GDI Integrated Facility Services Inc
TSX:GDI
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Estee Lauder Companies Inc
NYSE:EL
|
Consumer products
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Church & Dwight Co Inc
NYSE:CHD
|
Consumer products
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
American Express Co
NYSE:AXP
|
Financial Services
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Target Corp
NYSE:TGT
|
Retail
|
| US |
|
Walt Disney Co
NYSE:DIS
|
Media
|
| US |
|
Mueller Industries Inc
NYSE:MLI
|
Machinery
|
| US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
31
39.85
|
| Price Target |
|
We'll email you a reminder when the closing price reaches CAD.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Estee Lauder Companies Inc
NYSE:EL
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Church & Dwight Co Inc
NYSE:CHD
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
American Express Co
NYSE:AXP
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Target Corp
NYSE:TGT
|
US |
|
|
Walt Disney Co
NYSE:DIS
|
US |
|
|
Mueller Industries Inc
NYSE:MLI
|
US |
|
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
This alert will be permanently deleted.
GDI Integrated Facility Services Inc
You don't have any saved screeners yet
Good morning, ladies and gentlemen and welcome to the GDI Integrated Facility Services First Quarter 2023 Results Conference Call. [Operator Instructions] This call is being recorded on Friday, May 12, 2023. I would now like to turn the conference over to Mr. Stephane Lavigne, Senior Vice President and Chief Financial Officer. Please go ahead, sir.
Thank you, [indiscernible]. Good morning, all and welcome to GDI’s conference call to discuss our results for the first quarter of fiscal 2023. My name is Stephan Lavinge. I am Senior Vice President and Chief Financial Officer of GDI. I am with Claude Bigras, President and CEO of GDI and David Hinchey, Executive Vice President of Corporate Development.
Before we begin, I would like to make you aware that this call contains forward-looking information and we ask listeners to refer to the full description of the forward-looking Safe Harbor provision that is fully described at the beginning in the MD&A filed on SEDAR at the end of last night.
I will begin the call with an overview of GDI’s financial results for the first quarter of ‘23 and we will then like Claude to provide his comments on the business. In the first quarter, GDI recorded revenue of $591 million, an increase of $96 million or 19% over Q1 of last year, made up mainly of organic growth of 14% and growth from acquisitions of 2%. We recorded an adjusted EBITDA of $33 million in the quarter, a decrease of $3 million or 8% over Q1 of last year.
In Q1, we modified our adjusted EBITDA definition to exclude configuration and customization costs for our strategic information technology projects, which presently is the HRIS project that we began implementation planning in 2022 and launched on January 1 of this year. So far, we have spent $7 million on this project, which includes a $2 million CapEx on a total budget of $10 million, and there were $1 million of cost in Q1 of 2023 that were excluded from adjusted EBITDA. Presently, approximately 5,500 people have been onboarded into our HRS platform, and the remainder of our employees, are expected to be onboarding during 2023. Also in Q1, we made the decision to rename our business segments to more adequately describe their services offering. Also, Canada is now Business Services Canada and GentoU.S. is Business Services USA. In addition, supplementary service and corporate and illumination segments are now grouped under corporate and other segments.
Then to our business segment, our Business Service Canada segment recorded revenue of $141 million in Q1, a decrease of $1 million or 1% compared to the first quarter of 2022 and reported adjusted EBITDA of $14 million compared to $19 million in the first quarter of 2022, representing a decrease of $5 million. Our business service USA segment recorded revenue of CNY177 million in Q1, representing an increase of $14 million when compared to Q1 of 2022, increase partially attributable to the 2022 acquisitions and the appreciation of the U.S. dollar relative to the Canadian dollar.
