Beazer Homes USA Inc
NYSE:BZH
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Beazer Homes USA Inc
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Good afternoon, and welcome to the Beazer Homes Earnings Conference Call for the second quarter ended March 31, 2024. Today's call is being recorded, and a replay will be available on the company's website later today. In addition, PowerPoint slides intended to accompany this call are available in the Investor Relations section of the company's website at www.beazer.com.At this point, I will turn the call over to David Goldberg, Senior Vice President and Chief Financial Officer.
Thank you. Good afternoon, and welcome to the Beazer Homes conference call discussing our results for the second quarter of fiscal 2024.Before we begin, you should be aware that during this call, we will be making forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors described in our SEC filings, which may cause actual results to differ materially from our projections. Any forward-looking statement speaks only as of the date the statement is made. We do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is simply not possible to predict all such factors.Joining me today is Allan Merrill, our Chairman and Chief Executive Officer. On our call today, Allan will discuss highlights from our second quarter, the current environment for new home sales, some details on our operational strategy this spring and an update on the progress we're making towards our multiyear goals. I'll then provide details on our second quarter results, our forward expectations, a review of our balance sheet and land spending and then conclude with a review of our book value per share and the framework we employ in considering capital allocation. We will conclude with a wrap-up by Allan. After our prepared remarks, we will take questions in the time remaining.I will now turn the call over to Allan.
Thank you, Dave, and thank you for joining us on our call this afternoon.Our team delivered another successful quarter, highlighted by solid sales results and excellent profitability from a growing community count. We also invested for the future and enhanced our capital structure. In more detailed terms, new orders were up 10% from the prior year as we generated a pace just over 3 sales per community per month. This provides us with the backlog to modestly increase our expectations for full year deliveries. EBITDA was over $58 million, driven by slightly better-than-anticipated gross margins and careful management of overheads.We ended the quarter with 145 active communities, up from 136 at the end of December and 121 a year ago. Land spend was nearly $200 million, bringing our total 12-month spending over $740 million. And finally, with our senior note issue and an extension of our revolver, we strengthened our balance sheet, enabling the consideration of a broad range of capital allocation priorities. In addition, we were recognized for both our culture and the energy efficiency of our homes. We also held our annual fundraiser for our national charity partner, Fisher House, which generated nearly $2 million.We remain very confident in the multiyear strength of the housing sector and new home production in particular. Our thesis is anchored by both supply and demand factors. Shortfalls in new home production over the past decade and the lock-in effect of higher mortgage rates both contribute to very tight supply and an economy characterized by low unemployment, wage growth and attractive demographics for potential homebuyers provides clarity on the sources for current and future demand.Last quarter, I outlined our view that over the balance of the fiscal year, our sales pace, and to some extent, the mix and gross margins on those sales was likely to be closely related to mortgage rates due to strained affordability. We articulated 3 scenarios defined by the direction of rates, and this framework proved to be quite accurate in the second quarter. During the second quarter, mortgage rates moved around, ultimately rising about 20 basis points. This fell inside our base case, and as such, we were able to exceed our sales goals, though with a slightly larger share of spec home sales. Since the end of the quarter, rates have moved nearly 50 basis points, further straining affordability. If these rates persist, it's likely we will continue to see a stronger preference for specs.As we have talked about for several years, we are in the midst of transitioning to Zero Energy Ready homes in all new and longer-lasting communities. We call these are Ready Series homes. While we've committed that 100% of our starts will be Ready Series by the end of next year, we are substantially ahead of schedule with more than 3/4 of our starts being built to this standard last quarter. Given the importance we've placed on developing and delivering our Ready Series homes, I am pleased to report that despite having somewhat higher construction costs, these homes are generating higher margins than our prior series.So this spring, to accelerate our transition to the Ready Series, we've been encouraging our teams to be very competitive with pricing and incentives on our earlier Star & Plus Series homes. This will allow us to close out of older communities more quickly and simplify our production and sales efforts around the Ready Series. We can prove that these are the best built homes in our markets and the sooner we are solely focused on building and selling them the better. While this acceleration makes sense, there is a short-term financial consequence, which will be apparent in the