Ross Stores, Inc.

Ross Stores, Inc.

$146.09
3.13 (2.19%)
NASDAQ Global Select
USD, US
Apparel - Retail

Ross Stores, Inc. (ROST) Q4 2006 Earnings Call Transcript

Published at 2007-03-21 16:15:59
Executives
Michael A. Balmuth - Vice Chairman of the Board, President, Chief Executive Officer John G. Call - Chief Financial Officer, Senior Vice President, Secretary Michael O’Sullivan - Executive Vice President, Chief Administrative Officer
Analysts
Tim Geyer - Piper Jaffray Jeff Black - Lehman Brothers Brian Tunick - J.P. Morgan Paul Lejuez - Credit Suisse Kimberly Greenberger - Citigroup David Mann - Johnson Rice & Company Mark Montagna - C.L. King & Associates Margaret Mager - Goldman Sachs Patrick McKeever - Avondale Partners Rob Wilson - Tiburon Research Group Dana Telsey - Telsey Advisory Group Rob Schwartz - JL Advisors Richard Jaffe - Stifel Nicolaus
Operator
Good morning. Welcome to the Ross Stores fourth quarter and fiscal 2006 earnings release conference call. The call will begin with prepared comments by Michael Balmuth, Vice Chairman, President, and Chief Executive Officer, followed by a question-and-answer session. (Operator Instructions) At this time, I would like to turn the call over to Michael Balmuth, Vice Chairman, President, and Chief Executive Officer. Michael A. Balmuth: Good morning. Joining me on the call today are Norman Ferber, Chairman of the Board; Gary Cribb, Executive Vice President and Chief Operations Officer; Michael O’Sullivan, Executive Vice President and Chief Administrative Officer; John Call, Senior Vice President and Chief Financial Officer; and Katie Loughnot, Vice President of Investor Relations. We will begin our call today with a review of our fourth quarter and year-to-date performance followed by our outlook for the 2007 fiscal year. Afterwards, we will be happy to respond to any questions you may have. Before we begin, I want to note that our comments in this call will contain forward-looking statements regarding expectations about future growth and financial results and other matters that are based on management’s current forecast of aspects of the company’s future business. These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from historical results or current expectations. These risk factors are detailed in today’s press release and our fiscal 2005 Form 10-K and fiscal 2006 Form 8-K’s and 10-Q’s on file with the SEC. Today we reported that fourth quarter 2006 earnings per share grew 35% to $0.66, from $0.49 in the fourth quarter of 2005. Net earnings for the quarter totaled $93.1 million, compared to $71 million in the prior year period. For the 53 weeks ended February 3, 2007, earnings per share grew 25% to $1.70 from $1.36 for the 52 weeks ended January 28, 2006. Net earnings for fiscal 2006 were a record $241.6 million, compared to $199.6 million in fiscal 2005. We estimate that the 53rd week in fiscal 2006 added approximately $88 million in sales and $0.07 in earnings per share to both our fourth quarter and fiscal year results. In addition, we recognized expenses related to the adoption of FAS-123R equivalent to about $0.01 per share for the fourth quarter and $0.06 per share for the 2006 fiscal year. Adjusting for both the extra week and stock option related costs, earnings per share increased about 22% in the fourth quarter and 24% for the full year.
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Operator
(Operator Instructions) Our first question is coming from Tim [Geyer] with Piper Jaffray. Please go ahead. Tim Geyer - Piper Jaffray: Good morning and congratulations on a solid quarter. Just a couple of questions for you. First of all, I was wondering if you could give us anymore color on the content of your current pack away inventory, in terms of what percent is spring versus fall merchandise? Also, do you see any key categories within that inventory that could help position you in the upcoming season, or is there more of a branded focus within that inventory content? Michael A. Balmuth: Our balance of spring to fall pack away, candidly I do not have that number on me but it is consistent with where it has been over the past several years. We have been taking advantage of opportunities as we see fit in the market. Could you give me question number two again, please? Tim Geyer - Piper Jaffray: I was just wondering if there are any key categories that you are seeing that you were able to build up on previously that you think could help position you for these upcoming seasons. Michael A. Balmuth: Actually, what I would say is it has been broad-based and it has been a very good buyer’s market. Tim Geyer - Piper Jaffray: Great, and then one follow-up; I was wondering, have you explored the opportunity to bring in some exclusive brands, as many other retailers have done recently, given industry consolidation has improved the availability of some of these brands? Michael A. Balmuth: Actually, we still believe our business has brands that are traded in department/specialty stores and we have not gone forward on a proprietary brand. Tim Geyer - Piper Jaffray: Great. Thank you very much.
Operator
Thank you. Our next question is coming from Jeff Black with Lehman Brothers. Please go ahead. Jeff Black - Lehman Brothers: Great, just a couple of questions. First, for I guess John Call, the lower workers’ comp that impacted the expense rate, can you just explain or remind us why that is occurring and how much we see that benefit going forward? Second, for Michael, this year we are upping the unit growth rate, the 11% range or square footage, rather. What does it look like beyond ’07? It sounds to us like dd's gets more stores. I just was not certain when dd's hits that 80 to 100 mark. The overall question is are we continuing to see above 10% unit growth beyond ’07 when you have not made an acquisition of stores? Thank you. John G. Call: This is John addressing the workers’ comp question. There are three main drivers of the benefit there. First, we have experienced a reduction in the frequency of accidents and also in the severity of accidents, both in our distribution centers and our stores, based on programs that we put in place 24 to 36 months ago. Additionally, we have had the benefit of a favorable impact of California legislation on work comp, so all combined, the actuaries have dialed that in to their actuarial assumptions which drive out a lower work comp expense. We believe that those expenses are sustainable and have been actually included in our guidance that was issued for ’07. Michael A. Balmuth: Relative to our unit growth rate after ’07, where we took advantage of this opportunistic acquisition, we would expect to go back to a 9% to 10% unit growth rate. Jeff Black - Lehman Brothers: Mike, when might we see the 80 to 100 stores for dd's and reach profitability on the dd's side? Is that an ’08-09 timeframe? Michael A. Balmuth: It will be the next few years. We are putting that together. That is a moving target on stores right now but we are putting that together. The next few years I think would be safe. Jeff Black - Lehman Brothers: Okay, thanks. Good luck.
Operator
Thank you. Our next question is coming from Brian Tunick with J.P. Morgan. Please go ahead. Brian Tunick - J.P. Morgan: Thanks. Two questions; I am just trying to understand, are you raising your EBIT margin goal here? It sounded like you said 10 to 30 bps I thought a year, and now it sounds like you are saying 30 to 50 bps a year. We were just curious, given where your SG&A is now, is there anymore SG&A opportunity to cut? The second question on the new markets, what is happening with the store productivity and four wall returns versus your mature stores? Maybe just those two questions. Thank you. John G. Call: Brian, this is John. On the operating margin, both answers are actually correct. It is actually 10 to 30 basis points if we compare a 53-week year to our upcoming 52-week year. On a sustained basis, 52 weeks to 52 weeks, it is 30 to 50 basis points and that is our target and that is what we achieved this year. Brian Tunick - J.P. Morgan: Is all that coming on the SG&A line? John G. Call: Not all of it. Not all of it. In fact, this year it came out of the margin line where we had improvements in mark-downs, distribution center strength, et cetera. Brian Tunick - J.P. Morgan: Okay. Michael O’Sullivan: Brian, it’s Michael O’Sullivan. I will answer your second question about new markets. I think we are happy with some of the progress we have made in the new markets. In 2006, the Southeast comped at the same level as the chains. The Mid-Atlantic actually did better than the chain, so we are pleased with that but as we have said in the past, we would like the productivity of new stores in those markets to be better. We believe fundamentally the customers in those markets are the same as off-price customers elsewhere -- they want bargains. So we think we can do more, particularly in terms of assortment, to drive more business in those markets. But we were happy with the progress we made in ’06. Brian Tunick - J.P. Morgan: And you have those assortment planning tools now? Michael O’Sullivan: We are building them, and actually it is a combination of two things. One is we are continuing to back-fill in those markets, which naturally will help raise our awareness and our customer traffic. Secondly, we are making improvements to assortments over time. There are some tools that are going to take frankly a few years for us to roll out, to build and roll out, so we do not have the full toolset yet but we are trying to make improvements over time. Brian Tunick - J.P. Morgan: Terrific. Thanks and good luck, guys.
Operator
Thank you. Our next question is coming from Paul Lejuez with Credit Suisse. Please go ahead. Paul Lejuez - Credit Suisse: What can you tell us about -- we are hearing a lot about the sub-prime issue in the market. How do you think that could impact your customers? I do not know any kind of data that you might be able to share in terms of any changes in patterns that you are seeing, and customers that pay cash versus credit -- do you know what percentage of your customers own homes? I’m thinking about some of the macro data, trying to link it back to you guys. Michael O’Sullivan: Paul, we look at that kind of thing all the time, looking at what is happening in the macro economy. The truth is our business is sufficiently diverse and sufficiently complex that it is almost impossible to isolate a single variable. So obviously we are watching what is happening in the sub-prime market but I cannot see -- we have not seen any drop-off in our business that we can track back and say that is what drove it. I will say in the off-price, it is even doubly difficult to predict because on the one hand, something like that could affect your customers and therefore your sales but it could also affect your supply in a positive way. So it is almost impossible for us to parse through that and figure out what effect it will have. Paul Lejuez - Credit Suisse: Just to follow-up, inventory, it looked like it was up per square foot overall. What is the plan going forward? Michael A. Balmuth: Inventory was up as we ended the year. There were a couple things going on; we had more in transit into our DCs to get ready for the Easter holiday. We also had a calendar shift in terms of when the year ended. So those two things drove inventories up at year-end. We will have a calendar shift going forward, so it may be slightly different than it was last year but overall, we are planning in-store inventories flat. Paul Lejuez - Credit Suisse: Thanks, and good luck.
Operator
Thank you. Our next question is coming from Kimberly Greenberger with Citigroup. Please go ahead. Kimberly Greenberger - Citigroup: This is Meg for Kimberly. Just a couple of questions. First, can you provide us with more detail on the gross margin line, and maybe quantify how each component contributed to the 60 basis points increase in the quarter? Secondly, can you remind us when exactly you began to see efficiencies in your supply chain that allowed you to go get product into stores more quickly last year? Just lastly, can you give us end of quarter square footage? Thank you. Michael A. Balmuth: Let me dissect the margin elements. Merchant margin increased about 20 basis points. That is inclusive of shrink and freight. Distribution levered by between 40 and 50 basis points, and stock options included in gross margin cost us about 10 basis points. So if you add that up, that is the 60 basis point improvement in the quarter in G&A. What was your follow-on to that, Meg? Michael O’Sullivan: I think it was around supply chain. The short answer is it was about in the spring of last year when we saw the supply chain improvement, so we are coming up on the anniversary of that now. Michael A. Balmuth: I think the third piece was selling square footage. As we ended the year, it was about 18.6 million feet. Kimberly Greenberger - Citigroup: Thank you.
Operator
Thank you. Our next question is coming from David Mann with Johnson Rice. Please go ahead. David Mann - Johnson Rice & Company: Yes, thank you. Good morning. Just on that last question, in terms of the distribution efficiencies, can you give us a sense on how much more of the recovery there you have over the next couple of years in terms of gross margin improvement? Michael A. Balmuth: Relative to gross margin, again in the quarter we got 40 or 50 basis points. On the year, we got about 35 basis points. We are looking at that. We think in ’07 the improvement will be more incremental than that. In other words, not as much as that as we keep our foot on the pedal in terms of productivity. So we think there is more that could come over the next coming years. I would hate to put a cap on it. David Mann - Johnson Rice & Company: In terms of shrink, have you been able to take cycle counts to get a sense on how you are doing relative to -- I guess it is what, about a 10 basis point accrual lower than last year? Michael A. Balmuth: We do not really take cycle counts. We will take our full physical in the September-October timeframe. We do have a feeling that the shortage initiatives that we put in place have taken hold and are contributing to the improvement that we saw last year and anticipate that we will see continued improvement going forward as well. David Mann - Johnson Rice & Company: Okay, and then one other balance sheet question. The accrued liabilities jumped a lot. Is there anything to parse out there or is that just the timing issues tied to inventory? Michael A. Balmuth: Most of that is in payables. Our payables leverage was 66% this year versus 51% last year, so it is timing relative to working capital and the inventory build. David Mann - Johnson Rice & Company: Great. Thank you.
Operator
Thank you. Our next question is coming from Mark Montagna with C.L. King. Mark Montagna - C.L. King & Associates: I just wanted to narrow the results for the Southeast and Mid-Atlantic. I was wondering if you could tell us what percent of the chain’s productivity those two regions are operating at? I guess last year you said that they were at about 75% at the beginning of 2006. I am wondering where they ended up by the end of the year. Michael O’Sullivan: It is about that. Like I said last year, one of those regions was in line with the chain. The Southeast was in line with the chain. The Mid-Atlantic was slightly better, so they stayed around about the mid-70s. Mark Montagna - C.L. King & Associates: Could you tell us what your year-end cash target is and what your free cash flow projection is? Michael A. Balmuth: If we look at where we ended the year and comment about payables contributing to that cash balance, you probably would have to take $140 million off of that balance relative to the payables leverage we achieved. It is not sustainable. We are thinking about $290 million in CapEx, so you roll that out. Relative to our cash target going into next year, we have not really talked about that -- something more in line with more normal levels, more nominal levels. Mark Montagna - C.L. King & Associates: Okay, and then for your store openings for this year, are they all slated for existing markets or are you going to expand into some new markets at all? Michael O’Sullivan: For Ross, all of the openings will be in existing markets. For dd's, obviously we have talked about we are opening in Florida, Texas, Arizona, so those are new markets for dd's, although not new markets for the corporation. Mark Montagna - C.L. King & Associates: Okay. That’s all I needed. Thanks.
Operator
Thank you. Our next question is coming from Margaret Mager with Goldman Sachs. Please go ahead. Margaret Mager - Goldman Sachs: I would like to get a little bit more color on the success that you are seeing in your home area. What are the important factors driving that, especially in light of the situation, it seems a little bit surprising. If you could just talk about the home category broadly, that would be interesting. Also, I just wanted to make sure I understood clearly the complexion of same-store sales in March-April; March, up I think 4% to 5% and then April is what and the combined is up 1% to 2%, and that is because of the Easter shift, if I’m reading it correctly from you. Is there anything that you would say at all regarding the economy or the weather or the impact on business to date in the month of March? Thanks. Michael A. Balmuth: Margaret, I got the second part of the question clearly. The first part, there was some noise on the phone. If you could repeat the first part about home again. Margaret Mager - Goldman Sachs: I just wanted to get a little bit more color on what is happening in the home area, where you are finding success, how you are going to continue to drive that business, and why do you think it is doing well in the context of the housing market having its challenges at the moment? Thanks. Michael A. Balmuth: Our home business, we really have not added new classifications. We have not gone into any new categories. We have really strengthened areas within our buying team that actually has really improved execution, is how we have been getting our growth there. There have been reasonable opportunities in the market which supports our -- the home business is a little more up-front driven than the rest of the company, but there have been no opportunities to take advantage as the home business has been not quite as good around the horn. That is really the key of what has been happening. It has just been improved execution, improved opportunities for us to purchase. Margaret Mager - Goldman Sachs: Okay, so when you say it is a bit more of an up-front business, normally you are buying out farther on home? Is that interpreted correctly? Michael A. Balmuth: We and I think everyone else buys out further. There is importing there in the home business, so it has been a very good buyer’s market based on difficulties other home retailers have had. Margaret Mager - Goldman Sachs: Interesting, thanks. And then on the same-store sales, just understanding that and to date, how is March going? I do not know if you look at retail traffic data at all, but it is showing some declining trends in retail traffic for mall and retail broadly. I am just wondering what you are seeing. Thanks. Michael A. Balmuth: We really are not choosing to comment mid-month on how our performance is, but relative to what is going on, we are not economists, you know, we were -- running as we said along the lines of our plan. In these kinds of things, our business might not be an interesting barometer. Some customers in a difficult economy will trade down to off-price, so we are not really the bellwether I think on it. Margaret Mager - Goldman Sachs: Okay. Thanks.
Operator
Thank you. Our next question is coming from Patrick McKeever with Avondale Partners. Please go ahead. Patrick McKeever - Avondale Partners: Thanks. Good morning, everyone. On dd's, as you accelerate the growth of that business, I am just wondering if you have made any refinements or significant changes to the store prototype. Michael A. Balmuth: I would say that we continue to make small changes, tweaks in the prototype, nothing that is dramatic or extremely different from what we initially went to market with. But as we have done with Ross, we will continue to refine it over time. Patrick McKeever - Avondale Partners: So the prototype will be pretty similar to some of the first -- I’m sorry, the new stores will be pretty similar to some of the first stores that you opened in the San Francisco Bay area then? Michael A. Balmuth: They might be a drop smaller, but that is about it. Patrick McKeever - Avondale Partners: And then, Michael, you said that it is a buyer’s market out there for your merchandise. I guess my question is a year ago, the big event for the off-price space, I guess the industry overall, the apparel industry was the merger of Federated and May and the divestitures that occurred and so forth. What is the big event out there right now as it relates to, and what is contributing to the good opportunities that are out there in the marketplace? Or is it just a bunch of different things? Is there any one specific event that is helping the supply right now? Michael A. Balmuth: Always, it is a bunch of different things but I think the same thing that was the big driver a year ago, I think people are growing into that, the change in the retail landscape, and that creates supply imbalances, and that is where we come in. Patrick McKeever - Avondale Partners: Last question, just back to the new stores and new markets, so those continue -- there has not been a big change in the way those stores are performing relative to the overall, or relative to the stores in your existing markets? The productivity metric is still around 75% -- is that right? Michael O’Sullivan: Yes, there has not been a change. Our expectation, like we said a little bit earlier, we believe we can drive performance in those markets but we believe it is going to take some time. Patrick McKeever - Avondale Partners: And a lot of it still is tied to implementing more micro-merchandising and just merchandising the stores differently -- is that correct? Michael O’Sullivan: Yes, it is a combination of things. Certainly the assortments are a big piece of it. We are working on that. That is going to take -- frankly, that is going to take a few years. But also building awareness, building presence in those markets, which is why we continue to back-fill. So it is a combination of things, but certainly assortments is the biggest. Patrick McKeever - Avondale Partners: Okay. Thank you so much.
Operator
Thank you. Our next question is coming from Rob Wilson with Tiburon Research. Please go ahead. Rob Wilson - Tiburon Research Group: Thank you. Could you go over the comp store sales components in Q4, transaction versus average transaction size? John G. Call: Sure. In Q4, the transaction size was pretty flat. The comp was driven by traffic. Rob Wilson - Tiburon Research Group: You mentioned earlier that your merchandise margin was up 20 basis points in Q4 but you also mentioned that a couple of those components were shrink and freight, if I am not mistaken. John G. Call: That is correct. Rob Wilson - Tiburon Research Group: Could you break out those three components? John G. Call: Merchandise margin overall was up 20. That is all the goods related items. Shrink was up 15-ish -- excuse me, shrink was better by 15-ish and freight offset that completely. Rob Wilson - Tiburon Research Group: Are you willing to give us an earnings per share drag on dd's in FY06? John G. Call: I think what we have said is dd's was a drag of about 25 basis points in ’06, about $0.06, so it was about the same as options. Rob Wilson - Tiburon Research Group: So it was about a $0.06 drag? John G. Call: Yes. Rob Wilson - Tiburon Research Group: One final question; last year in Q1, you said the west coast had a cold and wet Q1. Are you seeing higher comps in California this year versus last year and versus maybe the rest of the chain? John G. Call: California was wet and cold last year and California is sunny and warm this year, so at the beginning of the month, what we said is we are going to align our comp guidance and sales reporting to month-end levels. I think we will leave it at that. Rob Wilson - Tiburon Research Group: No comment on February, California? Michael A. Balmuth: February in California, the weather, we didn’t think was a big deal year over year. Rob Wilson - Tiburon Research Group: Fair enough. Thank you. Thanks for taking my call.
Operator
Thank you. Our next question is coming from Dana Telsey with Telsey Advisory Group. Please go ahead. Dana Telsey - Telsey Advisory Group: Good afternoon, everyone. Can you please talk a little bit about minimum wage and any potential impact that changes there might have just on the expense structure? I noticed the merchant organization always continues to be refined. What spaces do you see needing to be filled for dd's or for Ross and are there any new categories that you are looking into for merchants in either area? Thank you. John G. Call: On the minimum wage, we did experience some of that pressure this year and we have it dialed in to our estimates for next year, so it does have some impact to us and we think we have it appropriately calibrated. Michael A. Balmuth: Dana, I believe your second question related to areas within merchandising that we would be looking for new merchants. Dana Telsey - Telsey Advisory Group: Yes, exactly. Michael A. Balmuth: It is really not something I would talk about in a forum like this, for internal reasons and external reasons. Dana Telsey - Telsey Advisory Group: In terms of categories, what do you think -- you had mentioned the home. What are you seeing in footwear and juniors? And is the landscape changing at all? Michael A. Balmuth: I do not see dramatic changes in the landscape. There are certainly trend changes in juniors going on but no dramatic change in the landscape that we are seeing. Dana Telsey - Telsey Advisory Group: Thank you.
