Sequential Brands Group's (SQBG) CEO Yehuda Shmidman on Q2 2014 Results - Earnings Call Transcript

Aug. 9.14 | About: Sequential Brands (SQBG)

Sequential Brands Group Inc. (NASDAQ:SQBG)

Q2 2014 Earnings Conference Call

August 7, 2014 10:00 AM ET

Executives

Gary Klein - CFO

Yehuda Shmidman - CEO

Analysts

Erinn Murphy - Piper Jaffray

Camilo Lyon - Canaccord Genuity

Eric Beder - Wunderlich Securities

Dave King - Roth Capital

Operator

Good morning and welcome to the Sequential Brands Group 2014 Second Quarter Earnings Release Conference Call. Please note that this conference call will be available for the next 30 days on our Web site, www.sequentialbrandsgroup.com. Before we begin, I would like to bring to your attention that statements that are not historical facts contained in this conference call are forward-looking statements that involve a number of risks, uncertainties and other factors, all of which are difficult or impossible to predict and many of which are beyond the control of the Company.

This may cause the actual results, performance, or achievements of the Company to be materially different from the results, performance, or achievements expressed or implied by such forward-looking statements. The words believe, anticipate, expect, may, will, should, estimate, project, plan, confident, or similar expressions identify forward-looking statements. Listeners are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date the statement was made.

Other than as required by law we undertake no obligation to update or revise such forward looking statements, whether as a result of information, future events or otherwise. Additionally the terms adjusted EBITDA and non-GAAP net income are all non-GAAP metrics in reconciliation tables which can be found in the press release distributed today and on our Web site www.sequentialbrandsgroup.com.

I will now turn the conference call over to our host for today Yehuda Shmidman, Chief Executive Office and Gary Klein, Chief Financial Officer. Mr. Klein please proceed.

Gary Klein

Good morning and thank you for joining Sequential’s second quarter earnings conference call. On today’s call, we will review our 2014 second quarter results, followed by a review of our overall business. Beginning with our financial results. For the second quarter that ended June 30, 2014 the Company earned revenue of approximately $7 million, representing an increase of more than 60% to our prior year quarter revenue of approximately $4.3 million. Adjusted EBITDA for the second quarter increased 49% to approximately $3.7 million compared to approximately $2.5 million in the prior year quarter.

Non-GAAP net income for the second quarter was approximately $1.1 million or $0.04 per share compared to approximately $800,000 or $0.05 per share in the prior year quarter. For the six months that ended June 30, 2014 the Company earned revenue of approximately $13.3 million, representing an increase of approximately 122% to revenue of approximately $6 million earned in comparable prior year period. Adjusted EBITDA for the six months period increased more than five times to approximately $6.8 million compared to approximately $1.3 million in the prior year period.

Non-GAAP net income for the six month period was approximately $1.9 million or $0.07 per share compared to a loss of approximately $600,000 or negative $0.05 per share in the prior year period. Of note, our trailing 12 month revenue was approximately $29.9 million and our trailing 12 months adjusted EBITDA was approximately $17.8 million. Adjusted EBITDA and non-GAAP net income are non-GAAP metrics and reconciliation tables for both can be found in our press release sent out this morning and on our Web site.

In addition to a strong revenue, EBITDA, EPS and net income metrics, our balance sheet remains well positioned for growth as we closed the quarter with approximately $16 million of cash on hand. I would now like to turn the call over to our Chief Executive Office Mr. Yehuda Shmidman.

Yehuda Shmidman

Thank you, Gary and good morning everyone. This was another consecutive quarter of strong results for Sequential, highlighted by substantial increases in revenue and substantial increases in adjusted EBITDA versus last year. Strength in our business during the quarter was across the board, as all eight brands in our portfolio were up year-over-year, led by best performers Ellen Tracy and Heelys. Here are the highlights. With Ellen Tracy, we saw growth across numerous categories including dresses and handbags. We continue to work on both domestic and international initiatives to position the brand for its next phase of growth and to that end we will soon be announcing a new marketing campaign for the brand’s 65th Anniversary.

