Earnings Call Transcript - ZVIA Q3 2023

Reed Anderson, Managing Director ICR

Greetings and welcome to Zevia PBC's third quarter 2023 earnings call. It is now my pleasure to introduce your host, Reed Anderson, Managing Director at ICR. Thank you, Mr. Anderson. You may begin. Thank you, and welcome to Zevia's third quarter 2023 earnings conference call and webcast. On today's call are Amy Taylor, President and Chief Executive Officer; and Florence Neubauer, Interim Chief Financial Officer. By now everyone should have access to the company's third quarter 2023 earnings press release and investor presentation filed this morning. This information is available on the Investor Relations section of Zevia's website at investors.zevia.com. Before we begin, please note that all the financial information presented on today's call is unaudited. Certain comments made on this call include forward-looking statements which are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and other filings with the SEC 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. During the call we will use some non-GAAP financial measures as we describe business performance. The SEC filings as well as the earnings press release, presentation slides that accompany today's comments and reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are also available on our website at investors.zevia.com. Now I would like to turn the call over to Amy Taylor.

Amy Taylor, CEO

Thanks, Reid and good morning, everyone. Welcome to the Q3 2023 earnings call for Zevia PBC. I will begin by sharing that the plans we articulated on our Q2 call to stabilize our supply chain and restore service levels are progressing as expected in Q3 and this continued now in November. Zevia's brand remains healthy and demand continues to accelerate, supported by the brand refresh, the improved on-shelf visibility that it delivers, and velocity continues to grow at double-digit rates. Consumer spending is up on the brand for household and per trip. Our pricing remained strong with limited elasticity, exceeding our expectations and supporting our continued gross margin improvements. Zevia continues to have tremendous long-term potential, as we gain distribution, invest in brand building and win new consumers. Our broader value proposition remains one of the most relevant in all beverages. There is more attention on better-for-you beverages than ever. Zevia's demand is reflected in dollar velocity growth, which measures sales per point of distribution and was up over 16% for the quarter, demonstrating that the brand and product portfolio meet the needs of today and tomorrow's consumers. Our initiatives continue to bolster margin and set us up to improve profitability reflecting the exciting potential in the years to come. The customer consumer challenges that impacted net sales and costs in the back half of the year are short-term and we expect supply chain to be stabilized by year-end and optimize for 2024. I will detail this as well as cover consumer data and strategic data by category and by channel on today's call. Zevia's mission focuses on global health for people and for the planet. And in Q3, we removed another 3,200 metric tons of sugar from consumer diets, never having sold a plastic bottle. Zevia is more affordable and represents 64% of non-alcoholic beverages in America. Our continued focus is taking our better-for-you beverages mainstream, making them available and affordable for consumers across all income levels. I'll walk us through third quarter results and then speak to our focus now and going forward. We delivered net sales of $43.1 million just above expectations for the quarter. Velocities were strong, despite production promotion given low stock levels, and our order book is at or above expectations for all three months of the quarter. Gross margins are strong and continue to improve year-over-year. We are realizing the benefit of improved promotional strategies, promising innovation performance, strong sustained pricing, and reduced cost of goods sold. These evolutions, along with a fully realized supply chain transformation, contribute to our continuing improvements in gross margin in the future and provide proof points of the strength of our business model. I'll speak to our consumer-based evolution and retail indicators via panel and scan data insights and then I'll walk us through updates against the plan to address customer fulfillment and put the supply chain transformation back on track. Households increased their brand spend by 13% and their spend per trip also by 13% over the past 12 months. Both of which were also up versus prior periods with consistent purchase frequency rates, further indicating brand and consumer health. The Zevia shopper is a highly desirable one, less price sensitive at all income levels. We're a home stocking brand, which remains a competitive advantage as we simultaneously build our single business and grow cold availability. Zevia shoppers spend 38% more on beverages compared to total non-alcoholic beverage shoppers. Our shoppers also make 30% more trips to purchase beverages. Zevia shoppers continue to differentiate themselves even further from average beverage shoppers, including high-growth specialty beverage shoppers as they continue to spend more on the brand overall. The most important scan metric of the quarter is velocity dollars per point of distribution. Zevia grew velocity 16.2% in the quarter, despite a 26% reduction in promotions. Base velocity per point of distribution was up 21.5% versus the prior year, measuring growth without distribution or promotional impact. Our