Jeff Black - Investor Relations, SCR Partners Mike Madden - President, Chief Executive Officer, Director Adam Holland - Chief Financial Officer, Vice President.

Brad Thomas - KeyBanc Capital Markets Neely Tamminga - Piper Jaffray David Magee - SunTrust Anthony Lebiedzinski - Sidoti & Co. Mark Montagna - Empirical Capital.

Good morning, and welcome to Kirkland's First Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Jeff Black of SCR Partners. Please go ahead..

Thank you. Good morning and welcome to this Kirkland's conference call to review the company's results for the first quarter of fiscal 2015. On the call this morning, we have Mike Madden, President and Chief Executive Officer and Adam Holland, Vice President and Chief Financial Officer.

The results as well as the notice of the accessibility of this conference call on a listen-only basis over the Internet were released earlier this morning in a press release that has been covered by the financial media.

Except for historical information discussed during this conference call, the statements made by company management are forward-looking and made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements involve known and unknown risks and uncertainties, which may because Kirkland's actual results in future periods to differ materially from forecasted results.

Those risks and uncertainties are more fully described in Kirkland's filings with the SEC, including the company's Annual Report on Form 10-K that was filed on April 14, 2015. With that said, I will turn the call over to Mike Madden.

Mike?.

Thank you, Jeff. I am happy to report a solid first quarter of fiscal 2015, with results exceeding our expectations and a raise to our full year guidance. The quarter was not without its challenges though, weather was unfavorable in late February and early March, and the West Coast port slowdown strained our merchant and supply chain organizations.

We dealt with inventory position below planned for much of the quarter and had to adjust the promotional calendar as a result, yet our teams executed extremely well and that is the key takeaway for the quarter. Sales came in at the top end of our guidance with comparable store sales up 3% in the quarter.

The conversion was strong and our average ticket was flat. Traffic was down slightly and we attribute the traffic decline almost wholly to the unfavorable weather in February and March. E-commerce sales increased 43% and added 2% to our consolidated comparable store sales. Earnings also came in ahead of guidance.

Merchandise margins improved and contributed to a 93-basis point gain in our gross profit margin. As expected, operating expenses increased as a percentage of sales and that reflects higher depreciation from our recent investments and higher rent from our corporate headquarters relocation.

As we look into Q2, inventory flow has resumed to more normal levels. Our year-over-year sales trends remain favorable and have accelerated a bit in the beginning of May. Inventory levels are healthy and overall in good shape and current.

We will use the second quarter to promote and clear some of the seasonal merchandise that carried over from the port delays and impacted our promotional calendar during the first quarter. As in the first quarter, we will carry higher depreciation and corporate rent expense.

We will also expect to open more stores in the quarter as well as begin the process of moving our e-commerce pick-pack operation to a separate distribution center. I will remind everyone that historically the second quarter is in large part a lower volume, more promotional quarter as we set the stage for our fall seasonal business.

Looking at the full-year, sales trends have been strong due to merchandise assortment that is clearly resonating with our customer and we feel confident about our real estate plans. Due to our solid start, we now expect earnings growth of 18% to 23% for the full-year.

Our priorities as an organization remain the same as what I outlined a couple of months ago. Increasing our in-store productivity, optimizing our real estate growth, improving our e-commerce channels and tightening our focus on capital allocation and return on investment. While we have much work left to do, we are encouraged by our progress.

Last year, higher sales and better margins, better profit margin drove an increase in operating cash flow. We ended the first quarter with $93.4 million in cash, and as we announced this morning, the Board has authorized the special dividend of $1.50 per share, payable in June.

The decision to pay special dividend reflects our strong balance sheet and our commitment to deploy a portion of the cash that we have generated over the last several years to shareholders. Since 2011, we have also retired almost 4 million shares of our common stock through repurchase programs, reducing our diluted share count by 15%.

The current repurchase program and special dividend underscore our confidence and our ability to generate sufficient cash to execute on our growth initiatives. The special dividend will be funded with existing cash and we have ample liquidity to continue to invest in our business which remains our number one priority.

As I said earlier, our teams executed very well in the first quarter. We talked about early gains achieved in our core merchandise assortment from our system as enhancements. We have given our merchants and planners the tools to become better managers of inventory and make better buying decisions. We will stay focused on improving our consistency.

