Good day, and thank you for standing by. Welcome to the Third Quarter 2024 UniFirst Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there'll be a question-and-answer session. [Operator Instructions] Please be advised today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Steven Sintros, President and Chief Executive Officer. Please go ahead..

Thank you and good morning. I'm Steven Sintros, UniFirst President and Chief Executive Officer. Joining me today is Shane O'Connor, Executive Vice President and Chief Financial Officer. I'd like to welcome you to UniFirst Corporation's conference call to review our third quarter results for fiscal year 2024.

This call will be on a listen-only mode until we complete our prepared remarks, but first, a brief disclaimer. This conference call may contain forward-looking statements that reflect the company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties.

The words anticipate, optimistic, believe, estimate, expect, intend, and similar expressions that indicate future events and trends identify forward-looking statements. Actual future results may differ materially from those anticipated, depending on a variety of risk factors.

For more information, please refer to the discussion of these risk factors in our most recent Form 10-K and 10-Q filings with the Securities and Exchange Commission. At UniFirst, we are the people who always deliver. We serve the people who do the hard work as they are the workforce that keeps our communities up and running.

They are our existing and prospective customers as well as our own UniFirst team partners. Our mission is to enable those employees and their organizations by providing the right products and services to do their job successfully and safely.

Whether that means providing uniforms, workwear, facility services, first aid and safety, cleanroom or other products and services, our goal is to partner with our customers to ensure that we structure the right program, products, and services for their businesses and their team, all while providing an enhanced customer service experience.

I want to sincerely thank all of our team partners and our customers as we strive towards our vision of being universally recognized as the best service provider in the industry, all while living our mission.

We are pleased to report the results from our third quarter of 2024, which showed solid growth in the top line and strong improvement in our bottom line. Overall revenues in the third quarter were up 4.6% compared to the third quarter of 2023, and our Core Laundry Operations' organic growth totaled 4.7%.

Operating income and EBITDA increased significantly in the quarter compared to a year ago, benefiting from lower cost expended during the quarter related to key initiatives, as well as favorable comparisons to the third quarter of last year related to elevated healthcare and legal costs a year ago.

Excluding these benefits, we still have experienced strong operating income and EBITDA growth during the quarter as well as year-to-date. We are also very pleased with the improvement in cash flows from operating activities compared to 2023, which were up 35.2%.

As a reminder, we've been incurring costs over the last couple of years related to our technology transformation.

As expected, the expense we are incurring related to these key initiatives is declining due to activities surrounding the deployment of our CRM largely winding down, and the amounts we are spending on our ERP project now being largely capitalized as we enter the implementation phases of the project.

During the quarter, our sales organization continued to perform well, selling prospects on the value that UniFirst can bring to their businesses. Overall, we are pleased with the solid organic growth for the quarter, delivering strong results despite a more challenging pricing environment.

Although we would classify our wearer levels as mostly stable, we have seen a bit of a decline in our net wearer metrics during the quarter. Our updated full year guidance, which Shane will discuss shortly, implies Core Laundry Operations' organic growth in our fourth quarter to be approximately 3.5% at the midpoint of the range.

During the last few quarters, as the market has emerged from a period of significantly elevated inflation levels, we have discussed a more challenging pricing environment and its impact on our sequential organic growth rates.

Although it is too early to be making too many comments about next year, we did want to communicate that based on these trends, we currently expect organic growth in fiscal '25 to be more modest than our fourth quarter.

At the same time, we continue to focus on investments in the business to enhance our ability to attract new customers, sell additional products to existing customers, as well as enhance our customers' experience and drive improved retention.

Opportunities to win national account customers remain healthy and we have had very good success adding a number of large programs this year, including a top three account in our first quarter. Although the sale of these accounts can be difficult to predict, we are well-positioned to take advantage of opportunities in the market.

In addition to our ongoing efforts to drive growth, we continue to focus on our operating excellence and cost reductions to enhance our margin profile. We are pleased with some of the progress in recent trends in key cost areas such as merchandise as well as other input costs.

Our team continues to be more proficient utilizing and optimizing the capabilities of our new CRM, including leveraging some of Clean's proprietary technology across all UniFirst, with all efforts focused on deploying standard processes across our local operations and driving productivity.

In addition, areas such as strategic pricing and account profitability, as well as strategic manufacturing and sourcing represent significant margin enhancement opportunities.

