Q1 2023 Whole Earth Brands Inc Earnings Call
Good morning, and welcome to the whole AG brands first quarter 2023, our results conference call.
Participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions.
Please also note today's event is being recorded.
At this time I'd like to during the conference call over to Jeff Sonic Investor Relations at ICR. Sir. Please go ahead.
Thank you and good morning, today's presentation will be hosted by Irwin Simon the Companys Executive Chairman, Michael Franklin, The company's Chief Executive Officer, and Bernardo CEO Chief Financial Officer.
Brian Litman, Chief Accounting Officer, and Andy Cherry VP of Finance branded CPG, North America, and global F. P&A.
Also on today's call and will be available for Q&A.
The comments during today's call and the accompanying presentation contain forward looking statements within the meaning of the safe Harbor provisions of the private Securities Litigation Reform Act of $19 95.
All statements other than statements of historical facts are considered forward looking statements. These statements are based on management's current expectations and beliefs as well as a number of assumptions concerning future events.
Such forward looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward looking statements.
So all of these risks and uncertainties are identified and discussed in the company's filings with the SEC.
Also refer to certain non-GAAP financial measures today. Please refer to the tables included in the earnings release, which can be found on the Investor Relations website investor that whole Earth brands Dot com for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures. Additionally.
Provided a supplemental earnings presentation on the Investor Relations website that may be useful in your analysis of the company's performance.
I'd now like to turn the call over to Mr. Simon go ahead Ron.
Thank you, Jeff and thank you all for joining our call today.
We're at an exciting inflection point in our business and I along side the board of directors feel incredibly confident about the future of our business.
Michigan changes have been made in our organization and it is clear as highlighted in our Q1 results.
We're gaining momentum and a relentless focus on profitability.
Michael has done an excellent job in its first four months and were thrilled to announce that Michael has now officially green who joined the company full time and remove is interim tag.
Our confidence in Michael's leadership is evident and the changes he is making we fully support.
Looking forward to his leadership during our next chapter of growth. Additionally, I'm also happy to be joined by Bernardo CEO , who we welcome to the team after more than seven years of Kraft Heinz and my early interactions with Bernardo is energy and passion for the consumer sector.
Evidence and his dedication to building a great leadership team will be a value added to our leadership team.
I'd also like to congratulate Jeff Robinson, President Matt worldwide on his performance neither Willard our general manager now of North America, and Ross niche ordering our president and CEO of International and Rishi, Dave Our Chief commercial officer of North America.
With that I want to welcome the new team and the exciting times ahead, I would now like to turn the call over to Michael.
Thanks Irwin.
Everyone and thank you for taking the time to join the call.
Im honored to officially be full time CEOC.
As I said on our last call I believe that there are significant opportunities for this business that will create long term shareholder value and I am excited to lead the many talented individuals across our global platform.
Since I've started those initial beliefs have only been reaffirmed.
<unk> for the board support and I look forward to updating all of you on our progress.
These last few months have comprised of in depth reviews focused on where we were where we are and where we want to go.
Aligning strategy and goals cross functionally is a critical component of ensuring the organization is collectively focused on our critical corporate priorities.
The interactions that I've had over the course of several months proved to be immensely valuable and I continue to be impressed by the depth quality and enthusiasm of our team.
The leadership changes announced on April 25th both in structure and personnel are the product of this engagement and are aimed at simplifying our structure fostering teamwork enhancing collaboration at all levels.
Streamlining our operations and enhancing cross functional activities, our key corporate priorities as we strive to enhance our productivity and generate sustainable long term growth.
We now have three president and Chief operating officers that will lead respectively. Our North America branded CPG business, our international branded CPG business, and our flavors and ingredient segment.
And all three roles, we have promoted from within and focused on giving high performers more responsibility inside our organization.
Nigel Wellington has been named whole Earth brands, as President and COO of branded CPG North America.
