Good day, everyone, and welcome to Fresh Del Monte Produce's fourth quarter and full-year 2019 Conference Call.Today’s conference call is being broadcast live over the internet and is being recorded for playback purposes. At this time all participants are in a listen-only mode.

After the speaker’s presentation there will be a question and answer session. [Operator Instructions]For opening remarks and introductions, I would now like to turn today's call over to Vice President, Investor Relations with Fresh Del Monte Produce, Christine Cannella. Please go ahead, Ms. Cannella..

Thank you, Julianne. Good morning, everyone, and thank you for joining our fourth quarter and full-year 2019 conference call.As Julianne mentioned, I'm Christine Cannella, Vice President, Investor Relations with Fresh Del Monte Produce.

Joining me in today's discussion are Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer, and Eduardo Bezerra, Senior Vice President and Chief Financial Officer.I hope that you had a chance review the press release that was issued earlier this morning via Business Wire.

You may also visit the company's website at freshdelmonte.com for a copy of today's release as well as to register for future distributions.

This conference call is being webcast live on our website and will be available for replay after this call.Please note that our press release includes reconciliations of any non-GAAP financial measures we mention today to their corresponding GAAP measures.

I would like to remind you that much of the information we will be speaking to you today, including the answers we give in response to your questions, may include forward-looking statements within the provisions of the Federal Securities Safe Harbor laws.

We ask that you review the forward-looking statements information included in the press release we issued this morning and in the company's most recent filings with the SEC.With that, I am pleased to turn today's call over to Mohammad..

Thank you, Christine, and good morning, everyone. Our performance in 2019 highlights the decisions we made in 2018 to realign certain production units and the progress we have made toward shifting our strategy to becoming a more value added and more diversified company. We advanced on many fronts in 2019, which I will highlight in a minute.

However, I want to first touch on our fourth quarter performance.The fourth quarter is traditionally a tough quarter for the industry. Also, our quarterly results were impacted by our Mann Packing unit's voluntary recall in November. To a lesser impact, competitive pressures on avocados and pineapples affected selling prices in the quarter.

Collectively, these fourth quarter factors constrained our full-year performance in 2019.Now I would like to highlight a few of our accomplishments in 2019. We gained strength in our fresh and value-added business driven by demand from both our existing and new customers.

Particularly for our fresh-cut fruit product line, which continues to expand globally. We proceeded with our roll out of the new healthy innovative products by introducing our Better Break vegetable-based on-the-go convenience snack pack, snack line.

We opened our new avocado production facility in Mexico, which will allow us to increase our pack out capacity, further strengthening our competitive position. In 2019, we commenced our strategic direction by expanding global customer supply partnerships.

I'm encouraged about how these key relationships are trending as they play important roles in the value-added product diversification strategy for our distribution channels.We reduced our debt in 2019, we brought back our quarterly dividend and we repurchased shares.

We also initiated capital investments in technology, automation and logistics as part of our strategic goal to transform Fresh Del Monte to be a technology-driven and efficient producer. Looking forward, 2020, I'm optimistic about the future of Fresh Del Monte. We are a different company today than we were a year ago.

We have embarked on five-year plan to transform Fresh Del Monte.

The key elements of our transformation involve protect and grow the core business, drive innovation and expansion growth on value-added categories, evolve our culture to increase employee engagement and productivity, become a technology-driven company to drive efficiencies, become a consumer-driven company, and sustainability, which means waste less for better world tomorrow.

While this transformation is a multi-year strategic plan and there is still a lot of work to do, I continue to be inspired by the commitment and resilience of our organization as we transform our company.I look forward to updating you regarding the actions we take on our path forward in our upcoming earnings call.

Before I turn the call over to Eduardo, I would like to mention that we are carefully monitoring the coronavirus outbreak, and the supply and demand dynamics in the global markets we serve.

Due to service cancellations and containers being unable to clear at certain Chinese ports, and thus the supply is being shifted to traditional markets such as Japan and Korea and may have adverse impact on our operations.

Like everyone else, we are closely following developments of the rapidly changing situation and our ability to supply our customers in the region.At this point, I would like Eduardo to take over..

Okay. Thank you, Mohammad and good morning. As Mohammad mentioned, our Mann Packing unit announced a voluntary recall products in our fresh and value-added business segment in November 2019. As a result, we reported adjustments of $11 million related to inventory write-offs, sales claims and other costs associated with the product recall.

