© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good day, ladies and gentlemen, and welcome to the Prestige Consumer Healthcare Third Quarter 2019 Earnings Conference call. [Operator Instructions] As a reminder, this conference call is being recorded.
I would now like to introduce your host for today’s conference, Mr. Phil Terpolilli, Director of Investor Relations. Sir, you may begin.
Thank you, operator, and good morning to everyone on the phone. Joining me on the call today are Ron Lombardi, our Chairman, President and CEO and Christine Sacco, our CFO. On today’s call, we will cover the highlights of our fiscal 2019 third quarter, review the financial results and our fiscal 2019 outlook and then take questions from analysts.
We’ve a slide presentation, which accompanies today’s call that can be accessed by visiting prestigeconsumerhealthcare.com, clicking on the Investors link and then on today’s webcast and presentation. Please remember some of the information contained in the presentation today includes non-GAAP financial measures. The reconciliations between adjusted and reported financial measures are included in today’s earnings release and slide presentation.
During today’s call, management will make forward-looking statements around risks and uncertainties, which we detail in a complete safe harbor disclosure on page 2 of the slide presentation accompanying the call. Additional information concerning risk factors and cautionary statements are available in our most recent SEC filings and the most recent company’s 10-K.
I’ll now hand it over to our CEO, Ron Lombardi, to walk through the highlights of our fiscal third quarter performance. Ron?
Thanks, Phil, and good morning, everyone. Let’s begin on page 5. In Q3, we delivered solid profit and cash flow. This profitability was underpinned by our asset light model and leading position in the OTC.
EPS grew over 4% versus the prior year, driven by our strong financial profile and solid free cash flow which allowed us to pay down $55 million in debt during the quarter. This profit performance demonstrates the benefits of our business model which helps partially offset revenue challenges in Q3.
Although we continue to experience consumption trends in excessive shipments, Q3’s top line was impacted by significant retailer inventory reductions at the end of the quarter. Despite inventory reductions, additional success is ultimately driven by consumer takeaway where we continue to win. Our brands are well positioned for long-term success using our time tested brand-building playbook to add value for both retailers and consumers.
Today we’ll discuss two excellent examples of brands that demonstrate this strategy. So while we’re disappointed in Q3 top line results, we’re confident in the underpinnings of our strategy in what is a challenging retail environment for some of our retail partners.
Now let’s turn to slide for more detail on our Q3 results. Our net sales were approximately $241 million down 3.1% versus the prior year on an organic basis. The primary driver to the decline was inventory reductions within the drug channel.
Sales performance in North America was positively impacted by continued strength in the GI and ear and eye categories while performance in the oral care subcategory has been impacted by changes at Shelf.
In Q3, our international segment was essentially flat versus prior year and is up 2% year-to-date after adjusting for foreign exchange. As a reminder, we can and do experience quarterly timing variation in distributor orders and shipment patterns in our international business.
The redesigned BC and Goody’s packaging which we discussed throughout the year has made continual progress and is now largely rolled out across channels. I’m pleased to report initial sell through trends, we made solid with positive consumer feedback aligned with our expectations.
Total company gross margin in Q3 came in at 57.7% up 30 basis points sequentially from Q2. Chris will make further comments on gross margin later. Adjusted free cash flow was $57 million in the quarter and continues to benefit from our industry leading EBITDA margin, minimal capital spending needs and low cash tax rates. Last, we paid down $55 million of debt in Q3 with our ongoing cash generation. This continued reduction of debt will enable future capital allocation optionality.
With that let’s summarize our year-to-date highlights on slide 7. Stepping back we feel good about the long term trends of our business even with the Q3 top line challenges discussed. For consumption which is the long term driver of the sales growth, we’ve continued the long term trend of outgrowing categories across our leading portfolio. We outpaced category growth and private label with consumption growth of nearly 2% year-to-date.
This performance was affected by softness in certain incidence rates largely in cough/cold and head lice during Q3. Although we did not see a direct impact on sales in the quarter, it is impacting full year consumption and we now anticipate being slightly below our 2% to 3% consumption target for fiscal 2019.
