Hershey Co

NYSE:HSY

Greetings, and welcome to the Hershey Company Fourth Quarter 2023 Question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded.

I'd now like to turn the call over to your host, Ms. Melissa Poole, Vice President of Investor Relations for the Hershey Company. Thank you. You may begin.

Good morning, everyone. Thank you for joining us today for the Hershey Company's Fourth Quarter 2023 Earnings Q&A session. I hope everyone has had the chance to read our press release and listened to our prerecorded management remarks, both of which are available on our website. In addition, we have posted a transcript of the prerecorded remarks. At the conclusion of today's live Q&A session, we will also post a transcript and audio replay of this call.

Please note that during today's Q&A session, we may make forward-looking statements that are subject to various risks and uncertainties. These statements include expectations and assumptions regarding the company's future operations and financial performance. Actual results could differ materially from those projected. The company undertakes no obligation to update these statements based on subsequent events. A detailed listing of such risks and uncertainties can be found in today's press release and the company's SEC filings.

Finally, please note that we may refer to certain non-GAAP financial measures that we believe will provide useful information for investors. The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations to the GAAP results are included in this morning's press release. Joining me today are Hershey's Chairman and CEO, Michele Buck; and Hershey's Senior Vice President and CFO, Steve Voskuil. With that, I will turn it over to the operator for the first question.

[Operator Instructions] Our first question comes from the line of Andrew Lazar with Barclays.

Maybe to start off, your guidance for '24 calls for about 2% to 3% net sales growth with volume flat to slightly down. So it implies about a 3-point year-over-year benefit from price, which would seem to be mostly carryover related from actions taken last year. So I guess my question is, does the current outlook embed any additional pricing actions this year to address the currently elevated cocoa costs? And if not, I guess if Hershey were to take additional pricing actions, would those benefit '24 or with the typical timing lag and the complexity of the systems transition, would that likely be a little bit more of a '25 benefit at this stage?

Andrew, let me talk a little bit about our pricing approach and strategy, and then Steve will go into the numbers. It's a dynamic environment out there, and we are taking a measured approach given historic innovation -- or inflation. As you know, we can't talk about future pricing. But I do want to be very clear that there's no change to our pricing strategy and our commitment to use pricing to cover inflation and to support the investments that we think are critical to drive the business. So given where cocoa prices are, we will be using every tool in our toolbox, including pricing, as a way to manage the business. Steve, do you want to talk about some of the specifics?

Yes, the way you laid it out, Andrew, is correct. The pricing that we're counting on that 3% or so, a lot of it's carryover, some of it from '22 to Eastern Valentine's Day. Some we took mid-last year on everyday chocolate and then a small increase we announced earlier this year on grocery items and food service. And you're right. When we think about the impact of future price increase, we're really challenged in the first half of this year just because of the ERP implementation. Like you said, it puts some limitations on what we can do, as you can imagine, enormous collaboration between us and retailers to execute that transformation. And so we're trying to keep things very stable during that period. And so further price increases should they come would benefit more the back half of the year and probably more so '25.

Got it. And then the EPS in '24 is expected to be sort of flat for the year. There's obviously a big discrepancy between what you're looking for in the first half versus the second half in terms of EPS growth. I guess I'm trying to get a sense of how much of this anticipated improvement is anticipated improvement in the consumer environment versus what you have maybe more visibility and control over with things such as timing of your planned system spending and timing of cost saves and productivity. Just trying to get a sense of the visibility to that -- to the swing, if you will, in EPS growth between the first half and second half.

Sure. Yes. It's not banking on cocoa relief, and it's not banking on some kind of surge in the consumer or really even a surge in the base business. The biggest factor is really 2 things driving it. One is the laps from last year. And as you know, we started out really strong in the first quarter last year and then ran into things like softer salty category growth in popcorn, the ERP implementation in salty and then the change in strategy at a key retailer. So as we think about the laps of those, that's one factor that impacts this profile because the laps gets much easier in the back half. And then the second thing you mentioned, Andrew, are things in our control. So the savings on the agility and automation initiative will get more traction in the back half again because the ERP places some limitations there. The same with productivity in the manufacturing areas, back-half loaded. And so those will accumulate as we turn the corner from the first half and pivot from the ERP sort of period of stability to a period of driving impacts against those savings initiatives. So it's really laps combined with the things in our control.

