Q1 2025 J&J Snack Foods Corp Earnings Call
Good day and welcome to the JMJ Snack Foods fiscal 2025 first quarter conference call. As a reminder, this call may be recorded. I would now like to turn the call over to Norberto Aja, Investment Relations. Please go ahead.
Norberto Aja: Thank you operator and good morning everyone. Thank you for joining the J and J snack foods fiscal 2025 1st quarter conference call before getting started. Let me take a minute to read the safe harbor language.
Norberto Aja: This call contains forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995.
Norberto Aja: All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements.
Norberto Aja: including statements regarding management's plans, strategies, goals, expectations, and objectives, as well as her anticipated financial performance.
Norberto Aja: These statements are neither promises or guarantees, and involve known and unknown risks, uncertainties, and other important factors that may cause results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.
Norberto Aja: Risk factors and other items discussed in our annual report on Form 10-K for the year-end of September 28, 2024 and their other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by forward-looking statements made on the call today.
Norberto Aja: Any such forward-looking statements represent management's estimates as of the date of the call today, February 4, 2025. While we may elect to update forward-looking statements at some point in the future, we disclaim any obligation to do so even if subsequent events cause expectations to change.
Norberto Aja: In addition, we may also reference certain non-GAAP measures on the call today, including adjusted EBITDA, adjusted operating income, or adjusted earnings per share, all of which are reconciled to the nearest GAAP measure in the company's earnings press release, which can be found in our investor relations section of our website.
Speaker Change: Joining me on the call today is Dan Fachner, our Chief Executive Officer, along with Sean Munsell, our Chief Financial Officer.
Norberto Aja: Following management's prepared remarks, we will open the call for a question and answer session. With that, I would now like to turn the call over to Mr. Fachner. Please go ahead, Dan.
Dan Fachner: Thank you, Norberto. Good morning, everyone, and thank you for joining us today to discuss our fiscal Q1 results.
Dan Fachner: Starting with a quick review of our first quarter results, we delivered solid top-line growth of 4.1% to 362.6 million.
Dan Fachner: driven by a combination of volume increases and pricing. However, our performance was impacted by a less than favorable sales mix, along with the input cost inflation that was not fully covered with price increases.
Dan Fachner: And although we delivered strong earnings improvement in the frozen beverages, foreign exchange headwinds associated with the peso limited the improvement.
Dan Fachner: Overall, gross margin declined to 25.9% from 27.2% compared to the prior year. The gross profit decline, along with the higher operating expenses, ultimately impacted our bottom line for the quarter.
Dan Fachner: The unfavorable mixed impact during the quarter primarily reflects two items.
Dan Fachner: The first is the loss of some seasonal business within bakery with a declining margin profile that we bid on but did not retain.
Dan Fachner: The second is attributed to lower churro volumes in food service as we lapped the benefit from a limited-time offer with a quick-serve restaurant last year.
Dan Fachner: Although we were able to grow volume elsewhere in the portfolio to help compensate for these losses, the mix was less favorable.
Dan Fachner: Our cookie volume is up meaningfully versus the prior year, and we've recently invested in new capacity to augment our capabilities.
Dan Fachner: We also added new churro customers in food service and believe this business will continue growing over time.
Regarding pricing.
Dan Fachner: While we realized price increases during the quarter, we were not able to fully offset the net impact of the higher input costs.
Dan Fachner: We experienced significant inflation in chocolates, eggs, and proteins that was only partly offset by deflation primarily in flour and dairy.
Dan Fachner: We have implemented additional pricing action in the second quarter for select categories that will further mitigate input cost inflation.
Dan Fachner: We also had some nice winds across the portfolio that helped to support our results during the quarter. Our frozen beverage business achieved record first-quarter results on a rebound in theater traffic as the movie lineup recovered from last year.
Dan Fachner: We achieved record results despite an unfavorable year-over-year weakening of the peso that impacted our frozen beverage performance in Mexico.
Dan Fachner: We also delivered strong results and frozen novelties across the portfolio, led by the growth in Docksters and Dippin' Dots.
Dan Fachner: Food service pretzels recovered in the quarter, mainly from a rebound in the convenience store channel and elsewhere.
Dan Fachner: Well, we're not satisfied with our results. We view the underlying challenges as temporary.
Dan Fachner: As I mentioned, we have implemented incremental pricing that has taken effect early in the second quarter. And, as always, we continue to pursue volume growth and mixed improvement across the portfolio.
Dan Fachner: Encouragingly, frozen beverages and snacks showed sequential improvement during the quarter, supporting confidence in our recovery trajectory.
Dan Fachner: We remain disciplined and focused on the business principles that have driven long-term success and shareholder value.
Dan Fachner: To that end, I am pleased to announce that our board has approved a new $50 million stock repurchase authorization.
Dan Fachner: This decision reflects our confidence in J&J's long-term value and our financial flexibility.
Dan Fachner: With a strong balance sheet and ample liquidity, we are well equipped to execute this plan opportunistically while continuing to invest in organic and inorganic growth opportunities.
Dan Fachner: We remain disciplined and thoughtful in deploying capital, ensuring that any investments we make delivers sustainable value for our shareholders.
Dan Fachner: Let me now briefly review highlights from each of our three business segments.
Starting with food service.
Dan Fachner: This segment continues to grow, driven by innovation and strategic partnerships, despite some unfavorable changes to the sales mix.
We realized 4.5% sales growth across food service.
Dan Fachner: led by a 4.8% increase in soft pretzels as convenience store sales rebounded.
Dan Fachner: Frozen novelties increased an impressive 9.8% which included 8.4% sales growth in Dippin' Dots, driven by the theater and our new vending channels.
Dan Fachner: Turo sales declined 9.2% reflecting the lapping of a limited time offer volumes that I referenced earlier.
Dan Fachner: Bakery sales growth of 6.6% largely reflects price increases to offset input cost inflation.
Dan Fachner: As for retail, we saw opportunities and challenges that led to a 2.2% increase in sales.
Dan Fachner: Frozen novelty sales increased meaningfully, led primarily by volume gains in Luigi's and Dogsters, which outpaced declines elsewhere in the retail portfolio.
Dan Fachner: The soft pretzel sales decline of 7.4% was partly attributed to an ordering system issue with a large customer that temporarily suppressed volumes.
Dan Fachner: Resolution of this issue in late December positions us for improvement in Q2.
Dan Fachner: Frozen beverage sales increased 4%, driven by an impressive 10% volume increase.
Dan Fachner: The boost in volume was attributed to 45% growth in theater channels compared to the prior year, thanks to strong content releases in November and December.
Dan Fachner: In addition to volume growth, machine revenue increased by 13%, offsetting a 3.7% drop in maintenance revenue.
Dan Fachner: As it relates to our end markets, the outlook for the 2025 North America box office is strong, with growth projected at over 10% year-over-year.
Dan Fachner: Driven by a recovery from last year's strike, the industry has demonstrated remarkable resilience, and we remain optimistic about its long-term recovery and growth trajectory.
Dan Fachner: And we're seeing a continuation of growth in overall consumer spending on leisure, entertainment, and experiential categories, which are outpacing traditional retail channels.
Dan Fachner: Leisure and entertainment segments, in particular, are performing better now than they did pre-pandemic, as consumers prioritize memorable experiences.
Dan Fachner: These trends provide a strong tailwind for our business as we look to align with these evolving preferences.
Dan Fachner: As we've demonstrated, our growing presence in the theater and entertainment channels, especially through Icy and Dippin' Dots,
positioned us well to take advantage of these trends.
Dan Fachner: With regard to our operations and logistics, our supply chain initiatives, driven by the addition of three new RDCs, are delivering as planned by increasing capacity and improving the efficiency of how we move products to customers.
Dan Fachner: With operations now spanning nine cold storage facilities, we have simplified logistics management across our network and lowered our inventory levels without compromising service.
Dan Fachner: Currently, over 94% of our sales orders are shipped from the new distribution network compared to under 30% a year ago.
Dan Fachner: This has resulted in more than a 12% reduction in average haul length, improved on-time performance,
Dan Fachner: and decreased line haul costs 13% per pound in our snack food business compared to the same quarter last year.
Dan Fachner: We're investing heavily in digital and shopper marketing to drive conversion across key brands like Super Pretzel, Luigi's, and Dogsters.
Dan Fachner: I want to highlight progress against a couple of our growth initiatives.
Dan Fachner: We have made great progress on the rollout of Dippin' Dots to the theater channel.
