Orion Energy Systems Inc

NASDAQ:OESX

Earnings Call Transcript 2024-Q2

[Operator]

[Technical Difficulty] Fiscal 2024 Second Quarter Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Bill Jones, Investor Relations. Please go ahead.

[Bill Jones, executive]

Thank you, and good morning, everyone. Thank you for joining today's call. Mike Jenkins, Orion's CEO, will begin with an overview of Orion's business strategy and outlook, followed by Per Brodin, Orion's CFO, who will discuss second quarter and year-to-date results, the company's financial position and its financial guidance. We will then open the call to investor questions.

Today's conference call is being recorded, and a replay will be posted on the Investor Relations section of Orion's website, orionlighting.com. Remarks that follow and answers to questions include statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally include words such as anticipate, believe, expect, project or similar words, also, any statements that describe future objectives and goals, plans or outlook are also forward-looking. Such forward-looking statements are subject to various risks that could cause actual results to differ materially than currently expected. These risks include, among others, matters that the company has described in its press release issued this morning as well in its filings with the Securities and Exchange Commission. Except as described therein, the company disclaims any obligation to update forward-looking statements, which are made as of today's date. Reconciliations of certain non-GAAP financial metrics to GAAP measures are also provided in today's press release. I will now hand the call to Mike Jenkins.

[Michael Jenkins, executive]

Thanks, Bill. Good morning, everyone, and thank you for joining our call today. As anticipated in our last call, Orion's business progressed in the second quarter with both sequential and year-over-year revenue growth of 17% and reflecting the revenue momentum we anticipated building as we progress through fiscal '24.

September was our strongest month of the year and within our top 3 months since the start of fiscal '23 for both our Lighting business and our overall total. Per will discuss our Q2 performance and financial guidance a bit later in the call.

Now I'd like to start by providing an overview of our strategy and performance across the business segments. Within our Lighting business, the $9.6 million Department of Defense European LED retrofit project began in earnest in Q2 with revenues of approximately $1.2 million, and we expect to complete the bulk of this project in the fiscal year. This project experienced some unexpected start-up issues working its way through the EU regulatory bodies, but is now in full swing, and we expect to catch up in the second semester of fiscal '24. We anticipate several other larger retrofit projects to contribute to the balance of this fiscal year, including a project for a global technology customer as well as continued growth from a long-term global warehouse logistics sector customer.

We also expect meaningful revenue to come from an outdoor lighting project for Orion's largest customer. We feel good about our growing pipeline of lighting business. We also anticipate solid full year growth in LED lighting revenue from our ESCO and electrical contractor distribution channels. In fact, the technology customer retrofit project I just mentioned, was sourced through a relatively new ESCO partner. By their nature, ESCOs are focused on delivering energy savings and environmental benefits to their customers. LED lighting retrofits are right in the sweet spot of their value proposition as they provide significant quantifiable long-term energy savings and generally a full return on investment within 2 to 5 years.

Our ESCO business was up 43% in quarter 2 and 38% for the first 6 months, which includes our expanded relationship with our large warehousing logistics customer, but excludes the DOD project, which was sourced through an international ESCO.

We are continuing to build our base of productive agent and distribution channel relationships, focusing on partners who recognize the value of our high product quality leadership and energy-efficient performance and our commitment to the highest levels of customer service. To extend our penetration in our distribution channels, we recently launched a new line of more value-oriented products that incorporate the industry-leading design, quality and energy efficiency for which Orion is known within the trade. These new products include TritonPro LED retrofit high bay and other interior fixtures as well as an expanded line of Harris branded exterior LED lighting products. They were developed in response to requests for more competitively priced LED contractor-grade fixtures that incorporate Orion's strong design and product quality.

Feedback has been very positive, and we've recorded over $1 million in revenue from these new products in quarter 2, their first quarter of availability. Our quoting activity has been strong, and we look to accelerate sales of these products in the second half of fiscal '24. Importantly, these products also provide a solid margin contribution.

Also on the product front, we recently debuted several new products that are compliant with the Build America Buy America or BAA Act, and we expect that they will be well received by those customers who prefer U.S. manufactured products. BABA is a certification, which requires 55% or greater of material content and products to come from U.S. sources. The BABA standard was created as part of the federal IRA bill and that stipulates state, municipal and schools to use BABA compliant products when possible in order to receive federal funds.