Our next question comes from the line of Ken Goldman with JPMorgan.

I wanted to ask a little bit. You have more innovation coming this year. You have more capacity. You're battling an elasticity situation that I think it's fair to say is higher than many people expected. But your media spending is only being increased by the same amount of sales growth. I realize you're focusing on some key items a little bit more, and you're kind of rebalancing some of that. But just trying to get a sense of the risk of some of your more flanker-type brands if media is pulled away from them, if that's the impression I'm getting, if that's the right one. And how really to think about your decision to maybe not raise media spending a little bit more than sales growth to kind of make sure that you're battling elasticity in the way that's appropriate.

Yes. Thanks, Ken. As you know, we are big believers and our business model relies on media as a key lever to continue to drive our brands over the long term. We're constantly -- we feel good about media going up in line with sales. We also constantly look to try and make those dollars work harder and harder for us and we've made some pivots in terms of some of our targeting that are actually going to give us expanded reach levels that will be greater than sales. So the impact we will get from that media will be more than the dollar increase but we will constantly evaluate that and if we are seeing even better than we expected, we'll revisit decisions and decide if we should be spending more, as we always do, during the year.

And then quickly, it's not often we see kind of a venerable established category like popcorn maybe slumping to this degree. Not really thinking about share gains or losses for Hershey in particular, but what do you see happening most recently in popcorn? And what do you think needs to happen for the category to rebound?

Yes. I mean I think what we saw this year was we did start to see some pressure in the category related to value. The fact that popcorn wasn't quite have as much satiety as some other snacks. And we saw some private label entries also get some focus. So I think what needs to happen and then compounded by that, in the back half of the year, we are the #1 or #2 player depending on the time frame in the category. And in the back half of the year around our ERP implementation, we pulled back on merchandising and advertising support to make sure that we didn't have issues with supply. So that certainly had an impact as well. So as we've gone into this year, what we think needs to happen, we have done. So we have made some improvements in the value proposition, introduced a value size, a bigger pack, we've sharpened some of our merchandising price points and also increased merchandising, and we are back to a much heavier investment in advertising and innovation that we've had over time. So we think we'll continue to see some of that lap through the first 5 months of the year and then really rebound nice growth and market share gains in the back half.

Our next question comes from the line of Max Gumport with BNP Paribas.

With regard to cocoa prices, you've previously talked about how there's sort of divergence between fundamentals and current market prices. I'm assuming you're looking at underlying supply/demand and the stock to grinding ratio, but I'm curious for an update on that front and how that informs your visibility into cocoa for 2024.

Sure. Yes, we look at a variety of things, as you can imagine, I'll say the fundamentals. And when I say look at, we have internal team of experts in this domain, but we also have outside folks who also give us points of view from -- make sure we're not myopic in the way we look at the market and what's happening. But it is -- we look at the fundamentals, we look at grind data, we look at crop yields, we look at weather, we look at all of those fundamentals and of course, demand. But at the same time, there's a lot of financial activity, transactional sort of activity and speculation that overlays the fundamentals. And it's been difficult certainly to untangle those 2 pieces. And so that's part of the reason that we have a hedging program is that we're not here to try to outsmart the market and beat the speculators per se, we want to make sure that we have visibility and have the opportunity to reduce volatility to the extent we can in the P&L, but it's certainly a very dynamic market.

Our next question comes from the line of Bryan Spillane with Bank of America.

So I've got 2 questions. And the first one is just I don't know if it was actually in the press release or not. But Steve, have you given us a sense of just what your overall inflation is or maybe what cocoa inflation is. I've got that question a few times this morning. So what's the inflation rate, I guess, in the guide?

Sure. If you look at it, kind of break it into 2 pieces. I'll just say commodities of which, obviously, cocoa and sugar are the 2 most inflationary. Low double-digit inflation. If you look at other parts of the P&L, it's more mid-single digits. So if you sort of average it over everything, it's high single digit.

Okay. And that's pretty well locked in, right? I'm assuming that you've got coverage on commodities for the year. Should we -- is that a good expectation?

Yes, that's correct.

