Lifecore Biomedical Inc (LFCR) 2009 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Landec third-quarter fiscal year 2009 earnings release conference call.

At this time, all participants are in a listen-only mode.

Later we will conduct a question-and-answer session and instructions will follow at that time.

(Operator Instructions).

As reminder, this program is being recorded.

I would now like to introduce your host for today's program, Mr.

Gary Steele, Chairman and CEO of Landec Corporation.

Mr.

Steele, you may begin.

Good morning and welcome to Landec's first nine months and third quarter of fiscal year 2009 earnings call.

I have Greg Skinner with me today, Landec's Chief Financial Officer.

This call is being webcast by Thomson CCBN and can be accessed at Landec's website at www.landec.com, on the investor relations page.

The webcast will be available for 30 days through May 8, 2009.

A replay of the teleconference will be available for one week by calling 888-266-2081 or 703-925-2533.

The access code for the replay is 1343032.

During today's call, we may make forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially.

These risks are outlined in our filings with the Securities and Exchange Commission including the Company's Form 10-K for fiscal year 2008.

As reported in yesterday's press release, for the first nine months of fiscal year 2009, Landec increased revenues by slightly over 1% to $183.7 million compared to the same period a year ago.

Net income for this nine-month period decreased to $5.9 million or $0.22 per share compared to net income of $10.2 million or $0.38 per diluted share last year.

At the same time during the first nine months of fiscal year 2009, we generated $6.3 million in cash flow from operations.

For our third quarter ended March 1, 2009, revenues were $53.9 million versus $59.6 million in the third quarter last year and our net income for the third quarter was $1.5 million or $0.06 per diluted share versus $4 million or $0.15 per diluted share for last year's third quarter.

For both the first nine months and the third quarter of fiscal year 2009, Landec continued to generate net income and positive cash flow from operations.

Notably during our third fiscal quarter, we were able to hold and slightly improve our gross margin and operating margin relative to our second fiscal quarter.

It is notable because for the first time since we've been in the fresh-cut vegetable business starting in the year 2000, overall industry unit volume shipments for the category have turned negative and have stayed negative for the five straight months through March 2009.

We began witnessing the decline in the overall fresh-cut vegetable category starting in our second fiscal quarter.

This decline, a result of deterioration of the US economy and the corresponding slump in consumer demand.

The fresh-cut vegetable industry category declined 8% during the first nine months of our fiscal year 2009 and declined 13% during our third fiscal quarter.

There is no doubt that the downturn in the US economy and the impact it is having on consumers is adversely affecting purchases of fresh-cut vegetable products, but less so for Landec than the overall market.

For both the third quarter and the first nine months of fiscal year 2009, Landec continued to increase its market share.

While the overall industry category unit volumes declined 13% and 8% for the three- and nine-month periods ended March 1, 2009 respectively, Landec unit volumes declined more moderately by 5% and 1% for the same periods.

Although we project that softening consumer demand in the category will likely continue to affect us in the short-term, we have recently seen a slowing in the rate of decline in the fresh-cut vegetable industry category and it appears that the declines in the upcoming couple of months will be less than what the industry experienced during the third fiscal quarter.

We are hopeful that the fresh-cut vegetable category will return to positive growth during fiscal year 2010, which begins June 1.

Importantly we see this as a time to further strengthen our market position in the fresh-cut vegetable category by using our strong trade brands, our BreathWay packaging technology, our low-cost position, and our strong balance sheet to further grow market share.

Let me turn to Greg for details of our results.

Thank you, Gary.

Good morning, everyone.

As outlined in yesterday's news release, Landec reported total revenue through the first nine months of fiscal year 2009 of $183.7 million versus revenues of $181.2 million for the same period a year ago.

The increase in total revenues during the first nine months of fiscal year 2009 was due to a $4 million increase in revenues from Apio's commodity trading business, partially offset by a $1.3 million decrease in revenues from Apio's fresh-cut vegetable business.

For the first nine months of fiscal year 2009, the Company reported net income of $5.9 million or $0.22 per share compared to $10.2 million or $0.38 per share for the same period last year.

This did increase a net income during the first nine months of fiscal year 2009 compared to the same period last year was primarily due to first, a $3.3 million decrease in gross profit in Apio's fresh-cut vegetable business, primarily due to increased raw material costs for produce and packaging.

