Good morning and welcome to Skyline Champion Corporation’s Fourth Quarter Fiscal Year 2020 Earnings Call. The company issued an earnings press release yesterday after the close. I would now like to introduce your host for today’s call, Sarah Janowicz, the company’s Director of Investor Relations and External Reporting. Sarah, please go ahead.

Good morning and thank you for participating in our earnings call to discuss our fourth quarter and full year results. We will also provide an update on current business conditions and how the company is navigating the COVID-19 pandemic. Joining me on today’s call is Mark Yost, President and CEO and Laurie Hough, EVP and CFO. I would like to remind everyone that yesterday’s press release and statements made during this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release and in our filings with the Securities and Exchange Commission. Additionally, during today’s call, we will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. A reconciliation of these measures can be found in the earnings release. I would now like to turn the call over to Mark.

Thank you, Sarah and good morning everyone. To begin, I hope everyone on this call and their families are well as we navigate the COVID-19 pandemic. I am proud of the resiliency of our team during this challenging time. The health and safety of our employees and our customers remain our highest priority. Today, I will briefly talk about our full year and fourth quarter results then provide you an update on the activity so far in our first fiscal quarter and thoughts about the balance of the year. I am pleased with the results Skyline Champion delivered in fiscal 2020. We grew adjusted EBITDA by 18% to $114 million for the year. We improved safety and turnover, increased margins, realized our run-rate synergies from last year’s merger, finish the integration of the company’s IT systems, completed the implementation of Sarbanes-Oxley, invested in our people, automation and digital go-to-market platforms as well as launched our Genesis brand of products. I am proud and appreciative of our team for their accomplishments this year. Turning to the fourth quarter, revenue was down 8% primarily due to the temporary idling of 24 factories in the final weeks of March and outsized industry growth in regions where we do not currently have a significant presence. With the COVID-19 related government restrictions and stay-at-home orders in the U.S., our customers canceled approximately 150 units and placed on hold an additional 250 units in addition to the impact of the temporary idling of plants, which reduced production by between 200 and 250 units in the U.S. The U.S. HUD market rebounded during the quarter, growing 13% with strong growth in the mid-Southern markets. Even as the industry experienced strong growth rates, the major markets we serve today, including California, Michigan and Florida saw quarter-over-quarter declines resulting…

Thanks, Mark and good morning everyone. I will begin by reviewing our financial results, followed by a discussion of our balance sheet as well as financial actions we have taken in response to the COVID-19 pandemic. Net sales decreased by 8% to $301 million in the fourth quarter. We saw revenue declines of $18.3 million in the U.S. factory-built housing segment as well as declines in our Canadian factory-built housing segment of $7.4 million. The decline in U.S. factory-built revenue was primarily driven by a reduction of approximately 234 homes sold to 4,603 homes compared to the same quarter last year. A 1% decline in the average selling price per U.S. homes sold to $60,200 also contributed to the decrease in revenue. The decline in the average selling price was due to a shift in product mix as we sold a larger percentage of single section homes this quarter versus the same quarter last year. Canadian revenue decreased 40% to $11 million driven by a 43% decline in the number of homes sold in the quarter. Average homes selling prices increased by 6% to $86,800. Our Canadian business was impacted by the continued reduction an oil prices in Western Canada. Consolidated gross profit decreased to $60 million, down almost 10% versus the prior year quarter. Our U.S. housing segment gross margins were 20% of segment net sales, down 60 basis points from the fourth quarter last year. Gross margins were impacted by reduced sales volumes, labor inflation as well as temporary plant closures due to COVID-19 shutdown orders. SG&A in the fourth quarter decreased to $47 million versus $53 million in the same quarter last year. The decrease was primarily due to a reduction in non-cash equity-based compensation expense, variable incentive compensation and integration cost. Net income for the fourth…

Thanks, Laurie. We are pleased with the incremental improvements we have achieved in fiscal 2020 as we progress the longer path to reaching our medium and long-term goals. As we managed through the day-to-day challenges brought on by the pandemic, we are continuing to focus and invest in our strategic initiatives of streamlining our products, digital offerings to our customers and adding more value and sustainability through turnkey services and the elimination of waste. We anticipate that these actions will provide benefits both in the near-term and in the years to come. As we look forward, we expect housing demand to benefit from tailwinds that will generate new opportunities for our business. Through this, Skyline Champion will continue to provide high-quality sustainable affordable housing solutions for our customers and their families. Our ultimate goal is to make dream home attainable for everyone. We will continue to demonstrate resilience through these unprecedented times and will be here to support the need for housing as the economy recovers. And with that, operator, you may now open the lines for Q&A.

