Matt McCall; Vice President, Investor Relations and Corporate Development; HNI Corp
Jeffrey Lorenger; Chairman of the Board, President, Chief Executive Officer; HNI Corp
Vincent Berger; Executive Vice President and Chief Financial Officer; HNI Corp
Reuben Garner; Analyst; The Benchmark Company
Greg Burns; Analyst; Sidoti & Company
Steven Ramsey; Analyst; THOMPSON RESEARCH GROUP
Brian Gordon; Analyst; Water Tower Research
Operator
Good morning and welcome to HNI Corporation 4th quarter and year-end fiscal 2024 results conference calls. (Operator Instructions)
As a reminder, today's call is being recorded. I will now hand today's call over to Matt McCall. Please go-ahead sir.
Matt McCall
Good morning. My name is Matt McCall. I'm Vice President Investor Relations and Corporate Development for HNI Corporation. Thank you for joining us to discuss our fourth quarter and fiscal year 2024 results. With me today are Jeff Lorenger, Chairman, President and CEO, and VP Berger, executive Vice President and CFO.
Copies of our financial news release and non-gap reconciliations are posted on our website. Statements made during this call that are not strictly historical facts are forward-looking statements, which are subject to known and unknown risk. Actual results could differ materially. The financial news release posted on our website includes additional factors that could affect actual results.
The corporation assumes no obligation to update any forward-looking statements made during this call. I'm now pleased to turn the call over to Jeff Lorenger.
Jeffrey Lorenger
Jeff, thanks. Good morning and thank you for joining us. I'm going to divide my commentary today into three sections. First, I will provide some comments on our 4th quarter and full year results. 2024 non-GAAP, EPS granted double-digit case for the third consecutive year. Next, I will discuss our initial expectations for 2025.
We anticipate one fourth consecutive year of double-digit non-gap earnings improvement. And finally, I'll discuss how we see our markets playing out over the course of the year and provide additional detail about our EPS growth visibility. Following those highlights, VB will provide more detail around our first quarter and full year 2025 outlook, including some thoughts on our ability to offset the impact of new tariffs.
He also comments on our strong balance sheet. I will conclude with some general closing comments before we open the call to your questions. I will start with the 4th quarter and full year. In the 4th quarter, non-GAAP EPS was $0.87.
This result was better than we anticipated. While revenue did moderate as expected, our members' continued focus on productivity, drove more financial benefit than we had forecasted and limited the decremental margin to only 17% for the quarter. As the year ended, workplace furnishings experienced softness with small and medium sized customers.
The transactional business within SMB, where products are sold through wholesalers and national supply dealers, was particularly soft throughout the fourth quarter. As we discussed last quarter, this business has a short selling cycle, typically involves smaller item purchases, and historically has been highly sensitive to macroeconomic changes. As a result, revenue trends can be volatile and shift rather quickly.
In our contract furniture business, fourth quarter revenue was down slightly versus the prior year, as the timing of larger projects temporarily limited segment growth in the fourth quarter. Finally, in residential building products, fourth quarter revenue declined 5% year over year as housing market weakness persisted.
Moving to some commentary on the full year, our members delivered another year of excellent operational and financial performance. Non-GAAP EPS totalled $3.06 up 15% from 2023 levels, reaching a new record high for the full year. Importantly, we deliver these results despite our markets remaining near cyclical low points. Consolidated operating margin in 2024 expanded 130 basis points on a non-gap basis to 8.6%, the highest level since 2005.
This strong performance was driven by workplace furnishings, profit transformation initiatives, KII synergy capture, and successful price/cost strategies. From a segment perspective in 2024, in workplace furnishings, our profit transformation plan and acceleration of KII synergies drove a 44% increase in non-gap operating profit. While segment non-gap operating margin of 9.5% reached the highest level since 2007.
In residential building products, ongoing housing market weakness pushed revenue lower for the year. However, segment operating profit margin expanded 50 basis points to 17.5% in 2024. The consistent profit margins in this segment are evidence of the business' unmatched price point, breadth and channel reach, along with the benefits of its vertically integrated business model and overall operational agility.
To summarize, 2024, our profit growth and workplace furnishings and marginal expansion in residential building products continue to demonstrate the strength of our strategies and customer first business model, along with the resilience of our members. During the year, we again demonstrated our ability to manage through all parts of the economic cycle.