Second, an $883,000 decrease in interest income due to the Company's decision to invest only in FDI insured certificates of deposit, US government-backed instruments, and AAA rated municipal bonds, all of which have yields that were considerably lower than those the Company realized from its investments in the same period last year.

Third, a $189,000 increase in income tax expenses due to an increase in Landec's effective tax rate to 41% for fiscal year 2009.

These decreases in net income were partially offset by a $287,000 increase in gross profit for Apio's commodity trading business.

It should be noted that only $600,000 or 15% of the $4.1 million booked income tax expense is expected to be paid in cash because of the repurchase of subsidiary options in fiscal years 2007 and 2008.

For the third quarter of fiscal year 2009, Landec reported total revenues of $53.9 million versus revenues of $59.6 million for the same period a year ago.

The decrease in total revenues during the third quarter of fiscal year 2009 was due to first, a $3 million decrease in revenues from Apio's fresh-cut vegetable business due to the decline in the fresh-cut vegetable category during the quarter.

Second, a $1.3 million decrease in revenues from Apio packaging due to the timing of minimum payments from Chiquita.

And third, a $1.3 million decrease in revenues from Apio's commodity trading business due to the decrease in sales volumes and from lower average per unit sales prices as a result of a change in product mix.

For the third quarter of fiscal year 2009, the Company reported net income of $1.5 million or $0.06 per diluted share compared to net income of $4 million or $0.15 per diluted share in the same period last year.

This decrease in net income during the third quarter of fiscal year 2009 compared to the third quarter last year was primarily due to first, a $1.8 million decrease in gross profit in Apio's fresh-cut vegetable business related to lower revenues and higher costs for produce and packaging.

Second, a $1.3 million decrease in gross profit from Apio packaging related to the timing of revenues compared to the prior year.

And third, a $307,000 decrease in interest income from lower yielding instruments compared to the prior year.

These decreases in net income were partially offset by a $618,000 decrease in operating expenses primarily due to lower selling, general, and administrative expenses at Apio and a $405,000 decrease in income tax expenses due to lower pretax earnings.

Turning to the balance sheet, during the first nine months of fiscal year 2009, our cash and marketable security balances increased by $4.9 million to a record level of $63.9 million.

The increase in cash and marketable securities was primarily due to generating $6.3 million in cash flow from operations and due to a $1.8 million tax benefit from the repurchase of subsidiary options.

These increases were partially offset by the purchase of $3.2 million of property, plant, equipment for our fresh-cut vegetable business.

Gary?

Early in fiscal year 2009, we said that we planned to invest $7 million in capital expenditures in fiscal year 2009 for further automation and expansion of our value-added fresh-cut vegetable processing facility, up from $4.2 million invested in fiscal year 2008.

As previously mentioned by Greg, we have spent $3.2 million during the first nine months of fiscal year 2009.

As a result of the current economic environment, we expect to invest a total of $4 million to $5 million for fiscal year 2009 instead of the original $7 million.

We have also said in the past that we plan to spend roughly $3.7 million in R&D up from $3.3 million spent in 2008.

We will continue our commitment to increasing our investment in R&D as planned.

Looking forward, we will be placing a greater emphasis on consolidating our already strong position in the fresh-cut produce arena, searching for acquisition targets both inside and more likely outside the food arena, and stepping up our out-licensing activities with new partners.

We believe that the US faces a prolonged and deep recession that may last well until 2010.

Landec has proprietary technology, a low cost structure, a strong balance sheet to not only weather the storm but to capitalize on new opportunities that are likely to emerge as undercapitalized companies look for partners and large corporations who are slashing their R&D budgets look for new products.

We see this as a time of opportunity.

We believe our future obligations to shareholders are first to focus on technology innovation and new product development and accordingly, we will be stepping up R&D.

Second, continue supporting our collaborative partners such as Chiquita, Monsanto, and Air Products; third, to ensure our sizable cash balances are protected in investments that are safe and available as needed to selectively pursue and take advantage of profitable growth opportunities.

In order to successfully advance our priorities, our plan over the next couple of years through the fiscal year 2009 and 2010 include the following initiatives.