The segment reported adjusted EBITDA of $12 million compared to $13 million in the first quarter of 2022, representing a decrease of $1 million. The organic revenue decline in Business Service Canada and Basel Service USA segment is attributable to a decrease in Covet related extra services as compared to Q1 of last year, which also led to lower adjusted EBITDA margin in both business service segments. Base service revenue is up both in Canada and in the U.S. Our Technical Services segment recorded revenue of $252 million or a growth of 47% over Q1 of 2022, including organic revenue growth of 43%. The segment generated an adjusted EBITDA of $11 million, representing an adjusted EBITDA margin of 4%. Revenue growth of the business is attributable to a strong increase in project revenue and higher service revenues compared to previous year.
Finally, our Corporate and Other segment reported revenue of $21 million and a negative adjusted EBITDA of $4 million compared to revenue of $18 million and negative adjusted EBITDA of $2 million in the Q1 of 2022. This segment also recorded organic growth of 17% in Q1 of 2023, mainly due to GDI’s integrated set service business unit, which was launched at the beginning of 2022. The Corporate and Other segment is composed of our Integrated Facility business service, our Genfare product manufacturing and distribution business as well as our corporate cost and elimination of intercompany transactions.
I would like now to turn the call to Claude, who will provide further comments on GDI’s performance during the quarter.
Stephane thank you [Foreign Language]. Good morning, and thank you all for taking the time to participate in our earnings call this morning. I am overall pleased with GDI’s performance in Q1 this year. In our Business Service Canada segment, we are seeing a stabilization of occupancy levels in the Class A and the office market as most occupants are well into the deployment of their individual hybrid work policies. We are actively working on a sustainable service model that would respond to most of the occupancy policies we are seeing evolving in the market.
As expected, we have seen a progressive decrease in per extra services in Canada, and we expect this to continue through the coming few quarters. We continue to expect margins in Canada to remain at a premium to pre-pandemic levels for the foreseeable future. Our business service US segment had a good quarter despite a lower margin in the quarter, which is primarily driven by a reduction of extra services, pass-through expenses and timing in price increases to customers. Our Canadian Cascadian business has been successfully onboarded and our 2 Seattle offices were combined at the start of the year. Finally, our IH service business is continuing to perform extremely well.
Moving to our Technical Service business. Ainsworth has an exceptional quarter, delivering organic growth of 43% and nearly doubled its EBITDA. As you know, due to the supply chain disturbance and Covet delays and Swartz started the first quarter with a record project backlog. We were able to execute on a significant amount of that backlog. However, we also booked more than we built in Q1, meaning answer backlogs continue to run at the all-time high. Additionally, Ainsworth OnCall service business had a strong quarter, generating close to one-fourth of the organic growth. Typically, the first quarter is Ainsworth’s weakest quarter from an EBITDA margin perspective and its HVAC service business typically do not start to ramp up until mid-Q2.
In the first quarter, we made a decision to move our GDI IFS and manufacturing distribution business into our new corporate and other segments due to the size relative to the other business segments. The IFS business is continuing to perform well on its two inaugural contracts and it’s building on its sales pipeline across North America. IFS typically focus on margin complex contract opportunities with sales cycles that can belong. But I’m encouraged by the opportunity they are personally. Our manufacturing and distribution business is gradually adapting to the lower office occupancy environment.
In conclusion, I would like to say that the outlook for all of our business segments remains positive. We have a strong market position in Canada, and we are steadily growing our U.S. footprint. The 3 acquisitions that we concluded in 2022 has been successfully onboard and are all performing well. Our balance sheet, which has been supporting our strong organic growth has a leverage ratio or less than 3x debt to EBITDA. We are a very strong and well-positioned competitor in the market. Our balance sheet is healthy and capable of supporting our growth objectives and our M&A team is actively working on new opportunities. I am pretty much looking forward to our team to continue adapting in this evolving environment in 2023.
So please, now, operator, if you could open the lines, please. Two questions.
Ladies and gentlemen, we will now begin. [Operator Instructions] Your first question comes from Derek Lessard with TD Securities. Please go ahead.
Yes. Good morning, everybody and hope you are all well.
Good morning.