We will also start to capture new opportunities, so there is a longer tail to our foundational investments and our merchandise margin should continue to benefit. We are opening more stores this year, most of them in the second and third quarters. We feel confident about hitting our goal for 8% to 10% square footage growth this year.

More importantly, doing so earlier in the year than we have in years past. We have made some important investments in people and analytics in real estate and I believe the function is prime for an improvement in locating and opening new stores. We are adding more science to the process using our loyalty program and making additional refinements.

We are building a strong pipeline for 2016 and we expect to sustain higher square footage growth for several years. E-commerce remains a priority and we do not believe it will impact our interim goal for 500 units. Through our loyalty program, we are learning a lot about our customer.

She is healthy, engaged in the category and a little younger, a little wealthier than we had originally thought. We are looking for additional ways to motivate her online.

As we have said, we are augmenting our Jackson, Tennessee distribution center with the leasing of a nearby 300,000 square-foot facility that will service e-commerce and some other ancillary function such as new store staging. We are also looking to add more integration in stores to enhance the experience and reinforce to ship the store model.

In the first quarter about 65% of our e-commerce revenue was shipped to stores. That reduces shipping charges and leverages our freight system, helping bring the channel closer to profit parity with our stores. Looking at the balance of the year, we expect to continue to see modest gains in the merchandise margin.

We should also start to see a greater contribution from expense leverage in the third and fourth quarters as we execute on our growth plan.

Longer-term our efforts to expand the store-based through real estate growth, better utilize floor space in our existing stores, enhance our e-commerce capabilities and reinvigorate our brand development, all provide exciting opportunities for our customers and our company. We look forward to updating you on our progress.

In closing, I would like to thank our over 5,000 employees in our stores, distribution center and corporate offices for their work in servicing our customers and our company. We really appreciate what they do. I will now turn it over to Adam for review of our financials before we take some questions.

Adam?.

Thanks Mike. Net sales for the first quarter were up 9.3%, while comparable store sales increased 3.0%. Brick-and-mortar comps were up 1%. That was driven by 1% increase in transactions, which was comprised of an increase in conversion partially offset by slightly decline in traffic.

Our average ticket was flat comprised of an increase in items per transaction offset by a decline in average unit retail price. E-commerce sales were $7.7 million for the quarter that is a 43% increase over the prior year quarter. From a geographic standpoint, sales and results were positive throughout most of the Southeast as well as Texas.

Merchandise categories experiencing stronger results were textiles, fragrance and housewares. We ended the quarter with 342 stores, a unit increase of 6%. We opened one new store and closed three stores during the quarter. At the end of the quarter, we had 2.59 million square feet under lease, a 6.2% increase from the prior year.

Average store size was also up 1% to 7,563 square feet. Gross profit margin for the quarter increased 93 basis points to 40.3%. This increase was primarily due to an improvement in merchandise margin, which increased 46 basis points to 56.4%.

Occupancy cost were roughly flat as a percentage of sales and outbound freight costs, which include e-commerce shipping down 39 basis points as percentage of sales, primarily due to a shift in our e-commerce business to more in-store pickup sales, which carry a lower fulfillment cost for the company.

Central distribution costs were down six basis points, reflecting comparable store sales leverage. Operating expenses for the first quarter were 32.4% of sales. That was approximately 12 basis points versus the last year. Store related expenses such as payroll and marketing, provided leverage versus prior-year quarter.

This leverage was offset by corporate related expenses such as professional fees and stock compensation expense, which included the $0.02 per diluted share charge related to the retirement of our previous CEO.

Depreciation and amortization increased 45 basis points as a percentage of sales, reflecting the increase in capital expenditures, including the implementation of major technology initiatives during the last several years. The tax rate for the quarter was 38.0%.

Adjusted net income for the quarter increased 23.1% over last year to 16% per diluted share, which excludes a $0.02 per diluted share charge related to the retirement of the company's previous CEO. Turning to the balance sheet and cash flow statement, at the end of the quarter we had $93.4 million in cash on hand over the prior year period.

This increase in cash reflects the improvement in operating performance. Inventories were $58.3 million, which reflects a 15% increase in total inventory from the prior year quarter.

As Mike mentioned, inventories are current and support an expected 11% to 12% sales increase for the second quarter combined with the pickup in new store opening activity. At quarter end, we had no long-term debt and no borrowings were outstanding under our revolving line of credit.

For the first quarter, cash used in operations were $617,000 as increases in working capital and higher incentive bonus payouts offset our improved operating performance. Capital expenditures were $2.7 million for the first quarter, primarily due to existing store enhancements and continued investments in our e-commerce business.

We bought back 74,746 shares during the first quarter for $1.7 million at a $23.29 average price.

Turning to our guidance, for the second quarter of fiscal 2015, we expect total sales to be in the range of $115 million to $116 million, which reflects an increase in comparable store sales of 5% to 7% compared with net sales of $103.5 million and comparable store sales increase of 3.6% in the prior year quarter.

Merchandise margin is expected to remain relatively flat as a percentage of sales compared to the prior year as the port delays shifted some of our promotional activity from Q1 to Q2.

Also, for comparison purposes, the second quarter of 2014 included the reversal of a shrinkage accrual which provided a benefit to that quarter amounting to about $0.02 per diluted share. As a result, gross profit margin is anticipated to be down modestly as compared to the prior year.

In addition, operating expenses will be impacted by more store openings in July as well as a higher corporate bonus accruals. As we previously disclosed, depreciation and increased rent related to our corporate headquarters relocation, provide additional headwinds compared with the prior year.

As a result, loss per share is expected to be in the range of $0.10 to $0.13 per diluted share. This compares with the loss of $0.06 per diluted share in the prior year quarter.

Turning to the year, we have raised our full-year guidance and expect to generate earnings per share of $1.18 to $1.23, excluding the $0.02 per diluted share charge related to the retirement of the company's previous CEO. This represents growth of 18% to 23% over 2014 without regard share repurchases.

We expect our top-line to increase 10% to 12% and expect our operating margin to improve. That also assumes a 39% tax rate. We expect to open 35 to 40 stores and close 10 to 15 stores for net square footage gain of approximately 8% to 10%. Most of the locations required for this year's growth have been identified.

The majority of new store openings will occur in the second and third quarters of the year, with closings expected to be spread evenly throughout the year. Our guidance assumes comparable store sales in the range of 3% to 5% for the year.

We expect gross profit margin to remain relatively flat and operating expenses to leverage as a percentage of sales versus 2014. From a cash flow standpoint, we expect to generate positive cash flow in fiscal 2015, excluding the special dividend and our ongoing share repurchase plan.

We do not anticipate any usage of our line of credit during the year. Capital expenditures are currently anticipated to range between $27 million and $29 million for landlord construction allowances for new stores. These capital expenditure assumptions reflect the increase in the store openings and distribution center enhancements. Thanks.

I will now turn the call back over to Mike..

Thanks everybody for being on the call today. Operator, we are now ready to take questions..

Thank you. We will now begin the question and answer session. [Operator Instructions] Our first question comes from Brad Thomas from KeyBanc Capital Markets. Please go ahead..

Thank you. Good morning, Mike, Adam and Jeff, and let me congratulate you on a nice start to the year here..

Thanks Brad..

I wanted to ask kind of a high level question about culture and then a question about guidance.

First, just thinking about culture and leadership and then people, Mike, as you have stepped into the CEO seat and Adam as you have moved into CFO seat, and as the company has moved its headquarters, I was hoping you could just maybe characterize for us some of the changes that have been in place at the management level and maybe what we do not see below the management level and how much is business as usual and how much you expect to change here..

Well, it is a good question. Well, first of all, first thing I would say that is culture is extremely important and I have tried to make that clear in my first three months on the job.

I mean, we have done a lot as a team, because we have got a lot of new faces here, so we got an interesting combination of a lot of longevity in places and a lot of new fresh faces and others. Bringing our team together and retaining what is special about Kirkland's culture, which is a lot, it really is. I mean, this is a special company.

It has been around for 50 years. Retaining that and combining it with some fresh new ideas is really important and that is really priority number one with our team right now. Moving into the new building is a culture shift. There is no doubt about it.

