Greetings and welcome to Zevia PBC Q3 2023 earnings call. [Operator Instructions] It is now my pleasure to introduce your host Reed Anderson, Managing Director ICR. Thank you Mr. Anderson. You may begin..

Thank you, and welcome to Zevia's third quarter 2023 earnings conference call and webcast. On today's call are Amy Taylor, President and Chief Executive Officer; and Florence Neubauer, Interim Chief Financial Officer.

By now everyone should have access to the company's third quarter 2023 earnings press release and investor presentation filed this morning. This information is available on the Investor Relations section of Zevia's website at investors.zevia.com. Before we begin, please note that all the financial information presented on today's call is unaudited.

Certain comments made on this call include forward-looking statements which are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are based on management's current expectations and beliefs concerning future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements.

Please refer to today's press release and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. During the call we will use some non-GAAP financial measures as we describe business performance.

The SEC filings as well as the earnings press release, presentation slides that accompany today's comments and reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are also available on our website at investors.zevia.com. Now I would like to turn the call over to Amy Taylor..

Thanks, Reid and good morning, everyone. Welcome to the Q3 2023 earnings call for Zevia PBC. I will leave by sharing that the plans we articulated on our Q2 call to stabilize our supply chain and restore service levels are progressing as expected in Q3 and this continued now in November.

Zevia's brand remains healthy and demand continues to accelerate, supported by the brand refresh, the improved on-shelf visibility that it delivers and velocity continues to grow at double-digit rates. Consumer spending is up on the brand for household and per trip.

Our pricing remained strong with limited elasticity, exceeding our expectations and supporting our continued gross margin improvements. Zevia continues to have tremendous long-term potential, as it gained distribution, invest in brand building and win new consumers. Broader value proposition remains one of the most relevant in all beverage.

There is more attention on better-for-you beverage than ever. Zevia's demand is reflected in dollar velocity growth, which measures sales per point of distribution and was up over 16% for the quarter, demonstrating that the brand and product portfolio meet the needs of today and tomorrow's consumers.

Our initiatives continue to bolster margin and set us up to improve profitability reflecting the exciting potential in the years to come. The customer consumer challenges that impacted net sales and costs in the back half of the year are short-term and we expect supply chain to be stabilized by year-end and optimize for 2024.

I will detail this as well as cover consumer data and strategic data by category and by channel on today's call. Zevia's mission focuses on global health for people and for the planet. And in Q3, we removed another 3,200 metric tons of sugar from consumer diet never having sold a plastic bottle.

Zevia's more affordable and 64% of non-alcoholic beverages in America. Our continued focus is taking our better-for-you beverages mainstream making them available and affordable for consumers across all income levels. I'll walk us through third quarter results and then speak to our focus now and going forward.

We delivered net sales of $43.1 million just above expectations for the quarter. Velocities were strong, despite production promotion given low stock levels and our order book is at or above expectations for all three months of the quarter. Gross margins are strong and continue to improve year-over-year.

We are realizing the benefit of improved promotional strategies, promising innovation performance, strong sustained pricing and reduce cost of goods sold.

These evolutions along with a fully realize supply chain transformation our input to our continuing improvements in gross margin in the future and proof points of the strength of our business model.

I'll speak to our consumer based evolution and retail indicators via panel and scan data insights and then I'll walk us through updates against the plan to address customer fulfillment and put the supply chain transformation back on track. Households increased our brand spend by 13% and their spend per trip also by 13% over the past 12 months.

Both of which were also up versus prior period was consistent purchase frequency rates further indication of brand and consumer health. The Zevia's shopper is a highly desirable one less price sensitive at all income levels.

We're a home stocking brand, which remains a competitive advantage as we simultaneously build our single business and grow cold availability. Zevia shoppers spends 38% more on beverages versus total non-alcoholic beverage shoppers. Our shoppers also makes 30% more trips to purchase beverages.

Zevia shoppers continue to differentiate themselves even further from average beverage shoppers, including high-growth specialty beverage shoppers as they continue to spend more on brand and overall. The most important scan matter of a quarter is velocity dollars per point of distribution.

Zevia grew velocity 16.2% in the quarter despite a 26% reduction in promotions. Base velocity per point of distribution was plus 21.5% versus prior year measuring growth without distribution or promotional impact. Our healthy-based business is a strong indicator for our long-term potential and our return to double-digit growth in the future.

