The Manitowoc Company, Inc. (MTW) Earnings Call Transcript & Summary

Okay. Good morning, everyone. Welcome to the fireside chat with Manitowoc. I'm Jerry Revich at Goldman Sachs. And I'm pleased to have with me Aaron Ravenscroft, President and Chief Executive Officer; and David Antoniuk, Executive Vice President and Chief Financial Officer. Aaron, Dave, thank you very much for joining us.

Good morning, Jerry.

Good morning, Jerry.

I'm wondering as a starting point, can we talk about the strategic priorities for your business today heading into this economic recovery and how that's evolved compared to what the strategy was 2 to 3 years ago?

Sure. Why don't I start with just a little bit of history for newcomers to the story? 5 years ago, we spun off the foodservice business, and we were extremely focused on becoming a sustainable stand-alone crane company, being able to thrive in spite of the cyclicality of our business. And so we spent the last 5 years, taking out over $100 million of cost and getting ourselves in a much better position to be cost-competitive and, as I say, to thrive and continue to invest through the cycle. I'm happy to say that we've really completed, I wouldn't call, [ a speedy one ] of our journey and we're moving in Phase 2, and we've rolled out 4 strategic initiatives that are extremely focused on growth. The first one is to expand our rental fleet for tower cranes in Europe. The second is to grow our Chinese tower crane business, which covers all the Belt and Road countries. Thirdly, we're increasing our investment in R&D in our all-terrain platform. And then lastly, we're pursuing acquisitions to help accelerate those 3 other initiatives. So it's [indiscernible] case from being cost-focused to being growth-focused. I think the timing sits well relative to the cycle.

And in terms of growing the business in China, in the past, it's been a really competitive part of the world, especially in your industry. Can you talk about how you see the opportunity to differentiate your product in that super cost-focused part of the world?

Yes, absolutely. So when we talk about China, I really think in terms of Belt and Road countries because where the Chinese compete today is becoming larger as time goes on and they start to migrate outside of China. So I'm a big believer that, yes, China is competitive, but it makes us more competitive to compete in that space. I think that's crucial for our long-term success. What's critical for our business is we are lucky, number one, because Potain is a well-known brand in China. The brand has actually been there since the 1980s, when we had royalty agreements with 3 manufacturers. So I think that's a really important factor for our tower crane business. And then number two is we've been in the process of redeveloping our product line. What we've produced in China historically has been legacy cranes from our European operations. Starting 3 years ago, we began -- we built out a team in China to develop cranes with a local specification, which I think is critical for us to get our costs in line and to be competitive from a pricing standpoint. So we're very comfortable with where we sit today. In China, we sold, I think, 5 cranes when we started this journey. And this year, we'll sell somewhere in the range of 300. So it's been a quick success -- and we've launched 4 cranes. We recently launched the latest one 2 weeks ago. So every time we launch cranes, that goes a long way in terms of our ability to be competitive and then, of course, to meet the local specs, so...

And in terms of the market share growth that you have seen, can you just expand on what region specifically has driven that penetration growth? And can you talk about your competitive landscape? Who are you up against mostly on the business that you're taking in today?

Do you mean specifically about China?

Yes.

Yes. So in China, we compete against the three major players plus there's one other private player. Yes, I mean, the Chinese market, it's pretty interesting because they'll produce 40,000 tower cranes this year. So our market share is very, very small, and we're just trying to get a small piece of that pie. I think the real important part is making sure that we get the right margins on those projects and then in addition, making sure we have the right payment terms. As you probably know, in China, a lot of times, there's lots of sales to be generated. But it's a question of making sure that we're also generating profit on those deals as well as getting the receivables paid. So that's as important to us as the sales are. And I'm pleased to say that where we sit today when we look at our margin profiles and our balance sheet, we're in good shape. So it's my way of saying I think we could grow a lot faster, but we're trying to do this in a premeasured way, where we're not risking our balance sheet at the same time.

And are payment terms comparable for your business in China versus the U.S.? Or is it...

No. I mean, if you look at it in places like Italy, even, for instance, there, it had always longer payment terms than what you'd typically see in Germany or in the United States and it's the same thing in China. So it's always this debate of what is the payment term going to be and how you're going to negotiate it. But we want to make sure that we collect on the receivable on top of that. If you go back 5 or 6 years ago and you looked at all the balance sheets of all the players in the space, I mean, there were huge amounts of bad debt and extended receivables. So we're very keen to avoid that situation.

