Garmin Ltd
NYSE:GRMN
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Earnings Call Analysis
Q2-2024 Analysis
Garmin Ltd
Garmin Limited reported an impressive second quarter with a new record in consolidated revenue, which saw a 14% increase to $1.51 billion. This growth was driven by strong performances in the Fitness, Marine, and Auto OEM segments. The company’s gross margin was 57.3%, while its operating margin expanded to 22.7%, contributing to an operating income of $342 million, marking a 20% year-over-year increase. Additionally, Garmin's pro forma earnings per share (EPS) rose by 9% to $1.58 despite a higher effective tax rate.
The Fitness segment experienced a remarkable 28% increase in revenue, reaching $428 million. This surge was primarily fueled by the robust demand for wearables. Newly launched products like the Edge 1050 premium cycling computer and the celebration of Global Running Day unveiling Garmin's strong community engagement further bolstered sales. Over in the Outdoor segment, while revenue dipped by 2% to $440 million due to lower Adventure watch sales, new products like the Approach Z30 smart laser rangefinder and the Alpha LTE dog tracking collar were launched, promising to stimulate growth in the second half of the year.
Aviation revenue remained flat at $218 million, with growth in Original Equipment Manufacturer (OEM) products offset by a normalization in the aftermarket. The Marine segment, on the other hand, saw a 26% revenue increase to $273 million, largely attributed to the acquisition of JL Audio. Even excluding JL Audio, the Marine segment still posted a 7% revenue growth, outperforming the market trends. New product additions such as the Force Kraken trolling motor series and the Panoptix PS-22 Ice Fishing Bundle played a significant role in this growth.
The Auto OEM segment demonstrated significant growth, with revenue rising by 41% to $147 million, driven mainly by domain controllers. Although the gross margin in this segment was lower at 16%, the operating loss reduced to $12 million. Garmin’s strategic partnerships and awards, including the 2024 Global Award for Excellence in Technology and Development from Yamaha Motor, highlight its strong market position. Financially, Garmin maintained a robust balance sheet with $3.4 billion in cash and marketable securities. The company generated $218 million in free cash flow and expects a total of $900 million for the year.
Given the strong performance in the first half of the year, Garmin has updated its full-year guidance. The company now anticipates total revenue of approximately $5.95 billion, an operating margin of 21.3%, and pro forma EPS of $6. These updates reflect the company's confidence in its diverse product portfolio and its ability to innovate and meet market demands.
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Thank you for standing by. My name is Christina and I will be your conference operator today. At this time, I would like to welcome everyone to the Garmin Limited Second Quarter 2024 Earnings Conference Call. [Operator Instructions]
I will now turn the floor over to Teri Seck, Director of Investor Relations. Teri, you may begin.
Good morning. We would like to welcome you to Garmin Limited's second quarter 2024 earnings call. Please note that the earnings press release and related slides are available at Garmin's Investor Relations site on the Internet at www.garmin.com/stock. An archive of the webcast and related transcript will also be available on our website.
This earnings call includes projections and other forward-looking statements regarding Garmin Limited and its business. Any statements regarding our future financial position, revenues, segment growth rates, earnings, gross margins, operating margins, future dividends or share repurchases, market shares, product introductions, future demand for our products, and plans and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this earnings call may not occur and actual results could differ materially as a result of risk factors affecting Garmin. Information concerning these risk factors is contained in our Form 10-K filed with the Securities and Exchange Commission.
Presenting on behalf of Garmin Limited this morning are Cliff Pemble, President and Chief Executive Officer; and Doug Boessen, Chief Financial Officer and Treasurer.
At this time, I would like to turn the call over to Cliff Pemble.
Thank you, Teri and good morning, everyone. As announced earlier today, Garmin delivered another quarter of outstanding results with double-digit growth in consolidated revenue and operating income.
Consolidated revenue increased 14% to $1.51 billion, a new second quarter record, with 3 business segments reporting strong double-digit growth. Gross margin was 57.3%, operating margin expanded to 22.7%, resulting in operating income of $342 million, up 20% year-over-year. We reported pro forma EPS of $1.58, up 9% over the prior year, which is a remarkable result considering the significantly higher effective tax rate.