You may recall Nigel is name given his founding of wholesome sweeteners prior to our acquisition of the business in February 2021.
Nigel let wholesome for nearly two decades as its CEO , making it one of the largest organic and Fairtrade sweetener companies in the United States.
Wholesome as our largest business within the branded CPG segment, and we are thrilled to have Nigel here to help us continue driving momentum with that brand as well as cross pollinate success factors across our other brands and operations.
Complementing Nigel is rajneesh, Ori, who has transitioned into the role of president and COO of our international branded CPG business Raj.
Rogers was formally VP and managing director of branded CPG IPA region.
As a seasoned entrepreneur and accomplished business operator with more than 30 years of experience in the CPG industry across various geographies and cultures.
He has demonstrated his ability to drive growth in underdeveloped markets and achieve outstanding results.
Is that a dynamic leader in our organization and we're happy to have him lead our broader international team.
These leadership changes are important components to helping us manage the CPG business as one strategic unit, which demonstrates our commitment to enhance collaboration streamlined decision, making and build scale for future growth.
This move is consistent with our philosophy of operating as one company one business one team.
All working towards a cohesive common goal.
Looking ahead as we continue to pursue new opportunities and navigate a rapidly evolving global marketplace. Our consolidated approach will enable us to stay agile innovative and competitive IMAX.
I am excited to be working closely with Nigel and rajneesh to accomplish our goals across our entire branded CPG business.
Within our flavors and ingredients segment, we have been fortunate to have a long term content and the leadership of Jeff Robinson.
His leadership this business has been executing very well.
Notably with its track record of double digit revenue growth for more than a year now.
We are looking forward to building on this success and reinvesting in new applications for our ingredients business to continue to further diversify our sales channels.
In addition, we are also making a concerted effort to reinvest and support our most valuable asset our people.
One of those initiatives includes implementing an employee stock purchase plan.
We want our teams to not only think like an owner, but to have the opportunity to become an owner and share any equity value creation, we hope to achieve.
We also recently announced our intention to return back to the office to continue to support and build a unified culture in the organization.
Individuals can be productive both at home and in the office, but our top priority is building a strong and collaborative culture and that requires that.
Being in person together with.
We have several other exciting initiatives internally that we are looking forward to rolling out to continue to build a culture of excellent excitement and energy.
I'm also happy to share that our plan to shutdown, our Alabama manufacturing facility is progressing according to plan.
We are in the process of moving our equipment into new lower cost environment with established co manufacturers and those lines should be up and running by the end of the third quarter. This year.
This will assist us in controlling costs delivering margin managing working capital and ensuring that we are delivering on our commitments with customers.
In summary, I am encouraged by the changes, we are making and the support it will provide to our global operation.
<unk> team that can make an impact.
My job is putting them in a position to succeed.
We are pleased with the initial results of this effort and we will continue to build on our early successes in the year ahead.
Before I pass the call over to our new CFO Bernardo Seo.
Also wanted to welcome Bernardo to our leadership team at whole Earth brands.
Bernardo joins us at an important inflection point, where we look to capitalize on a number of opportunities that lie in front of us as demonstrated experience coupled with his hands on energetic approach should elevate our team as we embark on the next chapter of growth with that Bernardo overview.
Thank you Michael and good morning to everyone.
Before I get into the financial performance I would like to express my excitement on joining holders.
Firstly I believe in the power of the company's mission, which is to enable healthier lifestyles, helping people enjoy life's everyday enrollments and the celebrations that brings us to get the.
The brand portfolio and geographic reach.
To be uniquely positioned to meet these growing consumer needs and drive value in one of the fastest growing categories in the CPG industry.
In the room for only two weeks already see a significant amount of opportunities to reduce costs.
From a supply chain perspective, and focus on new growth channels as well as drive more nimble revenue growth management.
I believe that my experiences at Kraft Heinz included capital will build upon the solid foundations that my predecessor.