Although some of these benefits going forward will be more significantly enabled due to the implementation of our ERP, we continue to focus on these areas and others we feel can move the needle in the near- to mid-term. We are also excited about the opening of new facilities this year in New York, Michigan, and Ontario, Canada.

These projects are good examples of investments designed to not only enhance our service execution and customer experience, but also improve our capacity for growth, operational efficiency, and profitability. We continue to believe strongly in the bright future of our First Aid & Safety division.

We continue to make investments in the sales and service infrastructure of the van operations to expand our footprint and ensure we can reach existing UniFirst customers as well as new prospects in the market that have a strong need for these products and services.

Customers expect solutions to their most pressing issues and First Aid & Safety are important contributors to these integrated solutions. These investments have delivered the strong growth that we once again achieved in the quarter.

As we progress increasing route density in addition to penetrating customers with the full breadth of services that we provide will be critical steps in building the profitability of this segment.

With that, I would like to turn the call over to Shane, who'll provide more details on our third quarter as well as the updated outlook for the remainder of the year..

Thanks, Steven. In our third quarter of 2024, consolidated revenues were $603.3 million, up 4.6% from $576.7 million a year ago, and consolidated operating income increased $48.5 million from $33.4 million, or 45.1%. Net income for the quarter increased to $38.1 million, or $2.03 per diluted share from $24.3 million, or $1.29 per diluted share.

Consolidated EBITDA increased to $82.5 million from $64 million in the prior year, or 29%. Our financial results in the third quarters of fiscal 2024 and 2023 included approximately $3.9 million and $8.4 million, respectively, of cost directly attributable to our key initiatives.

In addition, we incurred costs related to the acquisition of Clean Uniform during the third quarter of fiscal 2023 of approximately $0.7 million.

The effect of these items on the third quarters of fiscal 2024 and 2023 combined to decrease both operating income and EBITDA by $3.9 million and $9.1 million, respectively; net income by $2.9 million and $6.8 million, respectively; and EPS by $0.16 and $0.37, respectively.

Our effective tax rate in the quarter was 22.9% compared to 27.2% in the prior year. As a reminder, our tax rate can move from period to period based on discrete events, including adjustments to our tax reserves and excess tax benefits and deficiencies associated with employee share-based payments.

Our Core Laundry Operations revenues for the quarter were $528.5 million, up 5.3% from the third quarter of 2023. Core Laundry organic growth, which adjusts for the estimated effect of acquisitions as well as fluctuations in the Canadian dollar, was 4.7%.

This solid organic growth rate was primarily the result of solid new account sales, including a large national account we installed in our first fiscal quarter of 2024 and the impact of pricing efforts over the last year.

Core Laundry operating margin increased to 7% for the quarter, or $36.9 million from 4.2% in prior year, or $21 million, and the segment's EBITDA margin increased to 13.1% from 9.9%.

The costs we incurred related to our key initiatives and the Clean acquisition were recorded to the Core Laundry Operations segment and combined to decrease both the Core Laundry operating and EBITDA margins for the third quarter of fiscal 2024 and 2023 by 0.7% and 1.8%, respectively.

Segment's operating and EBITDA margin comparisons benefited from elevated expense in the prior year related to high healthcare claims and costs incurred related to a legal matter. Excluding these items, our segment's operating results also reflected favorable trends in merchandise, payroll, and other operating input costs.

Energy costs in both the third quarter of 2024 and 2023 were 4.3% of revenues. Revenues from our Specialty Garments segment, which delivers specialized nuclear decontamination in clean room products and services, decreased to $47.6 million from $49.4 million in prior year, or 3.7%.

At the same time, the segment's operating margin decreased to 23.9% from 25.2%. This performance was due to a decline in revenues and profitability in the segment's North American nuclear business.

As we mentioned in the past, the segment's results can vary significantly from period to period due to seasonality as well as the timing and profitability of nuclear reactor outages and projects. Our First Aid segment's revenues increased to $27.3 million from $25.5 million in prior year, or 6.9% due to strong growth in our van operations.

Segment had a nominal operating profit of $0.1 million during the quarter as the segment's results continued to reflect the investments we are making in our first aid van business.

At the end of our third fiscal quarter, we continued to reflect a solid balance sheet and financial position with no long-term debt and cash, cash equivalents in short-term investments totaling $125.4 million.