We expect to have some continuing impact from the recall in 2020. I'll now go into the results for the fourth quarter and full-year 2019.In regards to the product line, I will update you on fourth quarter numbers. For the full-year 2019, adjusted earnings per diluted share were $1.12, compared with adjusted earnings per diluted share of $0.40 in 2018.

Net sales were in line with the prior year at $4.5 billion, with unfavorable exchange rates negatively impacting net sales by $43 million. Adjusted gross profit increased to $312 million, compared with $280 million in 2018. Adjusted operating income for the year was $113 million, compared with $82 million in the prior year.

And adjusted net income increased to $55 million, from $20 million in 2018.

For the full-year 2019, net sales in our fresh and value-added business segment increased by $50 million to $3 billion compared to the prior year, primarily as a result of higher net sales in our fresh-cut, avocado and vegetable product lines.Our gross profit increased $5 million to $195 million and gross profit was negatively impacted by the Mann Packing voluntary product recall.

For the full-year 2019, net sales in our banana business segment decreased $47 million, due to lower net sales in North America, Asia and Europe, while gross profit increased $30 million as a result of higher selling prices in Europe and Asia.

For the fourth quarter of 2019, adjusted loss per diluted share was in line with the fourth quarter of 2018 at $0.45, net sales were in line with the prior-year period at $1 billion, with unfavorable exchange rates negatively impacting net sales by $4 million.

Adjusted gross profit was $47 million, compared with adjusted gross profit of $42 million in the fourth quarter of 2018.Adjusted operating loss for the quarter was $6 million, compared with an adjusted operating loss of $8 million in the prior year.

And adjusted net loss for the quarter was $21 million, compared with an adjusted net loss of $22 million in the fourth quarter of 2018.

In our fresh and value-added business segment for the fourth quarter of 2019, net sales were $597 million, compared with $618 million in the prior-year period, and gross profit decreased to $21 million, compared with $45 million in the fourth quarter of 2018.

The decrease in net sales and gross profit was primarily the result of Mann Packing's voluntary product recall. In our pineapple category, net sales were $115 million, compared to $116 million in the prior-year period, primarily due to lower sales volume and the selling prices in Europe, and lower selling prices in Asia.

Overall volume was 2% lower, unit price was 2% higher, and unit costs were 6% higher than the prior-year period.In our fresh-cut fruit category, net sales were $116 million compared with the $113 million in the prior-year period, primarily due to increased demand in North America, Europe and Asia.

Overall volume was 2% higher, unit pricing was in line with the prior year, and unit cost was 1% higher than the fourth quarter of 2018. In our fresh-cut vegetable category, net sales were $96 million compared with $120 million in the fourth quarter of 2018.

The decrease was primarily due to lower sales volume as a result of Mann Packing's voluntary product recall. Volume was 21% lower, unit pricing was 1% higher, and unit cost was 19% higher than the prior-year period.

In our avocado category, net sales increased to $65 million, compared with $65 million in the fourth quarter of 2018, supported by higher sales volume as a result of increased customer demand.

Volume increased 8%, pricing was 2% lower, and unit cost was 8% higher than the prior-year period.With the opening of our new packing facility and changes in how we procure of avocados, we believe we will see reduced costs and improvement in margins in this product line.

In our vegetables category, net sales decreased to $47 million compared with the $49 million in the fourth quarter of 2018, primarily due to lower sales volume and selling prices as a result of Mann Packing voluntary product recall. Volume decreased 4%, unit pricing decreased 2%, and unit cost was 1% higher.

In our non-tropical category, which includes our grape, berry, apple, citrus, pear, peach, plum, nectarine, cherry, kiwi product lines, net sales increased to $33 million compared with $29 million in the fourth quarter of 2018.

Volume increased 1%, unit price increased 11%, and unit cost was 2% higher.In our prepared foods category, which includes our traditional canned products, and meals and snacks product lines, net sales for the fourth quarter decreased 1% compared with the fourth quarter of 2018.

The decrease was primarily due to lower sales in our meals and snacks product line, partially offset by higher sales in our canned pineapple product line.

In our banana business segment, net sales were $399 million compared with $395 million in the fourth quarter of 2018, primarily due to higher sales volume in the Middle East and higher selling prices in Europe, partially offset by lower sales volume in North America and Asia.

Overall volume was 1% lower than last year's fourth quarter, worldwide pricing increased 2% over the prior-year period.

Total worldwide banana unit cost was 2% lower and gross profit increased to $13 million compared with a loss of $2 million in the fourth quarter of 2018, reflecting 3.7 percentage point increase in gross profit margin.Now moving to selected financial data.

On selling, general and administrative expenses during the quarter, they represented $49 million compared with $47 million in the fourth quarter of 2018.

The foreign currency impact at the gross profit level for the full year was unfavorable by $15 million and the foreign currency impacts at the gross profit level for the fourth quarter was unfavorable by $5 million.

Interest expense net for the fourth quarter was $5 million compared with $7 million in the fourth quarter of 2018, due to lower debt levels as well as lower interest rates.

Income tax expense was $1 million during the quarter compared with income tax expense of $3 million in the prior year.Regarding cash from operating activities at the end of the quarter, our net cash provided was once $169 million compared with net cash provided by operating activities of $247 million in the same period of 2018.

The decrease was primarily due to lower accounts payable and accrued expenses, partially offset by higher net income. Our total debt decreased from $662 million at the end of 2018, to $587 million at the end of 2019. As it relates to capital spending, we invested $122 million in 2019, compared with $151 million in the same period in 2018.

As announced this morning in our financial results press release, our Board of Directors declared a cash dividend of $0.10 per share payable on March 27, 2020, to shareholders of record on March 4, 2020.Just a correction in our avocado category.

Net sales increased to $69 million compared with $65 million in the fourth quarter of 2018.This concludes our financial review. We can now turn the call over to Q&A..

[Operator Instructions] Your first question comes from Jonathan Feeney from Consumer Edge. Your line is open..

Good morning, and thanks very much. A couple of questions I had, please. First, it seems that, in some ways, this quarter was -- with the fresh-cut value added products, every single major product segment had unit costs outperform pricing.

And I know it's a seasonal business, and you grow fruit, you contract for fruit, you got to move it at the price that it clears. But it just seems awfully coincidental that you saw margin -- apparent gross margin pressure in every single major segment. I think there was one in there not tropical where you didn't.

Was there some spillover effect from the recall into other segments of products where you had to give back on pricing, because people were unhappy with the recall? That would be my first question..

Thank you for the question, Jonathan. No, those were completely separate effects. When I look to our by pineapple as well as our fresh-cut fruits, that was impacted by the specific higher cost that we faced from our production in Costa Rica.

That's why when you look through fresh-cut vegetables, vegetables and meals and snacks, that's completely related to the voluntary recall that we announced. So no impact related to customers as it relates to your question..

And I guess, following up on that, was there any strategy involved in maintaining those volumes? Like, intra-quarter, you had -- you saw that -- was that an idea to maintain service levels at certain retailers to take a hit on the gross margin a little bit? Or was it just purely that costs came in, in your own production ahead of what you expected?.

Jonathan, how are you doing? The cost that you saw there was derived from actually increase, of course, it's because of the volumes in Costa Rica. For instance, for pineapple did not meet the required demand and we had to incur additional costs to satisfy our customers..

Got you. Okay. That's perfectly clear..

That's the reason for that. Our cost in pineapple has increased at the end of the year, which really reflected on the cost of the fresh-cut at the other end, and that was the reason. And we are working to correct that..

Okay. So my second question is that on bananas.

Better -- I know counter seasonal is small, but does this quarter tell us anything about an improving environment going into high season here? Or is the fourth quarter really just not all that meaningful given how it's all -- it's a down quarter for everybody?.

No, as we go forward, the banana prices had improved over the last year. In Europe in particular, as well as in the US, the prices have improved, in a contract basis, but that is not going to be translated immediately.

As we go into the year, I think that within the next couple of months, we would see the improvements as well as the increase in the bunker clauses. We have to add the cost of the new fuel that we are using in our ships, which were reflected also on higher pricing as far as has bananas is concerned going forward.

So this will be reflected up as we go down through the year. However, I would like to emphasize that our business is shifting away -- I'm not saying shifting away completely, but shifting away a lot from just depending on the core products.

We have a lot of initiatives right now as we speak, as it would take this in a completely different direction than what we see today. We have taken some steps and initiatives, some we can talk about, some we cannot talk, but there are so many initiatives in process that will translate in a different business model as we go forward..