Going forward, we expect continued earnings improvement driven by our margin expansion efforts and a return of revenue growth as we move through the year. However, as we enter the new year, we do see demand volatility across our businesses. That leads to my comments about our current expectations for 2025.
First, in our workplace furnishings business, our internal metrics and external indicators support our outlook for revenue improvement. And we are increasingly focusing our investments on driving growth in this segment. However, tariff uncertainty and rising inflation expectations provide reasons to expect ongoing volatility. Internally, orders and pre-order metrics continue to show improvement and backlog levels are up, pointing to a return of revenue growth in 2025.
Segment orders in the fourth quarter were up 2% compared to the prior year period. Consistent with recent revenue trends, fourth quarter orders from contract customers perform better than those from small to medium sized customers. Overall workplace backlog was also up double digits year over year at the end of 2024. And pre-order metrics remain encouraging with our order funnel and workplace furnishings up at a mid to high single digit pace year over year. Our internal metrics are consistent with what we are seeing in various external metrics that typically drive industry demand.
For example, office sublease activity and office space absorption are heading in the right direction. Both are leading indicators for office furniture demand and are providing additional reasons for encouragement. We're also continuing to see return to office momentum build as well. So as you look out into 2025, we have signals that are encouraging and support our view of a return to revenue growth, while at the same time, we are increasingly focusing our investments on driving revenue growth in this segment.
Moving to residential building products. Our current view is that any real housing recovery continues to push out, and our revenue outlook points to the majority of segment growth occurring late in the year as year over year comparisons ease and our growth initiatives gain traction. As is well documented, the dynamics in the housing market remain difficult.
After bottoming at 39 in August, the housing market index reached 47 in January. Well, this is solid improvement, the January reading remains below the 10-year average of 62. Builder sentiment continues to reflect the impacts of elevated interest rates and ongoing affordability issues. Despite these headwinds, we believe in the long-term opportunities tied to the broader housing market and the strength of our market leading positions and profitable operating model, and we continue to invest accordingly.
I will finish by making a few comments about our markets and provide additional detail around our elevated 2025, EPS growth visibility. As is evident from our commentary, it is and in the in the release and on the call, we are increasingly focused on driving revenue growth in both businesses. However, we do expect the year to start off a bit slow with revenue declines in the first quarter.
In workplace, the first quarter revenue softness is being driven by the transactional portion of SMB and large project timing within the hospitality business. Overall SMB activity lagged in the final quarter of 2024. I'll remind you, prior to the second half of 2024, S&P was an area of strength for us with consistent order growth over the previous two years, and we remain bullish about the fundamental backdrop.
As you look at 2025, our strength in the SMB space and our broad price point breadth continues to be competitive differentiators, especially as more cost-conscious customers embrace price mixing across projects, increasingly mingling S&B products in the contract settings.
In our contract business we see growth on the horizon. Contract orders were up 4% on a year over year basis in the fourth quarter. We continue to see encouraging signs within larger projects, and we saw order our performance from the workplace and health and markets during the last quarter of 2024. In addition, education order patterns improved as 2024 progressed, and the education order backlog is up double digits to start 2025.
We are still experiencing longer selling to order timeframes, which makes it a bit more challenging to predict revenue timing. So, while underlying demand drivers are encouraging in the contract space, the level of macro uncertainty, including the ultimate impact of tariffs, will affect how demand plays out. Looking ahead, we believe we are particularly well positioned to benefit as the workplace furnishings market continues to improve.
We have a portfolio of brands with unmatched products and breadth and pricing breadth and depth, allowing us to meet any future need a customer has. We have products that work for customers ranging from small businesses to the largest multinationals. Our brands are distributed widely across geographies, from tertiary markets to the top MSAs. And we can broadly meet the needs of workplaces, schools, healthcare facilities, and hotels.
Moving to residential building products, we continue to believe in the positive long-term market fundamentals. The near term remains dynamic, and we expect the market-driven revenue recovery takes some time, given the current housing environment. We are, however, optimistic about our opportunities to increase revenue through our growth initiatives.
Specifically, we continue to develop market leading new products and provide customers with more options and features. We are driving new programs to increase consumer awareness of the fireplace options, ensuring our products are considered in all remodel and new construction projects.
