Hello, and welcome to The Valens Company's Second Quarter Fiscal 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. At this time, it is now my pleasure to introduce your host, Everett Knight, Executive Vice President of Corporate Development and Capital Markets of the Valens Company. Everett, please go ahead.

Thank you, operator. Welcome to The Valens Company's second quarter fiscal 2022 financial results conference call for the period ended May 31, 2022. A replay of this call will be archived on the Investor Relations section of the Valens website at thevalenscompany.com/investors. Before we begin, please let me remind you that during the course of this conference call, The Valens' management may make statements including with respect to management’s expectations or estimates of future performance. All such statements other than statements of historical facts constitute forward-looking information or forward-looking statements within the meaning of the applicable securities laws and are based on assumptions, expectations, estimates and projections as the date hereof. Specific forward-looking statements include without limitation all disclosures regarding future results of operations, economic conditions and anticipated courses of actions. For more information on the company’s risks and uncertainties related to forward-looking statements, please refer to our latest Annual Information Form and our latest Management’s Discussion and Analysis each as filed with Securities Regulatory Authorities at sedar.com and on EDGAR at www.sec.gov or on the Valens Company website at thevalenscompany.com and which are hereby incorporated by reference herein. Although these forward-looking statements reflect management’s current beliefs and reasonable assumptions based on the current available information available to management as of the date hereof, we cannot be certain on that the actual results will be consistent with the forward-looking statements in the future. There can be no assurance that actual outcomes will not differ materially from these results. Accordingly, we caution you not to place undue reliance upon such forward-looking results. For any reconciliation of non-GAAP measures measured and discussed, please consult our latest MD&A as filed on SEDAR and EDGAR. Now, joining me on the call today are Mr. Robson, Chief Executive Officer; Mr. Sunil Gandhi, Chief Financial Officer; and Mr. Jeff Fallows, President and Mr. Adam Shea, Chief Commercial Officer will also be available for questions. With that, I would now like to hand the call over to Tyler. Tyler, please go ahead.

Thank you, Everett. Obviously, thanks, everybody for taking the time. We're going to jump right into it and hit a few things head on. And I'm probably going to start right on Slide six. So the biggest things I want to do is try to remove the noise from what's going on in the industry and what's going on with the company, and really focus on the fundamentals. And I want to be very clear that this quarter was not up to our expectations. Even though we did have double-digit growth in every segment other than adult rec, we did have net revenue increased to 3.5%. SG&A did decline as we said it would, but it's not happening fast enough and our cash burn is improving, but again, not fast enough. So all the right things are happening. But we do need to do a better job of accelerating some of those opportunities. And obviously, the biggest one right now is the provincial sales. Obviously, we missed on the double-digit growth which I did make that comment. A few things happened out of our control, but I'm not using it as an excuse. When you look at the transition from Verse to Versus, our team did an outstanding job of being prepared to do it, I would say some of the provincial boards sell short. So when you look at the depletion strategy of what's going on, we missed four weeks of those products because some of the retailers thought products weren't available, because the provinces didn't have them ready for the depletion. So rather than being out of stock, it was under a different SKU number. So we have corrected it. And I am happy to say that we got a record month of June, and everything is back on track. And then, we are essentially ahead of where we expect it to be now. And that's without any of the RTVs and without any of the late shipments that made it out of the Kelowna facility. So again, I'm being very optimistic, but cautious at the exact same time that business fundamentals are improving. And I know there's a lot of noise and I know there’s a lot of things to improve. But at the end of the day, I'm pretty happy with the way things are going internally. So at that, I'll turn it over you, Jeff.

Great. Thanks, Tyler. So the core message on the first Slide 7 is that is progress with both improvements and challenges coming from all of our focus areas. We continue to gain market share in Q2 as new product launches at the provincial level began to gain momentum. However, challenges related to our brand changeover from Verse to Verses resulted in us taking a step back in aggregate revenue despite our market share gains. Again, we saw a rapid rebound in both demand and aggregate sales in June with our best retail sales month-to-date. We also saw revenue rebound at Green Roads from a seasonally weak Q1 reaching aggregate revenue dollars roughly equal to that of Q4. However, inconsistency of supply from our third-party manufacturing partners, including vapes and gummies, limited growth, and we were left with a material amount of demand on the table in the quarter. Efforts are already underway to address these challenges which are expected to dissipate as we get deeper into Q3 and Q4. Integration initiatives are delivering against plan and are expected to deliver strong cost savings both above and below the gross margin line over the next two quarters. While some of the targeted initiatives took longer than originally planned to launch, the net benefits of the additional planning and preparation have created an opportunity to deliver more than the $20 million in annual savings, originally forecasted. Managing cash and reducing cash burn are key areas of focus for us, and we are beginning to see the benefits of our efforts here. That said, we have yet to see the full impact translate to our cash flow statement, but remain confident that we will be able to manage our cash balance effectively and see a material reduction in our use of cash over…

