Operator: Welcome to the TC Transcontinental First Quarter Fiscal Year 2025 Results Conference Call. During the presentation, all participants will be in listen-only mode. Afterwards, we will conduct a question-and-answer session, and instructions will be provided at that time. As a reminder, this conference is being recorded today, March 11, 2025. I would now like to turn the conference over to Yan Lapointe, Senior Director, Investor Relations and Treasury.

Mr. Lapointe, please go ahead.

Yan Lapointe: Thank you, Joelle, and good afternoon, everyone on the call. Welcome to Transcontinental’s first quarter fiscal 2025 earnings call. Before we begin, please note that you can find on our website at www.tc.tc our quarterly report, including financial statements and related notes, as well as the slides supporting management’s remarks.

A replay of this conference call will also be available on our website shortly after the call. Please note that, this conference call is intended for the financial community. Media are in listen-only mode and should contact Nathalie St-Jean, Senior Adviser, Corporate Communications, for more information. We have with us today our President and Chief Executive Officer, Thomas Morin; and our Executive Vice President and Chief Financial Officer, Donald LeCavalier. As referenced on Slide 2, some of the financial measures discussed over the course of this conference call are non-IFRS.

You can refer to the MD&A for a complete definition and a reconciliation of these measures to IFRS. In addition, this conference call might also contain forward-looking statements. These statements are based on the current expectations of management and information available as of today, and our outlook does not include the impact of potential tariff on our operation. Forward-looking statements also involve numerous risks and uncertainties, known and unknown. The risks, uncertainties and other factors that could influence actual results are described in the fiscal 2024 annual MD&A and in the latest annual information form.

With that, I would like to turn the call over to our President and CEO, Thomas Morin.

Thomas Morin: Thank you, and merci, again. Good afternoon to everyone. The results for this quarter continue to demonstrate the positive effects of our program to improve our profitability and financial position, our work to reduce the cost of goods sold, as well as fixed costs and to turn around underperforming plans continues across the organization. Turning to the Packaging sector, we’ve seen an organic decrease in revenues mainly due to the slower activities in our Latin American operations due to adverse market conditions and continued weakness in medical.

However, our cost of efforts combined with to a federal mix with significant growth in cheese and dairy enabled us to maintain the sector’s profitability for the quarter. In our Retail Services and Printing sector, we recorded an increase in profit for the third consecutive quarter and this, I’m proud to say, despite the impact of the Canada Post labor conflict, so kudos to the team. Increased book printing and specialized solutions activities contributed to this solid result. The sale of our industrial packaging business and the strong profitability in the quarter have enabled us to reduce a net debt ratio to its lowest since the acquisition of Coveris Americas in 2018. Meanwhile, we continue to work on our acquisition pipeline.

Let me now address the question of tariffs. As I mentioned on our last call, our cross-border exposure is limited to approximately 10% of our combined Packaging, and Retail Services and Printing sales. Out of that 10%, we have the confirmation that our book exports from Canada to the United States are exempted. Faced with such a volatile situation, we are focused on what we can control. First, we’re looking at a number of mitigating measures that can significantly reduce the impact of tariffs, considering we can’t eliminate their impacts completely.

We’re having conversations with our customers and suppliers to see what can be done. We’re also prepared to leverage our footprint on both sides of the Canada-U.S. border relatively quickly. Second, in this certain context, we will redouble our efforts on the execution of our priorities, as well as on the year two of our program to improve profitability and financial position. We will continue to increase our productivity through continuous improvement and operational efficiency, reduce our costs, and as always, be agile and react quickly to any new developments.

Lastly, the loss of the value of the Canadian dollar versus the U.S. dollar will provide some relief. We’ve done a great job in 2024 to become more competitive in the marketplace, and for sure, we will continue on that path in 2025. On this, I will pass it over to you, Donald.

Donald LeCavalier: Thank you, Thomas, and good afternoon, everyone.

Moving to Slide 5 of the earnings call presentation. For the first quarter of 2025, we reported a 5.5% decrease in revenues versus the same quarter last year. This decline was caused by lower volume and by the sale of our industrial packaging activities, partially offset by a positive exchange rate impact. Regarding profitability, we delivered a strong quarter with consolidated adjusted EBITDA of $97.5 million. Adjusted EBITDA grew by $1.4 million, despite the negative impact of the labor conflict at Canada Post and the sale of our industrial packaging activities.

