Good day, ladies and gentlemen, and welcome to The Clorox Company Second Quarter Fiscal Year 2016 Earnings Release Conference Call. As a reminder, this call is being recorded. And I would now like to introduce your host for today's conference call, Mr. Steve Austenfeld, Vice President of Investor Relations for The Clorox Company. Mr. Austenfeld, you may begin your conference

Great. Thank you. Welcome, everyone, and thank you for joining Clorox's second quarter conference call. On the call with me today are Benno Dorer, Clorox's CEO; and Steve Robb, our Chief Financial Officer. We're broadcasting this call over the Internet and a replay of the call will be available for seven days at our website, thecloroxcompany.com. Let me remind you that, on today's call, we will refer to certain non-GAAP financial measures, including but not limited to, free cash flow, EBIT margin, debt to EBITDA, and economic profit. Management believes that providing insights on these measures enables investors to better understand and analyze our ongoing results of operations. Reconciliation with the most directly comparable financial measures, determined in accordance with GAAP, can be found in today's press release, this webcast, prepared remarks, or supplemental information available in the Financial Results area of our website, as well as in our filings with the SEC. In particular, it may be helpful to refer to tables located at the end of today's earnings release. Please recognize that today's discussion contains forward-looking statements. Actual results or outcomes could differ materially from management's expectations and plans. Please review our most recent 10-K filing with the SEC and our other SEC filings for a description of important factors that could cause results or outcomes to differ materially from management's expectations and plans. The company undertakes no obligation to publicly update or revise any forward-looking statements. So turning to our prepared remarks, I'll cover highlights on our second quarter business performance by segment, Steve Robb will then address our financial results and outlook for fiscal year 2016, and, finally, Benno will close with his perspective as well as open up the call for Q&A. So turning to our top line results, in the second quarter, volume grew…

Thank you, Steve, and hello, everyone. We are very pleased with our second quarter and first half results. We're especially pleased to have delivered 18% diluted EPS growth in Q2, driven by robust margin expansion. Clearly, our strategy is continuing to work and deliver strong results for our shareholders, and we remain committed to investing in the business to drive profitable growth. And we're certainly pleased to have raised our EPS outlook for the full year. And with that, let me share my perspective on our Q2 results, the effectiveness of our strategy, and our outlook for the second half. First, we delivered solid Q2 results. Our U.S. business achieved sales growth with gains across all business segments and our International business delivered healthy sales growth on a currency-neutral basis. Strong innovation, coupled with our increased demand-building investments translated to U.S. market share and category growth. Through our last reporting period, International also realized meaningful share growth. And we achieved healthy margin expansion of more than 200 basis points to deliver our highest second quarter gross margin in more than five years. Second, our 2020 Strategy is continuing to work and we'll continue leaning in to drive growth that is profitable and sustainable. In the U.S., we launched a number of new products late in Q2 and, while it's still early, we are encouraged by the initial consumer response. We have additional promising innovation launching across our portfolio in Q3. We continue to eliminate costs that are not meaningful to consumers and reinvest the savings into the business, such as, by leveraging technology to engage with consumers and drive household penetration. We are very pleased our domestic business is healthy. In International, where the profitability of our business remains challenged due to weakening foreign currencies, our team is relentlessly focused on the four pillars of our Go Lean strategy to improve profitability. And I feel very good about the future of our International business, recognizing the fundamental strength of our brands in many countries, which is reflected in increased market shares. So we feel very good about our strong second quarter and first half results. And while we're very pleased with our strong year-to-date performance, I want to emphasize that we focus on driving sustained performance over the long term, consistent with our 2020 Strategy. And given that long-term focus, as Steve Robb noted, we're considering investing in some supply chain-related projects that will feed our future cost savings pipeline and benefit margins in future years. We're also increasing our demand-building investments in the back half of this fiscal year to keep our brands healthy and growing in the face of anticipated competitive activity in selective categories. And I'm pleased that we're able to make these investments for the long-term health of the business while also raising our earnings outlook for the current fiscal year. With that, let's open it up for your questions.