I'd like to provide a few channel and category insights before moving on to address some of our operational initiatives. Our growth for the quarter was led by exciting progress with the world's largest retailer who has doubled Zevia space converted from 6-pack to 8-pack.

It continues to test the brand's performance in the mainstream carbonated soft aisle. The test is outperforming expectations and bodes well for the future expansion. Zevia's soda is up triple digits in the chain in same-store sales.

This partner also started distributing three Zevia energy drink flavors in selected stores for the first time at the close of the quarter. These moves in conventional retailers are great examples of the impact of our brand refresh as we take our brand mainstream and of our total opportunity to lead the exciting growth of better-for-you beverages.

In the food channel, Zevia energy drinks are new distributed in three additional large regional chains and off to a strong start in October. Energy drinks represents an exciting future growth opportunity. Our soda portfolio also represents tremendous upside as innovation performed very well across core channels.

Creamy Root Beer and Vanilla Cola are number one and number two in terms of contribution to Zevia dollar growth across the quarter and both have ample room to expand distribution further the comparison to our legacy soda flavors.

Those are in top five velocity drivers among Zevia flavors and critically we continue to compete on taste with clean ingredients within the zero sugar space. Our new and improved cola taste tests well among passionate cola consumers and is rolling out into the market now.

Each new soda item we've introduce into our portfolio performs better than the last. Further, 12-pack continue to contribute to growth and support improved profitability.

And sleek single soda cans today sold in natural food and selectively foodservice are also top drivers of growth within the portfolio and key strategic drivers of trial among new users. And finally in the convenience channel, the new look brand made its debut at the National Association of Convenience Stores tradeshow in October.

We have augmented merchandising and selling horsepower with a new third-party resource to support route market and initial regional convenience engagements for 2024 spring resets are off to a good start. I will now provide an update on supply chain.

The transformation in Zevia's supply chain is a critical initiative to support our continued growth, enhance our customer service and drive efficiency and ultimately to materially reduce costs as we scale short-term missteps in its execution had a material impact on net sales for Q2 and the balance of the year.

As we consolidate our warehouse network from 27 locations now to nine we encountered challenges which impacted inventory management transfers and the accuracy and timeliness of customer delivery and ultimately our ability to deliver on demand.

So last quarter, we discussed the following elements of our plan to course correct and I'll provide an update on each one. One is that we have a new leadership team in place across supply chain.

With new talent and processes including new ways of working with third parties and across departments are paying dividends as is evidenced in our fill rate which improves each month. We expect to return to optimal on-time and in-full deliveries this quarter.

Two we re-phased transition plans for our warehouse network leveraging legacy providers for support through the transition with ample days of supply across all key schemes. This has been critical to stabilize the network and to address customer fulfillment as customer orders continue to come in strong.

But it also has a temporary impact on our adjusted EBITDA due to the higher transportation and storage costs associated with our investment in inventory redundancy to ensure the right product in the right locations. We expect our inventory balance to be lower at the end of Q4 versus Q3 as the pacing of inventory purchases normalize.

Thirdly, we changed our approach to freight to improve service levels and reduce costs. And finally, in Q3 we sold our company-owned warehouse, embracing an efficient third-party network model. In summary, plans to address the short-term issues in logistics and customer fulfillment are working.

It has acquired organizational changes, supply chain transformation adaptation, and short-term investments. But the plan is on track and we expect a return to normal by year-end with a more efficient supply chain going forward.

My last comments centered around brand building and I am increasingly confident that we are well-positioned to accelerate brand marketing. With the new brand visualization and market, we have product back in stock and much improved in-store visibility, while awareness of the better-for-you beverage proposition is on the rise.

And as we announced last month, we added a sharp and experienced marketer to our leadership in our CMO, Kirsten Suarez, who brings experience from P&G, Taco Bell and, most recently from an early stage growth brand in the better-for-you space.

Kirsten is already making an impact on how we think about brand building, consumer marketing, retail activation, and also portfolio management. We can share more tactically and regarding marketing investment levels on future calls.

I'll turn it over to Florence, our Interim CFO for additional color to our financial results and I'll return to wrap the big picture..

Thank you, Amy. Good morning and thanks for joining the call today. I will now provide an overview of our third quarter financial results, discuss guidance, and then pass it back to Amy for final remarks. As mentioned earlier, in the third quarter of 2023, we delivered net sales of $43.1 million, down 2.6% versus same time prior year.

This was caused by impact from the strong implementation of our price increase in the second quarter, coupled with our price increase from August 2022, which deliver a positive impact of $1.5 million, offset by declining volumes of 8.2% or $2.7 million, reflecting a supply chain challenging, resulting in lower order fulfillment.

Gross margin remained strong at 45.4%, up 2.1 percentage points versus the same quarter a year ago, due to the impact of price increases and favorable cost of goods sold from improved rates and product mix. This was partially offset by higher inventory losses related to exit of our legacy warehouses and brand [ph] and refresh rollout.

Selling and marketing expenses increased by 58.4% to $20.5 million, entirely due to selling expenses, leaving our immediate supply chain remediation actions, freight to customer, and site transfer costs were temporarily elevated as expected.

Our increased production levels also impacted our warehousing costs, with higher income in handling charges and additional charge fee. G&A expenses were $8.3 million or 19.1% of net sales, which is essentially flat compared to $8.3 million or 18.8% of net sales versus same time prior year.

Stock-based compensation and non-cash expense was $1.9 million as compared to $6.8 million same period in prior year. Net loss was $11.3 million compared to a net loss of $9.2 million last year, a decline of $2.1 million or 22.3%, primarily driven by the supply chain logistics challenges.

Loss per share was 16% per diluted share to Zevia's Class A common shareholders, flat with last year. Adjusted EBITDA loss was $9.1 million compared to an adjusted EBITDA loss of $2.1 million.

Our balance sheet remains healthy with $38.5 million in cash and cash equivalents and no outstanding debt as of the end of the third quarter 2023 as well as an unused credit line of $20 million.

Turning to guidance, we are narrowing our full year annual net sales guidance and reaffirming the high end of the range expecting to be between $165 million $168 million with the fourth quarter projections in the range of $36 million to $39 million, equivalent to an increase of 2% to 10% over prior year respectively.

Well, we do not provide guidance on adjusted EBITDA. We do expect costs associated with the supply chain stabilization and transformation to continue to negatively impact us in the fourth quarter, but to a lesser extent versus the third quarter as we complete the corrective action. Turning back the call to Amy..

Thank you, Florence. I'll close up here with a few comments before turning it over to Q&A. Zevia has a very healthy brand and business model and continue to experience robust consumer demand. We are realizing price in the market with strong consumer acceptance and delivering improving gross margins.

We are quickly returning to growth in legacy retail partners and winning distribution by category and by channel. We look forward to sharing more on our next call after Q4 and looking ahead to 2024.

Our number one priority in the meantime, is to continue to stabilize and improve our supply chain returning it to our best-in-class service levels and putting the network transformation back on track so that it supports our long-term objective of driving sustainable and profitable growth. So, this concludes our prepared remarks.

We will now open the call to your questions.

Operator?.

Hi. Thank you. Good morning..

Good Morning, Bonnie..

Good morning. My first question has to do with your supply chain disruption. I guess I was maybe hoping for just a little bit more color on the progress you've made to improve this. I'd be curious to hear how things are trending relative to your internal expectations.

And then, you mentioned, you're seeing progress in improved on-time and in-full deliveries in the quarter, so is there a way to quantify that? And then, curious if things have possibly accelerated in October and so far in November related to that?.

Sure, sure. Thanks, Bonnie. So the supply chain fixes in short required organizational changes supply chain transformation adaptations and then investments in inventory and thus warehouse and transfer. And well, we don't provide exact fill rates. We can give a sense of progression. Our low point from a service perspective was due in July.

And in recent weeks, we've reflected material improvement, specifically in approaching service levels from Q1 at the start of this transformation. And we are seeing improvement literally week-over-week. So we anticipate being back at, what I'll call optimal service levels by year-end. So that's in sight right now.

And we're hearing positive feedback accordingly from retail partners to confirm what we see on our side. And in parallel, we're able to return to optimal promotional levels to support the return to growth and of course, protection of market share growth in November..

Okay. That's encouraging. And then my second question, I just wanted to, of course, ask you about your presence at the NACS show this year. It's the first time you were there and I saw you. So you guys had a great boost.

I was just hoping to hear any early read on some of the meetings that you had with a lot of the retailers and just the opportunity you still see for getting into the C-store channel next year possibly with spring shelf resets. And then the second part of that Amy would just be maybe an update on progress you're making with DSD partners.

I know you guys signed new advantage solutions but any more progress with signing up more DSD partners. Thanks..

Perfect. Yes, you know the story well Bonnie. I think you kind of reported it there. So we were excited about having a presence at NACS this year for the first time ever and made a lot of very relevant introductions there, also had the opportunity to trial products. And I think there's always a positive surprise.

The consumer or retail actually tries Zevia, including our new taste cola, which we're excited about and really great tasting energy drinks that we really sell on taste and clean ingredients as points of differentiation within the better-for-you space.

And so, in terms of speaking with retailers in convenience, it's too early to provide like quantities or timelines on our rollout. But there's been very good receptivity for test partners. We can share more on the next call.

The target is indeed spring reset and we've had strong interest there and are optimistic about being able to operationalize a couple of different test partners. So it scales to the future.

And then of course, why are we ready for that as you mentioned, we've enlisted a third party sales agency, which helps with not only selling horsepower but also enhancing merchandising. So that's a step in the right direction to support our enhanced route to market and specifically convenience readiness.

We don't have any specific DSD partnership progress to share today. But we've made steps in the right direction. We're far more ready now for convenience than we were just months ago..

All right. Sounds great. Thank you..

Thanks Bonnie..

Thank you. Next question comes from the line of Jim Salera with Stephens. Please go ahead..

Yes thanks for taking my question..

Hello, Jim. Hi..

Hi. Good morning. I wanted to drill down a little bit on the household penetration. I know you guys mentioned in the footnote on the slides that it is largely temporary due to the supply chain disruptions.

But can you give us some context for -- if a consumer that previously was the Zevia consumer that the product isn't available for them? Do they replace it with another diet soda or is that something that just gets dropped from the basket? And then maybe as a follow-up to that when you do get back on shelf do they just snap back or do you need some sort of kind of advertising or promotion to kind of motivate them back to the brand?.

Okay. Jim very much understand your question. It's one of loyalty. So thank you for the question. Yeah, when we do see strain in our household penetration figure in terms of the size of the user base that is a bit of a misnomer as an indicator of interruption to the panel data, because of out of stock.

And where you can measure health is of course our continued double digit growth in velocities the sales per point of distribution and for our existing consumer base, we saw a material increase in dollar spend per household, and dollars spent per trip with the sustained purchase frequency. So what that tells us is the base is healthy.

So to answer your question, when folks can't find a Zevia on-shelf and this is why we and retailers both passionately committed to getting out of stocks eliminated. They generally build spend dollars. So that could for a retailer be a lost sale.

We do see some leakage back into other zero sugar beverages, but rarely do retail group fully replace that higher spend that comes to the Zevia shopper. We believe and even in October, we can provide the data to back it up. That way when we are back in stock the Zevia shopper goes back to buying the Zevia flavors that they love.

And we're able to continue to drive trial on new users faster, especially now that we're starting to ramp cold singles distribution. So the brand loyalty for Zevia is a big part of our quick recovery in the way that you're asking. And it also means that we don't have to spend per se to get sharper back.

I think the one caveat that, I'll make because of course in e-commerce, if you have declined the e-commerce, I need to fill that back up, so there's an investment necessary to bolster top of mind within that shopping environment. But in retail, let's say regaining those sales is quite straightforward as we simply fix customer fulfillment.

Hopefully that, is clear..

Yeah, no that's all very helpful color.

And then maybe as a follow-up as you guys expand the soda and the tea offerings, I've seen tea at wholesale clubs near me are a lot of those different consumers like soda consumer versus tea consumer and do they find the brand because they already know soda and then they also drink tea or is it a new consumer coming to the tea or coming to the energy that might not be aware of the Zevia soda?.

Sure. So, tea in particular is incremental. It's a very different shopper and different consumer. We see a lot of interaction between soda and energy. It is largely an existing soda consumer also purchasing Zevia energy drinks.

And the reason this is relevant is that we have the opportunity to bring let's call it a more health scrutinizing shopper to the energy category for the first time. And so those are incremental purchases in dollars, but potentially for some of the same shoppers that already know and love trust Zevia brand.

So there are incremental, tea tends to be with a new shopper, energy tends to be with the Zevia shopper that spends more now on the brand and enters energy drinks for the first time..

Great. That's all helpful. I'll hop back in the queue. Thanks guys..

Thanks Jim..

Thank you. Next question comes from the line of Chris Carey with Wells Fargo Securities. Please go ahead..

Hey good morning. Can you just address margin visibility? So clearly a lot of focus on the top line, but it's the fourth consecutive quarter of margin -- gross margin expansion. This has been kind of a point of attention over the past couple of years.

So can you just talk about how you feel about your ability to predict specifically gross margins and how you see things progressing perhaps in the medium term please?.

Sure. So we're pleased that we continue to improve year-over-year our gross margins and central to that improvement is sustained improved pricing -- strengthened pricing as well as more effective spend on promotion and then finally containment of COGS.

And so we've obviously not guided on gross margin but we've talked in the past about gross margin in the mid-40s and we continue to realize those expectations and would expect the same in the next quarter.

And then our plans for the future to continue to March toward those drivers of gross margin improvement at things strengthening in the top line through price and promotion.

We don't have any specific plans for price increases, but we believe that there's room there as well as continuing to optimize promotions as well as continue to contain costs with a more efficient supply chain continue to drive COGS down overall.

Chris does that answer your question?.

Yeah, yeah.

Is there anything that you're doing that perhaps is benefiting gross margin that once you are back to growing again, you'd need to reinvest or are we getting to a level of gross margin stability that you can keep make progress if that makes sense?.

It does. I think we're getting to a level of gross margin stability. And we're seeing the impact of our challenges in our supply chain transformation is on the adjusted EBITDA line that being outsized in Q3 far less so in Q4, and then that dissipates as we normalize inventory levels and thus the impact that inventory has on warehouse and the transfer.

But those are impacts that you see showing up in adjusted EBITDA and I think what you're indicating here do we see gross margin stability? Yes, but there's further upsides to that as well. It can continue to improve going forward..

Okay. Thank you..

Sure..

Thank you. Next question comes from the line of Dana Telsey with Telsey Advisory Group. Please go ahead..

Hi, good morning, everyone. As you're thinking about the changes that you've made whether it's in the size of the cans and what's happening with aluminum pricing, how do you see the puts and takes on expenses going forward? And what are you seeing overall from your different retail partners in driving the business? Thank you..

Sure. I think we're pleased to see the input costs such as aluminum stable to improving, and so COGS showed up in a in a pretty stable manner for us. We don't put a circle around that as a particular risk in the go forward.

I think in terms of controlling the controllables, we continue to optimize our portfolio, meaning what we sell and then our price pack architecture meaning what we sell at what price and in what channel and we see a lot of upside there in the immediate and long-term future.

If in the past as a new and entrepreneurial company we sold all products everywhere to learn what would sell. Now going forward, we're really matching the package to the shopper in the channel and seeking to optimize price, which indicates the upside in gross margins we were discussing earlier.

So we don't anticipate a lot of surprises on the cost side in the go forward. We really feel confident around stability as well as the future upside in gross margins because of that and we believe there's still room to optimize promotions and potential in price across the board with the portfolio.

Does that answer your question Dana?.

Yes, it does. Thank you.

And then, on the retail partners on what you're seeing?.

Say a little more, Dana..

On the retail partners on what you're seeing, how is it differing in order, patterns, shelf placement, anything to note there?.

Sure. Okay. Thank you. Yeah. So I mentioned exciting triple-digit growth in one of the major players in mass. We're really excited about that as an indicator of the brand's opportunity in what I'll call the mainstream. So outside of our legacy partners of natural, we continue to have growth opportunity within natural.

Again, as we optimized portfolio, drives singles availability, bring new flavors. All of those are performing really well in legacy partners, but our greatest upside is in the proverbial mainstream retailers, so mass, major grocery and of course as discussed earlier Bonnie convenience.

Just a quick health check on major grocery stores, in the month of October we saw growth in both major national grocery chains and in one of them 22% growth.

So when we're selling the right packs at the right price in major grocery stores and continue to grow and there's further upside as we expand into more effective parts of the store and as we expand whole availability. So we see the biggest upside in what I'll call mainstream channels.

But I'll emphasize that we still have growth opportunity through innovation and through single distribution in our legacy channels like natural..

Thank you..

Thanks..

Thank you. Next question comes from the line of Andrew Strelzik with Bank of Montreal. Please go ahead..

Okay. Hi. This is Daniel Gold on for Strelzik. Thanks for taking my question..

Good morning..

How much incremental expenses associated with exiting of legacy warehouses are there remaining cost implications as we flow into next year?.

Yeah. So thank you for your question Andrew. Much of the associated cost with -- coming from the supply chain issues were happening in the third quarter. You will see that warehouse storage as well as handling in will diminish as we're bringing the inventory levels down we also reduce our production levels.

So you will see a decrease in freight-in to our warehouses..

Yeah. Thanks Florence. And I'll just add sort of quantify that. Supply chain costs drove the majority of our adjusted EBITDA loss in the quarter and so specifically a good two-third of our negative number in the adjusted EBITDA column was a result of supply chain fixes..

Got it. That's helpful. Thank you.

And on a separate note, has your relationship with the retailers been impacted by lower fulfillment levels? Or is that really not been impacted since the velocity growth is so strong?.

So I think it's safe to say we don't come out of the supply chain challenge with no consequence right? This is a focus of our organization both fixing supply chain as fast as possible as well as maintaining current future opportunities with our retailers and given our strong legacy service track record through COVID and through the aluminum cans crisis and then with extra effort to provide retailers with transparency throughout our supply chain transition we're pleased that we have maintained retailer trust.

And we've kept pace with our broader strategic initiatives as a result. So while we get the bumpy road I think our extra levels of transparency have protected our broader strategic initiatives with our partners..

That's helpful. Thank you..

Thank you. Next question comes from the line of Alton Stump with Loop Capital Markets. Please go ahead..

Great. Thank you. Good morning. I appreciate you taking my question. Just wanted to go back to Bonnie's question on the supply chain disruption and understanding that's very difficult in any case to kind of predict the exact timing of it, but sounds like you're pretty confident that by the end of the year that you'll be through this.

So let's move into next year if that's the case, are you confident that we'll see at that point sell through demand for your products pretty much matching up the shipments, or is this something that we'll still bleed into the early part of next year?.

And that's great question. We are very confident in our expectation that supply chain will not only be stable in 2024, but become more efficient. And when we think about inventory levels, we'll sell through those and start to get to a closer match between shipments and scan toward the end of the year and early part of next.

Scanned that it's lumpy at the moment. The most stable figures are double-digit velocity growth, which is sales point of distribution.

And it's our perspective that scan data will start to reflect brand health in the coming months maybe not exactly week, as we fix the out-of-stocks on shelf as the fulfillment levels return to the optimum levels that we've had in the past. So, more to come on that after our Q4 call to give an outlook on 2024.

At which point if you'll see greater stability in the relationship between shipments and scan..

Understood. Thanks for that color.

And then I guess just as a quick follow-up on the cost front your question touched on this already, but it sounds like it's a pretty benign commodity cost environment, no one's packaging or otherwise heading into next year you know is that fair to say?.

Yes. I do think so. I think, obviously, everyone has an eye on inflation and there are some unknowns. But for the most part we are in a pretty stable environment with our input costs..

Got it. Thanks, Amy. I'll hop back in the queue..

Thanks, Alton..

Thank you. This concludes today's question-and-answer session. I would now like to turn the floor over to Amy Taylor for closing comments..

Thank you operator, and thank you everyone for dialing in this morning. We just wanted to quickly say that we appreciate your time and attention. The Zevia brand is very healthy.

The business model is strong and continues to experience robust demand, and we're pleased to see our supply chain course correction efforts returning to optimum level customer fulfillment levels.

We'll realize price the market for delivering improved gross margins, and we're quickly returning to growth this month and look forward sharing for including a look at an exciting 2024 on our next call. So, wish you all good Tuesday. Thank you..

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation..