You've been turning the inventory at about 4x. Is that a good metric to use to calculate the necessary inventory catch-up? Or how do you guys think about that?
Yes. I think the way to think about that, Jim, good question. Usually, there is going to be between 5 and 8 months of inventory and distribution centers on a normal basis. On today's basis is about as fast they can get it through the center and out the back door, so call it, less than 2 weeks. So that means you're potentially 8 months from having a restock inventory center distribution center, if you didn't sell anything.
Makes sense. Super helpful, Mike. And then I wanted to shift gears on car vehicles some. What's the latest on access to chassis? How are you positioned for that SCA and Tuscany business as you look into the back half of the year and maybe even further?
We feel really good about what we did in Q1, obviously. And that was a function of a lot of work done late in Q4. And as I mentioned at the Q4 earnings call, we were -- we felt good about Q2. We do. So we're in good shape this quarter. And we feel pretty confident about Q3, and we're still working on Q4. Most of the automotive guys have talked about kind of some back half of the year relief in terms of getting chassis out the door. They said that publicly. So that helps us. That gives us some confidence. So I guess, my general perspective is Q2 is great, Q3 pretty good. So working to make sure it's great. And in Q4, it's a little early yet for us to have Q4 locked up.
We'll move next to Rafe Jadrosich from Bank of America with a follow-up.
The gross margin expansion was pretty strong in the quarter despite the raw material [indiscernible] the shipping and container shortages that you referenced. Can you talk about -- you mentioned mix shift, but are there other things that are helping to offset some of those import cost pressures? And then how do we think about just gross margin going forward? This is definitely a higher level than what we've seen in the past. Is this a level that's more sustainable going forward?
Yes. I'll talk to gross margin first, Rafe, I guess. We talked about last quarter the benefits that we see once Georgia is fully up and transitioned. And so I'd love to tell you, yes, I feel great about gross margin here and even higher going forward, but the mix definitely had a positive effect on gross margin in Q1 when you think about where we had really strong quarters and the OE business at PVG being a little lower from a growth standpoint because of the model year changeovers, which tends to be a little bit lower margin. And so everything kind of played perfectly from a gross margin standpoint. So this really had nothing to do with the changeover to Georgia yet. And so hopefully, we can be at these levels going forward, but it will be more of the transition offsetting a negative mix shift back towards where we normally would possibly play with a little bit higher OE percentage. But I think back to your original question, yes, we had a lot of positive mix shift in Q1. Maybe Mike wants to elaborate on that a little bit.
Yes. Scott, I think that's right. The only thing I'd add, Rafe, is that productivity in Q4 in North American facilities was pretty hampered by COVID issues and redundancy and workforce just to handle COVID absentees and et cetera. And we didn't experience that issue in Q1 to any large degree. And I think that helps from a productivity and efficiency perspective in the North American facilities, which, obviously, as we move forward and hopefully get more of the pandemic and really where that will be a more of a consistent message we can give you.
We have a follow-up from Mike Swartz with Truist Securities.
Just a follow-up question on I think gross margin, yes, the -- I think you had about $2 million in costs that you called out for the quarter related to COVID and some productivity issues. One, am I right in saying that it hasn't been added back to your adjusted EPS and EBITDA? And then two, does your guidance reflect any further productivity issues related to COVID?
Yes. The COVID -- I think we had some add-backs last year, Mike. I think it was a...
$1.8 million.
$1.8 million yes, last year. But no, nothing that I'd recall material this year that would have been added back. And that -- what was the second part of your question? Maybe we lost Mike again. Operator?
We'll take our next follow-up from Larry Solow with CJS Securities.
Great. You mentioned, Mike, the mix shift. I'm assuming that mix shift is more on the power vehicle side, and I suppose in the aftermarket side and so that question kind of leads me into, is that really the driver? Is that sort of the SCA and some of the more interesting things you're doing in the upfitting market?
