Good day, and thank you for standing by. Welcome to the First Quarter FY 2025 Casey's General Stores Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised today's conference is being recorded.

I would now like to turn the conference over to your speaker today, Brian Johnson, Senior Vice President, Investor Relations and Business Development. Please go ahead..

Good morning, and thank you for joining us to discuss the results for our first quarter ended July 31, 2024. I'm Brian Johnson, Senior Vice President, Investor Relations and Business Development. With me today are Darren Rebelez, Board Chair, President and Chief Executive Officer; and Steve Bramlage, Chief Financial Officer.

Before we begin, I'll remind you that certain statements made by us during this investor call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include any statements relating to the ability to consummate the Fikes transaction, the potential impact of the confirmation of the Fikes transaction on the relationship with third-parties, expectations for future periods, possible or assumed future results of operations, financial conditions, liquidity and related sources or needs, the company's supply chain, business and integration strategies, plans and synergies, growth opportunities and performance at our stores.

There are a number of known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from any future results expressed or implied by those forward-looking statements, including, but not limited to, the integration of the recent acquisitions, our ability to execute on our strategic plan or to realize benefits from the strategic plan.

The impact and duration of the conflict in Ukraine and related governmental actions as well as other risks, uncertainties and factors, which are described in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the SEC and available on our website.

Any forward-looking statements made during this call reflect our current views as of today with respect to future events, and Casey's disclaims any intention or obligation to update or revise forward-looking statements whether as a result of new information, future events or otherwise.

A reconciliation of non-GAAP to GAAP financial measures referenced on this call as well as a detailed breakdown of the operating expense increase for the first quarter can be found on our website at www.caseys.com under the Investor Relations link. With that said, I would now like to turn the call to Darren to discuss our first quarter results.

Darren?.

Thanks, Brian, and good morning, everyone. We're excited to discuss the first quarter results in a moment. First, however, I want to thank our team for their hard work and dedication, which enabled us to start the fiscal year off strong. I also look forward to welcoming the Fikes team to the Casey's family, and we will discuss that later in the call.

As the school year begins, Casey's is proud to see projects funded by its cash for classrooms grants in action. Last year, we donated over $1 million in grants to schools across our footprint. We're grateful to our team members and guests for raising nearly $600,000 in this August campaign.

This will allow us to continue to have a positive impact on schools and children in our community. Now let's discuss the results from the quarter. Diluted EPS finished at $4.83 per share, a 7% increase from the prior year.

The company generated $180 million in net income, an increase of 6% and $346 million in EBITDA, an increase of 9% from the prior year. The first quarter was another great example of the strength and resiliency of the Casey's business model, as we were able to expand gross profit dollars while growing the store base.

Inside the store, we saw continued strength with our prepared food innovation as well as margin expansion, driven primarily by the grocery and general merchandise category. On the fuel side, the team is doing a tremendous job balancing volume and margin with positive same-store gallons combined with fuel margins over $0.40 per gallon.

We continue to show that our three year strategic plan is credible and achievable and our team is doing a great job both inside and outside the store. I would now like to go over our results and share some of the details in each of the categories.

Inside same-store sales were up 2.3% for the first quarter or 7.9% on a two year stack basis with an average margin of 41.7%. Same-store Prepared Food and Dispensed Beverage led the way as sales were up 4.4% or 10.6% on a two year stack basis, with an average margin of 58.3%.

Hot sandwiches continued its momentum from the fourth quarter and bakery also performed well. Margin was comparable to the prior year as favorability in waste was offset by a modest cheese headwind.

Same-store grocery and general merchandise sales were up 1.6% or 6.9% on a two year stack basis, with an average margin of 35.4%, an increase of approximately 130 basis points from the prior year, primarily due to good cost of goods management.

We saw positive momentum in the category, notably in both non-alcoholic and alcoholic beverages, specifically liquor, our 1,500 liquor licenses continue to be a strategic advantage for Casey's. For fuel, same-store gallons sold were up 0.7% with a fuel margin of $0.407 per gallon. We continue to outperform our geographic region on volume.

As Opus fuel gallon sold data shows the Mid-Continent region down approximately 5% in the quarter, indicating that we are taking share in the category. Our fuel team is doing a tremendous job announcing volume growth and margin and the results continue to show it.

