Good day, and welcome to the Christopher & Banks Corporation Fourth Quarter Fiscal 2012 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Jean Fontana of ICR. You may begin.
Thank you. Good afternoon, everyone, and thank you for joining us today to discuss Christopher & Banks earnings results for the fourth quarter and full year fiscal 2012. Joining us on the call today are LuAnn Via, President and Chief Executive Officer; and Pete Michielutti, Senior Vice President and Chief Financial Officer. After management has completed their formal remarks, we will open up the call for questions.
Before we begin, I would like to remind you that certain statements to be made during today's conference call are forward-looking statements. They are based on assumptions and expectations of future events, which may not prove to be accurate. These statements also involve substantial risks and uncertainties. The company's actual results may differ materially from those expected or implied by these forward-looking statements. These forward-looking statements may be identified by such terms as will, expect, believe, anticipate, initiative, estimated and similar terms or variations. All of the company's outlook and financial expectations, as well as assumptions underlying the outlook or expectations constitute forward-looking statements.
You are directed to the cautionary statement included in the company's earnings release issued today, as well as the most recent Form 10-K report and other SEC filings made since the date of that report, all of which are available under the Investor Relations section of the company's website at www.christopherandbanks.com and are applicable to the statements made today during the conference call.
I would now like to turn the call over to LuAnn Via.
Thank you, Jean. Thank you for joining us today to discuss our fourth quarter and full year fiscal 2012 earnings results. I will begin with a review of our fourth quarter financial highlights and accomplishments, followed by our strategic plans for fiscal 2013. Pete will review our full year financial results and provide guidance for the first quarter.
We are extremely pleased with the continued momentum in the fourth quarter as the hard work to execute the strategic plan that began just over a year ago has resulted in significant improvement in both sales and margins. Over the course of 2012, we repositioned our merchandise assortment to better align with our customers' preferences. We improved the balance of our good/better/best value proposition. We adjusted inventory flow to our stores, and we developed a more strategic marketing program.
As these initiatives were implemented, we saw vast improvement in our financial performance beginning in the second quarter and gaining momentum into the fourth. As a result, for the fourth quarter of fiscal 2012, we delivered an 18.5% comp store sales increase and generated a gross margin of 30.2% as compared to 7.1% in the same period last year. We also reduced our net loss per share to $0.11 as compared to a loss of $1.50 last year.
To achieve these much improved results, our merchandise assortment was focused on delivering style, quality and value along with versatility and great fit. This well-balanced merchandise offering garnered strong response from our customers, as evidenced by our higher conversion and units per transaction despite coming up against the highly promotional fourth quarter last year. While all categories that showed positive comps, our 2 strongest were woven tops, followed by knits.
Our sweater business showed strong gains. However, we do see additional opportunity going forward as we were not able to fully implement our merchandise strategies in this category in 2012. Also, our renewed focus on our core basic pants in both denim and wear-to-work programs prove to be successful. Moreover, our print value proposition has really resonated with our customers. We found that by delivering the right product, combined with a more balanced good/better/best offering and a clear value message, we can drive higher full price selling. This approach has helped our customers to understand and appreciate the value that we offer. And as a result, we did not have to take significant discounts to drive sales during the fourth quarter.
We saw average selling price increased by nearly 1% for the quarter despite a 20% decrease in ticket prices as compared to last year. This enabled us to deliver a much healthier margin rate. Additionally, we benefited from the changes we made to our merchandise flow, delivering 6 versus 12 major floor sets per year with increased depth in a greater number of key styles. We supplemented this with more frequent deliveries of smaller shipments with new colors and styles to keep our stores fresh. We will continue to refine the amount and timing of product flow in order to maximize margin and inventory turn.
We were also pleased with the results of the enhancements to our marketing program. We focused on targeted, unique, preplanned promotions and moved away from storewide events. We had a very successful direct mail campaign in the fourth quarter. We delivered 3 direct mail pieces, one each in November, December and January. While we sent similar quantities as compared to the prior year, this year's mailing generated twice the incremental sales of last year.
We also launched our Club Card programs, Smarty Pants and Sweater Club in the fall and ran it through holiday. We were very pleased with the strong response where after purchasing 5 of the featured items, the customers received the sixth one free. Redeemers shopped over 7x during the promotion and spent approximately 50% more than the same period last year. These shoppers not only bought the category featured on the Club Card, but other categories represented approximately 70% of their spend during the promotion period.