Orion is uniquely positioned to provide this product due to our U.S.-based manufacturing facility and capabilities. As you may know, over the past 24 months, we have diversified our business into 2 new complementary areas, which include electrical maintenance services as well as providing turnkey electric vehicle or EV charging station solutions. These new areas are well aligned with our core mission of helping customers achieve their business and sustainability goals while providing Orion with exciting cross-selling opportunities.

Many of our customers had previously asked us about our ability to help them in these areas, which was a key factor in our decision-making to enter these spaces. We entered the commercial industrial EV charging solutions market in our third quarter of last year with the acquisition of Voltrek. We had a large bus project in quarter 4 of last year and then saw revenue dip sequentially in Q1 this year as we managed through Voltrek integration and the build-out of its sales and project management teams to support expanding revenues and a broader geographic reach.

Our EV segment rebounded strongly in quarter 2, delivering $3.4 million of revenue versus no contribution in the year prior. We anticipate continued growth at Voltrek in the coming periods as the business capitalizes on its long-term track record of success, growing market interest in EVs throughout the U.S. and our ability to cross-sell these solutions with our strong base of customers and progress. [indiscernible] on the new vehicle fleet will be EVs by 2030 and 80% by 2040. Businesses everywhere are now considering their electrification and EV charging strategy to support their employees, customers and their own fleet needs. Orion is well positioned to help our customers and partners through this exciting and rapidly evolving journey.

Our Maintenance Services business also delivered both sequential and year-over-year revenue growth. We acquired Sealite Lighting in quarter 1 of last year, and with the acquisition came a number of multiyear contracts, some of which are now no longer profitable given a range of cost increases, including higher subcontractor costs that have occurred over the past several years. To address these inflationary pressures, we have updated our pricing for new and existing customers to better reflect our current cost structure.

We've been working to renegotiate contracts as they came up for renewal, and we are making progress. We have renegotiated 3 out of 4 of our most significant legacy contracts and believe this effort will return maintenance to solid profitability as these new price levels continue to impact our results in the second half of fiscal '24. We recognize our pricing effort could result in the loss of some business and could therefore provide a modest near term revenue headwind for the segment. Nonetheless, there are plenty of growth opportunities in this space, and we believe that we can restore profitability while delivering high standards of service and great value to our customers.

We recently finalized a 3-year preventative maintenance agreement with our historically largest customer. Orion will provide LED lighting and light electrical preventative maintenance services to our customers approximately 2,000 retail stores nationwide. The agreement formalizes and builds upon services we initiated in February and scaled through July.

Overall, I am pleased with the progress we are making, though we still have work to do in terms of integrating our lines of business and pursuing expanded revenue opportunities. We are excited about our expanded array of solutions to offer customers and partners and are encouraged by their interest. We have already secured product sales and new projects through our cross-selling initiatives between all 3 of our segments. This remains an area of focus for the business that we believe we can deliver growth synergies as we move forward.

In summary, we believe we are building a strong and diverse business for long-term success. We expect to see our total revenue accelerate across the business in the second half of fiscal '24, and as such, have reiterated our $100 million revenue guidance for fiscal '24. Now I'll pass the call to Per Brodin to discuss our financials and fiscal year outlook in more detail.

[Per Brodin, executive]

Thanks, Mike. Orion's Q2 '24 revenue improved 17% to $20.6 million from $17.6 million in Q2 '23, primarily reflecting [indiscernible] activity in the current quarter and maintenance revenue growth, which was partially offset by lower lighting revenues. Revenue also grew 17% on a sequential basis compared to the first quarter of fiscal '24. As discussed previously, we have several larger lighting projects, including the European DoD project and a large outdoor project, which we expect to ramp meaningfully in the second half of fiscal '24. We recognized $1.2 million of revenue on the Department of Defense project in Q2 '24, which leaves approximately $8 million of remaining revenue to complete this project. Our first half revenues rose 8% to $38.2 million from $35.5 million in the first half of fiscal '23.

Our gross profit grew to $4.6 million from $4.4 million in Q2 '23 [indiscernible] percentage. Notably, our gross profit margin improved on a sequential basis, reflecting the improved terms on 3 significant maintenance contracts and better absorption of fixed costs across all businesses.

As Mike discussed, our gross profit percentage is being impacted by inflationary challenges over the past several quarters on legacy contracts in our maintenance business. During the quarter, we renegoniated [indiscernible] 3 of 4 of our most significant legacy contracts, and we are working to update other legacy contracts as well.

