Toromont Industries Ltd

TSX:TIH

Earnings Call Transcript 2020-Q3

[Operator]

Good morning. Today is Friday, November 6, 2020. Welcome to the Toromont Third Quarter 2020 Results Conference Call. Please be advised that this call is being recorded. Your host for today will be Mr. Michael McMillan. Please go ahead, Mr. McMillan.

[Michael Stanley Howie McMillan, Executive VP & CFO]

Great. Thanks, Elena. Good morning, everyone. Thank you for joining us this morning to discuss the results of Toromont Industries Limited for the third quarter and 9 months ended September 30, 2020. Also on the call with me today is Scott Medhurst, President and Chief Executive Officer. As noted in the press release issued yesterday, we will be referring to a package posted to our website, and we encourage listeners to download and follow along. At this time, and as noted on slide 2 of our presentation, I'd like to advise listeners that this presentation may contain forward-looking statements and information that are subject to certain risks, uncertainties, and assumptions that may lead to actual results or events differing materially from those expected. For a complete discussion of these factors, refer to our press release from yesterday, which is available on our website. As is our practice, we will focus on key highlights for the current quarter. Scott will begin with a few general remarks, followed by comments on our overall results. After which, I will provide some highlights on our divisional results and financial position. After our prepared remarks, we will be more than happy to answer questions. Over to you, Scott.

[Scott J. Medhurst, CEO, President & Director]

Thank you, Mike, and good morning, everyone. Before I begin, I would ask that you move to slide 3 of the package. We are pleased with the gradual improvement experienced over the last quarter. However, the operating environment is complex and still quite fluid. Our customers are understandably cautious. And as a result, overall business activities are still below last year's levels. From the start of the pandemic, our teams have shown their resilience and the ability to adapt to an ever-changing environment. We are proud to continue to support our customers, keeping our employees safe while providing essential services and protecting the business for the future. During the quarter, we completed the transition of our operating system at our Québec dealership branches. This was a significant undertaking, and we are very pleased with the outcome, thanks to the team's incredible effort while executing in a unique landscape. With one common platform, we are now able to align our operations at the ground level and continue to leverage best practices, go-to-market approaches and efficiencies across our territory. We continue to closely manage and derisk our balance sheet with a sharp focus on inventory turns, collection of AR and on aged assets. Our financial position remains strong with ample sources of liquidity. Expense reduction is a priority, but we remain ultra careful not to negatively impact our ability to meet future market demands. While we have seen sequential improvement in our markets, there remains considerable uncertainty in the marketplace, and we expect the cautious tone to persist leading into Q4. Turning now to our financial results highlighted on Slide 4. Backlogs were $472 million at September 30, 2020. CIMCO backlogs were at near-record levels on strong industrial booking activity in early 2020. Equipment backlogs were lower on reduced activity levels, reflecting the cautious tone throughout the quarter. Overall revenues decreased 5% in the quarter versus last year. This improvement [ over the ] clients experienced in Q2, revenues were still below that of Q3 of 2019. Year-to-date revenue was down 6% to $2.5 billion. Operating income was 1% lower in the third quarter on the lower revenues, partially offset by lower expenses. Cost containment strategies continued and sales-related expenses, such as travel and other discretionary variables, were lower. We continue to incur some additional costs to protect our employees and customers such as additional safety supplies, benefits extension costs, work from home practices, facility and field sanitation procedures. Additionally, we expect to receive $7.3 million under the Canadian Emergency Wage Subsidy program, which is based on revenue declines in the quarter. CEWS was helpful, adding to our focus on protecting our skilled labor and salary positions as best possible, managing with a balanced approach in the short term as well as not taking our eye off the long-term needs. Net earnings decreased 3% in the quarter versus a year ago. EPS tracking the reduced earnings was $0.94 per share or $0.04 below 2019. Moving to Slide 5. Given the challenging environment, we've included a look at the sequential quarter performance. Q3 results have improved from the second quarter as economic activity gradually phased in. Revenues improved. However, new equipment sales remain relatively low, while rentals used equipment and product support showed the most improvement. Rental fleet utilization improved, which translates into higher-margin operating income and earnings. Product support activity is a function of customer activity and was better this quarter as customers were able to go back to work and site restrictions eased. Mike, I'll turn it over to you for some detailed comments on the group results.

