Good day and welcome to the Hormel Foods Third Quarter 2021 Earnings 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 today's event is being recorded. I'd now like to turn the conference over to Nathan Annis, Director of Investor Relations. Please go ahead.

Good morning. Welcome to the Hormel Foods conference call for the third quarter of fiscal 2021. We released our results this morning before the market opened around 6:30 AM Eastern. If you did not receive a copy of the release, you can find it on our website at hormelfoods.com under the Investors section. On our call today is Jim Snee, Chairman of the Board, President and Chief Executive Officer, and Jim Sheehan, Executive Vice - President and Chief Financial Officer. Jim Snee will provide a review of the Company's current and future operating conditions, commentary on each segment performance for the quarter, and a perspective on the balance of fiscal 2021. Jim Sheehan will provide detailed financial results and commentary on the Company's current and future financial condition. The line will be open for questions following Jim Sheehan's remarks. As a courtesy to the other analysts, please limit yourself to 1 question with 1 follow-up. If you have additional questions, you are welcome to get back into the queue. An audio replay of this call will be available beginning at noon today, Central Daylight Savings Time. The dial-in number is 877-344-7529, and the access code is 10159436. It will be posted on our website and archived for one year. Before we get started, I need to reference the safe harbor statement. Some of the comments made today will be forward-looking and actual results may differ materially from those expressed in or implied by the statements we will be making. Please refer to pages 28 through 35 in the Company's form 10-Q for the fiscal quarter ended April 25th, 2021. It can be accessed on our website. I will now turn the call over to Jim Snee.

Thank you, Nathan. Good morning, everyone. In the third quarter, our team delivered the highest quarterly sales in the Company's 130-year history, while operating in an environment, which included inflationary pressures and industry-wide supply chain challenges. Our ability to deliver this performance demonstrates the strength of our balanced business model and a strong consumer demand as we grew sales in all 4 segments and all 4 sales channels on an organic basis. Also in the third quarter, we completed the acquisition of the Planters Snack Nuts business. This brand fits perfectly into our vision for Hormel Foods and is another step in our strategic evolution. The integration has been smooth, which has allowed us to effectively operate the business with no disruptions. Each accomplishments were achieved by our team members who never lost sight of our long-term growth strategy in the face of unprecedented industry-wide challenges. To all our team members around the world, including our new Planters team members, thank you for your accomplishments, and thank you for staying safe. Now, more than ever, our investments across all areas of our business are paying off and have allowed us to reach even more consumers when and where they are eating. Whether it is cooking a meal at home, snacking at work, eating at a local restaurant, hosting a gathering with family and friends, or ordering food online, a Hormel Foods branded product will likely be an option. The proof is in our performance this quarter. Sales increased 20% on a volume increase of 1%. Compared to the third quarter of 2019, sales increased 25%. This all-time record performance was led by an acceleration in our foodservice business, sustained demand for our retail and deli products, continued growth from our international business and pricing actions taken across the portfolio. Excluding…

Thank you, Jim. Good morning. Third-quarter sales were $2.9 billion, an all-time record for the Company. Net sales and organic net sales increased 20% and 14% respectively, compared to last year. Segment profit increased 2% for the quarter, driven by strong results in the international segment, foodservice growth and the addition of Planters. Earnings per share were up $0.32. Adjusted earnings per share, excluding one-time costs and accounting adjustments related to the acquisition Planters was $0.39, a 5% increase. COVID -related expenses during the quarter were immaterial. Adjusted SG&A was 6.9% of sales compared to 7.6% last year. Advertising for the quarter was $31 million, an increase of 25%. Adjusted operating margins for the quarter were 8.7%, a decrease from 10.5% last year. We expect margins to show sequential improvement in the fourth quarter as the impact of pricing actions continue to take effect. Net unallocated expenses increased as a result of the onetime acquisition-related costs for Planters and net interest expense. The effective tax rate for the quarter was 13.3%. The primary driver of the decline was a large volume of stock options exercised during the quarter and a one-time foreign tax benefit. The revised guidance range assumes a full-year tax rate between 19% and 20.5%. Operating cash flow declined compared to last year, impacted by working capital from the Planters acquisition and higher levels of inventory. Inventory levels were unseasonably low last year during the third quarter. We paid our 372nd consecutive quarterly dividend effective August 16th at an annual rate of $0.98 per share, a 5% increase over 2020. This completes the 93rd consecutive year of uninterrupted dividend payments. Capital expenditures were $54 million in the quarter. The Company's target for the capital expenditures in 2021 is 260 million. The Planters acquisition represents a change to the…

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. Today's first question comes from Michael Lavery with Piper Sandler. Please go ahead.