I mean, we are in a nice three-story building and that is even an adjustment in and of itself having three floors instead of one, but it gets to that level is my point and we take it seriously and I think it is a big part of our success in the future, our ability to create that culture and evolve it to what we see it becoming, which is something really special..

That is helpful. Thank you, Mike. With respect to the guidance, I appreciate all the color on 2Q.

I guess, taking into account what you know now one quarter in the bag, what if anything has changed about how we should think about the all important holiday quarter?.

Well, Brad, this is Adam. I do not think. The guidance we gave for Q2 reflects what we originally had planned and the increased guidance is simply passing that improvement performance from Q1 onto the back of the year.

Clearly, we are a seasonal retailer and most of our profits are made in that all-important season, which kicks off in August and finishes in the middle of January, so from an earnings apportionment standpoint, I do not think there is a lot of change. Q2 was, the guidance we gave was not a surprise.

It was right and it what [ph] we had always expected..

The other thing I would add, Brad, is I think we have an opportunity with the new stores coming on to better leverage in the back half versus what you are seeing in Q1 and Q2..

That is great. Well, thanks and keep up the great..

Thanks..

Thanks Brad..

Our next question comes from Neely Tamminga from Piper Jaffray. Please go ahead..

Good morning. Congratulations. Really got to see the solid execution despite some of those headwinds, I just have quick questions on e-com and a couple of quick questions on stores if I may.

For stores we are getting some investor questions around how we should be thinking around store pre-opening expenses, so if you could give us any sort of kind of general guidelines on an average store basis I think that could help some of your investors.

Then also related to stores, can you just give us a sense of what new markets [ph] last year and how we should be thinking about store productivity in new markets versus the markets [ph]. Then I have two more quick ones for e-com. Thanks..

Sure. Yes. I will start off and pass it to Mike here, but on the on the new store openings, what we have got here is an unusual situation where we are opening a lot of stores very late in the quarter, a lot in mid-to-late July, and what you typically see with sure pre-opening expenses is you incur an expense.

As soon as you get possession, so you are paying rent before you have sales or before you are open for business as well as the setup cost to get the store up and going and these are all OpEx expenses I am talking about not CapEx.

You have got roughly with a number of stores we are opening, probably between $0.01 and $0.02 hit for the second quarter simply because you just do not have enough time in July to generate sales offset that. This is not unusual or any change in the model.

It is just really a timing effect that is going to ding Q2 a little bit, but you are going to be benefiting in Q3, because all the stores are going to be open for business from day one.

What was the other piece Neely?.

About the markets, so this year you opened - new stores, but what is the new market penetration this year versus last year and kind of how do we think through store productivity in new markets versus existing? Thanks..

Well, it is a good mix of, I mean, first of all let us say we are staying within our 35-state geography this year. We are not expanding into new state, but we are starting to penetrate more in the mid-Atlantic and into some of the markets in that area, the Midwest.

We continue to add stores in California and then there are some infill even in the Southeastern Texas and Florida, so it is all over the place, but it is confined of where we currently are and it is building out some of the markets that we have a lesser presence in today and I would say about maybe half, maybe a little less than half are in the Southeastern Texas and then the rest are in those other geographies.

In terms of the performance, we are going to open one of the classes so far so we have got a lot to come, but if you look at last year as an indicator, we are starting to detect a slower ramp up in some of the new markets. It is still a very healthy return in year one in those markets.

It is just that it appears that some of the newer market that we are entering or the markets where we are underpenetrated, you see you maybe a three-year kind of maturity and you starting in more like 85% maturity instead of 95, because a lot of our new stores over last few years have matured very rapidly and I think it is because of the real estate transition we have done off mall and the fact that we were staying even tighter within our core geographies..

Okay. That is helpful certainly as speaking through modeling kind of acceleration in growth, so thank you for that. Then just two real quick updates then on e-com.

Where are we more specifically on the timeline in two initiatives that you guys have underway? The first one being extending your selection is the drop ship vendor-type relationships and networks.

Where are you guys in that process? Then also on ship to store, just so that I am clear on this, are you at this point items in all stores available to ship to store or you are kind of like 20% into your own? Capitalize on that. Thanks..

Okay.

The first question about the drop shipping, I mean, that is that right now a project that we are in the midst of and we have a pilot plan for the summer, so you will see us start to do that as we enter into the back half and we will keep reporting on that, but to your point we do view that as the biggest way for us to expand the SKU selection on the site.

We have, I think, done a good job tightening that up this year actually. We are getting more revenue per SKU. We have been more profitable so far because of that and because of the shift to ship to store and it has really helped the numbers.

I mean, you can see it in Q1, so that drop ship project is one that the team is working on as we speak and we will have more to say about it as we report every quarter, but we should be preceding this year on that. The ship to store piece in terms of what is available and I kind of alluded to that in my answer just now.

As we started last year, we had a limited ability to have multiple shipping methods on the SKUs that we had on the site. We had determined it was either a direct shipment or it was an in-store shipment.

Throughout last year, we started giving customers the choice and started making available pretty much all of the SKUs on the site available to ship to store and we are a well on our way to having that in place and we have already seen the shift the customer that - what I called out in script 65% of the revenue in Q1 was ship to store, so we are seeing the customers avail themselves of that.

They get the free shipping and it so happens to be a more profitable scenario for us as well, which is really nice..

That is fantastic. Congratulations again you guys. Looking forward to see how this year progresses..

Thanks, Neely..

Our next question comes from David Magee from SunTrust. Please go ahead..

Yes. Hi everybody and great quarter..

Thank you, David..

David..

Just a couple of questions, one is - Madden, did you could you talk about your expectations for conversion of traffic in the second quarter?.

We did not get specific about that in terms of breaking down that comp increase expectation of 5 to 7. As we have come into the quarter, we have called out conversion as being strong. I think that will continue with our plans that we have for the second quarter. Ticket was flat in the first quarter.

I think we have a little more momentum in that metric and as well as traffic, because traffic was impacted negatively by some one-time events like the weather in Q1, so I think that those metrics looking a little sharper and better lead to the guidance that you are seeing..

Thanks Mike.

How much upside is there with conversion over time? Are you near peak with that metric or no?.

That is a good question. It is hard to say in a lot of ways, because when we were a mall-based retailers, which is kind of the history and as we have shifted off mall, there is inherently higher conversion rates off mall.

You are essentially reducing the traffic and depending more on a destination shoppers, somebody that is coming for a specific purpose, so you get less of the browsing, so you convert at a higher rate, so I do not think the ceiling is near for us there.

We have got a lot planned both, in terms of the in-store experienced and how we operate the store to try to drive that further and we think based on the number that we see of conversion and kind of knowing what others can do, we feel like we have got some upside better..

Thank you for that.

Lastly, how are you feeling about advertising over the balance of the year or do you plan to continue sort to shift gradually online and sort of social media? Any change in your thinking there?.

Well, a lot of that is evolving, David. I mean, we came into the year with a budget that was similar to last year and that has been the case and right now it has still been the case. We are spending a lot of time on brand development. I think that will be a component of what we work on for the balance of the year that is more preparing for the future.

In the meantime, we will continue to spend some advertising online, which we do a lot of today and we will continue our - we have got about half the chain right now that is setup for some direct mail and newspaper inserts that we continue to do, so we had about the same amount of drops in the first quarter as we did the prior year and we are still focused on that, because we are seeing some success with that.

I think the bigger effort in marketing this year is brand positioning and preparing us for what that looks like going forward..

When you say that Mike, brand positioning, where might we see that or is that still being developed right now?.

Well, we are working on it. That is part of our strategy as a team to leverage the brand a little bit more. We still feel like our awareness level compared to some of the competitors is lower. As we grow nationally, I think the real estate helps that to be in some of these markets in a more penetrated way, will help that.

I think where you will see it come out is more in-store, the collateral we use and also the external advertising that we end up doing whether that would be a continuation of some of what we do now or with newspaper and direct mail or more online advertising.

What we are trying to get to is a more cohesive together marketing creative look that will kind of be in the store, online as well as in our external communications..

Great. Thanks Mike. Good luck here..

All right. Thanks..

[Operator Instructions] Our next question comes from Anthony Lebiedzinski from Sidoti & Co. Please go ahead..

Yes. Good morning. Thank you for taking the questions. It appears that your improved IT systems are certainly helping you to manage the business more effectively.

Can you just talk about maybe and just give us a kind of base flow analogy what inning are we in terms of seeing the benefits from the IT systems at this point?.

