Q3 2019 Earnings Call

Ladies and gentlemen, thank you for standing by welcome to the Hudson's Bay Company prison third quarter 2019 earnings Conference call. At this time all participant lines are in listen only mode. After the speakers presentation. There will be a question answer session. So that's the question during the session you would need to press star one of your telephone.

Please be advised to today's conference is being recorded.

If you acquired further systems, Please press star zero.

To have a comfortable to your speaker today, Jennifer Bewley, Vice President Investor Relations. Thank you. Please go ahead.

Good morning, everyone and thank you for joining us today.

This morning, we issued our third quarter results, which had been posted defeat are.

In a moment I'll pass the call over to cleaner folks H.B.C. CEO Mbeki ruest, our interim CFO can make a few comments on a resolved and then we'll open up the called the question.

Before doing so allow me to provide a disclaimer regarding forward looking statement.

Statements made during this conference call regarding H.P.C.S current and future plans expectations and intention results levels of activity performance goals or treatment.

Or any other future events or developments and other statements that are not historical facts constitute forward looking statements.

Forward looking statements are based on current estimates and assumptions made by management in light of its experience in perception of historical trends.

Current conditions and expected future developments as long as other factors that management currently believe are appropriate and reasonable in the circumstances.

However, there can be no assurances that such estimates and assumptions will prove to be correct.

Many factors could cause H.P.C.S results could differ materially from those expressed or implied.

The forward looking statements for discussion of these factors, we refer you to the risk factors set forth in the Companys annual information form dated May Threerd 2019, the recent mdna as well as each be fees other public filings available on SEDAR, and Peter Dot Com and our own website HPC Dot com.

Listeners should not place any undue reliance on forward looking statements made on this call with that I'll turn the call over to help me not to discuss our third quarter.

Thank you kinda burn Hello, everyone. Since last February H.B.C. has made strides streamlining our business. So that we can operate from a position of strength.

<unk> financial performance.

With the sale of Lord and Taylor to lunch <unk> November we now have the portfolio that enables us to focus and capitalize on our greatest opportunity.

That's without the new Hudson's Bay.

There's no doubt that we wanted more from our third quarter performance as we were up against our most difficult comparison from year ago.

Drawn digital sales continued cost control and inventory management, we're not enough to overcome industry headwinds softening in the luxury category and the challenge of winning back market share in Canada.

Exactly the Avenue, we remain optimistic about our unique position in the luxury market and our ability to further solidified his business as a category leader.

We've made strategic investments with the goal of defining Sachs as the fashion authority with an elevated service model and digital experience.

And now we're leaning into personalization across all channels to drive growth.

And Hudson's Bay, we're capable of better results from what is the solid business.

We're working to recapture share by serving customers with a sharper merchandise at it and improved service.

All the early results are these efforts are promising we are not yet at the scale needed to overcome unproductive assortments.

Canada digital is a more emerging channel and we've made significant progress in improving the base ecommerce capabilities, helping to put us in a position to beat.

At Saks off fifth we're creating our version of an off price retailers. This business is in the early stages of an updated strategy to drive the thrill of the fine by delivering luxury for life.

We've begun to see early results after pivoting over a year ago I believe there's even more opportunity ahead.

I am confident in our go forward plans I believe but each of these businesses has the ability to deliver a best in class customer experience that will drive financial performance over time.

The only true certainty is that retail will be radically different in five years than what we know today.

Our joint H.B.C., not only to be here for the first stage of streamlining the portfolio, but the next stage, where we deliver on what EGPC can become.

Company focused on serving our customers building, our brand, making strategic investments in marketing and digital and connecting it all together for a unified shopping experience.

This quarter stacks up against an extremely challenging comps given the success, we had in the third quarter 2018.

Well there wasn't a decline this year of 2.3%.

Comparable sales are up 5% on a two year stack interest you gave that shows that luxury shoppers paused in the third quarter for Sox. The pause with most notable in Metropolitan City, well there are pockets of growth in smaller markets.

It appears though that the luxury pauses over as the fourth quarter quarter has started out a stronger track.

Dialing servicing clienteling continued to be core Differentiators for Sachs as noted by another quarter of strong sell through the fifth Avenue club, the ultimate personalized experience that drives meaningful customer relationship.

For most of this year, we've been testing and learning how to bring them more personalized experience to all sack shoppers.