Yeah. That much is clear, for sure, but I just wanted to understand what was going on that particularly. Just following up on that insight, Mohammad, do you -- is it fair to say then -- we've talked about you migrating the business, we talked about different initiatives you've had. And you've had some -- a lot of success doing that.

Will you be actively trying to reduce your banana volume going forward and maybe just do business with the most profitable customers or customers where you feel like you have to stay in the banana business but the emphasis -- as the emphasis moves away, does that look like you actively reducing your banana business globally aiming to do that?.

No, no. That's not the case. That banana business volume will stay, as this is our like core item. However, what we -- like for instance, we just introduced a few weeks ago, there was a pineapple -- this is our patented new pineapple, which is coming in a very small volume into the market -- into New York markets actually for certain customers..

Lucky me..

I'm sorry?.

I said lucky me. You'll have to tell me where. We should follow up on that later..

But we're going to only offer -- it's only offered I think in cocktails and in very certain restaurants and bars. But just to give you an idea, this is an item that we will wrap up, not now, but we are going to add small volumes during 2020, but in '21, '22, then volumes start climbing up.

But just to give you an idea, if we're talking about 20% on margins on the goal, we are talking here about -- I don't want to say the number, but several-fold....

Significantly higher..

Several-folds more than the -- so we have a lot of starts that will come out in the next few months and the next couple of years that will completely change the business. We are starting our f&b shop in Coral Gables in Miami by beginning of April, and that is completely different approach to the business.

And this -- we have already 20 shops in MENA region, which are successful. And we are starting our first shop now in the US in Coral Gables by end of next month. And we have very big hopes -- not hopes, but we are confident that this will become a completely different approach to the business as far as Fresh Del Monte is concerned..

That's great. That's very helpful. Thank you so much, Mohammad. I'll immediately begin searching high-end cocktail bars in New York for these pineapples..

We will send you a couple..

Thank you so much. I appreciate your time..

My pleasure..

Your next question comes from Mitch Pinheiro from Sturdivant & Company. Your line is open..

Good morning. So a couple of questions here. So first on the recall.

Could you just go over the numbers for me? Exactly what it cost you in the various buckets on the revenue side and what it cost you on the buckets on the cost side?.

Yeah. So, thank you for your question, Mitch. So when we look overall, we had lower sales related to the recall. And aside from that, we had claims that impacted that. So the impact of lower sales when you think from a gross profit margin there, just lower sales as compared to the previous year, we were talking about $27 million that was significant.

And we need to take into consideration that in Q4 2018, as you may remember, there was a recall on other products that we were not impacted on lettuce and we took opportunity of that and we saw higher sales of our products in Q4 2018. So we didn't see that in 2019, and also we saw lower sales impacting there..

So you're saying -- so you're estimating that you've had lost sales of about $27 million?.

Yes, exactly..

Okay.

And then on gross profit?.

Yeah, so in the gross profit level, as we compare to last year, we had several specific impact. So we had about $7 million related to lower sales, but also we had an additional $10.4 million that you see as one-time events on claims and other charges that we recognize at the gross profit level. And below that, we had $0.5 million impairment.

So those are reflected in the footnotes of the press release when we compare our GAAP results versus our adjusted results..

Okay. So, the one thing -- I am a little mystified that a hit to this extent wouldn't have been called out in a press release. Maybe, I know you wouldn't know the exact extent, but just to say that there was a voluntary recall of some Mann products is -- doesn't sound like $27 million. That sounds like $2 million..

No.

So if you look to the footnotes there, you're going to see that in the footnotes when we do the ongoing versus adjusted results, we are talking about the one-time events that we had of $11 million, but we clarify also when we talk about the specific segments, about the significant impact that we had in the fourth quarter on the specific fresh-cut vegetables, a significant impact on volume, as well as higher cost.

And the higher cost is mainly because we had lower volumes and also the same you were able to see in the vegetables piece as well. And so those are reflected there..

But Mitch, let me just add to this. You know that we have been -- we are insured. So, we haven't yet received our claim from the insurance. That loss that you see and we have announced most of it will be recovered. So....

Well, there's two points. But your insured, but also how does that affect customer relationships? When I've seen recalls in the past, there is grocery stores without product that are losing gross margin and the buyers in these categories are never particularly happy when their gross margins are getting hit and their bonuses are in jeopardy.

And sometimes the relationship is at -- there is an issue with the relationship between the buyer and you guys that could last a year or more until -- how does that stand?.

No, it's not as bad as you think. Definitely we had worked with our customers on a very open, transparent way, and some customers had to stop taking the product until all the issues were rectified in the plant. And some of them came back and already three started again receiving the products.

Some are still in the pipeline, but it's not really the major -- I don't believe that this has been a major hit in that in that respect. Add to this -- the whole problem is with this facility that -- when we acquired the company, this facility was in existence and had a lot of issues regarding facility and hygiene.

So in the meantime, we were constructing the brand new state of the art facility, which is called Gonzales, in Gonzales City about 15 miles away from Salinas. And we are shifting -- we are moving that in the next few months as we speak.

We are shifting all our production now to our new facility, which will completely change the business in a much different way in terms of quality, in terms of delivery, in terms of rising cost, you name it.

We are very, very confident about the future format and the vegetable business in particular going forward into 2020.So this was a one-time event. This will be recovered -- most of it by the insurance. Our relationship with the customers is solid, and we are -- we have addressed it in a very efficient and professional way.

So I'm not really worried about going forward in the future. It's -- so we're not concerned..

And how about -- but just how about the point where -- an event such as this, this is a meaningful event. I'm surprised that it wouldn't -- you wouldn't have put out a press release indicating to investors that that this is a bigger event than just a couple of million dollar recall. This was $27 million hit.

A lot -- I don't know what the -- I didn't do the gross margin hit, but it's a big number. And I'm surprised you would leave it till February 19 to give us the numbers.

Can you talk about that a little bit?.

Yeah, so let me correct one comment there. So on November 3, 2019, we came out with a press release and we are announced the recall. We came and announced all the products that were impacted by that.

And I think perhaps because the recall was related to Mann Packing, perhaps that may be overseen by some investors and analysts, but we came out proactively. And that's the important piece. This was a voluntary recall that we did and we communicated all of our customers and we communicated the media about that impact..

Well, I would disagree. I would -- I think that what I've seen in the news, on November 4, a Dow Jones story picked it up. But I would think -- and it said that it was a voluntary recall on quote-unquote some products. Some sounds like a little bit, not $27 million.

And number two, if you know that it's going out via Mann Packing's website and their communication network, but you guys are a public company. I think that ought to have been at least brought to an investor awareness -- not just to the grocery store customers.

And so I'm just saying that I wish I would have seen this and had known that it was more than just a couple of million dollar hit. And so that's that.Second question is on bananas.

What was your carton growth in the fourth quarter? I didn't -- it was at 1%?.

What do you mean? So the increase....

Or volume, however..

Sorry, I did not understand your question..

What was the volume in the quarter?.

In bananas?.

Yeah..

Yeah. In bananas, our overall volume was 1% lower compared to the last year's fourth quarter..

Okay..

But our -- as you can see, our -- we increased prices and our gross profit increased by $11 million as compared to last year..

It was a good gross margin..

I'm sorry?.

It's a good gross margin. It looked like your -- it looked like -- pricing in Europe was really strong, and it looks like it remains elevated. Did that have the impact on volume or because of pricing, or you didn't have enough supply there? Or what caused the volume decline in the quarter? Just a modest decline..

Yeah. So again, this year, we focused a lot on value versus volume in that sense. So we have some impact on volume in Asia as compared to what we had before, and a little bit in North America.

But the prices that we had more than offset them because also the actions that we took in terms of reducing our costs, that helped it expand the margin and had that almost 4 points differential that I mentioned about..

Okay. And then….

And just -- Mitch, just one thing to clarify. At the time that we announced the recall, we didn't have the idea of the extent of that, because we had to wait until the clearance from the FDA and then understand all that impact. And we came to that more closely during early 2020. And so that's why we decided to communicate that at this time..

Okay. Well, I would think that it would have been appropriate to communicate it a lot earlier than today, especially given it's a meaningful number. But that's OK. That's -- I understand where you're coming from. The last question I had was with regard to -- Mohammad, your coronavirus comment.

So are you saying that they are not accepting bananas in certain Asian ports and therefore that supply has got to get diverted, and therefore there will be some oversupply in other markets that would cause maybe some pricing pressure? Is that one takeaway?.

Actually, let's make it very clear. The ports in China, most of the ports in China have stopped operations because of the coronavirus. And the goods were stacked up in the ports. I can tell you, for instance, when the coronavirus was announced and the ports stopped, and then it just happened during the Chinese New Year, which was a long holiday.

So it really made the problem more compounded that there was a holiday, and then the coronavirus immediately hit in, so they extended the holidays. And the ports were not working. The trucking almost was coming to a halt.

So what happened is that, for instance, for argument -- for example, the Chilean cherry season, they have like 1,500 containers sitting at the ports in China. And they couldn't clear that. Some of it's still sitting until today.Now fortunately, as a company -- ourselves, we are not so much involved in China in this respect.

Our main business is in Hong Kong and we sell to China on a C&F basis. We don't have a presence in China itself.

So we are not hit in China as such, but what we are worried about is that the spill over, if goods cannot go into the Chinese market that they might have -- they might be diverted to the nearby markets, be it in Japan, Korea, or even in MENA. And we are watching the situation carefully. Hopefully, the Chinese market will open up soon.

That -- let me emphasize here that the Chinese market is not closed 100%, but definitely there are difficulties in getting the fruit and moving the fruit inside or the product inside China. I believe that this problem with the coronavirus -- and I've been saying it, I don't believe that it's going to be away before April.

And usually these viruses, they don't subside until the weather starts warming up, and then we will see the situation getting improved..

Okay. That's very helpful.

Is that -- so for the first quarter here, in which areas might we see your operations affected? In the non-tropical? Where else -- what other product lines might you be affected in Q1?.

The banana, in terms of -- in particular in Europe is a very strong market. The US is doing normal. Asia is the one that has really been impacted because of the coronavirus. And as well, MENA because the -- like ripple effect of the Chinese thing.

So, so far, the two markets that had been impacted is really Asia, which is Japan and Korea, as well as the MENA market themselves, as far as bananas is concerned. Pineapple is very strong market in Europe, in the States, and in other parts of the world. So this is the situation as we see it..

So mainly in your -- should it be in your non-tropical business where you might see where you're moving things from either, as you said cherries or other things into the Asian markets?.

No. As a matter of fact, with our shipments going into Japan and Korea are doing quite well. Our cherries that went to China was earlier than the coronavirus, thanks god, and we were done before the coronavirus. We don't usually sell too much grapes. Our major markets are Japan and Korea, and that these markets on the figures are doing very well..

Okay. All right. That's all for me..

And Mitch, just one thing to comment regarding Q1. As you may remember, last year, we had a one-time event that was gain on a litigation that we had that we do not expect that to happen this year. But at the same time, we are working very diligently as Mohammad mentioned about the insurance claims that we have.

And we expect that to have a positive effect in Q1, not to the full extent, because some of the business interruption and the impacts related to loss of sales that usually takes longer in terms of all the analysis that the insurance company takes place. But we do expect to see a positive effect from that in Q1..

Your next question comes from Richard Shuster from Boston Partners. Your line is open..

Hey guys. Just a little more clarification on the the Mann incident. What was the EBITDA impact in the fourth quarter? And you said that it was a one-time event, but I missed the beginning of the call. Will there be any impact in 2020 from the recall? Thanks a lot, guys..

So thank you for the question, Richard. So in the non-GAAP, we explain on the operating loss as we see -- sorry, operating income standpoint, we recognized about $10.9 million -- almost $11 million there. That is the key thing related to the one-timer on the recall. And also we had on sales an additional $10 million to $11 million, I would say.

Because the $27 million that I mentioned was mainly on sales, but when you bring that to the gross profit, we're talking about $21 million, $22 million. In 2020, we are taking several actions as Mohammad mentioned about shifting our operations into our new facility, but there is also curve of recovery that on sales to our customers.

And so we expect to see some improvement on sale that will take place in the first half of the year, but that's going to be more consolidated in the second half of 2020..

And just as a follow-up.

How much do you think the insurance proceeds will be from the recovery?.

So, I would say that we expect to be a significant amount. We don't share our insurance policies in that sense, but we expect that to be very representative related to the total impact that we saw..

Got it. Thank you very much, guys..

Thank you..

Thank you, Richard..

Unfortunately, we are out of time for questions today. I would like to turn the call over to Mr. Abu-Ghazaleh for closing remarks..

I would like to thank everyone. I know that it has been a disappointing quarter, for me and for everyone. But I am very confident about the future and I hope that next call we can share with you other, you know, good news. Thank you very much and have a good day..

Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect..