Q3 2020 PriceSmart Inc Earnings Call
Good day, everyone and welcome to price Smarts.
Incorporated earnings release conference call for the third quarter fiscal year 2020, which ended on May 31st 2020.
After our remarks from somewhere companies representative Sherry.
Thank you.
Chief Executive Officer, Michael O'leary, Chief Financial Officer.
Given an opportunity to ask questions as time permits.
As a reminder, this conference calls limit to one hour and is being recorded today Friday July 10th 2020.
Digital replay will be available following the conclusion of today's call due July 17th 2020 by dialing 1877.
Three four for 75 to nine for domestic callers.
One for one too.
317.
[music] eight eight for international callers.
During a replay access code.
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Fourth threenine.
Five.
For opening remarks, I would like to turn call over to price Martz, Chief Financial Officer, Michael O'leary. Please proceed sir.
Thank you and welcome to the price Mark earnings call for the third quarter fiscal year 2020.
We'll be discussing the information that we provided in our earnings press release, and our 10-Q, which were both released yesterday afternoon July nine 2020.
You can find both documents on our Investor Relations website investors Dot Placemark Dot Com, where you can also find a pretty email alerts.
As a reminder, all statements made on this conference call other than historical facts are forward looking statements concerning the company's understated plan revenues and related matters.
Forward looking statements include but are not limited to statements containing the words expect believe we'll make sure estimates and similar expressions.
All forward looking statements are based on current expectations and assumptions as of today July 10th 2020.
These statements are subject to risks and uncertainties that could cause actual results to differ materially including the risks detailed in the company's annual report on form 10-K for the fiscal year ended August 31st 2019.
That was filed with Securities and Exchange Commission on October 29, 2019.
The company opted to those risks in response to the Garanti virus outbreak as detailed in the company's quarterly report on form 10-Q for the quarter ended February 29, 2020 as filed with the Securities and Exchange Commission on April 2020.
These risks maybe update us from time to time and other filings with the FCC, which are accessible on the Fccs website.
Www Dot FCC dot com.
The company undertakes no obligation to update forward looking statements made during this call.
Now I will turn the call over to shrink their in begging price Martz Chief Executive Officer.
Thanks, Michael Good day, everyone and thank you for joining us.
Hope that you and your families are all safe and healthy in these challenging time.
During the third quarter of our fiscal year 2020, our company has traversed an extraordinary arc that started with.
Rapidly responding to unexpected challenges created by the pandemic, you're predicting the needs of our members it up our employees and then with lead moving to implement ideas and capabilities that we believe well positioned us well for the future.
As the dressed on the last Q2 earnings call held on April nine we organized our focus around a number of major priority.
Those priorities remain the same today people supply demand on cash management.
In addition to seizing on opportunities for the future.
As to people with our top priority firmly play on the well being of our employees and our members the quarter began with rapid adaptation to really work without compromising [laughter].
Since March we successfully onsite at almost all office based employees in the U.S. and internationally.
I believe is really moved as a major reason why we can report today that we're aware of only one confirmed called the case among our office basically Ralph the company.
At the beginning of this last quarter, we identified a group of 16 executive.
Together oversee all aspects of the company's operation.
Until recently this leadership change, but not for at least a couple of hours every single day seven days a week. He has video conference.
This allowed us to create another sufficient communication channel that enabled us to nimbly responded rapidly changing dynamics in our 13 different markets.
Although we've now been able to dial back the frequency of these meetings to several times a week, we follow the same format setting many of the other previously routine meeting.
This is proving to be effective and feeling real time with the unexpected while providing a form to quickly expedite new business initiative.
We were also an early mover on preventative measures in our clubs. These include enhanced training protocols used the personal protective equipment, social dispensing practices installation at protected barriers for cashiers another member facing areas.
Elimination of whose sampling elimination or reduction of food service areas assignment of excludes the shopping hours from members at high risk.
General and Liberal paid leave policy for sick or high risk employees Offsite employees its function could be performed remotely the creation of cohorts with staggered schedule development of reserve. So it's worth age itself watching preventatively indoor outdoor ready and he has less of an outbreak.
Hi Tech tracing mapping its first quarter training protocols and letting procedures for temperature, taking it helps certification questionnaires when employees report to work.
And many other measures.
We implemented an education campaign for employees about the health risk and we recently extended our efforts to provide education mouth and sanitizer.
