Casey's General Stores Management Discusses Q2 2014 Results - Earnings Call Transcript

Dec.10.13 | About: Casey's General (CASY)

Casey's General Stores (NASDAQ:CASY)

Q2 2014 Earnings Call

December 10, 2013 10:30 am ET

Executives

William J. Walljasper - Chief Financial Officer, Principal Accounting Officer and Senior Vice President

Analysts

Karen F. Short - Deutsche Bank AG, Research Division

Stephen W. Grambling - Goldman Sachs Group Inc., Research Division

Charles Edward Cerankosky - Northcoast Research

Bonnie Herzog - Wells Fargo Securities, LLC, Research Division

Benjamin Brownlow - Raymond James & Associates, Inc., Research Division

Anthony C. Lebiedzinski - Sidoti & Company, LLC

Operator

Good day, ladies and gentlemen, and welcome to the Q2 2013 Casey's General Stores Earnings Conference Call. My name is Whitney, and I will be your operator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Bill Walljasper, Chief Financial Officer. Please proceed, sir.

William J. Walljasper

Good morning, and thank you for joining us to discuss Casey's results for the quarter ended October 31. I'm Bill Walljasper, Chief Financial Officer. Bob Myers, President and Chief Operating Officer, is also here.

Before we begin, I'll remind you that certain statements may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. As discussed in the press release and in the 2013 Annual Report, such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from future results expressed or implied by those statements. Casey disclaims any intention or obligation to update or revise forward-looking statements whether as a result of new information, future events or otherwise.

We'll take a few minutes to summarize the results of the second quarter, and then afterwards open for questions about those results. As all of you have seen, diluted earnings per share in the second quarter were up over 24% to $1.06 compared to $0.85 a year ago. Year-to-date, diluted earnings per share were $2.50 compared to $1.86. The results reflect the strong sales performance across all categories. Before we go over each category to give more detail on what is driving our results, I'll remind everyone that we will release the details of November same-store sales on Monday, December 16. However, same-store sales for all categories in November continued to trend positive.

During the second quarter, we experienced a solid fuel margin environment resulting in an average margin of $0.167 per gallon compared to $0.149 per gallon in the same period a year ago. Year-to-date, the fuel margin is $0.194 per gallon, well ahead of our annual goal.

Casey's trailing full-year gas margin is $0.154 per gallon. Second quarter margin benefited from an increase in the value of renewable fuel credits, commonly known as RINs compared to a year ago. During the quarter, we sold 11.7 million RINs for $7.6 million. This represented about $0.018 per gallon improvement to the fuel margin in the quarter. Currently, RINs are trading for around $0.35. Last year in the third quarter, the average RINs sold were $0.05. Fuel saver program that we implemented in December last year in partnership with Hy-Vee continues to do very well. Same-store gallons sold in stores that participated in the fuel saver program increased about 7% in the second quarter, resulting in overall same-store gallons sold in the quarter to be up 4.2%. Total gallons sold increased nearly 10% to $423.9 million. Same-store gallons sold through the midyear point were up 3.6% with total gallons sold for the year up 9% to $850.4 million. The average retail price of gasoline for the quarter was $3.34 a gallon compared to $3.61 last year. Gasoline gross profit for the quarter was up over 22% to $70.8 million. Sales in the Grocery and Other Merchandise category were up nearly 15% to $416.5 million in the second quarter. Same-store sales were above goal, up 10.2%. We experienced double-digit sales increases across all areas of the category during the quarter compared to a year ago. We believe we continue to gain market share in the cigarette area as a result of the retail price adjustments made last fiscal year. However, as a result of those price adjustments, the Grocery and General Merchandise category margin continued to be adversely impacted, resulting in an average margin of 32.3%. Even with this impact, gross profit was up over 11% to $134.7 million. For the year, same-store sales were up 8% with total sales up 12.2% to $840.1 million. The average margin year-to-date is above goal at 32.5%. We are pleased with the gains in the category and anticipate continued growth throughout this fiscal year as we continue to benefit from the rollout of additional operational initiatives and new store openings.