Meanwhile, profitability remains strong. We’ve normalized freight and warehouse cost issues previously discussed and the important role out of BC and Goody’s has trended on plan. Profitability continues to translate into consistent in industry leading cash flow allowing us to pay down a $155 million of debt year-to-date.
With that let’s turn to slide 8. Even in the challenging retailer and incidence level environment our brands are well positioned for success and this slide is an excellent remainder of that. Our strong brand and diverse portfolio allows us to use a wide variety of brand-building approaches. With number one market share brands representing approximately two-thirds of our sales we’re focused on the end goals of driving category growth.
The result of these investments is long term growth for our brands in excess of the categories they compete at. In the drug channel which represents about 25% of our business, we expect ongoing destocking efforts in response to sales trends in industry consolidation. But for these retailers, our brands are adding tremendous value by offering needs based, high ring and innovative products which can help improve traffic and basket size for these retailers.
This was evidenced in Q3 where despite destocking efforts our brands outgrew categories meaningfully as well. However, our company continues to benefit from a diverse channel mix with our brands well distributed across other channels including math, food, dollar, convenience and e-commerce.
Looking at the graph on the slide, it’s clearer strategy to investment behind brands as yielding results. In these other channels our core brands are going well in excess of categories driven by our time tested brand-building efforts.
For example of a brand executing playbook, let’s turn to slide 9 and discuss Nix. The Nix brand was acquired in 2014 as part of our inside acquisition and as a brand that sits well with our long term acquisition criteria. Even in the category like lice treatment, brand-building, new products and innovation are important. It’s an excellent example of the long term success of our brand-building investment strategy, it’s also a timely example since it illustrates the value that our brand can deliver even with incidence level fluctuations and outbreak levels are down almost 5% this year.
We’ve achieved success with Nix for many factors. We’ve introduced new products like Nix Ultra which is effective against Super Lice and better positions our brand with consumers and retailers. We’ve also run TV and digital campaigns for Nix to grow awareness with parents and school nurses while concurrently launching an online lice tracker to help these consumers identify when a lice outbreak has occurred.
The result of these efforts is that over the last three years Nix has won meaningful additional share of the category while at the same time winning impressive distribution for the brand due to its new product positioning and support strategy. Further, despite sharply lower lice outbreaks in fiscal 2019, we continue to outperform the lice treatment category performance both in Q3 and year-to-date.
Let’s turn to slide 10. Compound W is the second of many examples of a strong core brand that has both the history of outperformance and ample runway for future growth. Compound W is one of a few OTC brands that were owned at the formation of the company. It’s a longer term example of winning with the consumer and ultimately with the retailer through brand-building.
We became the number one brand in the wart remover category several years and have grown our leading position even further over the last three years expanding our share by nearly six points. As you can see in the chart on the right, Compound W has meaningfully outperformed the category over the last few years with the fastest growth through our brand-building strategy including strong marketing support around new product introduction. Most recent examples of this include a kid bandage offering and the newly launched Nitrofreeze product which offers new extreme freezing technology to provide the highest SKU rate with just one treatment.
In conclusion, these two brands are remainder of the opportunity that our portfolio has to drive long term category growth. There is abundant opportunity to utilize consumer insight to drive long term demand which we’ve a history of success way.
With that I’ll turn it over to Chris to walk through Q3 financials in greater detail.
Thank you, Ron. Good morning, everyone. As Ron reviewed in brief earlier, I’d like to walk through our third quarter results in greater detail as well as offer certain expectations as we look ahead. As a reminder, the information in today’s presentation includes adjusted results that are reconciled in our earnings release.
On slide 12, you can see our high-level third quarter results, which included EPS growth of approximately 4% versus the prior year as we continue to deliver strong profitability. We reported an organic revenue decline of 3.1% to $241.4 million which as Ron discussed earlier was impacted primarily by inventory reductions at certain key drug retailers.
Adjusted EBITDA in Q3 declined versus prior year due to the Household divestiture, the impacts of BC & Goody’s packaging launch and the retailer inventory reductions.
Now let’s turn to slide 13, where I’ll discuss consolidated results. For the third quarter fiscal 2019, our net revenues decreased to 11% to approximately $241 million, but were down approximately 3% on an organic basis as I just mentioned after excluding the effects of the Household divestiture and foreign currency.
Year-to-date, we were also impacted by the launch of BC & Goody’s new packaging as well as a change in accounting policies around revenue recognition and the timing of certain deductions against gross sales. Regarding this change, I’d remind you the timing change we’re referring to relates to the timing of certain deductions against gross sales that we’ve discussed on previous earnings call.
Gross margin came in at 57.7% for the third quarter, up both sequentially and year-over-year. We benefited from the divestiture of the lower-margin Household Cleaning segment in the quarter and continue to normalize freight and warehousing costs. These benefits were partially offset by Q3 impact from the previously mentioned BC and Goody’s packaging rollout which continues to have certain transition costs as well as continued costs previously allocated to the Household Cleaning business which remained following divestiture. We continue to expect full year fiscal 2019 gross margin of approximately 57%.
Regarding A&P, we came in at 14.3% of revenue for Q3. As a reminder we anticipated a lower A&P spend as a percent of sales in the second half of fiscal 2019 versus the first half and we still expect our full year to approximate 14.5% of sales.
As expected, our adjusted G&A spending came in at just under 9% of total revenues in the third quarter and year-to-date fiscal 2019. As a reminder G&A dollars are largely fixed and the result is modest deleveraging against G&A as a result of the divestiture of Household as we move forward.
Last, we reported earnings per share in Q3 of $0.73 $2.06 year-to-date both representing mid single-digit growth versus the prior year as a favorable tax rate more than offset the operating income change resulting from the retailer inventory reductions and Household divestitures we’ve discussed.
Now let’s turn to slide 14 to discuss our cash flow. In Q3, we generated $57.2 million in adjusted free cash flow, which is adjusted to exclude approximately $12 million in tax payments associated with the sale of our Household Cleaning business. We anticipate $200 million or more of adjusted free cash flow for the full year fiscal year.
Our net debt at December 31 was $1.8 billion and equated to a net debt-to-EBITDA leverage ratio of 5.1x. We continue to anticipate using free cash flow principally for debt reduction. As a reminder we anticipate operating at lower leverage levels versus historical rates and are targeting a range of 3.5x to 5x going forward.
I'd like to now turn it back to Ron for discussion surrounding our outlook and some closing remarks.
Thanks Chris. Let's wrap up with some closing remarks and a review of our outlook for fiscal 2019 on slide 16. For net sales, we anticipate fiscal 2019 to be in the range of approximately $970 million to $975 million with organic revenue growth of flat to up a half a point.
Similar to year-to-date, we expect our full-year consumption growth to exceed sales meaningfully as retailers are expected to reduce inventory levels. As we look ahead although we are not giving formal fiscal 2020 guidance at this point, we do anticipate inventory reductions to continue to be a headwind in the upcoming year.
For profitability, we anticipate EPS to be in the range of $2.75 to $2.78 or +7% to +8% year-over-year. Regarding cash flow we expect full-year adjusted cash flow of $200 million or more.
In summary, despite inventory reductions impacting revenues in Q3, we delivered solid profitability and our long-term brand-building focus has us positioned for long-term success. We have confidence in our 3-pillar strategy of growing our top-line by winning with consumers, maintaining our strong financial profile and consistent cash flow, and our disciplined capital allocation approach to enhance shareholder values. Executing against this formula is a simple and effective 3-pillar strategy that has us positioned for continued success.
With that I'd like to turn it over to the operator for questions.
Thank you. [Operator Instructions] Our first question comes from Joe Altobello with Raymond James. Your line is now open.
Thanks, hi guys, good morning. So I guess, I'll start with the drug channel since it was the big issue of the quarter here. I think, one of your exhibits on page 8, you excluded the drug channel in terms of consumption. I could see why you would do that for shipment but why would you exclude the drug channel in terms of consumption?
Has your shelf spaced and the drug channel changed at all? And I guess more to the point if you look at your year-to-date consumption I think it was up 1.8% in total, but it was up 3.1 X drug. So I'm curious why consumption is down so much in the drug channel not just shipments? Thanks.