We prudently managed operating expenses with an increase of just 0.7% on a same-store, excluding credit card fee basis. Our continuous improvement team is doing a great job identifying areas to be more efficient and it shows that same-store labor hours were down 2%.

I'd now like to turn the call over to Steve to discuss the financial results from the first quarter.

Steve?.

we expect to be within our annual range, and that will be inclusive of several million dollars of certain one-time deal costs that we will incur during the quarter associated with the Fikes transaction. I would now like to turn the call back over to Darren..

Thanks, Steve. I'd like to thank the entire Casey's team for another strong quarter. We're off to a great start to our fiscal year, and the team is doing an outstanding job on executing on the three year strategic plan. One of the pillars of our strategic plan is to grow the number of units.

The initial target of at least 350 new units is expected to be accomplished nearly 18 months early with the closing of the announced acquisition of Fikes and in CEFCO convenience stores. As we noted in our announcement, these are highly strategic and high quality assets in a great geography in Texas, as well as further in the South.

We're excited about integrating the business and welcoming the Fikes team into the Casey's family. In addition, we're raising our three year store growth target to approximately 500 stores. Another pillar of the plan is to accelerate the food business.

The hot sandwich lineup that launched earlier in calendar 2024 continues to drive growth as the category was up approximately 70% in the quarter. We brought back a popular promotion for the summer with $0.99 fountain drinks, and the results were strong, with cold dispensed beverages outpacing the category's growth.

Our Prepared Foods team continues to innovate and create craveable food at the right price points to provide Casey's guests with products that they want. The third pillar of our strategic plan is to enhance operational efficiency. Our continuous improvement team working with store operations is delivering great results.

The first quarter marked the ninth consecutive quarter with a reduction in same-store labor hours. These reductions are the result of simplifying the operation and removing non-value added work from the stores.

We're excited about the impact this is having on our guest experience as our overall guest satisfaction scores improved 320 basis points over the same period last year. On the fuel side of the business, I'm extremely proud of the team's ability to balance fuel gallons with gross profit dollars.

Growing same-store gallons while posting $0.01 per gallon above $0.40 is a testament to the team and the tools we have in place. During the quarter, we also released our fourth annual sustainability report in July, which is available on our website.

Our team continues to make progress on making Casey's become a more sustainable business, and we're excited to share our sustainability journey with our shareholders. We will now take your questions..

Thank you. [Operator Instructions] Our first question comes from Michael Montani with Evercore ISI. Your line is open. Michael, your line is open. You can ask your question..

Yes. Hi, and thank you for taking the question. Just wanted to ask a two-part, if I could. First, I was hoping that you all could discuss the underlying health of your consumer in light of some of the crosscurrents that we've been seeing lately.

And then secondly, on the gross margin front, I just wanted to dig a little deeper into the second quarter on prepared meal and grocery margin.

Is it possible to enact hedging or take modest pricing to offset what we're seeing with cheese costs, Steve?.

Yeah. Thanks, Michael. I'll go ahead and talk about the consumer, I'll let Steve address the cheese costs and hedging. With respect to the consumer, just as a reminder, about three quarters of our guests make over $50,000 a year in income. And so we consider those to not be low income. So about a quarter of our guest base is in lower income.

For that three quarters of the guest base, we're not seeing really any change in behavior -- in purchasing bag, they're continuing to come to the store with the same level of frequency and essentially purchasing as they have typically. The lower income consumers are modestly changing their purchasing habits.

I wouldn't say that they're coming in less frequently than they had before, but they're opting to not buy as many units or items in their basket as they had previously. So there's a little bit of pressure there. But overall, Michael, I'd say, our guest base is hanging in there pretty good..

Michael, hey, good morning. This is Steve. On the margin question, specifically on cheese, we're about a quarter of our requirements are hedged out the remainder of the year at this point in time the remainder of the fiscal year.

And for sure, we obviously per the script do expect more inflation on cheese here in the second quarter even than we had in the first. But I would just remind you that when we think about margin broadly. We're really trying to manage the inside of the store total profitability to a level that we're comfortable with.

We don't necessarily drive the bus specifically on the prepared food margin per se, and we're quite comfortable with the gross profit dollar growth that we're generating with the pricing we currently have, we've made a little bit of adjustments on price and a couple of items against prepared food.

