J. M. Smucker Q1 2024 Earnings Call Transcript

Participants

Corporate Executives

• Aaron Broholm, Vice President, Investor Relations
• Mark T. Smucker, Chairman, President and Chief Executive Officer
• Tucker H. Marshall, Chief Financial Officer

Analysts

• Andrew Lazar, Barclays Capital
• Peter Galbo, Bank of America Merrill Lynch
• Ken Goldman, J.P. Morgan
• Matthew Smith, Stifel Nicolaus
• Pam Kaufman, Morgan Stanley
• Rob Dickerson, Jefferies Financial Group Inc.
• Jason English, The Goldman Sachs Group, Inc.
• Max Gumport, BNP Paribas Exane
• Steve Powers, Deutsche Bank Aktiengesellschaft
• Rob Moskow, TD Cowen

Presentation

[Operator]

Good morning, and welcome to the J.M. Smucker Company's Fiscal 2024 First Quarter Earnings Conference Question and Answer Session. [Operator Instructions]

I'll now turn the conference call over to Aaron Broholm, Vice President, Investor Relations. Please go ahead, sir.

[Aaron Broholm, Vice President, Investor Relations at J. M. Smucker]

Good morning, and thank you for joining our fiscal 2024 first quarter earnings question and answer session. I hope everyone had a chance to review our results as detailed in this morning's press release and management's prepared remarks, which are available on our corporate website at jmsmucker.com. We will also post an audio replay of this call at the conclusion of this morning's Q&A session.

During today's call, we may make forward-looking statements that reflect our current expectations about future plans and performance. These statements rely on assumptions and estimates, and actual results may differ materially due to risks and uncertainties. Additionally, we use non-GAAP results to evaluate performance internally. I encourage you to read the full disclosure concerning forward-looking statements and details on our non-GAAP measures in this morning's press release. Participating on this call are Mark Smucker, Chair of the Board, President and Chief Executive Officer; and Tucker Marshall, Chief Financial Officer.

We will now open up the call for questions. Operator, please queue up the first question.

Questions and Answers

[Operator]

Thank you. [Operator Instructions] Our first question is coming from Andrew Lazar from Barclays. Your line is now live.

[Andrew Lazar, Analyst at Barclays Capital]

Great. Thanks so much. Good morning, everybody.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Good morning.

[Andrew Lazar, Analyst at Barclays Capital]

I guess, just to start off, Mark, on the last earnings call, I think you mentioned that if we strip out Jif contract manufacturing and divestiture impacts, company expected about 4% organic sales growth, three points of which were expected to be volume on sort of a truly underlying basis for the full year. And I'm curious if this is broadly where you still see it today. And if so, maybe why the company is not necessarily seeing the same sort of volume weakness the industry seems to be dealing with currently and as other sort of peer companies have discussed?

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

Andrew, good morning. This is Tucker. You are correct. As you begin to break down our 9% comparable growth guidance, that 4% does have three points of volume/mix growth largely driven by Uncrustables coffee Milk-Bone and Meow Mix and then the one point of pricing as you have noted.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Yeah. Andrew, it's Mark. Thanks for the question. I think as you look at our categories, we are in the right categories which are resilient ones. And as we continue to share our story, we've gotten way more focused. We participate in categories that are growing and we participate across the breadth of those categories, all the while still investing in our brands. So we actually had, as you saw a very good quarter of both sales and volume growth and we expect the momentum to continue as we continue to invest, as we continue to execute with excellence and I could cite multiple areas. I mean, just peanut butter as an example of an affordable protein, continuing to grow, getting Jif back into its number one share position. Milk-Bone as an example where you've got products that span value to premium really meeting the consumer where they need. And then last, but of course not least, Uncrustables continues to be a strong growth engine for the company. So just very pleased with the results this quarter and our outlook for the future.

[Andrew Lazar, Analyst at Barclays Capital]

Got it. No, thank you for that. And then just lastly, pet sales growth was a bit below what we'd modeled. I guess, I'm curious, how did it compare to your expectations? And if sales were a bit slower, I guess, what's driving the weakness? And was it contract manufacturing-related or something else? Thank you.

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

Andrew, we continue to see positive momentum in our pet portfolio. And any shortfall to expectations for the quarter would be attributable to the co-manufacturing agreement. And as we noted on our prepared remarks, we have revised our outlook for co-manufacturing for the full year to be $160 million, which is a $25 million decline than what we expected coming into the year. And that would have been the driver for the quarter.

[Andrew Lazar, Analyst at Barclays Capital]

Got it. And just the decline is -- what would drive the decline in the co-man sales? Thank you.

