Whole Earth Brands, Inc.
Q1 2021 Earnings Call Transcript

Published: 14 May 2021

[Operator:]

Good morning, and welcome to the Whole Earth Brands First Quarter 2021 Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, today's event is being recorded. At this time, I'd like to turn the conference call over to Jeff Sonnek, Investor Relations at ICR. Sir, please go ahead.

[Jeff Sonnek:]

Thank you, and good morning. Today's presentation will be hosted by Albert Manzone Chief Executive Officer and Andy Rusie Chief Financial Officer. Executive Chairman Irwin Simon is also participating on the call, and will be available for Q&A.

[Albert Manzone:]

Thank you, Jeff, and thanks to everyone for joining the call today. Our business is off to a strong start in 2021. We delivered organic constant currency product revenue growth of 10% for our Branded CPG segment and 6% for Whole Earth Brands. This is our second consecutive quarter of double-digit growth for our Branded CPG segment, demonstrating the strength of our better-for-you brands and the impact it is having on our portfolio to generate long-term sustainable growth. We delivered $17.5 million of adjusted EBITDA in the first quarter driven by strong Branded CPG top line growth and improved margins as a result of successful cost productivity initiatives. Sales in all our key geographical markets around the world grew double-digits versus prior year as did our portfolio of natural brands, Whole, Earth, Swerve and Wholesome. I'm also happy to report to you that the integration of the Swerve and Wholesome acquisitions is complete, a testament to our people's competency, agility and focus. We are further encouraged by the pace of the economic recovery and the positive implications for the food service industry in North America. We are reiterating our fiscal 2021 guidance. Since going public over the past 10 months, we have been very deliberate in our vision to grow all our brands to a $1 billion revenue global food and beverage company that plays in attractive categories and geographies and delivers sustainable growth.

[Andy Rusie:]

Thank you, Albert and good morning to everyone. As a reminder, for those new to our company, our consolidated financials reflect both, predecessor and successor periods, indicative of the June 25th 2020, business combination date. The first quarter results, that I'll discuss, compare the successor's first quarter 2021 results, ended March 31st 2021, to the predecessor's, first quarter, 2020 results. As a result, our reported GAAP financials may not be comparable to the predecessor period. I'll call out some of the items that impact comparability, where appropriate, to enhance your understanding of our financial progress. And also point you to our non-GAAP reconciliations at the end of the press release for additional detail. Also, I encourage you to view the supplemental earnings presentation, on our Investor Relations website. Of note, we completed the acquisition of Swerve on November 10 2020 and Wholesome, on February 5th 2021. I will speak to reported results, which include, Swerve for the full first quarter period and Wholesome which is included on a partial quarter period, pro rata from the date of the close. Additionally, we will provide some select pro forma results, as if we owned, Swerve and Wholesome in both 2021 and 2020 to assist in your analysis of the organic growth of the combined portfolio. For the first quarter ended March 31, 2021 consolidated product revenues were $105.8 million representing a 60.4% increase from $66 million for the prior year quarter. On a pro forma basis including Swerve and Wholesome for the full quarter in both the current and prior year periods organic product revenue grew 7.9% compared to the prior year first quarter or increased 6.1% on a constant currency basis. Reported gross profit was $35.7 million, up from $25.9 million in the prior year period and gross profit margin was 33.7% in the first quarter of 2021 down from 39.2% in the prior year period. Results were positively influenced by the $10.1 million of contributions from the Swerve and Wholesome acquisitions and revenue gains partially offset by $1.6 million of noncash purchase accounting charges. Adjusted gross profit margins, when adjusting for all noncash and cash adjustments was 36.9% down from 41.8% in the prior year, driven by the inclusion of Wholesome's strong private label business partially offset by productivity and favorable product mix within the business. Consolidated operating loss was $3.1 million compared to an operating loss of $33.2 million in the prior year and consolidated net loss was $12 million in the first quarter of 2021 compared to a net loss of $28.7 million in the prior year. The change versus prior year is primarily driven by a $40.6 million noncash asset impairment charge in the prior year predecessor period, contributions from the acquired Swerve and wholesome businesses and revenue growth from the Branded CPG segment partially offset by onetime M&A transaction costs and both recurring and nonrecurring public company costs.

