Q1 2022 MGP Ingredients Inc Earnings Call
[music].
Good day and welcome to the M. G. P ingredient first quarter 2022 financial results conference call.
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Please note. This event is being recorded I would now like to turn the conference over to Mike Houston Investor Relations. Please go ahead.
Thank you I'm, Mike Houston, with Lambert and company M G P's Investor Relations firm.
Joining me today are members of their management team, including Dave Colo, President and Chief Executive Officer, and Brandon Gall, Vice President of Finance and Chief Financial Officer.
We will begin the call with management's prepared remarks, and then open up the call to questions.
However, before we begin today's call. It is my responsibility to inform you that this call may involve certain forward looking statements such as projections of sales operating income gross margin and effective tax rate as well as statements on the plans and objectives of the Companys business.
The company's actual results could differ materially from any forward looking statements made today due to a number of factors, including the risk factors described in the company's most recent annual and quarterly reports filed with the Securities and Exchange Commission.
The company assumes no obligation to update any forward looking statements made during the call.
If anyone does not already have a copy of the press release issued by M. G. P. Today, you can access it at the company's website Www Dot M. G P ingredients dotcom.
At this time I would like to turn the call over to <unk>, President and Chief Executive Officer, Dave Colo Dave.
Thank you, Mike and thanks to everyone for joining the call today.
On this call we will begin with an overview of our performance for the quarter ended March 31 2022.
Updates on key financial performance metrics and discuss the progress we have made against our strategy.
At the end of the call we will open the line for Q&A.
We are off to another strong start to the year with record results for each of our three business segments.
We are very pleased with our continued momentum this quarter and believe the underlying macro consumer trends that are supporting each of our business segments remain strong.
Consolidated sales for the year increased 82%, while gross profit increased 122% to a record $71 $8 million, representing 36, 8% of consolidated sales.
Reported operating income increased 144%, while adjusted operating income increased 124%.
We are very pleased with the sustained momentum across each of our segments this quarter.
The demand for aged whiskey, and new distillate continues to be a growth driver with a 44, 4% increase in brown goods sales for the quarter within our distilling solutions segment.
Which was previously known as our distillery products segment.
We recently changed the name of this reporting segment to better reflect the products and services, we provide to our customers.
Our premium Super premium and ultra premium offerings contributed to the encouraging results for the branded spirits segment.
<unk> growth in our higher priced American whiskey brands were key contributors to our strong gross profit results for the quarter.
Which represented 44, 5% of segment itself.
Ingredient solutions segment sales also benefited from strong demand and improved product mix, yielding record gross profit representing 29% of segment sales.
Looking at each segment in greater detail, we achieved another record quarter in our sealing solutions segment with sales ending the quarter up 25, 8% to $111 $5 million.
Gross profit for the quarter improved to $38 $9 million or 34, 9% of segment sales.
Sales of premium beverage alcohol increased 37, 7%, while brown goods sales grew 44, 4% from last year due to higher aged whiskey and new distillate sales.
It's whiskey cells also served as the primary driver to the increase in gross margins in the period.
Our growth in sales of Brown goods this quarter again outpaced the longer term market trends.
This was attributed to the sustained strong demand in each of our customer categories as well as our team's ability to capture unfilled demand.
We expect strong pricing trends to persist.
Our inventory of aging whiskey is offered M. G. P. A sustained position of strength and we believe this will continue throughout 2022.
Sales of new Distillate also posted strong growth for the quarter as we experienced an increase in demand compared to the prior year period.
While consumer demand for American whiskey remains robust and our diverse customer mix positions us well, we remain uncertain as to when the growth rates will begin to normalize and align more with a long term trend for the overall category.
We believe our significant share and scale advantage will position us well as this increased period of demand continues.
Moving to white goods sales posted another solid quarter with growth of 26%, primarily due to improved pricing and volume.
The growth, partially reflected volume shifts away from industrial alcohol and towards our white goods premium beverage products.
As a result sales for our industrial alcohol products decreased 33, 7% this quarter.
The decline was also partially attributed to reduced third party sales of industrial alcohol produced by ICP, our former joint venture partner.
As previously discussed we anticipate margins for both industrial alcohol and white goods products to continue at these lower historical levels.
Or in the low single digits.
Demand for industrial alcohol continues to moderate and due to the additional supply that has entered the market.
