Savaria Corp

TSX:SIS

Earnings Call Transcript 2022-Q3

[Operator]

Good day. My name is Mary, and I'll be your conference operator today. At this time, I would like to welcome everyone to Savaria Corporation's Q3 2022 Conference Call. [Operator Instructions]. This call may contain forward-looking statements, which are subject to the disclosure statement contained in Savaria's most recent press release issued on October 25, 2022, with respect to its Q3 2022 results. Thank you. Mr. Bourassa, you may begin your conference.

[Marcel Bourassa, executive]

Thank you very much, Mary. My name is Marcel Bourassa. I am with Sebastien, Nicolas and Steve, our CFO. That's a pleasure to first of all speak to you about our Q3.

I'm very proud of the number of Q3. Booking is strong. We make our projection, okay, in February, if you think, okay, your life like 10 months or 9 months back, okay. it's a different world, okay? Completely different world. And don't -- the people don't answers lately, unfortunately. So the people don't like that. We like [indiscernible], okay. After a projection, here comes the war, here comes the inflation, here comes the cost of container left and right and inflation was just everywhere, okay? And after that, the container, that was not easy, okay, to come to the port in Toronto.

So we will see to it to meet our EBITDA guidance, okay? And our EBITDA guidance, okay, we were at the low or -- of the -- we propose that would be lower of the near the $120 million and the $130 million. But when you put that all together, okay, if I was in February, I will tell you what we'll exceed with our bracket, okay? Because practically everything is so expensive, okay? So we have a very strong. My people work hard, okay, and I think we have a great number, okay, and thanks for the analysts who write to us, okay? I think you are very positive about Savaria. Thanks again.

So I am ready -- my team, okay, is ready. And first, okay, we go to Steve, our CFO, that I think is making a tremendous job, and Steve, can you take the floor, please?

[Stephen Reitknecht, executive]

Yes. Thank you, Marcel, and good morning, everyone. I will begin with some remarks regarding our Q3 2022 consolidated financial metrics. For the quarter, the corporation generated revenue of $201.4 million, up $20.6 million or 11.4% compared to Q3 2021. The increase was driven by strong organic growth of 15.7% and was somewhat offset by foreign exchange headwinds of 4.3%, netting out to 11.4% growth overall. Gross profit and gross margin stood at $64 million and 31.8%, respectively, compared to $58.6 million and 32.4% for Q3 2021. The increase in gross profit was mainly driven by higher sales volumes, while the decrease in gross margin versus last year was mainly attributable to continued inflationary pressures on the supply chain, especially in the European region, causing material cost increases.

These inflationary pressures were somewhat mitigated by initiatives taken to increase customer prices, reduced shipping costs and also due to improved fixed cost absorption. Adjusted EBITDA and adjusted EBITDA margin stood at $31 million and 15.4%, respectively, compared to $26.3 million and 14.6% in 2021. The increase in adjusted EBITDA dollars is primarily due to increased sales volumes, while the increase in adjusted EBITDA margin is mainly due to lower selling and admin costs as a percent of revenue, which offset the lower gross margin year-over-year.

And now I'll move on to our segment results. Revenue from our Accessibility segment was $145.4 million in Q3 2022, an increase of $9.8 million or 7.2% compared to the same period in 2021. The increase in revenue was mainly attributable to organic growth of 13.3%, which was offset by a 6.1% revenue decline due to foreign currency impacts. The weakening of the euro in town overshadowed the strength in the U.S. dollar versus the Canadian dollar. Our revenue growth was fueled by both the residential and commercial sectors as well as price and volume increases and we continue to build our backlog.

At September 30, our Accessibility backlog was approximately 3% higher than Q2, which was already a record quarter for us. Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $26.1 million and 18%, respectively, compared to $24.7 million and 18.2% for the same period in 2021. The increase in adjusted EBITDA was mainly driven by higher sales volumes, while the slight decrease in adjusted EBITDA margin was mainly due to continued inflationary pressures on the supply chain, especially in the European region, causing material cost increases, which again was partially offset by better fixed cost absorption from the increased revenues.

