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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
At this time, I'd like to welcome everyone to the Resideo Technologies Second Quarter 2020 Earnings Conference Call. Today’s call is being recorded. All participants will be in a listen-only mode until the formal question-and-answer portion of the call. [Operator Instructions]
I would now like to introduce Page Portas, Director of Investor Relations. Ma'am, please go ahead.
Good morning and thank you for joining us for Resideo's Earnings [Audio Gap] www.resideo.com.
We’d like to remind you that this morning’s presentation contains forward-looking statements. Statements other than historical facts made during this call may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties.
Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time-to-time in Resideo’s filings with the Securities and Exchange Commission. The company assumes no obligation to update any such forward-looking statements.
Additionally, during our call today, we will refer to certain non-GAAP financial information. A reconciliation of our GAAP to non-GAAP results is included in the company’s earnings press release and accompanying presentation, both of which can be found on the Investor Relations section of our website. We identify the principal risks and uncertainties that affect our performance in our annual report on Form 10-K and other filings.
I would now like to turn today’s call over to Jay. Jay?
Thank you, Page and good morning everyone. I would like to begin today’s call by thanking the entire Resideo team for the warm welcome they've extended me and for the way they've responded to challenges brought on by the pandemic. I believe that we have dedicated passionate people that want to win and I'm very excited to get to work with all of them.
While our second quarter revenue and earnings were down substantially compared to last year, primarily due to COVID, we are now seeing meaningful improvement in the business. Sales improved sequentially each month through the second quarter, and July sales were above last year in both P&S and ADI. We remain focused on the pandemic-related risks to our employees and our business. In particular, we are monitoring the reposition of business restrictions in several states and in countries where we have important manufacturing operations, as well as supply chain related risks.
That said, demand has returned to pre-COVID levels over the past few weeks in both our ADI and Products & Solutions business, and macro industry trends appear to be improving. Recent industry in data and customer feedback are pointing to positive trends in demand for both P&S and ADI. People are spending more time in their homes during the pandemic, which has created increasing usage of home systems, as well as an increase in home renovation and repair projects.
Our product portfolio is well-positioned to capitalize on these dynamics. Our previously announced financial and operational review is on track to deliver $30 million to $40 million of savings in 2020 and over $100 million annually in 2021 and beyond.
On top of this great work, our new leadership team is already pursuing additional opportunities to improve our balance sheet, reduce our cost structure, improve margins and drive greater top line growth. These initiatives are in their early stages, and we look forward to communicating them with you as they come to fruition.
With that, I'll turn the call over to Tony to discuss our second quarter results.
Thank you, Jay and good morning, everyone. I would also like to take the opportunity to thank our teams for their warm welcome and for all the work they did over the past few months, keeping things operating in a very challenging environment. I'm excited to be at Resideo and looking forward to the work ahead.
Consolidated revenue for the second quarter was $1 billion, a decrease of 17% compared to last Q2. ADI revenue decreased 10% as branch closures and modified or restricted operations resulted in lower customer activity in our stores. Our P&S revenue decreased 26% compared to last year, due to a decline in demand early in the quarter and code related factory and supply chain issues.
Consolidated adjusted EBITDA of $63 million was down 48% in the second quarter compared to last Q2 on lower revenue, an unfavorable product mix in both segments. ADI segment adjusted EBITDA was down 40% to $28 million as a result of lower revenue. ADI is a well run business and we chose to take a more limited response to COVID at ADI compared to P&S and our functional groups.
Segment adjusted EBITDA was also negatively impacted by reduced supplier rebates and lower early pay discounts. Mitigating these impacts was continued aggressive cost management, always a hallmark at ADI.
Although, we began the second quarter under widespread lockdowns resulting in many branch closures, ADI saw sequential business improvement each month throughout the quarter and daily sales averages rebounded as restrictions lifted and branches reopened. Today, 80% of ADI branches are fully open and virtually all of our branches are open when including those under modified operations and curbside pickup.
Products & Solutions segment adjusted EBITDA of $35 million was down 53%. P&S adjusted EBITDA was negatively impacted by product mix and increased factory costs related to COVID, partially offset by transformation programs and COVID-19 related cost actions. Business activity and orders troughed in April and then improved sequentially each month of the quarter.