The Prepared Food and Fountain category continued its strong performance with total sales up 17.2% to $171.8 million for the quarter. Same-store sales in the quarter were up 12.3% with an average margin of 61.8%, down from a year ago primarily due to increases in supplies and meat, offset by lower cheese costs. The average cost of cheese this quarter was $1.97 per pound compared to $2.11 a year ago. Currently, the average cost of cheese is approximately $2.05 per pound. Year-to-date, same-store sales were up 12.1%. Now approximately 50% to 60% of the same-store sales gains are attributable to the 3 operational initiatives described in the press release.

Gross profit dollars in the quarter were up 16%. We are pleased with the gains in the category and anticipate continued growth throughout the fiscal year as we benefit from the continued rollout of the operational initiatives and new store openings. At the, 6-month mark, operating expenses were up 14%. For the quarter, operating expenses increased 13.9% to $216.5 million. Over 60% of this increase was due to a rise in wages, primarily related to an increase in the operational initiatives described in the press release and operating 66 more stores this quarter compared to the same time period a year ago. Now included in the second quarter wages was an increase of approximately $3.5 million for incentive compensation related to the strong performance this year relative to a year ago. Without this increase, operating expenses for the quarter would've been up about 12%. In addition to these items, the results in the quarter also include about $1 million of impairment charges primarily related to store replacement activity. On the income statement, total revenue in the quarter was up 5.5% to $2 billion due to the strong sales gains mentioned previously, offset by a lower retail price of fuel compared to the same period a year ago. Year-to-date total revenue was up 9.3%, primarily due to sales increases mentioned previously and operating 66 more stores. Depreciation for the quarter was up 19.4% to $32.4 million. Included in this amount was about $1.5 million of additional accelerated depreciation compared to the second quarter last year related to the increased replacement store activity. We expect the increase in depreciation to be around 15% for the fiscal year. The effective tax rate in the quarter was 35%, down from a year ago primarily due to an increase in federal tax credits and an out-of-period adjustment to stock-based compensation tax benefits. In light of this, we expect our effective tax rate to be around 30.5% -- 36.5% for the fiscal year.

Our balance sheet continues to be strong. On October 31, cash and cash equivalents were $113.3 million, up from $41.3 million at the end of the fiscal year, primarily due to the recent debt we incurred. Long-term debt, net of prematurities was $803.8 million while shareholder equity rose to $692.1 million, up $89.9 million from the fiscal year end. We generated $185.3 million in cash flow from operations. At the 6-month mark, capital expenditures were $187.4 million compared to $163.4 million a year ago in the same period. This was up due to an increase in acquisitions and construction activity. We expect capital expenditures to increase as new store construction accelerates, and we continue to add kitchens to our recently acquired stores.

This quarter we opened 10 new store constructions and completed 19 acquisitions. For the year, we've acquired 22 stores and completed 14 new store constructions; 11 of the new store constructions we opened as 24-hour locations. Over the past 2 years, approximately 2/3 of the new stores, acquisitions and replacement stores were opened as 24-hour locations. We currently are on pace to complete a total of 40 to 45 new store constructions by the end of the fiscal year and replace at least 20 stores. Year-to-date, we have replaced 14 stores. Currently, we have 34 new stores and 14 replacement stores under construction. We also have 5 stores under written agreement to acquire. Now due to remodeling, we have not yet opened all the stores that we have acquired this year; as a result, our store count at the end of this quarter was 1,770 corporate stores. We are optimistic about the pipeline for new store and acquisition opportunities going forward.

In addition to the unit growth, year-to-date we have converted 94 more locations to a 24-hour format, added 57 additional stores to the pizza delivery program and completed 25 major remodels. The combination of these initiatives accounts for approximately 1/2 of the same-store sales increases. During the remainder of this fiscal year, we plan to add 50 more stores to the pizza delivery program in January and convert about another 10 stores to 24-hours.

That completes our review of the quarter. As I've mentioned previously, we will release November same-store sales on Monday, December 16.

We will now take your questions.

Question-and-Answer Session

Operator

[Operator Instructions] And our first question comes from the line of Karen Short with Bridge Bank.

Karen F. Short - Deutsche Bank AG, Research Division

Deutsche Bank. Just a quick couple of questions. In terms of the Hy-Vee initiative, I know you've given color around the comp and the benefits to the gallon comps, but any way of quantifying what percent of those customers are entering your store and how that's benefiting your Grocery and your Prepared Food comp?