Revenue from our Patient Care segment was $42.8 million for the quarter, an increase of $8 million or 23% when compared to Q3 2021. Revenue growth included organic growth of 21.2%, which was driven in large part by pent-up demand from the last 2 years of the pandemic, new contracts won and also price increases. Adjusted EBITDA and adjusted EBITDA margin both before head office costs stood at $5.9 million and 13.8%, respectively, compared to $3.1 million and 8.8% for Q3 2021. The increase in both metrics was primarily due to the increase in revenues and improvements in gross margins, mainly explained by better cost absorption, price increases and synergies with Handicare.

Revenue generated from the Adapted Vehicles segment was $13.2 million, an increase of $2.9 million or 27.7% when compared to Q3 2021. Revenue growth for the Adapted Vehicles segment was driven by 28.8% organic growth and was partially offset by a negative foreign exchange impact of 1.1%. The strong organic growth was driven by increased police and ambulance and vehicle adaptations despite continued vehicle supply chain disruptions.

Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, finished at $0.8 million and 6%, respectively, compared to $0.6 million and 6.1% for Q3 2021. For the quarter, net finance costs amounted to $2.5 million, essentially equivalent to the Q3 2021 amount. Finance costs in the quarter included $4 million of interest on long-term debt, which was offset by a net foreign currency gain of $2.2 million, most of which was unrealized in nature. Net earnings were $10.6 million or $0.16 per diluted share for the quarter compared to $4.8 million or $0.07 per diluted share for Q3 2021.

Adjusted net earnings, excluding amortization of intangible assets related to acquisitions, reached $15.8 million or $0.25 per diluted share compared to $10.5 million or $0.16 per diluted share for Q3 2021. This reflects an increase of 49.4% or $0.09 on a diluted share basis.

Turning now to capital resources and liquidity. Savaria generated cash flows from operating activities of $19.2 million for the quarter compared to $7.7 million in Q3 2021. This large increase was due to increased earnings and less of an investment in working capital than we saw last year as well as last quarter. We continue to make targeted increases in inventory while managing our receivables and payables.

As at September 30, 2022, Savaria had a net debt position of $398.3 million and was in compliance with all of its covenants. On a trailing 12-month adjusted EBITDA basis, Savaria's net debt-to-adjusted EBITDA ratio was 3.3x. This represents a 0.4% decrease versus Q4 2021. Savaria has funds available of approximately $102 million to support working capital, investments and other growth opportunities.

And looking forward, the current changing macro environment and movements in economic and political field create uncertainties. However, considering our recent financial performance and our strategic integration plan with Handicare, for 2022, Savaria expects to generate revenue of approximately $775 million, with adjusted EBITDA in the low end of our previously stated range of $120 million to $130 million.

And with that, this completes my prepared remarks, and I'll turn the call back over to you, Marcel.

[Marcel Bourassa, executive]

Thank you very much, Steve. Okay. Good job. And we can see that we have a fantastic quarter. And so I wish, okay, I do that some of our people have some question for us. So we're ready for the questions. Mary?

[Operator]

[Operator Instructions] We'll take our first question now from Michael Doumet of Scotiabank.

[Michael Doumet, analyst]

A 2-part question on Europe. I guess what's your confidence level here on sustaining a strong profitability in the region? And I ask in the near term, are you able to get more price to cover raw material and energy prices? And in the medium term, if demand weakens the macro situation remains fluid again, what's the confidence level there?

[Marcel Bourassa, executive]

Yes. Okay, we have for North America, a portion of Savaria, okay, we'll have a new increase in January, okay, roughly between 4% and 5% depending on the products. So [indiscernible] country have the same thing. So we will cover or exceed I wish, okay, what will happen on this side of inflation, Sebastien or Steve, do you have something to add?

[Stephen Reitknecht, executive]

Yes. Marcel, I'll jump in here, if I can. So -- thanks for the question, Michael. Just to touch on Europe, we are seeing very strong sales there. We saw double-digit sales growth in the quarter that was negated significantly by foreign currency impacts. So we're happy with the top line growth there. I mean the inflationary pressures were -- obviously, we're continuing to work on, and we're trying to mitigate where possible. But we don't have -- we're still confident in our performance there in our -- in the future. Bookings remain strong and revenue growth continues to be strong. So some challenges on the inflationary side, but those were somewhat expected.

[Michael Doumet, analyst]

That's perfect. Okay. And then maybe second question, look, I think it's fair to assume that 2022 has been a tough year for effectively all manufacturers even if I assume the bottom end of the 2022 EBITDA guidance, Q4 EBITDA, despite the favorable seasonality, should show some decent momentum from Q3, presumably, I think setting the tone for 2023. So my question is on 2023 here. Obviously, putting aside the macro discussion. What do you think are some of the factors here that are in our control that give you the confidence that you can drive profits higher next year?

