Q3 2024 Turning Point Brands Inc Earnings Call
A question and answer session.
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Speaker Change: Good day and welcome to the turning point Brands' third quarter 2024 conference call.
Speaker Change: I'd now like to welcome Andrea Flynn CFO to begin the conference Andrew over to you.
Lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
Andrea Flynn: Good morning, everyone, a short while ago, we issued a press release covering our Q3 results. This release is located in the IR section of our website at Www Dot turning point brands Dot com.
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To withdraw your question press the Star one again.
Speaker Change: During this call we will discuss our consolidated and segment operating results and provide perspective on the operating environment and progress against our strategic plan.
Speaker Change: So operator assistance throughout the call. Please press star Zero, and finally, I would like to advise all participants that this call is being recorded.
Speaker Change: As is customary I direct your attention to the discussion of forward looking and cautionary statements in today's press release and the risk factors in our filings with the Securities and Exchange Commission.
Speaker Change: I'd now like to welcome Andrea Flynn CFO to begin the conference Andrew over to you.
Andrea Flynn: Good morning, everyone, a short while ago, we issued a press release covering our Q3 results. This release is located in the IR section of our website at Www Dot turning point brands Dot com.
Speaker Change: On the call today, we will reference certain non-GAAP financial measures.
Speaker Change: These measures and reconciliations to GAAP are in today's earnings release, along with reasons why management believes they provide useful information.
During this call we will discuss our consolidated and segment operating results and provide perspective on the operating environment and progress against our strategic plan.
Speaker Change: I will now turn the call over to our CEO Graham Purdy.
Graham Purdy: Thanks, Andrew Good morning, everyone and thank you for joining our call.
Andrea Flynn: As is customary I direct your attention to the discussion of forward looking and cautionary statements in today's press release and the risk factors in our filings with the Securities and Exchange Commission.
Graham Purdy: Our consolidated third quarter results were better than expected and demonstrated continued progress against our plan.
Speaker Change: Adjusted EBITDA increased 11% to $27 2 million for the quarter.
Andrea Flynn: On the call today, we will reference certain non-GAAP financial measures.
Andrea Flynn: These measures and reconciliations to GAAP on today's earnings release, along with reasons why management believes they provide useful information.
Speaker Change: <unk> EBITDA increased 12% to $26 9 million.
Speaker Change: Given strong performance across our business lines, we are increasing our guidance for full year 2024, adjusted EBITDA to $101 million to $103 million versus our prior guidance of $98 million to $102 million.
Speaker Change: I will now turn the call over to our CEO Graham Purdy.
Graham Purdy: Thanks, Andrew Good morning, everyone and thank you for joining our call.
Graham Purdy: Our consolidated third quarter results were better than expected and demonstrated continued progress against our plan.
Speaker Change: Neither of these ranges include contributions from Cvs.
Speaker Change: During the September quarter was exact performed well with revenue up 6% to $49 3 million driven by growth in all our sub segments, except for one and we experienced another strong showing from our cigar business, which we've leaned into more heavily in 2024.
Speaker Change: Adjusted EBITDA increased 11% to $27 2 million for the quarter.
Speaker Change: <unk> EBITDA increased 12% to $26 9 million.
Speaker Change: Given strong performance across our business lines, we are increasing our guidance for full year 2024, adjusted EBITDA to $101 million to $103 million versus our prior guidance of $98 million to $102 million.
Speaker Change: We continue to be excited about this business going forward.
Speaker Change: The loan segment the decline was the lighter category.
Speaker Change: Due to weaker than expected performance, we are assessing the go forward strategy for this product line.
Speaker Change: Neither of these ranges include contributions from Cvs.
Speaker Change: During the September quarter. This exact performed well with revenue up 6% to $49 3 million driven by growth in all our sub segments, except for one and we experienced another strong showing from our cigar business, which we've leaned into more heavily in 2024.
Speaker Change: We saw growth in zig zag across our distribution channels, including a solid quarter with an alternative channel, which experienced low double digit growth both sequentially and year to date versus year ago.
Speaker Change: We remain bullish on the continued emergence of this channel, which provides us an opportunity for us to leverage our diverse SKU portfolio to offer these customers a one stop shop for all their accessory needs.
Speaker Change: We continue to be excited about this business going forward.
Speaker Change: The loan segment the decline was the lighter category.
Speaker Change: Due to weaker than expected performance, we are assessing the go forward strategy for this product line.
Speaker Change: As the category continues to grow and gain mainstream acceptance.
Speaker Change: We expect to see continued convergence of distribution channels as traditional C store distributors that we've done business with for decades increasingly target the <unk> market.
Speaker Change: We saw growth in zig zag across our distribution channels, including a solid quarter with an alternative channel, which experienced low double digit growth both sequentially and year to date versus year ago.
Speaker Change: At the same time, we successfully on boarded new distributors and manufacturers who have emerged to specifically serve this market.
Speaker Change: We remain bullish on the continued emergence of this channel, which provides us an opportunity for us to leverage our diverse SKU portfolio to offer these customers a one stop shop for all their accessory needs.
Speaker Change: They want to work with us because of our deep diversified portfolio strong brands and reputation as a reliable partner.
Speaker Change: As the category continues to grow and gain mainstream acceptance.
Speaker Change: Nearly 75% of all Americans now live in a legal medical or adult use state.
Speaker Change: We expect to see continued convergence of distribution channels as traditional C store distributors that we've done business with for decades increasingly target the art market.
Speaker Change: This secular tailwind should continue to benefit picks and shovels businesses late TPB with must carry brands like zigzag.
Speaker Change: At the same time, we've successfully on boarded new distributors and manufacturers who have emerged to specifically serve this market.
Speaker Change: Moving to <unk>.
Speaker Change: During the quarter Stokers revenue increased 12% to $41 4 million, reflecting a 3% decline in loose leaf a.
Speaker Change: They want to work with us because our deep diversified portfolio strong brands and reputation as a reliable partner.
Speaker Change: A 3% increase in MST and at 342% increase in free sales off a low base to approximately $5 million for the quarter.
Speaker Change: Nearly 75% of all Americans now live in a legal medical or adult use state.
Speaker Change: <unk> sales increased 26% sequentially, which is more than double the industry's 11% growth per MSCI and even greater growth in sell through to our end consumers.
Speaker Change: This secular tailwind should continue to benefit picks and shovels businesses like TPB with must carry brands like zigzag.
Speaker Change: Moving to stokers.
Speaker Change: During the quarter Stokers revenue increased 12% to $41 4 million.
Speaker Change: Through our disciplined test and learn approach.
Speaker Change: We believe that we have strong product market fit.
Speaker Change: Reflecting a 3% decline in loose leaf a 3% increase in MSG and at 342% increase in free sales off a low base to approximately $5 million for the quarter.
Speaker Change: Positive consumer feedback is consistently reinforce features in the brand's positioning outsize flavor mouthfeel and range of nicotine strengths.
Speaker Change: This consumer feedback and growth in purchases along with initial retail acceptance and reorders have convinced us to invest in expanding our team footprint, which requires investments to secure competitive placement execute our desired in store look and feel and participate in loyalty and promotional programs.
Speaker Change: Pre sales decreased 26% sequentially, which is more than double the industry is 11% growth per MSA and.
Speaker Change: And even greater growth in sell through to our end consumers.
Speaker Change: Through our disciplined test and learn approach, we believe that we have strong product market fit.
Speaker Change: We are particularly pleased with <unk> performance, given many distributors and retailers allocated capital to restocking the market leader, which experienced widespread out of stocks in the second quarter.
Speaker Change: Positive consumer feedback is consistently reinforce features in the brand's positioning pouch size flavor mouthfeel and range of nicotine strengths.
Speaker Change: This consumer feedback and growth in purchases along with initial retail acceptance and reorders have convinced us to invest in expanding our chain footprint, which requires investments to secure competitive placement execute our desired in store look and feel and participate in loyalty and promotional programs.
Speaker Change: It is also worth noting that we initially launched free at nine milligrams 12 milligram and 50 milligram strengths in order to offer a unique selling proposition.
Speaker Change: Due to overwhelmingly positive consumer feedback about the mouth feel and flavor profile.
Speaker Change: We are expanding into three milligram and six milligram as well, which currently represents over 70% of the category volumes.
Speaker Change: We are particularly pleased with freeze performance, given many distributors and retailers allocated capital to restocking the market leader, which experienced widespread out of stocks in the second quarter.
