Savaria Corporation

Thank you, James. And hi, everybody.

It’s a pleasure for me to be with you in different, okay, because we are in a very difficult period with the COVID. So, we are very satisfied about our Q1.

I think we recovered more in the last two weeks of March, but our sales were almost there, just a little bit increase, but I am very happy about EBITDA. So, our people are more and more efficiently and what we worked since two years, like with the Garaventa or Span, okay, we see some results.

So, I am quite happy about what we see. And what are likely to see, if the people want to stay home more and more.

So that would be very good, okay, to Savaria, is why we have our new logo that says Stay At Home With Savaria. So, I will pass the line to our CFO, Mr.

Mauro Ferrara. Mauro?

Thank you, Marcel. Yeah, thank you Marcel and good morning everyone.

The corporation generated revenue of $88.4 million, up $0.9 million or 1.1% compared to the same period in 2019, driven by business acquisition related revenue. Organically, revenue contract is mainly due to the anticipated loss of revenue from the corporation's Patient Handling segment as a result of Span’s exit from the low margin custom product market segment, effective Q3, 2019.

Gross profit and gross margin stood at $30.1 million and 34.1%, respectively compared to $27.1 million and 30.9% for the same period in 2019. The increase in both gross profit and gross margin was attributable to a combination of a better product mix stemming from both the corporation’s Accessibility and Patient Handling segments, and from the continued realization of Garaventa Lift integration related cost synergies.

Adjusted EBITDA and adjusted EBITDA margin stood at $12.4 million and 14.0%, respectively compared to $10.5 million and 12% for the same period in 2019. The increases in adjusted EBITDA and adjusted EBITDA margin were mainly attributable to the same factors as for the improvement in gross profit and gross margin.

Now moving onto our operating segments. Revenue from the Accessibility segment stood at $62.6 million, up $1.7 million or 2.8% compared to the same period in 2019, due mainly to the acquisition of Florida Lifts made in Q1 of 2019.

Organically, revenue remained flat, mainly as a result of lower than anticipated revenue generation in the latter weeks of Q1, 2020, a repercussion of the global COVID-19 pandemic. Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $10.4 million and 16.5%, respectively compared to $8.2 million and 13.4% for the same period in 2019.

The improvements in both metrics were due in large part to continued anticipated Garaventa Lift related synergies. Revenue from the Patient Handling segment stood at $21.0 million, stable when compared to the same period in 2019.

Silvalea acquisition related growth offset the anticipated revenue contraction attributable to the corporation’s decision to exit from Span’s low margin custom products market segment effective Q3, 2019. Adjusted for the exit of custom products, organic growth in revenue would have been 3.9% for the segment.

Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $2.5 million and 11.9%, respectively compared to $2.2 million and 10.7% for the same period in 2019. The improvements in both metrics were due to a better revenue product mix from Span, increased patient lift unit sales and contribution from our Silvalea acquisition made in the second half of 2019.

Revenue generated from the Adapted Vehicles segment was $4.8 million, a decrease of $0.8 million or 14.2% when compared to the same period in 2019. Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, were negligible compared to $0.3 million and 5.2% in Q1, 2019.

The decrease in revenue and adjusted EBITDA when comparing Q1, 2020 to Q1, 2019 was due in part to the shutdown of the corporation’s Quebec based manufacturing plant in the latter part of the quarter, again, a repercussion of the global COVID-19 pandemic. By extension, the lower revenue generated by the segment impacted its fixed cost absorption rate resulting in a negative adjusted EBITDA margin before head office costs.

Although, it will be difficult to predict the economic fallout from the worldwide COVID-19 pandemic, the corporation remains steadfast in what it can control. Notably, protecting its employees and serving its customers during this difficult time.

The pandemic has negatively impacted residential sales and installations within our Accessibility segment and the Adapted Vehicles segment as a whole. However, service and maintenance revenue within the Accessibility segment, and medical equipment sales within the Patient Handling segment, have expanded.

From a production perspective, the corporation has not experienced any major disruptions as it and its main suppliers are considered essential in most geographies where they operate. Providing a full year outlook in the midst of the current COVID-19 pandemic remains challenging.

However, given the corporation’s financial liquidity and strong balance sheet, we believe our post-pandemic future bodes well as our product offering is aligned with demographics. This completes my prepared remarks for the quarter.

Marcel, back to you.

Okay. Thanks very much, Mauro.

So, you see that we are in a very interesting industry when we talk about staying home, okay? So, I am fortunate to have very good people around me, very knowledgeable people.

So, you can go directly for Sebastien, okay, if you want to speak about COVID, about our work operation, about our 10-factory worldwide. Or after that if you want something on the finance, okay, speak directly to Mauro.

Okay? And if we want -- you want on speak, okay, about Span or general thing, you can speak to directly to Nicola and if you want to speak about the vision of the company, you can speak with me, okay, and it will be a pleasure to answer, okay, what you ask.

So, let's go for the call and thank you very much everybody. thank you for your time, okay, to listen to our conference.

I appreciate. And you know something, you are very important, okay, in the future of Savaria because the people review.

So, I am very happy and very proud that we have a good number of analyst who are on the call this morning. And again, thanks, okay, to be interested in Savaria.

So, let's go for a call. James?

Thanks. Good morning.

Maybe question for Sebastien. Just in terms of the throughput of the various facilities, can you help us understand sort of the level of activity that you are seeing now in recent week at your main plant?

Thanks, Fred. So, basically, we have been very lucky since the beginning of the pandemic.

Our main factory has always remained open. And I would tell you we have shutdown for approximately one month due to the severity of the virus over there.

Now, we are back in production in May and for the factory this is looking positive. First of all, for the direct market, in Italy, people aren't ready to see some customer at all to take some more new orders, so that still a little bit slow.

Montreal, a car factory is back in operation since the month of May. And for sure, like in a different location and we have 10 different factory.

Maybe in some other location we are missing 5% to 10% of our employee, which are outside in isolation, or did decide not to come to work, but at least throughput still good and we make sure that if we have an order, we can process it because later want to make sure we still have a good capacity to produce more order after -- depended make, when everybody's back to work at a 100%. So, far we have been very lucky and very cautious not to lose some throughput in our factory.

Thank you. Q1 included a couple of weeks of COVID.

Obviously, April was a full month. Marcel, can you give us your general observations on how Savaria performed so far in April.

Yeah. That's something -- again, okay, we are serious about it.

You can say we're lucky for sure. We are lucky, but we said we are good and we okay.

And this -- of the future, 18 years that we are public. Okay?

And we're growing, growing. We'll make a couple of acquisitions, whereas next set in the key, balance sheet.

Okay? That's allow us to protect our dividends.

Okay? And even to look at, some acquisition, Okay, if we have the right acquisition to do.

So, what I see, okay, April, okay, is like a copy of last year. Okay?

Very, very strong demand. Okay?

And I am very happy, but even if we are very optimistic or I am very quickly. So we have to be cautious, because that's something we never see.

And it's worldwide. And right now, we have operation worldwide.

So -- but -- so far, our main people are very proactive. Span, Jim is there.

We have been Vince at the Garaventa. And we have some good people in Montreal and Toronto.

So, -- and thanks to them. But Frederick, I see that I am very happy what I see right now and I am very happy that the people want to stay on -- with Savaria.

Thank you Frederic.

Thank you.

Thank you. Good morning, everyone.

Hi.

Have you seen a pickup in demand for residential elevators that corresponds to home measure -- stay-at-home measures being relaxed gradually?

Zach, do you want speak to -- you want to speak to me?

Yes, please.

Okay. Okay.

Okay. It's a pleasure to answer that.

Okay. So you see that, we have two new contract that we have announced Monday.

And I am very happy about that, because they are main builder. Okay?

Right now, the tendency is to put an elevator right at the beginning. If I see, our production of elevators in Toronto, we are just, okay, going at the same rate of last year.

Even with the various. So, I see that we have some project activity of our group.

Okay? We'll see good things in 2020 and, for sure, better things even in 2021.

So, yes. There maybe -- we will see the number of permits, it can go down a little bit.

But we have a new products. Okay?

That was installed to my home last week, like we call mini Vuelift. Right now, this one go right in the center of the stair and is exceptional products.

And if it is insulation, so I have home of 20 years. Okay?

And we have on three-level and with this new Vuelift that we design at Savaria and that was the first installation in a residence. And it's incredible.

First of all, the aesthetic is fantastic, but what is the most important, okay, just with a little work, about the pit is just five inches and after that you at that step to reach ramp at the different level. So, this project is easy to install, and you get a next exhibit for the three-level right away.

So, what is new product -- and what is good -- when you talk about problem, to -- you want to stay home, it's not just in Toronto or in Canada, but in the States, in Europe, everywhere. Okay?

