SpartanNash Company

Welcome to the Spartan Ash fourth quarter and fiscal year 2023 earnings call. At this time, all participants will be in a listen-only mode. Later, we will conduct a question-and-answer session. I would now like to turn the call over to Kaylee Campbell, Head of Investor Relations.

Good morning, and welcome to the Spartan Ash Company fourth quarter and fiscal year 2023 earnings conference call. On the call today from the company are President and Chief Executive Officer, Tony Sarsom, and Executive Vice President and Chief Financial Officer, Jason Monaco. By now, everyone should have access to the earnings release, which was issued this morning at approximately 7 a.m. Eastern Time. For a copy of the earnings release, as well as the company's supplemental earnings presentation, please visit Spartan Ash's website at www.spartanash.com. spartanash.com forward slash investors. This call is being recorded and a replay will be available on the company's website. Before we begin, the company would like to remind you that today's discussion will include a number of forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. If you will refer to Spartanash's earnings release from this morning, as well as the company's most recent SEC filings, you will see a discussion of factors that could cause the company's actual results to differ materially from these forward-looking statements. Please remember that all forward-looking statements made today reflect our current expectations only, and Spartan Ash undertakes no obligation to update or revise these forward-looking statements. The company will also make a number of references to non-GAAP financial measures. The company believes these measures provide investors with useful perspectives on the underlying growth trends of the business, and it has included in the earnings release a full reconciliation of certain non-GAAP financial measures to the most comparable GAAP measures, which can be found on Spartan Ash's website at www.spartanash.com forward slash investors. And now it is my pleasure to turn the call over to Tony.

Thank you, Kaylee, and good morning, everyone. Glad to be here. To start, I'm incredibly proud of our talented team of Spartan Nash Associates. We made huge strides in our long-term strategic plan in 2023. We delivered record profitability and consistently performed in line with our guidance despite a challenging macroeconomic environment. I want to extend a heartfelt thanks to each of our associates who contributed to our success. The investments we've made in our People First culture are paying off. Before I dive into the financials, I want to highlight the progress we've made with our people. In 2023, we improved our turnover rate by more than 9%, and the momentum continued to build with sequential improvement in the second half of the year. Our associate satisfaction helped us earn the prestigious Great Place to Work certification and a spot on Newsweek's America's Greatest Workplaces for Diversity in 2024. In addition, our overall rating on Glassdoor increased to 3.9 out of 5 in 2023 versus 3.4 in 2020. This puts our score at the top of our peer group and other major national retailers. We've also become a safety leader in our space, which is one of our proudest accomplishments. Since 2020, we have reached the top quartile for OSHA safety performance by reducing our lost time incidents by 78%. This includes a 20% improvement in the last year alone, and as a byproduct of our genuine effort to protect our people, we've reduced workers' compensation losses by nearly 30% since 2020. Together, these improvements in turnover and safety have resulted in improved associate engagement and increased productivity. Now, turning to financial highlights for the year. Starting with our top line, our 2023 net sales increased nearly 1% to $9.73 billion. The impact of our Amazon business reduced our sales by 2% over this period. This change in demand impacted our total company sales expectations for the year. However, we have continued to grow the top line, and importantly, the bottom line, despite the Amazon volume pressures. Speaking of the bottom line, we grew profitability in 2023, while others in the industry were simply maintaining or declining. Our main performance metric adjusted EBITDA was up 6% in 2023 and our adjusted EBITDA margin expanded 13 basis points compared to the prior year. Notably, with the exception of 2020, the last two years have seen the best EBITDA