William J. Walljasper

Yes. It's a little bit more difficult to quantify that because as you know, Karen, sometimes we will have customers complete a transaction at the pump and then come in the store and complete a separate transaction. So to tie the 2 together it's a little bit more challenging. To maybe give you a little bit more color on that, when you look at the customer count in stores that are participating in the fuel program, those stores are significantly doing a higher same-store customer count than the stores that are not in the program. We're also starting to see a pickup in certain areas of inside the store for the stores that do participate in that program. So we are optimistic that we are perhaps beginning to see some conversion of those customers into the store. To kind of give you perspective, the same-store customer counts for the Hy-Vee fuel saver stores are almost 5% in relationship to the non-fuel saver stores about 3.5%.

Karen F. Short - Deutsche Bank AG, Research Division

And then I guess just looking at operating expenses, any color on what Obamacare will do going forward in terms of impacting your operating expenses? And then could you just provide us credit card fees in the quarter?

William J. Walljasper

Yes. I'll take -- the second part, credit card fees in the second quarter were about $24.7 million. Those were up about $1.3 million from the same period a year ago. As far as Obamacare, we have looked at that. As you know, it was delayed from implementation to us about a year. We will provide more color on that as we get closer to that timeframe, but as we said in the past, we believe that as the current Act stands now it will be a material impact to operating expenses. It'll be spread all over a couple of fiscal years, obviously. But as that timeframe approaches and as that Act kind of develops, we'll certainly give more color on that.

Karen F. Short - Deutsche Bank AG, Research Division

And then any update on the new DC? I think you said on the last call that you'd give us an update on this.

William J. Walljasper

Yes. We're hopeful that we're able to give more color in this conference call or the upcoming conference call in March. We are still working out the incentive packages offered by the various states and communities, and so we haven't quite finalized the location in that regard. We're hopeful that come the March conference call we'll be able to give information as to the direction as far as the location, cost, when we will start the construction, the timing of the construction and any more details you might have.

Operator

Your next question comes from the line of Stephen Grambling with Goldman Sachs.

Stephen W. Grambling - Goldman Sachs Group Inc., Research Division

Just sticking with the OpEx commentary, is there a point at which the initiatives that you've been investing in will kind of hit the hump and start to come down, yet the initiatives should continue to build or how are you thinking about that?

William J. Walljasper

Yes. It really depends on the initiatives that you're talking about. Typically what we see -- and it does fluctuate from initiative to initiative, but typically, we see a ramp-up of the operating expense of those initiatives immediately as you would expect. But the earnings contribution doesn't necessarily coincide with that. We usually see a time period -- again, depend on the acquisition, it could be anywhere from a 6 to a 10-month timeframe before we really start to see the earnings contribution from that particular initiative. And so hopefully, that gives you a little bit of guidance on some of the timing aspects related to those types of initiatives.

Stephen W. Grambling - Goldman Sachs Group Inc., Research Division

Well, I guess as a follow-on, what would be a store that has matured initiatives in it? What would be the growth in OpEx kind of credit card fees?

William J. Walljasper

Well, typically what we see is this, Stephen. We see an OpEx lift in those initiatives anywhere from about 15% to 20% depending, again, on the initiative and the location. That's in the first year of its operation. After the first year, we start to see that decline in the tail-end of that year. And then it falls in line with, basically, what I'll call the rest of the store base that does not have an initiative. As we mentioned in the press release, stores that have not had an initiative are averaging about a 4.9% increase in operating expense lift. So it does fall back in line.

Stephen W. Grambling - Goldman Sachs Group Inc., Research Division

Okay. That's helpful. And then I guess, changing gears and thinking about gross margin, in terms of the tobacco impact, when will you be cycling that?

William J. Walljasper

Yes. The majority of the price adjustments we made last fiscal year were done in October and November, actually late October and November. Roughly about 40% to 45% of the price adjustments that we took last year happened in those 2 time periods. So we now have cycled those as we are now heading in December. And so intuitively, we might see is maybe as easy on the same-store sales because of that cycle as we now are cycling against that but also an improvement on the comparison with respect to the margin period-over-period. So, hopefully that's helpful.

Operator

Your next question comes from the line of Chuck with Northcoast Research.

