Welcome to Sysco's First Quarter Fiscal Year 2025 Conference Call. As a reminder, today's call is being recorded. We will begin with opening remarks and introductions. I would now like to turn the call over to Kevin Kim, Vice President of Investor Relations. Please go ahead.

Good morning, everyone, and welcome to Sysco's first quarter fiscal year 2025 earnings call. On today's call, we have Kevin Hourican, our Chair of the Board and Chief Executive Officer; and Kenny Cheung, our Chief Financial Officer. Before we begin, please note that statements made during this presentation that state the Company's or management's intentions, beliefs, expectations or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act, and actual results could differ in a material manner. Additional information about factors that could cause results to differ in a material manner. Additional information about factors that could cause results to differ from those in the forward-looking statements is contained in the Company's SEC filings. This includes, but is not limited to, risk factors contained in our annual report on Form 10-K for the year ended June 29th, 2024, subsequent SEC filings and in the news release issued earlier this morning. A copy of these materials can be found in the Investors section at sysco.com. Non-GAAP financial measures are included in our comments today and in our presentation slides. The reconciliation of these non-GAAP measures to the corresponding GAAP measures is included at the end of the presentation slides and can be found in the Investors section of our website. During the discussion today, unless otherwise stated, all results are compared to the same quarter in the prior year. To ensure we have sufficient time to answer all questions, we'd like to ask each participant to limit their time today to one question. If you have a follow-up question, we ask that you re-enter the queue. At this time, we'd like to call -- to turn the call over to Kevin Hourican.

Good morning, everyone, and thank you for joining us today. During our call this morning, I'll provide an update on general marketplace conditions, highlight Sysco's specific performance results, provide some color on select priority initiatives, and reconfirm Sysco's previously issued full-year guidance. Let's get started with a brief update on the overall food away from home marketplace. Food traffic to restaurants was down 3.6% for the first quarter, grew roughly 100 basis point erosion from the fourth quarter. With that said, traffic trends improved throughout the quarter, with July down 5%, August down 4%, and September down 3%. The traffic data just referenced includes the impact from significant hurricanes that occurred in the beginning and ending of the quarter. We are cautiously optimistic that recent actions by the Federal Reserve, lower general gas prices, and getting past the election will positively impact food away from home traffic in the second half of our fiscal year. Notably, the improvement in Q1 food traffic data was evident across all restaurant types. To help matters, we see restaurant owners taking actions on menu pricing to improve their value proposition. This is a positive for the industry overall. Sysco can help restaurant operators achieve lower menu prices through our Sysco brand assortment and through value-added products that help save restaurants time and money. An example of this is our FreshPoint business that provides pre-cut products that help remove prep work from the kitchen. Turning to the non-restaurant sectors, we are seeing strong performance across the board with particular strength coming from the business and industry sector as more companies are encouraging work from the office. As Kenny has said many times, these non-commercial sectors tend to be more resilient to overall economic conditions, and we are seeing that in our current results. Turning from…

Thank you, Kevin, and good morning, everyone. Our performance this quarter included sales growth and improved profitability, in addition to returning meaningful cash back to shareholders. As Kevin mentioned earlier, restaurant foot traffic was down 4% during Q1. Traffic levels also improved throughout the quarter, an important positive signal for the industry. Here at Sysco, we are focused on executing on the things that we can control as the market leader by growing share profitably. This includes continued improvements to the core business to better align expenses with volume growth, improving supply chain productivity and corporate expenses, all while delivering world-class customer service. We exited the quarter with stronger year-over-year top and bottom-line growth rates during the month of September, adding to our confidence in our full-year guidance. While traffic is an important proxy for industry health, Sysco has proven our ability to grow in any environment. Looking back at the past 12 months, we've seen on average 600 basis points positive spread between our growth in industry traffic to accrete leverage on our P&L. We believe the current macro and industry challenges are transitory, and as volumes improve, we believe we are well-positioned to fully leverage our size and skill advantages. Additionally, our strong investment-grade balance sheet coupled with our robust operating cash flow allows us to invest in business and reward our shareholders. We remain on target to return $2 billion back to shareholders this fiscal year through share repurchase and dividends. Looking ahead to the remainder of the year, we continue to expect a more normal rate of top-line growth, in particular from local, in the second-half of the year. The second half is expected to deliver mixed benefits as well as other P&L benefits from our actions across operations. This includes our plan to escalate strategic…

Thank you, Kenny. Before turning it over to questions, I want to acknowledge the recent passing of Ed Shirley, our former Chairman of the Board. Ed had a tremendous impact on Sysco over his eight years of dedicated service. His mentorship, wisdom, experience, and joy for life will be missed. Our thoughts are with Ed's family. With that, operator, we're now ready for questions.