Family members and cohabit tests of our employee.
We continue to fall all public health guidelines depart markets with measures such as metering traffic inside of our clubs to come up social discussing more stringent cleaning protocols somebody sanitizers enough to members mandating math were permitted by law and working closely with local health officials to report and track cases.
I've given that we have over 9000 employees with each market approaching a pandemic differently, we feel positive about the results so far from our efforts to minimize the risk to our employees into our numbers.
The second we remain laser focused on supply as well our supply chain, we prepared alternative distribution flows and shipping rose to minimize the rest of disruption to the fall merchandise.
We've prepared backup <unk> SAR Miami distribution facility within the U.S.
We've increased the use of our regional distribution centers, such as the one in Costa Rica and use of Ocean freight train Central American countries on many occasions that we've been faced with border closing the truck traffic.
We've anticipated potential issues and work closely with our vendors to protect the supply chain upstream.
The global nature of the pandemic agreed at significant risk of destruction at all links to the supply chain.
As to inventory supply during the last few months, we have faced some volatility because the shifting demand. Initially there was a big surge and demand for basic special items and not as much interest in discretionary items.
As the quarter progress tweaks that rather abrupt shifts towards non essential products more oriented toward improving amenities at home such as Binoptics exercise equipment.
All appliances and home office equipment.
In response to the shifting trend we've worked closely with our vendors to adjust who by the way has been extremely supportive because of our long standing relationships and our reputation in our markets.
We've developed alternative local sourcing of quality products that meet the standards of our six right to reduce out of stocks and when warranted, we placed limits on certain items maximize access for those products most in demand.
With regard to demand we've been paying close attention to how to meet our members where they are and that really varies from market to market. For example, each of our markets has been responding differently at different times.
Just as we've seen with the rest of the world the trajectory of and reaction to the pandemic varies by geography.
This creates such a dynamic situation, we monitor and that's just on a daily basis, because sometimes we received very little notice about new developments and restrictions.
We've even experience very mandates within the same market.
You know it's important to note here that although we were considered and central business. Our markets generally don't provide the same latitude and predictability that essential businesses and the United States enjoy.
For example, during the third quarter, we face temporary club closures limitations on hours the number of members in a club at any given time restrictions on in clubs dining in foodservice and restrictions on areas of our business like optical entire service.
Even though we've seen an increase in our average ticket. We have also seen a decrease in our in club throughput capacity in terms of traffic.
We believe that it's probably attributable to a combination of restrictions on the clubs restrictions requiring people to stay at home or limiting their mobility and general concerns or even fear about going out in public because of a pandemic.
I should note that these are also impacted us this quarter I trust that membership renewal rate and membership income as well as reduction in margin because the limitations on food service and our other businesses that include optical prior and bakery.
Despite these challenges our team has rallied together to keep serving our members in the most efficient and effective ways possible, which leads to one of our most important achievements during the cold period.
The transformation of our online capabilities.
We now have higher quality direct communication with our members through online channels share important current information thanks to our digital pack and member experience team.
Our following online social media is rapidly growing this helps the better predict that needs and preferences of our numbers.
Our digital platform now combined online membership sign up and renewal, which started in up by 29 chain with our companywide online catalog, which went live in Q2. This year and then in Q3 with the launch of clicking go.
What can go unable minimal contact shopping for our members you can now research and select merchandise on our website order and pay online and then have their purchase is placed directly into their card.
We rolled out but can go in about three months and it is now available in all 13 of our markets and in all but one of the Clos.
This includes implementation at new operational procedures as well as the Onboarding a teaching our frontline employees additional gill.
Fourth is sneeze service.
From what we're seeing our members are embracing that service.
And just June 1st month, where we were operational in all of our market.
Well I couldn't go represented 2.7% of not merchandise sales.
We're now advancing into the next phase of combining our clicking go program with home delivery option.
This could not been implemented without tremendous collaboration incredibly long hours and coordination teaching and the strong determination of art came to make it happen and it make it happen fast.
Our team demonstrated strong sense of United purpose to serve our members in a time with me.
We also believes that these efforts to strengthen our foundation for growth and often sustainable benefits for our future.
So I have to take a moment to call out and congratulate our team on this very important accomplishment.
Finally, weve been and remain focused on cash management and liquidity at the beginning of the quarter, we took appropriate steps to conserve cash as the quarter progressed argue evolved and your striking a balance between ensuring we have access to sufficient liquidity to weather the storm of unknown duration Walmart.
Teeny funds needed to take calculated risk.
With best in opportunities that we believe will support the future of company.
In addition, several of the capital projects that we initially suspended I've been with them.
With regard to liquidity management, Michael will cover that in just a few minutes.
Before moving onto our quarterly results I'd like you mentioned that we opened our 46 club are smaller format and lead Barrick Costa Rica on June 17th that's here.
Barry a cloud is our eight club in Costa Rica, and it's located in the Guana costs. They province, approximately 130 miles from the nearest price might Claude and three hours friend the capital City of San Jose.
The opening of the live very at club market special milestone for US for the first time in the history of Heart company. The U.S. based team remotely orchestrated guided and participated in the opening of a new club.
And our capable in country team manage the process and executed flawlessly showing that we can and will adapt and grow under the most challenging circumstances.
We're also looking forward to opening our third warehouse club in the greater Metropolitan area Bogota, our eight clubs in Colombia, which we expect to open in the second quarter fiscal year 2021.
We know we're navigating unprecedented hi at least in our lifetime, but I'm pleased with how we'd come together and cannot be challenges.
I applaud the team for the progress and performance. We've made this past quarter. It's evident that the team is inspired maybe more than ever about the important purpose of our business to improve the lives and businesses of our members.
Now I'd like to turn our attention to our results for the third quarter fiscal 2020.
Total revenues for the quarter were $799.9 million, an increase of 1.4% over the comparable prior year period that merchandise sales were $768.4 million, an increase of 1.8% over the prior year period.
Currency fluctuations in our markets had a 19.3 million dollar or 250 basis point negative impact on that merchandise sales for the quarter.
Comparable in that merchandise sales decreased by 3.6% with currency fluctuations impacting comparable sales negatively by 2.5%.
By segment and Central America, where we had 25 clubs at quarter end, including three clubs opened since May 2019, net merchandise sales increased 1.2% with a 6.4% decrease incomparable not merchandise sales.
Our comparable and that merchandise sales were negatively impacted by significant traffic reduction in our warehouse club due to the <unk> various local government travel restrictions I referenced earlier. Additionally, as expected we've seen sales transfer from our existing warehouse clubs to our recently opened warehouse club.
In the Caribbean region, where we had 13 clubs at quarter end total net merchandise sales grew 9.6% with comparable not merchandise sales growth of 6.4%.
Our Dominican Republic, Trinidad in Jamaica markets led the way in the segment with 21.4%.
16.4% and 11.8% growth.
Third quarter ended May 31, 2020.
In the Dominican Republic, our net merchandise sales growth was primarily attributable to the opening of our club in June 2019, and strong comparable sales growth.
And make a in Trinidad hopped strongly for the quarter with the same number of clubs as last year.
In Colombia, where we currently have seven club.
That merchandise sales decreased 14.5 per cent for the quarter and there was a decrease in comparable net merchandise fail a 14.8%.
The impact of currency on total and problem that merchandise sales in Colombia was significant at negative 18.7%.
<unk>, 18.3% corridor, respectively.
Turning to merchandise in terms of merchandising categories. We continue to experience strong growth in our food that fresh categories, driven primarily by growth in health and beauty groceries and credit Department.
Due to shifting purchasing patterns during a pandemic in early Q3, we experienced a shift compared to the same period last year away from non essential categories, such as apparel housewares and hardware.
However, as Q3 progressed in continuing into Q4, we seen reversals that those Trent.
Additionally, due to safety protocols and restrictions in place departments, such as food services tire.
The optical centers were negatively affected by the impact it's a pandemic again its Q3 progress we've seen some improvements in our foodservice optical entire departments because of easing of restriction in some markets.
Now I'd like to turned a membership.
Our total number of membership accounts decreased 2.2% when comparing the number of accounts as it may 31, 2020 versus May 31 2019.
Similarly, our trailing 12 month renewal rate was 82.5% in 85% for the period. The ended May 31, 2020, and make or do you want 2019, respectively.
We believe the primary contributing factor to the overall decreases the reduced warehouse club traffic so called at 19 restrictions as we previously mentioned.
Historically, our members with primarily renewed at or near the time of exploration while at the register in club.
So reduction of traffic, obviously can impact the practice.
Colombia has the largest decline of 8.3% followed by a decline in Central America of 1.4%.
