B&G Foods, Inc. (BGS) Earnings Call Transcript & Summary

Great. Thanks, everybody, for joining us for our next fireside chat with B&G Foods. And with us today are President and CEO, Casey Keller; and CFO, Bruce Wacha. Welcome, gentlemen. It's truly great to be back with you in Boston.

Good to be here.

Yes.

Maybe a good place to start off is, Casey, you've been at B&G for a little over 2 years now. You joined in the midst of a pandemic, broader industry supply chain challenges, historic inflation. Maybe it makes sense just to start with a little bit of a state of the union as you reflect on your sort of first 2 years in the role, maybe how the company has transformed since you've taken it over. And what's sort of top of mind as we finally approach what appears to at least be a more sort of stable operating environment, for a lack of a better term?

We hope, yes.

Notice I didn't say normalize, I said more stable operating environment.

All right. If you think about where we are right now, I would say we're making good progress, but we're not all in the bright. So when I joined, we had supply challenges, and I'll talk about those in a second. When I joined, we were beginning to see the first impacts of inflation. And I think B&G was probably one of the first businesses to call that out, which got much more exacerbated in 2022. And our leverage was too high. And the portfolio, in my opinion, was too complex for us to manage as kind of a single company functional silo. So let me take each one of those. So supply challenges, you work your way through those. And service levels are back up to 97%, 98%. Here and there, some spotty challenges on getting individual components. But for the most part, I think we're through that problem. So we're stable. Inflation, we started to see it in 2021, but really the Ukraine war just kind of sent soybean oil and corn wheat and everything way, way up. And so we had to respond. And I think even in 2021, we were probably, when I got that, I felt like we were too slow to take pricing, but we kind of picked our pace up and begin to take pricing. And then you could see after we went through the big increases in 2022, now our pricing is basically recovering those costs, those inflationary cost. So I feel like check, we're through the inflationary cycle, restoring our margins or restoring our EBITDA and getting back to where the business needs to be in that high inflation environment. And we're also seeing inflation kind of moderating a little bit. I wouldn't say it's completely done yet but at a much lower level. And on soybean oil, it's kind of staying high, but it doesn't seem like it's going to keep going up, at least for the short term. The portfolio to me was way too complicated, 53 brands operating in 30 different categories. We were struggling to really put our focus on any one place and we needed to make some choices. We've made some choices now with the business unit structure about what we're going to play and how we're going to play. We're very deliberate about spice and seasoning, a place we want to play, good margins, a great category. Meals, our meals portfolio is good, but we want to focus in on the Mexican at home, Las Palmas, Ortega and other things. Frozen and vegetables business unit really needed individual attention on the frozen business to get the economic model back up and going, which we're doing now, the Green Giant can business, kind of a tough business, but we're getting through that one. And then the specialty portfolio to me was just clarity on what we wanted. What we want to do there is just manage cash flow. We want to maintain cash flows. We want to make sure that we're getting that strong cash generation for those businesses to be able to service the debt and cover the debt. And each one of those has separate management teams that are managing those businesses against different criteria and different expertise in building the capabilities. So I feel like we've come out of a very complex portfolio, clarified the focus a little bit and pushed down accountability to make sure we're driving it better. I know we can talk a little bit more about that in a second. I mean the last piece, honestly, is that we were highly levered coming out of the pandemic, probably too highly levered. We didn't clean up the balance sheet as much as we should have. The inflation cycle just made that a much bigger problem. But if I look at the last 12 months, we pulled a full turnoff of our leverage. Our leverage is now down to about 6.7. We said we were going to be at under 7 by the end of the year, so we're ahead of schedule. We'll continue to push leverage down. We're getting inventory and working capital improvements. EBITDA is recovering nicely. The proceeds from the Back to Nature sale, we used to pay down some debt. So I think we're going to get progress there. But honestly, before we get back into the acquisition game, which to me is kind of core of what B&G has been historically, we got to get down well below 6 to get back there. And so we're making progress but more to do to get there.

Got it. Yes. About a year ago, you announced the formation of the 4 business units: spices and seasonings, meals, frozen and vegetables, and specialty. And I guess a little bit more color would be great on sort of how that structure has benefited the company maybe over the past year? Has it had the intended impacts that you sort of assumed?

So I think really, the #1 benefit from the business units is to provide more focus and clarity on the individual parts of the portfolio. And if you think about -- these management teams now have been up and running for about really operationally 9 to 10 months, but you're already starting to see the benefits. So I'll give you couple of examples. So one, I've always had the economic model on Frozen wasn't working for us. The gross margins were too low to be able to support a frozen kind of cost infrastructure. That team got the mandate, went to work. It's a real productivity in our facility in [ Arquata ], so we're getting margin improvements there. They figured out that our riced and spirals business, all the margin was being made by a contract packer that we had put in business, and so we just bought them and took the margin. And the other theme of that group is that the churn in the freezer case, in the frozen vegetable section, was like 20% a year. And we weren't driving an innovation that was profitable enough to replace the old stuff. So we began to kind of fix our innovation pipeline and launching stuff that's more profitable than what we had in the past. So all in all, we've increased the margins in that business by 200 or 300 basis points, just behind some really focused things that I don't think we would have gotten to if we didn't have a business team working on it. I could give you a couple of examples like Clabber Girl where we are pricing between all of our retail brands, and we supply most of, the private label is completely off. And so the management team went in and fixed that. And you can see that, that business, I don't know what it was up, like 40% in Q2. So I'm seeing better decisions, faster decisions, better multifunctional coordination in managing the portfolio from where we were, I think, at before.

And I guess, what role do you expect each of the business units to play within the portfolio? And maybe you can provide a little more detail on sort of how you assessed the potential of each unit as you went through the structure.

Yes. So one of the things we've done with the businesses is to provide very clear kind of expectations. So spices and seasonings, we expect to get organic growth of 3%. It's a good category. We've got a good position. We've got good brands. So I expect that business will put the resources and build the capabilities. It's pretty sizable, $450 million of our sales. It's a business that we should be able to grow, a business that we should be able to maintain high margins and profitability. And I believe it's also a place where we can acquire new businesses, build them in. We've got good assets. We've got good capabilities. We should get top and bottom line synergies to bring new businesses into that platform. So that's that one. The meals portfolio, again, I think we want like 2% to 3% growth. The Mexican at-home meals is part of that. We have also Cream of Wheat, Maple Grove Farms, some other kind of breakfast items. That portfolio is capable of delivering that, maintaining good margins as well. I see that as a clear expectation. And again, Mexican at home would be a place that I would favor sort of adding new acquisitions, kind of a fragmented authentic Mexican kind of portfolio out there in the marketplace. So frozen and vegetables, honestly, the mandate was fix the frozen economics. Do as much as you can to stabilize the canned vegetable business, but we can talk more about that later. That's a tough business to be in. Check, I think we're getting the frozen business back up. I think you'll see volumes start to stabilize as we get through the pipeline, the innovation pipeline. So we're making good progress there. Specialty with just the clarity -- and specialty is a code name for cash flow, okay? So manage the cash flow, good cash generation, maintain margin stability in that business. And that team is doing, I think, a very good job of doing it with a complex set of assets underneath them, predominantly the Crisco business. They've transformed to a Crisco pricing, commodity-based pricing model, which is kind of maintaining our gross profitability of that business very nicely. So each one of those business units understands their role, what their expectations are, where they're trying to get to, where we're going to put resources, where we're going to be light resources or where we're going to look at future acquisitions to put on.

Great. That's helpful. Maybe shifting a little bit closer in. On your second quarter conference call, sales actually came in a bit better than anticipated. You lowered the full year sales guidance a bit and are now looking, for base business, net sales growth of flat to up about 1.5% in the back half of the year. I guess can you talk about what you were seeing in the market at that time that ultimately led to that sort of back-half adjustment in what you're looking for in sales?

Yes. And I think the first thing to remember, as you think about in 2023, finishing '22, the job of the company was in management, we needed to restore margins, right? 2022 was a really challenging year for us from a margin standpoint. And so priority 1 was we got to make sure we have price in place and improve margins. And so management's focus was EBITDA. It was cash generation. It was reducing inventory and reducing debt. As part of that strategy, we knew we were going to put some pressure on sales. We're coming out of the pandemic. I don't know about normal, like you said, we're not there yet. But we are lapping a lot of inflated demand. For us, we're realistic. We are midway through the year. We're kind of flattish on sales. And our expectation for the back half of the year is sort of flat to up about 1.5%. And that's the guidance. That's kind of what would take us to where we are. I think that there's challenges, obviously, on the top line. I think the entire industry is seeing some volume pressure. I think people should take a long-term view on that and understand that we're coming out of inflated sales that persisted for 2, 3 years with several rounds of pricing. And really, over the long term, the B&G model is about stable top line and solid EBITDA margins, cash generation. That's the model that will deliver value to investors, and that's where we are.

And that's worked over a long period of time for this entity, going back since the really the IPO. You mentioned also on the earnings call that Green Giant volume declines in the second quarter were in part driven by sort of the shelf-stable piece of the business. The competitors have turned really aggressive on pricing and promotion to work down sort of higher inventory on seasonal pack. Can you expand a bit on how you ultimately see that playing out and maybe how much of an impact it could potentially have on the back half of the year, both from a top line and a margin perspective? And here we're talking primarily canned vegetables for the most part.