[Operator Instructions]. We will go first to Kelly Bania with BMO Capital. Your line is open. Please go ahead.

Good morning. Thanks for taking our questions. Just wanted to maybe start off with a quick one about the stronger exit trends in September. Can you just maybe drill down and elaborate on what is driving that? And are you willing to comment about where you're tracking in October? And then just in terms of bigger picture question, you remain quite positive on the impact from the compensation change into the second half? And can you just help us understand what gives you that confidence, quantify the effect that, that change had on local case growth in the quarter? And if low single digit is still the target for fiscal '25?

Kelly, Good morning. This is Kenny. So let me talk about Q2 to start off and then I'll address your question around September and October. So for Q2, we expect the EPS growth rate to be slightly higher than Q1, and that growth rate will step up in the back half of the year. Again, we're confident in the full year guidance. As it relates to October, the October month-to-date industry traffic we're seeing is similar compared to September, and we're seeing the same here at Sysco as well. But we're encouraged by the following. First is the last two weeks of October is stronger than the first two weeks, given weather-related events. The second thing we're charged by is select geographies are already hitting a local growth expectations driven by the SC additions as well as the new compensation model. As it relates to Q2, keep in mind, in Q2, we do have a tougher comp year-on-year. We are lapping the highest local case built in 2024 and an EPS growth of last year this time of 11%. All in for the quarter, we currently expect a slight uptick on EPS growth rate for Q2 with the growth rate turning more positive in the second half of the fiscal year. Kevin?

Kelly, it's Kevin. I'll take the second half of the question tied to the SC comp. For those on the call, we announced in June the comp change went live July 1. As I mentioned in my prepared remarks, there was a transitory impact of that new comp model in our Q1 as it relates to select people leaving the organization with that change. That's now behind us. We have fully stabilized the retention of our sales colleagues. Specifically, to your question about what gives us the confidence. We've remixed base to bonus, putting more emphasis on paper performance and we can see the elements of the comp program that we're focusing our colleagues on beginning to bear fruit. So what are those things? Increasing new customer count that is a very important component of the comp model. We are increasing our customer count and the progress that we made throughout Q1 is stepping up each month of that quarter, and we expect for that to continue. So that's proof point number one, we've increased our customer count and we expect that to continue in to be a tailwind into the second half. Second is total team selling, which is the bringing of our specialty businesses into a current Broadline account. We have made that a comp element for our Broadline sales colleagues. They are rewarded for that activity. So therefore, we are now seeing more of that team selling taking place. And the third is just overall performance of our colleagues, we call it grow on the grid. As they grow their business profitably, they earn more and Sysco benefits and improves. And as we're now 90 days plus into the new comp model, our leaders are helping our sales colleagues with moving up that growth on the grid, their success equals our success, and we're making progress month-over-month, and that's what gives us confidence for the full year.

We'll go next to Alex Slagle with Jefferies. Please go ahead.

Thank you. I just wanted to dig into the U.S. gross margin, I guess, which is facing headwinds related to the product, customer mix dynamics. And I know you have several initiatives in place to redirect the momentum here with a lot of it seemingly being self-help opportunity and the pieces kind of coming together in the back half. But are there external dynamics that have gotten any tougher, whether it's the competitive dynamics in the industry or if there's any evidence of product trade down within customers toward alternative proteins or elsewhere? Anything here to the degree that impacts your gross margins and the outlook?

Alex, it's Kevin. I appreciate the question. I'll start, and then Kenny can add anything he would like to add. I'll just go back to some of my prepared remarks. There are three drivers of the gross margin nominal decline from a percent basis year-over-year. The first is customer mix. We're growing our national business faster than our local business at present time. We expect that to decline as an impact over the year as we improve our local case performance. So particular headwind compresses or decreases as the year goes on. Second point, and it's the biggest of the point, is our strategic sourcing efforts. As I said in my prepared remarks, this is a timing-only issue. We are fully confident that the full year value that will come from our strategic sourcing will enable us to deliver our gross margin rates for the full year. It's just on a year-over-year basis, Q1 this year versus Q1 last year, the contribution from that program was lower. And it's a timing issue relative to the work we do in that program, and we have full confidence in the GP value creation that will come from strategic sourcing as the year goes on and we deliver the full year requirements. The last of the three is Sysco brand penetration percent. It's down slightly year-over-year. It's interesting to unpack that one. For local mom-and-pop street customers, our penetration is actually up year-over-year. It's our -- what we call LCC, which is the small chains, 10 to 100 doors in that range, that size customer, we're seeing a decrease in Sysco brand purchases year-over-year. To your question on macro, that's mostly tied to our national brand suppliers improving fill rate. With net-net is a good thing for the industries. Our customers don't like substitutions for those types of products. But Sysco brand fill rate tends to be better than national brand fill rate. And while national brand suppliers were having some challenges over the past couple of years that resulted in higher Sysco brand penetration. With that said, what can we do about that? We're putting what we call trade management deals in front of those customers, putting value in front of them specific to Sysco brand, and we are confident that we can improve the penetration of Sysco brand within that small chain concept division. Kenny, anything to add on margin?

Sure. Alex. If we take a step back for the quarter, overall, GP grew 3% and GP dollars per case expanded by 1%. I agree with Kevin's points around the drivers that put pressure on GP in Q1. And we have acted in place, as you heard from Kevin. A couple of other things I would say is that we also have other actions that drive GP. It's not just those three things in our company. We have other levers in our company that can drive GP as well. Let me give you a couple of examples, specialty -- growing specialty, right, that has a higher margin attachment rate. Total team selling, which gives us both top line and margin calories. As we go international, in particular, local customers, inbound logistics optimization, where we minimize touch points in terms of supply chain and on and on. So there are other things that our company is working on as well that would drive accretion to our P&L. And the majority of the benefit, as Kevin said, will be in the back half of the year. So in the back half, to summarize your question around phasing, we expect total GP, GP dollars per case and margins to grow in the second half of the fiscal year. And that's the big reason why you see the elevated run rate on EPS growth in the back half as well, coupled with local case growth. So to your question about controllable or the market itself, I would say it this way, most of the lift on margins and growth in the back half is from our own actions versus market lift. So definitely, it's more controllable, and that's the reason why we are confident in the full year.

Got it. Thank you. That’s helpful.

We'll go next to John Ivankoe with JPMorgan. Please go ahead.

Thank you. The question is on the sales force compensation change. You mentioned the word transition or transitory in relation to the first quarter. And it does sound like at least some of that may have been unexpected or unanticipated at least to a minor degree. So can we kind of drill a little bit more in terms of what type of transitory impact did we see? Did we see more kind of underperformers or performers in line leave? Did we keep all the kind of the best people that you really want to keep? Or was there any unanticipated type of turnover? And as we think about growing the sales force 20% over the next couple of years, as you've kind of seen some behavioral changes based on this new comp model, do we still think that 20% number is still the right target from here? Or can we get basically more out of existing people as they're compensated to do so?

John, it's Kevin. I'll start. Kenny can comment to the tail end of the question about the economics of the new SE hires, but let me address the first part of your question, which is the why we made this change, the impact that we've had, and again, the overall thought process behind it. This is a change we wanted to do. Our base space were too high as a percentage of the total earnings potential for our colleagues. Reminder, pre-COVID this was a job population that was 100% commission. So we implemented a base plus bonus program during the COVID years, and it’s time to unwind some of that, putting more of their pay at risk so that we have a pay-for-performance culture. Their outcomes and their output will determine their earnings and their success equals Sysco success. To answer your question on top performers versus underperformers our people performing below average. Our top performers, John, they love this program. they want more earnings potential in every Sysco sales colleague has the opportunity to earn more money in this program than in the old program. So our top performers are very pleased with this program. They're earning more money this year versus last year in our Q1. We did see an increase in colleague turnover in July. We did actually anticipate that. What we've said to our own internal leadership is one of two things has to change with this program. Behavior and outcomes need to change and therefore they earn more money or some of the individuals themselves will most likely rotate out. We did see that activity in July, an increase in our turnover that is stabilized. We have returned to our normal rates of SC retention. Our top colleagues are with us. Our top colleagues are earning more money and we're having no challenges with hiring new colleagues from competitors and from the industry to fill our inbound SE hiring needs. So we've made this change because we want to do. We made this change for the long term benefit of Sysco. We are confident that for the year to go, this SC comp change will be a tailwind to our performance, not a headwind and the change curve, if you will, is behind us vis-a-vis Q1. Kenny, anything to add on the P&L impact on the year-to-go hiring?

