Savaria (TSX:SIS) Q3 2026 Earnings Call

0:00 Good day, and thank you for standing by. Welcome to the Savaria Corporation's Q3 2026 Investor and Analyst Conference today. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I will now hand the call over to our first speaker today, Sebastien Bourassa, CEO and President of Savaria Corporation. Please go ahead.

0:57 Thank you Angela and good morning everyone. Today I'm happy to present our Q3 results which show that we have a good momentum across the business and a new process and culture that we have developed during several years is well established and this is why we have realized our best EBITDA dollars so far at $52.1 million at 21.2% EBITDA margins. First, accessibility with a growth of 9.1% and an EBITDA of 24.2% It showed that in our main division, we still have a lot of initiatives that are getting implemented and that we can offset some of the inflation we received this year. Our vertical strategy is paying off. As you know, we design, manufacture our own electronic PCB in the UK. We have good contribution from our China and Mexico factory, and we have made significant investment in machinery in the last few years in our local factory so that we can be more productive and we can make some custom product with good lead time.

2:00 The core product line of Omelirator and Sterlif remain the main driver of this growth and we continue to build our product roadmap with our 62 people in R&D across all the business segment. Here's a few examples that what excite me about the future growth. The new Lumo L. We have received an enthusiastic dealer response at the NEC exhibition in September with the launch of our new larger model of Lumo. We also introduce it at the Grand Design Show in the UK that we have really good interest from the designer and home elevator. The larger cabin can accommodate many styles of mobility devices. The Lumo L is now available in North America from October and will be available in Europe in January 2027. Through the floor, lift categories should be a strong area for coming years for growth.

2:49 It's really an elegant product that is easy to install and can be a retrofit application. VPAL. We talked about VPAL in the last few months, but again, the strong product offering and code compliant product in Europe that will really help us to develop the sales of home elevator in Europe in the coming years. Another exciting thing, the new precision cab for home elevator that was introduced at the NEC also was very well received. The style and colour are very trendy, which will be a big one for the contractor, designer and customers. The quality of those wood cab can be produced at a A factory in Greenville are outstanding. They can be sold in multi-units projects, custom home elevator, and really differentiate ourselves on our home elevator from our competitors and hopefully earn a higher share of projects.

3:38 Regarding Greenville, we continue to manufacture approximately 50% of our home elevator and our building expansion is on plan and should be ready by the end of Q4 of this year. Second, patient care. Happy with the growth of 9%, but for sure the EBITDA percentage is not where we want. The team of patient care is very aware and are working on it, and as we discussed during the last conference call, we did a mid-year price adjustment, which we hope to have better results in Q4, starting from Q4. Still, I would like to highlight the performance in Europe and the rest of the world, so good job, Gary, and the team in the UK. Third, acquisition. as we said during the investor day we have the ambition to do some acquisition for in the next five years for around 200 million those are small mid-sized acquisition in some area that we underperform or can bring some new products or new data network to expand our product portfolio and also the one-stop shop so far this year we did Baxter elevator in Texas where it's a booming market and in July and we closed the VPAD with a small home and a low-rise commercial elevator in Italy to help develop Europe in the coming years. With our net debt ratio of 0.85 at the end of Q3 and our liquidity that continues to grow at $338 million, we are in a very good position for our capital allocation to continue to make investments in this business.

5:05 To conclude, I'm very happy with the first nine months of the year and as we all will during the investor day, we have the ambition to grow the business at 12% per year in the next five years and maintainer EBITDA margins at 20 plus, which ultimately will lead us to a 1.6 billion of sales with over 220 million of EBITDA. Thanks to all the people at Savara for their efforts in the next chapter of growth. Steve, financial please. Thank you, Sebastian. Good morning, everyone. I'll now provide some additional details on our third quarter results. Starting with the key financial highlights for the quarter. First, revenue grew by 9% in Q3 including 6.8% organic which is in line with our guidance. Year-to-date revenue is up 8.1% reaching $726.4 million at the end of Q3. Secondly, operating income increased by 28.6% in Q3 and has increased by 38% on a year-to-date basis reaching $104.4 million which is driven by improved gross margins as well as the elimination of strategic initiative expenses.

6:12 And lastly, as it relates to capital allocation, we acquired BPAL, an elevator manufacturer in Italy in July and invested in the expansion of our Greenville facility while decreasing our debt leverage ratio and ending the quarter with available funds of $337.7 million to support our future growth plans. Now turning to consolidated revenue, we generated $245 million in the quarter, an increase of 20.3 million or 9% over last year. This includes organic growth of 6.8%, a 1.4% contribution from the acquisitions of Baxter and VPAL, as well as a positive foreign exchange impact of 0.8%, mainly driven by the strengthening of the USD versus CAD.

7:00 Looking at the segments, accessibility revenue increased by 9.1% to $196.5 million mainly driven by organic growth of 6.6%. Sales increased in all regions with Europe delivering another strong quarter. Patient care revenue increased by 8.6% to $48.6 million including organic growth of 7.5%. This reflects Higher project sales in North America and continued growth from our UK location, which was partially offset by a softer bed market. Now looking at gross margin operating income. Consolidated gross margin was 39.3% compared with 39.2% in Q3 2025, representing an increase of 10 basis points. Gross profit increased by 8.2 million year over year.

7:54 This demonstrates our ability to continue to increase gross margins under the current tariff environment. Operating income increased by $7.9 million or 28.6% to $35.6 million, representing a margin of 14.5% compared with 12.3% last year. The drivers of the increased operating income are increased revenues, gross margin expansion, Lower Other Expenses and the Termination of Strategic Initiative Expenses. Adjusted EBITDA reached a record $52.1 million, representing a margin of 21.2% compared with $47.6 million and 21.2% last year. Accessibility Adjusted EBITDA margin reached 24.2% compared with 23.5% last year, an increase of 70 basis points and again that's driven by improvements in both of our key geographical regions.

8:58 Patient care adjusted EBITDA margin was 16.2% compared with 18.3% in Q3 2025 reflecting higher selling and admin costs and unfavorable product and project mix and higher material costs. We are working towards improving the patient care margins in Q4 of this year. Net finance costs were $4.4 million compared with $2.2 million last year. Interest on long-term debt continues to decrease and decrease by $0.9 million mainly due to a lower debt balance. However, this was more than offset by a foreign currency loss of $1.9 million compared with a gain of $1.1 million last year, the majority of which is unrealized.

9:44 Net earnings increased by 18.4% to $23.1 million or 32 cents per diluted share compared with 19.5 million or 27 cents per diluted share last year. Now looking at cash flow and liquidity, excuse me, cash flow from operating activities was 36.8 million compared with 41.5 million last year. Cash flow before changes in non-cash operating items increased by 4 million to 41.9 but Working capital used $5.1 million compared to an inflow of $3.6 million last year. The largest driver of increased working capital in the quarter was inventory which we expect to decrease substantially in the fourth quarter ahead of year end.

10:34 Cash used in investing activities was $18.8 million compared with $5.4 million last year. We invested $9.7 million in fixed and intangible assets including $3.1 million for Greenville on a cash basis for the Greenville building expansion and related equipment and $9.1 million for the acquisition of VPAL. As at September 30th, the available funds were $337.7 million compared with $311.7 at year end and our net debt decreased to $173.2 million from $191.5 million. In closing, our Q3 results demonstrate good progress on achieving our long-term guidance. The underlying business is seeing strong growth, which is being helped along by strategic acquisitions.

11:24 Our EBITDA margin remains strong and our balance sheet continues to improve. This concludes my prepared remarks. I'll now turn the call over to JP for additional comments on our ongoing transformation efforts across the group. JP? Yeah, thank you, Steve, and good morning, everyone. As Steve mentioned, this is the third quarter since we communicated our new strategy and we continue to make steady progress on both top line and EBITDA, which are in line with expectations. So let me speak a bit more about how Q3 sales growth across segments and geographies links to our strategic actions. I'll start with North America. Growth in North America was fueled mostly by home elevator sales. And if you recall, our strategy is to expand home elevator sales in low penetration regions by bringing best practices to our dealers and by engaging with national builders. We are making great progress on all fronts.

12:19 We're also continuing to grow our direct stores and professionalize them with great results. Also, Maytot, our dumbwaiter and material lifts brand, continues to grow well thanks to our combined operational and sales efforts. In patient care, growth in Q3 is coming mostly from ceiling lifts, sales, and installation. We are reaping the benefits today of our product innovation with the M-Series and the associated sales efforts. Furthermore, we see strong ceiling lifts and bed order intake in Q3. So even if Steve was mentioning we had lower bed sales in Q3, we finished the quarter with a strong order book. Finally, Selvelia continues to be successful in growing sales and reducing costs in the UK.