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

Yeah. It would be what Post Holdings would need from their production standpoint as we support relocating products between manufacturing facility and supporting volumes. So it would just be what their expectation is in their network.

[Andrew Lazar, Analyst at Barclays Capital]

Got it. Thank you.

[Operator]

Thank you. Next question is coming from Peter Galbo from Bank of America. Your line is now live.

[Peter Galbo, Analyst at Bank of America Merrill Lynch]

Hey, good morning, guys.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Good morning.

[Peter Galbo, Analyst at Bank of America Merrill Lynch]

Maybe we could just start, I think there was a bit of confusion this morning just around your reported comparable sales growth number, Tucker or Mark, of the 21%. And then I believe on Slide 4 of the supplement, it shows closer to 16%. So I just wanted to be able to bridge that for folks. And maybe, Tucker, if you could just help, I think in the press release, you actually have the GAAP to non-GAAP reconciliation at the 21%. So if we can talk through those as well as just where that comes in relative to what your expectations were I think for the quarter of the plus 20% that you would put out last quarter? Thanks.

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

Peter, good morning. We delivered our quarter in line with our expectations. And let me break this down for you. On a reported basis, we were down 4%. But as you isolate the impact of the pet food divestiture, on a comparable sales basis, we would be up 21%. Embedded in that 21% is 11 points of Jif growth or restoration, primarily due to lapping the peanut butter recall. The second component would be the required co-manufacturing agreement or growth of 3 points. That leaves base business growth of 6.5 points for the quarter. And within that 6.5 points, we saw approximately 2.5 from a volume/mix standpoint and 4 points from net pricing.

[Peter Galbo, Analyst at Bank of America Merrill Lynch]

Okay. And just on the 16%, sorry, that's on Slide 4, Tucker, just again between that versus the 21% that you printed, just trying to understand the delta.

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

Yeah. It's the math associated with the divestiture impact on a reported basis year-over-year.

[Peter Galbo, Analyst at Bank of America Merrill Lynch]

Got it. Okay. That's helpful. And then, Mark, I think in your prepared comments, you spoke a bit about a reacceleration or planned reacceleration in Uncrustables growth from the quarter. Can you just kind of speak through the cadence of some of that over the course of the year? And maybe just what we might be seeing from a track standpoint versus untracked as you push into some other channels like Canada?

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Yeah, sure, Peter. It's -- first of all, we're really pleased with the Uncrustables growth. Keep in mind that we had -- we're lapping a really strong Q1 last year as well as we had a very strong prior quarter, which happened as a result of us really getting completely off allocation. So the momentum on Uncrustables is actually really strong and we expect growth to continue to be around that 20%-ish for the full year.

And what's driving it is, of course, some expansion into new channels. I mean, Canada is so far very relatively small, but great customer acceptance there, some other expansion into Away From Home. But I think probably most notably is the fact that we have just a lot of runway on household penetration. If you look in my prepared remarks, just talking about peanut butter and jams and jellies being 3 times the household penetration of Uncrustables. So there's plenty of runway there. And we're turning on advertising and other in-store activations. They are really, for the first time, going to start driving demand and pulling through the network. So just very positive on Uncrustables still and expect to hit around $800 million for the year in sales.

[Peter Galbo, Analyst at Bank of America Merrill Lynch]

Great. Thanks very much, guys.

[Operator]

Thank you. The next question is coming from Ken Goldman from J.P. Morgan. Your line is now live.

[Ken Goldman, Analyst at J.P. Morgan]

Hi. Thank you. Just following up on your commentary that for the second quarter like-for-like sales should be up mid-single-digits and EPS up low-single. Just as we think about modeling the quarter, are there any unusual tailwinds or headwinds to consider? I guess, how do we think about the specific cadence of your contract sales on pet in the quarter? Are there any lingering benefits from lapping the Jif recall that may bleed into 2Q? Just wanted to get a sense of anything we should think about just as we're modeling as precisely as we can.

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

Ken, good morning. As you think about the second quarter, just reinforcing mid-single-digit top-line, and that's squarely in mid-single-digits, low-single-digit bottom line. The first component that I would just acknowledge is, is that we did have a $0.16 over-delivery in the first quarter, which was largely SD&A-driven. So the predominance of those expenses will begin to come back in the second quarter and then throughout the remainder of the fiscal year.

And then as you think through the balance of the portfolio, continued momentum of spreads with some Jif recovery coming into the second quarter, momentum on Uncrustables. The coffee category will continue to perform. And then in the pet segment, there's -- the co-manufacturing sales, you probably could just make a little bit more equally across the second and third quarters with a slight slowdown in the fourth.

