Lassonde Industries Inc.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Lassonde Industries' 2026 Second Quarter Earnings Conference Call. The corporation's press release reporting its financial results was published yesterday after market closed. It can be found on its website at Lassonde.com along with the MD&A and financial statements. These documents are available on CEDAR Plus as well. A presentation supporting this conference call was also posted on the website. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has difficulties hearing the conference, please press star followed by zero for operator assistance at any time. Before turning to management's pre-recorded remarks, please be advised that this conference call will contain statements that are forward-looking within the meaning of Canadian securities laws. Forward-looking information is based on management's current expectations and assumptions and is subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. For discussion of key assumptions and risk factors, please refer to the forward-looking statements section of the MD&A. Also note that all figures expressed on today's call are in Canadian dollars unless otherwise stated and that most amounts have been rounded to ease the presentation. This call will also include certain non-IFRS financial measures and ratios that are not standardized under IFRS and may not be comparable to similar measures used by other issuers. Reconciliations to the most directly comparable IFRS measures and related definitions are provided in the appendix to the presentation and in the corporation's MD&A. This conference call is being recorded on Friday, August 7, 2026. I will now turn the conference over to Vince Timpano, Chief Executive Officer.

Good morning, ladies and gentlemen. I'm here with Francis Trudeau, our Chief Financial Officer. We appreciate your time today as we review our results for the second quarter ended June 27, 2026. Please turn to slide four. Lassonde delivered strong gross profit growth of 16% in the second quarter, driven by effective revenue management, improved product mix, moderating input cost, and solid execution of our business strategy. Despite pressure on industry volumes, as macroeconomic uncertainty affected consumer demand, and despite cycling a strong prior year comparison, our diversified portfolio performed well, underscoring its strength and resilience. Now let's turn to slide five for a closer look at our operations, beginning with beverage activities. In the U.S., we delivered a solid performance, growing volumes and gaining share despite category volume declines across measured channels. Despite continued softness in private label market demand, our business outperformed the category as we began regaining some of the distribution that had been temporarily affected by earlier supply constraints. We also maintained a disciplined approach to revenue management, carefully balancing input cost-related pricing actions with targeted promotional activity while remaining mindful of consumer price elasticity. You may recall that in early 2025, our volume build-back plan delivered meaningful gains with new and existing customers. I'm pleased to report that we have since expanded volumes with several of these customers while maintaining our contractual commitments with most others. Meanwhile, our U.S. branded business had a solid quarter, driven by distribution gains for Apple and Eve with national retailers in the U.S. Midwest and West. Leveraging Apple and Eve's strong reputation, we are methodically expanding the brand's reach across the United States in single serve and juice box formats. supported by targeted investments in these platforms at a North Carolina facility. These efforts are driving market share gains across both package formats, reinforcing Apple and Eve's strong momentum and growth potential while aligning with consumer trends favoring convenient on-the-go options. As for our new facility in New Jersey, the pace of construction continues to progress on schedule with equipment installation now underway. We remain on track to gradually begin transferring existing production activities from the current facility by late 2026 and complete this phase in the first half of 2027. Turning to slide six for Canadian beverage activities, despite cycling an exceptionally strong prior year period that benefited from bi-Canadian sentiment and despite mid-single-digit category volume declines, we maintained our category leadership. once again underscoring the strength of our Canadian beverage portfolio. Our national brands continue to outpace the category, driven by solid gains in shelf-stable products and sustained momentum in single-serve formats, while chilled performance was affected by a strong prior year comparison. Meanwhile, private label volumes were softer, primarily reflecting changes in a major customer's go-to-market strategy. as well as our targeted portfolio optimization actions, including the discontinuation of selected product lines. Against this backdrop, and as with U.S. activities, we remained focused in ensuring discipline in managing revenues through price and promotion practices that preserve market competitiveness while remaining responsive to shifts in consumer behavior. Innovation remains an important lever for improving our product mix in both established and emerging beverage segments. New formulations across our Del Monte and Oasis health grade portfolios, along with new single serve formats designed to meet consumer needs throughout the day, are improving our product mix, expanding our presence in attractive growth segments, reducing commodity exposure, and enhancing profitability. Moving on to food service on slide seven. While North American volume growth remained constrained by macroeconomic conditions affecting consumers' away-from-home dining habits, we continued to build meaningful traction with broad-line distributors in the United States, primarily by expanding private label beverage offerings in different pack formats. During the quarter, we began supplying tailored beverages to a prominent Canadian-based QSR chain using our bag-in-a-box aseptic packaging platform. Initial results have exceeded early expectations, and we expect volumes to continue ramping up in the second half of the year. At the same time, we remain actively engaged in negotiations and competitive bidding processes with national and regional partners across North America, and we expect to acquire several additional customers, albeit smaller in scale, over the balance of the year. Now let's turn to specialty food on slide eight. While industry volumes were softer across most of our key product categories, with modest increases in select areas, both our Canadian and U.S. operations delivered solid gains, led primarily by our core premium and super premium pasta sauce category. In the U.S., Summer Garden increased volumes for third-party pasta sauce brands, further demonstrating its execution capabilities, while in the barbecue sauce category, G. Hughes maintained its position as the number one Better For You brand. During the quarter, we completed the G. Hughes brand refresh internally and transitioned all packaging at the manufacturing level. While some legacy packaging remains on shelf as inventory moves through the retail network, we expect the refreshed positioning to increasingly support brand momentum in the second half of the year. You may recall that on our previous call, We announced distribution gains for GQs with a mass merchant in Canada. I am pleased to report that this agreement has since been expanded, and that we have also secured distribution with a national food retailer, an important step that further broadens the brand's reach and supports our growth ambitions in Canada. Finally, our Canadian operations delivered a solid performance, growing third-party brand volume, mainly through distribution gains for pasta sauces, and to a lesser extent, share gains in the ready-to-serve soup category. I now turn the call over to Francis for a review of Q2 results. Francis.