And we are strengthening our already strong relationships with builders across the country, helping them deliver the best overall value to the homeowner. While we invest in growth, we will continue to deliver high margin results and strong profits in this business. Longer-term, single-family housing remains under supply and demographics will support additional command growth.
The results of our ongoing investments which enhance our connection to customers and build on our leading brands will fortify our position of strength in the industry. Finally, and importantly, we have elevated earnings visibility this year and next. While our earnings expectation for 2025 does include revenue improvement, we continue to have high visibility of significant profit growth driven by operational improvements.
And as we have discussed, we have two initiatives underway, Mexico and KII synergies that will drive a total of $0.70 to $0.80 of EPS growth through 2026. That represents approximately 25% EPS growth on top of our 2024 earnings, with the savings expected to be divided roughly equally over the next two years. In addition, we continue to manage our cost structure and residential building products to align with the demand environment.
Early in the fourth quarter of 2024, we took actions to lower our cost structure by approximately $5 million in this business. Most of that benefit will be recognized in 2025, further adding to our overall profit visibility. So without help from the cycle, we expect our double-digit earnings growth to extend to at least five years. I will now assume the call of the VB to discuss our outlook for 2025. VP, thanks, Jeff.
Vincent Berger
I'll start by discussing our outlook for demand and profit. Beginning with demand, as Jeff commented, first quarter revenue in workplace furnishings is expected to decrease to a low to mid single digit rate year over year. The benefits of improving orders, backlog, and pre-order metrics are expected to drive revenue growth beginning in the second quarter of 2025.
For residential building products, the first quarter, 2025 net sales are projected to increase at a mid-single digit rate compared to the same period in 2024. We expect growth in both remodel retrofit and new home markets, with remodel retrofit growing high single digits and the new construction of low single digits. Recall, our remodel retrofit was artificially low last year as channel inventory was clearing.
We will continue to closely monitor several key housing markets, including interest rates, home affordability, consumer confidence as the year progresses. Shifting to our first quarter profit outlook, including the anticipated impact of tariffs, we're now expecting a non-gap earnings per share in the first quarter of 2025 to decrease slightly from 2024 levels. Based on our current tariff assumptions, there will be a temporary first quarter price/cost drag as existing backlog shifts.
We estimate this one quarter drag to be approximately $3million to $4 million. However, and importantly, we expect to recoup that drag over the remainder of 2025. Clearly the tariff situation remains very dynamic. However, we have the flexibility to adjust and expect to be able to manage the estimated impact for the full year. Currently we are accounting for the following 25% tariffs for Mexico and Canada, 10% additional tariff for China, and the announced steel and aluminium tariffs. We will continue to evaluate additional tariffs as they are announced.
Our mitigation plans include a combination of cost avoidance, supplier concessions, additional pricing actions, and productivity initiatives. From a price perspective, our current plans are to utilize a surcharge approach which allows us to adjust quickly in the dynamic environment and reduce the impact on our customers when possible. Our plan is to fully offset any tariff-driven inflationary pressure similar that we demonstrated in 2018.
In the first quarter, we expect operating margin in workplace furnishings to be down year over year as continued profit transformation efforts are more than offset by lower volume and tariffs. Residential building products operating margins is expected to expand on a year to year basis as we anticipate higher volume and positive price costs more than offset increased investments and tariffs.
Excluding the temporary drag from tariffs, first quarter non-gap earnings per share are expected to increase modestly, driven by increase in productivity partially offset by continued investments. Moving to the full year, we expect year over year revenue growth in the low to mid single digits in both segments. In workplace furnishings, quarterly year over year revenue growth rates is expected to turn positive in the second quarter, and we expect them to improve each quarter as the year progresses.
In residential building products, the majority of the year over year revenue growth is expected late in the year as comparisons ease and our growth initiatives gain momentum. On the bottom line, we expect another year of double-digit non-GAAP, EPS growth driven by savings from our broader productivity efforts, including about half of the remaining savings from associated with our Kimble synergies and the Mexico facility.
In addition, we expect increased profits from growth on a year over year basis. I'll wrap up with a few comments on our balance sheet and cash flow. Despite 2024 top line pressure, we expanded margins, grew profit, generated strong cash flow, reduced debt, returned cash to shareholders, and exited the year a stronger company. For the year, operating cash flow exceeded $225 million and year-end gross debt leverage is at 1.1 times as calculated in accordance with our debt agreements.