Thanks Jeff. B2B sales increased 11.1% quarter-over-quarter with Q2 revenue increasing to 7 million. While we have seen higher demand for bulk sales, we remain optimistic that the platform will continue to strengthen as our partners optimize their manufacturing processes a bit both industry and economic headwinds. B2B can be lumpy quarter-to-quarter as we realigned biomass to optimize margin profile for each customer. Moreover, pipeline remains robust with new B2B opportunities within and outside of the cannabis industry which provides upside. Sunil?

Thanks, Tyler. Slide 17, please. Let me start by saying that our operating environment continues to be challenging with ongoing inflationary cost pressures of volatile supply chain and retail price compression given the highly fragmented state of the industry in Canada. As a result, we have been taking aggressive actions to right size, our cost structure and streamline our business, which I will discuss in more detail later in the call. We do expect at this time that 2022 will be a challenging environment with financial failures anticipated across the marketplace. Now on Slide 17, consolidated net revenue you can see increased by 3.5% to 24 million in Q2 2022, with broad strength across Green Roads B2B and international markets more than offsetting the volatility in our provincial sales revenue. As previously discussed, potential sales revenue decreased by 14.8% to $9.2 million in the quarter. Largely due to asset depletion that turned provincial markets from the rebranding of certain SKUs from Verse to Versus. Additionally, about 0.5 million shipments to provinces delayed in Q2 pushed revenue from May into June. But even excluding these factors provincial sales revenues have rebounded in June, for the best month ever for the company. This combined with a strong pipeline of purchase orders already had for July give us confidence that the rebrand and expanded product portfolio is gaining traction with consumers and budtenders. Our B2B segment continue to double-digit growth reaching $7 million in revenue in Q2, up 11.1% from the previous quarter. The increase is primarily driven by higher demand in bulk sales and some onboarding of new customers. Our Green Road U.S. CBD business also saw double-digit growth of 11.8% to reach $5.7 million in the quarter. Growth was primarily driven by direct consumer ecommerce sales and an increase in international…

Thank you. We will now conduct the question-and-answer session. [Operator Instructions]. Thank you. Our first question is from the line of Aaron Grey with Alliance Global Partners. Please procced with your questions.

Hi, good morning and thank you for the questions. So first question for me, just going from the Verse to Versus right, you talked about record month in June for sales to provinces strong visibility into July. Just want to get some commentary in terms of how you feel comfortability on the sell through, at retail for that, especially with the brand switch and potentially not having it, on shelf or online for that certain period of time we talked about a couple of weeks. And then if you could just quantify the revenue impact you think you had from the disconnect with the provinces in the different SKU numbers? Thank you.

Yes. Thanks, Aaron. Great question. I will kick it over to Adam Shea, our Chief Commercial Officer in one second, but I would say it definitely hurt us. And I would say the balanced team did everything we could to basically make a smooth transition. But it was very lumpy at some of the provincial boards, even doing a brand transition at quarter-end or their inventory, month, for the year-end was challenging to say the least. But Adam, why don't you comment on both of those?

Yes. Thanks, Tyler. Aaron, I appreciate the question. So the Verse to Versus transition despite some choppiness throughout Q2, we're in a very good spot now. We're seeing strong, strong replenishment orders coming in. And I'm very, very bullish on where we'll be over the next several weeks, I think we have normalized our depletion rate. To your specific question around the impact. So on average, the depletion rate from provincial boards to customers, on average, in our major markets is anywhere between 800,000 to 1 million a week, depending on the point of the year. So having one or two weeks of no depletions due to SKUs not being activated, really did have an unfortunate impact, but certainly wasn't indicative of the efforts by our team or where we believe the brand would go.