[Operator:]

Thank you. We will now be conducting a question-and-answer session. Our first questions come from the line of Rob Dickerson with Jefferies. Please proceed with your question.

[Rob Dickerson:]

Great. Thanks very much. Good morning. I guess my first question is just around the conversations you've had so far with retailers, right? I mean obviously your larger strategic plan the Power of One strategy is kind of a core piece of your go-forward potential. So, I'm just curious if you could touch on maybe reception so far from retailers even though it's early innings kind of how conversations are going? I heard you mention maybe some second half product introductions coming so anything you can kind of elaborate on at this point would be really helpful. Thanks.

[Albert Manzone:]

Sure. Good morning Rob this is Albert. I'm happy to tell you as much as I can tell you within as you know most of our retailers would not appreciate that I mention specific names. But what I can tell you is first of all, we are excited about the fact that all of the key retailers are resetting their MOD this year. As you know last year some of them took a pass, which obviously, since we are fast-growing and have significant innovation and opportunities, we stand to gain this year. Second to your point the Power of One is very well received. And the reason is that as you can see on the supplemental deck, we have a clear goal and definition consumer usage brand promise for each of our four brands. And one of the great things with the integration of Swerve and Wholesome which is now complete is that those brands really play each a very significant role incremental role for the retailers backed by brand building initiatives and you are going to see new packaging on all those brands coming into the market at the end of the second quarter together with new campaigns and the reception from the retailers could not be more positive from us. Keep in mind as I told you in previous conferences that throughout all of last year we had 99% service level. So, we have proven to be a very reliable partner. And now adding to it the brand building the innovation and the Power of One at the shelf which the stories and the way we can lead this category, which is a great category as you know really backed up by strong secular trend is going very, very well. So, as I said, I can tell you that for Whole Earth, we are probably going to exceed 50% ACV pretty soon, which is a big step. And you can expect similar very strong performance on the other brands. I can tell you also that the introduction of the baking mixes, which are taking us into new categories for Swerve and Wholesome is going very well. So, I would tell you that our distribution is going well. The Power of One is going well and we are therefore very confident for what's to come in the quarters ahead.

[Irwin Simon:]

Hey Rob, good morning. I just want to add to that. I got to tell you, if you think about it a year ago this company was not in existence as a combined company. But if you look at our Wholesome brands, which is a phenomenal brand, the Swerve brand and then what Albert and the team have done with Whole Earth and even the expansion of Equal around the world and the new innovation that has come out and you know I'm about new products are the lifeblood of the company and the categories. It's absolutely amazing what the team that has got so much R&D on these products. And I come back and I think one thing that he really mentioned is the service levels. I never had those service levels at Hain, so working in those 99% service levels today, has been just major considering, he's got ingredients coming from all over the world. So, I mean they're set for new products new introductions and just serving the customers' demands as the growth takes place.

[Rob Dickerson:]

Yes. No it's a good point. It's impressive. 99% I think has been tough for a lot to achieve through the pandemic…

[Irwin Simon:]

Not many of your other companies you're writing about got those service levels. So anyway.

[Rob Dickerson:]

I'm aware. And then, I guess just kind of touching on what you said on innovation, I know in Europe, you have had other products that you'd throw out some of the sweet goods and the jam product. I think recently, I've seen a new product called, it's through the Wholesome brand, the organic delish fish? I think they're basically kind of like a Swedish fish product. I haven't heard you mention much about that and I'm just curious, as you think about that new innovation going forward obviously, the focus is on the core portfolio natural sweeteners stepping to baking mixes. When you think about other categories and other innovation, how you leverage the brands that you have? Do you foresee some of that incremental innovation coming out even later this year, or is that a multiyear process and we shouldn't be too excited about it? So, just trying to kind of gauge that timing and kind of the speed at which you can actually expand the brands brand? Thank you.