Good morning. Thank you.

Morning.

Can you just elaborate on your pricing a bit and give us sense -- I don't know, you said it's broad and maybe literally every brand and product, but maybe, one, just some of the order of magnitude and how you determined kind of what was appropriate. And if it might be enough or you think this coverage you for -- well into next year as well as obviously finishing this one.

Good morning, Michael. That's a really complex question. And you hit it right on the head when you say, and we've said it, that the pricing is very, very broad-based across the portfolio. And, I think, for us, what we have been watching throughout the second quarter and the third quarter is just to be prepared and making sure that as we're watching, not only commodity markets, but packaging costs and freight rates, is making sure that we're capturing those in that timeframe. And what's been different in this environment is obviously those costs have just continued to move away from us. And no different than any other food Company that you're talking to. What I do think is different though, is that we have been ready. We have taken broad-based aggressive pricing, but we've continued to have to do that and we will continue to have to do that as we've seen these markets and costs continued to move away from us. So again, it's really broad-based. It could vary by product, by categories. Clearly, we're watching all of the category dynamics. We're watching what's happening with the elasticities within our brands and categories. And so it's obviously a very complex dynamic. But the key takeaway though, is that we're really pleased with the pricing actions that we've taken, we're pleased with the brand performances, and we know that we're ready to react with some additional pricing going forward.

Okay, that's helpful. And maybe just to clarify, what we see from this report in the third quarter, would that pretty fully reflect the pricing, or was it really just getting underway so that we should expect it to accelerate?

Well, I mean, again, depends on brand and category, but we've got, as you can tell, a significant pricing that took place in the quarter. Some of that will carry over into the fourth quarter, but we also have pricing that is being prepared to go into effect that will take effect in the fourth quarter as well. So it's really going to be a combination of spillover from Q3 into Q4, and then some new pricing actions in Q4.

Thank you. Our next question today comes from Ben Bienvenu with Stephens, please go ahead.

Hey, thanks. Good morning.

Morning

Morning.

So I want to ask -- so in the adjusted results, it looks like the implied impact from Planters is about $0.07 per share. That's towards the higher end of what you've said the impact would be for the full year to Planters when you provided guidance last time on the deal. Can you give us some color on what you think the full year -- for the balance of this year net impact of Planters is that's implied in your guidance, so we can get some clarity on kind of the core business?

Good morning, Ben. The $0.07 that you're referencing is only related to those one-time events related to the transaction, so the closing costs and those accounting adjustments that were made. There’re obviously some transitional expenses as we bring this business online. That always occur with any type of business transfer. So those are -- those are included. We still believe that the 2 to $0.07 dilution in 2021 is reasonable.

Okay. Great. And then if I think about the -- I want to focus on the grocery products business. But if I think about the margin recovery of the business, you talked about taking price, working to take costs out of the system, drive efficiencies. Can you give us some sense of pace of recovery, obviously, implied in the fourth quarter, we're seeing meaningful margin improvement sequentially from the third quarter? But to the extent, you could delineate between grocery products and the relative segment's contribution to that improvement in margin sequentially and the trajectory from here that you see based on the current market outlook, that would be really helpful.

Sure, Ben. We could do that for you. I mean, I think the first thing to start with is the grocery products portfolio. Probably more than any other part of our business has the longest lag in pricing. And so, you'll see, we always say on average, 60 to 90 days in terms of how that pricing passes through. And for us, I mean, we've taken pricing across that entire portfolio, and you think about 72 pork trim and how that has been through the roof. And so we've been very aggressive, we've been ready to take additional price actions and so we've got a mix, just like I said earlier, we've got a mix that have taken effect in Q3. And we'll have a bigger impact in Q4. We have another round that'll be coming in Q4 that will really have the impact in Q1 of 2022.

Thank you. Our next question today comes from Tom Palmer, JPMorgan. Please go ahead.

