Stryve Foods, Inc.

Thank you for standing by. This is the conference operator. Welcome to the Strive Foods, Inc. second quarter 2022 earnings call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then 0. I would now like to turn the conference over to Sandy Martin with three-part advisors. Please go ahead.

Thank you, operator, and welcome to the Strive Foods second quarter earnings conference call. With me today are Strive's chief executive officer, Chris Beaver, and chief financial officer, Alex Hawkins. Before we begin, I would like to remind everyone that part of our discussion today will include forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Looking, forward-looking statements by their nature are uncertain and outside of the company's control. Actual results could differ materially from these expectations. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We do not undertake to update these forward-looking statements at a later date, and they only refer to today, August 15, 2022. In addition, today's call will include a discussion of non-GAAP financial measures including adjusted EBITDA and adjusted EPS. Non-GAAP financial measures should be considered as a supplement to and not a substitute for GAAP financial measures. We refer you to reconciliation of non-GAAP to the nearest GAAP measure included in today's earnings press release for further detail. This call is being webcast and can be accessed through the audio link on the news and events page of the investor section at ir.strive.com. Also, the earnings press release is posted on our website, and a copy of the release has been included in the Form 8 case submitted to the SEC. With that, I would like to now turn the call over to Chris Beaver. Chris?

Thank you, Sandy. Welcome, everyone, and thank you for joining us for our second quarter earnings call, and thank you to my teammates at Strive. You have been welcoming, transparent, and your efforts are greatly appreciated. Our second quarter results represent the largest revenue quarter ever for the company. For context, second quarter's gross revenues were $14.8 million, which is nearly half of the gross revenues achieved in the entire fiscal 2021 year. Clearly, the consumer demand is on the rise, which creates a tremendous amount of excitement about our future. While these top line results were certainly impressive, we clearly have opportunities to improve our delivery in a more balanced way. as evidenced by our profit margins. The lessons learned from our second quarter's performance highlight the need for transformational change. These changes, combined with the growing consumer demand, offer us significant opportunity to grow, improve margins, and deliver a profitable business, ultimately creating value for all stakeholders. I am now 10 weeks in at Strive. I think it's important to begin with some foundational comments about the company, why, As a fellow shareholder, I am excited to have joined Strive Foods and discuss our plans moving forward. Our portfolio of brands hold a unique and differentiated position as a delicious, healthy alternative for consumers, especially for traditional meat snack users. We know that our brands have a much broader appeal than other meat snack brands interacting with other healthy, higher protein alternative snack options, thus further offering us growth potential outside of the traditional category. Consumer demand continues to accelerate for better-for-you snacks, and it is increasing faster for products that deliver higher nutritional value without compromising taste and quality. Similar to other categories across the industry in which better-for-you offerings brought new users, disrupted the category norms, and has led to higher category penetration and growth, we are truly in that sweet spot in a high-growth category with fantastic tasting products that are minimally processed and deliver against the highest demand of product benefits. This presents drive the opportunity to delight our expanding consumer base, partner with our valuable retailers on category growth solutions while delivering value to our shareholders. We start with high quality steak, seasoned, air dried, and minimally processed. This delivers a superior consumer experience for taste along with more protein per ounce versus traditional jerky, without any of the no-nos, no nitrates, no gluten, no MSG, nothing artificial, truly natural ingredients, all while having zero grams of sugar. Earlier this year, we discussed our growing retail distribution, ranging from convenience stores to clubs to supermarkets, as well as distribution in numerous alternative formats. We have made progress growing distribution, and this will be a top area of focus. Increasing our distribution footprint will ultimately deliver more availability of our brands while helping our retail partners expand the category and affording our valuable consumers more opportunities to find their variety that's a favorite choice. In addition to building distribution, we will be disciplined with our investments for promotion, implementing a decision criteria that delivers a return on investment in advance of taking action will be our way moving forward. Within the last quarter, we learned some valuable lessons that will make us much better in the future. This includes the financial makeup as well as how we must execute with excellence. The executional lessons from Q2 also impacted the business downstream, which created short-term service challenges. Combine this with continued industry-wide supply chain challenges, rising input costs, and the importance of how we price and promote all present opportunities for us ahead. I am proud of what the team has accomplished and believe that the quality of our products along with the passion, pride, and talent in the organization is a strong foundation for our future from which to build upon. With that said, I'm excited to announce a major restructuring plan at our company. This plan builds off momentum from the first quarter where the company set in motion a path to profitability with solid sequential improvements from Q4 to Q1. While we have incorporated many of these elements of the original work, this restructuring plan adds key elements not previously contemplated. We will simplify the organization and the portfolio, introducing a productivity initiative that will attack costs through disciplined project management and continuous improvement in all that we do. For example, we have already optimized the organizational structure and headcount, brought clarity to roles and responsibilities, and are creating a culture of accountability. We have additional initiatives already actioned, such as rationalization of SKUs and implementing a zero waste mindset across the organization. This is particularly important as we seek to prioritize, simplify, and monetize all inputs by maximizing our yield. The compounding impact of this will improve the quality of revenues and ultimately profits. I will turn the call over to Alex to discuss Q2 results and liquidity, and we'll come back to discuss guidance and our key initiatives around growth, productivity, and execution. Underpinning these efforts is our transition from a founder-led organization to a true operating company. This type of transformational change takes planning, collaboration, and relentless execution. And the board, my teammates, and I are fully aligned on all these efforts. This is an exciting time for the company, and we are committed to making meaningful changes to our business operations to build a sustainable and profitable growth company. With that, I will turn the call over to Alex to discuss our Q2 financial results.

