Q3 2024 High Liner Foods Inc Earnings Call
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Speaker Change: Good afternoon, ladies and gentlemen, thank you for standing by welcome to the Highline or Foods incorporated conference call results of the third quarter of 2024 at this time all participants are in a listen only mode. Following management's prepared remarks, we will conduct a question and answer session and instructions will be.
Speaker Change: He provided at that time for you to go up for questions. If anyone has any difficulties hearing the country, especially starkey followed by zero for operator assistance at any time. This conference call is being recorded today Friday November eight 2024 at two P. M Eastern time for replay purposes.
Speaker Change: I would now like to turn the conference overtaking ready students Vice President of Finance for highlight no foods. Please go ahead.
Speaker Change: Good afternoon, everyone. Thank you for joining the Highlander Foods conference call today to discuss our financial results for the third quarter 2024 on the call from holiday Foods, a pause you were Chief Executive Officer, Gary Bachman, Chief Financial Officer, and Anthony without a chief commercial officer.
Speaker Change: I'd like to remind listeners that we use certain non <unk> measures and ratios when discussing our financial results. As we believe those are useful in assessing the company's financial performance. These measures I fully described and reconciled to ice arrest message in our MD&A.
Speaker Change: Listeners are also reminded that certain statements made on today's call may be forward looking statements under applicable securities law.
Speaker Change: Management may use forward looking statements discussing the company's strategy this end market.
Speaker Change: Which the company operates as well as operating and financial performance in the future.
Speaker Change: These are subject to risks and uncertainties and based on assumptions that we that are believed to be reasonable at the time that they were made and the currently available information.
Speaker Change: Actual results or events.
Speaker Change: Or financial results could differ materially from those anticipated in these forward looking statements.
Speaker Change: Hi, Linda Foods includes a thorough discussion of the risks and other factors that could cause this anticipated outcomes to differ from actual outcomes and it's publicly available disclosure documents, including its most recent annual MD&A and annual information form.
Speaker Change: Please note that Highlander foods is under no obligation to update any forward looking statements discussed today.
Speaker Change: Before I open today November eight Islander foods reported its financial results for the third quarter ended September 28 2024.
Speaker Change: The news release, along with the company's MD&A and unaudited condensed interim consolidated financial statements for the third quarter of 2024 have been filed on SEDAR and can also be found on the investors section of the highlight of foods website.
Speaker Change: If you'd like to receive our news releases in the future. Please visit the Companys website to register.
Speaker Change: And lastly, please note that the company reports financial results in U S dollars and therefore the results to be to be discussed today are also stated in U S dollars unless otherwise noted Highlander foods' common shares traded on the Toronto stock exchange and are quoted in Canadian dollars.
Paul: I will now turn the call over to Paul for his opening remarks.
Paul: Thank you Kimberly Hello, everyone and welcome to our Q3 2024 conference call I'm joined today by our Chief Financial Officer, Darryl Bergman, and our Chief Commercial Officer Anthony Rosetta.
Paul: Before I had over to Darryl to discuss the details of our financial results I will begin today's call with some high level commentary on the quarter and the progress we are making to drive improved performance across the business.
Paul: Nine months ago, when we first started to feel the pressure of market headwinds and consumer pull back on our business I shared that we would adopt an aggressive get balanced response, our golden as it is now is to support a sustainable recovery for our business that did not drive volume at the expense of profitability or vice versa. We.
Paul: On ensuring that our commercial activities supported improved near term performance and the longer term upside for branded and value added.
Paul: For the for the branded and value added seafood category in North America.
Paul: Our third quarter results show promising signs that this approach is working our commercial strategies are gaining traction driving sequential improvement in sales and volume compared to Q2, well holding onto margin.
Paul: We increased adjusted EBITDA by seven 5% or $1 $5 million for the quarter and grew gross profit as a percentage of sales by 200 basis points.
Paul: Consistent with the second quarter, our EBITDA growth in Q3 was supported by lower raw material costs and normalized inventory levels.
Paul: Continue to drive efficiencies across our business and as previously announced we were pleased to complete a refinancing of our term loan B ahead of schedule, which resulted in interest savings.
Paul: Nonetheless, and as expected sales and volume continued to decline in the third quarter compared to the prior year, largely driven by some customer and consumer pullback. The continued impact of a decline in contract manufacturing and exiting of low margin business.