[Ken Goldman, Analyst at J.P. Morgan]

Got it. That's helpful. Thank you. And then just to follow-up on your comment about SD&A. You previously guided I think to roughly even expense on that line item each quarter this year. Obviously, 1Q came in light. As we think about the next few quarters, should each of them be roughly the same? I guess, it's around $355 million implied or there -- might there be a little bit more lumpiness as they sometimes so?

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

Ken, I'm just verifying, but I think your assumption is fair around the $355 million over the next three quarters.

[Ken Goldman, Analyst at J.P. Morgan]

And should we just model that in evenly, barring any other information?

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

Correct.

[Ken Goldman, Analyst at J.P. Morgan]

Thanks, Tucker.

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

You're welcome.

[Operator]

Thank you. Next question is coming from Matt Smith from Stifel. Your line is now live.

[Matthew Smith, Analyst at Stifel Nicolaus]

Hi, good morning.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Good morning.

[Matthew Smith, Analyst at Stifel Nicolaus]

I wanted to ask about the pricing and inflation dynamic in U.S. Consumer Foods. I believe you said that on an underlying basis, pricing continued to lag inflation. So can you talk about the outlook there and when you expect that dynamic to inflect in your pricing to more than offset current inflation?

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Yeah. I think, Matt, we are seeing pricing offset current inflation in our Consumer Foods business. I think generally, across our entire business, pricing is relatively stable. We would consider ourselves still in an inflationary environment. We have had some -- we've sharpened our price points on coffee and passed some of that through to customers and consumers. And so that will help coffee in our future quarters as well. But generally speaking, whether it's consumer or the business in total, we have recovered inflation.

[Matthew Smith, Analyst at Stifel Nicolaus]

Okay. And then you mentioned coffee -- lower coffee prices passing on to the consumer. Are there other areas of the business maybe not directly commodity-related where you're seeing competitors already lowering their pricing, not necessarily related to the underlying commodity, things getting a little more competitive perhaps?

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

There's a -- a pretty short answer is generally no. We have not seen significant deflation across the industry.

[Matthew Smith, Analyst at Stifel Nicolaus]

Okay. Thanks for that. I'll pass it on.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Thank you.

[Operator]

Thank you. The next question is coming from Pamela Kaufman from Morgan Stanley. Your line is now live.

[Pam Kaufman, Analyst at Morgan Stanley]

Hi, good morning.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Good morning.

[Pam Kaufman, Analyst at Morgan Stanley]

Just wanted to dig into the coffee outlook a bit more. Can you talk about your strategy for coffee pricing this year given the favorability in coffee costs and how to think about the outlook for promotions versus potential list price changes? And I guess, generally, what are your expectations for segment growth? And how should we think about pricing versus volumes for the balance of the year?

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Pam, maybe I'll start and maybe Tucker probably has a comment here. We did see some -- a little bit of relief in the commodity, and that's what drove us to sharpen our price points in a few of our coffee brands. That has really took place in this month. So that will start to impact and help the business going forward.

Just a reminder that as we manage price, we really try to be prudent. We do feel that it's important to pass along both increases and decreases, but we do, do that with multiple levers. Sometimes, it's list price, sometimes it's trade or just getting a little bit more surgical on pricing, and that's really what we've done here. And so we do expect that to support the coffee business going forward. But beyond what I shared, we don't -- we probably cannot speculate on any future movements at this time.

[Pam Kaufman, Analyst at Morgan Stanley]

Great. Thank you. And then just on the pet segment. Can you talk a bit about what you're seeing in the consumer behavior in the pet category? We've heard from some of your competitors that consumers are exhibiting increasing demand elasticity and some trade-down in pet, particularly when it comes to treating. Obviously, Milk-Bone sales were still strong in the quarter. So just curious to hear what you're seeing in the dynamics in the category.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Yeah, sure. I mean, what I can speak to is largely pet snacks, specifically dog snacks. We did have a strong quarter on Milk-Bone and did see some good growth there. Part of the reason that we continue to have good growth is, as I've said before, the brand plays in that entire range of value from premium to more value-oriented or mainstream products.

We have seen a little bit of a shift to more of this -- the standard Milk-Bone biscuit, if you will. Our premium offerings continue to do well, but there may have been just a little bit of shift there. And then with -- as we've improved our supply chain on Meow Mix and gotten the original blend item back into sort of the number one volume position, that also would speak to the fact that our mainstream consumers are continuing to buy that product. So we feel very good about where our total pet portfolio plays at this point.

[Pam Kaufman, Analyst at Morgan Stanley]

Thank you.

[Operator]

Thank you. [Operator Instructions] Our next question is coming from Rob Dickerson from Jefferies. Your line is now live.

[Rob Dickerson, Analyst at Jefferies Financial Group]

Great. Thanks so much. Tucker, just first question for you. In the prepared remarks, you talked about the derivative instruments for the Post shares that are being divested. And it sounds like that cash inflow comes in Q3 and it seems like kind of your leverage is now and then with your incremental cash coming in, you could potentially be at 2 times net or lower maybe by the end of the fiscal year. That by far is the lowest you've been in like almost 10 years I think. So I'm just curious kind of how you're thinking about potential incremental capital deployment. And I realize you buy back stock, increase the dividend. But once you're hitting 2 times or less, seems like there could be incremental appetite, let's say, for acquisitions. So just curious how you're thinking about that. Thanks.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Rob, it's Mark. Yeah, we feel very good about our balance sheet right now. And obviously, this has been our intent all along. As you know, we have over the last couple of years been really focused in terms of refining our portfolio. But it does not mean that we're not interested in acquisitions. We remain very interested. And as you know, the industry as a whole has been somewhat quiet on the M&A front, but it's not for lack of investigating and looking, keeping lines in the water. And so we hope that M&A will continue or acquisition specifically will continue to play an important part of our growth story over time.

[Rob Dickerson, Analyst at Jefferies Financial Group]

Got it. Super. I'll pass it on. Thanks so much, Mark.

[Operator]

Thank you. The next question is coming from Jason English from Goldman Sachs. Your line is now live.

[Jason English, Analyst at The Goldman Sachs Group]

Hey, good morning, folks. Thanks for slotting me in.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Good morning.

[Jason English, Analyst at The Goldman Sachs Group]

Congrats on a strong start to the year.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Thank you.

[Jason English, Analyst at The Goldman Sachs Group]

A couple of questions for you. So the SD&A favorability looks like it was really corporate expense-related. What drove it? And why shouldn't we take that to the bank and assume it's going to be lower for the remainder of the year?

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

Jason, we saw some favorability within SD&A on the marketing line of some of our distribution and operations support lines and then also within our traditional corporate functions of administrative support. And really what we have made the decision to do is to continue to support our brands. So we have some incremental marketing that we're contemplating in the next three quarters. And also some of the expenses were timing-related. And so those are coming back in the second quarter. So we are not seeing SD&A favorability at this point in our fiscal year despite having seen it in our first quarter.

[Jason English, Analyst at The Goldman Sachs Group]

So I assume the timing was that corporate line because distribution is distribution. Marketing, that looks like it's timing, right, because you're holding the full year. Within corporate, what was the timing benefit this quarter? Because it was chunky. Your corporate was much lower than we expected.

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

Yeah. Just it had to do with various corporate items around accruals, incentives, timing of spend through various projects, so on and so forth.

[Jason English, Analyst at The Goldman Sachs Group]

Okay. That's helpful. Thank you. And then turning back to some of the segments. Looking at coffee, the price was weaker than we expected and it sounds like it's going to get even a little more -- and it sounds like it's going to turn deflationary based on the comments you made around the investment just this month. A, is that right? B, do you expect the segment to still post organic growth if price is deflating? Given there's really no volume growth in the industry, it actually looks like it's contracting. And sorry, three-part question. In light of the price investment, should we view a return to low-30s EBIT margins as out of reach for this year?

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

So Jason, maybe breaking this down, we -- on a year-over-year basis, coffee should be flat to slightly down just due to deflation in the underlying green coffee. We are expecting a level of volume momentum for the portfolio on a year-over-year basis. We do see gross profit margin improvement year-over-year, as you have noted. And from a segment profit standpoint, we are spending back some of that gross profit improvement in the form of marketing and investments in liquid coffee and sustainability. And so we would expect the segment profit margin to sort of be in the high-20s.

[Jason English, Analyst at The Goldman Sachs Group]

Helpful. Thank you so much. I'll pass it on.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Thank you.

[Operator]

Thank you. Next question today is coming from Max Gumport from BNP Paribas. Your line is now live.

[Max Gumport, Analyst at BNP Paribas Exane]

Hey, thanks for the question. With regard to gross margin, you took up your full year guidance. It sounds like it was due to incremental cost favorability. I was wondering if you could give us any color on some of the drivers of that capability you're seeing and what the sources of the change were and how that might impact to your assumptions around cadence for the next three quarters as well? Thank you.

