UFP Industries, Inc. (UFPI) Q2 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by and welcome to the Q2 2020 UFP Industries Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker, Mr. Dick Gauthier, Vice President of Business Outreach. Please go ahead, sir.

Welcome to the UFP Industries' second quarter 2020 conference call. Hosting the call today are CEO, Matt Missad; and CFO, Mike Cole. Matt and Mike will offer prepared remarks and then the call will be opened up for questions. This conference call is available simultaneously, and in its entirety, to all interested investors and news media through our webcast at www.ufpi.com. A replay will also be available at that website through August 22, 2020. Before I turn the call over to Matt Missad, let me remind you that yesterday's press release and today's presentation include forward-looking statements as defined in 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 the company's expectations and projections. These risks and uncertainties include, but are not limited to, those factors identified in the press release and in the filings with the Securities and Exchange Commission. I will now turn the call over to Matt Missad.

Thank you, Dick and good morning everyone. I had thought of a hundred adjectives to describe the second quarter of 2020 [indiscernible] phrase that came to mind too, like EMS unbelievable. I even had a Batman movie [indiscernible] yet my favorite and most appropriate terms are grateful and fortunate. I am grateful for the tremendous effort from all of our team members who worked so hard to keep our essential customers by far and kept UFPI moving forward despite all the hurdles. I am grateful to our customers who trusted us to keep them running as they took care of the consumers. And mostly I am fortunate to work with the greatest team in the industry, who performed even better than I could imagine once they were unleashed. I began to work nonstop to make sure we maintain safe working conditions while providing the product and services of customers need. And in spite of their awesome performance none of them are breaking their arms trying to pat themselves on the back. I think they should my long-term belief is that effective UFP is yet to come. I'll briefly review our overall second quarter performance. Our teams produced record net sales of $1.242 billion in Q2, up slightly from 2019. They set a new quarterly net earnings record of $66.5 million and a quarterly EPS record of $1.08 per share. EBITDA for the quarter was $111.4 million, up $20.6 million versus 2019. New product sales for the quarter were $141.9 million and a $243.7 million year-to-date. We are on track to meet our 2020 new products budget. Looking at the segment, the tail-end of the quarter is very different by market as we surmised in early May. UFP Retail Solutions for the shining star with sales of $609 million versus $482 million in 2019. Unit sales growth for retail grew by an astonishing 22% in the quarter. Our Dimensions, Home and Decor brands grew unit sales by 72%. New product sales of Dimensions project catalogue line was a strong catalyst to this growth. ProWood branded products grew unit sales by 27%. New door colored products as well as ProWood FR our new fire retardant premium product helped pave the way. Outdoor essentials consisting of Fence, Lawn and Garden products had 23% unit sales growth. New product sales of picnic tables and raised garden bed helped fuel this growth. UFP-Edge products which consists of siding, pattern and trim items saw an increase of 9% and Deckorator branded products recovered exceeding 2019 units by 1% and now 2019 year-to-date units by 5% versus the 14% deficit at the end of Q1. Deckorator Vault product revealed Eovations technology at nearly 20% ahead of 2019 on sales dollar basis. In order to meet strong demand and to create effectively for new products additional Deckorator [indiscernible] perpetual come online in early Q4. Another positive development in retail is our e-commerce growth. E-commerce unit sales of our retail products were up 119% from a year ago as more consumers who were forced to work from home shopped online. PPOP and UFP Retail Solutions at pre-bonus operating profit worth $54.6 million, up 94% over 2019 and more than three times the unit sales growth. Overall Retail Solutions has been holding strong in essential business in the current environment and given some sawmill curtailments, the strong sales and product shortages in some items. We expect the sales trends to continue and are grateful for our better relationships in times like these, which are a great advantage as we serve our customers. In addition, our [technical difficulty] decking program has expanded its footprint and is now also national. Moving to the construction segment, they saw a unit sales decline of 15%. Net sales were $359.2 million versus $414.8 million in 2019. Concrete Forming units declined 5%, Factory Built units declined 20%, Commercial declined 19% and Site Built units declined 15%. Pre-budget operating profit were $22.8 million for the quarter versus $25.6 million in 2019. Many builders slowed their land development process at the end of March, given the uncertainty and that may lead to a slight lag in profitability at some point in the future. However, demand remain strong as plans for May and June kept improving and is tracking with respect to volumes. Factory Built housing rebounded nicely where they have been permitted to restart the manufacturing processes. Order files are very strong customer level with some customer models out 16 weeks for delivery. New products in the Construction segment was good growth for the quarter include Concrete Forming hardware systems and pre-home outdoor products. Housing will continue to be strong, with both single family and multifamily with strong order trends. The Industrial segment was impacted most by COVID related shutdowns with