FTD Companies' (FTD) CEO Robert Apatoff on Q2 2014 Results - Earnings Call Transcript

Aug.12.14 | About: FTD Companies, (FTD)

FTD Companies, Inc. (NASDAQ:FTD)

Q2 2014 Results Earnings Conference Call

August 12, 2014, 05:00 PM ET


Jandy Tomy - VP of Finance

Robert Apatoff - President and CEO

Becky Sheehan - EVP and CFO


Jim Chartier - Monness, Crespi, Hardt & Co.

Ned Davis - William Smith & Co.


Greetings and welcome to the FTD Companies, Inc. Second Quarter 2014 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder this conference is being recorded.

I would now like to turn the conference over to your host Jandy Tomy, VP of Finance. Thank you. You may begin.

Jandy Tomy

Thank you. Good afternoon and welcome to the FTD Companies second quarter 2014 earnings conference call and webcast. With me today on the call are Robert Apatoff, President and Chief Executive Officer; and Becky Sheehan, Executive Vice President and Chief Financial Officer.

Before we begin, please remember that during the course of this call management may make forward-looking statements within the meaning of the federal securities laws that address the company’s expected future business, financial performance, and financial condition. These forward-looking statements involve risks and uncertainties that could cause actual results to be materially different than those expressed in our forward-looking statements.

In addition to the company’s periodic, current and Annual Reports filed with the Securities and Exchange Commission, please refer to the text in the company’s press release issued today for a discussion of the risks and uncertainties associated with such forward-looking statements.

Also, please note that on today's call management will refer certain non-GAAP financial measures including adjusted EBITDA, adjusted net income and free cash flow. The company believes these non-GAAP financial measures provide useful information to our investors. Please refer to today's press release for definitions and calculations of these non-GAAP performance measures as well as reconciliations of the non-GAAP performance measures to the company’s GAAP financial results.

Finally, FTD will solicit the required approval of its stockholders in connection with the planned acquisition of Provide Commerce that means Provide Commerce by means of a proxy statement, which stockholders should review when it becomes available as it will contain important information that FTD stockholders should consider as well as information about the participants in the solicitation. FTD stockholders will also be able to obtain the proxy statement, as well as other SEC filings without charge, at the SEC’s website or from FTD at its website, or by providing FTD Corporate Secretary.

Now, I would like to turn the call over to Robert Apatoff, President and Chief Executive Officer.

Robert Apatoff

Thank you, Jandy. Good afternoon everyone and thank you for joining us today. I will begin with a brief overview of our second quarter operating results and business highlights and then our CFO Becky Sheehan will review our financial results and outlook for 2014 in more detail. Finally, I will provide a few closing remarks and we will open up the call to take your questions.

Clearly the big news for FTD is our recent announcement of the proposed acquisition of Provide Commerce from Liberty Interactive. We are very pleased with the strategic transaction as we will further our vision to be the world's leading and most trusted floral and gifting company. I will discuss the acquisition in more detail later in my remarks.

The consumer environment in the U.S. remained challenging during the second quarter of 2014. However, our team remains focused on the execution of our strategic initiatives. We continue to benefit from our stable and consistently profitable business model.

I would like to focus on our three business segment for a moment. First, our Consumer segment which operates primarily through our ftd.com website is a direct marketer of floral and gifts products, majority of the orders we take are sent to our FTD member florists for fulfillment in their local areas, often fulfilled on the same day the order has taken.

The Consumer segment was challenged from a top line perspective in the second quarter, driven by a decline in order volume during the Mother's Day holiday. In our Consumer segment, we continue to see heightened levels of spending across the broader competitive industry on medial, marketing, online and search functions and certain partner programs that become more expensive to secure and maintain.

We also experienced lower performance with one of our larger partners. As a result, our costs in these areas increased in the quarter. However, we were able to grow our average order value by 4% in the second quarter. We have now grown AOVs in the consumer segment 11 of last 14 quarters.

Our team has identified and is executing on multiple initiatives that are focused on managing these costs and enhancing the returns on our marketing programs for the half second of this year. While these marketplace and competitive sectors weight more heavily on our U.S. consumer business, I am very pleased to report that revenues in the Florist and International segments improved in the second quarter.