margin expansion in the 10 years since our merger. The success of our supply chain and merchandising transformations contributed to these results. In 2023, we realized $55 million in benefits from these initiatives. Since launching our transformation work, we have improved our throughput rate by double digits, passed along benefits to our customers through the enhanced category planning program, and captured $80 million in total gross benefits. We continue to build momentum in other parts of our business as well. Over the past year, we, one, continued renovating, rebannering, and refreshing our stores, which represents 19% of our store base since 2021. Two, We grew our retail market share by 27 basis points. And three, we increased our own brand's retail unit penetration rate by 30 basis points. As we look ahead to 2024, our team is focused on growing top line, capturing additional benefits from our transformational initiatives and launching new cost savings programs. Regarding top-line growth, our new Chief Customer Officer, Amy McClellan, is now at the helm. Her team has identified organic opportunities that include expanding our national account service models, leveraging our existing network for new opportunities through capital-light business development, and accelerating market expansion opportunities as a result of last year's Great Lakes Foods acquisition. Amy has served on the executive team for two years and has leadership experience in retail, merchandising, and marketing. Prior to Spartan Ash, she was actually one of our wholesale customers. She understands the independent grocery business model and will be a great advocate for helping our customers grow with Spartan Ash. Other things we're excited about in 2024 include our continued transformation work. We expect to capture an additional $50 million to $60 million in benefits from our supply chain and merchandising transformations, as well as our go-to-market plans. This puts us on target to hit our gross benefits range of $125 to $150 million a whole year earlier than initially communicated. We're also in the process of launching several cost savings initiatives. These include automation and AI programs, such as the expanded use of Tally, our in-stock robot, which will appear in 75 stores this year. We're also implementing an automated workforce planning tool and inventory validation warehouse drones. As part of our ESG work, we're introducing operational shrink initiatives to help us reduce food waste across our total value chain. These are all capital light projects that will add value for years to come. We look forward to providing updates as the benefits of these programs materialize. Okay, so we have talked about our 2024 plans to grow to the top line, capture additional benefits from our transformation initiatives, and new cost savings programs. We're also actively evaluating inorganic growth opportunities. Over the past couple of years, we have refined our organizational structure to enable efficient and effective acquisition integrations. And we've demonstrated our ability to integrate new assets into our existing network through the retail and wholesale acquisitions we made in 2022. During the same two-year timeframe, more opportunities have presented themselves in both of our segments. We continuously evaluate these opportunities using a disciplined approach. We will remain good stewards of capital and will only pursue those opportunities that we believe will enhance long-term shareholder value. Before turning the call over to Jason, I want to provide some context on what has changed in our industry over the past couple of years. Volume headwinds are higher than the industry initially anticipated following the unprecedented food inflation spike of 2022. We experienced a drop in demand within our Amazon business as they developed a store format that better resonates with their customers, and we're seeing more inorganic growth opportunities. While our long-term strategic plan has consistently captured benefits, we will continue to reassess and adapt our strategy in response to industry headwinds and opportunities. To summarize our overall view of the business, there are many opportunities to win in any dynamic environment. I'm excited about the progress we'll make in 2024 and the value that our transformation work continues to create. All right, I'll now turn the call over to Jason to walk through the quarterly financials and 2024 outlook in greater detail.