Yes. So the way the canned vegetable business works is you have a seasonal pack that you take in at a certain price. And unfortunately, the '22 pack was pretty strong relative to the future demand. So we've seen excess capacity in the canned vegetable market. And I think historically, the market has kind of discounted to drive it out. I mean, obviously, we were probably a little slow to respond to that. We've now kind of gotten ourselves more competitive in the fall season. So we will work through our current pack and discount it to get it out. But it is it is unusual because, in years where like I'd say, in '21, it was a softer pack. So margins were high against high demand and lower supply. Got the opposite impact go on right now. So I think we'll get through it, but I think this is how the canned vegetable market works. People, they don't want to hold the inventory forever. So they discount to get it out, so you're sitting on the entire year. And we probably learned a lesson that we needed to move more quickly on that.

Okay. And then I think when we sat here last September, there was some uncertainty regarding the long-term direction of the frozen segment. And the priority at that time was, as you mentioned here, fixing the economic model of the business before really making a decision on that, one way or the other. So a year later, obviously, you talked a little bit about the progress that you're already making on the economic model in frozen. You can talk a bit more about that. And does that then give you a way to think differently about the business or its role in the portfolio or just something else, increased the optionality that you may have with respect to that frozen business.

I think, look, fundamentally frozen is a decent category. It's long term, kind of got good category growth. I think our issue, as we talked about last year, was we have to -- if you don't have a 30% gross margin in the business, you can't afford to run our frozen model. And if your churn is 20% in the freezer case every year, you've got to be able to support that kind of an innovation pipeline. So for me, the first step was getting the economics improved, getting to a better gross margin and being able to build the capabilities to drive a better innovation portfolio because we have driven a lot of innovation in the past since we acquired that business. A lot of it didn't make a lot of money. So figuring out how we could do that profitably was really important. So if you have those kind of capabilities, then to me, I'm cautiously optimistic that we could look at adding some more frozen assets to our frozen capabilities and to our distribution system and build some scale benefits. It's still a question mark for me. If I'm honest, I would favor buying a spice and seasoning business, setting it in, continue consolidating some of the Mexican at home, buy a specialty business that we know we could just plug and play and drive good cash flow generated from, buy it 6x, levered to 10x. So those would be my preferences. But I think frozen now is an option for us. It's an option that we can look at and explore based on what assets come up and how much scale the benefits we could get. But without the capability and the margins to that, I wouldn't make that a platform. So we're getting there.

Got it. And by the way, its spices is interesting because it always comes up, hey, you compete against obviously a really dominant player, right? But it's interesting you actually compete in that category sort of in a different way, right, not as much across the sort of a broad spectrum of spice, and you got some individual unique sort of brands that play differently. And it's worth going into that a little bit because it does give you, I think, an ability to sort of compete effectively in that category where some like just think, oh, being a small player in a category that has a dominant player doesn't make sense.

Yes. I think there's an interesting aspect to that category. So we're #2 to McCormick, just #2, but the reality is we're not head-to-head in terms of competition. So McCormick is clearly dominant in A to Z, and they have several tiers of the A to Z spices. We only have 1 smaller entry in the premium A to Z spices. The rest of our business is all blends, seasoning blends, grilling blends, grilling spices, very kind of differentiated products. We launched Einstein Brothers, Everything Bagel. So we're competing not in the A to Z, but in the blends and the interesting kind of segments that are emerging there. We even launched a sweet kind of Cinnamon Toast Crunch seasoning blend, added a sweet outlet to add to ice cream and yogurt and other things. That has done pretty well. So we're playing a different game than McCormick. And so far, that's working for us. And we look at licensed properties in a way to get some name recognition. And also with retailers, we're trying to add a little excitement to the category, not just bringing another cumin, we're bringing something that's a little bit more interesting and differentiated. And that's how we'll play.

Got it. Can you talk a bit about your recent move to alter the pricing structure, right, of some of the more sort of past-oriented Crisco brand. What was the purpose behind it, how effective it had been so far? Because that was a big shift, right, how that business operates, but one that I think has proven pretty successful thus far.

