Myers Industries, Inc. (NYSE:MYE) Q1 2025 Earnings Call Transcript

Myers Industries, Inc. (NYSE:MYE) Q1 2025 Earnings Call Transcript May 2, 2025

Operator: Hello and welcome to the Myers 2025 First Quarter Results. My name is Carla, and I will be coordinating your call today. [Operator Instructions] I would now like to hand you over to Meghan Beringer, Senior Director of Investor Relations at Myers Industries to begin. Meghan, please go ahead when you’re ready.

Meghan Beringer: Thank you. Good morning, everyone, and thank you for joining Myers conference call to review 2025 first quarter results. I’m Meghan Beringer, Senior Director of Investor Relations at Myers Industries. Joining me today are Aaron Schapper, President and Chief Executive Officer; Grant Fitz, Executive Vice President and Chief Financial Officer; and Dan Hoehn, Vice President, Corporate Controller. After the prepared remarks, we will host a question-and-answer session. Earlier this morning, we issued a press release outlining our first quarter financial results. We have also posted a presentation to accompany today’s prepared remarks. Both are available under the Investor Relations tab at www.myersindustries.com. This call is being webcasted on our website and will be archived along with the transcript of the call shortly after this event.

Please turn to Slide 3 of the presentation for our safe harbor disclosures. I would like to remind you that we may make some forward-looking statements during this call. These comments are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management’s current expectations and involve risks, uncertainties and other factors, which may cause results to differ materially from those expressed or implied in these statements. Further information concerning these risks, uncertainties and other factors are set forth in the company’s periodic SEC filings. Also, please be advised that certain non-GAAP financial measures such as the adjusted gross profit, adjusted operating income, adjusted EBITDA, and adjusted earnings per share may be discussed on this call.

Now, please turn to Slide 5 of our presentation, as I will now turn the call over to Aaron.

Aaron Schapper: Thank you, Meghan. Good morning everyone and thank you for joining us. On today’s call, I will begin by reviewing first quarter highlights. Then, I’ll provide an update on our focused transformation, our progress since our fourth quarter earnings call and our unique characteristics that define Myers. Following my comments, Grant will provide a detailed review of the first quarter financials, followed by Dan, who will review our outlook for the year. First quarter revenue was flat year-over-year. Growth in Material Handling was led by the contribution of our Signature acquisition and industrial growth for military products, offset by lingering softness in our Distribution segment. Margins improved as we did a nice job of controlling costs.

SG&A, which is the focus of our 2025 cost savings program, was lower as a percent of sales, resulting in an increase in EPS. I’m pleased with the team’s focus and performance, and I am reassured by the solid start to the year. At the same time, there are clear opportunities to improve, and I am confident that we are on the right path to elevate our performance. Before moving on, I would like to address tariffs as they pertain to Myers directly. Please turn to Slide 6. Our supply chain is predominantly based in the U.S. Most of the materials we purchase are from U.S. suppliers. 15 of our 16 manufacturing plants are here in the U.S. More than 90% of our 2025 Material Handling revenue is expected to be manufactured in the U.S. Further, the remaining 10% of revenue from this segment is currently protected by the USMCA and military exemptions.

For Distribution, less than 15% of our products are sourced from China. We plan to use pricing to offset tariff costs and have secured secondary and tertiary suppliers to mitigate the impact to our customers. This predominantly domestic-based supply chain should provide resilience to tariff-driven disruptions. As a result, we expect minimal direct impact from the current tariffs. We are also positioned to provide options for supply chain resiliency to our customers to help them mitigate these disruptions. Of course, this is a dynamic situation, and we continue to closely monitor any impact on factors that would alter end market demand trends. We stand ready to execute across a wide variety of scenarios should we find ourselves in an altered landscape than we are currently expecting.

Turning to Slide 7. During our fourth quarter earnings call, I introduced our Focused Transformation program. We are developing this plan to change course and accelerate our time line to deliver more consistent and reliable results. During my conversation with employees, I’m encouraged with how they are embracing the positive cultural shift to elevate our performance. Let’s review the 4 objectives and the early progress that we are achieving. The first objective is to establish a culture of execution and accountability to drive performance. We have adjusted our core values to include deliver results and continuous improvement, emphasizing a culture of lean management supported by clear, efficient processes. We have aligned incentive plans with individual business unit performance while retaining overall executive accountability to shareholders for corporate targets.

