CECO Environmental Corp. (CECO) Q2 2020 Earnings Report, Transcript and Summary

Good morning, and welcome to the CECO Environmental Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Matt Eckl, Chief Financial Officer of CECO Environmental. Please go ahead.

Thank you for joining us on the CECO Environmental Second Quarter 2020 Conference Call. On the call today is Todd Gleason, Chief Executive Officer; and myself, Matt Eckl, Chief Financial Officer. Before we begin, I'd like to note that we have provided a slide presentation to help guide our discussion. The call will be webcast along with our earnings presentation on our website at cecoenviro.com. The presentation materials can be accessed through the Investor Relations section of the website. I'd also like to caution investors regarding forward-looking statements. Any statements made in today's presentation that are not based on historical facts are forward-looking statements. Such statements are based on certain estimates and expectations and are subject to a number of risks and uncertainties. Actual future results may vary materially from those expressed or implied by the forward-looking statements. We encourage you to read the risks described in our SEC filings on Form 10-K for the year ended December 31, 2019. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that we make here today, whether as a result of new information, future events or otherwise. Today's presentation will also include references to certain non-GAAP financial measures. We've reconciled the comparable GAAP and non-GAAP numbers in today's press release, as well as a supplemental table in the back of the slide deck. And with that, I'll turn the call over to Todd.

Thanks, Matt, and I am excited to be here today. So, it has been approximately one month since I joined as the company's CEO. It is a privilege to lead CECO. We have a talented team, and as I get to better understand our opportunities, my enthusiasm definitely builds. Before we jump into the prepared remarks, and on behalf of CECO, we hope everyone is healthy and navigating the challenges associated with the COVID-19 pandemic. No doubt, the impact to our personal lives has been profound and of course, the global business environment has been jolted in ways not often felt. In many ways, we're all in this together. So please stay safe. Now let's review the material. Please turn to Slide number 3. Given my recent appointment as CEO, we felt it was appropriate that I share a little about my background, as well as what drew me to CECO. It is hard for me to believe sometimes that it has been over 25 years since I began my professional career. Time flies, and here we are, and I am grateful for the many people that have provided support for my development and the positions that added to my preparedness. I think if there are really three main takeaways I'd like to share about my background, I would highlight the following: First, I've been fortunate to have a diverse background with respect to various business functions and P&L management roles. This diversity has provided both breadth and depth with respect to growth strategies, execution and how financials speak to the truth of a company's performance. I continue to learn, and I look forward to continuing to expand my skill set here at CECO. Second, a significant portion of my career has been spent in multi-industry organizations, such as Honeywell, Trane, which was American Standard Trane at that time, and Pentair. So, CECO Environmental has a very natural feel for me, as I quickly immersed myself in the business and operational discussions and opportunities. On top of that big company experience, I have been fortunate to lead in advance a private equity venture-backed company. Anyone that has ever been in that more entrepreneurial environment will agree, you develop a certain scrappiness and some new business muscles that more mature companies don't necessarily provide. What all of that means is that I will apply the appropriate processes associated from the academy companies while also implementing some of the entrepreneurial muscle to CECO's capabilities and strategies. And third, I have defined a significant portion of my career success being associated with companies that create above-market shareholder value. My compensation structure should be and is aligned with shareholders. Our stock will reflect how well we perform as a company. So I am anxious to make an impact. In some early conversations with external stakeholders, the question was presented. Why did I join CECO? I'd summarize that it is about fit and opportunity. As I did my analysis of the company, I came to the conclusions listed on the slide and each has been reinforced in my first month at CECO. First, the company is financially healthy, in good shape and ready for its next chapter of growth. This is not a turnaround story, but a great platform from which we can continue to build. I like our products and our end-markets. I also like the size of CECO. I can make a real impact on the strategy and operations. And over the past month, I have gotten to know many of our 800-plus employees, with almost half being engineers with a tremendous passion and enthusiasm to solve complex customer and market challenges. Additionally, the company's Board of Directors is very aligned and focused on recurring revenue and high-value growth. We have a great portfolio to drive heightened financial returns and a balance sheet that enables CECO to make appropriate investments to win. In summary, I feel the best days are definitely ahead of CECO. The team is fantastic, energized and ready to write CECO's next chapter. So let's keep moving. Please turn to Slide number 4. This slide highlights three main focus areas. Despite the challenging environment, we made smart and strategic moves to better position our company in the markets we serve and also our cost structure. Our second quarter results were solid. We took appropriate action to protect the health and safety of our employees while also protecting the financial results of our organization. Let's discuss each in a little bit more detail. As noted toward the top of the slide, late in the quarter, we announced the acquisition of Environmental Integrated Solutions or EIS for short. The acquisition further increases CECO's solution capability, application depth and knowledge expertise. It also provides greater reach into various European markets. It may have been a small bolt-on from a financial perspective, but we are excited for the opportunities it presents. This week, we announced a joint venture between our Effox Flextor brand, Damper product line and Mader Machine Company. The combination of the two businesses Damper products and entities will deliver cost synergies, plant efficiencies and market leadership for growth. It also gives CECO added strategic optionality. We will be the majority owner. We also took action to align leadership across our industrial and fluid handling businesses. This new leadership structure enables more efficiencies and collaborative activities for growth and talent development. Each move is important to advancing CECO's portfolio, cost structure and growth capabilities. In the middle section of the slide, we provide high-level highlights on Q2 2020 operating results. Matt will definitely spend more time on this, but I am proud of our 800-plus associates and how great they performed in a very challenging and uncertain market. By almost any measure, the market environment was very soft. The significant pause in late Q1 and early Q2 drove orders down approximately 40% as we booked $60 million in the quarter. Trends did improve late in the quarter, especially in industrial and fluid markets, and we did not have any cancellations in backlog, which remains robust. Sales were down 7% year-over-year, but gross margins and EBITDA were both up. Earnings, on an adjusted basis, were $0.14 per share, up 75% year-over-year. Free cash flow was negative $6 million, in line with what we predicted on the Q1 earnings call. Of note, the company has produced almost $20 million more in free cash flow over the past four quarters than we did in the preceding period of similar time. Cash generation is critical to our investments and growth and we will continue this focus. We took decisive action in the first half of the year, which bolstered our results. I am proud of how well our teams executed in the challenging environment to deliver for our customers and produce these very solid financial results. Now let's go ahead and please turn to Slide number 5. The new challenges brought on by the global pandemic, no doubt, forced a pronounced pause in many industrial markets and in each of our lives. Good news is that CECO has been deemed an essential business to supply these critical markets. We have instituted a variety of important health and safety protocols. I would like to thank our cross-functional COVID task force for jumping to action and ensure all our employees are well informed, and most importantly, very safe. We have also accelerated new solutions and technologies to ensure we can work remotely in productive and collaborative ways. On the right-side of the slide, we highlight various proactive measures we implemented in the first half of 2020. Given the uncertain markets, sudden impact to our businesses, we are taking decisive actions to drive more than $10 million in annualized cost reductions. These actions are important to maintain our financial health and ensure CECO's strengthened position for the future. One additional note, the $40 million we drew – drew down from our credit revolver in March was paid back in full during Q2. We have a very good cash position and a strong balance sheet. Thus, the health and safety of our employees and customers is of the utmost importance and the health of the company's financial position is on solid ground too. Let's turn to Slide 6, which provides detail on orders by market. On the left side of the slide, you can see the markets associated with our Energy segment products and solutions and on the right side, you will see the Industrial and Fluid Handling order numbers. I won't read all the numbers by submarket, but the double-digit declines in orders in almost every market do reflect the dramatic reduction in capital expenditures in various energy markets and the pause most industrial companies witnessed in late Q1 and early Q2. We did see improved orders in many of these submarkets, especially in Industrial and Fluid Handling as the quarter progressed and again, we have not had any cancellations in our backlog. We did start to see pockets of strength in food and beverage, defense and certain processed water solutions sales. So, in Q3, we're happy to report that we continue to see a steady improving order trajectory and we'll continue to execute well. I will now hand it over to Matt, who will give more detail on our financial results and specific market commentary. Matt?

Thanks, Todd. We'll start with Slide 8. Orders of $60 million were depressed as markets paused significantly in the wake of COVID-19. As the spread has increased, customers remain judicious in their CapEx spend decisions impacting our order book. As the left bar chart shows, overall orders decreased 21% sequentially and 42% year-over-year. Starting with Energy, all end-market verticals were down. Refinery saw several awards delayed for several quarters. What we are seeing is that, while utilization is low, a good indicator for retrofit typically, demand is equally low, coupled with craft spreads that are well below the five year average. Refineries are being pinched and must conserve cash. Frac spreads have inched back from severe April lows, but we think this market will be challenged for six to nine months. Midstream oil and gas was down 67% as compared to the prior year's quarter. However, as we have previously mentioned, last year, in Q2, we booked a double-digit Middle Eastern oil storage project, making for an even tougher comp in this COVID period. The midstream market has not been hit as hard as the upstream market. Recovery in this market is likely early 2021 as MLPs and midstream companies look to conserve CapEx. Power gen nat gas markets were down 5% as news from the big three turbine OEMs remains down. Comments from leadership suggests overcapacity in the large turbine market remains and COVID has prolonged the downturn as electricity demand wanes. Our Peerless and Aarding brands continue to be well positioned to serve our global customers, and we are proud to advance the customer feedbacks that we provide superior product and service offerings. In total, we see energy markets being muted for a few quarters as CapEx spend is delayed into 2021 and new budgets are set based on lower demand. It's for these reasons we are taking broad based business unit cost actions now. As Todd already highlighted, the greater than $10 million of annualized cost actions are inclusive of the $1.5 million reductions executed last quarter and exclusive of the onetime Q2 furlough and loan wage cuts also communicated. Most actions have been executed in Q3 with some that will fall in Q4. Recently expanding beyond energy, as many have read, the industrial market slumped heavily in April and May, and global production halted with the spread of COVID. Our Industrials and Fluid businesses were no exception. Industrial segment orders were down 35% and Fluid Handling was down 23% year-over-year. While the longer-term outlook for industrial markets is cloudy with the impending election in November, we are encouraged by the monthly sequential orders trend moving upwards in June and July for Industrial and Fluid. Turning our eye towards the bar chart on the right, you'll see that revenue came in at $75.2 million, reflecting a decline of 6% sequentially and 7% year-over-year. With COVID-19, we saw a decline in sales in April and May as our subcontractors were shut down in Canada, Italy and India. As the quarter progressed, we saw a noticeable acceleration in June as our vendors return to work. As a reminder, our sales are recognized as a percent of completion using the cost-to-cost method. Thus, as our production partners execute projects, so goes our revenue. I am pleased to see our backlog starting to turn faster. As a final point of affirmation, outside of India, all CECO production facilities and partners are up and running full speed. Moving to Slide 9. Our backlog remains healthy at $204 million. Given the current market conditions, we are obviously pleased to have the solid bank's future revenue. Five months into the crisis, I am pleased to report that cancellations have been immaterial and delayed projects are starting up again. I tip my hat to our project management and engineering teams that have been working remotely with customers and vendors alike to keep projects on time and on budget. Now on to Slide 10 and our key profitability measures. Our gross margins remain healthy at 34%, which is up 1.3 points year-over-year, but down 90 basis points sequentially, driven primarily by a project mix. As we look into the second half of 2020, we are anticipating margin rates to drift closer to 30% temporarily as a large percent of the double-digit Middle Eastern oil-to-water separation project is converted to revenue and margins below our CECO average. We're pruning costs in our shops, SG&A and driving productivity to offset this temporary known pressure. Touching on non-GAAP operating income and adjusted EBITDA, both measures were better than the previous Q2 and sequentially, both were aided by the proactive cost measures taken in April and the furlough executed in the quarter. Next up to Slide 11, which summarizes several of the metrics already discussed on previous trend charts. I'll say again, our quick response to cost measures led to solid operating results in a challenging COVID quarter. Touching on just a few highlights, not otherwise covered, earnings per share was $0.09 on a GAAP basis, down $0.06 year-over-year, driven primarily on a one-time tax benefit recorded in Q2 of 2019 associated with the Zhongli divestiture. On a non-GAAP basis, EPS was $0.14 in the quarter, up $0.06 year-over-year on higher gross margin, lower SG&A and decreased interest expense. Our non-GAAP tax rate was 25% in the quarter and we anticipate maintaining that rate through 2020. Pushing on to Slide 12. As projected, our free cash flow was a usage in the quarter at approximately $6 million. It ended our streak of four quarters of positive free cash flow. The predicted headwind in Q2 was due to the timing of large projects that drove projected related purchases ahead of our scheduled billing milestones. So, it is really project timing. All signals point to health in our working capital. Inventories were flat sequentially and aging of our accounts receivable remains in line with historical averages. So in summary, the driver for increased working capital ties back to where we are in the life cycle of a few projects. As we’ve previously discussed, the company's free cash flows are lumpy. That is the nature of our business. If you normalize the lumpiness and remain focused on the fact that on a trailing 12-month basis or TTM, we've generated $17.3 million of free cash flow, which is up $19 million versus the previous trailing 12 months. Cash flows are a major focus within CECO and we continue to be committed to driving a greater than 65% free cash flow conversion to EBITDA on a TTM basis. Concluding on Slide 13, our balance sheet is in a solid position to weather these unprecedented times. In Q2, we used our strength to acquire EIS at a targeted valuation, which did increase our debt to a very comfortable $80 million. Our leverage ratio increased only 20 BPS from the prior quarter. Our net leverage ratio remains sub 1 and we have ample capacity on our revolver. As Todd mentioned briefly, we paid back the $40 million on the revolver that we drew down in March. We have great support from our syndicated banking partners and they understand how important it is to navigating the challenging environment and also fund important strategic investments. We look forward to maintaining a strong relationship for the long-term. Before I hand it back over to Todd, I'd like to echo his comments with respect to a personal thank you to our production, field service and commissioning team members at CECO. Their unwavering commitment continued to deliver for our customers despite the challenges. I am grateful to you and your families for your servant leadership to CECO and our customers. With that, I'll turn it back to Todd.

Thanks, Matt. As we look forward, I will just highlight a few more topics and then we look forward to your questions. Turning to Slide 15, CECO has a very unique portfolio addressing some of the world's most important challenges and opportunities; clean air, clean water, serving our customers so they can more efficiently produce their end products while operationally protecting their equipment. The workplace environment and the natural environment, that's what we serve, and we will continue to focus on expanding those solutions. We will steadily advance our investments in key prioritized markets. We have a very good and diverse product portfolio and we will continue to explore how we can add more recurring revenue and sustainable solutions. This is a real opportunity for CECO. All the while, we will be focused on innovation where customers need it most and providing flexible business models in areas where we can drive more growth. I am excited for our future. Speaking of how we think about the future, let's move to Slide 16. Over the past number of quarters, the company has highlighted some mid to long-term financial goals. We are evaluating how those goals might transform as we navigate the current environment and, of course, with my leadership. However, let's be clear, we remain committed to driving elevated levels of sales growth, margin expansion and stronger free cash flows. These are highlighted on this slide. We will expand on how we are driving these in the coming quarters and of course, as we articulate our strategic vision. The opportunities within CECO's current portfolio are very attractive, both in terms of growth and operations and we look forward to delivering strong returns and increased shareholder value. Please turn to Slide 17, and thank you for following along on this material. We are anxious to get to your questions. But once again, we would like to thank Team CECO. We will continue to focus on health and safety and we will continue to deliver for our customers. In the quarter, we had solid execution and we are in better position with our portfolio moves that we discussed. The EIS acquisition is already integrated and collaboration is delivering new opportunities. And the joint venture provides synergies and strategic optionality. The actions we have taken and will continue to take bolster our financial results and position the company for more efficiencies. Our leadership team is aligned and we understand the demands required to deliver shareholder value. Lastly, and once again, I'm excited to be at CECO. We have a tremendous team, a range of opportunities to continue to win, and I look forward to our next chapter. With that, let's open the line for questions.

[Operator Instructions] Our first question comes from Amit Dayal with H.C. Wainwright. Please go ahead.

Thank you. Good morning, Todd. Good morning, Matt. First of all, congratulations on your new role. Already, a lot of news flow alongside your appointment, so, good to see that. Just focusing on the recent deals, how should we think about contributions coming from these transactions for the rest of 2020 and then going into 2021?

Yes. I'll let Matt sort of talk about the financial side, and then I'll make a couple of comments on top of that. But it's a pleasure to be here and thank you Amit, for the comments.

Yes. So for EIS, we talked about that in the press release and which you should consider as far as the size of EIS for the second half of this year. We expect roughly around it to contribute another $10 million of revenue in the second half of the year at margins that we mentioned in the press release that our EBITDA margins in line to better than what CECO has. And so as far as the joint venture, it's quite small. The Mader Dampers piece is bringing in roughly $10 million of revenue and $1 million of EBITDA on an annualized basis and the Effox business that we contributed was roughly around $15 million of revenue and $2 million of EBITDA. So these are two smaller businesses that play in a mature market. And the point is around cost synergies, and we plan to start to execute those here in the near-term. But they won't contribute, EIS won’t or sorry, Mader will not contribute a significant amount to the second half of this year as far as modeling goes of EBITDA and revenue.

And just to build on that a little bit, in respect to both of these transactions, I'll talk just quickly about the integration of EIS has gone extremely well, already working and collaborating. So, we expect, maybe as we exit this year and go into next year, there is going to be even more growth opportunities as a result of their position in the market and how we are working together already. And then on the joint venture side, also the integration is, as Matt mentioned, it's relatively small, but these are businesses that are very complementary in terms of being integrated together quickly and smoothly. So we think those cost efficiencies are also going to translate in the joint venture.

Have you potentially considered acquisitive growth? Are there maybe business lines that already exist in the company that you may want to exit? Is that a possibility?

Yes. I think for us, in terms of commenting on M&A on a call, where we certainly understand our portfolio strengths and those are areas that we want to invest in organically and internally. How we think about building off of that from an M&A perspective, both in terms of acquisitions and divestitures, I think we are taking the appropriate process steps to evaluate where we have opportunity. And I think that's really where we are going to sort of stop on the call here. But absolutely, a strong balance sheet and – but tons of growth opportunities just within our portfolio.

Just one last one for me, if I may. With respect to sort of the remainder of the year, just given the commentary and sort of outperformance relative to our expectations for the second quarter, should we be looking for sequential growth for 3Q and maybe even 4Q?

Yes. So I'll take that one. We entered Q3 with $205 million of backlog. All of our operations are active. We've set a course for actions that moved $10 million or greater of annualized cost savings. That's pretty much in line to offset lower volumes that we expect. We do think second half that you are going to see a sequential pickup in revenue as that backlog turns out. And so, you can expect that operating income should improve just like Q1 to Q2 did. As for orders, we have seen a three months increase through July, which is positive, but we are not counting on a V-shaped recovery. So, what Todd and I are talking about is controlling our own destiny here. We are focused on cost in the near term and what we're interested in right now is focus on how to deliver sequential improvement in the second half. And 2021, we'll give – market will give us what – it gives us, but we are focused on cost at the current period.

Thank you, Matt. That’s all I have.

Thank you, Amit.

Thank you, Amit.

[Operator Instructions] Our next question comes from Gerry Sweeney with ROTH Capital. Please go ahead.

Hey. Good morning, Todd and Matt. Thanks for taking my call and Todd, welcome aboard.

Thanks Gerry. Good morning.

Hey, Gerry. Good morning.

I am going to start high-level, Todd, this is broad brush, I am not sure if you want to answer it, but you spent time trained in Pentair, some other places, a lot of companies that not afraid to pivot towards growth probably have some strong feelings of where maybe some of the industrial landscape is headed. Or any – again, it’s a broad brush, any areas that you think have better growth opportunities or areas they want to explore from a strategic standpoint? Or is it still too early really to get into that type of question?

Yes. I think – look, it's a fair question, Gerry and I understand the interest. Here is what I'd say. First of all, I really think that CECO is well-positioned for growth. Matt, Dennis and the organization have done a tremendous job over the last few years of really streamlining internal operations and processes. And I think some of that showed through in Q2 results, certainly, in terms of cost actions that the organization took in reflection not only of the challenging environment, but also because the organization is really capable of strong productivity. And that – and I think the execution of that showed. In terms of how and where we grow, we very much are interested in continuing to build off of businesses that we have or opportunities that we have for - I think, I would call it a more sustainable growth profile, recurring revenue, areas where we can grow aftermarket opportunities, as well as equipment sales. We have a very good and growing business in application design, system solutions. And so, those are really areas that we can just really focus internally. We have a big opportunity geographically still for us, as well in our current portfolio to go after. So, look, I think for me, the main focus right now is, really getting to know how and where we can continue to win. And as Matt said, control our own destiny, not only in terms of cost and cash, but really in terms of bringing new growth processes and new growth muscles to businesses that still have ample opportunity. And as far as beyond that, yes, look, I mean, absolutely have some good experiences in different industries, big and small and some of those organizations were somewhat acquisitive. And others like Trane Air Conditioning and American Standard Trane at the time, we didn't do a single deal in the time that I was there and yet grew revenues, margins, free cash flow, and shareholder return tremendously. So there is just an opportunity here for us to just get better every day and that's our focus.

Got it. That's fair. And I know it's only been a month, so I appreciate that. Shifting gears, this may be a little bit more towards Matt. But summarizing some of the end-markets to a little bit out there. But if energy remains muted, electricity demand is down, also sounded like midstream was a little less impacted than you anticipated. So that’s a positive. But maybe looking at fluid handling and industrial, again, not expecting a V-shaped recovery, but if you're looking at orders and activity, as we stand today, you think we are sitting at maybe 80%, 85% of where you were maybe going into Q1 or your original vision of this year? Or are you still a little behind that or for maybe a little bit about that? Just trying to put a little bracket around it.

Yes. I think Matt will give you more financial detail or percentage answer. This is Todd. Let me just make a comment that came through, I think, in some of our prepared remarks. But if they did or didn't, especially in Industrial and Fluid, the depth of the market was so far, at least, and it may - sort of the earlier part of the quarter. And then, as we cruised through June, those strengthened for sure and we saw that in other markets as well around energy. But I would say that we feel that Industrial and Fluid have started to hit their stride again. There is way more opportunity in each of those businesses. I'll make that comment and then hand it over to Matt to kind of talk about some of the finer points.

Yes, albeit the elections are coming, Industrial Solutions looks pretty good through July and the pipeline is definitely filling up when April, May were extremely solid. As far as the run rate business, that is our Fluid Handling solutions, we've seen a pickup there in inquiries. They haven't rebounded pre-COVID just yet, but out of the doldrums of April and May, certainly. Yes, I did use the word muted on energy. I am still optimistic that our team finds other avenues, other applications to win here. I think the refinery is probably one of the more challenging markets, as I mentioned on the call, due to crack spreads and utilization. But we have a fantastic market position there. And when that rebounds, we are going to be a part of that. So it's really about the nat gas turbine market and midstream oil and gas. We have a great water business where we separate water and reproduce it, put it back into the system and that business is growing in the Middle East and in North America. So, I am pretty pleased with what the team is able to do and hopefully, we can beat the trend of what's happening in energy over the next few quarters.

Got you. And then one final question, EIS. I know we talked a little bit about some of the numbers around that. But the other way I was looking at is maybe a foothold in Europe, due to cross-selling opportunities. I think even Todd mentioned geographic expansion was an opportunity. Any thoughts on using that vehicle as an opportunity to get bigger in Europe? And is that coming to fruition or again, get COVID, there's a lot of moving parts? But very high-level broad brush would be fine.

Yes. I think on a high level, it's a good – it's the right observation in the sense that – look, first of all, the acquisition made a lot of financial sense for both sides, number one. And these are no order, but I am just going to click through them. Number two, it does provide us with a nice geographic expansion foothold, as you say. I think number three, EIS has some fantastic position in a couple of markets that CECO didn't necessarily have. And I think also, it's an integration that moves very quickly for us and for them. And we are already mostly done with the actual integration. There is a few areas that are just very much on schedule. But the collaboration between the teams is very strong right now. And so, as we think about utilizing EIS and expanding into the markets where they have strength, that's absolutely our focus. And we're pleased with the early returns and results already and excited about what Q3 orders already look like between our two combined entities. And if you think about some of the segments like the aluminum areas, that they are strong. They really do open up some new doors for us in terms of beverage, et cetera. So, again, our view is it was a smart acquisition from a market perspective, financial perspective, and it's an integration that we were prepared for and have already executed.

Great. Guys, I appreciate it. I know there is a lot of moving parts. So, this is very helpful. And thanks again.

Thanks, Gerry.

[Operator Instructions] At this time, there are no additional questions. I would like to turn the conference back over to Todd Gleason for any closing remarks.

Yes. Thank you. It’s - again, it's a privilege to be here with everyone today and of course, with CECO, once again, we'd like to thank our team for a strong execution in an uncertain time. We focus on health and safety of our employees, our customers and everyone that we encounter in our markets. And our COVID programs and policies are in place and keeping us safe and healthy. We hope the same is true for everyone out there. We look forward to the second half of the year. For me, personally, I am already hitting the ground running with our organization. A lot to do. A lot to learn. But I am pleased and happy to be here and we look forward to upcoming conversations with each of you. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.