Our maintenance business also began benefiting from a new 3-year agreement to provide preventative maintenance services for our largest customer. In Q2, our efforts led to an improvement in service margin from negative 11.2% in Q1, although it's still slightly negative, we expect further margin benefits in the back half of this fiscal year, driven by the rollout of our new pricing. Gross margin on products improved approximately 250 basis points to 30.1% in Q2 '24 from 27.6% a year ago. This increase is attributable to new product sales and overall higher volumes benefiting fixed cost absorption.

Reflecting the steps taken in our maintenance business and our expectation of growing sales volume in the business overall, we expect our blended gross margin to improve further in the second half of this fiscal year. Our Q2 operating expenses increased to $8.7 million from $7.4 million in Q2 '23, mainly due to the addition of Voltrek operations included $1.1 million earn-out accrual and [ $200,000 ] of intangible amortization related to the acquisition. Operating costs declined sequentially from $9.6 million in Q1 '24 due to lower compensation-related costs and a large credit write-off that occurred in Q1 '24.

We recorded a Q2 '24 net loss of $4.4 million or $0.14 per share, including the Voltrek earn-out versus a net loss of $2.3 million or $0.07 per share in Q3. Cash used in operations a $4 million in Q2 '24, reflecting operating results in a $1.5 million Voltrek [indiscernible] payment, partially offset by positive net working capital effects. We achieved positive free cash flow in September and expect positive free cash flow over the balance of this fiscal year. At September 30, we had current assets of $45.3 million, which included inventory of $20.2 million, accounts receivable of $16.1 million and cash of $4 million. Working capital was $16.2 million at the close of Q2 '24 total current liquidity, including cash plus $8.9 million of revolver availability, was [indiscernible]. We expect our liquidity position to improve in the second half of the fiscal year based on the expected ramp in revenues.

In addition, we are looking at additional ways to enhance our liquidity, primarily through a potential mortgage on our corporate headquarters. As mentioned, in Q2, we started several larger projects and finalized a nationwide maintenance agreement. In addition, our backlog sits at $21.1 million in September 30. All of these things and more contribute to our full year revenue outlook. Reflecting these and other factors, we have reiterated our expectations for revenue growth of 30% or more in fiscal '24, complying total revenue of approximately $100 million. The achievement of this goal implies a meaningful revenue improvement in the second half of the year. Based on this growth expectation, we also expect a solid improvement of our second half bottom line performance. With that, I'll ask the operator to begin the Q&A session.

[Operator]

[Operator Instructions] Our first question comes from the line of Eric Stine from Craig-Hallum.

[Eric Stine, analyst]

So when thinking about the second half, you called out the DoD project, which has already started in the lighting project. So I guess I want to clarify if that started or when you expect that to start. But just curious, are there any other large projects that you would point to? And things that give you the confidence in that ramp, clearly, you're reiterating it, so you've got that confidence and just trying to gauge that.

[Michael Jenkins, executive]

Sure. There are a number of things. So obviously, the DoD project, as we spoke about, we talked about an exterior project for our largest customer, which is all basically happening in the second half of this year moving forward. And that's a mid-7 figures kind of project and rollout. We do expect that our #2 customer, which we've disclosed, is a global logistics company and warehouse company. We expect that business to continue to scale as we move forward, which on a year-on-year basis will give us nice growth. And there are other -- the global technology project which we spoke about, we do expect to recognize revenue on that moving into the second half of the year.

So there are a number of nice projects, which we expect activation shortly, some of which are already in flight and should scale.

[Eric Stine, analyst]

Got it. So the DoD 1 is already in -- that's already underway in the others. I mean fair to say you're waiting on, but there -- you've gotten good visibility into those starting?

[Michael Jenkins, executive]

That's right [indiscernible], we would have -- we were anticipating a bit more revenue in Q2. I referenced in my comments that we did experience some start-up issues getting through EU regulatory bodies. So that -- we view that miss basically to be caught up in the second half of the year.

[Per Brodin, executive]

And just for the math, Eric, that we did say we recognized $1.2 million of that in the second quarter. The total project is in the $9.6 million neighborhood. There was a few hundred thousand recognized in Q4 of fiscal '23. So there's about $8 million left that we expect the majority of that, virtually all of that to be recognized in the second half.

