PriceSmart, Inc. (PSMT) Q2 2012 Earnings Report, Transcript and Summary

Good day, and welcome to PriceSmart Inc.'s Earnings Release Conference Call for the Second Quarter of Fiscal Year 2012, the 3-month period ending on February 29, 2012. [Operator Instructions] After remarks from Jose Luis Laparte, PriceSmart's President and Chief Executive Officer; and John Heffner, PriceSmart's Executive Vice President and Chief Financial Officer, you'll be given an opportunity to ask questions as time permits. [Operator Instructions] As a reminder, this conference call is being recorded on Thursday, April 6, 2012. A digital replay of this call will be available through Monday, April 30, 2012, by dialing (888)201-1112 for domestic callers or (719)457-0820 for international callers. The passcode is 2522346. I would now like to turn the conference over to John Heffner. Please go ahead.

Thank you, and welcome to our Q2 earnings call. I hope you will find it to be a useful forum to review the information that we provided in our 10-Q filing, which we released yesterday, April 4, 2012. You can find that filing, as well as the earnings press release, which was also released yesterday on our website, www.pricesmart.com. Please note that the statements made during this call may contain forward-looking statements concerning the company's anticipated future plans, revenues and related matters. These forward-looking statements include, but are not limited to, statements containing the words expect, believe, will, may, should, estimate and similar expressions. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the risks detailed in the company's Annual Report on Form 10-K/A for the fiscal year ended August 31, 2011, filed with the Securities and Exchange Commission on January 9, 2012. We assume no obligation and expressly disclaim any duty to update any forward-looking statements to reflect the occurrence of events or circumstances which may arise after the date of this call. Now I'll turn this over to Jose Luis Laparte, PriceSmart's President and Chief Executive Officer.

Thank you, John, and welcome to everyone on the line with us today. I would like to start by talking about our sales performance for the quarter that included December, January and February with total sales of $537.8 million. We're very happy with our results for the month of December, always a key month in the retail business, and we were pleased to see our clubs finishing with a comparable growth of 19.9% for that month. January came at a comparable growth of 15.2% and February at 14.7%. When combined, the results of those 3 months total a sales growth of 22.2% in the quarter, with comparable sales at 16.7% for the 13-week period. It was, for sure, a busy quarter with a lot of activity especially in the month of December, where we were able to set new records by taking care of more than 2.5 million transactions in our clubs. Our sales on seasonal items were very good and consistent with our expectations, resulting in a good, clean inventory position as we have started a new calendar year in January. In our countries, as it is done in the United States, we put a lot of attention to bring in new items to make the first month of the year an exciting month for our members. As part of the excitement, we have good new seasonal programs that included exercise equipment, storage and, also very important, are our patio sets and sporting good programs in preparation for carnivals and Semana Santa, or Easter, which this calendar year happens to be exactly this week that we're having our call. As a club business, we're always ahead of the season with our early-in strategy, and a lot of the items for that time of the year hit the clubs in the month of January and February. As you probably noticed in the 10-Q, our performance in sales show a higher growth in the Latin America segment, attributed to 2 reasons. We have seen more improved economic conditions in the Central America market and the fact that Barranquilla, Colombia sales are also included in that segment. The Caribbean market still reported a good double-digit growth of 13.2% compared to 27.4% in Latin America. When we look at our performance in membership, it was also good to see membership base growth as we added more than 43,000 accounts during our second quarter, for a total of 84,288 accounts added within Q1 and Q2. Our renewal rate for the 12-month period ending February 29, 2012, was 89%. And we have seen several -- we have -- we even saw several clubs reporting more than 90% renewal rate. That speaks to our intentions of keeping our members happy and getting their vote of confidence in our business as they paid to renew their membership. I would like to spend a few minutes reminding everyone on the call of our priorities and key focus areas as we operate our warehouse club business in 13 different countries. One key initiative is to keep bringing exciting items that create a distinction from what other retailers sell in all the countries. Our goal is that in every visit to the clubs, our members put in their carts items that were not part of their shopping list, meaning that we're doing our job in bringing differentiation into the market. Another important priority refers to pricing. We constantly seek to find ways to keep reducing our prices, and all of our PriceSmart team takes that very seriously. The longest-standing business strategy in PriceSmart is to pass along to our members the benefits of the company's improved buying and operating efficiencies through lower prices. Those lower prices, in turn, drive sales volume, which then provides opportunity to further reduce expenses and allow for more competitive pricing. Last but not least, within our key focus areas, we carry an important assortment of merchandise oriented to satisfy the needs of the small businesses like restaurants, hotels, convenience stores and others. We believe it is important to bring value to those type of businesses, and our intention is to offer savings on those items and also a variety of unique merchandise for them. Before I finish, I would like to provide you with some other important updates on activities during the last quarter and also the first 6 months of the fiscal year. In January, we started the construction of our second location in Colombia, in Cali, in the south part of the city. Our current expectation is to open this club in the month of October 2012. Last month, we acquired approximately 12,000 square meters of property for our third location in Colombia and second in the city of Cali. In this case, in the north area of the city. The size of this site will require us to have parking underground and the sales floor on top, which increases the cost of construction. We have constructed this type of buildings in the past, but they may become more prevalent, particularly in Colombia where large land parcels in good locations are hard to find and the cost of land is higher. We're expected to open that warehouse club in spring 2013. We're pleased with the results of our first club in Colombia, which opened in August 2011 in Barranquilla. After 6 months of operation, we keep seeing very good acceptance of our membership concept in that city and that country. We experienced some challenges at the beginning of our operation in Colombia with the flow of imported merchandise, which caused some additional expenses that affected our warehouse margin by 14 basis points during the last -- the first quarter of the fiscal year. But we saw a lot of improvement in the second quarter, and we don't expect any additional impact going forward. We recently entered into an agreement to acquire property located in La Union, Cartago, Costa Rica. There are a number of contingencies associated with the final acquisition of the property. We're working on resolving those items, which will enable us to open what will be our sixth warehouse club in Costa Rica in late fiscal year 2013. As we get into the middle of our third quarter of the fiscal year, we're optimistic about the opportunity to take advantage of Easter sales, and very soon, the upcoming Mother's Day season in some of our markets, which will also drive some important sales in different area of our business, which includes, for sure, some of the nonfood departments and our bakery business too. Before we take your questions, let me turn things back to John Heffner for a few additional comments about the financial results in the second quarter.