But we're proud of our value proposition that we have in that category, both retail price and quality of the product combined. And we've had such strength in cost of goods management on the grocery business.

It obviously has flattered the overall inside margin, and it gives us, frankly, that much more room to continue leaning into the value offer on the prepared food side. I would expect we would continue to pay attention to inside margin more than either of the two individual categories here..

Thank you and good luck..

One moment for our next question. Our next question comes from Bobby Griffin with Raymond James. Your line is open..

Hey, guys. Good morning. Thanks for taking the question. Another good quarter. So Dan, I guess, first, I wanted to move over to the OpEx side and maybe talk a little bit more about the continuous improvements you guys are seeing, been a strong success story.

Can you just unpack some newer examples of what's driving it? I think in the past, we've used examples of taken the cash of the bank or maybe the laundry, but just it seems that the team continues to find nuggets to drop down for savings.

So just curious kind of what is on the kind of cards today and what is left there?.

Yeah. Bobby, happy to. The team does a great job of identifying opportunities to just operate our stores more efficiently.

And what I'd tell you is a lot of them aren't as -- the things going forward aren't as significant and as an individual initiative as some of the bigger things like removing trips to the bank and doing laundry and those sorts of things. But more recently, a couple of things that were implemented was the digital production planner in our stores.

And that's in the kitchen where the kitchen manager is responsible for forecasting the production of all of our food items in the store, that historically was a manual process with a lot of paper and a lot of manual accounting and then having to take that paper into the back office, entering into a system and their accuracy issues, and it just took a lot of manager time, that's all digital now.

So they scan items, labels print, the system does forecasting, there's no math being done by store managers, no paperwork being done by store managers anymore. So that takes a lot of time away that they were having to spend on that and gives them some more time back to work with their teams in the kitchen.

Another initiative is what we call 5S (ph) and essentially, it's a way of organizing and structuring the inventory in the kitchens and the rest of the store to be efficient to reduce footsteps in the kitchen to make sure inventory levels or appropriate ordering is done accurately.

And you see that come through in the results with not only some labor savings, but also waste improved in the quarter, inventory supplies was down in the quarter. So a lot of those efforts are starting to yield results, not only in the OpEx line, but in some of the margin lines as well..

Very good. That's helpful. And I guess, secondly for my follow-up. When you look at the prepared food business, are you seeing any notable difference in your different geographic markets by population. And I guess I'm just asking in the context of some of the fears around QSR pricing investments that are taking place.

So in the markets where you operate with a little bit larger population go up against more of the named QSRs that we know.

Are you seeing any type of difference in the performance of the Prepared Foods business?.

Yeah. Bobby, I can't say that we are seeing any sort of difference. What I can tell you is that in spite of a lot of the value offers that are happening in QSR, those are primarily lunch daypart focused. And our lunch daypart was actually the strongest daypart we had in Prepared Foods this quarter.

And I think it's a reflection of the innovation that the team has done on the sandwich lineup that we've talked about, but also keeping that price point low. So we've got a really strong value proposition, particularly for the level of quality that we’re producing in our kitchens right now, and I think that’s resonating with the guests..

Very good. Appreciate the details. Best of luck going forward..

Thank you..

One moment for our next question. Our next question comes from Bonnie Herzog with Goldman Sachs. Your line is open..

Thank you. Good morning, everyone..

Good morning..

Good morning. I just had a question on inside same-store sales, which I guess, grew 2.3%, but maybe it was a little softer than we were expecting, especially in grocery and general merchandise, which I guess, same-store sales growth for that was up just 1.6%.

So hoping you guys could just maybe lay out some of the puts and takes there? And maybe any changes to how value is being perceived in the store, given the signs of the pressure on the consumer and actually maybe even more pressures building on the middle income consumer?.

Yeah. Sure, Bonnie. There's a couple of things going on in this quarter from a same-store sales perspective. I think the first one being we're just cycling a really strong quarter from a year ago. It was our strongest quarter -- next to our strongest quarter of the year last year.

So we knew going in that -- the first quarter was going to be a little bit of a steeper hill to climb and that proved to be the case. The second thing was kind of a little bit of an anomaly that we experienced this year. If you look back at the last 13 months, we've had only three months that had negative traffic in our stores.

Every other month has been positive. Each one of those months has corresponded to us cycling over -- an over $1 billion jackpot in either the Mega Millions or the Powerball lottery. And so two of those three months in this -- the recycle over just happened to be in this quarter.

And so when you -- we saw a little bit of softness in traffic, and we can directly point to those lost lottery transactions as some of that softness. Now as you know, lottery as a commissioned sales product. So that doesn't really factor into our same-store sales. But we carry it because it does drive traffic.

And so we're attributing some of that softness to that dynamic with lottery. Those things are going to happen from time to time. And last year, we got to enjoy the additional traffic this time, we have to fight through that a little bit. But as Steve mentioned, August seemed to go back into the range of the annual guidance.

So we don't feel like there's anything systemic. It's just more of a cycling anomaly. With respect to value, like, I mentioned earlier, right, we're not seeing that pressure on the middle income or higher income consumers translate. I'll just give you one data point. If you look at fuel. Our E15 fuel volume was down about 10%. Our E85 volume was down 2%.

Premium fuel sales were up almost 9%, that's not the behavior that we see when consumers are under stress. They'll typically gravitate more towards those higher ethanol blends because they're cheaper, they'll pull back on premium sales because it's more expensive. We're just not seeing that behavior.

So I think at the lowest end, there is some moderating behavior. But overall, we're just not seeing that pressure translate into sales impact just yet..

Okay. That's helpful. And if I may, just a quick follow-up question, just maybe more in private label.

Just curious to hear a little more color on how your private label business has been performing? Are you still getting the same lift in the store? And -- have you, I guess, made any more progress on building out your tiered offering? I'm just thinking about whether it's a little more premium or value, etc.? Thank you..

Yeah. With the private label, I'd say, we've we pretty much held steady from where we've been historically. The percentage of sales, units and gross profit dollar contribution from private label has been what it's been for about the last year or so. So no change there. The team is working hard on that process of tearing out our private label offering.

We're not ready for prime time yet, so that's still work in progress. But we're not -- but we're still on that trajectory, and we will get that done here in the not-so-distant future..

And Bonnie, I'd probably add just from a margin contribution standpoint.

The private label business for sure has contributed to mixing up the overall margin and the inside of the stores, specifically in grocery, we’re probably a 100 basis points to good on the grocery margin because of the penetration of -- we've got over 325 SKUs, I think, at this point on private label, and that's worth over 100 basis points of margin to us in that category..

Thank you. One moment for our next question. Our next question comes from Chuck Cerankosky with Northcoast Research. Your line is open..

Good morning, everyone. Great quarter.

When you look at this period ahead of closing on the Fikes acquisition, will you be looking at any other deals?.

Well, Chuck, I'd say we're always looking at deals. So this wouldn't preclude us from looking at others. Just practically speaking, if we're talking about larger deals comparable in size to what this one is, we probably have to think really hard about going down that path, just from a balance sheet perspective. We have a capacity to do it.

It's whether we want to take on that amount of leverage to be available to do it. But aside from that, the M&A team will continue their work on the small acquisitions that we always do. And we'll also continue our organic growth, our new-to-industry stores will pull back a little bit, just to help us manage the balance sheet a little bit.

But aside from that, we're going to continue on the trajectory. And deals take time, and you have to be in the market to be in the market, so to speak. So we will continue to be looking and see what's out there..

As a follow-up, Darren, what kind of CapEx will Fikes need to update kitchens, etc.?.

We had -- I'll answer that, Chuck. We had -- we anticipate about $145 million, specifically to kind of renovate/retrofit, but the Fikes stores that are going to get kitchens, the majority of them will end up with the Casey's kitchen in them.

It will -- that will be spread over three to four years, realistically, kind of from closing just because of the permitting timeline, but $145 million, $150 million kind of true incremental CapEx is our current belief..

Great. Thank you..

One moment for our next question. Our next question comes from Krisztina Katai with Deutsche Bank. Your line is open..

Hi. Good morning. Thank you for taking the question. I wanted to ask about some of the recent retail price adjustments that you took in grocery and general merchandise.

As consumers are increasingly gravitating towards value, just how do you see Casey's position pricing product-wise today to continue that positive traffic growth to stores? And how are you leveraging the loyalty program and then increasingly private label to help reinforce that value proposition?.

Yeah, Krisztina. We're trying to be prudent on our pricing for sure. I mean you got a couple of different things going on. We're still experiencing those quarterly price increases or cost increases being passed on by the tobacco manufacturers and so as has been our practice.

We continue to pass those on to the consumer, that's probably the bulk of the pricing action that we've been taking in grocery and general merchandise. There's been a couple of other categories, candy in particular, some snacks that we've had some cost increases and we've had to pass that on.

But by and large, we are trying to keep retail pricing consistent and our merchandising team has done a fantastic job working with our suppliers to manage the cost of goods. And I’d say just a data point for you, if you were to look over the last four years since COVID hit, CPI is up about 23% over that time period.

And our Grocery and General Merchandise pricing is up only 16% and some of that is the impact of private label, mixing into that and having lower retail. Some of that is just us being conservative on passing those prices on the consumer.

And I think it reflects in our same-store sales performance relative to others in the industry that we have visibility to..

Got it. That's helpful. And then just as a follow-up, and I know your geographies have a bit different competition, but one of the -- one of your larger dollar store peers announced some pricing actions that they're taking in order to be more price competitive.

So how do you see promotions and markdowns playing out in the food and consumables industry? And how do you think that is potentially going to impact Casey's, if at all? Thank you..

Yeah. I think as consumers get a little more pinched and some of these other retailers have taken -- have been more aggressive on taking price over the last couple of years. I think they're starting to pull back a little bit, that I'm not as concerned about that, frankly, at least from the dollar store perspective.

We do sell some similar items, but they're usually different pack sizes a lot of different categories that we don't sell. We sell some things that they don’t sell. So we track pretty closely how we perform when we’re next to some of those other competitors. And our businesses really performed well and independent of how they’re doing.

So if they get more aggressive on price, I’m not so sure that that’s going to make a big difference to our business, just given the diversity of assortment that we have versus them..

Thank you. One moment for our next question. Our next question comes from Corey Tarlowe with Jefferies. Your line is open..

Great. Thanks. Darren, I was keen to get your perspective just on the broader M&A that we've seen in the industry. Obviously, you recently announced the Fikes wholesale and CEFCO acquisition.

But I'm curious as to hear your perspective on sort of the runway here for acquisitions in the space, why you think we've been seeing so much recently? And any other color you can provide on what you're seeing largely as it relates to M&A?.

Yeah. Sure, Corey. I think it's a variety of things. In the case of Fikes and CEFCO, I think is a well-run business. They are doing a great job. I think it's just simply a matter of having a family business. They've been in the business for a very long time, and they just decided it was time to monetize that business and to move on to other things.

So I don't think there's anything more complicated than that. And given that our industry is comprised largely of businesses, like, Fikes just smaller scale typically but family-owned and independent operators, there's always going to be that opportunity.

The other component and probably the thing that's driving a lot of the M&A activity is just simply the challenging environment that we're operating in. And it's been going on ever since COVID. It's just been harder and harder to run a really good and profitable convenience store business and scale is mattering more than it ever has.

And so with the fragmented nature of the industry and much smaller players, those smaller players are under a lot of pressure. If we look at industry breakevens according to MAX, breakeven cents per gallon is a $0.15 a gallon right now. And at the bottom decile, it's closer to $0.40 a gallon.

So there's a lot of operators out there that are just really struggling to survive, and that creates a great opportunity from an M&A perspective for folks like us who have the capacity and the ability to acquire and integrate those businesses..

Great. Thanks. That's very helpful. And then just on labor, I wanted to ask about your perspective there as well. And I know you've mentioned some wage inflation yet continued reduction in, I believe, labor hours.

Curious what you've seen from a wage inflation perspective and if you expect that to moderate as we go forward?.

Yeah. Hey, Corey. This is Steve. I'll try that one. We're running 3% to 4% wage rate inflation across our footprint now. And I think we would all agree that, that is consistent with kind of our historical experience, excluding the period of time, obviously, when COVID drove that number much higher. So it feels like a more normal wage rate environment.

We're certainly benefiting from more applications, generally fewer openings, generally, there's all kinds of benefits for us as that rolls through to less over time in the stores, less training costs in the stores because turnover generally has improved and we would attribute for sure, a large portion of the turnover improvement to all of the store simplification initiatives, we have to make those jobs better and easier for people, but there's an element of the labor markets a little bit friendlier as well.

So we don't see any impending change from kind of that 3% to 4% wage rate increase in our geography at this point..

Great. Thank you very much and best of luck..

One moment for our next question. Our next question comes from Karen Short with Melius Research. Your line is open..

Hi, everyone. This is Jacob Bacon Phillips (ph) on for Karen. So we just have two questions. The first is on the fuel supply chain.

Any update or color you can give on the upstream pipeline and capabilities you've been developing and maybe how the Fikes team will fold into that? And then the second is any update you can give on pounds of cheese used in the Prepared Foods business?.

Yeah. I'll go ahead and take the fuel supply.

Can you say again the second question?.

Update on pounds of cheese in the Prepared Foods business that you use?.

Okay. Thanks. Yeah. On the fuel supply, we had said that we would begin with our, what we call Fuel 3.0, where we begin to buy product further upstream into the supply chain and supply that ship it of a pipe into dedicated space. We did execute on that in the first quarter.

We took baby steps to be completely honest to make sure everything went according to plan and happy to report that it did. So we're continuing to grow into that capability. One of the exciting things about the Fikes transaction is that this comes with a fuel terminal, and they have a team who's been doing this for 10 or so years.

So we're actually acquiring some expertise in this area and a different asset that we can leverage to our benefit. So very excited about the additional benefit that we pick up with the Fikes transaction. Steve, will talk....

Just for cheese, cheese is the single largest commodity that we consume in our Prepared Foods business. I think most folks are familiar with that. We used a little over 40 million pounds of cheese for perspective in the last fiscal year that obviously goes up as store count goes up, but we're also trying to manage waste to offset some of that.

So we spent a little over $100 million in total, in aggregate on cheese on the last fiscal year for some perspective..

One moment for our next question. Our next question comes from Anthony Bonadio with Wells Fargo. Your line is open..

Hey. Good morning, guys. So sort of piggybacking on the labor questions. I know same-store OpEx has continued to trend pretty strongly. But I did want to ask about the Department of Labor overtime rule. I believe that's set to step up in January. I know there's a lot of uncertainty still around what that ultimately looks like.

But just maybe some thoughts on possible impact to your business if that does go into effect and how you're thinking about mitigating?.

Yeah. Anthony. Maybe I'll start with that. This is Steve. So due to the pending step up in January should have a de minimis impact for us at the current wage level that they've talked about, it would be a couple of million dollars on an annual basis to us. Most of our impacted team members are already above that threshold.

So the first certainly year in, I would say, would all be kind of washed out in our normal course, 3% to 4% wage increases that we had talked about earlier..

Got it. That's helpful. And then just on gallon trends. Obviously, you guys continue to underperform or outperform versus what we've seen in a lot of your peers.

Just maybe some more thoughts on what's driving that and how you think about maybe the halo effect from what the strong insight store proposition driving traffic to the pump?.

Yeah. Anthony, I think you hit it on the head, all things being equal, I think guests are going to choose where they shop based on the inside offer, and you've got to be competitive on fuel. And I think our fuel team does a really good job of having a consistent approach to pricing.

So over time, consumers can trust that they know what they're going to get when they come to Casey's for fuel, from a pricing perspective. And so they don't have to shop around as intensely as maybe with some other brands. And then there's the added benefit of coming into the store for all the other offers, and it is a convenience store after all.

And to the extent that you can combine trips, that just makes it even more convenient. And so just as a reminder, about three quarters of our transactions are non-fuel related. So people are coming to our stores all the time for the store offer. And when they need fuel, it just becomes how much more convenient to get their fuel while they’re there.

And like I said, we have a consistency in pricing that allows us to capture those sales..

Helpful. Thanks, guys..

And I'm not showing any further questions at this time. I'd like to turn the call back over to Darren for any closing remarks..

All right. Thank you, and thanks for taking the time today to join us on the call. Before we sign-off, I just want to once again thank our team members for all their hard work this quarter. Great job..

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day..