Good morning, Joe. So for consumption in the drug channel, we've actually seen a long period of declining consumption trends in that channel and the point of that chart in today's slide deck was to show that in our needs based categories that essentially we're seeing consumption and shoppers move to other channels for our products. We're not losing share. We're not seeing a share shift away from our branded products to competitors or private label in the drug channel.
So that was the intent there to show that we continue to feel good about the overall consumption of our business in the long term trends and then secondarily during the third quarter the impact on our shipments was a disconnect between the consumption rates even in that drug channel and shipments into the channel, Joe.
So basically you're reflecting just a long-term ongoing trend here in that channel or out of that channel, I guess.
Yes, correct.
And secondly, you alluded to capital allocation optionality and you said earlier as well obviously debt reduction is the focus, but beyond that when you talk about the optionality what's a greater priority, is it M&A or share repurchases at these levels?
Hi Joe, it's Chris. No, again we continue to prioritize debt pay down as our primary use of our free cash flow. Obviously, we will remain opportunistic when we think about share repurchase and then again always open thinking about M&A. But as we mentioned, we're targeting now a 3.5x to 5x leverage ratio. So all those things will come into play as we look forward, but as we sit here today still continuing to prioritize debt pay down as our number one priority.
Great, thank you guys.
Thanks Joe.
Thank you. And our next question comes from John Anderson with William Blair. Your line is now open.
Good morning everybody.
Good morning.
Just wanted to start out by asking a little bit more about the quarter, could you talk about, I don't think, I didn't even see it because I think the consumption that was cited in the presentation of 1.8% was a year-to-date number. Correct me if I'm wrong there. Is there a number for the quarter around consumption that you can share?
And then, if you can talk about obviously the drugstore channel was a source of weakness in shipments. But are there any other pockets from a product or brand perspective softness that you're seeing? I know you mentioned a couple like oral care specifically due to some shelf changes. I'm wondering if you can elaborate on that? Again so first consumption on the quarter, second some brand or product category challenges specifically the oral care?
Sure. So first on the consumption John, as I mentioned during the prepared remarks, during the quarter we saw consumption slowdown in both cough/cold and in the lice categories both were negative and resulted in consumption for the quarter for the company to be essentially flat. But I did comment that it really didn't have the impact on our sales level during the quarter. Our issue with sales in the quarter was specifically the drug inventory destocking. Year-to-date, we are nearly 2% and we continue to look for the full year to be around that 2% maybe slightly below at this point.
In terms of categories, GI and ear and eye continue to perform very well for us that we’ve all year. We have seen some continued softness in the oral care subcategory principally with DenTek as we saw some changes around distribution in certain retailers this year that has consumption levels negative for the DenTek brand this year. But beyond that we're not really seeing any other brands or categories performing out of line of what we would have expected for the year.
And so, it sounds like based on the full-year expectation on organic sales of 0 to half a point and the consumption expectation of close to 2%, you're looking for a couple hundred basis points maybe of inventory de-stock, 150-200 basis points of inventory destock which would be I think, correct me if I'm wrong would be above average, above a typical year. As you look ahead to 2020 you've mentioned that you expect further inventory destocking in fiscal 2020.
Do you expect it at the kind of the same level that we'll see this year again in that 150 to 200 basis points range or is there some hope or optimism that could come in below that or be more advantageous with some of this kind of winding down during the course of the year?
So, at the start of fiscal 2019 John, you're correct and you pointed out we thought we'd see a half a point to a point of disconnect between selling and consumption and we said at the beginning of the year that the biggest risk to our performance for fiscal 2019 would be if that inventory destocking was above that expectation. And we thought we had baked in enough to cover what was going on in the drug channel at the time but it turned out to surprise us and to your point be closer to almost 200 points of disconnect versus the half to 100 points that we thought going into the year.
As we sit here today we anticipate potentially the same level for fiscal 2020 and again we've seen a number of the large retailers in the drug space make recent announcements about continued plans to address store count and distribution center count. So we're anticipating that likely at the same level for next year.