Thank you, Jose Luis. You all have the numbers from our release and filing yesterday, so I will not go over them in detail. Instead, I would like to touch on a couple of items and perhaps, in doing so, I will have anticipated some of your questions. Net warehouse sales grew 22.2% in the quarter and comparable warehouse club sales for the 13 weeks ending March 4, 2012, grew 16.7%. The number of warehouse clubs used in the comp calculation changed during the 13-week period with 27 warehouse clubs in the comps in the first 4 weeks, essentially December, and then 28 warehouse clubs in the final 9 weeks, essentially January and February. The 29th day in February would not have affected the comps, as the comps are calculated on a fiscal week basis. As Jose Luis mentioned, our long-standing business strategy at PriceSmart is to pass along to our members the benefits of improved operating efficiencies and leverage through lower pricing, which in the current quarter, contributed to a 22 basis point decline in gross profit margins as a percent of sales compared to a year ago. Warehouse margins, however, went up 11 basis points on a sequential basis from Q1 of this year. This was largely due to the incremental cost that we incurred in the first quarter with our initial importation of merchandise into Colombia. We indicated then that it negatively impacted Q1 margin by 14 basis points. In Q2, these costs were reduced but still impacted gross margins by about 6 basis points. Membership income in the quarter grew 14.7% on 18.5% growth in member accounts. That difference relates to the timing of when accounts are added, 60% of the accounts were added in the second half of the 12-month period, but also due to a onetime correction to member income, which we recorded in the period totaling $323,000. The reduction corrected a misclassification of a portion of membership sales from revenue to sales tax. This will not have an impact going forward. Warehouse club operations expenses grew at a slightly faster rate than sales, 24.6% versus 22.2%, resulting in a 16 basis point increase as a percentage of sales. The infrastructure investment we are making in Colombia as we grow the sales contributed about 5 basis points of the increase. Other items, including debit card fees, payroll-related accruals and non-income tax-related tax contingencies are detailed in the MD&A section of the 10-Q. General and administrative expenses improved 7 basis points. Currency, which we no longer afford in gross margin but in other income and expense, was a net positive in the quarter of $875,000 with strengthening currencies in certain markets during the quarter. In the year ago quarter, the company had a $370,000 gain. The effective tax rate for the quarter was 32.8% compared to 30.8% last year. The 2% increase in the tax rate was primarily related to additional accrued tax liability related to uncertain tax positions. Colombia had little impact on the change in tax rate from the prior year and the quarter. Finally, a word about cash. We ended the quarter with $91 million in consolidated cash and equivalents. For the first 6 months, we have generated $48 million in cash from operations, have used $22 million for capital additions, including land purchases mostly in Colombia, and we made a $9 million payment of the dividend at the end of February. With that, Jose Luis and I would be happy to take your questions. Tim, should I turn it over to you?