During the quarter, our global employment surpassed 20,000 associates and we were recognized as a top employer by Forbes as well as U.S. News & World Report. We are proud of our associates who dedicate themselves to delivering growth through innovative and highly differentiated products. Given our strong performance in the first half of the year, we are updating our full year guidance. We now anticipate revenue of approximately $5.95 billion and pro forma EPS of $6.
Doug will discuss our financial results and outlook in greater detail in a few minutes. But first, I'll provide a few remarks on the performance of each business segments. Starting with Fitness. Revenue increased 28% to $428 million, primarily driven by wearables. Gross and operating margins improved to 57% and 25%, respectively, resulting in operating income of $108 million.
During the quarter, we launched the Edge 1050 premium cycling computer with a vivid color touchscreen display, a built-in speaker for audible feedback and Garmin Pay mobile payments. Also during the quarter, we celebrated Global Running Day, with Garmin users running nearly 11 million miles, beating last year by more than 2 million miles. Given the strong performance of the Fitness segment, we are raising our revenue growth estimate to 20% for the year.
Moving to Outdoor. Revenue decreased 2% to $440 million, primarily driven by lower revenue from Adventure watches following the anniversary of the fenix and epix Pro Series launch. Gross and operating margins were 65% and 31%, respectively, resulting in operating income of $136 million.
During the quarter, we launched the Approach Z30 smart laser rangefinder, with the range relay feature, which sends distance measurements to a compatible Garmin smartwatch or the Garmin Golf smartphone app. We also launched our first cellular-based dog tracking collar, the Alpha LTE. This small, rugged device attaches to existing dog collars and pairs with the Alpha app, so users can view their dog's movement from a smartphone or an Alpha handheld device. The Outdoor segment has performed as we anticipated so far this year and we expect growth to accelerate in the back half of the year with new product launches. As such, we are maintaining our 7% revenue growth estimate for 2024.
Looking next at Aviation, revenue was relatively flat in the second quarter at $218 million. We continue to see growth in OEM product categories, while the aftermarket declined in an ongoing normalization following the somewhat uneven results of the prior year. Gross and operating margins were 74% and 23%, respectively, resulting in operating income of $50 million.
For the ninth consecutive year, we were recognized by Embraer as the best supplier, most recently in the Electrical & Electrical Systems category for our G3000 Prodigy touch flight deck in the Phenom 100EV and Phenom 300E. The Aviation segment has performed as expected so far this year and we are maintaining our estimate of flat revenue in 2024.
Turning to the Marine segment. Revenue increased 26% to $273 million, primarily driven by the acquisition of JL Audio. Excluding JL Audio, revenue increased approximately 7%, outperforming widely reported market trends. Gross and operating margins improved to 54% and 22% respectively, resulting in operating income of $60 million.
We recently expanded the Force Kraken trolling motor series, adding a 48-inch shaft length to accommodate a broader range of boat sizes. We also expanded our ice fishing offerings with the Panoptix PS-22 Ice Fishing Bundle, an ultraportable live sonar solution for winter fishing, which won a Best of Category award at this year's ICAST, the world's largest sportfishing trade show. This is our fourth consecutive win in the ice fishing category and seventh consecutive award at ICAST.
Additionally in the quarter, we were once again selected as an exclusive supplier to Independent Boatbuilders Incorporated through 2029 for both traditional marine electronics, as well as audio equipment. Given the strong performance of the Marine segment, we are raising our revenue growth estimate to 15% for the year.
And moving finally to the Auto OEM segment, revenue increased 41% to $147 million, primarily driven by growth in domain controllers. Gross margin was 16%, and the operating loss decreased to $12 million. Our Auto OEM segment continues to be recognized as an outstanding partner. We recently received the 2024 Global Award for Excellence in Technology and Development from Yamaha Motor, for our motorcycle infotainment solutions. Auto OEM has performed as expected so far this year and we are maintaining our 50% revenue growth estimate for 2024.
So that concludes my remarks. Next, Doug will walk you through additional details on our financial results. Doug?
Thanks, Cliff. Good morning, everyone. I'll begin by reviewing our second quarter financial results, by comments on the balance sheet, cash flow statement, taxes, updated guidance.
We posted revenue of $1.507 billion for the second quarter, representing a 14% increase year-over-year. Gross margin was 57.3%, 20-basis point decrease from the prior year quarter. Operating expense as a percentage of sales was 34.6%, 140-basis point decrease. Operating income was $342 million, a 20% increase. Operating margin was 22.7%, 120-basis point increase. Our GAAP EPS was $1.56. Pro forma EPS was $1.58.