Thank you, Vince. Good morning, everyone. Let's turn to slide nine. Second quarter sales totaled $738 million versus $742 million last year. Excluding an unfavorable foreign exchange effect, sales decreased by 0.5%. This variation reflects lower sales volume, primarily within private label categories in Canada. The decrease also results from intentional portfolio management decisions, including the discontinuation of lower margins or non-strategic product lines within our Canadian beverage business units. These decisions accounted for approximately $8 million in sales during the quarter. Recall that last year's second quarter was exceptionally strong due to substantial volume growth from the bi-Canadian sentiment and, to a lesser extent, the U.S. build-back plan. On the other end, we benefited from higher U.S. private label sales volume, the favorable impact of overall selling price adjustments in the U.S., and from a more favorable mix of private label sales in Canada. Moving to slide 10. Growth profit amounted to $228 million, up from $196 million a year ago. Excluding a favorable foreign exchange impact, it rose $29 million, or 15%. This increase is coming from a decrease in the cost of orange concentrates, the favorable impact of selling price adjustments, and a positive shift in the sales mix. These factors were partly offset by lower sales volume and higher PET resin costs. SG&A expense were $157 million, up from $141 million last year, due to higher transportation costs to deliver products to clients resulting from recent fuel surcharges, higher performance-related compensation expense, and an increase in certain administrative expenses. During the quarter, we recorded $30 million in impairment charges, including $27 million related to a customer relationship intangible asset in our U.S. specialty food operations. This charge follows contractual changes in one customer that will result in lower production volume and associated profits. Importantly, the impairment is specific to a customer relationship and does not reflect any deterioration in the goodwill associated with our U.S. specialty food operations. Vince will provide additional color on the backfill plan in the outlook section later. Excluding these charges and other items that impact comparability, please note that adjusted EBITDA increased 19% to 101 million or 13.7% of sales from 84 million or 11.4% of sales last year. Turning to slide 11 for profit. Profit attributable to corporation shoulders was $27 million or $3.95 per share compared to $34 million or $5.03 per share last year. Excluding items impacting comparability, adjusted profit attributable to the corporation shoulders reached $51 million or $7.45 per share up 36% from last year. Let's turn to working capital on slide 12. At the end of Q2, the days of operating working capital ratio stood at 46 days versus 51 days three months earlier. The sequential improvement was driven primarily by higher DPOs and to a lesser extent lower DIOs while the ratio remained within our normal seasonal range. For the remaining part of 2026, we continue to expect working capital to remain within its historical range. Now onto slide 13 for cash flows. Operating activity generated 78 million in Q2 2026, as opposed to requiring 3 million last year. The improvement is mainly coming from a lower working capital requirement this year compared to last. CAPEX total 38 million in Q2 2026. As a reminder, CAPEX are projected to reach up to 7% of sales in fiscal 2026, including approximately 96 million US for the New Jersey project. Turning to our financial position on slide 14. Lassonde's net debt was 451 million at the end of the second quarter, down from 474 million three months earlier. This improvement was driven by solid operating cash flow generation, partly upset by CapEx. During the quarter, we allocated a portion of our cash flow to debt repayment, reducing borrowing by 32 million. As a result, the net debt to adjusted EBITDA ratio was 1.22 to 1 at the end of the quarter, down from 135 to 1 three months earlier. All things being equal, we expect the leverage ratio to remain well below our internal maximum threshold of 3.25 to 1. Finally, on slide 15, we have announced our intent to launch a normal course issuer bid to purchase for cancellation up to 200,000 common shares representing approximately 6.5% of issues and outstanding Class A subordinate voting shares over a 12-month period. The launch of the normal course issuer bid is subject to TSX approval. I now turn the call back to Vince for the output.

Vince? Thank you, Francis. Please turn to slide 16. Looking ahead, We will remain focused on executing our strategy by strengthening the competitive position of our brands, accelerating our innovation agenda, and ensuring the readiness of our New Jersey facility. At the same time, we recognize that the macroeconomic and geopolitical environment remains challenging, with potential implications for consumer spending, input costs, and supply dynamics. In this context, we will continue to leverage the strength depth and breadth of our portfolio while pursuing a balanced contribution for revenue management initiatives and volume growth. Given the current operating environment and excluding the impact of foreign exchange and any major external disruptions, we now expect 2026 sales to be slightly below last year's level. That said, we will continue to prioritize profitable sales over volume growth for its own sake. consistent with the disciplined approach reflected on our performance so far this year. Moving to slide 17 for our strategic priorities by division. In U.S. beverage, our focus will be on leveraging our investments in single serve and juice box capacity to support continued growth in attractive formats. Maintaining disciplined revenue management while remaining responsive to evolving consumer behaviors and price sensitivity and completing our new facility in New Jersey which will enhance operational efficiency and support our long-term U.S. growth platform. As for our Canadian beverage business, our priority remains fortifying our leadership through advancing innovation-led growth initiatives, maintaining disciplined revenue management, including targeted promotional spending while continuing to invest in our brands, and strengthening execution across our core channels. In food service, Our North American team will continue to pursue growth opportunities in this attractive market. Building on the early success of our first major bag-in-a-box customer, we are encouraged by the momentum we are seeing. Finally, in specialty food, we are focused on optimizing the integration of our North American network, refining the positioning of our branded products, and backfilling available capacity following contractual changes with one customer. On the backfill. Through multi-year agreements, we have already secured replacement volume representing more than 50% of the expected 2027 shortfall, with advanced negotiations underway for an additional 25%. This progress underscores our strong reputation in the marketplace and creates a meaningful opportunity to strengthen specialty foods position by further diversifying its customer base and product portfolio in line with our long-term objectives. Overall, our discipline execution gives us confidence that we can successfully manage this transition and use it as a catalyst to build a stronger, more diversified specialty food platform. Turning to slide 18 for an overview of certain cost components. Based on currently observed spot prices, we expect orange concentrate costs and, to a lesser extent, apple concentrate costs to be lower than last year. At the same time, The situation in the Middle East is adding inflationary pressure to transportation costs as the broader logistics chain adjusts to higher operating costs and evolving market conditions and to PET resin costs. While geopolitical developments and tariffs are beyond our control, we are focused on the levers we can manage, including reducing our commodity exposure through product mix optimization and innovation, maintaining pricing discipline and executing targeted cost initiatives to protect margins. As for tariffs, our network flexibility helps mitigate the impact by allowing us to optimize production and distribution flows as conditions change. However, we will continue to reassess and adapt our sourcing strategies as tariff rates on globally sourced inputs used in U.S.-based production evolve. In closing, on slide 19, We remain well-positioned to navigate near-term challenges while continuing to advance our long-term strategy. The NCIB reflects our confidence in Lassonde's long-term prospects and our belief that the shares are currently undervalued. With our strong balance sheet and disciplined approach to capital allocation, we view share repurchases as a compelling investment in the business and an effective way to create value for our shareholders. With a diversified portfolio of leading brands, deep customer relationships built in part on our proven ability to help them grow and strengthen their own brands, and disciplined execution by our dedicated teams, we will continue investing in the capabilities that will drive sustainable and profitable growth in the North American food and beverage market. This concludes our prepared remarks. We are now pleased to answer your questions.

We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up the handset first before pressing any keys. And to withdraw your question, please press star then 2. We have our first question from Martin Landry with Stiefel.

Hi. Good morning, Vince and Francis. Congrats on your results. My first question focuses on your gross margin. It expanded by 440 bps, a huge expansion on a year-over-year basis. I was wondering if you could provide us with a bridge and quantify the main buckets that explain this strong expansion.

Yeah, sure. Hi, Mathieu. So yeah, so the main story of the quarter is commodity costs. So I would say the significant part of the increase is related to commodities. So that would be the largest component. The second component would be price. However, what we see on price, that is less of an impact versus the previous quarters where price year over year was driving a significant part of the margin improvement. That's been less of a story, but still a positive story in terms of margin. And the third one is really mixed. and what we're doing in terms of the mix with our innovation and working with the clients on better mix, that would be the third main component. So that would be the three main components. I would say the bridge from a division standpoint, Martin, everyone contributed to the positive impact of year-over-year, quarter-over-quarter.

Okay, that's helpful. And maybe continuing on the commodity costs, looking at the price of orange juice concentrate, it continues to decline this year. I was wondering, what is the proportion of your needs that are hedged for 26, and to what extent can you benefit from this continued decline?

We've taken, I would say, an aggressive position on edging considering what we've seen in the last few months. I don't have the percentage of edging in front of me, Martin, but we're well protected right now. I would say most of our edging positions are ending towards the end of this year.

Okay, because I think the broader question is, sorry, I'm all on gross margin today, but it is one of those days. The broader question is, you know, that gross margin level, is it sustainable or you feel like there are other pressures that... may bring it down sequentially in Q3 and Q4. Just trying to assess a little bit what is the level of sustainability of that gross margin.

Yeah, that's obviously a great question. I just want to, before I answer your question, to basically reiterate our position on margins. We always focus on profit dollars and not profit margins. So that has been our approach. In the last few years, and that's what we're going to prioritize. This being said, you see our margins, and they are probably on the high side versus what we've shown in the last few quarters and last few years. So we're happy with this. We still see improvements in our network, pockets of improvement in terms of costs, and frankly, some of that has been reflected in the current margins. However, as we've disclosed a bit everywhere, it's a very volatile environment right now. We see a lot of pressure right now on freight, transportation, and there's the input cost, also a situation that we're following carefully. So in terms of sustainability, we don't know. We'll work to keep it for sure, but that's something right now that is very, very volatile, so difficult for me to answer that one.

Martin, I'll just add in terms of the volatility that we continue to see on items outside of orange concentrate, just as an example. We talk about transportation costs. There's fuel component that's tied to that. But in addition, when you consider the Middle East and the impact on fuel and the fact that we buy plastic, PET resin is also impacted. So that's sort of the counterbalance. And as far as concentrate in orange, which is You know, a portion of our commodities offset by some of the volatility that we continue to see and feel pressure against. So we started really feeling quarter two towards the tail end.

Okay, thank you for the call. That's helpful and best of luck. Thank you, Martha.

We have our next question from Ahmed Abdullah with National Bank of Canada.

Yes, good morning, and thanks for taking my question. I'll follow a little bit differently from Mustaine's line of questioning, but still on the profits. So you've moved your outlook a little bit to slightly below 2025, but your first half profitability from a dollar growth perspective looks like you're up 16% in the first half on adjusted EBITDA versus last year. Do you see that top line eroding all that first half growth and For the full year, you would see your adjusted EBITDA down based on the top line pressure? Or is there buckets of savings that you think would help manage that growth in the back half of the year?