Also in the second quarter, we renewed four of our Ellen Tracy licensing agreements including intimate apparel and sleepwear which remain key categories for us. Heelys also had a strong second quarter versus the prior year. E-commerce is by far the fastest growing part of the business with heelys.com sales expected to triple this year and with Amazon, Zappos, Shoebuy and nordstrom.com, all planning to at least double this year. In addition, we are anticipating a strong back-to-school season with our Heelys backpack line which will be featured at Staples, Journeys and Amazon.

New distribution for footwear this holiday season will include Nordstrom, Dick’s, Sports Authority and Modell's. Finally, we will be seeing new international distribution this holiday season at retailers that include Harrods, Selfridges and El Cortes Ingles in Spain. William Rast is on track for its fall U.S. launch of men’s and women’s sportswear and outerwear in all Lord & Taylor doors and online. Tailored clothing and accessories will debut in November and we are planning to introduce men’s, accessories, women handbags and footwear for the back half of 2015.

International distribution has been growing as well and now includes 12 retail partners for the upcoming season, inclusive of House of Fraser in the UK and [indiscernible] in Germany. Currently we have six licensees for the William Rast brand including Peerless Clothing and PVH, Phillips-Van Heusen and several more are in contract. For the Revo brand, our all new eyewear collection is being shown this week at the outdoor retailer show in Salt Lake City, and the first shipments will go to Sunglass Hut followed by other accounts including Amazon Zappos and the sports authority.

Also of note, our completely overhauled Web site revo.com launched this week including an all new e-commerce components. In tandem with all these new developments for the Revo brand and to announce the debut of the limited edition Danica Patrick for Revo collection, Danica is actively helping us to promote all the excitement and in fact just this morning, she was on national TV talking about the Revo brand.

In addition to the organic developments in our business, in this past quarter we also announced the transformational acquisition of Galaxy brand holdings, including the four brands: AND1, Avia, Nevados and Linens 'N Things. The transaction which is expected to close soon will position Sequential Brands Group move as one of the largest pure play, brand licensing companies in the world with a combined portfolio of 12 global consumer brands generating nearly $2 billion in global retail sales annually.

In addition to the increased scale that at this acquisition brings to Sequential, we believe it is a strategic set for multiple reasons. First, this acquisition broadens our reach to new product sectors including home and the explosive category of active athletic. Second, it diversifies the retail distribution of our business into new retail accounts including Walmart. Third, this transaction enabled us to add the Carlyle Group, and GSO Blackstone Group as new stakeholders in Sequential, joining us existing group of premier firms that include Tengram Capital Partners, BlackRock, Bank of America and Buckingham Capital. And last but certainly not least, this merger brings the talent of Eddie Esses and his team who have done an incredible job, building Galaxy’s portfolio brands and positioning them for future growth. Looking ahead, the acquisition environment remains as good if not better for us than when we reported to you after Q1.

We believe the profile our last acquisition target and post transaction performance of our stock has brought positive interest to our company from other perspective targets. Capital markets remain strong, and with the team of stakeholders that we have in place today we fully expect to be able to execute on all actionable opportunities that fits our acquisition criteria. In closing more than ever, we believe this is an incredibly exciting time to be part of Sequential.

Sequential began with less than $100 million of retail sales two years ago and is now positioned to achieve close to $2 billion of retail sales. Sequential earned just $5 million in royalty revenue and zero EBITDA in 2012 and is now expected to drive nearly $60 million of revenue and nearly $40 million of adjusted EBITDA, pro forma post the Galaxy closing.

And looking ahead to the future, we believe that the path to achieving our three year plan of growing to a $100 million of revenue and $70 million of adjusted EBITDA is well in its way as we continue to focus on executing our playbook. I’d like to thank all of our stakeholders for the continued partnership and thank you all for listening this morning. We will now open up the call for questions and answers. Operator?

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Our first question comes from Erinn Murphy from Piper Jaffray. Your line is open, please go ahead.

Erinn Murphy - Piper Jaffray

Yehuda, I would love to, just how -- if you could dig into a little bit more on the Galaxy acquisition, it seems like you just added great group of brand to your platform, really rounded out those categories at retail REITs. I think first, on the category perspective, could you speak a little bit more about how you are seeing the growth in both AND1 as well as Avia and then also is it [Technical difficulty] you get into that mass market.

