Q3 2022 SNDL Inc Earnings Call
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Good morning, and welcome to S. M D L. <unk> third quarter 2022 financial results Conference call.
<unk> issued a press release this morning announcing their financial results for the third quarter ended on September 30th 2022. This press release is available on the company's website at S. N D L Dot com and filed on Edgar and SEDAR as well.
Webcast replay of the conference call will also be available later today on the S. N D L Dot com website.
S. N deal has also posted a supplemental investor presentation found on the S. N D L Dot com website.
Presenting on this morning's call, we have Zach George Chief Executive Officer, Jim Keough, Chief Financial Officer.
Thank vander president of liquor retail and Andrew <unk>, President and Chief operating Officer.
Before we start I would like to remind investors that certain matters discussed in today's conference call or answers that maybe given to questions could constitute forward looking statements actual results could differ materially from those anticipated risk factors that could affect results are detailed in the company's financial reports and other public filings that are.
Are made available on SEDAR and Edgar. Additionally, all financial figures mentioned are in Canadian dollars unless otherwise indicated.
We will now make prepared remarks, and then we will move to analyst questions I would now like to turn the call over to Zach George.
Good morning, everyone and welcome to <unk> third quarter 2022 conference call.
Q3 proved to be another encouraging quarter for our company.
Our focus on operational execution and sustainable profitability.
Enabled us to deliver record revenue and operating cash flow this past quarter.
I have spent almost three years openly discussing the challenges facing our company in the cannabis industry and for the first time I see contrary indicators, suggesting that the Canadian industry is nearing a trough warranting a more bullish stance.
Despite the imperfect rollout of the Canadian legal cannabis market, a massive oversupply of licenses and products and continued pricing erosion. There are reasons for optimism Edison deal in a sense things and the Canadian cannabis industry are so bad that they are good we are seeing an unrelenting oversupply of flower inventory.
Trees, and then acceleration of bankruptcy filings amongst peers are.
Our team continues to work hard every day to turn industry headwinds, it's a tailwind for our consumers and investors as we drive toward improved results.
Our liquor retail business continues to reach a normalized run rate following the return of on premise consumption post COVID-19 and we expect seasonally strong results in Q4.
This segment has provided operating cash flow that has had a stabilizing effect on our consolidated results and we are pursuing new initiatives that we believe will drive further accretion.
Notably we are in the early stages of developing a cross segment loyalty program and intend to offer point of sale analytics as a service and both candidates and liquor in 2023 or.
Our strong business technology team is a differentiating factor for us and yes, we are.
Excited to unlock the team's capabilities.
Scale is mission critical to our success the baseline cost of running a CPG oriented company with the NASDAQ listing Hi, director and officer insurance rates internal and external Sox compliance costs and the commercial cost of best practices and CPG put many of our peers in a position where they are incapable of <unk>.
<unk> sustainable profits above the costs associated with managing its infrastructure.
This dynamic will drive further industry consolidation and we believe our vertically integrated cannabis business gives us the advantages required to be a strong member of our future oligopoly in Canada.
It is worth contextualize the growth that the <unk> team has built this past year we.
We have grown our revenue at a staggering rate of more than 1500% on a year over year basis, we now manage more than 350 liquor and cannabis stores, making us the largest private market liquor and cannabis distributor in Canada.
<unk> retail strategy is predicated on its quality store locations wide range of products and differentiated retail experiences. We also own and operate Canada's largest indoor purpose built cannabis cultivation and processing facility with a diverse brand portfolio ranging from value to premium.
Our cannabis retail in cannabis operations are key enablers in <unk> vertical integration strategy with the scale of data and insights generated through our retail network. We are able to continuously tailor our innovation strategy to play in high velocity product segments as well as white spaces in the industry in order to delight consumers.
Our integration work and cost control initiatives will continue into 2023, as we remain focused on opportunities related to our Cana and the recently acquired assets presented this and expect to close the proposed acquisition of balance in January of 2023.
With Valens <unk> aims to be a leading Canadian manufacturer with broad cannabis product capabilities strong optionality related to low cost procurement and best in class innovation potential the acquisition enhances our positioning by combining a diverse brand portfolio and extensive retail footprint.
Low cost biomass sourcing premium indoor cultivation and manufacturing facilities as one of the largest purchasers of biomass in the country. We expect the pro forma company to take advantage of the current market oversupply, which will enhance margins and provide desperately needed working capital to certain industry participants.