Okay, cool. And then, Michele, just I guess a bigger question or a broader question is just on the cost savings, the incremental savings this morning. Can you talk a little bit about maybe how you came -- how as an organization you came to that? And I think the question that some folks are asking this morning is just, are the cost savings a reaction, right, to inflation, you're trying to preserve as much earnings as you can which maybe implies cutting too much. You've got a lot of stuff going on and ERP system transition. Like is it really burdening the organization too much to try to focus so much on costs, when there's so much other stuff going on. So just your perspective on that, I think, would be helpful for folks.

Yes, sure. So I would say a year to 18 months ago, we had started working on some initiatives that we thought could create some real opportunity and value for the company. And executing those was dependent on 2 things. It was dependent on us getting through the S/4 implementation, which, as you know, we will be through Q2 of this year. And it was also dependent on us doing the unification of our salty snacks business, taking those disparate acquisitions we had and combining them together, which obviously we did this past year and also put in place S/4 across that platform across that business unit. That then can become an accelerator for us to really go after what we saw as some opportunities, both in terms of creating greater end-to-end connectivity and also using technology for automation and efficiency.

So this is really where we expected that we would be. Certainly, with some of the pressure on cocoa prices, we accelerated that work a bit versus our original time line, but the work was planned and underway accordingly. And we're trying to be very choiceful about where are the choices that we are making across those initiatives and certainly making sure that a lot of that implementation won't happen till post S/4 till we get through the implementation. So really, measuring out when we do what to match with the organizational capacity. Steve, anything you would add to that?

No, we're excited. We're going to get through ERP, we'll have 95% of our business all on one platform and the opportunities that will unlock. And then as Michele said, thinking ahead to things like integrated demand planning and bringing more automation to supply chain. These were things we had in the vision before, but now we're much closer to being able to make them realized.

Steve, you may be the first person that used excited and ERP in the same sentence. Look forward to seeing you guys in Florida.

Our next question comes from the line of Alexia Howard with Bernstein.

Can I ask about honing in on the chocolate category in the U.S. You've obviously seen some nice recovery in volume and market share over the last 2 or 3 months, it's been fairly sharp. Can you talk about what the main drivers of that are? I imagine that innovation with the Reese's Caramel's launch might be a piece of that. Just giving some idea of what's driving that and whether that trend is expected to continue?

Yes, absolutely. I'd say there are 2 things that have really created some nice momentum on the business. One was we saw consumers have a huge affinity to the seasonal traditions, and we had very strong growth in the category in both Halloween and holiday and we also won share. So that was certainly a key driver. And as you mentioned, we had talked about earlier this year the opportunity for us in '24 to really dial up innovation. We had a lighter year in '23. Our innovation for '24 is up about 1/3 versus where it was in '23. And we're really excited that we have some big innovations, Reese's Caramel, we believe will be a very nice addition, and that's doing well and Q4 continues to -- will be featured on the Super Bowl, so you can look for that as well. And then we have some exciting sweets innovation later in the year.

Perfect. And just continuing on the theme of innovation. You mentioned a third increase. Are you able to quantify where you're at in terms of percentage of sales from new products introduced over the last 3 years? I imagine that, that would have come down significantly since the pandemic started.

Yes. So we are up about 35% higher in terms of innovation versus prior year, and we are up slightly versus prepandemic as well. I think we've chosen not to talk about innovation as a percent of net sales.

Our next question comes from the line of Pamela Kaufman with Morgan Stanley.

A question on your capacity expansion plans. I think you previously mentioned you had a 15% increase in capacity coming online this year. Can you just give an update on that? And do your cost savings initiatives impact these plans at all? And then maybe you can remind us what products the capacity is going to be used for.

So I'll cover some of that and let Steve cover some of it. We've continued to invest in capacity in brands and businesses across the portfolio that have growth and opportunity ahead. Over the past couple of years, we focused on Reese's where we were short on capacity so that we could fulfill consumer demand. And then the other big area of focus we had was on the gummy side of the business in sweets. And the first part of this year, we complete and have capacity coming online for that business that we will be able to leverage to better participate in that segment in the back half of the year. Steve?

Yes, the only thing I would add is everything is on track. We're proceeding per plan. And the cost savings project that we talked about doesn't have any direct impact on those plans other than as we look to the future, more opportunities to automate and create some agility in supply chain beyond those projects. So...

Great. And in the prepared remarks, you pointed to 200 basis points of gross margin contraction this year. Can you walk us through how you're thinking about the puts and takes around gross margins in '24? And if you could give some color on the cadence of gross margin progression this year.

Sure. Yes, I'll give the highlight and the prepared remarks actually have a good section on that. So whatever I miss here refer back to that. But with overall full year basis down 200 basis points, as you said, we're going to see more of that in the first half than the second half for some of the reasons we talked about even earlier in this Q&A session. We will have, in the second half, higher commodity inflation. But in the second half, we'll begin to see more benefits from continuous improvements of manufacturing cost savings, the agility and automation program that we talked about will kick into more gear in the second half as we get past the ERP process. And then we're lapping some onetime costs in the back half related to salty and the ERP program.

So those laps plus the accumulated benefits that pick up on the savings side are what drive the biggest inflection from a gross margin standpoint as we look at the second half having more less drag than the first half.

Great. And just one more quick question. How are you thinking about the outlook for cocoa prices from here? And how is that influencing your hedging strategy?

Yes. Our hedging strategy has not changed or our kind of principles around how we manage commodities hasn't changed. It's a dynamic market, and we're not going to comment too much about future pricing. Our business, as Michele said, we've seen cycles like this before. We've got a lot of tools at our disposal to manage the impact of cocoa, and we plan to use all of those. So...

Our next question comes from the line of Robert Moskow with TD Cowen.

I guess I have 2 questions. The first is market share assumptions in the U.S. for 2024. Is it fair to say that you think you can grow share in confectionery? And the second thing on the pricing strategy, Michele, nothing's changed, but this is a different strategy than what you've had in the past. The idea is to kind of squeeze out the pricing in maybe more frequently and in smaller increments. And I guess is that still possible to do in an environment like this when the input costs spike so significantly it sounds like you're doing it this year, but is it more difficult to execute when you see this much volatility in the inputs or not?

Okay. So I'll take the first question first. Relative to market share, we expect to see sequential improvement as we go throughout the year. The first half will be pressured by a shorter Easter. Easter comes much earlier this year. And also, we will have about 5 -- a roughly 5 months in the first half of lapping the reduced merchandising and distribution at that one key retailer. And we know from this past year, the impact of that was about 2 points in total. We offset about 1 point of that on a takeaway basis. So that will pressure share.

In the second half, we then are past those laps of the shorter Easter and the retail merch and so we expect to see sequential improvement and to end the year in a much better place than where we're starting.

As I think about our pricing strategy, I'd say what is consistent is our goal to cover inflation with price over time. Within that, how exactly we do that relative to smaller, shorter, more frequent or bigger, the timing and the magnitude, to me, are heavily influenced by other factors such as where our input costs and general inflation are. So I think yes, overall, we have a strategy to expand gross margins to price to cover inflation and allow reinvestment. That hasn't changed. But how we go about doing that will be a bit different. We're also very much focused, price-pack architecture as an opportunity, all the tools in the lever.

Got it. So you could be flexible depending on the cost conditions.

Yes.

Our next question comes from the line of Michael Lavery with Piper Sandler.

I just wanted to come back to Easter and the ERP transition. You'd mentioned with salty in 4Q how you cut back on some of the merchandising and even, I think, a little bit of the marketing spend. With -- you mentioned Easter being a little bit shorter, but is there sort of an amplified headwind from the timing that -- would you be doing a similar approach to promotions or marketing in conjunction with the transition to dial that back a little bit? Or is there a reason that they wouldn't apply the same way as the salty transition did?

Yes, we're not deploying the same approach we did with salty in that respect. We'll still be building inventory in the first quarter, we'll still be draining that inventory in the second quarter just to derisk the transition, but we are not going the extra step of like freezing all activity in-store, merchandising promotion. We have full merchandising and promotion plans. Those are going to proceed. They were planned well in advance, and we have full confidence in being able to support them. So that is the difference.

Yes, we felt like we got a really good learning through the salty and this was our plan to do Mexico first, then salty and then the mothership and we got really good learning that we've been able to just incorporate and fine-tune along the way. We also don't have the complexity as quite as many different systems that we have to bring together with our business as we did with all of the acquisitions.

Okay. That's great color. And then can you just give us a sense on elasticities, maybe both how they currently look versus history? And then also what your assumptions are in the guidance as far as how they might progress over the rest of the year?