[Operator Instructions] We'll take our first question from David Strasser from Janney Montgomery Scott.

Just a few questions, if you don't mind. First of all, how long does it take for a new customer to ramp up its sales? And I guess, I'm trying to understand, with such new customer growth, can we accept -- look at that as somewhat of a leading indicator going forward for continued growth? Or does somebody tend to spend pretty much their normal amount when they become a member?

This is Jose Luis, and I think I'm going to try to answer your question. Hopefully, I understood what you were asking. I guess, we have very good reaction from our members on their first shopping experience as they join the club. But I also think that you start learning more about also as they keep visiting us. Obviously, we usually get a very decent sales on their first visit. But as they keep visiting us, we try to make a good job on keeping them impressed with our prices and exciting merchandise and, hopefully, in every visit, they will be spending more and more. And we actually see an increase in spending as they get to understand more how we operate the club business. They sometimes learn that there are items that they just find once a time or in the year, some of our special buys. So through the time, the members learn how to shop with our clubs, as they do in the States. So we actually see an increase on their shopping patterns most of the time.

And if I can change topic a little bit. When you look out over sort of a multiyear period of time, a longer period of time, looking at Colombia being basically the same population as the other -- your other markets combined, looking at sort of the comps that you're getting, do you look at the club -- first of all, do you have any sense of how big Colombia, from a number of clubs, could be? And then, as you continue to see such strong comps, does it give you an opportunity to increase density of clubs in existing markets and, potentially, find opportunities for even more clubs than you may have thought in the past in some of those markets?

Yes. Well, let me start addressing Colombia. Obviously, we have announced the other 2 buildings that are -- one is in the process of construction, moving ahead for an opening in October; the other one, as I mentioned, for next spring 2013. And definitely, we do realize that the size of Colombia is as much as Central America in total, Central America plus Panama. So we do believe there is a good opportunity to add more warehouse clubs there. And we believe we have the infrastructure and the opportunity to put different buildings in that country. With that said, officially, we have only -- we are doing our research and we have only announced those 2 in Cali. But definitely the opportunity, given that population of 42 million, 43 million-plus people, gives us a good opportunity with a member that, so far, has been accepting the concept of the membership pretty good. And then, regarding the other Central America or Caribbean markets, well, that's what we have been doing in the past. As much as we identified opportunities for opening new buildings, we do get to the point that we say in specific cities, as we learn more about the country or the city, we find opportunities to add new clubs. And that's how we have been adding a few units in the last few years, no? So we won't stop our efforts there. We're -- as I mentioned, we're adding our sixth club in Costa Rica, and we will keep researching for other opportunities in existing markets where our members will get -- where we see membership growth and where we see we can attack or serve more members.

And we'll take our next question from Jon Braatz with Kansas City Capital.

Membership growth was outstanding in the quarter, 18.8%, I think, year-over-year. If we would back out Barranquilla, what kind of a membership growth are we seeing in sort of the legacy stores?

Well, John, we don't provide individual membership numbers, so for our individual warehouse clubs, so I guess I can't respond directly to your question there. The membership -- the activity for membership in Barranquilla really started in our fourth quarter. So that's where we would have started seeing the membership sign-ups for us in Barranquilla, and then it continued in Q1. But we don't provide specific numbers for an individual warehouse club.

Okay, okay. I think you've noted, I think, in a prior press release that Sam's was thinking about maybe opening a store in Costa Rica. Have we heard anything new? Have you heard anything new about the possible expansion in Costa Rica by Sam's?

No. I guess -- this is Jose Luis Laparte, again. No. I guess, other than an article that came in a local newspaper, we haven't seen anything else in the markets, specifically in Costa Rica.

