Lennox International Inc. (LII) Earnings Call Transcript & Summary

All right. Well, good afternoon, everybody, and welcome to our first session of the afternoon. I'm very excited to have Todd Bluedorn, Chairman and CEO of Lennox with us today. Todd, thanks for joining us.

Of course, Joe, glad to be here.

So let me just start by saying congrats on the really strong Q1 results, right? Really good...

Well in my experience, any kind of analyst starts with a congratulations. That's the job, so I'll be waiting for the right hand. But go ahead.

No, I guess, maybe I'm like other analysts, and I probably have some thoughts on who you're talking about. But that's -- if I think about your results specifically for 1Q, they were great, right? Like we're 1 quarter into the year, you've already taken up your organic growth expectation and market expectations for the year. Maybe just spend a minute or 2 just discussing kind of what's changed on the margin -- on the margin for each of your end markets that allowed you to even take your forecast up. Just -- again, just 1 quarter into the year.

You know we -- on residential, it was -- we went from mid- to high single digits, and it was quite frankly, first quarter. I mean, it's a full year number. And once we got comfortable and could sort of delineate how much is pull forward, which was the $25 million called out, then we got comfortable that it was real demand and that we were gaining share and, therefore, would fall through for the full year. The balance of the year, we, quite frankly, didn't touch much. For the Commercial and Refrigeration business, that's a little different. That's more about -- we knew that in prior downturns, financial crisis, then I was a carrier after 9/11, that when the commercial market turns down, once it starts -- once there's green lights that the economy is back on, then the commercial market bounces back stronger over the next 18 to 24 months. And what we have seen with our customers in their communications with us, both with orders and just dialogue is that the green lights on, that they're spending on planned replacement again. And simple mathematically as last year, the market is down 20%, that's going to come back plus normal demand. So we think we have another 2 or 3 years of good demand in commercial and refrigeration.

Now that's encouraging here. And we'll touch on Commercial and Refrigeration, I guess, in a second. But maybe just focusing, again, just on residential HVAC because it's been a weird 3 years, right, for you guys, like, go back to the tornado disruption that you experienced and the pandemic, clearly. And you referenced on the most recent conference call finally being able to play offense, right? So just talk to us about like for the traditional kind of like Lennox brand, right, like you sell-through your own distribution, talk to us about like the relationships with the dealers, how those have improved over time and how you feel good about where they are today?

Well, I think what I feel good about is our ability compared to our competitors to service our dealers. And what I mean by that is investments we've made in product, coming out with a new high-end furnace, new high-end air conditioner, all the investments we have made in digitization. It's about coming out post-tornado, it takes a while once you turn the dealers back on to get them up to sort of 75%, 80% of their business that you had pre-tornado, it takes a while to sort of ramp it back up, and we're now lapping that and getting the full ramp up. And then third has been during a time of supply disruption, we think we've done as good a job or better than anyone in the industry of continuing to be able to support our customers. And I think that's been a big part of allowing us to gain share also.

Got it. I'm sure we'll talk about your dealers more, but maybe just thinking about like the other portion of your business, the Allied business, like that's been super strong, and you called out this inventory restock benefit this last quarter. What's kind of like your longer-term strategy to make independent distribution a bigger part of the mix? And then secondly, how do you think about the restock component going forward?

The restock component, we call it -- I'll answer that part first on the first quarter call was adjusting for days. Our Allied business was up about 65%, and that there was about a 20 -- we calculated or estimated about a $25 million pull forward effect of timing with people in the first quarter into the second quarter, which was about half of that 65%. So even adjusting for the pull forward, we were up 30% in that share gain. We had no preconceived notion, if you will, of what percentage Allied should be versus Lennox. We're running both full throttle. We have the accelerator down on both and whoever grows the most or the fastest will have a higher percentage 5 years from now. So we like our strategies in both those businesses, product offering, the distribution strategy is different. Everything we're doing on controls, everything we're doing on digitization for both those businesses. So we like them both. And I'm agnostic to which one grows or make similar margins in both places.

Okay. Well, that's great to hear. I guess, then in that sense, you've been a lot more exclusively own, let's call it, dealer channel versus independent distribution historically, like it's been 80-20 for you guys. If you're agnostic to it, because I get this question quite often, right, what's the distribution advantage for Lennox by being predominantly exclusive? And so maybe asking that question to you specifically, like what do you think your source of differentiation is there for having 80% of your business go through your own dealers?

I think what we -- what it allows us to do is leverage investments that we make across a nationwide distributor channel. And so what I mean by that is investments in e-commerce are critical to growing the business. And someone like Watsco can certainly match us investment for investment. But if it's a smaller regional distributor in Arkansas, they can't make those kind of investments. So they're competing against our own -- company-owned distribution that has industry-leading e-commerce capabilities. The advantage that you have is that there are things on digitization that only the OEM can do, prognostics, diagnostics, managing the warranty, managing the whole supply chain and availability of spare parts. And there's only things that the distributor can do around taking the orders, timing of the orders, coordination of delivery that's done on the e-commerce site. We're able to pull that together in one dealer-user interface that they're able to tap into all that information and get it at the same time. And no matter what they say, if you're selling to independent distributors, to dealers, it's still an arm's league transaction, and there's still information that the distributor doesn't want you to get about their dealer. But we're able to sort of cut through all that. And my comments about being agnostic wasn't that I don't think we have an advantage with owning our own distribution because I do, it's just I'm not going to put a throttle on Allied, I want them to grow as fast as they possibly can. And that puts pressure on our Lennox business to grow as fast as it can and so I like that.

Let's pit them against each other. I mean, it were, right?

Exactly. Yes. I mean, it's just sort of...

Healthy competition.

Yes. So we want to grow both of them as quick as we can.

Makes sense. You mentioned supply chain for -- in part of your comment on differentiation. It seems like you're managing that very well. Jobs report came out much weaker-than-expected on Friday. I'm just curious like how you're thinking about the risk of like labor availability versus product and component availability as we progress through 2021?

I think the headlines in the journal and sort of the jobs reports is almost 6 weeks behind what we knew and what we saw. We've known, and I talked about in the earnings call that the availability of labor is becoming more and more of a challenge that, in North America, to a large part, except for a handful of things like integrated circuits, steel, resin, we think we're to the backside of COVID impacts. It's not labor impacts, both for our suppliers and us to be able to produce the product that we need. We think we're managing it well. And so we think we're doing as good a job as anybody. And we're doing things that others are doing, which is paying people more. And being more flexible with people on some of the work conditions. But that's all on the guide, that's all in the economics to recuperate with price. But there are some of our factories where the starting wage is $13, $14 an hour. And it's hard to do in the current environment that it's -- economically, it's sort of more beneficial to selling a couch, and so you got to encourage people to get off the couch.

Yes. No, that makes a ton of sense. And your comment around being able to offset with price, you called out, I think, call it, 2.5 points of price increases this year. I think that seems pretty feasible, just given the environment that we're in and historically, how disciplined your business has been, right, and your competitors have been. What does that mean for the price-cost equation for the rest of the year? Does that add a little bit to the bottom line? Or like how are you thinking about it?

We guide -- the thing we guide with is commodities, and we've said that's going to be $55 million headwind. And then we have $5 million more on tariffs and $5 million more on freight. And then we don't guide about some of the labor inflation that I spoke about. And so we said we're going to get $1 million of price. And so first blush $90 million is greater than $55 million plus $10 million are $65 million. But sort of all in, I think price will offset inflationary pressures, but not quite by that much because, obviously, as I said, we're going to have to pay more wages this year to keep our factories up and running.

Yes. And maybe just focusing on the near-term for a second. The incrementals in resi were really good, right, in the first quarter. I think they were in the high 30s. As you kind of think about the second quarter, you had a lot to deal with already in Q1. Is there any reason to think that the incrementals can't be as strong in Q2? Or is this more kind of like the commentary that you've been making around feel like, "Well, we benefited a little bit because what we had, commodity prices and inventories, and that changes a little bit as we head into Q2 and beyond."

I think it's that. I mean it will be -- it's not a light switch gets it, but the high-water mark is first quarter because we're getting price, and we're not -- we didn't have the commodity pressures in any meaningful way because of hedging and because of a timing of the inventory flowing. And then what will happen as it goes through the year, it will be sort of more weighted the other direction. And so I -- second quarter, the incrementals will probably most likely still be better than they will be maybe third quarter. And then fourth is a little squarely just because the end of the year of how you do accruals and different things. But that's how I would build that one.