Financial expense decreased by $4.6 million to $9.3 million, mainly due to a lower debt level following strong cash flow generation in the last 12 months and from the lower interest rates on floating rate debt. Adjusted income tax increased by $1.2 million to $8.7 million and represented an effective rate of 17.3%. This led to an adjusted earnings per share improvement of 14%, going from $0.43 in Q1 last year to $0.49 in Q1 this year. Now moving to Slide 6 for the sector review. In Packaging, for the first quarter, we generated revenue of $389.4 million, a 2.2% decrease compared to last year.

The decrease is mainly due to the sale of our industrial packaging activities and to lower volume, notably in our LatAm activities and in the medical market where we continue to see some weakness. In terms of profitability, adjusted EBITDA in Packaging decreased by 2.3% to $59 million, mainly as a result of the sell of our industrial packaging activities. Despite the lower volume, we maintain a 15.2% EBITDA margin as we continue to see the benefits from our cost reduction efforts. Moving to Retail Services and Printing sector on Slide 7, revenues decreased by 9.2% to $240.7 million. This was mainly due to lower volume in our traditional printing activities, including the transition to raddar and the labor conflict at Canada Post.

The decline was, however, partially mitigated by an increase in our book printing and specialty solutions activities. Adjusted EBITDA grew by 6.1% to $41.9 million. This is the third consecutive quarter of profitability improvement for the sector and we achieved this strong performance despite the negative impact from the labor conflict at Canada Post. There was also $3 million of expenses related to the labor conflict at Canada Post that was put in other costs excluded from adjusted EBITDA. The strong performance came in large part from a combination of our cost reduction initiative, the optimization of our manufacturing network, the favorable effect of the rollout of raddar and growth in our book printing activities.

We expect a tougher comparable in the second half of the year, as significant cost reductions happened during the second quarter last year with the closure of our Saint‑Hyacinthe Plant and the transition to raddar across the Province of Quebec. Now turning to cash flow, as expected, and in line with normal seasonality, we saw negative working cap in the first quarter of 2025. Despite almost $60 million in working capital usage, we generated $23.6 million from operating activities. Our CapEx at $22.1 million were $14.5 million lower than last year. While we allocated $16.3 million in share buybacks in the quarter helped by the sale of our industrial packaging activities, we continue to reduce our net debt and improve our net debt ratio to 1.53 times at the end of the first quarter of fiscal 2025 compared to 1.71 times three months ago.

Overall, we’re pleased with our results in the first quarter and excluding the potential impacts from tariffs, we remain confident in our outlook. In our Packaging sector, we continue to expect to see volume and profit growth in fiscal 2025. This growth should be more weighted in the second half of the year, as we expect Q2 to be a challenging quarter, giving our solid Q2 last year. This being said, we expect a recovery in Latin America and medical, as well as a better performance overall versus last year in the second half of our fiscal year. In our Retail Services and Printing sector, despite the impact of the labor conflict at Canada Post that hit our first quarter results, we continue expecting to deliver a stable adjusted EBITDA in fiscal 2025 compared to 2024.

On tariffs, the situation is evolving and we are working on initiatives to mitigate the potential impact on our results. While the tariffs create uncertainty, our financial position is very strong with a net debt ratio of 1.53 times. We also expect to generate strong operating cash flows in the rest of the year, in addition to the monetization of real estate where we continue to expect to close the sale of two buildings in fiscal 2025. For these reasons, we are in good position to return capital to shareholders, including a special dividend of $1 per share. On that note, we will now proceed the question period.

Operator: Thank you. [Operator Instructions] One moment please for your first question. Your first question comes from Hamir Patel with CIBC Capital Markets.

Hamir Patel: Hi. Good afternoon.

Thomas, the 2% organic decline in Packaging in Q1, how much of that was price versus volume and how do you see volumes trending over the balance of the year?

Thomas Morin: Price was about 1% -- and good afternoon, Hamir. Price was about 1%. I will focus on two things that caused this reduction in the topline in Q1. I think, Donald, you gave already some color. First is LatAm.

So we believe LatAm is a temporary reduction and there are three reasons in LatAm. There was a -- there is a drought in Mexico. There is, as probably most of you know, some energy shortages in Ecuador. And the Columbia peso has devaluated 10%. So these were the three reasons why we went backwards in LatAm with some impact.

The second, as we also mentioned, is medical. In medical, we had a low quarter in sales. The one thing I would say is we have a good pipeline of opportunities coming from existing customers, as well as new customers and new products, and we have a pretty strong backlog as we speak. So we have confidence, as Donald said, for the rest of the year for these two segments which caused the majority of the volume decline, Hamir.

Hamir Patel: Okay.

Great. Thanks. That’s helpful. And just on the non-core assets side, I believe you mentioned that there were two buildings that you’re targeting to sell this fiscal year. Could you just remind us what sort of the remaining or expected proceeds would be from those two?

Donald LeCavalier: Well, if you go back to when we announced the program, we estimated that we will be probably having an estimated proceed of $100 million.

So far, we come through for $20 million and I will say that the two buildings that we expect to close this year represent a large part of what’s remaining. So you can establish somewhere between $60 million and $80 million.

Hamir Patel: Okay. Great. That’s all I have for now.

I’ll turn it over. Thanks.

Thomas Morin: Great.

Operator: Your next question comes from Adam Shine with National Bank Financial.

Adam Shine: Thanks a lot.

Good afternoon. Thomas, maybe just with respect to flyers, obviously, concerns out there that we could see a recession brewing. We’ll see how that whole tariff dynamic ultimately plays out. Usually, flyers can resonate well in that type of environment. Are you seeing any changes in the behavior of any of your customers quite yet? Do you expect anything? How’s the Q2 evolving so far with flyers?

Thomas Morin: Thank you, Adam, for the question.

Good afternoon. You’re right in saying that flyers are a good tool in the case of a high inflation or recession for consumers. So we haven’t yet seen an uptick to answer straightforward your question, but indeed, you’re right, we would expect this to happen should recession or inflation high rates materialize. I would say that it’s something we’ve experienced in the past, so you’re right in saying so. Yet, we haven’t seen an uptick on that.

Adam Shine: Okay. Anything to note on the evolving transition to raddar, just in terms of any additional distribution opportunities and perhaps just acknowledging that some of the pressure over the past year at the topline has been exacerbated as you move through that transition from Publisac to raddar. Are we getting closer to a lapping of that topline pressure or do you see that for another maybe quarter or two?

Thomas Morin: Well, I think, it’s difficult to predict. What I’d say on this, Adam, and the key message here is post the labor issue at Canada Post, we’ve seen the volume coming back in raddar. So one thing was the right thing to support the product during the strike, which we did very well.

Our customers are extremely thankful for that. And we saw very quickly after the strike, volume’s coming back to normal levels. We’ll see moving forward. It’s a bit early to say what we’re going to do next.

Donald LeCavalier: And Adam, if I can add, you -- second quarter will be the last quarter where we were last -- still last year using Publisac for a large part of Quebec, most of Quebec except Montreal.

And also we were using the plant in Saint-Hyacinthe. So starting in the third quarter, it should be more apple-to-apple, sure.

Adam Shine: Exactly. And just maybe one more thing just on the Packaging side. I know you talked about some better results expected in the second half of the year.

But I think in the last quarter, as you closed out fiscal 2024, there was a suggestion that the market in medical was perhaps stabilizing a little bit. So was there something that happened in Q1 to sort of reverse course a little bit there or was the comment maybe just a bit optimistic, perhaps premature back in December?

Thomas Morin: When we were talking in December, we already had a view on the backlog, Adam. So Adam, the backlog…

Adam Shine: Yeah.

Thomas Morin: … is strong. It’s the speed at which we can materialize or manufacture the backlog.

So nothing has really changed. It took a bit longer. So the signs are positive, as we speak.

Adam Shine: Perfect. Thank you for that.

Appreciate it.

Operator: Your next question comes from Sean Stewart with TD Cowen.

Sean Stewart: Thank you. Good afternoon, everyone. I wanted to come back to tariffs.

I would guess it’s quite small, but the book exports that are exempt from tariffs, can you give us a sense of the scale relative to the 10% of the combined company sales that are exposed potentially to tariffs, what that would constitute?

Thomas Morin: What we said is we have roughly 10% book in both sectors that are exposed to either mostly U.S. to Canada, but some of it also Canada to U.S. on Packaging. And I would say that the Retail Servicing and Printing represent less than 40% of that impact and a major part of it is either book or information material, so.