Duane Portwood, and a broader finance and accounting teams have put in place here.
My aim is to have the business generate sustainable long term value for our stakeholders and I'm looking forward sharing more details with you.
Our upcoming Investor conference in the third quarter.
With that let me walk you through our first quarter financial performance.
As a reminder, please refer to our non-GAAP reconciliations at the end of the press release for additional detail.
Current you to view, our supplemental earnings presentation on our Investor Relations website.
For the first quarter ended March 31 to include three consolidated project revenue grew one 5% to $130 million to $40 million versus prior year quarter.
On a constant currency basis product revenue increased.
Two 8% versus the prior year first quarter.
The growth deceleration as compared to previous quarters is largely attributed to a decline in the wholesome ingredients sales.
This was a conscious decision we made to avoid incremental tariffs that would have drop where lies the profitability.
Reported gross profit was $32 3 million compared to $39 6 million.
Prior year first quarter.
Adjusted gross profit was $39 5 million compared to $42 $8 million in the prior year period.
The decrease was largely driven by cost inflation, partially offset by pricing actions.
Reported gross profit margin was 24 partners in the first quarter of 2020 compared with 33 in the prior year period.
Adjusted gross profit margin was 29, 9% compared to 32, 8% in the prior year.
The client was primarily a function of higher cost of goods sold.
Due to the cost inflation, partially mitigated through increased breadth.
This resulted in higher sales to protect year over year gross profit dollars, but on a percentage basis results in a lower gross profit margin.
Additionally, the decrease was due to cost inflation number of price increases, including increased sugar tariffs as the <unk> continues to be strong.
Turning to Q4.
Adjusted gross profit margin has improved 100 basis points reversing the trend of consecutive decline in 2020.
Consolidated operating income was $3 million compared to operating income of $7 1 million.
Your first quarter.
Consolidated net loss was $19 $8 million compared to net income of $2 $7 million in prior year period.
Net loss was exacerbated by high interest expense and book income tax of over $10 million.
We expect cash tax payments between $4 million to $5 million net of refunds for the full year in 2023.
Finally, consolidated adjusted EBITDA was $16 6 million compared to $17 $8 million in the prior year first quarter.
The decrease was partially due to an unfavorable foreign currency impact of $40 million due to the strengthening of the U S. Dollar.
Excluding the foreign currency impact consolidated adjusted EBITDA decreased <unk>, 5%.
Depending on the segment results for Q1.
Branded CPG products revenues decreased $1 8 million or one 7% to $102 million for the first quarter of 2020 compared to $103 $8 million for the same period in <unk>.
On a constant currency basis segment product revenues were essentially flat compared to prior year as higher prices were offset by lower volumes.
As I mentioned before with.
Acceleration is largely attributed to lower ingredient sales, where we made a conscious decision to reduce sales of organic sugar to avoid incremental import tariff penalties.
Operating loss for the <unk> segment was <unk> $8 million in the first quarter of <unk>.
Compared to operating income of $6 $5 million for the same period in prior year.
The decrease was driven by the impact of cost inflation and higher costs associated with our supply chain renovation project.
Going back from a stronger U S dollar.
Flavor ingredient segment product revenues increased 13, 3% to $34 million from the first quarter of 2023.
Third to $26 8 million for the same period in the prior year.
Constant currency basis segment product revenues increased 14, 5%, primarily due to strong volume growth of eight 3%.
Even by growth in the licorice extracts, resulting for the company's commercial expansion and innovation efforts.
Pricing was also a significant contributor.
Six 2% versus prior year.
This was the eighth consecutive growth for top line growth and the sixth consecutive quarter of double digit topline growth for the flavor ingredients.
Operating income for the same segment was $9 $5 million in the first quarter of 2020 compared.
Compared to a green amongst $7 8 million prior year period.
The increase was primarily driven by revenue gains and favorable product mix.