Good morning. I just wanted to maybe start on the commercial office occupancy, and you alluded to that in your prepared remarks as well as in the MD&A as it being stable. Can you just maybe help me square away those comments and your views on the ground with what’s sort of being I guess, reported in the media. There has been some high-profile mortgage defaults in class B&C buildings in the U.S., and they’re starting to see elevated vacancies. I am just curious on what you’re seeing there?
Well, that’s a $2 question. Okay. First of all, I’m going to try to segregate one thing is building default, I don’t think are exclusively related to avid lower occupancy. I think there is a mix of higher interest rates, not occupancy but higher vacancy levels. Anyway, I won’t take the analyst jobs into evaluating the office market. But on our side, what we have seen over the year is, remember, a year ago, the world was still almost closed – so during the last 2, 3 quarters, we have seen kind of a stabilization of what, I would say, the next foreseeable future would look like. We are starting to have a better understanding of the occupant strategy and occupying their office. So, it provided us enough knowledge and information to work into structuring a service model that can respond to more or less all those services. We cannot work every day differently with different staff level and different office occupancy level. So, we needed to structure a service model that responds to most of the strategies, and we’re working actively into that. So, the good news is we’re starting to see a little bit more clearly what would be required for us to deliver the service. So, this will provide us a better stability. On the other hand, our COVID extra level has decreased tremendously over the last quarters. We expect that it will continue to be reduced slowly. I think we have seen the most surge of it. But now it’s all depending. If there is a resurgence of the virus and everything we can be in a totally different space. But for our perspective, we are seeing a better stabilization in the office building. Now we are about 50% occupancy overall. So it gives us a better working model for the future. I mean – and we will evolve as a base. Sir.
No, that’s very helpful. Are you seeing – Claude, are you seeing a difference in Versa in the U.S. versus Canada?
Yes. U.S. has reverted back, my view that I don’t know if my – my team will look at me funny. But I will tell you that our business mix in the U.S. is not the same as in Canada. So, our exposure or our market penetration to office and commercial properties is higher in Canada than in the U.S. So,in the U.S. through our sanitation, industrial and food business segments, they have more or less revert back to normal operations some time ago. So we are working in probably, I would say, a normal cruising speed in the U.S. generally. And I like Canada that to the business office segment is still evolving. Hopefully, it was clear enough.
Yes, that was clear. I was wondering if you had the sort of the office space mix of your overall portfolio?
Well, yes, we know what we have about – in Canada, we are talking about 35% – approximately 35% of our office portfolio. And in the U.S., probably we are in the area of 15%. You actually put a good point. You know what? For sure, our clients are into a thermal. So our job is to adapt and need to be – and to work with our clients and also be prudent on our credit with our clients, and we’re very focused on it.
Okay. And one last one for me before I requeue. Just maybe could you help us with the or your expectations around the technical services business, obviously, a very strong quarter for you there. Specifically, just looking to get some confidence on the growth and maybe level of revenue? And how much of the backlog should we expect you guys to realistically convert to sales?
Well, as you know, I’m very transparent. So to compare to Q1 of last year is a little bit biased because a year ago, we had supply chain issues. We had customer delay issues. We have project start-up delays because of the general environment. And you know what? And so, the backlog was built over time. And we had a good combination of backlog due to some delays and also very, very efficient contract acquisition. So, sword is working full steam ahead for the last while. You know what, it’s very, very I’m very pleased with the way the convert or backlog. We are not seeing any clouds in the horizon that would indeed us to deliver. For sure, it takes up a little bit of our working cap because they’re working – they’re working – they’re very busy. But you know what, in all, we are very happy, and I don’t see any major disruption that could revert the trends.
Thank you very much, guys.
Thank you.
Thank you. Your next question comes from Jonathan Goldman with Scotiabank. Please go ahead.
Hi, good morning.
Good morning, sir.