<unk> is well on its way to becoming one of Canada's largest adult use cannabis manufacturers and retailers and with our retail insights that financial strength <unk> should be able to adapt quickly to emerging and evolving consumer trends.
The company's inception prior leadership prudently focused on inhalable formats that have made up more than 80% of sales in the industry that said market dynamics change quickly and candidates and balance provides increased capabilities with a full suite of cannabis products, including adjustables and beverages.
<unk> also have the highest pro forma Canadian cannabis revenue on our last fiscal quarter annualized basis. Once we complete this acquisition.
We do not intend to participate in the knife fight that is ongoing between Canadian cannabis companies.
We seek to be a partner to the industry promoting best practices responsible consumption and sustainability.
Terms of our investment segment through the third quarter of 2022.
<unk> deployed capital to several candidates related investments with an eye of forest fair market value of approximately $678 million, including $527 million to the sunscreen Bancorp joint venture there.
This JV has credit exposure to a handful of operators, including Juicy Sky meant ascend parallel Columbia care and AFC gamma.
In the next few weeks, we expect to provide investors and stakeholders with more clarity about our sun stream portfolio of activities.
While our goal is to generate attractive returns as a strategic capital partner for these borrowers.
Certain cases, we may see defaults or other restructurings create an opportunity for <unk> to gain a meaningful operating footprint and a single or multi state format.
Our transformation is far from complete but with an improving portfolio cost discipline and continued organic and acquisitive growth.
Well positioned to reach our objectives, including the generation of sustainable free cash flow and long term shareholder value.
I am privileged to serve passionate professionals, including more than 2500 employees, who continuously worked to transform our business and delight consumers daily.
Our vertically integrated model dedicated team best in class balance sheet and scale, our competitive advantages. We've built for the express purpose of giving ourselves the flexibility to succeed under multiple economic and regulatory scenarios and these are the advantages that will lead us in our next leg of growth.
Thank you and I'll pass the call to Jim for comments on our financial results. Thank.
Thank you Zach and good morning, everyone I'd like to remind you that all amounts discussed today are denominated in Canadian dollars unless otherwise stated all comparative results for the third quarter of 2021 exclude the subsequent acquisition of Alcan, Inc, which closed on March 31, 2020 to certain amounts that were referred to on this call are.
Non IRS.
GAAP measures. Please refer to <unk> management discussion and analysis for the definitions of these measures.
Before I go into greater detail of <unk> financial results under each of our four operating segments being liquor retail cannabis retail cannabis operations and investments I will begin with our consolidated financial highlights.
It's a pleasure to announce that <unk> achieved record net revenue for the third quarter of 2022 of $230 million compared to $223 million in the second quarter of 2022 and $14 million in the third quarter of 2021. This represents a 3% increase sequentially and an increase of over 50.
100% year over year.
<unk> also achieved an adjusted EBITDA of $18 million for Q3, 2022 up 169% from Q2, 2022 and up 74% from Q3 2021.
Our cash flow provided by operating activities was $8 6 million in the third quarter of 2022 compared to cash used in operating activities of $17 9 million in the second quarter of 2022 and cash used in operating activities of $56 million in the third quarter of 2021.
Our gross margin grew to $50 million in Q3 2022, a record since <unk> inception up 17% from Q2, 2022, and an increase of over 2700% from Q3 2021.
General and administrative expenses for the three months ended September 32022 were $45 million compared to $9 million for the three months ended September 32021.
The increase of $35 million was primarily because of increases in salaries and wages as well as office and general expenses from the Alcan and inner spirit acquisitions with S. N deal now employing more than 2500 personnel across all segments.
Net loss for the three months ended September 32022 was $98 8 million compared to net income of $16 7 million for the three months ended September 32021.
This increase in net loss of $115 million.
Largely due to higher G&A expenses about $35 million depreciation and amortization $7 million.
Asset impairment of intangibles and goodwill from the inner spirit acquisition $86 million.
Finance costs of $8 3 million and change in fair value of derivative warrants of $32 million.
All partially offset by an increase in gross margin of $48 million lower investment losses of $12 5 million and transaction costs.
$9 million.
As of September 32020 to ascend deal has $988 million of cash marketable securities and long term investments and no outstanding debt.
I will now review the results for our liquor retail segment S. N. Dl currently operates 169 locations predominantly in Alberta under three retail banners, one and beyond liquor depot and a slicker.
Gross revenue for liquor retail sales for the three banners combined was $152 million for the third quarter of 2022, an increase of 4% compared to the third quarter of 2021, despite Alberta as off premise liquor retail volume sales being down this past quarter compared to the same period last year.
Gross margin was $35 million or 23% of sales in Q3, 2022 compared to $33 million in Q3 2021.
We continue to maintain the margin year over year through pricing and product mix strategy in Q3 2022.
Let's take a closer look at our cannabis retail results next we currently own and operate 183 locations under two retail banners spirit leaf and value but.
Gross revenue for the two banners combined in the third quarter of 2022 was $66 million compared to $6 1 million in the third quarter of 2021, 985% increase.
You bet sales, where the material driver of the increase with $58 million of revenue during Q3 2022.
Our gross margin for Q3, 2022 was $14 5 million or 22% of sales compared to $3 7 million in Q3 of 2021, and this is primarily due to value buds, new locations and aggressive pricing strategy.
I'll now turn to Sn deals cannabis operations results.
Revenue from the cannabis operations segment for the third quarter of 2022 was $16 5 million compared to $15 4 million, a 7% increase over the second quarter of 2022 and compared to $11 million in the third quarter of 2021, a 49% year over year increase.
We're pleased to announce that we achieved a record gross margin in the third quarter of 2022 0.2 million compared to negative $1 9 million for the three months ended September 32021, and negative $4 3 million for the prior quarter.
The significant improvement was mainly a result of the $2 3 million reversal of an inventory impairment in Q3, 2022, which demonstrates S N deals progress implementing supply chain excellence.
Next I'll review our investment operations.
As of the end of Q3 2022 S. N del's cannabis related investments had a carrying value of $677 million, including $526 million and the <unk> Bancorp, Inc. Joint venture for.
For Q3 2022, the investment portfolio generated interest and fee revenue of $4 3 million compared to $3 3 million in Q3 2021.
Our share of profit of equity accounted investees generated from investments by Sun stream was $9 2 million compared to $9 9 million in Q3 2021 and.
Net investment loss of $5 5 million as compared to a loss of $18 million in Q3 2021 on marketable securities.
Which includes unrealized losses on publicly disclosed strategic investments in village farms International Inc, and the balanced Company Inc.
Finally, let's discuss activities that affected S N Dl shares.
Effective July 25th 2022 Sn deals common shares were consolidated on a one share for each 10 shares outstanding basis.
At September 32022, and November 11th 2022, <unk> had an unrestricted cash balance of $291 million and $361 million, respectively, and a total of $236 million post consolidation shares outstanding as at November 11th 2022.
For the nine months ended September 32022, Sn Dl purchased and canceled $1 7 million common shares at a weighted average price of $3.61 Canadian dollars or $2 75 U S per common share for a total cost of $6 1 million.
The share repurchase program was scheduled to expire on November 19th 2022 on November 11 2022.
S N D. L Board approved the extension of this program by an additional year.
I would now like to invite tank lender president of liquor retail to provide further remarks on our liquor retail segment.
Thank you Jim and good morning, everyone I would like to start by saying I am proud of the liquor retail team's continued focus on operational performance and dedication to delivering an exceptional retail experience for our customers.
The <unk> segment strengthens F&B outlets ability to own the customer relationship and shape the retail experience.
Our positive results illustrate that capability.
Our third quarter results feature sales of $152 5 million or four 5% increase from the third quarter of 2021.
A 5% increase from the second quarter of 2022.
This result was achieved despite the decrease in off premise sales across the industry. This past quarter due to customers returning to a normal routine after the COVID-19 restrictions were lifted.
Adjusted EBITDA for the electric retail segment increased by 198% in the third quarter of 2022 compared to the previous year.
$4 6 million to $13 $7 million.
Gross margin in the liquid retail segment was $35 6 million or 23% of sales in the third quarter of 2022 compared to $33 6 million in the third quarter of 2021.
An increase of five 7%.
While the early gross margin growth is positive and we have maintained it sequentially.
Procurement teams carefully planned buying on limited time offers to increase margin.
We continued to state competitive pricing, especially with our discount banners, such as ace liquor and capture further market share with a great variety of value products for our customers.