Donald LeCavalier: Yeah.

And this…

Sean Stewart: Okay.

Donald LeCavalier: … expense, Thomas, includes, I think, you said it right, also what we sell from the United States…

Thomas Morin: Yeah.

Donald LeCavalier: …into Canada. Combined both…

Sean Stewart: Got it. Okay.

Thanks for that. And then just a question on the returns to shareholders and the thinking around the special dividend and the rationale for that choice versus faster buybacks and your company has pretty consistently increased the dividend as well. How we should think about the special dividend versus ongoing increases to the regular dividend going forward?

Donald LeCavalier: Well, we look at it as first, the good news is now we are in a position with our strong balance sheet. Back in June last year, we were confident enough to announce the NCIB program of which we bought back close to 50 million of share. And now we’re announcing the special dividend following a good transaction for us where we cashed more than $130 million.

So we thought that the special dividend was another way to return capital to investors. And if you look globally over the last year, we said it earlier today, we returned more than $125 million, and again, this fiscal year will be important return to investors. So we look at it as a global and we still have the NCIB in place of which there’s about 18% that we can trigger. We won’t comment of our action in the future, but we look at it as a total return to our investors.

Sean Stewart: Understood.

That’s all I have for now. Thank you.

Operator: Your next question comes from Maher Yaghi with Scotiabank. Your line is now open.

Maher Yaghi: Great.

Thank you for taking my question. I actually wanted to ask you a question on the tariffs from an opportunity perspective rather than what you could lose, because I think some of your peers transport a lot more than you across the border. Is there an opportunity to either win market share on either side of the border, given your capabilities, your capacity to produce both on the Printing and the Packaging?

Thomas Morin: I think -- yeah. I think it’s a good question. We’re obviously looking at any opportunity to not only mitigate as we could share with you, but also potentially take advantage of the tariffs, given our footprint, certainly for Packaging, as well as for Retail Services and Printing.

Also considering the lower Canadian dollar, obviously, that helps. I think it’s a long process to make it straightforward to materialize sales on both Retail Services and Printing and Packaging. It’s a long process. We’re talking about a 12-month-ish process. Now, can this be fast-forwarded, given the urgency by tariffs? Maybe.

So we’re actively looking at opportunities, of course, and the team is engaged in capturing some opportunities short-term. But let’s not expect a very quick win at this level. It takes some time to qualify and to be competitive. Yes, a quick answer. We’re looking at it as well.

Maher Yaghi: I guess that brings us back to the process of tariffs and the impact on that 10% you mentioned. How quickly clients can turn around and find another local supplier for the products that are in question here…

Thomas Morin: You know…

Maher Yaghi: … i.e., if let’s say tariffs are implemented in the beginning of April, how quickly do you think that 10% can be affected?

Thomas Morin: Well, the 10% is impacted right here. I mean, if tariffs are happening April 1 -- on April 1, there is an impact. That is for sure. Now, the question is more on the mitigation side of the process.

We have a strong supply chain base on both sides of the border, so we have a reliable supplier both in Canada and in the United States. And we can really engage with both of these supply sources and solutions, for the most part, not for everything, but for the most part. So how quickly can we engage? We’re already engaging with our suppliers as we speak. We’ve been engaged with them for the last two months, I would say, trying to find ways, in case of, which is where we are today.

Maher Yaghi: So the 10% -- just -- I just want to make sure I get this.

The 10% is the final sales that you make that are affected potentially by cross-border tariffs, right?

Thomas Morin: Yes.

Donald LeCavalier: Yes.

Thomas Morin: Either.

Maher Yaghi: It’s not the input cost. It’s not 10% of the input cost.

It’s 10% of the topline.

Donald LeCavalier: And this is why the details regarding the input cost came out recently. We’re working on it with the Canadian authorities to understand the details and to see where it could affect us, but there’s too much still to understand what will be the potential impact for us in Canada. This is why there’s a lot of volatility in this market right now, so it’s hard for us to say, this is the impact.

Maher Yaghi: Yeah.

No. I mean, I think, every day you wake up with a different answer. So maybe one last question and that’s related to the special dividend. In the context of a possible recession, either both in the U.S. or in Canada, and a weakening dollar, et cetera, even with that, you still felt your balance sheet is strong enough to support a special dividend.