13:06 In Europe, Organic growth is partly driven by the success of our commercial actions in B2B, so with our dealer business, as well as in our largest direct store in the UK. We are accelerating cross-selling of platform lifts, especially in the UK and NL, two markets in which we traditionally focused on stairlifts. In Q3, we also launched the outdoor 4000 rail, a new version of that outdoor rail, sorry, which has been a big commercial success. Finally, we are accelerating growth in the rest of the world, and like Steve and Seb mentioned, we now have VPAL with us, which is adding to our sales in Qtree. Beyond sales growth, we're continuing to improve our value proposition, our operations, and our costs. Let me share some examples from Qtree.

13:53 So in Greenville, as Seb mentioned, we commissioned a new paint line so we can build precision home elevator cabs in-house. This has the dual objective on one side to reduce our costs by bringing this activity in-house, but also to master our quality. And we had great reception from the first dealers that saw it today. In Wizhou, our China facility, we commissioned a new metal fabrication shop with some laser cutters, press brakes, and bending capabilities. This allows us to sustain the growth of our business with some in-house fabrication in a low-cost country. In the stairlift business, We commonize the drawing platforms in Europe for our stereotypes, which allows us to share workload across teams, reducing our lead times and our costs in the long run.

14:40 In Beamsville, we redesigned the QD1000 bed frame. The QD1000 is our mainstream entry-level bed, so it's now simpler to manufacture, the quality is better, and also we reduced our costs. We did our first batch production in Q3, and now we're ramping up production in Q4. In St. Louis, we set up a new assembly line for the clinical M-series lifts to be assembled in the US for us to manufacture locally a product for the US customers. Finally, in the UK direct business, we improved the service level of our call center while reducing the reliance and the cost for external third-party support. So all these are just examples of things we're continuing to do to improve our costs and our competitiveness in each market. Now there's also things that are still in motion and that we expect to materialize and come to fruition in Q4 and early 2027.

15:37 Let me just mention a few. So Seb talked about the LUMA-L. This has been well received at NAC, at Grand Designs in the UK and RehaCare in Germany and we're planning to launch this product shortly. We're also planning to launch a new Artera model which is currently on track and going through field trials in Europe. In patient care, we are continuing to expand the accessories and lineup for ceiling lifts and beds. As you heard about Vipal, so Vipal has been acquired in July and we're planning to start selling now to our European dealers in the next few months. We also have a lot of procurement initiatives that are still in flight, either to mitigate the risks of price increases or to reduce our costs. Finally, we continue to have a number of supply chain and operational improvement initiatives across all of our factories.

16:28 So all this to say, in spite of the challenging external environment, we continue to show resilience and to execute our strategy successfully. So now, back over to you, Seb.

16:39 Thank you, JP and Steve, for those callers. So first, before we pass it back to Angela, I just want to say thank you to all the analysts that cover Savaria. You do a very good job and you're well aware of the stories. So in general, I think we're ready for questions. Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. First question comes from Frederick Tremblay of the Vargins Capital Markets. Your line is now open.

17:30 Thank you, good morning. Good morning all. Just maybe starting with patient care, you mentioned that you're working towards improving the margin there in Q4. Can you maybe break that down a little bit more across the key factors? What are your thoughts on how cost of materials, product mix, and pricing should evolve from Q3 to Q4?

17:51 Well, good question, Fred. So for sure, patient care, again, we had a good growth this year, and we know, again, we said in April, the next few years, the growth is our main objective, but Yes, and we are a bit tough with patient care today. I look at the last three years, okay, with 19.1% a little bit during 2024, 19.4% in 2025, and here today we're at 18.1%. But yes, there has been a bit more inflation at that division with the foam and the aluminum, so I think we're working to offset that with the mid-year price increase, which is typically not something we do. So, yeah, I'm confident the margins will come back better in the coming quarter. So that will be a bit my answer, Fred, for today.

18:31 Thanks for that color and maybe sticking with margins but accessibility very strong at over 24% in the quarter. I think historically margins in North America were higher than Europe without getting into specific numbers. Can you just provide maybe a general update on how margins are trending in each geography?