[Michael Stanley Howie McMillan, Executive VP & CFO]

Thanks, Scott. Let's put a bit more color on the operating results, starting with the equipment group on Slide 6. Revenues were down 5% in the quarter versus a year ago and 6% year-to-date on reduced economic activity. New equipment sales, product support and rental activity were lower across all geographic markets and product groups. As Scott noted, we did see some improved activity during the quarter, but a tone of caution was evident, and activity was still below last year's levels. Cost containment strategies continue to be employed, including human resource initiatives and reduced travel and discretionary spend. New equipment revenues were down 16%, where used was up 37% in the quarter, down 9% and 18%, respectively, on a year-to-date basis, demonstrating the cautious tone that we have emphasized. Construction sales were down 10% in the quarter and down 3% year-to-date. Sales into mining markets were down 16% in the quarter, 25% year-to-date across most regions. Material handling sales were down 17% in the quarter, 5% year-to-date, again, mainly due to general -- to lower general economic activity. 2 bright spots included power system sales, which were up 36% in the quarter and 12% year-to-date, reflecting progress on prime power projects. Sales into agricultural markets were also up 7%, where a strong harvest year-to-date was relatively unchanged. Rental revenues were down 11% in the quarter, 15% year-to-date. Most markets and segments were lower, reflecting the gradual phase-in of market activity. Light equipment rentals were lower 7%, power, 31%; material handling, 16%; and RPO rentals, 43% in the quarter. That said, heavy rental in the construction market increased 10%. Product support revenues declined 3% in the quarter and 6% year-to-date with improvement, as Scott noted, in the third quarter as compared to Q2 as restrictions eased. Gross profit margins decreased 50 basis points in the quarter as lower product support activity levels dampened margins down 70 basis points, partially offset by improved sales mix up 20 basis points, with a larger proportion of product support revenues to total revenues. For the first 9 months of 2020, gross margins decreased 90 basis points, reflecting challenging markets in the second quarter of the year. On a year-to-date basis, equipment margins were down 30 basis points, mainly due to sales mix. Rental margins, while improved from Q2, are still lower by 50 basis points than last year on a lower average utilization in the quarter, which is a drag on earnings against our straight-line depreciation model. Selling and administration expenses decreased 100 basis points to 12.1% of total revenues and were down 13% in the quarter and 6% year-to-date, reflecting lower activity levels as well as cost containment initiatives that phased in from Q2. Governmental subsidies under CWS (sic) [ CEWS ] program reduced expenses by $6.5 million for the group during the quarter, totaling $7.3 million year-to-date. However, excluding these subsidies, selling and administration expenses were downward trending in both the quarter and year-to-date, reflecting lower compensation costs, discretionary spending, travel and training. Bad debt expense was also lower in the quarter but up prudently on a year-to-date basis, reflecting the current economic environment. Information technology-related costs also increased in both the quarter and on a year-to-date basis, $1.1 million and $2.1 million, respectively, as system enhancements and support for integration efforts at the dealership continued. Let's turn to CIMCO on Slide 7. Revenues were down 7% in the quarter and 10% year-to-date on lower construction activity stemming in part from construction site restrictions and closures related to the pandemic. Timing of receipt of orders and customer-specific construction schedules also affect timing of revenue recognition. Package revenues were down 5% in the quarter. In Canada, revenues remained relatively flat during the quarter as an increase in industrial revenues were offset by a decrease in recreational revenues. In the U.S., package sales decreased mainly due to weaker recreational activity. Product support revenues decreased 10% for the quarter and 4% year-to-date, with site restrictions and recreational activities limited, usual site maintenance and fall start of activities have not been possible and were factors in the quarter. Gross profit margins increased in both the quarter and year-to-date on good project execution. Operating income decreased 8% in the quarter and 20% year-to-date, largely reflecting the lower revenues. Selling and administrative expenses were down 3% in the quarter, including the government CEWS subsidy, reducing expenses by .8 million. Some additional costs are being incurred in this business to support the substantial backlog of orders, while other expenses, such as travel and discretionary were lower. Bookings were up 15% to $40 million in the quarter and 37%, primarily on good activity in the industrial segment. Backlogs were healthy at $216 million at the end of September, with industrial being higher in Canada and recreational higher in both Canada and the U.S. Approximately 35% of this backlog is expected to be realized in Q4, subject to construction schedules. On slide 8, I'd like to touch on a few key financial highlights. Management of our working capital continues to be a focus area. Accounts receivable aging is monitored daily and trending well. DSO was consistent with prior years. Inventory levels are also closely monitored, and our order boards have been adjusted in light of market activity. Accounts payable reflects the timing of purchasing and lower extended term balances. As of September 30, we maintained our strong financial position, with cash on hand of $471 million and available liquidity of $714 million. Good cash flow allowed us to repay our $100 million draw on the term facility as well. Our returns remained strong. And although impacted by contribution in Q2 and Q3, resulting from the pandemic, they benefit from the actions taken by our team to control spending and manage capital employed. The Board also approved the regular dividend at a rate of $0.31 per share, consistent with last quarter. On slide 9, we conclude with some key takeaways as we look forward to Q4. We will continue to focus on our 3 key priorities as we have done from the start, protecting our employees, serving our customers and protecting our business for the future. We continue to monitor the situation closely to evolve our business practices appropriately. Our disciplined operating culture, combined with the diversity of our customers and installed base, expanding product and service offerings, and financial strength position us well to respond to business requirements and execute on our long-term business plan. We appreciate our entire team's efforts and commitment to supporting our valued customers during this challenging time and thank our customers, supply partners, and shareholders for their continued support. That continues our prepared remarks. We'll be pleased to take questions. Elena, back over to you to set up the first call.