Charles Edward Cerankosky - Northcoast Research

Looking at the operating expenses year-to-date, they're almost, well, I should say in the most recent quarter, they're almost exactly half of what they were year-to-date, and last year's first half turned out to be just about 50% of the full year. So is that a pretty good way to look at the rest of this year?

William J. Walljasper

Well, yes. It's a good takeaway there, Chuck. I mean, last year when you look at operating expense, we were definitely backloaded with respect to some of the initiatives, I mean, new store construction, replacement activity, acquisitions. And because of that, we might have seen an increase in operating expenses as we go forward. We're going to cycling against that here coming into the latter part of this year. So when you look at operating expenses kind of on a go-forward basis, low to mid-teens type of movement probably is the reasonable movement. Again, I will caveat that to say that it really depends on retail price of fuel and if that starts to move up where that could have an impact on credit card fees.

Charles Edward Cerankosky - Northcoast Research

So you've been seeing the credit card fees come down?

William J. Walljasper

Yes. Well, I would say not actually come down, but not increasing at a rate that they have been increasing. Like for an instance, here in the second quarter, the retail price of fuel was down period-over-period, and we saw credit card fees go up about 7%, and that increase probably is more of a reflection on the increased gallons that we're pumping related to the Hy-Vee fuel saver program.

Charles Edward Cerankosky - Northcoast Research

Are those customers -- are they more likely to use a credit card?

William J. Walljasper

That's what we've seen . In stores that are in the fuel saver program, they have a little bit higher credit card utilization than non-fuel saver.

Charles Edward Cerankosky - Northcoast Research

Then back to the operating expenses, we should maybe see for the full year a dollar amount somewhere around $870 million?

William J. Walljasper

I wouldn't necessarily comment on the dollar amount on the call here, but when you think through to some of the things that are a little bit unusual that ran through -- not -- well, I wouldn't say unusual; but obviously, the bonus and bonus accruals for the year were higher than last year. Last year in the second quarter, we actually let out the bonus accrual for the executive officers, and so there's a disparity there in that regard for this particular period. As we go further into the year, the bonus accrual comparison certainly becomes a little bit easier.

Charles Edward Cerankosky - Northcoast Research

So that would be an element that would tail off and be totally separate from any initiatives?

William J. Walljasper

Yes. That's true. Also, Chuck, I should point out we that we did 94 conversions of 24-hour locations. Roughly about 40 of those were done in the second quarter here, and so that is kind of pushing the OpEx just a little bit here in the second quarter relative to what you might have seen same time period a year ago. We don't plan to do more than probably only 10 more conversions for the remaining of the fiscal year. So that does help in that OpEx side of the equation as well.

Charles Edward Cerankosky - Northcoast Research

Yes. That caught my attention, 94 year-to-date and only 10 in the second half of the year. Is there a reason for that sharp drop-off in extended-hour locations?

William J. Walljasper

Not necessarily. It's not really a drop-off. Coming into the fiscal year, we were clear that we're going to do about 100 24-hour conversions. We just happened to front load those more this year than the back half of the year. As we look forward into the back half of the year, we do have quite a few initiatives underway with replacement stores and construction activity that I alluded to in the call. Also, we'll be starting to look to add kitchens to the acquisitions that we've now acquired. So we certainly wanted to make sure we have enough opportunity and manpower and resources dedicated to those initiatives, so thus the acceleration. So we're really, to answer your question, we're right on pace to what we anticipated for this year. We're starting to work on the next group for next fiscal year ahead already.

Operator

Your next question comes from the line of Bonnie Herzog with Wells Fargo.

Bonnie Herzog - Wells Fargo Securities, LLC, Research Division

I just have a couple of quick questions. My first is on the expansion of your pizza-only stores. Could you tell us where these are located relative to your existing Casey's stores? And then do you expect any cannibalization or will they be fully incremental? And then what is your plan for these stores? Is a broader expansion expected?

William J. Walljasper

I think you're referring to the pizza express location, the takeout and delivery only. Is that what I'm -- I think that's what your question was?

Bonnie Herzog - Wells Fargo Securities, LLC, Research Division

Yes. It is. Yes.