Partially offset by $1 $6 million of favorable purchasing accounting adjustments in the prior year period related to inventory revaluations that not reoccur in the current quarter.
Operating expenses for corporate for the first quarter of 2023 were $5 7 million.
Compared to $7 $2 million in the prior year period.
The decrease was due to lower compensation expense driven by favorable adjustments and transaction related costs in the prior year that did not.
Pete.
Moving to cash flow and balance sheet cash.
Cash provided by operating activities for the first quarter ended March 31st 2023 was $4 1 million.
Expenditures for the same period was $1 6 million.
Which resulted in approximately $2 $5 million of free cash flow.
Free cash flow of $7 4 million.
As of March 31, 2023, we had cash and cash equivalents of $26 $6 million and 427 $6 million of long term debt.
Net.
Amortize debt issuance cost.
Our long term debt decreased from year end 2022 by approximately $5 million as a result of revolver pay down $4 million and normal amortization of $3 9 million.
At March 31, <unk> III, there were $72 million drawn on our $125 million revolving credit facility.
On April 24, 2023, we entered into amendment to our loan agreement, which temporarily increases the consolidated total leverage ratio covenant to provide near term flexibility and improve access to every revolving credit facility. The consolidated total leverage ratio we temporarily.
Between <unk> 25, and three five times in the next four quarters and then we turn to our regional maximum leverage ratio of five five times by the end of second quarter of 2024.
Even though through comfortable on where we stand given the challenging macroeconomic environment, we decided to take a conservative approach and add more flexibility to our balance sheet at minimal cost.
Reducing leverage to three times is company's top priority.
By 2023, we expect our leverage ratio to remain constant, but we're taking immediate actions, where we can to Richard.
Let's shift to our full year 2023 outlook that we're reiterating today.
As a reminder, our outlook is presented on a reported basis, which includes the impact of foreign currency translation and our expectations for growth are presented on an organic basis.
For 2023, we expect consolidated product revenues to be in the range of $550 million to $565 million representing growth of 2% to 5%.
We expect consolidated adjusted EBITDA to be in the range of $76 million to $78 million.
While we are not providing quarterly guidance, we do expect the first quarter to be the lowest quarter in terms of overall adjusted EBITDA and adjusted the March followed by sequential improvement over the remaining quarters throughout the year.
Our top priority is cash flow generation.
And the results of the first two quarters is a reflection of that and what's to come.
Finally, we expect total capital expenditures to be approximately $9 million.
And that concludes my prepared remarks, Michael now back to you. Thank you.
Thank you Bernardo as you can see in our results today. Our primary focus is on driving profitable growth, which is reflected in our improved margin performance.
As we discussed on our Q4 call we had a slightly negative impact on our net sales performance due to the press surrounding a retro Tal.
I wanted to reiterate that since 1991 in the U S. The FDA has approved <unk> for use in foods and drinks and is certified it is generally recognized as safe.
Similarly, our Richardson has been approved for use in more than 60 countries, including the European Union, Canada, Argentina, Australia, Japan, among others we.
We strive to provide our loyal customers with safe and high quality products and as always we will continue to monitor any updates with all of our products.
Following the news we saw an immediate impact on our sales, but those sales have continued to recover.
Additionally, as Bernardo mentioned wholesome ingredients volume decline had a significant impact on our branded CPG segment due to quota limitations for.
For the branded CPG segment, the impact was a 4% reduction in branded CPG revenues excluding.
Excluding ingredient sales all other branded CPG revenues increased by approximately 4% overall for Q1 2023 as compared to Q1 2022 on a constant currency basis.
Despite those impacts we were able to deliver a solid adjusted EBITDA performance with improved marketing execution, which as a result, we aim to continue to build upon.
Part of our reorientation of our leadership is to streamline our corporate structure, we will continue to find efficiencies wherever possible.
Overall, a good start to the year and we remain enthusiastic about the opportunities we have ahead.