These changes provide proper incentives to demonstrate our core values, motivating employees to achieve organic growth and profitability in each of our businesses. I believe these actions will drive cultural change, igniting a fire in our employees and validating the opportunity that attracted me to Myers. Our second objective is to create clear strategies, including action plans and specific KPIs, to improve the profitability of our entire portfolio. We are off to a rapid start. Over the past few weeks, we completed a series of employee workshops to review and evaluate the businesses in our portfolio, developing strategies for each based on their characteristics. Some of our businesses served high-growth markets. We will invest to support these businesses to continually drive organic growth.

We have other businesses serving lower-growth markets that do not require significant investments, but generate strong cash flow to fund high-growth businesses and fortify our ability to return cash to shareholders. Finally, we have a few businesses that are not performing at the level we expect. We are developing and implementing plans to improve these businesses within a reasonable time frame. I am optimistic that we are on the right path to drive improved performance across our entire portfolio. We plan to announce our updated long-term strategy for each business by the end of this year after we complete the necessary foundational work. Our third objective is to deliver consistent and reliable results by effectively controlling what we can control.

The first step that we announced during our last quarterly update is to deliver annualized cost savings of 20 million by year-end 2025 primarily in SG&A to reduce cost while enhancing operational efficiency. From my experience in managing business in dynamic markets, optimizing cost structure is vital during challenging markets and rewarding in upswings. The workshops I mentioned earlier were instrumental in identifying specific actions to drive efficiencies into the organization to build a foundation for long-term sustainable growth. We over-achieved our Signature synergy targets, delivering 12 million in cost synergies against our 8 million target. We are confident in our continued path to our 20 million annualized cost savings commitment.

Our fourth and final objective is to optimize cash flow and support disciplined capital allocation deployment. Last quarter, we launched a new $10 million share repurchase plan. In addition, we will continue to invest in organic growth, maintaining our CapEx target of around 3% of sales and focusing on high-growth opportunities that deliver superior returns. It is early days on our Focused Transformation, but I’m pleased with the initial pace of progress and confident in our team’s ability to deliver improved financial results from the changes we are making. Our mission is to provide products that protect the world from the ground up. I’d like to discuss 2 examples of how we do this, beginning on Slide 8. Many large stadiums with turf playing surfaces would like to expand the functionality of their properties and increase the revenue opportunity.

This creates a challenge to properly protect the playing service to eliminate damage that could lead to player injuries. In addition, the cost and time of converting the playing surface limits the revenue-generating potential. Our OmniDeck flooring system provides a differentiated solution. It is strong and durable, protecting the surface from machinery, staging, equipment, and foot traffic. It is lightweight, reducing the time and cost to repurpose the facility. As a result, the integrity of the playing surface remains intact. We have seen great success from our customers with this product. I invite you to view the video linked in our presentation to see a testimonial from our newest customer, SoFi Stadium. Another example of our mission in action is shown on Slide 9, Protecting our Troops.

Historically, our militaries used wood or steel packaging for ammunition. These are heavy, increasing the cost of transport and the stress on soldiers that carry these containers in the field. Our Scepter solution provides lighter, better, safer, and battle-proven packaging for transporting ammunition for the defense industry. Delivering a 41% weight savings, soldiers’ injuries are reduced, keeping them healthier to train and accomplish their primary mission. In addition, the transportation costs are reduced, enabling the military to allocate resources to other critical areas. We are so proud to support, serve, and protect our troops. These examples highlight who we are as a company and how we deliver value to our customers. Since our last earnings call, we have made progress on achieving our commitments.

We have acted quickly, starting the journey to create a culture built on accountability that fulfills our commitments and delivers results with a continuous improvement mindset. Building on this momentum, we are moving forward with purpose, transforming Myers with speed, agility, urgency, and acting with integrity. I will continue to meet with customers and investors, listening to your feedback to ensure we are creating value for you. With that, I will turn the call over to Grant to discuss our first quarter results. As previously announced, Grant will be stepping down as our CFO tomorrow. I wish to thank him publicly on behalf of the entire company. Although our time working together was short, I recognize the contribution he has made here since joining the organization, and I’m grateful for the help he has provided to me during my transition.