[Operator]

[Operator Instructions] The first question is from Cherilyn Radbourne with TD Securities.

[Cherilyn Radbourne, Analyst]

With respect to CEWS, the convention on The Street has been to exclude CEWS and look at results that way. But the issue with that is that high-performing organizations would have made other cost adjustments in the absence of a CEWS program. So can you talk about how you're thinking about that internally? And how you've been approaching that in discussions with your Board?

[Michael Stanley Howie McMillan, Executive VP & CFO]

Sure. Let me start with that, Cherilyn. I think, like you say, we try to be very transparent and disclose what we're seeing there. And I think Scott made in his prepared remarks, we are very conscious of protecting our skilled labor and managing that balance, right, between what we need short term being cost-effective, but also not taking our eye off the ball for the long-term needs of the business, right?And so I think -- again, I think we have incurred other incremental costs, which I think are notable, too. I mentioned some IT costs, which we accelerated, which is a pull forward, but we have incurred things such as incremental PPE. We've bridged benefits for employees on temporary layoff, and we advanced training. And we've done a number of things, sanitization and so forth, that we're also very mindful of which are embedded in our results, right?

[Scott J. Medhurst, CEO, President & Director]

Yes. Just, Cherilyn, I mean it was helpful, helping us continue to focus on protecting our skilled labor and other personnel in our business. But we're trying to stay disciplined to our operating practices and ensure that it's a balance between making sure we're operating in a very tight controlled environment and being conscious of our variable costs. But also, we are very attentive to protecting ourselves when an upturn starts, and we're just trying to be very conscious of that.

[Cherilyn Radbourne, Analyst]

Great. And we don't have a lot of history with the expanded Caterpillar territory, but bookings of $371 million looks pretty healthy to me. Was that your take on it?

[Scott J. Medhurst, CEO, President & Director]

I think it's acceptable in the environment we're operating in. Team did a nice job in there. I think we're proud of the team. And this is a unique landscape. But as Mike said, I think the team should be applauded because we also went live with our integration in Québec with the ERP transition, and that was no easy feat, and I'm really pleased and delighted we had no hiccups interfacing with customers. A lot of effort in there, where still a lot of effort and dynamics in play. But so far, we're pleased with that. And I think the team should be commended with everything going on, COVID impact, plus an ERP. I think that was a decent results with -- and combined with the bookings.

[Cherilyn Radbourne, Analyst]

And then last one for me. Your used equipment sales were quite strong. Is there any perspective you can give us there on how much of that was just rate trade in and disposals from the rental fleet or packages that your team may have sourced opportunistically?

[Scott J. Medhurst, CEO, President & Director]

Yes. Good observation, Cherilyn. So we were fortunate how the team positioned us with our used and having options for customers again. I think it's reflective of the cautious environment and the focus on customers, cash flows and things that we had some good value offerings with demo class. I mean our demo class was up over 35% in the quarter sales. We were -- we -- the teams were more opportunistic with the used purchased developments. And so that was up over 35% then, I think.So a combination of that with some rental fleet disposition and trade sales was combined for a very positive outcome on the used revenue sales. So that was a good outcome.