We have this kind of product -- the problem. So, what is good, Savaria I think, and I know that we have the best line of project of the industry.

Thank you for the extra color on that. In terms of your split for residential elevators, historically and not looking at the new Vuelift product line, how much has been new home builds and how much has been renovation and remodeling?

Well, I would say when you look for residential, elevator, okay, I go -- 90% is new build. Why?

Because you need the pit. And some -- and the pit takes like five-feet by five-feet.

And where in the house, that's already built, even me, okay, where is my five-feet? Maybe at one floor is there, but we will go in the -- I don't know, in the bedroom or I know the one who go in the bathroom.

That's not easy to put a shaft from the ground to the third level. But with this Vuelift that a core project in the future for Savaria.

But I see that our residential elevators will continue to grow and we'll continue to grow even with this terrible pandemic -- that we have with the COVID-19.

Perfect. Understood.

And you'd mentioned previously that you were looking at potential acquisitions in late summer. Do you still think that timeline holds up?

Maybe. Okay?

That was good to speak about that at the beginning of the year. Okay?

But right now, what we are very cautious, it's our cash flow. And we want to see with the company that we are looking to be interested, what they do during this period.

You know that's a challenge. Okay?

And the winner, okay, we'll see that what they will do in Q2 and Q3. So, we put a little bit that's on the hold.

That makes a lot of sense. Then just one last one for me.

Any long-term plans to turnaround Adapted Vehicle segment?

That's a good one. So, it's that an easy product right now.

And you know that for us, we don’t go out, so people in a wheelchair don't go out too. And I will tell you it's a challenge, but this sector so down.

So, often you read the floor, and we then go worse than it was. So -- but if we think about selling this division, we don't sell something, when it is kind of sales or EBITDA that they make right now.

For sure, I was in contact with some people in the state that we can look to sell some of our products. But that would be a challenge for this year.

And we'll see what happened. But there is not a -- for sure, this division is a challenge for us, but there is no way that is the right timing to make something about that.

Gotcha. And actually just one more from Mauro.

What was the increase in Garaventa margin?

Well, we didn't give it out, but it is hard. And last year, last year was the 7.3.

This year was a, let's say, was between eight and nine. So, let's leave it at that.

We're trying to -- right now, it's been over a year and a half, so we've got them to a lot of the synergies in. So, I think for now, comparing the whole company as a whole makes sense, because we've had them for over a year and you still see the increase in the overall margin.

So, yes, a piece of it does come from Garaventa. A piece also comes from legacy Savaria.

It's a combination of both, but we still see some synergies coming in there.

Okay. Thank you very much for taking my questions.

I'll leave it there.

All right.

Thank you. Good morning, everybody.

I guess, first question would be on dealing the size, I understood that it’s a nice contributor in the quarter. And just listening to the Handicare -- specifically Handicare, sounds like they're struggling in North America.

So just wondering, maybe Marcel, can you maybe comment to what you guys are seeing specifically in North American market and do you think that you're gaining share in that specific market?

You know that and you know very well Handicare. So, when we see the last result, but -- first of all, this is a very good competitor.

Very -- they are very nice products and they want to be more aggressive on their penetration of -- in North America. And even, I don't know why, but they change the CEO very recently, but they are doing quite well, related to the stairlift and curved stairlift.

They have a very nice project, they are very strong. But they have two products.

Okay? Or little bit three projects with the sitting lift.

But we have a complete line. So, often the distributors or the dealers want to make a business with one supplier and we are that company if you have to make business with just one supplier.

So, we are still looking at many finance opportunity that, that we have. Okay?

And as you mentioned -- as I mentioned and you see that’s on their statement that, that's a challenge for us. Because I am very happy that they are going well for the industry.

Maybe I will ask Mr. Rimbert that -- know a lot about and the care to complete my answer.

Nicola?

Yeah. Yeah.

Thank you, Marcel. I can speak briefly about our own performance within the ceiling lift segment.

It's difficult to really compare vis-à-vis Handicare in terms of stealing market share or not, and what their performance is. But from our perspective, we had our strongest quarter to date in Q1.

In terms of ceiling lift sales, we reached nearly $2 million in sales in the quarter, and we've been promoting the portable lifts and the gantry systems used in some of these temporary COVID facilities. And so, we're seeing how that plays out over the next several weeks and months.