Speaker Change: We started with six milligram online in two of our four flavors styles and have just recently started selling limited quantities and select retailers.
Speaker Change: It is also worth noting that we initially launched free at nine milligrams 12 milligram and 50 milligram strengths in order to offer a unique selling proposition.
Speaker Change: We will be accelerating distribution of six milligram during Q4 and expect to launch three milligram in Q1 2025.
Speaker Change: Due to overwhelmingly positive consumer feedback that the mouth feel and flavor profile.
Speaker Change: As we've noted in previous quarters. This continues to be a large and rapidly growing category with a long runway for growth.
Speaker Change: We are expanding into three milligram and six milligram as well, which currently represents over 70% of the category volumes.
Speaker Change: Looking forward to 2025 planning, we're also working to enhance our commercial system and go to market strategy to maximize our success in this category.
Speaker Change: We started with six milligram online in two of our four flavors styles and have just recently started selling limited quantities and select retailers.
Speaker Change: With that let me hand, the call over to summer to walk through some progress and results of some of our specific go to market initiatives.
Speaker Change: We will be accelerating distribution of six milligram during Q4 and expect to launch three milligram in Q1 2025.
Summer: Thank you Graham throughout Q3, we continued to build upon zig <unk> iconic history, while continuing our push towards ubiquity across all sales channels.
Speaker Change: As we've noted in previous quarters. This continues to be a large and rapidly growing category with a long runway for growth.
Speaker Change: As Greg noted, we are not only having success, winning new untapped alternative customers, but also increasing share with existing customers, who are buying more of the zig zag portfolio. We've seen healthy increases in average order sizes spanning valuable shelf space and merchandising within the stores.
Speaker Change: Looking forward to 2025 planning, we're also working to enhance our commercial system and go to market strategy to maximize our success in this category.
Speaker Change: With that let me hand, the call over to Sam to walk through some progress and results of some of our specific go to market initiatives.
Speaker Change: In the quarter, we expanded our successful <unk> portfolio across all sales channels with four new offerings, which have been well received in the market.
Sam: Thank you Graham throughout Q3, we continued to build upon zigzags iconic history, while continuing our push towards ubiquity across all sales channels.
Speaker Change: We also are in process of rolling out a new vibrant and look of the Zig Zag paper carton.
Sam: As Greg noted, we are not only having success, winning new untapped alternative customers, but also increasing share with existing customers, who are buying more of the zig zag portfolio. We've seen healthy increases in average order sizes, while expanding valuable shelf space and merchandising within the stores.
Speaker Change: These vibrant orange cartons will create a consistent high impact look that will increase the visibility, thus, making it easier to identify zig zag rolling paper cartons on store shelves.
Speaker Change: For Q4 and beyond we expect to continue introducing new products that build on this legacy while tapping into new innovation for today's evolving consumer.
Speaker Change: In the quarter, we expanded our successful him broad portfolio across all sales channels with four new offerings, which have been well received in the market.
Speaker Change: We continue to have a long runway in this channel of candidates and related product become more mainstream and we continue to solidify our position as a trusted high value partner.
Speaker Change: We also are in process of rolling out a new vibrant look under Zig Zag papers carton.
Speaker Change: These vibrant orange cartons will create a consistent high impact work that will increase the visibility that's making it easier to identify zig zag rolling paper cartons on store shelves.
Speaker Change: For example in legal dispensaries now over 10000 stores in 38 States, Canada Successories currently represents a tiny fraction of sale yet offer meaningful opportunities for both retailers and zig zag.
Speaker Change: For Q4 and beyond we expect to continue introducing new products that build on this legacy while tapping into new innovation for today's evolving consumer.
Speaker Change: For <unk>, we continue to be pleased with the brand's performance, which again posted over $40 million in revenue like we saw last quarter.
Speaker Change: We continue to have a long runway in this channel of candidates and related products become more mainstream and we continue to solidify our position as a trusted high value partner.
Speaker Change: We're focused on expanding distribution, especially with our product and continue to see the brands great depth at a fair price messaging resonate with today's consumer.
Speaker Change: For example in legal dispensaries now over 10000 stores in 38 states candidates accessories. Currently represents a tiny fraction of sale yet offer meaningful opportunities for both retailers and zig zag.