Thank you, Mr. Dorer. We'll hear first from Jason English with Goldman Sachs. Jason English - Goldman Sachs & Co.: Hey. Good afternoon, folks. Thanks for letting me ask a question. You've been talking for a while now about the risk of stepped-up competitive aggression, the need to maybe dial back or reinvest some of your prior price increases. Based on the tenor of your comments, it sounds like that may be becoming a reality now with higher trade spend this quarter, the caution about an intense – more intense competitive activity in the back half and the need to reinvest. Is that a fair statement? And can you elaborate further in terms of the shape of the reinvestment? What do you expect the A&P to look like for the year? And as you step-up trade spend, is there a risk that the price line actually reverts into negative territory for the U.S.? Stephen M. Robb - Chief Financial Officer & Executive Vice President: So, Jason, this is Steve Robb. Let me lead off on this. So, first, to provide some color, just like we said at the end of the first quarter, we do anticipate stepping up the level of consumer demand-building investment pretty significantly in the second half. I think you're going to see a split of that investment, some is going to go into trade promotion spending and then I think some is going to go into advertising. To dimensionalize it, over the long-term, we talk about advertising being at this 9% to 10% of sales level. I think it's likely we'll be above 10% in the second half of the fiscal year. And a lot of this is to support our new products. One of the things we know is we've got these preferred products so…

And next we'll hear from Steve Powers with UBS.

Great. So actually just cleaning up on that, so should we be expecting more like 150 basis points to 200 basis points of incremental demand-building in the second half between trade and A&P because it doesn't feel like we've seen that 100 basis points that you had aimed for the full year so far through the first two quarters? Stephen M. Robb - Chief Financial Officer & Executive Vice President: Yeah, fair enough. In the first half of the fiscal, I would say most of the incremental consumer demand-building investment, which there has been some, is really been focused on trade spending and it's been a little bit less than a point. You will see a meaningful step-up in second half, both in advertising, as well as trade spending and that's actually one of the reasons why the margins in the second half, EBIT margins in particular, are expected to be down versus a year ago. Again, we think it's prudent to take some of these commodity cost tailwinds we're seeing and invest it right back into our business, as we mentioned in our opening comments.

Great. And then I guess a main question on Hidden Valley, actually if I could, and really dressings in general. I'm just curious to see if you're seeing any signs or anticipating any change in the competitive environment in that category specifically? Because I'm thinking on the one hand you've got your main, one of your main competitors who has just gone through the process of in-sourcing production, presumably with the aim of accelerating innovation. And on the other hand, you've got Heinz Kraft who's shown what they can do when they focus their trade spend muscle on a category like mustard. So how are you guys thinking about monitoring those dynamics? Or do you think I'm portraying the environment incorrectly? Thanks.

Yeah, Steve, this is Benno. Look, this is a competitive category and always has been a competitive category, but we continue to be optimistic about this and we're doing well in the marketplace. Our innovations are successful. As I'm thinking about Ranch with where we have noted previously that we've gained more than 10 share points behind our expansion in this important segment. And we continue to have innovation both in the core as well as in adjacent spaces in food coming as well. So we remain focused on investing in the health of the business. We're doing well in the marketplace and I'm not expecting at this point a fundamental change to our strategy, nor to the dynamics in the category.

Great. Thank you.

And our next question will come from Bill Schmitz with Deutsche Bank.

Hey guys, good morning. Hey, I'm trying to figure out your gross margin guidance for the year because it looks like it's going be flat in the back half, which doesn't make a lot of sense given you've kind of said, like, most of the front half spending was promotional and the back half is going to be advertising. So any color on that would be super helpful. And then I have a follow-up. Stephen M. Robb - Chief Financial Officer & Executive Vice President: Yeah sure, Bill. This is Steve Robb. Let me answer that question for you. So as you've said, gross margin in the first half is certainly up nicely. I think we're up a little over two full points which feels pretty good. We do anticipate, on a full-year basis, gross margin will be up about a point. Could be a little above that or a little below depending on how things play out. But it's likely to be flattish in the second half and the reason for that is a couple of fold. First, we're just starting to anniversary some tougher comps in gross margin. If you look at the second half of fiscal 2015, you'll see that our gross margin stepped up quite a bit, so we're certainly comping that and actually holding onto those gains feels pretty good. The second thing is we will be increasing our trade promotion spending and that's certainly going to weigh on the gross margin. And then finally, we took some pricing. We're starting to anniversary as we move through the second half some of the pricing benefits that have been flowing through gross margin in the first half of this year. And while we absolutely expect commodities will be a tailwind in the second half, it's going to be less of a tailwind than you saw in the first half, again because we're starting to comp some of the benefits we saw in the second half of fiscal 2015. So from our perspective, we think we've got very healthy gross margins. We certainly feel good about the trends. And importantly, we feel very good about the full year outlook for the EBIT margin that we've shared with you today.

