Good afternoon, and welcome to the Beyond Meat 2024 Second Quarter Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Paul Sheppard, Vice President, FP&A, and Investor Relations. Please go ahead.

Thank you. Hello everyone, and thank you for your participation on today's call. Joining me are Ethan Brown, Founder, President, and Chief Executive Officer; and Lubi Kutua, Chief Financial Officer and Treasurer. By now, everyone should have access to our second quarter 2024 earnings press release filed today after market close. This document is available in the Investor Relations section of Beyond Meat's website at www.beyondmeat.com. Before we begin, please note that all the information presented today is unaudited and that 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 beliefs, and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Forward-looking statements in our earnings release, along with the comments on this call are made only as of today and will not be updated as actual events unfold. We refer you to today's press release, our quarterly reports on Form 10-Q for the quarter ended June 29, 2024, to be filed with the SEC and our annual report on Form 10-K for the fiscal year ended December 31, 2023, along with 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. Please also note that on today's call, management may reference adjusted EBITDA, adjusted loss from operations, and adjusted net loss, which are non-GAAP financial measures. While we believe these non-GAAP financial measures provide useful information for investors, any reference to this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Please refer to today's press release for a reconciliation of these non-GAAP financial measures to their most comparable GAAP measures. And with that, I would now like to turn the call over to Ethan Brown.

Thank you, Paul, and good afternoon, everyone. I am pleased to report a strong quarter of progress against our 2024 plan, including exceeding our Q2 revenue objective, continued reduction in operating expenses and cash consumption, and our best quarterly gross margin since Q3 2021. Today, I'll provide more detail around this progress in the context of each of our five key objectives for 2024, including the launch of Beyond IV as a defining pillar for Beyond Meat's center-of-the-plate role in the global health and wellness trend. But first, a brief overview of our second quarter financial results. Net revenues of $93.2 million exceeded the top end of our $85 million to $90 million guidance range but still reflected an 8.8% decline from the year-ago period. As discussed on prior calls, during the second quarter 2024, we scaled back on promotional trade discounts and together with the initial appearance of price increases on certain products in the US, this resulted in a 6.1% increase in our net revenue per pound compared to the year-ago period, including a 20.5% increase in our US retail channel net revenue per pound. Gross margin rose to 14.7%, substantially higher than the 2.2% outcome in the same quarter last year and the 4.9% level achieved in the first quarter of this year. Importantly, we expect to see further gross margin progress across the balance of the year, reflecting the combined impact of more fully distributed pricing adjustments, continued moderation of promotional spending, and ongoing COGS improvements as we consolidate our network and continue on our lean management journey. Operating expenses in the second quarter fell to $47.6 million as we continued to pursue efficiencies throughout the organization, marking a $8.4 million reduction year-over-year, a $2 million reduction compared to the first quarter of this year after…

Thank you, Ethan, and good afternoon everyone. I'll begin by reviewing our second quarter financial results before providing an update on our 2024 outlook. Net revenues decreased 8.8% to $93.2 million in the second quarter of 2024, compared to $102.1 million in the year-ago period. We were, however, pleased to see net revenues come in above our guidance range for the quarter, and we note that the rate of decline was much lower than the 18% year-on-year decline we saw in the first quarter of 2024. This decrease in net revenues for the second quarter was primarily driven by a 14% decrease in volume of products sold, partially offset by a 6.1% increase in net revenue per pound. The increase in net revenue per pound was primarily driven by lower trade discounts, pricing changes, and changes in product sales mix, partially offset by unfavorable changes in foreign currency exchange rates. Breaking this down by channel, our US retail channel net revenues decreased 7.5% to $44.9 million in the second quarter of 2024 compared to $48.5 million in the year-ago period. Volume of products sold decreased 23.2%, primarily reflecting ongoing demand softness in the plant-based meat category and the lapping of substantial promotional sales to a club channel customer in the year-ago period. However, we were pleased to see a 20.5% increase in net revenue per pound, primarily resulting from lower trade discounts, changes in product sales mix, and the early impact from recent pricing action. Regarding the latter, although it is still early days, we are encouraged by the initial read on consumer price elasticity, which appear to be generally in line with our expectations. US foodservice channel net revenues decreased 18.9% to $10.3 million in the second quarter of 2024 compared to $12.8 million in the year-ago period. Volume…

[Operator Instructions] The first question is from Ben Theurer with Barclays. Please go ahead.