Paul: Despite the continued headwinds we are encouraged by signs of progress in both retail and foodservice businesses.
We are expanding distribution in leveraging innovation to showcase the ability and convenience of our products to customers and consumers. We also continue to capitalize on the diversification of our business leaning into areas of greatest market stability as consumers shift between channels with a focus on value and premium offerings.
Anthony will share more details about this shortly.
Speaker Change: Overall, the strong execution by the team during the third quarter reinforces my confidence in our continued resilience and improving well performance.
In the fourth quarter, we will continue to keep a careful eye on costs mix and efficiencies to support profitable volume recovery in year over year adjusted EBITDA growth. Despite continued headwinds in anticipated fluctuations in pricing and demand.
Speaker Change: As we drive towards improved performance, we continue to invest in our business to return to profitable growth.
Speaker Change: We are in the fortunate position to be able to do so while also increasing the dividend. The 13, 3% dividend increase this quarter is the fifth consecutive year in which the board has increased the dividend between 2019 and 2020 for a period that encompass significant market turmoil from the pandemic.
Speaker Change: To supply chain crises.
Our ability to continue to support the demand against the backdrop of market turmoil validates our strategy as do the results generated in the third quarter.
Speaker Change: That said, we continue to believe that our share price does not reflect the underlying value of our company, which is why today, we announced an application to once again increase our share buyback program.
Speaker Change: The growing dividend and continued share buyback program.
Speaker Change: Are important elements of our approach to capital allocation, which also includes ongoing investment in our business as we continue to pursue potential M&A opportunities in the near term. We are focused on continuing the momentum of the third quarter to strengthen revenue while preserving profitability in these dynamic mark.
Speaker Change: <unk> conditions I will now hand, the right hand.
Speaker Change: I hand, it over to Darryl to discuss our financial results Daryl.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay. Thanks, Paul.
Speaker Change: And Hello, everyone. Further depaul his opening remarks, I would like to add that once again our results. This quarter are a good indicator of the company's resilience and our ability to drive year over year adjusted EBITDA growth.
Speaker Change: That said I will now turn our financial turn into an actual results for third quarter of 2024.
Speaker Change: Sales volume decreased in the third quarter by $4 2 million pounds, or six 9% to $56 8 million pounds.
Speaker Change: The company continued to operate in a challenging market conditions, driven by consumer pullback and competitive pressures in the company's retail business well highlight our foods experienced year over year decline in volumes. The company once again expanded distribution in strategic areas, including club and premium offerings.
Speaker Change: The company's food foodservice business Highlander Foods saw continued success of new value added innovations in terms of volume and expanded distribution and saw continued growth in alternative species. Despite the overall year over year decline in volume.
The sales decreased in the third quarter by $30 8 million or 11, 9% to $228 9 million driven by volume declines amid challenging market conditions and reduced pricing, reflecting deflationary market.
Speaker Change: Given the highly promotional and price sensitive retail and foodservice.
Speaker Change: Market. The company continues to take actions on promotions innovations and distribution to strengthen its competitive position and mitigate the impact of external pressures, while preserving profitability, which Anthony will provide more insight on here shortly.
Speaker Change: The weaker Canadian dollar in the third quarter of 2024 compared to the same period in 2023 decreased the value of reported U S. Dollar sales from our Canadian Diamond denominated operations by approximately 1 million relative to the conversion impact last year.
Speaker Change: Gross profit decreased in the third quarter by $1 3 million or two 6% to $48 3 million and gross profit as a percentage of sales increased by 2% to 21, 1% as compared to 19, 1% in the third quarter of 2023.
Speaker Change: The decrease in gross profit is due to lower raw material cost normalized inventory levels, a more profitable mix and a balanced approach to pricing focused on supporting both the bottom and top line of the business.
Speaker Change: My line or foods continues to drive continuous improvement across the operation to ensure prudent cost management.
Speaker Change: In addition, the weaker Canadian dollar decrease the value of reported U S. Dollar gross profit from our Canadian operations in 2024 by $200000 relative to the conversion impact last year.
Speaker Change: Adjusted EBITDA increased in the quarter by $1 5 million or seven 5% to $21 5 million and adjusted EBITDA as a percentage of sales increased favorably to 9.4% compared to seven 7% the.
