Garmin Ltd (NASDAQ: GRMN) Q2 2022 earnings call dated Jul. 27, 2022
Corporate Participants:
Teri Seck — Investor Relations
Clifton Albert Pemble — President Chief Executive Officer and Director
Douglas Gerard Boessen — Chief Financial Officer and Treasurer
Analysts:
Paul Chung — JPMorgan Chase — Analyst
Benjamin James Bollin — Cleveland Research — Analyst
Nikolay Todorov — Longbow Research — Analyst
Ivan Philip Feinseth — Tigress Financial Partners — Analyst
Erik William Richard — Morgan Stanley — Analyst
Presentation:
Operator
Thank you for standing by and welcome to the Garmin Ltd. Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will b a question-and-answer session. [Operator Instructions] As a reminder, today’s program may be recorded.
And now, I’d like to introduce your host for today’s program Teri Seck, Director of Investor Relations. Please go ahead.
Teri Seck — Investor Relations
Good morning. We would like to welcome you to Garmin Ltd.’s second quarter 2022 earnings call. Please note that the earnings press release and related slides are available at Garmin’s Investor Relations site on the Internet at www.garmin.com/stock. An archive of the webcast and related transcript will also be available on our website.
This earnings call includes projections and other forward-looking statements regarding Garmin Ltd. and its business. Any statements regarding our financial — our future financial position, revenues, earnings, gross margins, operating margins, future dividends, or share repurchases, market share product introductions, future demand for our products and plans and objectives are forward-looking statements.
The forward-looking events and circumstances discussed in this earnings call may not occur and actual results could differ materially as a result of risk factors affecting Garmin. Information concerning these risk factors is contained in our Form 10-K filed with the Securities and Exchange Commission.
In particular there is significant uncertainty about the duration and impact of the COVID-19 pandemic. This means that results could change at any time and any statement about the impact of COVID-19 on the company’s results could change at any time. These results and outlook is the best estimate based on the information available as of today’s date.
Presenting on behalf of Garmin Ltd. this morning are Cliff Pemble, President and Chief Executive Officer; and Doug Boessen, Chief Financial Officer and Treasurer.
At this time, I would like to turn the call over to Cliff Pemble.
Clifton Albert Pemble — President Chief Executive Officer and Director
Thank you, Teri and good morning everyone. As reported earlier today consolidated revenue came in at $1.24 billion, down 6% from the strong pandemic-driven comparable of 2021. We generated $293 million of operating profit for the quarter, which was down 21% from the prior year and operating margin was 23.6%.
Our performance in the quarter was influenced by several factors. First, the US dollar strengthened significantly over the prior year relative to other major currencies and unfavorably impacted second quarter revenue by approximately $57 million.
Our strategy for managing currency fluctuations of this nature is to increase prices where we are able and reset pricing as we introduce innovative new products. We believe this approach is very effective in managing currency changes over the long-term, but the rapid and relentless strengthening of the US dollar will be a significant headwind for the remainder of the year.
From a business segment perspective, underperformance in fitness had a significant impact on our results, which I will cover in more detail in just a moment. And finally, we continue to experience supply chain constraints, which limited the orders we could fill in the quarter specifically in marine and aviation.
Considering our performance so far, we’re adjusting expectations for the remainder of the year. We now anticipate revenue of approximately $5 billion, which is flat to the prior year and EPS of $4.90, representing a year-over-year decline of approximately 16%. This new guidance assumes currency exchange rates stabilize at current levels and we have adjusted growth expectations for fitness and marine, which reflect the current trends. Doug will provide more details on our financial results and updated guidance in just a moment, but first I’ll provide highlights on the performance and outlook of each business segment.
Starting with fitness, revenue decreased 34% to $272 million. Gross and operating margins were 49% and 9%, respectively resulting in operating income of $23 million. The second quarter decline was broad-based impacting all categories in the segment and was primarily driven by demand normalization in the advanced wearable and cycling categories. These are categories which benefited significantly from pandemic fuel demand in the first half of 2021.
Although, our Q2 performance was disappointing, we are encouraged by the response to our new product introductions. During the quarter, we celebrated Global Running Day with the launch of two new running watches, the Forerunner 255 and the Forerunner 955.
The Forerunner 955 solar version is our first running watch with solar charging capability, which provides up to 20 days of battery life in smartwatch mode. We also launched the Edge 1040 cycling computer featuring solar charging capability for superior battery life and multiband GPS technology for accurate high-performance positioning in the most challenging ride environments such as those found in urban areas or dense street cover. Given the year-to-date performance and current trends we now expect fitness revenue to decline 25% for the year.
Moving to outdoor. Revenue increased 18% to $382 million with growth across multiple categories led by Adventure Watches. Gross and operating margins were strong at 66% and 40%, respectively resulting in operating income of $154 million.
During the quarter, we launched the tactix 7, a premium smartwatch with unique capabilities such as night vision compatibility as well as advanced tactical performance and risk-based navigation features. The outdoor segment has been a strong performer so far and we are maintaining our revenue growth estimate of 20% for the year.
Looking next at aviation. Revenue increased 13% to $205 million driven by growth in both OEM and aftermarket categories. Gross and operating margins were strong at 72% and 30%, respectively, resulting in operating income of $62 million.
During the quarter supply chain constraints eased bringing back orders down from historically high levels, but we have more work to do to meet the strong demand for our products. We recently announced that we now have more than 25,000 integrated flight decks in service across a broad range of applications from piston trainers to transcontinental business jets. This achievement demonstrates the unmatched versatility and capability of our integrated flight deck systems. The aviation segment has delivered solid performance so far and we are maintaining our revenue growth estimate of 10% for the year.
Turning next to the marine segment. Revenue decreased 7% to $243 million. Demand for our products was even higher than it was during the historic second quarter of 2021, but we were unable to satisfy all of the demand due to supply chain constraints.
Gross and operating margins were 57% and 28% respectively, resulting in operating income of $69 million. Since it was first introduced in 2018 our LiveScope Sonar system has been a game changer for the inland lake fishing market and has been a growth catalyst for the marine segment.
We recently expanded our product lineup with the introduction of the LiveScope XR system which operates at greater depths and expands the addressable market for live action sonar to coastal and deep lake fishing applications. We’re excited to bring live scope technology to the deep fishing market and believe it represents another growth opportunity for the marine segment. Given our performance so far this year and the anticipated return of normal seasonality patterns in the marine market, we will now expect revenue growth of 5% for the year.
Looking finally at auto. Revenue decreased 6% to $139 million with declines in both consumer and OEM categories. Consumer was impacted by lower sales of consumer PNDs, while OEM was impacted by reduced orders from automakers who face their own supply chain challenges. Gross margin was 40% and we recorded an operating loss of $15 million, driven by ongoing investments in auto OEM programs.
During the quarter we entered a new product category with the launch of our first diesel headset offering truck drivers high-quality audio up to 50 hours of continuous talk time and unique integration features with our diesel navigator units. While the first half of the year has been slightly below expectations, we believe growth will resume in the second half as automaker production improves. As a result, we are maintaining our revenue growth estimate of 5% for the year.
So, in closing while we are facing a variety of headwinds it’s important to remember, our diversified business model provides many opportunities for growth within each segment. We have a very strong product lineup and more new products are on the way. We remain focused on what we can control and we’ll be agile and opportunistic as we navigate the evolving macroeconomic environment.
So that concludes my remarks. Next Doug will walk you through additional details on our financial results. Doug?
Douglas Gerard Boessen — Chief Financial Officer and Treasurer
Thanks Cliff. Good morning, everyone. I’d like to begin by reviewing our second quarter financial results, provide comments on the balance sheet, cash flow statement, taxes, our updated guidance. We posted revenue of $1.141 billion for the second quarter representing a 6% decrease year-over-year.
Gross margin was 58.7% and actually flat compared to the prior year quarter as favorable segment and product mix offset the unfavorable impact of foreign exchange rates and higher freight costs. Operating expense as a percentage of sales was 35.1%, 230 basis point increase in the prior year quarter. Operating income was $293 million, a 21% decrease. Operating margin was 23.6% a 440-basis point decrease. Our GAAP EPS was $1.33. The former EPS, $1.44.
Next look at our second quarter revenue by segment and geography. In the second quarter double-digit growth in the outdoor and aviation segments were more than offset declines in fitness, marine and auto segments. By geography the Americas region was flat, contributed about half of revenue for the quarter. The EMEA and APAC regions both impacted by foreign exchange rates declined during the quarter.
Looking next at operating expenses second quarter operating expenses increased by $26 million or 6%. Research and development increased $15 million year-over-year, primarily due to engineering personnel costs.
SG&A increased $10 million compared to prior year quarter, primarily due to increases in personnel-related expenses, information technology costs. Our advertising expense is relatively consistent year-over-year.
The highlights on the balance sheet, cash flow statement and taxes. We ended the quarter with cash, marketable securities approximately $2.9 billion. Accounts receivable increased sequentially to $699 million while the seasonally stronger second quarter declined year-over-year, relatively in line with our sales decline.
Inventory balance increased year-over-year to approximately $1.5 billion. We’re executing our strategy, increase days supply to support our increasingly diversified product lines, optimize the mix of ocean versus air freight shipments and to carry sufficient levels of raw materials safety stock to mitigate increased lead times.
During the second quarter of 2022, we generated free cash flow of $5 million, a $115 million decrease from prior quarter, primarily due to lower operating income and increased operating capital needs. Capital expenditures for the second quarter were $75 million.
We expect full year 2022 free cash flow to be approximately $500 million, capital expenditures of approximately $300 million. Also in the quarter we paid dividends of $129 million, repurchased $31 million of company shares, leaving $260 million remaining share repurchase program authorized through December 2023.
For the second quarter of 2022 the effective tax rate was 7.6%, compared to 14.8% in the prior year quarter. The decrease in effective tax rate was primarily due to income mix by tax jurisdiction an increase in U.S. tax deductions and credits.
Turning next, to our full year guidance, we estimate revenue of approximately $5 billion compared to our previous guidance of $5.5 billion. As previously mentioned, strengthening of the U.S. dollar a significant unfavorable impact on our second quarter revenue.
Assuming the euro will be at parity with the U.S. dollar for the remainder of the year, year-over-year unfavorable revenue impact will accelerate in the back half of 2022. We expect gross margin to be approximately 56.7%, which is lower than our previous guidance 57.5%, primarily due to the anticipated full year unfavorable impact of foreign exchange rates.
We expect operating margin of approximately 20%. Also we expect a pro forma effective tax rate of 8.5% which was lower than our previous guidance of 10.5% to projected full year income mix, by tax jurisdiction. This results in expected pro forma earnings per share approximately $4.90.
This concludes our formal remarks. Jonathan, can you please open the line for Q&A?
Questions and Answers:
Operator
[Operator Instructions] And our first question comes from the line of Paul Chung from JPMorgan. Your question please.
Paul Chung — JPMorgan Chase — Analyst
Hi. Thanks for taking my question. So just first up on fitness, where are we on kind of the channel levels on some of the cycling products? And what’s been the initial demand feedback for refreshing some of the four underlines including the 955? And how should we think about the seasonality for the balance of the year for fitness? And I have a follow-up.
Clifton Albert Pemble — President Chief Executive Officer and Director
Okay. Good morning, Paul. Channel levels and cycling, I’d say you have to look at two different sides of that. One is the cycle and computer side and the other is the indoor trainer side. The cycling computer side and the response to the new 1040 is very good. And so the inventory levels at the channel I think are fine.
The indoor cycling side of things with the tax trainers, I think generally the market right now is heavy on inventory of all kinds of trainers from every manufacturer. And so there’s a backup at retail of those products, which impacts our sell-in. It’s going to take some time I think for retailers to work through that.
But in general the retail demand is generally what people would expect for this time of the year. It’s not really the season yet in the Northern Hemisphere and we should see improved retail sales in the back half as winter approaches.
In terms of the other fitness products, the 955 and the 255, the demand has been very good, and we’re working through actually back orders on those as well.
Paul Chung — JPMorgan Chase — Analyst
Great. And then on aviation, you saw some record quarterly revenues resulting in, very nice operating leverage for the segment. Now it’s above that 30% mark again. Can you expand on some of the strength you’re seeing in the segment, product mix, market share? And you’ve provided the revenue outlook, but how should we think about the margin outlook for aviation in the second half?
Clifton Albert Pemble — President Chief Executive Officer and Director
Yeah. So definitely a good quarter. I think that we were able to catch up on some of our lingering backorders in the segment. Most of those were targeted to the aftermarket. Both sides of the Aviation segment, the OEM side and the aftermarket grew in the quarter. We expect that to continue in the back half because OEMs of course are working to fill the back orders that they have for airplanes, which are still very strong and we’re still catching up on orders in the aftermarket side of things as well.
In terms of market share as we’ve said before, we’re very strong in everything from the piston singles on up through the midsize business jet and we continue to win more platforms in those categories and are working on new projects to build our revenues for the future.
And then margin wise, I would say that aviation has been very solid when it comes to our margin profile and in that 70% margin range for gross margin, which funds a very heavy R&D investment to create the products that we offer. And kind of that mid to upper 20 range for operating margin is the sweet spot. As we get more leverage, of course, it goes up. But generally we tend to target in that range.
Paul Chung — JPMorgan Chase — Analyst
Great. And then lastly if I could fit one more in. Outdoor very strong quarter with the refresh of the fenix despite some tough comps. How is the sell-through tracking there and the status of the channel there? And then do you have a sense for upgrade versus new users to the platform particularly for the fenix? And any thoughts there would be great. Thanks.
Clifton Albert Pemble — President Chief Executive Officer and Director
So the refresh has gone very well. I think it’s taken us some time, but we are getting close to being caught up on the initial demand for the fenix and the epix, since it was launched earlier this year. There’s still some pockets of lingering back orders in those categories that we’re working to catch up on. In terms of the channel, we think it’s very very healthy and seems to be normalizing right now, with kind of the sell-in sell-through being balanced. In terms of user profile, we’re seeing pretty much what we have seen, in recent launches, which is roughly about half of our users coming into those families are new users and then we have upgrade users coming from all kinds of products, from much older generation fenix, to even our advanced wellness customers who are looking to upgrade to a more capable launch.
Paul Chung — JPMorgan Chase — Analyst
Great. Thank you.
Clifton Albert Pemble — President Chief Executive Officer and Director
Thank you.
Operator
Thank you. And our next question comes from the line of Ben Bollin from Cleveland Research. Your question, please.
Benjamin James Bollin — Cleveland Research — Analyst
Good morning, everyone. Thanks for taking the question. Cliff and Doug, I had a bigger picture question on inventory levels. When you think about your current balance sheet and the exposure to inventory, I know there’s been some targets to build that. How have those thoughts evolved? And then a follow-on, based on behavior you’re seeing from your partners, your go-to-market partners, do you have any thoughts about what they’re thinking about going into the holiday selling season and their overall commitment to inventory levels from where they stand right now?
Clifton Albert Pemble — President Chief Executive Officer and Director
Yes. So maybe just a high-level comment on our overall inventory. As you know, component lead times have been very long. And so in order to ensure, we have the materials to be able to meet demand. We’ve had to increase our weeks of supply on the raw material side. In some cases, we’ve been faced with what were typically, before the pandemic 13 to 26 week lead times now extending 26- to 52-week lead times. So, it’s a very challenging situation. And what we don’t want to do is, be left with demand with no inventory to build.
Additionally, on the inventory side, the freight side of things has been really challenging. And in order to solve the freight cost issue, we have to have more inventory coming on boats, which is a lower-cost mode of shipment and that takes a very long time. And so it simply just extends the amount of inventory that we have to carry. We feel like the inventory we have, is good inventory. We’re very versatile. We can reuse components and materials that we have across many different product lines. And we feel like, in general, that most of our product lines are solid long-term long life cycle products that we can sell over time. So, we feel very good with where we’re at right now.
In terms of go-to-market, and their outlook for the upcoming holiday season, it’s still early days. So, there’s work being done to finalize all of that. The early indications that we have in some of the segments, is a very strong commitment to promoting products in big quantities for the holiday season. So, that’s what we know so far. But again it’s probably very early days.
Benjamin James Bollin — Cleveland Research — Analyst
Okay. And then one follow-up would be specifically as you look at the outdoor business for the adventure watches, how are you thinking about the performance of that business through year-end? And how are you balancing the potential risks of maybe you’ve already seen some pull-forward. You haven’t seen it yet given the refresh versus the stronger underlying secular demand. And that’s it. Thank you.
Clifton Albert Pemble — President Chief Executive Officer and Director
Yes. So, our guide for the year is up 20%. We had a strong first half. So, as you can infer from the data, we expect that will moderate in the back half. We believe our product line is very strong and we believe that that is achievable right now. And we also have more new products coming which should boost our overall ability to grow in the back half.
Benjamin James Bollin — Cleveland Research — Analyst
Thank you.
Operator
Thank you. One moment for our next question. And our next question comes from Nikolay Todorov from Longbow Research. Your question please.
Nikolay Todorov — Longbow Research — Analyst
Yes, thank you and good morning everyone. First question on marine. I guess Cliff can you talk about where do you see the constraints? I know you had some constraints from prior quarter, but it seems like they have worsened. And also it seems like you’re building still a strong backlog. How much of that do you consider perishable given the macroeconomic backdrop?
Clifton Albert Pemble — President Chief Executive Officer and Director
Yes. So the constraints Nik I would say they’re not worse but they — in some cases, they didn’t get much better during the quarter. The main issue there was key components for our chart-plotters in order to be able to deliver those higher end plotters and we prioritize customers in the segment that impacted our selling prices.
But in general, I would say the backlog we’ve made some progress into Q3 and covering some of that. And we are assuming that we’ll have a greater level of seasonality more typical of the segment. Q2 is usually the highest quarter of the year and then it follows off as people in the Northern Hemisphere bringing their boats out of the water and put them in storage and they wait to upgrade boats and work on them in the spring. So, we’re assuming some of that may be deferred but that’s why we brought our guide down to about 5%.
Nikolay Todorov — Longbow Research — Analyst
Okay. And then second question I have is that maybe on the opex side, maybe can you talk about what are the changes you’re implementing following the revision in the outlook how is the opex lines changing given the new outlook?
Clifton Albert Pemble — President Chief Executive Officer and Director
Yes, I think we’re definitely taking a look at that and we’re looking at two different areas. We’re being very selective in our hiring to make sure that we don’t outgrow our revenue growth. And we’re also looking at our general opex focusing on priorities and essentials and making sure that we narrow the priorities to the most important things. So, we’re trying to manage that and steer it for the long-term.
Nikolay Todorov — Longbow Research — Analyst
Okay. Last one if I can squeeze. Fitness gross margin, should we expect given the current environment and the inventory overhang that high 40s is kind of the norm in the near-term? Or is there any potential puts and takes that can change that direction?
Douglas Gerard Boessen — Chief Financial Officer and Treasurer
Yeah. In the fitness, gross margin a lot of you said puts and takes in it. We did see some unfavorability relating to the foreign exchange rates, which we would anticipate that to continue in the back half. Now Cliff talked about also freight. Freight’s also been impacting our gross margins also there from that standpoint. And so, you’ve seen some of the other segments that may have seen some improvement in there like outdoor from product mixes where they have and some things we’ll watch a higher percentage of those. But it’s really going to be a function of what is that product mix portfolio that makes up that — the fitness side of things. But probably, as you said probably similar to what you indicated our gross margins for go forward. But we do have some headwinds that we’re currently facing.
Nikolay Todorov — Longbow Research — Analyst
Got it. Thanks guys. Good luck.
Douglas Gerard Boessen — Chief Financial Officer and Treasurer
Thank you, Nick.
Operator
Thank you. And our next question comes from the line of Ivan Feinseth from Tigress Financial. Your question please.
Ivan Philip Feinseth — Tigress Financial Partners — Analyst
Thank you for taking my question and congratulations on the good aviation performance. Following the introduction of the diesel headset, do you think there’s an opportunity for you to expand into aviation cockpits headsets considering that’s really only dominated by two companies and none of those have the cockpit presence that you have?
Clifton Albert Pemble — President Chief Executive Officer and Director
Yeah. I think — good morning, Ivan, we’re really excited about the diesel. And as I’ve mentioned many times in the past, our strategies for growth are introducing new products and new product categories, entering new markets and this reflects that commitment. Right now, we’re focused on attacking the opportunities on the truck side. And then we’re exploring other avenues where this kind of technology might be useful.
Ivan Philip Feinseth — Tigress Financial Partners — Analyst
Now based on your overall bigger picture hiring and space expansion plans in Olathe, do you think that some of what you’re going through that you’re seeing right now is just more of short-term headwinds? And what do you feel the bigger picture growth opportunities continue to be?
Clifton Albert Pemble — President Chief Executive Officer and Director
Well, first, I think everyone hopes that the economic situation is short term, but none of that has really proved to be true. So we’re making sure we’re managing the business for the long-term. We are in need of more space in Olathe particularly to be able to bring more people back on to campus and also focusing on those priorities that we have particularly needing more people in aviation and some of the consumer areas as well and balancing our overall hiring needs. So we’re committed to building out and finishing our space expansion here in Olathe. And then I think we’re in good shape, when it comes to overall space accommodations for our people for the next kind of phase of growth.
Ivan Philip Feinseth — Tigress Financial Partners — Analyst
Right. And in upcoming new products, can you give us some idea of the areas that we should be stay tuned and focused on where we’ll see some new products introduced this year or the second half of this year?
Clifton Albert Pemble — President Chief Executive Officer and Director
Well, we have introductions planned in most every segment. And so stay tuned, but I’m pretty excited about some of what’s coming.
Ivan Philip Feinseth — Tigress Financial Partners — Analyst
All right. Thank you very much.
Clifton Albert Pemble — President Chief Executive Officer and Director
Thank you.
Operator
Thank you. One moment for our next question. And our next question comes from the line of Erik Woodring from Morgan Stanley. Your question please.
Erik William Richard — Morgan Stanley — Analyst
Hey, good morning, guys. Thank you for taking my question. Maybe Cliff, I’ll start with a kind of a high-level question for you and then ask one for Doug. I think as we’ve gone through the pandemic and now kind of in this quasi-pandemic stage –consumer electronics have gone through a near record period of elevated demand that some could now say is normalizing.
I would just love to get your take Cliff on just how you think about the TAM for your consumer-facing businesses. Do you think it’s permanently larger today than pre-COVID levels? Is there a risk that it returns? Just high-level thought process and how you’re thinking about the TAM as we move kind of past the peak of the pandemic.
Clifton Albert Pemble — President Chief Executive Officer and Director
Thanks, Erik. Yes, I think, the pandemic certainly highlighted to people the importance of health and wellness and fitness. And so I believe that change in people’s focus probably is a very long and enduring mindset. We did experience a lot of new demand and had new customers coming into our ecosystem. I believe that’s a longer-term opportunity than as they use those devices and then look for a device with new capabilities they will then look to Garmin for an upgrade. So I believe that creates an enduring customer base for us and leads to opportunities in the future.
Erik William Richard — Morgan Stanley — Analyst
Okay. That’s helpful. And then maybe Doug, by my math kind of gross margins in the second half will be a bit below 56%. Operating margins will be around 18.5%. So is there any way you can just kind of help us quantify the impact of the various factors impacting kind of this new lower second half margin outlook?
Douglas Gerard Boessen — Chief Financial Officer and Treasurer
Yes. Well a big factor of that is foreign exchange rates. So as I mentioned the — assuming parity for euro and US dollar, we should expect year-over-year impact change to accelerate. For instance in Q2 of last year of 2021, we’re about 120. Then this year the average for Q2 2022 was about 107. And then it went to by I think 118 and 115. Then if you assume parity, which is similar to where we’re at right now, that year-over-year exchange will accelerate. So that is impacting our gross margin there as well for the bigger piece of that piece. But then also as we mentioned freight is something we are managing through that also.
Erik William Richard — Morgan Stanley — Analyst
And maybe if I could just clarify would you say that FX is the only kind of incremental headwind? Or would you say freight is now more of a headwind than you expected 90 days ago?
Douglas Gerard Boessen — Chief Financial Officer and Treasurer
It’s interesting freight. So freight was probably the biggest story. Maybe a couple of quarters ago we were year-over-year. Now, as Cliff mentioned we are managing a piece of that as it relates to our inventory levels. We are trying to have a larger percentage of our shipments on ocean versus air, which is helping that.
And also on a year-over-year basis we saw some of those large increases last year in the rates. And I’d probably say some of those rates are maybe a little bumpy here too, but more or less stabilizing. So there will probably be some ups and downs in freight through the back half of the year kind of see what’s going on with the rates whether ocean there but it won’t be as significant of a driver as the FX — foreign exchange rates, which I think are going to be a bigger item that we’re going to be headwind against in the back half.
Erik William Richard — Morgan Stanley — Analyst
Okay. Thank you so much for the color guys.
Douglas Gerard Boessen — Chief Financial Officer and Treasurer
Thank you.
Operator
Thank you. This does conclude the question-and-answer session of today’s program. I’d like to hand the program back to Theresa Seck for any further remarks.
Teri Seck — Investor Relations
Thanks everyone for your time. Doug and I are available for callbacks. Have a great day. Bye.
Operator
[Operator Closing Remarks]