Earnings Call Transcript - REYN Q2 2020

Operator, Operator

Ladies and gentlemen, thank you for standing by and welcome to the Reynolds Consumer Products Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today’s call is being recorded. I would now like to hand the conference over to your speaker today, Mark Swartzberg. Thank you. Please go ahead. Thank you. Good morning and thank you for joining us on Reynolds Consumer Products second quarter 2020 earnings conference call. On the call today are Lance Mitchell, President and Chief Executive Officer; and Michael Graham, Chief Financial Officer. Nathan Lowe, Senior Finance Director; and Chris Mayrhofer, Vice President, Corporate Controller and Principal Accounting Officer, will also be available for Q&A. During the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management’s current expectations and involve risks and uncertainties that could cause actual results and outcomes to differ materially from those described in these forward-looking statements. Please refer to the Reynolds Consumer Products annual report on Form 10-K and other reports filed from time to time with the Securities and Exchange Commission and its press release issued this morning for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Please note, management’s remarks today will focus on non-GAAP or adjusted financial measures. A reconciliation of GAAP results to non-GAAP financial measures is available in the earnings release posted under the Investor Relations heading on our website at reynoldsconsumerproducts.com. The company has also prepared a few presentation slides and additional supplemental financial information, which are posted on Reynolds' website under the Investor Relations heading. This call is being webcast, and an archive of it will also be available on the website. I would also like to note that we are conducting our call today from our respective remote locations. As such, there may be brief delays, crosstalk or other minor technical issues during this call. We thank you in advance for your patience and understanding. I would like to answer all of your questions during the question-and-answer session. In the interest of time, we ask that you ask one question and a follow-up and rejoin the queue if you have additional questions. And now, I would like to turn the call over to Lance Mitchell.

