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PriceSmart, Inc. (NASDAQ:PSMT)

F1Q2013 Earnings Conference Call

January 10, 2013; 12:00 p.m. ET

Executives

Jose Luis Laparte - President & Chief Executive Officer

John Heffner - Executive Vice President & Chief Financial Officer

Analysts

Dave King - Roth Capital Partners LLC

Mark Litwin - Remington Partners

Gregory Garner - Singular Research

Ronald Bookbinder - The Benchmark Company

Darren (ph) - Janney Capital Markets

Jon Braatz - Kansas City Capital

Operator

Good day and welcome to PriceSmart Inc’s earnings release conference call for the first quarter of fiscal year 2013; the three-month period ending on November 30, 2012.

All participants are currently in a listen-only mode. After remarks from Jose Luis Laparte, PriceSmart’s President and Chief Executive Officer and John Heffner, PriceSmart’s Executive Vice President and Chief Financial Officer, you’ll be given an opportunity to ask questions as time permits. (Operator Instructions).

I’d now like to turn the conference over to John Heffner. Please go ahead sir.

John Heffner

Thank you and welcome to our Q1 earnings call for fiscal year 2013. I hope you will find this to be a useful forum to review the information that we provided in our earnings press release and 10-Q filing, which we released yesterday January 9, 2013. You can find both the filing as well as the earnings press release on our website www.pricesmart.com.

Please note that statements made during this call may contain forward-looking statements concerning the company’s anticipated future plans, revenues and related matters. These forward-looking statements include, but are not limited to statements containing the words expect, believe, will, may, should, estimate and similar expressions.

These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the risks detailed in the company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2012 filed with the Securities and Exchange Commission on October 30, 2012. We assume no obligation and expressly disclaim any duty to update any forward-looking statement to reflect the occurrence of events or circumstances, which may arise after the date of this call.

Now, I will turn this over to Jose Luis Laparte, PriceSmart’s President and Chief Executive Officer.

Jose Luis Laparte

Good morning everyone and thank you for joining us in our conference call for the results of our first quarter fiscal year 2013. Today we’re actually taking this earnings call from our Miami DC, so you may hear some forklifts on the background. That’s just our regular business hours here in Miami. Shouldn’t be any interruptions on our call, but just in case you hear forklifts somewhere in the background.

As I always do, I want to start with the report on sales performance. We did $523 million in net warehouse sales, resulting in 11.8% total growth versus last year and in comparable sales that growth was 8.3%.

Same as in other quarters of last fiscal year 2012, we have a different growth rate on sales in our regions, with Latin American markets growing 15% for the quarter and 5.8% for the Caribbean region. The more diversified and larger Latin American markets reflect better economic conditions compared to the Caribbean country. In addition, Latin America had the benefit of nearly one and a half month of sales from the opening of our new Cali, Colombia warehouse club, which opened on October 19, 2012.

In terms of membership income, for the first quarter we saw an increase of 21.2% with $7.7 million. Total active accounts for the end of the quarter were $999,000, showing an increase of 14% over the prior year. Our renewal rate for the quarter was 86%.

While I speak about membership I would like to confirm that as we announced on our last earnings call, we successfully launched our new type of membership, the platinum membership. A $75 annual membership card, compared with our current $35 card for our business and diamond members. Platinum members will earn a 2% rebate on their purchases with a maximum annual rebate of $500.

Similar to Costco’s executive membership, the platinum membership can provide more savings and value to PriceSmart’s highest volume shoppers, thereby building greater member loyalty and hopefully incentivizing these members to increase their purchases. At this time we are limiting the platinum membership to our Costa Rica market in order to assess the effectiveness of this membership category before introducing it into our other markets.

We are very encouraged with the initial results and acceptance of this new membership in Costa Rica. It shows that our members are willing to invest in the additional fee to get the 2% wavered on their purchases with PriceSmart.

During the first quarter we opened our new location in Cali, Colombia, in the south of the city; our second warehouse in Colombia. The initial results are positive, not only on sales, but also on the acceptance of the membership concept and our business model. Colombia is a competitive market, but we believe we bring a lot of excitement with our merchandize election and our low prices.

We continue on this schedule with our plans to open our second location in Cali in the northern part of the city. Construction is well under progress and we are expecting an opening during the third quarter of this fiscal year, likely in May 2013.

