B&G Foods' CEO Presents at Barclays Back-to-School Conference (Transcript)

Sep. 6.12 | About: B&G Foods, (BGS)

B&G Foods, Inc. (NYSE:BGS)

Barclays Back-to-School Conference Call

September 06, 2012 09:45 AM ET


Dave Wenner – President and CEO

Bob Cantwell – EVP, Finance and CFO


Unidentified Analyst

Relative to many of its peers, B&G Foods has been notably successful at navigating the recent challenges that have faced the package food group. In addition to utilizing its portfolio strategy and true hedging to deliver above average based business growth, company also completed an opportunistic acquisition of The Culver Specialty Brands from Unilever, the combination of which has led to its outsized performance. We're delighted to have President and CEO, Dave Wenner and Executive Vice President in Finance and CFO, Bob Cantwell with us today to discuss B&G in more detail. And with that, I'll turn it over to Dave. Thanks for being here.

Dave Wenner

Thank you Andrew, good morning everyone. Thanks for joining us today. We appreciate your interest in the company. Our basket gets larger and larger every year which I'm very proud of and we'll just let you read those statements on your own. When you look at B&G Foods, there is some core strengths here that really are the keys to our success over the years as a growth company, albeit a primarily growth through acquisition company. Our first is that we have been able to find acquisitions that we can make immediately accretive to our business and this has been very important. We like to think that we are very, very good at executing on acquisitions, understand what we're faced with typically which includes a sales decline of some sort from the previous owner because we are in a lot of cases buying "orphan" brands from larger food companies and then turning those businesses around and not only stopping the sales decline but putting innovation in to the brands to generate modest organic growth in the brands.

We prioritize our efforts by arranging our brands in three tiers and I'll talk about this a little bit later, but that gives us focus on higher margin businesses and businesses where we really see a return on investment in if you in terms of slotting and marketing and things like that with brands and efficiency from a working capital point of view.

When you look at what we buy and what we do with it, we're looking to generate a merging structure that is well above the average in the food industry and then to turn those margins into something more tangible in terms of free cash flow and this company emphasizes free cash flow as much as any metric financially and management is incentivized around free cash flow, so it’s a very, very important measure that we look at all the time.

Out of that free cash flow, we have I think demonstrated over the years that our intention is to return a meaningful of that free cash flow to our shareholders as dividends and between that and stock appreciation as Bob will show you generate a superior return for our shareholders. It’s formula has worked very, very well over a good number of years now and so we really don't see any reason to change what we do in a lot of ways. It is work, it has generated the returns and it's been very, very successful.

So when we look at well, what are we are going to do in the future, it’s a blend of the same as it has been in the past. We're of the size that we can continue to do these incremental accretive acquisitions, if we buy the right properties and just keep on doing the Culvers of the world, year-after-year for some time yet and generate nice business growth from acquisition and then turn those businesses around and generate organic growth as well, look for cost efficiencies and just keep working on improving the margins on our business and turn those margins into free cash flow. That's the essence of what we do and we are ready to continue to do that. We're well established in terms of our capital structure to continue to do those acquisitions and continue to build this business as we have in the past.

So what do we look for when we look for acquisitions? If you followed B&G for any number of years, you're going to recognize this slide, because our acquisition strategy having been very successful really hasn’t changed a lot. We are a shelf stable branded food company, so that's the kind of properties we're looking for. And we isolate pretty much the brands because we have found that although that's an attractive proposition in private label, that proposition typically comes with lower margins and higher working capital needs and that's not what B&G Foods is. We're looking for shelf stable products and shelf stale products with defensible, niche positions in a lot of cases so that we're not competing in commodity categories and we can enjoy the margins we enjoy. And a lot of our margins are simply a function of the categories we compete in. obviously you like to acquire products that fit what you already are. So if we stay this shelf stable either grocery or household now, we have similar sales distribution in G&A systems, we get synergies that. That has and I'm sure will in the future serve us well when we're up against private equity people. And a lot of times, private equity is our principal competition in these acquisitions, because we are focusing on brands under $100 million in sales or even packages of brands under $100 million in sales.

The big food companies are not going to come out and compete for products like that. They can't use the formula that they have for managing brands when brands are smaller. In fact that's why they divest brands like the ones we own, is because their way to manage a brand, support a brand and grow a brand doesn’t work with these smaller brands. So the competition is limited, its typically private equity and we are truly the strategic buyer in the context of that competitive set.

We want brands that have strong margins. That implies that it’s a brand that we're willing to invest in, in terms of growth and it’s a brand that will generate significant free cash flow out of the margins in the business. Now the one note and the one real change to this slide that I will say is that the financing market these days has expanded the multiples that can be paid for these brands. If you go back five, six years, a multiple of six, seven times EBITDA was a pretty competitive multiple on a lot of cases. Obviously we paid a lot more than that for the Culver acquisition, but because the financing environment is what it is today, you still get the same free cash flow result. We're looking for something that generates about 50% of free cash flow out of the EBITDA and you certainly can get that with the financing cost there are today and Bob will show you what part our leverage plays in our free cash flow and given the rates today, it's not as significant as it used to be in the past.

So our latest acquisition was the Culver business that we did last November. The progress on that has been excellent. As is typical with most of the acquisitions we do, we did find the business in some a bit of a decline and that's normal with these kind of businesses and it's something that we try and understand as much as we can going in, where you're exposed, what rotational sales are not going to be done, what promotions are missed, what distribution losses are there. We certainly found all of those with Culver. We knew they would be there. But the good news is that by jumping on this as quickly as we usually do, and getting behind, we're actually ahead of projection from a topline point of view about 2.5%. So we not only halted the decline of the business, we've actually grown the business. The margins have been very, very consistent with what our projects were. So all the costs and things like that are under control. Free cash flow is also very consistent with projections and that was a very strong projection because we had said, that out of the $36 million in EBIT that we identified for Culver, about $28 million was going to come out as free cash flow. And that in fact is happening.

Early August, we completed a total changeover of Canadian sales and distribution infrastructure. We had done what business, our base business had done in Canada through distributors, Culver was doing it directly in the traditional warehouse to grocery warehouse method of distribution. We shifted all of our existing portfolio of sales out of this distributors into this warehouse mode and that's going to be a considerable cost savings for us by doing that. And it really gives us a meaningful base in Canada that we can now start pushing more of our base business into. So we really created a whole new infrastructure up in Canada as of August, to move forward with the entire business where opportunities present themselves.

Beyond that, we are really on the cusp of putting out new products in the Culver acquisition. Not all of these 39 products that I am referencing will come to be. There is still be weaned out through but there is going to be a decent surge of products here in the last three, four months of the year and its being done over every brand except Clean Guard, which is a very minor brand in this portfolio that we brought. So you're going to see new product activity across the board in this and hopefully that will accelerate that sales growth that we're already seeing.

So at the end of the day, after we acquire these businesses, what do we want to be? We want to be a business that sells you shelf stable, branded food products that are the kind of products you want to feed your family. And brands like Ortega and Cream of Wheat really are the essence of these kind of products. Good food that is appropriate for families that provide you a good value but is nutritious, fun and something that the family can eat together or you can eat conveniently by yourself.

So a we look at achieving that goal, we emphasize certain brands more than others within our portfolio and we introduced this peer strategy at this conference a while back and it basically takes our brands and divides them into three tiers. Tier one brands are the higher growth profile brands that we see in the portfolio, not quite half of sales and more than half of EBITDA. So they are higher margin brands and we really just see opportunities.

Ortega is a tier one brand. Ortega is a brand that has grown very, very consistently for us, year-after-year-after-year. We continue to see significant opportunities from a distribution point of view, from a new product point of view and hopefully from a marketing point of view. So we're investing in all three of those, Ortega gets additional support compared to other brands and to get that growth, and we've been very successful at growing these brands. They grew not quite 5% in 2011. So far this year about 2%, so we're seeing growth even though the environment out there has decelerated overall and as we grow these top two tiers in our business, we are moving the mix of our sales up and increasing our margins just because we're selling more of the higher margin brands.

And that brings you to tier two which at 22% of sales is a smaller piece of the business, but now here between the first two tiers, you have 70% of our sales and about 80% of our EBITDA. So you’re really focusing on a very meaningful part of the business in the top two tiers. These brands have more modest growth potential but we do see growth potential and we have superior EBITDA margins and a lot of cases higher than tier one because we're not investing as much money in them as we are in the tier one brands.

And Accent would be a great tier two brand. Accent in of itself is something that's very hard to move the needle on. It has an incredibly loyal audience. But it's hard to bring new people in to it. We've been successful in doing that in the last year or so by putting Accent into dollar stores and the size dedicated to dollar stores and creating that value for consumers and growing the brand that has been for around many years but with very modest growth. So that's the kind of thing we would do with the tier two brand. Limited new product activity, really opportunistically looking to expand distribution, largely in non-grocery channels, very modest marketing support, but if you do it right, we've got very good growth in 2011, although some of that was acquisition growth and we have had a decline in 2012, a lot of that's rationalization in one or two of the tier two brands.

Tier three brands, everybody looks at these and goes why don't you sell them? Because the reason, very simply is, 30% of our sales and the margins in these brands although not what the rest of the portfolio is, are typical food business margins. Our EBITDA margin in these brands is a low double digit margin. So these are not awful brands. These are good brands from a margin point of view. And they are typically very good cash generators. But we're managing these businesses to probably achieve a neutral result and in some cases we've rationalized product lines out that are lower margin, high working lines and especially in the private label area. Very limited new product activity but it's not like we don't do anything. B&G is a good example of a brand where we actually launched some 24 ounce sized pickle items in the New York area and gained share because we did that.

So we do where we see the opportunity launch products here but it's in a much more modest effort than it would be in tier one and certainly tier two. And we're very opportunistic and very tactile with these brands. And we've kept these brands relatively stable over the years by doing that and as I said, they are great cash generators and they've done a good job for us in terms of contributing to the value of the enterprise.

So that's what we look at when we're looking for organic growth. If we execute this strategy as I said before, we will be definition increase the margins in the overall business changing the mix positively and as you see in our results, keeping that margin structure up throughout the business.

And we are not telling you that we are going to be a high organic growth company. We're looking for a very modest low single digit organic growth in this business. But we're trying to follow consumer trends and this is the kind of innovation we do with these brands that we buy where in Joan of Arc which is a tier three brand, I mean its kidney beans, so it’s a commodity business but we put out a no salt added bean that is doing very well following that sodium trend in the business. Whole grain in the Ortega business, lower sodium seasonings and things like that in the Ortega business. In Cream of Wheat, we've done an awful lot of work and I'll show you a slide that gives you the array of products but we've done a lot of work in terms of trying to move the demographic down and create new consumers in Cream of Wheat. Because Cream of Wheat has a very loyal older following but we need to get some younger consumers in there as well.

And then also as I said before, really chasing new distribution opportunities and trying to follow consumer buying trends in the business by doing things like Cream of Wheat in a three pack for dollar stores and a six pack which is that purple package there for drug stores and then formatting things for clubs in the Ortega line and there is the accent item that I referenced before which is designed for dollar stores and in a lot of cases, the dollar store business is very good. We've had nice growth over the last year or so in dollar stores but it's also kind of fine item and we took out 1.5% of our sales right now and when you think about it, there is very, very limited space in the dollar store. So you're fighting for very finite real estate. The good news is, if you get a hit, you're in 8,000 stores overnight. So there is a lot of leverage from a distribution point of view, but the competition is pretty tough in terms of getting products into dollar stores. But when we design products for these dollar stores, we're very careful about maintaining our margins. So in the case of Cream of Wheat where you would buy a 12 pack instant Cream of Wheat in a grocery store for 3.99, you can buy a three package in a dollar store for $0.99. Comparable price point for a consumer on a per package basis, slight increase in cost for us from a packaging point of view on that outer cardboard carton but margins are very, very close and price point is very, very close relative on a serving basis which we also consider important. The last thing we need is the Wal-Marts of the world going to a dollar store and seeing our products considerably cheaper than in a Wal-Mart. So we're trying to maintain margins and trying to maintain price point comparability.

This is the kind of thing we've done with Cream of Wheat. When we bought Cream of Wheat from Kraft it was a relatively stayed line, tried and true but declining about 6% a year. We've grown the business since we bought it. Obviously refreshed the packaging but also launched the three products on the left there are all new products in the instant line and the instant line is really where the growth is in the hot cereal category. People less and less are cooking things on stove top. So we launched the chocolate product here in the last year. Cinnabon was done two years ago and now we have a variety pack that includes the Cinnabon product as well. We continue to look at innovation in this line and given the margin structure and the opportunities we see here, we're going to keep pushing this line, it’s a very, very good line for us.

So when you look at our P&L and you look at what we do, the brands we have do not support massive marketing efforts and that's part of why they get moved out of large food companies because you're not going to do a meaningful television campaign on a $20 million brand. You have to be more guerilla in terms of how you are marketing to consumers and that's what we do. I think they just passed out a cook book that's going out now, going to be at 30,000 checkouts for supermarkets and it really is the kind of thing we do to try and reach the consumer more directly and we did one for Ortega a while back and it was very successful. We're trying to use efficiency in terms of reaching consumers rather than the blunt instrument if you will of television advertising and this is the kind of thing that we would do.

We also are fortunate in that it’s the day of the internet, so we can do a lot of things with the internet that are very efficient from a marketing point of view. This shows you the traditionalist things we do with FSIs, little bit of television, we do modest television, but we're not the people who are going to spend tens of millions of dollars on television and print. And also, what we're very much about digital promotion of one sort of another and Facebook has been very powerful in terms of free sampling and really getting us direct to consumers and we've done free sampling offers with the Emerald line, with the Ortega line and now with the Mrs. Dash line. We're putting product right in the hands of consumers who are interested in the product and really getting a significant increase in the activity on our websites and on the likes that we see on Facebook. We have well over 300,000 likes with Mrs. Dash now out of a free sampling campaign and that really lets you talk to your consumer and I think that's very important and talk to your consumer efficiently, because we're not as I say, the people who are going to spend a tremendous amount of money on marketing albeit that we have increased working marketing in this company this year over 40% from what it was last year. So on a relatively modest marketing spend, we are spending more money.

We're also trying to partner with people and (inaudible) is a campaign that we kicked in the spring with the FSI drop doing some alliance with the food network and really trying very hard again to use efficient marketing to reach people and so far the response has been very, very good.

Let me switch gears for a second to the cost side of the equation. If you look back, it's almost five years now, it's really surprising how fast time flies. If you look back, we had a lesson learnt back in 2008 where we really weren't aggressive in terms of what our positions were on buying things. So when that first wave of significant cost increases came in 2007, 2008, we were caught flatfooted in some cases and had very significant cost increases that we were not able to price fast enough to accommodate and we saw an EBITDA decline out of that. 2009, that trend continued but we were catching up in price, 2010 of course cost went down relative to the large increase. But in the last few years, 2011 this year and now looking forward in to 2013, we're very proud of the work we have done in terms of hedging costs, actually it's not truly hedging, its pricing commitments on buying commodities and really delaying cost increases number one and giving ourselves a horizon for pricing number two, and we've minimized our cost increases and really insulated ourselves from the cost increases so that when we look forward to 2013, even with the surge you have seen recently in grain prices and things like that. Today, we're forecasting a modest cost decrease in 2013, most of that coming from commodities because we've locked commodities in, in a lot of cases all the way through the fourth quarter of 2013 at favorable prices to 2012.

So I think we've done very, very good work here. It's done a great favor to us in terms of limiting the price increases that we've had to take, our price increases 2011, 2012 on average were around 2%. And those price increases were done in anticipation of the cost increases rather than chasing the cost increases as you can see in 2008-2009 and really has allowed us to maintain margins from a cost price point of view and in some cases actually improve margins. So we've been very good at that. I think we've sort of adopted the philosophy that let`s assume the worst go and forward on that basis from a cost point of view and the markets have really proved us right from that point of view.

Underlying that is a cost control if you will, cost improvement where not only have we fixed our cost where can but we're looking to generate about 4% of our manufacturing cost and ongoing cost reduction efforts throughout the company. This first off offsets the everyday cost increases you see be it wages, healthcare and other benefit costs but it also gives us room to maneuver from a price point of view and a promotion point of view. And this effort is gaining momentum in that we have saved $8.5 million in 2011 and $6.5 million through the second quarter of 2012. So you can see there is a momentum build there. And certainly when you look at what our outlook for cost is in 2013, its playing a part in that cost decrease that we're forecasting in 2013 and it actually has lower the number that we're forecasting for an increase in 2012. So this is a very important element of our business and we've executed it very well.

With that, I'll turn it over to Bob Cantwell who will talk about the margins that come out of all that work

Bob Cantwell

Thank you Dave, good morning everyone. When we looked at what we've accomplished and we go back to 2005, we've grown sales at a compound annual growth of 6.2% from 379 million in 2005 to almost 544 million in 2011. EBITDA has grown even faster at 13.3% from 61.9 million in 2005, the way we finished last year at a 131.1 million. And along the way we've grown EBITDA margin from a little over 16% back in 2005 where we finished 2011 of 24.1%.

We certainly have industry leading EBITDA and capital efficiency margins. Our EBITDA margin, we finished the year in 2011 of 24%. When you add in the Culver acquisition on a pro forma basis, we're looking at EBITDA margins of 26%. We've actually run the first half of 2012 at an EBITDA margin a little bit above 27%. So we're ahead of those pro forma numbers. The rest of our peers are average about 14% EBITDA margins. So we're substantially ahead of our peer group. And our EBITDA turns into free cash flow. That 26% EBITDA margin turns into about 24% free cash flow with the rest of our peer group looks at about 12% on average ranging from 20 down to 4%.

We certainly have led the way on shareholder return and this is stock price appreciation and dividends back to our shareholders, for the five years ending August 27th of 2012, our return to shareholders has been 233%. Our net closest peers at a 135% then it tails off substantially after that. So almost double the second one in our peer group on a return to shareholders. And that return has created tremendous market cap for this company. Back in 2008, our market cap was a little bit below 200 million. We've grown at a compounded annual growth rate of 71% where we are today is a little over $1.4 billion. So substantial market cap growth since 2008.

And a very important part of our model and I'll show you our cash flow metrics in a minute. We return a substantial amount of our free cash flow to shareholders. Since 2007, we've return 62% of our free cash flow to shareholders. 2011 our dividends to shareholders were 38 million. At our dividend rate today, our dividends are a little over 52 million, back to shareholders on an annual basis. So substantial amount of return and that's been a very important part of our model and a very important part of our model as we go forward.

When we look at our current debt structure today, we have a term A bank loan of $146 million, a term B bank loan of $224 million and a high yield senior during 2018 of $350 million, total debt on our balance sheet is 720 million, that is leverage of about 4.3 times through June and about 4.1 times as we project out based on the mid-point of our range that we've given out of a 168 million of EBITDA for 2012.

Our projected cash interest for 2012 today is 42.6 million. This is very important slide as we look at why our EBITDA really turns in to a substantial free cash flow. At the mid-point of our range, we're looking at EBITDA for 2012 of 168 million. When we add back our share based compensation of about 4 million, we did adjusted EBITDA or after share based compensation of 172 million. Our cash interest requirements is only 42.6 million, very low cash taxes based on this income of 20.5 million and very low CapEx based on the size of our business because 40% of our business today is (inaudible) so we don't have a lot of CapEx, so we spend about $11 million a year. That generates excess cash of $98 million on that 168, a little over 58% of our EBITDA turns into free cash flow.

2012, we'll pay our dividends of 50.2 million which leaves us cash that ends up on our balance sheet and used to pay debt of almost $48 million. So substantial cash flow generation and that's why we were allowed to continue to pay a substantial dividend back to our shareholders.

When we looked at how we've done through the first half of the year, 2011 sales of 261 million. We've finished the first half of this year at 306 million, sales up 17%, gross profit up 25% from 87 million in 2011 to almost 109 million in 2012. EBITDA up 30% a little over 63 million 2011 to 83.2 million in 2012 and diluted earnings per share are up 28% from $0.53 to $0.68.

With that I'll turn it over to Dave.

Dave Wenner

In closing I'd just like to say that we believe we built the business in the last 10 years that is really superior to most of the industry in a lot of ways and to us the very, very important metric is that shareholder return slide that you saw, we think that by following the acquisition and organic growth strategy that we have, we create shareholder value very efficiently and give our shareholders a meaningful return, that's our aspiration going forward and we believe the model will allow us to do that. And with that, we have some time for questions.

Question-and-Answer Session

Unidentified Analyst

Thank you. Perhaps we can start off by talking about the potential for synergies around the Culver acquisition. I know you were conservative in the way you were thinking about that, didn’t build any of that into your EBITDA forecast. Like you’ve had some time now with the business, perhaps you can give us a sense of where the opportunities there are and how substantial they can be?

Dave Wenner

Well the synergies, because everything is (inaudible) there is no manufacturing synergies per se. but we have seen distributions synergies beyond what we projected. It's probably lower to our cost of distribution about another 10 basis points from beyond what we projected the real synergy in the existing infrastructure besides the dilution of costs a lot of which we did project, is up in Canada where by being able to move our sales and distribution effort to the more classic model, we're going to save somewhere between $1 and $2 million by cutting out the distribution margins there. And we haven't modeled that in there. So that's a benefit that we will see in the last four, five months of the year. And then as we go forward, hopefully we'll see further ones as we increase volume.

Unidentified Analyst

And then on the most recent earnings call you talked about expecting volumes to sort of be more flattish in the third quarter and hopefully be positive year-over-year in the fourth, after I noted it were down a bit in the first half in (inaudible) from a lot of packaged food peers. How is that outlook now that you're getting closer to the end of the third quarter? Does that seem like it still holds and is a reasonable thought process?

Dave Wenner

Well it seems to be recovering. It’s a very, very gradual recovery. It seems to be tracking the kind of recovery you're seeing in the economy where it's very slow, but it is definitely firming bit by bit and it's not just our results, I think you're seeing that in a lot of other results that are being published these days by food companies where volumes are firming probably not as fast any of us would like but they are coming back.

Unidentified Analyst

On the M&A front, I think on the last call you also talked about how in this sort of volume challenged environment, perhaps some sellers are sort of waiting to see some recovery before coming to the market. Has your pipeline from an M&A perspective changed dramatically one way or the other? Are you starting to see more opportunity and how comfortable are you to handle an acquisition at present given the four tons leveraging you discussed?

Dave Wenner

The pipeline's actually been fairly active. But it's mostly on the private equity, private owner front where properties like you just saw the Pretzel Crips business; snack factory business gets bought by Lance. Properties like that are coming out and its pretty active on that side and very inactive on the strategic larger food companies spinning things outside.

So it's definitely out there. Factors I think are that the financing markets allow for a significant valuation out of the purchase prices that they'll get and of course the uncertainty of the tax laws are probably an incentive for private owner to strike while the iron is if you will.

On our ability to do an acquisition, our ability is good as it has ever been. We have a terrific currency in our stock. We have full access to the financing markets and we can do a sizeable acquisition today, were the right acquisition to present itself.

Unidentified Analyst

Dave, as far as the overall portfolio of these performances been pretty decent, any trends or categories that may have ranked your internal expectations. And then separately if you can bring us up to date as far as the serve cost that you typically source from Canada? Thanks.

Dave Wenner

Well, I'll do that. When syrup came in this year at a fairly neutral solution, there was a price increase up in Canada where 90% of maple syrup comes from but it was offset by currency benefits and we were able to buy more US syrup than we had in the prior year that lowered our cost from that point of view. So syrup came in as a neutral solution which given that we buy about $30 million of syrup of that as supply cost is a good outcome. As far as brands not doing what we would like them to do. I guess I would think a lot Cream of Wheat in the first half; we had a tough first quarter with Cream of Wheat because of the warm weather. That was our theory at least coming out of first quarter was that warm weather had lower sales and you saw that throughout the hot cereal category. Second quarter came in very nicely and proved that out if you will, from a theory point of view but we really think that Cream of Wheat should be growing faster than it is. But as I referenced on the call, a lot of that has to do with our inability to get the new products that are doing well in the 50% of our business at supermarkets. Supermarket category of use have stretched out tremendously and a great example is Cinnabon which is our third bestselling instant product. That is growing in Kroger now, at two years after it was launched and the simple reason is that Kroger had not reviewed the hot cereal category in the interviewing two years. So we have a very successful product that's going into one of the largest retailers in the country today rather than two years ago because of that dynamic and that's part of that, it makes it tough to grow when you have very, very good products but some of the customers aren't ready to take them on.

Unidentified Analyst

Do you have some limit on your debt to EBITDA that you wouldn’t go above?

Dave Wenner

Well as Bob showed you, our interest cost at a little over four times leverage is 25% of our EBITDA. So we're very comfortable from that point of view but we're very sensitive when leverage gets up around five times because we think it’s a real filtering mechanism for institutional interest in the stock. People just ignore the underlying numbers and say five times leverage, I'm not interested. But as you can see the cash flow story is very compelling, but we just assume not gets filtered out. Thank you again for your interest.

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