[Marcel Bourassa, executive]

Well, we're a beautiful industry, okay, Michael, just okay, and it's for me, okay, because I turned 70, okay. People need our products around the globe, okay? So it is, okay, if it's not -- you did a project tomorrow, you will need one in 6 months, 1 year, 2 years, okay? This is why, okay, we have growth. We will continue to have growth. We are very confident, okay, of the growth because we are opening a new factory in Mexico, okay? That's important for us, okay, and to deliver quickly the products to our dealer. So that's it, okay? And I think Sebastien to be there, okay? And to be able in 10 months, okay, that we have a factory right now, and we have some people already working, okay, and we will see the impact on that in 2023. So I am very optimistic about 2023. I'm very optimistic, okay, about our people, I think our marketing is great. And we will have order, okay, and we -- I think we will present a better number for sure in '23. Sebastien, you have something to add on that?

[Sébastien Bourassa, executive]

I would just say to that, we always try to have action plan for our divisions so that they can get better in terms of productivity, manufacturing, sourcing. So I think we have a lot of project on the go for next year, actually for example, this year, we have got manufacturing of the free curve into North America. We are just getting better in every day. So that's the good part. And next year, we have a second product of [indiscernible], which also is going to be manufactured in Toronto that should [indiscernible] Mexico, we talked about it. But again, no expectation for this year, but next year, that should help us to achieve a growth for North America. That's some examples of projects that we have on the go with different divisions.

[Marcel Bourassa, executive]

Thank you, Sebastien.

[Operator]

And we can now take our next question from Frederic Tremblay of Desjardins.

[Frederic Tremblay, analyst]

Sebastien, you mentioned the free curve. Just a question on that. Can you talk a bit about the demand that you're seeing from that product from North American dealers. Has it been consistent with your initial expectations so far? And what's sort of the outlook for that product specifically?

[Sébastien Bourassa, executive]

So I think -- go ahead, Marcel.

[Marcel Bourassa, executive]

Just to say, okay, what is very important, okay, that sell occurs [indiscernible] study, okay, do you have the product? When can you install it, okay? So the delay of projections and talk to the customer is very important. And we will offer very soon, very soon, beginning of '23, okay, that will have a lead time, okay, less than 2 weeks. That's something, okay, was missing because it was a 6 weeks, it was 8 weeks, okay? Now, we will be there, okay, with the end care support us, okay, come at towards entity to be quicker and quicker in the delivery. You will see a big increase of the number of sales, okay, because we are delivering, okay, we will deliver faster. Sebastien, you have something to add?

[Sébastien Bourassa, executive]

Yes. So it's a good start, I think, Fred, you don't become an expert the next day, even though we have all the machinery. So this year, -- the team in Grafton went through a lot of training. I think our lead time is decreasing each month. And now we are at 3.5 weeks, which is better, and we target to be at 2 weeks at the end of the year, as Marcel said. Our people have been cross-trained. Now they are doing some -- we can sell elevators to stair lift in North America. So other dealers have been offered the curve [indiscernible] to free curve. So I think -- that's a good step. But definitely, we should see some better growth in the curve stores in the coming year with the manufacturing in Toronto.

[Frederic Tremblay, analyst]

Great. That's helpful. Maybe, Marcel, if you can speak on Q4 so far in terms of demand or shipment. Obviously, the bookings, as I mentioned, were strong in Q3. How is that translating in Q4 so far?

[Marcel Bourassa, executive]

So far, so good. We have the -- I speak, okay, like North America, first, okay. And we see the booking, okay, and it's not like a service, okay, where we install a couple of books after that, okay. But like on the residential elevator, they're booking is our highest booking than ever, okay, on a residential elevator. So that's very strong, okay? And I see for sure everything can change, okay, with some more or something that is just okay that we don't see, okay, nobody knows what will happen in the next -- until the end of the year, okay, or in '23. But I think what is -- our Savaria is positioned okay to be able to deliver the project to our customers. And we -- that's a great industry. We have a nice competitor and I think they are very good, okay? But I think we're a little bit better, okay? So I am more than say that we will meet, okay, what our latest guidance that we have done and maybe exceed a little bit on sales. So I wish that answer your question, Frederic.