Thanks, Tony, and welcome to everyone joining us on today's call. I want to highlight some of our key successes from this past year before jumping into the detailed quarterly results. These highlights include one, Achieving a record adjusted EBITDA of $257 million, growing 6% compared to $243 million in the prior year. Two, expanding our adjusted EBITDA margin by 13 basis points compared to the prior year. Three, increasing our reported net earnings by 51% to $52.2 million compared to net earnings of $34.5 million in 2022. Four, expanding net margin by 18 basis points. Five, returning more than $48 million to shareholders through share repurchases and dividends. Six, generating more than $89 million of cash from operating activities. And seven, maintaining strong liquidity, giving us flexibility to support our long term strategic plan that include both organic and inorganic investments. This past year, we also made significant progress on our margin enhancing initiatives, the supply chain and merchandising transformations. We realized $26 million in cost savings during the year from the supply chain transformation, which is in line with the $20 to $30 million range we previously provided. To echo Tony's comments, since launching the supply chain transformation in 2021, we've improved our throughput rate by double digits, We are still capturing synergies from this program and expect additional cost savings in 2024, which I'll discuss momentarily. We're also incredibly proud of our success with the merchandising transformation, which is still in its early innings. This past year, we captured $29 million in benefits. These benefits were, again, in line with the $25 to $35 million range we previously shared. Now, turning to our fourth quarter results. Net sales in the quarter decreased 2.8% to $2.25 billion versus 2022's fourth quarter sales of $2.31 billion. The decline versus the prior year period was due to decreased unit volume in the wholesale and retail segments, which is consistent with industry trends and headwinds in our Amazon business. Gross profit for the fourth quarter was $339 million, or 15.1% of net sales compared to $341 million or 14.8% of net sales in the prior year's fourth quarter. Our gross profit dollars were flat due to the lower volume I mentioned, while the margin rate increase was driven by reduced LIFO expense consistent with inflation trends and benefits realized from the transformation programs. The increased rate was partially offset by cycling the inflation-related price gains from the prior year quarter. As a percent of sales, our reported operating expenses decreased 36 basis points from prior year. The improvement was primarily due to a reduction in supply chain expenses driven by efficiencies from our supply chain transformation initiative and lower incentive compensation compared to the prior year quarter. Interest expense increased $1.6 million compared to the prior year quarter to $9.7 million due primarily to an increase in borrowings and the higher interest rate environment. Now, turning to our segments. Net sales and wholesale decreased $33 million to $1.6 billion compared to the prior year quarter. The 2% decrease was primarily due to demand changes within our Amazon business. Moving to the bottom line, the wholesale segment's quarterly adjusted EBITDA was $40.7 million compared to $27.2 million in the same period last year. the segment's profitability increased due to one, reduced supply chain expenses, two, benefits realized from the merchandising transformation, and three, lower incentive compensation. Wholesale reported fourth quarter operating earnings were $21.7 million compared to $0.3 million in the prior year's fourth quarter. These results included $8 million in asset impairment charges related to continued supply chain network optimization in response to customer demand changes. Now moving to the retail segment. Sales came in at $647 million for the quarter, compared to 678 million in the fourth quarter of 2022. Our comparable store sales decreased 2.8% for the fourth quarter, while they remained strong on a two-year stack, increasing 6.1%. Similar to the last few quarters, continued reductions in EBT benefits offered to consumers in our retail geography adversely impacted same store sales by approximately 2.7% this past quarter. In addition, our fuel sales were down more than 19% to the prior year quarter. The reduced fuel sales were primarily driven by lower price per gallon. Retail adjusted EBITDA was $13 million compared to 19.9 million in the prior year quarter. Along with lower volumes, the decrease was also driven by a decline in the gross margin rate, notably from the pharmacy business. which negatively impacted gross margin by 100 basis points. Gross margins were also adversely impacted by cycling elevated fuel margins in Q4 last year. The decrease in gross margin was partially offset by reduced operating expenses, including lower incentive compensation. Retail reported operating earnings were $1.9 million compared to $8.5 million in 2022's fourth quarter. Turning to the balance sheet, our leverage ratio of net long-term debt to adjusted EBITDA increased sequentially in the fourth quarter by 20 basis points to 2.3 times compared to the third quarter of this year. And as I said earlier, our liquidity remains strong, giving us flexibility to support our plan, including both organic and inorganic investments. As covered in today's press release, we are providing our initial guidance for fiscal 2024, which incorporates several items that include one, Our current expectations for the 2024 grocery environment. Two, the demand outlook for national account customers. Three, pocket acquisitions. And four, securing $50 to $60 million in benefits from the supply chain and merchandising transformations, as well as our go-to-market plan. To execute this plan, we continue to invest in capabilities and initiatives that deliver long-term shareholder value. These investments are heavier in the first half of the year to maximize run rate value exiting 2024. It's due to the success of our transformational programs that we are offsetting rising industry headwinds, and we are well on our way to hit our original gross benefits target range of $125 to $150 million a year earlier than initially anticipated. Overall, we expect our full year net sales to be in the range of $9.7 to $9.9 billion. We also expect our total planned capital expenditures to be in the range of $135 to $145 million for the year, which includes continued investments in our strategic long-term plan. Moving on to our main profitability metric, we expect fiscal 2024 adjusted EBITDA to be in the range of $255 to $270 million. while continuing to invest in our transformational initiatives. This range is inclusive of tuck-in acquisitions. We anticipate interest expense to be in the range of $37 to $42 million this year, reflecting the ongoing elevated interest rate environment and investments in our business. On a per share basis, we expect adjusted EPS to be in the range of $1.85 to $2.10 per share. I'm very energized about the year ahead, and I believe 2024 is going to be our best year yet. And with that, I'd like to turn the call back over to Tony.