Our Florist segment generated an increase in both service and product revenue. Further, our revenues per member were also higher than the prior year second quarter. Our Florist business leverages the significant order flow from the Consumer business. And as we have stated before, the majority of orders generated by the Consumer business are solidified number of florists.

Finally, our International business, operating primarily under the Interflora brand performed very well in the second quarter. Interflora also capture significant consumer demand and like our Consumer business in the U.S., a majority of orders we take in the U.K. are sent to our Interflora number of florist for fulfillment.

Our team has multiple initiatives and process to support future growth in revenue and profitability across each of our three business segment. Those include, first, strategic targeted marketing programs to increase order volume including expansion in our partnership programs with both new and existing corporate and sympathy partners.

Second, an increase in media spend to identify and target new customers in the U.S. and in the U.K. Third, programs to more productively target our existing customer base to improve segmentation initiatives in our email marketing campaign and greater penetration with our gold royalty program.

Fourth, marketing and merchandising enhancements to increase average order value, such as the expansion of or order upgrade path and to increase current value through the continued introduction of innovative floral and gifting products for our customers including increased multi-product bundling options.

Fifth, technology enhancements to improve the customer shopping experience including continued improvements in our mobile platform. And sixth, the improvements in our fulfillment and distribution capabilities.

Now, continued our focus on innovative products, we recently launched two new product lines. First, Color Confections launched in July with our brightly colored vases and the very colorful arrangements to help our customers sweeten someone’s day.

In addition, we launched the Jardin collection which is line of French, European bouquets proposed casual garden flowers. Jardin in French means garden. This new collection will take advantage of the more casual garden staler arrangement trends popular today.

We believe we still have a great opportunity for product innovation to help drive future growth. As many of you are aware, the floral and gift industry continues to evolve. Like most every consumer goods industry, consumers are in control of where and how they shop.

Shopping behavior continues to migrate to e-commerce and mobile platforms and floral offerings are more commonly positioned at retail locations including grocery and mass market stores.

In the face of this changing landscape, it is our responsibility to understand and correctively adapt to the changes and attract as much consumer demand is possible to FTD and our number of florists.

To this point, as we recently announced FTD entered into an agreement to acquire Provide Commerce. The transaction combines FTD's iconic brands FTD and Interflora alongside Provide Commerce's diversified and recognized world consumer floral and gifting e-commerce brands which include ProFlowers, Shari's Berries and Personal Creations.

Provide Commerce's brand portfolio has become its destination of choice consumer gifting needs and occasions. And combined with our brands, we expect to have one of the most compelling floral and gifting portfolios in the world.

Together FTD and Provide Commerce will offer consumers an enhanced shopping experience through an expanded selection of innovative floral and gift products providing them with greater choice and convenience. Importantly, the combined company with expected annual revenues in excess of $1 billion will also allow us to provide greater support for a number of florists in their local businesses by expanding resources to create new targeted programs and services.

We believe this acquisition will advance FTD's business strategy by uniting two dynamic and highly complementary businesses, generating material cost synergies and creating a team of best-in-class operating strategies. We continue to expect this transaction to close by the end of the 2014 and we will provide you with additional updates as we progress through the process.

In summary, we believe both FTD and Provide Commerce share a common mission and vision focused on our customers. Together, we will create an outstanding floral and gifting experience to inspire, support and delight our customers during all of lives most important moments.

We believe this transaction will create the foundation for FTD that better servers our stakeholders. At FTD, we will consistently find ways to complement our brands through the many innovative and differentiated products and service offerings and best-in-class partnerships. Most importantly, all of these problems and initiatives are created with our customers in mind.

We're honored to be a part of some most important occasions in our customer's lives.

And with that overview, I would now like to turn the call over to CFO, Becky Sheehan.

Becky Sheehan

Thanks Rob and thank you everyone for joining us on the call today. As Rob mentioned, I'll provide further detail on our second quarter 2014 financial results and review our outlook for the full year of 2014.

Now onto our second quarter 2014 results. Consolidated revenues increased 2.3% to $168.1 million compared to $164.3 million in the second quarter last year. Net income decreased slightly to $4.7 million compared to $5.5 million in the second quarter of 2013.

The effective tax rate during the second quarter of 2014 was 53% compared to 39% in the prior year. The increase was primarily due to non-deductible cost related to the planned acquisition of Provide Commerce.