Before opening the call to Q&A I would like to thank our team members all around the globe for their continued efforts that make our company better every day.
With that I would like to open the call for Q&A operator.
Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by one on your telephone keypad.
Hey, Jay Cohen from acknowledging your request questions will be taken into again received should you wish to cancel your request. Please press the star followed later too.
Thank you speaker phone please lift the handset before pressing any Keith one moment. Please for your first question.
And your first question comes from the line of Bobby Burleson from Canaccord. Please go ahead.
Yes. Good morning, good morning, Thanks for taking my question.
So just curious congratulations on reiterating that 2023 guidance and it sounds like we're going to see growth on a sequential basis for the balance of the year.
And I'm wondering within that what the mix might look like between branded CPG and flavors and ingredients. So any color there in terms of shift.
Shifting mix throughout the year.
Sorry can you repeat your question just again, thank you broke up again.
Yes, I am curious about the mix shift between branded CPG and flavors and ingredients throughout the balance of the year. How do you expect those two to.
Play out mix wise in terms of contribution to that outlook.
Yes.
As you saw with.
Yes.
Q1.
Our.
For flavors and ingredients, we obviously had a strong quarter for Q1, one in which we're excited about.
Obviously, you had continued growth we're hoping that continues throughout the balance of the year for.
Our branded CPG segment.
We expect that to catch up you.
Throughout the balance of the year this year.
And so Q1, we had some we obviously took some pricing we had some volume drop off we made a conscious decision to not sell into the ingredients volumes, we expect that to continue.
Two growing come back towards Q2, Q3 and Q4.
Thanks, Greg.
Okay, Great and then just as a follow up.
Theres been talk continuing this year of consumers trading down from maybe premium too.
Mainstream or value.
Product and I'm curious you guys are very broadly positioned in terms of your skus relative to those tiers.
Wanted to get a sense for what the impact spend on holders.
And in terms also volumes.
And the pricing actions you are taking so I know theres a lot Tom Panther, but yes.
Yes. The main thing is how is the portfolio positions versus that dynamic.
That's a great question look I'd start off by talking about the flavors and ingredients segment for Friday types of tradeoffs and changes in consumer.
In consumer products business is insulated from some of those macro changes with regard to the branded CPG segment. We saw a broad diverse set of products products that serve if consumers are trading down we're able to sell products into all three channels, whether that's value whether that's premium.
And so we feel good about where we stand today, we sell.
On the legal business, we have our branded business and <unk> business. So in terms of the diverse mix. We're set for navigating any trade down is there any changes based on any macro changes and changes in consumer.
<unk>.
Appetite for products.
Okay.
Yes.
Great. Thanks.
Thank you and your next question comes from the line of Rob Dickerson from Jefferies. Please go ahead.
Great. Thanks, so much.
I just wanted to focus on the on the tariff.
Situations I guess just in Q1 it sounds like.
There were you hit capacities, then you'd have to pay additional fee, but then the decision was not to import more so than volumes go down.
And kind of going back.
Question was just that as you get.
Through the year does that go away I think you said because.
We wont hit those capacity.
Constraints or I guess, the import constraints and therefore, you will be able to import because I'm just trying to right size.
Your decision should not drive volume because of the cost.
You still need to import the product.
Organic sugar frankly is different the regular sugar, but clearly sugar has inflated a decent amount and I don't hear you talking about incremental pricing to offset that.
Trying to get a little bit clarity, yet to kind of why that corrects and.
Yes.
Also doesn't sound like there is more pricing coming.
Thanks.
Yes.
Thanks, Rob.
One thing I had mentioned is when we think about.
Allocation. This was a conscious decision that we made at the beginning of the year right. When we went into the year, we did with UV allocation.
It can be.
Wanted for Q1 2023.
From our corporate priorities, we're looking to repair for the margin profile of the business that we have today. So we made a conscious decision to pare back selling through the ingredient channel, which is which has a lower margin channel for us and in order to sell into into that into that channel. We would've had to pay a tariff on the on the ingredients.
M&A ingredients W. Sold. So this was a conscious decision one that we were very cognizant of and.
This is in line with our corporate top priority of preparing our margin profile.
Okay, Okay got it.
I'll leave it at that.
And then you mentioned in the prepared remarks.
Just kind of opportunity of new growth channels.
I mean, clearly youre not a large company.
Now so I assume there are many different channels, where you can go but at the same time I would also assume that you had some visibility on that.
Over the past few years I know, they're kind of a lot of rotation in terms of new management, but the same time. There is also a legacy and I'm sure you've looked at it before so maybe just to touch on.
What those new growth channels or what.
What you see going forward, yes, yes in our flavors ingredients have been incredibly impressed since I started with the team's innovation coming out of that business is great. We're finding new applications and new areas and channels and industries that we can go after for selling our products and using our finished goods.
Outside the quarter consumer related products.
And then when we look at the consumer product side, and our campaign and our CPG business.
Obviously announce.
As you might see a regenerative organic certified exclusive launch with whole foods.
Which we will regrettably excited.
We have some great innovation coming out of <unk>.
And innovation is incredibly important for US right. When we think about our CPG business over 10% of our net sales are driven by innovation that is incredibly important and something that we hope to continue to build on in the future.
Okay.
Alright, Great and then just the last quick one.
Little bit broader question is just so.
Im commentary again, our prepared remarks around.
Back in the office.
Mid teen kind of building a culture right.
Maybe if you could try to draw.
Define.
What that culture would be the ideal situation.
<unk>.
Yes look it's.
Credibly important for our team members to keep together right now just working with the individual functionally working cross functionally building relationships, we want to individuals in our organization to communicate communicate Austin.
<unk>.
I said in the prepared remarks, it can be just as productive as you are in hone that you are in the office, but it's just tough to build a great culture.
Not in the office together and Thats why were making the rotation change.
Thank you.
Thank you and your next question comes from the line of Scott <unk> from <unk> capital. Please go ahead.
Hey, guys yeah. Thanks for thanks for taking my questions. So I actually just wanted to go back to a question that was just asked.
Around the tariffs and kind of the volumes in the branded and the sugar area the organic sugar area.
As we move to two Q3 Q4 Q the dynamics still in play.
That were in <unk>.
Yes, we're going to continue to advantages for the quarters ahead.
And we're continuing to monitor what the allocation is.
And for Q2 Q3 Q4.
We will message obviously appropriately.
Okay and then just.
Kind of a miss I should congratulate everybody in their new roles and whatnot. So congratulations to all on the call and looking forward to working with you guys.
My second my second question is.
It's more longer term I mean, obviously.
Things have changed quite a bit since.
Last couple of years, So I was wondering Uh huh.
Mike what are you.
What's your vision for the company long term.
So that's part one and then part two is what is the turnaround as you know the.
Economy gets worse.
Things are much more difficult kind of what's the kind of plan b. So kind of a two part question vision and plan B.
Yes, I mean.
My perspective, we've a great team in place.
<unk> made a lot of it.
Changes to our leadership organization and is part of that re org.
We're really excited about the team.
And I was talking about when we talk about the vision of the business.
We want our international CPG business to continue to grow there is so much opportunity for countries that we're currently not in today for us to expand into I mean, we're seeing continued international growth markets that we've entered into.
Are you talking about China for transact.
For Q1, 2023 relative to Q1 'twenty two that business has grown over 80% is continuing to find new opportunities to sell products in North America, we've made a low hanging fruit opportunities.
But we want to make sure that we continue to go after to go after that that will create material off site and with NAPCO is continuing to operate and find new ways, where we can create new innovation for us to sell our products.
This is as I just mentioned our business has a lot of new applications to go after and we want to make sure. We may continue the growth pattern that we've seen historically.
And then a plan b, if things are worse than expected, especially macro.
Our plan is our plan.
No I think look we feel we feel very comfortable about where we are today.
Feel good about where we stand we think theres a lot of opportunity to go after I think we want to make sure that we stay on plan for 2023 and that is our top priority.
Perfect. Thanks, Thanks for taking the questions.
Thank you once again should you have a question please press star.
By one on your telephone keypad and your next question comes from the line of Brian Meredith from Lake Street Capital markets. Please go ahead.
Hey, good morning, guys. Thanks for taking my questions.
First one for me I Wonder if you could call out some areas that you feel like you guys can take some more costs out of the business and where you feel like you guys can gain some more efficiencies.
Hey, Brian This is Bernardo. Thank you for the question. So we did that.
The biggest headwind that we see.
Opportunities for cost improvements isn't with supply chain like we mentioned before.
Similar to us might be spoke in the prepared remarks.
Our supply chain reinvention as opposed to.
So close to $11 million.
Ian.
Upon that further.
Looking for logistics and also and also better than gasoline.
Yeah.
Got it that's helpful.
And then next question you know so excluding the wholesome ingredients business that you know a lot of the other questions have addressed you said all other branded CPG was up 4%.
I was wondering if you could unpack that a little bit in terms of price and volume just so we can kind of get a sense of what the volume trends look like for not the ingredients business and then kind of using that to get a good understanding of what the what the underlying demand looks like.
Sure Brian and also welcome you to take a look into our supplemental deck on page four we had a view of that but going back to your question in Q1.
Our branded CPG business price break down eight 9%.
Offset by a volume decrease of about of.
About the same amount being half of that because of the ingredient side.
As we progressed through the year, we are expecting a more balanced growth as we realize the occ's went away as price starts to decelerate through the quarters.
Got it that makes sense, thanks for taking my questions.
Thank you.
Thank you and your next question comes from the line of JP <unk> from Roth Capital. Please go ahead.
Okay.
Great. Good morning, everyone and thanks for taking the questions.
Maybe if we could just start on kind of the new organizational structure.
Gardening branded CPG.
In terms of thinking about that was there an opportunity, which gave you that kind of cost and corporate costs out and.
If not or if so maybe just is there any way you're thinking about SG&A and whether there is an opportunity for some more cost cutting there. Thanks.
Okay.
So the leadership changes.
Election of empowering individuals in the organization, we've done a great job.
Historically that we wanted to make sure to be our business and our teams going forward.
Nigel obviously builds wholesome into where it is today and we want to continue that growth pattern wholesome has been a great acquisition for us and something we hope to continue to build on.
<unk> done an excellent job of finding new opportunities in our international regions.
Where we can sell additional products and Jess and Jeff has done a great job of NAPCO. So we're excited to have him.
Continue to lead that business.
Okay.
Okay.
It sounds great and then.
Maybe just looking through the Q briefly is there anything to call out specifically with the.
The performance in Europe , It looks like it was down a bit year over year, and just wondering if theres anything special to mention.
Europe is very important for us.
When we look at our brands in Europe , they are market, leading brands and for us that when we look at Europe . We have detailed product in three primary areas in Europe that is France that is.
Belgium, and the U K and there is a ton of white space for us to go. After we are incredibly excited about the opportunities that we have in Europe .
Continue.
To build and grow going forward, we've had some market share growth in those regions and that's something that.
We want to continue to grow faster.
Very helpful. Thank you for the time.
Thank you.
Mr. <unk> there are no further questions at this time. Please proceed.
Thanks, Jeff and thank you all for joining our call today. We appreciate your support and look forward to continuing to update you on our progress.
Most importantly, I'm just wanted to take the opportunity to also thank all of our team members globally for their dedication and efforts with that thank you everyone.
Thank you that does conclude our conference for today. Thank you all for participating you may now disconnect.