We also launched our private label credit card program in mid-April and have issued over 300,000 cards since the launch. The average dollar spend among cardholders is about 50% higher than non-cardholders. Those that used the card this past year spent 25% more than they did the prior year, and on average, they made one additional visit.
While we had many successes in 2012, we are really only in the fourth inning of the game. We still have significant growth opportunity ahead of us. Let me now turn to the initiatives we are focused on for 2013 as we set the stage for sustainable long-term growth.
First, we will build our 2012 -- on our 2012 successes by offering merchandise that ensures that we maintain a compelling, versatile and quality fashion assortment at a great value. We're focused on continuing to offer a balance of classic fashion and unique style at affordable prices. Our intent is to provide her with a complete outfit that meets her needs. We will continue to drive our core net business with the appropriate balance of basics and novelty and greater depth. With woven emerging as a strong category, we are reintroducing a classic shirt business with increased color breadth in key silhouettes. We also believe we have an opportunity to grow market share in vests and jackets by offering both casual and wear-to-work styles. The assortment will encompass key items at opening price points and special pieces at better and best prices. Our bottoms business will be focused on our most important fits for versatility and comfort. We are also offering her an enhanced, fashion-right dress selection this season. Finally, our accessories will be designed to complete her outfit.
These improvements in our merchandise assortment and value proposition will be clearly communicated through a targeted and compelling marketing strategy. Our marketing program will include a greater focus on optimizing our CRM database and Friendship Rewards loyalty program to personalize communications with our customer. We are also strengthening preplanned promotions to allow for integrated marketing messages across all channels. We will make greater use of direct mail and e-mail with fashion and promotional messages designed to drive traffic into our stores and to our website.
We have begun to incorporate private label credit card inserts in the monthly billing statements to drive repeat purchasing. Given the continued positive response and increased profitability resulting from our direct mail program, we will increase our investment in 2013. We will be sending additional mailings to all customer segments, active, lapsed and new, as each continues to deliver a positive return. In addition, we see further opportunity with our Club Card program. As such, we will enhance our marketing efforts to support the programs in 2013 with stronger direct mail, e-mail and in-store support.
Our grassroots marketing has enabled us to maintain a strong connection with our customer, and we plan to continue to engage her with in-store fashion shows and calling campaigns to draw her into our stores. Lastly, we will maximize our windows with more visually compelling presentation of key product categories balanced with promotional messaging.
We are also increasing the focus on e-commerce. Our goal is to ensure our e-commerce sites maintain our brand integrity and are maximized as a testing platform. We believe that we have significant opportunity to increase traffic and gain traction in new customer acquisition with additional investment in the areas of technology and expertise.
We plan to implement a new platform in April, allowing increased efficiencies in site management, including visual merchandising and campaign management. We will add resources to our e-commerce team, including a Vice President, as well as an Online Marketing Manager. We plan to fine-tune online exclusive buys to capitalize on our strength in denim, wear-to-work and thematic merchandise in addition to offering various bottom lengths, including petite and tall, while increasing testing of extended sizes and new categories for the stores.
Turning to our store base. Our store pilot program was a great success in 2012, and we plan to refine it in 2013. Our pilot stores delivered a 38% comp store sales growth in the fourth quarter, significantly ahead of the overall company increase of 18.5%. We have added 32 new stores to the pilot program for the first quarter, bringing the program to approximately 100 stores in total. We will continue to test and evaluate various initiatives, including grassroots marketing and updated store visuals and fixtures in addition to optimizing our staffing and inventory level. Once we complete the evaluation, these learnings will become the basis for our DNA across our store base, with the objective to maximize profitability and productivity.
While we are pleased with the results for the pilot program so far, we still have a way to go to reach our potential. In 2007, 103 stores generated sales in excess of $1 million. In 2011, that number was down to 2 stores. With the initiatives undertaken in 2012, we regained some traction with the number of million-dollar stores reaching 21, and our goal for 2013 is to be more than double that number.
