Metro's (MTRAF) CEO Eric La Fleche on Q2 2016 Results - Earnings Call Transcript

| About: Metro, Inc.A (MTRAF)

Metro, Inc.A (OTCPK:MTRAF) Q2 2016 Earnings Conference Call April 20, 2016 10:00 AM ET

Executives

Roberto Sbrugnera - VP Treasury, Risk & IR

Eric La Fleche - President & CEO

Francois Thibault - EVP & CFO

Analysts

Michael Van Aelst - TD Securities

Mark Petrie - CIBC

Peter Sklar - BMO Capital Market

Vishal Shreedhar - National Bank

Jim Durran - Barclays

David Hartley - Credit Suisse

Keith Howlett - Desjardins

Operator

Good morning. My name is Jessa, and I will be a conference operator today. At this time I would like to welcome everyone to the Metro Inc. 2016 Second Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question and answer session. [Operator Instructions]. Thank you. Mr. Roberto Sbrugnera, Vice President- Treasury, Risk and Investor Relations, you may begin your conference.

Roberto Sbrugnera

Thank you, Jessa. Good morning everyone and thank for joining us today. Our comment today will focus on the financial results of Metro second quarter which ended March 12, 2016. Joining me today is Eric La Fleche, President and Chief Executive Officer, and Mr. Francois Thibault, Executive Vice President and Chief Financial Officer.

During this call we will present our second quarter financial results and comment on second quarter highlights. We will then be happy to answer your questions.

Before we begin, I would like to remind you that we will use in today's discussion different statements that could be construed as being forward-looking information. In general, any statement which does not constitute a historical fact may be deemed a forward-looking statement. Expressions such as expect, intend, or are confident that, will, and other similar expressions are generally indicative of forward-looking statements.

The forward-looking statements are based upon certain assumptions regarding the Canadian food industry, the general economy and our annual budget, as well as our 2015-2016 action plan.

These forward-looking statements do not provide any guarantees as to the future performance of the Company and are subject to potential risks, known and unknown, as well as uncertainties that could cause the outcome to differ significantly.

A description of the risks which could have an impact on these statements can be found under the Risk Management section of our 2015 Annual Report. We believe these statements to be reasonable and pertinent at this time and represent our expectations. The Company does not intend to update any forward-looking statements except as required by applicable law.

I would now like to turn the call to Francois.

Francois Thibault

Thanks, Roberto, and good morning to all. Sales for the second quarter totaled CAD2.88 billion, an increase of 6.5% versus Q2 last year, and same-store sales continue to trend positively as well, coming in at plus 5% for the quarter, while our internal measured food basket inflation was 3%.

EBITDA in Q2, 2016 totaled $202 million, or 7% of sales, and it's up 10.5% from CAD182.8 million or 6.8% sales for the same quarter last year. Our gross margin in Q2 of this year was 19.9%, flat versus the same quarter last year. We continue to benefit from operational leverage with operating expenses at 12.9% of sales in this quarter compared to 13.1% for the same quarter last year.

Our share of earnings for our investment in Alimentation Couche-Tard was CAD21.2 million in the second quarter versus CAD16.3 million for the corresponding quarter of 2015. Second quarter, 2016 income tax expense of CAD41.4 million represented an effective tax rate of 24.9% compared with 2015 second quarter tax expense of CAD34.1 million for an effective tax rate of 23.4%. I'll remind you that the effective tax rate last year was lower than usual as we benefited from some positive outcome on few tax files.

The current effective tax rate is more in line with the statutory tax rate adjusted for Alimentation Couche-Tard. So, net earnings for the second quarter were CAD124.9 million, an increase of 11.9% versus CAD111.6 million net earnings for the same quarter last year. Q2, 2016 fully diluted net earnings per share rose 18.6% to CAD0.51 from CAD0.43 last year.

Under the normal course issuer bid program, the Corporation may repurchase up to CAD18 million of its common shares between September 10, 2015 and September 9, 2016. As at April 11, 2016, we've repurchased 7.4 million shares for total consideration of 272.5 million representing an average of CAD36.94 a share.

Yesterday the Board of Directors approved a dividend of CAD0.14 a share, that's a 20% increase from last year and we'll remain committed to growing our dividend as we have over the past 22 consecutive years.

This concludes my comments. I would now like to turn it over to Eric La Fleche. Thank you very much.