Thank you. [Operator Instructions] Our first question today is coming from Mike Dahl from RBC Capital Markets. Your line is now live.

Good morning. Thanks for taking my questions and hope you guys and your teams are and families are well.

Thanks Mike.

Mark, I wanted to revisit a couple of comments you made around production levels and just to make sure we understood them correctly and I may have missed part of it, but you were talking about it kind of production rates as a percentage of last year as we moved through April and May. Can you just give us – can you repeat those or give us a sense of just quarter-to-date what your shipment volumes are down in both the U.S. and Canada?

Yes. So, Mike, in the first 2 weeks of April, we were running at 40% of last year’s levels. In the latter part of April, second half of April, we were at 60% of last year’s levels. And then most recently in May, first 2 weeks of May, we are running at 75% to 80% of last year’s levels. So it’s been increasing 20%ish per every 2ish weeks through that time period. And I expect it to remain in that 75% to 80% through the remainder of the quarter are really driven, sales is really not as much of the issue right now as production. So, we are ramping production back online to give our dealers product and our dealers have actually have seen very good demand. Many of the dealers are just not reopening, so as a result, they are just able to take products. So, it’s really a timing issue.

Got it. Okay. So if I look at that your expectation then would come out to be roughly down 30% to 35% and in the U.S. if I think about those run-rates for the full quarter?

Yes, I’d have to do the weighted average, Mike, but yes, in essence that sounds mathematically in the ballpark, yes.

Okay.

And then as far as I think you also asked on Canada, in Canada thus far for the first 7 weeks of the quarter, we are running at 65% of prior year levels in our Canadian operations.

Okay, alright. Thanks. Then my second question is a follow-up and I think it’s along the same lines you have made a comment that you would expect industry shipments about flat with or consistent with site-build estimates, site-build estimates are – there is a pretty varied range right now. So, two part question, one would be when you say in line with those what are you using as kind of a consensus for site-build numbers? And then the second part is bigger picture, I think a lot of us are on board with the idea that there is some real tailwinds to manufactured housing growth over the coming years, but from a near term standpoint, you do have a customer base that’s particularly, economically sensitive. You have some potential disruption in the financing improvement thematic. You have got developers that may put things on hold. So, I guess I am – what I would like to know is that the given those factors why do you – why is it your expectation that manufactured housing can kind of hold its share it in the near term?

I think, so first off, I am probably in the 15% to 20% range in terms of the full year kind of number. I think right now the CARES Act is acting as a – instead of kind of unemployment insurance, it’s acting more as a stimulus package to certain wage level demographics in the country. So, I think we are getting a short-term bump and we are seeing that. I am concerned what happened after July depending on what happens obviously in the government’s actions that they take. But overall, I think there is a tremendous movement. Our retailers are telling us that their business activity level on a whole and it’s very sporadic obviously, is exceptionally strong. We have seen 2 weeks or 3 weeks ago about 60% of the retail base in the country roughly was idled or maybe shutdown because of stay-at-home orders or other such items. Now, today about 90% of the retailers I would estimate are active and open. They maybe only have one person in the office, social distancing or doing more online. But I would say, the actual traffic in closing ratio, while traffic is down, the closing ratio was so high that I would say several retailers are experiencing all-time record volumes in certain parts of the country. So it is sporadic, but I think there is a demand for housing, it’s pent up. And I think we are seeing that type of traffic pattern at many of our retail base, I think it’s going to be the community channel that is going to watch rents and payments come in over the next few months before they start to really return back to the market. They have started to return, but I think it’s going to be more of a slow drip over the next few months until they have some assurances that maybe they can have a payment stream coming into them before they start placing orders for new homes. So, I think on the whole I am very bullish, because we are seeing more activity in the rural areas of people interested in acquiring on homes and we are also seeing tremendous number of companies who are moving to the work from home type policies. That’s not hit just yet, but with those two trends and given our – the predominant amount of sales that we have going into rural areas, that’s a huge long-term positive for us. So it just depends on how fast that shift happens and I am anticipating that will start to happen more towards the fall of this year.

Okay, thanks, Mark. Really appreciate the insights.

Thank, Mike.

Thank you. Our next question today is from Greg Palm from Craig-Hallum. Your line is now live.