This brings me to our real estate strategy. For 2013, we are currently planning on opening 5 outlet stores and one dual store. Over the long term, we expect store count expansion to be primarily driven by adding outlet stores. We are still in the process of determining the optimal number. Our plan for full-price stores is to focus on finding opportunities to convert Christopher & Banks and CJ Banks to dual stores where we believe we can better serve our customer by providing our full complement of missy, petite and women sizes in one location. Overall, we will take a methodical and disciplined bottoms-up approach to real estate with a focus on our existing store base. We are analyzing sales and margin productivity across all categories and size ranges at each location to determine where we can maximize square footage profitability and productivity by converting to a dual store.
In addition, our recently upgraded planning and allocation tools will allow us to more accurately determine the mix of sizes and categories within all of our store concepts. We will also continue to implement our findings from the pilot program to the broader store base. Overall, the initiatives that have been implemented have led to significant improvement in our financial performance, particularly in the second half of 2012. But as I said earlier, we are only in the fourth inning, and we are confident that as we build upon these successes, we will continue to see improved financial results. We are in the process of developing a strategy that will provide the foundation for sustainable, long-term growth. We're excited about the prospects that lay ahead for Christopher & Banks and look forward to continuing to share our progress with you throughout 2013.
With that, I will now turn it over to Pete for a review of our financial results.
Peter G. Michielutti
Thank you, LuAnn, and good afternoon, everyone. I will begin with financial review for the 14-week period ended February 2, 2013. I will then provide some general comments regarding our outlook for fiscal 2013.
As we announced in January of 2012, we changed our fiscal year-end to the Saturday closest to the end of January from the Saturday closest to the end of February to better align our financial reporting needs with our operational cycle and other specialty retailers. As a result of these change in our fiscal year end, we filed an 8-K containing unaudited comparable financial information, including quarterly financial data for the 52-week period ended January 28, 2012. My financial review today will cover the 14 and 53-week periods ended February 2, 2013, compared to the 13 and 52-week periods ended January 28, 2012, except where otherwise noted.
I will begin with discussing the results for the fourth quarter. Total net sales grew 9.8% to $116 million in the fourth quarter of fiscal 2012 compared to $105.6 million for the comparable prior year period. Of the increase, approximately $5.1 million or 4.8% relates to the 53rd week in fiscal 2012. During the quarter, the company operated on average 124 or 17% fewer stores than during the comparable period last year. Same-store sales increased 18.5% for the 14 weeks ended February 2, 2013, compared to the 14 weeks ended February 4, 2012. This compares to an 18.6% decrease for the 13 weeks ended January 28, 2012.
The prior year comparable store sales decrease was largely driven by moving our semiannual Friends and Family event to October in 2011 versus November in 2010. Adjusting for this shift, same-store sales in the prior year period were down approximately 6%. As expected, traffic for the recently completed quarter was down slightly as we were up against a significantly more promotional environment from a year ago.
However, conversion rates and higher units per transaction during the fourth quarter resulted in a 7.1% increase in average transactions per store. Average dollar sale increased by 11.3%, driven by an increase in units per transaction and an increase in average unit retail for the fourth quarter of 0.8%. This increase was achieved in spite of the fact that our average ticket prices were approximately 20% less compared to the year-ago period.
Gross profit totaled $35 million, and gross margin was 30.2% in the fourth quarter of fiscal 2012. Gross profit was $7.5 million, and gross margin was 7.1% in the 13 weeks ended January 28, 2012. The increase in gross margin compared to the prior year was largely attributable to both increased merchandise margins, as well as the positive leverage of buying and occupancy cost, resulting from the increase in same-store sales and the benefit of closing underperforming stores. The merchandise margin increase is evidence that the product and marketing strategies that we have employed are resonating to our customers and confirm we are on the right track.
For the fourth quarter, selling, general and administrative expenses were down $0.6 million to $34.8 million or 30% of net sales compared to $35.3 million or 33.7% of net sales in the comparable period last year. The SG&A savings was attributable to $2.7 million in reduced store payroll and other store operating expenses directly related to stores closed as part of our restructuring initiative, offset by approximately $2 million of additional expenses related to the 14th week. Expenses came in lower than our prior guidance, primarily due to significantly lower medical cost and continued refinements of our store staffing model.
Depreciation and amortization expense was $4.2 million in the fourth quarter of fiscal 2012 and $4.5 million in the comparable period last year. The decrease resulted from operating approximately 124 fewer stores during the quarter, combined with a reduction in our depreciable asset base resulting from the impairment charges recorded in the fourth quarter of last year.
For the fourth quarter, our operating loss was $4 million, and this compares to an operating loss of $32.4 million for the comparable period last year before impairment and restructuring charges. We also continue to maintain a full valuation allowance in our net deferred tax assets at the end of the fourth quarter. As a result, our income tax benefit of approximately $100,000 in the fourth quarter of fiscal 2012 was due to nominal taxes, offset by changes in valuation allowances.
Our net loss for the fourth quarter totaled $4.1 million or $0.11 per share. Net loss for the comparable prior year period totaled $53.2 million or $1.50 per share.
Now let me return to the results for the 53 weeks ended February 2, 2013. Total net sales were $430.3 million as compared to $436.2 million for the 52 weeks ended January 28, 2012. Comparable store sales increased by 5.7% for the 53 weeks ended February 2, 2013, compared to the 53 weeks ended February 4, 2012. For the year, we operated an average approximately 114 or 15% fewer stores in the year than the prior year period.
For the year ended February 2, 2013, operating loss totaled $16 million and included a $5.2 million pretax, primarily noncash benefit related to restructuring charges. This compares to an operating loss of $82.1 million for the comparable prior year period, which included $21.2 million in impairment and restructuring charges. The net loss for fiscal 2012 was $16.1 million or $0.45 per share, which incorporates a negative effective tax rate of approximately 0.6%. This compares to a net loss of $81.4 million or $2.29 per share for the comparable prior year period.
Now turning to our balance sheet. We ended the fourth quarter with approximately $40.7 million of cash and cash equivalents and no long-term debt compared to approximately $33.2 million at the end of the third fiscal quarter. Total inventory was $42.7 million at February 2, 2013, compared to $39.5 million at January 28, 2012. Inventory per store, excluding in-transit and e-commerce inventory, ended the quarter approximately 21% above the levels at January 28, 2012. This increase is a result of the acceleration of spring receipts and higher inventory levels to support expected sales level in the first quarter of fiscal 2013. A composition of the inventory at the end of the quarter was very current. Approximately 80% of the inventory was represented by January and forward life cycle product or core inventory. And this compares to 66% at January 28, 2012.
Accounts payable at the end of the fourth quarter was $22.6 million as compared to $19.5 million at January 28, 2012. The increase is due to the timing and higher level of merchandise receipts I just discussed. We have no outstanding borrowings under our revolving credit facility as of February 2, 2013, and have not drawn on our credit facility other than to open letters of credit in the normal course of business.
Capital expenditures for the quarter ended February 2, 2013, totaled $500,000. For the full year, capital expenditures were $3.6 million. During the fourth quarter, we closed 30 stores. In addition, we converted 13 dual stores back into Christopher & Banks stores during the quarter. While we believe the dual stores format represents a growth opportunity, these additional 13 stores at neither the existing women's size customer base nor square footage to be successful dual branded stores. As of February 2, 2013, we operated 608 stores, consisting of 383 Christopher & Banks stores, 160 CJ Banks stores, 40 dual stores and 25 outlet stores.
Before giving guidance for 2013, I wanted to update you on the shelf registration we filed in May of 2012. We will be filing our Form 10-K report for the fiscal year within the next couple of weeks. After we file the Form 10-K, we intend to update our pending shelf registration statement on Form S-3 and have it declared effective by the SEC.
Under the shelf registration statement, once declared effective, we may offer and sell from time to time in one or more offerings common stock, preferred stock, warrants or units consisting of these securities. The aggregate offering price of all securities that may be sold under the shelf registration statement will not exceed $75 million. The shelf registration statement is intended to give us flexibility to access public markets on a timely basis and cost-effective basis in the future in response to financing and business opportunities. We do not have any current commitments or plans to sell these securities.
Now I would like to update you on our general outlook for the first quarter of fiscal 2013. As LuAnn mentioned, we are very pleased that our strategic initiatives are driving significantly improved financial performance, and we expect to see continued improvement going forward. That said, we are mindful of the uncertainty associated with the current macroeconomic environment, and we'll closely monitor our business to ensure we are responsive to any changes in sales trends. With that, I will now provide you with our guidance on several operating metrics for the first quarter.
We expect same-store sales for the first quarter to increase in the low 20% range. As you recall, we reported a 15% same-store sales decline for the prior year first quarter, so this will be our easiest comparison of the fiscal year. We expect approximately 800 to 900 basis points of gross margin improvements in the first quarter as compared to the comparable prior year period to an approximately equal parts to improved merchandise margins and positive leverage on occupancy expense. We expect SG&A dollars to grow due to increased investments in marketing in-store payroll, albeit at a slower pace than the anticipated net sales growth. We expect our inventory growth in the first quarter to be in line with our anticipated increase in the same-store sales for the quarter.
Now I'd like to provide you with some of our expectations for the full fiscal year. We expect capital expenditures to be approximately $9 million. We expect to recognize a nominal amount of tax expense for the year as the company's tax provision will continue to be affected by the valuation allowance in our deferred tax assets in fiscal 2013.
Finally, we expect average store count to be down 11% for the first quarter and 8% for the full fiscal year as compared to the comparable prior year period. Overall, we believe we are well positioned to benefit from the initiatives we have in executing over the last year, and we are very excited by the opportunities that lie ahead as we continue to build upon this foundation.
With that, I will turn the call over to the operator to open it up for questions.
[Operator Instructions] And we'll take our first question from Neely Tamminga with Piper Jaffray.
Neely J.N. Tamminga - Piper Jaffray Companies, Research Division
So LuAnn, it's just really encouraging to hear you already talk about kind of the next steps and around the corner. You guys are obviously headed towards profitability, right, and you've alluded to it with the outlook, strategy. And I'm just wondering, how should we be thinking about that bigger picture path to profitability in terms of the pace as you also try to layer on some new growth into the businesses? And I would -- separately related to that, I'd love to hear your thoughts on some -- just additional on adjacencies or categories and what can mean for the overall outfitting to your customer?
So first of all, Neely, let me say that as I detailed, we are looking at now a long-term plan that we're working on from a bottoms-up approach to really, really put forth what we feel that we can accomplish in the next 3 to 5 years. We are focused on, obviously, continuing on the path that we are now, growing the foundation of our business and delivering the results in both top line and bottom line. At the same time, we feel strongly that we need to start positioning ourselves for that long-term sustainable growth. So we're doing our bottoms-up planning at this point. So more to come on that a little bit later. But we do think that we have continued opportunity from a store base, specifically as it relates to the outlet. So while we look at basically a 15% four-wall profit there, we really feel that based on what we've received from our customers that we have opportunities to continue to grow that outlet business. Having said that, we think from a base perspective, that our store count is probably appropriate without really making the changes into dual stores. So we're doing a whole bottoms-up approach to that as well to determine how many dual stores we can actually really convert over the next 3 to 5 years based on our expiration dates, and obviously, availability in the centers. We are making investments in our marketing. As we've seen very strong returns, we believe that we can continue to grow our base, getting back more of our active customers, lapsed customers and then also creating new customers. So we feel that we have a very strong opportunity to really continue to get those customers back into our stores. And we're seeing that, obviously, with the results that we've had and the return on our investment from those direct mail pieces. So we really want continue to invest in that. From a category perspective, Neely, I really believe that we do not want to make any major changes to the specific categories that we're carrying. In fact, we are limiting -- eliminating handbags from our accessories business to really focus on outfitting the customer. So we want to really make sure that all of our apparel is really accessorized with complementary accessories so that we can really increase that average dollar sale.
And we'll take our next question from Jeremy Hamblin with Dougherty & Company.
I wanted to talk a little bit more about the pilot program and understand in terms of the pace of the program that we should expect continued rollout in 2013. Can you shed a little light on that?
Peter G. Michielutti
Jeremy, so if you remember, there's 4 aspects to it, and one of them is upgrading the talent, which we have done specifically in the pilot store programs but now are looking hard at the rest of the chain to make sure that we have the right talent in place. And that is a big driver of a change in pace in the store's profitability. We've added incentive programs in those stores, and we have already expanded that to the districts and the regionals in order to generate the same type of push for the sales across the entire chain, while not in all our stores, but at the district level, which is going to manage store base. Looking at the payroll aspect of it, we are still in the early stages of analyzing what's the right level of payroll, and we think we're getting close to being able to optimize that. And then it's not going to be like we're going to add another 20 stores or another 30 stores. We're just going to start using that philosophy to run the other stores from the right staffing level and what's the right productivity to get out of that staff. And finally, the inventory levels, we think we have enough of a history now that when we get to the back half of the year, we'll be able to better determine what's the right inventory levels for all stores based on their volume groups because the most recent additions on the pilot stores is a cross-section of stores from a volume standpoint, and that's going to give us the base...
I'm sorry, we accidently hit the mute button, sorry. So what else do you have?
Sorry, I wanted to also just follow up. In terms of what you learned in the fourth quarter about how that program was working, did you learn more about how you needed to adjust maybe the payroll versus the sales impact or what you needed to do on the merchandise selling aspect versus how you're going to manage the payroll? Is there anything new that was learned?
Actually, we've learned from both of those. So there are tweakings that are in place right now as we learned in certain stores that we needed additional inventory and certain stores we didn't need as much inventory. And the same as it relates to payroll. So we continue to have some really key learnings from that time frame, and we're looking again at the key run, addition of the 32 stores where we're actually testing some additional penetration of marketing in one of the markets to see if there's an opportunity there, some learnings there as well. So we are really taking the learnings from all of those and incorporating them into our longer-term strategy for the total chain.
Okay, great. And can you also just provide some guidance for us in terms of some of the big sales events that you're going to have in the spring, kind of your fashion show event and Friends and Family? Can you just discuss the timing of those compared to last year?
Sure, sure. So this week, we are up against our Friends and Family from last year, and we have our fashion event with the fashion show on Saturday. And our Friends and Family event falls into April this year. And Jeremy, the strategy is really the positioning of Easter. With the change in Easter, we adjust our calendars to be more appropriate for that timing.
Okay. One last housekeeping item. Pete, on depreciation and amortization for 2013, how should we be thinking about that? Is that kind of $14 million, $15 million or...
Peter G. Michielutti
$13 million to $14 million.
$13 million to $14 million?
Peter G. Michielutti
And we'll take our next question from Janet Kloppenburg with JJK Research.
Just a couple of questions. I was wondering about AUR trends. Now that you've got really good, strong full price [indiscernible], maybe you expect to -- I don't know when it is that you start to anniversary the period where you're promotional levels started to level off and you weren't up against so much clearance. And I'm also wondering where the sales per square foot are now and what your goals would be for growth there and the opportunity to leverage your expense line better as that productivity level moves higher.
So from a promotional perspective on your first question, Janet, we'll start to really be more comparable as we move out of the first quarter. So we were very highly promotional the prior year in the fourth quarter, as well as the first part, obviously, of 2012. So that will stabilize as we move out of Q1. On the sales per square foot, we ended the year at 173. We are looking to continue to pick up that pace, and obviously, our goal for the long term is around 200.
Okay. And was that where it was peak? Or do you know where the historical peak level was?
Peter G. Michielutti
The historical peak, well, if you go back 10 years, it was when we had a much smaller store base. It was about $250 million. And then going back nearly 5 years, it was in $210 million to $215 million.
Yes, that's what -- yes.
Okay. Once you get the areas, does that suggest that profitability levels improve significantly once you get up to $200 million?
Peter G. Michielutti
I think as you go up the scale of improved sales productivity, those additional sales fall through at a much greater rate to the bottom line, and we will be able to leverage the expense base a lot better.
Okay. And then another question. I'm not familiar with the outlet strategy. Are you going to be building in made-for-outlets products there? And what are the margin applications for that strategy?
So actually, we are looking to improve the margins in the outlet stores. And this is going to be done by really putting a strategy together that is mixed amongst the regular priced product that we bring from our store base, our regular store base product, as well as unique products that we will be building specifically for the outlets in different fabrication, leveraging fabrics, et cetera, and then also a mix of clearance. So we're looking to really split that about 1/3, 1/3, 1/3. Whereas right now, they have a much larger percentage of clearance, so that does impact the margin.
And that concludes today's question-and-answer session. Ms. Via, at this time, I would like to turn the conference back over to you for any additional or closing remarks.
Thank you. I continue to feel very positive about the long-term potential for growth of the company, and I'm confident we have the right strategies in place to return the company to profitability. I look forward to reporting on our progress at our next conference call, and thank you for your continued interest. Have a great evening. Thanks, everyone.
And ladies and gentlemen, that concludes today's conference call. We thank you for your participation.
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