Good morning. My name is Simon, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mohawk Industries First Quarter 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded today Friday, April 26, 2019. Thank you. I would now like to introduce Mr. Frank Boykin. Mr. Boykin, you may begin your conference.

Thank you, Simon. Good morning everyone, and welcome to Mohawk Industries quarterly investor conference call. Today we'll update you on the company's results for the first quarter of 2019 and provide guidance for the second quarter. I would like to remind everyone that our press release and statements that we make during this call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties including but not limited to those set forth in our press release and our periodic filings with the Securities and Exchange Commission. This call may include discussion of non-GAAP numbers. You can refer to our Form 8-K and press release in the Investor Information section of our Web site for a reconciliation of any non-GAAP to GAAP amounts. Before proceeding with the call, we want to express our sympathy to the family of John Swift, Mohawk's CFO from 1984 through 2004, who recently passed away. John was a leader in the transition of Mohawk from a $300 million division of Mohasco through a leveraged buyout followed by an initial public offering. He helped grow Mohawk into a $5 billion flooring company prior to his retirement in 2004. Moving back to the earnings call, joining us today are Jeff Lorberbaum, Chairman and Chief Executive Officer; Chris Wellborn, President and Chief Operating Officer; and Glenn Landau, who joined Mohawk this month as Executive Vice President and Chief Financial Officer. With that, I'll turn the call over to Jeff for his opening remarks. Jeff?

Thank you, Frank. In the first quarter, our results came in line with the high end of our expectations. We delivered sales of $2.4 billion, up 1% as reported and up 6% on a constant exchange and days basis. Our adjusted operating income for the period was $207 million or 8.5% of sales in a difficult environment which we anticipate improving. The U.S. dollar strengthened significantly versus the prior year reducing our translated results for the period. During the period, the economies were softer in most of our regions. Housing markets were weaker, and material and energy cost escalated around the world. Uneven demand impacted volume increasing pressure on pricing and mix as competition increased. To align our inventories with demand, we reduced production rates to manage working capital. In the U.S. flooring retails reported that after a disappointing results in January and February, activity was improving by the end of the quarter. During the first quarter, we raised prices in many of our markets to cover inflation. And each of our businesses are taking specific actions to adapt to the present environment. We are introducing new products to differentiate our offerings and enhance our margins. We have replaced higher cost assets, consolidated operations, enhanced manufacturing processes, and reduced overhead expenses. We will take further actions across the enterprise as we move through the year to grow our sales and improve our margins. While we are managing through the current conditions, we are continuing to strengthen the long-term value of the business. The integration of 2018 acquisitions in Australia, New Zealand, and Brazil remains on track. And we are further investing to enhance their performance. Our products and geographic expansions continue to ramp up as we increase sales. We will realize the potential of these projects through 2020 and beyond. For more detail on the performance of segments, I'll turn the call over to Chris.

Thank you, Jeff. For the quarter, our global ceramic segment sales increased about 2.5% as reported. And we are up about 7% on a constant days and exchange rate. Our operating income was about $90 million or 10% of sales including the acquisition of Eliane and headwinds from slower markets, pricing pressures, and inflation. In the U.S., the ceramic industry faced continued pressures from LVT as well as imports from a stronger dollar. A group of ceramic tile has recently filed dumping claims against China, the largest ceramic exporter to the U.S. If confirmed, tariffs could significantly increase the delivery cost to Chinese imports and change competitive pressures. Due to earlier interest increases, U.S. home sales and construction slowed although both have recently improved as mortgage rates declined. To enhance our position, we have begun many initiatives across the business. To cover inflation and transportation, we implemented price increases across many categories. To compete with imports, we have begun offering private label programs and shipping direct truckloads to reduce the delivery cost. We have improved service to our customers with new mobile systems to make ordering and picking up faster and easier. We are enhancing our value proposition with unique features such as slip resistance, greater durability, and bacteria-resistant technology. We have added high end decorative tile collection and thick porcelain outdoors tiles as an alternative to stone. We are testing a fast installation technology. And we are pioneering a porcelain roofing system that offers the beauty of traditional slate with greater value. The start of our new quartz countertop plant is on schedule and will complement our sourced stone and quartz program. The plant produces slabs that are about 30% larger than the industry, which reduces both installation seams and waste. We are also expanding sales of our porcelain…

Thank you, Chris, and thank you Frank as well for the introduction and support over these past weeks. I'm pleased and excited to be a part of the Mohawk team and look very much forward to engaging with you our current and prospective shareholders and the broader investment community to build on an already strong relationship. Now to the financial performance and the year-over-year bridges, first quarter net sales were $2.4 billion up 1.3% as reported compared to prior year were up 6% adjusted for days at a constant FX basis. Organic growth in legacy businesses measured in net sales per day on a constant FX basis was positive despite slowing markets and weather in North America up nearly 1% versus prior years. One point of clarification for those of you who have picked this up who may not have picked this up already in our last earnings call it was stated that there would be one more day in the first quarter this year versus last year, while in actuality there was one less day. Correspondingly, there will be one more day in the fourth quarter this year. I hope that clears up any questions. Back to the financials, as this at the segment level, Legacy Flooring Rest of World showed the strongest growth largely offsetting continued weakness in Flooring North America. Gross margin adjusted for special items came in at 27.1% in the first quarter, a decrease of 280 basis points versus prior year. The decrease was driven primarily due to inflation and input, so $45 million weaker price mix of $12 million and market related downtime of $7 million partially offset by higher volume including acquisitions of $21 million and lower startup costs of $9 million. FX impact on gross margin dollars was $22 million on favorable.…

Thank you, Chris. All of our businesses are taking actions to enhance our results with our major focus on LVT manufacturing, U.S. corporate performance, managing ceramic headwinds and increasing the utilization of new investments. In the U.S. flooring sales started out weaker and recently began to improve. Outside the U.S. most markets have softened and we are adjusting as required. Across the business, we are enhancing our offerings, reducing our costs, and ramping up new plants to expand our portfolio. We continue to realize increases to offset inflation and restore our margin. Our LVT sales are expanding significantly. And we are making equipment modifications to increase our volume and productivity this year. We are restructuring our U.S. carpet and laminate assets, and realigning our European ceramic operations to improve our cost results. Our recent acquisitions are positively impacting our results as we integrate them into our business. Taking all this into account, our EPS guidance for the second quarter of 2019 is $2.81 to $2.91 excluding any onetime charges. We are investing in new products and geographies to drive growth and strengthen our organization. To improve our execution, we are taking the necessary steps to adapt to the present conditions and deliver greater profitability in the long term. We will now be glad to take your questions. Simon? Operator? Operator?

[Operator Instructions] Your first question comes from the line of Stephen East with Wells Fargo. Go ahead, your line is open.

Thank you, and good morning, guys. Jeff, as you look at the demand both in Europe and the U.S., U.S. is rising, Europe is starting to slowdown. Could you talk some about the magnitude of each? Is the U.S. acceleration offsetting Europe or not? And do you think Europe -- the way you'll are forecasting now, do you expect Europe sales to remain positive for the year?

In the U.S., the industry we are anticipating with housing and what's going on in the market to be slower this year than last year, but we really don't have a good visual into how that's going to evolve. Depending on the different estimates, some people have it picking up dramatically as we go through the year and others have it still hesitating. Our estimates aren't any better. In Europe, the economies are all slowing across Europe and the competition is increasing as that occurs. And in that environment, we outperformed it in the first quarter. We think we can continue to outperform it for the rest of the year.

Got you. Okay. And then, as you look at flooring North America, the big issue is obviously on the margin side versus the revenues. But margin down about two thirds versus last year and it actually your op income sequentially declined more than revenues decline. So I guess if you all could rank order the causes of the drop in your op income? And any color on how you expect those to continue through the year?

Industry sales were weaker. The production was lowered in order to reduce the inventories. We had high material cost flowing through from prior which impacted the margins. The price increases we put in are helping to offset except the mix is going the other direction. We see lower material cost and higher prices improving margins going into the second quarter. To improve the cost, we talked about replacing high cost assets, closing inefficient operations. We are consolidating multiple warehouses and we are reducing headcounts and overheads to improve the results.

All right. Thank you. I appreciate it.

Your next question comes from the line of Tim Wojs with Baird. Your line is open.

Yes, hey, good morning everybody. I guess just maybe my first question on LVT, is there any way to provide any sort of kind of numerical update may be and just how the LBT performance is in North America maybe relative to last quarter or six months ago and how does that compare if you look at Europe maybe as a proxy since that capacity set up a little longer than North America?

What was said is that the global capacity was operating where we expect will be over a $1 billion when the plants are optimized as we go through in Europe the LBT line is ahead of the U.S. line and the process has stabilized, the productivity and wastes are continuing to get better. We have identified equipment modifications which are being executed as the volumes going up to eliminate bottlenecks which are holding it up. We are introducing products across our brand and rigid products to use the capacity and we're expanding our customer base in Europe. In the U.S., we are making engineering modifications similar to ones that have already been put in Europe the U.S. is making progress in it. We are shipping rigid products in the marketplace as we go through and I don't have any specific numbers to give you but we're confident that the LBT deal provide us advantages and through the year continue increasing as we increase the volume the overhead absorptions and the returns will get better.

Okay. Is there of $1 billion of capacity I mean is there any way to think about what the utilization is today on a run rate basis.

I don't have to give.

And then I guess on the production side of things, how are you kind of thinking about production as you kind of move into Q2 and I guess if you look at the market for 2019 what market growth level are you assuming in your production expectations. Is it flat is it up slightly, I'm just trying to think about how you guys are thinking about top line growth in '19 organically?

It's really different by market by market. Then you have the acquisitions going through I think.

May be to the U.S.?

In the U.S. the numbers are now for last year yet but we're estimating that the industry grew 3% to 3.5% and our assumptions are that with what's going on it'll be slower than that and be less than that even with the price inflation that's occurred overall that's our sort of thinking about it. The carpet industry sales in the first quarter were down and so were ours with LBT impacting on as we go through and that's also being impacted by mixed economy as we go through so that would help you a little.

Okay. That's helpful, so maybe kind of on a volume basis in a flattish sales growth for the market isn't a bad assumption.

Your next question comes from the line of Susan Maklari with Credit Suisse. Your line is open.

Thank you. Good morning everybody. My first question is just how should we think about productivity in the US and especially given the initiatives that you have within carpet consolidating some of those assets? LVT obviously coming online laminate all these different kind of projects that are coming through. How should we think about those coming together and perhaps improving the productivity over time?

So productivity across the business was impacted by lower manufacturing, levels higher costs for the employees and the ramping up of these new projects all end up in productivity improved the cost we talked about replacing assets and restructuring different parts and operations and we've reduced both direct labor and overheads. We think the productivity will continue to lag in the near term due to the inefficiencies and higher costs but we expect to see improvements continuing throughout the year.

Okay. And then as we do think about the inventories and going into maybe a seasonally stronger period. Do you think that you've fully rightsized the business? How are you thinking about your level of utilization going into the second and third quarters?

The inventory levels were up in the period but almost all the inventory increase was up to two new plants that require inventories to support them. The acquisitions that we did last year the inventory flowing in and then with the tariffs that were expected. The products we're importing from China would dramatically increase the inventories in the period, for the most part most of our inventories in the ongoing businesses were kept under control with lower production rates and we're going to match the demand the production with the demand for the most part going forward.

Okay. Thank you.

You're welcome.

Your next question comes from the line of Stephen Kim with Evercore ISI. Your line is open.

Thanks very much guys, I appreciate the time. My first question relates to the role that mix played in the quarter and what we could expect him to heading into 2Q in the rest of the year. In particular we noticed that the price mix number was pretty big negative in flooring Rest of World. And I know you also include mix by product type in your volume numbers and so I wanted to and I noticed that in flooring North America that that volume no impact was a little higher than we expected. So I guess my question is essentially. Can you help us understand what the mix dynamics product mix and channel mix were the main drivers in flooring North America and Flooring Rest of World. And should we expect those trends to be longer lasting throughout the rest of this year.

With the mix, the mix in flowing North America Steve is this is the same thing that's been going on for some time. First let me just say what we disclose and talk about is a combination of price mix. We have a difficult time pulling apart and separating, the mix in North America has been negative has we have seen a couple of things, one, product changes where we've seen product changing from higher price point nylon to lower price point polyester and then as we started putting in price increases that also drove some negative mix as well. And then I think you're referring to the on the on the floor in rest of world the number you're speaking to is price mix combined right not mix itself, correct?

Correct.

Yeah. So I think what's happening in flooring Rest of World Is in some of the categories over there product categories we're seeing raw materials go down and that's impacting pricing. Jeff I don't know if you want to add anything to that or not.

