MPAA - NASDAQ

Good morning, and welcome to the Motorcar Parts of America Fiscal 2023 Fourth Quarter and Year-End Conference Call. All participants are in a listen only mode. After the speakers presentation we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Gary Maier, Vice President of Communications and Investor Relations. Thank you. Please go ahead.

Thank you, Julian. Thanks, everyone for joining us. Before we begin and I turn the call over to Selwyn Joffe, Chairman, President and Chief Executive Officer; and David Lee, our Chief Financial Officer, I'd like to remind everyone of the Safe-Harbor statement included in today's press release. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements, including statements made during today's conference call. Such forward-looking statements are based on the company's current expectations and belief concerning future developments and their potential effects on the company. There can be no assurance that future developments affecting the company will be those anticipated by the company. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve significant risks and uncertainties, some of which are beyond the control of Motorcar Parts of America and are subject to change based upon various factors, in particular, our expectations about future -- anticipated future growth and opportunities with customers may not be achieved. The company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. For a more detailed discussion of some of the ongoing risks and uncertainties of the company's business, I refer you to the company's various filings with the Securities and Exchange Commission. With that said, I'd like to begin the call and turn it over to Sel.

Thank you, Gary. I appreciate everyone joining us today. We achieved record sales levels for the fourth quarter and fiscal year, reflecting the resumption of more normalized ordering patterns by certain customers as well as continuing favorable industry demand for our nondiscretionary automotive aftermarket parts. The outlook for our product demand is positive as we enter our new fiscal year. Equally important, I must recognize the contributions of all of our team members who are focused every day on providing the highest level of service to our customers. With regard to gross margins, we expect improvement as fiscal 2024 evolves. As sales and production volume increases we expect incremental benefit from increased overhead absorption. Due to the increased demand for our products and the easing of our inventory reduction initiatives we are starting to increase our production levels. In addition, we will realize the full benefit of price increases that have already been approved, which will roll-out throughout this fiscal year and enhance our gross margins. We anticipate benefits from order volume improvement, operating efficiencies and cost-reduction initiatives that we continue to implement across the entire organization. These initiatives include an ongoing company-wide strategic analysis of opportunities to realign our resources and cost structure to enhance profitability and cash-flow, both key areas of particular focus for our team and Board in fiscal 2020. High-interest rates continue to have a significant impact on profitability. Primarily due to rates related to long-established customer supply-chain finance programs. Fortunately, we have made progress in getting relief from our customers and we expect to realize benefits as fiscal 2024 evolves. We are a major supplier of critical nondiscretionary automotive aftermarket parts and we are working with our customers to address the sharply high interest-rate environment which impacts both MPA and our customers, as well as all companies doing business with the leading automotive retailers. It is an industry challenge that requires practical solutions and further actions. Now, let me address our outlook. As stated in our news release this morning, we expect sales for fiscal 2024 to be between $720 million and $740 million, representing between 5.4% and 8.3% year-over-year growth, respectively. We expect to see margin accretion from efficiencies related to the higher-volume and cost-cutting initiatives as I noted earlier in my remarks. With respect to cash-flow, our expectation is to continue to make progress to generate cash. Operating income is expected to be between $60 million and $65 million before the non-cash foreign-exchange impact of lease liabilities and forward contracts. The non-cash impact of revaluation of cores on customers’ shelves, and supply chain disruptions. The company estimates other non-cash items will be approximately $16 million including corn and finished goods premium amortization and share-based compensation. And cash expenses anticipated to be approximately $2 million for special EV related research and development expenses impacting operating income. The company estimates depreciation and amortization will be approximately $12 million. In summary, operating income before the impact of the non-cash and cash items and before depreciation and amortization, as previously mentioned, is expected to be between $90 million and $95 million. In short, it is a top priority in fiscal 2024 to enhance our gross margins and cash-flow. Our multi-year strategic initiatives and favorable industry dynamics bode well for the company and we are extremely well-positioned for sustainable top and bottom line growth in our hard parts businesses as well as testing solutions. As you know, at the end-of-the fiscal year we announced a $32 million strategic convertible note investment to enhance our liquidity and capital resources at a pivotal point in the company's evolution. This strategic investment complements management's ongoing goals and objectives while enhancing the company's working capital to support building sustainable shareholder value. We not only value the investment, but also the participation of Bison's Co-Founder. We remain diligently focused on achieving our near and long-term financial targets. Now, let me expand a bit further and discuss the other drivers to support our ability to achieve our longer-term financial targets and why we are enthusiastic about our market position and the opportunities moving forward. We experienced meaningful traction in fiscal 2023 with customers and consumers since the launch of our brake-related product lines, with operating efficiency improvements continuing as volume increases and with fixed-cost absorption. We are on track to exceed our previously-stated goal of achieving $300 million in annual brake-related product sales over a several year period since their launch. We are continuing to expand sales in Mexico with multiple product lines as our customers’ experienced increased demand for aftermarket parts, which currently includes rotating electrical, wheel hubs, brake boosters and master cylinders. We are receiving increasing interest and orders for our test solutions and diagnostic equipment which includes our benchtop testers for alternators and starters from major retailers and major global automotive, aerospace, and research institutions for EV mobility, product development and design and their related services. We are returning inventory levels to more normalized levels following a strategic buildup to meet demand during recent global supply-chain challenges, notwithstanding certain brake related inventory product requirements. These assets throughout fiscal 2024 will greatly enabled us to enhance our cash flow targets. In short, we continue to be well-positioned to address both the internal combustion engine market and the emerging electrical vehicle market with product functionality and applications across both markets. Industry data continues to support our view that strong demand for internal combustion engine applications and our broad-line of non-discretionary aftermarket parts will be here for decades, notwithstanding electric vehicle growth, which still represents a small percentage of overall car part. Despite the global headwinds during the past few years, we in many respects have emerged stronger and better-positioned to capitalize on our strengths. I will now turn the call over to David to review our results in greater detail.