In the first nine months of fiscal 2024, we saw significant improvement in our cash flow from operating activities, which increased 35.2% to $193 million, primarily due to improved profitability and lower working capital needs of the business.

We also continue to invest in our future with capital expenditures of $121.9 million and repurchased $16 million worth of common stock. I'd like to take this opportunity to provide an update on our outlook. We continue to expect our revenues for fiscal 2024 to be between $2.415 billion and $2.425 billion.

However, we now expect that our diluted earnings per share will be between $7.17 and $7.49. Our outlook for fiscal 2024 includes an extra week of operations in our fourth fiscal quarter compared to 2023 due to the timing of our fiscal calendar. This outlook also assumes Core Laundry Operations' organic growth at the midpoint of the range will be 4.5%.

Core Laundry Operations' operating and EBITDA margin at the midpoint of the range will be 6.6% and 12.7%, respectively, an estimate of $12 million of cost directly attributable to our key initiatives that will be expensed in fiscal 2024 and will decrease both the Core Laundry Operations' operating and EBITDA margins by 0.6%, an effective tax rate of 24.5%, and no future share buybacks or unexpected, significantly adverse economic developments.

This concludes our prepared remarks and we would now be happy to answer any questions that you might have..

[Operator Instructions] Our first question comes from Manav Patnaik with Barclays. Your line is open..

Hi, good morning. This is Ronan Kennedy on for Manav. Thank you for taking my questions.

Can I just get some further context to the things you talked about the challenging pricing environment, so the dynamics at play, whether that's inflation, moderation, new wins coming on at lower pricing, and then also some further context around the lower wearer metrics and kind of the drivers of some potential weakness there?.

Sure. Let me hit those one at a time. I think when we talk about the more challenging pricing environment, it's primarily inflation -- emerging from this inflationary period, right? I think about it from how we're managing our vendors, and after multiple years of higher costs, we're putting more programs out to bid with our vendors.

And I think you're just seeing some of that, in general, in the marketplace, and that's leading to somewhat of a more challenging pricing environment, which probably isn't surprising. From a new account perspective, I wouldn't say there's really been a significant change.

We've talked about over the years, new account acquisition is often a competitive situation, but I wouldn't say there's any significant change in that pricing environment over the last few quarters. And as far as the adds versus reductions, I don't want to overestimate that.

But we had been talking about, if you go back over the last couple of years, a year ago, we were getting some more pull from adds versus reductions. In the last couple of quarters, we had been saying it's been mostly stable. And although, again, as I said in my prepared remarks, I would still say it's mostly stable.

We have seen a little bit of weakening there during the quarter. It didn't have a significant impact but wanted to mention it just as we think it may be a precursor of a little bit weaker hiring environment..

Thank you for that. Yeah, that leads into my next question. That's what you've talked about on the prior or the most recent calls as kind of a cautious tone out there with respect to hiring, but not seeing broad calls for reductions.

Can you just kind of characterize or comment on the demand environment and how that informed your outlook for 4Q? Obviously, that was within the full-year guide, but your comments on the expectation for more modest growth in '25?.

Sure.

I don't think we're overbuilding in any impact from softer ads reductions or sort of overall demand over the next quarter or even into '25, although I'd say that context, as we look toward next year, we don't expect to be getting a significant pull from higher wearer levels, but we're also not building in at this point, nor do we typically a more significant pullback in wearer levels.

And we're really not seeing that yet. We're just seeing somewhat of a downtick. The only thing I will say there is a little bit less hiring in the market does have some advantages.

We're seeing less turnover in our own employees and we're seeing less turnover in our customers' employees, which also does lead to a little bit of a better ability to manage merchandise costs with your customer when you're not dealing with sort of high turnover of employees within our customer base..

That's very helpful. Thank you. And then if I may just sneak in a third, please.

Are there any end markets where you are seeing particular weakness or strength for that matter?.

No, it's really around the edges. I wouldn't say, in the past, we talked about oil or manufacturing. I wouldn't say there is any one area that, that is sort of outweighed in what we're seeing..

Thank you. Appreciate it..

Thank you..

One moment for our next question. Our next question comes from Andrew Wittmann with Baird. Your line is open..

Great. Thanks. Good morning, guys..

Good morning..

I just had a couple of questions here just to understand the quarter a little bit better then I'll go a little bit broader picture. But I guess maybe, could you just help remind us on the year-over-year margin comparison, you mentioned that last year's healthcare costs and legal costs were elevated, so that was kind of a known easy margin comp.

But you went on to say that, you actually had leverage in these other areas.

So just to level set a little bit, can you help us quantify or understand what you think the unusual amount of healthcare or legal costs were in the prior year so we can understand maybe what the underlying benefit from merchandise, labor, those things were? Energy would be another thing to comment on in that as well..

Yeah, I'll take that, Andy. When you take a look at our comparison in our core year-over-year, the comparison is about 170 basis points. So last year, in our third quarter, as I had mentioned, as you just mentioned, healthcare claims ran high, and as a result, we had corresponding high expenses related to that as well as that reserve.

Those two items, when we compare with this year, account for about 100 basis points of that about a point. The other items that I had mentioned, which were the favorable trends in our merchandise, our payrolls, and other operating input costs, account for that 70 basis points of difference.

And really, those three factors are contributing equally to the favorable comp..

Okay. That's super helpful. I guess you guys always know I ask that question, so thanks for being ready for it..

Actually, you would have asked about energy..

Energy, yeah..

I hadn't spoken to that. Energy was 4.3% of revenues in both quarters. So that was a consistent comparison..

That's helpful. I guess just, I mean, given that 70 basis points for these other factors, it's still pretty good leverage. I guess, I look at the fourth quarter margin guidance. You guys beat by a lot here. I got to think that you came in a little bit better than your plan.

Obviously, you did because you raised your guidance, but you didn't really pass through any of the margin benefits that you saw in the fiscal third quarter to a change in your fiscal fourth quarter margin outlook.

So I just was wondering if you could give the thought process behind that, if you're being conservative, or if there's an offset somewhere else in the P&L that would suggest that this margin benefit that you saw in the quarter is going to come through in 4Q..

Yeah. When we take a look at our outperformance in the third quarter, some of that was informed by the performance in our Specialty Garments as well as our First Aid business. As we've mentioned, Specialty Garments is usually seasonal and has down fourth quarter. So sequentially, obviously, that performance would be a headwind.

So we weren't expecting that the benefit that we saw in the third quarter to carry over. Core Laundry did contribute some of that. But again, when we talk about things like our merchandise or our payrolls, some of that was actually anticipated those merchandise trends that we've been talking about.

We've sort of been receiving as we've gone throughout the year. And that favorable trend continued into the third quarter. A lot of that was anticipated to carry forward into the fourth. Our other operating input costs, they trended favorable in the quarter.

Some of that, we were pleased to see and some of that we believe relates to some of the sourcing. And as Steven had mentioned, we are putting more things out to bid, but they do tend to be variable from quarter to quarter as well.

So some of the favorability that we saw in the third quarter, we were cautious as it relates to the forecast for the fourth, just to make sure that they weren't being influenced by timing items..

Okay. Appreciate that. And then I guess maybe, Steve, one for you here. I guess I just wanted to dig into some of your comments on the national accounts that you had in your prepared remarks. You mentioned that you installed in your fiscal first quarter of '24 large national account, I think you guys kind of talked about this before.

I think by my calculation, it's around 50 basis points of revenue just for that large account. You said top three, I think is what you said in the script. But it sounded like you had other comments on national accounts. Maybe you talked about the pipeline.

So I just wanted you to clarify, were your comments on the national account business referring retroactively to things that you've already won? Or is it comments about your enthusiasm or your positivity on the national accounts, looking at what you've got out in terms of bids or quotes for these national accounts, maybe the number of those or stuff that you've won that hasn't yet been installed? And maybe if you wanted to talk even more broadly, what you're seeing going on in the national accounts.

Are more of them changing hands today? And what's the competitive dynamic around that? Thank you..

Yes, I think the comments were a little bit of all of the above, right? So we definitely have had good success during this year and again wanted to highlight that account from earlier in the year because that accounts being installed early in the year, really right at the beginning of our last or this fiscal year will provide a difficult comp on growth as we head into next year.

But the commentary was also around what we are seeing is good opportunities materializing in the market, I guess, I would say the pipeline. It wasn't really specifically about accounts that we've signed that have yet to install, but it's just more about the activity.

And yeah, we probably are seeing, on balance, maybe a few more programs out there and available with some opportunities, probably falling into the category of folks, again, coming through an inflationary time and looking for opportunities..

Okay. I'll leave it there. Thanks, guys, and have a good day..

Thanks, Andy..

Our next question comes from Kartik Mehta with Northcoast Research. Your line is open..

Good morning. Steve, I just wanted to go back to your comments on pricing and just understand a little bit. I know during the inflationary phase, you were getting a little bit more than normal pricing today.

Is the competition increase that you're not getting price increases, or are you getting price increases in their model?.

We certainly continue to get the price, right? But I think when you think about price increases and you think about the environment, we're consistently going through a cycle where we're renewing accounts and going through annual escalators.

And so in general, as you go through those cycles, yeah, it's a balance between getting more price from your customers appropriately based on the profile of the customer, also trying to secure renewals in the face of potentially competition.

And again, I think just customers out there looking at all costs, I mean, we've all gone through years of sort of mounting costs in many, many areas, and I think there's just more activity out there right now.

And, continuing to develop and maintain relationships with our customers and show the value of the service is really a big focus to make sure we can secure renewals at appropriate pricing going forward, but it's really just more activity out there in the market..

And when you look at kind of new large accounts or new enterprise accounts, are you seeing more opportunity there as well? And could that result in greater price competition? I know new accounts have always been something competitive. I'm wondering if that environment changes at all, as companies kind of try to look more curtailing costs..

Yeah, no, I think we are in a unique cycle right now.

I think, coming off of inflation at the levels that we were experienced over the last couple of years, I mean, if you think about it, we went through COVID, which was a cycle where, in general, customers were very happy if their service providers were able to show up and service them, which I think we did a great job of through that cycle.

And then you hit a period where costs really escalated very significantly.

And now, as things are settling down in both areas, I think, yes, I think you are entering a period of elevated competition and focus by customers on cost, and that does provide sales opportunities, and we're probably seeing some of that as well, but it does provide some other challenges in those other areas..

And just one last one on your FY '25 comment.

When you say modest growth, would you anticipate kind of growth similar to what you're going to see in the fourth quarter, or would you define it a little bit differently?.

I think in the prepared remarks I said that we expect growth next year to be more modest than our fourth quarter. And again, we do want to highlight that it's early to be giving that outlook. And we just, in the nature of transparency, want to make sure we're communicating that trend.

And obviously, there's a lot that can happen between now and then and over the course of fiscal '25, which is part of the reason I mentioned opportunities for national accounts that could materialize and other things that could impact that trajectory.

But just based on the tough annualization of a higher pricing environment as well as the account we installed early last year, those comps are tougher heading into the year..

Thank you so much. I really appreciate it..

Thank you..

Our next question comes from Luke McFadden with William Blair. Your line is open..

Hi, good morning. This is Luke McFadden for Tim Mulrooney with William Blair. Thanks for taking our questions today. I wanted to ask, with the one-year anniversary of the Clean acquisition, we're curious if the business has met expectations relative to when you first closed the deal.

Were there any surprises that are positive or negative relating to the business operations or the integration process?.

Yeah, good question. No, we've been very happy. And I would say virtually everything has met our expectations. We talked a year ago, how we're going to be patient on some of the more complex aspects of the integration due to the technology work that we're doing more broadly as a company.

So some of those facilities continue to run separately from some of our facilities, and there's still integration activities to come.

But our expectations in the first year were to be able to kind of pick off that a little bit more low-hanging fruit type synergies of purchasing power and supply chain and some other areas, as well as make sure that we're maintaining the employees and the customers that all are very important assets from that acquisition.

And we've been very successful doing that. And I know it's not the largest piece of our overall business, but it has performed ahead of where we thought it would coming into the year..

Very, very helpful. And then just kind of sticking with kind of inorganic growth here.

How are you seeing the shape of the M&A environment from where you sit today? And how would you characterize your appetite for acquisitions maybe as we move through the end of the year here and into 2025?.

Yeah, certainly the appetite is still strong. I think as we've talked about over the years, I would say that the activity right now is a little spotty. We see some interest, but I wouldn't say there's an overwhelming amount of activity out there right now.

But, the Clean acquisition materialized somewhat out of nowhere very quickly, several months before we did that deal. So we continue to develop and keep the relationships in the marketplace and certainly have an appetite. I talk about our cash flows improving and the healthy balance sheet.