[Frederic Tremblay, analyst]

Yes. That's perfect. Just maybe one last one quickly for Steve. On SG&A expenses, we've seen that come down both year-over-year and quarter-over-quarter basis. Anything in particular driving this trend? And have we sort of reached a normalized rate around $45 million, $46 million a quarter for SG&A? Or is there more room for that to come down?

[Stephen Reitknecht, executive]

So it depends if you're looking with or without amortization or depreciation, we are seeing the intangible assets, amortization related to acquisitions come down, and that will continue to come down as the Handicare acquisition assets amortize off the books. But generally speaking, Savaria has done a good job in most regions of keeping SG&A costs relatively flat and lower as a percent of sales, so keeping the cost base flat while we're growing the top line. So it's normalized for the most part. The only piece that will continue to decrease is that amortization aspect, Fred.

[Operator]

And we can now take our next question from Derek Lessard of TD Securities.

[Derek Lessard, analyst]

Maybe this one for Nick. Really, really strong results in patient care, specifically interested, Nick, in the synergies that you're getting there from Handicare? What's left and sort of sustainability of that?

[Charles Rimbert, executive]

Yes. No, I think it was a good quarter again in Q3, and thanks for the question. There's still quite a bit to go in terms of synergies. We're -- I would say scratching the surface, especially as it relates to cross-selling. That's one where a big focus of ours has been over the past year. Again, it's a lot of training that's involved. It takes a while for some of the span guys to learn how to sell a bath or vice versa.

So kind of getting guys cross training to these products and then organizing the sales territory. So that's something that's kind of been ongoing. We have patent fill been leading that initiative for us. So that's one where we still think that there's a lot of upside with cross-selling. But otherwise, in terms of the end markets, the end markets, they've been good for -- so you saw the 20% organic growth.

It's a continuation of a trend that we've seen over the past couple of quarters. There's good spending here in Canada. So good government spending in Canada. And in the U.S. IDN spending because that's hospital spending has been quite good for us. So those have been the 2 drivers of that business -- of the growth of that business, those, yes.

[Derek Lessard, analyst]

Okay. I'm just curious if there's -- in terms of the backlog, I know you gave it for the Accessibility segment. Can you maybe comment on some of the backlog that you're seeing in your business?

[Charles Rimbert, executive]

Well, the backlog here for patient care, it's more on the -- I guess, on the Handicare side of things, right, on the ceiling lift, the installation business that we have there, it's more project-based. So there's a bit more of a backlog associated with that than there is maybe on the legacy span side. So the backlog is still quite good. I think the order intake from the beginning of the year is what we're seeing here some here in Q3, there is some contracts that have been won, and we're just delivering on those. There's been certain delays of some of these new builds that also is kind of pushing some revenues out so that should hopefully impact us in a positive fashion, possibly, whether it be in the back half of this year or last quarter of this year or going into next year, some stuff that's gotten pushed out.

But otherwise, the backlog has been relatively strong there. The order intake possibly come down a little bit here. I guess we can't expect 20% growth forever, but we do still anticipate some strong growth here in Q4 and going into next year, things are quite especially as you think about some of the cross-selling initiatives that I mentioned earlier, haven't quite taken hold yet, and we're expecting that to kind of help boost growth going in 2023?

[Derek Lessard, analyst]

Okay. And maybe a broader one. Just curious if you've seen any improvements on the material cost side, I guess you pointed to Europe where you're seeing material increases, and I'm assuming that's from 4x. Just wondering how much more room you guys might have to push on the pricing front there and what's your visibility look like?

[Marcel Bourassa, executive]

Sebastien?

[Stephen Reitknecht, executive]

So yes, maybe Marcel, I will take this one. Pricing is obviously something that we look at more in an isolated -- from an isolated perspective, we look at our different markets and our different products. It's coming to the end of the year now. We've just announced some price increases for the North American market. And obviously, we're looking at our different markets. So -- we have seen the inflationary pressures. Our -- we're looking at what we can source differently and how we can mitigate that. But obviously, a big lever that we can pull on is price increases, and that's something that we are continually looking at -- it's -- at this point, I can't say what the increases are going to be for the European region in particular, but that's something that obviously we're focused on and going to be implementing for next year.

