Q1 2023 ACCO Brands Corporation Earnings Call
Thank you for a patient's ladies and gentlemen, the actual bans first quarter earnings.
Thank you for your patience.
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Ladies and gentlemen, welcome to the ACCO brands first quarter 2009 Free earnings Conference call. My name is Glenn and I'll be the operator for today's call if you'd like to ask a question. During your presentation. You may do so progressing star one tack on key pad.
I'll now hand, you over to your host Chris Mcginnis to begin Chris. Please go ahead.
Good morning, and welcome to the ACCO brands first quarter 2023 Conference call. This is Chris Mcgugan Senior director of Investor Relations.
Speaking on the call today are Boris Ultimate Chairman and Chief Executive Officer of ACCO Brands Corporation will provide an overview of our first quarter results and an update on our 2023 priorities.
Pet Bird, President and Chief operating officer, who will discuss the upcoming back to school season, New product innovation and provide an update on cost savings initiatives and double Carter Executive Vice President and Chief Financial Officer, who will provide greater detail on our first quarter results and the outlook for the second quarter and full year.
Following that we will open the line for questions.
Slides that accompany this call has been posted to the Investor Relations section of tobacco brand Dot com when speaking about our results we may refer to adjusted results.
Adjusted results exclude transaction integration amortization and restructuring costs and noncash goodwill impairment charge the change in fair value of the contingent consideration related to the <unk> earn out and other nonrecurring items and reflect an adjusted tax rate sketch.
Schedules of adjusted results and other non-GAAP financial measures and a reconciliation of these measures to the most directly comparable GAAP measures are in the earnings release and the slides that accompany this call.
Due to the inherent difficulty in forecasting and quantifying certain amounts we do not reconcile our forward looking non-GAAP measures.
Forward looking statements made during the call are based on the beliefs and assumptions of management based on information available to us at the time of the statements are made.
Our forward looking statements are subject to risks and uncertainties and our actual results could differ materially.
Please refer to our earnings release, and SEC filings for an explanation of certain risk factors and assumptions. Our forward looking statements are made as of today and we assume no obligation to update them going forward.
Following our prepared remarks, we will hold a Q&A session now I will turn the call over to <unk>.
Thank you, Chris and good morning, everyone and thank you for joining us.
We're pleased with our results for the first quarter, which exceeded the high end of our guidance for sales and adjusted earnings per share.
These results were led by the continued strength of our brands.
Geographic balance of our portfolio and the strong execution by our team despite a challenging consumer and retail environment.
We made significant progress against our margin improvement efforts in the first quarter.
With gross margins growing by 250 basis points.
And adjusted operating margins, improving 90 basis points year on year.
Yeah.
Comparable sales were down 6% versus near record Q1 sales last year.
In North America in addition to the weaker economy.
We and many in our industry.
Faced a difficult year over year comparison due to last year's early shipments.
Back to school products due to supply chain constraints.
Which did not repeat in 2023.
With normalization of supply chain.
We're back to the typical cadence of back to school shipments.
Normally occur in Q2 and Q3.
This was a large component of comparable sales decline in North America.
We also saw continued pressure in the gaming market and the industry wide slowdown in it spending impact our technology accessories sales.
North America did benefit in the quarter from improved price.
<unk> actions and.
And strong SG&A cost controls.
In EMEA.
Demand was impacted by the weak macroeconomic environment compared to a strong pre war quarter last year.
Despite that we made significant progress in restoring our margins through pricing and cost actions with adjusted operating margins improving by over 400 basis points.
Adjusted operating income growing by 50% in the first quarter.
Our market shares remained strong.
Our international segment benefited from price and volume increases led by the recovery of in person education and return to office and our Latin American markets.
Sales grew 17% year on year.
Price cost savings and benefits of scale.
The adjusted operating margin expanding 490 basis points.
Adjusted operating income growing 90%.
Before I update you on our 2023 key priorities.
Want to provide color on our global technology accessory sales, which consist of our computer and gaming accessories products.
Part of the gaming market continued to be challenged due to the lack of availability of certain wireless chips, while controllers and supply chain constraints of a console.
We expect greater availability of chipsets.
<unk> chain, beginning in the second quarter, which along with anticipated strong slate of new game releases and new product introductions.
Should help improve our volumes going forward.
We hold leading market share positions in third party gaming accessories.
This category to grow for the full year.
Importantly.
The expansion efforts in our EMEA and international segments are on track.
We remain excited.
The long term global growth opportunities for gaming accessories.
Within computer accessories after five years of growth.
We've seen demand slow as businesses are being more cautious about the it spending in response to the current macroeconomic environment.
Yeah.
Our sales pipeline continues to grow and we are winning new business.
The timing of purchases is being deferred.
We expect computer accessories will show sequential improvement throughout the remainder of 2023, given the strength of the pipeline.
Our new product Rollouts.
In February .
I shared with you four key priorities for 2023.
Restoration of our gross margins as our top priority.
Followed by profit management about top line.
Continued investment in our brands and new products.
And tight management of our expenses and inventory.
We have made progress on all fronts in the first quarter, which gives us confidence.
Adding into the remainder of the year.
We successfully implemented global price increases in January .
And in combination with our cost savings actions believe this year, we will be able to recover much of the lost profitability from the high levels of inflation, we have experienced over the last two years.
In the quarter, we made significant progress in our EMEA and international segments.
Expect greater benefits from these actions.
Our North American segment, as we enter our high volume quarters.
We'll continue to manage our topline well in what is a slow economic environment.
Given the strength of our brands with leading market share positions.
Our service capabilities.
We are the supplier of choice for many of our channel partners.
We offer them and the consumer.
Implementing assortment of brands that occupy value to premium price points.
This breadth of offerings with strong brands.
Allows our partners to win across multiple categories in peak season.
Like the upcoming North America back to school.
Or the audit European back to business season.
We also did a good job with our expenses in the quarter, the management of headcount and closely watching discretionary spend.
Both headcount and SG&A expenses were down year on year.
Before I turn it over to Tom I want to say I'm encouraged by the momentum will build in the first quarter and remain confident in our transformation to drive long term sustainable organic profitable revenue growth as global economies improve.
We have the right team in place to weather difficult economic environment.
Well capitalized with no debt maturities until 2026.
And low fixed interest rates.
Over half of our outstanding debt.
We will continue to generate consistent strong cash flow.
<unk> dividend payments and debt reduction in 2023.
Now I will turn the call over to Tom to discuss back to school with private innovation and update you on our restructuring initiatives Tom.
Thank you Boris and good morning, everyone.
Let me begin with few comments about the upcoming back to school season.
Back to school has an important seasonal business for ACCO brands and represents a significant portion of our annual sales, particularly in our North America and international segments.
We are a bts market leader in the U S, Canada, Mexico and Brazil.
The back to school market historically is very resilient in both good and bad economy.
Which is important to understand with the current economic backdrop.
The industry sales expectations for this year's North America back to school season is to be roughly flat.
Retailers are being cautious with loading back to school inventory and we believe our partners will rely on Q3 replenishment as product sales through.
It is too early to give meaningful insights on our North America back to school season, However, orders are coming in as expected and weeks of supply at our retailers.
Is at historic norms.
Additionally, we expect growth in our back to school business and the international segment.
With Mexico in Q2, and Q3 and Brazil later, this year and into Q1 of 2024.
Now a few comments about our team's good work and developing meaningful product solutions for our consumers.
We have upcoming product introductions across multiple categories and geographies that will help drive organic growth.
Company's commitment to innovation is being recognized globally as we won numerous awards in 2022 and in 2023.
For the last two years ACCO brands has been named one of Crain's Chicago businesses, most innovative company.
A recognition we are very proud to have earned.
Further recognition has been by the good design and the Red Dot design Awards.
Both are internationally recognized and are highly desired endorsements for high quality design.
In the past year Red Dot recognized five ACCO brands products, including three supporting the Kensington product range.
In the EMEA segment, our lights ergonomics offering was awarded business product of the year at the European Office product Awards.
In North America, the Kensington, Universal Korean won pro audio headsets, which.
Was awarded best New technology product at the North American office product rewards.
And gaming accessories, we recently introduced several products in conjunction with Universal Pictures successful release of the Super Mario Brothers movie.
And the animated adventure film based on Nintendos Mario video game franchise.
And our do it yourself tools category the repeat brand began a collaboration with Bosch and 2022.
The partnership has expanded our product offering with the EMEA segment.
To include 18 volt rechargeable tool as a part of the Bosch power for all.
Battery initiative.