Okay. Great. And then just Argentina and Canada, which we never talk about. What are they as a percentage of sales and profits? And how localized is production? Because obviously both of those currencies have gotten a little wonky recently. So I'm just trying to figure out what the transaction impact might be. Stephen M. Robb - Chief Financial Officer & Executive Vice President: Yeah, so let's take each one separately. First, starting with Argentina. Argentina represents about 4% of our sales. Now let me be clear. That was before the devaluation that we saw in December, which you might recall, we anticipated and built into our outlook. So I think on a go-forward basis, Argentina's probably something like 3% to 4% of our sales. Not the largest part of our business. And I would say just related to the devaluation of Argentina, we anticipated it. It's unfolding about as we had expected. I do think in the second half of the fiscal year and probably for calendar 2016, Argentina will weigh on results a bit following the devaluation. But generally, I feel pretty good about the long-term direction of the country, some of the changes they're making. And importantly, because we anticipated this, we have good plans, we're executing it well and things are coming in as expected. Canada, let's, Steve, do you want to take the Canadian question?

Yeah, Bill. Canada's also about 3% to 4% of our sales. Unlike Argentina, which doesn't have as much transaction exposure, there are some items that we sell in Canada that are manufactured in the U.S., so they do have some U.S. dollar exposure which will give us a little bit of a headwind on the gross margin line from a transaction exposure standpoint, but I wouldn't call it significant.

Okay. Great. And sorry I promise, just one more quick one. If I look at the Nielsen data, it doesn't seem like your promotional spending is ticking up if you look at percentage of sales on deal. So what's kind of missing based on what you guys said about the roughly 100 basis points of higher promotional spending? Stephen M. Robb - Chief Financial Officer & Executive Vice President: Again, most of the incremental investment that you're going to be seeing is going to be in the second half of the fiscal year. It has stepped up in the first half but you may not be seeing all of that in the numbers. But I do think particularly as we move to the third quarter and certainly well into the fourth quarter, you will see a step-up both in advertising as well as trade promotion investment.

Okay. Great. Thanks, guys.

Moving on, we'll hear from Ali Dibadj with Bernstein Research. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Hey, guys. So if I look at your gross margin benefit that you're getting from commodities going down and pricing going up, this kind of sweet spot, right, where the commodities are going down and the pricing is still up, and you go across time, this 290 basis points for this quarter is relatively high. If we look back, it looks like there's kind of calendar year 2009 was a time where you also had some of these benefits at this much of a positive from both of those. But what happened after that, very much as you describe, is that gross margins were a little bit more challenged. And I get that. You have to put more back into trade spend. You have to invest on the commodity, Steve, as you said, back into the business. And so that I get your guidance going forward, and feels like it will be next four quarters, not just the back half of the year. But what also happened subsequent was that your top line fell quite flat. That was a very different timeframe, arguably, but really it was like a two-point drop in your top line growth as you had to spend back perhaps more than anticipated into the business from commodities. So it wasn't just a gross margin issue, it was also the top line start to slow. And I ask – I noticed that in the context of your 3% to 4% organic sales growth going forward and trying to understand how you're making sure that you're not going to see the top line slowdown dramatically as well as it has done when you've kind of exited this sweet spot of commodities and pricing. Stephen M. Robb - Chief Financial Officer & Executive Vice President: Ali, this is Steve Robb. That's a great question, which is why we're investing for incremental profitable growth. So one of the reasons we're taking some of the commodity goodness we've been seeing in the last couple of quarters, we're putting it back into the innovation. We're putting it into our new products. We're supporting our base business, which is why, as I had mentioned in my opening comments, we feel quite good about volume growth in the second half of this fiscal year. We anticipate fairly strong volume growth. So I would say that we're playing for the long-term. We're focused on delivering not just good quarters but, more importantly, good years consistently over time. And by making these incremental investments, we think that it'll lead to better long-term performance for the company. Ali Dibadj - Sanford C. Bernstein & Co. LLC: So – sorry, do you want to add something, or no?