Well on like personalization as table Stakes, we've learned about connecting online data to our top selling associates can drive upside.

As part of our effort to lean into personalization, we plan to empower more associates with this capability and further tailored to saks experience to individual shoppers.

At our New York City flagship, we entered the holiday season, with an elevated shopping experience, including high touch services and exclusive merchandise.

It's important to note that at this time last year. The majority of the flagship main floor was impacted by a grand winner renovation.

Today, we're thrilled that customers will find our flagship at full strength with little to no disruption from good construction and truly exemplifying our new luxury strategy.

For Hudson's Bay comparable sales in the third quarter decreased 3.9% and increased 0.4% on a two year stack basis.

As we said before the challenges facing Hudson's Bay are largely self inflicted work is well under way to reimagine the customer experience with an emphasis on newness exclusivity better merchandise and service.

Thus far we've seen a positive response.

Growth within certain categories, including home kids and beauty.

Well this incremental progress is encouraging more work needs to be done and faster in men's and women's apparel fronts to fully reposition ourselves in the markets have returned to growth.

We are modernizing and delivering a more upscale at it by investing in brands that bring more fashionable design and style for the upcoming season Hudson's Bay will have expanded our relationship with 250 brands our customers currently love introducing 75, new designers and exiting.

600 brands.

We're also placing an emphasis on service improvements Hudson's Bay, and we've made progress improving NPS scores in stores.

We've been attacking our top detractors, including the Socit availability cues and wait times its wells the store environment.

We've been here third zoning strategy, allowing ourselves he has to be more nimble and introduced concepts like open sell shoes from customers that they preferred speed in the system.

Recently I visit I visited one of our most improves doors in the third quarter Fairview.

Like many other stores when they added a digital return death their NPS score jumped and we're driving more efficiency through central cash guests and buy online pick up in stores.

Finally, we're fixing the fundamentals of the store environment, providing easier navigation opening fitting rooms and cleaner facilities.

Digital sales were a bright spot for Hudson's Bay, where we've upgraded our ecommerce presence marketing and service.

Most notably digital sales grew by 17% in the third quarter and Ed NPS scores have nearly tripled since last year.

The waters tripled year over year, driven impart by the launch of our Hudson's They app in the first quarter.

For Saks off fifth new customer acquisition continued to drive top top line performance, including a 4.9% comp sales increase in the third quarter and a 2.6% increase on the two year stack basis.

Accessories women's apparel kids in shoes, where our top performing categories.

Rosen. This business has been the result of a strategic shifts, but emphasized changes to our buying marketing and service model, enabling the business to deliver an experience that provides fashionable on trend items that a great value.

For holiday, we've invested in delivering key luxury items that provide shoppers with the sprinkled Soc style moving onto digital sales across our businesses were strongest quarter up 15% driven in part by tighter marketing integration.

Digital is an area where fixing the fundamentals such a site speed a streamlined checkout process and a more accurate view of inventory have made a positive impact on performance.

These improvements have also helped to establish the foundation we need.

To advance our businesses digital experiences through greater personalization.

Before I turn the call over to Becky I want to hone in on our strategic priorities in light of recent news.

Over the last month, many have asked if we expect our strategy to change in short the answer is no whether we are public or private company. Our strategy remains the same.

Making focused investments to drive growth in each of our businesses.

Hanting that customer experience across all channels.

Reducing operating costs and complexity, while continuing to fix the fundamentals.

And capitalizing on the value of our real estate.

These actions are crucial in ensuring we can drive both top and bottom line performance over the long term.

While this will take time, we're confident in our journey at our promises to do everything within our power to deliver on the extraordinary heritage and potential of H.B.C.

For more details on our financial performance I'll turn the call over to Becky.

Thank you Selena and good morning, everyone.

Our financial results are a bit noisy this quarter due to our ongoing strategic actions, including continuing store liquidation European transactions and our exit from the Netherlands as well as the updated real estate appraisals coming out of the special committees work.

Third quarter revenues totaled 1.8 billion, including a comparable sales declined 1.7% as the company labs, a high performing comparable sales in the third quarter of 2018.

On a two year stack basis, H.B.C. comparable sales grew 2.8%.

Gross profit declined year over year by 38 million and gross profit margin was down 120 basis points to 38.3%.

<unk> bounced from our second quarter performance with less of an impact from promotions and inventory.