Moving to restructuring.
In the fourth quarter of 2022, we initiated restructuring plans in our North America, and EMEA segments and.
Intended to improve operating efficiency and reduce costs was.
It was an expected annual cost savings of $13 million.
In North America, we have action plans, including the consolidation of supply chain operations.
And automating our sales support process.
We saw $2 $5 million of benefits from these actions and our Q1 P&L.
And remain on track to deliver the full $13 million during the year.
In the first quarter, we took a $3 3 million restructuring charge, which was related to our footprint rationalization project in EMEA.
We are closing one manufacturing facility in Continental Europe , and expect it to be completed by the end of the third quarter with the savings to come in 2024.
We continue to analyze our global footprint for opportunities for further cost optimization and consolidation.
We also remain on track to deliver another $15 million of incremental savings from our ongoing productivity initiatives.
I will now hand, it over to Deb and I will come back to answer your questions.
Deb.
Thank you Tom and good morning, everyone.
When we last spoke to you in February we highlighted the impact of last year's inventory destocking by retailers with their cautious approach to replenishment.
And falling demand due to the macroeconomic environment.
In the first quarter, while the macroeconomic environment remains challenging.
We did see a sequential improvement in retailer inventory replenishment.
This improvement helped us beat our sales guidance for the first quarter.
The stronger sales and the improvement in our margin profile due to our pricing and cost actions helped us deliver adjusted EPS above our outlook.
In the first quarter of 2023 reported sales decreased 9% versus Q1 of 2022.
Comparable sales, excluding foreign exchange were down 6%.
The decline was due to lower volumes in our North America, and EMEA segments more than offsetting global price increases and solid growth in our international segment.
Yes.
Gross profit for the first quarter was essentially flat at $119 million.
The sales decline as gross margin improved 250 basis points to 29, 6%.
The cumulative effect of our pricing and cost actions.
Adjusted SG&A expense of $95 million was down from $97 million in 2022.
Adjusted SG&A as a percent of sales increased 160 basis points to 23, 6% due to the lower level of sales.
Adjusted operating income was $24 million up 8% compared with the approximate $23 million last year.
Adjusted EPS was <unk>.
Versus 11.
In 2022 as interest and nonoperating pension expense has increased which we expect to be a headwind for the rest of the year.
Now, let's turn to our segment results.
North America reported and comparable sales were down 15%.
Volume declines more than offset accumulative pricing actions.
This was slightly better than expected.
As anticipated, we faced a difficult year over year comparison in the first quarter due to the early purchase of back to school product by retailer in 2022.
Given normalization of supply chain. These purchases did not recur in the first quarter of 2023 to the same level as in the prior year period.
Sales in the first quarter were also impacted by lower retailer demand due to the macroeconomic environment as well as declines in technology accessories due to softening IP spending and a lack of wireless chip for a gaming accessories.
We expect this to be the last quarter of difficult comparisons for gaming accessories, as we expect sequential improvement in both availability and consumer demand.
North.
America adjusted operating income margin in the first quarter decreased due to negative fixed cost leverage from the volume declines.
We expect larger benefits from our pricing and cost actions as we progressed throughout the year and move into higher value periods.
Now, let's turn to EMEA.
Net sales for the quarter were down 13% to $136 million.
6% of this decline was due to FX.
Comparable sales were down 7% to $145 million mainly.
Mainly due to volume declines offsetting our price increases.
Demand continues to be impacted by the overall macroeconomic environment in the region.
Especially as compared to the first quarter of last year before the impact of the Russia, Ukraine water.
Sales of technology accessories declined reflecting industry wide trends.
In the first quarter EMEA posted adjusted operating income of $14 million.
Almost a 50% increase over the $9 million a year ago.
The margin rate improved 420 basis points from the prior year to 10%.
The improvement in adjusted operating income was due to our pricing and cost actions taking hold.
Moving to the international segment reported and comparable sales in the first quarter increased 17%.
Growth was driven by price increases and strong demand in Latin America as resellers gained momentum from in person education and return to office.
The International segment posted adjusted operating income up $12 million up almost 90% versus the prior year $6 million.
The adjusted margin rate improved 490 basis points to 13% in the quarter due to the higher pricing and improved sales leverage.
Switching to cash flow and balance sheet items due to seasonality, we generally use cash in the first half of the year and generate significant cash flow in the second half of the year.
Free cash flow improved by $83 million in the first quarter.
We had a use of free cash flow of $25 million versus a cash outflow of $108 million a year ago.
The improvement was driven by better working capital management, as we lowered inventory levels and returned to a more typical product payment cycle as well as reduced incentive compensation payments.
In 2021, we ended the year with higher levels of inventory with much of it paid for in the first quarter of 2022.
Reversing that trend we ended 2022 with inventory that was significantly paid for.
The change in timing of payments improved first quarter cash flow significantly.
We ended the quarter with a consolidated leverage ratio of four.
Three times.
Well below our five times covenant ratio and expect to end the year within a range of three five to three seven times.
Longer term, we are still targeting two to two five times.
At quarter end, we had $420 million of remaining availability on our $600 million revolving credit facility.
As shown on our earnings slides more than half of our debt is fixed and not impacted by interest rate increases.
And we have no maturities until 2026.
We ended the quarter with $127 million in cash much of this cash about $106 million was.
It was held in Brazil and in April we took actions to repatriate $46 million of.
Of this cash back to the U S.
Which we then used to reduce borrowings on our revolver.
The remaining cash balance in Brazil will be used to fund their inventory for back to school.
Turning to our outlook, we are providing a second quarter outlook.
And reiterating our full year guidance for 2023.
For the second quarter of 2023, we expect comparable sales to be down four to down 7% with adjusted EPS of 29% to 32.
For the full year, we continue to expect comparable sales to be within a range of flat to down 3%.
We expect our gross margins to increase over the prior year and be similar to our 2021 margin rate.
Longer term, we continue to target a range of 32% to 33%.
While we have reduced our overall cost structure from our restructuring actions as we mentioned in February the restoration of our annual incentive compensation as well as increases Merit and go to market spending will lead to higher SG&A levels in 2023.
For the full year, we expect adjusted EPS to increase 4% to 8%.
<unk> eight to $1 12, as double digit growth in adjusted operating income is partially offset by higher net interest cost of about $10 million and higher noncash nonoperating pension expenses of $5 million.
The adjusted tax rate is expected to be approximately 29%.
Intangible amortization for the year is estimated to be $43 million.
Which equates to approximately 32.
Of adjusted EPS.
We are reiterating that we expect our free cash flow to be at least $100 million.
After capex of $20 million and to end the year with a consolidated leverage ratio within a range of three 5% to three seven times.
Looking at cash uses in 2023, we expect to continue to prioritize dividends and debt reduction.
Now, let's move on to Q&A, where board, Tom and I will be happy to take your questions.
Operator.
Okay.
Thank you.
Ladies and gentlemen, if you would like to ask a question. Please press star followed by one on telephone keypad now.
Ask your question. Please ensure your mute locally.
We have our first question comes from Greg Burns from ship Tony Company, Greg. Your line is now open.
Good morning.
Just digging into the <unk>.
Decline you saw on.
The Kensington side of the business, how much was that down in the quarter and your outlook for the rest of the year.
Does that.
Are you looking for that business to still.
Grow this year or is it just going to show improvement and also kind of the law.
Lower level you saw this quarter.
Hi, Greg Thanks for the question.
Kensington sales were down.
Low double digits in the quarter.
We are.
Important to point out that sales were down, but Pos sell through at Kensington was up.
It was up a little bit in.
The U S and it was up significantly more and Europe . So obviously, there's a lot of inventory being taken out of the channel given the.
Overall macro environment, and especially what's happening on the <unk>.
Technology side, when you see that from multiple companies earnings reports, we still expect the.
Kensington business to grow for the year.
Last year.
That business grew about 13% so growth will not be as high this year and we don't anticipate it to be as high this year, but we still expect the business to grow.
Okay.
And you mentioned new product introductions is.
So I guess your outlook for growth there around.
Maybe some new product introductions and do you have a target for four like revenue contribution from new products in any given year or how should we think about that layering in this year.
I'll, let Tom answer that question, yes, so Greg another great question. Thank you for it.
Yes annually, we do have.
A target within our Kensington business specifically.
I don't know that we would want to publish that target, but we do have a target we track to it we have a business cadence in which we measure it each quarter and it gets set annually. So the short answer is yes, we have a growth target.
And I think it is important to note over the last five years as <unk> said in his prepared remarks, the Kensington business has grown the CAGR is roughly <unk>.