Yehuda Shmidman

Erinn we lost you a little bit midway, but certainly Erinn I think we got the question. You know, as it relates to Galaxy, the first thing I’ll mention is just to reiterate this truly is a transformational acquisition for Sequential. As you know it nearly double the size of our scale, taking us from $1 billion to 2 billion retail sales. We talked about the revenue metrics and EBITDA metrics and just net result is it really positions us as one of the largest pure play licensing companies in the world. In terms of I can address about the product categories and the channels and the growth prospects, in particular I believe you asked we get to that AND1 and Avia, we really believe that the brands are just at the very beginning stages of their runway ahead. There is a lot of growth potential in terms of categories, in terms of new categories, in terms of the current categories of growth within the retail landscape and certainly internationally where we believe there is a lot of growth ahead. So, as we talk about organic growth and we have a companywide target to achieve high single-digit if not 10% organic growth for our portfolio on an annual basis, we certainly do believe Galaxy fits the bill and we are very excited about the growth prospects ahead.

Erinn Murphy - Piper Jaffray

I guess I would love to hear a little bit more of an update on the personnel. I think you have added -- Eddie is staying onboard. How do you. [Technical Difficulty].

Yehuda Shmidman

Erinn, you blanked out a little bit but I know you are asking about the personnel. In terms of the Galaxy acquisition certainly we're acquiring four great brands and an ongoing business which we believe will grow. But in terms of the team that’s absolutely an additional strategic factor that got us excited about this transaction, something we're very attracted to. The gentleman Eddie Esses, who is currently running the business has agreed to stay on to run the business. His whole team will stay on as well. These guys have just done an amazing job at creating value in a relatively short period of time, building what they have done and they have got great relationships in the field with their licensees, with their retail partners and certainly we are very excited about the talent that’s going to be added to Sequential as part of this transaction.

Erinn Murphy - Piper Jaffray

That’s great to hear and I guess just last question for me. It sounds that you are still very bullish on just the overall M&A environment out there. I guess maybe just help us walk through the process of how you are evaluating now as you think about future deals which mean both the debt and the equity financing options?

Yehuda Shmidman

So, in terms of how we finance acquisition, we do believe we are going to be continue to be opportunistic. As you have seen in our past, if you look at the last, call it two years, when you include Galaxy, we have acquired nine brands and we have done that through a combination of equity and debt. I will say that in terms of sort of metrics that we keep in mind as directed by our Board, certainly we would like to be around four times net debt in terms of leverage. Sometimes it might go a little bit higher, certainly will go at times lower. But overall one thing that’s really important is as we look at any new brand acquisition, one of the key criteria in how we look at those brands is to understand that the brand will be accretive.

So as we think about debt and we think about equity, we want to make sure those new brands that we acquire are accretive. We want to of course make sure that the brands fit our business model, make sure we believe we can grow them within our business model of organic growth. And after that we certainly will look at all avenues of debt and equity strategies.

Operator

Thank you. And our next question comes from Camilo Lyon from Canaccord Genuity. Your line is open. Please go ahead.

Camilo Lyon - Canaccord Genuity

Congratulations on the Galaxy acquisition, it’s truly remarkable. Speaking about Galaxy, I wanted to get your thoughts and maybe if you can help us understand, just how much integration there is and just help me understand the process with integration, if there is much to be had? And then the follow on that is, how could we begin to get back on the acquisition evaluation process to evaluate forward opportunities?

Yehuda Shmidman

Sure, so let’s start with integration. We have been spending quite a lot time on this transaction even well before we announced it. And so one of the benefits, sort of the position we're in today is that there really is a very, very quick integration if you will once we get close and of course we're working on the closing every day right now. And of course as you know we're looking to close before year end or sooner. So, one of the benefits of this business model is that integrations are generally pretty easy and pretty quick and especially as it relates to Galaxy because we put so much work into this ahead of time, I really do believe we're going to hit the ground running.

In addition to that as you Camilo, one of the big sort of focal points for us as we have been building Sequential over the last two years is to build out the platform for additional capacity. And what I mean by that is that, and this relates to the second part of your question, as we think about Sequential post Galaxy, we absolutely are focused on finding new acquisition to put into the portfolio. But I think if you think about our playbook in terms of the two key chapters, number one, clearly we want to make sure that we're delivering on organic growth. We want to make sure that our brands are growing but without a doubt we want to make sure we continue on the acquisition path as well.