[Albert Manzone:]

Yes, that's a great question. And as I mentioned in previous calls, right, we are expanding into adjacencies and I mentioned them earlier that our chocolate snacks, candies in all of our international markets. And actually jams as you said. And we are getting very strong results in Europe, in Australia and New Zealand and Asia. What we like about this, which is aside from those incremental business is also the strategic intent behind it. They are really helping you to drive household penetration because you essentially get to users in those over categories that accumulate on top of the ones you already have. So this is a big driver of awareness in the store with multiple touch points. It's a very big driver of household penetration of awareness, which is really if you think about the brand building it's really about generating the awareness and then the trial and then the household penetration. So, they build a business and they essentially create a virtuous circle. So we're doing this with Equal with Canderel with Pure Via in Europe. In Australia, we are having a lot of success. In the US, as I told you and what we can publicly say is that, we are starting with Wholesome and Swerve into the baking mixes, expect to see those products in more places very soon since we got a number of wins. As I told you before, I can tell you that we're winning a number of things not warranted yet. And we are -- the pace of expansion for us is really top of mind. And so, I think you are going to see those categories I mentioned this year and you would start to see more next year. Some of this is going to be done organically. Some of it is going to be done through M&A, as I did mention in my opening remarks but we're working both fronts, because with our own brands there is a lot to do and they have the added benefit, as I say to bring new customers, consumers and increasing household penetration.

[Rob Dickerson:]

Okay. Great. And then one last quick one is just on the M&A front. I know you say it is an ongoing part of the strategy. Would you say, armed and ready, if the opportunity is there or integration on the recent acquisitions is more priority and maybe forthcoming acquisitions will be something down the road more of a next year or 2023 event? That's all. Thank you so much.

[Albert Manzone:]

Yes. As I say thank you, and as I said in my opening remarks and as Irwin mentioned, we came a long way from in less than a year, we did acquire two companies in eight months. I'm very happy to say that those businesses have now been integrated in about 60 days. And we have actually – I was leading those integration meetings weekly and we actually stopped them because all of the work streams and there were many have been completed very successfully. The teams are working very well together. To your point before on the Power of One we do have one sales organization. We have synergized the brokers who were very strong. And essentially we are always looking at opportunities being our core business of sweeteners being adjacencies that you referred to. And given the right opportunity, we reserve the right to move next year or sooner.

[Irwin Simon:]

Rob, we are out there in the marketplace always looking for the right strategic accretive deal to align. I think again it showed that by the Swerve and the Wholesome deal and just even putting this together. And I think again we're better even positioned. We weren't noticed in June, when we did Swerve. We weren't noticed when we did Wholesome. But I think there's a lot of brands or companies today that are recognizing they wouldn't be so bad to be part of the Whole Earth family.

[Albert Manzone:]

Yes and the thing I will add, because I should have said it earlier, but it's just that, as I have mentioned several times and I'm happy that we could demonstrate this, a lot of – I just want to salute the team who is doing a fantastic job. And as I mentioned many times, there is a lot of people in our organization that have significant experience having led acquisitions and integrated acquisitions. And I think doing those two in 60 days, well embracing the new organizations that have joined us successfully, demonstrate that this is a competency that we do have and can leverage continue to leverage going forward.

[Operator:]

Thank you. We ask that you please limit your questions to one question and one follow-up question. Our next questions comes from the line of George Kelly with ROTH Capital Partners. Please proceed with your question.

[George Kelly:]

Hi, everybody. Thanks for taking my questions. So, if we could start with the synergies, I was reviewing the slide deck, you commented in your prepared remarks about the kind of near-term and longer-term opportunity around synergies to supply chain reinvention. So hoping, you could tell us more about, what's actually happening then in Phase I of that plan. And I know Phase II, it seems like there's less detail right now but can you tell us just more generally what that could involve?

[Albert Manzone:]

Sure. I'm happy to start and then Andy, if you want maybe to back it with some – I'm happy to take you through the concept. And as you have mentioned there is in the supplemental deck on Page 8, there is first of all a Phase I. If you look at our supply chain we essentially expanded significantly the total amount of variable spend to about $150 million. And that represents for us a number of opportunities. Some we're leveraging, as we speak and they are benefiting us this year on against any inflationary pressure, which is essentially significant productivity in what we buy both from a packaging standpoint, from an ingredient standpoint, from a transportational standpoint. And those are synergies that we do right away including manufacturing. So remember that we are asset-light which means that we have multiple co-manufacturers and co-packers. And we are in this phase in the process of optimizing that. So if we do sachet in three places maybe we could do it in one. If we do bags in two places maybe we can do it in one. And so we're sorting out and optimizing our asset-light network that really benefits us greatly. The second phase is a phase that essentially addresses the total in a more structural way I would say network, which is as you can imagine the next iteration. Think about if you are less centers of production if those centers of production are closer to the harbor of entry since a lot of our ingredients come from the same locations. If the warehouse is co-located with the center of distribution, if you go into a cool truckload versus hot truckload those are things that will take us a little bit more time and you will see those benefits in 2022, 2023 which are a little bit more structural than the first phase that we do right away. So I stop there and happy to have any follow-up of this.