Next, we look at our second quarter revenue by segment and geography. During the second quarter, we achieved double-digit growth in 3 of our 5 segments, led by the Auto OEM segment with 41% growth. Fitness and Marine segments had 28% and 26% growth, respectively. By geography, we achieved double-digit growth of 18% in the EMEA region and 15% in the Americas region. APAC region growth was 1%.
Looking next at operating expenses. Second quarter operating expense increased by $46 million or 10%. Research and development increased approximately $19 million year-over-year, primarily due to engineering personnel costs. SG&A increased approximately $27 million compared to prior year quarter, primarily due to increases in personnel-related expenses, including the impact of the acquisition of JL Audio.
A few highlights on the balance sheet, cash flow statement and taxes. We ended the quarter with cash and marketable securities of approximately $3.4 billion. Accounts receivable increased both year-over-year and sequentially to $808 million, following seasonally strong sales in the second quarter. Inventory balance decreased year-over-year but increased sequentially to approximately $1.3 billion. During the second quarter of 2024, we generated free cash flow of $218 million, $3 million decrease from the prior year quarter. CapEx expenditures for the second quarter 2024 were $37 million, approximately $15 million lower than the prior year quarter. We expect full year 2024 free cash flow to be approximately $900 million, capital expenditures of approximately $350 million.
For the second quarter of 2024, we paid a dividend of approximately $144 million and purchased $10 million of company stock. At quarter-end, we had approximately $290 million remaining of the share repurchase program which is authorized through December 2026. We had an effective tax rate of 17.9% compared to 8.9% in the prior year quarter. Increase in effective tax rate is primarily due to the increase in the combined Switzerland tax rate, in response to global minimum tax requirements.
Turning next to our full year guidance. We estimate revenue of approximately $5.95 billion compared to our previous guidance of $5.75 billion. We expect gross margin to be approximately 57%, higher than our previous guidance of 56.5% for the year-to-date performance. We expect an operating margin of approximately 21.3%, compared to our previous guidance of 20%, also expect pro forma effective tax rate of 16%, which is higher than our previous guidance of 15.5%, due to projected full year income mix by tax jurisdiction. This results in expected pro forma earnings per share of approximately $6, an increase of $0.60 from our previous guidance of $5.40.
Concludes our formal remarks. Christina, could you open the line for Q&A?
[Operator Instructions] Your first question comes from the line of Joseph Cardoso from JPMorgan.
So maybe first question here is just on the guide. When I take a look at the updated full year guide, the implied second half outlook suggests maybe a more muted revenue flow-through to earnings than maybe we are accustomed seeing for Garmin. Can you maybe just walk through the puts and takes there and perhaps what's driving the pressures on the incremental margins into the second half? And then I have a follow-up.
Yes. So when we think about that, yes, relating to the gross margin, back half versus what we've seen in the first half, we'll continue to see segment mix have an impact. That will have an impact to reduce that -- the gross margin in the back half. As it relates to expenses, yes, we'll continue to make investments in R&D, primarily to support our innovation.
Got it. And then maybe just as my second question, Marine on an organic basis continues to outperform the broader market trends, as you guys have been highlighting. And so I was just curious if you could double-click on the outperformance there. Like, what are you seeing broadly as the drivers of the share gains Garmin has experienced, for example? Is it broadly across the portfolio? Or are you seeing better trends more in a particular area of the portfolio? And then maybe just curious what other factors could be contributing here and any thoughts on how sustainable this could be from your vantage?
Yes, Joe, I think our performance in the aftermarket is definitely much better than the overall market. And even in the OEM channels that we serve, our performance is much better than the broader markets been reporting. I think we attribute this to really our product lines, highly innovative and very broad. We're doing very well and in chartplotters, we have the best mapping and sonar systems, radar and autopilots. And trolling motors are somewhat of a newer category for us. It's expanding and helping us to take share.
And your next question comes from the line of Erik Woodring from Morgan Stanley.
Doug or Cliff, either one of you, I just want to kind of get your viewpoint. As we think about the guidance increase, obviously, nice outperformance in 1Q, so you were tracking above and now we've seen you raised guidance. Would you say that, that increase in guidance is solely a reflection of the better first half? Or are you seeing some of that sustain into the second half relative to your expectations? Just want to kind of get a sense, is this kind of a reflection just of 1Q outperformance? Or is the second half of the year better than you thought as well? And then I have a follow-up.