Dan Fachner: The new Sundays hit the shelves in January with a large retailer and will reach other retailers throughout the quarter.
As it relates to capital deployment, our strong balance sheet
Dan Fachner: We remain disciplined and thoughtful in deploying capital, ensuring that any investments we make deliver sustainable value for our shareholders.
In summary, while Q1 presented challenges,
Dan Fachner: We believe they are short-term in nature and remain confident in our ability to leverage the strength of our diversified product portfolio and iconic brands.
Looking ahead, we remain focused on driving incremental placements.
Dan Fachner: fostering innovation and expanding partnerships which will position us well for sustained growth and value creation.
Dan Fachner: I'd like to thank all the team members at J&J for their discipline and dedication to our long-term success.
Sean Munsell: Thank you for your continued support. I'd now like to hand the call over to Sean.
Sean Munsell: Thank you, Dan, and good morning, everyone. Looking at our fiscal first quarter results, revenue increased 4.1% to $362.6 million, marking a Q1 record.
Speaker Change: As Dan mentioned, we experienced increased sales across the portfolio from a combination of volume and price increases. Food service revenue increased 4.5%, retail was up 2.2%, and pros and beverage grew 4%.
Speaker Change: Cost of goods sold increased 5.9% to $268.7 million, leading to a gross profit of $93.9 million compared to $94.6 million in the year-ago period, while gross margin declined to 25.9% from 27.2%.
Speaker Change: As Dan mentioned, despite the top-line growth compared to the prior year, price increases lagged input cost inflation, and we also experienced some unfavorable mix changes associated with our bakery business, as well as the loss of limited-time-offered churro volumes from last year.
Speaker Change: Record Q1 frozen beverage performance supported results despite headwinds from a weaker peso related to our Mexico business.
Speaker Change: Moving down the income statement, total operating expenses were 24.2% of sales as compared to 24.4% last year. Overall operating expenses increased 3.3%.
Speaker Change: Marketing expenses were 7.9 percent of sales in line with last year's percentage of sales.
Speaker Change: Overall marketing and selling expenses increased 4.4%. Almost half of the year-over-year increase was related to increased brand amortization expenses associated with a legacy churro brand that is being phased out for the Ola churro brand.
Speaker Change: Distribution costs were 10.9 percent of sales, down from 11.6 percent in the prior year. The decline primarily reflects the impact of startup costs at our regional distribution centers last year. Absent those impacts in the prior year, distribution costs would have been approximately in line with last year's percentage of sales. As volume ramps up over time, we expect the distribution cost rate to decline.
Speaker Change: Administrative expenses were 5.2% of sales in line with the prior year.
Speaker Change: Other general expense increased 1.6 million year-over-year, primarily reflecting favorable impacts in the prior year period.
Speaker Change: Operating income for the quarter declined to $6.2 million from $9.7 million, reflecting the near-term pressures on profitability. Adjusted operating income was $8.2 million compared to $13.5 million last year.
Speaker Change: This resulted in net earnings of $5.1 million compared to $7.3 million in the first quarter of fiscal 2024 and earnings per diluted share of $0.26 versus $0.37 in the prior year period. Adjusted earnings per diluted share were $0.33 versus $0.52 in the prior year quarter.
Speaker Change: Adjusted EBITDA declined to $25.3 million from $30.2 million in the first quarter last year.
Speaker Change: In closing, although the quarter presented some challenges that we're navigating, we're encouraged by some of the positives we've seen this quarter, particularly with the recovery in theater traffic given our presence in that channel.
Speaker Change: Our top line continues to grow from a combination of price and volume growth.
Speaker Change: Our bakery business has experienced some challenges, but it does provide some contractual protection from input cost volatility.
Speaker Change: The Dippin' Dots rollout to theaters is progressing smoothly, and new product launches are poised to drive further growth, positioning us well for the year ahead.
Speaker Change: Additionally, a strong balance sheet in cash generation continue to provide us with the flexibility to invest in the business.
Dan Fachner: Before I turn the call over to the operator, I want to thank Dan, our board of directors, and every member of the J&J team for their warm welcome.
Speaker Change: I would now like to turn the call over to the operator for questions and answers.
Speaker Change: Thank you. At this time, we'll conduct a question and answer session. As a reminder to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.
Speaker Change: To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster
Speaker Change: And our first question comes from Line of Todd Brooks of The Benchmark Company. Your line is now open.