[George Kelly:]

If you were to quantify the impact of both Phase I, I don't know if you're prepared to quantify Phase II, but could you just generally talk to how big of an impact it could be?

[Albert Manzone:]

I think we said the Phase I on the supplemental deck is three to four reached in 2023 and Phase II is significantly more. I don't think we're prepared to talk to it. But essentially this is a big driver for us of productivity which is a big benefit that we do have in the marketplace versus competitors and other companies. Andy, anything to add?

[Andy Rusie:]

No. No I think you said it well Albert.

[George Kelly:]

Okay. That’s very helpful. I will hop back in the queue. Thank you.

[Andy Rusie:]

Thank you.

[Operator:]

Our next questions come from the line of Pablo Zuanic with Cantor Fitzgerald. Please proceed with your question.

[Pablo Zuanic:]

Good morning. Congratulations on the good start to the year.

[Albert Manzone:]

Hi, Pablo.

[Pablo Zuanic:]

Look I have two questions. But can you hear me?

[Albert Manzone:]

Yes, very well. Good morning, Pablo.

[Pablo Zuanic:]

Good morning. I guess one for Andy first. So the guidance for the full year is 3.3% to 5% pro forma organic growth. You reached 6.1% in the first quarter. Is the comp on Flavor & Ingredients I hear the comp issue for CPG in the second quarter, but back half you had a recovery post-COVID. You have the ACV expansion that you've talked about. I would think that there's room for the number to accelerate over that 6.6%. So if you can just give some context to that it just seems that you should be well ahead of the guidance this year. And the same question in case of EBITDA, the guidance for the year is close to 17%. You did in first quarter EBITDA margin 17%. As some of those synergies kick in I realize there's some dilution from Wholesome full quarter now in the second, but you would think that you would also be ahead of that. So just a brief answer on that. It seems to me that the math will imply that you are well on track to beat your guidance. Can you comment on that?

[Andy Rusie:]

Sure. No it's a great question Pablo. And so, first of all, I mean, we're very confident in the year. And as for the reasons Albert alluded to from the operational plan with the innovation and the distribution opportunities Pablo that you just alluded to. So we're very, very confident in that and we look to see that throughout the balance of the year. You're absolutely right on the math part of it. The second quarter is a tougher comp. So you can expect the growth rates obviously for that to be lower than what we've seen in Q1 and then would have higher growth rates in the back part of the year. Look I think as we get through the year obviously there is volatility still in the rest of the year so we're being prudent. And so I would say in the end you can see with our guidance that we're confident in it but we're also just being we're also being prudent as we look through the balance of the year. But again we've got a lot of exciting things that as Albert alluded to that you'll see come through from a P&L perspective both on the top and the bottom-line. And we'll continue to look at it as we get further along in the year, Pablo.

[Pablo Zuanic:]

Okay. Thank you. That's very helpful. And just a quick follow-up, I was going to ask you if I look at the 9.7% almost 10% pro forma growth in CPG, excellent growth in the first quarter. Then I look at slide 9, right, Whole Earth up 33%, North America retail Swerve 22%, Wholesome 18%. That alone naturally 70% of your US business, right? So that gives you like 14 points of growth Equal up 7%. So in total I'm looking at 16% growth for CPG and you reported 10%. So is international a drag, or is there something wrong with my math there? It seems that the CPG growth although 10% of course is a great number would have been even much better than that?

[Andy Rusie:]

Yeah. No, I'm happy -- and Albert I'm happy to take that one Albert. So the short of it is obviously what we're showing on slide 9, we've had great performance, especially in those brick-and-mortar retailers that you see on slide 9 where we've grown above the category and the category is robust both in measured channels that you see on slide 9, but also in non-measured channels like e-commerce and so forth. The delta simply is in the first quarter we still had a headwind when it comes to food service, right? So food service was still strong in 2020 in January and February and the first part of March. And so from our US performance, it was overall that was a headwind. So when we think about the category as well as our performance, that foodservice was definitely a headwind. I will say you mentioned on the international side, our international businesses actually grew very well in line with kind of the North America business. And so we saw actually fairly robust growth across the world in Q1. But generally, it's a channel mix Pablo to be able to answer your question to reconcile the strong brick-and-mortar performance versus say good service from a comparison versus first quarter last year.