As you know, we're strategically streamlining our retail portfolio.

In the third quarter, all of our Netherlands locations 13, Saks off fifth stores.

She's Hudson's Bay clearance centers in Canada, where in liquidation.

While those locations contributed 55 million to sales their gross profit contribution was de Minimis. When you remove the liquid adding locations from our third quarter financial results. Our gross margin right was flat year over year at 39.5%.

Liquidations are continuing in the fourth quarter, albeit in theater fewer locations.

Once completed we will have 245 locations across three distinct businesses in North America, and a strategically positioned store network concentrated in top markets characterized by population density and higher than average household incomes.

In addition, we continue to evolve our merchandise relationships, where it makes economic sense for H.B.C. and our partners.

During the quarter.

These changes accounted for approximately 19 million of the year over year gross profit decline as well as an unfavorable impact on retail sales.

However in the long term we believe these changes will have a positive impact on gross profit as we work to create a win win model with potential to benefit both H.B.C. and our merchandise partners.

Overall gross profit margin, excluding liquidating sales was higher year over year at Hudson's Bay, and Saks off fifth and slightly lower Saks fifth Avenue.

Last quarter, we shared our belief the gross profit declines would moderate in the second half of the year as compared to our first half performance and our Q3 performance confirmed stuff.

With a shorter holiday calendar, we can only side that the season have started with a normal level of promotions in luxury and in Canada.

Moving onto SGN today, we're committed to running our business as efficiently and exploring opportunities to further reduce expenses to better or overall financial operating performance, while still providing our customers with improved service levels.

In the quarter SGN, a expenses declined 29 million year over year, resulting in an S.G. you name margin of 36.9% an improvement of 70 basis points.

We continue to benefit from previously closed stores.

Well as our strategic initiatives that we anticipated would kick in in the second half of the year.

Further optimization of in store scheduling to best meet customer demand and improved back of house operations have contributed to year over year savings, which we had been reinvesting in marketing and our personalization efforts.

Even so adjusted EBITDA from our North American retail operations declined 24 million on an annual basis in the third quarter.

As lower sales and lower gross profit were not fully offset by improvements in Austria <unk>.

As you know we expected adjusted EBITDA to be lower in the first half of this year in comparison to last year as we anticipated that the benefits from our strategic initiatives would not fully take effect until the latter half of the fall season.

After our second quarter results, we said that our expectation for improvement year over year carried risks.

With the decline in the third quarter, we do not expect to top last years performance, even if the fourth quarter improves.

The sale of our German retail on real estate assets during Q3 impacted our financials in several areas.

First we recorded 16 million less in adjusted EBITDA from our real estate equity investments during Q3.

Second we continue to experience noncash losses on our German retail investment of 80 million in the third quarter on 282 million for the full year up until the time, we closed the sale transaction in early October .

These losses will not be replicated next year.

Third we had a net gain on the sale of the retail on real estate transactions of 870 million. It was partially offset by a 640 million charge largely due to contractual lease accounting obligations that are required should be recorded as we assume.

In the Netherlands retail operations, which we are now closing.

After the quarter ended.

HBC, Netherlands filed for protection from creditors lender Dutch law.

You will allow us to lower the operating leases liability to the guarantee amount in the fourth quarter.

The net present value of our Netherlands leases guarantees were 379 million at November 2nd.

Fourth we were able to settle one of those leases after the quarter closed, which created a 36 million gain with similar negotiations continuing with other landlords.

And finally, we had a 153 million noncash tax expense due to the company's utilization of carryforward <unk> tax losses against the full gain on sale of 870 million, which essentially draws down or deferred tax assets.

For 2020, we anticipate real estate adjusted EBITDA will be diminished by approximately 100 million due to the divestiture of European real estate.

At this time, our estimate of the ongoing cash expenditures related to the Netherlands leases guarantees is unchanged at approximately 300 million.

Finally, there were two primary impacts from the special committees commissioning of Cushman, and Wakefield and C. D. Ari at the request of certain of our minority shareholders to appraise H.P.C.S real estate.

First the values and want to Peg building was written down which triggered a 10 million dollar impairment in the quarter.

Second an additional write down of 37 million of deferred tax assets.

We're very pleased to have improved on our gross margin performance from Q2.

Recognized our fourth consecutive quarter of S.G., a nice savings and nearly exited Europe .