Sure. John. Three things I'll say. First is most of the year-over-year incremental sales professionals on our post today were higher in the back half of '24 and the new compensation program was rolled in early July. So the benefits we expect to see will mostly happen in the second half of the year. From an ROI standpoint, to your question around adding headcount. We are committed to growing our local sales professional head count. And we will be disciplined on facing some volume expectations and market conditions. As Kevin said in his prepared remarks, we will not go too fast, and we will not go too slow will be deliberate on when and where we add, meaning investing high-growth markets to ensure an optimal return on investments. And by the way, we are seeing a high correlation between head count adds and volume growth by market. The last thing I would say is that international had a good quarter for us. The local growth was 3%, which was contributing to a 12% OI increase. And the good news is it's not just one market, every region within our international portfolio grew local sales.

Thank you very much.

We will go next to Mark Carden with UBS. Please go ahead.

Good morning. And thanks so much for taking the questions. So another one on some of the salesperson compensation shifts with the adjustments to the new model, you guys have done some territory reductions in rebaselining. How is the sales force adapting to some of these changes so far? And are you seeing the kinds of team-based selling lifts you were anticipating?

Thank you for the question. To be clear on where the head count adds are occurring, it's not a shocker on approach of spreading them evenly across the United States. We're adding the head count to high-growth opportunity markets for Sysco. We won't specifically, on this call, tell everyone where those activities are happening, but the incremental headcount is going to places where our business is robust, strong, growing, and we're going to make that fast source run even faster by fueling those geographies with incremental headcount. So these are population growth corridors in the United States and other areas where we do see tremendous potential for Sysco to win market share and to win market share profitably. So it's not every colleague that is impacted by this. In fact, it's a reasonably small percentage of our current colleagues are impacted by a new person coming in. And as Kenny has said many times, when a new person joins, we give them a small starter book of business of roughly five accounts. So that means five other SEs have donated one customer account. So the impact is reasonably negligible to current colleagues. Why we're doing this is we want to grow our customer count. We want to grow our book of business and by adding the SE headcount. It allows us to make that growth occur without increasing our territory size beyond the red zone for existing colleagues. So we're really pleased with the work that's happened with the placement of those colleagues and the total team selling component of your question, we're on track with total team selling. What it starts with first is who are the customer prospects to who is the customer that's buying from currently Sysco Broadline, and we know through our data, they're buying produce…

We will go next to John Heinbockel with Guggenheim. Please go ahead.

Kevin, can you talk to -- if you think about the maturation, right, of the new sales cohorts, start with five accounts. Where are they in six months or a year? What's the path, right, to get to sort of full book of business, number one? And then when you think about the proof points that you're seeing, right, in the geographies, what are the corollaries? Why are those geographies succeeding particularly? And then just the quick last one is just -- I know you talked about specialty. Is it possible that 20% of your accounts are not buying specialty from you? Could it be that high or higher or no?

Okay. Just on the first part. Thank you, John, for the questions. On the first part of your question, which is how are they performing? As Kenny said, we hired colleagues as cohorts throughout the year classes if you will. The majority of that hiring did take place in the second half of the year. We are tracking each of those cohorts versus what week are they in. So 12 weeks unless they should be at a certain level. 12 to 24, they should be at a certain level. The news to report on today's call is each of the cohorts is moving up the productivity curve at the rate that we expect. We actually added sales trainers as a part of these efforts to ensure that they're being provided. It's mostly product knowledge skills training. So that they can, in fact, sell Sysco brand, as an example. So what I can share on today's call is, we're pleased with the performance of the 2024 hiring cohorts. They're maturing up their productivity curve at the rate that we expect their growth comes from winning net new business. We are increasing our customer count as Sysco month-over-month in our Q1, and we expect for that to continue, in fact, pick up pace as the year progresses along. Kenny, anything you want to add to that? John, the second part of your question?

What was the second part?

Yes, please.

Well, the second part was the proof points, right, they're succeeding. I'm just curious, is there any commonality to that in terms of size of the cohort geography growth, how you're attacking that? And then the last piece was just your specialty opportunity.

Yes, very good. On the proof points, we can very clearly see in the geographies where we're adding head count that we're performing better in those geographies from a market share growth perspective and in the geographies where we have not. And that reinforces even more the point in the importance of where and why and how we need to be deploying the headcount talent and it gives us that strong confidence that we keep forward with the hiring pace and hiring plan. Think about metro. I won't name a metro market, but where you know from our history, we've under-indexed from a market share perspective in those metro markets. Head count growth is happening in those metro markets, and we're seeing our market share growth capture. As it relates to the percentage of our customers that have the opportunity for total team selling, it's high. We're not going to quote the exact percentage, but it will be north of the number you quoted. It's a substantial number of customers who are currently buying from Broadline only.

Thank you.

We will go next to Edward Kelly with Wells Fargo. Please go ahead.

Hi. Good morning, guys. Kevin, you talked about -- it sounded like this is about the sales force hires, but about an emphasis on a balanced, maybe measured sort of pace of sales hires in '25. Can you maybe elaborate on that? I mean you've had some initial turnover issues, which you're over now, but does that impact your ability to grow the sales force by the 450 hires this year. So I'm curious, is that a target that still applies? Does that impact '26? I'm just kind of curious, like, are you rethinking like the pace of the sales hires, the magnitude of the sales hires? Any color around all of that, that you can provide?

Yes, it's Kenny. So I can start off. So we are committed on growing our local sales professional head count and for this year and many periods ago. But we'll be disciplined on the pacing types of volume expectations, the market essentially ensuring that we still have leverage in the P&L and to ensure we still have margin expansion as well. As Kevin said, we'll pace it appropriately by market, not one night that’s all. It's ensuring that we are smart and disciplined on where we add. As Kevin said, there's a strong correlation now between ads and market growth rates. Kevin?

Yes, I think that's -- we're committed to hitting the hiring target, but we'll be very responsible based that we have the net leverage flow-through throughout the year that we're looking for. Just one additional comment. We're having no difficulty at all hiring people. When we put out our job rec, we call them cohorts, we're getting attractive candidates from competition, and we're getting attractive candidates from the industry AKA from restaurants and from existing customers.

Great. Thanks guys.

We will go next to Brian Harbour with Morgan Stanley. Please go ahead.

Yes, thanks. Good morning, guys. Can you just talk about your confidence in sort of private label penetration, right? Based on your comments, it sounded like maybe it had been running higher just due to the environment. So what specific actions and what kind of time do you think it will take to continue to push that higher?

Yes. Great, Brian. Thank you for the question. To answer this one with sincerity and earnest is to break it down into the three different customer types we have. So we have the mom-and-pop local customers, street customers. We have that small chains that I mentioned earlier and then big chains. Our penetration percent is very different with those three customer types. For local mom-and-pop customers, the street customers, our penetration actually increased year-over-year in the first quarter and it's continued to run the play. We're doing extremely well there. Within the small chains, the growing concepts, slight dilution year-over-year, mostly driven by national brand suppliers increasing their fill rates, which net-net for the overall industry is a positive. What we need to do to make progress with that customer type is what we call trade management deals in front of them, product cuttings, let them taste our brand product, share some of the value creation to Sysco when we win that case, with the customer. That's what a trade management deal is. The Sysco brand case is substantially more profitable than a national brand case, and we can invest some of that favorability with that customer in order to be able to have them be able to make a shift with Sysco, and that's what we're working on. There are multiples of examples of new product introductions a year ago that give us the progress, confidence that we will be able to make there. And then the third is with the largest national chain customers. It's a similar concept. Mostly, this is not restaurants. This would be health care entities. This would be education entities. Think about those as behind the counter, back kitchen conversions, we have an opportunity to put more trade management deals in front of those noncommercial customer types to show them the value of Sysco brand, invest in some of our favorability with those customers to encourage them to make a shift. So Sysco brand penetration, we have confidence over the long term, this will continue to be a growth story for Sysco and the margin tailwind. The bigger story for margin, though, for the year to go, if you look at Q1 versus prior year, it's the strategic sourcing component that I talked about during my prepared remarks. It's a timing-only issue, Kenny and I are fully confident that the full year, we will deliver our margin profile, margin target. The value creation will just be more second half. These are strategic sourcing, competitive bids, there RFPs, they just take time, and we're fully confident in the full year value creation. Kenny, anything to add?

Yes. Brian. So keep in mind, the Sysco brand portfolio is $2.2 billion portfolio, and it's still growing quarter after quarter. And we have strong existing penetration, i.e., think about local customers, about 50% penetration of global customers. As Kevin said, we're excited about the product promotions as well as product innovation. I also think it's important to call out, as Kevin talked about, strategic sourcing. Strategic sourcing, the benefit we'll get is not only Sysco brand, but also non-Sysco brand as well, and that's a reason why we're confident that we expect leverage -- other leverage in the P&L in the back half.

We'll go next to Jeffrey Bernstein with Barclays. Please go ahead.

Great. Thank you very much. Two related questions just on sales growth as we think about the rest of this year. The first one, I guess, local case growth was 20 basis points in this quarter. I think you said Edward Don at 160. So I guess without that, it was maybe down 140 basis points, but you guys seem very confident in the acceleration. I get the feeling most of it is about the ramp in hiring and the compensation changes. So I'm just curious, what's the greatest risk to this assumed acceleration, if in a quarter or 2, for some reason, it doesn't play out as expected. And my follow-up is just more broadly, I guess, just on fiscal '25. Your slide deck shows 4% to 5% sales, I think you said a couple of points of inflation. So we're talking about maybe 2% to 3% case growth. Just wondering how you think about the case growth between the chains and the independents whether presumably that gap meaningfully narrows I guess more broadly, just asking your confidence in the fiscal '25 guidance, both the top and the bottom line?

Jeff, it's Kevin. I think it's a great question, and we're putting this up there and this is a good capstone question. So I'm actually going to start second part of your question, which is overall confidence. In the process of answering that question, I will directly address your volume growth question, and then toss to Kenny for final words. So what gives Kenny and I the confidence in the full year is the following, three main levers in the P&L. Volume growth, gross margin, expense management, and we have direct line of sight for each of the three of the progress that we're making and then therefore, the impact of that progress on our full year. So let's start with volume. As mentioned earlier, key regions are already hitting our volume growth targets. Those regions are ahead of the change curve. They give full confidence that as we get the rest of our country performing at that level, that success is highly realizable. We're making month-over-month progress in our Q1, which we will carry into the remainder of the year. The comp change was actually more of a headwind in Q1 than a tailwind, and that completely flips here to go as it becomes a tailwind. The headcount has, Kenny said, they happened mostly in the second half of fiscal 2024, these folks are still coming out of training classes. They're still coming out of their product knowledge training class. They're now hitting the street. We're growing our customer count that customer count growth will continue as the year goes on. Total team selling, this is new muscle for Sysco. We are getting better at the team-based selling. We have crystal clarity on who the customer targets are. We're doing a better job of getting the specialists into the…

Yes. Jeff, a couple of things to add. So the headline news is, we are very confident in our financial guidance for the year. Three things as some sort of Kevin said, exit rates, point number one, right, September was our strongest month of the quarter, both top and bottom line. Next and is continuing into this quarter. Number 2 is the levers we have in our P&L. So think about what Kevin talked about between GDP, supply chain and also corporate expenses. I won't repeat the first two, but corporate expenses -- we were down 50% year-on-year, and we still have a robust pipeline for year to ago as well. So to your question around if things were different, what can we do? We can flex our expenses. It is a muscle reflex before, and we know how to flex on the floor. And the last but not least, our confidence also guided by the fact how we managed last year, right? Think about last year. It was dynamic. We had disinflation, deflation, we have a softer macro backdrop and we were able to overcome that and come in higher than the midpoint of our guide. So as Kevin said, fantastically. We are managing the company, and we are playing the long game. Yes, we have some purposeful decisions such as compensation model and new facilities roll out in the quarter. But it's the right thing to do for our company. Overall, we are confident we can achieve our full year guide of both top line and bottom line.

Ladies and gentlemen, this does conclude today's program. Thank you for your participation. You may disconnect at any time.