The ratio was unchanged from the end of the third quarter of 2024. We deployed cash flow by further accelerating stock repurchase activity in the fourth quarter while maintaining our long-standing quarterly dividend. For the year, we returned $129 million to shareholders through stock buybacks and dividends.
The combination of our strong balance sheet and consistent cash flow generation will continue to provide a high degree of financial flexibility and capacity for investment. Our capital priorities remain reinvesting in the business, paying dividends, pursuing share buybacks, and exploring M&A opportunities. I'll now turn the call back over to Jeff.
Jeffrey Lorenger
Thanks VB. As we look to our future, we are committed to driving revenue growth and delivering strong margins across our businesses. Despite ongoing macroeconomic uncertainty and anticipated demand volatility, we have elevated earning capability through 2026 and are increasing our investments to drive growth. We delivered a third straight year of double-digit earnings growth in 2024, and we expect the momentum to continue in 2025.
Beyond 2025, we are positioned for continued success. We have elevated earnings growth visibility through 2026. Broad and diverse product and market coverage and workplace furnishings, market leading positions and residential building products, and we feel now is the time to lean into additional investments to drive future growth. All this is supported by our strong balance sheet and the ability to drive continued free cash flow.
I want to thank each H&I member for their continued dedication and congratulate them on delivering another year of excellent results. We will now open the call to your questions.
Operator
(Operator Instructions)
Your first question is from the line of Ruben Garner with benchmark.
Reuben Garner
Thank you. Good morning, everybody. Maybe to start the last couple of years, the focus has definitely been on the margin front, savings and synergies.
It sounds like growth and investments and growth is more of a focus. Now I was wondering if you could dig in a little bit on what exactly you're investing in specifically on the workplace side, and then, why you kind of feel like now is the time to turn that on.
Jeffrey Lorenger
Yeah, good question. I think first of all, let me start with we're still focused on margin expansion. That's still a headline news, but we're investing, we think now is the time we're investing in more selling capabilities. We're really focused on simplifying our customer experience and improving it. We're increasing our spending and product development, continuing to up our game in in digital connectivity throughout the value chain and so, we just feel it's a really good time to do that and we're going to stay on it.
Look, we see strength in some of our verticals that that warrant more investment as well and, in the office, starting to show some growth in healthcare, education, hospitality, kind of, so there's a lot of reasons for us to want to lean into the investment profile right now.
Reuben Garner
Okay, and then, on the residential building products side, can you talk about the company specific drivers that give you confidence in that growth target for this year and specifically the acceleration in the back? I understand the inventory dynamic, but maybe, VB, I think you referenced investments that you hope to drive accelerated growth in the backup, so if you could just talk about those as well.
Vincent Berger
Sure, I think that the ruin the investments have started. They obviously will taper in as we get further in the back half, but it starts with our continuing to organize around the consumer, which is the business units we introduced this to probably three years ago, and the closer we organize around the consumer, our efforts and benefits get, more tactical and precise. So, it starts with capabilities and selling and getting closer to the builder. We have a privileged position with our relationship with national accounts, our own distribution, as well as our online distribution.
So, we're adding, selling, I would say, capacity and capabilities in all those areas, and then we're going to continue to drive category awareness, consumers still need to know that fireplaces are an option both on the retail side as well as on the new home side, and I'd say finally our product pipeline, the. The breadth and depth of that across all brands and all categories are pretty strong. So, all those investments are certainly incremental dollars that we're doing versus run rates, but we will continue to defend our margins while we invest.
Those should not be something to think that it's going to degrade the high teen margins that we've been doing. We feel it's the time just like workplace to put the money in there to drive growth for not only this year but the future.
Reuben Garner
Great, I look forward to seeing you next week. I'm going to sneak one more question in. The federal government, can you remind us of at your exposure is there and what the kind of early indications are? I know you've got a lot of moving pieces with potentially cuts, but also return these mandates, so just an update on that would be helpful.
Thank you.
Vincent Berger
Yeah, on the federal side, it's an important part of the business, but it's a small part of the business. Let me start there when we look at the whole portfolio across workplace furnishing. So we're approaching it right now, no changes, and we're just going to continue to monitor. We still have selling capabilities and forces addressing the opportunities here and it's an area where we can grow, but for now it's a little bit of status quo.