Lance Mitchell, CEO

Thanks Mark. Good morning, everyone. Today, I would like to start by recognizing and thanking essential frontline workers, especially the work of healthcare professionals caring firsthand for those who are sick. Employees at our retail partners have also stepped up to continue to supply people with essential products on an ongoing basis. We are pleased to be able to support them, and I’m incredibly proud of how the entire team at Reynolds has come together, as we emerge from this quarter a stronger and more agile company. The pandemic continues to present immense challenges for people everywhere and there are five areas where I believe we have learned, grown, and demonstrated new and better capabilities in the quarter. I will review each of them, including the challenges we faced and high-level comments on our second quarter financial results, then speak to our second half priorities and how we are pivoting from managing the crisis to leading and working our plans to become a stronger company and partner. Safety, our safety-first culture has served us well as the pandemic developed in March and was fully underway throughout the second quarter. We implemented unprecedented safety protocols ahead of CDC guidance with urgency. These included safe distancing, barriers, shift separation, mandatory mask usage, temperature testing, hand washing and increased cleaning. It’s one thing to develop policies and procedures. It’s yet another to ensure that they are implemented on a day in and day out basis. Our safety culture has ensured we successfully continue to follow all the guidelines we established at the outset of the COVID-19 pandemic. Supply chain. We moved rapidly to expand capacity for products that continue to be in higher-than-planned demand, and we were creative in unlocking capacity. We worked with our retail partners to pause low-volume SKUs in favor of priority items; shifted innovation emphasis from on-the-go to stay-at-home products; centralized a portion of inventory management to improve replenishment and accuracy; re-commissioned mothballed capacity in our cooking and baking segment; accelerated line additions; added plant staff; and undertook other measures to deliver against the increase in demand. As a result, our capacity continues to increase, contributing to retailer in-stock rates well above levels early in the quarter in many of our categories. However, we are not operating at full utilization rates, reflecting challenges fully staffing existing and new capacity and contributing to out of stocks in certain product categories. Staffing challenges reflect multiple factors, including: absences in local hot spots; employees’ childcare needs; and hiring conditions in certain local economies. We’re making progress here, but we have more to do. Overcoming this is a top priority of our leadership team. Category management. We strengthened the competitive advantage by spending more on proprietary research, developing new consumer insights and implementing new analytical tools to support our retailer partners and future product development. For example, we conducted three successive waves of research to identify progressive changes in shopping behavior since the start of the pandemic, allowing us to see new normals of growth and share by product segment. We undertook a state-by-state analysis of restaurant and dining out trends in relation to reopening orders, discovering patterns that are helping us predict localized trends for our tableware business. We adopted a new analytical tool to predict growth of our most important product categories, factoring the latest trends in the predictions and continually back-testing for accuracy. And in terms of e-commerce, we conducted research, identifying that an average of 26% of U.S. shoppers now look to e-commerce to fulfill their purchase needs in our categories. All of this tells us we’re seeing a sustained shift in behavior that benefits our categories and our ability to serve our retail partners. In terms of consumer behavior, our July Harris Poll finds that heightened nesting continues and that a significant majority of consumers expect to continue the increase in cooking, baking, cleaning and organizing in which they are engaged today. Consequently, we are planning and operating on the expectation that these shifts benefit the majority of our categories, not only in 2020, but over the long-term, too. Leadership is our fourth area of growth. We developed tools, policies and training that allow us to lead and manage remotely. We’ve also increased communications to promote alignment, increased investment in cybersecurity training for a distributed workforce and adapted in order to remain on track with our plans to exit transition service agreements. Our financial results, we reported strong revenue performance in the second quarter, in spite of last year’s exit of certain low-margin store brand business, lapping a price point investments in Reynolds Wrap foil, lower related party revenues and decreased demand for our tableware business. Our e-commerce retail sales were also strong in the quarter, as we continue to capture elevated participation in the e-commerce platforms. And adjusted EBITDA grew double digits, driven by our top line and gross margin expansion of 200 basis points, primarily from lower material and manufacturing costs, in spite of incremental COVID-19-related operating costs. When we formed Reynolds Consumer Products in 2011, we had the opportunity to create a new company built on well-known brands from solid legacy companies. We used that opportunity to create a culture that prioritizes safety, families, ethics and achievement of our financial and strategic goals. Nine years later, we entered the IPO process a successful company, partner and competitor, benefiting from the requirements of going public. Today, our leadership team leads an even stronger and more agile company, and I could not be more proud of our team and employees for their resilience and success responding to the challenges and opportunities presented by the COVID-19 pandemic. As we move through the second half, our priorities are: one, additional spending and work to better understand changing consumer preferences, behaviors and shopping patterns; two, advertising levels to support momentum into next year, and readying innovations with continued focus on at least 20% of net revenues from products launched in the last three years; three, build-out, staffing and rightsizing of capacity; four, additional automation of production and processes; and five, delivery of other standing and new revolution business transformation initiatives. I would like to conclude by reiterating that we continue to make safety our top priority, striving for zero accidents. I’m happy to tell you that we have experienced a record low number of incidents year-to-date, even with the challenges of a pandemic and projects to increase our capacity. That’s a continuation of our safety culture journey. Over the last seven years, we have reduced our injury rate by 30%. I will now turn it over to Michael to discuss our results for the quarter and our outlook.

Michael Graham, CFO

Thanks, Lance, and good morning, everyone. I’d like to echo Lance’s comments in thanking our employees whose dedication has been crucial to navigating our company through the implications of this pandemic, and I’m extremely proud to be part of the Reynolds team. With that said, I now will spend a few minutes reviewing the financial results for the quarter. Total net revenues in the second quarter of 2020 were $822 million compared to $791 million in the prior year. The increase was primarily driven by stronger volume stemming from the consumer response to the pandemic. We saw increased demand across our Reynolds Cooking & Baking, Hefty Waste & Storage and Presto Products segments, whereas our Hefty Tableware segment was negatively impacted by the pandemic. We’ll go into the details of these segments shortly. Net income for the second quarter was $112 million compared to $55 million in the second quarter of last year, and adjusted net income was $115 million for the second quarter of 2020. The increase was primarily driven by the aforementioned stronger volume as well as lower interest expense, reflecting the capital structure that went into effect with the IPO. Adjusted EPS for the quarter was $0.55. Adjusted EBITDA for the second quarter was $193 million compared to $169 million in the prior year. The increase was primarily due to the previously noted volume increases. Now I will discuss the results of each of our segments. Reynolds Cooking & Baking net revenues in the second quarter were $295 million compared to $275 million in the same period of last year. The increase was primarily driven by increased demand due to consumer response to the COVID-19 pandemic. The increase was partially offset by lower related party sales and lower pricing from actions largely taken in the prior year as we supported our customers in achieving key price points and as a result of lower material costs. Adjusted EBITDA in the quarter was $66 million compared to the prior year of $49 million as the impact of higher revenue along with lower material and manufacturing costs, which were partially offset by the impact of lower pricing. For Hefty Waste & Storage, net revenues in the second quarter were $203 million compared to $183 million in the prior year. The increase was primarily driven by the increased demand due to the consumer response to the COVID-19 pandemic. Adjusted EBITDA in the quarter was $63 million compared to $52 million in the prior year, primarily driven by the increased revenue. Now moving on to Hefty Tableware, net revenues for the segment were $186 million compared to $207 million in the prior year. This segment was negatively impacted during the quarter because of fewer social gatherings, particularly around end-of-school year and summer events. Additionally, lower demand from foodservice businesses serviced by our retail partners contributed to the decline. Adjusted EBITDA in the quarter was $43 million compared to $51 million in the prior year, primarily due to the decreased revenue as well as increased material and manufacturing costs resulting from our transition to a standalone entity. Finally, the Presto Products segment net revenues were $138 million compared to $131 million in the prior year. The increase was primarily driven by increased demand due to consumer response to the COVID-19 pandemic, partially offset by exit of certain low-margin store-branded businesses in the prior year. Adjusted EBITDA in the second quarter was $28 million compared to $24 million in the prior year, primarily driven by the increased revenue. Now moving to our capital structure, as of June 30, 2020, we had a cash balance of $392 million and a total debt outstanding of $2.44 billion. Adjusted net cash from operations was $263 million for the quarter compared to adjusted net cash from operations of $165 million in the prior year. CapEx was $29 million for the quarter compared to $26 million in the prior year. I am pleased to announce that our Board has approved a quarterly dividend of $0.22 per common share, which is expected to be paid on August 31 to shareholders of record as of August 17. Additionally, subsequent to the quarter-end, we made a voluntary $100 million principal payment against the balance on our senior secured term loan facility. I would now like to comment on our guidance for the fiscal year ending December 31, 2020. The following guidance is what we previously provided for fiscal 2020: net income to be in the range of $335 million to $355 million; earnings per share to be in the range of $1.60 to $1.69 per share; adjusted EBITDA to be in the range of $695 million to $715 million; adjusted net income to be in the range of $388 million to $403 million; and adjusted earnings per share to be in the range of $1.85 to $1.92 per share; net debt to be in the range of $1.9 billion to $2.1 billion. We expect higher-than-previously planned demand for many of our products to continue over the balance of the year. And as a result now expect 2020 results to be at the upper end of the previously provided ranges for net income, earnings per share, adjusted EBITDA, adjusted net income, and adjusted earnings per share. We are also confirming our previous guidance for net debt. This is a positive outlook on our guidance we communicated in May and provided in the context of our business facing a high degree of uncertainty going forward. It also reflects a number of headwinds limiting our expectations for the third and fourth quarters, particularly the fourth quarter. We are on track to complete our capacity objectives by early 2021. However, the addition of capacity in this environment involves added costs, and the staffing challenges on existing lines are compounded as we add capacity, reflecting the factors Lance noted earlier. Our research and trends indicate fewer and smaller social gatherings are an offset to higher rates of everyday consumption for many of our products, leading us to expect less from holiday-related sales. Also, while our tableware business is expected to see moderation of Q2’s headwinds as foodservice and dining out trends improved from the pandemic lows, we expect continued pressure from this business over the balance of the year. We have also seen increases in all of our key commodities in recent months, and the outlook is worse than our expectations when we reported Q1 earnings in May. We have seen COVID-related costs rise. In the quarter, discrete costs for cleaning, safety and related items were in the range of $5 million to $10 million. In addition, we are experiencing operational and supply chain inefficiencies arising from operating in a high-demand environment, delays in certain cost-saving programs, and other factors. Logistics unit costs have increased as a result of higher fuel costs and lower distribution efficiencies. We expect SG&A increases to be elevated, reflecting A&P increases that are skewed heavily to the second half, driven by our plans to build additional portfolio momentum as well as pandemic-related delays in A&Ps originally scheduled for the first half. Thus, the amounts planned for Q4 are well above fourth quarter levels of 2019. Finally, it is important to note that we assume no significant disruption to our operations, supply chain or retail partners for the remainder of 2020. On the topic of a secondary, as many of you know, the 180-day lock-up on the sales of the shares by directors, executive officers in Packaging Finance Limited recently expired. Our largest shareholder has not advised of any intended change in its position and is very pleased with the performance and outlook for the company. As we look ahead, we continue to believe that our business model is well-positioned to drive attractive returns in the long term. Our expectations and focus areas continue to be average annual volume growth in the low single digits; continued investment to support margin expansion; average annual adjusted EBITDA growth of low to mid-single digits; average annual net income growth in the mid-single digits; and a dividend payout ratio of approximately 50% of net income. With that, we will turn it back over to Mark. Thank you.