[Pablo Zuanic:]

Got it. And one last one, if I can squeeze one here. Just -- I don't have the data, but your market share in North America for Whole Earth versus Truvia where is that? You're showing the ACV numbers there right the growth difference, but just rough numbers on that can you comment?

[Albert Manzone:]

Yeah, I'm happy to take this. The market share is strong. We have gained market share across most of our top markets around the world. And our market share in the US was 11.5% I think year-to-date.

[Pablo Zuanic:]

Truvia?

[Albert Manzone:]

I can come back to you on that.

[Pablo Zuanic:]

I guess another way to ask the question Albert is, obviously bigger is the opportunity you're talking about 50% you're at 28% right now with Whole Earth so a lot of room for upside there. But -- and to your benefit in terms of market share from the larger ACV. But I'm just trying to think in terms of velocity whether you have a sense of whether there are huge differences in growth. I'm looking at

[Albert Manzone:]

No, I like your question. I like your question a lot. Obviously, as Rob mentioned earlier, those wins that we are scoring, we are scoring them now. So Walmart is resetting their MOD in September, which means that we're going to ship in August. So you are going to see a lot of that performance coming really going forward. And what I'm happy to say is that the overlap is positive, but essentially you can expect that to continue to grow. We're very happy with the velocity to your point which points to the expansion I was mentioning for Whole Earth and the very significant pickup we have on all our innovation with Swerve and Wholesome. So again, that goes back to what I said before about the Power of One.

[Pablo Zuanic:]

Got it. Thank you.

[Operator:]

Thank you. Our next questions come from the line of Bill Newby with D.A. Davidson. Please proceed with your question.

[Bill Newby:]

Good morning, guys. Thanks for taking the questions and congrats on a great start of the year.

[Albert Manzone:]

Good morning, Bill.

[Andy Rusie:]

Thanks, Bill.

[Bill Newby:]

Albert just wanted to start and ask you about kind of the baking category in general. I mean obviously a lot of momentum there coming out of 2020 and I guess thus far through the year. I'm wondering kind of with mobility picking up, with vaccinations picking up, foodservice reopening any impression on how sticky some of that growth that was gained in baking in 2020 has been throughout the first part of this year and kind of expectations moving forward?

[Albert Manzone:]

That's a great question. And first of all, as I said, we have the right strategy and the right vision at the right time. So the move that we have made the vision we have for our company, the requirements of consumers to want to eat more natural more plant-based clean label know what's in the products, the number of people in the family in the same households that have different needs, different diets et cetera is exponential. So we're in the right place at the right time, and if you look, we just need some checks, gut checks on exactly your questions. And today you have 47% of millennials that follow a special diet. You have 58% of millennials that look for healthy ingredients in food and beverage and clean label. And so if you look at the baking specifically you have 46% of consumers that are looking to bake more meaning at least once or twice a month. So I think it's with the mobility which we will benefit by, by the way, because what is great on the mobility side is we're going to go back into foodservice. And what is great about foodservice is consumers are going to ask for natural options, which before were not offered. And with Swerve and Wholesome, we have even the opportunity to play in the back of the kitchen, and those are all things that were not existing before, because Swerve and Wholesome didn't have a foodservice business. So we're going to benefit from that, but at the same time the consumers' mobility is not going to impact I think, their desire to eat healthier, and that's 47% of consumers. So this baking more with products like Wholesome, which are really fantastic products and our new campaign on Wholesome is, Let's Bake Things Better, which is going to come out in June. We have a five fantastic scratch quality baking mixes, which are getting very positive feedback. Similarly for Swerve, if you want to go into the zero calorie, no added sugar. So I think we are excited. And again, there is opportunity to -- it's a huge category to bring differentiated innovation and healthier options than the ones that are being proposed today.