He will be missed, and we wish him all the best. Dan Hoehn, Vice President, Corporate Controller, will serve as Interim CFO while we undergo a formal search, which has been launched to identify our next finance chief. Over to you, Grant.

Grant Fitz: Thank you, Aaron, for those kind words and good morning everyone. I am proud of what we have accomplished during my time at Myers, and I truly believe the organization is heading in the right direction as our Focused Transformation program is already showing signs of improvement. I look forward to following Myers’ future success. Turning to our financial results on Slide 11. First quarter net sales of $206.8 million were essentially flat year-over-year as growth in Material Handling, led by the impact of our Signature acquisition, was offset by lingering softness in our Distribution segment. As a reminder, Signature was closed on February 8 of last year. This will be the last quarter we will call out its inorganic contribution to year-over-year performance.

We expanded adjusted gross margin 80 basis points to 33.5%, driven largely by the acquisition of Signature and favorable product mix. Adjusted operating income improved to $18.7 million, with the margin improving 100 basis points to 9% of sales. We also reduced SG&A expenses for the quarter. We will begin to see our Focused Transformation work deliver further SG&A run rate savings next quarter and through the balance of the year. Adjusted EBITDA margin also improved, expanding 170 basis points. Diluted adjusted earnings per share were $0.22 compared to $0.21 in 2024 on improved operating income, partially offset by higher net interest expense. Turning to Slide 12. Net sales for Material Handling increased 3.6% compared to the prior year, primarily due to the contribution from the Signature acquisition.

Industrial sales were stronger, primarily for military applications. We saw cyclical softness in Food & Beverage for seed box demand. Material Handling’s adjusted EBITDA increased 11.7% to $36.3 million, resulting in a 160 basis point increase in adjusted EBITDA margin to 23%. These improvements were attributed largely to our increased Signature product mix and our ability to effectively reduce SG&A and manufacturing costs. Distribution net sales decreased 10.3% on lower volume and pricing. Adjusted EBITDA decreased to $0.5 million, primarily due to lower gross margin, partially offset by lower SG&A due to an improved cost structure resulting from our Distribution center consolidation. Turning to Slide 13. Operating cash flow was lower this quarter on an increase in working capital due to accounts receivable timing and a build in inventory as we took some proactive action before the tariff details were announced.

We expect working capital to improve in future quarters. We allocated $8.1 million to CapEx as we continue to invest in organic growth. We maintained total liquidity of $267 million, including $231.7 million of availability under our current revolving credit facility and cash on hand of $35.3 million, providing us with additional flexibility to support our capital allocation priorities. Please turn to Slide 14. As Aaron mentioned, we repurchased $1 million in shares under our share repurchase program announced last quarter. There remains $9 million under this authorization, and we plan to continue making opportunistic purchases to complement our ongoing dividend as we return cash to shareholders. Debt was essentially flat for the quarter with our net leverage ratio at 2.8 times.

As mentioned before, we are targeting a ratio of 1.5 to 2.5 times. At this time, I will now turn the call over to Dan to review our current 2025 outlook. Dan?

Dan Hoehn: Thank you, Grant, and let me also wish you well. As we did during our last quarterly update, we are sharing some high-level qualitative expectations for the year, which are shown on Slide 16. We see both risks and opportunities for the businesses, and we’ll continue to monitor end market conditions for impacts from tariffs or other factors that may influence demand trends. Let me review our expectations by market. Industrial should continue with moderate growth driven by global inventory replenishment for military applications and to a lesser extent for bulk container and organizational products. In Infrastructure, ongoing strong project spending supported by material conversion from wood matting should continue to support strong growth.

We now expect the vehicle end market, which includes RV and marine, to be down as a result of economic uncertainty driven by developing tariff impacts. We previously expected this end market to be stable to down. In Consumer, we anticipate stable sales of fuel containers and an expected return to a more normalized storm season. Our Food & Beverage end market, including Agriculture, is projected to be stable. Automotive Aftermarket Distribution is expected to be slightly down. We are working to stabilize this business as we improve our cost structure, sales territory alignment, and digital sales strategy. We will continue to look for opportunities to expand our market presence and deliver solutions to our customers. At the same time, we expect financial results to improve as we make progress on our Focused Transformation.

I would now like to turn the call back to Aaron for some closing comments before we take your questions. Aaron?