We're also pushing it as part of our staying home at Savaria campaign that Marcel had mentioned earlier. That's also an area of focus for us as it relates to the lifts, so trying to put more lifts into the home care market.

And finally, we're also seeing quite a bit of momentum in lift sales through our recent acquisition in the U.K. through Silvalea.

So, that's also pairing quite nicely with their swing distribution. We're seeing some uptake there as it relates to lift sales into both the U.K.

and their distribution channels in Europe. So, I would say it's quite positive from us.

I can't really speak too much in terms of what the competition is doing. But from Savaria’s perspective, we're encouraged and we hope that will continue throughout the rest of the year.

Great. Thank you.

And then I guess, Nick, while you're offline, I think lot of the session around Patient Handling margins [technical difficulty] comment, but you guys felt you could get that division margin up to level 15% range in 2020, at least quarter you start -- you're somewhere around 12%. Are you assumed that I heard correctly?

Are you guys still comfortable with that 14% plus range for 2020?

Yes. I mean, if you think about all of last year -- and when you look at it on the year basis, because there's some seasonality that happens from quarter-to-quarter.

But for the full year -- last year we achieved a 14% EBITDA margin within the Patient Handling segment. And our expectations are to improve on that this year.

We had mentioned getting up to 15% was the goal. So, if you look at the first quarter, we're up just over 1%, I believe, versus the margin of last year.

So, we're at 12%. I think last year we were about 10.5%, 10.5% to 11%.

So, we're seeing incremental improvement in the first quarter. And I think that you'll see throughout the rest of the year, we should also see some improvements there in the margin at -- again both expand Magog Silvalea or our division as a whole.

So, yes, I think we are still confident that we can make an improvement over the 14% of last year.

Great. And then my last question for Mauro.

You've got some stats on effort there. Are you able to take advantage of any government [technical difficulty] and things?

Yeah, we are looking into that. Like we said, there was a couple of plants that were shutdown during the quarter, one in Europe and the one in the Quebec for the Adaptive Vehicles.

So, we are looking into that. We've also kept a lot of people online.

So, we're looking into that. The programs are not as simple as they seem to be.

There's a lot of different criteria that you can apply to it. So, we do see us being able to use some of it.

But we're not talking a game changer here. We're talking about reasonable amounts and we'll have a -- we'll probably have an update on that probably towards the end of Q2.

And we'll see if need be to mention during our next call. But like I said, we're not talking here millions of millions and millions of dollars here.

We're talking within reason what we can expect to get because overall, as you saw, Q1 our performance was actually not that bad compared to last year. And we'll see how Q2 goes on with the progression of the COVID-19 situation.

Thank you.

Hey, good morning guys. Thanks for taking my questions.

And I hope everybody is staying safe. So with the impacts of COVID-19 being global and there's definitely different timelines depending on geography.

I'm wondering, are there certain markets that you can touch to -- even if there's smaller markets that are showing some signs of a recovery into May that might be a read-through for some of the other markets. I don't know if this one's for you, Marcel or not, but any color, that would be good.

Okay. I want to begin and maybe Sebastien will add some comments after that.

Just to give you where we are right now at this date in May. Okay?

So, especially what we said about the European because I talk to them everyday. But yeah, I would just want to mention what is very important that we have as of right now, all of our office, Zurich office are opened.

And we add 75% of our dealers in the States who are open, if we see like California, that's a good market for us. They are open, East coast about -- all the East Coast.

Okay? We are open for sure in New York, Long Island, that's a challenge.

But when you have 75% of your dealers open and 100% of our direct sales. And I just give you a good example.

We have our Savaria lifts in the Florida that they are doing just a great job. And we have the same at the Maryland.

We'll have with the premier lift. So, it's why I see that, that is very interesting.

And in this industry that we are right now that we have all this -- we have very busy in North America. And I think that's a vision what will be the next quarter or two or 2021.

But I don't run into myself. That's something we'll never see in our life, but we have right now this pandemic.

So, Sebastien, can you add a little bit to answer that for me in Europe?

Yeah. So, basically -- unfortunately, we have been lucky enough to learn from the West, the East.

So really if we started with China. We had a good first quarter financial in China, but for sure, February was tough.

I was missing a lot of staff. But from March is back to normal.

I have all my employee, they are able to travel to go to the supplier, to do some customer. In Australia, we are open.

As normal Italy. It was a tough March, but now and the beginning of April, now they are fully back to work for the manufacturing.

Direct sales in Italy is still difficult, make appointment with customer. Swiss, Germany, Poland and Czech is a bit slower maybe than the usual.

But still we are the good operational mode. And we are up to North America.

We talk about the car factory that was shutdown for almost a month. Now they are back into operation.

North America, as Marcel say, 75% of our dealer are operational. But what's important to understand, it doesn't mean that the dealer which is not making acquisition is not sending order to the factory because maybe his planning is reopening of his area.

So if you want to be successful, you need to make sure you have some elevator need go to install. So, far we have been lucky, always learn from West location to come to the East and just try to improve every month to put some new measures in place to keep our employee safely.

Okay. That's very good color.

And during -- turning to Patient Handling. I guess, it's probably for Nick.

In your MD&A, excluding customer -- custom products, the organic growth I think was just under 4%. I'm just wondering if you can kind of maybe even directionally talk to how that fared into Q2 and onwards, particularly given some potential failings.

I know you guys had talked about the bed charters in the past and just some other ways that there could still be some good demand in that segment. Yeah.

Any color, that would be good.

Okay. Hey, Ammar.

So, yes. The 3.9%, 4% that we achieved in organic growth in Q1, it's kind of inline with our expectations for -- before that that vision, and you've always said kind of in that mid single digits is what we expect in terms of organic growth.

There wasn't much of an impact of COVID in the quarter. Maybe the last couple of weeks of March, but for the most part, it's really into April and the first part of May that we're seeing an impact from the COVID-19.

So, we have seen, and we kind of hinted on this on our last call together after Q4, is that we have seen an increase in demand for beds. That's been pretty steady.

Again, maybe that last little bit of April or -- sorry -- last little bit of March and then very strong in April, we're seeing that continue into May. If we're lucky, it might go into the first part of June.

So, I would say on the bed side, things have been very, very strong and we've been increased capacity there and billings were [ph] by upwards of 50% there in April. So, again, taking some measures to meet this kind of surge in demand.

On the mattress side, I would say is that at first we did see quite a bit of an uptick in -- I guess an uptake in mattress sales, which corresponded to what we saw with the best, but you have to realize that a lot of these -- is kind of surge in demand is for the temporary COVID facilities. So, they're really looking for mattresses on a very temporary basis, mattresses that they will be able to dispose of relatively quickly afterwards.

So, not -- what I would call high end mattresses. So, there as well -- the mattress sales haven't -- I mean it's not kind of a one for one ratio I would say with the beds as it relates to this kind of increase in sales due to COVID.

But again, we're seeing some good demand overall within that segment. It's a bit early to tell how it's going to play out throughout the rest of the year.

We're not even halfway through Q2, but so far through April, it's been good. And again, it's primarily driven by beds.

And otherwise the lifts, I mentioned that earlier on one of the other questions. Our lift sales have been quite nice and that should continue.

We expect it to continue into Q2.

Okay. Great.

Thanks, Nick. And I guess, just a final one probably for Mauro.

Are there any -- are there any synergies left that could still be extracted from Garaventa? And I don't mean, I call it, in the next quarter or two, given everything that's going on.

I just mean more longer term, is there still a lot that's left there, a little bit to, or how do you see that operational efficiency rolling out, call it post COVID?

Well, I mean, listen, we do have some that that we still see coming forward. To what extent as you mentioned, the COVID-19 is kind of going to kind of a little cringe into it.

But yes, we defiantly still see a little bit of an uptick coming from Garaventa for -- hopefully for the rest of the year. I'm not sure Sebastien maybe can talk a little bit more as far as the costing side, from the cogs, but yeah, there should be a little bit more to come.

Yeah. So, basically, if we look at last year, the core business of Savaria, we always say it was a 20% plus EBITDA business and we're finished Garaventa 13% last year.

So, I think we are just at the beginning. No.

And that's -- the first quarter there was a contribution. We'd go from 13.4% to 16.5% Garaventa as its contributions for that.

What we have to improve is four points. Is there efficiency in the factory in Italy, in Vancouver?

We had typically -- we don't sit at a very high backlog. We have to make sure we have a good throughput.

So, that's number one. And number two, when we bought Garaventa, not each store was profitable.

We have a lot of store in the States and in Europe. So, we're working at each store is profitable every month.

Purchasing with China, yes, we have increased our purchasing in China. We are just at the beginning.

And last thing is our product mix in Europe. We have to -- if we want to be successful we have to sell what we manufacture.