Very shortly we will have complete focus on North America.

As many of you know inventory efficiency has been another area of financial opportunity and it's a key component a strengthening operations and improving free cash flow.

Our merchants are leveraging new tools and processes to drive data driven decisions and working to ensure that we are holding inventory in the most advantageous locations for our customers, which has continued to improve fulfillment in our digital operations.

We ended the third quarter comparable inventory declined by 3% year over year inline with our full year target for a low single digit decline.

Saks off fifth and Hudson's Bay, or holding less inventory and Saks fifth Avenue inventory was up slightly.

Our balance sheet and liquidity had improved substantially with net debt of 1.7 billion at the end of the third quarter.

Representing 2.8 billion of outstanding debt and 1.1 billion of cash.

Net debt has declined 56% or 2.2 billion year over year due to the repayment in retirement of our 656 million term loan.

Eliminating the 512 million Lord and Taylor mortgage.

And the balance of cash proceeds from our European transaction.

Our liquidity is strong at more than 2.1 billion, a combination of cash and availability on our ideal.

That amount over 970 million is attributable to availability on our Avi eldest supporting by our bar supported by our borrowing base that undrawn at the end of Q3.

Capital investments were 85 million during the third quarter in 2019.

Declined from 110 million from the same quarter a year ago.

While much of the work has been completed this year on Saks Grand renovation, including the opening of the vault during the quarter the spending last year was substantially higher.

In addition to build out of stocks American Dream and improvements at Hudson's Bay stores is ongoing.

On the technology side, we continue to fix the fundamentals in stores.

Digital corporate to modernize and cloud in April our technology platforms, as well as spend to connect our online and offline shopping experiences.

Our capex expectations for the year has narrowed to approximately 300 million net of landlord incentives or 350 million in total.

Finally, we knew that we would not get to cash free cash flow positive this year, but we hope we would be close.

Given our results thus far in 2019, we reiterate that we will not be free cash flow neutral in 2019.

That concludes my remarks, operator, we'll now open it up for questions.

As a reminder to ask the question you need to press star one or your telephone to withdraw your question press the pound.

Please stand by one compiled acuity roster.

Our first question comes from our teachers with RBC Your line is something.

Yeah good morning.

Could you just walk through a little bit more detail on Ah Onez DNA.

Obviously, there's lots of changes there, but could you give us a sense maybe of the organic change in spending I don't know if it makes sense to do that by banner.

We're just in total and then and then you know the outlook for either for Q4 or into 2020.

[noise] good morning, Mark. Thank you for your question.

We have always had a lot of opportunity to reduce or S.G. and I call and it's been a particular focus and we'll continue to be so I'm going forward, we're taking a rigorous review right now.

All of our Paul both within the banners in corporate.

And our eliminating anything that we can I'm not sure. What you meant by organic there are there are some items included in our S.G. and I know that or not you know traditional S. You know type expenses, but those are very very small when you look at US you know you in the total.

Yeah, I mean, I guess, what I'm just getting at is net of sort of store closures or you know on a like for like basis. If you think that you can.

Continue to reduce total us she and I spent I guess is because really what I'm getting.

We do the company you know as you're well aware has grown by acquisition and while we've done a good job in integrating some parts of S.G. NIAGEN, taking advantage of synergy there are other areas that we still have a lot of opportunity.

Not really pertains of course to our open source.

Yeah, I would read and write that Mark I think that good this quarter. What you see his efforts that we had begun Lilly to make sure that we've got a labor in the right places labor front facing with customers got really looking at back of house labor and challenging whether we've got the right model.

So we made nice improvements in the quarter on that as we look forward, we definitely see more opportunity I would say one big area is really we've talked all year about moving more to the edge and essentially a reducing our corporate overhead so that she needs to be a very big area of focus.

As well as I'm looking at each of the business units and asking ourselves. If we were starting over what kind of cost structure do we need and so those are two areas, where we're spending a lot of time and you should expect to see improvement in that and if I could add one more thing we have implemented a new store labor planning model.

Well, we did that during this year and we're really seeing a lot of benefit from having our store labor scheduled on when we know we're gonna have our highest customer traffic.

Okay I appreciate that on the gross margin side and on the assortment.

You know you've outlined some pretty material changes in terms of the vendor base.