Good afternoon, Ethan, Lubi. Thanks for taking my question. So, Ethan, to begin with, maybe as it comes out to the rollout of Beyond 4.0, the platform, and then obviously the associated price increases you've been putting through, and we're seeing that already nicely as you've highlighted on a per-pound basis. Two things around this. One, can you update us on how much of your portfolio has seen this upgrade and the new pricing already and how much is still yet to come over the next couple of months and/or quarters? And then what has consumer perception maybe been just around the product and how is the feel associated with the price point, which obviously is a higher one than prior, that would be like kind of like my first general question, and I have a quick one for Lubi.

Okay, great. So I'll go ahead and answer the first point first on what percentage of the portfolio has undergone renovation upgrade. And if you look at what we launched so far, you have the Beyond Burger, you have Beyond Beef, and then you have Beyond Dinner Sausage. All of those now have the new formula, and you have the associated endorsements and things of that nature. And that new formula is the new proteins, the new fat systems, et cetera. And then the additional application there is the Sun Sausage, which has even lower saturated fat levels. We do expect to continue to migrate the portfolio in the direction of those types of things. But for now, those are the major changes we've made. On the price increase, we've generally been pleased, as Lubi mentioned, the elasticity's come in largely where we expected. But I think the other piece to note is the significant reduction in promotional trade. That has helped us a lot on margin, and we're very pleased to see the portfolio sustain that. If you look at the consumer reception, which is for your third question, we do have data which is encouraging. If you strip away the promotional activity I talked about, which kind of tends to distort the year-over-year numbers, and just look at the base, and then you look at some of our larger accounts, you do see velocity for Beyond IV items, particularly beef and the burger, which is where we have the most data. You're seeing growth in certain accounts that are significant national grocer accounts and then seeing stabilization in others. So we're quite pleased with that given that we instituted a significant price increase, pulled back on trade. And so we think that is evidence that the product is doing well and the messaging is resonating. Also along those lines, if you look at the chatter about the product both in the medical community and in the nutrition and registered dietitian community, it is extremely positive. It's not positive in the sense of, this doesn't taste very good but it's very healthy, it's really a -- to me, something that our research and development and operations team needs to be extremely proud of. They not only improved the nutritional profile of those products, which were already strong, as I mentioned, but they also, from an organoleptic perspective, improved the products. And so, and we're seeing that in their reaction, whether on social media, whether on media coverage. So overall, we're very pleased with how that launch is going, extremely early days. We just announced it right before Memorial Day, and we continue to see some of it on the dinner sausage side flow through. So overall, quite pleased. On the price increase, I'll hand it over to Lubi to handle that.

Yeah, Ben, I think, did you have a second part of the question? Was it specific to the price increase?

No, the price -- that was actually covered by Ethan. What I was wondering, you tend to always give a little bit of more of a near-term outlook and not only for the full year. So anything you can maybe share on your initial thoughts as to the third quarter now as we start getting into easier comps from last year, fair to assume that we're going to get into growth and continued margin expansion also on a sequential basis, or how should we think about the third quarter, maybe in context to the second quarter, as that one came already better than what you initially expected.

Yeah, sure. So I think as Ethan mentioned in his prepared remarks, we do expect to see sequential improvement in our gross margins in the second half of the year. And our guidance would imply that as well. You're correct. In recent quarters, we have provided some directional color for the current quarter. We're not doing this -- that for Q3 specifically, but what I'll say is, if you think about just the seasonality of our business, right, typically we tend to generate most of our revenues or a bigger portion of our revenues in the second and third quarters. And so as you're thinking about Q3 versus Q4, I would just keep that in mind and then from an operating expense perspective, if you look at our guidance, right, what it would imply obviously for the back half of the year would be a lower rate of operating expenses relative to the first half.

Okay, perfect. Thank you very much. I’ll pass it on.

Sure.

The next question is from Adam Samuelson with Goldman Sachs. Please go ahead.

Yes, thank you. Good afternoon everyone.

Hey, Adam.