Okay. Fair enough. We touched on inventories a little bit earlier and the impact it had last quarter. Is this something that will persist, you think, into multiple quarters? Like can you see this inventory build on the resi side? It sounds like it's persisting into 2Q. Just any thoughts around that would be helpful.

I think, again, lots of strategies, lots of plans, lots of thinking, but we sell more units when it's hot than when it isn't. And so the variable that's unaccounted for is the hot summer. So if we have another hot summer, then I think it continues. If there isn't a hot summer, then I think the inventory starts to catch up.

Got it. Okay. I know you guys have historically called out you're going to have like a 10-point type impact to organic growth depending on how warm or cool December is. But that's fair. Replacement was up a lot this quarter. I think it was up north of 40%. I think you had new construction up 25%, so healthy, no matter what. But the replacement market is a market that many have been calling for an end to, right, for several years, and it seems like we're continuing here. Just any thoughts on the resiliency of the replacement market? How much of it do you think has been driven? Like the pandemic seems like it's helped, right, from the stimulus perspective, just any thoughts around that?

Well, just to calibrate on the numbers, I mean, what we said on the call. So we think the real sell-through to the homeowner was up maybe 10%, 15%. And so the number is higher than that, in our case, was because of days and/or inventory build or share gain. And so we thought our Lennox business was up around 20%. We thought the market -- sell-through market was up 10%, 15%, and the delta there with share gains. Back in December, we said we thought there's another couple of years of at least a mid-single-digit growth for the industry from the echo of what happened in the housing boom. And then I think you're right. It's hard to quantify the benefits, but there's clearly something happening, people living in their homes, working -- better say working in their homes, making decisions to replace the unit rather than waiting. I mean on the margins, I think -- I grew up in Pennsylvania, sort of a swing state. And so if our air conditioner would have broken in August, my dad would never have replaced it. He'd have waited until May to replace it. So I think there's some of that going on where people now aren't waiting and pulling it forward. And then I think to your point, people have money that if they want to replace it, they can. And so -- but I do think there's also that, again, it's unquantifiable at this point that I think people are running their units more. And I think that has some impact of sort of pulling demand by reducing the life of the products. And so I think all those trends, even though I can't quantify them, I think, are helping and will benefit us. And I think all those sort of go forward, I think people are going to start going back to the office. It's like -- as we talked offline, you're getting ready to go, I'm in my office today. But I still think people are going to be working at home. There should be a lot of flex work and people working in the home, and I think that helps us.

Yes. So I know it's crystal ball, right? So it's really hard to predict. And we've all been wrong in predicting. But I'm going to ask it anyway because you've got way more expertise than I do in this regard. And so like as you kind of think about them the next couple of years, and you've got like the SEER changes that are happening, which is usually like a good thing for the resi replacement market. How are you thinking about the next couple of years? I mean, does the party continue?

I don't like to say party, I hate that because that sounds like a bubble, right? I sort of step back and say, prior to the financial crisis, the residential market has never been down more than 1 year in a row. So it's just market where there's households form, you build a house, you buy an air conditioner and then 15 years later, there's catastrophic failure, it gets replaced. And so it's just a sort of constant upward growth of a market of 3%, 4% over time. And then the whole financial crisis through it and the turmoil. I think what will happen is -- yes, I think there's another couple of years of mid-single-digit growth. But there will be a year that if you just look at the math from when units get replaced, that there will be a downmarket. But then offsetting that is what I spoke about, which is I think people being home have sort of changed that curve a bit that I think will help us. As You suggested, any time there's a regulation change on minimum efficiency, that tends to spur demand. And then the other one is it looks like it's going to be 2025, which is more than a couple of years out, but 2025, there's going to be a refrigerant change. And when there's a refrigerant change, that spurs demand because people -- if you have a system break with you -- if you have a unit or component break, the air conditioner goes bad, you most likely replace the entire system, you buy a new furnace, a new coil, new line set. And so refrigerant changes drive demand also. So I think all that helps us. But again, the wildcard is weather. I mean, a couple of years from now, if it's a cool summer, market may be down a little bit. Our models suggest it would be, ignoring all the these new trends I talked about. But then I'd just like to say, look, we gain 0.5 point of share, which we do, that's 3 points of revenue, gain a point of price, gain a point of share, we're still up 3 or 4 points -- 2 or 3 to 4 points, depending on how much you think the market is down. There's never a year in the model that suggests it's down dramatically. It's down 2 or 3 points. So I -- look, there's going to be a year where the market is going to be down and all the bears will be right, but it's certainly not this year. And I don't think it's the next couple of years, but we'll see.