unit declined by 27% in the second quarter. Net sales were $224.4 million versus $291.2 million in 2019. [Indiscernible] operating profit was $18.6 million versus $26.1 million in 2019. The Industrial segment experienced significant sales declines from customers in the durable goods manufacturing industries. Some customers were down 50% year-over-year due to COVID related shutdowns. UFP Industrial did notice some improved sales trend in June and continues to recover. New products showing growth in industrial and good specialized, moving boxes, steel trading an OEM furniture firms. Continuing to look at any customer impact in agriculture, durable goods and outdoor equipment and certain OEM furniture manufacturers can give us a good indication of the impact on our industrial business going forward. On the International front, sales were down 10% versus 2019. Profitability improved however as retail demand for product increased in our Mexico and Canada operations. The International operations in Industrial were impacted by COVID just as the U.S. was and sales suffered in those product lines. We kept off without the second quarter without describing the lumber market while we focused on unit sales, the industry is focused on sales dollars and the lumbar market clearly provided a tailwind for sales dollars. While the lumbar market dipped slightly in early April based on peers, it is now [indiscernible] clients. Composite Index is up $200 board fees about the mid-April low. The Random Length Composite Index is $175 per thousand board fees above mid-April low. Demand has outstrip supply in our more capacity [indiscernible] demand appears to be strong for at least the next 30 to 60 days based on current order files and by any further government action. We expect to keep certain government stock that have been working with our vendor partners to obtain all available material to serve our customers. We do not currently have safety stock for most of our product lines. So what is the outlook for 2020, I believe the U.S. has a strong economic foundation and is important for all of us that business that remains shutdown are allowed to reopen safely. Individuals suffering from a loss of their job and livelihood deserve the opportunity to make a living. Navigating to COVID responses disruptions in many markets and the election year challenges will be difficult but not insurmountable. Leaders who have no consequence or deliberately tend the economy will create an irreparable situation. We are highly seeing an optimistic outlook [indiscernible] outplay personality and emotion and expect the majority of Americans who break free enterprise and personal responsibility. UFP plans to continue to operate safely. Parts of our business, which rely on hospitality and vast entertainment then is making challenge faster than we originally forecast, while other essential retailer should continue to remain strong. Our business model takes into account I think variable cost structure both our manufacturing operations and SG&A facing part of the align of incentive programs to prebonus operating profit and return on investment. And we are not part of our original 2020 plan our travel expenses have reduced dramatically as we view more activities virtual that has helped reduce our overall SG&A cost as a percentage of gross profit. I still believe that personal relationships are critical to business and kind of culture so travel will be necessary. However we can utilize that power to reduce the frequency and duration of travel in the future. As you know we have a very strong balance sheet and generated terrific cash flow during in the second quarter and while the people lost the line financial strength of our customers, we still see several opportunities to execute our strategic plan to continue our lost impact improving sales growth, profit growth and shareholder returns. We maintain our capital allocation philosophy of returns to shareholders and expenditures for growth, new products and manufacturing efficiencies. In April we reduced our 2020 capital expenditure budget by 20 million but given the performance thus far we will add these dollars back into our total. Although it’s unlikely we will always spend future long lease time with our equipment manufacturing and construction. We still have an amply pipeline of acquisition opportunities and we are able to close on the acquisition of T&R last week which will help our industrial growth plan. We see many acquisition opportunities in our business here in lumbar. While the current climate creates uncertainties in the near term, our strategies for longer term and we hope to utilize our strong balance sheet drive additional growth and profitability at or above our target ROI range. Our capital availability puts us in a strong position to take advantage of additional opportunities including somewhat bigger opportunities to help us free the 50% annual growth target through acquisition. We continue to fit amount of set dividend and yesterday the Board approved a $0.125 dividend payable in September. As always, our focus remained on return on investment and we will look to deploy the capital in the best way possible through that plan. Our January 1, 2020 [indiscernible] through a market base record and geography base model continues to go well. Having an experienced management team to manage clearly [indiscernible] tremendous leverage. Being able to finally those opportunities that other companies don’t have has driven our exceptional performance. We couldn’t have achieved the exceptional results without our exceptional people. Therefore we continue to increase with my optimism for the future as well. As the segment and business unit leadership has designed to become implementing the future strategies, I see a tremendous growth and improvement essential in each segment. Now I like to turn it over Mike Cole to review the second quarter financial results.

Thank you, Matt. This quarter provided another solid example of how UFP’s balanced business model and diversified product portfolio is a great advantage in challenging time. Our results this quarter, highlighted by 24% growth in operating profits 140 basis point improvement in operating margins to 7.4%, the 200 basis point improvement in our trailing 12 months return on invested capital to over 15%. Operating cash flow of $147 million more than two times higher than the first six months last year and total liquidity of $562 million at the end of June a $170 million increase since the end of the first quarter. Moving on to highlights from the income statement, overall net sales for the quarter were flat compared to last year and consisted of a 3% increase in our selling prices substantially offset by a 3% decrease in our units sold. Results by segment varied greatly with exceptionally strong unit sales growth in our retail segment, offsetting unit declines in construction and industrial, which were more adversely impacted by the pandemic and stay at home orders. Fortunately for us, this cost the consumers to initiate more home improvement activities, as the quarter progressed, resulting in strong order flow from our retail customers. Breaking down our sales by segment, sales to the Retail segment increased 26%, consisting of a 22% unit increase, and a 4% increase in prices. Organic unit growth was 21%, driven primarily by our ProWood Outdoor Essentials and Dimensions business units. New product sales for the retail segment were also strong, growing by nearly 16%. Sequential demand trends within this segment continue to remain strong. Sales for the industrial segment were impacted by stay-at-home orders as businesses of many of our customers weren't deemed essential. Travel restrictions also impacted our ability to gain share, adding new customers and additional locations of existing customers. As a result, our unit sales dropped 27% for the quarter fortunately, as states began reopening their economies our sales rebounded from being down 32% year-over-year in April to being down 14% year-over-year in June and we're optimistic this will continue to improve. Finally, our sales to the construction segment decreased 13% resulting from a 16% decline in units. Organic unit growth dropped 18% and was comprised of a 5% decline in concrete forming, a 15% decline in site fill, a 20% decline in factory built and a 29% decline in commercial. As with the other segments, we experienced a significant demand improvement within the quarter, with sales rebounding from being down 19% year-over-year in April to down 6% year-over-year at June. Moving down the income statement. Our second quarter gross profits increased by over $18 million or almost 10%. This increase was comprised of $28 million improvement in retail, and a $3 million increase in international, offset by a $6 million decline in construction and an $8 million drop in industrial. Our gross margins improved within each of our business segments and increased overall by 140 basis points to 16.5% due to a variety of factors. Notable drivers include the impact of rising lumber prices and products we sell with a variable price like ProWood pressure treated lumber and strong organic growth and leveraging fixed costs within the retail segment. Continuing to move down in the income statement. Total SG&A expenses increased less than $1 million or 0.7% as an increase in bonus expense was offset by temporary decreases in medical, advertising and travel related expenses. Our bad debt expense also declined with our trade receivables almost 95% current at the end of June. As a reminder, our bonus plan is based on a combination of pre-bonus operating profit and return on investment, which are both considerably higher this year. Below the earnings from operations line, the equity investment portfolio of our Dallas, our insurance captive rebounded to report a $2.7 million unrealized gain during the second quarter compared to $100,000 gain last year. Moving on to our cash flow statement. Our operating cash flow this year improved by $76 million compared to the same period last year, primarily due to an improvement in earnings and an increase in our crude liabilities since year end. We measure our cash cycle to assess our working capital management and for the second quarter improved to 49 days compared to 53 days last year, due to a reduction in our day's supply of inventory driven by strong demand and lean inventories in our retail segment. Investing activities consisted primarily of capital expenditures totaling $47 million including expansionary efficiency related CapEx of $17 million. We've also spent nearly $19 million and business acquisitions primarily for Quest Design and Architectural millwork in March. Our previously announced acquisition of T&R lumber occurred in July. Financing activities consisted of $3 million in net debt repayments $15 million of dividends and $29 million of share repurchases, from the first quarter. With respect to our balance sheet at the end of June, we had approximately $37 million in net cash compared to $192 million in net debt last year, and our total liquidity increased to $562 million at the end of June consisting of $201 million in cash and $361 million in availability under our revolving credit facility. This provides us with ample resources to not only operate our business but take advantage of wise investment opportunities, during this challenging time. That's all I have in the financials, Matt

Thank you, Mike. Now, I'd like to open it up for any questions you may have.