And then I think I think Becky, we're calling out a 19 million dollar impact related to that but could you just sort of clarify I don't know if I have that right and then do you expect more in Q4, and when do you sort of expected benefits to materialize from from the ships.

So.

Thanks again Mark.

What we're talking about we have she two areas odd change related to the way we work with our vendors. One is where there are a few very few vendors who are moving from a well be calling owns sale basis, where we actually buying type.

Possession of their inventory to where that it's more of a lease sale basis, where they actually occupy space in our stores, but they they are responsible for the the salespeople in the sales during the transition on those very few vendors, there's a lot of noise in the numbers those.

We're converting from the owned to lease basis I'm, sorry, we believe that that are coupled with the change in the way we account for certain rebates and allowances that we'd get some vendors on we believe that that had a negative impact in the quarter of 19 million there.

It will be I believe a smaller impact in the fourth quarter and then moving into next year I'm, we should be completely.

Out of that kind of noise.

And is that just or is that at the Sox banner or at the Hudson's Bay banner or both.

Primarily at the Sox fan.

Okay, and then well enough just back to the sort of changes in the vendor relationships and the and the number of brands again was that specifically Hudson's Bay.

Yes. It was okay, and where are you out in terms of actually seeing that or or rolling out through the stores.

Well the numbers I was talking about is what you can expect to see in the spring and I would say more qualitatively I feel very good about where we are in the home business, where we have made a lot of changes from what I would call.

He said category offerings to more fashion forward at home and we can't really he it's starting to take hold.

I wouldn't say we are more in our infancy. However, in the women's and men's apparel category and where we have brought in newer or more exclusive fashion forward brand, we're really happy with their before in formats.

But we need more of them to offset the declines that we're seeing and some of the older more conservative brand.

So that is a shift that he will continue to see next year.

It is it's not moving as fast as I would like it to be moving quite frankly.

So that's an area that Ah we continue to work on the other area that I would highlight that we're pleased with on the out of hand, just beauty, where we've seen really nice performance in the second half. So as you think about the big chunks of the store a women's and men's apparel is still our biggest category. We've got more work to do on costs.

<unk> as a team knows what they need to do and they're going after it and.

And then in home and beauty, we're starting to see the turnaround that we expected.

All right. That's helpful. When you were describing it initially I think you said something you know along the lines of up scaling the at it.

Is that a fair characterization is that going to be consistent across the entire network or sort of more focused in your in your sort of urban stores or how should a how're you doing that.

Yeah, it's a very good characterization would definitely moving from.

Good businesses to better and more fashion forward and I can see that in the numbers in terms of what's selling and also how we're buying for the spring I do feel encouraged by that and I would say, our particular focus and where we see the most opportunity I would be in our top 20 stores. However.

As I get more and more stores I would say the opportunity is is more global in nature I think that our customers are telling us across the nation.

That they're looking for slightly more upscale at it and where we're putting it in its working so well were really looking across the company to bring it more he's brands.

Okay. Thanks, and then just my last question just on the digital obviously, you're getting some better traction there could you just talk a little bit more detail, but what you've done differently and then on a relative basis, you know how do those sales sort of differ in terms of piano impact.

Today, you know versus versus stores.

Sure.

I think gives it the cheap big buckets that I would say have contributed to success across the board and digital has and are focused on fixing the fundamentals as well as the changes we've made from a marketing perspective, and first I want to give a lot of credit to the teams across all of the areas that are working on that.

But around fixing the fundamentals, it's really bad.

Hey, good things as I said around say speed checkout process.

Very much connected to for example, getting the right inventory in position. So while we historically had seen nice demand we didn't have the inventory and position and what we were doing was disappointing testimony.

And so that is moving along really nicely and you can see that in particular some of the fact that for example at Hudson's Bay, We've tripled our net promoter score on the digital experience, but across the board made very nice improvements.

The mental on the digital marketing side, we just gotten a lot more savvy and aggressive around our use of data and that is translating in she is very nice increases in traffic. So overall I'm really pleased with the work and we see still more often seem to be ahead.

As you look at our businesses.

Sachs isn't business, where essentially it's the profitability of a store sale and additional sale are essentially the same so we're really.

Channel agnostic as you think about sales of digital versus or sales et cetera.

And that is unique I would say in retail that exists because of sort of stuff. The labor model S. Saks and just the very high price points that we have in the Saks business.

At <unk> Hudson's Bay, I'd say, it's more typical of what you see it other retailers, which is the overall profitability is lower southern online order and so on that is not not unexpected but something that we consider as we think about the growth of says businesses. All in however, I think what we know is that the.

Customers looking for an omni channel experience and it's the integration of stores in digital that are really becoming the winning value proposition one data point that I like to use in Canada that I think as some compelling is that 97% of all of our E. Commerce returns come to our stores and I think that reflect.

How omni present, our stores are and because the return processes. So easy for our stores. It makes the online ordering process more compelling for customers.

All right appreciate all the comments on the bus.

Thank you. Our next question comes from Oliver Chen with Cowen and company. Your line is open.

Hi, This is John on for Oliver. Thank you for taking out costs and could you just talk little bit more on the potential reasons for why you think looked and shoppers took a pause in threeq U.S. Saks and what do you see in terms of the competitive environment. Now do you think the market is relatively rational and do you expect pressure and for Q from competitive closures.

So I'm not.

Sure.

We weren't they were using external data when we look at this sudden dies essentially we're looking at credit card spending among high end Department store shoppers and we did see a decline starting in August so that was the piece that we noticed for the first time quite.

Frankly, a we did have some positive impact of various initiatives, we're working on but not enough to offset the pause that we saw.

Among the overall spending on as we're now into the fourth quarter or what I would tell years, we feel a lot better about the business.

Business has been quite strong for the last eight weeks or so and.

Right now on the other hand, we're still seeing this pause in any external data. So I would say, we're still cautiously optimistic but I you should expect to see much better performance in the quarter from Sac.

And you know in some ways remember, we're also comping the fourth quarter last year, where our flagship store.

I had a lot of issues in terms of being close so it's a much easier quarter for us because they thought we do have some nice trends going and so far I would say, it's been pretty rational from a promotional perspective, we're certainly watching closures in the marketplace and anticipating that back some pressure on us.

So far we've not seen that.

Thank you very much yeah.

Thank you Wes can lay so many of you wish that's the question at this time. Please press Star then one are you touched on telephone.

Our next question comes from Patricia Baker with Scotiabank. Your line is open.

Oh, Thank you very much and good morning, everyone well you know I just want to drill down a little more on the.

A detailed that you gave us about what you're doing to be assortment at Hudson Bay, and I want to clarify so when you were answering a market and initially so did you say that by the spring up 2020, you would have to 75, new vendors in in the Bay and the 600 he.

Added up 600 odd brands would be complete.

Yes that that phase it would be done I wouldn't say all of our work will be Don I was just getting the numbers you should expect to see for the spring.

Okay, and then if we look at that back.

Can you just provide some kind of a direction well see what with the bulk of de 600 brands that you're taking taking all this debate with the bulk of those be in apparel.

Yes, they would be and smaller smaller businesses and apparel.

Okay, and then likewise with the 75, new brands that you're adding also those apparel as well.

Yeah, a lot of kids at at work has been in apparel, because I do feel good about the work we've been doing at home.

Okay Super and then you did a provides an indication to talking about the luxury market Soc and indicated that you know Q4 knock on wood has started a better trends are somewhat in Q3 to have any commentary on what you're seeing in Canada with hot band how the holiday season has started off.

Sure Yeah in in early November a we were quite soft in Canada.

But then a we had a very good Thanksgiving and cyber Monday and things have span relatively good sense, then I I still think we'll have pressure in the fourth quarter. It today, but I am more encouraged by what I'm seeing then I felt a.

Q3, and in Q3, even the trends in Q3, we we were hit hardest in August and September and got a little bit better in October as the weather about holder and we didn't see nice growth in our outerwear business. For example, so you know it it it's.

You know I feel encouraged by what we're seeing sense. Thanks, you know they did the black Friday break on the other hand, I'm still very cautious because we need to see more than she is good we.

Okay. Thank you and good luck. Thank you.

Thank you and I'm currently showing no further questions at this time I'd like turn the call back over to Jennifer Bewley for closing remarks.

Thank you for taking the time to learn about HPC for additional questions. Please call Investor Relations at six 460 to four Sixthree line have a great day happy holidays, and we'll see you on Tuesday.

Ladies and gentlemen, just stays conference call. Thank you for participating you may now disconnect.

Oh.