[Eric Stine, analyst]

Okay. Got it. And then on the maintenance contracts, and I know you said you've renegotiated 3 of 4, but you've got some others out there. I'm curious if you can kind of quantify how many others might be out there that you would look to renegotiate and then curious if you have the mechanisms that you've got in place now whether there's some variability to the contracts based on market conditions? Or are they just short enough in nature that it would just be kind of an ongoing renegotiation whenever they come up?

[Michael Jenkins, executive]

Sure. Yes. As indicated on the last call, we were able to kind of off-cycle address pricing on a couple of these contracts. We have fully got renegotiated 3 out of our top 4, we have 1 major contract, which is still out there that we need to work on. .

The way it works is basically we've renegotiated pricing and then all these accounts have their normal kind of RFP cycle. And so we will be working through that. And some of those are up as early as the beginning of our fiscal year -- early in our fiscal year.

[Per Brodin, executive]

And maybe, Eric, a little more context 4 large contracts really are the bulk of the piece of maintenance that is at State Light. So there are other miscellaneous contracts, but those 4 would represent the bulk of the revenue in that part of the segment.

[Eric Stine, analyst]

Okay. And so the last major 1 is that that's where you've kind of -- I mean, maybe to simplify, you presented them with the new pricing and now they go through a process and hopefully, in the RFP process you would win.

[Michael Jenkins, executive]

Yes. I mean certainly, we're going through with all of them, and that's the 1 that's remaining. So yes, I mean, in principle, those are having conversations right now. So...

[Eric Stine, analyst]

Yes. Understood. Okay. Maybe last 1 for me. Just on the EV opportunity. I think I've asked this before, but just curious, obviously, your customers, many of them requested these capabilities from you. Do you expect this to be a decision that's by company over their footprint? Or is it more kind of a site-by-site decision?

[Michael Jenkins, executive]

I think it can work both ways. I think it really depends on how they run their businesses and how centralized or decentralized they are as a company. I think some will go basically across the country. And we're having some conversations with folks like that and others, it will really depend on whether or not they have a fleet location out of that facility, et cetera. So I think it's going to work both ways.

[Operator]

And our next question comes from the line of Amit Dayal from H.C. Wainright.

[Amit Dayal, analyst]

Just on the EV topic, is pipeline more sort of corporate and enterprise? Or is there some government-related opportunities as well?

[Michael Jenkins, executive]

Yes, there certainly are both private and public opportunities. We currently do business with municipal governments. That's part of kind of the legacy of Voltrek as well as with private companies. And so we see growth in both areas. We were recently at a federal government trade show. And there was a tremendous amount of conversation about the electrification strategy of the federal government for their own use and facilities. So I think downstream, we're going to see rapid adoption in both areas.

[Amit Dayal, analyst]

Okay. And then on the Voltrek earnout, could you remind us what remains to be paid out, et cetera?

[Per Brodin, executive]

Yes. We made the payment I referenced in September of $1.5 million toward the fiscal '23 earn-out, and then there was another $1.5 million paid in October towards that $3 million earn-out. There will then be the opportunity for a fiscal '24 earn-out, that amount would be paid in the second quarter of calendar -- second calendar fiscal '25 to the extent it's earned, that is a $3.5 million opportunity.

And then the following year, there's a $4 million opportunity plus a kicker for a cumulative -- on cumulative EBITDA earnings over the first 3 years of ownership, which could be a max potential of an incremental $3.15 million that would be paid at the same time as the fiscal '25 earn-out opportunity.

[Amit Dayal, analyst]

Okay. I appreciate it. And then maybe just on the service and maintenance segment. I know you're going through a lot of sort of renegotiations, et cetera. But are you also actively trying to add new clients at this point? Or are you sort of trying to clear out your existing setup with the legacy contracts before you move to adding new customers?

[Michael Jenkins, executive]

Sure. Well, we actually did add quite a bit of new business with our #1 customer, as we talked about on the preventative side for 2,000 locations. So that was a big add to the team in terms of new volume. So right now, we're certainly digesting that. We're building out and shoring up our resources around that. And then at the same time, focused on profitability for the legacy business. We do see growth opportunities out there, but we certainly want to approach this a bit step-by-step and address the profitability of the legacy business as our first order of priority right now.