Caribbean, partially offset these declines with a 1.1% growth at membership accounts.
Good day, Colombia Central America has been the hardest hit regions for the most part in terms of the severity of duration of the governmental restriction.
However, due to the notable increase of online traffic and the new visibility of inventory online and opportunity to shop through our click adult program membership sign up every neil's completed the on might have also been steadily increasing.
Despite the decrease in membership accounts membership income increased three point person he's made 3% during the quarter.
The growth in membership income during fiscal year 2020 in our Central America segment. It's primarily the result is the opening three new warehouse club Santiago that I've watched and Metro Park in Panama, and San Cristbal in Guatemala.
During calendar 2019 platinum membership launched into Central America markets, which also contributed to the increase in membership income.
I didn't have an impact in Q3, it's important to note that we launched the platinum membership program in Colombia during the month of Joan.
In our Caribbean markets membership income growth was primarily attributable to the opening of the new boat Rebar warehouse club in the Dominican Republic Engineering 2019 in the past calendar year, Kraton and membership launched in Threeq Caribbean markets.
Membership income in Colombia declines in the third quarter due to the decline in total Columbian membership accounts, which we believe is primarily driven by a reduction in traffic caused by the pandemic.
John Hopkins University data indicates within our operating market that currently Colombia has the highest report it covered knighton cases exceeding over 106000 cases as of July 3rd 2020.
Net income for the third quarter fiscal year, Twentytwenty decreased 9.9% $12.7 million or 41 cents per diluted share compared to $14.1 million or 46 cents per diluted share in the comparable period last year.
As a reminder, we ended this quarter with 45 warehouse club compared to 42 clubs at the end of the third quarter of fiscal year 2019.
The new clubs include one in Panama referred to as Metropark, one in the Dominican Republic CIBIL, The bar club and the San Cristbal Club and open in November 2019 in Guatemala.
Following the opening of the leap area club in here and we now operate 46 clubs with our 47th expected to open in Boca Park, Colombia in Q2 fiscal year 2021.
Now turning to June sales, which we released earlier this week may and June improved sequentially versus April sales when compared to the prior year.
Net merchandise sales for $249.2 million decrease of 1.5% versus a year ago.
FX fluctuations adversely impacted net merchandise sales by 3.1%.
With a four week ended June 28, 2020 comparable net merchandise sales decreased 4.9% with a negative FX impact of 3.1%.
In closing our commitment to our members to our employees into our values remain steadfast.
The challenge is brought on by the pandemic.
That's trying as it has been for everyone has also provided us with great opportunities.
And we're not going away that we're prepared to respond to what is still a dynamic environment. We will continue to try to predict the best way to meet the needs of our members and we will continue to implement new and improved initiatives as we champion this business.
For our employees for our members and for our shareholders.
I want to thank all of our shareholders for their commitment and trust your grateful to our employees, especially those on the front line you continue to buy or all of us in these ever changing times.
I wish you all safety and good health.
I'll now turn the call over to Michael.
Thank you Shirley good morning, or afternoon to everyone and thanks for joining us today.
Sure. He mentioned in many ways, but pandemic has accelerated some of our plan. In addition to quickly evolving our adaptability to unforeseen market conditions.
We shifted some of our priorities in the short term never losing sight of the tenets of our business model and our long term goals.
Well, we do expect continued on terms that they and their economies of our 13 markets.
Due to cover 19, and we'll continue to proceed cautiously we will do so with an eye on opportunities to solidify the company and our market position for the future.
During the third quarter fiscal 2020 total revenues were 799.9 million, an increase of 1.4% and that merchandise sales were 768.4 million and grew 1.8%.
Third quarter increased membership sales was driven by a 21.7% increase in average ticket.
Partially offset by a 16.4% decrease in transaction, partially due to capacity another government restrictions as a result of the cobot 19 done done it.
Comparable networks, most sales were down 3.6%, which includes the impact of sales transfers to our newly opened clubs in existing markets currency negatively impacted both our net merchandise sales and our comparable number two most sales by 2.5%.
Total gross margin not merchandise sales was in line with the same quarter last year at 13.9%.
But was down during the quarter when compared to recent quarters.
The decrease versus recent quarters was largely due to its never going to drop off in sales in our higher margin areas, our foodservice bakery and optical that were particularly impacted by the pandemic.
Total revenue margins decreased 20 basis points to 15.9% compared to 16.1% and the third quarter fiscal 2019.
The slight decrease in total revenue margins is primarily due to lower margins when markets the euro business and a onetime reimbursement from one of our credit card vendors in the comparable period over the prior year.
<unk> expenses for the quarter were 12.9% of total revenues they decreased to 40 basis points versus the same period last year.
There are two main factors that contributed to our positive leverage that's tonight.
First we took proactive measures to control costs. These measures included forlorn from U.S. employees temporarily reducing compensation for higher paid U.S. employees and carefully managing warehouse expenses. During these times of uncertainty.
Second we benefited from lower Preopening expenses compared to the same period in the prior year.
These savings were partially offset by incremental cost to implement additional safety measures in our clubs to protect and better serve our employees a members as well as costs related to work or can blow program and other omni channel initiatives.
Operating income was 24 million or 3% of total revenue in Q3 of fiscal 2020, compared to 22 million or 2.8% of total revenue for those same period last year.
Net interest expense increased for the quarter, primarily due to higher average long term loan balances to fund our capital projects and recent drawdowns on short term lines of credit as part of our cobot 19 related efforts to secure a cat.
Our effective tax rate from third quarter fiscal 2020 was 38% versus the rate of 34.7% a year ago.
The unfavorable net impact is mainly driven by the loss of benefit of foreign tax credits, which are no longer recoverable as a result of U.S. tax cuts and jobs Act. However, we had a significant favorable impact from improvements in uncertain tax position, partially offset by the unfavorable impact from a tax treatment of changes in the value of foreign currency.
While quarterly rates may vary due to specific event based on our current trends in results. We expect our full year fiscal 2020 effective tax rate to be between 34 and 35%.
Net income decreased 9.9% to 12.7 million with diluted earnings per share a 41 cents in the third quarter fiscal 2020.
Compared to 14.1 million with diluted earnings per share a 46 cents from a third quarter of last year.
Moving onto our balance sheet, we ended the quarter with a strong position with cash cash equivalents unrestricted cash totaling $266 million, an increase of 152 million versus the same period a year ago.
Cash provided by operating activities increased 61.2 million versus the same period last year, primarily due to significantly lower merchandise levels as we adjusted to dramatic shifts in demand throughout the third quarter.
Inventory per club was $6 million at quarter end versus 7.9 in the prior period.
Oh, so I'm going to sell do not very significantly from current levels, we would expect inventories to shift back towards historical norms beginning in Q4.
Net cash used in investing activities increased by 43 million.
Primarily due to the increase in investments in certificates of deposits from Trinidad dollars. We have on hand, while we were actively to convert those trinidad dollars into us dollars availability allow.
The 123.1 million dollar increase in cash provided by financing activities is primarily the result of a net increase of proceeds from long term borrowings of 59.8 million compared to year ago.
Finance, our warehouse club construction projects and 61.5 million dollar increase in cash provided by short term borrowings.
As I mentioned in her last call. We have increased our short term borrowings to increase available cash on hand them to cure cash for any future potential operational cash needs because of course covered my team.
That's where I mentioned one of our main priorities during the cobot 19 pandemic has been liquidity management.
Some uncertainty remains in our markets due to the pandemic, we have confidence in our ability to continue our operations successfully while managing our cash position in response to the adverse impact imposed by the pandemic. We practically made the following adjustments to mitigate further risks.
First of all in addition to the drawdown on lines of credit that I mentioned previously we have negotiated extended terms with many of our vendors and I've taken advantage of tax deferral arrangements where available.
Second we continue to target inventory management by focusing on shifts and consumption patterns and by adjusting merchandise buying accordingly in addition to focusing on supply chain efficiencies.
Third we initially furloughed approximately 80 employees in the United States and implemented temporary salary reductions for U.S. employees and executives on a tiered basis, increasing from 10% to 30% based on compensation level. In addition to our board members falling through really waving their next quarter's cash compensation.
Finally, shortly after the onset of the pandemic with almost all of our capital project.
However, as we have gained a better understanding of the climate. We're operating in we are gradually restarting certain of our previously postpone capital expenditures such as construction of our third club and but we'll talk Colombia, which we expect to open in Q2 fiscal 2021.
Although it has been a challenging time or the past few months. We believe that we are emerging as a stronger company. Thank you all for your support during these times of uncertainty. We believe that we are on the right though for continued growth.
I will now turn the call over to the operator to take your questions. Operator, you may know start ticking or caller's questions.
[noise], we will now begin the question answer session to ask a question you May Press Star then one on your phone if you're using a speakerphone. Please pick up your headset before pressing the keys.
Time, you need to withdraw your question you compressed start and then too.
At this time, a pause momentarily to assemble roster.
[noise].
[noise] [noise] [noise]. Our first question comes from Jon Braatz, Kansas City capital.
[noise] more ensuring Michael.
Good morning [noise].
Sure. It's just wanted to touch base with you on gross margins I know they came down sequentially to 13.99%.
And you talked a little bit about the change in merchandise mix driving that and.
Can you give me can you give us a sense as to other proportionality of that Oh the change in the a change in the margin as a result of the changing merchandise mix. So how significant was and you know maybe how quickly you you can envision that the rebuilding again from.
The third quarter level.
Well, our total gross margins of 13.9% were flat with Q3 of last year, but but down from where we what we've been achieving an hour flight 20, but we attribute.
This in large part two areas of our business. It's it's not so much the merchandise says it is the the fact that we had restrictions on tire service Oh those types of things that would acquire more physical contact are obese, including bakery or just the end.
Firemen at such that you wouldn't have as much gathering and having a ordering the KCS is much and and those kinds of things that are generated that which would.
Impact gross margins significantly those areas, where most affected demos. For example is another example demo income was was reduced but in terms of the the margin for our.
Merchandise and the merchandise marching margins those have been holding pretty firm and in line with our our pricing strategy and consistent with our.
Our value proposition and our disciplined with a six rights.
So there has been some shift in emphasis from imports to domestic should make sure that we're covering out of stocks.
But ah that's about as much color as I think I can give you one on the reason for the margin being at <unk>, 0.9% do you. When you look at those higher value added services whats optical and bakery, you know maybe compared to where you were a month ago or are those services beginning.
The incrementally improve are you seeing some oh some gains in that area versus maybe like I said, maybe a month ago.
The short answer is yes, but it is a dynamic situation.
Okay, because if they're highly correlated with the kind of restrictions that we're seeing in the markets and that's why because those are that those are the types of services that require more physical contact and as a read and be more impacted by what the the Mort global and environment is okay art do use.
You know obviously you operate in a lot different countries in a lot of different variables are you seeing any sense that maybe.
Oh, yes, there's a resurgence hub.
Cobot cases are continuing high case high level cases that there might be additional restrictions placed on placed on a on people in your markets and maybe on on on your operating hours and so on.
You know the best I answer I can give you yeah [laughter] just like we've handled this entire process over the last three months is that we are getting prepared for all sorts of scenarios and we think that's the most responsible thing to do and it puts us in that position to maximize sales.
And meet the needs of our members I, if if I were to ask do you in the United States would you think is going to happen with a pandemic. It would be a touch question to answer I. Just the same grew in our markets, but we're clearly seeing that there is a cause and effect you know as cases go up there.
Restrictions tend to be greater.
And and we don't have a crystal ball. So the best we can do is prepare our business should be ready and at the ready to be able to best serve our members.
Given any kinds of restrictions that are thrown our way.
Okay. Okay. One last question from a competitive standpoint.
Are you are clicking go are you as advanced or more advanced the maybe than some of your some of your competitors.
Have you have you dealt with this do you think from.
In a better way than a in a quick away some of them than some of your competitors.
I don't really spend a lot of time comparing to our competitors in that regard all I can tell you is that a week later.
Launched expedite it rolled out in a way that I haven't seen elsewhere, and we're getting very positive reception from our members. We still have a lot of work to do and a lot of upside potential in terms of creating greater efficiencies and and we're learning and we're implementing new ideas to get better and better.
Gonna be layering on the delivery aspects I shoot to this program, which I think it's also going to be well received by our members.
So all I can tell you is that given the numbers that we saw in June.
That there seems to be Oh, good response from our members and that there is more potential there. Okay. Thank you Shirley.
Thank you.
This concludes the question answer session I would now like to turn the conference back over to the management team for any closing remarks.
Well I just like to say, thank you to everyone I'm. The ALJ. Thank you for the supports and for the understanding where all in this together we're learning a lot from this process and we as I said earlier plan to put it to good use going forward and I'd like like the most especially rack.
Nice our employees.
Michael.
Yeah. Thank you very much everybody.
Have a good weekend.
Take care.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.