So I guess maybe first just thinking about kind of that tension between kind of the price increases and the clear desire to drive gross margins, but also kind of thinking about the unit cost reductions and kind of the ability to drive that on a lower volume base. Can you help us think about the improvement in gross margins in the second half and how much we should be thinking really is increment incremental price increases or the flow through of effectuated price increases and mix versus actual reductions in unit costs from here? I appreciate you're trying to simplify the business, but the volume base is also shrinking, so I'm trying to just balance those two figures. Thank you.

Sure, do you want me -- I can take that.

Sorry, Lubi, I'll grab it and hand it over to you. So, I think if you look at the cadence of the price increase, we began it in certain retailers and certain products beginning in April, phased it in a little bit more in May. And so this third and fourth quarter should be the sort of fuller distribution. And so we do expect some uplift from that. And then, of course, trade reduction will continue throughout the back half. So we'll also expect a good [guide] (ph) from that. But I don't want to underestimate, and I think this is where your question is, the significant progress that we're making on cost of goods, and that is coming from several different areas. Probably first and foremost is the internalization of our network. That decision was taken for a variety of reasons, but one of the main benefits is that it's cut down on tolling fees and underutilization fees that have been some of the drag on the business. It's also allowing for significant savings in logistics as we move forward, as well as much better overhead utilization and absorption -- overhead absorption. So, we continue to think that those will drive a lower cost basis across the products for the balance of the year. Some other things that are kind of knickknacks, the inventory reserves coming down, and then reduced depreciation on a smaller asset base given the write-off we did at the end of last year. So those things all combine to have, I think, a favorable view on the top line and then some significant progress as we begin to wring costs out of the system. And I think the last piece is more -- almost philosophical. We are bought into, as I've mentioned many times over the last sort of 18 months, the lean management practice and principles. And so the established value streams, looking at our business that way and the horizontal flow of value across it has allowed us to continue to get more efficient. And so I think we're realizing cost reduction and savings and focus even on things like materials through that transition to a lean management structure. But, Lubi, anything you want to add to that?

No, I think you've covered it pretty well, Ethan. I think what I would just say is that if you look at the results for the second quarter, yes, we did begin to see some of the benefits from the recent price increases. But as Ethan mentioned, we should get -- as that price increase starts to impact a greater portion of the overall business, we should have more of a benefit from that. If you look at our net revenue per pound this quarter in Q2 in our US retail business, that was up 20.5%. I think, one thing that's notable there is that most of that was not driven actually by simple -- by pricing, strict list price increases. It was driven by a reduction in the promotional spending relative to a year ago, and there was also some benefits from mix. And so the impact of pricing was not yet impacting that in a major way. And so we'll benefit from more of that as we go through the year. And then as Ethan mentioned, there's other things within cost of goods sold as well, where we should -- other areas where we should see some efficiencies. As Ethan mentioned, there were some temporarily high labor costs and things like that as we were bringing production volume in-house. And so the back half improvement that we expect in gross margins being driven both by the top line, better pricing as well as improvement in COGS.

Okay that's helpful. And maybe quick follow-up with the second half. I think take the revenue, the gross profit, the OpEx and the CapEx guidance, and I wrote it all together, it would still imply kind of negative free cash flow, maybe slightly smaller cash usage than you saw in the first half of the year, depending on exactly which direction working capital trends, I guess, but that includes kind of some of the pricing and the gross margin actions that you're kind of alluding to. So, from where we are in the second half of the year, what is the -- how do we think about the pathway to actually getting to a free cash flow, a positive outcome, and kind of when do you think it's possible that that could be achieved?

I can take that. I mean, we have not -- so I think it's absolutely true that our top priority as an organization, as a management team is, we are trying to drive this business to cash flow positive operations as quickly as possible. We have not said that that will occur this year. And as you know, we typically we don't provide guidance in terms of expected cash consumption during the year. But look, as we've said on previous calls, right, that we are working, we continue to work on bolstering our balance sheet. That's a top priority for us. But we're going to continue to do the things that you're starting to see the results of in this quarter, which is continue to reduce operating expenses, continue to drive gross margin higher. I think the team has done a really good job in terms of our working capital efficiency. You can see our CapEx spending has been pretty low as well. So all of those things will benefit us, but we're certainly not calling for getting to cash flow positive in the back half of this year.

I appreciate that color. I'll pass it on. Thanks.

The next question is from Robert Moskow with TD Cowen. Please go ahead.

Hi, thanks. I had a question about how retailers in the US are viewing the plant-based category. I mean, you said yourself that the category still remains weak. But I was wondering, like, how are retailers responding to that? Are they reducing shelf space for the category and reaction? Or is it leading to a shakeout of the smaller players? And could you actually benefit from that as a result? Thanks.

Yeah, thanks, Rob. Appreciate it. So I think the answer is a little bit of both. Just to broaden our context, as I've said many times, we view this, although we thought initially we would escape it, we view this as just part of the process of disruption. There's going to be pushback, there's going to be a lull, there's going to be a shakeout, and that is obviously happening. My job is to strengthen our business throughout that and emerge stronger as a result and I think we're doing that. The retailers are responding to this in a number of different ways. Some are just staying the course, some are shifting products, placements between fresh and frozen, and others are executing pressure on some of the lower performing players. So in that sense, I think we do benefit as beyond and impossible emerge as the two main players. So I think it's all of the above. But I also just want to caution, I continue to view this over a much longer lens. I think what you're seeing with the Beyond IV portfolio is the main thing that destabilized this category has been the misperception around health. Obviously, there have been some pricing issues and things of that nature, which in a recessionary or difficult economic environment are always more challenging. But we are hammering away at the single most important issue in our view that is required to get the entire category growing again. The early results we're seeing from Beyond IV suggest that we're on to the right strategy. And I have no doubt that as more and more consumers become educated, not only from us, but from nutritionists who are backing in, [indiscernible], dieticians, doctors, national health organizations, et cetera, that it'll become, I wouldn't say it's a stubborn few, but it'll become fewer and fewer people that are misled around the tremendous benefits they can bring to themselves and to their families by changing out the protein that's kind of in the plate and using the odd to improve their health. So the ability of our team to create products that not only deliver on taste but really deliver on this health message, I think, can't be overstated. Over time, we'll continue to address price and in some regards if you look at certain products with certain customers in certain regions, we have already achieved an element of price parity. But that right now is not the most important factor to consider. It really is around cleaning the well a bit and making sure that the consumers understand the power of these products to impact the health of their lives and their loved ones.

Okay, just a quick follow-up. Maybe I missed it, but how much was the price increase that you took, that you mentioned in April, not including the trade spend variations, and how did it influence 2Q?

I don't think we give the exact blended amounts, but if you want to add what some of the results have been, I don't think I've ever shared the full blended amount.

Yeah, no, that's right, Rob. You didn't miss it. We didn't say how much the price increase was. But I think you can probably get a sense if you look at consumer takeaway data. But again, if you look at the change in that revenue per pound in our US retail channel, like I said, pricing was actually not the most significant driver of that. It was -- the vast majority of that was related to the reduction in trade spend and then there was some benefit from mix which was also a bigger driver than just pricing alone.

But there was a price increase. So is it showing up more in third quarter because you're in more retailers with the price increase in third? I'm just a little unclear like, how to dimensionalize it.

Yeah, that would be our expectation, Rob, is that it would show up more in the third and fourth quarter because as Ethan mentioned, right, there was -- the price increase was implemented in waves. The first wave really began to happen in early April and the second wave in May. And so when you look at the third and fourth quarter, we should benefit from a full quarter of more widely distributed price increases.

Okay. Thank you very much.

Sure.

The next question is from Alexia Howard with Bernstein. Please go ahead.

Good evening, everyone.

Hey, there.

So, can I ask about your market share trends in Europe? We obviously don't have visibility into that. As I think about the US market versus the European market, it seems as though the US has been troubled as a category because of the misinformation campaign, but the category strength is actually quite reasonably robust in Europe. However, in terms of the competitive dynamics, it seems as though the European market is more fragmented, perhaps more competitive. So I'm just wondering if you could speak a little bit to what you're seeing in terms of market share trends in the retail channel and potentially in foodservice and how you see things trending from here.

Yeah, so I can take that initially and then hand it over to Lubi. It’s not only Europe, but I think if you look at Canada, we do like what we're seeing, for example, in Canada with respect to the trends for Beyond Meat in retail, where we're seeing growth and seeing some encouraging signs of broader consumer acceptance for our brand there. If you go over to Europe, it is, as you've said, it's highly fragmented, so it's hard to draw definitive conclusions about the entire geography. But I will say that if you look, for example, at one of our largest strategics, we continue to do a really nice book of business with them. And I think they're pleased with some of the launches we've had. And I think you'll see some continued activity there. And so on the strategic side, we like what we're seeing. Retail, there's so many different economies, there's just different factors considered in terms of getting into the refrigerated section and things of that nature. I'm very bullish on Germany. I think it's a terrific plant-based market. It's, as I've mentioned before, one of the top in the world. And so I think you'll see us be aggressive there. But drawing a conclusion around overall market share for the entire geography of Europe, which is difficult given the fragmentation. Lubi, I don't know if you have any further details.

Yeah, I would just say, as it relates to the retail channel in the EU, the way we think about growth in that particular channel and region is much less about market share gains and much more about distribution expansion. So, we're starting from a very small base in the EU. I mean, generally speaking, if you look at our market shares across our key European markets there, and call it in the low single-digit percentages, because we just don't have that large of a presence out in Europe at the moment. So, it's really about expanding our distribution and which is why we were so focused on this initiative to make sure that our shelf life for our fresh products was where it needed to be. And so we are -- we expect we'll start to see some of the benefits from this in the back half of this year to start seeing more distribution expansion within the EU and in particular, as Ethan mentioned, the German market is one that we are very excited about. The vast majority of that entire market, I think it's over 95% of the category, is in the refrigerated portion of the overall category. And up until just recently, we essentially had no access to the refrigerated aisle. And so it's much more about that. I would say just sort of generally speaking, when we look at the European market, our core products, the burger and mince products over there continue to perform well. I think we've struggled a little bit more in the chicken portfolio in the EU. That's where we do see the very highly fragmented market over there. There's a large private label presence in the EU as you know. And so I think the trends certainly in the chicken portion of our portfolio in the EU have been softer than we would have anticipated, but we’re still -- we remain pleased with what we're seeing on the core side. And like I said, it really comes down to expanding distribution.

Great. Thank you very much. I'll pass it on.

Sure.

[Operator Instructions] The next question is from Peter Saleh with BTIG. Please go ahead.

Great. Thanks. Thanks for taking the question. Ethan, I was hoping you could talk a little bit about the competition, particularly in the US. How do you see the health of the competitors right now? And what exactly do you see them doing as you guys are reducing discounts and raising price? Are they doing the same? Are they doing something different? Just trying to understand the dynamics right now that you're seeing with your competitors.

Thanks for the question. Yeah, I don't see a counter move yet on the competitive side. I think we're all trying to do the same thing, which is move from one phase of this disruption to another which is sustainable and profitable operations. So I don't anticipate any significant progressive moves and reaction to us or prices as well.

Understood. And then just curious, what else can you guys do in this environment to really encourage trial or drive trial? Because that seems like to be another big obstacle at this point in time.

So the good news is, I think, when there's a debate in the public sphere about pros and cons or something, right? And at some point, one side of the debate goes way too far. You tend to get people to come in and work on your behalf just because it's the right thing to do. And we're seeing that now where registered dieticians, nutritionists, doctors are saying, cut this stuff out. Like, these products can really help you achieve some of your goals from a, whether it's cardiovascular perspective, whatever the goal that may fit the portfolio that we have, we're starting to see people come out of woodwork and talk with their patients about it, talk with their followers about it, and that I think that could have earned media and engagement with consumers while it's potentially less splashy than some of the earlier stuff we did. Very meaningful because it is so consistent with that slope of enlightenment that they talk about in the Gartner Hype Cycle. It's where people are now finally beginning to understand, okay, wait a minute. I mean, the folks on the call, this can make a practical and real difference in your health. You can ignore it, you can get involved in the politics of it, or you can just try it. And we're hearing more and more people say, you know what, Beyond IV, I really like it, some sausage, what a neat concept, really healthy, I understand it. I'm benefiting from your products in X, Y, and Z, and that type of word of mouth is really important. And it's not all spontaneous, right? We are working within the health community to help get this message out. And you can see that with the various accreditations we have, you can see it with our broad and deep engagements in the nutrition and registered dietitian community. But it's not necessarily splashy. It's just effective.

Thank you very much.

The next question is from Ken Goldman with JPMorgan. Please go ahead.

Hi, thank you. Ethan, there's a lot of helpful conversation on this call about nutrition and the continued battle against misinformation, and I do appreciate that. I wanted to ask a little bit about how confident you are that the products taste and texture, whichever product you want to talk about, the burger, the sausage, whatever, is where you want it to be, because when I talk to investors and I talk to friends and family about the product and obviously it's a small sample size, I don't want to extrapolate too much, it's still about the taste, where people say, look, I know a hamburger isn't good for me, but I like eating it more than a Beyond Burger, more than your competitor's burgers. The taste isn't quite there, and the texture isn't quite there where they say, I really want to eat this. And food is still about what people want to eat more than what they have. I've asked this question before on the call, I know. So, I just wanted to get a sense of an update of kind of where you are in that, in the stage of the product. Thank you.

Yeah, no, thanks Ken, good question. So, we wouldn't launch something that we felt did not represent an increase in the organoleptic or sensory experience of the product. That's not something we'd want to do. And so in particular, the shift to this protein blend dealt with some of the off flavors. The use of avocado really helped with some of the flavor notes, as well as the health and a bunch of other changes were made. And so we are seeing that simultaneous consumer reaction that this, there's obviously going to be some when you change a formula and somebody would like the old formula, so you're going to get some criticism from that. But overall, the reaction has been strong and the tests we ran prior to launching indicated that this was an improvement on taste. And so, we don't need everybody to like the product. We need enough people to like it. And there are -- there's a very large addressable market, as I've talked about before, and not everyone does what they should do, I get that. But enough have a concern that, or at least a desire to be healthy, that they enjoy the taste of this and they enjoy the health benefits and so they're going for it. And I think it's really -- if you had to say, even [yours] (ph), the X amount of dollars and all you can spend it on is either taste or health, I'd absolutely go after health because that's the misperception. There's enough people who really like the taste of the Beyond Burger and have been doing this for about 15 years. I know when they don't, I know when they do. And enough people that really like the taste, particularly this latest portfolio, that getting clear with folks about the really transformative impacts can have on their health. Look, I mean, we know this, that the standard American diet, it'll give you potentially a statin, give you stints, give you some other things. And there's a way through that, which is diet. And putting Beyond at the center of the plate is a major enabler of a healthier diet. So that's the message that I get across.

Thank you for that, it's helpful. And then I wanted to ask a follow-up about pricing. And the reason that you're not taking price internationally, and I believe that's the case, please correct me if I'm wrong, that you don't have that scale, that you don't necessarily -- you're not in a place necessarily where you have the distribution yet. And to get distribution, you kind of want to maintain a price level that is maybe a little more appealing than it would be in a larger steady state environment or are there other factors to consider?

That's right. I mean, if you look at some of the stuff we're doing in Europe, for example, with large strategic partners, that does have much more of a pricing element to it, right? And so that's where you see us continuing to be aggressive in some of those things, but yeah, primarily the folks in the US.

Hey, Ken, maybe What I would add to that as well is, I believe it was two years ago at this point, we did take a very close look at our pricing relative to the competitive set, particularly in the EU. And we felt that the price gap, our products were at a premium, they remain at a premium today, but we felt that the price gap was a little bit too large. So we did kind of reset our pricing level relative to the competitive set out there. And so I certainly think what you mentioned is certainly one element, right? But I think we did a pretty deep dive a couple of years ago to make sure that we're sort of priced in a place that we believe makes sense for that market.

Great. Thank you so much.

Sure.

This concludes our question-and-answer session. I would like to turn the conference back over to Ethan Brown for any closing remarks.

Ethan, I think you're on mute.

Thanks, guys. I'll be very brief. I think -- just wanted to emphasize net revenue came in quite a bit higher than we were expecting. Margin is the best it's been since 2021. Cash is way down. Operating expenses are also down. Consolidation networking needs to go really well, continue to implement lean and drive cost out of the business. We're doing this while we're addressing what I think is the main issue around the category is restoring the health halo. Doing that not only on our own marketing, but also in association with a lot of very influential organizations and leaders in the health and wellness community. So a lot of really positive stuff going on and a pivotal year for us. I look forward to reporting the balance of the year and sharing with you guys how this strategy continues to unfold. But I appreciate the interest and look back soon.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.