Low double digits on that and new product development and introductions is a big piece of that growth.
Over the years.
Okay. Thank you.
Thanks, Greg.
Thank you.
With our next question comes from Joe Gomes from Noble capital Joe. Your line is now open.
Good morning, and thanks for taking my questions.
Good morning, Joe.
So I wanted to start out with.
Last quarter, you had talked some about your SKU reduction efforts and I was just trying to get a little update on how they are performing.
Yeah, Hey, Joe This is Tom Thetford.
Take that question. Thank you for it.
We are aggressively looking across our entire portfolio, but particularly in our mature markets.
At our SKU offering.
As many companies have felt the impact of the changes in consumer behavior over the last few years with the pandemic and then the inflationary pressures the consumer's feeling.
Demand has changed in our portfolio and so our collective teams are marketers and our supply chain teams are working closely together to retire products that no longer meet our minimum thresholds and introduce.
Margin accretive products across all of our product categories. So that work is ongoing and we're making nice progress.
Okay. Thank you for that.
On the Latin American business, I know, it's been a quarter or two here, where <unk> had some.
Good performance driven by the return to in person education, an in person office.
How much more of that trend do you think is available.
Are we kind of past that or are they all back.
To a more normal environment at least on the school side, and maybe an office getting to where.
There seems to be that blend in.
Office versus telecommuting.
We still believe that there is a bunch left in Latin America Latin America, obviously has been recovering.
From the pandemic scores are open offices are open, but if I compare our volumes not revenue, but volumes volumes are still below pre pandemic levels. So theres still.
Market expectations, and our expectations that those volumes will continue to recover.
There, obviously been a lot of.
Price.
Inflation in the market just given the cost inflation that all of US has experienced over the last couple of years.
So with that we expect revenue growth to continue this year.
Both our Mexican business in our Brazilian business are expecting good.
Back to schools.
And their markets with significant growth over the prior year.
Okay.
Just if I could sneak in one more.
Yes, no the capital allocation, you've talked about focus on dividends and debt repayment.
But if we're looking at the stock here that was down about 24% year to date, just off a 52 week low.
Have the buyback authorization.
Point, Boris I guess for you sit there and say hey.
It makes sense to start.
Repurchasing shares here.
Yes, I would just reiterate Joe that the priority is to fund the dividend and to pay down debt, we believe that in this environment.
A lot of the pressure on our stock is coming from our leverage.
And I think it will suit our shareholders very very well if we.
Pay down debt and transfer of that debt to equity by doing that so.
That's the priority.
Okay, great. Thank you.
Thanks very much.
Thank you Joe.
As a reminder, ladies and gentlemen, if you would like to ask any further question. Please press star followed by one on half on key patent now.
Let me ask a question. Please ensure your phone is on mute locally.
With our next question comes from Kevin Stein from.
Ken Research Kevin Your line is now open.
Good morning, everyone.
Hi, Kevin.
Hey, Boris.
To start out by asking about.
Gaming accessories, you mentioned there.
<unk>.
Growth in gaming accessories, this year and sequential improvement.
As the year progresses.
Is that.
A positive update relative to what you expected before.
Just trying to get a sense as to.
The improvement there and if it's.
Kind of coming out of that.
Slowdown that we had seen last year end.
If it's just trending maybe a little bit better than you thought.
Okay.
It's a similar outlook that we had before we expect it to have a difficult Q1 due to the compares were still selling a lot of product in Q1 of last year and then we mentioned we had some product availability issues due to lack of some wireless chips in the last three quarters.
This year outside of last year and it continued through Q1 of this year. So we knew we were going to have difficult compares.
That's now behind Us and we expect growth in Q2 and in the second half of the year and overall growth for the full year, but that's consistent with our expectations that we had going into the year.
Okay. Thank you.
And similarly on.
There was discussion around.
Slower it spending in.
Lower computer accessories sales.
Yes, you did say you expect sequential improvement as we move throughout the year and growth for the full year of it I was just wondering if that was.
A newer development the slowdown or if that has kind of been baked in there or what.
You had already thought for the year, obviously, you didn't change your guidance or anything, but just kind of trying to get a sense as to how much of a.
A change that is relative to prior expectations.
I think versus.
A couple of months ago.
The <unk>.
Environment is a little bit slower than we expected.