Operator
Thank you. Our next question is coming from Rob Schwartz with JL Advisors. Please go ahead. Rob Schwartz - JL Advisors: Congratulations on a strong finish to the year. I have two questions. First, regarding dd’s margins over time. As it starts to mature, do you think margins should approach those of Ross? Secondly, over the long-term, do you think your past peak margins of 9.5% are achievable again? John G. Call: Relative to dd’s margin, as we look at how dd’s is doing, what the sales levels are in that box, and we look at the results we expect out of that box over time, they are very similar to the Ross margins that we achieve over time. Relative to your second question on margin expansion, we believe that there is room for margin expansion for the next couple of years. We are targeting 30 to 50 basis points. We feel pretty good about that. Clearly the biggest impact on margin, or the upside to margin could be top line growth. That is where we are with that.
Operator
Thank you. Our next question is coming from Richard Jaffe with Stifel. Please go ahead. Richard Jaffe - Stifel Nicolaus: Thanks very much guys, and a good end to the quarter, or good end to the year, rather. Just a follow-on with dd's DISCOUNTS, could you compare dd’s to Ross in terms of inventory investment, sales per store, dollars and units per transaction? Michael O’Sullivan: It is a little bit difficult to make apples-to-apples comparison between dd’s and Ross, partly because the dd’s we have opened so far are all in California, dd's is a new chain, Ross is 25 years old. I would stay away from making comparisons between the two businesses for all those reasons. It is hard to come up with any meaningful comparison. Richard Jaffe - Stifel Nicolaus: Well, just trying to gauge the level of dollar investment a store would require in terms of inventory, and perhaps you have answered the question in your expectations for sales per square foot would be comparable to Ross over time. Is that fair to say? Michael O’Sullivan: On sales per square foot, yes, over time. Richard Jaffe - Stifel Nicolaus: I guess the inventory commitment in terms of the cost of a dd’s versus the cost of a new Ross, inventory plus build-out? Michael O’Sullivan: For the same volume store, comparable, yes. But that is my point. Because Ross is in 27 states and dd’s is currently in one, it is hard to make that direct comparison because you have to pick a store that looks exactly like dd’s to make the comparison. But if it is the same volume store, then the inventory investment would be similar. John G. Call: I would also say on the build-out costs, where we are to date is they look a lot more like Ross stores that we take in our own construction, so there is a little bit higher cash up-front commitment that will, the return on that cash takes a little bit longer if you look over the life of that lease, which is typically 10 years. It looks very similar to Ross on the construction. Richard Jaffe - Stifel Nicolaus: That is very helpful. Thank you. Just a quick question on the debt. Obviously incurred some debt on the balance sheet and if I understand, eliminated some of the off balance sheet liabilities. Is that complete? There is no off balance sheet liabilities related to the DCs, or for any other reason at this point and the debt has covered all of that? John G. Call: We have put on $150 million of long-term notes. We took that down in December. Earlier in the year, we paid off a synthetic lease of $87 million and we also paid off a short-term note for $50 million, so that debt basically replaced a piece of the off balance sheet debt and a piece of the on balance sheet debt. We still have $70 million of off balance sheet liability related to our Southwest DC. Richard Jaffe - Stifel Nicolaus: Is there any intention to do a similar transaction to eliminate that? John G. Call: No, that is long-term. I think that is ten-year money. Richard Jaffe - Stifel Nicolaus: It is as we see it now. Okay. Thanks very much.
Operator
(Operator Instructions) There appears to be no further questions. I will turn the floor back over to you for any further or final remarks. Michael A. Balmuth: Thank you all for attending and have a very good day.
Operator
Thank you. That does conclude today’s teleconference. You may disconnect your lines at this time and have a wonderful day.
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