Ladies and gentlemen, thank you for standing by. My name is Bhavesh, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Motorcar Parts of America Fiscal 2024 Second Quarter Conference Call and Webcast. At this time, all lines have been placed on mute to prevent any background noise.

After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I will now hand the call over to Gary Maier, VP of Communications and Investor Relations with Motorcar Parts of America. You may begin your conference..

Thank you. Thanks everyone for joining us today. Before I turn the call over to Selwyn Joffe, the Chairman, President and Chief Executive Officer, and David Lee, the company's Chief Financial Officer. Let me 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 beliefs 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 Motorcar Parts of America. Actual results may differ from those projected in these forward-looking statements.

These forward-looking statements involve significant risks and uncertainties some of which are beyond the control of the company and are subject to change based upon various factors. In particular, expectations about 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. I would now like to begin the call and turn it over to Selwyn..

Thank you, Gary. I appreciate everyone joining us today. We were encouraged by record sales and record gross profit for the quarter and six months and solid cash flow from operating activities. The company generated approximately $15 million of cash from operating activities during the quarter.

For the six-month period the company used approximately $5 million in operating activities.

However, I should mention had we not intentionally decided to lower collection of receivables by $35 million as of September 30 we would have generated approximately $30 million of positive cash from operating activities for the six month period, predominantly coming in the second quarter.

Using the customer supply chain vendor finance programs, we have the option to draw down on customer payments at any time which David will explain in more detail. Industry trends remain favorable and we're seeing improving operational efficiencies with increasing sales volume.

We're continuing our focus on leveraging our strengths including our solid customer relationships, highly regarded product quality industry-leading steel coverage and quality not to mention our value added merchandising and marketing support.

In summary, our operating efficiency improvements along with increased overhead absorption from higher sales and production and price increases all bode well for margin expansion. Our quarterly results reflect the benefit of some price increases and we anticipate additional benefits from further price increases for the balance of the year.

We're excited with our positive cash flow generation for the quarter and remain focused on neutralizing working capital as much as possible for the balance of the year.

Our initiatives; include increasing gross profit and operating income, managing our inventory as a percentage of sales and implementing programs to extend days outstanding on accounts payable.

As a reminder, 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. With respect to cash flow, our expectation is to continue to generate cash. David will expand upon this in a few moments.

Regarding year end guidance, we expect operating income before the impact of the non-cash and cash items and before depreciation and amortization to be between $90 million and $95 million.

To provide more details before the non-cash foreign exchange impact of lease liabilities and forward contracts, the non-cash impact of revaluation of cores on customer shelves and supply chain disruptions, operating income of income for fiscal 2024 is expected to be between $60 million and $65 million.

We estimate other non-cash items will be approximately $16 million including core and finished goods premium amortization and share-based compensation and cash expenses to be approximately $2 million for special EV related R&D expenses that impact operating income. Depreciation and amortization are estimated to be approximately $12 million.

In short for the fiscal 2024 second half, we expect to continue to enhance our gross margins across the board and enhance our 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 business as well as testing solutions.

Now let me expand a bit further, and provide some updates to other drivers of our business to support our ability to achieve our longer-term financial targets.

We continue to experience meaningful traction, with customers and consumers with the launch of outbreak related product lines with operating efficiency improvements continuing, as volume increases and with fixed cost absorption.

We've continued to expand HubSpot Sales in Mexico, with multiple product lines as our customers experienced increased demand for aftermarket products. We're receiving increasing orders and new customer interest for our test solutions and diagnostic equipment.

In particular, our benchtop testers for alternators and starters from major automotive retailers and distributors to the professional installer.

Major global automotive aerospace and research institutions for electric vehicle mobility, product development and design, continue to purchase our equipment and utilize, our Detroit tech center testing services. Lastly, the AAPEX show last week was very positive and the outlook for new business remains very strong.

We continue to be well-positioned to address both the internal combustion engine market, and the emerging electric vehicle market, with product functionality and applications across both markets.

Industry data continues to support our view that strong demand for our 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 the overall copper.

I'll 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-Q that will be filed later today. Let me first, provide key highlights for the fiscal second quarter. Net sales for the three months increased 14% to a record $196.6 million.

Gross margin increased by 5.5 percentage points. Gross profit increased 35.2% to a record $41.1 million, and the company generated approximately $15 million cash from operating activities. I should mention that gross profit for the quarter was impacted by non-cash items, as well as cash items.

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 $4.7 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. Second quarter gross margin was 20.9% compared with 15.4% a year earlier.

Gross margin was impacted by 2.4% from the previously mentioned non-cash items, as well as 1.6% from cash items as detailed in exhibit three of this morning's earnings press release.

In summary, in addition to the non-cash and cash items explained previously, gross margin for the fiscal 2024 second quarter reflects the partial benefit of price increases, that went into effect during the current quarter and operating efficiencies as well as changes in product mix.

Operating expenses were $27.2 million compared with $24.7 million in the prior year period. This included a non-cash expense of $4.8 million, for the foreign exchange impact of lease liabilities and forward contracts, compared with a prior year non-cash expense of $1.1 million.

The remaining $1.1 million of operating expense decreases, included cost reduction initiatives. Net loss for the fiscal 2024 second quarter improved to $2 million or $0.10 per share from a net loss of $6.5 million or $0.34 per share, a year ago.

As detailed in exhibit one of this morning's earnings press release, non-cash items impacted results for the quarter by $8.7 million or $0.44 per share and cash items by a $2.7 million impact or $0.14 per share.

In addition to the above non-cash and cash items, results for the quarter were impacted by the previously mentioned items that impacted gross margins. As Selwyn mentioned, results are expected to benefit moving forward as the full impact of certain price increases realized combined with higher sales volumes.

Results for the fiscal second quarter were impacted by $6.1 million or $0.23 per share of higher interest expenses, primarily due to higher market interest rates related to the supply chain vendor finance programs. Interest expense was $15.4 million, compared with $9.3 million for last year.

We've received meaningful annualized price increases, which will contribute to a net income enhancement. Income tax benefit was $46,000 compared with an income tax benefit of $914,000 the same period a year ago.

I should mention that the effective tax rate for the fiscal second quarter was affected in part, due to the inability to recognize the benefit of losses by specific foreign jurisdictions. However, we expect that these losses will be utilized against future profits which will benefit future tax rate.

In short, there are various factors impacting the tax effect. EBITDA for the second quarter was $16.3 million. EBITDA was impacted by $11.6 million of non-cash item and impacted by $3.5 million in cash items. EBITDA before the impact of non-cash and cash items, mentioned above, was $31.4 million for the second quarter.

EBITDA for the prior year second quarter was $4.9 million. EBITDA was impacted by $6.7 million of non-cash items as well as $5.1 million in cash items. EBITDA before the impact of non-cash and cash items, mentioned above, was $16.7 million for the prior year second quarter. Now let me discuss the six months results.

Net sales for the fiscal 2024 six month period increased 5.9% to a record $356.3 million from $336.5 million. Gross profit for the fiscal 2024 six month period increased to a record $67.7 million from $56.8 million a year earlier. Gross margin for the fiscal 2024 six month period was 19% compared with 16.9% a year earlier.

Gross margin for the fiscal 2024 six month period was impacted by $8.1 million or 2.3% of non-cash items and $5.2 million or 1.5% of cash items. Net loss for the fiscal 2024 six month period improved to $3.4 million or $0.17 per share from a net loss of $6.7 million or $0.35 per share a year ago.

Results were impacted by non-cash items totaling $9.1 million or $0.47 per share and cash items totaling $4.4 million or $0.23 per share as detailed in Exhibit 2. Results expected to benefit from various initiatives that will be realized that I discussed earlier, concerning price increases and higher sales volume.

EBITDA for the fiscal 2024 six month period was $29.6 million. EBITDA was impacted by $12.2 million of non-cash items as well as $5.9 million in cash items. EBITDA before the impact of non-cash and cash items mentioned above was $47.7 million for the current period. EBITDA for the prior year fiscal 2023 six month period was $15.4 million.

EBITDA was impacted by $12.2 million of non-cash items as well as $8.9 million cash items. EBITDA before the impact of non-cash and cash items, mentioned above, was $36.5 million for the prior year six month period. Now we will move on to cash flow and key corporate items.

The company generated approximately $15 million of cash from operating activities during the quarter with expectations as strong operating cash flow will continue for the balance of the fiscal year.

During this period, the company intentionally deferred collecting approximately $15 million of receivables offered through its customer supply chain vendor finance programs, which resulted in lowering cash flow by that amount and interest expense savings of approximately $1 million.

This enabled the company to defer interest expenses until price increases for interest rates are fully recognized. Additionally, the company used this liquidity to pay down the $11.25 million balance of its term loan.

Interest rates on the term loan were approximately 2-percentage points higher than rates offered by the company's customer supply chain vendor finance program.

In short, we will continue throughout the year to monitor interest expense levels and opportunities to reduce interest based on the timing of monetizing customer payments, we can elect when to be paid through the customer's supply chain vendor finance programs offered and we paid a proportional discount rate.

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 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 profits, we're diligently focused on opportunities to neutralize working capital growth, including customer product demand planning, enhanced inventory management and improving vendor payment terms. Our investments are and will further bear fruit.

We're 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 from both new and existing product lines.

Our net debt at the end of the quarter, excluding our convertible note, was approximately $155 million while total cash and availability was approximately $112 million.

For further explanation on the reconciliation of items that impacted 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..

Thank you. [Operator Instructions] Our first question comes from line of Matt Koranda from ROTH MKM. Please go ahead with your question..

Hey guys, good morning.

Just wanted to start off with the traditional question around the breakdown in revenue between rotating electrical wheel hub, the brake products and other?.

Hi Matt, so for the second quarter, rotating electrical was 67%; wheel hubs 9%; brake-related products was 20%; and others was 4%..

Okay. Got it. And then in terms of the growth that you're getting out of brake, can you maybe just talk about how we should think about the new business that's rolling on there? I know you're expecting a bit of a ramp up. There's growth in the quarter obviously.

There was last quarter, but it feels like still there's a bit more on the come for the back half. Maybe just talk about, how we should think about growth expectations in the brake products side of the business..

Yeah, I think things are going well in general across the board for our product lines. The brake business is continuing to grow lots of opportunities many significant opportunities that we're preparing for. So I think just in general Matt, we feel real good about the current state of our business and demand for our products including brakes..

Okay. And then on wheel hub, I noticed I guess it's down for the second quarter in a row here. That has been sort of in a bit of decline in the last year. Maybe just speak to sort of the dynamics that are happening there.

I think there was some seasonality in the last few quarters, but maybe just could you talk about the dynamics at play with the wheel hub business..

Yeah I think that business is slightly slower right now, not sure exactly why. Just you know unfortunately, there's no real specific data that says it should be slow or fast. Ultimately, it should grow. But overall again, I go back to the overall just the environment out there is positive for product lines.

And hopefully we'll see resumption on the wheel hub growth. Can't give you too much insight other than we expect it to grow just been unseasonably a little bit slower..

Okay, got it. And then just implied in the growth outlook that you have for the year, it's high single digit percentage growth for the back half if I can use the midpoint of the guidance you've given. You guys have put in place like a decent amount of price and taken several rounds of pricing.

To my knowledge, I assume also you'd probably get some volume lift. Maybe just could you speak to how much lift you think you're going to get from price in the back half of the year versus volume? And then just maybe any commentary selling on inventory positions at your customers.

Where do they sit in terms of being maybe in line with where you need them to be versus why you are a little heavy?.

Okay. A lot of pieces in that question. I mean let's just talk about pricing. And we talked about pricing making up for the increased interest rates. I mean we're very comfortable that that's going to happen. We will see incremental pricing in the next quarters that have already been committed to.

And we remain committed to passing on inflationary costs, whether it’d be in interest or other expenses through. And so whatever that ends up being it will end up being. But we do have good visibility on our already approved pricing increases. The other side of it is volume for all of our products is up. And we were off to a good start this quarter.

And we expect volume to continue to be driven. We've talked about the fundamentals of the aftermarket and then the tailwinds and an aging car fleet. Average age continues to go up miles driven as it continues to be positive. And so these cars are going to fail and need non-discretionary parts that we're talking about.

So, I don't see any product lines that we have in decline mode. I mean I do see obviously wheel hubs, but there's no fundamental that says that wheel hubs will not recover. So, all of our product lines look good. I think as we ramp up and experience these greater margins I mean these quarters are becoming more the norm for us.

And we have better overhead absorption, our efficiency get better. And as we take on new business which again, we expect to take on over the next I mean hopefully for the foreseeable future, we should see margin accretion, we should see volume growth and we should see positive cash flow. Inventory, we're building a little bit of inventory right now.

I mean just because the outlook for our sales is very positive. And so to keep up with that, we're building inventory. We do have new business that we're ramping up for as well. So, there will be some inventory increase. I do expect receivables to come down in time as we go forward. So the actual cash flow will be seen.

We'll catch up the collections of receivables. We have the option to take it whenever we want to. They're sitting there waiting for us. So liquidity is as strong as it's ever been and we expect to see that in the positive cash flow numbers..

Okay..

I don't know, if I answered all your questions. There was a lot in your questions..

Yeah I'm good at asking a thousand questions embedded – okay. So as pricing action complete at this point I guess we put there so many rounds.

Are there more to come? Can you help us understand the timing of anything incremental that you're doing?.

Well, I think for sure you'll see more price increases in this current quarter that are still rolling in and even some more in the fourth quarter. For now that's correct. But I mean again depending on inflationary costs we'll monitor it and we'll have to see. I mean, hopefully, interest rates stabilize it looks like.

But if we see increases there we intend to increase prices to make up for it..

Okay. Got it. Just a couple more quick ones. So the outlook, if I look at the implied margin in the back half of your year looks like you're assuming that it gets a little worse than what you put up in the second quarter.

But I'm just -- with all the pricing that you put through the volume lift you're getting, maybe some mix benefits and cost absorption why should it be the case that margins erode relative to the second quarter?.

Look, we're being very conservative. It's just that simple. I mean, there should be no reason. We're sitting here. We're experiencing extreme tailwinds to our business positive things to our business. At the same time, we've been very cautious about changing the outlook, but things look positive for us right now.

Then there's no reason that it should get worse..

Okay. And then just lastly, can you level set everybody on cash flow expectations for the rest of the year? I know you deferred or you said, you deferred like $15 million.

And AR collection so that's a good guy for the third quarter maybe just speak to can we expect positive cash flow from operations in the third quarter and the fourth quarter of this year? And then maybe just if you want to thread in or talk about any of the inventory or AR dynamics that we should think about for the rest of the year as it pertains to working capital..

Yeah. So working capital neutrality is probably becoming a buzzword for NPA internally. So first of all, let me answer your question is yes we expect positive cash flow for the back six months. We generated $30 million, essentially generated $30 million in the first six months.

We don't know why we couldn't do that in the back six months, that we will have to wait and see. The other side of it is, I mean, increased gross margins increased EBITDA increased work on days outstanding on payables and neutralizing working capital.

Yes, there will be some growth in working capital for the new business that comes on no question about that. But that will be quickly reversed as that new business kicks in and the sales kick in from that. But again, we're very focused on cash flow. We're very focused on stable growth. And we expect things to continue on this trend line..

Okay. Appreciate all the answers. So I'll leave it there..

Thank you..

[Operator Instructions] Our next question comes from the line of Brian Nagel from Oppenheimer. Please go ahead with your question..

Hey, good afternoon. This is William Dossett on for Brian. Thank you for taking our questions. So you've discussed that demand remained strong and that's consistent with the update that you gave back in August.

Can you just discuss probably the drivers of the strength? And I wanted to ask about for guidance any range of outcomes that you've potentially embedded and perhaps the key areas of upside and downside?.

Yeah. So again, what's driving our business is number one we continue to have great market share. Number two, we have price increases. And the most important piece is that the fundamentals of the aftermarket continue to be really strong.

And our customers' inventory level someone asked I didn't answer that properly in the last question, I'll address it now. Customers need inventory. And this is non-discretionary parts when the consumer needs to replace that part. The customer has it. We don't believe that there's excess inventory in the channel at all.

We think there's still opportunity for growth in inventory in the channel quite frankly. And so that's another tailwind. And the average age of the car park continues to go up. Miles driven seems to be at least stable to positive.

And so I just -- I don't see -- we have as an industry every now and again you get a blip in a product demand and people try and describe what that is but that's somewhat of an unknown. But overall these cars need these replacements and they're going to have it. And so I think there's overall strength everywhere for us.

I think the upsides for us new business opportunities that we have and that we were ramping up for. So there's upside there. I think there's upside in the margin opportunity. Clearly, from price increases, but also from overall production efficiencies. Challenges are you never know again whether it can cause short-term blips.

There's always a risk that you can lose business, but we hope we're not on that side of it and we don't expect that. But overall, we've used the outlook for our business very positively right now..

Thank you for that.

And to follow-up just on your point, have you seen any short-term blips that you suspect that there has been at all any deferral amid higher inflation? And then to that point, is there any point at which you think price elasticity comes into play just with the cost increases for purchases?.

Yeah. So I mean, we've had blips and then we've had some large customers have had some challenges and that they're coming out of that and they're still coming out of that. So there's some more upside in that. So that has caused some blips for us.

I mean our fundamentals for our business have been really strong, but we had some unusual customer blip now last fiscal year. So we see the back of that. We are optimistic that all of our customers continue to be strong. I think we see a little slower ramp up and now some parts of our brake business, but very strong.

But that's because of some slowdown and changeovers but we expect that to recover. So again, I think overall, there's some deferral in demand in our product lines. I think that's coming. But again, the day-to-day fundamentals the registered fundamentals that we see for our product lines, but really positive.

In terms of price elasticity, we have non-discretionary products. So I mean to the extent that these products cost more and that's validated I mean we expect that that demand should not be affected by price increases. I think that overall the consumer choices to either repair the vehicle or scrap it.

And if you look at the relative value of the vehicle versus the repair the repair makes all the sense in the world unless they're absolutely unable to make a repair then that have to resort to public transportation.

But we see the non-discretionary nature basically overcoming any pricing obstacles or short-term pricing obstacles and that those prices can be pushed through and should stick.

And the disproportionate value of the repairs still very much positive for the consumer and then alternative starters et cetera, et cetera the cost of them compared to the value of the vehicles and the alternatives are miniscule. So we see plenty of upside..

That's very helpful. So another question that I wanted to touch on was from our team regarding factoring in interest rates. On that topic, you've all called out price increases for the third and fourth quarters to help compensate for the higher interest rates.

Can you discuss MPA's ability to pass on these higher costs to customers? And as you've done with the election not to draw down on the factoring last quarter, what tools can you use to mitigate and manage these higher interest expense?.

Look, there's not a lot of tools that we see out there to manage the high interest. It is what it is. I mean at the end of the day, we feel that we deserve a fair price and that includes charging for these interest rates. And so these are certainly the accelerated interest rates.

And so we have been passing through, it's never easy to get price increases, but we absolutely must have them. I mean I think every supplier must have them, because I mean this is a true cost that's a cash cost. And so we need to make up for it.

So I think we'll continue to pass them through and from where we are right now and hopefully they at least stay stable and eventually start moving downwards. But we intend to pass it through. And unfortunately, this is part of the -- all costs get eventually passed onto the consumer.

The consumer makes a judgment on whether you will continue to spend on that particular product. In our case, it's non-discretionary and the value quotient is extremely positive even with the price increase..

And to quickly follow up on that this forthcoming price increases in Q3 and Q4, did they compensate you for the current level of interest rate? And one reason I ask is to be able to understand, what's the likelihood of future cost increases in terms of marketplace?.

We're not there yet. I mean, that compensates for a lot of the increase, but we think we should be getting more. I mean again, I'd just say that as an industry participant, I'm not advocating that we're going to get or not going to get. I'm going to have to wait and see.

But again, we believe that these, the factoring rates extend the term for the customer and the customer has to pay for those extended terms, and the working capital costs. And I don't think I'm unique in that feeling. I think that the entire supply chain feels that way. So while it's a difficult discussion, I think it's one that's pretty clear.

And so I think that everybody need strong suppliers out there and the consumer needs to have products. I mean, if a goal goes down for the consumer, the consumer needs these products to keep their vehicles on the road. If not for companies like ourselves, the car park would be substantially damaged in terms of being able to be repaired.

So the entire aftermarket or supply chain needs to be able to -- needs to be viable. And that includes the cost of interest..

Thank you for that.

And the last question if I may from marketing was just on the framing the opportunity, the longer term opportunity from some of these focuses that are beyond the more mature hard part business, which is the I guess great opportunity in Mexico emerging product lines such as brake related product categories and power management in EV, you mind discussing that?.

Yeah. I think look let me start with the JBT-1, which is this rotating electrical alternator and we've started to test them. And we have orders now backorders on that I mean firm orders for over 3,000 units there. That product line has proven to be extremely successful and we're starting to see more and more benefit from that coming.

So that's a very significant piece of business and we expect double triple or even quadruple that amount of demand to unfold in the next 12 months. So that part of the business, we think is going to be extremely strong and we're very excited about it. I think we have an industry leading product.

And the customers that have embraced it are seeing huge successes from it and are committed to it, so very exciting there. I think the electric vehicle diagnostics what's a little more choppy in that CapEx budgets keep getting pushed back or there's a lot of, sort of, a little bit of negative discussion on the EV growth right now.

So again that bodes well for combustion engine perceptions quite frankly. I think the perceptions whatever they are, we've got 30 years there's no at least in the combustion engine opportunity of tailwinds quite frankly. I think it will keep getting better. But anyhow just to talk EV talk for a little bit but the EV market is sporadic.

The demand for our testers, our emulators, simulators continues to be good. It's not as easy to predict quarterly volume on that. Some of these projects are longer. What is exciting though is that Detroit test center, which is a software-as-a-solution test center is seeing a lot of -- there's a lot of demand for that.

In fact that we've got reservations now that books up that facility for 120 days out. So that's pretty exciting. Margins are very good in that business. And electric power management is a fast evolving big demand category. And whether it be for the automotive aftermarket, but we're seeing a lot of it in drone technology and in aerospace.

So I think for longer term down the road that's going to be quite exciting to us and especially selling computer time for our solutions will be a big part of that. We've recently put in a new CEO into that role on electric controller, a heavy technology person.

And he's worked for us in the past but he has come through the ranks and he's taken over there. And we're excited about the opportunities there as well..

Thanks so much. Best of luck..

Thank you very much. Appreciate your interest..

There appear to be no further questions at this time. Gary Maier, I turn the call back over to you..

Okay. I just want to say in summary we're excited about a fiscal second half that's coming up. It's supported by strong demand for replacement parts and aging car park, opportunities from multiple replacements has caused down the road longer.

We've built a solid platform for growth and a non-discretionary aftermarket products serve a critical need for customers and consumers. And most importantly in closing, I want to recognize the contributions from our all of our management team and all of our team members who are focused every day on providing the highest level of service.

We're all committed to being the industry leader for parts and solutions that move our world today and in the future. And we thank everybody for 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 third-quarter call in February and in our investor conferences.

So thank you very much..

Thank you. This concludes today's conference call. We thank you for your participation. You may now disconnect..