healthy-based business is a strong indicator for our long-term potential and our return to double-digit growth in the future. I'd like to provide a few channel and category insights before moving on to address some of our operational initiatives. Our growth for the quarter was led by exciting progress with the world's largest retailer, who has doubled Zevia's space converted from 6-pack to 8-pack. It continues to test the brand's performance in the mainstream carbonated soft drink aisle. The test is outperforming expectations and bodes well for future expansion. Zevia's soda is up triple digits in the chain in same-store sales. This partner also started distributing three Zevia energy drink flavors in selected stores for the first time at the close of the quarter. These moves in conventional retailers are great examples of the impact of our brand refresh as we take our brand mainstream and of our total opportunity to lead the exciting growth of better-for-you beverages. In the food channel, Zevia energy drinks are now distributed in three additional large regional chains and are off to a strong start in October. Energy drinks represent an exciting future growth opportunity. Our soda portfolio also represents tremendous upside as innovation performed very well across core channels. Creamy Root Beer and Vanilla Cola are number one and number two in terms of contribution to Zevia dollar growth across the quarter, and both have ample room to expand distribution compared to our legacy soda flavors. They are among the top five velocity drivers among Zevia flavors, and critically we continue to compete on taste with clean ingredients within the zero sugar space. Our new and improved cola tastes well among passionate cola consumers and is rolling out into the market now. Each new soda item we've introduced into our portfolio performs better than the last. Further, 12-packs continue to contribute to growth and support improved profitability. And sleek single soda cans sold in natural food and selectively foodservice are also top drivers of growth within the portfolio and key strategic drivers of trial among new users. Finally, in the convenience channel, the new look brand made its debut at the National Association of Convenience Stores tradeshow in October. We have augmented merchandising and selling power with a new third-party resource to support route markets, and initial regional convenience engagements for 2024 spring resets are off to a good start. I will now provide an update on the supply chain. The transformation in Zevia's supply chain is a critical initiative to support our continued growth, enhance our customer service, and drive efficiency and ultimately to materially reduce costs as we scale. Short-term missteps in its execution had a material impact on net sales for Q2 and the balance of the year. As we consolidate our warehouse network from 27 locations now down to nine, we encountered challenges which impacted inventory management, transfers, and the accuracy and timeliness of customer delivery, ultimately affecting our ability to deliver on demand. Last quarter, we discussed the following elements of our plan to course correct, and I'll provide an update on each one. First, we have a new leadership team in place across the supply chain. With new talent and processes, including new ways of working with third parties and across departments, are paying dividends as evidenced in our fill rate, which improves each month. We expect to return to optimal on-time and in-full deliveries this quarter. Second, we have re-phased transition plans for our warehouse network, leveraging legacy providers for support through the transition with ample days of supply across all key schemes. This has been critical to stabilize the network and to address customer fulfillment as customer orders continue to come in strong. However, it has also had a temporary impact on our adjusted EBITDA due to the higher transportation and storage costs associated with our investment in inventory redundancy to ensure the right product in the right locations. We expect our inventory balance to be lower at the end of Q4 compared to Q3 as the pacing of inventory purchases normalizes. Third, we changed our approach to freight to improve service levels and reduce costs. Finally, in Q3 we sold our company-owned warehouse, embracing an efficient third-party network model. In summary, plans to address the short-term issues in logistics and customer fulfillment are working. It has required organizational changes, supply chain transformation adaptations, and short-term investments. But the plan is on track, and we expect a return to normal by year-end with a more efficient supply chain going forward. My last comments center around brand building, and I am increasingly confident that we are well-positioned to accelerate brand marketing. With the new brand visualization in the market, we have product back in stock and much improved in-store visibility, while awareness of the better-for-you beverage proposition is on the rise. As we announced last month, we added a sharp and experienced marketer to our leadership team in our CMO, Kirsten Suarez, who brings experience from P&G, Taco Bell, and most recently, from an early-stage growth brand in the better-for-you space. Kirsten is already making an impact on how we think about brand building, consumer marketing, retail activation, and portfolio management. We can share more tactically regarding marketing investment levels on future calls. I'll turn it over to Florence, our Interim CFO, for additional color to our financial results, and I'll return to wrap the big picture.