Sorry. Ali, it's Steve Austenfeld. I would just point out as well, in comparison to that time period you're referring to, our categories are much stronger and much healthier than they were a year ago. I mentioned earlier in my prepared remarks, our categories up about 2%, and that's been pretty consistent over the last several quarters to almost a year. So I think we feel much more confident not only in the strength of our brands, as Steve noted, and the investment we're making, but just in the underlying health of our categories. Ali Dibadj - Sanford C. Bernstein & Co. LLC: And from the competitive – that's helpful – and from the competitive angle, you mentioned a couple categories, a couple of competitors who are taking their prices a little more aggressively it sounds like. Can you characterize it a little bit more? So is it the private label folks who want to drive trial and so they're starting to get more aggressive on taking the commodity benefit to the consumer? Are you hearing anything from Walmart, your biggest customer, 26%, 27% of sales? Is it the branded players? And as a subset of that, can you discuss a little bit your price gap versus your peer group, your competitors in some of these categories? And are there still places there out of whack?

Yeah, Ali, this is Benno. The last one up front, price gaps are about where we want them to be, and I would not consider them to be out of whack. If you think about competition, we've previously talked about three categories in order to reemphasize that that's really where the competitive focus is. The first one is Glad trash, where through lower commodities we are seeing private label and the one branded competitor. What we're anticipating that some of that commodity goodness is being passed on through trade spend, and we are certainly planning for that. Home Care is a business where we've been very successful, and we certainly noted that in our Q2 remarks, and where we've been gaining market share over a number of periods. And we expect that category in particular in wipes, which is the hot bed where we're doing particularly well, to become more competitive from a branded competitor point of view in the back half. And then in Litter, as Steve Robb noted earlier, we have innovation coming up that we believe in, in Fresh Step with Febreze, and we're investing incrementally behind that innovation. So it really is a case by case but we think it's very prudent for us to plan for that. Our strategy calls for an acceleration of profitable growth, and the increase in spend is certainly very consistent with that. Ali Dibadj - Sanford C. Bernstein & Co. LLC: And still in those categories. Okay. That's helpful. Thank you.

Our next question comes from Wendy Nicholson with Citi Research.

Hi. My first question is sort of a follow-on to that. I know one of the things you talked about back at the Analyst Day was sort of the way you have shifted your focus and expanded your focus or broadened your focus with regard to specific retail channels. So in terms of the incremental trade promotion, would you say there's a consistent level of trade promotion that you're engaged in across the retail channels? Or is the fact that you're putting particular money into grocery in some areas, boosting that level of spending as well? And sort of related to that, can you talk about Burt's Bees specifically? We got the gift box of lipsticks in the mail and they were fabulous. So they looked great. But my question was, wow, this is something that's very different than we've seen in the past from Burt's Bees. This doesn't feel like a drugstore product. How much is the retail distribution for Burt's Bees specifically changing?

Yeah, Wendy, on retail channels first, so our policies are fair and equitable, right? So we do not favor any channel over the other on trade. So we want to make sure that all of our retailers have the same access to the same plans. So we should not expect any increase in trade promotion on selected businesses to favor any channel over the other. On Burt's Bees, thank you. I'm very happy you liked it. And that's very consistent with the initial consumer response that we get and certainly also the response from our customers. This has been a great quarter on Burt's Bees where we delivered double-digit growth on top of double-digit growth the year ago, and we're investing behind lipsticks but also the base business to keep it that way. Look, it's a pretty attractive price point. The lipsticks I'm referring to, $8.99. It's really a great product that has unique moisturizing benefits, and we think that compared to some of the more expensive brands out there this delivers terrific value to consumers. And like I said, the initial customer response is very positive and we'll continue to drive that, without losing focus on the base business. We have still a tremendous opportunity to drive the businesses across lip, face, body, that we're already in and we'll continue to have a balanced investment program. Certainly, I think some of you had noted that while we've seen a solid sales increase in the lifestyle segments that the profitability has not followed that sales increase and that is because we're investing incrementally in the business, which is a reflection of the optimism that we have behind Burt's Bees and the other brands in the Lifestyle segment.

But that distribution, the double-digit growth on top of double-digit growth, is that organic or is that the result of expanded distribution?

Well, certainly if you think about it, Wendy, just from a lipstick point of view, that distribution of course is incremental. But I would still look at that as organic because we've now just entered a new segment through innovation. And, from that, we will draw value down the road. So I would look at it as organic but certainly the distribution growth on lipstick and other new innovation has contributed to the double digit growth for the quarter.

Got it. And then just – I don't know that I heard a direct answer to Ali's questions specifically about Walmart. I think ever since Walmart came out – whatever, a year ago, and said, hey, we're going go after these companies for more trade promotional dollars and all that kind of stuff and SKU rationalization, and you guys have said historically no, nothing's changed really. Just to be crystal clear, the increases that you're putting forth now or you're planning to put forth in terms of trade promotion, it's coming from you? It's not a request on the part of the retailers asking for more from you?

No. So the increase is proactive, and like I said earlier, will impact all retailers.

Yeah.

I know you'll understand that we don't discuss specific plans by retailer. But what I can tell you is that the level of strategic alignment that we have with Walmart continues to be very strong. We are growing very nicely with Walmart. Our business is very strong and we have a strong innovation pipeline with Walmart, which leads to the fact that the vast majority of the conversations we continue to have with that customer are around how we can grow their categories and our brands with them for the benefit of their shopper. So once again, the trade spend increase is planned and will affect all retailers and is not in response to whatever might have happened or is rumored to happen with any specific retailer.

Terrific. Thank you.

Moving on, we'll hear from Lauren Lieberman with Barclays.

Thanks. Good morning. I love the lipstick, too. Very moisturizing. Just want to talk a little bit about International. You guys have enormous experienced pricing in the U.S. and have had a very good read on elasticity and how things would progress both as pricing goes in and as you anniversary it. Can you talk about your confidence into the quality of your analytics internationally and where you think elasticities have kind of been as you expected or better or worse? Thanks.

Yeah, we feel equally confident in our ability to take pricing in International. And we are, in fact, taking pricing across a number of the International businesses today. So I wouldn't say, Lauren, that there's a difference between U.S. and International, and our track record to take pricing in International is very strong. Now, at this point, are we able to close the entire gap that we see from – or the entire amount of cost increases that we're seeing through inflation in International? No. But we are taking pricing pretty broadly. As you might have seen, our volume in International's been somewhat flat and our organic sales growth was 6%, and much of that difference was certainly driven by pricing. So I feel optimistic about where we are in pricing in International, and we have a pretty good read on what happens. And it's pretty much playing out in the marketplace as we expected.

Great. Thank you.

Thank you, Lauren.

Our next question comes from Javier Escalante with Consumer Edge Research.

Hi. Good afternoon over here. Good morning over there. My question tackles this trade spending decision whether it's reactive or proactive from a longer term perspective. True, your gross margin is great this quarter, but it has been range bound for the last five years. So if categories are up 2%, which is a change in a long time, and you feel confident about the health of the categories, you feel confident about the innovation, there is a deflationary environment in commodities, it seems to me that you are kind of like leading the charge here in terms of the trade spending. Why? Shouldn't you actually heed or aim at expanding gross margins? So why is this? Thank you. Stephen M. Robb - Chief Financial Officer & Executive Vice President: So, Javier, this is Steve. I'll take that question. So when we look at trade spending, first, to be really clear and this is important, this is a choice we're making as a company. It's a choice to step up the level of in-store merchandising behind things like Burt's Bees or Litter with Febreze, because we think again we've got great products and if we get trial, we get repeat. We've talked to that before. I think in some categories like Glad, what you see is when you – the commodities come down. The good news is you get a bit of a tailwind in margin, but you also tend to see a bit more money go into the market. And what we tend do is adjust our trade spending up and down to reflect that in selected categories. So what I would say is when we look over the long term, you'll see us do two things. One, if commodities start to recover, and we don't think that'll happen in the short term, but as they recover, you'll see us probably make adjustments in the trade spending in selected categories. I think we've demonstrated that we know how to manage our trade spending and commodities over time. And then second, these dollars can move around on the P&L. We may put more into advertising or R&D. The key for us is to invest for profitable growth and just stay true to the 2020 Strategy. So again, I think we feel good about the choices we're making today, but we retain the flexibility to make different choices in the future as the markets evolve.

Just a clarification, right, in theory, we all like the notion of gross margin to spend because it will give you more wiggle room in terms of how much, whether you spend in trade spending, whether you spend in advertising. So why is it that then structurally your businesses don't allow for gross margin expansion? Because it seems to me that you're saying, well, basically the second half is going to be flat even though all these positive things. And it's kind of like confusing because it at some point, it seems as if you're leading the charge as if you don't want to maintain the pricing environment that would allow to build gross margin, à la, Colgate, say.