Hi, thanks for the question.

Hi, Tom.

Maybe just circling back to Planters, you noted about 40 million nonrecurring charges in the third quarter. Your guidance is on a GAAP basis, so it includes these charges. And then, as we look at the fourth quarter, what's embedded for either charges or credits related to that Planters business? I mean, are there going to be additional non-recurring considerations, or is 40 million the extent and it's pretty clean going forward?

Well, I think that you've seen the expenses related to the transaction are included in the 40 million, and some accounting adjustments are included in the 40 million. But until you complete your purchase accounting and make all of the accounting adjustments, which we think will be probably finished at the end of the fourth quarter, you can't say that all of the adjustments have taken place. So we believe that this is the majority of the expenses, the vast majority of the expenses, but they're still could be some one-time expenses come through as we close the purchase accounting process. Does that help you?

Just to clarify, is anything embedded in that guidance number or it would be incremental at this point?

That is an all-in number. So that is a GAAP number that we are basing on what we believe is the performance of Planters and we're pleased with the transition into Planters. We've been pleased with the sales rate at this time period. The expenses that are called out and then those transactional or transitional expenses that occur anytime that you're bringing business into your organization. So that is an all-in number.

Thank you. And our next question today comes from Ben Theurer with Barclays. Please go ahead.

Thank you very much. Good morning, Jim and Jim. Just wanted to go back to the price increases and you've talked about, obviously, you've done something in Q3. You expect more to do in coming quarters. On the very initial ones, have you seen some sort of the reaction from consumers and customers and in terms of sensitivity to the price increases? And how has that been offset by the brand strength for some of your core plans where you've introduced those price increases.

Really -- we've been really pleased with the performance of all the businesses in the face of the price increases. The elasticity models that we typically use, we're outperforming those. And so we'll continue to watch the brands, the categories, the elasticities going forward. But I think the last point in your question is the really important one, and one that we highlighted in our comments, is that the brand strength that we have, that we've invested in, in sales over time is more important than it's ever been. As we're faced with such an inflationary environment and making sure that consumers have brands that they recognize and that resonate with them on a day-to-day basis is really, in our mind, is one of the key drivers of our success for the sales growth.

Thank you. And then, on Planters, there's things been talked about and that's about how clean the fourth quarter is going to be. But if we look into fiscal 2022, would you feel comfortable reiterating your initial guidance of accretion and that high teens range for Planters?

Yes. At this point, then we would -- I mean, it is early. We've got what? Maybe 8 or 9 weeks that we own the business in the third quarter. But we're very satisfied with the sales performance. Many of the assumptions that we've made in other parts of the business are all holding up. We said we've already seen some of the benefits out an iconic brand like that can have on our business, we're experiencing that in the convenience channel. So, yes, at this point, although it's early, we still feel very comfortable with that range.

Thank you. Our next question today comes from Rupesh Parikh with Oppenheimer. Please go ahead.

Good morning and thanks for taking my question. So I guess just on your foodservice business, just given that we are seeing COVID cases spiking a number of markets, just curious if you've started to see any impact within that business.

And we have not, Rupesh. I mean, honestly, our foodservice business just continues to accelerate. And it really goes back to the challenge that these foodservice operators are pacing and its labor, right? And so as you think about how they have to compensate for that shortage of labor, our portfolio perfectly aligns with what they need to get caught. And so we're helping those operators overcome those challenges for doing it with our direct selling force, which we've said is a competitive advantage. And again, more than ever, it is a distinct competency of this organization. So we haven't seen the foodservice business slow at all. We're seeing it accelerating and we feel incredibly bullish on our portfolio and what we are going to be able to achieve going forward.

Okay. Great. And then maybe this one follow-up question. And I'm not sure how much you are going to share, but as we look at 2022, is there any way you can share some of the buildings blocks as you see them right now for next fiscal year? I mean, clearly, Planters it sounds like that [Indiscernible] accretion is still something that's in the range of possibilities, but just wondering if there's any other initial puts and takes, you'd be willing to share as we look out to the next fiscal year?