Florence Neubauer, Interim CFO

Thank you, Amy. Good morning and thanks for joining the call today. I will now provide an overview of our third quarter financial results, discuss guidance, and then pass it back to Amy for final remarks. As mentioned earlier, in the third quarter of 2023, we delivered net sales of $43.1 million, down 2.6% versus the same time prior year. This was caused by the impact of the strong implementation of our price increase in the second quarter coupled with our price increase from August 2022, which delivered a positive impact of $1.5 million, offset by declining volumes of 8.2% or $2.7 million, reflecting supply chain challenges, resulting in lower order fulfillment. Gross margin remained strong at 45.4%, up 2.1 percentage points over the same quarter a year ago, due to the impact of price increases and favorable cost of goods sold from improved rates and product mix. This was partially offset by higher inventory losses related to the exit of our legacy warehouses and brand refresh rollout. Selling and marketing expenses increased by 58.4% to $20.5 million, entirely due to selling expenses, leaving our immediate supply chain remediation actions, freight to customer, and site transfer costs temporarily elevated as expected. Our increased production levels also impacted our warehousing costs, with higher income in handling charges and additional fees. G&A expenses were $8.3 million or 19.1% of net sales, which is essentially flat compared to $8.3 million or 18.8% of net sales over the same period last year. Stock-based compensation and non-cash expense was $1.9 million compared to $6.8 million in the same period last year. Net loss was $11.3 million compared to a net loss of $9.2 million last year, a decline of $2.1 million or 22.3%, primarily driven by supply chain logistics challenges. Loss per share was $0.16 per diluted share to Zevia's Class A common shareholders, flat with last year. Adjusted EBITDA loss was $9.1 million compared to an adjusted EBITDA loss of $2.1 million. Our balance sheet remains healthy with $38.5 million in cash and cash equivalents and no outstanding debt as of the end of the third quarter 2023, as well as an unused credit line of $20 million. Turning to guidance, we are narrowing our full year annual net sales guidance and reaffirming the high end of the range expecting to be between $165 million and $168 million with the fourth quarter projections in the range of $36 million to $39 million, equivalent to an increase of 2% to 10% over the prior year respectively. We do not provide guidance on adjusted EBITDA, but we do expect costs associated with the supply chain stabilization and transformation to continue to negatively impact us in the fourth quarter, but to a lesser extent versus the third quarter as we complete the corrective action. Turning back the call to Amy.

Amy Taylor, CEO

Thank you, Florence. I'll close up here with a few comments before turning it over to Q&A. Zevia has a very healthy brand and business model and continues to experience robust consumer demand. We are realizing price in the market with strong consumer acceptance and delivering improving gross margins. We are quickly returning to growth in legacy retail partners and winning distribution by category and channel. We look forward to sharing more on our next call after Q4 and looking ahead to 2024. Our number one priority in the meantime is to continue to stabilize and improve our supply chain, returning it to our best-in-class service levels and putting the network transformation back on track so that it supports our long-term objective of driving sustainable and profitable growth. So, this concludes our prepared remarks. We will now open the call to your questions.

Bonnie Herzog, Analyst

Hi. Thank you. Good morning.

Amy Taylor, CEO

Good morning, Bonnie.

Bonnie Herzog, Analyst

My first question has to do with your supply chain disruption. I guess I was hoping for just a little bit more color on the progress you've made to improve this. I'd be curious to hear how things are trending relative to your internal expectations. And then, you mentioned you're seeing progress in improved on-time and in-full deliveries in the quarter, so is there a way to quantify that? And then, curious if things have possibly accelerated in October and so far in November related to that?

Amy Taylor, CEO

Sure, thanks, Bonnie. So the supply chain fixes, in short, required organizational changes, supply chain transformation adaptations, and then investments in inventory and thus warehouse and transfer. While we don't provide exact fill rates, we can give a sense of progression. Our low point from a service perspective was in July, and in recent weeks, we've reflected material improvement, specifically in approaching service levels from Q1 at the start of this transformation. We are seeing improvement literally week-over-week. So, we anticipate being back at what I'll call optimal service levels by year-end. That's in sight right now. We're hearing positive feedback from retail partners to confirm what we see on our side. In parallel, we're able to return to optimal promotional levels to support the return to growth and, of course, the protection of market share growth in November.