Aaron Schapper: Thank you, Dan. Our team at Myers is aware of the significant work that needs to take place to achieve our potential. We are moving forward with urgency to execute our Focused Transformation, which includes supporting and growing Myers’ uniquely differentiated products, which protect the world from the ground up. Rightsizing the organization to optimize our cost structure and support our growth initiatives with a continuous improvement mindset will enable us to work smarter and more efficiently, and supporting a balanced capital allocation framework that invests in growth while returning cash to shareholders. I continue to be excited about the opportunities to improve performance and create value for our customers, employees, and shareholders. With that, I’d like to turn the call over to the operator for questions. Operator?

Q&A Session

Operator: [Operator Instructions] And our first question comes from Christian Zyla with KeyCorp.

Christian Zyla: Good morning everyone. Grant it has been wonderful working [indiscernible]. We wish you all the best in the future.

Grant Fitz: Thanks so much Christian. Likewise, it has been great to work with the KeyBanc team.

Christian Zyla: First question for me. Just generally, thanks for the additional tariff detail on the Distribution business. If I recall, there are a couple of facilities in Central America. Are those subject to tariffs? And then how price sensitive are your customers here if you raise price to offset the tariff costs you mentioned? Would you expect to see a volume offset in any of your business?

Dan Hoehn: So the Central America piece is a relatively small part of the Distribution business. So, while there is some impact of tariffs like there is in the rest of the world, we don’t expect that to have a material effect on Myers. From a price-sensitive standpoint, of course, our customers are always looking for the best value that we can get, and it’s our job to make a profit on products that we’re selling. So, if we need to push price, we will.

Aaron Schapper: Yes. I would just add too, Christian, on that is that we do have, we talked a little bit in the opening comments that we are looking as well too for alternative suppliers where we think that there’s some value to do that. And so, I think overall, echoing on Dan’s comments, we feel we’re in a pretty good position, and we don’t see, particularly in the Distribution business, having a significantly different footprint of supply than what we would see with other competitors, and we feel we’re in a pretty good position working with our suppliers and also leveraging price as needed.

Christian Zyla: Got it. Understood. And then on free cash flow for the quarter, can you just walk through why that was so low year-over-year? And then just bigger picture, correct me if I’m wrong, but history suggests 15 million to 20 million of free cash flow per quarter should be achievable in a steady run rate for you guys. Is that how you think about the business? Or just any broader thoughts on that?

Grant Fitz: Sure, Christian, this is Grant. I’ll take this one. I think Q1 was a little bit different than what we’ve typically seen within Myers. As you know, we typically have some very good operating cash flow with the business. And essentially, we had 2 things that occurred in this quarter. The first one was that we had a very strong March, particularly with Signature and our Scepter business. And so, we just have some timing of accounts receivable on when those will actually be collected as those sales were driven more towards the end of the month. And then the second thing is that as we were looking at the potential tariff impacts, we also looked at doing some opportunistic buys on inventory ahead of potential tariffs, and so those 2 items really created a situation where we have a lower than typical historic free cash flow for the business.

We do anticipate that’s going to recover throughout the year as we see this continuing and I wouldn’t say that we have any changes in terms of the pattern of the free cash flow that we would typically generate for the year and I certainly think that we’re in a very good position. I think, quite frankly, that’s one of the real attractiveness to Myers is just the ability for it to generate cash.

Aaron Schapper: Yes, Christian, I would just add that we’re pretty happy. We remember the Section 301 tariffs when they came out back in 2018, and our team really was very proactive in making sure that we had what we needed to mitigate any of the tariff pieces, sometimes there’s bits and pieces that you have to get. And I think they did a great job of getting that inventory in early, just remembering some of the other tariff shocks that we moved quickly and got things in so that we could make sure we mitigate price and make sure that our customers are taken care of. So, we’re in pretty good shape from that standpoint.

Christian Zyla: Great. And last one for me, and then I’ll pass it back. This is just a joint question for Signature and Scepter as it relates to Military. Have you seen any additional uptake in orders or qualification activities for your products in either of those businesses? And then for Scepter, ammunition containers, are you still projecting 40 million this year from that contract? And then what are your thoughts for 2026 and beyond for that? Thank you so much.

Aaron Schapper: Yes. We’re very happy with the order flow in both Scepter and Signature. So, if you’re looking at both new customers and new opportunities, I would say that we have both – in both of those areas. We’re very happy with the growth of that. The business is performing well. The customers — we have good relationship with the customers. We’re very close. So, we anticipate both of those businesses to have strong growth going not only into this year, but looking into next year, we’ll be looking at the capital that those businesses need to continue to grow, and we’ll make sure that they’re funded. We’re looking at what more we can do in other areas, especially in Europe on the Scepter side to see the growth that we get there as well as Signature.

So, not only do we have opportunities to grow here domestically in our footprint, but we have also opportunities in Europe to grow there as well. So, we’re pretty excited about the future of those 2 businesses in particular.

Christian Zyla: Great, thanks. Dan looking forward to working with you.

Dan Hoehn: Likewise Christian.

Operator: And our next question comes from William Dezellem with Tieton Capital Management.

William Dezellem: Thank you. I have 2 questions. First of all, relative to the Vehicle group now forecasting that [indiscernible]. So, the Vehicle group turning down, is that specific to RV, marine, the auto components business? Is it tied to something changing in the economy? Could you provide more detail behind kind of that change in outlook, please?

Aaron Schapper: Yes. So, kind of, let’s take it in 2 parts. First, I’d take RV, marine, kind of the more recreational vehicle part. I mean there remains a lot of hesitancy and caution among our customer base on that side. There’s a lot of tariff uncertainty right now. And when people are looking at potential inflationary pressures and then sustained — perhaps sustained high interest rates or at least not coming back down as fast as they normally or at least as projected on a dot plot earlier in the year, it creates a lot of uncertainty on that side. So, in general, a lot of RV and marine products are financed. So, when there’s high interest rates, it makes it a lot harder for people to know, hey, how all in they’re going to go.

So really, it’s that kind of economic uncertainty right now that really affects the marine and the RV spending. So, at this point, our customers are not really sure what the rest of the year is going to look like. Therefore, they’re just — there’s kind of like a wait-and-see kind of approach. So that’s why from our projections, we thought, well, that’s going to be, a wait and see is going to affect us. So, that’s why we project that market to not be as strong as we had. And particularly in the last call where things were looking up, that is definitely going to change since the tariffs were announced. So, around that uncertainty. And then it reflects the Automotive side and the parts that we do for the Automotive side, well, I mean, that’s been pretty well covered on what’s going on in the Automotive side with the tariffs and everything else.

So once again, until we caution, hesitancy, a lot of pieces and parts are, they’re working out the taxes, they’re working out the tariffs. So, until we kind of get some stability and comments where people actually know what all the tariff landscape is going to look like, you’re going to see some ebb and flow on that side as well. So right now, everyone is kind of waiting for some policy with the say, firming up on the tariff side, and I think then that will release. But in the meantime, those are the 2 really hesitant and uncertain. I mean people have had a really hard time forecasting what that’s going to be right now. So, just being transparent on what we see out in the market today.

William Dezellem: That is helpful. And do you sense that your RV, marine customers that they have chosen to lower inventory, particularly let their dealers clear their lots a bit? Or is it something just more generic that they’re in a bit of a pause mode due to not knowing?

Aaron Schapper: Yes. I think it’s the latter where they’re kind of in a bit of a pause mode and trying to figure out which way to go. We have heard some that are looking to idle — some of our customers looking to idle plants. But at this point, everyone is very much in a listen-and-learn mode and trying to understand, a lot of people talking to each other trying to understand where — kind of where the economy is going for this side. So, I think at this point, it’s kind of, it’s a pause situation. I haven’t heard anything specifically other than that. And there’s talk about what they’re going to do in the idling, what they’re not going to do. But at this point, we haven’t heard anything specific.

William Dezellem: Great. That’s helpful. And then relative to the Distribution business, as you’ve taken some time here to learn this business, Aaron. What do you believe is needed to turn the business given the circumstances it finds itself in today?

Aaron Schapper: Well, the Distribution business, I’m still learning that business. It’s a different business. It’s very much a service and sales business. It’s incredibly important to be close to our customers on that side and understand what our customers’ needs are. And your customers’ needs change over time and business evolve over time. I think it’s really important to look at where we are from a sales organization and the services we provide to our customers and, A, make sure that we’re providing the right service that our customer needs; and B, making sure that we create value when we’re offering those services and then we get paid according to that value. So, at this point, it’s still early for me. I’m learning that business.