And then you also spoke about increasing R&D for all-terrain crane products. Can you expand on what the pipeline looks like for new product introductions and the opportunity set?

Yes. So obviously, as we're trying to reduce costs around the globe the last 5 years, we weren't able to really expand enough that we would cut back on our R&D. But we were -- we didn't -- like we weren't able to invest in R&D as we'd like to. And during that period, specifically for the all-terrain business, we needed to meet new regulatory standards: one being emission standards for Tier 5 engines; two being crashworthiness test, new standards; and then lastly is the electrical EN standard. So our R&D team in Germany was extremely focused on meeting those standards. And there's some product gaps that have evolved because of that. So today, we're increasing our investment by $4 million as well as we have resources to free up in the North American team, we're diverting some of those resources to new projects. So we've put forward a road map where we'll develop 7 new cranes over the next 5 years. And we're really looking forward to the opportunity to present some of those cranes at bauma in 2022.

And the initiative to grow the rental fleet in Europe, you've put your toe in the water over the past couple of quarters. Can you talk about what your experience has been like so far?

Yes, sure. So I mean, in all these initiatives, we like skills and levels. So when I look at the tower crane opportunity, again we're investing $50 million of CapEx. That will get us, I don't know, 30 to 40 cranes, depending on the size. But that's a relatively small toe in the water. That being said though, the returns are very attractive for us. The margins are better. It increases our stickiness from an aftermarket standpoint. And I think this is a stage for potential acquisitions in that space. But we're really looking for year-on-year growth in these sorts of initiatives where, as I say, there's no home runs. It's blocking and tackling and [indiscernible] with the investments we make. That's exactly how I see this initiative.

And Aaron, can you expand on the point around M&A? So you mentioned it's possible to accelerate growth for the rental fleet in Europe. And it sounds like based on the strategic framework, the M&A focus might even be broader than that. Can you just comment on what you folks are targeting? And is that [indiscernible] so in terms of new folks not looking at rental fleet but also other M&A opportunities?

Sure. Historically, we've never really -- we've had a pretty narrow scope in terms of what we would consider [indiscernible] over the last 20 years. Of course, in the last 5 years, we weren't in a position to do deals. So as we move into this space, I mean, it's all about building out our funnel, and we want to start with the largest group possible. So we will -- our core is in tower cranes and mobile cranes. And any thing within that space, we're willing to take a look at and consider it to figure out how it fits with us strategically. What's most important to us is in the deals that we're looking at, they're primarily focused on aftermarket service. How do we increase more of that annuity-like revenue stream that has higher margins? So the field is broad in span. And at this stage, there's nothing that we would disqualify. We're -- I would say that's a big change in the direction of he Manitowoc historically. Historically, we have been only focused on manufacturers. And of course, we had a foodservice business that we were entertaining. So as I say, very focused on crane -- the mobile and tower crane business and looking to figure out how we grow the less cyclical portion of our business.

And Aaron, earlier in the conversation, you mentioned when you folks own the rental fleet, the aftermarket opportunity for the manufacturing business is higher. Can you give us an order of magnitude? So when you do all of your own service, what's the parts increase per crane that you're seeing versus when the channel is independent?

Yes. So I would suggest that folks have a look at one of the PowerPoints that we put on our web page, I guess, it's two or three, where we outlined all the different revenue streams. I just -- it's difficult to target at my crane. The way I looked at it though is more about what is our share of stomach and what are the different opportunities we get because we run a crane that could lead to a multitude of different revenue streams. One could be the commissioning, it guarantees us the parts. And obviously, there's a rental component of it. But there's many instances where actually the rental is it's a rental purchase. So it's a -- you rent to top off the crane, you get the acquisition price and it turns into a sale, which is an opportunity for us to grow our market share. And then lastly, sometimes these deals get bundled in with a deal. So you'll get a large construction company in Europe, where they may have a fleet of a couple of hundred cranes, but they get into a project, maybe they don't like the location or where their fleet stands, and they're interested in maybe using 10 of the cranes that are in their fleet. They might need to buy 5 cranes from us. But then they're looking to rent another 5 cranes just based on the dynamics of their own fleet rather than trying to add to their fleet. So there's a good opportunity, where we've never really [indiscernible] in the past. So as I say, I think it just opens up our perspective in terms of being more aggressive in the overall market.