Thanks, Chris. Let me begin by providing some background on the factors that drove the second quarter's results. From a capacity perspective, the second quarter was the largest in the company's history. While the achievement of 10.9 million in net sales in the quarter shows a nearly 48% sequential growth over Q1-22, it doesn't tell the full story. For context, the sheer level of tonnage produced and fulfilled was nearly three times that of any prior quarter. As Chris discussed, these outsized production and fulfillment volumes in Q2 were primarily attributable to a time-specific event which placed our products in a retailer for a limited period during the second quarter. This nationwide program all occurred within the second quarter of 2022. While this event created high levels of demand, it also produced challenges to price mix and our supply chain. We faced higher input costs than expected and experienced additional challenges related to our own execution. As Chris stated, many lessons were learned and we will be better going forward. Adding to the negative gross margins, certain reserves and write downs were taken in conjunction with the go forward restructured plan. related to non-core assets. The compounding effect of discounting on the top line increased commodity input costs, yield-related challenges, and these one-time charges created the perfect storm of negative gross margins for the quarter. These ramped production requirements also led to execution issues and fulfillment challenges, culminating in short-term supply gaps in our wider distribution network, causing lower-than-acceptable in-stocks with our current retailers. While these compounding adverse effects were significant, they were temporary and mostly attributable to one-time factors, which we believe are now behind us. Since June, we have been able to quickly return to a more normalized production cadence, allowing for improved yields and quickly recovering in-stock percentages at retail. Inflation is still a factor. However, in beef, it has moderated significantly over the last several months. Early this year, we took price actions which went into effect during the first half of 2022. As we shared on our last call, we have implemented a systematic continuous price action review process to proactively take price should the need arise. As an outgrowth of that process, we acknowledge the potential effects of the far-reaching drought conditions on beef markets and are seeing early indications of a return to rising input costs. To that end, we just recently announced another price increase which will take effect later this year. With this explanation as the backdrop, let me walk you through the financial results for Q2. During the second quarter, net sales of $10.9 million grew by 48.9% versus the year-ago quarter. Our gross profit loss for the quarter was $4.4 million, compared to positive gross profit of $3.6 million, or 48.7% of revenue in the year-ago quarter. As discussed in our last earnings call, we announced leadership change, and Chris stepped in as the company's CEO on May 23rd. Since that time, Chris, in full collaboration and alignment with our leadership team and the board, reviewed the business strategy, near-term prospects, and took actions to strengthen our path to profitability program with an additional restructuring plan that he will discuss in more detail in a moment. Consequently, several decisions were made as part of the company's restructuring plan, that necessitated certain one-time write-downs of non-core assets and other reserves, many of which were taken in the quarter. These had a considerable impact on our second quarter results. Ultimately, these were non-recurring charges of approximately $3.9 million that we have added back in the calculation of adjusted EBITDA and adjusted earnings per share. As a result of these items, the second quarter net loss was $16.4 million, or 53 cents per share. compared to a net loss of $5.6 million or 55 cents per share in the prior year quarter. The quarter over quarter per share amounts were impacted by the change in weighted average shares outstanding from 10.1 million shares for the 2021 second quarter compared to 30.9 million shares for the 2022 second quarter. The weighted average shares outstanding was impacted by the company's capital raise and D-SPAC transaction. The adjusted loss per share was $0.39 for the second quarter, which compares favorably to the adjusted loss per share of $0.58 for the year-ago quarter. These adjustments include restructuring charges for one-time staff reductions, reserves, write-downs, and other non-cash items. Finally, our adjusted EBITDA loss for the second quarter was $11.4 million compared to an adjusted EBITDA loss of $4.4 million a year ago. you can find the gap to non-gap reconciliations at the end of today's press release. At the end of the second quarter, we had approximately $5 million of cash and cash equivalents with positive networking capital of $12.2 million. And I'm pleased to announce that we are currently under letter to secure in excess of $20 million of committed non-dilutive borrowing capacity through a combination of facilities, which we hope to close in the near term. We believe that our path to profitability in conjunction with the restructuring plan is expected to dramatically change the trajectory and with the goal of reaching profitability during the first half of 2023. We are resolutely focused on reducing the company's losses and carefully managing the deployment of cash to fund operations and growth in working capital. We are managing our business with focused discipline and plan to continue to carefully manage cash consumption so as to maintain a reasonable amount of liquidity to operate the business for sustainable growth and the achievement of our goals. We understand that the second quarter financial results and execution challenges were painful. However, the experience did provide us with fantastic household penetration with our target consumers, and their response gives us great confidence in the broad appeal and consumer attractiveness of our Strive family of brands. In Q2, we challenged the company's capabilities under past operating practices, and it took its toll. These learnings have amplified the need to make the changes that have been underway, which Chris will highlight shortly. We firmly believe this evolution will benefit us across all facets of the business and drive operating excellence, productivity, and value creation in the long term. Under Chris's leadership and the company's restructuring plan, we have new accountability, accountability goals, and transformational imperatives. These directives serve to foster and develop a culture of accountability with clarity on objectives, goals, strategies, and metrics. We have deployed challenging but achievable targets, budgets, and reporting to track and manage progress. We are executing against the plan to streamline the organization structure and reduce non-value-added tasks and expenditures driving productivity. Clear alignment and focused execution paired with on-trend products that consumers love will propel us towards our goal of profitability. To that end, I'm pleased to share that the preliminary results of early Q3 numbers show that our plan is working, with positive gross margins tracking meaningfully ahead of our internal plans and in excess of the last three quarters. With that, I would like to turn it back to Chris.

Thank you, Alex. Relative to guidance, we previously guided to a range of $43 to $48 million in net sales for the full year of 2022. Upon further review and factoring in our restructuring plans, we are now guiding to a range of $35 to $37 million to ensure a higher quality makeup of the revenue, a restoration and sequential improvement of gross margins, and significant progress towards reaching profitability during the first half of 2023. We have identified and are eliminating non-profitable revenues. Further, due to the COVID-related equipment supply chain challenges, we have experienced a delay on the timing of an innovation platform previously planned for the back half, which is now planned for 2023. Additionally, we are prioritizing our core portfolio. We will optimize our portfolio with an initiative to rationalize SKUs. We anticipate that these intentional actions will optimize revenues, delivering sequential growth in net sales and gross margins from Q3 moving into Q4 of this year. We have clarity on the tasks ahead. I have managed through similar challenges in my past. We are moving this company beyond a startup business to a well-known and respected consumer packaged goods company with recognized brands that are available throughout the country. These transformational imperatives that Alex touched on are the basis of our journey, and we will align the team around a productivity plan that focuses on three important categories. First, the quality of growth. It's a fundamental pillar of all successful CPG companies. Ensuring we are focused on building the business with fact-based prioritization and discipline execution. We will build our core and then add more through margin accretive innovation. Secondly, Productivity, which includes important projects that drive simplification, such as SKU rationalization, design to value, price pack architecture, project management, and ROI-based decision making. This is how we will expand gross margin and deliver the profitability. Third and critical to every other initiative is discipline execution. We will be maniacal about our execution. With a highly engaged team driving accountability in everything we do, this is the flywheel effect. a known concept required to move companies from where they are today to world class. We are very confident that our strategy will lead to further stability and ultimately profitability for our company. I joined Strive because of the tremendous upside potential that this business has. We are fortunate to be competing in a high growth category with the best quality, best tasting products with attributes that are unmatched by our peers. We have the most on-trend brands that offer significant growth potential. The plan that we have built and the energy and commitment from our team has me extremely excited and confident about our skill and our will to unlock and reach our full potential. With that, we'd like to open the line up for questions. Operator?

Thank you. We'll now begin the question and answer session. To join the question queue, you may press star, then 1 on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then 2. Our first question is from Alex Berman with Craig Hallam Capital Group. Please go ahead.

Great. Thanks, guys, for taking my question. Totally makes sense that you guys would be pulling back on some expenses and doing this restructuring given so many of the headwinds that are out there. Wondering if you can give us a little bit more detail on what specifically you're going to be pulling back on. Are these you know, wholesale sales where there just wasn't any margin in it for you or, you know, maybe opportunities to pull back on direct-to-consumer marketing where the acquisition costs were just too high? Can you give us a little bit more color? You know, that's a pretty big target of expense cuts in the second half of the year. Just wondering where we should see that and how that's going to manifest itself into revenue and expenses.

Yeah, thanks for the question, Alex. Just a couple things. We are not providing the level of detail amongst the specificity of each of the channels where the mix of product is going to be sold through. But I'll tell you this, it'll be a combination of three things, expense management, people management, and channel management. And with that channel management comes our investment against the returns that we get against those revenues. We have overtly identified, we've identified and overtly and intentionally moved out some volumes that were historically done and or plan to be repeated that don't create value. So we are very targeted in what we're doing, and that will ultimately shift the mix of how product does come in, but it will do it in a way that has a return on the investment, not just to drive revenues.

Okay, that's really helpful. Thanks.

And then can you talk a little bit more about the target to reach an inflection to profitability in the first half of the year next year? Is that on the same basis that you've been reporting adjusted EBITDA? Is that the metric we – should be looking for, and can you give us just a little bit more sense of what the numbers could look like to kind of get you there in the first half of the year? Obviously, not that you're giving guidance for next year, but I would assume that with the lower sales guidance for this year, we're probably thinking about you know, lower revenue base for next year than we would have previously. Is this just going to be, you know, just a dramatic reduction of expenses? Is it going to be more gross margin? Can you give us just a sense of what the numbers might look like that get you to that adjusted EBITDA positive in the first half of the year?

Well, this is Alex. I will – answer part of that for you. So yes, adjusted EBITDA is the metric that we're kind of keying in on for those statements. And so that's where we'll track to. As we shared, part of our strategy here is a normalization of our gross margins. That's obviously very important and staying ahead of the curve on any commodity or inflationary issues out there. We're not giving any specific guidance for next year just yet, other than we do anticipate reaching that inflection point in the first half of next year. I think, as you inferred, that's going to be a combination of optimizing our spin throughout the P&L, improving our gross margins, and continuing to foster growth in our quality growth throughout our distribution network.

Yeah, I'll just add a little color to it. You know, coming into a company that's, you know, kind of in the early stages of the development presents a lot of opportunity from my lens. When it comes to the manufacturing side, we have opportunities to network, optimize the network from the consolidations, the DCs, from order sizes and the way we fulfill our products to process improvements and utilization of labor in the plant cycle time. Getting to a zero waste mindset to drive cogs up down and revenues up So when you use all the byproducts you can turn into other products that will then compound the delivery of what what? It will have from both the bottom and top line sourcing opportunities from real-time impact and inventory management to a more intense level to ultimately improve our free cash flow getting really disciplined around the specs of our products from a our own and sometimes we do private label type products as well. Having a multi-year capacity plan that complements the demand potential that we need to achieve so we can be very overt in our allocations of capital and phase it in properly that supports the demand that we need to generate. And then in organizational design, we have it in both the direct headcount but also third parties, whether it be service providers and or consultants and professional service providers. That all in concert with some of the portfolio optimization from rationalizing some of the skews, which were primarily some of these skews were just sold on direct-to-consumer and, quite frankly, are adding a lot of complexity without delivering the value. I would say there's a lot of low-hanging fruit just based on some of those headlines there.

That's really helpful.

Thank you. Thank you both very much.

The next question is from Brian Holland with Cohen and Company. Please go ahead.

Hey, good morning, everyone. This is Jacob Henry on for Brian Holland. My first question is around distribution. I believe there was an expectation for strong distribution progress in the quarter, so I'm wondering if you could provide some color around what that looked like against your expectations given the top line results.

Yeah, thanks for the question. We continue to drive distribution gains, but it was a bit muted in the data that you read from the service providers because some of our service had some disruptions. And therefore, it looks a little bit muted. But when you look at it from a broader base perspective on a 52-week basis, you can see that the amount of continued growth that we've been able to experience. And it is impressive. It is very impressive. And quite frankly, we're kind of just getting started because There's so much white space out there. Bacadillos is growing both from distribution and velocity with higher pricing. And we're just getting started with that brand. Kalahari is doing very well in some new distributions on the natural channel. And then the Strive brand obviously is a bit muted in the numbers from an ACV standpoint, but still the strongest in distribution that we have. We've got a lot of white space to go after there. We were going to be very clear with our customer teams as to prioritization and channel development. So, good progress. A little bit muted on what the service providers and consumption providers are showing just because we were out of stock on several SKUs for an extended period of time.

Great. Thank you. That's helpful. Changing topics here. Moderating beef costs were cited during your presentation. Can you just remind us how we should think about that flowing through the P&L and also to what extent you're hedged here?

Sure. So, I'll provide what color I can. We haven't commented publicly on any specifics around hedging strategies or anything like that. With respect to beef costs, you know, it's a combination of the input cost itself and our yields ultimately as it goes through our production facility. As we shared, one of our opportunities is going to be to continue to optimize our yield, which, you know, we had certain yield-related challenges in the second quarter. So that ultimately offsets the effective beef cost as it flows through the P&L. But as we continue to improve that, we'll hopefully see some normalcy there. And then as we shared, you know, we recognize that There are challenges with the drought conditions across most of the country right now, and we're starting to see early indications that that will affect beef pricing moving forward. And so we've gone ahead and proactively pushed forward some price increases, and we'll continue to monitor that closely moving forward.

Okay, thank you. That's helpful. And then, Chris, last one for you. Prior to Strive, you were part of a turnaround at Hain Celestial and a lot of value creation through innovation and brand investment while at Pinnacle Foods. As you've now been with the company for about 10 weeks, what experience of yours stands out as most applicable at Strive and its current positioning?

Yeah, really, thank you for that. And there's really two experiences I'll kind of lean on, both the Pinnacle Foods as well as the Hain one. And getting your core foundation and your strategy really clear and consistent and staying true to that is paramount for the team. And that way, the efforts will follow those strategies and that prioritization. Secondly, when we innovate, we will innovate with margin and creative intentions that will expand the category, expand our brand presence, and get us into new and different spaces when we're not today. So very optimistic about what this all these brands have from an expandable household penetration with the core and a lot more run room on capabilities and expansion into, you know, complementary concentric circles.

Very helpful. Thank you both.

The next question is from Mike Grondahl with Northline Securities. Please go ahead.

Yeah, thanks, guys. Could you break out sales between your sales that went to that limited promotion at that retailer and all other sales? And I'm trying to just understand how much of the negative cost of goods sold was related to those, to sales at that retailer.

Good question.

While I'd love to be able to provide you that degree of detail, I would, unfortunately, I just can't get to that degree of detail. But I will tell you, it was a very big program. It created a lot of positives for us. First and foremost, it got us national exposure to a very attractive shopper audience and consumer base. Secondly, our actual sell-through in the locations was very, very impressive. And thirdly, we know that this is going to drive way more than awareness because the trial is there and our data supports that when trial happens, repeat, you know, definitely follows. With that being said, it creates a lot of opportunities for us, not only with a particular retailer, but many others as a result of it. And that's what we're excited about. And we think we'll be able to continue our journey of our prioritization around distribution expansion, being smart and mindful about what and how we promote and when we promote, and making certain that it's a win-win-win for us, for our partner, and also the shopper or consumer. So this is a definite inflection point for the company with a lot of learnings, albeit some expensive ones, but a lot of good learnings, not just with the shopper and consumer, but also internally on how we can be as efficient and effective to manufacture at the lowest cost of goods possible.

Got it. And will you be working with that retailer going forward? Do you think they'll be in your 3Q, 4Q numbers?

We hope to be working with that retailer like we do with all of them. I can assure you we're in dialogue, and we're optimistic about what the future can present based on some of the data I just shared with you.

Got it. And then if that retailer was really large – How extensive were your out-of-stocks at other retailers? Could you just go into that a little bit more?

Yeah, I think the one thing to take away from what Alex shared was we did triple the amount of volume, actual tonnage, through the manufacturing sites than we've ever done before. So it did stress the capacity challenges and expectations that we had within the organization. Those are some really important lessons learned as learned as a growing, you know, young company. Um, with that being said, we, um, uh, we believe that we, um, did lose quite a bit of, um, uh, downstream, um, revenue. But we didn't lose the distribution that's quickly being restored. Okay. We're back and we're back, uh, you know, through the pipeline of the distributors and wholesalers and direct to retailers. And with our business route to market, we have such a hybrid where we go direct to some retailers, some go through, you know, specialty distributors, some go through other alternative means. That's a bit slower process than one of the larger CPGs where it's like, oh, you got the product and it gets back on shelf in very fast fashion. So there's a little bit more of a drag time for a company like us. But with that being said, it's productions back up to Alex's earlier comments and running very efficiently and effectively, and we're restoring customers. Not only the margins, but we're also getting the product back in stock in the stores.

Got it. And Alex, can you just define what you meant by yield challenges? Was that you couldn't get raw materials or you couldn't produce as fast as you thought, manufacture? Because it sounded like manufacturing was kind of 3X. So what did you mean by yield challenges?

Sure. With our business, as we're processing whole muscle beef and drying it, maximizing our yield and actually converting that into a finished product is obviously critical to our margins and profitability. And as we ramp production on a tonnage basis to be three times that of anything we've ever done, you know, given that we're the first folks ever to do this kind of production in the United States at this scale, there are some key learnings and challenges that arose. So it was a matter, the deal challenge comments more around our conversion of effectively raw ounces into finished ounces out the door. And, you know, we have identified and are executing against our path of restoring our yields to where they should be. And we made meaningful progress and we'll continue to work to optimize and minimize waste as we transition to a zero waste mindset organization per Chris's comments before.

Got it, got it. And then you guys commented on headcount, but where's headcount today versus the beginning of the year?

It's something that we haven't disclosed publicly.

Yeah, I mean, we use multiple outside service providers, and we also have our own employees. It's always striking that right balance to optimize all parts of that flywheel. So we've got opportunities within manufacturing to utilizing service providers, and we want to be as efficient and effective as well. But part of the delivery of operating expenses is, targeted at, you know, our own cost to run the business. And, you know, we right-sized appropriately. We have clarified roles and responsibilities and ways of working, which will actually have a compounding effect rather than, you know, everyone trying to fix or solve or, you know, pursue an opportunity. So it's going to be much more focused and fluid and the compounding factors of one plus one will will yield much stronger addition to 3, 4, 5 versus the 2.

Got it. And then just lastly, the $20 million in non-dilutive financing, could you just rough what's a timeline there? And I just want to verify there's no warrants, there's no options, there's nothing equity linked to that. Is that what you mean by non-dilutive?

That's correct. Right now we're under letter. We're working expeditiously towards a closing. We anticipate that that will happen in the near term. I don't want to put a very definite timeline on it, but we're working diligently and we believe that that'll be in place in short order. And yeah, so no diluted features to it. It's actual just senior financing.

Got it. Okay. Thank you.

This concludes the question and answer session. I would like to turn the call back over to management for closing remarks.

Thank you all for listening in and some fantastic questions and dialogue. As you can tell, we're very excited about the potential future and progress that we are starting to make. And thanks for your interest in our company. We will be presenting at the upcoming Midwest Ideas Conference in Chicago on August 25th. So if you'd like to schedule a one-on-one meeting with us, please reach out to three-part advisors. Finally, we look forward to providing an update of our progress when we report third quarter results in a few months.

Thank you and have a great day.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.