Jeffrey Lorenger
Yeah, we haven't really seen any, changes on buying patterns or anything yet. There's obviously a lot of dust in the air, but right now we're going to stay the course and like you say, there's probably going to be puts and takes there, over over the course of the next couple of years, but we like our position and we're going to stay present and invested in that space.
Reuben Garner
Great, thanks again and congrats on the strong close. Good luck, the rest of this year.
Operator
Your next question is from the line of Greg Burns, Sidoti
Greg Burns
Morning. Are you seeing any indications that that the that SMB part of the business is, I know it's probably shorter cycle, so not as much visibility, but any indications there that you might be seeing improvement in demand or stabilization there. I did notice that like the SMB Small Business index was showing, positive signs last couple of quarters post the election. Are you seeing anything in the market that might give you hope that that SMB piece rebounds in 25?
Jeffrey Lorenger
Greg, that's a good question. I mean, right now we're kind of flattish, in that space we like our position. We know as it turns we'll be there and but it's a little early to call that. I think it really suffered from kind of the hangover of the election kind of going in ending the year and it's been a little rocky to start, but as things stabilize, I would anticipate that we'll see some. Revenue upside towards the back half of the year.
Greg Burns
Okay, and then with the tariffs it sounds like you know you're going to be able to offset them on a concurrent basis, maybe not so much in the first quarter, in the past I always thought there was like maybe a little bit delay on your ability to pass through price and that'll work its way through the system. Why are you able to offset the tariffs on like a contemporaneous like in quarter basis going forward.
Jeffrey Lorenger
Yeah, that's good. That's a good question, Greg. I think, we won't be able to do it in the first quarter just because we chose it, we're not. It's been kind of fast and furious, and we're going to push the backlog out, but this time maybe from the last time we're going to take a surcharge approach as opposed to a permanent price list price adjustment that that's 0.1 because you know these things kind of come and go and it's more dynamic, I think than last time.
So that's a quicker mechanism than pushing a list price adjustment through. And I think it's a fair approach for our customers and we're also, look, we're also working our supplier concessions. We're looking, we are king at our productivity, all to get to a neutral place on this and be fair to everybody involved, but the real bottom line is we're going to surcharge it, which we can move, in a week or two fairly quickly.
Greg Burns
Okay, great. And when we think about, maybe revenue growth this year, volume is picking up, what's your typical incremental margins on. Yeah, the top line growth you're projecting.
Vincent Berger
Yeah, I think it's fair to say now with the productivity improvements in workplace, you can consider 40 plus percent for incremental margins on the on the core business, both residential and workplace furnishings.
Greg Burns
Great, thank you.
Vincent Berger
And I think the important one more comment there, that's while still investing. So the investments that Jeff was talking about I was talking about on residential is we continue to we expand, we continue to expand those margins while doing that.
Greg Burns
Okay great thanks.
Operator
Your next question is from the line of Steven Ramsey with Thompson Research Group.
Steven Ramsey
Hi, good morning. Wanted to think about near term residential. Maybe you can extrapolate to the mid to long term if there is any, but the Resi outlook for mid-single digit growth in the first quarter yet orders up 8% and that's continuing. Can you maybe clarify what's kind of driving the delta there and if it is a delay if it helps Q2.
Vincent Berger
Sure, so I think we got a, Q1 is obviously the smallest year, smallest dollar amount from a seasonality standpoint. So, we can start there, and we talk about up, min single digits. We look at two markets. We look at the new home market and the residential remodel. So, I think it's important to talk about both the new home market as we as we. See right now Q4 we're actually down 2%, but we see that market continuing to improve, and it has each quarter over the last four quarters to now almost be at a flat to a breakeven point.
If I look at the last 90-day permits, which is a great indicator for us on kind of forward-looking demand, that's actually flat as well. So we see that stabilizing. When I look at the plus eight in orders, the important number in there is actually the remodel retrofit. We're coming off of a very low comp. We've got two years of down 40% if I look at the last two years of residential. So this is why we have confidence that we think we can start, we will start seeing some growth in that area, and that will obviously continue through and build as we go through the year.
Steven Ramsey
Okay, helpful. And then thinking about workplace, you talked about the extended timeline between the conversations in order to sale. I'm curious if both customers, both customer bases are still moving slow, that is contract in SMB and is that timeline shrinking at all?