Speaker Change: The increase in adjusted EBITDA is due to favorable distribution expenses and lower net SG&A expenses, partially offset by lower gross profit in.
Speaker Change: In addition, the weaker Canadian dollar decrease the value of reported adjusted EBITDA and USD from our Canadian operations in 2024 by $100000 relative to the amount.
Speaker Change: Relative to the conversion impact last year reported net income decreased in the third quarter by $12 8 million to $18 3 million and diluted earnings per share increased by 45 to 61.
Speaker Change: The increase in net income is due to the increase in adjusted EBITDA and increase in business acquisition integration and other expenses and a decrease in finance costs and lower depreciation and amortization costs, partially offset an increase in income tax expense.
Speaker Change: Excluding the impact of non routine or noncash expenses that are explained in our MD&A. Adjusted net income in the third quarter of 2024 increased by 700000 or 14.3% to $5 6 million and correspondingly adjusted diluted earnings per share increased by <unk> <unk>.
Speaker Change: <unk> to 'twenty in the third quarter of 2024.
Turning now to cash flows from operations and the balance sheet.
Speaker Change: Net cash flows from operating activities in the third quarter of 2024 decreased by $40 6 million to an inflow of $13 4 million compared to an inflow of $54 million in the same period in 2023, despite higher net income and loan or interest paid this is due to lower changes in noncash working capital.
Speaker Change: Balances compared to the previous year, lower finance costs due to a gain on the modification of the long term debt and lower depreciation and amortization.
Speaker Change: The decrease is partially offset by increased cash flows provided by operations.
Speaker Change: Capital expenditures were $17 2 million in the first three quarters of 2024 compared to $13 1 million in the prior year, reflecting the continued investment in our business.
Speaker Change: Net debt of the of the third quarter of 2024 decreased by $10 3 million to $239 million $289 6 million compared to $249 9 million at the end of fiscal 2023, reflecting lower bank loans long term debt lease liabilities and a higher cash balance as at September.
Speaker Change: 28, 2024 as compared to December 31, 2023.
Net debt to adjusted EBITDA was two four times at September 28, 2024, compared to two six times at the end of fiscal 'twenty three the.
Speaker Change: The ratio has continued to improve into 2020 in 2024 due to lower net debt and a higher rolling 12 months adjusted EBITDA compared to fiscal 2023.
Speaker Change: In the absence of any major acquisitions or unplanned capital expenditures in 2024, we expect this ratio ratio to continue to be lower than the company's long term target.
Speaker Change: Three times at the end of fiscal 2024.
Speaker Change: Notably as well the early refinancing of airliners term loan B, which was completed was completed in the quarter. This provides a stable platform.
Speaker Change: For organic and accelerated growth strategies.
Speaker Change: The refinancing was not only at improved rates, but also oversubscribed, demonstrating the confidence of our lender community.
That our lender community has in Highlands.
Speaker Change: Also during the third quarter, our net debt continued at the lowest levels of the company has seen in more than 10 years.
Speaker Change: Before I wrap up I'll provide details on our intention to increase the size of our normal course issuer bid.
Our application, which is subject to the approval of the T. S X would increase the number of shares at the company that the company intends to purchase from 700000 to 1 million 643340, an increase of 903340 shares.
Speaker Change: Our move to increase the NCI be as Paul noted reflects.
Speaker Change: The board and managements belief that the share price currently does not reflect the true value of the company in.
Speaker Change: In closing our strong balance sheet supportive financial partners focused team and demonstrated ability to consistent EBITDA performance amid and die.
Speaker Change: Dynamic economic backdrop positions us well to support our strategy strategy and capitalize on future growth opportunities I will now turn the call over to Anthony to discuss our discuss our operational highlights.
Anthony Rosetta: Thanks, Daryl and Hello, everyone.
Anthony Rosetta: The third quarter largely played out as expected in terms of market conditions challenges and emerging opportunities. We continue to operate in a highly competitive and promotional market on both sides of the border consumers remain price sensitive and seafood continues to be a more expensive option for protein and certain.
Anthony Rosetta: In comparison to other grocery staples in foodservice traffic continue to decline across the industry and consumers traded down within foodservice and dined out less frequently.