Can you maybe talk a little bit about that view that you have that got you to decide to pay the dividend now instead of waiting a couple of months to see what tariffs could mean to the economy?

Donald LeCavalier: Well, first, you -- yeah, you did mention tariffs, precision and also the U.S. dollar. So there’s a lot of different aspects to that, but I would say first that the U.S. dollar being at $1.44, right above, $1.45 is very positive for us. Actually, you can see in our bridge in our first quarter, the impact of having a dollar probably an average at $4 -- $1.40 gave us $2 million more profit on the Packaging.

So if it’s $1.45, that’s important for us. So that’s one thing. Second thing, yes, we do have a strong balance sheet. We’re at $1.53. If we perform up the impact of paying a dividend, we’re back where we were at the beginning of this year, which is roughly at $1.70.

And we see the -- we have a strong forecasted free cash flow, as you were. We have limited need in CapEx. So we’re really confident about the future of our balance sheet. And too hard right now to say if the recession was the impact, but as Thomas mentioned, usually on the Retail Services side, this is a resilient business on the recession. And on the Packaging side, we’re doing packaging for food, for retail food.

So, overall, I won’t comment on what would be the impact of recession, but when we take all those, I expect the Board and the management was confident to pay that dividend right now. And it’s usually at this first quarter where we announced the new collar versus the dividend for TC.

Maher Yaghi: I see. Maybe, sorry, one last question on M&A, because there’s voices out there saying that if we do have, and if Canada has to face a certain tariffs, there could be an increase in potential M&A within Canada, within Canadian firms. What’s your view on that? Is there a potential for increased opportunity to transact in the coming months, given also your strength in your balance sheet?

Donald LeCavalier: Well, I think, we mentioned already at the last call that we were actively looking at complementing our footprint, notably in Canada and in the ISM segment of our portfolio.

What I can tell you today is that we don’t change our plan and we are actively pursuing this direction. Now we also remain opportunistic. If there is something of any interest [Technical Difficulty] why not? But for the time being, the focus remains exactly the same as it was three months ago. We have a strategy and an action plan which has been delivered as we speak.

Maher Yaghi: Okay.

Thank you very much. Merci.

Thomas Morin: Thank you.

Operator: Your next question comes from Stephen MacLeod with BMO Capital Markets.

Stephen MacLeod: Great.

Thank you. Good evening, everyone. I just wanted to follow-up on a couple of things. One was just with respect to just the cost savings and the initiatives that you have implemented and we’re obviously seeing the benefits of. Just -- can you just give us some understanding or some update as to where you stand in terms of recognizing the full percentage of the expected savings that you had laid out?

Thomas Morin: Yeah.

Thank you for the question. We said that I think last time that we had achieved I think $30 million out of $40 million programs. So we still have time to go. That’s what I would say in a short answer.

Donald LeCavalier: Yeah.

And as we said also when we spoke about the outlook for fiscal 2025, we expect topline for price pressure to be relatively flat on the Packaging side, and obviously, Printing is going through a transition, but we were -- we remain confident to see growth. So obviously the cost program will be only we will achieve the remaining $10 million, but we’re proactive on many other issues to be even better to achieve more than this $40 million.

Stephen MacLeod: Oh! Great. Okay. That’s good.

Thank you. And then maybe just turning to -- that the impact on the Retail Services and Printing business. I mean, do you see a scenario where the long-term run rate on margins in that business is now north of 19%?

Donald LeCavalier: Well, if you -- obviously as we said and we’re still in transition, the full impact will be at the end of the second quarter. But because of using less paper and paper is a past true. So we always say that roughly paper represented 50% of the flyer products and with raddar, we use way less paper.

So just mathematically, it helps us to have better margins. So we say that the margin we will make over the last 12 months do represent the new base and it’s up to us to get to be better. And we’re confident that raddar can expand across Canada and create more opportunity to be even better on the margin side. But we’re definitely glad with the margin increase that we had in this group for the last five quarters, which is going back at the close to 20% margin that we used to have in the past.

Stephen MacLeod: Yeah.

Okay. Okay. Great. One other question I had was just on the CapEx outlook for 2025. Are you still kind of in that, I think, it was $120 million range.

And then maybe could you just give us some color on how to think about the tax rate for the year as well?