Last year in the insulation business there was a shortage of raw materials and the prices spiked about 30% or more and the prices have in the recent time come back down. So a major part of that is those prices coming down but at the same time it drove our selling prices up impacted the volume of the industry and us and with the costs coming down we're lowering the selling prices along with the decreases but the volume of the product category is going up and it's doing reasonably well right now.

Got it. Okay that's helpful. My second question relates to some of the management changes that we've seen recently. Obviously Glenn it's nice to have you aboard and Frank we're going to be sorry when you're not as present on the calls but we've also had some other questions regarding sort of deeper within the organization. And so my question relates to number one in what is your point in the global ceramic business and particularly Daltile in terms of running that business or you going to have any differences in how you manage that business. And then secondly in Flooring North America, I wasn't sure if you had yet ahead of the resilient business in within Flooring North America. I know you broke down into five categories reported and so wanted to get a sense for how we're doing in terms of staffing on that?

We have a really strong organization in the North American ceramic business is operating well and continues to operate well at the moment we've chosen for Chris to operate as the interim President and we haven't selected another person at this point. There's no rush the Chris if you remember operated the business for many years and the organization is continuing to go forward. We have selected someone else to run the other business and everything's like we would like it.

Steve, I would just comment the throughout this ceramic segment now the organization is extremely strong, Europe, Russia, Brazil, North America and of course JP and I sat beside of each other for 20 years I've put him in that job and I just want him time to get in the business again and it's working really well.

I just wanted, Chris, to work another day a week.

Excellent. Okay, thanks, guys.

Your next question comes from the line of Mike Dahl with RBC Capital Markets. Your line is open.

Good morning. Thanks for taking my questions. My first question, a lot of company is across building products have called out a number of headwinds in the quarter but one in particular has been de-stocking at large retail. Could you comment about kind of what the inventory levels are in your or your sense of where the inventory levels are from your larger customers. And have you seen any changes in order patterns as part of that comment you made about improvement?

Well I can just comment on that. In some cases in the ceramic side with large customers, we have a lot of new products coming in and they are at the same time taking all the old products out. So that's causing some of the de-stocking that you're talking about where it's just product changes.

And some of the other ones, there were some pushing out of it as it went through also.

Got it. Okay. My second question Jeff it's a bit bigger picture, if I step back and think about the moving pieces and what you're talking about in some of your global operations. Clearly, a big focus for you and the company has been expanding internationally over the past decade and increasingly the growth has come in countries that are emerging in nature and it seems like you're adding volatility to the portfolio alongside this global push. And I wanted to just ask you how you're thinking about your global strategy at this point based on kind of how the past 12 months or so have informed your results?

I don't think it's changed anything. Nothing's come as a surprise. You have periods of time where the U.S. dollar strengthens and then the translated results are impacted as part of the European businesses, we're investing in, we're trying to grow into other product categories as we've talked about to expand our footprint in Europe. There was strong organization that we think are outperforming the market in Russia. We expanded our presence, we have the leading ceramic business in Russia where we expanded the laminate business and Russia is doing well, we've put in new equipment to expand it and we're putting more investments in as we grow our market share in Russia. We've entered the Brazilian market with the new acquisitions we made last fall. We hired one of the best, we bought one of the best businesses and got the talented management alongside it to operate it. There will be more volatility in that marketplace but I think we're well positioned to do well within it. And so as a general rule, I would throw in Australia to Australia. We knew that the marketplace was due for a slowdown and we bought it. That was based on what we paid for it, we think we paid the right amount for it given that we knew we were headed into it and no surprise that Housing was overbuilt and softening right now. The results are still good and they're changing the strategies as we go forward. So I think we're doing the right things for the long-term of the business.

And I would just add one more thing just to make a point. Russia we've been in since 2013 with the Ceramic acquisition and we've got a really good strong management team there and they've done a phenomenal job managing through the ups and downs and staying ahead of the market through both increasing and declining environments. So overall, I think we've done a pretty good job of managing the complexity of the geographic footprint around the globe.

But there is more volatility, I mean the one you just talked about the translated results from Russia 1.5 was Ruble is collapse but our business is still strong there and still growing.

And I would just add one more thing, even when we go into a market like Brazil, we've known Eliane for 20 years. We know the management team very well, the President very well, and so, we've done a lot of work before we make an acquisition like that.

Okay. Appreciate the thoughts. Thank you.

Your next question comes from the line of Keith Hughes with SunTrust. Your line is open.

Thank you. There was a comment earlier in the call about reducing capacity specifically in Florida, North America, can you talk about what specifically you're doing and what's the timeline to get that completed?

So what first thing is we installed some new low-cost extrusion capacity, which still is leading to closing to old extrusion operations, we're also closing a yarn plant, a small tuck in plant. In laminate, we built a new warehouse to take off and we're closing two other warehouses and consolidate another plant with that move all of the things have good paybacks based on reducing the costs.

So Jeff, are you taking? Are you lowering your overall extrusion capacity by these moves? Are you just planning at a corporate life or just exceptionally weak, the last six months?

We took out some high cost extrusion and it will be slightly less but not; it won't keep it from meeting the ongoing demand.

Are you running extrusion below where you need to run it to make good profits?

We consolidate this together. So the new assets we have half of it in and running now. And the other half going in the next month, I think and I guess through the costs of our extrusion costs will come down. That's the…

Okay. Thank you.

Your next question comes from the line of Justin Speer with Zelman & Associates. Your line is open.

Thank you, guys. This first question Frank or Glenn, can you walk through or give us your free cash flow expectations for the year. And within that your expectations for working capital drag as you map towards a full year number?

Sure, this is Glenn speaking. Like I said earlier, free cash flow was strong in the quarter at $33 million, it's $100 million better year-over-year. And our outlook is very good. And that's based on the fact that capital spending as we spoke to, in our outlook will be down materially year-over-year and that is all upside first versus last year. So again, we're quite confident in a very strong cash performance and cash generation and ultimately, we believe, we can whittle down that working capital during the year on efficiencies?

But I think the number was like $600 million or $700 million that you related last quarter is that still intact?

I think, it's north of that.

And in terms of that working capital, just looking at that, the working capital as a percentage of sales is quite elevated 25%. I think the highest we've seen in quite a while and you mentioned a few of the puts and takes there, most of the takes, but how should we think about that as the year progresses? And is there any risk of obsolescence within that number?

Well, the big driver on that is inventories. Justin and we've been working as Jeff mentioned, to get our inventories down for some time I think that made good, we've made good progress with that. The inventories are if you look at it from the end of last quarter to the end of this quarter, about $50 million. However, days actually improved by one and a half days. If you compare inventories to a year ago, they're up over just a little bit over $290 million. And most of that related to the new plants, all the investments we're doing that we're putting out, how to get the inventories up before ahead of the sales. The acquisitions that we've done, and then the higher Chinese inventories that we came in, came in to get ahead of the tariffs. So I think…

And then, the last question. Oh, sorry.

I'm just going to say, I just say, I think we're managing our inventories. Well, we're making progress, and we'll be in line where we need to be by the end of the year.

Thank you. The next question is that the implied guidance and the sequencing of guidance, I know it's an improvement in terms of year-over-year degradation. But the second quarter guidance is below what most we're expecting particularly giving the lower inputs that we saw with oil collapsing into January. I know it's sensory accelerated but oil inputs down quite a bit, pricing still good. Why is it the margin profile better next quarter and when should we see the year-over-year become more neutralized in your mind as we think as we started thinking about potentially a better back half in terms of underlying demand.

As you said the results for the first quarter were at the high end of our expectations. We expect the second quarter results improved with higher pricing and volume and lower raw material costs. At the same time, as we look out, we see the economy slowing and we see housing growth under pressure. We also are having difficulty anticipating what the inflation is going to be for the rest of the year. What we've continued to say is that the year-over-year decline in margins will improve throughout the year and keep getting better. And the future periods will have higher production rates, will have increased pricing, they'll be less startup costs in them. And it will start getting some of the benefits from the restructurings that we've been talking about.

And can you quantify any of the restructuring benefit this year. The following this year that you've just announced in the press release?

We'll get some, the activities will be ongoing through this year, and then we'll see a much better benefit, larger benefit full-year benefit as we move into next year.

Thank you. Appreciate it.

Your next question comes from the line of John Baugh with Stifel. Your line is open.

Thank you for taking my questions, and my condolences on Chatsworth's passing, sad news. My question is to two different ones. One, did you have a material increase in the amount of imported LVT to sell either year-over-year or sequentially. And then, is there any update on the accretion from the acquisitions you've done? Any update with macro slowing, particularly in Australia to that guidance. Thank you.

The important LVT sales are going up significantly. We also brought in more inventory based on thinking there could be a 25% tariff increase ahead of it. Also, the sales of our own manufacturing products are also going up as we go through.

Do you have the guidance with the…

Well the accretion guidance hasn't really changed John; I think we said for early on at a Brazilian acquisition. We expected annual EPS accretion in the first year of about $0.15. And then, on Godfrey Hirst, I think we had said accretion of $0.15 in the second-half of last year, so about $0.30 for the full-year, so that those numbers haven't changed.

Thank you. Good luck.

Your next color or your next question comes from the line of Phil Ng with Jefferies. Your line is open.

Hey, guys, I think part of the path ordering improvement going forward at some point productivity would flip positive, you start laughing on this price cost headwinds. And you're done drawn down inventory, just curious, it'd be helpful for you to kind of give us a sense, if any of these pieces you're expecting to flip positively in the next few quarters or just any color on some of the time frame would be really helpful.

I think, we do expect those at the same time we are having difficulty estimating the economies in the housing pieces we go through as well as the inflation right now. And the only guidance we've given is what we keep saying that the Euro decline in margins will improve and get better as we go through the year.

Okay. And these on the product just in terms of production and inventory, it sounds like, it's a work in progress. Should we expect that to be a big headwind going forward, just because it's been a drawdown dynamic throughout last few quarters? Did you have any better line of settling that trend?

Most of it's behind us, but there's still some of it left because the first quarter wasn't quite as strong as we thought, but for the most part, as we said will be manufacturing and most of the businesses similar to the demand.

Got it. And then from a capacity standpoint, just curious if you could give a little color in terms of where your capacity utilization is shaking out with some of the initiatives you've done in North America going forward whether it's carpet, is there an opportunity for you to kind of repurpose maybe some of your vinyl capacity into LVT? Thank you.

The different assets manufacturers different products and so you can't relatively, can't easily switch them between one product category in another. Next question operator.

Your next question comes from the line of Michael Wood with Nomura Instinet. Your line is open.

Hi, thanks for taking my question. I just want to ask the margin question in other way. I understand the pressures to 2Q year-over-year since you're still de-stocking, and there's a lot of price mix pressures, but in third quarter, you begin to lap some pretty major headwinds. You know that we're supposed to be temporary. I'm curious by third quarter, what are the major pressure points to margins? If you can, is there going to be lower productivity or higher, mix, negative mix, or cost pressures?

The problem we're having is you're asking for specific ongoing guidance, which we continue to say we giving the general piece of where it is. We think that we have a lot of actions in place to improve our position in the business. There's some questions about what will happen in the different environments, such as, depends on who you listen to the dollar strength could go up significantly, depending on somebody or could go the other way dramatically, depending on who you listen to. The oil price hit recent highs lately, it could be at $55, or it could be to $80, which impacts the prices. There's a lot of variables, which we don't know how to put into the specifics. And we don't want to lead you astray.

Understood. Okay. And you talked about price being implemented across the product categories. Do you know yet whether or not they've been successful taken by the market and any quantification in terms of what that incremental benefit could be?

There are price increases and most products and most geographies that have been implemented on the prices are flowing into the business, which is helping the second quarter. Also, this increases in various prices you mentioned, Brazil. The gas prices have gone up astronomically. We have the same thing in Mexico as yet. So the pricing is covering -- in some cases, it's covering the changing pieces and other cases, it should help the margin, which is why the second quarter is going to be better.

Okay. Thank you.

The final question is from the line of Matthew Bouley with Barclays. Your line is open.

Hi, thanks for taking my question. On the inflation side, Jeff, understanding it's not your business to predict commodities. But how does that oil price rebound kind of impact your thoughts around price increases, specifically, in carpet? You know, do you think that further price increases would be necessary, just kind of looking at where commodities are at this point? Thank you.

It's too early to tell. The price is highly volatile. It could drop significantly or stay the same or go up. In general, it takes anywhere from two to three, four months to pass through to our purchases. And that also changes depending on supply and demand dynamics of the various steps in between. So we're watching it and we'll have to see. The move has been recent. And we have no idea whether it's going to going to be maintained or if it's going to go up or down from here quickly. As if so our guests are no better than anybody else in the oil business and the chemical businesses as you go through. With that, I'd like to make sure everybody understands that we're taking the actions to improve our results. We're confident that our new investments will give us the returns we want in time as we wrap them up. We're taking actions to improve the existing businesses. And we appreciate you joining us for the call. Thank you very much.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.