third quarter.Margins will be down sequentially, partially as a result of a higher share of specs, but more so from our efforts to move through our older series homes. With that said, we expect margins to rise in the fourth quarter as our mix of closings shifts strongly toward Ready Series homes. And for the full year, our EBITDA, net income expectations remain within the range of our prior outlook as we anticipate more closings and tighter management of overheads to offset much of the short-term gross margin pressure. Dave will provide specifics, but I wanted to explain why we chose to impact the mix and pricing of our sales this spring.Finally, let me update you on our progress toward our multiyear goals. As it relates to our goal to have more than 200 active communities by the end of fiscal '26. As I mentioned, we closed the quarter with 145 active communities, up nearly 20% versus the prior year. We expect to end the fiscal year with more than 155 communities, representing year-over-year growth of about 15%, which also happens to be a good benchmark for projecting year-end community counts in '25 and '26.As it relates to our balance sheet goal of having a net debt to net cap ratio below 30% by the end of fiscal '26, we completed the quarter with a ratio at 43.4%, up a little bit versus the prior year. This is simply a function of the seasonality and timing of our land spend. By the end of this year, we expect this ratio to be in the mid- to low 30s, positioning us to be comfortably under 30% by the end of fiscal '26.And finally, as it relates to our goal to have 100% of our starts Zero Energy Ready by the end of calendar '25, I'm very pleased that we reached 77% Ready Series starts in the second quarter. With our acceleration, we are in excellent shape to reach our stated goal, perhaps even early. As we get closer to fiscal '25, I'm excited to see the impact that community count growth, reduced leverage and a truly differentiated product will make to our financial performance.And with that, I'll turn the call back to Dave.
Thanks, Allan.For the second quarter of fiscal year 2024, new home orders were 1,299, up 10% compared to the prior year, driven by a 14% increase in average active community count. This translated to a sales pace of 3.1 sales per community per month, slightly above our guidance. We closed 1,044 homes generating homebuilding revenue of $539 million, with an average sales price of about $516,000. Gross margin, excluding amortized interest, impairments and abandonments, was 21.7%. SG&A was 11.5% of total revenue as we continue to prudently invest for our rapidly growing community count. Adjusted EBITDA was $58.8 million. Interest amortized as a percentage of homebuilding revenue was 3.0%. Our GAAP tax expense was $6.7 million for an effective tax rate of 14.7%. Net income was $39.2 million or $1.26 per share. This included an $8.6 million pretax gain or $0.28 per share of EPS from the sale of our investment in Builder Homesite, a technology company specializing in digital marketing for new home communities. This gain contributed to our higher tax rate, but has been excluded from our adjusted EBITDA.Our third quarter expectations contemplate mortgage rates staying about where they are now with the economy remaining generally supportive. In this environment, we expect to sell at least 3 homes per community per month and end the period with approximately 150 communities. We expect to close 1,150 to 1,200 homes, up modestly versus the prior year with an ASP of roughly $505,000. Gross margins in the quarter will likely be about 20% as we work through sales arising from our acceleration to the Ready Series. SG&A as a percentage of total revenue should be approximately flat compared to the prior year. Together, these results should generate adjusted EBITDA above $50 million. Interest amortized as a percentage of homebuilding revenue should remain in the low 3s, and our effective tax rate to be less than 12% as we continue to benefit from energy efficiency tax credits leading to diluted earnings per share above $0.80.Turning to our full year. We now expect to deliver over 4,750 homes, reflecting more than 10% annual growth and an ASP of about $510,000. Based on our third quarter margin guidance, we expect our full year gross margin to be above 21%, implying a good recovery in the fourth quarter from more Ready Series homes. SG&A as a percentage of revenue should be around 11% as we continue to carefully manage overheads. Achieving these results would lead to adjusted EBITDA greater than $260 million and diluted earnings per share of at least $4.50 based on an effective tax rate of 15%. Aat this level, we'll generate double-digit returns this year while positioning the business for significant growth in fiscal 2025 and beyond.Speaking of 2025, while it's still a little early to give specific guidance, I want to offer some initial thoughts on revenue, gross margin and returns. Revenue should be significantly higher year-over-year, driven by our community count growth. We expect gross margin to improve in fiscal '25, in part because of the mix shift Allan described. In fact, over time, margins on our Ready Series homes should continue to improve as we work with our trades to reduce their build costs. It's also worth noting that every Zero Energy Ready home we deliver qualifies for a $5,000 tax credit, which would translate to about another point of margin if it weren't buried in our tax expense. Ultimately, higher revenue and improved gross margin from an increasing number of communities should lead to greater profitability and higher returns next