Okay, great. Thanks very much for that color. And then, second question from me, just on the gross margin, as it relates to your EBITDA profitability target, can we focus on the gross margin for a second here and just help us bridge to some of the line items there in terms of the improvements on the gross margin, whether or not you want to get more of a specific target in terms of what's embedded in the EBITDA profitability on the gross margin side. Any color there to help us bridge around the improvement would be very helpful. Thank you.

Absolutely. Sunil, why don't you take that one?

Sure. Look, obviously, we don't really give margin guidance as an official statement from the company. But I think, we know that based on our views, our provincial mix, sales mix, the cost of improvements that we absolutely expect to see, largely based on contract growth situations and automation. We would definitely expect our gross margin profile to double from where it is now, back to where we would need it to be. We want this steady database business long-term to be a gross margin profile of north of 30%.

All right, great. Thanks for the color. I'll jump back in the queue.

Your next question is from the line of Neal Gilmer with Haywood Securities. Please proceed with your questions.

Yes, good morning. Thanks for the questions. Maybe I'll start on the Coldhaus distribution or partnership. Obviously, it was just announced in June, when does that actually get sort of fully implemented? And what sort of things are you going to be sort of monitoring as far as evaluating the success of that over the first few months of the program?

Yes. It’s a great question. Adam, why don't you start and then I'll add on to the back of yours.

Yes, sounds good. Neal, thanks for the question. Very excited about Coldhaus partnership. Anyone who is familiar with Coldhaus, they're experts in drugstore, distribution, logistics, et cetera. We've got an exclusive partnership with them now where they will solely represent Valens brands, specifically to start in the markets of BC, Alberta and Ontario. In those three major markets, we’ll have well over 90% coverage of the cannabis -- legal cannabis retail universe, with the ability for frequency, weekly and bi-weekly to well over 75% of that universe. So we're very bullish. This gets underway on September 1. And we're very bullish of the ability for that team to have laser focus priorities related to Valens specific brands and ultimately be able to help both retailers and consumers better navigate our portfolio. So we're feeling very bullish about that knowing Coldhaus’ record of success in other categories.

Yes. Just kind of to add on that, Neal. I think the biggest thing to not only the direct store model whether we are going to be physically in stores very frequently, unlike any model we've seen in Canada, unlike the big sales industry. I would say, it’s the competitive intel like the CRM system that they have, we can be much more methodical and much more concise on how we maneuver. So as they're doing information in store, we can literally find out which stores are carrying which SKUs and then be laser focused on the ones that aren't. So I do believe it's going to be the most dominant sell-through force out there. And then we've interviewed all the big ones, I've never seen anything like Coldhaus before in my career.

Okay, great. Thanks both of you for that. Second question I guess is on the EBITDA profitability. I guess if I'm trying to think through of the cost saving initiatives, you guys have announced at least $20 million. If I just sort of take the simple way to go about it, so that's 5 million a quarter, some of it just going through COGS and some through SG&A. Is there -- what sort of revenue, I don’t know, if you're going to answer this, but like, is there a certain revenue level that you guys need to achieve such that you're going to get that EBITDA profitability in Q4, just basically just sort of coming off of where we are from what was reported in the EBITDA loss in Q2?

Absolutely. Like you said, I don't know if we'll answer exactly. But Jeff, why don't you take a stab at it, and then Sunil will follow up?

Sure. Obviously, if you do the simple math on it, let's say, for example, applying a 30% gross margin, you can sort of come to an assumption around sort of targeted SG&A levels. I think what you're going to see is a combination of both. I think, number one, revenue growth, as we're seeing in the pipeline, both on our retail recreational footprint, as well as Green Roads and other areas of business, number one. Number two, as we said, we see $20 million-plus in savings through the initiatives that we're running. We think that's going to contribute towards that EBITDA positive. And thirdly, I think the product mix, as all of these other as retail sales or recreational sales continue to increase, the product mix will SKU towards higher margin products. Sunil, I don’t know if you want to add to that.

No, I think Jeff hit a nail on the head, it's obviously you're flexing all three levers. And so revenue growth, it's the margin expansion and the SG&A going down all at the same time, that will all contribute and stay in there.

Okay, great. Thanks very much, guys.

Our next question is from the line of Andrew Partheniou with Stifel GMP. Please go ahead with your question.