Speaker Change: Turning to free after successfully expanding into the six milligram nicotine strength last quarter across DTC and select retail channels. We are encouraged by the initial incremental results.
Speaker Change: First yogurt, we continue to be pleased with the brand's performance, which again posted over $40 million in revenue like we saw last quarter we.
Speaker Change: As these initiatives took place during the quarter, we didn't enjoy a full quarters benefit that being said our D to C side continues to show consistent revenue increases strong engagement and solid repeat customer orders.
Speaker Change: We are focused on expanding distribution, especially with our <unk> product and continue to see the brands great depth at a fair price messaging resonate with today's consumer.
Speaker Change: We launched both rewards and subscription programs on our D to C side in the quarter.
Speaker Change: Turning to free after successfully expanding into the six milligram nicotine strength last quarter across D to C and select retail channels. We are encouraged by the initial incremental results.
Speaker Change: Since these introductions, while early growth engagement and number of repeat customers have increased further.
Speaker Change: Look forward to sharing additional progress as we accelerate go to market strategies in 2025.
Speaker Change: These initiatives took place during the quarter, we didn't enjoy a full quarters benefit that being said our D to C site continues to show consistent revenue increases strong engagement and solid repeat customer orders.
Speaker Change: In summary, we continue building our brands and our long term executing against the plan, we have established growing our omnichannel business and winning new consumers to add to our growing customer base.
Speaker Change: We launched both rewards and subscription programs on our <unk> site in the quarter.
Speaker Change: We will continue to maximize the value of our world class brands and strengthen our extensive distribution capability.
Speaker Change: Since these introductions, while early growth engagement and number of repeat customers have increased further.
Speaker Change: Let me now turn the call back over to Andrew to go through our financial results.
Andrew: Thank you summer starting with our consolidated quarterly results Q3 sales were up three 8% to $105 $6 million. Excluding Cvs overall revenue was up eight 4% year over year.
Andrew: Gross margin was up 10 basis points year over year to 58%.
Speaker Change: As reported SG&A for the quarter was $33 $2 million, which includes the nonrecurring items.
Speaker Change: PMT expense was up $900000 year over year and transaction related costs were up $800000 year over year.
Speaker Change: Adjusted EBITDA was up 11, 3% year over year to $27 2 million.
Speaker Change: Going into segment performance.
Speaker Change: <unk> sales increased five 5% year over year to $49 $3 million due to the strength in all of our categories with the exception of the lighters category as mentioned.
Speaker Change: Gross margins decreased 180 basis points year over year to 55, 4% during the quarter. This.
Speaker Change: This was driven primarily by product mix.
Speaker Change: Stokers net sales increased 12, 1% year over year to $41 4 million in the quarter with a two 9% volume increase and a nine 2% price mix increase.
Speaker Change: Net sales for the MST portfolio grew 3% year over year.
Speaker Change: Stokers MST volume was down 3% despite category volume down 8% with share growing 40 basis points year over year to seven 3% during the quarter. According to MSCI.
Speaker Change: Share of in store selling was up 90 basis points year over year to 11, 3% with stokers now in stores, representing approximately two thirds of industry volumes, which still provides a long runway for growth.
Speaker Change: Chewing tobacco sales were down approximately 40 basis points from the previous year.
Speaker Change: Stokers chewing tobacco was the number one <unk> brand in the quarter, gaining 230 basis points of share to 32, 9% According to MSCI.
Speaker Change: Overall, ptv loose leaf volume was down 4% feeding category volume declines of seven 1%.
Speaker Change: Category performance was driven by a larger decline in premium loose leaf with tpb's volumes benefiting from consumer trade down as stokers volumes grew from the previous year.
Speaker Change: Our free sales more than quadrupled year over year as we continue our national rollout.
Speaker Change: Gross margin was flat versus year ago at 55, 8%.
Speaker Change: Moving to Cvs.
Speaker Change: Sales were $15 million gross margin was 22, 1% adjusted EBITDA was approximately $270000.
Speaker Change: Moving on to the balance sheet, we ended the quarter with just over $33 million of cash free cash flow for the quarter was $12 $6 million year.
Speaker Change: Year to date free cash flow is $45 8 million.
Speaker Change: On July 15th we retired our $118 $5 million convertible notes with cash on hand with.