Yes, thanks for taking the questions and hope everybody is doing well. I guess I just wanted to follow-up or clarify on a couple of things. First, can you actually give us some color on what some of the order trends have been over recent weeks? I think you said that backlogs are actually up since quarter end in the U.S. so that implied some strength, I know you talked a lot about sort of production rates, but what are you actually seeing in terms of orders right now?

Yes. So, orders have been outpacing our production, Greg, pretty consistently over the past several weeks. I mean obviously each week is independent, but we have built up backlog. Our backlog year-over-year now, are up from where they were at this point, Laurie 5% to 10%.

Yes.

Stronger backlogs than we had at this point last year. So, we are seeing sales slightly outpace the production levels that I mentioned to you just previously. The question is are those orders and pace can keep up and we are just watching that so far they are holding. And like I said to Mike, a minute ago, Greg, I think the piece that we see is I think the community channel, which is roughly 40% of the HUD market is going to kind of slowly return, whereas retail activity thus far is stronger than it was in the prior year in aggregate as retails are coming back obviously when they were at 50% or not, but recent trends – I would say retail activity is stronger than it was last year.

Interesting. So, I guess that kind of implies that it leaves some of your retailers are seeing activity that’s in excess, so where we were pre-COVID, I mean, are there – is it certain geographies or is that just a byproduct of certain retailers, I mean what do you think is sort of driving that strength?

So, it’s definitely geography-based, Greg. So it’s not – I am kind of making a broad statement in terms of the U.S., but I would say, that statement is probably true for 60% to 70% of the country. Right now, obviously, places that are just reopening haven’t had that bump yet, but states that have been open or maybe more open have experienced those trends pretty consistently. I really attribute that to a few facts, one is a large portion of our customer base are the meat packers and the warehouse workers and the grocery clerks and the healthcare professionals and those folks in addition even though there is rampant unemployment or high levels of unemployment in the country. Most workers today with their confidence level believe we are going to be returning to work, I think about three quarters of all the laid off employees believe that they are just temporary furloughs and they will return to work. So, right now, given the CARES Act, many workers are getting a stimulus package are getting somewhere between at least in the lower income demographic getting a 30% to 40% pay increase by being unemployed. And so I think they are using that opportunity to invest in their future and invest in home.

Yes. That makes sense. Last one following up on your comments around these trends to rule, I guess is that a theory at this point? Are you actually seeing folks making the move and just kind of curious if you are – are these renters, are there certain geographies where maybe you are seeing more of an impact now just wanted to get some additional thoughts on that, because I thought that was another interesting theme?

Yes. I think right now, it’s more of just a forecaster or an estimate, Greg. We are not seeing actual tangible people move to rule yet. I think people – it’s too early in the stay-at-home order process for people to really be out, I’d say relocating at this point in time. But I think that will come in a few months like I mentioned I think in the fall is when I expect that activities start coming together at this point in time. So, it – but it’s definitely interesting that the number of people coming into dealerships that are closing on homes and putting deposits on homes across the country is very high at retail. So, the closing ratio is just it’s impressive actually, so with those kind of numbers that even it’s offsetting lower walk-in traffic.

Yes, great. Alright, thanks for the color. Best of luck going forward.

Thanks, Greg.

Thank you. Our next question today is coming from Daniel Moore from CJS Securities. Your line is now live.

Mark, Laurie. Good morning.

Good morning.

Good morning.

Laurie, you touched on the margins going into the next quarter perhaps being impacted to some degree by social distancing, talk about that I guess a) if it’s more of a supply issue or a production issue, what the glide path is to getting back to full production capacity and b) what that glide path looks like from a margin and productivity perspective what you have learned so far as far as how to handle actually working in the factories, etcetera, maybe a little bit more on that would be helpful?

Sure. So, the company in addition to the social distancing down, the company chose to continue to pay its portion of employees that were furloughed their health benefits and other benefits. So as long as we have those furloughed employees, that’s going to be a bit of a drag on margins, but the right decision overall. I think that it’s highly dependent margin growth or back to normal margins as higher – the trajectory is highly dependent on volume as you stated. So as we see volume pickup over the next weeks and months, we will be able to return to that level depending on how many furloughed employees we still have. I don’t know if that that helps.

It does, it does. I understand that helps some of the dynamics. In terms of just the gross margins, can you give us a sense of what we have seen on average through the first call it 6 weeks, 7 weeks of fiscal Q1?

Sure. Looking at our decremental margins, they are around low 20% range right now.

The decrementals not the gross margins?

Yes, yes.

Okay. And Mark, you mentioned financing both from a consumer perspective and inventory floor plan perspective, what do you see in there – are things loosening up from maybe let that initial freeze back in March and how much of a bottleneck do you think that will be to getting back to maybe flatter year, flatter kind of year-over-year comps?

Yes. I think the financing environment actually down overall. It is actually very good right now. What we are seeing is primarily in West Texas oilfield related areas we have seen credit tightening, lending tightening in aggregate. But I would say outside that, the real only focus for the financing companies has not really been on taking credit or any of those factors it’s been driven by validation of employment levels. So, right now, credit and financing for product is actually very, very good just depending on the employment levels and employment status of the individual.

Got it. Thank you. And then lastly for me, you gave good color on the geographic regions just as in terms of the cadence over the course of the quarter, are the kind of Midwest and Northeast over the last couple of weeks you are starting to see those come back or play a little bit of catch up relative to the rest of the country or it’s too early to tell?

Yes. I think they are playing some catch up, Dan, but I think what’s more important is really I view it that the mid-South is playing catch up. So, if you look for example 2 years ago in the fourth quarter, our fiscal ‘18, the mid-South region was at about 6,500 units in the quarter and last year, the mid-South because of rain and inventory dropped about 2,000 units to 4,500 units. So they had a 31% decline year-over-year because of weather last year’s fourth quarter and so this year the mid-South’s growth was about 1,300 units, which is about 30%. And that’s really just – so I actually deal with really the market growth in the mid-South this year quarter-over-quarter is really because they were at 6,500 2 years ago, they dropped 31% last year because of weather at one-time events. This year they are just getting back to what I am going to call normal recovery. And so in the Midwest, we are definitely seeing communities come back and those things, but really the market trends are more driven by at least in the mid-South by return to normal. And then I think the other markets are just seeing their normal growth rates and come back as communities come back to the market.

Very good. Helpful. Appreciate it. Thanks for the color.

Thank you.

Thank you. Our next question today is coming from Matthew Bouley from Barclays. Your line is now live.

Hey, good morning, everyone and thanks for taking the question. I hope everyone is doing well. I wanted to ask back on the 10% EBITDA margin timeline being pushed out. I know the prior expectation was for that to be I guess on a sort of a constant revenue target. So, the push-out, is that just entirely due to the lower production volumes and kind of that under-absorption of employee cost as you mentioned Laurie or is there kind of an impact to the timeline on the operational initiatives as well, because I was wondering if there was sort of an opportunity to perhaps even accelerate some of those operational initiatives in this environment? Thank you.

Hi, Matt. Thanks for the question. It’s entirely due to volume. So, the pulling out the 10% is entirely due to volume, we will just see how the value comes back. We are going to continue to focus on the operational initiatives that we have set out to do.

Okay, but no change to the timeline of those initiatives one way or the other?

Not really, not as of today.

Okay, got it. And then secondly I wanted to ask back on the financing side, I guess a little bigger picture though, I guess what are you hearing or seeing what the GSEs are doing here in terms of their plans to rollout that secondary market that we have been waiting for? Thank you.

So, I would say that duty-to-serve program is still on hold. Actually, Freddie actually came out and said that they are not planning to move forward with it. Fannie Mae is still planning to move forward with the duty-to-serve. So we are just waiting for them to rollout. So it’s really a timing. We are more encouraged to be honest by the secondary lending that’s happening in the market. And I would say today we are seeing more lending activity than we have in a long time that the lending market is actually quite good for us at this point in time.

Okay, thanks for the details.

Thanks, Matt.

Thank you. Our next question today is coming from the Philip Ng from Jefferies. Your line is now live.

Hi, yes. This is actually Collin on for Phil. So, you called out the 250 units are placed on hold in the quarter, have you seen these orders released in the fiscal first quarter and kind of baked into those production rates that you called out or are you anticipating that these orders will come later on in the year and kind of give you a nice bump?

Yes. I think those orders column will come sporadically. We have probably gotten a few of those in the numbers within April and May. But I would say really it’s dependent on customer who put it on hold on what their time horizon is and how they are viewing their return to the market and many of those are community customers. So, I believe it’s just – it’s going to be rolled out in small increments over time. So, it’s really – I don’t see it coming back as a big bump at one point in time. I think it’s going to be something where our customers going to get comfortable and say it released 25 units – it released 15 units at a time or something like that to as they get more confident in the future expectation to the market.

Okay, I understood. And then you called out that 15% to 20% decline in your shipment, can you talk about the shape of the rest of the year, is it steady decline throughout the remainder of the year? Do you expect to see some positive inflection at some point in calendar year ‘20 and then just how you think Sky will track relative to the industry just given your footprint?

Yes. I think as I mentioned before, I think with footprint I am expecting the mid-South to continue to grow. Just to get back to that I am going to call it normal level, where they were 2 years ago before the – I will call it the range hit them last year. So, I expect the mid-South continue to grow a little bit obviously. We are going to be impacted definitely in the first quarter in our first fiscal quarter due to the fact that much of our geography was in the Northeast, which was hardest hit by stay-at-home orders and in the pandemic in general. So, I think you will see a little bit of dynamic there, but as the rest of the year progresses, we will be right on track. Overall, I think the housing or the industry shipments I think I am looking at it from a standpoint that after we get through July-August type time period and some of the stimulus wears off that we might see a little bit of a slowdown in the market. And so I am a little bit – I will call it I am cautiously optimistic, I’d rather plan for the market to be a little softer going into the tail end of the year. And so that’s the outlook is just what’s going to happen after the stimulus runs out and are we seeing any false signals from the current environment? And do we see more, more people more of the unemployment flip from furloughs to permanent layoffs? And in depending on that training as it comes to bear in maybe the July or August time period, that’s really the telltale of whether we are going to beat those estimates or go under them.

Great. Thank you for the color.

Thank you.

Thank you. [Operator Instructions] Our next question today is coming from Rohit Seth from SunTrust. Your line is now live.

Hey, thanks for taking my question. Most of them have been answered. Just on the builder developer Genesis initiative that you have. You can provide any color and maybe give us an update and what your thoughts are there?

Yes Rohit. The builder developer channel was actually quite good for us in the fourth quarter and we saw significant traction or good traction I will call it in the fourth quarter of getting product out in the field, we actually had between 1 and 200 floors in backlog at the end of the quarter related to the Genesis rollout. So, it was definitely gaining traction for us just few weeks after the rollout and in the midst of COVID.

So have you seen a pause in that now and what’s the – how the in-bound or are more people knocking your door to take a look at what’s going on with Genesis and the opportunities?

Yes. I think, overall, the in-bound is still good. People are inquiring overall for the marketplace. I don’t think it stopped, I think there is a little bit of a pause obviously in today’s market, now a lot of people are quoting builder developer projects just yet today. So – but I would say, our actual inquiry activity has not slowed down. I would say the quoting has slowed down, but the inquiry activity has not slowed down. I think people just are waiting to see a little bit of the future before they move forward.

Okay. And then in terms of your demand, is there any difference at the different price points, are you selling some of those higher price point homes more like as that traction picked up and is there any difference in the price points in terms of products in the modular in HUD code at the moment?

No. I think right now the – we are not seeing any specific price point gain more traction than another in the marketplace. There is a little bit higher demand for a low-end product in certain regions of the country. But overall, I would say we are actually seeing pretty high demand at every price point that we sell to in terms of its normal ratio. So, I think it’s a really good question and we are actually seeing – we are not seeing one price point falloff versus the others necessarily. So it’s actually been encouraging to see that dynamic today.

Okay. And then are you offering incentives or your retailers offering incentives to move product any of that sort?

I would say no. I mean, right now the retailers, the dynamics happening at retail today, I would say is that the customers are walking in and a customer who is visiting a sales center is buying and actually there – this might be a generalization, but what we have heard from our retail base is that the customer is not necessarily as price sensitive as they are just I need a house, I need it soon and what do you have and what can we do to close the deal. So it’s not as much of a shopping environment as much as it is a purchase environment at retail currently.

Okay. And then a lot of the job losses that are out there are travel, tourism etcetera, in your footprint, I mean, do you have a sense of what the job losses are in your footprint, the rate of job losses are more or less is the headline I guess worse than what’s actually happening in the footprint?

I don’t know the answer to that, Rohit, to be honest, but I would say most of the people that are coming in today believes that they are going to be reemployed coming out of this, a vast majority. So the general shopper today and the general person who is laid off, I would say that’s actually visiting dealerships believes I will have a job either currently have a job or will have a job and they are just temporarily furloughed for the time being. So, most of our footprint is in the Northeast. We have a significant presence obviously mid-Texas. So a lot of those – we are not necessarily in popular cruise destinations or those type of hospitality hotspots. We are generally in I am just going to call it rural America, where maybe that tourism isn’t quite as prominent.

Yes. That’s covered my point. Alright. And then on the strategic initiatives, I mean the bigger plants are idled and isn’t there a way to automate your production a little bit faster, I am surprised to hear that, it’s just going on trend the timeline?

Yes. I think the question would be what’s the lead time on automation equipment, Rohit, right now, at least some of the automation equipment will have lead times that are drawn out just because of their supply disruptions. So, it’s a little too early to tell in that case, so – but you know I think we have got plans underway and we are working towards those items and towards kind of our digital plan.

Alright. Last one for me, on the manufactured housing, the community channel, what percent of that is your – what percent of that is your mix and then what are the trends you are seeing there, I realized there is a region-specific issue in that channel and just give me update on that and how do you see that playing out for the rest of the year?

Yes, thanks Rohit. The community channel is approximately 30% of our sales. And the way that’s playing out, I would say, is certain states like Michigan, Michigan actually and California, there was strong M&A activity. So, Michigan had M&A activity for a large REIT that is closing in June. In California, there was I am going to call it a buying frenzy by REITs of other communities in California. So in California, many of the REITs have been working on putting in infrastructure and doing infrastructure spending before they buy homes with the purchases. So we are just waiting for the conclusion of that infrastructure spending for some of those communities to restart their buying patterns. So I think overall it’s – there is still good demand. I do think there is going to be a pause with some of the REITs in terms of what their outlook is and what their concern on unemployment and payment levels will be going forward thus far. If you look at the public REITs and others that we have talked to, they have actually been surprised with how – with their ability to collect and receive payment.

Wasn’t the collection rate like 95% for them? 95%, 96% is pretty good.

Yes, very good.

Alright. That’s all I have. Thank you.

Thanks, Rohit.

Thank you. Our next question is a follow-up from Daniel Moore from CJS Securities. Your line is now live.

Thank you again. Just as it relates to ASPs, do you see Q4 as being sort of the harbinger of things to come over the next couple of quarters or do you think we can get back to flat or maybe even a little bit of growth as we get later into fiscal ‘21?

Hey, Dan. It’s really highly dependent on product mix. So I think we are going to see a higher – continue to see a higher percentage of single lives at least in the short-term and then as mix shifts we will see a shift in ASP, but I expect relatively flat to Q4.

Got it. I guess so far what we have seen at least in fiscal Q1 that mix to single floors are still holding?

Yes.

Got it. Thank you.

Thank you. Our next question is a follow-up from Greg Palm from Craig-Hallum. Your line is now live.

Yes, thanks. Few quick ones. Laurie, you wanted to follow-up on the margin targets, I guess to clarify did you withdraw the previous margin targets because of the lack of visibility you have right now. So, for example, I guess if the industry in your volumes do recover faster to call it pre-COVID levels, is the expectation that in that environment you can still hit the 10% target or has something changed that’s not volume dependent, just wanted to be clear?

Nothing has changed. It is entirely volume dependent.

And visibility.

Yes.

Yes, okay. Makes sense. And then I am thinking more about the commentary on recent activity thinking about your footprint a little bit more, I mean, obviously whether it’s states like Michigan or the Northeast, I imagine things are still pretty slow there, but maybe you can confirm that. If they are I mean that would make the recent order trend commentary company-wide even more impressive. So I guess are you expecting any pent-up demand as some of those states and areas start to reopen like the rest of the country?

Yes, Greg. I think we should see a little bit of a spike as things start to open back up, especially as retailers come back online and move forward. So, I do expect that will be a positive sign going forward as we move. And frankly I think when we saw in the quarter 11% year-over-year sales order growth, we view that as fairly strong and that includes all of the cancellations and orders put on hold. So I think we saw very good year-over-year growth even though our markets were relatively flat, especially given the COVID situation.

Yes, okay. Alright, that’s it for me. Thanks.

Thanks, Greg.

We have reached the end of our question-and-answer session. I would like to turn the floor back over to Mark for any further or closing comments.

Just want to thank everyone for their time today and hope everyone and their families are staying healthy and well. We will continue to make our way through the COVID pandemic effectively and look forward to the tailwinds that it will take the company to the next level. Thank you very much for your time.

Thank you. That does conclude today’s teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.