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

Max, good morning. As you noted, we came into our fiscal year with a gross profit margin guidance of 36.5% to 37%. We have now guided to a 37% outlook for the balance of the year. So on average, we've come up about 25 basis points. What gave us conviction in doing that was just seeing some cost favorability within total cost of goods sold. In areas where you have a level of commodities, you have a level of transportation, you may have some in the manufacturing and distribution environment. But it's not significant. It's just some level of cost improvement. As we think about the outlook for the balance of the year, that gross profit margin will improve in each of the next three quarters in order to get you to the 37% outlook for the full year and it will be pretty consistent over Q2, Q3 and Q4.

[Max Gumport, Analyst at BNP Paribas Exane]

Thanks. And turning back to the commentary on trade-down in pet. We've also been hearing some chatter about this dynamic and seeing it in the data as well. I'm curious what you think is driving this increased value-seeking behavior? And how long you think it can persist? Thank you.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Matt, it's Mark. I won't speculate on how long. I do think as we have refined our portfolio to fit our strategy, obviously, pet snacks is really our crown jewel there. And I answered a little bit of that question earlier. Keep in mind that -- we all as pet owners feed our pets, obviously, pet food. Pet snacks are a little bit more discretionary, but nonetheless, keep in mind that consumers oftentimes treat their pets better than their children. And so we do believe that the pet snacks and our -- particularly our dog snacks portfolio, will continue to perform as we continue to meet the needs of consumers wherever they may be at from value to premium. So we really feel good about where our portfolio is positioned there.

[Max Gumport, Analyst at BNP Paribas Exane]

Thank you. I'll leave it there.

[Operator]

Thank you. Next question is coming from Steve Powers from Deutsche Bank. Your line is now live.

[Steve Powers, Analyst at Deutsche Bank Aktiengesellschaft]

Yes. Hey, good morning. Thank you. Just a question on -- as it relates to free cash flow. Given that you've raised your outlook $0.25, which implies a decent -- I mean, if that is a cash EPS increase, I would expect a little bit of flow through, maybe $25 million or so, to free cash flow that we don't seem to be seeing. So maybe you can just talk about what's driving that. Thank you.

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

Steve, we are seeing some incremental cash taxes as we had a strong finish to our last fiscal year as we continue to look through certain activities through this fiscal year. And that has really been the driver of the change of why we didn't raise our free cash flow guidance.

[Steve Powers, Analyst at Deutsche Bank Aktiengesellschaft]

Okay, okay. Very good. Thank you.

[Operator]

Thank you. Next question is coming from Robert Moskow from TD Cowen. Your line is now live.

[Tucker H. Marshall, Chief Financial Officer at J. M. Smucker]

Robert, perhaps your phone is on mute, Robert. Robert if you can hear us...

[Rob Moskow, Analyst at TD Cowen]

Can you hear me better now? Sorry about that.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Yes, Rob, welcome back.

[Rob Moskow, Analyst at TD Cowen]

Okay. Yeah, slow start, for sure. In the prepared remarks, you said that Meow Mix continues -- the demand continues to exceed your capacity and you're beginning to replenish inventory. What's the plan for improving your capacity for Meow Mix? You say in second quarter that you -- it looks like you're going to grow above consumption in second quarter. What are you doing at the plants to stretch your capacity to make that happen?

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Rob, it's Mark. We're already in process of course on those efforts. And it's all around productivity and making sure that the plants themselves are operating at their highest capacity. There's some nominal capital investments to make sure that the equipment is running as best it can. And so it's really -- it's fundamentally around those types of things. And we do expect the improvement to continue through the second quarter and support the demand.

[Rob Moskow, Analyst at TD Cowen]

Okay. Any unusual impact in the back half of the year? Will this be an easy comparison in the back half or will it be kind of like normal ship-to-consumption?

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

It should be normal.

[Rob Moskow, Analyst at TD Cowen]

Okay, great. Thank you.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Thank you.

[Operator]

Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further or closing comments.

[Mark T. Smucker, Chairman, President and Chief Executive Officer at J. M. Smucker]

Thank you. Thank you all for your time today for joining the call. We are really pleased with the positive start to our fiscal year. And of course, as we always say, our results were really made possible by our outstanding employees. So I'd like to just take a moment to thank them for their hard work and dedication to the company. We hope that many of you will be able to join us in Boston at the Barclays conference next week. A live webcast of our presentation on September 5 at 12:45 can also be accessed from our Investor Relations website. So I hope to see you all there in person or virtually. Thank you.

[Operator]

[Operator Closing Remarks]