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Savaria Corp
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Good day, everyone. My name is Shannon, and I will be your conference operator today. At this time, I would like to welcome everyone to Savaria Corporation's Q3 2021 Conference Call. [Operator Instructions] Today's call is being recorded.This call may contain forward-looking statements, which are subject to the disclosure statement contained in Savaria's most recent press release issued on the November 10, 2021, with respect to its Q3 2021 results.Thank you. Mr. Bourassa, you may begin your conference.
Shannon, thank you very much for this introduction. Hi, everybody. My name is Marcel Bourassa. I'm the CEO. And it's a very interesting, challenging Q3 that we have, but I am very happy, very proud of our results. During period Q3 that some price increase, inflation, I don't call that inflation what happened in the freight. This brutal increase, I don't know it's fair or not, but we have nothing to say. The price is that if you are not happy, don't be happy, but they will not ship. So it was bad. That was -- another thing was the price of material increase. Labor is not easy to have. To offer an example, we have our best booking ever. But it's difficult to go through and make some big increase, but it's difficult to have the labor. And that's -- and plus, the Canadian dollar was very strong during Q3.But you will see that I am very confident that we will make our $100 million that we said before the call make. We're near the end, and I am very confident. We are just good people around at Savaria. People with talent. An example, I am very happy that the result of Handicare, I take people that we were many talent and produce very well, and we are so proud of them. I'm so proud with all the other division. Some division, we have to be better. And we'll mention that in 2 minutes.With that, we have some increased price that we have done, but not -- we are very polite because we have some dealer that make a living for maybe 30 years. And our customer, we respect them, and I think they respect us. So we were -- you know somebody order an elevator to Mr. Smith, we respect the price. For the next order, later or the beginning of 2022, we increase our price, and we'll make another increase of price at the beginning of 2022. So we go with them. They are our live dealer and our direct office. So we work with them. And I think it's a win-win. They are very, very happy that we will not increase like overnight the price. We share that.And you will see that we will see in 2022, I am not enthusiastic, but very enthusiastic. Patient Handling was very difficult. We were in the status that we study the people, study a little bit the market. We have Handicare, we have Silvalea, and we have Span. So that represent right now 20% of Savaria’s $140 million. That's a lot of dollar.And I'm very proud that we have a new person, Patrick, who is a VP Development North America. This guy, I like this guy. It would be a complement to our team. And he passed the last 20 years with Arjo. And if you look at the last statement from Arjo, they have a very good EBITDA. I think this is a great company in our Patient Handling. So we will try to go back to an EBITDA of 15% quickly with Patrick. Welcome, Patrick.So I will, at the end, if you have some question, I will be very happy to answer to you. If you see what we see in the future, we see a tremendous year in 2022, but we want to finish 2021 in good strength and add our $100 million. So we'll go in finance. I will pass to Steve.
Thanks Marcel, and Good morning, everyone. I'm going to begin with some remarks regarding our Q3 2021 consolidated financial results.In the third quarter, Savaria generated revenue of $180.8 million, almost double the $90.8 million reported in the third quarter last year, mainly due to the acquisition of Handicare. This is the second quarter of full consolidation of this acquisition.Gross profit and gross margins stood at $58.5 million and 32.4%, respectively, compared to $32.6 million and 35.9% for the same period last year. The decrease in gross margin can be attributed to additional costs related to the supply chain, including shipping costs and also the reduction of subsidies from the COVID-19 employment retention government of Canada program.Adjusted EBITDA and adjusted EBITDA margins stood at $26.3 million and 14.6%, respectively, compared to $16.9 million and 18.6% in Q3 2020. The significant increase in adjusted EBITDA was mainly attributable to the Handicare acquisition, excuse me, and cost containment efforts across the company. These factors were partially offset by additional costs related to the supply chain, including shipping costs, and also by a reduction of subsidies from the COVID-19 employment