This anticipated continued decline in the profitability of white goods and industrial alcohol is factored into the fiscal year of 2022 guidance.
Revenue from warehouse services increased 36, 2% this quarter as compared to the first quarter 2021.
This growth can be attributed in part to the growth in the number of customer barrels aging in our whiskey warehouses and other services we provide.
Turning to branded spirits sales totaled $55 $8 million for the quarter, primarily due to sales of brands acquired as part of the <unk> acquisition.
We also benefited from continued strength in our premium Super premium and ultra premium brands, reflecting higher case volume of these higher margin products as well as increased points of distribution for the legacy <unk> brands.
Gross profit for the segment increased to a record $24 8 million or 44, 5% of segment sales for the quarter.
Strengthening consumer demand for our brands, especially our premium Super premium and ultra premium offerings continues to be a major catalyst for growth.
We are encouraged by the growth we're experiencing as we continue to successfully execute our premium innovation strategy.
Increased distribution and improved pricing on select brands as well as product mix contributed to the record results this quarter.
We believe consumer demand for our expansive family of brands will continue to position us well for incremental growth.
Turning to ingredient solutions sales for the quarter increased 46, 2%, while gross profit increased to $8 $1 million or 29% of segment sales each of which represents record results for this segment.
As a reminder, we experienced some temporary softness in our ingredient solutions segment in the first quarter of 2021, primarily due to a natural gas curtailment that impacted approximately two weeks of production last year, which reduced gross margin by approximately 400 basis points.
The increase in sales was primarily driven by increased volumes and higher average selling prices of specialty wheat, starches and proteins as well as commodity wheat starches.
Our experienced sales innovation and R&D teams worked effectively and collaboratively to meet our customers' needs as we achieved another quarter of record results.
Before I turn the call over to Brandon I want to reiterate my excitement for the continued momentum we experienced this quarter across each of our business segments.
Our product offerings remain aligned with strong consumer trends as evidenced by our ability to effectively recruit new business and grow with existing customers.
This concludes my initial remarks, let me now turn things over to Brandon Gall for a review of the key metrics and numbers Brandon.
Thanks, Dave for the first quarter of 2022 consolidated sales increased 82% to $195 $2 million as a result of strong growth in each of our reporting segments gross profit increased 122% to $71 $8 million due to record performance by all three.
Three segments.
Gross margin increased by 700 basis points 36, 8%.
Corporate selling general and administrative expenses for the quarter inclusive of advertising and promotional expenses increased $10 million to $21 8 million as compared to the first quarter 2021, primarily driven by the assumption of Lux cause SG&A expenses.
Operating income for the first quarter increased 144% to $50 $1 million, primarily due to the increase in sales and gross profit as previously discussed.
Adjusted operating income increased 124% to $50 $1 million.
Our corporate effective tax rate for the first quarter of 2022 was 23% and remained unchanged from the year ago period.
Net income for the first quarter increased 142% to $37 $4 million.
Basic and diluted earnings per share increased to $1 69 per share from <unk> 90 per share while adjusted EPS increased to $1 69 per share from $1.01 per share.
Adjusted EBITDA for the quarter was $55 $4 million or 115% increase from the year ago period, driven by the solid performance of all three business segments.
Corn wheat flour and natural gas are three of our largest commodity expenses in each had seen upward prices over the last several quarters as.
As we shared in February we entered the 2022 fiscal year with the majority of commodities purchased against contracted volumes.
<unk> extensive risk management program that includes purchasing the corresponding grain at the same time, we contract volume and pricing for our products.
Our objective as always is the price through as much commodity input inflation as possible.
However for various reasons, we do not contract with 100% of ourselves for example, there are certain.
Customers for our white goods and industrial alcohol products that choose not to contract in advance. Additionally, customers for our fuel grade alcohol distillers feed and related co products also purchase in the spot market. As a result, we cannot provide assurance that we will always be able to price through increases.
And commodity costs to our customers in the open market.
That said, we remain committed to pricing <unk> increases where possible and our full year consolidated guidance contemplates. These inflationary headwinds. Additionally supply chain disruptions have had a minimal impact on our operations over the past several quarters, but this is another area, we continue to monitor to mitigate potential.
<unk>.