Eric La Fleche

Thank you, Francois and good morning everyone. Following a good start in the first quarter Metro continue to deliver strong operating results in the second quarter. Effective merchandising strategies, solid execution and our consistent investments in our network produced our highest same-store sales in years at 5% especially coming on top of a strong quarter last year with comp sales of 4.5%.

Strong topline growth and good cost control resulted in operating leverage to drive strong net earnings growth. Customer account, average basket and overall tonnage increased in the quarter. Inflation increased slightly from the previous quarter due mostly to higher inflation in fruits and vegetables and a bit in meat products.

We anticipate inflation to lessen in the coming quarters as we will cycle a weaker Canadian dollar last year and start purchasing more fresh products locally. Our capital plan remains on track. For the first 24 weeks the company and its retailers open three new stores and carried out major renovations and expansions on 14 stores for a gross expansion of 151, 000 square feet and a net increase of 42,000 square feet or 0.2% net of store closures.

Première Moisson recently opened its first store outside of Montréal and Québec City. We are very happy with the results so far and the strong opening bodes well for the future expansion of Première Moisson. Adonis is also performing well in both Québec and Ontario and we'll be opening its 11 store this summer in Downtown Montréal.

In closing, while we expect the market to remain very competitive, we are well-positioned with our multiple formats, high market share in both of our markets and a strong balance sheet.

I'm confident that executing our business plan will continue to deliver value to both our customers and our shareholders.

So this concludes my comments. I would be happy to take your questions.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Irene Nattel from RBC Capital. Please go ahead. Ms. Nattel, please go ahead. Your next question comes from the line of Michael Van Aelst from TD Securities. Please go ahead.

Michael Van Aelst

Thank you. I guess I'd like to start on the strong same-store sales. I'm assuming this comes from a lot of your CapEx programs that you put in place. Can you talk a little bit about the effect on gross margin and whether you're getting some temporarily higher shrink initially with following the [renos] and the shift in the mix and what is the outlook for that?

Eric La Fleche

Well, first I'll comment, the same-store sales are quite strong. I'm very happy with that. I think our merchandizing in both markets -- in both banners and both markets was effective. So we're gaining customer account. We're seeing higher traffic in our stores, slightly higher basket. So we're happy with our performance. I think the team has done a great job, executing better and better at store level. So that's giving us good traction.

The gross margin number is I think is strong number. We're happy with the level of our gross margin especially with this sales level. So, we're fine with that mix. In terms of shrink, no news to report, no big change there. There is always room to improve, but we're about the same as the previous quarter. When we renovate a store, Metro Store, the wild concept and ad services and more assortment, yes that can cause short-term shrink, but we're managing that well and I think happy with the results.

Michael Van Aelst

Can you talk about the CapEx, I think it was up 60% in the first half of the year and I had assumed that mean you're on track to hit something close to the 350 target. But can you provide more color where the bulk of that money or where the major new projects are brought geographically and the type of projects that you're working on, is it mostly wow or is other..?

Francois Thibault

It's about equal between regions maybe a little more in Ontario these days, but not that much more. On the conventional side we're focused on renovations and expansions and improving the Metro offer with some wild stores. And on the discount side it's mostly renovations, and in the case of Super C, a few relocations and a few new one.

So, the mix is pretty even between the provinces. And on the conventional side it's more skewed towards renovations. Then on the discount side, little more skewed towards new stores on top of renovations. So yes, we're on track, 300 to 350 is the right number. More and more stores are planned for the back half with the warmer weather. So there is work in progress and we expect to be on track.

Michael Van Aelst

And can you just tell us where we are in terms of number of wild stores in Ontario and Québec?

Eric La Fleche

I don't have the exact number. It's over 20 stores in counting, so in Ontario I would say we have close to 10 stores that we would qualify. Is that the latest ones are all in a GTA, Yonge & Eglinton, Bayview and Front Street and Humber Park, so there is more of those coming and in Québec we've on track to deliver more wild stores.

Michael Van Aelst

Yes. I may try and squeeze one more question. Just on the eCommerce initiative, can you provide us an update if it all and how we should think about the related expense and when that ramp up?

Eric La Fleche

We're still working on the pilot and preparing for something later this year, so I'll keep my comments at that. There's a bit of expenses in our numbers today to prepare for that as we build the infrastructure and have a small team dedicated to it. So, overall throughout the year it might increase a bit towards the end of the year, but it's not going to be material.