18:52 I think, again, without getting too specific, I think the success a bit, as I said a bit earlier in my remark, is we are vertical integrated. We do a lot of things by ourselves, some parts. We are always very active with procurement, try to improve when we do R&D. and we try to launch it at the right price. So we'll see. On all the legacy, all business, things continue to still happen. And for sure, when we make some acquisitions, that division is a bit lower than the average. But over time, we have enough projects to be able to bring this up. So, no, it's very positive. Again, it's our best margin so far. I think we'll go one quarter at a time.

19:31 Great. I'll get back in the queue. Thanks.

19:33 Thank you, Fred. Thank you. Our next question comes from the line of Zachary Evershed of National Bank. Your line is now open. Good morning, Zach.

19:48 Good morning. Organic growth, I think, has been accelerating for at least the last four quarters if we look at it year over year. And so if we think about all the work you're doing with your initiatives, European dealers, timing of product launches, What are your hopes for 2027 for consolidated organic growth?

20:10 Good question. So I think I will need to refer to the investor day of April. I think we said that we had the ambition of doing 7 to 8% per year. And I think again, we did not even finish one year since the investor day. So no, I think that will be a nice target to continue in that. And for sure, new product is super important. I think we did a lot of work the last two years to be more efficient with our R&D, to launch product at the right time, to have a good sequence of events. And I think we're starting to see some positives of that. So again, we have some good action time with the sales team, which we are part of the world where we can be better. So now I'm quite confident about the organic growth for the next few years.

20:49 Gotcha, thanks. Then flipping to the other side of the growth equation, how's the pipeline looking for M&A?

20:57 Oh, pipeline, okay, yeah, so far we did two this year, okay, and we know historically we did three or four, so I think we need to see over time, but no, I think we still have some good opportunity, but again, we're very selective and very diligent in our approach. Again, we want to also just see what's happening with the economy. with the tariff and so on. But definitely, we want to do 4% to 5% of acquisition per year. So if we look at the five-year strategy, I'm quite confident we will achieve it. But again, it might be lumpy. For one year, a bit less. The other one, a bit more. But overall, if we look on a five-year period, we will achieve it.

21:33 Gotcha. Thanks. And just one last quick one. With the Greenville expansion wrapping up in Q4, where do you think your capex is going to fall for the quarter? Steve? Yeah, so it is, Greenville's going to be, the new addition's going to be open and ready early December, so it's really within the next few weeks. CapEx for this year, as you know, is trending up. We're kind of in the high 3.8, I think, range right now, year-to-date. We're probably going to be ending the year at around that range, and then next year, Zach is going to be back more in the 2.5% range of revenue. But what you're seeing year-to-date, that's going to continue for Q4.

22:16 Understood, thanks. I'll turn it over. Thank you. Our next question comes from Jonathan Goldman of Scadia Bank. Your line is now open. Hey, Jonathan. Hey, good morning, team. Good morning, guys. Thanks for taking my questions. I was wondering if you could just talk about the strengths you're seeing in home elevator sales. I mean, it seems to be different than what we're reading about in new home starts in the U.S., and kind of sluggishness in Canada as well. But it seems like you guys are growing and selling a lot of units. Is that a function of something you're doing internally, whether share gains, new products, or is it maybe a market dynamic that I'm missing?

23:00 Again, I think if we go back, there's not enough home elevator in terms of percentage that are sold into a new house. And I think all the efforts that we have been doing in the last 10, 15 years to train people, I think people are more thinking about that. So I think Even if there was less construction, it doesn't mean we could not sell more home elevator. And I think also the fact that, again, we work hard on our options with new cab, touchscreen, CUP, and so on. Again, we are trying to gain also some market share. Again, Texas is a place where we bought Baxter because we saw a good opportunity to be better over there. So I think we are making some right effort with our sales distribution channel and also with our product lineup that we can continue to grow this segment. And also, again, the Lumo, you could argue it fits a bit in the Trudeau floor and the home elevator market. Again, so Trudeau floor, it's a retrofit, most of the time application, but maybe more cost-attractive for customer.

23:56 So definitely, I think all this segment of home elevator should continue to be good in the next few years for Savaria. Interesting color. And then maybe I think you guys alluded to this in the prepared remarks on the cross-selling in patient care in Europe. Is that mainly related to NHS or is there other sort of product lines that you're expanding beyond that and selling to different sort of channels?

24:21 Pursuit of success is always a few different categories. Yes, NHS has been a super positive one to help, but also we look at ceiling lift. This is something that we introduced a few years ago. Now we start to have more and more traction with that. So, and again, we moved to a new factory two years ago in the UK that has a real power circuit to be more efficient, to be better, and I think definitely, I think we will see some growth in the future in the UK and across Europe, right now. Okay, that's a good color. Maybe if I could just squeeze one more in. You guys kind of gave some color on this, and you kind of see it in the inventory bump in the quarter and kind of the CapEx comments you provided, Steve.

25:06 But how are backlogged trends exiting the quarter? I mean, pretty good growth organically this quarter. It looks like comps are still pretty decent coming up in Q4. How is the backlog trending as you exited Q3?

25:17 Well, I would say our backlog is quite stable. Okay, again, If we look, I know people, they know early time. They place the order right on time when they will get it, when they need it. I think we have teach a lot our dealer in the last few years to order on time and to get the delivery when they need. Because again, our production factory are very stable in early time. It's very rare that we're late. So I think it's a long question of education. But yes, the backlog is, remain healthy. So we're quite happy with that. Okay, that's good, Tyler. Good result. I'll get back to you.

25:51 Thank you. Thank you. Next question comes from the line of Justin Keywood of Steeple. Your line is now open.

26:05 Good morning. Hi. Great to see the results. I want to ask on the services or reoccurring revenue of the business and how Savaria Link is progressing. If we're able to have an update just on the percentage of overall revenue that's reoccurring, and if there's a target in either the near or medium term. Thank you.

26:31 Good question. For sure, service and maintenance is super important. Right now, we're at 10% to 15% of our top line in service and maintenance. For sure, when we have a direct store, we have a chance to have also the service with the end user, so that's good. When it is with our dealer, the dealer has the maintenance contract and us, we can have maybe some spare parts after the warranty. and I think the more units we put on the market, the better chance we have to increase this percentage. And again, CyberLink is just, again, we're at the beginning and I think we talk about the initiative the next five years. Yes, we see a good benefit of that to have the best tools for a dealer to troubleshoot their products, to see a bit what's happening to different units. So again, installation time, service time is super important. So how can we become more efficient? I think definitely the CyberLink will continue to help us on that aspect in the future.

27:21 Thank you. And I assume there's higher implied margins within the services revenue. Are you able to detail what that is on a gross or EBITDA basis?

27:33 Unfortunately, we don't go per product or margins, but definitely the service maintenance usually is a good one. So that's really a thing for the total contribution for sure.

27:44 Understood. So that could be creative to margins as that services proportion increases overall going forward. Is that a fair characterization?

27:55 I think that's a good assumption, yes.

27:57 Okay, great. Thank you for taking my questions.

28:00 Thank you. Thank you. Next question comes from the line of Cheryl Heng of TD Cohen. Your line is now open. Hi, Cheryl.

28:14 Good morning, everyone. Thanks for taking our questions on the color so far. Maybe I'll start with a question for JP. I think last quarter you pointed to over 50 new initiatives implemented that help reduce costs and sounds like there's a lot more in Q3. Wondering if you can talk about, wondering if you can help us get a sense of how much the cost savings these initiatives are generating? Yes, so maybe just to answer your question. So first, we continue to have more or less the same amount of initiatives that are implemented each quarter. In terms of how much costs are going to be saved, I prefer not to give you exact numbers on this call if that's okay, but it's always a similar proportion, right? So it's at least a third of our impacts or our cost reductions.

29:05 So we continue to drive that. But I cannot give you an exact number.

29:12 Okay, understood. That's helpful and thank you. And sounds like you're putting through pricing and patient care and maybe a bit in accessibility as well as you pointed to improve pricing. Curious what you're seeing in terms of competitive activity in each market as you put through pricing.

29:32 I'm sure some competitors are on the call. I will not answer for them. But again, us, yes, it's a discipline, a key to do some price increase every year because, again, this inflation, we add some feature on our product, we'll give increase to our employees. So I think it's normal to have some price increase every year. And again, we have a job to do. We have to remain competitive. But it's up to them to do what they want to do.

29:56 OK, understood. Maybe just lastly, Is the inflation pressure still focused just on foam and aluminum? Are you seeing inflation in other areas as well? And do you lock in the prices for your key materials? Or do you always purchase and market price?

30:16 Oh, that's a good question. So I would say for sure that the food costs had an impact on many different types of materials this year. Again, why we have been able to continue to improve the margins is because we had enough positive projects to offset some of the negative that we might have. And maybe this is where an excessivity went a bit more and then Again, yes, phone is a very big part of our purchasing. Yes, we have been in pack. And regarding annual contract or market, I would say, again, we'd make a different strategy in our global procurement, maybe different vendor or different product, maybe different strategy. It always depends also what the vendor are allowing to do.

30:55 Okay, got it. Thanks very much. Thank you. Next person for question comes from the line of Rossi Hassan of Paradigm Capital. Your line is now open.

31:13 Thanks. Good morning. Thanks for taking my questions. Maybe just first one for Steve, just following up on the patient care margin. Is there more operating levers to capture with future price increases in the segment? Yes, there is. To be honest about what we saw in Q3, we were hoping for more operating leverage. They were able to maintain the gross margins relatively flat. We were hoping that they were going to increase. The reason why we didn't see that increase was because of the cost pressures that Sebastien alluded to on foam and aluminum. We are seeing operating leverage across all of our business, not just in patient care.

31:56 Okay, fair enough. Thanks. and then maybe a question for JP, just in regards to Europe, are there certain countries where you're seeing stronger growth in the region at all or is it just across the board? Do you mean for our business or from the market standpoint?

32:14 For your business specifically. Yeah, for sure. So we have different levels of growth by country, so I cannot get into the details of which one, I won't say it because that's competitive information, but But yeah, we are more successful in some countries than others and that suggests to me that there's more potential for the future to catch up on the other places where we're maybe less growing, not as fast as in some other countries.

32:40 Okay, that's helpful. And then maybe just on M&A in the region, is your focus on dealers and manufacturers or either or? Any thoughts there? And then maybe just valuations you're seeing there.

32:54 I think the mix of both has been a bit of success so far. Again, a new product is always superb because we can improve our one-stop shop and then I have a thousand dealers that are excited about it. So definitely when there's opportunity on product or a small manufacturer, we look at it. And a dealer for us, again, we have some dealers sometimes that want to retire. We're a very natural buyer, so that's always interesting. In terms of multiple, I would say again, we always pay the right price for business. I don't think people call us because they are in distress and they need to sell at discount. I think usually we pay the fair price.

33:31 Okay, great. And maybe just lastly, when you talk about Europe and the rest of the world, what percentage of that does Europe make? I'm assuming it's the bulk of it, but do you guys break down what percentage Europe is in that segment?

33:44 It's combined together, no. Yeah, Europe and the rest of the world is combined. Sorry, was that your question, Razzy?

33:50 Yeah, exactly. We don't get into that level of disclosure.

33:56 Okay, fair enough. Thanks for taking my questions. I'll leave it there. Thank you. The next question comes from the line of Michael Glenn of Raymond James. Your line is now open. Hey, hello. Sebastian, maybe just curious if you could provide any insight into organic within your direct network versus the dealer network in accessibility in North America.

34:31 Okay, good question. For sure, again, it's always a balance. And what is interesting when we have direct store, again, we can always test our marketing idea. We can test our few products to Make sure things work, then we're able to teach our dealer how to improve also. So, definitely for us, again, the success is a mixed combination between direct store and dealer. Unfortunately, we don't disclose the growth in one or the other. There will start to be a bit too much detail, but that was just a combination of the two that has made the success. Okay and I just want to come back to the inflation question and I just want to focus on again accessibility and steel and aluminum input prices in that segment how you are managing those costs.

35:18 Again a bit to go back over the answer earlier so yes there has been some inflation across the globe okay but I think we have done enough effort to have positive project to be able to offset some of the inflation. I think yes, container price are up, transport is up. Yes, some of the entrant is up, but I think at the end, we had enough positive project this year to offset the things. And also don't forget China. Again, things are relatively stable. There's less inflation than maybe we had in North America. And last one for me. So in the past couple of years, Patient care has had a bit of a Q4 bump on its top line. I'm just wondering if that would be expected this year or we might see a different trend.

36:13 Again, for patient care, there's some end of the quarter, some government fiscal year and so on. So, yes, I would be disappointed if they don't have a good Q4. Okay, thank you. I am not showing any further questions at this time. I would now like to turn the call back over to Sebastien for closing remarks.

36:44 Thank you, Angela, and thank you for all the analysts for your good question. It's always interesting to talk about Savaria. Again, we have a growing story with the aging population. People want to stay at home. So I think definitely we're in a good segment, a good business that we can continue for the next few years. So thank you, Angela. We'll see you next quarter in March. Thank you. Thank you for your participation in today's conference. This concludes the program. You may now disconnect.