[Derek Lessard, analyst]

I want to get everybody in. So this is probably one for Sebastien. I'm just curious about where you are in terms of, I call it, your onshoring strategy in Mexico and Brampton. So just wondering if you're able to maybe give some indication of what you're expecting in terms of some cost savings around the supply chain, where you are in lead times? And when do you expect Mexico to be fully ramped?

[Sébastien Bourassa, executive]

Thanks for the question. So basically, as Marcel said in the press release, we signed a release like 7 months ago. And basically, we moved into a building in September, but we are starting operation since this week, November 1, to do some subassembly and to do some finished products. So in November, we are going to have some finished products going from Mexico to the U.S. I think there's no change for our guidance for this year. I think as well already a lot have happened this year. But definitely next year to build the growth for North America, we needed some additional capacity. So Mexico is going to serve well in terms of that aspect.

And I think lead time is key from a transit time from Mexico to North America. So you can see here on the long term, that should then pass maybe lower inventory and hopefully to find some cost savings initiative. But first, our mission was to rebalance a bit with Asia and North America. So that was the main purpose of Mexico. But again, it's next year expectation.

[Operator]

We can now take our next question from Zachary Evershed of National Bank Financial.

[Thomas Bolland, analyst]

It's actually Thomas calling in for Zach. I apologize, the line correct early in the call. Would you mind repeating what the North American price increase will be in 2023, please?

[Marcel Bourassa, executive]

Okay. That's me, okay, you put that okay for North America, okay, we increased, okay, from different projects, okay, for an average, maybe between 4% and 5%, okay, right at the start of the year. And that would be not touching, okay, with our backlog. That is quite high, okay, but we can see in the future, okay, it's why we do that right at the beginning of the year, okay, for North America and our other friend in Handicare, okay, they will do the same thing, okay? Or they are doing the same thing. So we are proactive, and we will continue to deliver a great year in 2023.

[Sébastien Bourassa, executive]

Just one little comment, Thomas. You know what we said this year when we announced a price increase because we have to be respectful with our dealers. We have a certain cycle. It takes up a certain time to change the backlog. So it's not because we have announced it, it is in effect in January and then [indiscernible] January 1. So I think we can expect more contribution of the price increase in North America to be more towards Q2 due to the high backlog.

[Thomas Bolland, analyst]

That's helpful. And maybe one last one for me. Could you maybe talk about your net exposure to interest rate fluctuations after swaps? And what about your net FX exposure, how much hedging is in place?

[Marcel Bourassa, executive]

So thank you, okay. So that's very interesting, okay, but that's a very important question and we're a specialist on that, Steve?

[Stephen Reitknecht, executive]

Thanks, and thanks for the question, Thomas. On the interest rate side, we do have quite -- we have a few cross-currency swaps in place that are favorably impacting our interest rates overall. So -- we do have U.S.-based debt and also we are benefiting from -- we are benefiting from lower interest rates in Europe as well. So our net interest rate is lower than what you'd see published in the Canadian market. So I think we're doing a decent job there.

With regards to FX, I mean if you're talking more on the top line or with regards to debt, but I mean, on the top line, we can see the FX impacts in the quarter. They are quite sizable for the euro and the pound. I mentioned earlier, we saw double-digit growth in Europe, which we're quite happy about. But we -- but that was negated by the decline in the euro and the pound versus the Canadian dollar. So we are somewhat diversified there. We have the strength from the U.S. dollar counteracting that, but the weakness in the pound and the euro was greater than the strength in the U.S. dollar that we saw for the quarter.

[Operator]

And we can now take our next question from Justin Keywood of Stifel.

[Justin Keywood, analyst]

I have 2 questions. One is I'm curious how the curved stair lift is selling in North America, if have been started because with Handicare, I know that was one of the key that could gain some traction here at home if you have any indication of how that's going so far?

[Marcel Bourassa, executive]

Sebastien?

[Sébastien Bourassa, executive]

Thank you. Basically, Justin, I think we are happy of this year. And we have first manufacture it here in Toronto. We have trained our salespeople of Savaria to know about the Handicare product and to bring some Savaria dealer to buy the Handicare products. So I think it's going in the right direction. We see a double-digit growth in Australia. I think as Marcel mentioned at the beginning of the call, as we get better returning time that should pass to continue to have accelerated growth in North America to the current story. So [indiscernible] of the beginning of integration onto the curve study for North America.