[Operator Instructions] Our first question will come from Ketan Mamtora with BMO Capital Markets. Please go ahead

Thank you. Good morning Matt and Mike and congrats on a very strong quarter. Starting off on the retail side, Matt can you talk a little bit about the strength that you saw in June? Has that continued into July as well if you look at some of your sort of key end markets and products, whether it's on the ProWood side or the Deckorators, the Outdoor Essentials side, maybe just give us some sense? I know you would not want to get into sort of specific numbers, but at a high level, what you are seeing thus far in July, because there has been some sort of concern that a lot of this on the DIY side especially is pull forward in demand versus kind of fundamental improvement in demand. So maybe just give us some sense of what you are seeing.

Yes, it's a good question Ketan. I think as we look at it, I would say that from a high level view the demand profile is still very strong and you can kind of look at lumber market and see that the demand for that product continues to remain strong, so that's a good indicator from our standpoint, I think there's a lot of people who have projects that have not been able to get the materials, they need. So, we expect that demand to continue. As I mentioned before, at least the next 30 days to 60 days and could very well continue beyond that. But it seems to be strong at this point.

And then on the Deckorators side, is it possible to quantify the capacity increase that you all are looking at, which is going to come on later this year?

Yes. I believe the capacity increase is going to be somewhere between 25% and 35%.

Got it. And so, all of that will be available spring of next year I'm assuming, is that how I should be thinking about it?

Yes.

Got it. And then on the e-commerce side within retail, is it Matt to quantify how big that is within the retail side?

Well, it's possible, but we haven't really broken it down at this point Ketan. So, I can only give you the high-level perspective on it, and I think as I mentioned in the remarks, what we're seeing is more people that are working from home, probably are looking around their houses and seeing all these projects that need to be done, and so they're ordering online and that's really, really helped to explode our e-commerce initiative.

Got it. And then just one more on the lumber side obviously, you've seen a big spike in both Southern Yellow Pine and SPF prices; from what you are seeing, all the curtailments that happened in late March and April has that all come back online or is there some that is still ramping up based on what you are seeing, can you give us some sense?

Yes, I think there has been - most of that, if not all of it is back online now, whether it's running at full capacity I couldn't tell you, but I do believe that the demand is there, and it's outstripping the capacity and it's going to take a while for that to catch up, but as with any kind of market move, it's always a difficult challenge try to guess exactly when that's going to happen, but our team has done a great job of managing their inventories and managing their purchases and working with the various mills, both domestic and foreign to try to make sure that we have at least enough product to meet the demand as best we can.

Our next question will come from Steve Chercover with D.A. Davidson. Please go ahead.

You almost gave me a flashback with your Batman reference. Yes, thank you. So it's extraordinary that sales and retail actually accelerated in the quarter to June exit rate of 47% growth. And I guess, intuitively I would have thought that DIY projects would have tailed off as people went back to work, but you're saying it's going to be strong for at least the next 30 days to 60 days. So, have you had any shortages in your raw materials such as Southern Yellow Pine, the cap sales from being even stronger?

Yes Steve. I think that's been one of our challenges during the quarter. As we mentioned the mill curtailments impacted it, but yes, we believe we could have sold and I can't quantify, but we could have sold significantly more had we had material available.

Okay. And so numbers still going parabolic, will you do anything at some stage to protect yourselves? So when lumber eventually hits the top and reverses?

Well, we certainly will, we certainly are. We're very cautious about it, we're probably sacrificing a little bit of margin today just to make sure that we don't get into a negative situation and we work with our vendors, very much with our vendor managed inventory programs to help alleviate some of that potential risk.

And I know you said you have no safety stock on hand. So, is the way to protect yourself basically by turning the inventory as rapidly as you always do?

Correct.

Okay, thank you. And then in industrial and construction, absent any backslide in reopening, do you think that the trajectory should improve throughout the quarter could get you back to flat or even modest year-over-year growth in the current quarter?