Okay. One last question and, again, I don't know if you're going to answer this, but obviously the Barranquilla store is doing very well. I guess the Colombian subsidiary itself is probably still in the red. Can you give us an idea how much of a drag the Colombian operation might be this year in terms of overall results?

Well, I think in the 10-Q, we indicated what we believe the impact in our SG&A expenses was relative to the sales there because of the infrastructure, the cost of infrastructure we have in place. From an operating perspective, the infrastructure we have there certainly is in place really to support more than one warehouse club. As we build up more warehouse clubs, we'll -- it'll sort of equalize out with the infrastructure we have in place there. So we don't have -- but you're right, we don't provide specific information about the profitability of an individual subsidiary.

So, John, essentially, we're not -- we really aren't going to see much material increase in, let's say, the infrastructure as we go forward from this point now in Colombia?

We generally have the infrastructure in place for more than the one club we have as we build out more clubs. At some point, depending on the number of clubs, we might have to add more. But at that point, I think it would be within the context of the number of clubs we have.

And we'll take our next question from Ronald Bookbinder with The Benchmark Company.

I'm just wondering, how long does it take for a store to reach mature levels? At what percentage of mature store levels is Barranquilla achieving?

Jose Luis, you want to...

Yes. You're breaking up. Can you repeat the last portion, Ronald? You're breaking a little bit.

What percentage of mature store levels of sales is Barranquilla achieving?

What percent...

Well, I guess, let me start with an answer and then Jose Luis can jump in here. I guess, mature -- I think behind your question is a notion that a mature warehouse club no longer has much growth and, therefore, has sort of flattened out its growth. The -- I can indicate that the kind of comp growth that we're seeing is not related to the age of our warehouse clubs. We have warehouse clubs in Costa Rica that have been there for 9, 10, longer than that. I think we opened there probably 13 years ago or something. And we're seeing comparable -- we're seeing the kind of comp growth in even some of those older warehouse clubs that we see in the -- that we see in total for the company. So there's not a good correlation between age of clubs and comp growth. So that might speak to the notion of the maturity curve that you might be referring to.

Yes. And let me add something. I don't -- I guess, through the years, obviously, as we see a lot of our clubs that are comping positive, we don't really know yet what the, I guess, the -- what -- when we reach that level. I guess, every year, we keep -- we try to keep improving our comparable sales. And so far, we have noticed that, I guess, there's always a good opportunity to keep improving your sales, either through more transactions, more members or just as a result of a favorites [ph] ticket going up. So there are different things that, when all put together at the same time and combined, provides the opportunity to keep growing even what we consider, let's say, mature clubs that have been in the markets for us, 13 years, the highest are 14 years. So there's not -- we have -- we don't know exactly what is that mature level yet.

Okay. And on food inflation, how is that affecting the overall basket? And is it affecting your traffic at all?

No. I guess -- go ahead, John.

Our sales are largely transaction-driven, the sales growth. So I think our growth in the quarter, we sort of indicated what the growth was. If I -- my recollection is something like a 20% growth in sales, or something like 18% would be transactions and 2% would be average ticket. So in that, it would take a little bit. But the numbers are in the 10-Q. And so we're more far transaction-driven than average ticket, which would suggest that the inflation would not have a big impact on us. And again, across the full range of things that we're offering, both imported and local, there's quite a mix shift of all sorts of products that we're selling. So it'd be hard for me to, I think, to drill into in size, a specific number that says this is what we would attribute to inflationary effects on certain commodities. Jose Luis, anything you want to add on the...

No. No, you've -- I mean, you basically hit it to the point. I think that answers the -- hopefully, that answers your question.

Yes, it does. When the inventory -- the inventory grew less than sales. Did you guys just outperform your internal plan or why was that?

Is that on a year-on-year basis or a quarter-to-quarter basis?

Yes. Year-on-year basis.

I don't have a good answer for that. Inventory is a point in time and sales is over time, so I guess I wouldn't have a specific...

The only thing that I will add, I guess, probably to John's reference on inventory is that I think, obviously, every year, we try to keep improving the way we flow the goods to the different countries. A good percentage of our inventory comes out of the, obviously, exports from the United States and other countries. So we try to do a better job of flowing the merchandise. As we keep growing in our sales volume, that becomes even more critical since we got to make sure that we don't have limitations on, I guess, on each of the clubs. So it's just a matter of keep flowing the inventory. We are pleased with the way we're cleaning through seasons, as I mentioned in my initial comments, on the conference. And it's been -- obviously, we'll keep looking at opportunity to keep improving the flow of inventory through our DCs or even regionally with our local or regional vendors.