Before I turn it to John Heffner for his additional comments, I would like to give you’ll some quick update on December sales. We finished the month of December with sales of $253.7 million, representing a total growth of 11.6% and comparable sales of 13.7%. The comparable sales period equated to the four weeks ending Sunday, December 30, 2012. Last year the same four-week period ended on Sunday, January 1, New Years day, when all our warehouses were closed.

Consequently our four-week comp period this year have one more date of sales compared to last year following period. This had an approximate 3% positive effect on our comp growth, where we see the opposite effect in our four-week January period. I am pleased with the way we finish our holiday season, between the accomplishment of the first quarter and December.

During December we saw good performance in different departments of food, fresh and non-foods. Our season food program had a very good year compared to last year and the members were able to enjoy a lot of novelty items from our selection of candies and chocolates from the U.S. and Europe. Electronics had a good performance for the month with LED TV’s being the main drivers of good sales growth.

For computers, I think its happening in the U.S. Tablets are becoming a very important item in our selection. Our bakery business also reported good growth versus last year and every year we keep seeing our members enjoy our cakes and especially some signature items that we bring for the season like fruitcake, which are very popular in our market. The transition to new merchandize for the spring season, which we are now approaching, is going well.

We achieved another company milestone in December and we surpassed 1 million membership accounts. We are looking forward to continue and to serve these members as we now move into the new calendar year 2013.

And the last comment I would like to add is regarding expansion plan. We continue to pursue the necessary permits for our six clubs in Costa Rica and we hope we can get that completed in the next few weeks, so that we can open this club during fall 2013. At the same time we are busy looking for more opportunities to add additional sides in existing markets, including Colombia where we will have three clubs by the end of this fiscal year.

Thanks again for joining us today and before we take you questions, let me turn things back to John Heffner for our few additional comments about the financial results.

John Heffner

Thank you Jose Luis. I hope you all have had a chance to access our earnings release and 10-Q, both of which were made available yesterday. Let me highlight a few items in our financial results specific to the first quarter before we take your questions.

Let me begin by calling your attention to a change we have made with respect to product demonstrations, which occur in our warehouse clubs. In the past we have treated the cash consideration received from vendors for these product demonstrations as other income on our P&L, which flows to total revenues. Other income is not a component of warehouse sales.

The expenses associated with these demos were in our cost of goods sold and warehouse operating expenses. Beginning with this quarter we have reclassified that income, reduced by the associated expenses as a reduction in cost of goods sold. This will have the effect of reducing other income and total revenue by $1.1 million to $1.3 million on a quarterly basis and increase warehouse gross profit margin as a percent of sales by 10 to 13 basis points. It will also reduce warehouse operations expense as a percent of sales by 11 t o17 basis points.

It had a very small impact on warehouse sales, which related to the supplies we used in these demonstrations, but that is a very negligible amount. There is no impact on operating income or net income from this change. Prior periods have been adjusted to reflect this and with the full disclosure of that change in our 10-Q for the past four quarters.

Warehouse gross profit margins as a percent of sales were up from Q1 of last year by 43 basis points at 15%. 14 basis points of that improvement related to additional costs we incurred last year in Q1 in our initial importation of merchandize into Colombia. These costs are no longer being incurred. The remainder of the increase related to end cap income, vendor promotions, reduced shrink and fewer markdowns.

Warehouse club operations expense for the quarter were 8.76% of sales, a 19 basis point improvement from Q1 of last year, as most cost factors showed leverage, particularly depreciation, utilities and repair and maintenance. The opening of the Cali warehouse club and the sales growth of the Barranquilla warehouse club had a positive impact on the expenses we have in place for our country headquarters in Colombia.

We encouraged some pre opening expense in the quarter related to the Cali warehouse club opening and we will likely have a similar expense spread over Q2 and Q3 as we ready the Cali north club for opening. Operating income grew $5.5 million over the first quarter of last year to $29.8 million.

Foreign exchange translation gains or losses had a negligible impact in the quarter, whereas last year we were at a $1.2 million loss, and the tax rate of 30.5% benefited from a decrease and a taxable loss in Colombia among a few other things, which we detailed in our 10-Q. All of this resulted in an earnings per share for the quarter of $0.66 compared to $0.47 last year.

We ended the quarter with $84 million in consolidated cash and equivalence, having a net use of cash in the quarter of nearly $7 million related to our annual build up of merchandize inventory in advance through December holidays and $15 million of capital investment primarily related to our two Cali warehouse clubs.

With that Jose Luis and I would be happy to take your questions. Tim.

Question-and-Answer Session

Operator

(Operator Instructions). We’ll take our first question from Dave King with Roth Capital.

Dave King - Roth Capital Partners LLC

Thanks a lot guys. I guess first off for December, it was a pretty good – we had four weeks in comps there; the strongest growth in nine months or so. Maybe can you talk about what you think is driving that in your opinion and whether its local economic factors, any specific countries within what you transact with Latin America showing the most strength, etcetera.

Jose Luis Laparte

Your question is what is driving that Dave, you said?

Dave King - Roth Capital Partners LLC

Yes, yes. I mean your comps over the last – I don’t know if you can hear me okay, but I’m on the road right now, but with comps like over the – I mean it looks like over the last nine months you had comps that were slower, kind of in the high single digits and then you just had reacceleration to 13.7% or so. It sounds like 3% of that you kind of quantified, but I mean its still better than it had been to some extent. So I was wondering if there was anything else to kind of drive that?

Jose Luis Laparte

I will say that from our perspective we really prepare a good holiday season. The first quarter in December we were really looking at a good holiday season and the preparation obviously showed that we were able to deliver those kind of results. That would be my additional comment Dave and I mentioned it specifically, some departments where we saw pretty good performance as one of them as I mentioned, electronics, some of those areas in computers and there were obviously a lot of good categories in the food area, food and fresh area.

So combination, it’s basically a combination of different categories where we were better prepared and I think our members enjoyed the shopping experience during December with us then.

Dave King - Roth Capital Partners LLC

Okay, that’s fair. And then on membership activity, it looked like new member growth kind of slowed a bit, even with the opening of the Cali store. Maybe can you take about what’s driving that and then also just renewal rates. I think we’re a bit lower than what we’ve seen in a while and do you think that has to do with the fee increase or is there something else and how do you better tell; if that’s the case, how do you better tell the customers. Help tell them the story about the value proposition provided.

John Heffner

Sure, let me address that Dave. I think with respect to renewal rates, our renewal rate has dropped slightly from 88% to 86% over the past year. I think the jury is out a little bit as what you could specifically attribute that to. I don’t think we can attribute it specifically to the fee increase in some markets where we increased the fee and see no change in renewal rate and others, including where we did not change the fee had seen some small reduction.

So I would not attribute it specifically to the fee increase and we should probably even study that for that small change from 88 to 86 over the past 12 months. Economic factors could be in play there as we have seen in some of our smaller markets, but we’ll have to do some more study on that.

Dave King - Roth Capital Partners LLC

Okay, and then just on the membership, new member growth, is there anything there to highlight.

John Heffner

I don’t think so. I think the membership growth is fairly constant, but the numbers are getting bigger, so I think the percent of the denominator is getting bigger for the numerator to have to create the same percentage.

Dave King - Roth Capital Partners LLC

Right, absolutely. Alright, thanks so much guys.

Jose Luis Laparte

No problem. Thank you Dave.

Operator

And we’ll take our next question from Mark Litwin with Remington Partners.

Mark Litwin – Remington Partners

Hi. Thanks very much and good job folks. Can you tell me or us, which countries have had the higher year-to-year growth in stores, same-stores and which countries had the lowest?

John Heffner

Well, we don’t provide individual information on that Mark, but as you look at our segments, our Latin American countries are stronger than our Caribbean and particularly I think the smaller markets in the Caribbean are the ones that are not having a stronger growth rate as some of our larger markets in Central America.

Mark Litwin – Remington Partners

Okay, thank you.

Operator

And we will take our next question from Greg Garner with Singular Research.

Gregory Garner - Singular Research

Thanks, nice quarter. It looks it continues to executive well. The question on the gross margin, last quarter was abnormally high due to some distribution issues. This quarter I think John you mentioned vendor promotions, lack of shrinkage; is this a new level that we can expect here or is this again, would you still consider this more a bit of an anomaly on the high side.

John Heffner

I think sequentially we are down from Q4 to Q1.

Gregory Garner - Singular Research

Yes, I guess I mean what this quarter was, it seems to be a little bit high than what you are targeting on a long term. So is this an anomaly I guess is my main question.

John Heffner

Well, the company’s strategy is to push the benefit of lower cost back in the lower prices for our members going forward into the degree that we operate and execute well a give quarter, provide the opportunity for us to take those costs and move them back to lower prices going forward.

Gregory Garner - Singular Research

Okay, but I mean, do you think there will still be these vendor promotions. I mean lack of shrinkage, I means that can change quarter to quarter, lack of markdowns I suppose is more of a coincide with the positive comps. Well, I’m actually thinking December there, but so back to the November quarter. I’m just trying to sense, is this something that can repeat itself or should we really look at that 14.5% as a target still for the gross margin.

John Heffner

I’m not sure we have a specific target in a specific sense that same way, but I would say that our intent is to continue to be operationally efficient and take cost out as much as we can and push that back into lower prices that may have a impact on margin percent as we go forward.

Gregory Garner - Singular Research

Okay, in the Barranquilla store, was that included in comps in November? Was November the first month or was December the first month for...

Jose Luis Laparte

November was the first month of Barranquilla starter in the comps.

Gregory Garner - Singular Research

Okay, so even with that there was still a good step-up in comps from November to December, okay. A question on – well, I guess you did sort of address some of the membership, but is the primary membership weakness, would that also be in the Caribbean markets that you are finding our lower same-store sales. Was that a proper way of looking at things.

John Heffner

Yes, I think that’s probably fare. I have a date in front of me, but I think that’s probably fair that our…

Jose Luis Laparte

Yes, it’s a little bit more slower obviously in those Caribbean markets compared to that bigger markets, Latin American markets where the results are more, I guess more population, more people knowing to pull from. There is a little bit of correlations for sure Greg on that.

Gregory Garner - Singular Research

Okay, and the increase in electronics, was that any change. I mean for December now that was such a good sale item apparently that you mentioned a couple of times. Was there any – do you see that as a significant change in either from a sequential month or is it really more of a holiday situation that you see even was greater than last year.

Jose Luis Laparte

I would say that we were better prepared to get more business during the holiday season as obviously we were looking. When we travel during the holiday time we are in very good shape in electronics, good inventories. We were expecting a good holiday season. I would prepare for that.

So its our result of obviously preparation and I think electronics has always been a good timing for us, not only during the holiday time, but in general it’s a good department where we have a good reputation on low prices, good quality items and good brands. So it’s just a good execution I would say from the perspective of the buying and the operations to accomplish good results and especially in a month like December.

Gregory Garner - Singular Research

Okay, and just one last question and I’ll get back into the queue. Can you tell us anything about the new store or land acquisition process in Colombia for potential new stores say into fiscal year ’14, since it takes about 12 months from. It seems like approximately from time of closing on the land to the new store opening. Can you tell us that you have anything that you are looking at, several properties or coming close you think you might have something to say in a few quarters; anything along those lines?

Jose Luis Laparte

Yes I would, we have opened two and we have one more under construction. We don’t have Greg, a specific number in mind, although given the size of Colombia market we believe that we can open multiple warehouses in the country, we can secure the right size, and obviously we continue to experience the success that we have been so far.

I think we keep working on the major cities if not – it’s obviously that’s why I’m here. Though we are committed in the major cities, we have our target to start and we don’t have anything official, but hopefully very soon we’ll be able to share more information on new sites and you are right, it takes approximate 12 months, 14 months to I guess from the time we announced and the time we open one of our warehouses over there. But we don’t have anything extra else to share now as far as our future growth. They are all under the fact that we believe that there is good opportunity now.

Gregory Garner - Singular Research

Okay and if I could ask one more, I’m just curious about how – do you seen any kind of competitive response to how you’ve been successful in Colombia. Are some of the local stores making any kind of merchandising change that you are competing with or are you not really seeing any change there at all?

Jose Luis Laparte

We have seen a little bit of change, not big change but we have seen a little bit of change in terms of some competitors adding more imports probably to their selection, knowing that one of our strengths is defiantly dying, the U.S. merchandising, imported merchandise, but at the end of the day although we are competing with Colombia, we’re stronger retailers, no question, very strong retailers, good companies running good businesses there, but different formats.

I think the warehouse club concept meeting with changes that the other guys are doing, I think there’s a very good niche for that warehouse club. Very good acceptance of the membership concept, so…

We have seen small changes, but nothing drastic and we expected that to happen. Obviously as we opened we knew that there was going to be a reaction from the other competitors. But I don’t think that we have seen anything dramatic in terms of the way they do business. A little bit more aggressive in some prices, probably in some areas, but nothing that doesn’t happen anywhere else. Now it happened at some point in Northern Central America and Caribbean countries and we expected that to happen in Colombia also.

Gregory Garner - Singular Research

Okay, thank you.

Jose Luis Laparte

Thank you Greg.

Operator

And we will take our next question from Ronald Bookbinder with The Benchmark Company.

Ronald Bookbinder - The Benchmark Company

Good afternoon. First I was wondering, you were just taking about the strong input from the U.S. and Jose Luis you were at the Miami DC. What percentage of your goods are exported out of the Miami DC and while the container long shore man strike has been adverted for the time being, what would your plans be if there was container long shore man strike on the east coast.

Jose Luis Laparte

I will say probably out of Minami we should probably – yes, I will say most of our exports are coming out of Miami. We have other 9 other DC's obviously, but basically 80% of our exports are coming out of these facilities here in Miami.

Regarding the strike or the problems, at some point we had a plan be where you will be knowing that we had some risk. So even before things were -- I mean we always have a plan B or a contingency plan in case something happens and it happened in the past in the cultural we have on the west coast where we have our other DC. So there’s always a contingency plan that we think we can pull together pretty fast to react to any kind of problem like that.

We do realize we have weather related to things that can happen in this facility as it happens in Miami. So in general we also have a contingency plan to be proactive and be able to react given the weight. We do realize the weight of imports in our business and we really need these operations to be running pretty much 24 hours a day to be successful in our business.

Ronald Bookbinder - The Benchmark Company

Okay, and Q1 was the highest operating margin in about a year and a half, such that PriceSmart, you probably could give more margin back to the numbers. So should we continue to see prices go lower to the numbers and would you get even more aggressive than you have been?

Jose Luis Laparte

I would say that we would continue being aggressive on margins. We are not changing the plan on increasing margin. It happens to be one quarter where we got all of the things happening at the same time, the execution, the less margins and good holiday season. We got vendor rebate money, but we are not changing at all our direction Ronald and we will definitely keep low in our prices and maintaining our low margin structure in place. We are no definitely looking changing that, I don’t know.

Ronald Bookbinder - The Benchmark Company

Okay, thank you and good luck going forward.

Jose Luis Laparte

Thanks Ronald.

Operator

And we will take our next question from David Strasser with Janney Capital Markets.

Darren (ph) - Janney Capital Markets

Thank you. This is Darren (ph) on for David. I just wanted to clarify the renewal rates. I seems like your measuring over a 12 month period and its gone from 89% to 86% with six months or so with the fee increase in place. I mean is it safe to assume that current renewal rates on a quarterly basis are running lower than that, somewhere in the 82% to 82%-ish range in order to bring it down by that much and if that’s the case, can you just talk a little bit more specifically about the markets where you are having issues what the pushback is, the types of members that maybe aren’t renewing, thanks.

John Heffner

Well, the measurement of our renewal rate is a rolling 12 months and from a year ago it was 88, it is now 86, so that can change over some time. I think we did some – we revalidated sort of the approach we’re taking on our membership and I don’t think I have a good answer for you.

I think we need to do some study. I think its moved down slightly. I don’t think it sort of matches to the math you have there, but I think we need to do some more study as to whether there is really a trend of – I don’t there is of some significance there. It could be members who have been shopping for a while, it could be members who when they do renewals they tend to renew, when they come back into the Whitehouse club as opposed to renewing when their membership expires and so we will carry then for a couple of more months in terms of our – we won’t be carried with numbers, but renew it in three months after their expiration, they will go back into the renewal, but I think its – I don’t have any specific thing I can point to at this point.

Darren (ph) - Janney Capital Markets

Okay, thank you and then I mean on gross margin, is it somewhat connected. I mean has your plan changed at all with regard to investing the fee increase back in the price. I mean it just seems like gross margin hasn’t really changed since the fee increase. Maybe its just an anomaly and is there anything going on there that we should be aware of from a benefit standpoint. I know you mentioned your regional distribution centers going in Central America, I believe Costa Rica and Panama. Are they providing tailwinds; are they operated by a third party I’m assuming.

Jose Luis Laparte

Yes, well first of all we are not – the DC’s office was operated by us. What we are doing right now in Costa Rica, we have a warehouse established that would be operating as a regional DC and it is operated by us, we are not doing it through third partners in those markets.

And I guess on the other question, on margin, nothing has changed dramatically and as I mentioned before, our margin goals remain the same. The expectation when we did the membership fee was to keep obviously lowering our prices and transferred those savings or transferred the benefits of our regional membership income to lower prices. That will continue to be our formula for business. We don’t have any plans on changing it at all.

Darren (ph) - Janney Capital Markets

And then any other metrics on the platinum membership pilot in Costa Rica? It seems like that could defiantly be a big opportunity for you guys, any timing plans on when you think it may be rolled out across the chain. Any impacts on comp and gross margins.

Jose Luis Laparte

Yes, its probably too early, because we just launched it a month, I guess two months ago right now and I think its probably too early to know the result. The nature of the acceptance is very good and I think members are excited about the opportunity. It proves us the loyalty that we can get from those members and as I mentioned in my script a few minutes ago, we got to see how that turns into incremental sales, which is the expectation. So it’s a little too early to have a better view of these David, but I believe we are very encouraged to see that the initial acceptance is doing and members got it, members understand the importance of that.

Darren (ph) - Janney Capital Markets

Okay, thank you. Good luck for the rest of the year.

Jose Luis Laparte

Thank you very much David.

Operator

(Operator Instructions). We will take our next question from Jon Braatz with Kansas City Capital.

Jon Braatz - Kansas City Capital

Good morning gentlemen.

Jose Luis Laparte

Hello Jon.

Jon Braatz - Kansas City Capital

John, Jose, as I read the 10-Q I noticed that more of your sales growth came from average price or ticket price versus transaction compared to relative quarters. What might account for that little bit of change?

John Heffner

Well, I think generally speaking John, if I recall the numbers here, the average transaction or the average ticket has always sort of been 2% to 3%, but when it was out, when transactions were growing 17 or 18, 16 or 17 then that was a smaller portion of the total. So I think the change there really a reduction in transactions, but I think our average ticket is sort of in the range of our historical activity.

Jon Braatz - Kansas City Capital

Okay, secondly John or Jose, would you like to maybe make a qualitative statement about how the first store in Cali is doing relative to Barranquilla. It’s your second store in Colombia. Are you seeing similar type of membership growth, sales patterns and so on and so forth; nothing specific, but sort of qualitative?

Jose Luis Laparte

Yes, well we don’t really provide individual information I guess from an operation perspective and I would say that the acceptance in the city of Cali has been very good also from the membership perspective Jon to start with, has been very good, and there are different dynamics I guess in the city of Cali versus Barranquilla; very similar competition.

I would say that the Cali store is obviously doing as good as we expected and to the point that obviously we are excited about opening the second one in the city of Cali. Going forward we don’t see any real difference between cities where there will be some I guess variations within each of the city as we have been, even in the current price market, countries where we are doing business.

But in general without sharing a lot of detail, I guess in the individual performance of Cali, we are very pleased with the results that we have seen in the last three months now since we opened and they had a good December month also and the membership dates keep growing in that market, which is the important thing for us to watch right now in Cali.

Jon Braatz - Kansas City Capital

Okay, thank you. John, one last question. Your tax rate was a little bit lower in the quarter 30.5%, you want to guess where it might be going in the future?

John Heffner

No, I don’t want to guess where its going in the future.

Jon Braatz - Kansas City Capital

Alright, thank you

John Heffner

I think generally our tax rate runs between sort of at a normalized basis sort of 32% to 33%, in that sort of range.

Jon Braatz - Kansas City Capital

Alright, thank you

Operator

And at this time there are no other questions in queue. I’ll turn the call back over to Mr. Heffner.

John Heffner

Well, thank you Tim and on behalf of Jose Luis and maybe the PriceSmart employees here in Miami who are busy moving, we’re seeing a lot of activity in our warehouse here. Thank you all for participating with us today and a belated Happy New Year to you all. Bye-bye.

Operator

This concludes today’s conference call. We appreciate your participation.

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