SMB is leveraging the scale store footprint and warehousing infrastructure to enable strategic buying decisions that drive margin and competitive pricing.
One of our electric retail strategies to gain gross margin results remains with our preferred level sales referred label sales were $10 7 million in the third quarter of 2022, an increase of approximately $1 million compared to the third quarter of 2021.
Our liquor retail segment model was built on the premise of operational efficiencies.
To provide as much value to our customers, while ensuring sustainable profitability.
Despite wage increases we are able to reduce our payroll cost by 3% compared to the previous quarter.
We also reduced our operating expenses for the liquid business by approximately 6% in the third quarter of 2022 compared to the previous quarter from.
From $6 million to $5 $7 million.
Our diligent focus on cost efficiencies allows us to offer a competitive pricing to our community.
Leading to stable revenue growth.
Our customer count for all our banners is up by 1% year over year.
And the average basket value is up 3% despite inflation pressures, we see larger basket sizes at our widened beyond locations, where consumers some florida extensive offerings and experiential approach to liquid retail.
We currently have 11 weidenbaum locations in all BARDA and one location in below numbers Columbia.
And Alberta, Weidenbaum stores account for approximately 8% of the market share in the province compared in line with the previous quarter proving the success of the destination shopping concept.
Our third quarter sales results for our wine and beyond.
The three 8 million.
A 43% increase from the third quarter of 2021.
The increase was mainly due to our four additional stores opening this past year.
We are very proud to announce that widened beyond celebrated its 10th year anniversary. This past September .
<unk> this milestone with our community by running a 10 week long celebration that included local partnerships.
<unk> single barrel leases exciting tasting events and various in store promotions.
<unk> operates 169 liquor stores and all BARDA, our linker banner's market share in Alberta, where we predominantly operate was approximately the same as previous quarter.
At 17, 6% in the third quarter of 2022.
Market share data is based on management's estimates using available industry data.
Moving forward, we will continue to optimize profitability and cash flow for the liquid retail segment by focusing on cost discipline margin credit products and differentiate it preferred label offerings.
We will leverage F&B els extensive inventory in retail footprint to enable leading e-commerce experiences and touch points.
Looking to 2023 and future expansion, our approach will be calculated and focused on current market conditions.
Again for your time, this morning, and I'll pass it onto Andrew for SMB Els cannabis operations update.
Thank you tank and thank you all for joining today.
This was another encouraging quarter for our cannabis operations building off our positive momentum in 2022.
We are beginning to see the scale of our vertical integration strategy deliver our intended results and maturity of our operations solidify our path to long term profitability.
With our focus on cost optimization and enhanced product strategy.
We are successfully executing our 2022 plan.
Our focus on cultivation excellence continues to show positive returns as gross revenue from the cannabis operations segment for the.
Third quarter 2022.
It was $16 5 million.
Compared to $15 4 million, a 7% increase in the second quarter of 2022, and compared to $11 million or 49% year over year increase.
SMB <unk> achieved a record gross margin before fair value adjustments for the three months ended September 32022 of $3 6 million or 31% compared to negative $4 9 million for Q3, 2021, an increase of $8 6 million or 100.
76%.
These substantial improvements demonstrate <unk> progress and delivering sustainable topline growth through managing our product mix pricing and volume initiatives.
I'm also pleased with our continued focus on implementing supply chain excellence to drive disciplined around cost optimization, despite intense price compression higher power costs and overall cost inflation.
To further expand on our product mix strategy.
We have increased our inhalable offerings nationally through <unk>.
Large format flower and both infused in traditional pre roll formats to meet growing consumer demand and drive market share in these keystone segments.
We continue to make progress in our cultivation strategy, reflecting industry dynamics.
Our access to increased data and analytics through our vertical integration at retail enables us to target white spaces and enhance our portfolio offering.
We are excited to announce the launch of the value, but private label in partnership with Nova cannabis, which arrived in Alberta in early November and will launch in Ontario early in the first quarter of 2023.
The valuable offering focuses specifically on large format flower and is uniquely curated for the valuable as consumer.
The initial launch includes four Skus, both 14 Gram and 28 Gram pack sizes with fully composed to the packaging.
We recognize our role in reducing cannabis packaging waste, while also looking at opportunities for significant cost savings.
I am excited to report on this with more detail on the fourth quarter, but the early sentiment from consumers has been very positive.
To further build on our large format offerings under the Palmetto brand, we launched several flower skus in the third quarter to fill growing industry demand, including 14 grant formats, both our romulan and LG pushed dried flower.
Moving to pre rolls this category inclusive of infused offerings continues to accelerate representing seven out of 10 of the fastest growing segments in our owned retail locations.
We will share of revenue and one retail has increased by almost 10% since January 2022.
As such we have expanded our top leaf caviar cone offerings with two new flavor blends launched in the third quarter.
We're also excited to launch our caviar cones reserve pack in Q4 as part of our holiday campaign.
Although the Palmetto brand, we will launch new infused Piero in Q4.
This enables us to compete at various price points and pack sizes within one of the fastest growing inhalable segment in Canada.
Finally to build on our vertical integration and export strategies.
<unk> completed our first international shipment to Israel in the third quarter of 2022.
And through our acquisition of the <unk> business, we're looking to accelerate further international opportunities.
While our primary focus remains on the Canadian market International export will prove to be a beneficial expansion for our cultivation and processing operations.
The additional monetize will inventory procured from dentists and increased production capabilities further enables our supply chain to expand our large format flower offerings through our leading retail footprint nationally.
In closing we remain on track with our plan.
I'm proud of how our team continues to execute during a very challenging time within the industry.
We're optimistic about the momentum built in 2022 and closing the year strong.
Thank you.
I'll pass it back to Zach for closing remarks.
Thank you.
Overall I am encouraged by the progress we are making across all aspects of our business I am proud of the way our team is executing with purpose confidence and resilience. Our work is far from complete but <unk> is a tremendous opportunity to continue forging the path forward for regulated products, both in Canada and internationally.
The team is committed to building a world class business and we are excited about the possibilities ahead.
Thanks to all and we look forward to updating you on our progress into the end of 2022.
Thank you we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad Youll hear a tone acknowledging your request.
You are using a speakerphone please pick up your handset before pressing any keys to.
You withdraw your question. Please press Star then two we will pause for a moment as callers join the queue.
Our first question comes from Sean <unk> of Canaccord Genuity. Please go ahead.
Good morning, and congrats on the quarter.
My first question is on the cannabis operations. So just based on some of the third party tracking data we subscribe to we saw timber adult use sales had come down slightly for your brand.
Particularly towards the end of the quarter and that kind of sustained into October . So I was wondering if you could provide any color on the dynamics, there and more specifically.
What indications do you have or.
<unk> started to capture a majority of the revenue synergies expected from that all kind of transaction.
Or do you see other ways to leverage that platform towards expanding your branded sales from here.
Hey, Sean.
Yeah, Hey, Sean Andrew.
Thanks, Thanks for the question.
Look I think first thing I'd say is we're on our plan for our own retail and our vertical integration strategy. So I think thats tracking as we expected to track and I would also say too we're.
As we've stated before our focus isn't driving for short term market share as you can look at our our our earnings results here, we've been really focused on the margin profile through mix and volume and pricing.
And you can see that start to pay dividends for us as we build out more sustainably obviously market share is important for us.
And a couple of things maybe I'll mention on that point I think as I stated we're on track for our own retail we're looking at some of the data that we're getting through our own retail and Thats, obviously bass and some of the areas that we're focused on.
Particularly as I mentioned in my comments is around the pre roll offerings.
I think that's a big opportunity and we see that segment continuing to grow both from traditional <unk> wells as well as the PUC. So we're focused on.
<unk> got a fairly large offering into some of the large format flower.
That has not been something that we've had in our portfolio.
Throughout the last couple of years, So we'll start to see some of that.
Play out in Q4.
Sean.
That's where primarily the majority of that volume is shifting its certainly moving away from that three five grand will be in the large format flowers. So I don't think Thats also a good tailwind for us as we think about kind of ending the year and then getting into 2023, I don't think thats going to stop particularly given the oversupply in the market and then I think look I think there is the last component I would say is.
As you think about.
Our recent acquisition of database and the flexibility and Optionality that provides us on low cost flower and continuing to play in that segment as the industry kind of figures itself out with pricing I think that's a positive and then Zach.
Jack mentioned in his comments, we're excited about the pending close of balance and through that.
You know that midstream manufacturing side, that's going to further accelerate our ability to claim these white spaces that our current portfolio that doesn't necessarily.