Hi, good morning, thanks for taking my questions. Maybe first talking about B2B and the U.S. have business, international as well, all very impressive growth rates here. Just looking forward trying to understand, do you believe that these growth rates are replicable. Or you expect to see stronger growth in rec that could supplement or overtake maybe a little bit of softening and in the B2B CVD channels, or international because it seems this quarter was really hitting on all cylinders there. And it could be a little bit of softening before a reacceleration would sometimes occur. Just wondering if that the proper way to think about it or next quarter, we should see the continued momentum on all of these businesses.

Yes, great question. So, Jeff, I will answer the first part, and I'll kick it over to you to the U.S. side. I do expect stability across the board in a lot of the verticals, obviously, with the biggest area of attention for us being adult rec or provincial sales. We do believe there's a huge opportunity there, which should bring stability, to our forecasting and moving forward because we were in control of our own destiny. As far as B2B, it's extremely lumpy. So it's week by week, month by month. And a lot of the challenges we're seeing just without rec, a lot of the other licensed producers are seeing as well. So there's a lot of turbulence, but what our goal right now to do, which is optimize the manufacturing capabilities we have, and then backfill with strategic partnerships, like the B2B relationship. So I do expect more momentum to continue, especially through adult rec and some of the other opportunities and then stability on the B2B side. Jeff, why don’t you touch on the U.S.

Sure. From the Green Roads side, while we did see growth 11% growth quarter-over-quarter, I can say that we were -- it didn't meet our expectations in terms of performance in the quarter. There were some online challenges related to our strategies with Facebook and Instagram that that held us back a bit but also, as we noted, the third-party suppliers not providing the consistency or the availability of product to meet the demand. So we do expect there's more demand there's more opportunity and there is more shelf growth coming out of Green Roads in the coming quarters, working hard to realize that. On the international side, you're right, there was a nice little bump there this quarter. But I won't say that that's sort of a one time, I'd say that's been a long time in building and nurturing that. And [indiscernible] has been patient with us in terms of realizing that, but we're starting to see the benefits of all those efforts materialize. And so the growth that we saw as we're looking at Q3 and Q4 right now, we're continuing to be excited about the additional revenue provided by those channels and think that there's more to come.

Thanks for that. And maybe transitioning going back to Coldhaus here. And maybe going a little bit deeper into your kind of decision-making process between partnering exclusively with Coldhaus or versus developing your own sales force. Just wondering, what really drove you to partner Versus them versus developing this in-house?

Yes. No, I think that is a great question. And Adam, feel free to tag on at the end. We looked at all models, going forward, interviewed the majority of the big distribution platforms and/or sales agencies. And we've never seen anything with the level of sophistication that we saw with Coldhaus, whether it's the CRM system, whether it's the routing. I've never seen anything like it. And even when you look at the predictability of the opportunity at hand, it's like we can be at this store at this time between 10:25 am on a Tuesday, and 10:30 am. So the repeatability of Coldhaus and then traceability too. They've been extremely successful. And if you look at some of their other partners, I think you can understand why that we would choose them. Adam, I don't know if you want to add anything.

Yes. Andrew, the only three things I'd add to Tyler's comments is, the way to look at this really is about -- it's a balanced sales force that is anchored in Coldhaus. So you're going to see, the retailer will see a Valens representative wearing Valens, the tire show up to their store. So the person at store XYZ in Ontario that also has a store in BC, they're just going to see a Valens representative who's there on a consistently frequent basis, who's being very methodical about their call, not they're sort of randomly talking about 25 different things over the course of 40 minutes, rather, very specific 15-minute call that anchored in key priorities. And then as Tyler referenced, the significance in their intelligence around routing really allows us to drive that reach and frequency that just isn't -- we did not see that in any of the other partners we could have considered. So very excited for that. That to be underway out in September 1.

Thanks for that. I'll get back in the queue.

Thank you. Our next question is coming from the line of Frederico Gomes with ATB Capital. Please proceed with your question.

Hi, good morning, thanks for taking my questions. My first question is on your sales guidance. [Indiscernible] $225 million. That would be more than double the revenue that you had this quarter, annualized. So could you maybe just remind us how much of that growth you expect to come from B2C in Canada? How much of that would be, B2B? And how much would come from the U.S.? Just trying to understand, which segments you expect will grow faster? Or next year? And how much you have, within your control to drive that growth? Thanks.

Yes. No, good question. I'll probably kick it over to Jeff or Sunil. I don't think we're going to give formal guidance on the breakdown of how we expect the revenue to unfold. Obviously, with a turbulent time in cannabis. I think it's going to come from multiple levers or verticals, but Jeff feel free to add on.

Sure. I think maybe I'll start and Sunil you can clean up. So if we're looking at the various segments, obviously, and we said very specifically, that we think there's a significant opportunity for us in the Canadian recreational space, that's getting our priority, and that's getting a lot of our focus. So a significant amount of the growth. We anticipate coming from that, number one. Number two, we think from the Green Roads in the U.S. CBD business, we think we've only just started to scratch the surface, on what that business is capable of doing. And so from our perspective, that's going to also add a significant contribution to that growth profile. I think you're also going to see, international start to take a little piece of the pie started to add on a more meaningful basis as we move forward here in the coming quarters. B2B as Tyler said, it won't be lumpy. But some of the relationships and some of the opportunities that we're seeing, and then we're nurturing, that could be also be a very big contributor to our revenue profile going forward. Sunil?

Yes. I think Jeff nailed it straight on. I think the way to look at it is, our two key pillars of growth that we expect to get us to where we want to be is Canadian adult rec and Green Roads with the other segments playing meaningful, but supporting roles. So the revenue and the margin growth being led by Canadian adult rec and Green Roads.

Okay. Thanks for the color. And then a second question is, you have some market share targets, and you are behind them for certain product categories, in particular, pre rolls. So could you comment on what initiatives you have in place right now to drive growth in pre rolls for the remainder of the year? Thank you.

Yes, absolutely. So Adam, I'll go first, then feel free to tag on. I do believe we are behind in a couple of categories. And I think there's very real reasons. One, some of our listings got delayed in Alberta, for example, eight weeks. And then some of the -- I would say infused pre rolls haven't really made it to market share numbers yet. So in the later half the year with a lot of listings going live, that's been really expect to push the needle, that coinciding with a Coldhaus start, we believe will be the back half of the year, that will really start to gain momentum. Adam?

You are spot on Tyler. The only additional thing that I would say is that, when you look at, depending on what period you're comparing to Frederico, you think year-over-year, there's a different pricing dynamic in the marketplace today, across pre rolls of all segments, frankly, than there was a year ago. We're feeling the impact on that on, call it more premium pre rolls. And I think we'll be quickly ahead of where we thought we would be based on the three points that Tyler said. So I'm not worried about that feeling very bullish about the innovation we have coming in the next several weeks.

Okay. Thanks for the color. I will hop back in the queue.

Thank you. The next question is from the line of Michael Friedman with Raymond James. Please proceed with your questions.

Hi, good morning team. And thanks for taking my questions. I wonder if you could give a few tangible examples of your -- of how you've been enacting these cost saving exercises, both the ones that you've actioned already, and those that you are targeting in the future. And if you could give an example from the SG&A bucket and the COGS affecting bucket. Thanks very much.

Absolutely. That's a great question. Sunil, why don't you start and then I'll add on?

Sure, I mean, I think we highlighted on one of the slides in the material where you can kind of see where we're getting things from. We know we had a very acquisitive 2021. So naturally coming out of that we did have areas of duplication and where we need to centralize things. So you see a lot that reduction, in some cases coming through SG&A lines there is some rationalization of cost, people cost, infrastructure cost that we've been undertaking through the first six months of the year. So that would come through SG&A. On COGS, you're going to see a few different things, you're going to see the impact of lower input costs, you've been undertaking initiatives, not just run the contract growth, become through it, things like, reduce input costs, other areas, as well as the labor profile significantly changing. As we've installed, a lot of CapEx we are automating certain areas, it is natural that the average cost of labor to make your product goes down. So in some cases, there's people applications and in other cases [indiscernible] capital. In other cases, it's sourcing. In other cases, it might be infrastructure and overhead, but we're realizing savings in all those areas.

Okay, that's really helpful. I appreciate you letting that. Now, I wonder, you're undergoing these cost saving exercises at the same time as you seeking to double revenue over the next year or so. Are there areas where you are -- I guess, how can you assure us that in reducing these costs, you're not creating bottlenecks?