Complete one or more new licensing partnerships; expand the sales of our packaging technology with Chiquita and others; bring our collaborative seed coating program with Monsanto through field trials; start at least one new initiative in a promising area of materials science outside of the food technology business, which could involve an acquisition of or minority investment in one or more material science-oriented companies; and continue to generate net income and positive cash flow along with maintaining a strong balance sheet.

Over the next 24 months, we are confident that we can continue to take advantage of broad applications of our unique polymer technology to grow and very importantly diversify our business and generate increased shareholder value.

Part of our near-term plans are to hire a VP of business development and we believe we are close to doing that; expand the sales of our L'Oreal products and take new initiatives with other major personal care companies, which is already beginning; see progress in our Monsanto program, particularly in the area of controlled release of pesticides and fungicides and in coatings that enhance plant vigor and corresponding improved yield; expand our market share in the fresh-cut vegetable category and negotiate lower input costs with key non-grower suppliers; start one or more research initiatives and new applications of our material science technology; and move M&A activities from the broad search to a focus on one or two more specific partner candidates.

Our near-term and 24-month goals are driven by our focus on achieving our long-term objectives for revenue growth with profitability and positive cash flow.

We also believe that over the next five years, our pretax margin mix will begin to change with increasing contribution to sales and pretax margin coming from our nonfood technology licensing business, which generates higher percent margins and which is expected to grow faster than continuing growth in our value-added specialty packaging vegetable business.

If our partners execute in a timely way and if we continue to implement our plans well, we should see both gross margins and net margins increasing over a three to five-year timeframe.

We are now ready for our questions.

(Operator Instructions) Nick Genova, B.

Riley & Co.

Good morning, thanks for taking my question, guys.

I wanted to ask on some of -- a comment that was in the press release that you expect operating margins to improve sequentially.

Do you think that is going to be primarily driven by a higher gross margin or do you think it will be more on the cost side, like a reduction in SG&A sequentially?

Well, I think, Nick, it's going to be a combination of the fact that we expect that some of our packaging costs will be lower in the fourth quarter than they were in the third quarter.

And secondly, we also expect operating expenses to be lower in the fourth quarter than third quarter, so it's a combination of the two.

And what's --?

I saw that even in Q3 the expenses were down.

What's driving that expense reduction?

Can you give us a little more color on that?

Well, it's a combination of things.

Last year we had particularly in the fourth quarter some fairly sizable G&A expenses.

But also in the area of Apio and this is volume-driven, a lot of your sales and marketing is tied to your revenue and when your revenue is down, your sales and market is going to be down.

Okay, great.

Then on the gross margin side within Apio, I know that produce prices have been somewhat elevated.

What's the outlook on that?

Is it kind of staying there and as you look into the season throughout 2009, what's -- what do you guys see there?

They are going to stay at the same levels that they are at right now.

Most of these contracts are calendar year contracts and so that will affect us through the rest of '09, which ends in May, and then through at least the first half of 2010, the higher produce costs as compared to '08.

Okay and then one thing that's been impacting California actually has for several years and then it looks like it will be even more severe this year is just general drought conditions.

Does that impact your business at all?

Obviously it can, but fortunately most of the areas we get our produce from is groundwater, and so far groundwater has not been impacted from what you've seen about the Fed cutting off the San Joaquin Valley and so on and so forth.

So up to now it has not impacted us.

Okay, great.

Thanks, guys.

Peter Black, Wynnefield Capital.

Hey, guys, how are you?

Just two quick questions.

One, in terms of Chiquita's minimum payments to you, could a successful rollout of the Chiquita-To-Go program at Starbucks and McDonald's potentially get you over the volume hurdle there or do you really need to see a full rollout on the grocery store format to start seeing a revenue increase from Chiquita?

A successful rollout in Europe and the US of Chiquita-To-Go, which as you know is on track, combined with a major quick-serve restaurant customer, and whether it's McDonald's or someone else, that would get us over the hurdle.

But Chiquita-To-Go alone probably would not, Peter.

So you need both and you would not need retail if you were landing a fairly major quick-serve restaurant chain.

Okay, so do you have any kind of data from McDonald's that suggests that the rollout is going well there so far?

We know very little.

They are real hush-hush.

All we know is that our technology is working as advertised, which as you know is needed to get to very remote sites.

I think McDonald's -- not going into my own thinking here -- I worry that recession and their focus on really low-cost low-priced items on their menu could be affecting us.

I just don't know, but we don't really know much about what is going on there and probably won't, Peter, for some time.

So I wish I could tell you more.

Okay and then moving over to Air Products, do you have a sense of when that collaboration with Air Products would start to become meaningful from a revenue and profit contribution standpoint?

Yes, well first of all there's two components of the Air Products relationship.

One is in the personal care area, where we add ingredients to some of their skin and skin care, lotion care products.

I think we're up into about eight or nine products right now and doing well.

And even with this recession, people are buying these very expensive personal care products and right now all of our products are with L'Oreal under various [bands].

On the other side is the catalyst business with Air Products and that is being -- that is affected by the downturn in the economy because much of the applications are in construction such as pipe retrofitting, etc., so that's -- that one is not growing at this point.

To answer your question, I think what we really need is to land one or two new customers outside of L'Oreal to really have this thing hit that inflection point that we're all waiting for and we are in trials.

We are in testing to go through what's called a coding process where it has to be accepted and approved and you have to do the toxicology and those types of things.

So for that endpoint to take place, I think we have another year of that process to qualify these new customers, Peter, before it takes off.

Okay, and is Air Products agreement, are they exclusively working with L'Oreal so that your signing up with new personal care customers would be completely separate from that agreement or is this through Air Products?

No.

Our relationship for everything in personal care is through Air Products.

They provide the marketing and sales expertise on their own nickel and you may recall, we share in gross profits in a very attractive way when products are sold.

Right.

Okay, thanks.

Nelson Obus, Wynnefield Capital.

We are double-teaming you today.

The first question is pretty simple.

Do you basically have a paper packaging contract that expires?

Is that what's behind the optimism in terms of those prices going down?

It's just that what the world has gone through, Nelson, and you've seen it in your other companies, over the summer when oil prices were going crazy, everybody viewed it as an opportunity including our suppliers to say, boy, the world is tough.

We've got to raise prices, and everybody had to go with it and so those prices went up, and that includes for us films, plastics that go into our trays, and corrugated cardboard.

And that's what, about a 20% -- about 20% --?

20% of our cost of sales in the (multiple speakers)

So that kind of went through the roof.

We fought our battles as best we could.

Our view is the world has changed and it took some time for the world to come back and sit down with these folks, including us and so we have renegotiated prices.

So that is what's going on.

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Now in the area of produce, where we bought raw materials from farmers, that has not gone down.

That did go up and it stayed up because it's more driven by land values and land costs in these growing areas than anything else.

And land has been going up out here for these types of prime regions where you can only grow vegetables -- you know and it's very rare that you can find other places to do that.

So we see an optimism because we've been able to recently renegotiate some prices in these (inaudible) inputs.

So when they give you higher prices they forced you to sign a longer contract is basically --

Yes --

-- what took place there, okay.

But now, you know, the world has changed and so we sat down (multiple speakers)

Yes, definitely the world has changed.

More interesting question for me anyway, I think I've expressed on these calls a certain cautionary tone in regard to acquisitions.

I read with interest in the press release a reference to the fact that you had spent a fair amount of time looking at an acquisition and had walked away from it.

I guess the question is what did we learn from that experience which the outcome of which without knowing anything, I feel very positive about because it shows discipline.

And maybe you could share with us what in terms of that whole experience you learned?

Yes, a lot of time spent, by the way, and frankly probably a distraction for many of us.

But what we learned is that our disciplined approach to having a checklist that is fairly tedious and robust that have to do with strategic reasons for making acquisitions, operational reasons for making acquisitions, and financial reasons, you have to have checks by each of those little boxes and when you don't have those checks, you walk away.

Good enough.

Well, so it worked and double down next time, okay?

Yes.

Okay, are you currently --?

I mean is there currently a deal flow that is occupying some of your time or are you more focused on internal operations?

A very fair question.

Much more time frankly so and thankfully so on operations and how do we grow the business internally.

On the other hand, I would say that we have begun to step up activities and we have hired a third party to help us kind of broad sweep of looking outside of food at material science companies that may reside on their own or they may be embedded in larger companies where we think that that -- their material science technology is synergistic and complementary to what we are doing.

It's right at the beginning.

It's a broad sweep.

I'd like to tell you knew exactly what we're looking for, but we don't.

But we will.