Yes. So we're expecting elasticities to be similar to the historic levels. So that's our key assumption.

Our next question comes from the line of Tom Palmer with Citi.

Maybe just first off on the pull forward of the productivity and cost saves. I just wanted to follow up from the earlier question. Are there new found savings embedded in this? Or are these largely initiatives that would have been done in the year? Just maybe clarify that piece of it.

Sure. So when we did our investor conference back in March, we talked about incremental productivity savings in the manufacturing area. So this is incremental to that to start with. This is beyond that. As Michele said, in the longer-term view, we saw these as opportunities, but it's new opportunities, it's really built off the back of some of the technology now coming to fruition is the way to think about it.

And we've really beefed up and are beefing up our capabilities in technology. We hired a CDTO in the fourth quarter, who's really bringing us capability and further expanding what we can do as a company, we believe.

Okay. And I know there's some questions that kind of danced around this, but I'll be a little more direct on it. Just on pricing, what exactly is flowing through as we think about 2024? So kind of what pieces of the portfolio are being touched? Are there incremental pricing actions embedded at all in guidance or kind of what we start out in the first quarter as the run rate is kind of the full magnitude?

Sure. Yes. So we have sort of 3 pricing components that are embedded into the outlook. I touched on a couple of these earlier. There's the Easter Valentine's Day action that was taken in '22. That's reflected this year. There's everyday chocolate increase that we executed mid last year that's reflected. And then there is a small new price increase on grocery and food service items that really went just into effect this month. So that's happening right now. Those are the only assumptions that are embedded in the outlook right now.

Our next question comes from the line of Chris Carey with Wells Fargo Securities.

So just a few follow-ups, if I could. Just on gross margin. I guess to kind of put a fine point on this one. Do you expect expansion in the back half of the year? Or are you saying that it's just going to be less contraction than in the front half?

It's going to be less contraction. The contraction will be more significant in the first half, less in the back half.

Okay. Understood. That's what I thought. Then just on a segment basis, right, there's this dynamic where most of the inflation, clearly, is hitting you on the confection side, but probably some of the more fundamental category dynamics are more pressured on the snacks side, clearly because you're expecting below algorithm for next year. And just from a margin dynamic between the segments themselves, is there a dynamic where -- and this quarter is so hard to assess with snacks because of ERP, but will snacks require more investment in a strange way it will have more margin contraction than what we're going to see in confection?

Is there any way you can just kind of frame investment needs and sort of fundamental margin pressure in snacks versus just, I guess, inflationary driven inflation that we would see in confection. And then I apologize for just one more cleanup in a way.

But I think to Bryan's question on SM&A as a percentage of sales, we're probably implying a roughly 15-year low for this year. Maybe just help us contextualize why we're not getting too low from that standpoint and maybe that 15-year journey is just about increasing efficiency relative to the sales pace. It's come up a couple of times. So any added context there would -- maybe would be helpful.

Sure. On the segment margins, you're right, the confection business is going to bear the brunt of the margin impact due to cocoa. Salty margins are up for 2024 year-over-year, and that's even on the back of some pretty heavy investment. And so we feel good about the journey that we're on there. It's not impacted, obviously, by the cocoa component. On the second question, could you just say the question again? I want to make sure I heard that one.

It's effectively that operating cost as a percentage of sales look to be implied at a roughly 15-year low in 2024. And it's really just understanding why that's not cutting to the bone or going too low relative -- well, we're just getting more efficient relative to sales base over time. And that's what we're doing next year and the year after that kind of stuff. Maybe just contextualizing that history would be helpful putting 2024 in context.

Sure. Yes. Well, let me first say, we're not cutting to the bone. That's not the intent of the program at all. We want to continue to protect the brands and the capabilities that give us differentiated opportunities the market. When you look at operating expenses, if you look back over time, definitely getting more fixed cost leverage, the business is bigger even with a little bit slower growth here in '24 than we've seen in the last couple of years. We get significant leverage. We have efficiencies elsewhere in the P&L, driving efficiencies through the P&Ls and every year activity and that's not new.