Speaker Change: Hey, thanks for taking my questions and welcome aboard, Sean. Good to have you. Thanks, Todd.
Todd Brooks: Is there a way that you could provide kind of a gross margin bridge for the decline year over year, kind of parsing out for us how much was commodity-related, peso-related and mix-related? I think that would be helpful.
Sean Munsell: Yeah, yeah, so in simple terms, Todd, if you look at the decline from where we were last year to this year in gross margin...
Sean Munsell: You've got about, you know, 80 basis points that we associate with what I would call the gap in pricing relative to input costs.
Sean Munsell: The balance of that is really coming through a mix with the Law Center bakery business.
That's just, you know, simple broad strokes.
Sean Munsell: You know, when you think about the foreign exchange impact relative to last year, you know, keep in mind that we have, we have a relatively large frozen beverage business in Mexico, had a really solid quarter, but there was a headwind associated with the pesos. So the pesos weakened about 20% versus prior year and that amount is, you know, that's almost a million dollars.
Speaker Change: Okay, great. And just a more structural question, how does this kind of creep up in such a dramatic fashion over the course of a quarter?
Speaker Change: I think the comment in the release was that those actions would help to further mitigate some of these pressures that you just highlighted.
Speaker Change: necessarily apply that it's being fully mitigated. So just kind of the thoughts on taking pricing.
how much of these kind of...
Robert Aja, Ken Plunk, Daniel Fachner
Todd Brooks: And, you know, the magnitude of the pricing that we've taken, you know, had it been, say, retroactive to Q1, that would have closed right around, you know, 80 basis points of that gross margin contraction.
Todd Brooks: So, again, not to imply that that's going to cover all of the ingredient cost inflation, but it's going to help to cover a fair bit of that gap that we experienced in Q1. And just as it relates to the ingredient cost inflation, the input cost inflation year over year.
Todd Brooks: We did have some relief in flour, we had relief in dairy and some other items, but when you look at chocolates and you look at eggs.
Todd Brooks: Just the unit cost of both of those products have nearly doubled on a year-over-year basis.
Todd Brooks: Surely we would have liked to have had that pricing implemented in Q1. That didn't happen, but we're confident that we're getting it here in Q2. And that pricing that I was just referencing, that's really kind of the snack side pricing.
Todd Brooks: You know, we expect that we're going to have about, we've already implemented another, you know, 4%, approximately 4% in price increases associated with the frozen beverage business, another 3% in dip and dots.
Todd Brooks: But, you know, the sales team has worked through this with our customers, and it will make a difference.
Speaker Change: That's good to hear. And then finally, is there any worry that with the consumer in a
Speaker Change: you get the pricing through, but what are you watching and where are you most worried about potential volume response?
Speaker Change: for the downside that would offset some of this benefit. Thank you.
Thank you.
Speaker Change: Yeah, Todd, that's a great question. Good talking with you. You know, we're watching that really closely, and we will continue to watch it closely. But as you know, some of these.
increases that we've received from things like chocolates and eggs.
Speaker Change: are pretty standard wide across the industry. And so we're gonna have to pass some of those on, and then just watch what happens at the end user. We've been fortunate enough to be able to grow volume.
Speaker Change: across the organization and even, you know, this quarter having a 4.1% increase. So we'll watch it closely, but we do feel like we need to pass those increases on.
Speaker Change: Okay, thank you both. And just to build on that, I mean we've been, you know, we've been selective in terms of where the pricing is being implemented, what products, so it's not as if it's just across the board.
Thank you. One moment for our next question.
Speaker Change: And our next question comes from the line of Andrew Wolfe of CL King. The line is now open.
Great, thanks.
Speaker Change: Sort of have a start with a follow-up on what Todd was some of them where he was sort of going at So this is like if you just for the hurricane
Speaker Change: So, I mean, is there any systems issues with regard to, you know, tracking costs and...
Speaker Change: and you know being time picking them up in a timely enough manner or their contractual issues where you know you just can't bump the price up that immediate because you're stuck in a contract or is it more trade relations
Speaker Change: where, you know, certain price increases only come through with certain customers kind of on a fixed schedule. Can you help us just understand, you know, why the, you know, from the outside, why the price, why, you know, it's sort of half a year of price increases.
and, you know, of cost increases.
Yeah, yeah, and now we're seeing, you know, price realization.
Speaker Change: A little bit of a lagging. Yeah, sure, great question. And this, I would describe this as not being a matter of visibility. This was predominantly a function of just the time that it took to, you know.
Speaker Change: to get to get these price increases, you know, through to our customers.
Speaker Change: There's been a lot of price increases in the industry, for sure, you know, given what we've seen and inputs. And so it just, you know, it took a little bit more time than we were planning for to get that push through.
Dan Fachner: Good morning, Andrew. This is Dan. Sean is spot-on there, you know. Todd just asked a question about the customer and what happens to the end-user as these prices go up. You know, whenever you're raising prices, it's a touchy subject to go after and sometimes you're in the contracts.
Dan Fachner: Sometimes there's a lag of time that it takes to get there. We believe that we have that covered as we go into the second quarter, but yes, we have a lag going into it.
Dan Fachner: Okay, and so roughly, again, taking out the hurricane impact, the 20 to 30 basis points.
There isn't.
Dan Fachner: yet covered. Is that pretty much all mixed? And- Yeah, that's right. That's right. The extent it is, can you, I'm kind of mixed. Is it more to do with losing the high margin churros?
Dan Fachner: Yeah, or is it or is it within the bakery business like, you know, any specificity and how you how you how that sort of gets better going forward is helpful.
Dan Fachner: Yep, we really had two things that happened in the quarter.
Dan Fachner: One is, as you mentioned, the high volume churro business from a QSR that was really promoting it strongly, and we'll do that in the second quarter. We still have to face that a little bit as well. The other is we lost some pie business at a major retailer that is really seasonal. The only impact that it has is in that first quarter, but that also had an impact on us. We retained the no sugar added.
Dan Fachner: piece of the pie business, but we lost the other as it became more competitive and we bid on it and just did not retain the bid. Yeah. And I would describe that as being, you know, pretty attractive margin profile last year on the pies.
Dan Fachner: But that margin wasn't going to hold this year given some of the competitive pressure. We bid on it at a lower price, ultimately weren't awarded it. But in the prior year, it was a healthy margin, same with the churros.
Dan Fachner: So if, last thing, if we wanted to build back your...
Dan Fachner: Operating profit by segment. I guess we would take most of the 80 basis points into the profit.
Dan Fachner: food service and most of the 20 basis points for mix yeah there's a profit for food retail yeah yeah that's right yep
Dan Fachner: And did you, how much did the basis of the peso impact...
Dan Fachner: profitability for the beverage, for his beverage. Yeah, it was, look, it was close to a million dollar impact for the quarter. It's a, it's a pretty substantial business down there. And, and keep in mind, it's just, you know, we've reached that period where you're, where you're lapping, you know,
Dan Fachner: The peso was you know trading around 17 last year at this time And you know now we're up around 20. So it was close to a 20% impact
Okay, thank you. Thank you.
Thank you. One moment for our next question.
Great. Thanks so much. Good morning, everyone.
Speaker Change: I guess just a couple questions, hopefully not too hard. Dan, maybe first question, you had a comment and prepared remarks around this kind of recovery in the community story channel and maybe if you could just...
Speaker Change: Spend a little time trying to provide a little bit more color as to kind of what you're seeing actually in that channel, maybe more broadly speaking, and then also just kind of specific to kind of what's working for you more within the channel. That's the first question.
Speaker Change: Yeah, you know the reference there was our pretzel business growing inside the convenience store channel.
Speaker Change: and we have a really strong team associated with that today.
Speaker Change: And they've gone out there and found some good new business over the last six months or so. And we're seeing a nice recovery where maybe some of that business has lagged over the last year. I like what our team's doing and I see a good recovery in that portion of our business.
Okay, cool, super.
Speaker Change: And then maybe just kind of, again, broadly on the gross margin side, you know, clearly understand everything that's said so far around the cost-price differential in the near term, there's some contractual, you know, protections in probably certain products, certain commodities.
um, you know.
Speaker Change: And then, but then I also hear, you know, kind of like ongoing growth potential, you know, such that movie channel, you know, traffic can improve, the lineup looks good.
Speaker Change: et cetera, et cetera, you know, with maybe still a little bit of kind of margin pressure in Q2. It doesn't sound like it would be as much, let's say, just given some of the pricing catch-up. But as we kind of think about like
Speaker Change: First half, back half. I feel like we talk about J&J a lot. First half, back half, just because of the seasonality of the business.