Thank you, Selwyn, and good morning, everyone. I encourage everyone to read the earnings press release issued this morning as well as the 10-K that will be filed. Let me now provide a review of our fiscal fourth quarter and 12 month financial results. Net sales for the fiscal 2023 fourth quarter increased 18.8% to a record $194.7 million from $163.9 million in the prior year. Fiscal fourth quarter results benefited from increasing product demand for the spring and summer seasons and recently implemented price increases. Gross profit for the fiscal 2023 fourth quarter increased by 40.3% to $36.2 million compared with $25.8 million a year earlier. Gross profit for the quarter was impacted by non-cash items as well as cash items. Let me provide details for each and then I'll provide further details on the impact on each additional line-item so that you can further understand the underlying fundamentals between periods and the opportunities to enhance profitability. The non-cash items reflect core and finished good premium amortization and revaluation of cores on customer shelves, which are unique to certain of our products and required by GAAP. The total for these non-cash items in the quarter was approximately $3.6 million. A more detailed explanation of core accounting is available on our website and I would encourage anyone with questions about this topic to review the video. We also incurred transitory supply-chain disruption cost of $2.9 million as referenced in Exhibit 3 of this morning's earnings press release. Fourth quarter gross profit as a percentage of net sales was 18.6% compared with 15.7% a year-earlier. Gross margin was impacted by 1.9% from the previously mentioned non-cash items, as well as 0.5% from the previously mentioned cash items, partially offset by employee retention credit. While the global supply chain situation is improving, we are still experiencing challenges. In summary, in addition to the non-cash and cash items explained previously, gross margin for the fiscal 2024 fourth quarter compared with the prior year was impacted by inflationary cost not yet covered by price increases, higher per unit costs resulting from less absorption of overhead costs as we manage our inventory levels and changes in-product mix. Gross margin improvement is expected to be in-hand as the full benefit of certain price increases realized and with higher sales volumes in fiscal 2024. Operating expenses were down $8.6 million for the quarter to $12.4 million from $21 million in the prior year period. This includes a non-cash gain of $6.7 million, with the foreign-exchange impact of lease liabilities and more contracts compared with the prior year non-cash gain of $3.4 million. The remaining $5.3 million of operating expense decreases, included cost-reduction initiatives and approximately $3.1 million benefit from the employee retention credit. Fiscal fourth quarter results benefited from a $5.1 million employee retention credit. The ERC was reimbursement for prior incurred expenses during the COVID-19 pandemic. Subsequent to the pandemic, cost-reduction initiatives related to employee-related expenses were implemented, along with other ongoing strategic opportunities to reduce costs -- resulting in approximately $5 million annual run-rate expense reductions, going forward. We reported net income of $1.5 million or $0.07 per diluted share. As detailed in Exhibit 1 of this morning's earnings press release, results reflect the favorable impact of non-cash items totaling $1.5 million or $0.07 per diluted shares. Cash items that benefited results, including an employee retention credit, partially offset by transitory costs related to supply chain disruptions totaled $922,000 or $0.05 per diluted share. In addition to the above cash, non-cash and cash items, as previously mentioned in the gross margin discussion, results for the quarter were impacted by inflationary cost not yet covered by price increases, higher per unit cost resulting from less absorption of overhead costs as we manage our inventory levels and changes in product mix. Results are expected to be enhanced moving forward, as the full benefit of certain price increases is realized and with higher sales volumes in fiscal 2024. I should note that we have implemented cost-reduction initiatives throughout the company, including travel, outside services, labor cost and overall cost-saving opportunities which are expected to further enhance profitability. Additionally, results for the fiscal fourth-quarter was impacted by $7.8 million or $0.30 per diluted share of higher interest expenses primarily due to higher market interest rates, mostly related to customer vendor financing programs, representing $4.9 million of the increase. Interest expense was $11.9 million compared with $4 million for last year. Of this rise in interest expense, approximately 80% resulted from higher market interest rates. I just further emphasize that the large interest expense incurred in the fourth quarter was primarily driven by a sharp rise in interest rates of 4.2 percentage points compared with the prior year by the accounts receivable discount programs offered by our customers. This increase almost tripled the discount rate the company paid in interest expense in the prior period. As a critical supplier of non-discretionary automotive parts, our customers appreciate the challenges. The company expects to realize meaningful annualized price increases which will contribute to net income enhancement. We expect that we will more than cover the fiscal 2023 increase in AR discount interest expense of $17 million. Fiscal 2023 total interest expense was approximately 5.8% of net sales. We expect fiscal 2024 total interest expense to be approximately 7% of net sales, including approximately $3.2 million non-cash [PIK] (ph) interest, assuming interest rates remain relatively stable. Income tax expense was $10.4 million compared with $1 million for the period a year-ago. I should mention that the effective tax rate for fiscal 2023 was affected in-part due to the inability to recognize the benefit of losses at specific foreign jurisdictions. However, we expect these losses will be utilized against future profits, which will benefit future tax rates. Net loss was $322,000 or $0.02 per share in the year-ago period. Results a year-earlier were impacted by non-cash items totaling $1.9 million or $0.10 per share and cash items totaling $3.2 million or $0.17 per share, primarily transitory cost related to supply-chain disruptions. EBITDA for the fourth quarter was $26.9 million. EBITDA was favorably impacted by $1.9 million of non-cash items and $1.2 million in cash items, and employee retention credit, partially offset by transitory costs related to supply-chain disruptions. EBITDA before the impact of non-cash and cash items mentioned above was $23.7 million for the fourth quarter. In addition to the above non-cash and cash items, EBITDA for the quarter was hindered by inflationary cost not yet covered by price increases, higher per unit cost resulting from less absorption of overhead costs as we manage our inventory levels, and changes in-product mix as previously mentioned. In summary, further EBITDA improvement in fiscal 2024 is expected as the full benefit of certain price increase is realized and with higher sales volume in addition to cost-reduction initiatives. EBITDA for the prior year fourth quarter was $8 million EBITDA year ago was impacted by $2.5 million in non-cash items, as well as $4.3 million of cash expenses, primary transitory costs related to supply-chain disruptions. EBITDA before the impact of non-cash and cash items mentioned above was $14.8 million for the prior year fourth quarter. Now let me discuss the 12 month results. Net sales for fiscal 2023 increased 5% to a record $683.1 million from $650.3 million in the prior year. Prior year net sales was positively impacted by $13.3 million in core revenue due to a realignment of inventory at customer distribution centers with sales benefits evolving as product mix changes. Gross profit for fiscal 2023 was $114 million compared with $117.9 million a year-earlier. Gross profit as a percentage of net sales for fiscal 2023 was 16.7% compared with 18.1% a year-earlier. Gross margin for fiscal 2023 was impacted by 2.3% of non-cash items and 1.4% primarily by transitory supply-chain disruptions, as detailed in Exhibit 4 in this morning's earnings press release. In addition to the non-cash and cash items just mentioned, gross margin for fiscal 2023 was impacted by various items discussed previously for the quarter. We expect gross margin improvement to be enhanced with the full benefit of certain price increases and with higher sales volumes, as I noted in my previous comments for the quarter. Net loss for fiscal 2023 was $4.2 million or $0.22 per share compared with net income of $7.4 million or $0.38 per diluted share a year ago. Results were impacted by non-cash items totaling $8.2 million or $0.42 per share and cash items totaling $8.5 million or $0.44 per share, primarily transitory costs related to supply chain disruptions as detailed in Exhibit 2. In addition to the above items, results for fiscal 2023 were impacted by various items discussed previously. Results are expected to be enhanced as various initiatives are realized, as I discussed earlier, concerning price increases and higher sales volume. EBITDA for fiscal 2023 was $48.9 million. EBITDA was impacted by $10.9 million of non-cash items, as well as $11.4 million in cash items. EBITDA before the impact of non-cash and cash items mentioned above was $71.2 million for the current period. In addition to the above items, EBITDA for fiscal 2023 was impacted by various items as referenced previously for the quarter. In summary, as I discussed earlier for the quarter, we expect EBITDA improvement, as the full benefit of certain price increases and higher sales volumes are realized, along with cost-reduction initiatives. EBITDA for the prior fiscal year 2022 was $41.6 million. EBITDA was impacted by $22.3 million of non-cash items as well as $18.5 million in cash items. EBITDA before the impact of non-cash and cash items mentioned above was $82.5 million. Now we'll move on to cash flow and key corporate items. Net cash used in operating activities during the fiscal fourth quarter was $326,000 versus $22.7 million cash used in operating activities in the prior year. I should mention the employee retention credit was cash-neutral for the fourth quarter. We expect to generate an increase in operating profit on a year-over-year basis for fiscal 2024 supported by organic growth from customer demand, price increases and operating efficiencies from our now completed footprint expansion and generate positive cash flow for fiscal 2024. In addition to our goal of generating increased operating profit, we are diligently focused on opportunities to neutralize working capital growth, including customer product demand planning, enhanced inventory management and improving vendor payment terms. Our return on invested capital on a pretax basis at March 31, 2023, was 15.7% compared with 19% a year earlier. Our investments will bear fruit, and we are gratified by the ongoing success of our expanded operations in Mexico and the growth momentum of our emerging brake categories along with expectations of increasing financial performance for both new and existing product lines. Our net debt at the end of the quarter was approximately $177.5 million, while total cash and availability on the revolving credit facility was approximately $98.6 million after certain contractual adjustments. Lastly, as Selwyn mentioned, we entered into a note purchase investment and the sale of $32 million in aggregate principal amount of convertible notes due in 2029 at a conversion price of $15 per share. The company is able to redeem the notes after three years. Additional information regarding the terms and condition of the investment is available in the related Form 8-K filed on March 31, 2023 and in the press release. For further explanation on the reconciliation of items that impact results and non-GAAP financial measures, please refer to Exhibits 1 through 5 in this morning's earnings press release. I would now like to open the line for questions.

[Operator Instructions] Our first question comes from Bill Dezellem from Tieton Capital. Please go ahead. Your line is open.

Thank you. A couple of questions to begin with here. Relative to your commentary about the cost reductions that have taken place since the pandemic ended presumably that is -- those are cost reductions that have been implemented since early May. And if that is correct, would you talk in more detail about those and how they came about and if there's any more color surrounding the $5 million annualized benefit, please?

Yes, this is David. So the largest part of that reduction is going to be reduced labor and related costs. So, as part of efficiencies and including expanding gross margins, we reduced payroll and related expenses as well as other costs, as well as I mentioned in my prepared remarks, outside services, travel and et cetera, throughout the organization.

Yes. I think also the second part of the question is, is this $5 million run rate. I mean we have an additional $5 million that has not been reflected yet in the numbers for the future. So while we adjusted out the employee retention credit, we do expect that $5 million reflects -- that $5 million gain reflects the annualized run rate going forward.

That's right.

All right. Thank you. Do you see additional cost reduction opportunities similar to what you have implemented here in May and June?

Well, I think that's what I'm referring to when I say there's an additional $5 million of cost reductions on an annualized basis going forward. So yes, I mean, we do see some of that opportunity.

Thank you. And then let's talk a little bit about the supply chain if you will, please. What product lines are still impacted by the supply chain issues? And we've heard a number of companies reference that the supply chain is largely back to normal. And so, what are you experiencing that is different than those companies that are feeling like it's more normal again?

Yes. So I would say that I echo that, that I think that supply chain is coming back to normal. We've had a -- we still have a few headwinds. I mean we've still got the leftover of distributing Chinese tariff wheel hubs that we had when Malaysia got shut down. I mean, there's delays in shipping. We're seeing an interesting phenomenon where freight is actually no longer in excess demand. In fact, there's overcapacity, and we're seeing delays in shipments coming in because of carriers making unplanned stops to fill up their capacity. So that's affecting our ability to get to the sales levels that we normally would have been able to do. We see that significant reduction in supply chain expenses though. I mean, so we do see an end to this. The semiconductors on the electric vehicle side has been a challenge, power supplies in the electric vehicle and diagnostics side has been a challenge, but appears to be getting better as we -- day by day.

And so, my interpretation with your comments relative to the Chinese tariffs is it, you still have product in inventory that has the Chinese tariffs on it, but you will soon be working your way or finished working your way through that, and will be back to the Malaysian product that will then be lower cost. And at that point, the supply chain cost, which I think were roughly $3 million this quarter will be significantly reduced, if not essentially eliminated.

Correct.

And what quarter are you currently anticipating that you will finish working your way through that inventory?

I think we're substantially through it now in this quarter.

Great. Congratulations on that. And then, would you please talk through the price increases that were implemented in the fiscal fourth quarter and then what you have planned here in fiscal 2024, and maybe dissect that, whether it's by customer or product line or whether it's across the board increases?

Yes. So all increases across the board and very difficult, Bill, to get into too much granular detail on that for a number of different reasons, including proprietary information by customer and competitive reasons. But overall, we expect to have over $20 million of price increases recognized in this fiscal year, plus more that will on an annualized basis, come into effect the following year. I think for now, as David said, I think it more than covers the interest rate increase and the discount rate. So we expect to start seeing that through this year. And clearly, I think the other side that gross margin story there is that, assuming supply demand continues the way, it looks right now we can get our plants back up and running and get back to more regular overhead absorption numbers.

Thank you. And so, maybe that's a great segue into the vendor finance programs and what progress have you made on that front? Or is it really just being addressed through price increases?

Yes. I think all of that is addressed in the price increases between interest and costs and inflationary costs. The price increases get so complicated because we've had so many rounds of them. It's hard to now start breaking down witches for witch anymore. But as I said, we're north of $20 million of incremental price increases that will be recognized in this fiscal year and then additional going forward. I think I answers your question. I'm not sure. I'm sorry. Did I hit everything you asked?

That was and that covers it. So, thank you for the time.

Thank you very much. Appreciate the questions.

Our next question comes from Jeff Bronchick from CSC. Please go ahead. Your line is open.

Good morning, gents. Just a good new shareholders. A quick question. I don't think you really have to spend 25 minutes reading the press release, which was excellent and detailed, and you can go right to questions by $0.02 for next time. But Selwyn, maybe -- you talked about a couple of times bigger changes for the company or I don't know if you used the word historic, but inflection point. What sorts of things are you referring to as far as maybe how the company might be run in the next five to seven years vis-a-vis the past? And then you made a reference to in addition to the gentleman with the convertible at the company, like what other -- what help is he doing on the Board to help changes you're referencing.

Okay. So let's break that up, and let's talk about inflection. I think we pre-COVID embarked on pretty significant initiatives to launch a brake category, [breakfast] (ph) category. And I think now we're pretty much almost a full line brake supplier. In conjunction with that, we expanded our facilities from 300,000 square feet to 1 million square feet. Added thousands of new employees, added the opportunity to reach what we believe is another $300 million of break related revenue. And so, as we go through the next couple of years, it's not a matter of searching for new product lines, it's a matter of maturing the existing product lines, leveraging our new facilities into greater operating efficiencies, generating the significant cash flow that we believe that it will come with us enhancing margins in some of the newer product lines as we get more mature and volume increases through these facilities and really just leveraging that opportunity for capacity. I mean, that should enable us -- now we haven't given a finite term, but to move us to over $1 billion in revenue. I think the other side of it is that, the industry is interesting right now on the supply side. I think we're in a great position to take advantage of opportunities that may exist in the inventory -- in the industry as the supply chain has generally gone through some hardships, and that leverages -- my answer to the second part of your question is, we've had Doug Trussle to the Board. And I think Doug brings with him significant industry knowledge and a group behind him that is able to continuously stay focused on that industry knowledge and keep us abreast from a different perspective, more of a sort of a private equity perspective of market opportunities and pros and cons of different things. So while I think we've had a very strong and continue to have a very strong diverse board, I think this strong private equity and industry-related knowledge enables us to really hunker down on really building value. We've, I think, done a good job in a lot of areas, but we certainly have not done a good job of building value in our share price. And we want to be focused on delivering results that shareholders can relate to and that will drive our value in the marketplace. And so, I think all of that sort of bodes well for our future. I mean we have spreads now to tackle what we need to tackle. And I believe we've got a very exciting opportunity ahead of us.

What -- so with -- what is the proper inventory number that you think you can comfortably run to balance the desires of the customer base with your interest in reducing interest expense and creating value for shareholders. Like what do you think that number is [indiscernible] indeterminate period going forward?

Yes. So I'm not going to talk about a number, but I will say that I'll give you an inventory turn ratio that I think is much more indicative because we're growing and I think if you look back historically -- well, first of all, before I start talking about that, the number of SKUs that we have to deliver is very significant. We offer over 30,000 SKUs and our fill rate expectations are significant, mostly in the mid-90s and up. And the lead times from our customers are pretty short. So having said that and being an all make all model supplier, we think that the historic turn rate of 4 times a year for finished goods inventory is a level that we should be at. And we've been there and that -- when we were there, we had very significant fill rates, industry-leading fill rates for that matter and as a result, had incredible support from our customer base. I think we've dropped that down to three and change, and now we're heading back up to these four turns. And I think for a near-term goal for us that four turns is a realistic one. I mean that doesn't mean it stops there. But I think that's the next level for inventory.

And have you seen -- I mean, what has been -- my last question. Just in general, because in some ways, one could argue the shareholders have supported the desires and needs of your customers for quite some time. What sort of feedback or -- I mean, from either a competitive stance as you raise prices and try to extract inventory back up the customer. What sort of -- what things are different, let's say, today than maybe six or nine months ago when you were sort of in the opposite mode. How has the industry changed or the reaction to your moves different than maybe your thought.

I don't know if they're different to what I thought. I can't really -- my thoughts evolve quickly on this. I think, look, anytime you're looking for price increases with large retailers, and I mean, there's always pushback, I think the opportunity to get fairer prices is better today than it was a year ago or two years ago. I think that in part depends on really the rationality of our competitors, which I think will have similar challenges with financing the inventory and the payables of our main customers. A lot of it will depend on alternatives. I mean they're driven, obviously, to drive the working -- negative working capital. And a lot of it will depend on their ability to get fair pricing in the marketplace for their products. And rational competitors, including Chinese, including the Chinese, which have always been a wild caught. But look, I think the industry realizes that the amount of financing being supplied by the supply chain is significant, and that at some point, the consumer has to pay for that. I mean, our customers are not going to pay for it, but they should pass it on. And so hopefully, we get back to a rational equilibrium, which I think we're getting close to.

Thank you very much.

We have no further questions in queue. I'd like to turn the call back over to Selwyn Joffe for closing remarks.

Great. And thanks for the great questions. And in summary, notwithstanding the headwinds I discussed this morning, we're excited about our future as I just had mentioned. We've built a solid foundation both to -- both top and bottom line growth from our existing product lines, supported by strong demand for replacement parts and clearly an aging car park in the sort of recessionary environment we're in. We are committed to enhancing cash flow and profitability as our strategic initiatives evolve. In closing, one more time. We have a great -- we have great team members, and I appreciate their dedication to the company and our customers. We appreciate all your continued support, and thank you again for joining us for the call, and we look forward to speaking with you when we host our fiscal 2024 first quarter call in August and at upcoming investor conferences. Thank you.