[Justin Keywood, analyst]

Great. Good to hear. And then my other question is a broader goal. I know late last year, there was a new longer-term target, although it's becoming nearer term of Savaria expanding sales to $1 billion by 2025. And if that goal is still on track.

[Marcel Bourassa, executive]

I will tell you, okay. I would be disappointing a little bit if we are not better than 2025, okay, at the end of the year. I think, okay, I'm very positive about that. So that say -- our cross rating that we do, okay, it will help okay about internal growth. Plus, okay, we have working in that our product meet the code in Europe. I am very optimistic about that we will -- by the end of '25, okay, we will exceed, okay, our objective -- our big objective to be at $1 billion. And we wish you know what is important to our EBITDA, okay? That's a goal, okay, to reach okay 20%, okay. So we're there, okay. And we will push our products. I am very happy that Sebastien finish the project, okay, up to be in Mexico. We will develop at the same time, okay, this country and country around there to sell direct. So all this little being okay, we had a -- so I am very optimistic for our objective, okay, of 2025.

[Justin Keywood, analyst]

That's good to hear. And just to clarify that the target would be 20% EBITDA margins at that scale level?

[Marcel Bourassa, executive]

Yes. That's our objective, okay? So we know where we are right now, and we know exactly where we want to go. And we have a target, okay, that's an aggressive target. But you can imagine if we reach that, the result that will be the bottom line, okay? So I am positive my people are positive. The people that will buy at the Handicare, okay? They are a great partner -- and for sure, okay, we will -- it's not easy here right now in this development that we are, okay, but we continue to work hard and we continue to deliver. But it's important to continue to improve our products, okay, and just to see [indiscernible] okay the best project at the best price. So yes, I am very optimistic.

[Operator]

We can now take a follow-up question from Derek Lessard of TD Securities.

[Derek Lessard, analyst]

Just a couple more from me. I was curious on if you can maybe talk about what you're seeing in terms of your innovation pipeline over the next -- maybe heading into next year, but as well as longer term?

[Marcel Bourassa, executive]

Yes. We don't have a crystal ball, okay, but what is the best crystal ball is looking around the globe, look out the aging of the population, okay? And it's there, okay? And I am more optimistic, okay, about the sales, okay, and what for sure, okay, we have to deliver, okay? But I think we deliver, okay? Sebastien, you have something to add?

[Sébastien Bourassa, executive]

I would just say that innovation is always very difficult to talk on account because it's very, very confidential. But what we have is we have 50 people in R&D working on improving existing products, developing new products, and this is all work that is done to support the growth. And right now, what did we say on previous calls is that we want to bring some of the vertical product in Europe to make it C-compliant, to make sure we can have the one-stop shop in Europe so that's one of our key focus right now.

[Derek Lessard, analyst]

That's helpful. And I understand the competitive nature of it. Last one for me is, how do you guys think about returning capital to shareholders, more specifically, buybacks versus dividend increases.

[Marcel Bourassa, executive]

That's a good question, okay, and that's a question of policy, okay. So we began to deliver dividends, okay, many years ago, okay? And more and more, okay, we have with the increasing of the EBITDA, a portion of dividends, okay, is smaller than it was, and it will become a little bit smaller in the future too and to offer always to our shareholders at an increase every year. But I think the potential of growth of our EBITDA will be higher than the percentage of increase of our dividends. That's our strategy. Sometimes it takes a little bit more time than I wish. But you know exactly my thinking on that.

[Operator]

[indiscernible] the Q&A session. I would now like to hand the call back to Mr. Marcel Bourassa for closing remarks.

[Marcel Bourassa, executive]

Thank you, Mary. Thank you for our analyst. That's very important, okay. You do a great job about Savaria. I see all that you will write yesterday night and you are very positive. Okay, actually more positive, okay, than we see again on the stock exchange, okay. We have -- you're right, okay, and you know maybe Savaria more than other people, okay, that you see that our stock would be around $20, okay? Or you suggested that the value can be around $20. So it will be there. We have to continue to work. Our partner Handicare and other company will continue to work hard too and to deliver the best projects okay, to the customer. So thanks to my employee, thanks to my analysts, okay. And we'll see you at the beginning of next year. Thank you. Thank you, Mary.

[Operator]

Thank you. This concludes today's call. Thank you all for your participation. You may now disconnect.