Mark Swartzberg, Speaker

Thanks, Michael. As I turn it over to the operator for the questions. Operator?

Operator, Operator

Thank you. Our first question comes from the line of Bill Chappell with Truist. Please proceed with your question.

Bill Chappell, Analyst

Hey, thanks. Good morning.

Lance Mitchell, CEO

Good morning, Bill.

Bill Chappell, Analyst

I guess just on – certainly, your portfolio is well positioned with your store-brand private-labeled portfolio. Just trying to understand if you are starting to see consumer trade down or if you are kind of expectations for the remainder of the year kind of consumer trade-down and kind of related impact to margins?

Lance Mitchell, CEO

If you mean by trade-down shifting from brand to store brands, we have seen just the opposite continuing. You can see that in the scanner data, even through July, that shares across our categories have remained strong for the branded businesses. And in fact, they have continued to grow in some cases.

Bill Chappell, Analyst

Got it. And do you expect that to continue as we kind of move forward for the rest of the year and in a recession?

Lance Mitchell, CEO

Well, as we have talked previously, this company has not gone through a recession as Reynolds Consumer Products, but the legacy companies have. And the historical look back indicates that there was no meaningful difference in shares changing during the last recession for the majority of the products.

Bill Chappell, Analyst

Got it. And then one follow-up just on the capacity additions is there a need for these additions? Are you expecting demand to continue well past COVID and into 2021 or is this just things being pulled forward that you were planning to do down the road anyway?

Lance Mitchell, CEO

It is a combination of both. We did pull forward some planned capacity additions, but we have also increased our capacity because our outlook for consumer demand, based on the research I talked about in my opening remarks, indicates that this is a more permanent type of demand pattern from consumers for our categories. So we are adding additional capacity for the long-term.

Bill Chappell, Analyst

Got it. Thank you so much.

Lance Mitchell, CEO

Thank you.

Operator, Operator

Our next question comes from the line of Rob Ottenstein with Evercore. Please proceed with your question.

Rob Ottenstein, Analyst

Great. Thank you very much. So I am wondering how the dialogue with retailers has progressed given your important role as a category captain through – let’s say March through June. And given what you are saying that you think there’s a more permanent demand pattern here, is that something that retailers agree with? And are they going to therefore give more shelf space? And then related to that, how is the whole discussion going with retailers in terms of e-commerce? And how do you see the development of e-commerce as the crisis continues?

Lance Mitchell, CEO

Okay. I guess, there are two questions there. And the first one regarding our relationship with retail partners, I think our relationship has emerged from the pandemic in the last quarter stronger than it was before. We have been very transparent with them about our capabilities, our capacity additions. And we have talked about our SKUs that we are going to pause and come to a collaborative agreement on that. So there are agreements that the categories are going to grow and a demand permanently stronger than we had originally anticipated before the pandemic because consumer behaviors are changing. Regarding shelf space, that’s premature. We haven’t had those discussions. We are discussing new product introductions. But regarding the shelf space that’s not something that’s been on the agenda as of yet. The second question, remind me again, please.

Rob Ottenstein, Analyst

Just you had mentioned that, I think, 26% – based on your research, 26% of the population was looking towards e-commerce as a channel for your products. So I am trying to understand what that means in terms of how you are going to adapt to that and what that means in terms of your discussions with your brick-and-mortar retailers?

Lance Mitchell, CEO

Well, I would say, first of all, our brick-and-mortar retailers, we include in e-commerce. So, curbside pickup and the programs that the brick-and-mortar retailers are participating in is included in the way that we look at e-commerce. It’s not just home delivery, but it’s all aspects of e-commerce. And we are very pleased with our results in e-commerce through the second quarter and as we look forward because in those categories, we are growing, in fact, growing from a share standpoint, most of our products faster than we have grown traditional brick-and-mortar channels.

Rob Ottenstein, Analyst

Are you able to give us a sense of what percentage of your sales were e-commerce and a sense of what your share in e-commerce looks like?

Lance Mitchell, CEO

Yes. I can’t share that number at this point partially because the data is still murky. Some retailers are sharing very detailed numbers and some are not. So we get directional data there, but we are not getting clean data. That is going to improve over time as more and more retailers provide specific information.

Rob Ottenstein, Analyst

Okay, thank you very much.

Operator, Operator

Our next question comes from the line of Jason English with Goldman Sachs. Please proceed with your question.

Jason English, Analyst

Hey, good morning folks.

Lance Mitchell, CEO

Hope you are doing well.

Jason English, Analyst

I was a little surprised by the revenue you posted this quarter. In light of the data we are all looking at in Nielsen or IRI, I think many of us expected to see a more robust figure. Can you walk us through what the disconnect is? As we look at these numbers, why the gap? What are some of the offsets?

Lance Mitchell, CEO

We are on our quiet period, I really want to reach out and talk about this, and so did Mark. We attribute this mainly to the decline in related party revenue and a straight focus on scanner data at the macro category level that must take the net of our branded and private label performance. So let me try and break it down for the quarter. Our related party net revenues were down $14 million for the quarter, and the related party is just primarily into foodservice and restaurants, foodservice foil, and bakeware, aluminum pans. Our reported net revenues, excluding related net revenues were up 6% for the quarter. That’s still well below the rates I know many of you cited from the scanner data. And I said it’s important to go deep into the category and accurately net our branded and private label performance to see how we perform the scanned channels. For example, in tableware, our Hefty Cups performance was more than offset by our private label cup performance, whereas our private label performance in the foam plate segment outgrew the branded. In tableware, it’s also important to note that paper is a significant part of the disposable dishes segment, and we are introducing new products in that area, but we don’t yet participate in that segment in a meaningful way from a paper standpoint. In addition, some of our revenue from the Tableware business is sold in certain channels for foodservice applications. So a combination of all of those events, you can’t look at our business just on the scanner data across – and apply that across our entire company.

Jason English, Analyst

That’s really helpful. I appreciate the point. Sorry go ahead.

Mark Swartzberg, Speaker

And Jason, I will add to that, Jason. This is Mark speaking, nothing substantive because Lance covered the substantive points. But we get that you are tracking the data and trying to get it at the most granular level you can. So definitely look for Nathan and I to help you just follow it because as Lance said, the number was – the underlying number was plus 6%. And you obviously want to be able to see that and try to get closer to that as you go through given sort of month intra quarter.

Jason English, Analyst

Absolutely. You are still a new company, and we are all trying to learn here. So we will lean on you going forward a little more heavily. The second question. Michael, in the tail end of your prepared remarks, you ran through a lot of headwinds in the fourth quarter. From logistics costs, from commodities moving to incremental COVID costs, to heavy-up on SG&A ad spend in the fourth quarter. Can you give us any sort of quantum of investment? Any way to contextualize the level of expenses and headwinds that you are talking about there?

Michael Graham, CFO

Sure. I would attribute a big – a large part of that headwinds, and I did comment on that, is related to our A&P spending. So a couple of things contributed to that A&P spending. Some of it was related to the COVID, but also a large part of that is that as we start to build momentum for our franchise, we want to make sure it’s supportive with appropriate levels of A&P spending. So a big chunk of that additional cost that you see directly relates to A&P spending. The other part of it is that, I would say, from an overall standpoint is that we do have larger increases in commodity costs that rising in the second quarter. And we see that both on the aluminum side as well as the resin side.

Lance Mitchell, CEO

I would also say from a volume standpoint, Jason, we are expecting the holidays to be different this year. That is traditionally our largest quarter from a seasonality standpoint, is Thanksgiving and the December holidays. And we don’t expect those to drive the same kind of volume as they have in the past, partially because consumers already have on hand many of our products and partially because the gatherings are going to be different.