Yes. I mean, it's a great question. I'm going to quantify it -- or qualify it by saying it's early. But what we just talked about, our foodservice strength, I mean, we expect labor to continue to be an incredible pinpoint for foodservice operators. But our portfolio is going to help us overcome that and we're going to help -- continue to help those foodservice operators. We do think that some of the additional capacity that we have coming online in early '22 for our pepperoni business expansion, and our bacon business is going to serve as well. You mentioned the impact of our Planters business, and we've had a great run with our MegaMex business, the authentic Mexican portfolio, not only the base business but the innovation that we're generating. We would expect some continued international strength as well. And then, as we talked earlier, the impact from pricing actions will also come into play. And that's all the good news. The offset to that will be what happens with inflation, what happens with labor that will impact our business in our manufacturing facilities. So there's a lot of unknowns on that side. But I think we feel really good about how we've built this portfolio and how we've built the business for the long term. And we're optimistic about 2022.

Thank you. Our next question today comes from Ken Zaslow with Bank of Montreal. Please go ahead.

Hey, good morning, guys.

Hi, Ken.

Morning, Ken.

Can you let us know, is supply chain challenges bigger or smaller than the inflationary pressure that you're feeling, and what are you doing to change the supply chain challenges? And when will they be mitigated?

Good morning, Ken. Good question. The inflation is one, as we look at our gross margin change, we certainly have had inflationary pressure. But when we look at our pricing action, our improved mix, and some efficiencies we've brought online, we have really offsetting that inflation. The pressure on the gross margin really relates to the labor shortages. Not only labor shortages at our facilities, but labor shortages throughout the supply chain. At times, we've had lines that have not been running at full capacity, that has strained us some overheads because we've had shortages in our plants, and other times, we've been notified, let's say relatively late, that our suppliers cannot provide us either packaging or input into our products. So as we look at the third quarter, as we look forward, really inflation, we think we've managed very well. It's this labor issue that is creating the pressure right now. So I'd say it's more of a labor issue.

And Can I -- I would just -- just to add on to that, I mean, really the key in all of this is, like you said, what are you doing about it? And there is, as you know, strong linkage between the labor and inflationary issues. So labor is costing us. The labor that we have is costing us a lot more. Then you have to deal with the [Indiscernible] labor. So we're pricing for the increased labor. For the labor that we don't have, clearly, we're raising starting wages. We're being more aggressive in how were finding employee pools to hire. We have to be more aggressive and more disciplined in how we are retaining our employees or finding ways to automate. That doesn't happen overnight, but I would tell you that we've had successes in automation when we think about packaged placement, palletizing, and how we can pivot and reallocate those team members to more important manufacturing responsibilities. And then, through it all, it's how do we simplify our operations. And so, all of those things go hand in hand. And the one thing that this team has been able to do is not find themselves in a victim mentality, but really say, what are we going to do about it? Because that's really our challenge.

Great. I'm not a big fan of my next question, but I have to ask it just because you have to think about it this way. Which division do you think will be able to have margins at least on par with year-ago levels first? And then how does that progress for the other divisions? I know that dollars going to the bank is more important, but I'm just trying to figure it out just because obviously the sales are distorted by pricing and I'm just trying to figure out which divisions does a margin catch up? Which is the first margin, which are the first divisions, and then how long will it take? Just kind of framing that and I appreciate it.

Sure. I -- it is -- and I hate to give this answer, but I'm going to, is it really depends. And we think our Grocery Products division, as we've seen some moderation in raw materials has a really good opportunity to return to a more normalized margin structure also and it's a subset, but foodservice, obviously, within Refrigerated Foods, not only through the growth of the business but also the mix shift is really going to provide margin enhancement for us over time. So again, not a big fan of the answer, but I've got to give that.

Ken, the one thing that I would point you to is that, it's early in the quarter, but we see relief on the pork side of the input costs. For instance, hogs were averaging 118 in the third quarter, they're down to 93. Bellies have even come off a little bit, but you'd expect bellies to come off at this time of the year. And we're seeing some relief in trim. Now, the only other -- the only area outside of pork that, from a raw material input that we're seeing, increase is in the beef category. Beef started to go up and our second quarter, and that trend has continued. So we're seeing relief in the pork industry. Again, this is -- I'll give you the same warning that I did last quarter. Labor is a very important factor as to how these costs are going to trend in both the near and long term.

Thank you. Our next question today comes from Peter Galbo with Bank of America. Please go ahead.

Page, Jim and [Indiscernible] good morning. Thanks for taking the questions.

Good morning, Peter.

Jim, I just wanted to dive in a little bit deeper on the labor situation. A few of your peers have talked about vacancy rates or open requisitions that they have somewhere in the range of like 6% to 10%, which is obviously elevated versus normal. I guess just the 2 questions that one, can you kind of give us a sense of where that stands for you in terms of open positions. And then secondly, just as we look at the volume number in 3Q, I think it was on at least on an organic basis, like 1.15 billion pounds. Is that a good kind of run rate number to use in terms of your total volume that you could actually produce until the labor situation kind of corrects? Just trying to understand that part. Thanks.

Peter, I would start with, I mean, I think that rate is a good range for us, as well. I mean, it ebbs and flows depending on the week, to be honest with you. But I think if you operate with that number, that range in mind, you're in the ballpark. I think there's always considerations when we talk about our volume number. Clearly, we had lower harvest level this quarter, which does have a dramatic impact on volumes. And so we've got to watch that closely. But taking it to a higher level, yes, the idea of labor in our plants does have an impact on the volume and what we're able to produce. So that's why it is so important that we do take a very aggressive approach in hiring retained, finding those areas to automate, and how do you simplify your operations. We absolutely have to get that done and there's not a higher priority in the organization from a human resource perspective, and a supply chain perspective. So it doesn't give you the specific number you're looking for, but it does at a high level. Labor is a driver for the volume that we're able to produce.

No. That's helpful. Thanks, Jim. And A - Jim Sheehan, maybe just two cleanup questions. On the gross margin for the fourth quarter, I think you said improved sequentially, but should we still be expecting that to be down year-over-year? And the second part, I just wanted to make sure that the sales guide for the full year still includes the 53rd week, correct?

Yes, everything includes the 53rd week. And as we said, that guidance is an all-in GAAP guidance. There's still going to be pressure on margins in the fourth quarter, but again, we have additional pricing action that are confident will improve this process. And again, we have the same labor issues we dealt with in the third quarter and we still have the same supply issues that we have been dealing with. So we know what our employment rate is. But some of our suppliers, we have less visibility to and we've had surprises that have interrupted operations and actually have increased our cost as we've had to go out and find alternative solutions. So it's an improving situation, but I would still expect they will trail last year. The fourth quarter of last year had its own challenges, but I think that would be the trend.

Thank you. And our next question today comes from Carson Barnes from Consumer Edge Research. Please go ahead.

Good morning. Thanks for the question. Can you talk a little bit about international pork demand, especially with respect to the African swine fever. As China and other countries work through that. Are you seeing any changes in demand or risks to the business moving forward?

We really haven't at this point, Carson. For us, we've been really focused on shifting our international pork supply to a ractopamine-free supply, and that's really allowed us to open up some new markets and price accordingly. So, I mean, that's for our business, that's really been the big driver on the supply side of the business. The other piece that we'd be remiss if we didn't mention is just the freight availability for pork and other international exports. Although some of our branded exports shows growth, freight availability continues to be a risk in the supply chain going forward.

Thanks a lot. That's helpful.

Our next question today comes from Adam Samuelson at Goldman Sachs. Please, go ahead.

Good morning. This is actually Arthur on for Adam. I was hoping we could tackle the inflation question a bit differently. Just looking at the updated guidance and if we take the midpoint of both ranges, it's about a $0.09 downward revision. How much of that $0.09 is attributable to increased inflationary pressures? As you can imagine that the two to $0.07 diluted range leaves it a bit wide for interpretation in terms of how much is actually impacting the business for this year. And if you could also give some color as to what cost buckets those are in outside of feed and maybe by segment. That'd be really helpful. Thank you.

We've talked about the inflationary pressure that exists with the business, if we think that pork inputs will be above last year, they will moderate, we believe from third quarter, but there will still be significant pressure on inflation. Beef is going up as I stated. It's still continuing to grow in the fourth quarter. The freight issue isn't going away, so there's going to be pressure on freight. If anything, we've seen increases in freight costs recently. Jim has talked about the problems that we're incurring with ocean freight and the additional expenses that it's taken to overcome those challenges. The labor issue was an issue that is probably the hardest to read right now. What is going to happen to labor, how quickly it will recover or will it recover at all? And just the challenges of the supply chain are putting pressure throughout the organization. And those are the issues that we've addressed in our guidance. And we think that we've taken a fair approach to that -- to those issues. I think as far as how you categorize it; I would look at the pork and the beef inputs and identify bad. On the other hand, we are seeing tremendous recovery in the foodservice business. And we're still seeing strong demand in the retail. So the demand is there for our products. We've priced appropriately. It's a matter of having the labor that's available to produce the product and to meet the demand.