fiscal year.Turning to our balance sheet. In March, we refinanced our 2025 senior notes with a new note due in 2031, leaving us with no maturities until 2027. We also extended our revolver expiration to March of 2028. We ended the quarter with total liquidity of $433 million, providing plenty of firepower for our growth ambitions. Pivoting to our investment in land, we spent nearly $200 million in the quarter, driving our year-to-date spending to just under $400 million. We remain on track for full fiscal year spending of at least $750 million with the ability to invest more as opportunities arise. Even as we have increased land spending, we remain focused on balance sheet efficiency to drive attractive returns. More than half of our total lots are controlled through options, a ratio we expect to sustain. Finally, as it relates to our community count, we already control all the land we need to hit our fiscal 2025 growth goals and most of what we need to hit our 200 community count goal by 2026.Achieving our profitability will lead to a book value per share of $40 or higher by the end of the fiscal year. The chart on Slide 18 shows the progress we've made thus far in growing our stockholders' equity, having more than doubled our book value per share in just the past 4 years. In recent years, we've generated growth in our share price, but it has remained below our book value even as the composition has dramatically improved. Last year, we conducted a comprehensive investor survey to get at the root cause of that disconnect. The result of that survey was clear. Shareholders told us they wanted to see a robust and sustainable growth trajectory and a less leveraged balance sheet.Those results led us to introduce our multiyear goals, which include ambitious growth and deleveraging objectives. These multiyear goals form the foundation of our approach to capital allocation because we agree with our shareholders, generating growth and balance sheet strength are essential to creating shareholder value. Today, we have excellent visibility into achieving these goals. This is allowing us to contemplate alternatives for our excess capital. In practical terms, that means we are weighing the return and risk characteristics of additional land investments against the value created through share repurchases. Given our valuation in relation to current and future book value, we believe share repurchases are likely to represent an attractive additional use of capital. We have $41 million remaining in our previously authorized share repurchase program.With that, I'll turn the call back over to Allan.
Thanks again, Dave.We're pleased with the results we generated in the second quarter. We delivered solid orders and profitability from a growing community count, and we positioned our company for the future with significant growth in our lot pipeline. Perhaps more importantly, we're excited about where we're headed. We have a clear path to reaching each of our multiyear goals. They represent substantial growth in the business, a resilient and flexible balance sheet and an innovative and differentiated product offering. We are confident we can create significant shareholder value from these results.To close, I'd like to acknowledge my colleagues here at Beazer. We have a truly exceptional team, all of whom are committed to creating value for our customers, for our partners, for our shareholders and for each other. I could not be more proud to represent them.With that, I'll turn the call over to the operator to take us into Q&A.
[Operator Instructions] Our first question comes from Julio Romero from Sidoti & Company.
Guys, thanks for all the color on the product mix next quarter and the accelerated closeout of Star & Plus Series homes and kind of the strategic rationale behind it. I guess just my question is, how confident are you that the financial impact is only centered around the third quarter? And maybe talk about the scenario if that leaks into the fourth quarter.
Yes, I'll jump in first, Julio. And thank you for the question. I think we're very confident that the margins in the Ready Series homes are higher, both on the specs and to-be-built that we've sold than on our Plus and Star, and we're going to run out of Plus and Star homes. That was sort of the point. So confidence into the fourth quarter is very good. Now look, there's an overlay on any of this. If the rate environment is radically different, substantially higher rates over the next 3 or 4 months than what we've experienced, there may be other things going on, but it's not going to be the fault of the product mix.
Very helpful. And then any way to kind of parse out the margin impact between -- for next quarter between greater specs versus the accelerated closeout of the Star & Plus homes?
The thing is, it's -- look, we anticipate the question. I appreciate the question. It's a really tough one. It's not an easy thing because a lot of the specs are also Star or Plus. So is the effect because they were specs or is the effect because they were Star or Plus? Our sense is, this more significant impact, more than half, is related to intentionality on our part to get beyond Star and Plus and the minor portion relates to a slightly higher mix of specs in the quarter. But as I've said, the 2 things kind of overlap because getting through Star and Plus, that's what most of our specs work.
Yes. I got you. That makes sense. And -- very good.
Next, we'll go to the line of Alex Rygiel from B. Riley.
Nice quarter, gentleman. Can you talk about the cadence of new order activity throughout the quarter and into the month of April?
It was -- it built. January wasn't great, February was a little better, and March was better than February. I don't have final April numbers, honestly. We closed the month yesterday. I would say, April was choppy. It was similar to March. It didn't really differentiate itself significantly. Some markets a little better, some markets a little weaker, but we don't release monthly order numbers because I just think, at our size, it's very hard to draw conclusions from a month, but I don't see anything fundamentally different in April than we saw in March.
And in your implied full year closings guidance suggests a very strong step up in the fiscal fourth quarter, or maybe one of the best record. I suspect you've got that visibility in your backlog at this time, but maybe if you can comment on that.
Yes. Look, Alex, it's Dave. I would comment that we feel pretty comfortable given the production universe that we have. And you can see in the Q, the number of units we have under production between the backlog and our specs are under construction. We feel real comfortable with the full year guide and increasing the guidance we did in the quarter. But frankly, you're right, there's still work to do for the fourth quarter, and we're out doing work. So I think your assumptions are correct and the math you're doing is right, but we feel real comfortable given the size of the backlog and the production universe.
Very helpful.
And let me just add one other frame on that. It's not perfect, but I know it's a bit of an industry convention to look at backlog and do a conversion ratio of what will backlog be at June 30 and what percentage of that will close in the fourth quarter. It's a much higher fourth quarter backlog conversion in the last couple of years, but that's also a function of the fact that cycle times are dramatically different than they were over the last couple of years. So we won't be back to the kinds of backlog conversion that we had pre-COVID. So yes, it's a big step up. When you sort of put it in the pre- and post-COVID context, with the production universe that we've got, we feel very good about it.
Next, we'll go to the line of Alan Ratner from Zelman & Associates.
Nice quarter, and thanks for all the detail. Allan, first -- and I apologize if you've given this detail in the past, but I was hoping you could just go into a little bit more detail on exactly kind of what the primary differences are between Ready Series and the older series. I'm not sure if they're drastically different in terms of floor plans or anything else that would kind of contribute to that margin lift that you're citing here.
So there are a number of things. And in fact, I have to admit, Alan, I was really hoping for this question, and in fact, anticipating it. So there is a slide in the appendix that has both the homeowner benefits and some of the building science features that make these homes different. The envelope is different. The way it's wrapped is different. The way it's insulated is different. It has what's called an ERV or an energy recovery ventilator.The thing that a consumer would immediately notice is typically 2 x 6 walls. They'd also notice that the ducts are all in conditioned spaces, which kind of makes sense to people, they're like, gosh, running a bunch of ducts in an unconditioned attic where I'm losing a lot of heat or I'm gaining a lot of heat depending on the season is a problem. And then as we talk to people, we can really put mathematics with third-party validated testing on it relative to what's called a HERS score but maybe even more importantly, the air exchanges per hour.Now I know that a large portion of our buyer population doesn't walk into a new home community saying, I'm shopping HERS or I'm shopping ACH. So for us, a big opportunity is to explain to people the value that, that represents for them. And then when they say, okay, well, that all sounds good, but everybody sort of talks about green, where is the proof. And that's where the third-party validation, the testing and the metrics are. And then, frankly, they can't unsee what they've seen. They go into another community, and they asked to see somebody's HERS scores and our homes are pulling 30s and low 40s. They're going to go see 70s and people are bragging about them.So those are some of the characteristics that are different. I don't know if that totally answers your question. If we go a lot deeper, I want my building science people to get into it. But I will tell you, I've highlighted the features in this exhibit so that you can see very clearly the things that a buyer sees and understands if we do our job, this just makes it a better home.
Got you. So on that point, though, I mean, is the better margin, would you say more of a cost savings? Or it sounds almost from what you're describing, you almost get more of a price premium, given all of these features in the home. So is it more of a price versus a cost savings standpoint?
Yes. It's definitely a price issue because the cost to build these homes are higher than the cost to build our prior series homes.
Got it.
And Dave talked a little bit about '25, and I mean it's obviously early, but the thing that we have seen every community -- or every division started with 1 community with Zero Energy Ready and 1 home. And then it was the whole community, and then it was 2 communities. And this ball rolling downhill in terms of building momentum, what's really starting to happen is the trades get it, they are seeing benefits in cycle time, for example, our HVAC contractors are able to take a couple of days out of the install with the advanced duct install with our homes. They didn't know that at first. They were charging us a premium. They're like, we don't know what this is. We haven't used these products. We don't understand it. We don't really want to do it. You're going to have to pay extra to get us to do it.Now they look at it and say, wow, this home is actually going to be much better from a warranty standpoint. It was faster for us to build. Yes, we'll do that again, please. And we haven't -- I don't think really scratched the surface and clawing back some of those savings. So today, it is the fact that these homes are more expensive to build. And I don't want to in any way diminish our efforts to date, but I still don't think we've really scratched the surface on truly connecting buyers with realizing this is a home they cannot buy anywhere else. And I have done this personally in markets when I travel. Let's go look at a $2 million home. And let's see what their HERS score, what their ACH score is. Let's ask questions like to create a comparator to the kind of home that we're buying or building. We've got an opportunity to get better and better at explaining that. And that's why I think the revenue side is an opportunity as much as the cost side is.
Great. Thank you for all that detail, Allan, and I'm not surprised you had the slide prepared for us. Second question, if I could. You mentioned the slide in your first quarter deck that kind of had the 3 scenarios, and I happened to pull it up. And the downside scenario in that deck is an environment with rates in the high 7s, which we're kind of pushing back up against today. I'm sure that's not what you and everybody expected 3 months ago. But on that slide, you also said, and I guess, in that environment, you would expect the sales pace to be sluggish and incentives to be higher. It doesn't sound like from your comments, you're really seeing that effect from the move-in rates. So I'm just curious if you could maybe just talk through what you are seeing in response to higher rates. Has the consumer been largely agnostic to it? Are you incentivizing more to kind of buy down the rate or do other things to improve the affordability equation given the move higher?
We haven't seen a dramatic shift in incentives, particularly financial incentives. We have seen a migration and that overstates it. We've seen a move towards more temporaries than permanents as rates have moved up. Obviously, you get a pretty good bang for the buck on a [ 2-1 ] or a [ 3-2-1 ]. And in a higher rate environment, I think some buyers are analyzing that and saying, well, it's unfortunate, but with a temp, I am going to get a lower pay rate for a few years, and I will have an opportunity to refinance.I'm always at pains to point out, I don't know why I feel so strongly about it, that, of course, when buyers use temporary buydowns, they do qualify at the full pre-buy down rate. So this is not creating a different kind of a housing problem. And those of us who have been around the industry a long time, I want to always be very clear about this isn't like some previous period. But we are seeing a little more interest in the temporary buydowns.And the other thing that we saw, and we saw it in the second quarter, and I think we're going to see it in the third quarter and frankly, it's going to help us a little bit is, I think, a heightened interest in specs. I think that's the other thing that happens. And given that I'd really like our remaining spec, or Star & Plus series to go away in the third quarter, I'm okay with that.
[Operator Instructions] Our next question comes from Alex Barron from Housing Research Center.
Yes. I wanted to focus in on share buybacks. I heard you mentioned it a little bit at the end, but I was just curious what would it take at this point given the valuation for you guys to step up and buy -- start to buy some given the big discount to book value?
Well, Alex, we try to make it pretty clear in the prepared remarks. We have a framework that we use. It's a consistent framework that looks at risk versus reward. And I would tell you, we have a $40 million authorization that's currently outstanding. And given where the stock is currently trading, not just from where the book is today, but where we see and have visibility on where it's going to be over time. It looks like a much more attractive use of our capital on a go-forward basis from a risk and return perspective. I won't get too detailed beyond that. But clearly, we're looking at it and evaluating it all the time on a real-time basis.
I'll go a little further. I think we will be in the market executing against some share buyback. What we're not going to do, Alex, is just say, hey, at any price, it's the right thing to do. But in the current context of the share price, I do think that we will be participating in share buybacks when our window opens this quarter.
Yes. No, I'm not saying at any price, but when it's trading at a 30% discount to book, it seems almost like a no-brainer. But anyway, good to hear that. What about similar thoughts on dividends? Maybe you're not quite there yet, but other builders have started to launch more consistent dividends. Just sort of thoughts around that.
I would tell you, Alex, it feels a little premature to have that conversation. I think we try to make it pretty clear kind of what the considerations in the market. And frankly, the purchase program, as Allan said, seems to make a lot of sense given where we are, so.
Yes, and we want to execute our multiyear goals.
Yes.
Like we've got -- we are going to grow the community count. We are going to have net debt to net cap below 30% when we said we would. And we think we can do that and accommodate in these -- this range of share price and buybacks. But I think to go beyond that in terms of returning capital to shareholders, we need to get a little further along.
Okay. Great. And if I could ask a little more on the orders. The Southeast region orders were down 30%. And is that just mainly because you're experiencing strong demand and communities are selling out faster than you're replacing them? Or what's going on there?
Yes. A lot of our Southeast divisions do not have very large community counts. And one of the things that happens to us occasionally in the Southeast is that we'll gap out because we don't run a big, big spec program, so we can get caught between phases a little bit. I don't think anyone should infer from a quarter a particular narrative around the Southeast. Our Southeast markets are pretty good. We are happy to be in them. And frankly, we're growing community count in every one of them.
[Operator Instructions] Currently, our last question in queue is from Jay McCanless from Wedbush.
So I wanted to ask also on the orders with both the Southeast and the East down pretty significantly relative to where the West was. The cynic in me says some of this move to the Ready, Plus homes is move some inventory, generate some cash flow in a very competitive environment. Is that the right way to think about this? Or is there really a push to get some of these newer homes out there?
We really want to get the newer homes out there. You are familiar with our balance sheet. There isn't really a generate cash focal point. We're really trying to maximize the value of every community. We've got some communities that have been in the Star & Plus Series where we've been able to introduce Ready. We want to accelerate that. We've got some communities that are not going to be converted or transitioned to Ready. I'd like to build out of them. And in the communities where we are in all new communities are only Ready, we definitely want to get some sticks in the air. So we are seeding, as we always do, those communities with some specs. But that -- the focal point is really around the sooner we have clarity, certainty and the simplicity of we sell Ready homes. They're better built and they perform better. I think the happier we'll be, our buyers will be and our shareholders will be.
Jay, I would tell you in the East, the sales pace was very much in line with the overall company average. It was a little bit a tough comp from last year, but there's really nothing for you to get into there.
Okay. And then I wanted to ask, I'm looking for the slide in the deck where you said that the -- okay, I think it's Slide 14 where you say that the gross margins when you transition to all Ready homes or mostly Ready homes is going to be improved versus the second half of fiscal '24. But when I'm looking at the numbers you gave right now, it looks like 20% adjusted gross margin for the third quarter, probably something in line to maybe a little bit better for the fourth quarter. I mean, that's a pretty easy bar to say you're going to be higher than. Where are these margins going to compare to where they were in the first half where you guys had pretty good set of gross margins in the first half of this year?
Well, Jay, just for a quick correction on the question. The words in the script were pretty clear. If you look at the full year gross margin guide, it suggests a pretty significant pickup in the fourth quarter. So it's not going to be around 20%. We said it's a number better than that.
And I think we guided to about 21% for the full year. The only way you're going to get there with Q3 at 20% is a good lift in Q4.
Exactly.
Okay. But then still the question is, how does the margins under these new homes compared to what you were doing in the front half? Is it going to be equal, slightly less as you get the build issues worked out? What should we expect from that?
Well, I guess I would say is we think that margins in '25 will be higher than margins in '24. And that's because these are homes that command, I think that kind of value and because I think we can keep working on getting our build costs down. So it's hard to make a comparison of one period to another period, is which periods in which homes, but at a higher level, what we've said is '25 will be above '24.
Okay. And then the last one I had, just on the specs, it looks like your specs and process were up sequentially from first quarter to second quarter. Could you talk about what's driving that?
Community count growth.
Yes. Jay, if you look at our slide, we actually show on a per community basis, and it's really not dissimilar on a per community basis. It's just that we have the community count growth coming online, and that's driving some incremental specs.
Okay. And then I actually did have one more. What was the incentive percentage in the quarter? And what was it in the prior year?
Let me grab it for you. One second, Jay. I don't have it in front of you -- front of me right now. I can tell you, Jay, the number hasn't moved too significantly in the second quarter. It's been a pretty minimal change. I can follow up with the exact number, but we look at it pretty closely on a quarter-by-quarter, week-by-week basis to see what's happening and it really didn't move much in the second quarter.
And I am showing no further questions.
Okay. I want to thank everybody for dialing in to our second quarter call. We look forward to [indiscernible] in next quarter as we move toward the end of the year. Thanks so much, and have a good night.
Thank you all for participating in today's conference. You may disconnect your lines, and enjoy the rest of your day.