We certainly are interested for good assets as they come available..

Great. Thanks so much..

Thank you..

Our next question comes from Andrew Steinerman with JPMorgan. Your line is open..

Hi, it's Andrew. Two questions. One on merchandise amortization, one on customer service. Merchandise amortization, could you just quantify that a little bit for the third quarter? I know thinking back to the second quarter was like flat, maybe slightly up.

It just sounds like we're really at an inflection point in merchandise amortization being a tailwind, would you characterize it that way? My second question is about customer service. I know it's long been your goal and your vision to become the best service provider. And in your prepared remarks, you talked about enhanced customer service experience.

How do you measure customer service experience like, is it NPS? Is it a client retention score? Like, where are you currently on that service experience journey?.

Yeah. So Andrew, as it relates to the merchandise, you're right. Earlier in the year, when we were talking about the impact of merchandise on our operating income, it was relatively flat. As we've gone through the year, the benefit that we've seen there has continued to expand. It's still relatively nominal.

The impact on the quarter was a favorable benefit of about 20 to 30 basis points..

Okay..

Yeah. As I had mentioned, aside from that, healthcare claims expense comparison and the legal, the other items, the benefit from those other items were equally shared, accounting for that 70 basis point comparison..

Yeah. I'll take the customer service question, Andrew. In terms of how we measure ourselves, retention has always been a key factor. And over the last year, we have introduced for the first time a more formal NPS program with our customers. And I would say, it's growing in terms of responses and so on.

So we're not at the point yet where we'd be communicating results. But we've been pleased with the early results that we've been getting. And I think that lines up with our feeling that overall in the market, we have a pretty good service reputation.

But that being said, and as we've talked about before, with over 250 locations out there, the goal is really consistency location-by-location, state-to-state, coast-to-coast, to really get to the point like where as we go out to bid for services that, that reputation is differentiated and that our retention can match.

And a lot of investments we're making in whether it's facilities, technology, and people are all designed around, really enhancing that outcome. So again, I think it's always been a focus of the company, but as we invest in technology and some additional ways to measure true customer satisfaction, it's becoming an even bigger focus..

Thank you very much..

Thank you..

Our next question comes from Josh Chan with UBS. Your line is open..

Hi. Good morning, Steve and Shane. Thanks for taking my questions.

On retention levels, are you successful at maintaining your typical retention rates now, even though you might have to concede some on price? Or is retention starting to dip below your normal levels?.

Yeah, I would say we've said it in the last couple of quarters, it has ticked up, and I think a lot of it is around the pricing environment and the more competitive nature.

I don't want to overestimate that, but I think, yeah, I would have to say it's up a bit as well, lost accounts, I should say, compared to maybe our -- not as much our historical, but I would say we went through a cycle where we really saw improved results in that area.

But again, I think the environment we're in right now is, on balance, a bit more competitive based on some of the factors I mentioned earlier..

All right. I appreciate that color.

And then I guess, looking forward, how should we think about margin expansion in the face of slower growth? Is there any way that you can kind of ballpark or quantify that for us going forward?.

Yeah, I think, at this point, looking into next year, we're really not in a position to make additional comments about margins or the results going forward. I think, as I mentioned in our prepared remarks, and as Shane mentioned, we are pleased with some of the trends of costs.

Someone mentioned before sort of hitting the inflection point on merchandise, which is somewhat cyclical, but also we're doing a number of things from a sourcing perspective and an operational execution perspective that we continually focus on to drive cost improvements, particularly, if growth is going to be slower..

Okay. Yeah. Thank you. And then maybe just one more question. Your comment that the fiscal '25 growth could be more modest than the fourth quarter.

Is that inclusive of lapping the extra week this year, or is that [Technical Difficulty]?.

Yeah. Everything we're talking about there is sort of apples to apples, sort of excluding the impact of the extra week..

Okay. Perfect. Thank you for the color and thanks for your time..

Thank you..

And I'm not showing any further questions at this time. I'd like to turn the call back over to Steve for any closing remarks..

Great. I'd just like to thank everyone for joining us today to review our results. We look forward to speaking with everyone again in October when we expect to report our fourth quarter as well as provide our outlook for fiscal '25. Thank you and have a great day..

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day..