Donald LeCavalier: Yes. We’re confident with the $120 million. We do have discussion internally and Thomas spoke to it in his opening remarks to maybe use some CapEx to mitigate the impact of the tariff. And I will say that you might see also movement on the working cap to also protect versus the tariff impact. So but the $120 million should be the right spot, even though that now at $145 million, most of our CapEx in the U.S., but we’re working hard as a group to maintain that $120 million and we’ll see for the tax rate we should be in the same zone as fiscal 2024.

Stephen MacLeod: Okay. That’s great. Thanks for the color, guys. Appreciate it.

Operator: Your next question comes from Drew McReynolds with RBC.

Drew McReynolds: Yeah. Thanks very much. Good afternoon. A couple of clarifications for me. First on the strike impact, Donald, you referred to, I may have missed it, $3 million of strike impact not being in EBITDA.

Is that the right interpretation? I can’t recall what you said?

Donald LeCavalier: Well, it’s just that those are expenses that occur in Q1 that we have to -- we put in place to protect our product and to support our clients. We put in place an infrastructure in the first quarter, creating distribution in the rest of Quebec. And that was -- that came with a cost and we can put this cost below the line. And that’s the $2.9 million that I referred to. So when you go back to what we said in December, like, that it should be an impact of $7 million, I’ll say that today the global impact is roughly in that region, including the $2.9 million that we were able to put below the line.

Thomas Morin: Correct. Yeah.

Drew McReynolds: Okay. Yeah. That’s perfect.

And another point of clarification, just back to tariffs, you did mention last quarter 10% of total revenue was cross-border sales. The language today, did I hear you correct? That’s 10% in Packaging and 10% in Printing is roughly that exposure?

Donald LeCavalier: Yeah. Thank you for clarifying this. It’s 10% combined. So about 10%…

Drew McReynolds: Yeah.

Okay.

Donald LeCavalier: … 10%.

Drew McReynolds: So 10% combined is the exposure. And then within Retail Services and Printing, you said a portion was below 40%. Obviously, the book printing is the majority.

What was the below 40%?

Donald LeCavalier: Well, if you take the 10%, which is the console numbers for TC, from that 10%...

Drew McReynolds: Yeah.

Donald LeCavalier: … there’s about 40% coming from the Retail Servicing and Printing and that…

Drew McReynolds: Yeah.

Donald LeCavalier: …from that amount, a large part of it is what we call information materials that are currently excluded from the tariffs from Canada to the U.S., which is obviously mainly our book business, but it also includes some other business that we do on Retail Services.

Drew McReynolds: Okay.

Okay. Yeah. Thanks for that clarification. And then maybe a last one here on maybe to you, Thomas, on the end market demand within Packaging coming out of last quarter, you obviously alluded to the volume and pricing put and taken. It just seems like out of the gate here, as it pertains to LatAm and medical, it just took a little bit longer to kind of get back to where you need to get back to.

Is there anything else that’s kind of changed from your commentary last quarter or do you still see that kind of end market demand improving?

Thomas Morin: Yeah. There is nothing really material that has changed. The -- a large amount of my comments are driven by our own actions. I mean, we don’t rely that much on the overall market trend in case it’s a macro trend. The -- so a line of sight on the pipeline of opportunities and deals with closed is still the same.

Drew McReynolds: Got it. Got it. Okay. That’s great. Thanks a lot.

Thomas Morin: Thank you.

Donald LeCavalier: Thank you.

Operator: [Operator Instructions] Your next question comes from Martin Kim with Cormark Securities.

Martin Kim: Well, thank you for taking the question. I just have a short one.

Is there any long-term target leverage ratio you’re looking at?

Thomas Morin: For leverage ratio?

Martin Kim: Yeah.

Thomas Morin: We don’t establish targets, but we do prefer to be under 2 times. That’s been historically the case and this is where we always supposed to be. Obviously, when came -- when we do acquisition, we will definitely go above 2 times, like we did in the past. But we’re more comfortable to be under 2 times.

This is where we can do like we did like in the last 12 months being proactive either on NCIB, dividend or an acquisition.

Martin Kim: I see. Thank you so much.

Operator: Mr. Lapointe, there are no further questions at this time.

Yan Lapointe: Thank you everyone for joining us today on the call and we look forward to speaking to you soon.

Operator: Ladies and gentlemen, this concludes the conference call for today. Thank you for participating. Please disconnect your lines.