Thank you, Jason. Back on my previous comments, while we have been building our capabilities and optimizing the business, the macro environment has continued to change, and we have a strong foundation to flexibly pivot with these changes. The plan we launched in 2021 sets us up to outperform the industry. The team's hard work has optimized our supply chain, provided ongoing value for our enhanced category planning and compelling offerings. helped us gain share based on the insights from our marketing innovation work, and enabled us to steadily grow profitability despite a dynamic changing environment. We've built a strong foundation, and we're pursuing organic growth and evaluating inorganic opportunities, giving us the confidence to achieve our 2025 profitability targets. Before we open the call up to questions, I want to take one more opportunity to thank our associates, Their execution of our plan is the reason why we continue to win with our customers and shoppers. With that, I'd like to turn the call back over to the operator and open it up for your questions.

If you would like to ask a question, please press star 1 on your telephone keypad now. You will be placed into the queue in the order received. Please be prepared to ask your question when prompted. Once again, if you have a question, please press star 1 on your phone now. Our first question comes from Ben Wood from BMO Capital Markets. Your line is unmuted.

Hey, good morning, guys. This is Ben on behalf of Calibania. Thanks for taking our questions.

So I wanted to follow up on Tony's comments and the prepared remarks about kind of the additional headwinds you're seeing and just how that relates to the 2024 guidance. range so guidance implies kind of flattish EBIT growth EBITDA growth to mid single digit EBITDA growth versus you know the nine percent annual CAGR you guys kind of outlined in your long-term plan so wanted to know how much in 2024 is within your control versus how much is dependent on the macro or the national account environment what drivers get you to the high end of that range versus the low end and then longer term kind of same question As you guys think about re-accelerating towards EBITDA growth of 9% or high single digits, how much can you get with just better Spartan execution versus how much do you need cooperation in the broader macro and competitive environment?

Hey, Ben, this is Jason. Thanks for the question. So a lot to take in there, but maybe the starting point is just a reminder that we're committed to the $300 million of EBITDA in 2025. And we also recognize that the world we live in has a lot of uncontrollables. And what we're doing from our standpoint is controlling the things we can control and driving the performance of our margin enhancing programs. And you also heard from Tony that we're outperforming the initial plan in that space. So we're expecting to deliver the $125 to $150 million gross benefit a year earlier. And what that's allowing us to do is kind of plow through the incremental headwinds in the marketplace. So nobody predicted that we'd have two years of double digit inflation. But what we've done is we've operated and we've executed regardless of what the market conditions look like outside. And what we're doing is building the machine that drives performance in up and down markets and adjusting accordingly. And those adjustments include continuing to focus on delivering our margin enhancing programs, And we expect to see upside in those as well and be on our pathway and on our trajectory to that $300 million.

Okay. That's helpful.

And then I also wanted to dig in on the commentary about volume trends. I think you guys said they were, you know, from an industry perspective, a little bit more significant of a headwind than planned. So can you talk about what's the, you know, what promotional and volume trends did you see in 4Q? And then... You know, is it more of a structural reset than you guys previously thought, or is it still the plan to get volume to come back as this inflation abates? And what's the plan for volumes into 2024?

I'll start, Ben, with just the headwinds thing you mentioned here a second ago. Overall, the consumer has been just a wee bit slower to come back into the same units based on the waning inflation, a little bit more than our industry expected, I'd say, broadly, as you see in other announcements as well. the consumer is looking for deals. I think you'll see more of those. You'll see more folks trading into more economical price points like our own brands. And so that has continued. It was sort of the theme for most of last year. It's continued throughout the fourth quarter of last year as well. So So we think we're optimistic about the consumer coming back and getting back to sort of normal and normal stable growth phase, but it's been a wee bit longer than we expected at this point.

Yeah, Ben, from our standpoint, the way we've kind of building on the last question or the earlier question, we've really focused on making sure we meet consumers where they're at and building out our private label, our own brand's portfolio, and that's performed really exceptionally well through this process. And as Tony pointed out, consumers are still choosing Things around convenience, for example. Our cut fruit and vegetable business was up very strongly in the year and continues to perform very well. Everything across the convenience spectrum is performing well. We're seeing programs and benefits in frozen entrees, for example, that are performing well, and you think about that as a convenience factor as well. So we're making sure we get the assortment right, we get the product portfolio right, and the price points right to meet consumers where they're at to continue to grow and perform, again, despite the economic backdrop.

Are you seeing any vendor support, vendor promotions coming back?

The promotional environment continues to be pretty rational overall. I would say broadly across 2023, the promotion levels were modestly higher as volumes across the grocery industry were squeezed. And we're participating in that as well, but I wouldn't characterize it as any sort of drastic kind of sharp change in the investment profile from the vendor community, but rather kind of a slow increase in promotions generally that are funded through the vendors. And together, when they invest with us, our goal is to make sure that we drive performance both in our stores and with our independent customers. so that when the consumer wins, our independent customers win, we win, and our vendors win along the way.

Great. Thank you very much.

Our next question comes from Scott Mushnick from R5 Capital. Your line is open.

Hey, guys. Thanks for taking my questions. So I was wondering if I could get some clarification. You mentioned tuck-in acquisitions and adding to 24 EBITDA. Just kind of trying to understand the scale of that and how close you are to making some of those acquisitions.

Yeah, as I mentioned here, this is Tony, Scott.

I think I mentioned this also the last time we talked. We're actively sort of evaluating opportunities in the M&A space. I think you'll see us both actively evaluated, as I mentioned also. I think we're looking at a number of options to shore up our overall business offering, broadly in the spaces we play. I think I mentioned this last time, there are likely to be more of them in retail stores, and so we have probably more that we're evaluating in that space than in the wholesale space. But we see that as a really, really important way for us to get our businesses sort of growing and our support, our overall mission to deliver the ingredients for a better life is we add those things that actually make the business we currently have stronger. And we see plenty of opportunities out there. So you'll see that over the course of time as we move through these next couple of years.

And I had a follow-up to that, Tony, but I was wondering about the EBITDA question that I that I mentioned, how much, you know, scale it as far as your forecast for 24?

Hey, Scott, this is Jason. I think about these as pretty small acquisitions that build scale and margin, but really represent a relatively small contribution to company performance. You know, these are things that fit in our geographies, fit in our footprint, and are synergistic to what we do But you should think about these as relatively small in the context, and that's what's incorporated into the plan. What we're trying to do is give investors and folks like yourself real good clarity on where we're headed. And if you kind of wind back the clock, at our investor day a couple of years ago, we talked about our M&A strategy, and we talked about how we would think about M&A, and nothing's frankly changed on that front. What we've done is really executed on our organic plans and built the the framework to execute both organic and then inorganic that sits on top of it. So what we want to share is that we're ready to kind of continue to move that forward consistent with the strategy we laid out a couple of years ago. But frankly, we had to do some of our own internal house cleaning things first. And now we're moving into the inorganic elements and we'll stack that on top of our strategic plan.

And just to follow up to what Tony said, are these wholesale customers currently that you think this is going to take place, or is this retailers that maybe you guys aren't servicing right now?

We're certainly evaluating both of those options.

Okay. I have more questions, but I'll yield there. Thank you.

Our next question comes from Andrew Wolf from CL King. Your line is open.

Hi, good morning. I just want to ask about the gross profit dollar trend pre-LIFO, like FIFO gross profit, you know, has been down and, you know, sort of at an accelerating pace. Is that a lot of comparing to the year-ago gains in inventory holdings, or is that more price competition in the market? You know, what is the biggest driver there of your, you know, what's going on with gross profit dollars and margin pre-LIFO again, exclusive of the LIFO changes? And secondly, you know, when does that stabilize in your view, you know, particularly with regard to the 2024 guidance? Thank you.

Andrew, this is Jason.

Thanks for the question. And so maybe touching on the very first element, and you mentioned this in your question, the gross margin, of course, has been weighed down by the kind of wind down of inflation-related price gains that we've been projecting. So kind of nothing new on that front. And it's been offset or largely offset by the transformational programs in both supply chain and merchandising at the gross margin level. When I think about our gross margin overall across the business, we delivered a margin pickup versus prior year. But we, you know, obviously looking back a couple of years, we're still winding down from the inflation-related gains, and that's weighing on the results.

Do you evaluate the business on a LIFO basis or a FIFO basis for gross profit?

FIFO. I mean, your EBITDA takes out LIFO, right? Correct. All right, I'll move on from that.

You just talk about, you know, sort of the wholesale business, if you will, in terms of, you know, which is, you know, holding up better than retail right now, understandably, given how competitive, you know, the consumer is. But, you know, how do you, how is inflation in wholesale? And, you know, sort of how is volume holding up? And, you know, I know the market is what it is, but Just, you know, specifically more for Spartan Ash.

Yeah, so the wholesale business overall continues to perform well. We had, as mentioned on the call, you know, part of the wholesale equation is the Amazon business, which is they are, as I mentioned earlier, they're resetting their expectations and finding a way to get a retail offering that makes sense for them. And so they pulled back. So that kind of colors the overall volume perspective in our wholesale, but Independence performing, you know, kind of roughly the same as our retail, our own retail stores. Our military business continues to be strong. We're having a second really good year with military and good growth there. So overall, our military, our national accounts, ex-Amazon, and our independent grocers are sort of performing at expectation.

Okay. And lastly for me is on the retail business, did Did fuel deflation or did you sell, was it deflation or did you sell less gallons? And just what impact did the fuel, you know, the lower fuel sales have on the retail segment sales? So we can look at it sort of on a grocery basis.

Great question, Andrew. So two things. On the top line, it was about a $20 million drag in lower fuel sales. And the lower margins, so what we saw were lower margins as we lapped unusually high fuel margins in Q4 2022. The impact of that was about $4 million on the bottom line. So when you think about our results, we delivered a 6% adjusted EBITDA growth year over year. And that was in the face of lapping a $4 million step down in fuel margins in the quarter.

Got it. All right. Thank you. Appreciate it.

As a reminder, if you do have a question, please press star 1 on your touch-tone keypad now. And our next question comes from Alex Slagle from Jefferies. Your line is open.

Hey, thanks. Good morning, guys. A couple questions, high-level inflation expectations baked into your guidance for next year and just any general views on the level of expected supplier promo activity and any thoughts on just the Amazon Fresh business, what you're kind of baking in when you think about those plans?

Yeah, so a couple of things.

So inflation, we see inflation continuing to stabilize, getting back to kind of a normal range of inflation that we may have seen a couple of years back or three years back, I guess. I guess following on a couple, I'll turn over to Jason for a second here for a little more color on that. But the You know, Amazon business, just to build on that again, I think they're, again, as I mentioned, they're finding their way to the right place in their business. We're supporting them as they kind of design what's going to be best for them and for their consumers. They have, so they've continued to kind of continue to right size that business. And we saw more of that in the fourth quarter as they continue to pull back and figure out what they're going to do next there.

Maybe one more comment on the outlook for inflation. We've projected or incorporated about a 1% food inflation assumption in the plan going forward. We think that that modest outlook is reflective of where we're at. Obviously, nobody can perfectly predict the future, but we finished 2023 kind of consistent with what you see externally, sub-3% inflation levels in both our retail and wholesale businesses. And we expect that to continue to wind down into 2024.

Great. And then on new and lapsed customers joining and partnering with your wholesale business, any views on what that pipeline looks like, where you're seeing momentum building the most?

Sure, yes, we have a pretty active engagement with a number of folks out there. As you know, these relationships are often long and sticky, and we believe we have a great offering obviously for our current customer set, but we're seeing good enthusiasm for what we bring to the marketplace. We have great services that we bring to our independent customers. We are refining the types of things that we offer them, and we have great people in the field. Amy is just getting started with her role in that and kind of reshaping how we get more aggressive in the things that we can bring to bear. And so far, the reception has been very good. So we are very bullish on being able to bring more folks into the fold with, again, with the service and the fine people we have out there servicing those customers.

All right. And one more, actually, just sounds like good momentum on just reducing turnover and Kind of like accelerated in the back half. And how much more room to go there and just sort of what the opportunity looks like to get beyond historical levels of turnover and overtime?

Yes, we had a really good year last year overall in retention. A lot of focus, as I mentioned in my earlier comments. The process of putting people first and really focusing on how you get folks engaged in the business and understanding and excited about our goals And the work we've done to sort of recognize and reward those achievements have come a long way. Our retention rates are better overall. They got much better in the early phases, and that's when people are sort of experimenting and trying to learn about their careers. So we see really, really great momentum on overall turnover. And as that sort of wanes, and obviously to your second part of your question, we see better performance on overtime as well. So I think we have better stability, better schedules for folks, and it's a great virtuous cycle when you get that going the right direction. So we feel great about what we're doing right now overall on the people front.

Thanks very much. For any final questions, please press star 1 now.

And as there are no other questions at this time, I will now turn the call back over to Tony Sarsom for closing remarks.

All right. Thank you. And before I close, I wanted to welcome the customers we are hosting today and tomorrow at our annual virtual expo. Attendees for that will participate in educational sessions and auctions. And notably, our customers will get the opportunity to forward buy some terrific deals. We see plenty of opportunities for growth in our independent customers in 2024 and look forward to sharing those ideas with them over the next couple of days. So I'd just like to say thank you again for your participation in today's call. We appreciate your interest in Spartan Ash. And from our family to yours, we'd like to wish all of you a very pleasant good morning.

This concludes today's conference call. Thank you for attending.