Michael Van Aelst

Thank you.

Operator

Your next question comes from the line of Mark Petrie from CIBC. Please go ahead.

Mark Petrie

Hi. Good morning. I wanted to ask about the Québec market and obviously discount has been a greater focus particularly with 60% of rollout, obviously you've got a lot of levers to pull there. But how do you feel about your mix in terms of promotion and sales coming of the flyer in discount and conventional?

Francois Thibault

We feel pretty good about that. I think both Metro and Super C have effective merchandizing programs. Good programs in both banners to save money everyday, different types of programs, but had a strong promotional flyer for both banners that's heavily focused on fresh. So we compete. We do our own thing and overall conventional and discount is growing nicely. So yes, the Super Center rollout continues. It has an impact, but we're well-positioned with both of our banners to compete.

Mark Petrie

And I guess more broadly speaking here, are you seeing any change in consumer behavior as a result, presumably as a result of the inflation we've been seeing for a while now that would lead you to potentially alter your traffics in terms of promotional ways et cetera?

Eric La Fleche

Well, for sure inflation pressure makes the challenge to offer customers great value, so we make a lot of effort in both of our banners to offer great value to our customers every week, so we have to find the right items that will deliver that value while giving us sales and margins that we aim for. So far I think we've been able to do that. So we've been passing through inflation while offering good value and that's reflected I think in our higher traffic, in our higher sales. So, generally I'm pleased with that.

Mark Petrie

Okay. And then just lastly in terms of the inflation number, I mean, you talked about expecting to slow down a little bit, could you just talk about the trend on Center Store inflation, and whether that's picking up?

Eric La Fleche

Yes. We've seen some pickup in some of our costs, so we are passing that on as the market allows, while remaining very competitive. So it's something our teams put a lot of effort into, so we got to deliver value to our consumers and be competitive. So, there's a bit of an inflation pressure on the CPG side, and so some of it that gets passed through. Some of it not and some of it slower and we got to put in all the promotional mix. So, I think the guys done a good job to handle and deliver the numbers we got.

Mark Petrie

Okay. Thank you very much.

Eric La Fleche

Thank you.

Operator

Your next question comes from the line Peter Sklar from BMO Capital Market. Please go ahead.

Peter Sklar

Thank you. Eric, can you talk about the level of promotional intensity you're seeing in terms of competitive backdrop. Is it stable, worse, better, where is it falling out?

Eric La Fleche

I think it was generally stable quarter over quarter. There is always a skirmish in certain areas that can happen, recently I think meat pricing is quite aggressive given the cost of that commodity these days. So, it’s a competitive market. As I said in my closing comments, it’s very competitive out there. Competitors are not inactive and we have to stay on top of our toe. So, promotional activity remains the same. The weights and the penetration of our promotional activity remains about the same. It’s high. Promotional sales are in the 60% range and that’s been like that for a while and we don’t see that changing for a while. Again, it’s…

Peter Sklar

When you say 50% range, is that center of the store or total store?

Eric La Fleche

Total store.

Peter Sklar

Yes. And just the other question I want to ask. On this new -- that IGA has done in Québec, which has got a lot of publicity lowering the shelf price. Is that a strategy that Metro’s ever considered going back to your suppliers and my understanding is negotiating the trade dollars so that they are offering you a lower net price as supposed to these big bucket trade dollars? So, I’m just -- is that’s ever something that you’ve thought about.

Eric La Fleche

Well, we have good relations with our suppliers in certain categories. Negotiations vary by supplier and by category. So, I won’t divulge any big secrets. I will just say that we have our own merchandising programs and our own strategies and we think they are effective. There are several programs in the Metro banner to deliver good value every day. We have a strong promotional flair. We did reduce prices in the fall on certain grocery items in our Metro banner in Québec, to close the gap a bit with discounts. So, we’ve been doing some of that. But we are not focused on our own things. So this new program -- it’s out there. We are obviously going to analyze it. If certain adjustments need to be made, we will make them but we will not change our strategy and we will keep sticking with our guns and our program.

Peter Sklar

Okay. Thanks very much.

Operator

Your next question comes from the line of Vishal Shreedhar from National Bank. Please go ahead.