retention government of Canada program.Turning to segmented results. Accessibility revenue reached $135.7 million in Q3 2021, almost double from $68.5 million in Q3 2020. The increase in Accessibility revenue is mainly due to the acquisition of Handicare and also organic growth of 2.7%. Prior to the acquisition of Handicare, revenue was split almost equally between residential and commercial. The strong performance on the residential side in Q3 2021 was partially offset by weakness in commercial. Accessibility revenue growth was also partially offset by a negative foreign exchange impact for the quarter. Accessibility adjusted EBITDA and adjusted EBITDA margin, before head office costs, stood at $24.7 million and 18.2%, respectively, compared to $15.3 million and 22.3% in Q3 2020.The significant improvement in Accessibility adjusted EBITDA is mainly due to the acquisition of Handicare, while the decrease in adjusted EBITDA margin can be attributed to additional costs related to the supply chain, including shipping costs, and also to the reduction in COVID-19 employment retention government of Canada subsidies. These items were partially offset by cost containment efforts.Patient Handling revenue totaled $34.8 million in the third quarter of 2021, an increase of $17.4 million or 100.5% compared to Q3 2020. This increase was mainly related to the Handicare acquisition and also organic growth of 11%, partially offset by a negative foreign exchange impact. Patient Handling adjusted EBITDA and adjusted EBITDA margin, before head office costs, stood at $3.1 million and 8.8%, respectively, compared to $2 million and 11.7% in Q3 2020. Likewise, the significant increase in adjusted EBITDA is mainly due to the acquisition of Handicare, while the decrease in adjusted EBITDA margin is partially related, additional supply chain costs and a reduction in the government of Canada's COVID-19 employment retention subsidy. These items were also partially offset by cost containment efforts.Adapted Vehicles revenue reached $10.3 million in the third quarter of 2021, an increase of $5.4 million or 110% compared to the same period in 2020. Adapted Vehicles adjusted EBITDA and adjusted EBITDA margin, before head office costs, amounted to $0.6 million and 6.1%, respectively, compared to $0.3 million and 5.8% in Q3 2020. The year-over-year increase in Adapted Vehicles revenue is once again attributable to the Handicare acquisition, partially offset by organic contraction due to timing issues and a shortage of vehicles stock. Increases in adjusted EBITDA and adjusted EBITDA margin for Adapted Vehicles were related to the Handicare acquisition. This was partially offset by a reduction in the government of Canada's COVID-19 employment retention subsidy.In the third quarter of 2021, net finance costs amounted to $2.5 million compared to $1.5 million for the same period last year. The increase is mainly due to higher interest expenses due to additional long-term credit facilities related to the Handicare acquisition.Net earnings reached $9.1 million, or $0.15 per diluted share, in the third quarter of 2021 compared to $8.1 million, or $0.16 per diluted share, for the same period last year. Adjusted net earnings totaled $9.6 million, or $0.15 per share, in the third quarter of 2021 compared to $8.2 million, or $0.17 per share, in Q3 2020.Turning now to capital resources and liquidity. Savaria generated cash flows from operating activities of $7.7 million in the third quarter of 2021 compared to $16.3 million for the same period in 2020. The year-over-year decrease is mainly due to net changes in non-cash operating items of $12.5 million, including a ramp up in inventories as well as increases in receivables and other current assets. The ramp up in inventories was the result of intentional actions taken to minimize any potential supply chain disruptions on the business in Q4.As at September 30, 2021, Savaria had a net interest bearing debt position of $307.1 million and was in compliance with all of its covenants. On a trailing 12-month adjusted EBITDA basis, Savaria's debt to adjusted EBITDA ratio was 3.5x compared to 3.6x in the prior quarter. Savaria has funds available of $138 million to support working capital investments and growth opportunities.Looking forward, the uncertainty around the future impact of the ongoing global pandemic makes it difficult to predict future performance. However, considering our financial performance year-to-date with an adjusted EBITDA of $71 million, combined with current backlog levels and our strategic integration plan with Handicare, we remain confident we will achieve our previously stated goal of generating adjusted EBITDA in that of $100 million in fiscal 2021.On that note, I'll turn the call over to Sebastien for our business and operational highlights. Sebastien?