Good morning. Another one on the Technical Services, mainly the margin. So sales were close to flat quarter-over-quarter, but margins were down 240 basis points. So, I know there’s obviously seasonality in the business. But could you remind us how that seasonality impacts margins in the segment? Also maybe there’s some mix elements in there? And if there’s anything else unusual in the quarter that would keep margins at the lower level in the first quarter?
Okay. You know what? I’m sorry, because you know what, it doesn’t come in very well here. Okay, you want to you want me to explain to give you an overview of the seasonality. Are you talking about the Business Service segment or the technical segment?
Thing like the sales, they’re flat quarter-over-quarter, but margins are down. I know the seasonality, but if there’s anything else.
Well, well, there are two big factors. First of all is first quarter, there’s a holiday season, there’s people reintegrating the office. So, we always lose 3, 4, 5 usually 5 billing days, which the business is more or less working on two cylinders to start with. Secondly, is all the HVAC startup season and what are the fabric of air conditioning units, startup of chillers and everything, it doesn’t happen in February. It happens in end of April, mid-May. So, we are working on projects, discontinued, but the higher margin service call systems and you know what the holiday payouts and the business they lost, if you allow me to say it this way, are all contributing to make it a low – usually a less profitable segment.
Now, that’s crystal clear. I appreciate that. And then the second one, again, margins at this time, the Business Services USA margin, so kind of below recent trends, pre-pandemic levels. main the script, you called out some sort of pricing lags, I believe. But I wonder if anything else there. Yes, go ahead.
No, no, no. I’m sorry. I didn’t want to interrupt your finished base, and I will answer after don’t worry.
No, I’m just waiting for the color. I’m just trying to figure out margins for the balance of the year, whether – I just want to make one quarter into a whole year and extrapolate that.
Absolutely, absolutely. Well, you know what – there are some factors that affected the margin. First of all, we have a significant client what that still has a pass-through expenses that are – we will terminate this first phase contract and the past to expenses will be revised. So that affects the margin on a mathematical approach. Secondly is we have another large client that increases are due – the increases are enforced in July. So, we have a little bit of a lag for those. It’s a sum of smaller things that makes it a little bit lower, but I expect margins to resume normally, what, in Q2 and Q3. And again, the surge of the margin is not critical, but I expect it to become to go back to its normality in the next months.
Perfect. Appreciate the color. Thanks.
Thank you. Your next question comes from John Zamparo with CIBC. Please go ahead.
Thanks. Good morning.
Good morning.
I want to start in Business Services Canada, and I just would like to better understand the dynamic there. And I get the year-over-year comparison. But if we look at Q1 compared to Q4, sales were roughly the same, both in dollars and the mix of recurring versus on call, but EBITDA margin was down over 100 basis points. So can you help us understand the movement in EBITDA margin quarter-over-quarter?
You know what each segment – well, first of all, is on the business service side, for sure, on one side, you’ve got a drop in revenues of the COVID extra. So that affects both revenue and margins. There’s an extra day in the quarter as well over the last quarter. So that makes also a difference. And again, like I’m saying is we are still working into getting a better glimpse of our new normality. I expect that we will run like I said, at a premium over our traditional margins, but there’s a reality that what to work on the original COVID margin, it would not be sustainable over a long period of time, unless the world changed again. On the technical side, I think I kind of explained the margins overall, how it works. So somewhat what I can say.
Yes. That’s fine. It was just specific to business services. So that’s helpful. Sticking with Canada, any recent labor negotiations in Canada for business services? And if so, can you share what kind of cost increases you’re agreeing to versus the past few years?
Okay. Well, that’s interesting. We are – so far – okay, first of all, let me say that we do not foresee any significant disturbance in the market. So that’s a good news. As you know, we have over 150 collective bargaining agreements. So, it’s a full-time job, like we say. So, we don’t foresee any major disturbance. Secondly, what we have seen is that negotiations end up around a 4%, 4.5% increases that’s resuming at a normal, I would say, traditional 2% – 2.5% increases. So, we see a jump, which is not abnormal. You all know – you all see the inflation. So yes, collective bargaining agreement tend to work on a 4% to 5% increase, a jump and resuming to a certain normality. This is the simplest, but I think the closest reality answer I can give you.
