Clearwater Paper CEO discusses Q4 2012 Results - Earnings Call Transcript

Feb.20.13 | About: Clearwater Paper (CLW)

Clearwater Paper Corp (NYSE:CLW)

Q4 2012 Earnings Call

February 20, 2013 05:00 PM ET

Executives

John Hertz - SVP and CFO

Linda Massman - President and CEO

Analysts

Graham Meagher - TD Securities

Steve Chercover - D.A. Davidson

Ian Zaffino - Oppenheimer

James Armstrong - Vertical Research

Operator

Ladies and gentlemen, welcome to the Clearwater Paper Fourth Quarter And Full Year 2012 Results Conference Call and webcast. At this time all participants are in a listen only mode. Later we will conduct a question and answer session and instructions will be given at that time. (Operator Instructions). As a reminder this conference call is being recorded. I would like to turn the conference over to Mr. John Hertz, Senior Vice President and Chief Financial Officer. Sir, you may begin.

John Hertz

Thank you Saied. Good afternoon and welcome to Clearwater Paper’s fourth quarter 2012 conference call. Our press release this afternoon includes details regarding our fourth quarter and full year results and you’ll find a presentation of supplemental information posted on the Investor Relations area of our website at clearwaterpaper.com.

Additionally, we provide certain non-GAAP information in this afternoon’s discussion. A reconciliation of the non-GAAP information to comparable GAAP information is included in the Press Release and supplemental material provided on our website.

I would like to remind you that this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements.

Factors that could cause actual results to differ materially include those expressed or implied by risks and uncertainties described from time-to-time in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2011 and our quarterly filings on Form 10-Q. Any forward-looking statements are made only as of this date, and we undertake no obligation to update any forward-looking statements.

With that I will report on our full year and fourth quarter results. 2012 was a year of significant accomplishments and cost structure improvements for Clearwater Paper. On the financial side of things we are reporting net sales of $1.9 billion and diluted earnings per share of $2.72 per share, which is a 64% increase over 2011 EPS of $1.66 per share. Adjusted EBITDA came in at a record $228 million or 12% of net sales and we generated $199 million in cash flow from operating activities or 11% of net sales.

On the operational accomplishment side of things, our new TAD paper machine at Shelby was started on time in December of 2012, and construction costs for that facility and the upgrades in Las Vegas are now expected to be under budget at $270 million. Further we achieved a $10 million synergy run rate in Q4 related to the Cellu Tissue acquisition. We also optimized our asset base by selling our foam business and moving the bathroom-tissue line from Lewiston to Las Vegas to improve efficiency.

Finally in the fourth quarter, we acquired a whole log chipping operation near the Lewiston Mill, which combined with our lean manufacturing and cost optimization initiatives, are all expected to save us at least $19 million annually by 2014.

Now turning to the fourth quarter, net sales came in at $463 million. That's down 4% sequentially from the third quarter due to 6% lower shipment volumes in consumer products and 1% average price per ton decline in paperboard. Compared to the fourth quarter of 2011, net sales are up $13 million, that's excluding the impact of sawmill that we sold in November of 2011, due mainly to a 6% improvement in tissue shipment tons.

Fourth quarter gross margin came in at 14.3%, which is slightly down versus the third quarter gross margin of 14.7%, as sequential reductions in pulp and fiber costs were offset by increased chemicals, transportation, and labor related costs.

Additionally we saw lower fixed cost absorption as paperboard production was down approximately 5000 tons due to the maintenance downtime and tissue production in Las Vegas was down approximately 2000 tons associated with the TAD paper machine conversion.

Compared to the fourth quarter of 2011, gross margin declined 250 basis points and that's with taking out the Lewiston sawmill primarily as a result of the year-over-year decline in paperboard prices. SG&A expenses of $31 million were 6.7% of fourth quarter net sales, as compared to 6.4% in the third quarter and 6.1% in the fourth quarter of 2011. The primary reason for the increase was approximately $2 million in nonrecurring executive relocation and retirement related costs in the fourth quarter of 2012.

Corporate spending was $13 million of the total $31 million in SG&A spend for the fourth quarter and was flat with the third quarter. Compared to the fourth quarter of 2011, corporate spending increased $2 million and that is after adjusting for the impact of last year’s sawmill sale, due primarily to the nonrecurring executive related costs and the reallocation of certain G&A spending from the divisions in 2011 to the corporate bucket in 2012.

Fourth quarter earnings before interest, taxes, depreciation, and amortization or EBITDA was $56 million as compared to $59 million in the third quarter. The sequential decline in EBITDA was primarily due to the lower shipment values within consumer products and a lower average price per ton within paperboard. EBITDA margin of 12.2% was essentially flat with the third quarter and improved from the adjusted EBITDA margin of 11.8% in the fourth quarter of 2011 at lower input cost.

Fourth quarter net interest expense of $7 million was essentially flat with the third quarter. Compared to the fourth quarter of 2011, interest declined $3 million due to capitalized interest. We do not expect to capitalize any interest in 2013.

Our effective tax rate for the quarter was 30.2%, which is down 10 points down from the 40.2% in the third quarter and down 18 points from 47.8% in the fourth quarter of 2011, due mainly to state tax credits associated with hiring and capital spending at our Shelby facility, as well as the impact of the true up of the full year 2012 effective tax rate in the fourth quarter. Our effective tax rate for 2012 was 42.5% and we expect it to be 40% plus or minus a couple of points in 2013.

Net earnings were $20 million or $0.84 per diluted share, compared to $19 million and $0.80 respectively in the third quarter. The increase in EPS was primarily due to the lower effective tax rate as well as the decline of 168,000 diluted weighted average shares outstanding. As compared to the fourth quarter of 2011, earnings are up $7 million or $0.29 per diluted share, after adjusting for the sale of the sawmill.

Non-cash expenses in the quarter included $21 million of depreciation and amortization, $2 million of equity based compensation and $3 million of non-cash pension related to expense. Employee head count at the end of 2012 was approximately 3,860. At first it was approximately 3,710, at the beginning of the year. Capital expenditures were $50 million in the fourth quarter of 2012, which included $23 million related to the TAD project, bringing total TAD project expenditures to date to $254 million.

Capital expenditures in 2013 are expected to be approximately $91 million, which includes an estimated $60 million associated with the TAD project. As was previously mentioned, we now estimate that the TAD project will cost approximately $270 million, excluding capitalized interest.

Long term debt outstanding at December 31, 2012 was $524 million, which was consistent with the September 30, 2012 balance. Please note that on January 17, 2013, we issued $275 million of 4.5% senior notes due in 2023, net of total operating expense was a $4 million and $60 million of breakage costs associated with redeeming the ten and five eight’s (ph) percent notes. We netted approximately a $105 million. As a reminder, redemption of the ten and five eight (ph) notes triggered $30 million make-whole premium that will impact other income and expense in the first quarter.

We intend to utilize the net cash proceeds to repurchase common stock pursuant to our previously announced $100 million stock repurchase program. We plan to fully execute the program in 2013 and intend to execute $50 million of the authorization through an accelerated share buyback program and the remaining $50 million through open market transactions throughout the year.

During the fourth quarter, we repurchased approximately 231,000 shares of common stock at a total cost of $9 million, which completed our $30 million buyback authorization at a total program average share price of $35.15.

As of the most recent measurement date of December 31, 2012, our company’s sponsor pension plans were underfunded by $79 million. That’s down from $89 million the prior year. We contributed $3 million to these plans in the fourth quarter of 2012, bringing total 2012 contributions to $21 million. We expect to contribute approximately $20 million to these plans in 2013.

With regard to our liquidity, we ended the fourth quarter with 33 million of unrestricted cash and short term investments. We generated 38 million of cash from operating activities in the quarter or approximately 8% net sales. Our leverage ratios remain strong. Our total debt to total capitalization, excluding accumulated other comprehensive loss was 44.4% on December 31, 2012, compared to 45.1% on September 30, 2012. EBITDA to net interest expense for the fourth quarter of 2012 was eight times.

So in summary, Clearwater Paper fourth quarter 2012 financial performance provided a strong finish to a solid full year 2012 and we believe that we are well positioned to achieve our stated objective of at least $300 million of EBITDA in 2014.

I will now turn the call over to Linda Massman, who will discuss the company’s segment performance and outlook.

Linda Massman

Thanks John. Before I get into the segments, I would like to take this opportunity to congratulate Tom Colgrove and Dan Johansen on their new roles as President of the Consumer Products and Pulp and Paperboard Divisions respectively.

Tom has successfully run our Pulp and Paperboard Division for the last four years and prior to that spent more than 25 years with Kimberly Clark and Proctor & Gamble. Dan joined the company 40 years ago and he spent the majority of his career in our former Wood Products Division and in our Pulp and Paperboard division in both sales and operating roles.

I would also like welcome Beth Ford and Kevin Hunt, who joined our Board of Directors last month. Beth has spent 25 years in various leadership positions in multiple industries, including flavor and fragrances, consumer package goods, publishing, and oil and gas and is currently Executive Vice President, Chief Supply Chain and Operations Officer at Land O’Lakes.

Kevin bring more than 25 years of private label consumer experience to the Clearwater Paperboard and is the former Chief Executive Officer, President and Director of Ralcorp Holdings, which manufactures, distributes and markets private-brand food products. With the promotions of Tom and Dan and addition of our new Board members, I am confident that Clearwater Paper has the leadership in place to achieve our strategic goal and generate additional value for shareholders.

Regarding our company goals, I wanted to give you an update on our business strategy on long term vision. December of 2012 marks the four year anniversary from our spinoff from Potlatch. We thought that this would be a good time to review these items.

In January, we finalized a strategy development and are now in the process of communicating a five point plan all employees across the company. The plan is called Drive and has specific three year goals that focus on number one, developing, engaging and protecting our employees; two, realizing, growing and enhancing financial performance; three, improving our processes and systems; four, valuing and deepening our relationships with our customers and five, ensuring sustainability for our company and the communities in which we operate.

Employees are very engaged in the initiative and have already began to jump in head on to meet the plan specific goals and believe the achievement of these goals will ultimately produce additional value for the shareholders of our company.

Now a discussion of our segment results. Consumer products net sales were $281 million for the fourth quarter 2012, down 4% versus the third quarter, primarily due to the decline in shipment tons to 130,733. More specifically, retail tons were down 3% and non-retail tons were down 9% due to tight parent roll inventory.

In addition, as John discussed, we had the 2,000 tons of lost production associated with the Las Vegas conversion and the division did build some inventory in the quarter which is typical at year end to prepare for the first quarter sales. Partially offsetting the sequential volume decline were the 2% increase in total tissue average net selling price per ton to 2,147 as the retail versus non-retail shipment mix improved from 53% retail in Q3 to 55% retail in Q4. Also benefiting total selling price with a richer product mixed within retail, as retail pricing was up 1% versus the third quarter due to higher shipments of facial tissue, while non-retail pricing was flat.

Consumer products net sales were up 5% versus the fourth quarter of 2011, due to a 6% increase in volume. As a reminder, these volumes and pricing figures are available on our website as supplemental materials in the Events and Presentation section of the Investor Relations page.

Also beginning this quarter, we are providing a breakout of volumes and pricing for retail versus non-retail. We are also providing sequential bridges by division in addition to the consolidated bridges that we have been providing.

Consumer products operating profit margin for the fourth quarter of 2012 was $23 million or 8% versus $18 million and 6% in the third quarter, and is up mainly due to the richer mix of retail versus non-retail and lower pulp costs flowing through our financials in the quarter, although we did see market pulp cost rising approximately 5% towards the end of the quarter. Consumer products operating margin improved from 6% in the fourth quarter of 2011 due to better retail pricing and lower input costs.

As John mentioned in his summary of 2012, our new paper machine at Shelby started up under-budget and on time in December of 2012. In the fourth quarter we also finished the improvements to our Las Vegas TAD machine, which enabled the facility to produce both TAD ultra-bathroom tissue and household towels. The Shelby paper machine produced approximately 1800 tons of paper in the fourth quarter. We expected to produce 55,000 tons in 2013, and to be at a 70,000 tons per year run rate in the fourth quarter of 2013.

Now stepping up to how that flows through on a total division basis for 2013, we expect incremental CPT production tons to be 41,000 tons, of which we expect to ship 26,000 tons. We also expect to build 10,000 tons of incremental inventory and the remainder is converting yield loss.

Of the incremental shipment tons, we expect the lion’s share to be retail. Between Shelby and Las Vegas, we incurred a total of $3 million in startup related costs in the quarter, $1.8 million of which was capitalized for the Shelby paper machine. We now have four converting lines operating at Shelby with an additional napkin line starting up in 2013. The four operating lines produced approximately 3.6 million cases in 2012.

Now turning to our 2013 outlook for the consumer products division. I would start by pointing out that we have included slides in our supplement materials, providing our general outlook on volumes, price of mix, input costs, and maintenance and repairs for Q1 and for the full year 2013.

Overall, we believe the wind is still firmly at the back of private label tissue, as it grew 4% in 2012 in the U.S. despite expected population growth of only 1%. Private label continues to gain share and we believe that we are well positioned to grow our 37% nationwide share of the U.S. private label tissue market.

For the full year 2013, we expect to ship an incremental 4.6 million cases versus 2012, a 9% increase as a result of our expansion efforts. Tissue pricing mix will improve with the addition of TAD bath tissue cases and we expect input cost as a whole to increase in the first half of 2013 and then decline in the second half, resulting in being net stable for the year versus 2012.

While published reports are now calling for pulp to rise through July and then remain at those levels throughout the remainder of 2013, we are seeing signs that we're near peak pulp prices for the year and expect prices to start falling as we move into the second half of 2013.

We believe first half 2013 increase of external pulp and natural gas will begin to be offset by reduction in transportation costs in the second quarter due to bathroom tissue coming online at Shelby as well as inventories coming back in line.

Specifically for the first quarter of 2013, we expect our price and mix of tissue products to remain stable and expect shipment volumes to increase to approximately 134,000 tons. As to input costs, we began to see an increase in external pulp pricing in late Q4 and we have seen that continue into Q1. Because of the TAD bath tissue launch, compounded by strong demand and our tight inventory levels in the month of January, we are seeing a couple of nonrecurring cost pressures in the first quarter.

We expect to purchase 4000 to 5000 tons of external parent rolls in the quarter, which will likely constrain margins and two, internal parent roll transportation cost will likely be up in the first quarter. We expect the rest of our input cost to remain stable.

Pulp and paperboard net sales of a $182 million for the fourth quarter of 2012, were down 3% versus the third quarter due to 2% decline in paperboard volumes to 190,339,000 (ph) tons and a 1% decline in paperboard pricing to $936 per ton, caused by market related erosion on plate folding and cup products. Compared to the fourth quarter of 2011, pulp and paperboard net sales were flat, that's excluding the sawmill.

Pulp and paperboard operating margin for the fourth quarter of 2012 is $26 million or 14% as compared to $34 million or 18% in the third quarter. The decline is due to the pricing reduction; $2 million higher scheduled maintenance expense, and an increase in labor related charges. Compared to the fourth quarter of 2011, pulp and paperboard operating income decreased 19%, after adjusting for the sawmill sale and related costs due to lower net sales in operating margin.

Now regarding our 2013 outlook for pulp and paperboard; for the full year 2013, we see the broader paperboard market being stable to improving, although somewhat dependent upon GDP growth. We are planning for stable production and shipment volumes throughout the year.

While pricing was soft early in Q1, we are seeing our strongest January and February backlog since our spin off in 2008. As it relates to our input costs, John mentioned the whole log chipping facility that we acquired in December and as a result we expect to see a $2 million to $4 million annual improvement in wood fiber cost.

We see chemical and transportation costs remaining stable throughout the year and slightly higher natural gas costs. We currently expect to see approximately $14 million of major maintenance charges in the year, with $3 million following in the first quarter relating to the Arkansas Mill and $11 million following in the third quarter relating to the Idaho mill.

Specifically for the first quarter of 2013, while production is expected to be stable, sales volume was approximately 14,000 tons in paperboard on a one time basis versus Q4 of 2012, as we are initiating a consignment inventory program with a significant customer. We saw a little bit of incremental pressure on pricing here in the first part of the quarter and we expect overall price and mix to be stable to slightly down for the full quarter.

We expect to see the benefits of our whole log chipper begin in the first quarter and all other input cost to remain stable, with a reminder that we have the $3 million in incremental major maintenance plan at the Arkansas mill.

So, now looking at the whole picture for the first quarter versus the fourth quarter, we expect increased consumer shipment volumes will be more than offset by a decline in sales volumes in paperboard due to the consigned inventory program.

In addition, we expect that external pulp pricing and the one time effects of incremental purchase paper and transportation cost could put 1 to 3 points to downward pressure on CPT operating margins, although we are working internally to try to offset these headwinds.

Interest expense will be $5 million higher in the first quarter as compared to the fourth quarter, due primarily to the lack of interest capitalization and then we’ve got $13 million for the early redemption of bonds and also impacting other income and expense and John already mentioned that the effective tax rate is expected to be 40% plus or minus a couple of points.

In summary, we delivered a solid fourth quarter and full year 2012. Our acquisition of Cellu Tissue is now fully integrated and our Shelby project is ramping up quickly. Further we believe that our drive plan and changes for management team and the addition of our new board members position us well to achieve our strategic goal and deliver on our goal of $300 million of adjusted EBITDA in 2014.

Thank you for listening to our prepared remarks and we will now take questions.

Question-and-Answer Session

Operator

(Operator Instructions). And our first question comes from Graham Meagher from TD Securities.

Graham Meagher - TD Securities

First, just wanted to note that we do appreciate the improved disclosure that you’ve provided this quarter. First question, Linda, can you just discuss the sort of competitive behavior you’re seeing from both the branded and private label producers as you’re selling the output from Shelby into your retailers.

Linda Massman

Yes, I would say the market remains very stable. We are actively engaged with our customers as we’re looking to begin selling out Shelby. We’re in great detailed dialogue with them now and I would say it’s a pretty normal operating environment from our perspective and our focus right now is on really getting that TAD bath tissue product to the shelves of our retailers as quickly as we can.

Graham Meagher - TD Securities

And then maybe just on the paperboard market, you gave a little of color on January, February. Do you expect pricing to comeback a little bit as we move into Q1, Q2?

Linda Massman

I would say that we did see some softness in Q1. I guess we’re encouraged by the strong backlogs we’re seeing in January and February and I think it might be too early to know exactly what’s going to happen with pricing, but definitely encouraged that we’ll begin to see those stronger backlogs.

Operator

Thank you. Our next question comes from Steve Chercover from D.A. Davidson.

Steve Chercover - D.A. Davidson

I guess Linda kind of answered it; you did accumulate 14,000 tons of inventory in the paperboards that you’ve said for this new customer?

Linda Massman

What we’re going to do is move that into a consignment sales relationship with them. So it will be our inventory that we’ll own for a while.

John Hertz

And Steve, it’s John. The way I think about it is, we shipped that product and because it is now going to be on a consignment relationship with that customer, that shipment doesn’t get to be recognized as sale. So it’s going to stay in our inventory until they actually pull it into their manufacturing line.

Steve Chercover - D.A. Davidson

And presumably, that has some benefit to them since you own it. Does that mean that the middle net somehow creeps up a bit, because you’re providing them with kind of working capital service?

Linda Massman

There is definitely going to be a small incremental working capital cost to us, but we think that’s more than offset with this more strategic relationship we’ll develop with this particular customer. Clearly already a strategic relationship has been developed with this customer, that’s we’re even moving into this type of relationship. But it will ultimately help us as well because it does allow us to build a stronger and more consistent shipping volume with this customer, which will get us more flexibility as we progress through year to be able to react to what’s going on in the marketplace.

Steve Chercover - D.A. Davidson

And I apologize, I was having some technical issue so I might have missed it, I mean is that an onshore customer?

Linda Massman

Yes.

Steve Chercover - D.A. Davidson

Okay, great. And also with respect to Shelby, it sounds like you had a great startup. Were there any startup expenses that we should incorporate within our estimates that presumably go away?

John Hertz

Steve, this is John. I think we said we actually incurred about $3 million of startup costs, but $1.8 million of that was capitalized, so the net $1.2 million you could say goes away in the first quarter. I would remind you that right now we’re on household towels and we’ve got a convert over to bathroom tissue and so that would be the first time we'll have done that. Of course, on that machine and there could be some start up related costs associated with that, but we do not anticipate that moving the needle, it would be, probably not material.

Steve Chercover - D.A. Davidson

And how are the machine controls working? I guess neither of you were there for the startup of Las Vegas, but is anyone there who could shed some perspective as to how it compares?

Linda Massman

I would say that we couldn’t be more pleased with our startup of Shelby. I have to just say, I’m very proud of the team and what they’ve accomplished. It started up incredibly well on anybody’s standards. And we do have Tom Colgrove, who has a tremendous amount of experience bringing up tissue machines in his former life as well. And I think what we’re most proud of is this facility started up on time, under budget and quite frankly what we didn’t say is this really on quality. Our consumer testing has been going very well. We are definitely on target with regard to quality with the bath-tissue, with regard to both strong and soft, and now it is really up to the sales team to remain thoroughly engaged with our customers as they are and getting that product to the retailer shelf as quickly as we can.

Steve Chercover - D.A. Davidson

And just how quickly, does that have to be tested at retail?

Linda Massman

We have been going through that already with a large number of our customers, because we have been able to get some product off of the Las Vegas facility. So we are well into the selling process at this point and feel pretty good about how excited the customers are to get this product.

Operator

Thank you. And our next question comes from Ian Zaffino from Oppenheimer.

Ian Zaffino - Oppenheimer

Just a quick question, the 3.5% retail price increase; that was some mix, right? I’m just trying to get what the apples-to-apples pricing would be, ignoring mix?

Linda Massman

It was definitely mix related and we said we sold a little bit more, different retail mix more to facial, and that would have caused that change.

Ian Zaffino - Oppenheimer

Okay, so basically sort of flat pricing with a 3.5% benefit from mix?

Linda Massman

Yes, exactly. There has not been any big market changes in pricing that we have experienced. So yes, that would be a mix related in individual customer relationships.

Operator

(Operator Instructions). Our next question comes from James Armstrong from Vertical Research.

James Armstrong - Vertical Research

My first question is more of a clarification. When you gave your $300 million EBITDA target, what year was that for again?

John Hertz

James, that’s 2011 cost structure to achieve in 2014.

James Armstrong - Vertical Research

Okay, to achieve in 2014, I just wanted to make sure. Okay then, on Shelby, if it was at a 100% today, do you think that you could place all the tons with a minimal impact to the market and what’s your ramp up curve going to look like to get to 100%. For instance will you be at 50% to 60% in the first quarter, 70% in the second, how does that look?

Linda Massman

Maybe I'll take the first question first, which was I think more about tissue capacity and if we were fully ramped up and maybe I'll change the context a little bit because we will be ramping up through the course of the year.

We do have a slide in our investor deck that I think is quite telling. It shows, I think the first part of the chart is 2011 tissue demand versus capacity and it shows that the two are matched up pretty nicely at 97%. And then given what has been announced from a capacity increased perspective in the marketplace as well as what we've seen historically with regard to tissue growth, primarily driven by population, shows at the end of ‘13 that ratio is very consistent at 97% and we don't have any reason to believe that wouldn’t continue to be the case.

So, the additional capacity announcements I think are fine and the market will absorb that. With regard to how the Shelby ramp, we gave you some indication as to how that flows off with the 55,000 tons, but specifically we have to go through the selling process that is going to be individually driven by each of our customers and what their needs are and what their plans are to get this to the shelf, and I would say today our closest indication would be that while we're going to have to build some inventory and make sure we can meet the normal and customary good customer service that we provide our retailers, most of that volume will be in the third and fourth quarter. We'll see some of it in the first and second quarter but it would definitely take a larger ramp in the back half of the year.

John Hertz

And that's a shipment volume comment. From a production volume we do see that growing linearly through the year.

James Armstrong - Vertical Research

Yes, but production side that helps a lot. And then lastly, how much of the $100 million authorization has been used to date?

John Hertz

Well, I'll answer it this way. We were in the quiet period when we finished our authorization, and we won't be out of the quiet period until a couple of days after this call.

James Armstrong - Vertical Research

Perfect, so nothing really has been used as of yet.

John Hertz

Sure.

Operator

I’m showing no one else in the queue at this time. I would like to hand the conference back over to Ms. Linda Massman for closing remarks.

Linda Massman

And I would just like to thank everybody for joining us on the call and we look forward to catching up with you soon. Thank you.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This concludes our program for today. You may all disconnect and have a wonderful day.

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