Thank you, Steve. So my name is Sebastien Bourassa. I'm the VP of Operations and Integration at Savaria. We'll be talking about the Accessibility, and then our friend Nick will talk about the Patient Handling.So with the inflation and the global supply chain issue, labor shortage, I'm quite pleased with result of the third quarter. If we talk about the organic growth 3.5% for the third quarter, for sure it is below expectation, but we expect to rebound in the few coming quarter because the residential home elevator backlog remained quite strong. And we expect a better contribution from the commercial segment for the incline platform, vertical platform for 2022, which has impacted a lot this year.As announced last quarter, we did some price increase on our different products to offset some inflation on raw material and freight. We needed 1 quarter to flush our backlog, and we expect a better contribution in the fourth quarter. As Marcel said at the beginning, we are planning to make some new price increase in 2022. We have increased our inventory level to reduce a bit the risk of supply chain for the winter. So we should be in good position to deliver our organic growth.After that, regarding the integration with Handicare, which I'm sure people have a lot of question, I would like to highlight first a very good performance from Handicare in the third quarter. It was a strong performance, so thank you. Regarding the integration, I think it's progressing well. We have made some adaptation to our new leadership team. And we had the opportunity for the first time to meet in-person in Netherlands and U.K. a few weeks ago with my brother, Alex, and Bill. We had the chance to meet Pete, Clare, David and all the team. It was very nice to see all the different layer of management. And I have to say that there's a lot of talent at Handicare, very good processes, good automation, a very impressive factory. So congrats, Pete and his team. And what the most important is that everybody at Handicare that we met are very excited to be part of Savaria team. They want to be part of the family. They want to share their knowledge, and they want to learn from what we do at Savaria. So that will be good for the future.Regarding our cross-selling synergy, it has continued to move up between Garaventa and Handicare, mostly on a stairlift in the Garaventa network, and with the inclined platform into the dealership of Handicare. Vuelift, that should be a start for 2022. That's definitely on the agenda with the team of care, so thank you for looking at that.As far as North America, it will really start in January 2022, the Freecurve, the single tube manufacturing in Toronto. We have received equipment. Our robots are under installation. People are receiving some training. We are expecting to make some better tests in December in order to be live January 30. This will be a game changer for North America in term of lead time, in order to make some custom curve stairlift in a few days. Obviously our dealer are quite excited. So please come to visit us in Toronto in January.So overall, we think we are at the right pace to do a $12 million synergy run rate by the end of next year, as we said a bit earlier when we have announced transaction of Handicare. And with all those challenge, we remain on track to achieve our $100 million EBITDA in 2021.So Nicolas, patient lift?
Yes. Thanks, Sebastien. I'll spend a minute or 2 to discuss the integration here with our Patient Handling segment. It is well underway. As was mentioned previously, travel restrictions have eased, and we've been able to make multiple trips now back and forth between our operations and the U.S. and Canada. Now these in-person meetings have been important in helping us to get to know one another and to better understand our respective products, sales channels and organizational structures. One of the main goals of our strategic integration planning is to bring together the businesses of Handicare and Savaria as one cohesive Patient Handling group. And this really starts at the top. Earlier in Q3, we consolidated the leadership of Handicare and Span. And just yesterday, as Marcel alluded to earlier, we announced the arrival of an industry veteran with 20-plus years' experience to help lead our sales integration efforts and to oversee the commercial strategy for our Patient Handling activities.Some areas of particular focus are the development of a clear product roadmap, SKU rationalization and the harmonization of our ceiling lift tracks and accessories. Through these initiatives, we'll be able to optimize purchasing and manufacturing efficiencies, and in doing so, deliver a better experience for our customers. Marcel has made it very clear to us in particular that the Patient Handling segment is an important part of the Savaria Group, with a combined revenue base now of $140 million. And we'll be working very hard over the coming months and quarters to ensure that our integration plan is successful and that Patient Handling will be a meaningful contributor to Savaria's overall growth going forward.So with that, I'll turn it back over to Marcel for any final comments before the Q&A. Marcel?
Yes. Thank you, Nicolas, and good presentations, Steve, Sebastien, Nicolas. We are so excited to complete this year and go to 2022. So do we have some question, Shannon?
[Operator Instructions] And we'll take our first question from Derek Lessard of TD Securities.
Good morning. This is Cheryl standing in for Derek who's on another earnings call. So I'm wondering if you could talk about your confidence behind maintaining your $100 million EBITDA guidance, given the top operating backlog, please.
I am very confident, as I mentioned before. We have many things going not so good for us in Q3. But even with that, we are satisfied with the final result. And as I mentioned before, and Sebastien said that, we have all our staff in-house to make our Q4. So we have no problem of shortage. Everything is there. And I think that will -- everybody will continue to work hard and we will deliver. Sebastien, do you want to add something on that?
No, I think some pretty good comments. The team know exactly what they have to do. They have the order in hand. So we are confident with the forecast we have in place.
And our next question will come from Nick Agostino from Laurentian Bank Securities.