Jason English, Analyst

Yes. It will be interesting to see how that plays out. Thank you all for your time and I will pass it on.

Operator, Operator

Our next question comes from the line of Lauren Lieberman with Barclays. Please proceed with your questions.

Lauren Lieberman, Analyst

Great. Thanks. Good morning.

Lance Mitchell, CEO

Good morning.

Lauren Lieberman, Analyst

I just wanted to – your line to follow-up again I know you just ran through some details on, I guess, helping us through how we should be looking at Nielsen going forward, and we’ll pick that up further offline. But I wanted to also just clarify the comments on in-stock versus out-of-stock. So right now, would you say that, I guess, let’s say, as of July, that your shipments are now back in line with takeaway and that retail inventory levels are kind of where they need to be?

Lance Mitchell, CEO

Let me answer that in a couple of different ways. First of all, our in-stock levels have improved from where they were in April. So we saw the out of stocks increase until inflection point at the end of April with a combination of demand easing and capacity increases that we put in place. Capacity is coming closer to matching demand due to our rapid planning, our creative solutions that I have talked about in my opening remarks as well as adding staff. So yes, we are seeing improvements, but we still have many of our products on allocation with our retail partners. And we are continuing to add capacity and staffing, although not at the rate, as I indicated, that we would like because our case fill levels are not at the 98.5% that we target for ourselves. But the in-stock levels have returned, and it varies by product to the low 90s. It’s not like you go into a retail partner and see the shelves wiped out in our categories, like you may in others. And our retail partners tell us we are doing better than a lot of other companies in keeping the in-stocks. But it’s not to the level that we hold ourselves to, and we are continuing to work to improve that, as I said in my opening remarks. We are – a lot of our – and essentially, in a lot of our products that are in high demand, we are shipping everything we are making. And so what you’re seeing in the scanner data is shipments. So retailers are not sitting on inventory. In fact, they’ve depleted a lot of their inventories.

Lauren Lieberman, Analyst

Okay because the reason I wanted to also touch on this is, if I think back to some of the conversations that we’ve had about pre-COVID, if you can remember that time, some of your market share gains for Hefty came – they were very strong performance on innovation, right? The part of the story was that you were already capacity constrained and that was beginning to be alleviated. But now when we look at the Nielsen data, we continue to see shares under pressure. And so just thinking ahead to retailers needing to prioritize with manufacturers that can deliver in-stock levels, is there a worry that some of this continued market share pressure, because of the stock issues, kind of persist and requires greater investment outside of CapEx, but to kind of build back that market share on the superior products that you’ve got?

Lance Mitchell, CEO

Yes. Across those categories that are in high demand, which includes waste bags, we have significant capacity increases underway. And we expect to be able to be at the restored case flow levels that I talked about by the end of the year. So we can talk through the waste bag business directly. I think our shares have held up very strongly during this period of time. I attribute any change that primarily to some minor out-of-stocks at a few retail partners, but those are rebounding this month and will continue to rebound.

Michael Graham, CFO

Lauren, I would like to just add to what Lance is saying. I am confident that after a little more time, the market is going to be just simply more accurate at reading what we actually did in scanned channels and in terms of absolute performance because you can see in the scanned channels that our share trends are good. So your concern about in-stock, where I understand from the perspective you’re looking at and the way you’re looking at the data, I hear where you’re coming from. But as Lance said, the share performance, pick your channel – or not pick your channel, pick your category, there are a few exceptions, but the dominant trend is one of very healthy share performance. So I think it really just boils down to really making sure you’re getting at the proper granular level of what’s happening in our business, and that’s not a unique to Barclays comment.

Lauren Lieberman, Analyst

Okay, awesome. Thank you. I will follow-up. Thank you so much guys.

Operator, Operator

We have no further questions at this time. Mr. Mitchell, I would now like to turn the floor back over to you for closing comments.

Lance Mitchell, CEO

Well, thank you, everyone, for your participation and interest in Reynolds Consumer Products. We’re becoming a stronger and more agile company, and I’m privileged to lead this great team with discipline and vigilance on safety and a focus on strong performance in an even more attractive environment for our products. Please take care of yourselves, your families and your friends. Stay safe and healthy. Goodbye.

Operator, Operator

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.