Okay. And looking at...

Ronald, we have another question here with somebody. Give somebody else a chance. Well, can we have the last one from you?

Sure. I'll get back into the queue.

We will take our next question from Greg Garner with Singular Research.

Perhaps this has been asked before. I fell off the call for a few minutes there. But I didn't want to ask about -- well, first of all, your comp store sales have been just surprisingly strong, and I just -- do you have a sense for whether that's coming from merchandising, or is it from the store expansions that have been occurring in the bakery in the last couple of years? And with that, I also wanted to -- I don't know if you went into this, if I missed that -- a little bit more about what kind of store expansion might be planned for the next several quarters outside of the new stores?

Yes. Well, let me -- this is Jose Luis Laparte, Greg. I guess, regarding your comment on comp sales, it comes from different departments. We can't point out specifically just either foods or bakery or other. I mean, it's -- although we have seen good growth in foods and our OBs, our other business which includes bakery, food service; but in general, I guess, if we look at different categories, departments, we have seen pretty solid growth even on the nonfood department. So it's been a good mix, I guess. From our perspective, it's a very healthy mix of, I guess, comp growth coming from different areas of the business which is, again, a good indicator for us. Regarding club expansion, as I mentioned in my original comments or initial comments, so far we have the plans for the 2 that we're planning: well, one in construction in Cali South; one in, I guess, already -- that we purchased the land in Cali North. And then, the one that we started an agreement in Costa Rica, so far, those are the only that we can comment about future expansion.

Well, I was wondering, not so much the new stores. I got that part. I think you're on a good track there. I'm just wondering about the existing stores and how, like the -- because the bakery has been expanded at different stores in the past year or 2, and it seems if that might be a driver for some of these comp sales increases. Maybe I'm not looking at this correctly, so any commentary along those lines would be great.

Yes. No, I mean, you're right, definitely. Some of those areas, I guess, we are very pleased with what we have seen in terms of growth. In some of the clubs, we even expanded our bakeries. We have done some little expansions also on food service. Any opportunity we have to expand a little bit our buildings or some specific areas to better serve our members and obviously increase our sales where we will keep making them and we have done them in the last few years. We have done different fresh remodels also as we see opportunities to keep increasing our sales in either frozen, daily prepared foods, different areas and that will continue, I guess, as we keep growing internally in those clubs. That's what drives, definitely, some of the comparable growth, the fact that we try to improve in the specific areas where we see opportunities for improving sales.

All right. And just a question about Colombia. Is the merchandising any different? If about 1/2 of the merchandise is shipped from the U.S. as I understand perhaps, correct me if I'm wrong, is shipping expense with the price of oil changing, is that going to impact margins in the future? Can you just address those items about merchandising and any overhead costs of servicing the Colombia stores?

Yes. As far as the assortment, I would -- I mean, it's a little -- it's very similar. The merchandise assortment that we have in Colombia has probably a higher penetration or a higher presence of imports for sure since we just started in that country. But for the most part, we don't have a specific assortment for Colombia. No, we basically have the same assortment that we have in different Caribbean Islands or Central America, and that's what has been pretty much the success of our club there. Regarding your other question, I guess, we have the pressure, yes, on fuel prices. But it's been actually, I guess, pretty decent for us. No, I don't think we have big problems on or needs of increasing our prices too much. The pressure is on. And obviously, we keep doing our best to reduce on our distribution center as much as we can, the cost, so that we impact our retail prices and we pass less of those increases for our members. But so far, it's been okay, I would say.

Okay. And just one last question. On the Costa Rica store that you just announced, I was concerned about how -- why it's taking so long to bring that to completion. It seems to be longer than your normal path or timeline. Is that because -- I thought you mentioned some contingencies with the land acquisition. Is that what's causing this delay? Or is there something else there?

Yes. Well -- yes, let me -- I guess, I'm not sure it's been taking long. I mean, since we announced it, obviously, it's been probably the normal process, but we have to realize, and it's going to happen in different cities and depending on the municipalities, there are some municipalities that have more, I guess, restrictions or contingencies for you to be allowed to open a building. That can go from, I guess, assets from the main roads or can go from different things that they may have in place. And then, sometimes the process with some municipalities is just slow. We wish we can move it faster. But the reality is, in a lot of cities and countries, there is so much we can do and we do our best. But there's so much we can do and sometimes you just have to be patient with the speed that the government has now for reacting to your needs. I would say, hopefully, it would move as fast as we can in the future. But that's the reality, so we are subject to the speed of the government in each country.