[Bill Newby:]

I appreciate that. That's very helpful. Thanks for the color there. And then I guess maybe one for Andy. Obviously, pretty hot topic throughout the earnings season this quarter is inflation. And I haven't heard you guys really comment on how maybe your expectations there have changed. I mean, could you maybe just talk about how you think about your coverage there through the rest of this year? And maybe just help remind us why this model might be a little more insulated than others in terms of handling the rapid increase in inflation we've seen over the last couple of months?

[Andy Rusie:]

Yes, Bill. Great question.

[Albert Manzone:]

Do you want me to start -- do you want to start or, Andy…

[Albert Manzone:]

Yes. I can take it if you want Albert, and happy to. So Bill, I think it’s a great question. I think first and foremost, I don't think -- we don't have the same inflationary type of pressures that maybe you're seeing in other consumer packaged goods companies, which don't have the same exposure to some of the commodities that you're seeing from probably other companies you cover or what have you. So that's number one. Number two for what we do have the team as Albert alluded to before we've got a great team and we've been out in front of it. So we pre-bought materials where we saw inflation coming to help minimize the impacts. Our productivity has been very robust to be able to offset any inflation. And then third, the team from the commercial side has done a great job managing that with different tools that we have at our disposal from a pricing perspective. So we have taken some price around the world to get ahead of it. And so we've been doing a great job managing that inflation both from the standpoint of productivity as well as pricing. Albert, I don't know if you want to add anything else to that?

[Albert Manzone:]

No, you said it.

[Operator:]

Thank you. Our next questions come from the line of Mark Smith with Lake Street Capital. Please proceed with your question.

[Mark Smith:]

Hi, guys. I just wanted to follow-up real quick on new products. Sounds like a good pipeline of products coming later this year. But Albert, can you update us on kind of how the mix is on current new products or innovative products that are out now?

[Albert Manzone:]

Yes. The new products essentially, as Irwin alluded to at the beginning is, something we invested in for some time. It's like e-commerce. We started investing in having top-notch R&D with 6 R&D centers with an organization around the world sourcing the best ingredients being at the forefront of the ingredients. And we consistently deliver above 15% of our innovation of our net sales coming from innovation. Last year, I think I reported 16%. I think this year, we say 15% I think we're going to be way above. And those innovations are essentially what is driving our success in the marketplace. If you take not baking mixes, but if you take baking and you take essentially take on Whole Earth, what we have been able to do on baking is, essentially really to establish this brand that they say that, we finished the year at 28% we're aiming to go at 50%. It's the fastest-growing Stevia brand in the market year-to-date. It's one of the fastest natural brands in the market. We are -- and I cannot disclose, but we have scored significant wins that you are going to start to see end of Q2. And that is true around the world. I mean, if you look at this brand -- the natural in baking and then I have a few more, but if you take baking in the UK we became after three years the number 2 brand in natural and the fastest growing. And we will become number one. In Australia we became from zero, the third brand and we are growing 200%. And we just listed the 5 SKUs around baking. And that's just one example. Because another big trend that we see is, really the one around fortifications around added benefits. So one of the big crazes right now is turmeric. And we have Whole Earth with turmeric. We have Whole Earth with collagen coming out. So I would say that, we do see significant -- we have significant expansion with Swerve with the brown line which is doing very well. Wholesome as I said we're number one. We are going to relaunch honey. We are going to relaunch agave. We're just introducing the baking mixes. So, this is part of the story. Those are by the way as Andy mentioned earlier about the different revenue growth management techniques. Obviously, innovation provides you with price pack architectures opportunity which we're facing upon. And those are highly incremental to the retailers. And therefore, we get the appropriate space and we're happy with the performance that they have in the marketplace. They are what is bringing new life into a category, we came into in 2016, believing in it and now taking it places and expanding into adjacencies.

[Operator:]

Thank you. Ladies and gentlemen that is all the time we have for questions today. I'd like to turn the conference call back over to Mr. Manzone for any closing comments.

[Albert Manzone:]

Yes, I just wanted to thank you all for joining the call. I'm looking forward to have more discussions with all of you. And as I said, I think we have a great strategy and a great vision at the right time which is always important. And we are very excited by our brand-building initiatives, our innovation, our distribution and our top-notch supply chain. And I just want to again hats off to the team who is -- I'm blessed with and doing a fantastic job. And so, with that we are excited by the year ahead of us and thank you very much all of you.

[Operator:]

Thank you. That does conclude today's conference call. We do thank you for attending. You may now disconnect your lines.