That’s great color. Thank you. And then one more in Canada and back to commercial office customers. Are you seeing more requests for reduced level of services or requests for price reductions from corporate clients?
Well, yes, you see we tried to be ahead of the parade. People now have a – like I was saying is people start to have visibility on how they will operate. Now, they want to design their requirements according to that the new occupancy model. So, the good news is over the next three months, four months, five months, at least we are going to be able to develop a more stable platform. Now, every day is a new day. It’s – but it’s getting there. So, yes, it will probably come out to a reduction in service – net service level, but in service requirement because of less occupancy, but we will see a more stable environment. So, our strategy is to adapt to our customer. This is our primary objective, evolve with them and be more aggressive and continue to be aggressive in business development to still generate growth although our base customers in this segment will probably generate less revenue, but I think an overall better margin, like I was saying.
Okay. That’s helpful. Two more. One is on the M&A pipeline. And I am wondering what you are seeing there? And are you seeing any change in either the number of opportunities or the quality of opportunities, particularly within Technical Services?
Well, listen, I would say you know what, again, I don’t want my team to look at me funny, but not worried, they are very busy. So, we are both working on the business service side and the technical side in Canada and the U.S. So, you know what, I am very happy to see the level of work being done there. I cannot tell you more because we don’t give guidance, but I think you will see what I am saying.
Alright. Understood. And then one last one, I feel like I ask this every quarter, but on working capital, and you referenced it earlier, Claude, but there was a material drag on cash flow generation that came mostly from receivables. I wonder if there has been any change in payment terms or are customers deferring payments? Just would like to better understand that dynamic. And I think you had previously said you expect a fairly material net improvement in working capital. So, is that still the expectation for this year?
Well, yes, that’s a very good point because this is one of the focus that we are working on. Two, three pieces, first of all is as interest rate surges, we have seen a little bit of a drag in our AR in our receivables because customers, they face a better – a higher interest rate. So, we have to be – we are working more actively with them. Secondly, the growth in ends work also you know what, in project, this is by far one of our most demanding working capital segment. So, yes, the heavy production we had in Q1 affected our working cap. So, our strategy is three-fold, is we are really, really close to our customers on the credit side, because I would like to service our client for our best of ability, but I like to be paid. Secondly, is to really work with our business partners to – on a better cash flow management or more restrictive cash flow management and support the business unit and the working capital needs, that’s key.
Got it. Okay. That’s helpful. I will leave it there. Thank you very much.
Thank you.
Thank you. Your next question comes from Zachary Evershed with National Bank Financial. Please go ahead.
Good morning everyone. Thanks for taking my questions.
Very good morning Zachary.
So, with the bulk of CapEx leading to Technical Services, how fast is capacity ramp up off that spend? And have you been able to increase capacity since the last quarter?
Capacity side, yes, we have increased it because you see the revenue is there. So, we have increased capacity. Our labor pool is in the high-90s. So, that remains also a work in progress to continue to hire and train people. On our technical side, it’s not easy as recruiting just anybody and send them in a car or in the truck, I mean. So yes, we are working. We are hiring. We are training people. We are working with our subcontractors and our business partners to be able to realize more. So, I am at with what is done. I think we will continue to generate the revenues. We have a better capability, but it’s a work in progress going forward to continue to build this capability for sure.
That’s helpful. Thanks. And then looking at corporate and other, what’s the path back to profitability there? How that as far hurting right now?
What actually Fuller is better or is not hurting very bad, we are – what we are in the mix of working on a business plan with Fuller And the building re-occupancy is actually now permitting us to generate more revenue. So, I am not in a critical mode on that front, Zachary. It’s just that what the second part of COVID was difficult for our business unit. There was an oversupply in the market. Our office customers were not consuming. So, you know what, it’s like a double dipper, but things are starting to resume to a little bit better normality now.
Great. Thanks. Then moving on to M&A, can you give us a sense of your appetite and what size targets you are considering given your current balance sheet?
Well, as I always say, the M&A activities are opportunistic. We are – for sure, we still are looking to midsized businesses that we can acquire and integrate with our family. Usually, those are quite accretive and we have been successful in that. This being said, at the last couple of acquisitions, as you said, they were more significant. We have a better capacity. So yes, we are looking to more significant acquisitions because we have the capacity. I have the team, I have the depth, I have the knowledge and we have the expertise to do it. It’s not only a question of cash, it’s a question of capacity. So, I can tell you that we are ready to continue to grow, and we are capable of undertaking larger opportunities. I am very confident on that front.
Great. Thanks. And then on those potential targets, any change to M&A multiples given the tighter interest rate environment?
Actually us, we are applying the change, but it doesn’t mean that everybody is at the same place. But it’s still new, it’s still new, but we have to work with our potential targets, and we work them out with them. And I think people understand that there is a new reality shaping up. I mean saying that the investment banking market as adjusted, they are still working on the other higher expectations, but we work with them.
Got it. Thanks. Would you be able to share any color on the size of the Technical Services backlog in terms of dollars or weeks?
Well, we do not disclose this information, Zachary. But you know what, if I were blunt, for the next year, I think we have enough work in the projects.
Fair enough. Thank you. And then just one last one. You are now seeing more clearly what’s required in business services and some stabilization in office occupancy. We have been watching margins in Canada declined by about 100 basis points every quarter since Q2 of 2022. Any signs of that decline slowing?
You know what, and you see that – let me share a comment that I shouldn’t. It’s interesting is in 2019, we were at the level. And all things being equal, we are delivering, although that most of the COVID extras and higher-margin projects is vanishing. We still sustained a very high margin EBITDA in dollars, I mean. So, I think the team has done a great job in bridging the pre-COVID the post-COVID. This being said, the margin is continuing to adjust. I cannot tell you specifically where we will be at the end of the year, but I don’t think there would be significant 4 points, 5 points, 6 points, and 100 points down. I think that we are – I think that at least three quarters of it is behind us now.
That’s helpful. Thanks. I will turn it over.
Thank you. Your next question comes from Liam Bergevin with Desjardins Capital Markets. Please go ahead.
Hi. Good morning guys. Just another question on the strong 1Q quarter in Technical Services, including the on-call services that are starting than usual, will it impact on Q2 activity levels?
So far, we don’t see anything. As you know, we are in our second quarter. So far, we have not seen that. I think that we had a mild winter. It helped a lot on the break fix and services. But no, we don’t see anything in particular. We have no signs of reductions.
Okay. So, you haven’t seen that in being pulled forward to 1Q, are you – okay, and are you still expecting showing activity into Q2 as well?
Absolutely. I understand your question is did we do our Q2 business in Q1, but it’s not the case. It’s continued to generate the revenue so far. This is what we have on our Board. And on the usage of ours, the report is still the same, so what so far so good. I think that our service delivery in the market is strong. I think people recognize that. And so, we are servicing more and more customers every quarter.
Great. That’s all for me guys. Thank you.
Thank you very much.
Thank you. There are no further questions at this time. Mr. Bigras, back over to you.
Well, thanks everyone again for taking the time for this call. I would just leave this message is we are – I think that we are very, very well positioned to adapt to the market. There has been a lot of changes, a lot of volatility. I think our grand kid will talk about this 10 years as the great disturbance. So, our capacity and our adaptability and our focus on profitability, I think will help us to go and continue to go through this time. I think it’s a known secret that the economy is looking a little bit to be getting into recessions. I am happy to say that we are strong. We have a good balance sheet. We are positioned to capture opportunities. So, it’s worked, but I am very positive on the outcome over time. Thank you very much again
Ladies and gentlemen, this concludes your conference call for today. We thank you participating and ask that you please disconnect your lines. Have a great day.