And so that's where we are turning our attention and while we will keep our eyes open in the food business for opportunities, our focus is more focused on material science opportunities outside of the food.

It sounds like you somebody else making the first cut, so that's a positive.

Okay, thanks.

Walter Schenker, Titan Capital.

Good morning.

I would have thought that the trading operations since it is a methodology to reduce risk in the package side would in theory is when the packaged side is down actually be up some as opposed to down.

Am I missing something or is that --?

Yes, Walter, the trading business is very seasonal.

It's one in which the primary products that we export to Asia are stone fruits, grapes, apples, broccoli.

Those are probably the top ones.

And the stone fruit is probably number one and that season goes from June to about October and then it falls off.

And then you don't have any stone fruit again until June.

So really if you look at historically our breakdown of our revenues, about 75% of the revenues in our trading business occur during the first six months of the year.

25% occur in the second half because it's a supply-driven business.

If the supply is there, we can export it.

If it's not, we can't.

So that's why the second half of the year export and the trading business is lower than the first half.

But it is to some extent when your package -- fresh packaged is down, the extra product you contract for is sold through the trading operation, correct?

Yes, we can use that as an outlet, but that's not as material as the seasonality effects.

Okay, thank you.

(Operator Instructions) Will Lauber, Sterling Capital Management.

Good morning.

You mentioned a couple of times in the call, in the press release that you guys are growing market share in the fresh-cut vegetable category.

How are you doing that?

We've got -- I know we are biased -- but we have a couple of advantages that we are capitalizing on.

First of all, we are a very good operator and we deliver probably the highest quality product in the industry and we are proud of that and we want to continue to do that.

Secondly, we do have technology that can get product in good shape from the West Coast to the East Coast.

And third, we have been able to manage better I think than others during critical shortage periods when produce is very scarce, there's either been heavy rains or freezes or whatever, we have been able to manage our inventory flow and our availability probably better than anybody in the industry.

That's known to our customer base.

That doesn't mean to say that there aren't some tough competitors out there.

There are and there are some real loyalties in the industry that are hard to break, but that's what we've been doing.

We've been basically, it's technology, quality, and delivery performance that has been working for us and we hope to maintain that.

And back to the -- I guess the acquisition that didn't work out, Gary, you didn't quite mention but would it be safe to assume that it fell apart over price terms or --?

Wow.

If you don't mind, I would rather not go into a lot of details on that.

But let's just say that there is very important things for us that have to do with non-competes and definitions of non-competes.

If you are going to buy somebody, you don't want them coming back and nipping you in the bud and there were issues about valuation and price and that kind of thing.

So generally you are right, but I would rather not go into more detail if you don't mind.

But it was enough frankly for both parties to realize that this -- it was close but no cigar.

Okay and with Aesthetic Sciences, do you have any idea of how long they can hold out without any additional financing?

There is one excellent question and you know they are living with not much cash.

I don't think I need to tell this group the difficulty in the venture capital world of getting venture capital investors to invest more money.

That's a real difficulty.

So their focus is on corporate deals and the worry I have is that corporate deals take time and so we are concerned about it.

We are only a passive investor.

We are not a venture capital investor.

We are not the answer for their short-term cash problems.

But we've got our fingers crossed that they will find some corporate strategic partnering financing here that will let them go forward.

But there's a risk that they won't and so we wanted to highlight that for folks to know that that possibility exists.

So I guess my follow-up question was would there be any way that you guys would put more money into it?

But it sounds like that is a negative.

No, I don't think so.

Let's put it this way, if the venture guys wanted to put more money in and they were asking us to come in with them, we would certainly consider that.

But just to be the venture guy alone, that's not our cup of tea.

Then if you could give a -- my last question, if you can give an update on I guess both the Monsanto trials.

Okay, well in the spring you plant seed and you have trials and this is obviously a very important spring for us.

We have two programs with Monsanto.

One has to do with what we call loco weights -- low-weight coatings that go on to the seed and the hypothesis is that we provide a protective coating that improves the vigor of the seedling and therefore the plant and therefore leads to yield improvements.

You can only look so far in laboratory testing, greenhouse tests.

You've got to go into the field, so that's important for us to see this spring.