Again, youre seeing it from the public announcements from.
Other companies in our space and also from large technology companies announce.
Hey offs due to the.
Specifically due to the it environment.
What we've seen though is we've seen better performance in other parts of the business.
Offsetting the a little bit of a slowness that we've seen on the technology side, so more specifically.
Our business products have performed better than we expected.
So overall as a company and will deliver better results even.
Now on the computer accessory side, it's a little bit slower than expectations.
Okay.
One last question for me.
You had you mentioned there are some areas of the business performing better than expected.
And Deb I.
I think you mentioned that.
You saw some.
Improvement inventory replenishment in the first quarter that helped too.
Our sales guidance is there anything more to call out about that or elaborate on in terms of that being a trend or.
Yes.
Wondering about the comments you made.
Yes, I think as Tom said in his remarks just on.
Back to school, and then kind of replenishment we're at.
I'm kind of weeks of supply as historical levels and as the prior year. So.
Feel pretty good setup for the back to school season.
I don't really think there's much more to add I mean, I think we are expecting.
The sequential improvement as we go forward.
Okay. Thank you for taking the questions I'll turn it over.
Thanks, Kevin.
Thank you.
Our next question comes from Hamzah <unk> from Dws financials.
Kevin is now.
Open.
Good morning. So the first question was just follow up on your expectations on back to school.
Are you expecting.
It'll be the same kind of replenishment you've seen in prior years, its just more coordinated and one or two quarters.
And then as far as.
The answer goes are you getting any kind of feedback from your retailers right now as to what their ordering pattern would be.
Tom go ahead.
Yes so.
I'll start with the last part of your question.
We do a pretty good job with our retail partners in collaboration of planning out the season and when orders would flow into the stores and kind of work backwards from there all the way to our Asian factories on product that we import.
Our domestic shipments tend to go later out of our domestic factories. So all of that is very well coordinated with our partners for Bts and I would say for the most part.
That is similar to what we have seen historically last year was very much an anomaly as retailers, who are trying to ensure supply with the global supply chain crisis.
Really apex ing, if you will at the time that their decisions were being made regarding back to school inventory. So last year was more of anomaly versus this year being different than historic norms.
We've kind of reverted back to more.
Kind of historic ways of the Bts cadence in North America, playing out.
I do think to time, we probably are anticipating.
More.
Retailers kind of chasing their pls and so some shifting into the third quarter could also happen this year.
Yes, and Thats a normal behavior.
They typically buy in Q2 for the first wave and then they replenished in Q3 us products sell through as Scott mentioned last year. They didn't do that there was an anomaly and this year, we expect to revert back to normal typical performance and overall to your first question, we expect a flaw.
<unk> back to school and that's what the industry expects as well roughly flat back to school.
Okay and my last question was just as far as the power distribution goes in Europe has that started in <unk>.
What are your expectations for that product in the region.
Yes.
It has started with.
We started really in earnest in the first quarter of this year with our expansion efforts.
Europe is a large addressable market for gaming accessories, and specifically console gaming accessories, and we have relatively small shares our business is primarily concentrated in two markets the UK and Germany.
So we have in the first quarter trained all of our salespeople, we've consolidated our operations from a three PL into agco owned facilities and so all of the backend work has largely been completed.
Now, we're just kind of working against some of the trends that Boris mentioned earlier.
I think we're probably off to a bit of a slower start than we would have hoped but we still have great optimism for the balance of the year.
Okay, great. Thank you.
Thanks Alan.
Thank you.
As a reminder, ladies and gentlemen, if you would like to ask any further question. Please press star followed by one on half on key Pat now.
Okay.
We have no further questions on the line.
Thanks, Brian I'll, just do the closing remarks.
Thanks, everybody for your interest in ACCO brands we.
We had a stronger than expected start of the year and are encouraged about the remainder of 2023.
As we stay focused on executing against our key priorities and keeping margin improvement at the forefront.
We have managed well in difficult environments and are confident in our ability to navigate the current economic challenges.
We're confident we have the right strategy and believe we are well positioned to continue to deliver organic sales growth compelling market performance and improved financial results as global economies recover.
Look forward to talking to you in a couple of months to report on our second quarter results. Thanks, everybody.
Thank you Dave.
Ladies and gentlemen. This concludes today's call. Thank you for joining you may now disconnect your lines.
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