So you cut out there for me, if someone else, welcome to answer, but if you could repeat the question.

Yes, I'll repeat it briefly. How can we be confident that as you're undergoing these material cost saving exercises, you're not creating bottlenecks for growth in achieving your [2023] [ph] revenue guidance?

Yes. I know that's a great question. And to be frank, Sunil, you can add on as well. I would say this was always the plan that when you invest in automation, and we'll use [FlowerPak] [ph], for example, we used to do call it 8000 units a day. Now we're doing 2000 an hour. We've invested in the CapEx and really optimize the platform to really push. And we're not cutting anywhere, we potentially see bottlenecks. And right now, it's really just pushing on core SKUs that have a ton of velocity through. So it's really just recognizing the synergies of the platform that we built and really pushing. So we don't see any bottlenecks in any of the product line items that are going out in the foreseeable future.

Okay, thank you very much.

Yes, I think to build on what Tyler was saying, I think what he's referring to is exactly like a scalable business, right. So sometimes you're reducing reordering, but we're building a scalable business I mean that's more automated, fewer, bigger, better, more ability to get product out of the system, more ability for us to actually generate those revenues. And in some cases where you might be looking at areas for like post acquisition, we just realized we could deprioritize, a couple of areas, reduce overhead costs, et cetera. Those are not the types of things that you would expect to have a material impact on our ability to grow revenue. So for the most part, the savings have been in areas that would not impact that.

Michael, the other area, I'd add on for you to double check on your research side, look at other companies like Organigram, like that as more revenue than us with almost half the SG&A. I think that you can look in the industry, that with the automation we've invested in, it's not unreasonable to expect especially note that we doubled our SG&A, over doubled our SG&A last year with a lot of the acquisitions. So this is just realizing the cost savings. And as Jeff mentioned, in his part, we've delayed some of those and been more methodical to that process. So we can continue that ramp and revenue and smooth that out over time.

That's terrific. Thanks for this color.

Thank you. The next question is from the line of George Todorovic with M partners. Please proceed with your question.

Yes, good morning, guys. Just filling in for Nicholas Cortellucci this morning. So firstly, what product forms are you seeing most of the rebound in during June and July?

Yes, great question. Why don't Adam you talk on that one? Adam?

Sorry, I'm totally sorry about that. For some reason my phone was, I apologize, everyone for the for the tech problem there. The question was about where we're seeing the product. The most bounced back in product format, just to just to confirm sorry.

Yes.

Yes, we are seeing actually, quite frankly, across all parts of the business, I think the one area where we're a little bit sluggish is on concentrates. But frankly, we're having a significant uptick in all of our form factors. Bates is leading the way with very, very strong volumetric replenishment orders. Our dried flower business, similarly, the pre roll business as well, our beverage business, edible business, I would say is normalized. Lots of opportunities still, on the edible side. I think right now we're seeing it really across the board with the exception of a little bit of softness in the concentrates business. But that was a softness that we anticipated. So we're feeling good right now about where we are on volumetric as far as we proceed through Q3 right now.

Great. That makes sense. Second question for me. What are you thinking in terms of using the cash on hand over the next few quarters?

Your question around, what are we seeing on cash on hand for the next few quarters?

Yeah, in terms of using it?

Yes, I think what we stated in our material was that we definitely expect the cash burn to reduce as the EBITDA goes down. So obviously, you are EBITDA negative as you're going down that path, you'd naturally expect to some cash along the path, but you don't expect any material investment and things like working capital or CapEx or whatnot. That's what gives us the confidence that we're on the path towards getting towards cash flow, breakeven, and that will allow us to navigate through the balance of a year.

Good it. Thanks.

Thank you. At this time, I'll turn the floor over to Tyler Robson for closing remarks.

Yes, appreciate it. Just want again to say thank you for everybody for the continued support and time. Obviously, this quarter was not up to my expectation. Even though we were doing basically what we said we're going to do cash burn is coming down, SG&A. We're doing everything we said it's not happening quick enough and with such a big opportunity that we missed on adult rec, we will bounce back and we will continue to drive the business forward. So with that, again, want to thank everybody I'll turn it back to the operator to close the call. Thank you.

Thank you. This does conclude today's call. Thank you for your participation. You may now disconnect your lines at this time and have a great day.