Just a quick question on the -- you guys called out labor shortages. Certainly that's something that many, many companies are experiencing. Just wondering, are you seeing -- with the change in government programs on the subsidy side, are you seeing any relief on the labor shortage side? And if not, what sort of steps are you guys taking to improve, I guess, your shortage situation? And should we be thinking about higher, I guess -- or a margins impact if you guys are having to pay or throw it higher wages to attract the talent?
Nick, thank you for the question, and Sebastien can add a bit after. In general, it's not just very as general. It's why I am so happy that we have this curved stairlift that's coming from Handicare. That, everything is about robotically. Very quickly, we will have a capacity of 5,000, manufacture 5,000 curve for North America. That's major. And that number of people don't stay because the robot can work 24 hours and 7 days without to be unhappy. We have to be careful that when we improve or increase the salary at some level, the other level want some increase, too. And we are in shortage of that, and I think that will not change overnight. That will be a challenge in 2022. But we are very proactive. We do a lot of things. But when we have the competition like from Amazon, man, somebody can say, hey, somebody -- okay, it's good. But Amazon, they have good program, too. So that's not easy. But it will continue, but we work hard. We have somebody, Lauren in our HR that she work hard, she try to be innovative. And Sebastien, can you add some comments? You are in the manufacturing.
Yes. I think it's a good comment from Marcel. I think, Nick, for sure the labor shortages are not everywhere. We have some place example in China where people willing to come to work for us. And then we have this pace where we have more automation that maybe the risk is a bit lower, but that's something we're working hard to improve. And it takes time, though. We are flexible, but not so much. We have to plan our growth. And that's a bit something where we are doing to make sure that next year we can deliver some growth. So I think we have a lot of good incentive, and over time we will surpass those challenge.
Okay. And then just my follow-on question. You guys say in the press release that freight costs are on the decline. Is that -- are you guys now starting to see, by making that comment, not only is it I'm assuming declining costs, but are you starting to see deliverables coming through the port, if you will, in B.C.? Is the deliverables of product more timely in line with your prior expectations? Are you starting to see a change there in line with the lower freight cost? And if so, Sebastien, you made a comment that you've increased the inventory through Q4. Is that something that we should anticipate a reversal starting in Q1 as the freight situation improves? And I'll leave it there.
Yes. For sure, Nick. We started the freight to decline a bit. We hope it'll continue as the economy reopen and maybe the demand that people that -- the over ordering that people did will eventually come back to a normal level. For sure the port of Vancouver or L.A. in the U.S., they are congested. But still at one point, that's why we have increased our inventory. Our container will set a certain pace much better than it was in Q2. And I think in order to lower the inventory, I think we have to wait 1 or 2 quarter to make sure things stabilize. Winter, with storm and everything, that we always have to be quite a bit cautious with our stock level.
And our next question will come from Zachary Evershed of National Bank Financial.
If you could help me out, how are you thinking about the pace of recovery in commercial end markets in Q4 and over 2022?
Nicolas?
Yes. The commercial, it has been the drag. I think in certain of the comments that have been made here, residential is really carrying all of our growth in Accessibility. I'm very happy that Handicare's exposure to residential is almost 100%. So with their stairlifts, that's been a big boon for us. But as it relates to commercial, it's difficult to know the timing of when it will come back. Our anticipation is that 2022 should be -- if it's in the first quarter or second quarter, I'm not entirely sure, but we are expecting those orders to come back. It's not a question in our minds of if, but just a question of when. It sounds like I've been repeating myself because I've talked about sustained foot traffic for quite some time now, but we are starting to see that.Some of these landlords, the wage subsidies, the rent subsidies are coming off. They're just starting to break even and starting to make money. They're seeing customers come back. So I think it's going to take a little bit of time for them as well, to be comfortable with their own personal balance sheets before they start making some of these investments. So we do anticipate it to come back in the next year, but it's difficult, Zach, for me to tell you exactly when the light's going to turn on there.
And our next question will come from Matt Buckles of Stifel.
I just have a few questions. First, I know last time we spoke there was some mention of doing some tuck-in acquisitions. I was wondering if you can maybe update us on your deal pipeline in terms of maybe the number of targets or potential revenue. And I guess secondly, wondering if multiples have changed at all, given what's going on with the global supply chain.
Just to tell you that for sure, we have a good balance sheet and we have our bank, well over $130 million I think accessible for making some acquisition. But we don't have -- we're not looking at the major acquisition. But I am sure in 2022, you will see some small acquisition that will be located at key territory that we are a little bit weaker right now, or at some products that we want to add in our line. But really, with focus on integration, we have so many good things that can be, but for sure, we will make some little acquisition.
Understood. Okay. And you mentioned it, but the solid balance sheet, I was wondering if you could maybe provide a little more color in terms of where the number, top few priorities lie in terms of whether it's spending on supporting working capital, investments. Sounds like M&A may be a little bit later. But if you could just outline where your priorities are, that would be helpful.
Okay. Sebastien, you want to take it?
I can take this one, Marcel. We are making investments in inventory, absolutely to working capital. Make sure we don't put any of the sales in jeopardy for Q4 and going forward. So we'll continue to make investments there where needed. On the CapEx side and investment side, we're obviously investing a large amount in the facility here in Brampton to have the curve stairlift production up and running now in Q4 and up for 2022. So there is a significant investment that's been happening there. Other than that, we will continue to make strategic investments in CapEx as required, but any excess funds we're going to use to delever. If something does come up on the acquisition side, the timing is right and the opportunity is right, we will pull the trigger on that, but our plan is to continue to delever.
Okay. And last one for me. I was wondering if you could provide any commentary related to or maybe quantify your overall organic growth expectations over these next few quarters.
So, Sebastien or Steve?
If you go back to the statement that we said before that we want to be a $1 billion company by 2025, that means that we have to be in the 8% to 10% range very often. So I think 40x is definitely the target we are looking for.
And our next question will come from Frederic Tremblay of Desjardins.
So first question for me is on the price increases. You mentioned potential for further increases into 2022. I was wondering if it's more on, let's say, categories that weren't increased in 2021, or is it an increase that's going to be on top of what you've already done for some of your brands here?
You know, we have some increase in every division in 2021, and every division will have a new increase at beginning of next year. So that's -- and the people understand that. Understand they are just go make their grocery and the implication is there. So it's there for them. It's there for us. And we want to share a little bit with our customer and our dealer. And they understand that we have to be strong, have to have a strong balance sheet if we want to keep our role to be the best manufacturer around the world about accessibility product.
Okay. And appreciate the comment on the Patient Handling initiatives. On the timing of the improvements, I was wondering if Patient Handling is expected to contribute more meaningfully in Q4 than it did in Q3 to attain the 2021 guidance. Or is the improvement in Patient Handling expected to be more significant in 2022 and beyond?
To be realistic, that it would be easy to be better in Q4. But I will see the real action and the introduction of Patrick will be -- we will see more change and more EBITDA percentage at Q1 2022.
And our next question will come from Michael Doumet of Deutsche Bank (sic) [ Scotiabank ].
First question. The 2021 EBITDA guidance, that implies a sequential improvement in EBITDA. I understand the typical seasonality here, but I wanted to get a sense for how much of this sequential increase is expected to be driven from higher sales versus what maybe I would call margin recapture. And then just as a follow-on, on the margins, any way you can provide us a sense for how much still needs to get recaptured beyond Q4?
Sebastien, you want to go or I go?
You can talk about segment. Maybe Steve can complete.
Okay. So you know something, we have some price increase everywhere. But as I mentioned before in the call, that us in accessibility for elevator, residential elevators, the order that they place with us, we respect the time line that they will go to install to Mr. Smith with the same pricing. But that is done, that we will see an impact in the Q4. And I know that Handicare and I know that Span and our other division make an increase of price, and we will see that in Q4. But we will see that again, we have another one in Q1, at beginning of Q1. So you will see that roughly it would be a little bit more combined 2021 and 2022 more than 10%. So that's my way of what I see right now. And everybody has number on that. And I think it's fair increase that it would be combined 2021, 2022 over 10%.
And just I can add on that, Marcel. Obviously we saw inflationary pressures in Q2 and Q3 and also on the freight cost side. We have done price increases this year already, but nothing what we put -- nothing compared to what we put in place in Q3. So the more widespread price increases that we put in place in Q3, we're going to see that to come through in the margin in Q4 and going forward. And as Marcel said, we're going to continue to look at price increases. So to your question specifically about margin versus revenue impact in Q4, we're anticipating both.
That's really clear, guys. So most of the catch-up versus pricing happens in Q4, but it sounds like there's still some left in 2022. So, yes. No, that's helpful. And then maybe Steve, just a question for you. If I look at the consolidated P&L, both gross margins, SG&A rates declined quite a bit from Q2. Now I think there's plenty of reasons that are understood on the gross margin side, but I wonder if you can talk about what drove the SG&A lower quarter-over-quarter and whether or not that's sustainable.
So we did have a recast of our financials. So our MD&A was prepared with the recasted numbers on a year-to-date basis for Q3. We had a reclass from SG&A into margins. So if you're looking at prior MD&A, you'll see that change. Whereas if you look at our Q3 MD&A, the year-to-date numbers, it's more in line. Obviously, we did have some pressures this quarter in gross margin and in SG&A. A lot of that was on subsidies. We saw that in subsidy decrease. We saw that in both gross margin and in SG&A. But there was no other real impact to SG&A in the quarter.
Okay. So not much of a read, I guess. No, that's helpful. And then maybe the last one. What do your conversations with your dealer network suggest for the speed of the potential uptake in the stairlift sales manufactured from Brampton? And I guess the flip side to that, in terms of the stairlifts that do not need to be air freighted from Europe, what's the confidence level that you can now sell those into the European market with speed?
I'll tell you, our dealers are very excited that they can propose a project, curved project or curved stairlift, and they can install that in 2 or 3 days after the order. So that will be the best in North America. And other company are very good, but we'll work hard to deliver this product. We put a lot of energy, dollars to be sure that we will be in production for North America at the beginning of 2022. Look at the -- that would be major just on the freight that right now, Handicare sell in North America, sending that by air freight. So it would be coming from our factory. So it's very -- and I would even like very much to see that we would have something that we can deliver -- I repeat myself -- that they can deliver quickly to the customer. Sebastien, you have something on that?
I think what's important to know is they have been doing it in Netherlands for years and years. They have perfection their system. It's a well-run system, and we're duplicating the same thing in Toronto. So the team has done a very good job to train us, to help us. They will be there at the beginning to make sure we don't make mistakes. So I think that take years and years to become an expert, and we have the chance to do it from the day number one.
[Operator Instructions] We do have a follow-up question from Derek Lessard of TD Securities.
This is Cheryl on for Derek again. I'm just curious if you have any plans for to build any other Handicare products in North America. And if so, what type of CapEx and time frame would you be anticipating?
Sebastien?
For sure. If you look at the Handicare right now, they are experts in stairlift and that's what they do. So right now, the straight stairlift is already available within North America. The double tube which is currently made also in Europe. Maybe sometime next year, we could look to manufacture the double tube system of Handicare in North America. But first we have to finish with a single tube to make sure we are successful, and after that, we can think about a second product. But all the other straight stairlifts are already available. The double tube is available, but need to be shipped overseas. That's the next opportunity.
And Sebastien, I would just add, that's a major change for us to manufacture in Toronto. The products that we have the best EBITDA in term of percentage. So that's something that will be a true impact of our EBITDA in 2022. It's why I'm so enthusiastic about this thing. We work hard with Handicare. And as mentioned, they prove that they can deliver this product. So we will have this knowledge or we have right now because it's quite advance in Toronto, and again it's that we're best EBITDA product. So we will be very enthusiastic to speak to you about -- when we speak to you again in the first quarter next year. We will give you where we stand with that.
Okay. That's helpful. And maybe one last one for me. Just wondering if you could update us on some of the cross-selling synergies that you're being able to monetize since closing the deal with Handicare.
Steve?
Specifically on the sales side, yes, they're starting to come. The synergies that we looked at with the Handicare deal, we had them in 3 separate buckets. We had the indirect costs, we had the direct costs, more of the cost of goods section, and then the sales. The indirect piece is obviously coming a little bit faster. I think that's easier to execute. The sales side is starting to come. We're starting to see that come through, absolutely. That is more heavily weighted towards the end of the 1 to 2 years of our integration plan. The good news is that we are seeing it start to come through. We have put some leadership changes and realigned the teams to more effectively go after some of those synergies. And we're confident we're going to deliver at least what we have set out in our initial expectations.
And it does appear, we have no further questions at this time. I'll turn the conference back over to our speakers for any additional or closing remarks.
Okay, Shannon. Thank you very much to be there. Thank you for my team. And thank you very much the analysts. You're an important part of the success of Savaria because you deliver the good news to the buyers. So again, thanks for your very good work everybody that we speak this morning. And a big thanks to everybody, all my division. You work hard, and I recognize that. And you are very fortunate for us, our 2000 employee. So thank you very much. Thank you, Shannon.
Thank you. And that does conclude today's teleconference. Thank you all for your participation. You may now disconnect.