[Amit Dayal, analyst]

Once, if the service margin is normalized for you guys, how much of a lift should we expect to the overall blended margin ?

[Per Brodin, executive]

Well, I think if you look at the blend, think about the blend of the margin, we expect to ultimately get back to what we've experienced as a more traditional service margin for that business. So that's not going to happen over the next quarter or so as we continue to renegotiate these contracts, but that's where we are certainly targeting that this business is headed.

[Amit Dayal, analyst]

Okay. And I'll follow up on that 1 later. But that's all I have for now.

[Operator]

Our next question is from the line of Alex Rygiel from B. Riley Securities.

[indiscernible]

[Unknown Analyst]

This is [indiscernible] for Alex Rygiel. Can you hear me?

[Michael Jenkins, executive]

Yes, sure. [indiscernible]

[Unknown Analyst]

Okay. That's so confusing because I logged in as myself. But okay, sorry about that. A couple of quick questions. Just given the interest rate environment, are you seeing any kind of project delays or just slowdown in bidding opportunities for some of the larger projects?

[Michael Jenkins, executive]

At this point in time, we have not seen any [indiscernible] delays that we could attribute to that not at all.

[Unknown Analyst]

Okay. Good to hear. Also in terms of your Voltrek business, it sounds like it's progressing fairly well here. Are you still on track to hit kind of a $10 million to $12 million in revenue for the full year. Can you talk a little bit about the pipeline? And maybe how big this business can get for you in the next couple of years?

[Michael Jenkins, executive]

Sure. Yes. We did say earlier that we thought that between the Voltrek business and the maintenance business that it would be around 1/3 of the business overall. We still think we're on track for that, plus or minus. The [indiscernible] that you referenced for Voltrek given our current run rate coming out of this quarter, we definitely feel like that's achievable.

And in terms of the longer view of Voltrek and the EV space more broadly, as I referenced in my comments, the macro environment remains very strong towards EVs. It won't be perfectly linear, but directionally strong. And we do see the opportunity to grow a business of $20 million to $50 million in the next couple of years.

[Unknown Analyst]

Excellent. And then it's nice to see that you reiterated your revenue guidance for the full year. Just any thoughts on EBITDA for the second half of this year. Can you exit on the positive EBITDA? And how do we get there?

[Per Brodin, executive]

Well, in my comment, I certainly mentioned that we expect our improved and increasing sales to [indiscernible] line results. So we do expect, as I make it to be free cash flow positive, which I think implicit in that [indiscernible] EBITDA positive as we leave the year. But say that our year-to-date performance would [indiscernible] probably not finish the year with a net positive result.

[Unknown Analyst]

Okay. And then just 1 final question. I believe you had a large DoD contract for your Pure Motion product, and it was awaiting funding. Any update on that? Or any just update on some of your newer kind of I guess, more value-add products?

[Michael Jenkins, executive]

Pure Motion, the project that you referenced is still live. It is still -- but it's basically on a hold status right now with the DoD. So we do expect that, that project will at some point move forward, but we don't have timing at this point in time. .

[Operator]

[Operator Instructions] Our next question comes from the line of Andrew Shapiro from Lawndale Capital Management. .

[Andrew Shapiro, analyst]

Just trying to get drill down into this maintenance contract stuff and the losses. When you define a contract as a legacy contract, what do you mean? And when was State Light acquired?

[Per Brodin, executive]

By Legacy contract, we mean it was something that was an existing customer of State Light when they were acquired. We acquired State Light effective January 1, 2023.

[Andrew Shapiro, analyst]

So fairly recent and all that. Now -- [indiscernible] okay? And these contracts I think you said in the last call when I asked questions, we're around 3 years or so in duration. So I guess that may be medium term to long term for this kind of business. What are you doing differently in your new maintenance contract bidding to share I guess, we'll call it margin risk or to mitigate this risk? Is it just that you're pricing it higher and hoping that you won't have another wave of inflation are you doing with a shorter duration on the pricing? How are you approaching it differently?

[Michael Jenkins, executive]

Yes. So each of the customers have their own specifics around how you can tender and go through an RFP process. So we are confined by some of those protocols from the customer [indiscernible] build in a reasonable level of escalation into our contracts, given the inflationary environment that we've experienced over the last couple of years, where that's not possible, then we have to take those inflationary challenges that are anticipated over the future into account when we go through the RFP process.