As we've previously stated our strategy has been to migrate away from industrial alcohol and toward our white goods premium beverage products, whose customers historically are longer term in nature and pricing less susceptible to wide swings.
System with those efforts white goods sales for the first quarter increased by 26% to $21 million, while industrial alcohol decreased by 33, 7% to 11 $5 million.
Cash flow from operations was $22 $2 million in the first quarter, which was up from approximately $17 million in the first quarter of 2021, reflecting the strong cash generating capability of our business and the significant contribution of the watsco acquisition.
Strong free cash flows for the quarter further highlight the value and execution of our long term strategy, providing M. G P with adequate support for our expansionary projects.
M. G piece balance sheet also remains strong, allowing us to continue to invest to grow we remain well capitalized with debt totaling $232 7 million and a strong cash position of $27 $3 million.
Our investment in inventory of aging whiskey increased by $6 million at cost as compared to the fourth quarter of 2021. This net increase was driven by increased put away during the quarter.
Switching whiskey put away with growing future distilling solutions and branded spirits segment sales is one of our priorities and long term strategies.
We also remain committed to continuing our investment in our operational capabilities. We expect approximately $47 2 million in capital expenditures during 2022, which represents an approximate $10 million increase above the forecast we provided during last quarter's earnings call.
We've identified opportunities to accelerate projects such as the construction of the textured protein facility in Atchison, Kansas as well as new opportunities that will strengthen our competitive position in the markets we serve.
We believe these new and accelerated projects all share attractive payback period and returns on investment, which should enhance shareholder value over the long term, Dave will speak to these more in a moment.
The board authorized a quarterly dividend in the amount of <unk> 12 per share, which is payable on June 30 to stockholders of record as of May 20th. The board continues to view dividends as an important way to share the success of the company with shareholders.
We believe our capital allocation strategy focused on organic and acquisitive growth aligns well with our long term strategy as well as the underlying consumer trends our business is well positioned to leverage we will continue to pursue M&A and conduct expansionary projects to accelerate growth and increase our capabilities and product offerings.
And now let me turn things back over to Dave for concluding remarks.
Thanks, Brandon this quarter marked another milestone for record results across each of our business segments as well as a strong foundation for future growth.
Critical element to building on that foundation for growth as our recently announced three expansionary projects.
As a reminder, the first is an expansion of our Lux ROE distillers facility in Bardstown, Kentucky, which will allow the distillery to operate 24 hours per day and increased capacity by 75%.
Second is the construction of a new barrel warehouse facility in Williamstown, Kentucky, and third is our Texturize protein extrusion facility in Atchison, Kansas.
We have also received board approval on two new projects that are in support of the continued demand we're experiencing for our brands and our customers' brands, which will include an additional warehouses in Kentucky and further expansion at our electro distillery in Bardstown.
With the increased demand, we have been experiencing for our new distillate, aged whiskey and ultra premium spirits brands as well as texture is protein products. These investments position us well for continued sustainable growth across the organization.
As Brandon mentioned, our inventory of aging whiskey increased $6 million from the fourth quarter to $180 1 million at the end of the first quarter. We remain supportive of our library of various mash bills and vintages and expect they will continue to meaningfully contribute to increased levels of <unk>.
Gross profit and cash flow for the company moving forward.
While we anticipate volatility in the broader economy to persist in the near term, we remain confident in our team's capabilities and strong market position as well as the value of each of our segments bring to our global customer base.
We believe the underlying macro consumer trends that are supporting each of our business segments remains strong and we expect these trends to continue through fiscal 2022.
We will maintain a high level of operational execution, and we will be deliberate and all actions, we take as we navigate the market dynamics this year.
We are confirming our full year fiscal 2022 guidance.
We expect sales to be in the range of $690 million to $715 million, which would equate to a percentage growth rate range of approximately 10% to 14% from the prior year period.
Adjusted EBITDA is expected to be in the range of $150 million to a $157 million, which would equate to a percentage growth rate range of approximately 6% to 11% from the prior year period.
We are forecasting basic adjusted earnings per share to be in the $4 15 to $4, 35% range with basic weighted average shares outstanding expected to be approximately $22 million at year end.
Yeah.
As we progress our ESG initiative, we recently disclosed our environmental and sustainability policy statement.
And Q1 2022 wastes disclosure report on our company website under our social responsibility section of the site.