Okay. So you're still confident that it would come to an opening?

Yes, that's -- we still have, so far, we are working on the contingencies and we will be reporting any difference soon.

And we'll take our next question from Ronald Bookbinder with The Benchmark Company.

I was wondering about store growth going forward this coming year 2013. We're looking at the 3 stores, but you have been opening up about 1 store every 9 months. How should we look at it with the infrastructure that you have in Colombia in place that would be focused on building out that market? Could we think about 3 stores per year going forward now?

Hard to tell the answer, but we keep studying each individual city and every opportunity. But at this point, we can't, I guess, put out a number of club openings that we will expect to see in Colombia. We'll do our best. That's probably all I will say in that respect.

Okay. And comps for March, did you mention what the comp was for this past month?

No. Ron, we'll be releasing our March comp sales tomorrow.

And we'll take our next question from Eric Cha with Brown Advisory.

With respect to your membership fee, it looks like it has been rather steady over the last several years. When was the last time you had a significant increase? And how are you thinking about it going forward?

Okay. Last time, it's been probably, I want to say, 8 years or something like that, John, I guess, or more probably since...

I guess, forever ago, might be. Yes.

Yes. It's been a while that we haven't had any change and, I guess, we keep reviewing what are the needs. But, yes, it's been a while that we haven't had any increase in our membership fee.

I think one of the things that we've seen in the -- and we report this, is sort of average fee per -- or average income that we collect per account has generally been creeping up as we made different changes to our -- how we offer a membership, and including additional cards and how we market that. But the base fee hasn't changed for 8 years. Although we are -- I think we've experienced a little more membership income per account that we've been signing up based upon the way we've packaged additional cards.

And let me just add something. I guess, whenever we -- I guess, our concept is if we ever raise the membership fee, it will be in the interest of keep reducing our prices just to make -- to provide more value for our members.

And we'll take our next question from Jon Braatz with Kansas City Capital.

Jose Luis, I guess, obviously the Barranquilla store is doing very well. And I guess, one of the things I learned when I was down there is that there was maybe an element of familiarity amongst the people there about a warehouse club store. Do they travel to Miami and so on. And do you have that same type of familiarity in Cali? And would you expect maybe the ramp-up in Cali to be a little bit slower than maybe Barranquilla?

I think, John, our experience after visiting most of the cities -- obviously, Barranquilla has this big influence of the Miami market, but our experience with Colombia has been that they -- a lot of people traveled to the States, if not Miami, other places. And they are pretty much familiar with the warehouse club concept. And I think the acceptance of import merchandise will be probably very similar in those markets. We really feel that's probably the case for either Cali or any other city in Colombia.

And we'll take our next question from Tom Lamb with Weybosset Research.

Yes. My question is regarding your savings and how you divvy them up, say, between your customers and perhaps your shareholders. What is your thinking in regard to when you can -- when you have savings, giving a bit back to your shareholders versus your customers. Could you tell us how you might think about that?

Well, I'll jump in and make a comment. And Jose Luis, you can add anything. We -- as Jose Luis mentioned and I think I underscored, the basic business model of the company is to drive efficiencies in our operations, reduce our costs. We do that by buying better, by distributing more efficiently, by reducing the operating costs in our locations. We also get leverage from higher volumes, which has an impact on some of those things as well. And when we do that, we use that as a driver for reducing prices, which will allow us to continue to drive additional sales, additional membership. And in that way, that's how those dollars fall to the bottom line, and that's where I think the investor benefits from that as we drive the top line.

Okay. So would you characterize that as the customer comes first, so I understand that, and the shareholder benefits from the outcome of all that?

I would say that's probably appropriate.

And at this time, there are no other questions in queue. I'll turn it back to our speakers to for any closing remarks.

Well, great. I don't have any specific closing remarks. Jose Luis, anything you would like to add to the call?

No. I guess, thank you for all participants in today's call and, I guess, Happy Easter.

Thank you, very much.

Thank you.

That concludes today's conference. We appreciate your participation.