[Andrew Shapiro, analyst]

Okay. In last call, I also had asked about, and I think you said at the time you were negotiating improvements and it looks like you got 3 out of the 4. And you said on the contracts that wouldn't amend the furthest the runoff would take you into the spring. So of those kind of contracts where they won't amend to allow for a price increase, et cetera, and that are going to expire later in the spring. Do you expect those customers to then renew at your higher and better terms? Or that's going to be kind of annualized revenue that you were generating that will not be added back in? And can you kind of give a range to help quantify or get our arms around, I guess, the amount of revenue from that subsegment that we wouldn't mind necessarily going away, but we shouldn't count on continuing?

[Michael Jenkins, executive]

Yes. That is directionally correct. The number of these contracts are going to naturally expire in spring, actually in quarter 1 of our next fiscal year, some of them are at the end of April and in that time frame. So the renegotiations that we've done are basically for the current contract period, then we'll go through the cycle for the next round of RFPs. At this point in time, those are active conversations, which are starting, and I really have no guidance to provide on any of that as those are active conversations with customers.

[Andrew Shapiro, analyst]

Okay. And like how large in terms of revenue is the whole State Light segment here that I guess includes a combination of profitable and unprofitable .

[Per Brodin, executive]

When we acquired State Light we disclosed that they were a $9 million to $10 million business.

[Andrew Shapiro, analyst]

Okay. And the renegotiated ones, the ones that you opened up your inter period was this just to get to breakeven on those contracts or the pricing would provide for profitability at your normal margin or somewhere in between?

[Michael Jenkins, executive]

Yes. Moving forward, it is our mandate to have these contracts be profitable. So not just breakeven .

[Andrew Shapiro, analyst]

No, I understand that, Bill, in terms of the new ones. But right now, you've gotten some contracts amended inter-period before they expire and you got some improvement. But the improvement you got, did you get just to break even, did you get to your desired margin? Or did you get to somewhere in between?

[Michael Jenkins, executive]

Yes. All of these contracts, the pricing changes that we're making will allow for the company to be profitable on these contracts. They are rolling out, so we don't recognize the change in all cases immediately because there's often a backlog and those types of things. So the full impact of these contract changes and pricing changes occur over time. But the goal and what we've implemented is for all these accounts to drive profitability.

[Andrew Shapiro, analyst]

Okay. And 2 other follow-ups not on State Light. Voltrek, when does that acquisition anniversary? And remind me the earn-out targets are not just revenue based, but they're EBITDA based, right?

[Michael Jenkins, executive]

So the anniversary of Voltrek just occurred this past month in October. So we've just now anniversaried it. And the earn-out is based on EBITDA, not on revenue.

[Andrew Shapiro, analyst]

Okay. And the DoD contract profitability, as you build that thing out, the accounting on that, that's not like some kind of completion of contract type of accounting? Or is it .

[Per Brodin, executive]

I mean, to some degree, that's a decent way to think about it, it's based on installation of the fixtures, which is a decent analog for percentage of completion. So as we impacting multiple buildings on those bases. So it's as we install fixtures, we recognize the revenue.

[Andrew Shapiro, analyst]

Okay. Lastly, you made a comment about potentially seeking a mortgage on the headquarters building. Of course, this is not the optimal time to go lock in some kind of long-term rate. When does your current bank line? What's its maturity date .

[Per Brodin, executive]

December of 25 .

[Andrew Shapiro, analyst]

Okay. And your pricing is what reference rate plus what? What's the margin on that? .

[Per Brodin, executive]

[indiscernible] .

[Andrew Shapiro, analyst]

Okay. And are we in the toughest band right now in light of the fact we're not generating positive EBITDA?

[Per Brodin, executive]

That's correct.

[Operator]

And with that, this concludes our Q&A session. I would now like to turn the conference back to Mr. Jenkins for closing remarks.

[Michael Jenkins, executive]

Thank you, and thanks to everyone for joining and listening to our call today. I look forward to updating investors and stakeholders in coming months and quarters as we execute on our growth objectives for fiscal '24. We continue to take opportunities to meet with investors in person or virtually. We are presenting at the [indiscernible] & Company Virtual Conference on November 15, and I encourage you to listen to our presentation and/or to register for one-on-one call.

For more information on our planned events or if you would like to schedule a call with management, you can contact our Investor Relations team whose information is in today's press release. Thank you very much. Have a good day.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.