We remain on track to disclose the company's greenhouse gas emission information during this year and the environmental sustainability report for calendar year 2022 in Q1 of 2023.
We are also working with a third party to complete a holistic assessment of the company's ESG program to ensure we have an effective and optimized approach to our ESG journey going forward.
We are committed to refining the effectiveness of our tactical execution and we will continue to leverage the strong foundation, we have established over the years with the objective to deliver sustainable long term value for our shareholders.
That concludes our prepared remarks, operator, we are ready to begin the question and answer portion of the call.
We will now begin the question answer session to ask a question you May Press Star then one on your Touchtone phone.
If you are using a speakerphone please pick up your handset before pressing the keys.
If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
The first question comes from.
Zero.
Oh go ahead.
Hey.
Good morning.
For image.
No.
I don't know if you mentioned this but you did talk about the new distillate sales being strong in.
In the quarter, how how does that balance out with age was was it roughly the same growth rates or did one grow faster than another.
Yeah, Great question mentioned, thanks for thanks for that we actually saw well into double digit growth for both new distillate and our AG sales in the quarter. So.
While Asia is definitely still expanding as we've seen in previous quarters.
Discipline is definitely you.
You know joined the rates as well with its performance in Q1.
I mean, how much I mean, how much visibility did.
Did you have into the quarter like was there a surprise we surprised.
With sales at all or.
I mean, I know you don't get 100% visibility with customers but.
Can you talk about like what might have changed and added to the strength.
Yes, it's really we're seeing it from top to bottom from all of our customer classes, whether it's crafts to.
Regional to national multinational Theres religious we've talked about just general tightness, we're seeing for age, but we're now starting to see that even more so for new distillate capacity as well.
And as a lot of our customers have more and more success and get better capitalized.
They're able to put down more earlier than maybe they were in prior years.
Okay.
Relative to your guidance for this for the next three quarters.
As it relates to brown goods.
Hi.
How should we think about this so we can obviously you know.
These growth rates can continue.
Essentially run out of product itself. So.
We are.
We'd be thinking about this in the in sort of like again like a balanced type of growth between aged and new distillate in the remaining quarters.
Yeah, you're right for the quarter nudist slid and AIDS sales combined were up north of 44%.
That's not anything that we would suggest you or anyone else models out ongoing me right. So what we've what we've consistently said is over the long term, we're going to fall more in line.
With the overall growth of the category.
As we look at the remainder of the year, we do not anticipate the same level of growth in subsequent quarters for our brown goods for that reason.
So that's how we're thinking about it.
You know a lot of growth coming into the or a lot of demand coming into the year and a lot of customers of ours that were in need of H barrels a new distillate for their businesses.
Okay, and just one more question and I'll get back in the queue when the ingredient solutions business.
Number one how much of the growth.
What was the dollar amount affected last year.
Due to you know.
You shut down and then.
Second.
Gross margin was terrific at 29% I don't think I've seen it that high close I guess last year point.
Is that a is that a is that the right margin to think about going.
Going forward this year.
Yes.
So yes to answer the first part of your question Mitch It was about a 400 basis point impact just on the natural gas curtailment. During Q1 of last year are there may have been some other minor issues that happened two to further dampen it.
But the gross margin percent in Q1 of last year was 27%.
Whereas this year, obviously, we printed a 29% gross margin percent, we've been pretty consistent we think that mid to upper Twenty's is what this business is capable of doing we saw it in Q2 and Q3 of last year and we saw it in a number of quarters and the year before that so as we as we look forward, we continue to see that capable.
That potential in this business just due to the the way the business has mixed up.
More.
It's more specialty products.
And expanded margins over time.
Okay, well thanks for your time I'll get back in the queue.
Yeah.
Your next question comes from Bill Chappell with the kidney.
Go ahead.
Joe Your line is open you may ask your question. Thanks, Good morning.
Hey, with regards to the outlook clearly your first quarter results were well ahead of at least the street expectations and it appears that they were maybe ahead of your initial expectations has there been any major offset for the remainder of the year that that you're seeing.
Anything that's popped up here, but you said you are fairly well hedged on green.
Think the your kind of outlook for white goods and industrial was already baked into your initial guidance unless I'm wrong. So is there anything else. We're missing that has cropped up or as we look for the next few quarters.
Yeah. Thanks, Bill Yeah, It was a very strong quarter.
As you can clearly see but as we've always maintained ours is a four quarter business.
And we don't want to get in a habit of being over reactive any certain quarter, especially the first quarter of a year, but that being said there are three things. We are really thinking about as we look at the remainder of the year first of all on the commercial front and we've already talked about this is Mitch we don't expect to repeat in brown goods sales performance of 44% in subsequent quarters.
Secondly.
We experienced in Q1 very strong pipeline shipments for our Super premium and Ultra premium American Whiskey brands. While this is something we're going to continue to assess we don't anticipate this recurring at that clip throughout the remainder of the year, we're going to see how depletions come through in Q2 through four and see how distributors look to <unk>.
Refill their pipeline.
Those are the two items, we're watching on the commercial front on on.
On the inflation front, there are real headwinds in commodities.
Yeah.
And so despite inflation in Q1.
We've seen spot pricing for the most part has kept up.
Within our expectations.
But there are parts of our business that we call. It out. So for example, there is certain customers for white goods and industrial that do not contract.
So they will be purchasing in the spot market and then we also caught out build that fuel and.
Distillers grain and related co products, which represented about a little over $12 million in sales in Q1 alone. That's all done on the spot market. So we're watching as we go finish.
Finish off the remainder of the year are those prices in the spot market.
Entailed the level needed.
It relates to the underlying commodity input prices.
Okay.
I understand.
In terms of kind of looking at the brown spirits, both new and aged.
Can you explain to the customer behavior, that's driving this demand I mean I assume.
It's understood that there's kind of a global and U S shortage of brown goods.
So I didn't know is that increasingly customers that are that are looking at your your aged inventory is it is it or is it just the existing customers or are more willing to load up early on and then for new do you have customers that say, we're gonna be short for a long period of time, let's go in.
And accelerate our new purchases right now because we don't want to be short four years from now I mean, how I explained it was kind of the the behavior. That's driving it now that we are kind of a net short environment.
Yeah, Bill I think everything you just said is kind of playing out. So we continue to see very strong demand on aged from what I would say, our it's our existing customers historically as well as some new customers.
Coming into the market.
And we we've said on the last couple of calls that we think are aged inventory in particular is extremely tight at this point in time.
So that dynamic is playing out on the new distillate side again.
Again, we're seeing very strong demand as Brian had mentioned.
And again with existing customers, but also new customers wanting new distillate to lay down.
And what we're doing as a result, right is our new distillate business historically, a fairly significant portion of that has been contracted we're encouraging customers to contract even more of our new distillate capacity going forward to protect their brands and then we're also on the AG side of the Biz.
This encouraging customers to contract aged whiskey, as well, which as you well know historically, that's been a very difficult feat to accomplish but we are seeing more receptivity from customers to age to contract H Brown as well, it's not a significant portion of our business yet.
It appears to be growing.
We're in this current environment.
Got it and then two more just on the kind of consumer takeaway of Brown in general I mean is the sense that yeah.
No there is not going to be any fallback post pandemic.
Brown kind of.
Two took maybe a leap in and share of overall spirits over the past two years and that's that's kind of going to stay at this level and that's why you're seeing so much new in <unk> demand.
Yes, I think thats, a big part of it I mean, if you look at the share data.
The premium plus brands, if you will the higher priced American whiskey brands are driving all of the growth.
And a big part of our customer base participates in the premium plus categories with their specific brands and we're seeing the same thing in our branded spirits.
Portfolio.
We're seeing the growth and you saw that the gross margin performance and branded spirits for the quarter.
As well it was primarily driven by you know.
Excellent.
Sales of our premium plus American whiskey brands.
Got it and last one for me just on the <unk>.
Might have missed it if you said the pro forma growth for the quarter year over year of the branded portfolio and then were there any was it was it is it all steady was it brown did really well and why any more color just kind of on the performance of cars.
100, plus brands. Thanks, Yeah, Yeah, we didn't disclose pro forma performance Bill.
On the business, but.
Without having at even at my fingertips at this moment, but but it was definitely a very strong quarter.
Quarter, four branded spirits gross margins in the north of 44% for the quarter after being in the mid.
Mid to upper Thirty's.