Yes. Todd, it's fair. And it's a fair point in terms of like, even if we do see down, it's probably not going to be down double digits, right, like low single digit declines. That's a fair point.

At that's just a lineup of the stars of cold weather and other things. I mean what's happening...

Well, I mean what's happened, I guess, over the past decade is that there's been some disruptions, right? Like we can point to the tornado disruption, but it's not just a Lennox issue. It's happened across a variety of different companies, right? And typically, those disruptions have caused either share gain or loss. Like is there anything happening in the environment today? Is there anything to point out with the major players? Or are you even seeing more concentration in some of the bigger players versus the smaller players? Just any market dynamics in resi HVAC to be aware of?

I mean share tends to move slow over 0.5 point to a point a year to gain more than that, you're sort of borrowing it. And we've talked, I think there's been things written about Goodman and their issue to produce, and I still think that remains there. To a lesser degree, some of the other players have been impacted. I think we're now in the middle of -- we're going to see. We're coming into the summer selling season, who can continue to produce, who can secure the labor, who can secure the integrated circuits who can do what needs to be done. So I don't think the story is fully changed or fully told yet. I don't think the industry structure is changing in any major way. I think it's who's going to sort of come out of this with greater share and who's going to come out with lesser share.

Yes. Okay. That's fair enough. Going back to the comment, we -- I made earlier on being able to play offense. Part of that playing offense is you've kind of restarted your new store strategy after a 2-year hiatus. So maybe just provide an update, I know you're planning to open, I think, 30 new stores this year. How do we think about like the profitability and your ability to really kind of penetrate the dealer channel with these stores? Just any thoughts around there would be helpful.

Yes. I mean, the strategy remains consistent that opening up physical stores helps drive market share gains because it allows dealers who want to pick up product rather than take direct delivery. And so we think it's a good strategy. We're going to continue to do it. We said our target as 350 stores, I believe, in 2025. And we're focused on doing that. We're going to open up 30 stores this year. We get to approximate operational breakeven in 12, maybe 18 months, depending on the location and the real estate costs. Once it's a mature store, 3 years or so, we're doing about $3 million to $4 million depending on the location. About half of that's incremental and half was existing customers buying, taking direct delivery from us now getting from the stores and they're incremental to our EBIT ROS. So we like to go down on these stores. We continue to play with the model, and we'll continue to play with the model as we move forward. We like the physical stores. We also just like doing omni-channel that customers increasingly want to deliver to their location rather than picking it up. And so we continue to focus investments on the last mile to be able to support customers. And so we like the store strategy. It's going to -- we think there's multiple years in that, but there's also other ways we're going to continue to serve our customers.

Yes. And I think you mentioned -- so you mentioned omni-channel, you mentioned digital investments earlier. So maybe touch on the investments that you're making there to make sure like you've got e-commerce capabilities as well going forward? Like how do you feel like you're positioned relative to some of your peers today?

Yes. I mean I'd say Watsco, and we are sort of a cut above others. One, because we have the national distribution; two, because we focused on it. To me, the thing I remind everyone of is everyone says they can sell online, but then there's Amazon, there's everybody else, right? And so just having an e-commerce site isn't the same. I mean, having e-commerce site is having all your SKUs there, being able to pull up a unit and then having all the associated spare parts that are with it or installation kits that are with it that allows you to compare and contrast, it allows you, when you place an order, to track it to a 4-hour window when it gets delivered to your site, that allows you to do warranty and pick the type of warranty that you want, there's different warranty options that you can do online and sign for. I think those are all the capabilities that we have and continue to build. And again, it's also about the user interface or how the dealer gets involved with it, that -- in a seamless way that they can have their salesperson go out and use an app to sell the unit. And then from there, they can order the unit. And then from there, they can track the unit and sort of seamlessly do it, and we think that's important.

Yes. We're talking about e-commerce, maybe shifting gears over to the commercial side of your business. I think you called out Amazon this quarter. I'm just curious, like how big are your retail customers like Amazon? Obviously, seeing a ton of growth in that sector today. So just any thoughts around that, maybe I'll pause there.

Yes. I mean, more broadly, distribution is increasingly a big part of what we do. And so sort of as the traditional retail trades down, stores go away, if you will, distribution has been an offset. And Amazon is a big customer of ours, but some our other distribution locations to support this last mile, if you will, and having a warehouse to pull out of it. I also talked about on the call that schools are slightly less than 10% of what we do, another growth vertical for us. And then even within our traditional retail channel that has shrunk as part of our overall sales as these other segments have grown or other verticals have grown. We continue to do business with lots of national accounts and a lot who are winning. Customers of ours, including Home Depot, Best Buy, Lowe's, Walmart, and they're winning now. So we continue to grow with them also.

Yes. So Todd, I mean, when you think about like the growth in those verticals, right, it could be pretty substantial over the next few years. Like do need to acquire at all to get bigger in the space? Is it going to be done organically? We can go back to the schools conversation a second. I'm sure we want to talk about stimulus. But just curious, like do you have what you need from whether -- I mean, I know you have the technology, do you have it from the distribution standpoint to be able to serve those guys today?

Yes, we do. We may have to add some more production capacity. And if we do, we will. But we have the technology. I mean, the vast -- our focus on schools is K through 12, we're not selling to higher education in any meaningful way, although we do some jobs there. And the delineation is higher education tends to be more applied. K through 12 is, I don't know, 70% unitary. And so we're able to sell to the vast majority of applications. If they want energy efficiency, which a lot of schools do, we sell them either our Energence Ultra or our new Model L, which is one of the most efficient rooftops in the marketplace. If they want more entry level, first cost, we'll sell more landmark units. And in both applications, we come in with the best indoor air quality offering in the marketplace with MERV 16 filters, UV lights, so we can help there also. So -- and we have dedicated salespeople who are selling directly to schools. And so we now have a lot of expertise. And so we feel we're well positioned for the school opportunity. We don't need to do any acquisitions to do that.

Yes. And then just on school specifically, I guess, as you think about when the spending is going to occur? You've already seen a nice full uptick in that business this past quarter. I think you called out greater than 20% growth. How are those conversations going at this point? Like do you think that the opportunity is probably going to be more of a 2022? Is it later this year during like the holiday season? How are you seeing those conversations progress?

I think it's going to be spread out both places. I don't -- all that money is not going to be spent over Christmas, right? So schools tend to move slower than commercial customers maybe for obvious reasons. And so we're well positioned to take care of it. I think it's going to be multi-years. I don't think the money comes in and they spend it all at once. I think they'll phase in what they're doing, and we're well positioned to take care of it.

Got it. And just similarly, just around like the stimulus measures, the America's Jobs Plan has like roughly $10 billion in there for federal buildings funding. How big of a business is that for you guys? And do you have an opportunity there as well?

We do a little bit with federal buildings. But a lot of those buildings are applied in nature. So that's not a major vertical for us.

Okay. I had a question come in from the audience, specifically on your commercial business. The question is around whether you think your revenues this year can get back to 2019 levels in 2021?

We'll see. I just don't want to answer. I mean, we don't give segment guidance. I mean, the market was down 20% last year, and we call for the market to be up high single digits this year. I think that's a bit of a long downhill path to get to the revenue the same it was in '19, but we'll see what happens for the balance of the year.

Yes. No, that is a tough part. Refrigeration, maybe shifting gears for a second. Just strong backlog in North America, maybe touch on like what you're seeing there? Is it some pent-up demand from no spending during the pandemic? Like any thoughts around what's driving the stronger backlog there?

I think it's 2 things, broadly speaking. I think one is what you just said, similar to commercial customers, refrigeration customers put off spending. And now they're back in a forceful way sort of doing what they would have been doing anyhow plus what they've missed. Two is, there was a major product change last year for us and for our competitors due to DOE regulations. We think we have a very, very good product line, right cost position, right efficiency position, easy to do business with. So we think we're gaining share above and beyond the market being strong. So backlog in refrigeration. After a very good first quarter, backlog remains strong. Order rates are strong. I think we're set up for a pretty good run in refrigeration also.

Can you just remind us on the refrigeration side, specifically like mix of business, like where are you selling into mostly? Where are you seeing kind of like the pockets of strength? Is it the grocers? Like where are you seeing it?

I mean, the vast majority of the business is in North America, so I'll give a North America answer. About half of what we sell is through wholesale distribution. So you think of United Refrigeration and the other half we're selling directly to OEMs or think about a Hillphoenix. There's a large customer of ours that we sell to others who do display cases. And the verticals that are strongest right now is cold room, so that sort of ties to what we were talking about with Amazon and the distribution cold chain. But also grocery is strong this year after -- it seems like forever being soft, we're seeing some strength in grocery. And so that's been important also, too. A little softer are restaurants and convenience stores are somewhere in between.

Yes. We had Hillphoenix, we had Dover on earlier. And yes, their backlog is growing like gangbusters. So nice to see.

You have just got Dover also. Yes, they're a large customer of ours. So when they grow, we're happy.

Yes. The 2023 margin target, 12% to 14%, pretty strong improvement from where we are today, right? And fully recognized like the pandemic change things for everyone. But can you just maybe talk about like some of the progress you think you'll make in narrowing that gap and what the drivers are going to be?

Yes. I mean I think you saw a taste of it in the first quarter. We had a strong first quarter. So we saw significant margin expansion. I think volume helps. I think we weren't quite a critical mass, but especially in Europe, the volume is helpful, the spread across the assets that we've had. We've had factory issues the last 2 or 3 years. I think those are now largely behind us and so see you sort of see -- you go from losing oil in the factory to sort of driving productivity in the factory. And then the other elements of material cost reduction, SG&A leverage that we typically have. So we're feeling pretty good about the refrigeration margins.

Okay. Cool. Maybe my last line of questioning, I mean, got -- since we guess things have died down recently in terms of the consolidation discussion. One of your peers talked about recently about consolidation in like the 5 to 15 players, but not necessarily in the top 4 because the concentration was relatively heavy. I guess, I just -- I'd love to hear kind of your thoughts, any updated thoughts on consolidation. And then I think maybe going back to a question I asked you earlier, like, do you think that the top 4 kind of gained share throughout this pandemic?

Who is the competitor who said that, do you know?

Trane.

Okay. I mean the answer must have been a global answer because in residential, North America, there aren't 15 players. There's 6, and if you include Nortek, which I don't know if you should, there's 7. In commercial, I think there's even -- commercial unitary, there's even fewer. So I think Trane's definition is either an applied business where you're including a lot of adjacencies and/or an international answer. I think domestically in North America, in the markets we play, there's 6, maybe 7 competitors in residential and fewer in commercial. I don't think the top 4 are gaining share. I think we're gaining share. And I think maybe 1 or 2 of the others are. But I mean, Goodman's at least from a unit point of view, we think, is the industry leader, and I think are losing share, and I think Carrier should par maybe. I think Trane's probably gaining share, and I know we're gaining share.

Got it. Okay. Then maybe just lastly, since we are talking about M&A, you did mention Nortek. You've had a couple of announcements recently, JCI announced the Silent-Aire acquisition, Madison IQ with Nortek. Just, I guess, a question for you is like did you guys look at either? And how are you thinking about M&A for you?

Well, I think everyone is looking at Nortek probably for the last 3 or years, right? I mean they were owned by private equity multiple times. And so I think anyone wanted to get a book on a book, but pretty complicated company, good luck to the new owners. And then Silent-Aire just doesn't fit -- I mean it's a fit with JCI, maybe, but it's certainly not a fit with us. Our focus on M&A has been consistent. I mean, we would do something in the markets that we have an industry-leading position in, North America residential or North America unitary, to consolidate the industry. And then to a lesser degree in refrigeration, because there, there are more adjacencies that could fit with what we do. We're going to have launch into North America or Europe. And I've always been hesitant to do an acquisition there until we got our house in order. I mean, you have to earn the right to do the acquisitions. I think we're there now or soon we'll be there. And so we will look for opportunities there, but those tend to be smaller deals. But we've had a business model that's been grow organically, expand margins, have your return on capital, drive up to over 40% and then use our cash to buy shares. And when we were at 100, people thought maybe should we back off share buyback, when we were are 200, should we back off share buyback. So I think that's a strategy that worked even at our stock price to them.

Great. Well, Todd, thanks for spending the time with us today. It's always great to see you. Enjoy the rest of your week.

Thanks, Joe. Enjoyed it as always, thanks.