[Operator]

The next question is from Yuri Lynk with Canaccord Genuity.

[Yuri Lynk]

Just wondering on the -- when the new territory will be fully leveraging the ERP. And when -- what that might look like in terms of the financial results? And what are some of the goals that you want to see once they get fully up and running? I'm assuming they have to be trained and whatnot on the new system.

[Michael Stanley Howie McMillan, Executive VP & CFO]

Yes. It's a good question. I'll start with that one, Yuri. So we did convert to our operating platform the middle of September, about the 14th, we completed that. And so as you mentioned, I think getting them on one platform, getting the whole company, we did -- just as a reminder, we did the Maritimes back in April. And so this brings the new territory on to our platform. And we're in the process now of working through our next quarter.As you can imagine, there are lots of process changes and some change management as the teams get used to the new environment. But what it does do is it does give us very consistent visibility into the different parts of the business. It aligns a lot of the data, a lot of the accounting as well and things like that as we get through the close. And so as we go forward, it's an advantage, but there are -- certainly, there are processes and changes that we are working through with the team so they get used to the new operating environment from their former one. And so again, that's in support of our Toromont CAT business. We did convert the Battlefield rental business a year ago, June. And so they've been well on that system and starting to see some of those benefits to help us grow that business as well over the course of the last year.

[Scott J. Medhurst, CEO, President & Director]

Yes. Just -- we've got a ways to go here and once we plugged in and -- like we're delighted with what took place there. But as you say, there's a lot of training. We had our branch model embedded last year. So that was good. But now we get to really focus on our operational excellence variables that we can -- we believe we can leverage more and some of our best practices with our go-to-market approaches. We think we can improve on that and improve on logistics and things of this nature.So there's some heavy lifting to come, but the great part is that represents opportunity. Now we have to execute. But the great thing is that we're plugged in, and we're on a common platform. We still have one more event to go with material handling, but we'll get to that in Ontario next year, but we're pleased and looking forward to executing on these opportunities from an operational and go-to-market approach.

[Yuri Lynk]

That's helpful. My second one, just on mining, lots of interest industry-wide on autonomous hauling, not something that traditionally fit the type of mining in your territories. But is that changing? Are you seeing any increased interest in autonomous hauling?

[Scott J. Medhurst, CEO, President & Director]

Yes. I think -- and we applied Caterpillar and how they're positioning us in the marketplace there. Lots of dialogue going on, on that front, and we'll see how things materialize.

[Operator]

The next question is from Jacob Bout with CIBC.

[Jacob Jonathan Bout]

I wanted to go back to the Québec Maritimes. And so the integration of the ERP system is now complete. Can you just talk a bit about what is left as far as major steps in the Québec Maritimes integration?

[Scott J. Medhurst, CEO, President & Director]

Well, leveraging on an operational side, we look at our product support, operational component, how we -- and now we have better visibility to the KPIs. There was some -- I mean, when you're operating off 2 different platforms, there's some differences in there and how we're handling the flow of data and how we're managing some of the KPIs that we zero in on. So now we have consistency. And we'll have better visibility across the enterprise to these KPIs on a consistent basis operationally. Also, how we're managing our assets, right?It was a -- I'll use the word, a little clunky at times and how we're working through that. But I applaud how the team were able to maneuver through that. But -- so we're in a better position with how we're going to manage assets and our return on asset base at the branch levels. And then you get into the interface with the customers, I think will be -- will provide more consistency with our approaches there. Our logistics are some of the synergies. But -- so it sets us up. But again, we can talk about it. And I think we're getting great progress. There's a ways to go even with our heavy rents and power systems fleets. We can manage those more effectively. But now we've got to go execute. We've got to prove it out more, but we're ready for that next phase.

[Jacob Jonathan Bout]

Okay. And then activity levels in Québec Maritimes versus Ontario, do you see much difference in the quarter?