Three quarters last year, so we're really seeing a strong a strong pull for our super premium and ultra premium American whiskey brands and and that showed in the margin profile that we saw in the quarter.
Got it okay, great. Thanks, so much.
Thanks, Bill Thanks Bill.
The next question comes from Ben <unk> with Lake Street Capital Michael. Please go ahead.
Alright, Thanks for taking my questions and congratulations on a really great quarter.
A few questions from me first of all on the performance during the quarter I'm wondering if you can talk about.
Kind of cadence throughout the quarter did a lot of that.
Really.
The access of growth or excess growth.
Was that kind of seen on our <unk>.
Flatline basis throughout the quarter or did you maybe see growth spike at the start of the year and then begin to tail off towards the end of the quarter heading into Q2.
Yeah, I think if you look at each business I mean, I'll start with ingredients our ingredients business was very consistent throughout the quarter, we continue to see excellent demand.
And in that in that business in it.
Was a pretty darn consistent each month in the quarter.
And we expect to see that same kind of performance for the balance of the year and ingredients.
In our brown distillery products business.
Our white goods are pretty consistent month to month and brown goods is where are we.
We can see some deviation month to month, I'd say, new distillates pretty consistent month to month, and then we can see peaks and valleys in.
Brown goods, so that's how I would describe the quarter floor distillery.
Building solutions, and then brands, it's typically a pretty consistent.
Revenue pattern month to month, although as Brandon said in Q1, we had some really strong shipments.
In a couple of our American whiskey brands that I would view potentially as kind of refilling the pipeline.
Drove some pretty strong demand, but even in that business overall the revenue is fairly consistent.
Just a month and quarter to quarter.
Got it got it that's helpful. Thank you.
<unk>.
I don't recall, if you if you could touch on this explicitly or implicitly around kind of refilling the pipeline and the driver of that.
Around.
Around exports.
Specifically and so my question is.
What degree do you think the.
The EU tariff lifting on on December 31.
You know really provided.
<unk>.
And in the quarter and and and if it did provide a tailwind in the quarter or was that seen kind of uniformly across both the branded spirit distillery segment or one segment see that more materially than the other.
Yeah the tariff.
The lifting of the tariffs had an immaterial impact on us.
We don't have a large part of our revenue.
Chips internationally, whether it's in our distilling solutions segment, where branded spirits.
Now we think there is good upside long term, but.
The tariff reduction in tariffs or the suspension of the tariffs really had a minimal impact in the quarter.
Okay.
I guess a quick follow up question to that I mean within the distillery segment, specifically do you would you have visibility of shipping.
Product in that in that group.
Group to domestic customers and know that that was going to end up.
And then in international markets or is that something that you guys. Just don't don't really have visibility up.
Yes, I mean, we don't have clear visibility to that but you know.
The assumption is that if we're shipping product to our branded customer in the U S. And then theyre exporting that brand.
International internationally, then obviously some of that liquids internet ending up in international markets, but we don't know which percent of their brands going internationally versus staying domestic yes.
We have been developing our international reach Unsealing solution. So that's going to include developing a customer base that space.
For example, western Europe or parts of Asia. So we have greater visibility there, but as far as what brands and specifically going into today's point yeah.
We just don't have access to.
Okay, Alright fair enough.
And lastly.
Last one for me and I'll get back in queue on the ingredients side I feel kind of like a broken record here, but the growth rate has just been exceptional in this in this quarter.
And I'm curious if you can provide any.
Any context around it.
If.
There was excess growth seen from any any new customers any new categories or expanded broad product categories.
Oregon was that just growth really seen kind of uniformly.
Yeah, the latter pretty much uniform growth with primarily existing customers. Then so again as we talked about in the past that the product lines that we have in this business there are plant based.
High protein.
Quality starches are excellent fibers, there and strong demand in our customers products that we're selling into continue to grow nicely. So that's what you're seeing as the primary drivers in the increased revenue in this business.
Got it well congratulations.
On just the really excellent quarter across all three groups. Thanks for taking my questions and I'll get back in queue.
Thanks Pat.
This concludes our question and answer session I would like to turn the conference back over to Dave <unk>, President and Chief Executive Officer.
Thank you for your interest in our company and for joining US today for our first quarter earnings call. We look forward to talking with you again after the second quarter.
The conference has now concluded thank you for calling in today.
That's correct.
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