As we sit here today, like...
Speaker Change: You know, could we be in a situation such that as, you know, we're in the back half of the year that that gross margin could actually wind up being, you know, at least flattish, just let's just like argument's sake, right? Pricing comes through some of the one-offs.
Speaker Change: you know, kind of go away, maybe traffic, you know, movie channel picks up, just trying to gauge how you're kind of thinking about
Sean Munsell: Rob, great question. I'm going to let Sean answer some of it and then I'll add some color to it, but thank you for that question. Yeah, good question.
Sean Munsell: So the way I would portray that is, you know, when we think about the second half, you know, we're, you know, the goal here, you know, our expectation is that we're going to get back to that, you know, low 30% gross margin level.
Sean Munsell: This quarter, the second quarter, you know, I would describe that as being sort of transitional between, you know, Q1 and the back half.
Sean Munsell: The one headwind that we really face in the second quarter is the churro volumes that we had last year. So we had pretty significant QSR churro volumes for the Super Bowl. We've added new churro customers, but we don't expect to see the same volume in churros.
Sean Munsell: this second quarter that we did last year, and that's, you know, relatively attractive business.
Sean Munsell: But when you look at the second half of the year, the expectation is that we still get back in that low 30% gross margin range. And keep in mind that's just the seasonality of the business. That's where you're gonna start to see more help from the pros and beverage and the dip and dots in the portfolio.
Speaker Change: You mentioned in your conversation that the theaters and the theaters do anticipate being up 10% year over year. As you know, we've continued to grow inside the theaters with Dippin' Dots and with Icy and really on our snack food side too.
Speaker Change: And then just some good winds across the business as we enter into the second half of the year. We feel pretty confident that we'll be back into that range that we were last year, if not better, by the time the year's up.
Speaker Change: Okay, okay, super. That's very helpful. And then I just, I guess just quickly on Zipman Dots,
Speaker Change: Yeah, we're really excited about the release of the Dippin' Dots in the retail and we've had great acceptance really all across the board.
Speaker Change: We did kick off with a major retailer that's nationwide in January and then it will be
Speaker Change: in the market, really, in all of them by the time we...
get into mid-February.
Speaker Change: And then you'll can see it grow across retailers all throughout the quarter. Really great acceptance to the new product. And so far, the early readings of the sell-through have been really good. So we're watching it closely, but we have a lot of really high hopes on that particular product.
Speaker Change: Hi Super, and then this last quick one for me is just the
Speaker Change: Should it just be assumed this point that like, well, absent an acquisition opportunity, that yes, we will look to, you know, repurchase at least some of our stock and especially just kind of given where valuation sits today relative to history. That's all. Thanks.
Speaker Change: Yeah, I'll take that one. Yeah, so I describe this as just being consistent with the company's capital deployment strategy.
Speaker Change: You know, our objective, of course, is to deploy capital that, you know, we think generates, you know, value for shareholders over time and, you know, we see compelling value in the shares.
Speaker Change: I will say that, you know, our plan is to be, you know, opportunistic in terms of, you know, the pace and the timing, but I would, you know, view this as, you know, being complementary to the rest of the capital deployment strategy. This isn't something that is
Speaker Change: kind of an and-or with, it's an or with respect to M&A. So yeah, it's, you know, it's just, it's just a consistent approach is the best way to describe it.
Speaker Change: Okay, great. Fair enough. Thank you. Appreciate it. Thank you, Rob.
Speaker Change: Thank you. I'm showing no further questions at this time. I'd now like to turn it back to Dan for closing remarks.
Dan Fachner: Thank you, Operator. In closing, we are executing our strategy effectively in a dynamic operating environment, and we remain confident in our ability to achieve our goals both in 2025 and over the long term.
Dan Fachner: I'd also like to take a moment to commend Sean on his smooth transition and ability to quickly take a leadership role within our organization.
Dan Fachner: We look forward to sharing our fiscal 2025 second quarter results with you, and in the meantime, if you have any questions or would like to connect with us,
Dan Fachner: Please reach out to our Investor Relations team at JCIR at 212-835-8500. Thank you and have a wonderful day.
Ken Plunk, Daniel Fachner
Dan Fachner: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.