And we've also seen more efficiencies in the international business. If you think back, the margins were quite a bit lower a couple of years ago before we made some of the transformational moves there. So a combination of all of those things have led to the improvements that we're seeing, but we're not cutting so far that we feel we're putting in jeopardy any of our key capabilities or growth potential.

Our next question comes from the line of Rob Dickerson with Jefferies.

So I just wanted to come back to your, I guess, brief commentary today, then I think you mentioned it in the prior couple of calls, just around consumer shopping for products with maybe a bit more satiation because clearly, your conversation today seems a little bit more focused on cocoa cost inflation, salty and then also pricing potential from here. But like if we just separate all that out and we just get a focus more on kind of current consumer shopping behavior, especially within the confection category, would you say there are kind of ongoing behavioral shifts that are still taking place? Or you kind of foresee that maybe reversing out as you get through the year? Just trying to get a sense as to kind of how you view the consumers shopping that category relative to other parts of snacks.

Yes. I mean, I'd say, first of all, overall, with the consumer, certainly, I think there is some increase in consumer confidence. We've seen unemployment rates, employment be stable. However, we do continue to see some value-seeking behavior in some pockets of consumers. We believe that the behavior across confection has largely normalized. And we think that we have some of the right steps in place to kind of offset that satiety issue that we've seen with popcorn in areas like adjusting value across different pack types, enhancing marketing communication in ways that build the value proposition. So we do expect that we'll start to see some normalization in popcorn as we go through the year.

Okay. Got it. And then I guess I just want to ask on kind of longer-term salty segment growth potential. While I realize you may not be giving -- providing new long-term targets relative to what you presented at the Investor Day last year. I mean, clearly, it seems like enough has changed, let's say, to at least ask the question. So we're thinking kind of past 2024. Do you think broadly that kind of low double-digit kind of growth for that segment is still feasible? Or like could distribution maybe be a little slower there needs to be a little bit more investment required to get there? Just kind of any color as to how you're thinking about that.

Yes. No problem. Hey, we continue to feel great about the salty snack business and their long-term potential. We've seen such tremendous growth over time. There's no change to our long-term outlook. Our long-term outlook and the algorithm has always been around mid-single-digit growth. We had never expected low double-digit on the long term. We had expected originally that this year might be a bit stronger, but not on a long-term basis. So no change to that long-term outlook.

Ladies and gentlemen, our final question comes from the line of Jim Salera with Stephens Inc.

In your prepared comments, you mentioned that we would be seeing some joint merchandising activations between confection and salty. Can you just give us a sense for -- is that to increase buy rates in Hershey households that maybe buy the confection part of your portfolio but not salty? Or is it more of a way to increase the visibility for salty by kind of piggybacking on the good merchandising activations you already have for confectionery?

Yes, it's really some of both. Certainly, there's power to that visibility of all of these great brands together. Our salty brands now are 2 of our top 10 brands. So they have the velocity that warrant being with some of our other really major brands. And then, of course, it does encourage some of that cross household purchase as well.

And then if I can maybe drill down on Dot's in particular. I think you mentioned incremental club distribution for Dot's, I can say in my neck of the woods at least, it certainly feels like more Dot's placements when I shop my local club store. How much more distribution upside should we think about for Dot's in some of those untracked channels where we don't have as much visibility?

We still do have some distribution upside on Dot's. So I'd say more than several points of distribution upside still remain.

Our next question comes from the line of John Baumgartner with Mizuho Securities.

I wanted to come back, Michele, to the outlook for ad spending in 2024, I guess, more or less in line with sales. Is that a function of just having spent ahead of sales in 2023 and now it's a more normalized year? Or is there an expectation for maybe a shift in reinvestment to other drivers, whether it's trade or anything else where your total spend growth is actually above the rate of sales because it just seems as though the larger innovation coming through the need for more pricing in the market. I'm sort of surprised that the ad spend is not going to be up higher this year.

We always really do look across the entire bundle. And certainly, we have some trade spending increases in '24. And so we look at what's the right bundle across DME, across marketing, consumer marketing and trade that we think will have the biggest impact and most efficiently on driving revenue. So it is some of balancing the total view of all of that spending together, which is a big area of focus for us. How do we make it all together work as hard as each individual piece.

Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Ms. Poole for any final comments.

Thank you all for joining us this morning. We look forward to catching up with you later today to answer any additional questions you may have. Have a great day.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.