But again, as we look forward and think about fiscal 2020, we will give more details on the May call for 2020 is that, what's within our control is winning with the consumer, launching new products, bringing innovation and continuing to build our brands so that we continue to grow share and that fundamentally will drive long-term success. So that's how we think about things and what we expect for next year.
That's fair and I'm kind of, as you can tell I'm kind of picking around to try and get some insight into 2020 at this point, I'm just following up on that Ron. We assume a similar level of inventory reduction due to the dynamic in a couple of the channels. We're looking at a year where organic growth is flat to up slightly.
As you think about the balance of the P&L is there any reason that we'd see significant shifts on any other lines, the expense lines? I mean, I'm thinking out loud here, but it feels like gross margins in 2020 should be better than gross margins in 2019 because full year of Household out more normalization of trade transportation warehousing, the anniversary of the BC and Goody’s, kind of headwind.
So that seems like it will be a positive story from a gross margin perspective and then below that it sounds like the advertising ratio you see level are uniform and G&A probably relatively uniform. So, am I kind of thinking about the complexion of 2020 in a reasonable way at this point?
John, we don't answer that and again we're not intending on giving any specific guidance or outlook for fiscal 2020 at this point is, if you step back and take a look at our Q3 results, you see the benefit of our industry-leading financial profile in cash flow generation and the stability of our business model. So even in the quarter that is an outlier in terms of organic decline, we went back and looked at 16 quarters of organic performance and this down 3% is really an outlier for our business.
We were able to see a sequential increase in gross margins from Q2 to Q3, solid level in the high 57, EBITDA margin at 35%, $0.73 of EPS and over $55 million of free cash flow generated during the quarter. So that benefit and solid performance we would expect to continue even in a year with more modest levels of organic growth. So I'll leave my comments to that for fiscal 2020.
Thanks. And last one from me, can you just remind me what the impact of the BC/Goody’s packaging innovation was to gross margin in the current fiscal year?
Joe, this is Chris. Maybe we’d speak quarter, if I combine BC/Goody’s was almost 100 basis points on our margin, but I'll remind you in Q3 we also had some favorability for rev rec about 30 basis points and we also had some favorable brand mix that we might not expect to repeat itself as we look ahead to Q4. So we're holding our margin for the year at 57.
But BC/Goody’s was at 100 basis points yet in the third quarter, Chris?
It was, it was. I think one thing to just remember on BC/Goody’s is, we continue to have some transitory costs as we finalize the transition and also as we look forward we'll be working through our exit with our previous co-packer. But generally speaking, we have a stable gross margin all the time as Ron commented on.
Thanks so much, really helpful, everybody thanks.
Thanks John.
Thank you. And our next question comes from Steph Wissink with Jefferies. Your line is now open.
Thanks, good morning everyone. Just a follow-up on John's question and talk a little bit more on the drug channel. You have really good perspective on what's happening with respect to store count reduction, BC consolidation, inventory per store reduction, but is there something unique about the drug channel that they're not picking up the business online like you would see from your partners in [Mass] or other channels? So that's question one.
And then, question two related to drug is just the degree of cutback seems to be pretty material and it seems also to be pretty abrupt. So maybe talk a little bit about your process, how you engage with your buyers across channels to get some insight into how the buying plans are starting to form? Thank you.
So, first thing I'll start with Steph is that, we really start from a position that we'd like to see all of our retail partners do well and have our product offerings available for consumers, no matter where they choose to shop. So we'll start with that.
The second thing is, we really do not get a lot of insight into what the retailers plan for in terms of inventory reductions or change that self or whatever is going on in their planning until it kind of happened then we were surprised at the extent and how it happened at the end of the quarter, end at December in terms of the disruption in the normal order patterns that we saw.
So, we really don’t get a lot of insight in my comments today are limited to what we're seeing in the public domain that's being announced by the different drug retailers. So, I'm not providing any insight in terms of what we may be hearing because we're not getting a lot of insight. That's the first part of it.
The second is in terms of where shoppers are choosing to go, we really think it's more of a channel shift versus drug consumers moving from drug retails online. So, I don’t think it's quite that simple, I think it's much more complicated in terms of where consumers are travelling and changing in terms of their shopping habit.