Well, I keep saying the third. I guess, at some point I am going to say fourth or the fifth. I still think it is early Anthony, and knowing that we have made a lot of strides especially with our best-selling products, our core merchandise. We continue to see our margin improved on those items, which comprise about 35% to 40% of the assortment.

That was an early win. There is other things that we are doing in terms of managing SKUs and categories that we benefited no doubt from on the planning side as well as the buying. Then we have not really even addressed some of the pricing opportunities we might have with clearance optimization tools, promotional-type tool.

When I say there is still a tail here, I mean, that is what I am talking about. Our team is really excited about doing a lot more than what we have already done, but we have got to take it a step at a time too and absorb what we have added and that is where we are.

I mean, it takes a while to integrate a lot of this and get it really humming and that is where we are in the process..

Okay. Yes. Certainly it sounds like you are off to a strong start this year, so as far as the performance of your stores and some of your newer markets just go back to an earlier question, so I think you had said that some of the new stores are opening roughly 85% productivity.

So is that just to function of just the brand awareness just not being a strong, and if that is the case, what are your plans to improve that?.

That is probably the biggest reason, Anthony. When you think about the market like a Detroit for example, where we had a couple of stores in the suburbs, we are adding a few more to get more dense and create that and I think it just takes some time.

I mean, we do not have any examples like brand new markets where we drop the store and it is just completely a fresh entry. It is more of these fill-in opportunities Denver is another opportunity over the next couple of years. I think, we have Minneapolis, New Jersey, we have started to add some stores. We are seeing success in all those areas.

I just think with more brand awareness and through the marketing, we will be able to go into some of those markets, because it will be a lot more efficient whereas right now we are not even advertising in some of those, because it does not make any sense financially..

Got it. Okay. That makes sense.

As far as your dividend, certainly a good move on your part there to reward shareholders, so do you have any thoughts about implementing perhaps, say, regular cash dividend?.

That is something that we would never take off the table. I mean, we would always be discussing how we return some of our cash to shareholders. We made the decision here. We’ve had a buildup of cash over the years. We know we have a good ability to fund our growth plans with the cash that we have and through cash we will generate.

We bought back a lot of shares over the last four years, we essentially reduced the share count by 15%. I think, when we determine it is the right time to consider that, we will.

Right now, we just felt like the best decision was - we have had to buildup, we feel like it is time to return and that is a nice yield for shareholders by doing it this way at this time..

Got it.

Lastly, can you just remind us how much you have left on your share repurchase program?.

Yes. Anthony, we initiated it last in May of 2014 and we spent about $5 million in that, so $30 million authorization. Then we spent another call it $2 million there, so we have got a little over $20 million left in authorization, which runs through the spring of 2016..

Okay. Thank you very much..

Our next question comes from Mark Montagna from Empirical Capital. Please go ahead..

Hi. Congratulations on the good results and it is great to see you guys elevating the execution even higher..

Thanks Mark..

Thanks Mark..

Yes.

Question, in the past you have spoken about white space in terms of current assortments and possibly moving into new categories and I am just wondering where you stand in terms of that progress?.

Well, I mean it is continuous. I think, right now we are focused on the category - we have a hierarchy and we work through '13 and '14 categories and it is more about maintaining and creating newness within those. I mean, we have done it in our textile categories. It has been very successful. We have expanded our pillows assortment.

We have done more outdoor and I am speaking to first quarter. We added curtains and accessories program over the last couple of years, which was a new business.

So we are constantly evolving in each category and that is something that the buyers are really focused on and trying to create incremental business inside the categories that we offer and working in tandem with our visual merchandising team to bring it to life in the store. I mean that connection is really what is important.

As we have worked together on these things in creating areas of the store, it makes it easier for the buyers to go after new ideas, because we know how we are going to display it and that it is going to have prominence in the store and we can get a good read on it, so it is a constant process, but part of our concept is always being fresh and new, so there is nothing new for us and it is just thinking about it a little bit differently..

Okay. That is excellent. Thank you for the input on that..

Thank you, Mark..

Having no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to Mr. Madden for any closing remarks..

Well, we just appreciate everybody being on the call and we look forward to speaking with you next quarter. Thank you..

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect..