Medifast Inc (MED) 2006 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Q2 2006 Medifast Inc. earnings conference call. My name is Shanika and I will be your coordinator for today. And this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (OPERATOR INSTRUCTIONS) I would now like to turn the presentation over to your host for today's call, Mr. Brendan Connors of Medifast, Vice President of Finance. Please proceed, sir.

Good afternoon. My name is Brendan Connors and I am Medifast's VP of Finance. I am joined today by Mike McDevitt, our President and Chief Financial Officer, and Brad MacDonald, our Chairman of the Board and CEO. I would like to welcome you to Medifast second quarter conference call for the period ended June 30, 2006.

Before we begin, I would like to read the following statement. Statements included in this conference call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks and uncertainties such as competitive factors, technological development, market demand, and the Company's ability to accurately estimate revenues due to market factors beyond its control. The actual results may differ materially from any financial outlook stated herein. Further information on potential factors that could affect the Company's financial results may be found in the Company's reports on Form 10-K end 10-Q filed with the Securities and Exchange Commission. Medifast shall have no obligation to update the information provided on this call to reflect subsequent events.

Now I would like to go over the financial results. For the three months ended June 30, 2006, Medifast reported revenue of $20 million versus $10.6 million for the same period in 2005, representing an increase of 89%. A majority of the sales increase was a result of an approximate 160% increase in the direct marketing sales channel compared to the second quarter of 2005. The Take Shape for Life drug sales network had a 70% increase in sales year-over-year. Also the corporate (indiscernible) model continues to evolve and in doing so realized a significant increase in sales as compared to the quarter ended June 30, 2005.

The Company had selling, general, and administrative expenses of $12.6 million as of June 30, 2006, which was an increase of $5.8 million from prior year. The largest increase in SG&A was related to increased advertising expenditures. We increased our advertising spend from $1.2 million in Q2 of 2005 to $4.5 million in Q2 of 2006. In the second quarter of 2006, the Company did significant testing of new television channel clusters as well as additional print and media.

The Company anticipates (technical difficulty) to significantly increase advertising spend rate in the first quarter of 2007 and sales and testing of additional advertising venues is necessary in order to effectively spend the increased advertising dollars. The advertising budget for the full year of 2006 is expected to total between $11 million and $12 million. With the exception of the advertising expenses, the majority of the increases in SG&A were associated with the variable expenses related to a growing business. These expenses include bank charges, new employees, and basic infrastructure buildup.

The Company reported net income of $1,475,000 or $0.12 per basic share, $0.11 per diluted share versus $753,000 or $0.06 per basic share, $0.06 per diluted share in 2005. The second quarter of 2006 represented the Company's 27th consecutive quarter of profitability.

For the six months ended June 30, 2006, Medifast had revenue of $39.1 million representing 107% increase compared to $18.9 million reported for the first six months in 2005. The Company had selling, general and administrative expenses of $23.9 million as of June 30, 2006, which was an increase of $11.8 million and $12.1 million for the first six months of 2005.

As a percentage of sales, SG&A has decreased from 64% for the first six months ended June 30, 2005 to 61% for the six months ended June 30, 2006. The Company reported net income of $3.2 million for the first six months of 2006 or $0.25 per basic share, $0.23 per dilutive share, versus $1.3 million or $0.10 per basic share, $0.10 per dilutive share for the first six months of 2005.

On the balance sheet, the Company has stockholders equity of $25.5 million and working capital of $12.3 million at June 30, 2006 compared to $20.6 million and $9 million at June 30, 2005 respectively. Due to the sales growth, our cash balance increased to $2.5 million at June 30, 2006, versus $1.2 million at December 31, 2005.

Now I would like to discuss the financial expectations for the full year of 2006. We are increasing topline full-year guidance. Previously the Company expected to generate revenue of $66 million to $68 million for the year, with an after-tax profit of $0.38 to $0.40 per dilutive share. The Company now expects to generate revenue of $70 million to $72 million for the year with an after-tax profit of $0.38 to $0.40 per dilutive share. The revenue increase is mainly attributed to the expected increase in sales due from the continued success of the advertising initiative, while the earnings per share is expected to maintain due to continued testing of advertising initiatives moving into the new year.

Now I would like to turn the over to Mike to go over our second-quarter highlights.

Thank you, Brendan, for the financial summary. I would like to start out by stating that the Company was very pleased with our results for the second quarter of 2006. There were multiple factors supporting the revenue growth, which mainly included continued success of our direct to consumer advertising initiatives to include approximately $2 million in testing new advertising venues. These venues included both television and print media.

Approximately 45% of our second-quarter budget was utilized by testing and proving new advertising venues, touching an expanded demographic with the Medifast methods. These advertisements were pointed at a slightly expanded customer demographic mainly focused on age and income. We are very pleased with the results from this testing. The additional advertising dollars spent on the testing was the primary reason the second quarter cost to acquire increased to an estimated $150. However the data obtained from these tests was very informative and we feel necessary in planning for an anticipated increase to the advertisement spending in 2007.

We are very confident with the effort of expanding our advertising focus to a broader range of clientele and we believe the data received through the customer responses will help us to make the minimal adjustments to advertising messaging, the design, and placement that will drive significant revenue growth while continuously decreasing our cost to acquire a customer. We look forward to exploiting these new venues with an increased advertising budget in the upcoming year.

Our Take Shape for Life division experienced sales growth of approximately 70% as compared to the second quarter of 2005. This sales growth can largely be attributed to the beginning stages of expansion of the sales network into additional cities as well as the increased activity in already established cities. The amount of new health advisors has been increasing steadily each month and we are excited for additional growth as we have just recently launched the new business in a box as well as the IP platform for both e-commerce and the health advisor back office management.

The new business in a box is the business starter kit for a newly signed on health adviser. It is full of training materials and support tools to get one started on the path to business success. We feel this new training tool along with a world-class IP platform will assist in decreasing health advisor attrition rates and in turn growing the number of active health advisers and Take Shape for Life revenue. This was an initiative we spent much time creating second-quarter of 2006 and look forward to seeing its benefits in the quarters to come.

Our clinic model has continued to evolve with the most exciting news in this division being the rollout of five Medifast weight control centers in the Dallas area and four more to soon follow in the Orlando market. This initiative showed immediate revenue affect on the clinical business model as the brand awareness of the Medifast business is believed to be a major reason for the most recent improvement to revenue run rates of these clinics. Although still only 5% of the current overall business revenue, the Medifast weight control centers will be a clinical model that will offer medical monitoring, improved personal counseling sessions, optional programs that utilize appetite suppression drugs, and many other value-added components and resources.

We plan to take advantage of the opportunity to grow the clinic business through continued focus on the startup of the corporate clinic model and for the remainder of 2006 and then to target experienced franchise area developers for future growth.

In the business of weight loss, education, and support for a consumer is very important for both short-term and long-term success. Throughout the second quarter, we launched two major education and support initiatives to help our consumers, potential customers obtain great success within reaching their goals. The secret is out. Medifast. "What Physicians Have Always Known About Weight Loss" is the title of a newly released book. The book provides a simple and clear guide on how to overcome the societal, emotional challenges of dieting to successfully lose weight by addressing the internal, external, physical, and emotional components of maintaining a healthy lifestyle.

Another initiative that was launched in the second quarter was the online customized weight loss community called MyMedifast. Available for free to all Medifast customers, MyMedifast offers users an interactive community, dieters can seek support by participating in a wide variety of interfaces including joining regularly scheduled chat about nutrition, dieting, and exercise, or posting motivational messages on the message board. The response from the customers has been tremendous as they utilize each other for support and motivation.

We will continue to move along smoothly with the implementation of our enterprise resource planning solution which will upgrade the technology infrastructure, improve manufacturing business processes, and more efficiently manage the IT function and better enable the expected growth in the future. The ERP system project should be completed early in the fourth quarter.

The first half of 2006 has been an historic one for Medifast. Everyone on the team has made a significant contribution in order to support the financial results that we're speaking on today. Our distribution center can in Ridgely, Maryland is now shipping most products within 24 hours of order. Our call center continues to improve on a level of support and education we offer to our customers. Our production and manufacturing employees have worked long hours in order to increase production output and meet the customer demand. The marketing and sales team continue to help drive the current growth we're experiencing while learning new ways to see continued increases in the near future. And the accounting and finance departments have provided analysis and support every step of the way.

With all of their considerable contributions from all these departments, these results would not have been possible. I'd like to thank everyone on the Medifast team for their hard work and dedication.

Now I would like to introduce to the call our Chairman of the Board and CEO, Brad MacDonald, to present to you some exciting news which Medifast has also just announced today.

Thank you, Mike. Today we announced that it will list its common stock on the New York Stock Exchange. Accordingly the Company has applied to withdraw securities from the listing on the American Stock Exchange and we really appreciate what the American Stock Exchange and Cohen, our specialist, Cohen specialist has done a great job for us while we are there and it really helped us grow this business. So we really, really appreciate it.

Trading on New York Stock Exchange is expected to commence on August 25, 2006, subject to the Company's selection of the specialists and completion of the proper securities filings. The Company's ticker will remain the same, MED, and Medifast common stock will continue trading on the American Stock Exchange until moving to the New York Stock Exchange sometime around August 25. We are quite pleased to be joining the New York Stock Exchange family of companies. We believe this will provide great liquidity for our stock. It will enhance the value for investors in the long run. It will provide, we believe, more liquidity and also provide more investor institutional interest as we go down the road, which will help keep the stock in ranges that investors may find more comfortable than some of the volatility that we have today.

So thank you very much. We really appreciate all your support and we look forward to going forward in 2006 and 2007 and the New York Stock Exchange will be a great addition and be a great partner as we move this business platform forward.

That you very much, Brad. It is one more exciting initiative we are having this year with Medifast.

Now I would like to open up the call for questions from the investors.

(OPERATOR INSTRUCTIONS) Greg Badishkanian, Citigroup.

Thank you and congratulations on your New York Stock Exchange listing. Your sales growth was very robust and I'm just wondering -- I think I missed it, but could you just go through each of the divisions, maybe what the revenue growth rate is or some sort of breakout -- Take Shape for Life and also your direct to consumer business?

As far as the Take Shape for Life division, for year-over-year that is up 70% from where we were last year. The direct to consumer advertising business is up 160% year-over-year from where we were last year at this time. And the clinic and doctors business has maintained around 5% of sales, which is about 25% on the revenue basis.

Good. When you look at the direct to consumer advertising business, very robust revenue growth obviously and you are doing some marketing initiatives and investments so that you can maintain the growth. Did you mention a 25% of spending was on testing in the quarter?

Really what you are looking as far as testing was actually about 45% of this total amount of money spent was on what we call testing and what that was advertisements that were outside the exact customers genre that we have always been accustomed to our core demographic. It's very slight as far as maybe a minimal amount of age or a minimal amount of even income per family, but really something different such as along the lines of going after a bit of a younger clientele. So what we found was that it was very successful. We were able to acquire those customers at a rate below the industry average, which is $150, which is terrific. However we are very confident that with the minimal tweak in our advertisements to really hit on what we learned it is better to attract that clientele, we will even be able to drive that cost to acquire down in the near future.

So when you test and you're trying to get new segments, new market opportunities and 45% of your advertising is spent on that or your marketing, when would you plan to sort of step up the marketing in those particular segments? When would it be tweaked? Is this setting yourself up for an '07 diet season or is this over the next few quarters?

You are pretty much on there. What we've decided to do is maintain our advertising budget for the full year -- $11 million to $12 million. Spend some of that money in testing these new just kind of overreaching areas for the Medifast customers and then really just seeing how we're going to best spend our money in 2007 for a significant increase in advertising budgets.

Did you mention CAC is $150?

For the second quarter CAC was $150.

Do you know what it was last year?

Last year for the full year it was at $135. And for the first quarter of this year it $125. However in the first quarter we did have a little bit help with some additional PR mainly that People's article that probably brought in close to about $700,000 of revenue.

Right. How about second -- do you have offhand, second-quarter last year?

All I have last year in front of me is the full-year cost to acquire which is that $135.

Okay, that's helpful. Good. Moving over to the Take Shape for Life business, you have just sort of looking at -- you had your conference I guess it was a month or two ago. What was your sense in terms of the attendance there? Was it up? If so by how much and how did they respond to the different tools that you're giving them now for their business?

Attendance of the conference was an all-time high, it was up probably about 30% from last year. As far as the response to the tools was terrific. They left there very excited about the new IT platform which has just recently launched Stage I August 3 of this month as well as the new business in a box, which is now shipping out for all new health advisers. Because that is an attrition rate, really it is going to take a little bit of time to see the real increase in sales from that. But we're glad we got it out there before the big diet season rush in the first quarter and we're expecting to see continual growth in that business from here until the end of the year.

Good. Just a follow-up also in your direct advertising business. When you look at the mix, roughly how would you in rough terms how would you say that mix is brought out between the different types of media formats?

What we knew is that in the past we've only been heavily focused on the print media so in the second quarter a large piece of this testing we did was in the television market, so I would say of the breakout of spend it would probably be 55% print, 35% TV, and then 10% [other].

That is primarily the testing that you're doing is the TV, right?

Exactly.

You're getting good -- you know, below you said $150 CAC or about $150 CAC?

That is about that $150 CAC for that TV piece.

Okay, so this is a whole new media venue for you. When you look at the length of stay, do you have that in terms of the second quarter and maybe -- I guess it is hard to say if you're just testing it, but the new customers that you're getting with this new test marketing, how would you say that that is going to play out in terms of how long they are going to stay in the program for?

It is a new type of clientele. Like I said, it is only slightly different. I would anticipate that it's a very similar lifetime value and they also should be increasing with the increase of port tools we're putting out there now, both with the book as well as MyMedifast. In theory, it should help all customers stay on the diet for a longer period time, so I would say they -- let's keep them somewhere around that $575 live time value for that direct to marketing consumer.

Great. Thank you very much and congratulations on your new listing. Take care.

Scott Van Winkle, Canaccord Adams.

Congrats as well. A couple questions. First on Take Shape for Life you say attendance is up 30% in convention. What was the number of actual attendees.

Number of attendees this year was 300.

Did you spend more -- first, what was the timing of the convention last year?

Last year it was around the very same time. It was the end of June last, this one was the beginning July, July 1.

Any odd change in the spending year-over-year?

As far as the --

The event itself.

We did up the -- nothing more than 30% from what it was last year.

Any change in the compensation plan year-over-year?

No, the same compensation.

Okay, so if we look sequentially from Q1 to Q2 -- and I realize you've got a seasonal business and it is always best to look sequentially, but if we do anyway on the SG&A, your SG&A rose to a $1.2 million sequential yet your spending on advertising rose $2 million sequentially. I am wondering what came down on a sequential basis from Q1 to Q2?

As far as overall in SG&A, we have really seen (inaudible) initiatives in the ERP system. We've seen a lot of different efficiencies there. We saw it did climb up a little bit from the first quarter so as far as from first quarter to second quarter we're pretty much maintaining steady. Last year at this time there was an additional perhaps amortization piece involved there. Brendan, if you know of anything additional you want to add?

A little -- in Q1 we had to take -- actually we had to write off a customer list. We saw an actual couple of -- $200,000 based on that. This quarter we had a little less amortization.

Another major piece was between this year and last year we did have a selloff of the TCF business which has helped provide a little bit more focus for the Medifast business as well as that business was also at a loss. As well as the clinic piece of the business, the clinics last year were not a profitable business. This year they are seeing rather significant revenue and profit. So it is really not that direct -- it's not the network marketing or the advertising pieces. It is more the focus of the business on the weight loss as well as the profitableness of the clinics.

Okay. And all of the five clinics that opened in the quarter, and the four coming in Orlando, those are corporate owned?

Correct. Five opened in Dallas and four are to be opened in Orlando, all corporately owned.

When you look across your business, how do you feel about staffing levels in the senior management team? Mike, you and I have talked about -- I've asked about a head of marketing and are there specific positions that you kind of have open requisites out now to fill?

With the exception of the margin piece, we're very well staffed and very well pretty much in place for some significant growth. We've recently put some additions in the IT aspect of the business which are paying off large, but other than that, no, we're very much ready to go for 2007.

Okay. Inventory was up sequentially. I assume you're trying to rebuild from a couple quarters ago when you were real tight.

Very true.

The call center is all good to go, trained and backed up and ready for the rush in January?

The call center is currently ready for its current levels plus another about 20%. We will be spending the last probably six weeks of the year getting them trained and ready for the January increase.

Okay. And the testing you did on the marketing side, the 45% that was testing, you said most of that or I think it was all the television advertising was basically testing. How many different spots did you run?

As far as the 60-second, 30-second infomercial type spots? We pretty much stuck to the 30-second spots in the TV as well as 60-seconds but nothing longer than a minute.

So the picture yourself campaign, what were the other campaigns you did?

There was the picture yourself campaign and there was the too busy to lose weight campaign.

Okay, and when you sit back and look at your obviously your testing for next year and you've got a couple more quarters and are going to test some more, was there one area where you kind of felt like, yes, we've really got to work on this a lot?

I would say that depends on the age demographic. I think the 30-year and above about that 40-year old is a tremendously great potential inside that market. What we're looking to do is kind of change the look and feel of our ads and we can probably grab that a bit of lower-cost to acquire.

Did you go too young or go too old?

We didn't go either too young or too old. I think we were pretty much successful but I think we can be much more successful with a little bit of adjustments on the young market as we continue to focus on the other. We have always had a great -- our name has always been very strong in the brand awareness from the older markets so I think it is now growing out in the young market.

Okay. And on your guidance for the back half of the year I think you are around $0.24 year-to-date -- so you're talking another $0.14 to $0.16. Should we assume that just kind of tails off a little bit third quarter and then into fourth quarter and the fourth quarter would be your seasonally softest earnings quarter?

What we wanted to do in the second quarter was get a large percentage of that testing out there to the advertisements because that is the closest to the first quarter we feel as far as the advertising pieces. We will continue to maintain our advertising budget to that $11 million to $12 million piece and as always with seasonality in the fourth quarter you might see a little bit of a drop off. We would love to see Take Shape for Life and when they start to grow kind of pick up some of that, but yes, you are pretty much right on target as far as it will tail off toward the end of the year in preparation for a large advertising expense in the first quarter.

As far as the testing on the advertising in the back half of the year where it's going to be a little bit less effective, is that going to be more aggressive in the third quarter or the fourth quarter?

More aggressive in the third than the fourth, however the second would be our strongest in total.

Okay. The advertising plan for 2007?

Significant increase in advertising planned. Yet to be determined and approved by the Board after reviewing all the tests received for 2006.

And when you sit back and look at the business at this point, do you really start with the level of advertising and then build around that? Is that the first metric that's really going to drive your business?

Being vertically integrated we're kind of in a blessing where we can control our manufacturing distribution very easily. Call centers are the ones that takes the most amount of ramp up time. That would be about six weeks so basically it comes down to how much money you want to put in advertising. We feel that we can manufacture well up to $250 million in sales. We can distribute well up to $250 million in sales so not to try to go anywhere near those rates next year but those are the three pieces of the business that can be considered bottlenecks. So we want to make sure we have those pieces ready to handle any kind of advertising dollars that we do spend.

Last question, on the product side any changes you need to make there or enhancements to the product offering?

We are looking to get some new products out there by the end of the year which we think a bit more of the solid form. There's still going to be a powder format but they can turn more into solids to have a bit more of a less taste (indiscernible) to the consumers but we're pretty comfortable that the Medifast brand is still a very young in its brand awareness so that we can do very well with the products we have on hand now before any real necessary changes are needed.

Do your customers tell you that you need a new dinner offering or anything like that? I look at the products and I say I see a couple of their breakfast items, I see some lunch with the soups. Is the dinner where people ask for a little more substance?

Usually the customer chooses the dinner to be their end one on the day. The Medifast meals -- there are five Medifast meals end ones and so they usually go with a chicken, beef or fish of their own choice and side salad for their dinner. So I would pretty much say that is the one they choose to do their own with real food, so the meal replacements are easiest on the go which people are going to do mostly for breakfast and lunch at the office.

Okay. Great. Thanks.

Michael Lasser, Lehman Brothers.

So excluding the spending on television, was CAC in the media, print media down? Year-over-year?

For year-over-year, no. The CAC in the print media was pretty much the same as it was in the first quarter. The overall blend was $150. Television had some pieces that drove it up a little bit probably closer to an overall television CAC of about 175 to $200.

The segments that you're targeting, it's slightly different but what about from a gender perspective? Is it still mostly females?

We are still focused heavily on the female. We have a far [point] from saturation in the female market.

How is the message different to target the younger versus current demographic and the slightly higher or change in income distribution demographic?

The messaging was very similar this first round. That when we kind of got the feedback from the consumers as far as what they want to -- what need to be changed. We will be making those changes and moving forward for the rest of the year throughout 2007.

Then you stated before that you have confidence that you will have an ability to reduce customer acquisition costs. Could you point to something and what could you point to that offers that confidence?

Very confident in the sense that we are getting the feedback. It was the first on the Company had gone off to that younger clientele and we're getting feedback of what we could do to maybe slight change that we are going to have nothing but a positive [impact]. The good news is that we would acquire customers at $150 all the way throughout the quarter and also the great news is that is the first time we really try to really go after that market, so there is only room for improvement inside there.

And when you mean reduce customer acquisition costs, is that relative to the 150 in the quarter or the $135 versus last year?

That's for the 150 for the quarter. We think we can continue to drive that down throughout the remainder of the year as well as 2007.

Two more questions. Given the growth in the number of customers, has the percentage of new customers from referrals changed at all?

That is maintaining about where it was. The main referral piece of the business would be the Take Shape for Life business and when we see a customer who might be very successful referring a lot of individuals, they naturally seem to congregate over that Take Shape for Life mentality and they join that -- they are able to actually get commissions on that sale.

Then when you introduce new products, will you reevaluate your pricing with the outlook for price increases moving into next year?

We will definitely be keeping an eye on that with the economies in the states they are moving forward into '07.

Should we interpret that the tendency would be to restrain price increases?

I think the Company with increasing pricing out there -- right now we have no intention of any price increase or decrease that we're maintaining however if anything it would have to be an increase in the near future.

Okay, thank you very much.

(indiscernible).

On last quarter's conference call, May 15th, you mentioned total advertising at $2.5 million for this quarter and it seems it came in at $4.5 million.

$2.5 million was the first quarter.

You were discussing your guidance for this quarter.

We did increase advertising testing throughout the year. The original budget for the year was set at $10 million. We've increase that now to $11 million to $12 million. We started the year off -- the second quarter off with a $2.5 million and through continued increased advertising and television increased that to the $4.5 million figure.

Okay, so when the conference call happened originally the $2.5 million figure was what you had anticipated. It just went up throughout the quarter.

Throughout the quarter, exactly. (multiple speakers). the timeline to get those testing out there because it is most similar to the first quarter of '07.

My other question is related to CAC. If I went back and listened to the previous conference call, I feel like you mentioned that CAC for the first quarter was $100 and I'm pretty sure I just heard that you told I think it was in answering Greg Badishkanian's question that this quarter you just mentioned that last quarter it was 125, so you had previously said it was $100 in CAC for the last quarter and now you just said that it was 125. Can you just clarify for me so I know?

No problem. In the first quarter we spent about $2.5 million in advertising expense and acquired about 25,000 customers, giving it about $100 cost. We had an original agreement in television advertising with our buyer whereas that would put up the initial cost of the advertisement and we would then pay them a percentage of the sales commission so the first quarter had a bit of a difference in advertising expense as what we spent and then the commission has spent which is technically an advertising expense but was outside of that department. That agreement moving forward (technical difficulty) therefore everything is being spent on our dollar. There is no more commission expense being paid to the buyer. So moving forward everything is in advertising expense and commission expense is not separate from that.

Okay, so there was a slight change and obviously you could not make note of it until after the fact.

That's right. Including the commission expense of this quarter costs to acquire was around $125. Straight advertising expense outside of that commission was $100.

Okay. Thanks, gentlemen. Keep up the good work.

A follow-up from Scott Van Winkle, Canaccord Adams.

Mike, when somebody calls up after seeing your advertising -- calls into the call center and they are given the option of a counselor and going into the Take Shape for Life program, that first order, I know you don't pay a commission to the distributor but where do you account for that revenue? Does that go into the direct response or does that go into the Take Shape for Life?

That goes in as a direct response in order to pay for that cost to acquire that consumer.

Okay, and then the next order they would have would go into the Take Shape for Life piece?

Exactly

Thank you.

There are no further questions in the queue. I would like to turn the call back over to Mr. Mike McDevitt. Please proceed.

Thank you very much. We appreciate you taking the time to hear us share our vision for the Company. We are excited about where we are today and the opportunities for the future. We thank you for your continued support and look forward to speaking to you when we announce our third-quarter results later on this year. Thank you very much.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.