Speaker Change: With our projected free cash flow generation. This year, we are well within our previously disclosed leverage range of two to three times and are comfortable with our liquidity position.
Speaker Change: In the quarter, we repurchased $1 $1 million worth of shares.
Speaker Change: In addition, the board has authorized a share repurchase program that has a capacity of $100 million.
Speaker Change: On to guidance and other line items.
Speaker Change: As previously noted we are increasing our guidance for full year 2024, adjusted EBITDA to $101 million to $103 million versus our prior guidance of $98 million to $102 million.
Speaker Change: Neither of these ranges include contributions from Cvs.
Speaker Change: For modeling purposes, the effective income tax range is 23% to 26%.
Speaker Change: We revised our capex expectation from $11 million to under $10 million for the year or.
Speaker Change: Our investment plans have not changed and reductions are timing driven.
Speaker Change: We expect to spend approximately $4 million for the full year to supplement our PMT as that related to our modern oral products, which remain under review by the FDA.
Graham Purdy: Now, let me turn it back over to Graham.
Graham Purdy: To conclude we're pleased with our progress nine months into 2024.
Graham Purdy: Now I'll turn it over to questions.
Speaker Change: Thank you we are now open for questions and if you have dialed in and we would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue. If you would like to withdraw your question simply press Star one again.
Speaker Change: You all called upon to ask you a question in a listening via loud speakers audio device. Please pickup your handset and ensure that youll phone is not on mute when asking a question.
Speaker Change: And today, we ask you to limit your questions to one and one follow up.
Speaker Change: And your first question comes from the line of Eric Deloria from Craig Hallum Capital Group. Please go ahead.
Speaker Change: Great. Thanks for taking my questions and congrats on a very nice quarter here.
Speaker Change: Thanks, Eric next question for me just on the growth outlook for free it sounds like you have some increased marketing initiatives.
Speaker Change: Underway I'm wondering if you could just kind of help us understand.
Speaker Change: The growth outlook for <unk>.
Speaker Change: Sort of expanded.
Speaker Change: Velocity or perhaps SKU counts in existing doors versus kind of the growth coming from new door penetration and if you can sort of help.
Speaker Change: Help us break that out between.
Speaker Change: Kind of near term.
Speaker Change: Average term opportunity that'd be helpful.
Speaker Change: Hey, Eric This is summer thanks for the question.
Speaker Change: So as you know, we launched with a focus on national distribution, Sierra and continue to scale and add new independent retailer.
Speaker Change: As you also know getting into changes there is a little bit more of a longer runway unchanged are the predominant place where <unk> installed about 67, 70% of the category. It's all through the chain of convenience stores and larger chain stores take a little bit more time to get into but as you know we have relationships longstanding relationships, where our products are currently.
Speaker Change: Followed with those teams are.
Speaker Change: We're in active conversations and expanding distribution and with the expansion of our six product and three milligram to comment in Q1, we're really excited about continuing to extend the portfolio across that that chain universe.
Speaker Change: Alright, that's helpful. And then just for my follow up.
Speaker Change: So this.
Speaker Change: New ALP brand.
Speaker Change: Tucker Carlson affiliated brand has been reported by Wall Street Journal patents have been filed.
Speaker Change: We haven't seen official announcements.
Speaker Change: From from turning point brands, just yet, but just wondering if you can kind of comment.
Speaker Change: High level on your <unk>.
Speaker Change: Thoughts for the outbreak for this partnership just kind of any color you may be able to provide would certainly be very helpful. For us. Thank you.
Graham Purdy: Hey, Eric It's Graham I hope, you're doing well look at this point in time, we're not going to talk about today, but we will have some updates in the near future.
Speaker Change: Fair enough thanks, guys.
Speaker Change: Thanks, Eric.
Speaker Change: And your next question comes from the line of Michael Lake with Benchmark. Please go ahead.
Speaker Change: Thanks, Good morning, when you look at the free sales going forward with the introduction of the <unk> six milligram what percent of your sales do you think will come from the new 36 milligram versus.
Speaker Change: The larger low Graham.
Speaker Change: Down the road.
Speaker Change: Hey, Mike So as you know the majority of the volume in the category is taken up by three and six milligram product.
Speaker Change: Nearly 70% of the category and so the fact that we've been as successful as we have been with 912 and 15 has been very encouraging for US. We continue to hear consumers talk about our product differentiation, including mouth feel and flavor and so as we get into where the majority of the category.