I'll now speak to some metrics for me not have highlighted on past calls, the plan to incorporate going forward. Please note that these are all unadjusted GAAP measures. Q2 gross margins of 23% was down three points from Q2, 2019 and slightly down from 24% in the first quarter, due to lower revenue coupled with increased factory costs related to COVID safety measures and unfavorable sales mix.
Selling, general and administrative expenses for the second quarter totaled $242 million, down 14% or $40 million from Q2 last year and down 3% from Q1, as the company benefited from COVID-related cost management, ongoing transformation initiatives, and lower spin related expenses. This all flowed through to an operating loss of $6 million for the second quarter compared to an operating profit of $42 million for the prior Q2.
Operating margin for the second quarter was a negative 1% compared to a positive 3% last year, as lower sales volume slowed all the way through the P&L and more than offset lower SG&A. The company reported a net loss of $76 million or $0.62 per share in the second quarter. As we've previously discussed the non-deductibility of payments to Honeywell under the reimbursement agreements result in higher tax expense than the company would otherwise incur.
Cash from operations for the first six months of 2020 was $71 million, an increase of $108 million year-over-year, primarily a result of lower working capital tied to the slowdown in business activity. Accrued expenses increased as well, partly due to deferral of the $35 million Honeywell reimbursement agreement payment, and $6 million of trademark licensing agreement payments.
I'd like to note the company anticipates an increase in working capital and a decline in accrued liabilities in the third quarter as business conditions improve.
On July 30, we made our regularly scheduled $35 million reimbursement agreement payment, as well as a $6 million trademark licensing agreement payment to Honeywell. Honeywell has agreed to defer the Q2 reimbursement agreement payment for an additional 90 days through October 30. We remain in discussions with Honeywell, and we'll update our stakeholders should there be any material developments.
The remainder of 2020, as Jay noted, we are guardedly optimistic. July was a strong month for both ADI and P&S, and we are now seeing sustained order rates well above last year. Strong demand, particularly in P&S appears to be driven by end user demand rather than channel restocking.
Our factories are working aggressively to meet demand and reduce backlog, and we continue to build capacity by investing in new lines and recruiting more direct labor. However, given continued elevated business risk, we are not providing revenue and earnings guidance for the remainder of 2020. If business condition stabilized, it is our intent to reinstate guidance for 2021.
As I said earlier, we will continue to report and discuss adjusted EBITDA as a performance measure as we have in prior quarters. But we will also report and discuss our GAAP results. Beginning in 2021, we intend to deemphasize non-GAAP measures and instead focus on operating income, cash flow from operations and other GAAP measures.
As many of you know, I'm a firm believer in the discipline GAAP reporting in parts and reducing judgment around what adjustments are appropriate to include GAAP presents a clearer picture of actual results against a known benchmark.
We will continue to provide all the necessary information to allow investors and other stakeholders to understand our financial performance. And for those of you interested in maintaining a version of adjusted EBITDA for modeling purposes, our financial disclosure will support being able to do so.
I'd like to, again, thank the entire team and to our investors and analysts. I look forward to engaging with all of you moving forward.
With that, I'll turn the call back over to Jay.
Thanks, Tony. I wanted to close with a few things. And I would like to mention yesterday's announcement from ADT. We have a longstanding relationship with ADT and they remain a valued business partner of ours. ADT comprise less than 5% of our consolidated revenue over the last 12 months at approximately our consolidated gross margin. There's no -- there has been no change to the terms of our multiyear relationship, and we look forward to continuing our partnership with ADT.
I want also indicate while COVID-related risks remain, we were also very pleased to see the strength of demand and the recovery of our businesses have made over the past few months. I'm truly excited by the potential of our business, and the opportunity to work alongside our teams to make Resideo thrive.
We will build on our strong -- very strong foundation of product breadth, customer relationships, and a deep history of providing reliable, quality products and services to our thousands of customers with additional focus on product innovation, efficient operations, and building an action orientated winning culture. In the coming weeks, I look forward to engaging with many of our customers globally suppliers, investors, and most importantly, our team members to build the relationship that are critical for our future.
So, thank you everyone. This concludes our prepared remarks. I think we have to -- Page is going to also discuss a few things once again before we get into Q&A.
Thank you. With us today for the Q&A, we have Andy Teich, Lead Independent Director; Jay Geldmacher, CEO; and Tony Trunzo, CFO.