And in terms of the opportunity set for you, is it confined to Germany? Or are there other markets where you could go downstream without disrupting your distribution arrangements?

Yes. I mean, we've talked a lot about Germany because historically, our market share has been relatively low in Germany or lower than we would like. We have 30 to 35 dealers in that space that are mostly focused on self-erecting cranes, not the top-slewing. The top-slewing are the more expensive type that we're talking about here with respect to rental. We work with those partners hand-in-hand in many cases. We do go direct in certain cases with the key accounts. So this is an area where we're working closely with our dealers to minimize the conflict and do in a way that's a win-win for both organizations. That being said, there are opportunities in some of the international construction companies. And then having the fact that we could get into a deal, let's say, that could go into the U.K. from a French construction company when that project is done, moving -- having the ability to move that crane into a German rental fleet gives us a lot more flexibility that we wouldn't otherwise be able to handle. So again, I'd say it's sort of like our acquisition opportunity as well, where we're open to considering any and all the ideas. We always like to talk in terms of countries in Europe. But as time goes on, there are more and more of these international entities that we've got to be more flexible in terms of serving.

And if we look back at the last Analyst Day, you folks laid out 10% margin targets. Can you update us on how you're thinking about normalized sales and margins today? How has that framework evolved?

Yes. I think it's difficult to answer the question of what is normalized sales in the crane business because we're so cyclical. What I will say is in 2019, we're [indiscernible] would prove that if we can get over in that $2 billion number, we can get to that 10% EBITDA. When I -- if you look at some of the aspirations we've put out, and it's as much internal as it is external, long term, our goal is how do we grow our revenue to $2.5 billion. And it's going to be a combination of where the market takes us as well as what we can do with acquisitions. And from all the acquisitions that we've been considering, those typically have higher margins than one of our core businesses. So I think it's a combination of things: one is getting the volume; and then it's, two, how do we use acquisitions to help boost up our profitability.

And Dave, can you comment how you're thinking about permissible operating leverage for an acquisition and then how quickly would you target getting that down and whether equity issuance would be on the table if something were sizable enough?

So Jerry, I think that generally speaking, the main source of our gunpowder is our ABL, which has no outstanding borrowings on it. We have a $275 million asset-backed line of credit, which provides us with, I'll say, adequate liquidity. I think when you look at the acquisition pipeline, I don't see us doing transformative like an Enodis back in 2009, singles and doubles are the best way to go in an acquisition. That being said, when I look at operating leverage, we always talk about operating leverage going -- during an acquisition at that time, going above a 3x multiple with line of sight coming down to a 2x multiple point in that regard. So it's the fact that we want to look at opportunities that are accretive in year 1 from both an earnings and a cash standpoint. But generally speaking, we are comfortable going above a 3 level in leverage and with line of sight coming down to the 2 level in the future.

And can you say more about the financial profile of businesses that you're looking at? What -- obviously, you focus on IRR. But what multiples does that translate into when you're looking at the opportunities that you spoke about earlier?

Right. So I'd say, generally speaking, we look at where are we trading today, what our multiples are in the marketplace and what we're willing to pay as a multiple that doesn't dilute our existing shareholders. So we're cognizant of the fact that we need to do acquisitions on a disciplined level. And I think that looking at that, we're moving in that direction.

And how active is the M&A pipeline at this point?

Very active.

In terms of the other lever, in addition to pulling out an ABL is, obviously, cash flow. Your cash profile ahead has improved. Can you talk about how we should be thinking about free cash flow evolving over the course of '21? And I think there are some moving pieces on the working capital side. That would be helpful to flesh out as well, Dave, if you don't mind.

Yes. So I think we've talked about in our earlier calls when we talked about our cash flow from operating activities, we said 2021 is going to be a positive year for CFOA and then we're looking at our capital expenditures and how that was going to impact our free cash flow and we've talked about free cash flow being at that breakeven level. The team has done an excellent job in managing working capital. And what we've been able to do is, we believe, at this point in time, from a free cash flow level, we will generate cash this year just because of the discipline that we've input around working capital. That being said, the real wildcard is our [indiscernible]. I think when we go back, I have to give a little history, back into late '17 and into early '18, so back then, when Eric was running the operations, we adjusted our build schedules to kind of conserve on working capital and cost. And that may have translated into some missed opportunities in those years. With the uptick in business that we have right now, we see this as an opportunity to get some of these sales. And so at the end of the year, we're looking at -- we're closely looking at our build schedules, and we don't want to miss any opportunities. So our inventory levels may increase as a result of the increase in orders that we think may happen towards -- for the rest of the year here. And if that's the case, we will grow our inventory as [indiscernible] historically, we've come down. So I think, generally speaking, in spite of the fact that we grow inventory, we'd still be positive on the free cash flow line.

Okay. And can we go back to the product development discussion across the machinery sector, we're seeing a broad use of telematics for predictive maintenance and essentially improved end market intelligence. Can you talk about which of your products of telematics has a factory default today? And what's the installed population?

Yes. So I mean, that's a tricky discussion because it's something I think all industrial companies have been working on over the last 10 to 15 years. I think we've all struggled to figure out how do you really generate revenue and margin off it. What I have seen is, in most cases, it's evolved into being something that's more about reducing costs and servicing customers. So that's my way of saying I think we have a mixed approach. And it evolves as the technology improves and we're able to get more data off the cranes and really be able to use it more effectively. So when I look at where we stand, we're in good shape in terms of the tower crane business, particularly in Europe. We've had [indiscernible] it continuously goes on more and more cranes. It does generate revenue. I mean, there is value that really comes out of that, that folks are willing to pay for. It's not just about locations because that's been one of the things that's been long-discussed. But this is an instance where if we have a crane down, we're able to send someone, go in remote diagnostically sort of like your IT department would do on your computer, if you're having an issue and really go into the machine and have a look and see what the root cause failures are for some issues that may have stopped the crane. So that's worked out well. And then on top of that, we're continuously looking at, okay, now you get WiFi and you get 5G, how much more data can you get? What can you use the data for? Those sorts of things. It's very different. I'd say, in the mobile business, we've had, I would call, a stop-start. We invested a fair amount of money 10 years ago on something called CraneSTAR, which we essentially pulled off the large majority of cranes that's on request. We did that 4 years ago because of the significant costs that had versus the value of what customers are willing to pay for. And now we've had, say, a second kick at that most recently. In the fourth quarter, we kicked off an engineering project in the all-terrain business. And the real focus there when you look at all-terrain cranes, and those are the most complex of cranes that we produce or, I would say, are probably in any of the crane markets, given the fact that they run on the road and pick up 500 tons on taxi service, very common [indiscernible]. So we've got [indiscernible] approach. We're going to have something in test now to be launched at the end of the year. And in that one -- and in that case, initially, I don't see it as an opportunity to necessarily generate revenue. It's more about increasing the serviceability of the machine and servicing our customers. Just like you'd have on your iPhone or on your computer, we're constantly doing software upgrades to those machines. They are heavily dependent on the software, [indiscernible] you can use cranes and make them more flexible. Today, you [indiscernible] by hand, mostly with the thumbnail or the computer. Our goal is that we can do that with WiFi someday in the future. So that's sort of the direction that we're going. So yes. I mean, this is really an evolving situation, I would say. And we're starting to make some gains on where I'd say we've been behind in the last few years.

And in terms of the product development process as a whole, you folks have worked hard to shorten the time to market for new products. Can you just update us on where the process stands today? What's the lead time for new product introductions and any opportunities to report continuous improvement from here?

Yes. So in the last 5 years, we've developed and launched more than 60 new cranes. Formerly, it would -- we've always listed innovation as one of our strategies. I would say today, that's part of our normal everyday business. So it's not what I'd call strategic initiative or breakthrough initiative for us. The process is really baked in, in terms of all of our engineering departments. We made good progress. When you look at a crane, one of the biggest challenges you have is actually developing all the load charts. So you physically have to do all the lists. We don't know how we can get around that. So that's, I think, the long pole in the tent in terms of reducing our time to developing these cranes. But that being said, I mean, we continuously make gains. During COVID, we started to do remote diagnostics. So historically, we do all of our testing in the United States. We do all of our testing in Shady Grove. But our team in Manitowoc, our engineering team in Manitowoc, would have to physically fly to Shady Grove in order to do these tests. During COVID, we were able to develop some remote diagnostics to do those tests in spite of where our physical locations were. So as I say, it is the law of diminishing returns as the gains we made early on were huge and it varies by crane. But I feel really good about where we are today and the returns that we get off those projects.

Okay. Terrific. And in terms of just to transition to talk about the demand environment, maybe just starting in North America, can you talk about where we are in the cycle for each of the major product lines in this region as we enter '21 here?

Yes. So when I look at first quarters -- first quarter orders, our biggest strengths came from the tower crane business in Europe, came from the tower crane business in China and Korea and our mobile business in Australia. So those are the strongest markets we've had. We did see a pickup in the U.S. market, but it was high single digits during the first quarter. I would say the big rental houses are still reluctant to take the market and look for big deals in the United States. But I think we're hopeful, there's a lot of things to discuss about inflation regarding on the cost side of it. But when mineral prices continue to rise and oil prices [indiscernible] over $60, I think that creates opportunity for our customers. So we'll have to wait and see how that plays out.

Right. And in terms of just the absolute level of demand in the U.S., how far off of the bottom are we for the main products? Is that high single-digit growth that you mentioned there? And is that just a fair characterization of where we're off the bottom and forget the super cycle, where we're going versus normal cycle highs as you see them?

Yes. I mean, I think the complexity of answering that question is just the mix of the products that we have. So as we mentioned in the end of the fourth quarter, we saw strong demand for crawler cranes. Those machines are $6 million, $7 million, $8 million price tag. So they can move the needle pretty quickly. Crawlers have been pretty positive for us the last few quarters. So those other lines, the ones that are more oil and gas-oriented, I would say, have been slower.

And in terms of the order cadence over the past couple of quarters, could you just help us get a sense for what activity was -- as we worked our way through the fourth quarter and the first quarter, how much of an acceleration did you see or essentially we got visibility on the reopening?

I'd say it's modest, sort of along the lines of what we've said around the high single digits. So there hasn't been much of an acceleration in the United States yet.

So interesting, so pretty steady cadence. Okay. And then in terms of -- can we have a similar conversation for where we are in the cycle for tower cranes in Europe, how far off the bottom are we and frame that for us in terms of...

Yes. So I mean, if you look back over the last 5 years, the tower crane business started to climb back up in 2016 and it continuously improved for 4 years. Going into 2020, we had anticipated the market would start to slow down. I mean we generate a lot of our revenue out of France, and there's been huge projects around the Olympics and the Grand Prix projects. So our expectation is that it would slow down. 2020 threw a wrench in that, I mean, obviously, went down with COVID. We were really surprised with the strength that we saw in the first quarter and I would say in the late fourth quarter of last year and in the first quarter this year for those products. So it's very difficult to predict how that cycle behaving. Because I think for all of us and even the customers I spoke -- speak to throughout Europe, it's really played out differently than we anticipated. The other thing that's aiding to that is that the self-erector business has been really strong, and that's been driven by some of these accelerated depreciation programs in some of the countries in Europe, Italy specifically, has put in place. So when I look at where we are in the first quarter, I would say more like something that would be at the top of the cycle or near the top of the cycle for tower cranes. So we have to wait and see. [indiscernible] feel for where that settles in until we get into the fourth quarter, which is where we normally have our winter campaign and we start to see our orders come in for the following year. You start to enter the slow period, especially in the summertime months, for the tower crane business. That's the difficulty.

Yes, I've heard that about Europe. And in terms of the price increases that you spoke about on the call, Aaron, can you just talk about the timing of the increases and exactly what you've communicated to customers? And any difference in the markets?

Yes. So I mean, it varies by product and it varies by geographic region. When we were in the first quarter, as we said in the first -- the last conference call, when this thing opened up, we expected steel would start to decline as the year went on. That's not happened. It's pretty clear now that the inflation, if you saw the numbers that were reported this morning, it's out there, it's real. Or if you filled up your gas tank lately, it seems like it's $10 every time I put another tank in my gas -- in my car. So it's real. And so we've had follow-on price increases. And again, those vary by what we're seeing in each market by product line and the exposure they have, whether it be steel or other things. So I think this is something we're going to be up against for the next several quarters. So we've done one round. We've announced the second round in several products. And I think a third round is very possible when we see where inflation is. But we try to be as close to the customers. We don't want to overshoot it either and have an effect on our [ command ].

And what's been consistent about your performance as a management team is you folks seem to beat margin expectations every single quarter. And I'm just trying to put that historical performance through the context of the relatively guarded comments about price/cost and how well you folks know your cost structure. And I'm just trying to understand, is that just a healthy respect of, "Look, there's supply chain challenges beyond cost, so we want to make sure we can execute," versus, "No, look, we fundamentally believe we're going to be looking at a big price/cost drag on a net basis as the base case"?

Yes. No, it's -- the inflation is for real. I think the news is actually catching up on what we've been communicating. I mean, every day it seems like since the earnings call, it feels like now the news is starting to catch up with -- when you see copper -- it was $4.70, it was $4.72, it was $4.80 yesterday. [indiscernible] might go to $7. Steel is where it is. I mean, the inflation is where it is. If you ask me where we came in, in the first quarter, and yes, I know [ we beat ], I guess, we'd really be lucky than good. Our mix was much more favorable. As we had said in the previous call, we expected crawlers to be really strong, which they were strong. But that being said, our tower business was much stronger. And when we look at the mix of it all, I think that's benefited us. I know everyone likes to point to our conservatism. That has been part of it. But I'd also say that we try to take a pretty realistic view of the world in terms of what our mix is and what the costs are, what the price dynamics are. And we're always following -- when you have these sorts of volatility in material prices, and we're always lagging behind that. And so then there's this game of what sort of coverage do you have for those products and steel and then how fast you can get the price increases implemented and effected.

And then based on that comment on the lag effect, so essentially, to the extent we have backlog that's protected, presumably that suggests that at some point in '22, just on a year-over-year basis because we won't have protected backlog, price/cost, on paper, it sounds like it should be better. Can you comment on that? Is that a reasonable way to think about it?

I think when I look at the -- I wasn't able to predict what's happened in the copper and steel in the last 3 months. So I'm not going to try to project what's going to happen 12 months from now with respect to inflation. So I think it's way too early to jump to that conclusion. We still could be chasing these prices. And the other side of it is the crane business is extremely competitive, and we've got to get the price increases implemented and effected and people accepting it.

And the other lever that you folks kind of have outside of pushing pricing is through the new product introductions and delivering products with updated level of automation and hopefully higher built-in gross margins. Can you talk about how much that's contributing to the business today and based on our earlier discussion around new product introductions, whether that cadence picks up into next year?

Yes. So I mean, it's sort of built into the system because we've been doing it for some [indiscernible]. And typically, what happens is there's two things. When you first launch a product, one, from a market standpoint, our market share goes up and it's great for volume. However, as we introduce that into production, it does take us a couple of quarters to get the cost where it needs to be and get our productivity where it needs to be. So in fact, once we launch a product, we typically get good sales. But it does take us a couple of quarters to catch up from -- to meet our targets with respect to productivity and material costs. But as I say, that's all built -- I would say that's built into it because we've had this -- we've been rolling new products into our production schedules now for 4 years. So I don't view that as necessarily upside from a specific cost standpoint or margin standpoint. To me, that is figuring out how we grow market share and continue to increase our volumes, which it does have its own effect from an earned hour standpoint.

Okay. Good. And then Aaron, you touched on this earlier in our conversation, the focus transitioning from focusing on costs to returning to growth. What does that mean for your SG&A to sales as hopefully we get a sales recovery over the next year? Plus how would you expect OpEx to grow relative to sales in a recovery?

Yes. I mean, we've made some modest investments in terms of I talked a little bit about the $4 million we invested in the all-terrain business. As we have prototypes, those are pretty significant costs that can increase our SG&A. But I would say it's pretty modest. I approve every single position at the company, whether it be a replacement or a new position. So those jobs are hard to come by. So there's -- it was a lot of hard work to get our cost down over the last 5 years, so we're not interested in pouring it back in. So it does dribble back in. I think from an SG&A standpoint, the biggest headwinds we'll have is we have not had salary increases in a large portion of our population for this year and last year. So at some point, we're going to start to hopefully give salary increases and that will have its natural effect on our SG&A.

Yes. Terrific. Well, that's all the time we have today. Aaron, Dave, thank you very much for telecommuting to join us at our conference. It's nice to see you. And thank you, everyone, for joining us.

Thank you very much, Jerry.

Thank you, Jerry.

Have a good day.