This is what Savaria -- the house has been always doing in the past. And this year we are doing a lot of effort on the Vuelift, on the mini Vuelift.

We see good potential in the future. Last year we have started to manufacturer on stairlift in Italy.

So, I think by improving all those four key segments, there is no good reason why we should not be to continue each year to bring the Garaventa up to increase the overall -- our margins of the sector.

Thank you for that -- thank you for that color Sebastien. And thanks, guys.

I'll turn it back.

Hey. Good morning, guys.

Nice quarter. I wanted to circle back on the elevators.

I'm trying to square the comments about flat sales in April. And the lower housing starts, I guess that we are expecting in Q2.

So is there -- I mean the company fulfilling previously received orders, or is there a huge element here of market share growth? And how do you look -- or how should we think about orders for the rest of Q2?

And do you think you can sustain maybe these levels? Then the question is, I'm asking it because contentious is looking for negative 17% year-over-year growth in Q2 and it feels like your -- what was presumed to be the most disadvantaged part of the business and Dakota feels like it's actually performing well.

Okay. I'll take this one.

Yeah, but I just want to mention for sure, that what is very important in a company or at least my vision of this company is that booking, booking and booking. And so far, -- if I just go back last week -- and just go back yesterday on Monday, we see some orders -- more orders coming in.

And what -- and again, our focus is that we have I think with manufacturer as much at a return in 2020 in Q2 and Q3 and Q4. That's what I've done last year.

Plus, we have the new element, that we have the Vuelift. The small unit that's is -- it is roughly a 39 inches diameter.

Okay? Because that's a round one.

So I see that -- and I am very, very optimistic about what we see on architecture. Okay?

We make webinar to architect and that was a good strategy in Q1 and we do continue to do that. Education of our dealers about our residential elevators and the new Vuelift.

So, our people -- we don't go -- we learn how always to improve ourself. Okay?

And before the way it sell that was going to see the dealer and go -- on a trip and take four or five days, a month just to travel and when you travel, lot of this time -- the time is -- you are productive maybe at 50%. Okay.

Because you travel. And you don't have to travel when you have a webinar or we have a Google team.

So, we are very, very happy that we push this idea to reach our dealer more often with some internet that we can reach them, show our products, discuss with them, okay? What we can help the people.

And that’s why I think we are better right now than we were before. And the people appreciate, our dealer appreciate that, yes, we have an elevator, but right now, we have completely a new product that we can offer to more people, that we don't have the space for the elevators.

Now we have some space that we have and we will put a Vuelift. So, I see great thing coming.

What is the great thing? Is it in Q2, Q3, Q4, next year?

So, we don't know about this. But even during this period, we are -- that we can go almost what we have done last year.

Okay? But we'll see.

It's the future, but for sure, if we look about a couple of years, it's our products are exactly what we need, the people need to stay on.

And what's important to understand is the home elevator maybe also the customer takes six to 12 months to build and the guy that has started at the beginning of the year was stop -- his project was stop after two months and he has already planned and designed to put an elevator as soon as the market reopen is going to place his order for his elevator and he will put it in, he will finish his project. And the guy that did that start to build his house, maybe we'll call back his architect, say, I don't want my parents to stay any more in the long-term care, I will find a solution to bring them home.

So that's why we're very positive about those residential elevator. And we have done a lot of marketing efforts in the last year with the Vuelift.

Yeah, we are tracking the customer very often with the Vuelift, but maybe it ended up with the traditional sales of our wood cab elevator. So, I think we have the best mix and a lot of options.

So, that's why we have a good traction in this access to this segment with home lift.

Okay. Great.

Those are great comments. And it sort of does help, I guess, give us a sense of where the numbers to land in the next couple of quarters.

I mean, I want it to -- I guess that's a good segue into going to the campaign for Stay At Home with Savaria. Obviously, got a lot of relevance as it addresses the need in the current environment.

Maybe I just want to address, what's your take on the longer term implications from COVID-19 to the Accessibility business, particularly as it relates to seniors? And maybe what can Savaria do better to address the needs, I guess of the future.

Okay. Maybe, you have a good see of the future, Nicola.

Any crystal ball?

Well, my crystal ball is pretty cloudy. But I can give it a shot.

I would say, yes. The trend of people wanting to stay at home, I think that will continue.

And if anything, it's going to be more reinforced by the current environment. So, what does that mean?