Bonnie Herzog, Analyst

Okay. That's encouraging. And then my second question, I just wanted to ask about your presence at the NACS show this year. It's the first time you were there and I saw you. So you guys had a great boost. I was just hoping to hear any early read on some of the meetings that you had with a lot of the retailers and just the opportunity you still see for getting into the C-store channel next year, possibly with spring shelf resets. And then the second part of that, Amy, would just be maybe an update on progress you're making with DSD partners. I know you guys signed new advantage solutions, but any more progress with signing up more DSD partners. Thanks.

Amy Taylor, CEO

Perfect. Yes, you know the story well, Bonnie. We were excited about having a presence at NACS this year for the first time ever and made a lot of very relevant introductions there. We also had the opportunity to trial products. I think there's always a positive surprise. The consumer or retail actually tries Zevia, including our new taste cola, which we're excited about, and really great tasting energy drinks. We sell on taste and clean ingredients as points of differentiation within the better-for-you space. In terms of speaking with retailers in convenience, it's too early to provide quantities or timelines on our rollout, but there's been very good receptivity for test partners. We can share more on the next call. The target is indeed spring reset, and we've had strong interest there and are optimistic about being able to operationalize a couple of different test partners. So it scales to the future. And then, of course, why we're ready for that, as you mentioned, we've enlisted a third-party sales agency, which helps with not only selling horsepower but also enhancing merchandising. So that's a step in the right direction to support our enhanced route to market and specifically convenience readiness. We don't have any specific DSD partnership progress to share today, but we've made steps in the right direction. We're far more ready now for convenience than we were just months ago.

Bonnie Herzog, Analyst

All right. Sounds great. Thank you.

Amy Taylor, CEO

Thanks, Bonnie.

Jim Salera, Analyst

Yes, thanks for taking my question.

Amy Taylor, CEO

Hello, Jim. Hi.

Jim Salera, Analyst

Good morning. I wanted to take a closer look at household penetration. I understand you mentioned in the slides that it's mostly temporary because of supply chain issues. Could you provide some context on what happens if a consumer who previously bought Zevia can't find the product? Do they switch to another diet soda, or does it just get dropped from their shopping list? Additionally, when the product is back on the shelves, do customers return to it automatically, or is there a need for advertising or promotions to encourage them to come back to the brand?

Amy Taylor, CEO

Okay, Jim, I very much understand your question. It's one of loyalty, so thank you for the question. When we do see strain in our household penetration figure in terms of the size of the user base, that is a bit of a misnomer as an indicator of interruption to the panel data because of out of stocks. Where you can measure health is, of course, our continued double-digit growth in velocities, the sales per point of distribution and for our existing consumer base, we saw a material increase in dollar spend per household and dollars spent per trip with sustained purchase frequency. So that tells us the base is healthy. To answer your question: when folks can't find Zevia on the shelf, and this is why we and retailers are both passionately committed to getting out of stocks eliminated, they generally build spend dollars. So that could, for a retailer, be a lost sale. We do see some leakage back into other zero-sugar beverages, but rarely do retailers fully replace the higher spend that comes from the Zevia shopper. We believe, even in October, we can provide the data to back it up. That when we are back in stock the Zevia shopper goes back to buying the Zevia flavors that they love. We are able to continue to drive trial on new users faster, especially now that we're starting to ramp cold singles distribution. Brand loyalty for Zevia is a big part of our quick recovery in the way that you're asking. It also means that we don't have to spend, per se, to get shoppers back. The one caveat I'll mention is that, of course, in e-commerce, if you have declined in e-commerce, we need to fill that back up, so some investment is necessary to bolster top of mind within that shopping environment. But in retail, let's say regaining those sales is quite straightforward as we simply fix customer fulfillment. Hopefully, that is clear.

Jim Salera, Analyst

Yeah, no, that's all very helpful color. And then maybe as a follow-up, as you guys expand the soda and the tea offerings, I've seen tea at wholesale clubs near me. Are a lot of those different consumers like soda consumers versus tea consumers? Do they find the brand because they already know soda, and then they also drink tea, or is it a new consumer coming to the tea or coming to the energy that might not be aware of Zevia soda?

Amy Taylor, CEO

Sure. Tea, in particular, is incremental. It's a very different shopper and different consumer. We see a lot of interaction between soda and energy. It is largely an existing soda consumer also purchasing Zevia energy drinks. The reason this is relevant is that we have the opportunity to bring a more health-conscious shopper to the energy category for the first time. Those incremental purchases are in dollars, but potentially consist of some of the same shoppers that already know and trust the Zevia brand. Tea tends to be with a new shopper, while energy tends to involve the Zevia shopper that spends more now on the brand and enters energy drinks for the first time.

Jim Salera, Analyst

Great. That's all helpful. I'll hop back in the queue. Thanks, guys.

Amy Taylor, CEO

Thanks, Jim.

Chris Carey, Analyst

Good morning. Could you provide some insight into margin visibility? There has been significant focus on revenue, but this marks the fourth consecutive quarter of gross margin expansion. This has been a key point of focus over the past couple of years. Can you share your thoughts on your ability to forecast gross margins and how you anticipate things will develop in the medium term?

Amy Taylor, CEO

Sure. We’re pleased that we continue to improve year-over-year our gross margins, and central to that improvement is sustained improved pricing, strengthened pricing as well as more effective spending on promotion and containment of COGS. We've not guided on gross margin but we've talked in the past about gross margins in the mid-40s, and we continue to realize those expectations. We would expect the same in the next quarter. Our plans for the future continue to march towards those drivers of gross margin improvement with strengthening in the top line through price and promotion. We don't have specific plans for price increases, but we believe there's room there as well as continued optimization of promotions and driving COGS down overall.

Chris Carey, Analyst

Is there anything that you're doing that perhaps is benefiting gross margin that once you are back to growing again, you'd need to reinvest? Or are we getting to a level of gross margin stability that you can keep making progress, if that makes sense?

Amy Taylor, CEO

It does. I think we're getting to a level of gross margin stability. We're seeing the impact of our challenges in our supply chain transformation on the adjusted EBITDA line that is outsized in Q3, far less so in Q4, as we normalize inventory levels and thus the impact that inventory has on warehouse and transfer. Those impacts will show up in adjusted EBITDA, but I think what you're indicating here is that we see gross margin stability. There is further upside to that, and it can continue to improve going forward.

Dana Telsey, Analyst

Hi, good morning, everyone. As you're thinking about the changes that you've made, whether it's in the size of the cans and what's happening with aluminum pricing, how do you see the puts and takes on expenses going forward? And what are you seeing overall from your different retail partners in driving the business? Thank you.

Amy Taylor, CEO

Sure. I think we're pleased to see input costs such as aluminum stable to improving, and so COGS showed up in a pretty stable manner for us. We don't put a circle around that as a particular risk going forward. I think in terms of controlling the controllables, we continue to optimize our portfolio, meaning what we sell and then our price pack architecture, meaning what we sell at what price and in what channel. We see a lot of upside there in the immediate and long-term future. In the past, as a new and entrepreneurial company, we sold all products everywhere to learn what would sell. Now going forward, we're really matching the package to the shopper in the channel and seeking to optimize price, indicating the upside in gross margins we were discussing earlier. We don’t anticipate a lot of surprises on the cost side going forward. We feel confident around stability as well as future upside in gross margins because of that, and we believe there's still room to optimize promotions and potential in price across the board. Does that answer your question, Dana?

Dana Telsey, Analyst

Yes, it does. Thank you. And then, on the retail partners on what you're seeing?

Amy Taylor, CEO

Say a little more, Dana.

Dana Telsey, Analyst

On the retail partners, what you're seeing, how is it differing in order patterns, shelf placement, anything to note there?

Amy Taylor, CEO

Sure. Okay. Thank you. Yeah. I mentioned exciting triple-digit growth in one of the major players in mass. We're really excited about that as an indicator of the brand's opportunity in what I'll call the mainstream. So outside of our legacy partners of natural, we continue to have growth opportunities within natural. Again, as we optimize our portfolio, drive singles availability and bring new flavors, all of those are performing well in legacy partners. Our greatest upside is in mainstream retailers, so mass, major grocery, and, of course, as discussed earlier, convenience. Just a quick health check on major grocery stores, in October we saw growth in both major national grocery chains and in one of them a 22% growth. When we're selling the right packs at the right price in major grocery stores, we continue to grow, and there's further upside as we expand into more effective parts of the store and as we expand cold availability. We see the biggest upside in what I'll call mainstream channels, but I’ll emphasize that we still have growth opportunities through innovation and single distribution in our legacy channels like natural.

Andrew Strelzik, Analyst

Okay. Hi. This is Daniel Gold on for Strelzik. Thanks for taking my question.

Florence Neubauer, Interim CFO

Good morning.

Daniel Gold, Analyst

How much incremental expenses associated with the exiting of legacy warehouses are there remaining cost implications as we flow into next year?

Florence Neubauer, Interim CFO

Thank you for your question, Andrew. Much of the associated cost with exiting the legacy warehouses occurred in the third quarter. You will see that warehouse storage costs as well as handling will diminish as we're bringing the inventory levels down and we also reduce our production levels. So you will observe a decrease in freight-in to our warehouses.

Amy Taylor, CEO

Yeah. Thanks, Florence. I'll quantify that. Supply chain costs drove the majority of our adjusted EBITDA loss in the quarter, so specifically a good two-thirds of our negative number in the adjusted EBITDA column was a result of supply chain fixes.

Daniel Gold, Analyst

Got it. That's helpful. Thank you. And on a separate note, has your relationship with the retailers been impacted by lower fulfillment levels? Or has that really not been impacted since the velocity growth is so strong?

Amy Taylor, CEO

I think it's safe to say we don't come out of the supply chain challenge without consequences. This is a focus of our organization; to fix the supply chain as fast as possible while maintaining current future opportunities with our retailers. Given our strong legacy service track record through COVID and through the aluminum can crisis, and then with extra effort to provide our retail partners with transparency throughout our supply chain transition, we're pleased that we've maintained retailer trust. We've kept pace with our broader strategic initiatives as a result. While the road has been bumpy, our extra levels of transparency have protected our broader strategic initiatives with our partners.

Daniel Gold, Analyst

That's helpful. Thank you.

Alton Stump, Analyst

Great. Thank you. Good morning. I appreciate you taking my question. Just wanted to go back to Bonnie's question on the supply chain disruption, and understanding it's very difficult in any case to predict the exact timing of it, but it sounds like you're pretty confident that by the end of the year you'll be through this. So let's move into next year, if that's the case, are you confident that we'll see at that point sell-through demand for your products pretty much matching up with shipments, or is this something that will still bleed into the early part of next year?

Amy Taylor, CEO

That's a great question. We are very confident in our expectation that the supply chain will not only be stable in 2024, but become more efficient. When we think about inventory levels, we'll sell through those and start to get to a closer match between shipments and scans toward the end of the year and early next year. Scans are lumpy at the moment. The most stable figures are double-digit velocity growth, which is sales per point of distribution. It's our perspective that scan data will start to reflect brand health in the coming months—maybe not exactly week-by-week—as we fix out-of-stocks on shelf as the fulfillment levels return to the optimum levels that we've had in the past. More to come on that after our Q4 call to give an outlook on 2024. By that point, if you'll see greater stability in the relationship between shipments and scans.

Alton Stump, Analyst

Understood. Thanks for that color. Just as a quick follow-up on the cost front, your question touched on this already, but it sounds like it's a pretty benign commodity cost environment, no one's packaging or otherwise heading into next year; you know, is that fair to say?

Amy Taylor, CEO

Yes, I do think so. Obviously, everyone has an eye on inflation and there are some unknowns, but for the most part we are in a pretty stable environment with our input costs.

Alton Stump, Analyst

Got it. Thanks, Amy. I'll hop back in the queue.

Amy Taylor, CEO

Thanks, Alton. Thank you Operator, and thank you everyone for dialing in this morning. We just wanted to quickly say that we appreciate your time and attention. The Zevia brand is very healthy. The business model is strong and continues to experience robust demand, and we're pleased to see our supply chain course correction efforts returning to optimum customer fulfillment levels. We'll realize price in the market for delivering improved gross margins, and we're quickly returning to growth this month. We look forward to sharing an exciting 2024 on our next call. So, wish you all a good Tuesday. Thank you.

Operator, Operator

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