Vishal Shreedhar

Hi. Thanks for taking my questions and congrats on the sales line. Just -- and I think you alluded to this but just on the balance between sales growth and gross margin percentage, are you pleased with that or would you have preferred it to be a little bit of mixed bag into the margin percentage?

Eric La Fleche

Well, we try to deliver dollars of gross margin and profits at the end of the day. So the 19.9% or 20% gross margin with 5% same-stores sales, we will take that every day. Can we achieve that every day? It’s a good mix this quarter and we are very pleased with that. And it’s about dollars and gross dollar margins growth and we are seeing nice growth from Metro and good expense controls, so pleased with those results.

Vishal Shreedhar

Okay. And just on the back of that question, the results that you are seeing, that 5% obviously is an unusual result given the backdrop unusually strong. Is that more of a function of Metro’s merchandising programs, which has picked up or is it transient competitor weakness? I guess another way to ask this question, what I’m trying to get at is this benefit that we are seeing ex-inflation is that sustainable for at least a few quarters or was it transient.

Eric La Fleche

It was a quite strong quarter and I don’t have a crystal ball going forward and I’m not going to give you guidance. I don’t think it’s a one quarter wonder. We’ve had steady same-store sales growth for several quarters now. I think we have good momentum in the business in both markets and I think we can sustain that. We feel confident in our merchandising ability, in our store execution. Ontario is certainly doing better than it was. So, we are confident that we can have good success.

That being said, inflation, we expect to come off a bit so that will have -- could have an impact on the topline and on same-store sales. So the fact that the industry’s square footage has moderated quite a bit in the last year is also a positive factor and we will see how that evolves going forward. As far as we can see, total industry square footage should still be moderate growth. So, we should be able to continue to perform well.

Vishal Shreedhar

Okay. And just on the buyback, it was a tad lighter than I would have expected particularly given the solid quarter. Just any thoughts on why the buyback might have been a bit lighter this quarter and if there is plans to get more aggressive?

Eric La Fleche

I will let Francois answer that.

Francois Thibault

So, we did do quite a bit in the Q1, so we were already over 6 million of share buybacks in Q1 and last year, we did 12 million. And then in Q2, the stock performed very well and we typically do not chase it as it’s rallying strongly. But in recent weeks after the end of the Q2, we repurchased just over a billion shares. So, right now we are at 7.4 and I feel we are quite on track given past experience. So that’s why there could be some ups and downs in terms of the overall activity but overall we maintain the repurchases.

Vishal Shreedhar

Okay. And maybe just one quick last one. Typically, I don’t think you give color on this. But I think just given the unusual comp, it’s worth asking the strength that you are seeing in the comp is that discount of conventional Québec or Ontario?

Eric La Fleche

Well, again, we don’t give you banner or even promise. Both markets were up and both provinces contributed. I will leave it at that.

Vishal Shreedhar

Thanks.

Eric La Fleche

Thank you.

Operator

Your next question comes from the line of Jim Durran from Barclays. Please go ahead.

Jim Durran

Good morning. Just on the SG& line, I mean the inflation year-over-year over the last two quarters has been reasonably high. You alluded to the fact that some of the expense left might be attributable to the ecom prep. Are there any other factors we should be aware of that, that are causing the SG&A to look so strongly?

Eric La Fleche

Well, volume is up quite strongly. I think that’s the main factor and with that comes store labor, more trucks on the road, more cases shipped from the warehouse. So, I think we’ve done a great job of controlling our costs. If you look at our expense as a percentage of sales, it’s come down 20 bps. So, I think that’s a good performance and anytime we get operating leverage as we should with this kind of growth of sales, I think we are doing the right thing.

Jim Durran

Okay. And I mean, we are all, I know are focused on sales line because it’s such an impressive comp result but I haven’t heard you use the word excellent quarter in a long time. Was there any dynamics in the quarter that caused things to sort of kick into a new gear, or was there some changes in terms of the competitive landscape that might have helped out?

Eric La Fleche

It was excellent in many respects. So, yes, I don’t like to blow the whistle too hard but it was an excellent quarter. So why not say it.

Jim Durran

And I would never deny you that opportunity but from an inflection standpoint like normally when you deliver a strong quarter, you call it a good quarter. This has got more of an inflection tone to it. So, I’m just wondering why you felt that this quarter might have been better than some of the past quarters.

Eric La Fleche

I don’t know if it was -- and again, as I said both markets contributed. We are seeing good traction in both of our markets. We are gaining a bit of share in both of our markets. So in that sense it’s very good on top of the fact that we were comping a strong quarter last year. So the teams did a very good job. Every time you cycle a strong quarter that increases anxiety and we delivered so that’s why.

Jim Durran

And have you heard any update on the Québec government’s plan with respect to drug pricing both rebates and tendering?

Eric La Fleche

So the government announced last week the professional rebates from generic companies directly to pharmacists that were proposed to be uncapped will remain capped for the nine months and then be uncapped. So there is a little more clarity on the professional rebates going to pharmacists. There is still -- we are still waiting for news on the exclusive distribution or call for tender exclusive distribution that the government is proposing.

So there was a parliamentary commission on that. We don’t think it’s the right way to go. We don’t think it will save the government money but we are still waiting for by-laws and regulations to see what will come at that. So the precisions or whatever announcements that were made last week do not have an impact on us directly. It has an impact on pharmacists and I can’t really comment for them.

Jim Durran

And any idea why the government decided to renege on removing this rebates feeling completely?

Eric La Fleche

Well, I think you would have to ask the government but the code I read is that they decided to do that because of the other Bill 81, which they are thinking of doing call for tenders for molecules. But again, the government does not come out with rules or how that could work or will work. So, I think they are looking both the rebates and the call for tenders until the call for tender’s portion that gets more clarity that’s why they left to cap on it. That’s my understanding but again, you would have to ask them.

Jim Durran

And does any of this change your interest in having a bigger presence in pharmacy?

Eric La Fleche

We remain interested in the pharmacy sector. We still like that industry. It’s a regulated industry in the sense that there are sometimes so much uncertainty but we like the long-term growth profile of that industry. No, it doesn’t change our level but we watch it closely.

Jim Durran

Okay. Thank you.

Operator

Your next question comes from the line of David Hartley from Credit Suisse. Please go ahead.

Daniel Battiston

Hi. This is Daniel Battiston on for David Hartley here. And just back on the questions about topline and margin impact. Just in terms of the conversion of your Metro conventional stores to Food Basics stores, has there been any impact on that in terms of -- on the sales or margin impact due to the shift?

Eric La Fleche

Well, we typically do one conversion or two conversions in any given year. So, no, I don’t think that’s had a major impact but we are happy with the recent conversions. We did one in Hamilton last year that is giving us good results but it is overall doesn't affect the numbers. It contributes but doesn’t really change the big picture.

Daniel Battiston

Okay. Thank you.

Operator

Your next question comes from the line of Keith Howlett from Desjardins. Please go ahead.

Keith Howlett

Yes. So, I was wondering how your private label sales are trending and whether there as inflation is in the centre of store, whether you are getting an increase in private label sales or in a proportion of private label sales?

Eric La Fleche

Yes, we are. Private label sales are growing very nicely. Again, in a context of inflation and customers searching for value that typically favors private label and we are seeing that clearly in all of our banners. We see private label up over performing, so very pleased with that.

Keith Howlett

And then in terms of the mix of sales between the Fresh, Gourmet or in the centre of store, does the sales growth remain higher on the parameter, or is it sort of balanced?

Eric La Fleche

Well, it’s still growing more on the Fresh side. There has been a bit of more inflation, obviously in produce last couple of quarters so that helps the dollars and there is also tonnage. We are seeing tonnage go up in Fresh. I think with merchandising, effective merchandising, I think we are seeing higher Fresh tonnage. But centre store growth is stabilizing. We are not seeing losses in centre stores. We are seeing decent performances in centre store too.

Keith Howlett

And then just on -- I just want to make sure I heard correctly. It’s about 50% of sales are related to promotion.

Eric La Fleche

When we say that number, I should give you a little more precision. It’s obviously the weekly flyer that’s in that number but we also have long-term lockdowns in EoDTS, rotating EoDTS, four weeks, eight weeks, 12 weeks. All of that is considered “promo”. I’m not talking about the weekly flyer promo at 50%. That’s not what I meant. All of our different programs amount to about 50% of our sales, which has typically been the case for quite a while.

Keith Howlett

And I don’t expect that you wish to break this down but I’m sort of presuming that I could be wrong but the percentage on promotion in conventional is higher than in discount or is it not very much?

Eric La Fleche

Well, I don’t want to go there.

Keith Howlett

Okay. And just on the price spread in Québec bit so lease as indicated, I guess they believe the consumer perceives the price gap between discount and conventional to be higher than it really is. I guess I presume you don’t believe they don’t believe they do have that perception I guess. But what’s your view of what the consumer thinks the price gap is between conventional and discount and what is the gap actually?

Eric La Fleche

I won’t comment on our competitor’s strategy but we, again, as I said earlier we need to be competitive in both of our formats. There is a price gap between Metro and Super C or Metro and Food Basics because it’s not the same offering. It’s not the same concept. It’s not the same service. So there needs to be a price gap. That said it needs to be in the right space. So, we have been reducing the price gap over time as we take ourselves of the business, we can reduce that price gap while offering great offering to our customer.

So, I’m not going to give you a precise number but it’s something we manage very closely so that the conventional pricing has not had a whack. It needs to be competitive. So, we -- I said earlier, reduce some prices in certain grocery products, centre store products in the fall exactly with that in mind on essentials and people that -- items that people put in their baskets every weekly. You’ve got to be close to the discount price. It’s the “market price”. So even if you are a conventional store you need to be at the good price or very close to it and that’s what we try to do. I don’t know if that helps.

Keith Howlett

No. That’s very helpful. Thanks very much and just on the capital spending for the year. How much are the affiliate -- I always get a little confused on this. How much are the affiliate dealers spending and how much is the company’s spending?

Eric La Fleche

Well, when we say we are going to spend $300 million to $350 million companywide that includes warehouses, IT, all sorts of other projects in addition to the retail stores and our affiliates will typically spend around $30 million to $40 million a year in CapEx in our retail network. So, most of our spending corporate goes to the network and we have to add to that some -- the money I just mentioned for the affiliates. It all adds up in the retail network to around $300 million bucks.

Keith Howlett

Great. Thank you.

Eric La Fleche

Thank you.

Operator

[Operator Instructions] Your next question comes from the line of Irene Nattel from RBC Capital. Please go ahead.

Irene Nattel

Thanks and good morning. Sorry about that. My nose got a little bit stuck. Just coming back to the fall issue, the drivers of the same-store sales. You’ve had the fraction issue there. You had the initiatives in terms of the in-stock and the value proposition or promise to consumers in both Québec and Ontario. Are those still the key initiatives that in your view are driving the strong same-store sales, or are there others that you have added that we may not be aware of?

Eric La Fleche

Well, I think Fresh is a key strategy for us in all of our banners. So, I think it’s a key driver of traffic, which is in itself the key driver of same-store sales. Effective merchandising strategies in our promotional flyer every week is a key driver of same-store sales, strong execution at store level and customer satisfaction, which is something we’ve really worked hard at, build same-store sales momentum over time. So it’s not just one thing. It is several things that helped. The industry square footage is also a factor. One of our competitors has been reducing square footage over the past few quarters. That’s helped us little bit. No question about that. But I think it’s mostly effective merchandising and stores execution.

Irene Nattel

And that was going to be my next question about [Indiscernible] in Québec, so presumably that’s helping at the margin as well.

Eric La Fleche

It is. It’s not just our same-store sales number.

Irene Nattel

Yes.

Eric La Fleche

It’s a combination of them.

Irene Nattel

And one of the things that we haven’t really talked about again on the call is Metro and so was Dunnhumby. Are you continuing to see the benefits of the some of the data mining that you are doing there in terms of dropping you basket by?

Eric La Fleche

Yes. We work hard with Dunnhumby, the Metro merchandises in Dunnhumby to do exactly that to the price sensitive customer, the up-market customers, so assortment pricing promotion, all that is continuous effort. So with the data, the insights and working with our suppliers, we are trying to provide value to our customers. So that’s also a contributing factor. And it’s a continuing work in progress. We try to focus the efforts of Dunnhumby successfully, so it’s helping.

Irene Nattel

That’s great. Thank you.

Eric La Fleche

Thank you.

Operator

There are no further questions at this time. I turn the call back over to the presenters.

Eric La Fleche

Okay. Thank you. So, thanks for having join us today. Our third quarter conference call will be held on August 12th of 2016. Thank you.

Operator

This concludes today's conference call. You may now disconnect.

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