Speaker Change: We're quite encouraged about the early call.
Speaker Change: Comments on your part from consumers and getting into that.
Speaker Change: <unk> three milligram category and the early sales that we have for six milligram have also been very encouraging incremental to our business and we're continuing to get that really great consumer feedback reorders on our DSD site for example have been quite encouraging.
Speaker Change: Okay, and then just a follow up on that when you look at your supply chain for <unk>.
Speaker Change: <unk>.
Speaker Change: And then.
Speaker Change: Obviously growing demand within the.
Speaker Change: <unk>.
Speaker Change: Retail space can you talk about what may be the limiting factor is it getting new accounts to take the product or is that having enough product to get into the doors.
Speaker Change: Hi, Mike look I think it's.
Speaker Change: We've talked about this in the past getting into chains as somewhat of a transactional event because of.
Speaker Change: The process and no two chains are alike in terms of their plan of grams and the cycle times that it takes to get in there.
Speaker Change: We feel great about our manufacturing capacity at this point in time.
Speaker Change: And I think one of the other areas that we're looking at right now is given the results of <unk>.
Speaker Change: Past election.
Speaker Change: Exploring U S manufacturing options may be of interest depending on what potential tariff environment looks like.
Speaker Change: Okay. Thanks. So then just one last question when you look at the all channel versus your traditional distribution doesn't all channel unit offer larger revenue opportunity of a traditional convenience store or are they similar how do you view the opportunities for sell through.
Speaker Change: All channel per unit.
Speaker Change: That's a great question categorically, we believe that the Tam for the all space is as large if not larger in some cases in the convenience store channel and given the runway for growth given that we're under indexed in the alternative channel the profit is quite some.
Speaker Change: Difficult for us as we think about that that being said the two channels are converging quite a bit. So we are definitely mindful of how those channels are playing together and making sure that we're tackling every opportunity that comes our way in a profitable manner.
Speaker Change: Yes.
Speaker Change: Great. Thanks, good congrats on the continued success look forward to more.
Speaker Change: Alright.
Speaker Change: And your next question is from the line of Nick Anderson for US and can please go ahead.
Speaker Change: Yes. Good morning, Thanks for taking our questions and congrats on the quarter here. It's the first question for me just on the free and the pricing strategy side, you've taken share within stokers you'd kind of quite that product competitively are you. Following a similar blueprint for free just your sense of the pricing strategy and how you are looking to capture share as you enter new stores there. Thank you.
Speaker Change: Yeah sure. Thanks for the question Nick as we think about the free brand. It is a premium brand that we believe can compete at a premium pricing level with the other major competitors in the marketplace and our pricing strategy will reflect that.
Speaker Change: Okay I appreciate that color and then second one for me just on Zig Zag in the cigar opportunity Thats, the second quarter in a row, where you've seen kind of solid cigar growth curious how much additional white space Youre seeing there and just kind of what the expectation is for that segment going forward. Thank you.
Speaker Change: Hey, Nick Graham welcome the cigar category is as a massive opportunity for for this company.
Speaker Change: There is a lot of correlation with consumers in that channel with the with the rest of this exact portfolio.
Speaker Change: We think about that opportunity the runway there is.
Speaker Change: A couple of billion dollars in manufacturer revenue obviously, we're in the extreme early innings of this process, but couple of things that we think we really have going for US is we've got an incredible foundational brands in zigzagged to leverage against that space and we've also got products that we purchase a number of years ago.
Speaker Change: Through one of our smaller acquisitions that give us runway vis vis the regulatory environment. So it's it's a wonderful opportunity for US again early innings, but we think that the size of that opportunity could be it could be fairly substantial over the long run for the company.
Speaker Change: Great. That's good to hear that's it for me I appreciate the color.
Speaker Change: Thanks, Nick Thank you.
Speaker Change: And due to the strength of time, we do need to conclude our Q&A session I would like to hand back over to Gregg <unk> for closing remarks.
Speaker Change: Alright, Thanks, operator, I appreciate everybody joining the call today, we're excited about the results coming out of Q3, and we look forward to talking to you in a few months.
Speaker Change: This does conclude today's conference call enjoy the rest of your day you may now disconnect.