The one thing – Javier, this is Benno – I would say that we should not assume that trade spending is pricing. One thing that Steve Robb noted earlier is that a lot of the spend in the back half, as was the case in the front half, went into the support for our innovations, innovation to generate trial for which we get a great return, which we know from our analytics. So trade spend isn't bad. Trade spend is spending that drives our brand equities. And I think you know that we have a very disciplined approach to how we spend. We spend where we get the greatest ROI short term and long term and we believe that trade, in particular doing times when you have strong innovation, certainly plays a role in driving our brand equities and continuing driving the strong brand health that we have today and that we expect to have in the future too.

But just to finish up, is this innovation gross margin accretive? Do you plan to maximize the product mix with this innovation? Because then I don't understand still why gross margin cannot build up from here.

We have an internal criterion and that is that innovation has to be gross margin accretive to the company. And then if you think about some of the innovation that we invest in at this point, for instance Burt's Bees lipsticks, you can imagine that those are very attractive businesses where we get a great return in the long term. And if we can drive trial behind what undoubtedly is a great product, which we know from internal testing, as well as if you go for instance on any of the sites that consumers use to post reviews, the initial consumer response is very enthusiastic. This is a great investment. It is an investment for the long term and certainly not an investment to maximize the profitability on lipsticks for any given quarter. But how can we not invest in the long-term health of this business if we have promising innovation like that? So we're taking the long-term view and we're not afraid to invest behind it, even though in any given quarter, short term it might not maximize gross margins or the profitability of the business. Stephen M. Robb - Chief Financial Officer & Executive Vice President: And, Javier.

Understood. Stephen M. Robb - Chief Financial Officer & Executive Vice President: Just, I'm sorry. The last point I would like to make, just for the record on gross margin, in fiscal 2015, our gross margin was up 90 basis points. Call that about a point. This year, we anticipate gross margin being up about a point. And, importantly, we're investing more in our cost savings pipeline over time. So the idea that we can't expand gross margins, we've been doing that for six quarters, and we've got some very results that we've been posting. So we certainly feel good about the plans we have in place to expand EBIT margins 25 bps to 50 bps over the long-term annually.

Thank you very much.

And we'll hear next from John Faucher with JPMorgan.

Yes. Thank you. Ben, I want to talk a little bit about uses of cash, and we've generally seen a little bit of a slowdown in the repurchase over the past couple of quarters, which makes some sense. And you're down below the low-end of your leverage ratio, and Don used to talk a lot about sort of the tuck-in acquisition piece surrounding healthcare. Can you give us maybe your view of M&A in terms of where that could be different? And would that lead to something where you could foresee something bigger happening? Or should we still – I know you mentioned tuck-in in the slides at the Analyst Day, but are you taking sort of a more holistic view of the M&A opportunities as you look at where you stand right now? Thanks.

So no change in strategy. Tuck-ins are still preferred and what we have said in the past, which continues to be true, John, is that natural personal care, broader healthcare, or health and wellness and food enhancers are businesses and categories that we're strongly interested in. We have certainly noted that we're looking at everything. If we think that it adds value to our shareholders and as you can imagine we look at a lot of things throughout the year as do our competitors, I presume. But what we are after is businesses that are a strong fit with our strategy, that are attractive from a growth as well as a margin perspective, and, importantly, businesses that we can get at a good value. So we will stay disciplined. We will look for the right opportunity. And we do that all through the lens of making sure that whatever we might do in the future creates value for our shareholders. So I would characterize that as staying the course. We have preferences but, look, you can never say never. We look at everything, and a lot of things throughout the course of the year through the lens of making sure that we create value.

Got it. And then just one sort of quick follow-up on that which is, is tuck-in defined more by – you talked about it more from, let's say, a segment standpoint or a category standpoint – is tuck-in defined more by segment or in terms of something you already have? Or is that more of a size component? How would you define that, or is it both?

I mean, we – I would say, it's both. Look, again, we have a preference for acquisitions of a certain size, but we also want to make sure that whatever we might do is a good fit with our capabilities and close in. So it's a combination of both.

Great. Thanks.

That will conclude our question-and-answer session for today. Mr. Dorer, I would like to turn the program back to you.

Yeah, thank you. To sum up, we're very pleased our strategy continues to work and delivered strong Q2 results. Our business is fundamentally healthy, and we're pleased to have raised our outlook, which we believe presents a balanced view of the challenges and opportunities we see for our business during the second half of the fiscal year. Thanks for joining us today.

Ladies and gentlemen, again, that does conclude today's conference. We thank you all for attending.