Okay, that's helpful. And then, just one follow-up on Amazon or online in general. Can you just talk a little bit about the investments in A&P that are related to digital, relative to historic plan of purchase or shelf-based marketing?
Sure. And our business continues to see very significant growth online and Amazon in specific. Specifically, last year we were up nearly 100% or so this year, we're close to up 80% or so and anticipate solid growth next year as we continue to make investments in that channel.
So, we're growing our investment there but it really keeping it in line for a long-term initiative to grow there.
Okay, thank you.
Okay. Thanks, Steph.
[Operator Instructions] Our next question comes from Linda Bolton Weiser with DA Davidson. Your line is now open.
Hi. Can you talk a little bit more about these, the other channels that you think the consumption is shifting to, whether it be dollar stores or convenient stores or club channels or whatever and I guess specifically on the club channels, do you have any presence there or do you have episodic opportunities for programs and club.
And can you just talk about like are you actively doing anything to try to expand into new or new channels or just anything that's creatively thinking out of the box in terms of distribution. And then secondly, related to shelf space, can you elaborate on the DenTek, I think you alluded to some loss of shelf space there.
And just what are you doing there and have you had any significant innovation in DenTek. Thanks.
So, guess three questions here. First on distribution in channels that our products are in. our products are generally very broadly distributed across channels and retailers within the different channels. Club, isn’t necessarily a big channel for our products in our categories. Its needs [base] and you're not generally stocking up with three packs of our kinds of products.
So, club isn’t a big opportunity for us and expanding distribution really isn’t an opportunity either, although it's always an opportunity to grow but we're not under penetrated in any particular channel, Linda. It's the first question.
Second, in terms of shelf space around DenTek, the specialty peg section is fairly competitive and if you go into and look at it retail, you'll see each year that the retailers may make a lot of changes in the different offerings and this year we saw some loss distribution. DenTek's use a couple of retailers, made some changes; that's not the first time we've seen that since we've owned DenTek.
We were actually a big winner on that a couple of years ago, we saw DenTek were nearly 10% I think in the second year of our ownership. So, that's going to be a little bit of a different space for us where it may have more variability but over the long-term we continue to feel good about DenTek's position to work with the retailers to help improve that space in the store.
In terms of new products and innovation, we had a number of new products that we did launch over the last year in that space.
Okay. Can I also ask how much of the year to-date EBITDA decline was due to the divestiture of Household Cleaning?
Yes Linda, we talk about household the three quarters, Q3 to Q4 being about an $11 million of EBITDA.
I'm sorry, that's for the nine months year-to-date?
Correct.
Okay, thanks. And then, can you talk about I know you really don’t want to get into much about FY'20 other than what you said but is there anything that you know right off the bat that's going to cause a cadence change or some differences in cadence between first half or second half next year or anything that you already know ahead of time.
Obviously, the third quarter will be an easy prior year comparison because of this year. But is there anything else that you know that can help us in our modeling this by quarter for FY'20?
At this point, we really don’t have any insight into anything for a shift between first half, second half, next year, yes. And again, we'll give more detail on the May call, Linda.
Okay, thanks, very much.
Thank you, Linda.
Thank you. And our next question comes from Frank Camma with Sidoti & Company. Your line is now open.
Hey, good morning. This is Aster calling in for Frank. So, you recently disclosed that your average cost of borrowing is now 5.6%. Given leverages inching down, is there an opportunity in resigning some of your floating debt into fixed. And then so, how would it look like?
Yes, I mean this is Chris. So, as we sit today, we're expanding just over 46% of our debt floating, right, or generating about $200 million a year that we obviously apply to the floating rate debt. This year call we did a refinancing back on March to shift a lot of our floating to fixed.
What I can say is we always look for opportunities to either lock that in or more aggressively pay that down. So, we'll look for opportunities and take them as we have historically. But as we sit here today more to comment perhaps when we issue our guidance.
Okay, thanks.
Thank you.
Thank you. And I'm not showing any further questions at this time. I would now like to turn the call back over to Ron Lombardi for any further remarks.
Okay, thank you. Thanks for joining our call today. Have a good day.
Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program and you may all disconnect. Everyone have a wonderful day!