[Scott J. Medhurst, CEO, President & Director]

It was -- well, what we are encouraged with on the rental services side was Québec -- we saw great improvement in Québec. Actually, the utilization improved a touch quarter-by-quarter. So that was encouraging. Still have a ways to go because we want to get higher utilization in there, but that was encouraging on our Québec side in Maritimes.The -- what we saw was the markets improved in Québec in the Maritimes as the quarter progressed. But we've seen a shift, and this isn't just in QM, it's throughout, a real shift with increase in small product sales activity. So your -- I'll call it, your building construction products and compact. They were extremely active. I think we're up over 35% compared to previous quarter. So -- but -- so that was significant relative to the larger iron activities we saw. And again, I think it's just -- again, there was -- if you -- that landscaping area was very active, things of that nature, but still a cautious environment with some of the larger iron.

[Jacob Jonathan Bout]

Okay. Last question for me. Just in the -- so equipment bookings are obviously quite strong, but mining was down 4%. Maybe just comment on levels of engagement and expectations for, say, the next 6, 12 months?

[Scott J. Medhurst, CEO, President & Director]

Yes. So what -- I mean, mining can be lumpy, as you know, on a quarter-by-quarter comparison. But it's -- I think there's a caution. As you recall, in Q2, there was a major shutdown. So Q3, I think it was about getting up and running, which took place. Production improved, activity levels improved, but still cautious to when it came to CapEx. And we'll see how things play out here in the coming months in terms of activity on prime products.

[Operator]

The next question is from Michael Doumet with Scotiabank.

[Michael Doumet, Analyst]

If I assume a gradual recovery in product support revenues through Q3, the quarter-over-quarter recovery going from minus 16% to minus 3% would imply that you may have exited the quarter in positive territory. Any way you can confirm that? If not, maybe just discuss the overall cadence.

[Scott J. Medhurst, CEO, President & Director]

Well, it improved, and we're pleased with that, but there's still caution in there. And again, our customer -- here's how we've interpreted what's taking place. So there was obviously some hard stops in there in Q2. And customers were very focused on getting back to work, getting up and running. And on all the segments we operate in. And understandably, that's where their focus was. And with less so attention to repairs.I mean our rebuild activity on a unit basis was down in the quarter, about 10%, but that's understandable because customers were focused on executing their jobs and getting back into production mode. So -- and our WIP is down at the end of the quarter, which was concerning going into the next quarter. So -- but I think it's just -- reflects the environment we're operating in. And we'll see how things progress where machine utilization is improving, and we'll see how things trend in. But we're in a cautious mode here with the WIP and we'll see how. But again, we're very focused on -- ultra focused, I'll say, on making sure that we are preparing for an uptick in the product support side. So actual -- in fact, we're back hiring tech. So that's the mode we're in, but it's a fine line you're walking, right, and we're focused on the future.

[Michael Doumet, Analyst]

Great. Interesting commentary there. And then maybe just -- you called out product support as the main area of gross margin pressure in this quarter. I don't think that was the case last quarter. So I'm wondering here, I mean, if it's strictly volume-related or if there's an element there of no lower productivity due to social distancing or other measures. Just any sense of how to think about that going forward.

[Scott J. Medhurst, CEO, President & Director]

Yes, I think it's a combination of a bit of volume in the mix and what took place there. I mean as I said, the rebuilds were down. And -- but that sort of sums it up there.

[Michael Doumet, Analyst]

Yes. Okay. That makes sense. And then just -- maybe correct me if I'm wrong, but I don't think you flagged lower rental as a driver for lower gross margins in the quarter. I'm not sure if I missed that, but were you able to offset maybe some of the lower utilizations with higher rates or lower costs or mix? Just what played a factor there that we didn't see it in the gross margin pressure?

[Scott J. Medhurst, CEO, President & Director]

Well, utilization improved, but there's still rate pressures in there. If you look at the overall activities in the fleet and power was down on the revenues. We had some shifts in there. It was a bit lumpy on a quarter-by-quarter comparison. So I mean, there's pressures in there, but we were pleased with the uptick in the utilization, particularly on the real services side. And -- but it's a competitive environment right now.

[Michael Stanley Howie McMillan, Executive VP & CFO]

Yes. I think to add to that too Michael, is just like we did speak to the phase in, and I think it's important to understand the utilization rates on average, right, as it sort of phased in over time, activity improved. And so going into July, we have a straight-line depreciation model up, it's pressure on the margins for rental. And you have to get to a certain point before you start to recover that fixed cost, right? And so think of it as a bit of a blend from that perspective, right?

[Scott J. Medhurst, CEO, President & Director]

We had a bit of pressure in their material handling as well.

[Operator]

The next question is from Maxim Sytchev with National Bank Financial.