Yes, Erik, I think there's a lot of moving pieces that go into the guide. In some cases, as in Fitness, I think we're very optimistic and encouraged by our performance. And so there's a little more optimism in that guide as we anniversary the launches of the major products that we had last year.
And then in Marine, I think we're mostly taking a wait-and-see approach. We're rolling forward certainly the higher performance. But as has already been noted, the marine market is generally stabilizing and so we're simply just taking a slightly different view there. And everything else remains in line with what we had earlier said.
And one thing to add in Marine, we are anniversarying the JL Audio acquisition end of Q3 also.
Okay. No, that's very helpful. And then, Doug, maybe for you. Your free cash flow kind of seasonality historically has been a bit volatile but more often than not you do about 35% to 40% of annual free cash flow in the first half of the year. If we take your updated viewpoint on free cash flow, I believe it was $900 million for the year, it would imply first half free cash flow is actually more like, call it, 70%, which would be at least near decade high.
Can you maybe just help us understand some of the seasonality or moving pieces as it relates to free cash flow? Why the second half of the year would be so much weaker than we see historically for you guys? And that's it for me.
Okay. Good question. There is the working capital consideration you take into consideration also. So one of which is inventory. So in the last year, in the back half, we saw some benefit relating to our inventory being lower. This year, we expect in the back half that we would be increasing our inventory.
On a year-over-year basis, we probably expect inventory decrease in line with sales, so there will be a use of cash in the back half for inventory.
And your next question comes from the line of George Wang from Barclays.
Two parts. Firstly, can you give updated thoughts on capital allocation, especially given still elevated cash balance, just the 2Q, the buyback was pretty small. Just -- and also a related question just on the CapEx, you guys have still guided pretty elevated CapEx full year being $350 million, with the 1H being smaller spend. Maybe you can walk me through how you think about these 2 parts.
Sure. As it relates to capital allocation, it's consistent with what we've had in the past, our priorities are really reliable dividends, investments back in our business as CapEx, also acquisitions such as JL Audio and then share buybacks. And share buybacks is really depending upon the market and the business conditions. We'll take a look at that every quarter.
As it relates to CapEx, yes, the back half, those investments really relate to some investments in our manufacturing facilities. Also, we'll have some invest -- IT projects to enhance some of our security infrastructure as well as we're continuing our renovations of our facilities here in Kansas.
Okay. Just a quick follow-up, if I can squeeze in. I just wanted to, kind of honing on the Auto OEM, especially kind of as we look beyond BMW, the main controller. Last quarter, you guys alluded to 2 new wins just on the infotainment system side. I assume it's higher margin. Can you kind of give a bit more thoughts and color if you can, kind of I assume it's going to ramp starting from 2026 kind of more on the infotainment system, maybe kind of -- any color would be appreciated.
Yes, George, we announced those additional awards last quarter. Nothing has really changed in that since then. We're working hard to bring those to market, as we mentioned, starting in 2026.
In terms of the margin profile for those products, I would just point out that's still domain controller products. And so that carries that typical mid-teens kind of gross margin that we've been talking about with it as well. So it's very much in line with the business that we're currently seeing settle in, in terms of the Auto OEM revenue structure.
Your next question comes from the line of David MacGregor from Longbow Research.
I guess I wanted to just pick up on the discussion around the OEM auto and congratulations on the progress there. You're obviously in the market with a product that is succeeding with customers and building on the BMW, now with Yamaha and others. But I guess I'm a little confused on why there isn't a little more scale benefit in terms of your margin outlook.
And so you mentioned there's still controllers and there's still that kind of gross margin profile that you've communicated in the past. But I would have thought maybe the -- your EBIT contribution would build as you build scale in that business. So is it just not at scale, it's just more variable cost than this than we expected? Or how should we think about the longer-term economics as you grow that business?
Yes. I think, David, if you look where we are this quarter versus last year, there's been a big swing in product mix to that domain controller category, which, what we've been saying for the past year is that, that would definitely be a margin impact because of the profile of those products. And so that's what's driving our gross margin this year compared to last year. And it pretty much put the gross margin dollars kind of even with last year.
So there's a big transition point that we've already gone through. You saw our engineering and expense structure come down and so our loss decreased. And I would point out that Auto OEM also absorbs a certain amount of allocated costs across the company, which would otherwise go to other segments. So we're starting to see that leverage. We're probably a little bit behind where we thought we would be, although we're talking about very small numbers in terms of the difference. And so we're looking forward to the additional volume ramp and seeing those leverages come into play as the efficiencies go up.
Okay. Maybe I could just shift gears and ask about Fitness and Outdoor and just if you could talk about what you're seeing in retail conditions and retail inventories at this point?
Yes. We watch that very closely. We're able to see our sell-in versus our registrations. And we believe that the channel is really very clean right now. The products are selling through at a very consistent rate with our sales in. And the products seem to be very popular and people really appreciate them. So we're really excited about our performance in wearables in general.
Okay. And just last for me, on the Marine guidance, they're up 15%. How much of the incremental growth there is coming from the addition of the trolling product offering? And just expanding that, having a product that maybe you didn't have to offer a year earlier.
We don't break out specifics on that but I would say that trolling motors are contributing to that increased organic revenue. But it's not the only category. In fact, chartplotters were also very good. And that's an indicator basically of the market robustness and the strength of our product line as people are installing it on their boats.
And did you say what organic growth in Marine was, excluding JL?
Up 7% is what we said.
Your next question comes from the line of Jordan Lyonnais from Bank of America.
A few of your competitors have started launching smart rings. Is that something Garmin is interested in, would be looking to expand to for the fitness line?
Well, we're interested in all kinds of product categories, including that and others. So far, we've done very well with our wearables and I think it has the most utility. But there's certainly a group of people that like that kind of form factor. So we keep open minds to the categories and we explore all possibilities.
Got it. And then just a follow-up to, are you seeing any increases in promotions from you guys pushing it through retailers or anything else?
I don't think the promotional activity is materially different. We have a yearly cadence around the calendar of our retailers, most recently, for example, Prime Day. The mix of products that we offer can vary from year-to-year and that can probably affect whether it's more promotional or less. But in general, I would say it's shaping up to be a pretty typical year.
Your next question comes from the line of Ben Bollin from Cleveland Research.
Cliff, I'm interested in your thoughts on the year-to-date performance in Fitness, obviously, remarkable. How do you think about the drivers to what you've seen? You had certainly a product with Forerunner 165. I'm curious about that. Any thoughts on TAM? And then if you have any perspective on how a strong cohort of customers added during COVID, is there a bigger refresh opportunity? Any thoughts on that would be helpful.
Yes. I think our year-to-date performance has been remarkable. We credit it to the strength of our product line. It's certainly not just the Forerunner 165. We have the 965 and 265 which are also doing very, very well, the vivoactive 5 on the low end of advanced wearables, as well as the Venu 3 and 3S, all of which has been popular. So we're seeing success across the range of products from high end to low end.
In terms of the overall market, I would say that it's generally stable. It's not a huge growth market but it's a huge market. And our opportunity is really share gains, which we see happening with the kind of results that we're driving. So we're excited about that.
And in terms of refresh opportunities, we track that, new users versus existing users and what kinds of products that they go from and what they go to. And definitely, we see this refresh cycle that occurs with our customer base every 2 to 3 years. And we're starting to see some of that, especially as our new products really leapfrog the generation or 2 behind where they might have already had a product that they were using. So definitely, there's ongoing opportunities with the existing customer base.
Okay. The last one for me. Also curious how you think about potential AI opportunities for both internal and customer use cases. It seems like you have a very unique high-fidelity data set in Connect. Just curious your thoughts on what you guys could be looking at or some options around AI.
Yes. I think we're no different than most companies. We look at AI as a potential business tool and we're doing some of that. Some of what we look at there, we take a wait-and-see approach because there's still a lot of claims that AI is making that have yet to be demonstrated. But in terms of product-specific uses, I would say that, that's a more constrained model around customer data and trends is something that we're very interested in. And we continue to explore possible features that we would have in our products in the future driven by that technology.
Your next question comes from the line of Ivan Feinseth from Tigress Financial Partners.
Congratulations on another great quarter and a great first half. In the slides, you talk about the strength in Fitness was driven by wearables but the revenue decline in Outdoor was driven by Adventure watches. What is the difference between the -- what's driving the strength in the fitness wearables, let's say, versus the outdoor wearables?