And long-term, if you think about our three year plan of getting to a $100 million in royalty revenue and $70 million of adjusted EBITDA, we do believe we are well on our way to achieving that and absolutely we will look to acquire new brands that fit our criteria once we close the Galaxy transaction.

Camilo Lyon - Canaccord Genuity

Great and then you mentioned in your prepared remarks that because of the acquisition that you have, in-bound calls coming to you from potential targets. Can you help us maybe direct some of that thinking as it pertains to maybe the categories that you will be focusing on broadly or maybe perhaps the distribution opportunities that you now have available to you. You mentioned that Galaxy is giving you one more distribution where you didn’t have that before. Are you looking to fill the distribution in Walmart with one of the brands or are you looking to round out some of the latter category exposure that you have?

Yehuda Shmidman

Good question. In terms of how we think about this acquisition vis-a-vis categories first and foremost, we do believe this business model works across multiple sectors. So today we’ve several brands in the fashion sector, several brands now in athletic including Galaxy brands in the holding industry, brands in the hard lines area and the way we like to think about it is, if we are going to work with the big retailers in the world, we’d like to think about the brands that trade within those retail floors and certainly the big box retailer of course, as we know, soft lines and hard lines and so we’re always looking for great brands where we can monetize those brands through our unique business model and do business on a large scale with those big boxes and therefore from a category perspective it’s not too much a specific category that we’re looking for as much as we’re looking for brands that fit sort of our formula.

Beyond that what I would say is you’re absolutely right in calling out that this -- one of the key aspects of this Galaxy transaction is that it does diversify our channel base in a really positive way and if you think about the full scale of distribution that this company has inclusive of Galaxy, we now have brands that trade and call it as high as Nordstrom, Lord & Taylor and Gillard [ph] and then all the way through the pyramid to places that include Walmart and number of accounts in between.

So, a big part of our strategy certainly is continuing to diversify the risk profile in terms of acquiring just more brands and as well spreading the risk if you will across multiple distribution channel. But having said all of that if we find a good brand, if it fits fashion or it fits electronics or if fits soft goods and it fits our criteria, we believe we can grow it through our platform, we are going to pursue it.

Camilo Lyon - Canaccord Genuity

So your agnostic basically is what you are saying.

Yehuda Shmidman

Yes.

Camilo Lyon - Canaccord Genuity

But there isn’t any particular category that is ripe for the analysis right now, whether it’s footwear, whether it’s apparel whether it’s fashion, athletic, home goods, electronics or just opportunities are bound?

Yehuda Shmidman

Yes, I mean look we love all those categories that you mentioned. We love the apparel space, we love fashion space whether it’s footwear, apparel. Maybe just one other note I'd add to the sales process is while we are agnostic it is very calculated. So if you think about that process where we’re trying to identify great brands and great licensees and big box of distribution behind it, lot of our thinking comes from working with our licensee network and working with our retail network an trying to find brands that do fit their needs and I guess your early question about Walmart certainly is we know the need there or in other retail channel. We’re certainly going to pursue brans that fit it.

Camilo Lyon - Canaccord Genuity

Great, and then just one final question and I’ll jump out. Could you maybe just tell us how the discussions are going with some of your retail partners and how they are thinking about the back half/ it’s been a pretty promotional first half of that year in retail and I’m curious to see if you are hearing if that promotional landscape is going to persist, improve, get worse as we get into the holiday season and maybe how that may or may not impact your brands?

Yehuda Shmidman

Sure, there isn’t really much I can report to you different than what we're all hearing in terms of the general market but I will say is one of the interesting things about our brands and most of our brands inclusive of the Galaxy but even without Galaxy is that a number of our brands are in launch mode, whether be in new categories or current categories or new geographies. And so a lot of our growth is coming from market share. Obviously we prefer healthy environments but you need sort of attributes of our business model where we have minimum guarantees, where we have diversification in terms of distribution, in terms of category all that helps insulate us from any temporary sort of downturn that we might see in the macro environment. So, not much to report different than what we all know in terms of the broader market but certainly with our focus being on the sequential portfolio, we do think we are positioned to make our plan for the year.

Operator

Thank you, and our next question comes from Eric Beder from Wunderlich Securities. Your line is open, please go ahead.

Eric Beder - Wunderlich Securities

Could you talk a little bit about William Rast? I know you have the big roll out coming with Lord & Taylor and it’s really going to kind of recreate the brand. If you kind of give us a little more color on how that’s going to rollout, how you look at that?

Yehuda Shmidman

Absolutely, we're really excited about William Rast. We’ve been talking about this plan for a while and now watching it executed is very exciting. We're on multi-country, multi-departments store, coordinated global re-launch of the brand at the moment. Certainly as you know we have a successful launch today. We have a successful launch earlier this year in Europe across many different retailers and now more retailers coming on board and then to your point in your question, we’ve got right in our backyard, the U.S. launch at both Lord & Taylor's tours coming in the next few weeks which is very exciting. We have got all sorts of marketing plans around that, which you will see come out during fashion week, after fashion week and beyond. And so overall, I'm very excited about the positioning going forward. Also we mentioned on the earlier remarks that our licensee pool has been growing. We have partners that include PVH now, Peerless, wonderful companies and several more that are in contract to support new categories as we get into 2015 and 2016.

Eric Beder - Wunderlich Securities

Sure, thank you. And when you look at -- you have two brands in both Revo and in Heelys where basically they were one major license and the goal I guess eventually is to take those to be lifestyle brands. Is that the goal and do you look upon kind of the Heelys expansion as kind of the model to take both those brands beyond where they are right now?

Yehuda Shmidman

Definitely, you think about Heelys and certainly the core category being footwear and absolutely when we acquired the brand about a year a half ago, we wanted to solidify the footwear base which we think has been very successful and continues to be successful and then beyond that, we signed a new license for backpacks and we have added some categories in the protective gear and long-term, we want to continue add new categories and it is the same for Revo, you are absolutely right. That brand was acquired, call it a year ago; certainly again, wants to solidify the core category of eyewear. In fact just today Danica Patrick, our spokesperson was on MSNBC and CNBC and she is continuing to do a number of media outlets for us today promoting the eyewear line. But beyond that long-term, to your point, our goal is to expand Revo as an outdoor performance lifestyle brand into several new categories.

Eric Beder - Wunderlich Securities

And last question on, I have to bring it in, Franklin Mint, when are we going to start to see the first hearings of what Franklin Mint is going to become with you guys?

Yehuda Shmidman

Franklin Mint, two major things to report there. One is we have launched the e-commerce platform with a very strong partner, a company named Delivery Agent, West Coast based e-commerce firm, very, very strong company, great people over there. That new Web site has launched and long term we believe will be one of the biggest, if not the biggest driver for the brand. And then secondly, we do have a retail partner on-board to launch the brand towards the end of this year. With deference to them, we have to wait until we get much closer to the launch to announce the name. We are excited about the specific partner that we have on-board for the brand.

Operator

Thank you. And our next question comes from Dave King from Roth Capital. Your line is open. Please go ahead.

Dave King - Roth Capital

I guess first off, just a few questions here and maybe digging into the quarter, looks like expenses were up a little bit more than we were expecting at least even on the strong revenue growth. And so I am curious as to what might be driving that. It sounds like there may have been recent hires that caused it but any color there would be great and appreciated.

Gary Klein

So, obviously it was a good quarter. EBITDA was up quarter-on-quarter from the prior quarter, expenses as well were up slightly and that again it’s a timing of our advertising. As we get deeper into the year, our advertising will go up, especially with these back-to-school and holiday marketing campaigns. So, I think this quarter it was about 3.9. It will be a little bit higher as we go forward.

Yehuda Shmidman

And the other thing Dave, just to add-on, as you think about our EBITDA margins and again as I know you are very familiar with the company over time, we have seen as we have bolted on new acquisitions, our total EBITDA margin has expanded, which of course was the plan as we try to leverage the overall platform and integrate new brands that operate on individual basis that are higher. One of things of course you'll see as Galaxy comes in and we will talk more about numbers once that deal closes, is again the additional margin expansion overall of the business.

Dave King - Roth Capital

That helps a lot and then actually in terms of the revenue growth we saw this quarter, obviously 60% really strong number. I guess how should we be thinking about organic growth versus kind of that high single-digit or even sometimes kind of 10% target. It sounds like you had a fair amount of growth for Ellen Tracy and Heelys. But just maybe generally how is the business performing relative to that and how should we be thinking about it going forward?

Yehuda Shmidman

Sure, first call after the quarter that all eight of the brands revenue-wise were up versus last year in the same quarter. It’s a strong testament to the brands and a testament to the portfolio, certainly good indicator for us. As we think about organic growth, it is certainly though on an annual basis, just because timing of launches and timing of new categories can come based on different season. So, as you pointed our high single-digit or even 10% organic growth goal is very much a goal and we look at that on the annual basis. We do believe we are fully on track this year to hit that and so when we think about this quarter and we think about the prior quarter and then the future quarters, we think we are in good shape to achieve that goal.

Dave King - Roth Capital

Fantastic and then as we think about Galaxy, what’s going on there it seems like that business is kind of already firing on cylinders in terms of maybe growth but then also margins and then some of the distribution that you have lined up. I guess can you just talk about maybe some of the opportunity that you see there in terms of either at the distribution or at categories or is it too early to talk about it until that closes but maybe just any kind of color would be great and appreciated.

Yehuda Shmidman

Absolutely, definitely do the best I can and obviously within the parameters that we haven’t closed yet but we certainly do want to talk about the brands. First I would sort of call your attention that we think about the brands, in particular. So take AND1 and one for example which in the basketball category in athletic and take the brand Avia which is in fitness, wellness performance. Those categories as a whole are just are red hot. They are exclusive categories in general and so if you think about the possible applications of those two brands in particular to those particular categories, certainly from a growth perspective we get very excited. We see category expansions, we see growth within the core categories and on a general basis as well you do see a large base of retailers that have an interest in the brand and that gets us excited and then most importantly I would call your attention on the international opportunities, from the brands and today there has not yet been development outside the U.S. in a dramatic way and we believe we can add a lot to that as we work together with Eddie and his team.

So, by and large I would say absolutely we’re focused on the growth and at the same time you are right, they’ve done a great job until this point which is the value we described for the acquisition, certainly they've done but we do believe there's future growth ahead.

Dave King - Roth Capital

Great and then – yes.

Gary Klein

I just wanted to talk about one thing. As you’re looking at SG&A in the quarter, we did have -- from the Galaxy deal we just start incurring some of the deal expenses this quarter. We accrue at about your $2.4 million of the non-yield that we expect in the quarter. So maybe that’s also why it may look a little bit higher. If you look at the EBITDA rep that we put into the press release today, that is how you identify those and back them out. So you can look at it accordingly.

Dave King - Roth Capital

All right, great. Fantastic, that’s helpful and then I guess last one for me, just following up on some of the earlier questions, it sounds like the deal pipeline out there, if anything has improved post Galaxy which I think is great and encouraging, I guess how should we be thinking about that in terms of timing? I just want to make sure I understood the prior stuff. It sounds like, deal closes ideally well, hopefully maybe even in the third quarter but certainly probably by the end year end and then maybe so, you wouldn’t necessarily do anything until then and then after that is when we should start to think about maybe future deals, hopefully given kind of this opportunity to capitalize on the better pipeline. is that a fair assessment?

Yehuda Shmidman

It is, I think the way that we still think about is very much unplanned to acquire two to three brands per year. Certainly Galaxy fits that profile for this year’s target but we do believe on a consistent basis that we can acquire two to three brands, we can achieve our three year plan of a $100 million broke in 70 of adjusted EBITDA. So, yes in terms of this year I think the way you characterize this sounds correct which is we certainly are working towards the closure of Galaxy at the moment and as we get past that, certainly we will look to acquire more brands. Obviously the one thing we really don’t -- not the only thing but one of the things we don’t control is timing as it relates to acquisition but we have been seeing as you pointed out and as we said earlier is a strong environment of brand opportunities, a strong environment in capital markets according to [indiscernible] and with the addition of new stakeholders joining our current stakeholders we do believe we have the capacity to execute on actionable opportunities.

Operator

Thank you, I’m showing no further questions at this time. I would like to hand the conference back over to Mr. Yehuda Shmidman for closing remarks.

Yehuda Shmidman

Great, thank you. Just want to thank everybody for joining us this morning on the call. We sincerely appreciate your time and interest in Sequential Brands Group. Should you have any follow up questions, management will be available throughout the day. Please feel free to contact us.

Operator

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

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