I mean, it could be -- we talk a lot about resident elevators, but there's also other products that we offer that could fit into those needs. So, even if you're not looking to build a new home, you could retrofit your home.

You could put in a porch lift, for example. So, those are products that we offer.

You can put in a stairlift. We haven't talked much about that, but that's also a product that we're looking to promote as it relates to retrofitting the home to keep you in it longer.

You have the various lift product. So kind of promoting our home lift products.

I guess the portable, ceiling lift and the gantry systems. So, I think, you look at our product mix, it's not just residential elevators.

We're really trying to push the entire portfolio of products that we offer that suit -- this trend. We talked about our house and that's -- I guess at the beginning of this call, Marcel had mentioned that one of the big advantages of Savaria is that we do have the full suite of accessibility products.

And so, our Stay At Home with Savaria campaign, it's really pushing all of those elements, because not everybody might be building a new home or B, having the means to put a Vuelift, but maybe the stairlift could be for them or maybe a porch lift. So, I think it's -- we're pushing the entire categories of home.

And so longer term, I don't know exactly what it means in terms of our sales, one, two, three, four years down the road. But there is this baby boomer population that -- the oldest baby boomers, those born in 1945 are 75 years old now.

And so we have a big kind of a wave that's coming in front of us of these baby boomers that will likely look to stay at home, if possible as opposed to going into some sort of skilled nursing facility or long-term care facility.

Yeah. Thank you, Nick.

And just to add. Yesterday night I am an interview with Quebec newspaper -- press.

And he asked me roughly the same question. And I see -- what you see in the future for this accessibility what kind of growth.

And I mentioned that this accessibility division of Savaria is just -- if we make this job and we will make the job -- that I see over 10% of goals back at this accessibility. I just say like yesterday, the 10% or more -- I don't know if it will be in 2020, in Q4 or Q3 or early the next year.

But it will be there, because the people want to have an accessibility home.

Thanks, guys. Thanks for the questions.

Stay safe. Appreciate it.

Good morning and thanks for taking my call. I'm wondering if there's been any changes in your view on the supply chain, and if you feel comfortable with the current inventory levels.

Sebastien?

Well, as you can see in our financial inventory has always -- never been an issue at Savaria. We carry the right level.

That's why we went to -- the first quarter without the new supply issue from our main factory in China, because we're at the right level in China, the right level there. And as soon as we start the beginning of the pandemic, we ship all our finished goods from China to ensure we will have no disruption in our supply chain.

So, for sure, like now with the tighter economy, that might be an opportunity for us to renegotiate some of the pricing. So, we assume the long-term what can be achieved.

But at least, we don't see any price increase on our supply chain. And maybe just some opportunity to work on cost saving on long-term if our volume continued to be there.

Okay. Thank you.

That's helpful. And then I had a question on the $3 million in contracts that were announced earlier this week.

Are these new customers? And is there an opportunity to expand those contracts either for the current projects or new projects that are coming online?

Yes, for sure, that's all new custody and -- but that's a -- the dealers that is our dealers in the premier league. Okay.

And in Toronto, that's our direct office as this other contract. But now I will begin to release -- to chute the people.

If we have a contract over $1 million, I will begin to put that on a press release. Okay?

And you will see that it will come around the nearest say, because they have better -- bigger projects that we have often in Canada. So, yes.

That's new customer and that's very good. When the people see that, all the builders other architect, say, hey, they put the elevators in each of their contract.

That open eyes to customer or even architects or builders. And that's what we push just one thing, more orders.

Okay. Thank you.

I appreciate that. Thanks for taking my questions.

And thank you to follow Savaria.

Okay. Back to Marcel.

Okay. First of all, thank you my dear analyst to be on the line.

I appreciate all other people, all maybe investor. So, I appreciate the time that you pass on Savaria and be sure, one thing that we have 1,450 people working for Savaria right now.

And right now, 1,400 are happy guy. We give them a little bonus during this hard period.

We'll make a check of $1,000 to each employee. And we'll maintain the $1,000 was for in Canadian dollars and even the guy in China.

I don't know in RMB, Sebastien, what mean what for them? Like 7,000, 6,000?

Approximately, 5,500.

Yes. So, I am not good with the RMB.

So -- but something we have to assist and thanks our employee. But if we are known in this world, it's because of you, with your research.

That's my concern area. And you bring some good news.

So, again, thank you very much and thank you for my team. James, thank you for your work.