I have a lot more customer visits. I really want to talk to a lot more of our customers to understand and make sure that we’re matching our service with their needs and making sure that we add value. So, I think it’s a little early. It’s a great question, William, and I appreciate the question. And I hope that on the next time we speak that I will have a lot more information for me and for what our customers need and making sure that we match that.

William Dezellem: Great, thank you. And Grant, thank you for all the time you’ve spent with us over the last couple of years and very best of luck in whatever the next chapter brings for you.

Grant Fitz: Well, thanks so much Bill. It’s been great to work with you and Matt as well too.

Operator: [Operator Instructions] And our next question comes from Anna C Jolly with Gabelli & Company.

Unidentified Analyst: Good morning, it’s [Carolina] [ph] from Gabelli. Thanks for taking my question. Just first, it’s been about a little over a year since you acquired Signature. Can you just talk now that you’ve had that year under your belt, kind of what’s worked? What hasn’t? Any learnings you found from the acquisition?

Grant Fitz: Yes. Maybe I’ll take that one. Good morning [Carolina] [ph], it’s great to hear your voice here. Signature has been a really good acquisition for Myers. As we’ve talked before, it’s very much been on the business case that we had put together when we first acquired the business. And in fact, one of the things that I think we’ve learned from this is that Signature had a lot to offer to our business in terms of just some of the processes and the way that they’ve run some of their operations. And so, we’ve really had some good learnings on both sides where Signature has gotten some improvements with some uptime on some of their equipment through some of the expertise that we’ve had in our core businesses. And likewise, we’ve been able to leverage some of the Signature learnings into our core businesses for similar types of improvements.

And just in general, their whole business management system has really been something that we’ve been really leveraging throughout the company. The other thing that was interesting, we did talk about the synergies. We’ve achieved $12 million of synergies with the business, which is better than the $8 million that we had initially anticipated. It’s been driven by a mix of some of the things I talked about as well as we’ve got some additional resin savings than what we had originally anticipated. And so, we feel very strong about the business. It’s in a very good end market as well too with a lot of good upside potential. And I think culturally, it fit in very well with Myers as well. I do think that from just overall learnings, every acquisition is another opportunity for us to learn and we continue to build on that.

Aaron Schapper: And [Carolina] [ph], I would just add from my standpoint, it’s a great culture. It’s a great sales team. It’s a great operational team. And so, as we work through integration, the learnings from Signature and the learnings from one another about how we do things just helps the whole. And when you have a really good culture coming in and integrating it really just makes Myers a stronger business. So, I think we’re quite happy with the Signature acquisition. And we’re quite happy to have the Signature team with Myers, and we’ll continue to be able to leverage more from what they bring to the table.

Unidentified Analyst: Perfect, thanks. And then just a second question. In the press release, you discussed pricing on the Material Handling segment. Can you just elaborate a little bit on the decisions around pricing?

Dan Hoehn: So, the pricing, I’m sorry, [Carolina] [ph]. So, you’re asking about pricing in the Material Handling segment, correct?

Unidentified Analyst: Yes.

Dan Hoehn: So, we did take some strategic spots where we adjusted our pricing to make sure that we were more competitive in the market and to drive volume.

Aaron Schapper: Thanks, Carolina. I was just going to say we’ve been very active on just making sure and particularly in our Akro-Mils area and Buckhorn area that we’ve been going after any competition that we’ve had in those areas, and I think we’ve been very successful with that. And just once again, kind of going back to that is our customers they pay for value. And it’s really important that when we’re going through and we’re looking at pricing that we are pricing to the value that we’re giving. And so, I think we’ve had good gross margins in a lot of these businesses. It’s really continuing to make sure that we press the pricing for the value that we give. And we’ve got good relationships with customers. We’ve got a long-standing relationship with these customers, and I think they value what we bring to the table. So, we’re just making sure that our pricing continues to reflect that value in most everything we do.

Operator: [Operator Instructions] As we currently have no further questions, I will hand back over to Meghan Beringer for any final remarks.

Meghan Beringer: Thank you for joining us today. My contact information is available on the last slide of this deck should you want to schedule time to continue this conversation. Also, we are attending the KeyBanc Conference in Boston on May 29. We look forward to connecting with you. With that, we will end the call. Have a good day.

Operator: Thank you. And that concludes today’s call. Thank you for joining. You may now disconnect.