Yes, Larry. Good question. I apologize, guys. I think you're getting into the one question and the system's kicking out and making you get back in line, so I apologize for that. In terms of mix shift, yes, you're right. It's a couple of things. It's not only -- it's not only shifting between different product lines but also different channels. And what we saw in Q1 was not only a large upgrading business for us, which was great to see but also an aftermarket business in some of our more legacy product line that was significantly larger than we've experienced in the past.
And not to mention the fact that we -- as we did last quarter, this quarter in Q1, we rolled backlog into the next quarter. So we weren't able -- again, demand just outstripped supply and we could into Q2 between $10 million and $15 million of backlog and aftermarket. So we're just seeing a really robust demand curve in aftermarket as well as upfitting. And as I mentioned on the call, Powersports continues to be incredibly strong with our large customers in that space.
[Operator Instructions] And we'll move next to Scott Stember with CL King.
Just a little bit back over to the bike business. You talked about just general strength across the board. Is it fair to assume that the aftermarket and OEM above off the charts, is there one that's stronger than the other? Is it just everything just going gangbusters right now?
They are both incredibly strong. So one wasn't necessarily better than the other. I would say that we have some container shortages at the end of the quarter that actually pushed a little bit into Q2, some of our soft goods and other aftermarket type products. So that are just again a function of getting logistics to support the demand more than trying to find demand.
I do think the aftermarket and OEM business is strong. And an earlier question was really around was some of that growth driven by lower-cost product offerings, et cetera, and the answer to that, I should have answered it then, is no. We're still focused on our high-end premium products and that's where our customers are wanting us to supply today. So that's what we're focused on.
All right. And just last question on the commercial vehicle, the suspension application that you have there. I know it's been working its way into the aftermarket. Could you talk about any successful proliferation towards any OEMs at some point?
Yes. We're still working in the aftermarket use end. So we're still trying to fulfill the demand at the owner operator level as well as driving aftermarket business into the [ spinner van ] category and some of the other product categories that we've talked about in the past. We'll work towards that OEM solution, but I think that's still a ways in the future. We've got a lot of growth in front of us before we get there. And we're working on new designs, new product offerings, et cetera, along the way to be -- to probably better positioned for an OEM application when we're ready.
Question from Anna Glaessgen with Jefferies.
I saw you recently spoke on the Jeep Performance Parts lift kit for a hybrid vehicle. Could you maybe speak to the opportunity from this segment within PVG?
Anna, what was the Jeep Performance part you're talking about?
Recently, there was a lift kit that they announced.
Yes. So really, all those aftermarket type applications are just expanding the portfolio. One of the things that we really try to do is diversify across as many platforms as we can. And that was just another example of expansion and trying to deliver more products into different spaces. So you'll see us announce those kinds of initiatives on an ongoing basis, especially as we start to see more electrification in the space and the opportunity for aftermarket parts on electrified vehicles.
To Craig Kennison with Baird.
Yes. Appreciate it. And congratulations. So a year ago, you raised a little bit of capital. And then in the last year, you just generated a ton. Wondered if you could give us an update on your capital priorities and maybe shed some light on what the M&A environment looks like if you have an appetite for that.
Yes, Craig, this is Scott. For sure, we have an appetite for the M&A market. I think -- and when we did the equity raise, we felt like we were doing it to go on offense. I don't think at the time we envisioned the valuations to be where they've been at for the past close to a year.
And so while we're very interested in continuing to look at M&A moving forward, we're not going to do anything that -- we're not going to pay too much, I guess, in our minds. And so we haven't found the right thing at the right price yet. But absolutely, I completely understand. And I am acutely aware of the capital structure issues that we have currently. And I'd love to go spend some of that cash on the right business. We just need to find the right one.
[Operator Instructions] And it does appear there are no further questions at this time.
Okay. Well, thanks, everyone, for joining us. We appreciate your interest in Fox Factory. Thank you.
This does conclude today's program. Thank you for your participation. You may disconnect at any time.