Anthony Rosetta: This was driven in part by the higher cost of dining outside of the home with the average check size for a meal wouldn't home rising 4% in the quarter.
Anthony Rosetta: While our diversified business enabled us to benefit from the related improvement in the retail frozen seafood category. We did experience pressure on our foodservice business. During Q3 in particular this quarter, we lapped a successful limited time offer <unk> that ran in Q3 2023.
However, we continue to experience relative stability in non commercial and we saw we saw strong performance within the school system, where we want additional business. This year. We also expanded distribution, which will help us offset continued near term pressure.
Anthony Rosetta: Turning now to our retail business in which distribution gains were also a bright spot our distribution gains continued to be tied to innovation and value and demonstrate how the core attributes of our strategy are working together and supporting improved performance compared to Q2 and laying the groundwork for recovery.
Anthony Rosetta: In U S. Retail we have continued to make inroads with major club retailers driven by product innovation and value associated with club site purchases carrying value with volume allows us to appeal to the value conscious consumer while preserving margin and will remain a key tenet of our strategy moving forward.
Anthony Rosetta: We are supporting this strategy with a targeted with targeted marketing activation in partnership with our retailers. We're encouraged by the results. So far both in terms of the number of marketing impressions and how this is translating into expanded distribution, especially in the club channel.
While it is early days retailers have responded positively to developing mutually beneficial campaigns I am confident in the opportunities here to support sales and volume recovery and growth over time we.
We have some exciting campaigns time to rollout in partnership with retail with retailers to coincide with the Lenten period.
Anthony Rosetta: From a portfolio perspective, the bright spots I shared in Q2 continued in the third quarter and our U S retail business, where the category continues to improve overall, our seaworthy premium Atlantic Salmon brand.
Anthony Rosetta: Continues to be a top performer and is in fact, the fastest growing brand in the category.
Anthony Rosetta: During the third quarter, we secured new listings and expanded distribution for our value capture of the day and Fisher Boy brands, along with our premium <unk> and see where the brands the.
Anthony Rosetta: The strong response to these products coupled with the increasing demand by consumers for value and convenience offered Brian by frozen restaurant quality seafood bodes well for our future performance in retail we will continue to focus on our barbell strategy of leaning into value and premium ends of our portfolio moving forward.
Anthony Rosetta: In Canadian retail of the category is also improving albeit not at the same pace as in the U S and remains highly competitive while competitive pressures continue to negatively impact our share during the third quarter. We are capitalizing on the strength of our customer relationships and the opportunities associated with our.
Anthony Rosetta: Our innovation brand heritage and customer marketing partnerships to push back against competitive pressure.
Anthony Rosetta: We also continued to deepen our footprint in the Canadian club category during the third quarter with performance in that channel leading to overall growth in shipments in Q3 innovation.
Anthony Rosetta: <unk> continues to support performance and listings across mainstream retailers with our two new value added shrimp innovations off to a promising start as the number one and number three branded innovations in the category this year.
Anthony Rosetta: Turning now to alternative species, where the trends we saw in the second quarter continued into the third southern Blue wedding growth continued in both the U S and Canada in retail and foodservice and we converted another SKU over this species during the quarter.
Anthony Rosetta: Southern Blue Whiting is a promising value based PC that attracts consumers given its cost and pace and we expect this growth to continue particularly in our foodservice business going forward overall I'm encouraged about the progress we made in the third quarter to support the top line, while protecting margins looking ahead.
Speaker Change: We intend to build the momentum underway supported by strong consumer and get customer engagement and innovation success I look forward to updating you on our progress in Q4, and I'll hand, it back to Paul for his concluding remarks.
Paul: Thank you Anthony as you have heard today, we are executing well against our targeted strategy to offset headwinds and return to profitable growth.
Speaker Change: <unk> continued market challenges, we are encouraged by our financial and operational performance in the quarter, and especially our ability to make pressed on the top line, while continuing to strengthen profitability.
Speaker Change: We are well positioned to build on our progress in the fourth quarter as we partner with our customers to support category growth and deliver value convenience and innovation to consumers seeking seafood as healthy and affordable source of protein.
Speaker Change: Our strong balance sheet from a source of competitive advantage and priority for us.