[Maxim Sytchev, MD & AEC]

I was wondering, Scott, maybe if you don't mind talking about how you feel about the rental opportunity over, let's call it the medium term. Is COVID changing the behavior of the clients sort of permanently? Or you think that we're going to be back to normal, whatever that means, over, let's call it, I don't know, 9 to 12 months? What are your thoughts there?

[Scott J. Medhurst, CEO, President & Director]

Yes. Well, we're not in a normal environment. And -- but I think the Q3, we saw improvement. But just as an overall rental, even our -- if we look at our new RPO rental purchase option, I mean, there was a massive shift in there from a year-over-year basis. We've got a decline there of over almost 15%. We had over $90 million on rent coming into the end of Q3 2019. And this year, we're down significantly.So it just shows where the environment we're operating in. And -- but I'd say still, overall, we are still very much committed to this strategically. When we look at the dollar opportunity and the trends in rental, we're not going to slow down there with our approach. We're just -- I'd say we're in a unique situation. We're maneuvering through it. It is a bit of a drag, but we're still looking at this as strategically a great opportunity, particularly with the expanded territory.

[Maxim Sytchev, MD & AEC]

Great. Do you mind maybe -- I don't know if you have already done this work, but what are your thoughts in terms of kind of rental CapEx for 2021? Or is this just too early to even contemplate this?

[Scott J. Medhurst, CEO, President & Director]

Our teams are going through the planning process right now, and we'll have a better read on that in a couple of weeks. But I mean, we -- Mike, we were down in CapEx in the quarter.

[Michael Stanley Howie McMillan, Executive VP & CFO]

Yes. If you look at our notes and so forth, you'll see that's a big area for us in terms of how we curved our capital spend and just try to manage the fleet through this period, right? And so indication would be that we are going to increase our CapEx somewhat, but it's going to be based on the business plan and what we see going into the year as we get closer. And so we'll look to optimize that, Max, as we get into the year.

[Scott J. Medhurst, CEO, President & Director]

We'll keep our distance in there, Max, relative to the age -- some of the aging where you have to stay committed to the level of investment or you'll hurt yourself over the long term, right?

[Maxim Sytchev, MD & AEC]

Okay. Okay. That's very helpful. And then curious to see -- I mean we've seen Ontario budget yesterday, sounds pretty positive from an infra perspective. What are your kind of large construction clients? Like what's the body language from those guys? Maybe any color on that end market if it's possible.

[Scott J. Medhurst, CEO, President & Director]

Well, I think our tone on our customers right now, they're focused on just getting some work done that they have right now. But I think it's all about timing and shovel-ready and how quickly things can materialize here. I mean it's encouraging, but I think we'll sort of in a -- I think everybody is in a wait and see and see what type of work is released and the timing.

[Maxim Sytchev, MD & AEC]

Okay. Fair enough. And last quick one. Balance sheet is an extremely strong position and probably going to get stronger over the next 12 to 18 months. I was wondering if you care to comment on capital deployment priorities over the time frame.

[Michael Stanley Howie McMillan, Executive VP & CFO]

Sure. Yes. Great segue. I think keep in mind, the team has done a tremendous job on working capital and Capex, and we're in a good position. Again, what we are preparing for is just to have liquidity, and we're in a good position to help, as activity picks up and warrants, we will see working capital investment as things build. And so we anticipate that. Certainly on the inventory receivables side.We talked a little bit, our AP is down and that's just commensurate with timing of purchases in some terms we had. But CapEx is the other variable. So we are, I would say, from a priority perspective, we'll continue to manage our cash flow very carefully. Working capital will be the first draw. We have a number of initiatives for organic growth that will take priority on capital. If the returns are there, we'll continue to push really hard on those metrics and challenge the team to drive those returns. Debt repayment, of course, we're in a good position at this point. We want to maintain that cash balance and liquidity depending on demand and where things go. And again, we're committed to our dividend and so forth and that sort of thing, but it would be really operational care and feeding of the business as a priority and then have dry powder for the future, right?

[Operator]

This will conclude today's question-and-answer session. I will now turn the meeting back over to Mr. McMillan.

[Michael Stanley Howie McMillan, Executive VP & CFO]

Great. Thank you, Elena. Thanks, everybody, for your participation today. That does conclude our call. We wish you a great day, and please stay safe. Thanks again.

[Operator]

Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.