I think that the outdoor wearables, Ivan, was really when we passed the pipeline fill of our fenix and epix Pro releases from last year. And as we look forward, we're basically factoring in our additional product releases that we have for the rest of the year and we anticipate that will grow as we move forward.
And then like some of the functionality like with the launch of the Pro models, you have the updated or the better ECG measurement and there's ongoing talk in health focus of the importance of HRV. Like can you talk about like how -- are these some things that are driving upgrades in sales? And what do you envision as far as future functionality?
Yes, I think we've really been a pioneer in those kinds of sensor measurements, particularly when you look at HRV, which drives many of our metrics in our devices, from performance, condition to sleep quality, which are all very important things. And so we've been on the forefront of that. And our practice has been and our history has been, as we invent these features, we roll them across product lines and expand the functionality broadly and make it available to even more users.
Your next question comes from the line of Noah Zatzkin from KeyBanc Capital Markets.
First, kind of just a housekeeping question. Could you remind us how to think about the mix between aftermarket and OEM within the Marine business, post addition of JL? And then second, you guys have obviously been able to maintain strong margins in what's been a kind of choppy Marine industry. So from a margin perspective, exiting this year, assuming the industry is on a more stable footing, like how do you kind of think about like the kind of longer-term margin structure of the Marine business?
Yes. So our Marine business is mostly comprised of aftermarket, especially in this environment where boat building is at a reduced level as field inventory has worked down. With the addition of JL Audio, a lot of those sales we probably categorize more in the aftermarket area, although there is some that goes to OEM. It's a little harder to track in Marine because some of the distribution channels are independent distributors who sell in turn to smaller boat builders. And so it isn't always possible to track exactly which products go where. But in general, we're seeing strength in the aftermarket channels as well as better-than-industry performance in the OEM side.
In terms of the margin picture, I would say that other than the impact that we've talked about with JL Audio as a dilutive factor, overall, we don't see any change in the overall Marine margin structure, especially as you mentioned, towards the end of the year, we would see that the segment and the market really will continue to perform in the ranges that have been historically true.
[Operator Instructions] Your next question comes from the line of Erik Woodring from Morgan Stanley.
Just 2 quick ones, if I may. Maybe big picture, some of the questions have maybe alluded to this topic. But I'd say there have been some growing concerns around consumer spending. We're also hearing about some evidence of incremental, let's call it, hardware spending in Europe -- hardware spending weakness in Europe, excuse me. Just given your significant exposure to each market, can you maybe just give us some detail on exactly what you're seeing from an end demand standpoint related to the consumer? Are you seeing any trading down? It doesn't seem like it but I just want to make sure we get your perspective given how -- kind of how wide you reach is. And then just a quick follow-up.
Yes. I think, Erik, we would say that there's not any significant evidence that spending patterns for our product lines and our customer base are currently being impacted. It's a little hard to say it's not because we don't have control data to measure that against because we're doing so well. But we do tend to target a customer base and product ranges that are not at the commodity low-end level. So we make premium products with clear differentiators and customers seem to appreciate them and step up for them. So it would appear that, that is resonating with customers.
Okay. That makes a lot of sense. And then maybe just last one. If you look at Garmin Connect MAUs, strength there, at least growth there has been very consistent in the mid-teens on a monthly basis year-over-year. Is there any way that you can help us understand what of that growth is new customer additions versus prior Garmin customers just reengaging with the Connect app? And does that behavior look any different than past cycles or past periods? Just trying to understand kind of the strength of new users versus existing users that are just reengaging. And that's it for me.
Yes. Our Connect registration behaviors, we've mentioned those from time to time, that most of the new accounts and the new devices we see registered on Connect are from new customers. We do see a healthy number of existing customers that continue to engage with Garmin and they upgrade their devices. And we see, frankly, a robust secondhand market where people might sell one of their products and trade up to another one and somebody, a brand-new customer to Garmin, comes into Connect, which gives us an opportunity to then upgrade them in the future. So in general, I would say it's a very healthy environment, and mostly still driven by new customers.
With no further questions. Teri, I'll turn the floor back over to you.
Thank you all for joining the call today. Doug and I are available for callbacks. And we hope you have a great rest of your day. Goodbye.
Thank you. This does conclude today's conference call. You may now disconnect. Have a great day.