Adjusted EBITDA for the second quarter of 2014 was $22.5 million compared to $23.6 million in the second quarter of 2013. Adjusted EBITDA was negatively impacted by higher cost marketing program during the quarter, particularly in our consumer segment and incremental cost associated was being a standalone public company.

These items were partially offset by the Easter calendar shift from the first quarter of 2013 to the second quarter of 2014.

As Jandy mentioned earlier, please review our press release issued today for a reconciliation of non-GAAP financial measures to the comparable GAAP financial measures as well as related definitions and calculations including those adjusted EBITDA, adjusted net income, and free cash flow.

I will now review our segment performance. Consumer segment revenues for the second quarter of 2014 decreased 2.2% to $96.1 million compared to $98.3 million in the second quarter last year. This decrease was due to a 5.8% decline in consumer order volume, partially offset by a 4.1% or $2.63 increase in average order value.

Consumer segment operating income was $10.6 million compared to $11.6 million in the second quarter of 2013.

Florist segment revenues for the second quarter of 2014 increased almost 1% to $41.7 million compared to $41.4 million in the second quarter of 2013. Services and product revenues each increased $0.2 million.

Florist segment operating income was $12.1 million for the second quarter compared to $12.3 million in the second quarter last year.

Average revenues per member increased 6.4% to $3,203 compared to $3,011 in the second quarter of 2013.

International segment revenues increased 7.4% on a constant currency basis and 17.6% on a reported basis to $35.8 million compared to $30.5 million in the second quarter of 2013.

International segment operating income was $3.5 million, up from $2.9 million in the second quarter last year. International segment consumer orders for the second quarter of 2014 increased 7.9% to 0.5 million orders and average order value was $55.68 consistent with the prior year in constant currency.

Now, focusing on our balance sheet and cash flow. Our free cash flow for the six months period ending June 20th, 2014 was $12.6 million compared to $9.4 million in the prior year. Cash flows from operating activities for the six month period ending June 30th, 2014 were $19.2 million and cash and cash equivalent was $63.5 million as of June 30th, 2014 compared to $48.2 million as of December 31st, 2013.

Debt outstanding at June 30th, 2014 was $220 million unchanged since December 31st, 2013.

As many of you are aware and Rob mentioned on July 30th we entered into an agreement to acquire Liberty's Provide Commerce floral and gifting businesses. Under the terms of the agreement Provide Commerce will become a wholly-owned subsidiary of FTD. The transaction is valued at $430 million comprising 10.2 million shares of FTD common stock and $121 million in cash.

Upon closing, FTD will have approximately 29.2 million outstanding and Liberty will own approximately 35% of the FTD shares outstanding.

As previously discussed in March of this year, FTD's Board of Directors authorized a two-year $50 million share repurchase program. As we have been in negotiations for the Provide Commence acquisition, we have not purchased any shares to-date.

Along those lines, our Board and management continually affect the best use of capital and we're mindful of the interest of our shareholders in making those decisions. We're focused on our objective of delivering attractive returns to our shareholders over the long-term and we continue to believe FTD is well-positioned to pursue future organic and inorganic growth opportunities that support that objective and that the share repurchase program provides us with additional flexibility in that regard.

And now turning to our annual outlook for 2014. Our outlook remains consistent with the guidance we provided on July 30th. Our outlook includes consolidated revenues of $640 million to $650 million, net income of $16.6 million to $20.6 million, adjusted net income of $40.8 million to $43.3 million, adjusted EBITDA of $81 million to $85 million, and capital expenditures of approximately $10 million.

Our full year effective tax rate is expected to approximately 42% impacted by non-deductible cost related to the planned acquisition of Provide Commerce. Such cost impacts the rates by approximately six percentage points.

Please be mindful that our guidance does not include the impact of Provide -- planned acquisition of Provide Commerce, but does reflect an estimated $13 million to $15 million of transaction related cost.

Our guidance also includes 2014 standalone public company cost and incremental compensation cost for the management team and employees as we align compensation as a standalone public company.

That concludes our financial overview. I will now turn the call back to Rob for a few closing remarks.

Robert Apatoff

Thanks Becky. We believe our strong balance sheet and our unique business model will enable to continue to generate consistent cash flows and will provide us with the financial flexibility to fuel our future growth in the U.S. and the U.K.

Going forward, our management team will be focused on our efforts to move towards closing our acquisition of Provide Commerce and we remain intently focused on managing the control ballistics of our business as we pursue growth opportunities to deliver strong financial performance and enhance shareholder value long-term.

That concludes our prepared remarks. We're now available for your questions. Operator?

Question-and-Answer Session


Thank you. We will now be conducting a question-and-answer session. (Operator Instructions)

Thank you. Our first question comes from the line of Jim Chartier with Monness, Crespi, Hardt. Please proceed with your question.

Jim Chartier - Monness, Crespi, Hardt & Co.

Hi, good evening.

Becky Sheehan

Hi Jim.

Robert Apatoff

Hey Jim.

Jim Chartier - Monness, Crespi, Hardt & Co.

Hi. Just wanted to kind of get some more color on kind of sales guidance for the year. So, your annual guidance now implies an acceleration to kind of 4% or 5% sales growth in the back half of this year, which is a decent acceleration from the first half. So, what gives you guys the comfort that you guys can achieve that?

Robert Apatoff

Well, I think part of it I line in my speech, we kind of laid out six of key prongs that we're doing -- that we're really focused on. One is the kind of targeted the marketing programs and the expansion in our partnership programs this year, we have launched some new and existing program, simply partners because new multi-plates -- whenever our sympathy partners that we're seeing great promise in that's going from testing to full deployment.

Second, we're looking at an increase on (minute) [ph] spend to identify and target new customers in the U.S. and the U.K. We're spending -- launching a new program for instance in the U.K. which is centered one of the most popular programs and in the U.S.; we're driving new programs in display. I know there are online vehicles that we have not -- did not go after in the first half of the year.

We talked about new programs to our existing customer base. We have improved segmentation initiatives, we feel launching email and -- in our email marketing campaigns and we also have programs to drive quicker penetration of our gold loyalty program and with that program, comes a much higher order for customer realization.

We talked about -- Jim, we talked about other market merchandising enhancements, expansion of our order upgrade path which drove AOBs and the are just some of the -- there are six of my listed, there's more than that, but those kind of key factors that we see driving the business.

Jim Chartier - Monness, Crespi, Hardt & Co.

And how has the business performed outside of Mother's Day and Easter, it seems like you guys are sacrificing some sales to maintain margins. Are you -- is the sales trend better outside of these major holidays and just lack of major holiday help you in the back half of the year?

Becky Sheehan

We certainly have found that at the major holidays and I think we said that on our last quarter call as well that the -- that competitive environment makes it certainly more challenging to compete and participate. So, we do see that in the major holiday timeframe, our business tends to be more challenged or has been certainly this year.

Jim Chartier - Monness, Crespi, Hardt & Co.

So, as the business performed better outside of those holidays and again is--

Becky Sheehan


Jim Chartier - Monness, Crespi, Hardt & Co.

Most visible--

Becky Sheehan

Yeah. So, Jim I'm sorry, didn’t mean to interrupt. I mean the direct answer is yes. The business has performed better than outside of the key holidays that enhanced during those key holiday period.

Jim Chartier - Monness, Crespi, Hardt & Co.

And did you guy see any improvement in sales trend over the course of second quarter that also could give confidence in the outlook for the back half.

Becky Sheehan

I think the confidence that we have in the back half is that we've got new initiatives and new programs that we didn’t have in the first half and those are really important to us. Part of it is that being certainly our programs, our marketing spend, like we've adapted in the past to affectively compete in the marketplace and that's where we're comfortable with our guidance and obviously, we believe in the plans which is why we have them in place and why we intend to continue to execute the ones that Rob laid out.

Jim Chartier - Monness, Crespi, Hardt & Co.

Okay. And then how do you guys feel about additional acquisitions going forward. There's the acquisition of Provide and Excise preclude you from doing additional acquisitions in the near future?

Robert Apatoff

No, first and most, we're focused on Provide Commerce integration. It does not preclude us from doing other acquisitions that we really feel they are the right strategic fit. They presented to us all the time, we look -- and we’re constantly looking, but right now we're focused on Provide Commerce. If something else comes around, is a terrific fit for us, we have the flexibility to do something about it.

Jim Chartier - Monness, Crespi, Hardt & Co.

Okay. And then finally, in your slide presentation announcing the Provide acquisition you guys mentioned at the deal would be accretive to 2015 EPS and you also implied in the numbers of about $32 million LTM EBITDA for the business. Could you make it accretive in 2015, by my math I estimated about $41 million or $42 million of EBITDA from Provide, the question one is that number in the ballpark?

And then are there any kind of unusual items in that $32 million of EBITDA that helps kind of bridge the gap?

Becky Sheehan

Yeah. It’s a great question. I would say that there's probably a couple of things that I would call a bit unusual in the LTM period for the Provide business. Certainly, first quarter storm passed, it had a significant impact on them and you would have seen in our PowerPoint presentation that you're referencing. We did make an adjustment of approximately $7.6mi to their reported EBITDA related to that storm.

I think that when their results were actually reported by Liberty, the ad-back was closer to $13 million and so that's obviously an important factor that impacted them in the first quarter.

The other thing is in the LTM period, there is not an Easter period and with their gifting business, Easter is an important holiday. It certainly contributes more than in everyday period, that's missing in the LTM period.

And then the last thing that I would probably point to as well is, they have a great personalization business that they moved to a new facility over the course of last year -- it was late last year.

And as you might imagine, when you move operations there's always some incremental cost associated with that move. You don’t do that every year. They certainly, I don’t think, plan to do that again anytime soon. But those costs, obviously being one-time in nature, wouldn’t repeat themselves going forward. There was no add back in the results for that move cost.

So those are some unusual factors that I would say are in the LCM. It certainly help bridge to a higher number as you look forward.

Jim Chartier - Monness, Crespi, Hardt & Co.

Great. That’s very helpful. Thanks and best of luck.

Robert Apatoff

Thank you.

Becky Sheehan

Thank you.


Thank you. Our next question comes from the line of Ned Davis with William Smith & Co. Please proceed with your question.

Ned Davis - William Smith & Co.

Yes, good evening. I'm wondering -- I want to get little more clarity, post the acquisition what the role of our Florist network is going to be? And specifically, are you telling them that they will see incremental delivery volume and marginal profit for them?

And secondly, have you been able to assess how they view the deal? I mean, you are adding $600 million in annual revenue and admittedly a lot of it is not products of their delivery. But how do they view this deal as affecting the value of being an FTD member?

Robert Apatoff

Great questions. And I think these sums up as my letter to the florists that I send off the day of the -- that we announced the acquisition. And this company is founded 104 years ago by florist -- actually florist and John Valentine which is ironic. But we are rooted in the Florist business. The florists are the backbone of our company. They -- and the industry and they will remain so.

We made it very clear to the florists, while everybody clamors for same day delivery. We've had same day delivery for decades. So the florists -- we were very clear to them that this, we believe, will be a great thing for them. Clearly, we are -- will become a much bigger company.

We believe we'll be able to drive many more orders into the Florist business and hopefully give them additional options of gifting and some of the other businesses that we will be involved in to allow them to be a much more competitive in their local marketplace.

We're also going to be using some of our resources to drive co-op advertising for them and help them compete in their local markets as well as hopefully use some of our ability to buy floral product and containers and at less expensive numbers than they’ve been paying in the past.

There is also technology enhancements. Between the two companies we have great best-in-class technology which we will be able to work with them to provide new options for them to help them better compete in the local marketplace as well.

So when you combine everything from the standpoint of -- you now -- you have a friend in the floral business that just got a lot bigger and is going to offer them more and more options and more solutions for their local businesses. So I think it’s a win-win.

Ned Davis - William Smith & Co.

So pardon my naivety on this, but if somebody goes online and on the ProFlowers' site and puts in an order and companies are combined, you have an optimization way of distributing that either to florists or you do a wholesale -- some kind of wholesale player and he drops it. Has that kind of changed or in other words, if I'm an FTD florist will I get designated to deliver a ProFlowers order?

Robert Apatoff

Well, the sites will be -- remain separate. They -- we both are great brands. Clearly, we see this as -- they have an existing Florist business which is called FloristExpress which is still by another larger service. These are all things we're assessing during integration. But those are things that we will be laying out very clearly for the florists in the future.

Ned Davis - William Smith & Co.

And then just related to the earlier question about acquisition, I mean, your company prior to sell-off on having this kind of negative working capital and for the most part not really having -- carrying any kind of inventory, the receivables. And their model is somewhat different.

But I'm just wondering when all those kind of sorts out, I know that your CapEx were higher -- relatively high compared to yours also, it's almost twice yours but about roughly the same priced company.

Do you see your financial model having to change significantly, where you going to be carrying a lot more inventory, you're going to be more like a conventional marketer of products, more like some of the other players in the gift and floral industry?

Are you going to try to maintain this kind of disciplined high rate of return financial strategy for the combined business? You know that’s a loaded question -- add more color…

Becky Sheehan

Yeah. No, it’s a loaded question, but thanks for asking it Ned. So, I will tell you that as we move forward our intention is to continue to be a very disciplined management team with operating strategies that follow those kinds of discipline. As you said they have a different business model than we do.

But as you might also appreciate with perishable products, flowers and perishable gift items, you don’t inventory those for long periods of time. I know that’s obvious. But it's not like you stack your warehouse with lots of berries or lots of flowers and therefore make significant investments in that regard.

So we will continue to move forward. There is a lot of work to do when we go through the merger integration planning, exercise. But I will tell you that our intent is to remain very disciplined as we have been running the historical FTD business.

Ned Davis - William Smith & Co.

One little housekeeping thing. Thank you for that answer. One little housekeeping. The tax rates are little strange. I understand the reason why. What in fact will be your probable cash taxes in -- with regard to your guidance? Maybe I could figure it out from the -- just from the figures that were given out. But maybe you can just tell what's your cash taxes would be for the year if you hit the midrange of the guidance?

Becky Sheehan

So what we've said and -- what I said earlier in the comments is -- although you are right, that tax rate looks a bit goofy, we're estimating the full year effective rate to be at about 42%, that’s largely driven by these non-deductible transaction related expenses. A more normalized tax rate would be at 36% based on our current estimates. So that would be a good number to use…

Ned Davis - William Smith & Co.

And that’s a worldwide tax rate or U.S., Britain et cetera. Okay, go ahead.

Becky Sheehan

No, that’s right. So 36% is sort of a normalized rate that you should use for 2014, excluding those transaction costs.

Ned Davis - William Smith & Co.

And that would be a cash tax -- that would be approximately the cash paid tax rate, if you will, which you actually have to send out to the IRS or the British revenue -- that’s cash taxes?

Becky Sheehan

Yeah, it should get us close. Well, I have to go back and look, should stay for sure. But that should get us close.

Ned Davis - William Smith & Co.

Finally, with respect to the deal related expenses, I know you know the proxies would be coming out, but are most of the deal related expenses now behind you?

Becky Sheehan

No, actually most of the deal related -- if you are talking about the deal related to the acquisition of Provide Commerce?

Ned Davis - William Smith & Co.

Yes, yeah. The stuff that is sort of filing up the tax rate among other things, right? Some of that is in the second quarter, right?

Becky Sheehan

Some of that is in the second quarter. We've incurred $1.7 million of those costs in the second quarter. We actually -- the majority of those that are yet to come. So there is much more to be done with respect to the proxy and the other work leading up to, obviously, the regulatory approval, then the shareholder approval. So the forecasted costs are in the $13 million to $15 million range.

Ned Davis - William Smith & Co.

And if I can read between the lines of your comments about the share buyback being kind of suspended, which has had because of the new [transaction] (ph). Should we make the assumption that until this transaction closes you probably just going to not do share buyback or can you really comment on that?

Becky Sheehan

Well, we still have the $50 million two-year repurchase program in place. As we said and as you just obviously noted, we did not buyback any shares while were in the midst of negotiations on this transaction.

So the plan remains in place. Management and the Board will continue to assess when initially it’s a good time to buy back shares and that’s what we intend to do.

Robert Apatoff


Ned Davis - William Smith & Co.

And one last, have there been any key executive departures that the target that you are aware of?

Robert Apatoff

No there is not.

Ned Davis - William Smith & Co.

Okay. Thank you. Thank you very much.

Robert Apatoff

Thank you.


Thank you. There are no further questions in queue at this time. I would like to turn the floor back over to management for closing remarks.

Robert Apatoff

Thanks operator. We appreciate all your interest in FTD. Thanks again for joining us this afternoon. Take care.


Thank you. This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.

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