So I think those are some areas of our market share, but I think over the course to understand the context.
Sean Jean can add to that.
Just to add it's important to keep this in context right because we closed the <unk> transaction at the end of March.
So when you think about share of shelf.
Inside the Novo network. It started at zero. Okay. So this is not a light switch we are going to.
We've moved very very carefully on a sustainable basis and focused on.
We're economic margin is but also we're trying to drive the right assortment. We're also trying to optimize the performance of the retail network itself.
So you should expect this to be a two year process as we transition and.
Manage the assortment.
And mix going forward.
Thank you.
My next question is just on your views towards U S operations. So obviously your balance sheet the position of strength here.
And with cannot be making that announcement for the kind of the USA structure. It seems like there may be a door that might open up a bit for you to leverage that balance sheet in the U S.
I just wanted to get a sense is this something that sundial, given any thought to particularly using a similar structure to make opportunistic plays.
In the U S or is the focus still here to remain on building that credit book there.
Yes, thanks for the question Sean.
As you know our pace of deployment has slowed so we have seen.
The cycle really starts to grip in maturing markets in the U S and so <unk> seen pressure on flower prices I would say that we think that.
The cycle in Canada is.
As much as several years ahead of what we're seeing in the U S. So we expect more competition and pressure.
In the U S. As those markets mature, we feel quite good about our position with $5 billion credit portfolio through our.
Sunshine venture and as mentioned I think that's going to be a pretty dynamic book in some cases, we will very much be past some strategic suppliers of capital, but in other cases.
There is still a need for additional working capital and in some cases recapitalization of business businesses, and we're well suited to.
Provide leadership and helped drive those processes. So.
We think 2023 is going to be quite an interesting year in terms of our existing capital footprint in the U S.
Okay. Thank you for the answer there and once again, congrats on the quarter and ill pass it along.
Once again, if you have a question. Please press Star then one.
Our next question comes from Fredrik <unk> Gomes of ATB capital markets. Please go ahead.
Hi, good morning, congrats on the quarter, Thanks for taking my questions.
My first question is on the Canada retail segment.
The number of leased stores declined this quarter.
And perhaps if that's coming from your franchise network so could.
Could you comment on what's driving those store closures given the current environment in retail or how are the economics looking like Q2 slightly franchisees.
What are you doing to maybe improve that thank you.
Yes, it's a great question.
I appreciate it so we've seen quite a bit of activity.
Change in the retail portfolio. So we've been actively opening doors in certain cases closing doors, you'll recall that.
A lot of the site work or <unk>.
Franchise partner selection was done by prior leadership.
So still working to optimize that network and I would expect sort of every iteration of what you would expect to happen.
Going forward include including organic openings.
Closings and growth by acquisition.
So this is really a natural process, where the portfolio needs to be pruned, a hyper competitive environment.
<unk>.
But overall the network is functioning as you would expect given the dynamics in the difference.
The pricing structure that is in the market today.
Okay. Thank you and then.
In terms of your first international shipment this quarter to Israel and notwithstanding.
How should we look at the potential increase in international sales there and are you looking at other potential markets such as Germany for example.
Yes, I think particularly with Andrew here I appreciate the question.
Yeah, absolutely I think our first transaction.
Particularly with exports.
We can build a line so really pleased with our team's ability to execute that on.
On the SMB side.
In Q3.
We obviously closed on this acquisition on November one so at the last two weeks here, we've been kind of moving forward there understanding further opportunities when we look at export as as I mentioned in my commentary.
Great Optionality for our operations business is Canada kind of figures itself out we obviously are maintaining our focus on the domestic market.
We have lots of.
Interest in our flour, both from a legacy <unk> standpoint in some existing contracts.
But also moving forward is as other markets and regulatory frameworks figure themselves out.
In regards to what the future holds on that front and other markets that we're looking at all of them.
We're going to be pretty focused on the current agreements that we have in place and filling those but we're setting up our operations to have the optionality required as more regulatory.
Figures itself out depending on which country and we're certainly continue to look at that but.
That's still some ways away, particularly in markets like Germany is we figured item.
Okay. Thanks for that thank you.
This concludes the question and answer session I would like to turn the conference back over to Zach George for any closing remarks.
Thank you operator, and thanks, everyone for joining US today, we look forward to updating you on our progress in the near future have a great day.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
Yes.
Okay.
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Yeah.