William J. Walljasper

Yes. And just to clear, we only have 1 of those stores currently up and operational. We only have about 4 months of data. The expansion -- I wouldn't necessarily call an expansion. It's more of an expansion of the testing of that particular initiative. The results right now are a little bit too hard to tell at this point, but we felt in order to give it a full research and development process, we need more types, more of those stores in different areas. The areas that we're going to focus here and have identified are here in the metro area, I mean, in the Des Moines metro area. So we don't have a time period set up for those yet. But once those are up and running, we'll monitor those to see whether this is a program that has legs and it can continue beyond that. So it's very premature at this point, but we're excited about the opportunities, and we're certainly going to try to service customers the best way we can. To answer your question about cannibalization, that's really more enhancing. It's -- we're looking to identify areas that probably are underserved by our pizza program and looking to better serve the customers in those particular areas. So there maybe some cannibalization, but I think overall, there will be an announcement of the combined efforts.

Bonnie Herzog - Wells Fargo Securities, LLC, Research Division

That's helpful. And then just a quick question on coffee costs. Given the drop that we've seen in costs here, have you been able to leverage these lower costs to run any special promos, essentially steal share maybe from coffee sold in QSRs?

William J. Walljasper

We haven't done any promotional activity. Now coffee is one of those, what I'll call, key items that we do survey on price adjustments to make sure we are competitive on our pricing. You're exactly right. Coffee costs have come down. I mean, we are locked in on a forward buy of our coffee through July. We are currently looking for opportunities perhaps to even extend that lock beyond that. Don't have anything to report in that regard at this point, but have not done anything from a large scale on promotional side yet.

Bonnie Herzog - Wells Fargo Securities, LLC, Research Division

And then just maybe the final question on just the acquisition environment in your view, what are you seeing and what types of multiples or deals being done at? And then what would your ideal acquisition look like in terms of maybe the number of units, store size, that type of thing?

William J. Walljasper

Well, the multiple, the trailing EBITDA multiple is about 5x to 7x. That's what we've been experiencing. We do pay outside of that on both sides of it depending on the asset quality. But as far as the pipeline, it's probably as full -- the funnel -- it's probably as full as I've seen it in my 24 years with the company. We are optimistic about opportunities going forward in that regard. As far as the ideal acquisition, that's kind of hard to say. I would say that probably the answer to that question would be most of the acquisitions that we come across are smaller chains, perhaps, even mom and pops, one-offs. Those tend to be very good acquisitions for us. They tend to be in on our sweet spot as far as the small town business model. In many cases, we're the only one suitor for that particular target; and consequently, we tend to buy those rights. So, I'm not sure that's an ideal one, but that seems to be the common place based on our geography. But having said that, Bonnie, that doesn't mean that we would shy away from a large acquisition. We're constantly looking for acquisition of all sizes that makes financial sense for us.

Operator

[Operator Instructions] Your next question comes from the line of Benj Brownlow with Raymond James.

Benjamin Brownlow - Raymond James & Associates, Inc., Research Division

Just a followup on Bonnie's question. Are the -- when you look at the acquisition pipeline that you have now, is it mostly in new regions or existing markets or is it a split between those?

William J. Walljasper

I would say it's both. Going into new states certainly does afford us an opportunity to look and extend our look into geography, but it'll be a combination of both, probably split pretty equal at this point.

Benjamin Brownlow - Raymond James & Associates, Inc., Research Division

0nd just one question on the margins. When you look at -- it seems like most of the commodities are trending, I guess, favorable between your coffee or cheese, but excluding beef. Are there thoughts -- how do you feel that -- how much room do you feel there is with the consumer to increase prices to help overcome whether it's, I guess, primarily the higher beef costs? Do you feel there's room there because you because you obviously haven't seen any sort pushback from the customer in the past when you've raised prices? And the second part, if you have the breakout on what the margin impacts from cigarettes were?

William J. Walljasper

Yes. To answer the first part, I mean, we always look, as you know, Ben, at competitive price adjustments. We do pricing surveys of key items. Obviously, our Prepared Food category is definitely a key area for us. And so to the extent as far as being able to pass on some of these cost adjustments to us, we're always looking for that opportunity. In many cases though, it's dictated by the competitive landscape and certainly don't want to price ourselves out of the competition by taking a price increase. So we constantly look at that. We are currently looking at that for opportunities. We've done a very good job in my opinion over the last 3 to 4 fiscal years on taking price adjustments in certain areas of our Prepared Food category, and we'll continue to look at opportunities. Now in this particular quarter, we did have, as we alluded to, some supply costs and some meat costs increases. And so that was to the tune of about $1.6 million. You roll that up, that's about 90 basis points on the margin in the quarter. So you're right. Some of the commodities, cheese is heading in a favorable direction. Certainly coffee is heading in a favorable direction. So we're always looking at those for opportunities to lock those in to certainly to maintain our cost structure. The second part, you asked about cigarettes, the impacts. The cigarette margin for this particular quarter was down about 180 basis points relative to the second quarter a year ago. Now as you might recall from Q1 and Q4, we were trending anywhere from 250 to 300 basis points down in the cigarette margin. So this is a function of us cycling over some of the October price adjustments we made last year. We will cycle over the remaining part of that here and have cycled over that in November, and so that margin differential period-over-period should certainly ease. But we continue to see some very solid unit movement with cigarettes.

Operator

Your next question comes from the line of Anthony Lebiedzinski with Sidoti & Company.

Anthony C. Lebiedzinski - Sidoti & Company, LLC

Had a question as related to your beer margins. I know you've been opening more stores with beer caves and just wondering if you could just discuss what impact you're seeing within the beer programs?

William J. Walljasper

Yes. It's a good question, Anthony, and you're exactly right. As we open these new stores and replacement stores, nearly all of these have beer caves or beer vaults. And as a result, we do see a shift into larger pack purchasing, which does have a lower margin than your smaller pack or single serves. And so the beer margin was off in the second quarter, and that certainly was contributing in some part to the drop in Grocery and General Merchandise. But having said that, even in the beer category, gross profit dollars in the beer category was up in the mid-teens. So at the end of the day, that's what we strive to accomplish is the gross profit movement so.

Anthony C. Lebiedzinski - Sidoti & Company, LLC

Can you quantify the impact of the beer margins?

William J. Walljasper

Meaning the drop?

Anthony C. Lebiedzinski - Sidoti & Company, LLC

Yes.

William J. Walljasper

Beer margin drop was about 15 to 20 basis points from the second quarter a year ago.

Anthony C. Lebiedzinski - Sidoti & Company, LLC

And just a couple of housekeeping items. Can you just say how many stores are now operating on a 24-hour basis? And also how many of your stores deliver pizza?

William J. Walljasper

24-hour is about 650 or so. The pizza delivery is about 325.

Anthony C. Lebiedzinski - Sidoti & Company, LLC

And lastly, I came across somewhere that you're now offering or maybe just testing a flatbread pizza. Can you just comment on that initiatives?

William J. Walljasper

Yes. We are testing that. That's actually scheduled to rollout in January to all of our stores, and it's one of those items where it -- the flatbread crust has become a very popular item. We've taken notice of that, have been working on trying to pull together a flatbread crust that would meet our quality standards. And we think we've found a product, and we're excited about the rollout from January. So if you're in the neighborhood, Anthony, grab a flatbread pizza.

Operator

Your next question comes from the line of Chuck Cerankosky of Northcoast Research.

Charles Edward Cerankosky - Northcoast Research

Follow-up, Bill. Yes, Bill, just thinking about the commodity cost coming down in your generally Midwest slice [ph] of the country where you operate, how do you think that will affect the communities and customer behavior where you operate?

William J. Walljasper

Well, typically when we see commodities decrease in our agricultural economy, that's always a plus. I can't necessarily tell you that, that's going to equate into more donut sales or pizza sales necessarily. But consumer confidence, I think, usually tends to be pretty strong. But quite honestly, Chuck, consumer confidence has been pretty good over the last several fiscal years here in the Midwest.

Anthony C. Lebiedzinski - Sidoti & Company, LLC

So actually you don't see an offset to farm incomes and then that filters through to other parts, say the Iowa economy, et cetera?

William J. Walljasper

I wouldn't say there is any direct correlation in that regard. We haven't been able to ascertain that yet.

Operator

There are no further questions in the queue at this time. I would now like to turn the conference back over to Mr. Bill Walljasper. Please proceed, sir.

William J. Walljasper

Well, I'd like to thank everybody for joining us this morning. Again a reminder that same-store sales will release Monday, December 16th, and hope everybody has a happy holiday. Thank you.

Operator

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.

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