Thank you. And I guess on that point with the labor shortages, is there any way you could quantify the magnitude of some demand that you weren't able to meet due to these labor shortages?

I think it's -- as Jim said, it depends what we [Indiscernible] that were being challenged. And as we talked about earlier, it's not just the labor that we have available, sometimes it's interruptions in the supply chain that it's categories that we didn't think we were going to have a problem to pop up. So I would say that constraint is significant and it's across the -- I can't think of a single segment that hasn't been impacted by this labor constraint.

Thank you. And our next question today comes from Jacob Nivasch with Credit Suisse. Please, go ahead.

Thank you very much for the question. Just one quick one on pricing, but a little bit of a longer-term perspective here. [Indiscernible] about record sales here, but a lot of it is driven by pricing. And I'm just trying to think once inflation presumably does subside. I know you guys have said in the past that pricing for you guys tends to be sticky. So I'm just trying to think once inflation does subside, what does price look like when that time comes? Would we expect to see this kind of this pricing -- the full amount of pricing here stick? Or, I guess, what are you guys thinking, I guess, when that scenario comes?

Thanks, Jacob. The key takeaway from our ability to price is through these cycles, we have demonstrated our ability to expand margins over time. So I think if you start with that as the premise, you'll get a good read on what we're expecting to happen. Now, as you go through each of the different businesses and channels, it will be different. You have our Grocery Products segment, which acts and looks more like a consumer products organization. So that pricing will step. You've got our refrigerated foods retail business that has more commodity elements tied to the pricing. And so, you will see that move up and down based on the raw material performance. Understanding, of course, going back to my original statement, that we have a history of being able to expand those margins. And that's really what drives our stickiness comment. Doesn't it mean that the pricing is going -- that current level is going to stay in effect, especially in refrigerated foods. What we are able to do, though, is expand that pricing over time as raw materials moderate. That's how we think about stickiness and pricing for us.

I understand. Yeah. Thank you.

Okay.

And the next question comes from Rebecca Scheuneman with Morningstar. Please, go ahead.

Good morning, and thanks for the question. So when I kind of look at how your Q3 shaped up, obviously, gross margins are lower. But also, if you look at the SG&A lines, once you strip out those one-time charges, that came in more favorably than I had been expecting. I'm just kind of wondering are these dynamics a reflection of the current environment, or is there something about the Planters business that has lower gross margins, lower SG&A expense?

I think that you have both, Rebecca. First of all, you do have the Planters business coming in and as we've said from a -- for a long time since the acquisition, we knew that we'd be able to manage this business in a very efficient manner. And I think you're starting to see some of the things that we talked about. Woodley(ph) did the acquisition that there is an efficiency here that we believe exists. And the first quarter has given us confidence in that belief. As Jim said, we have a higher sales base that we have not added SG&A at the same level. So I think that's the first thing to look at. The other thing is that there is an efficiency in the business that we've brought forward with. We've talked about Project Orion for a long time. It's adding efficiencies in our SG&A. One quarter in SG&A doesn't make a trend, but we believe that we have a more efficient operation coming out of 2021 that we had coming into it and we believe that that efficiency is going to provide a long-term benefit to the Company.

Okay. Great. Thank you very much.

Okay. Ladies and gentlemen, this concludes our question-and-answer session. I'd like to turn the conference back over to A - Jim Snee for any closing remarks.

Well, thank you all for joining us today. We look forward to sharing more about our long-term growth strategy at our investor update on October 14th. In closing, it's clear that we've built a portfolio and business for long-term success. And our team is operating in an incredibly complex business environment. Yet they've been able to deliver record sales results by continuing to execute our long-term growth strategy. While we still have work to do, I am incredibly grateful to and proud of all our team has accomplished in a difficult operating environment. Have a happy and safe Labor Day weekend.

Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.