Speaker Change: It strengthens our resilient through challenging times and affords us the ability to be measured and strategic in our response.
Speaker Change: Similarly, it allows us to be patient and disciplined as we explore opportunities for M&A waiting for the right opportunity to accelerate our growth across the value chain, while continuing to return capital to our shareholders and invest in our business.
Speaker Change: We are focused on building our third building on our third quarter progress delivering year over year increase in adjusted EBITDA and pushing towards a return to topline growth while surfacing value for shareholders.
Speaker Change: With that I will hand, the call over to the operator to open it up for a question and answer period operator.
Speaker Change: Thank you and ladies and gentlemen, we will now begin the question and answer session to ask a question you May press star followed by the number one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing any keys do it via a question. Please press star followed by the number Q. Once again, please press star one to ask a question.
Speaker Change: One moment. Please for your first question.
And your first question comes from the line of Kyle Mcphee with core Mark Securities. Please go ahead.
Speaker Change: Hi, everyone.
Speaker Change: To start I want to unpack some of the moving parts feeding your volume performance, which was better than I thought this quarter it seems like.
Speaker Change: One of these highlight our specific growth initiatives.
Speaker Change: Our our masking more and more the macro headwind. So first on that topic can you help us quantify the new wins that you are landing now if we isolate the volume wins in retail and foodservice that youre, calling out what does that look like in terms of year over year growth and is it snowballing versus the wins you talked about in recent quarters or Youre, just kind of benefited largely from.
Speaker Change: The same way.
Yeah, No I think there is some benefit from wins, we had earlier in the year in foodservice and retail.
Speaker Change: And we're also.
Speaker Change: Continuing to win some new business, including some new distribution and also from the effect of I think some good promotional activity that's helped support volume.
Speaker Change: And you're right.
Speaker Change: The trend has improved we're still not back to top line growth although.
Speaker Change: Certainly have moved in that direction.
Speaker Change: Compared to where we were earlier in the year.
Speaker Change: Okay and can you help us kind of quantified when we isolate that's moving part the win like is it kind of.
Low single digit like one 2% type volume when isolating this Doug.
Speaker Change: Yeah, that's I think that's probably.
That's probably right.
Speaker Change: We did have.
Speaker Change: But we did pick up some volume related to Usda's school business, which is larger volume so that would be on top of that.
But that helped offset some of the contract manufacturing declines that we talked about earlier in the year.
Speaker Change: Got it Okay, and then on the macro moving parts impacting your topline.
Speaker Change: Would you describe it as the intensity of the macro admin staying the same is it getting worse I'm trying to figure out when macro kind of stopped showing up a headwind and you're moving parts because if it's not getting worse I think you will have largely lapped it up to your next quarter.
Yeah, Kyle it's Anthony I think Theres, a couple of different things happening foodservice is has been down the last few quarters and continues to be down. So that is definitely a headwind for us as the larger part of our business and portfolio as traffic was down a couple of percentage points, we're seeing.
Speaker Change: <unk>.
Declines in <unk> on the value side of food service for the first time quarter.
Speaker Change: Eater check is up overall, so that headwind for us offsetting that though is within foodservice as you can imagine as customers are looking for value, they're shifting into distributor label or private label, we do a good chunk of that business.
Speaker Change: The label and so have been able to have some relatively stable performance associated with that in addition to our business and noncommercial like Paul talked about with what we picked up in schools and school feeding in particular and then the other side of it is that retail is improving so as consumers are eating out less and at home.
Speaker Change: More which is getting worse in foodservice better in retail than we're seeing the pickup in retail and some traction with both our innovation as well as with the distribution and promotional tactics that we have going on.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Thanks for all the color on the moving parts lastly.
Speaker Change: The last thing I wanted to talk about with you.
Speaker Change: Gross margin percentage, so increased promotional activity as one of the moving parts impacting this line item.
Speaker Change: Offsetting some of the lower inventory cost dynamic that youre getting those benefits. So I know Q3 marked decline for increased promotional activity.
Speaker Change: <unk> continues but I guess my question is is.
Speaker Change: As the intensity of promotion accelerating going forward, what should we expect there or are you just kind of holding on to the existing intensity of promotion.
Speaker Change: No. It will continue with the with the promotional activity.
Speaker Change: Perhaps at all.
Speaker Change: Slightly higher pace than in Q4, because as were seeing the positive effects of that promotional activity and that's driving overall higher gross margin dollars.
Speaker Change: The other piece, though Kyle to factor in for sure is just that the impact of mix right. So as a as we see.
Speaker Change: An increase in some of the private label a bid business that may.
Speaker Change: May come at lower margins, but certainly is supportive to the overall gross.
Speaker Change: Gross margin dollar growth.
Speaker Change: Got it okay. That's it for me for now thank you.
Speaker Change: Thank you and your next question comes from the line of Mervyn Yoga with BMO capital markets. Please go ahead.
Mervyn Yoga: Thank you and good afternoon guys.
Firstly I just wanted to clarify quickly Paul I think you mentioned year over year EBITDA growth.
Mervyn Yoga: Was that in reference to 2024 or was that also including the fourth quarter of this year.
Paul: Yeah, It's certainly year to date, we've had.
Speaker Change: EBITDA growth over the prior year and as we've really been saying through the year, we expect to be able to deliver EBITDA growth for the full year and obviously with the with the performance we put up in the first three quarters.
We are even more confident of that performance on an annual basis.
Speaker Change: Mhm, Okay perfect.
Speaker Change: And then just on sales in the coronary so beyond the volume decline can you parse out the impact.
Speaker Change: From price deflation as well as mix this quarter.
Okay.
Speaker Change: From a deflation perspective, there's probably not a lot that's factored in.
Speaker Change: It's more of an impact of the volume decline and mix.
Speaker Change: We because we are starting to see some species the prices.
Speaker Change: Come back up off lows earlier in the year. So I would say it's more of a.
Speaker Change: Mix impact than.
Speaker Change: And then a deflationary price impact other than.
Speaker Change: Obviously promotional activity can have some impact on.
On the.
Speaker Change: The net sales.
Speaker Change: Uh-huh, Okay that makes sense and then I guess just sort of as you as you think about Q4 on a year over year basis, when we're looking at and volumes here.
Speaker Change: A nice sequential improvement there and in Q3 would you expect to see a further improvement into Q4, as well still down year over year, but sequentially improved.
Speaker Change: While we certainly expect to see a sequential improvement and as we've been saying, we're really working to get back to.
Speaker Change: To topline growth.
Speaker Change: It's we've had a good start to the quarter.
Speaker Change: But we need to we will continue to work on.
Having a strong finish to the year.
Speaker Change: Okay great.
Speaker Change: And then.
Speaker Change: And clarity touch on gross margins so just on SG&A.
Speaker Change: It was quite steady on a year over year basis.
Speaker Change: I was looking for a bit of an increase there maybe you can talk about just how SG&A dollars.
Speaker Change: Excluding the DNA component arch are expected to trend into Q4.
Yeah, nothing that I would <unk>.
Speaker Change: I'd highlight that should swing the swing to the.
Any amounts to any degree the only thing I would say I would caution we always look at what I'll call adjusted SG&A. So we exclude any impact us.
Speaker Change: Long term incentive programs those kinds of things. So when you exclude that I wouldn't expect any significant change quarter over quarter. So the one area that there can be some seasonality in is our marketing spend but again nothing significant between between Q3 and Q4 that I'd highlight.
Uh-huh and so like I guess, if it's really relatively steady sequentially you had been looking for a larger year over year increase into Q4 is that right.
Speaker Change: And SG&A as a percentage of sales.
Speaker Change: I guess I'm not sure I understand the question.
Speaker Change: Yes, more on SG&A dollars.
Speaker Change: Like if your if your comment was in relation to SG&A dollars being relatively flat sequentially.
Speaker Change: Sequentially or were you referring to SG&A as a percentage of sales.
I was thinking of SG&A as a percentage of sales, yes, yes, I see.
Speaker Change: Okay perfect that makes sense that's it for me. Thank you.
Thank you and there are no further questions at this time I would like to turn it back to Paul you were president and CEO for closing remarks.
Speaker Change: Thank you operator to close I want to thank you for joining our call today, we look forward to updating you with our results for the fourth quarter of 2024 on our next call in February.
Speaker Change: Okay.
Speaker Change: Thank you presenters and this concludes today's conference call. Thank you all for participating you may now disconnect.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Okay.