[Operator Instructions]
Our first question will come from John Lovallo with Bank of America.
Hey, guys. Thank you for taking my questions, and that Jay we appreciate the commentary on the Google, ADT tie up. I guess, obviously, this is the elephant in the room here. You mentioned, I think, 5% revenue exposure. If I remember correctly, securities about $800 million business for you guys. So is it really just 5% of that, which is the revenues exposure? Is that 5% in all in number, I guess?
And then, I guess, more broadly, what is the risk to raise these content over time, including the sensors, and most -- maybe most importantly, the control panels and then ultimately being able to market your comfort products through the ADT network once Google and ADT start putting out joint product next year.
Yeah. I -- a couple of things. One, I mean, as I mentioned, we have -- our relationship with ADT is good and it just gets a long-term relationship. As I mentioned, it's less than -- the 5% over the past 12 months of our total Resideo sales and I think that's what we can share it with you guys today. I'm looking forward to continuing our relationship with ADT.
Okay. Okay. So, then just to be clear, I mean, you don't see risk to your content with ADT.
Yeah. I think it's too early to comment. I mean, looking our relationship is multiyear. It's -- and that's pretty much what I stated. I think, it's a good partnership and we'll continue to communicate with all of you as we move forward and how that how that proceeds.
Okay. And then it seems like July trends were positive. Can you just help us maybe quantify what ADI and P&S were up on a year-over-year basis in terms of revenue in July?
Tony, you want to comment?
Yeah. Sure. Hi, John. It's Tony Trunzo. Nice to meet you over a conference call. So, we're not going to be in a position to disclose percentage increases month-over-month. Other than to say that -- and it's unusual in this particular situation for us to make any comment on sort of the post quarter close results, but we decided to call them out this time because of the unique nature of the pandemic and the pretty fast moving events that have caused our -- there have driven our performance and others.
Like I said in my prepared remarks, the trough was in April. In both businesses May was better than April, in both businesses June was better than May. And in both businesses, July is proving to be better than June. So I -- the momentum is clearly up. The comps are clearly ahead of last year, but we're not in a position to get into the monthly year-over-year changes.
Okay. Understandable. And maybe one final one for me. The $50 million of original SG&A savings of what you achieved, I think $15 million in 4Q 2019. How has that progressed into the second quarter?
So, I'm trying to track some numbers that maybe I'm not sure exactly what you're referring to. What I can say, John, is as we indicated on the call that the transformation programs that we initiated earlier in 2020 that were addressed in the Q1 call, and we mentioned today. We continue to expect that the net savings for 2020 to be $30 million to $40 million, which is on a net basis after all of the costs associated with those programs. The vast majority, the large majority of those savings are going to be realized in the second half of this year.
So, a lot of what you saw in the first half of this year was particularly on a reported GAAP SG&A basis, was not related to those transformation projects, because the costs to implement them were embedded in the numbers as well. It was a slight positive, but it wasn't a huge number in the first half of the year.
Okay. Got it. Thank you, guys.
Thank you. Our next question will come from Craig Irwin with ROTH Capital Partners.
Good morning, and thanks for taking my questions. So, Jay, I know you've only had less than -0- less than 90 days on the job now. But as you get a better feel for Resideo and the potential of the company, do you have an idea or maybe a rough framework of what you think the ideal manufacturing footprint would be over the next five or 10 years? And as you look at the product portfolio, do you have a feel for maybe what an ideal mix of internally produced versus outsourced products might look like for Resideo, as you maybe put together a plan to get to this future?
Yeah. That's a great question. I mean -- and we're looking at all those things right now. And with my background, as well as Tony's and Phil Theodore's background, the kind of the new guys -- new kids in the block with our entire Resideo team were reviewing all that. And I've personally have had a lot of experience of working on those type of transformational programs to optimize your global operational footprint, as well as your global engineering footprint, and what's the right balance. So, I'm really looking forward to being able to share more of that with you guys in the future calls, but that's definitely something that we're spending a lot of time with, and there's a lot of opportunities.
Great. And then my second question, if I may. Since we are discussing Tyco, many people that follow Resideo or former shareholders believe that the Tyco contract might've been mispriced when it was renegotiated. There is a very long-term history of a close relationship between Honeywell, Resideo and Tyco. Can you maybe discuss with us whether or not you might see an opening for a renegotiated contract or an amended contract with some -- that might allow better profitability given that this is really essential for the support at almost 30% of your securities business?
I'm assuming you mean ADT?
Yeah. ADT. Sorry. Yes.
Yeah. Absolutely. Yeah. So to answer your question, I mean, bottom line is we won't have any discussions about that today. And our agreement is a multiyear agreement. And so, we're in that right now. And if any of that changes, then, of course, we would share that with you. But that's -- I think that's all we can share with you today.
Great. And then -- the last question, if I may. The focus on GAAP, I really liked that. It's a pleasant change compared to most of the broader industrial university stays where everybody's trying to exclude the kitchen sink. From a GAAP accounting standpoint, what do you think is fair for investors to expect if we take the GAAP results a loss of $76 million this quarter. What do you think that the key moving pieces are that we should see taper down as expenses? Obviously, COVID and the COVID-related weakness hopefully we'll pass for all of us, pretty quickly. But with some of these spin-off expenses and other tax adjustment items taper down fairly quickly or -- do you expect quite a lot of volatility in your GAAP numbers, as we do go into 2021.
So, Tony?
Craig, its Tony. Nice to meet you over a conference call as well. Look forward to hopefully meeting in person at some point in the near future. Yeah. The -- so glad to hear that you are a supporter of the migration to GAAP. I -- in my prior public company CFO days, I never did a non-GAAP reconciliation, and we did one this quarter. We'll probably do one in Q3 and Q4, but I look forward to going back to not doing non-GAAP reconciliations and the associated disclosure in 2021.
In terms of what to expect, there are -- so, I highlighted kind of where we're going to go on the GAAP reporting. A lot of the focus is going to be on operating income, operating margin and operating profit, because it takes out two of the largest issues associated with our relationships with Honeywell and how they affect our financials.
The reimbursement agreement payment, the cash from that is pretty steady quarter-to-quarter, but the GAAP impact is -- it can be volatile for reasons that are complex. And we've -- I think we've been through before. Those are reflected in other income. So they -- you see those below operating income. So, they're not impacted by discussion of operating income and impacted by those -- that volatility. And that's unfortunately not going to go away. We'll address that every quarter. We'll take you through what the number is. But that's -- we're going to have that as long as we have the Honeywell reimbursement agreements and that's just part of the deal.
The other issue is those payments, as I think, are not tax deductible to us, which means that it's not technically a discrete tax impact, but we sort of have this large aspect of tax that is driven by the fact that some substantial chunk of what we -- what flows through our P&L isn't deductible for tax purposes. The closer you get to a zero on the net income line, the more proportionally that dynamic becomes operative and it becomes bigger. And again, there's some complicated tax accounting and tax rules associated with that, that we can take you through it, if you like.
In terms of the other items that have been called out in adjusted EBITDA, you're right, spin related costs are tailing off. We still got a little bit to go in terms of some of our IT programs. The spin related costs are tailing off pretty rapidly.
The -- we talked about the fact that the transformation projects that are currently underway are going to generate $30 million to $40 million of benefit this year on a net basis. As I said, a significant majority of that will be in the second half of the year. So, coming out of the year, we'll be at a run rate that we expect will be somewhere in that a $100 million a year plus range. The costs associated with the current transformation projects will predominantly be in 2020 -- there'll be some in 2021, but it will predominantly be in 2020.
But as Jay said, we're not stopping with the stuff that's in flight now. There's a lot that's going on under the hood in terms of making sure that we get our cost structure right, make sure that we get our supply chain and our manufacturing efficiency and resiliency in the right place and drive margin improvement. There are sales activation activities underway. These are things that'll -- there'll be expenses associated with those in 2021. I don't have a number for you yet as to what those will be, but I anticipate that they will be meaningfully less than they were in 2020. And as I said, when they occur, we'll call them out as part of that discussion around GAAP and the drivers of those GAAP numbers on a quarterly basis.
Great. Thank you very much for that.
Thank you. Our next question comes from Jeff Kessler with Imperial Capital.
Thank you. Thank you for taking my question. And Jay, it’s good to reach you, and Tony and Andy, it's like a reunion, I guess. It's good to talk to you again.
Nice to reunion. Yeah.
The -- if you -- can you talk a bit -- can somebody talk a little to me about some of the product changes or product, let's go, product reformation that came on in the first six months of the year, particularly in the way the acceptance of the new thermostat that you had last year, that was probably brought out a little bit too early, the nature of the accessories for water heaters that were -- that were not -- that did not come about in terms of revenue last year, that seemed to be -- that have now annualized through and some of the other types of products that are giving you, perhaps the improvement that you're seeing on a sequential basis in the last several months.
Yeah. Hi, this is Jay. Nice to meet you.
Hi.
And look forward to meeting face-to-face. There's a lot -- you covered in that question. My response to you today is going to be somewhat brief just from the standpoint that, we -- as we evaluate all the products that are in the pipeline as we all came into the business, as well as the new products that we have on the -- in our new product NPI system and in our product roadmap, we're going through all those now. And in great, great detail, the terms of where we put our investments and how our investments are going. And I -- we plan to share that with the investing community in the weeks and months ahead.
But today, I'm not going to be able to give you a blow by blow of exactly how they evolved, performed over the -- as you asked for the last six months and what our forward look is. But we definitely -- I'm excited about being able to talk with all of you, all our investors about our entire product roadmap and technology plays that we're planning -- that are in play right now. And what's coming in -- as we finish up this year going into next year. And we'll set up a time to do that and maybe do it a technology road show type communication. And I think that would be the best time to really get into detail. I'd bring along our President of the Products & Solutions group, because as you know, we put a new person in charge of that at the beginning of this calendar year, and he's done a lot of different things since he's taken over. So, we have a lot to share, but I just won't be able -- we won't be able to cover that in today's call.
Okay. Second question is on ADI. As you noted, ADI was -- did not need as much -- did not need as much remediation help as perhaps the product side did. Historically, for this company, going back to the demo days, things like that, ADI was a window on the world for the product side of the business. And I think that's what Roger's expertise was making this thing a window on the world so that you could have an idea of what was going on in the industry. There wasn't that much visibility on the part of the product side relative to ADI I think in the first few months of the existence of the new company.
I'm wondering if you could discuss a little bit about what you're doing with ADI to make it again a more of a -- kind of a -- I keep calling it, a window on what's going on out there in the business overall. And if you could just maybe expand that to talk about what is ADI seeing in terms of product flow -- demand flow from what is selling and what is not selling currently?
Well, as you know, ADI is a big distribution business. And as you indicated is that thing -- is that company was built and grew. It's a window for not just our Products & Solutions business, but it's also a window for a large number of -- they have a huge portfolio of companies that they go to market with on a global basis. And as they continue to look at and review strategically what fits well with them, then they're continuing to expand that and that footprint continues to get bigger and bigger. And I think this is another area that as we -- when we do a Resideo road show, tech -- technology market preset of presentations, our investment community will share with you the types of things that they've done as they continue to expand their total product offering along with what, of course, our Products & Solutions piece is as part of that portfolio.
So it's -- they're very busy with looking at what else they can do to expand their footprint in a variety of different areas that they've traditionally been part -- that's been part of their portfolio from a technology standpoint, but then also what they can do to further strengthen their existing segments and what new segments they can participate in as part of their total offerings.
Tony, do you have anything else you think you'd want to share on that piece?
Yeah. Jeff, I -- your point is right. And it's an interesting -- and to use your phrase a window on the world, the recent dynamics at ADI have been interesting, they've been confirmatory of -- at some level of what seen on the P&S side. But the strength there has been -- it's been across the board, which causes us to -- we don't want to get out over our skis at all, but having that insight into both kind of a larger projects, as well as the smaller projects and seeing strengths even in those larger projects, it gives us a little bit of perspective that we can indeed feedback into the Products & Solutions business.
I would say the linkage between the two businesses, while good today, can be improved and creating a little bit of a feedback loop there in terms of our ability to really position ourselves for even greater success at P&S as a result of information that we're able to glean from the behavior of the various markets that ADI is something that we can probably take a step forward on.
Okay. One final question. I know that you obviously can't comment on -- can't comment the payments to -- the remediation payments to Honeywell specifically, but number one, is there any -- is there any possibility of leeway on those payments in perhaps your discussions with -- when you discuss things with Honeywell with regard to who's going to be into sell what market, whatever. When you get to talk to them, does the subject of these remediation payments ever come up? And number two, is there any way -- is there any way that the tax treatment of these payments can ever be changed or modified or negotiated?
Tony?
Yeah. So, as you guys know, our relationship with Honeywell is complex. There are a lot of vectors to it. We're, obviously, in dialogue with them on a regular basis because of the complexity of that. As you've seen they have shown a willingness to work with us by deferring the Q2 payment for another 90 days to the end of October, as we sort of get through some challenging times in the marketplace.
Unfortunately, Jeff, we really can't go any further than that. It's a critical relationship for us. There are certain drivers to it that as we've talked about, and as you highlighted are impactful to our financials. To the extent that there's any change to any of those, we will, of course, be in a position to share when it actually happens. But in terms of really being able to speculate on any of those things that, that wouldn't be appropriate.
Okay. Thank you very much, and look forward talking with you in the future and the immediate -- and see you guys again.
Absolutely. And look forward to meeting with you.
Thanks, Jeff.
Thank you.
Thank you. Our next question will come from Ian Zaffino with Oppenheimer.
Hi. Great. Just a follow-up on that last question with the Honeywell payment. Will you have to make that entire payment once the deferral period ends, or will that payment maybe be amortized over the life of the deal? Thanks.
So, Ian, it's Tony. I can speak to what our current situation is, which is Honeywell has agreed to defer the payment that was originally due in Q2 to October 30 of this year. So, currently the agreement stands in a format that we will have two payments -- two cash payments to Honeywell on October 30 of this year, totaling $70 million. There's nothing currently that includes any deferral or any repayment of that -- any repayment of that over time.
Just as an aside, our liquidity position has improved over the last 90 days as you can see from our financials, and we're approaching the situation such that we can be prepared to make that payment as per the current agreement with Honeywell. If that changes, we'll certainly let you know.
Okay. Thanks.
I think as Tony has already stated that we remain in constant dialogue with Honeywell and we'll update all of you on any developments as we move forward.
Okay. Great. Great. Thanks for that color. And then also -- I don't know if this is asked already, I have been a little bit late. But on the security side, can you maybe give us a -- maybe a breakdown between your business that's exclusively panels versus the peripherals. And then also, how is the sale process made with, let's just say, an ADT or even any other security company, is it -- for the panel, is it for the entire system? So, it would be the panel plus the peripherals -- and maybe walk us through that a little bit. Thank you.
Tony?
Yeah. I mean, the -- so the security business has a number of different pieces to it, Ian. I'm not a 100% sure I tracked what you were going through, but obviously there's the component where ADT is a big customer. There's a component that is our branded product. And then, there are some -- there's some recurring revenue in there and obviously some international pieces.
The -- I guess the way I'd characterize it as kind of all over the map. I mean, chunk of it actually -- obviously goes through ADI as well. And it's really going to be a job by job basis going through ADI, what the mix of product is. I'm not sure that fully addresses your question. Maybe you can give me a little bit more color and we can try to get you a little bit more.
Yeah. I guess, what I was thinking I guess to ask you a little bit more -- clearly is -- if you think about your relationship with ADT, how much of your sales to ADT, let's just say, involve the grip platform compared to the peripherals like a door, tap, a window break, et cetera. Thanks.
I see. Yeah. Unfortunately, we're not in a position to get into that level of granularity with respect to ADT. There's just not a lot of color we can offer there. We have a contract with them that obviously is a meaningful one for our business. And we're pleased to be partnered with them. But I can't get into detail about sort of product mix and how that works.
What I would say though, I think that as part of our technology -- also I want to do as we move forward the next few months, I want to capture that for you guys. So, I think, it would be very important for you to have a deeper understanding of how we go to market globally through our various channels and understanding what's hardware, what software what's the -- the sensors tied to this. And I think, it'll give you a deep -- everyone a deeper understanding of that. And I think we can do that and be able to educate you guys in a deeper way and show where our -- it also ties back to our product roadmaps of where we go with the new products and technologies moving forward. So, we'll definitely cover that.
Okay. Great. That'd be really helpful. Thanks so much, guys.
Yeah. Thanks.
Thank you. This concludes the question-and-answer session and today's call. Thank you for joining us and have a great day.