Yeah, that's a tough one, Ahmed, because, you know, as I said, we're on a low side on commodity and the pressure we're facing on external environment is difficult to quantify right now. There's also elements like negotiation of USMCA that in the next two weeks we'll follow carefully. Right now we're still protected. So for me to answer about what's going to be the impact of the lower sales and the guidance versus historically is very difficult right now. Excluding tariffs. I mean, that's the caveat. The excluding tariff, you know, that's very difficult to answer. I think we're, again, we're, when you compare ourselves versus market, I think we're happy with the margins level. However, as I said, we're on the good side on commodity, and what the impact is going to have should there be some changes on the margin in the later half of the year is difficult to quantify right now.

Okay. That's fair. And then just switching on to the, you know, the charge related to the customer relationship. Can you perhaps give us a bit more color around, you know, the revenue even contribution that came with that? And what caused that kind of contractual change? Is this a trend in the market that's happening or should be expected? Do you expect this to reoccur at some point with other US specialty food customers?

No, it's definitely not a trend in the market and it does not affect anything in terms of our positivity versus that segment of the market and the food category. Basically, what happened is when we acquired this summer garden, we had a significant concentration with one client. and basically we knew that this agreement would be at one point rediscussed and we were kind of exclusivity position and what happened is some additional capacity were added in the market and basically the client decided to diversify their risk while continuing our relationship with us. So we signed a three-year agreement with that customer so we still are having a discussion with them. However, the volume as decreased in a significant portion, and that materially affected the amount that we had in our books, and we had to record an impairment. But nothing in terms of not doing business with the client, nothing in terms of our level of optimism in that category, and as Vince mentioned, it's also going to provide us an opportunity to diversify, and already 50% of the volume has been backfilled. We're working on the rest, and the impact will come in the future quarter, and we're working on this right now. And I think the teams are doing a good job, but we see that also as being stronger by being more diversified.

Okay, and just one last follow up for me. The backfill volumes that you've secured Are these margins expected to be... How do they compare with the lost customer business that you lost there?

We're not talking margins by clients, Ahmed. We're backfilling the volumes, and over the next... It's going to depend on all kinds of situations, like in terms of productivity and mix and type of business we're going to backfill, but we're not providing details on that.

Thank you. I'll pass the line.

We have our next question from Luke Hannon with Canaccord Genuity.

Thanks. Good morning, everyone. I wanted to, if we can, maybe just get a sense of the bridge between the prior sales guidance that you had and then now what you have in there with it being slightly below 2025 levels. What is the biggest driver of that change? Is it just general category softness? Is it in relation to the specialty foods and the changes with the contract there? Is it more related to the change in the Canadian, I think it was mentioned in the deck, there's a change in a customer's go-to-market strategy. I guess I'm just trying to figure out the bridge and basically what maybe we can expect as it relates to 2027 as well.

Yeah, so in terms of what we could expect for 2027, we're currently working on budgets and next year and we'll provide that later. It's going to come soon, Luc. In terms of the bridge, so what we've seen, so basically I would categorize that in three buckets. First one, a bit of on our side, as we announced, like we discontinued some product lines. And I would say like the baby food, the frozen and glass, like discontinuation, while was not contributing to profit, was contributing to profit and sales, to volume and sales. So I would say about a third of the delta is coming from that decision that we've made. The second bucket, I would say, is specific elements that happen in the market with one of our main customers. We changed their go-to-market and promotion strategy. That combined also with last year during the Buy Canadian, One supplier that had a supply chain issue that we benefited from that. So that was those, I would say, specific elements being the second category. And the third one, I would say, is category-related, as well as, I would say, softness of the buy Canadian year over year. So that would be, I would say, the three buckets of reasons why the bridge between the $3 billion and the lower amount that we announced. I don't know, Vince, anything to add there?

No, it was well said.

Okay, great. And then for my follow-up here, and then I'll pass along, I wanted to ask about capital allocation. You had announced the buyback alongside your results, and you can correct me if I'm wrong, but I believe it's the first time. within four years that you had done that. If we were to go back four years ago, there was good reason for that as well for you discontinuing it because you're focusing on Project Eagle and fixing up the U.S. business. So the balance sheet seems relatively clean today. You had mentioned that the shares are undervalued. I believe they've been in and around the same valuation though for the last few years as well. So I guess the main question I'm asking here is, What now has changed that's making you go forward with the buyback? Is it just purely that there's more float in general out there and so it's a little bit easier to execute on that? And maybe secondly on that, how do we think about going forward? Should a buyback be, will it be a regular part of returning capital to shareholders or do you just see particular opportunity in the shares from there?

Yeah, you know, we see a good, like last two years have been very capex intensive and, you know, also absorbing the acquisition of Summer Garden. So, and we see now it's a good timing in the next 12 months, like the level of capex, the finalization of the New Jersey project. So we see like it's a good timing. And as you've seen, like our leverage is pretty, very low conservative. So we are able to do this buyback as well. It doesn't compromise any ability to also do any other type of projects, M&A or other.

Okay, so to be clear on that last point, you're doing the buyback and then there's no change on the M&A front. You're still looking potentially for acquisitions.

I mean, it's always been part of our historical strategy, and if there's some occasion, we would definitely consider.

Got it. Thanks. I'll pass the line.

We have our next question from Frederic Tremblay with Desjardins Capital Markets.

Thanks. Good morning. I wondered if you could comment on the evolution of demand and volumes through Q2 and into July. Any month-over-month trend in demand in beverage worth highlighting as we think about the demand baseline for Q3?

That's a good question, Frederic. It's Vince. What we're seeing from a category perspective is Still price-led in both Canada and the United States. The United States is still more price-led than you're seeing in Canada. I think dollars were up about 2.5%. Category volume was down about 4.5% to 4.7%. The category in Canada was down about 3.5%. All that to say, the dynamics really haven't changed that much quarter over quarter. You continue to see a price-led environment, softening on the price portion of it. Thank you very much. Thank you. Some of the category dynamics, and this is true both in Canada and the United States, is units per trip are down. So clearly what consumers are doing are being more mindful of the dollars they have and how do they stretch those dollars out. And I would say that's a phenomenon that you're seeing both in Canada and the United States. The second thing that we're watching a little more closely, and Francis had commented on it, was the dynamic between brand and private label. Because in most respects, what you would assume in an environment where there's an affordability concern that The category of benefit, our category of benefit from a private label perspective. But what you are seeing is some customer dynamics that are influencing pricing and the price gap between brand and promo has contracted in particular when brands are promoting. So we're continuing to watch that. The last thing that I'm going to say is in particular when you look in the U.S. and you look at the economy, high-end consumers are still buying. And they're buying and they're buying at a premium level. who is being impacted as the lower income consumer where you're seeing them actually buy less units per trip. So all of that to say, it's still a little bit uncertain in terms of does the trend just continue? And I believe that it'll continue for a period of time through the year. I don't know that anything will change on that front. I don't know that the declines are going to accelerate, but it's something that we're watching closely.

That's helpful. Thanks for that color, Vince. For my follow-up, just on the... The contractual change in US specialty food, just a couple of clarifications there. You mentioned diversification. Is the 50% volume replacement that you've secured with one or more customers? And then what's your level of confidence that you can get to 100% replacement volume in a timely manner?

Yeah, it's through multiple customers. And we are very confident to fill that very quickly. In a few months, we've been able to backfill rapidly and we're very confident to get there very quickly.

And just to clarify, when does that take effect? Meaning, is there a trend in volume or revenue in EBITDA headwind in 2026 from this? You have some time to get to that full replacement of volumes, I'd say by early 2027. What's the timing on all this?

Timing in terms of volume is Q3, Q4 next year. And in terms of pricing, we've seen impact this year.

Just to clarify, it's Q3, Q4?

I said next year, like at fiscal 2026.

Okay, and any way to quantify the net revenue impact from this in the near term? Is this a significant customer for Summer Garden?

It's not significant for Summer Garden, and the backfill work we're doing right now is we're confident. It's too early to assess, but we're very confident that it would not be material impact.

Okay, great. Thanks for taking the questions. I'll leave it there. Thank you.

And this concludes the question and answer session. I would now like to turn the conference back to Vince Timpano for closing remarks.

Thank you, operator, and thank you for joining us this morning. We look forward to speaking with you again at our next quarterly call. Have a great day. Have a great weekend, everyone.

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