I think that's a great question. I'm not sure I have the right answer to that one yet, Steve, I think that would certainly be our hope. But it really just depends on how quickly things ramp up - the trend line is very positive. We expect that trend line to continue, I can't tell you whether or not it's going to be back to year-over-year by the end of the Q3 or not, but we still see very positive improvement trends.

Our next question will come from Reuben Garner with The Benchmark Company. Please go ahead.

So, the gross profit - you guys a negative ratio makes my charts kind of tough. But the gross profit growth, it was very impressive in the quarter. I guess - I understand the retail elements of it. Can you help me on the construction in the industrial side the margin improvement that you saw there even with, if I recall correctly, prices were up in both of those segments? So, I guess that was a headwind volume being down also headwind is it just mix that's an offset there, was the lumber movement within the quarter a driver in those two segments as well, or is that just, I guess just tell me how you got margin improvement in construction and industrial in the quarter, if you could?

Yes. So, let's start with construction. I think a lot of that has to do with mix in the construction space, it also has to do with probably a year-over-year comparison, where we had some jobs that were unprofitable in 2019 that impacted gross profit negatively. We obviously didn't have those in 2020. So, there is an improvement there. So overall, I would point to the mix shift as being the bigger driver on the construction side. On industrial, I would say that mix is a part of that issue, some manufacturing efficiencies are part of that issue. And I would also point to kind of customer concentration and customer mix as well. As we talked about at the end of Q1, we were looking at our customer base in the industrial market and there is a number of customers that were relatively modest size and unprofitable, and I think the industrial team has done a really good job of working to either make those customers profitable business or actually we've moved on, and probably priced ourselves out of some of those types of opportunities. So, little different story between the two segments, but I think they're both really positive trends that we hope we can keep moving forward on.

Okay. And then on the growth side for those two segments, I mean you've got the pull forward question on the retail side is the inverse possible with the construction and industrial business where some of the activity in the second quarter was maybe not canceled, but delayed and you could get some catch up hold you over until there is an economic recovery or do you think a lot of what would have been in the second quarter is probably been canceled in those two segments. I know there's a lot of moving parts, but the best you can if you can help with that.

Sure. Yes, I think construction definitely is just kind of a delay, unless something else fundamentally changes the projects that were proposed need to happen and so I expect those to continue moving forward. And so I look at Q2 is just kind of a pause as I mentioned in the remarks there might be some issue down the road with a lack of available lots simply because that the homebuilders stopped developing for a period, there but I think that is very positive trends for construction and on the industrial side, I think there is a large demand that was unmet for a lot of those durable goods, we mentioned that things were shut down for a period of time and there is a shortage and those products to a lot of which go into housing projects HVAC systems being an example. So I think that there is a catch up that should happen in the industrial space as well. The only issue from my perspective is how long it takes to kind of get caught up. And back to that normal

Okay, great. And I must stick one more and I got to ask my quarterly Deckorators question. So the. I think if I heard you correctly, down just 1% in the second quarter year-over-year. I know last year, the first half, you had the load in with lows to comp against. Is there any way to think about kind of what the underlying organic growth was for that business? And did you miss out on any business there because the capacity issues and this is a lot of questions in one but is the capacity that's coming online in early fourth quarter. Is that a pull forward of when you were? I know that's something you've already announced, but is that a pull forward in timing because demand has been so strong.

Yes, I think probably the same story is true, although to a lesser extent with Deckorators product lines. I think product availability certain colors certain styles was impacted a little bit and the demand flow was a lot different than we probably would have predicted at the beginning of the year. But the idea of creating more capacity. We know that the products are selling well. We're excited about where that's going and as we pointed out, the Deckorators fault and Voyage product lines that with the Eovations technology that has a growth trajectory. That's greater than the rest of our product lines to so lot of opportunities there for us to grow and improve

Our next question will come from Julio Romero with Sidoti & Co. Please go ahead, sir.

My first question was on the cost control side. Great job on the SG&A leverage with the 42% there. How much of that do you think maybe was due to maybe some temporary factors maybe some inefficiencies from customers and that type of thing or maybe cutting some manufacturing expenses that are kind of on the temporary side versus maybe some of execution their performance under teens part

Yes, I don't know that I can really quantify that for you Julio with into the different categories. We do know that there were some, that I think are more permanent in nature. Some of the efficiencies that we came up with I think the travel issue that I called out is one that part of that will be permanent and part of that will be temporary that has been a fairly significant driver for us. And obviously sales volumes being what they were in the gross profit dollars being what they were definitely helps that trend lines as well. It's not all just on the cost side part of it on driving the gross profit dollars higher to make that percentage improve Mike, do you have anything to add on that.

And I guess if you could talk about any changes on the competitive landscape. I think you're a little better capitalized than maybe some of your competitors, have any opportunities kind of become clear to you as you progressed throughout the quarter?

Yes, I think there is a lot of opportunities, and as I said before, I think with uncertainty comes opportunity and I think people are concerned, short-term and so for us, it creates a number of opportunities to pursue the business units, strategic plans and we really hope to be able to accomplish some more of that over the next several months because I think it is a good time to try to reach our targets and some of the other competitors are in a spot where it makes more sense for us to continue to drive and expand.

Understood. And then last one from me is, can you talk about maybe T&R Lumber and how it fits with the industrial segment. And do you still see a pipeline of tuck-ins and are the multiples potentially becoming more attractive there? Thank you.

Yes good question. So T&R really fits nicely into our industrial family of companies that are very complementary, they actually have some products and relationships that we don't have and we look forward to being able to scale their capabilities throughout our entire network which is one of the attractive features of their company. And they have terrific people as well and we always are looking for good people. So it's a really nice combination. In terms of multiples and where the market going again, I think as I mentioned, there is uncertainty. So we would expect that multiples may - there is also a number of issues in terms of what performance has been given COVID and other things for these other companies that are looking to market themselves. So we're not at a spot yet where I think we can predict that multiples are going to go down or up or whatever but I think for us, we have a better insight in terms of what we're trying to accomplish. And to the extent that people are ready we're standing by ready to move forward on transaction

We do have a follow-up question from Ketan Mamtora with BMO Capital Market

Thank you. Maybe just taking a slightly different tack on Steve's question on sort of the construction side of the business. Within sort of the construction side, Matt, are you seeing any specific end-markets that are doing a little better than some of the others. Obviously in Q2 site build, factory build, commercial all were hit quite hard, but are you seeing sort of a faster recovery in any one or nothing that you can call out. I'm just curious.

Yes, I think Ketan from our standpoint, our site built operations are very much regional in nature. And so, I think we have selected the right locations to be in site built. So the improvement there, which may or may not reflect what is happening nationally, but the markets that we're in are still very strong both single-family and multifamily, so that's one area where I would call that out. And as we mentioned, commercial have been impacted probably more negatively than other areas and expect that trend to continue, although I do expect commercial to continue to improve. Yes factory built as we did call that out, it’s down pretty significantly, and I think that was due in large part to mandated shutdowns so as that recovers, I think there is an opportunity there as well.

And then just turning to balance sheet and capital allocation, you got a net cash position, which is obviously a great position to be in especially in these times? But as you kind of look ahead, maybe just talk about the priorities you've talked about M&A and but also said that you all will really disciplined? So just talk about capital allocation priorities and where does kind of dividend fit in, in this, and if you would be open to doing something like a special dividend or like a one-time dividend at some point in time?

Yes, I think Ketan that's a great question. And obviously, our goal is to make sure that we provide the very best return to our shareholders. We have a number of growth opportunities both within our capital expenditure bucket, as well as our acquisition opportunities that we think will yield the best long-term growth for our shareholders. That's where we want to dedicate the vast majority of the capital. To the extent that we're not able to do that on a good cost effective and a strong ROI basis, our natural reaction is to return that capital to the shareholders. So I would say that right now we have an ample pipeline. We have a lot of projects, part of our new structure that I think is going very, very well, is that each of our leadership teams has identified different areas where they see opportunities to really drive ROI. And until they run out of those types of opportunities, I would guess that's where we put most of our capital. Looking at different things with the dividend and making sure that that provides a reasonable return to our shareholders, we'll continue to do that as well as we continue to grow cash flow and grow our bottom line performance.

And speakers I'm showing no further questions in the queue at this time. I'll turn the call back over to management for any further remarks.

Once again, I'd like to thank you for spending your time with us on the call this morning. I apologize for the bumpy recording information that was out first, but hopefully I sound better live. We all know that the impact of COVID and the response to it are going to continue, but we're very encouraged by the opening of baseball season. It's a symbol, and we look forward to - with optimism to a return to more normal activities for all of us. Have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.