And then next fall, we wanted the second program, which is our controlled release program, which has an active ingredient in the coating which could be a fungicide or insecticide which you hope to hold their against the seed, protect the seed and the soil and then dispense it at the right temperature when the pest, the fungus or the insect emerges.

And that's based on soil temperature, by the way.

So those two programs are slated for field trials this year.

And then as you get into those, you hope to then go to South America and get another bite at the apple in the southern hemisphere so that you get enough field data to know what you have.

So we are starting this spring and we will keep you posted.

So it sounds like I guess Monsanto probably doesn't have any real incentive to do anything before that five years is up anyway, but it sounds like it's probably going to be about that time when they will have a good idea of what the technology is doing.

Is that correct?

I think that's right, Will.

They are funding us to the tune of $1.3 million or $1.4 million a year in R&D spending.

I don't think that's material enough for them to want them to trigger a purchase of the license -- of the rights that we have in our agreement.

So I think you are right.

I think it's probably a couple more years, but the ball is in their court.

They could choose to do it earlier.

I wouldn't expect that.

And a while back we had asked you in all the different partnerships what was kind of like the -- I think you were using a baseball term the double, triple, the homerun.

Would it be safe to say that Monsanto is probably the homerun right now a couple years out?

Or the possibility of --?

Yes, I'd say it's got that distinct possibility if the field trials go well, if the value is shown, if Monsanto is true to form and chooses not to do niche launches but really broad-based sweeping launches of putting coatings on all their seed.

In that scenario, this would be substantial.

All right, thank you very much.

(Operator Instructions) Steve Denault, Northland Securities.

Good morning, Gary and Greg.

Can you remind us what the Chiquita minimums are in fiscal 2010?

$1.5 million.

And that's down from want for fiscal 2009?

In '09 it's $2.2 million because we had one special project going on.

And Steve, they can choose annually to opt out of that by moving to a nonexclusive if they want to.

Okay, when do they need to make that decision?

Late in the calendar year, before December 1.

Next November.

Okay.

Do you have any sense of when, you know, you would expect or Chiquita would expect McDonald's to make decisions in terms of the trials?

Steve, can you accept a don't know answer?

Sure.

I don't really know and I don't know that Chiquita knows.

Okay, the other thing I'm trying to reconcile is -- in your third quarter that ended late February, your units fresh-cut units were down 1%.

The sales were down 6% but we were also in an environment where sourcing was an inflationary sourcing environment year-over-year.

Can you help me reconcile that?

The volume being down versus the --?

Well, the sales were down, yes, sales were down greater than volume, which suggests sort of ASP deterioration.

There was a shift -- when we talk volume, we are talking about total volume, so you are talking our bags, our trays, everything.

The main reduction in our volumes not only in the second quarter but in third quarter was in the area of trays.

Well, trays have a much higher sales price than bags.

So it's a mix change.

And you can imagine what's going on with trays.

People are just not hosting parties.

Families are not getting together like they used to, and so that has had a greater impact than on the bags business.

Who else sells trays outside of the club channel?

Outside of the club channel is a company called Mann Packing, a private company in Salinas, and a company called Taylor, again another private company in Salinas.

Okay.

Do you have distribution outside of club with trays?

Oh, yes.

We are very prominent in retail stores with our trays.

Okay, all right, that's all I've got.

Thank you.

A follow-up from Nelson Obus, Wynnefield Capital.

I don't want to be argumentative, but I've seen some data that indicates actually that families are getting together in the home more than they used to.

You look at the performance of companies like Green Mountain that makes -- the ability to make coffee in the house.

I really think it might have less to do with people getting together and more to do what they spend when they get together.

I just --

That's a fair point.

I made a statement that was broad sweeping.

You know, we know that people are going for frozen stuff.

We know they are going -- they're reaching in their pantry for canned goods that have been there awhile.

So that's a good point, Nelson.

I think that's more accurate about what's going on.

If we get some more income in there, people will go back to -- or if the whole wellness theme continues to resonate, I think we will get back to people eating good stuff rather than cheap, bad stuff.

Yes.

We hope.

Okay.

(Operator Instructions) I am not showing any further questions at this time.

We thank everybody for being with us on this call.

We appreciate it and look forward to talking to you to give you updates on our progress.

Thank you.

Thank you, ladies and gentlemen, for your participation in today's conference.

This does conclude the program.

You may now disconnect.

Good day.