Jeffrey Lorenger
Yeah, that's a good question. I think we're there--, there's a lot of noise in the system right now. I would have told you that it was starting to shrink, but then, kind of year end and tariffs and and.
Some of the just kind of noise kind of I think it's slowed that. I think we're kind of in a state I don't, it's not extending anymore, but I don't, it's a little too early to call whether that trend will continue or we've got to, I think whatever we. I was a bit of a temporary pause, but I did see that working its way, slowly working its way down the timeline, and I would say right now we're in a position of kind of a whole pattern, given, kind of given some of the things that are that are happening.
Steven Ramsey
Okay, and to make sure that this dynamic is embedded in the full year guidance and kind of that timeline of improvement starting in two, I assume.
Jeffrey Lorenger
It is, Stephen. It is that in that that we've tried to the best of our ability, we've lived with this for a bit now, so we, the business has the businesses have adjusted their process to account for that. So yeah, that is embedded in our full year look.
Steven Ramsey
Okay, helpful. And then last thing for me, you did a good job managing SGNA in 2024. Is this a positive factor again in 2025, just the SGNA line growing at a slower rate than sales?
Vincent Berger
We actually have SGNA in 2025 growing as a percent. This is the point about time of investments and keeping it relatively steady throughout. So I think it's the the correction SGA in this year was adjusting for actually the bright sizing in the business while investing. Now it should stay pretty steady.
Steven Ramsey
Okay, that's great.
Thank you.
Vincent Berger
And that remark is a percent of sales just so we're clear on the math.
Operator
(Operator Instructions) . Your next question is from the line of Brian Gordon with Water Tower Research.
Brian Gordon
Hey, good morning, everyone. First, I just wanted to say, congratulations on the strong margin performance and a challenging environment. I guess my first question would be, what you might be hearing from your contract customers on where they stand with respect to return to office and how they might see those trends play out over the next year or two.
Jeffrey Lorenger
Yeah, that's a good question. I think, there's more momentum building on return to office, kind of in the trenches, and it's so the good news in a macro standpoint, I think there's more conversations, there's more activity.
It still is a little bit case by case. Every business is a little different, and they're all the good news is is that if you cut the pie chart up, there's more people talking about. And planning for it than there was a year ago and I&I see that continuing how they execute the timing of execution is still a little bit case by case based on the business model, but you know it is continuing to trend in that direction.
From our perspective, and that's what we're kind of seeing on a day-to-day basis and every time that happens, whether they're shrinking, moving cities, going from hybrid three days to four days, all those are furniture events, and they all are spawning dialogue and discussion about how best to accommodate and actually.
Make it a great experience for their employees, that and make the investment so that those employees will, want a return or at least not be struggling with the return.
Brian Gordon
That definitely makes sense. Thank, I just want to dig in a little bit more on the SMB side of the business. Why do you think at this point SMB might be lagging behind contract a little bit? Is this kind of more you think an industry effect, a balance sheet effect, growth effect? What do you think might be driving some of this, given the fact that it's a volatile business, of course.
Jeffrey Lorenger
Yeah, well, I think two things. One, we that business has been really strong on a two-year kind of run rate, so maybe there's a little bit of a natural breather there. But the fact of the matter is that the contract, as we've been talking about has been building for quite some time and this the comments. Talk about return to work were more twinkling your eye and now they start to become reality, and I think my sense is even though there's disruption in kind of the market right now and tariffs, those customers are they they've studied this enough now and they're moving forward.
And look, the SMB folks, they have the luxury to be able to kind of pause on a dime, and that's, I think it's no more, no less than that, Brian. It's one is a longer cycle and the fact like we talked about it gotten a little longer. But the commitment is still there, and the S&P is, taking a bit of a breather like they always we've historically seen this almost every time there's a disruption in the economy that the S&B can kind of flatten out or turn negative, but they turn on fairly quickly as well.
Brian Gordon
Great, thank you so much, and good luck with the quarter.
Jeffrey Lorenger
Okay.
Operator
At this time, there are no further questions, I will now hand today's presentation back over to our presenters for any closing remarks.
Jeffrey Lorenger
All right well appreciate everybody's time today. Thanks for joining us and spend some time with us. Have a great day.
Operator
This concludes today's call. Thank you for joining. You may now disconnect your lines.