So Crisco is part of that cash generation portfolio. So I think when we bought the business, the volatility of soybean oil was really growing. It's tied to the oil commodity now because of biofuels, I think. So we were seeing this huge swings going on. And if our goal is to maintain cash flow and profitability, the reality is what we want to manage our business for is gross profit. So what we do with -- so trying to do a traditional way of managing pricing with retailers where we would come in every time the commodity would spike, it wasn't working for us, it wasn't working for them. So what we agreed was to come in every quarter, take a running average of the soybean oil spot market, tie pricing to that and stick to that for the next 3 months. And we would buy in those windows to try and make sure that our costs and our prices were running together. And we're in our third cycle now with retailers. They like it. We like it. If I look at our gross profit margin, I mean, our gross profit last year and this year was pretty much -- since we've acquired in '21,'22, '23, gross profit has been pretty stable. And so it's working. It's not easy because we're learning how to run a commodity business, and we're paying a lot more attention to the soybean oil market. I can tell you that we're looking at that every day. But it's a different approach and one that I think is working for that business to do what we needed to do, which is to generate good cash. And the only other thing because I've answered so many questions today, we don't pay as much attention to the sales and volume. We're looking at that, of course, and we're sensitive to evolving trends, but sales will go up, margins will move around, gross profit dollars, that's what we care about.

And as you said, in the past, it is somewhat more like the popping category, which you've got experience on as well. Staying on Crisco, you mentioned having seen it hover above 1 when prices cross that $5 threshold, our expectation is that as prices recede back below $5, expect the elasticities. You're still above 1 on the way down, if you will, meaning that the price reduction should coincide with significant volume recovery. Now that Crisco prices have begun to kind of move lower, I guess what are you seeing in the market in the volume recovery side?

So we haven't really seen the price come down that much because the last pricing cycle happened with customers at the end of August. We had a small decline kind of starting in June. And we did see kind of volume declines begin to improve, right, moderate with that. So the real test for me is -- because we'll get below the $5 mark. In Walmart, we'll get below the $6 mark in grocery on an everyday basis. But as we head into the fall season, we're going to promote. We're going to be promoting a 2 for $4, 2 for $9, 2 for $8. So I think that promotion cycle will help accelerate the buying progress it will compress the differential in private label. And I think you'll see we'll get that latency effect back on the way down that we saw on the way up.

A question on sort of merchandising and promotional activity in general. Is it fair to say, as you move to the back half of this year and the important holiday season and everything else, just given that service levels are back to a better place now, pricing is now better, caught up, right, to inflation, that you can go after a more normal change cadence of like in-market activity and pressure on these brands than maybe you've been able to do over the last 2 years? Or is that -- am I overthinking?

I think that's fair.

I think that's fair. I think the promotional activity is going to start to return to normal, right? And it has been depressed for the last 2 or 3 years, supply chain being one of the biggest drivers of why it was depressed.

And on that, my sense is it's volume driving. And a lot of it, right, is pretty high ROI because it generates a lot incremental ROI.

I think what you -- so 2021, very low levels, increased in '22 and is now increasing in '23, not only back to where it was pre-pandemic, but it's heading there. But I think it's exactly what you said. I mean we're taking a cost approach to how much we increase because we don't want to just like throw a bunch of money. We want to make sure that as we build promotion activity back, it's going to produce a return and a lift. And so we're taking a steady-as-you-go approach. But he's right, I think it is moving back towards where it was pre-pandemic.

Do you feel like your systems allow you now to pretty accurately track return, right, and lift on sort of commercial spending. I know companies have made a lot of -- certainly, there've been a lot of investment over the last couple of years, in being able to better assess that in a much more granular way.

Yes, we made an investment in a trade management system a couple of years ago, which was primarily designed to kind of first control the spend and make sure we could track it. And now we're using it for post-promotional analytics to improve our returns. So we're beginning to see an improvement in our returns on our major customers because we deployed it in there and actually probably broaden that within the next 6 months to a broader set of kind of customer crews. But there is always opportunity in this one to get more efficient. We may not cut spending, but we want to get more volume and lift out of it at a higher return.

Outside of Crisco and Green Giant, at least in 2Q, right, sales for the remainder of the portfolio, in aggregate, I think increased about 3.5% or so. What's been going right in that part of the portfolio? Maybe what have been some of the gems, if you will, the shining stars within that piece of it over the last year or so?

Do you want to take that?

Yes. I can take it. We don't pick between our brands, right? And there's always going to be some pluses and minuses. We highlighted to you that, for unique reasons, we're more challenged than others. But we've got some other brands that did pretty well, leveraged spices and seasonings business. It's lapping some deep performance, but it's starting to fire on all cylinders. You think about that category on a pre-pandemic level, that's a growth category and actually do well. Clabber Girl is having one of those moments where things are working. We're able to take price, but we're still getting some good volume performance. We've got a pretty interesting position there, as Casey said. We own the brand, and we're producing some of the private label. Great, great performance there. So I think there's always some brands that you're going to point out, the overall performance has been fine.

I'm curious on your take on the overall industry sort of volume weakness that we've been seeing. It doesn't seem that -- right, private label is not gaining a ton of share, away from home is not gaining a ton of share. I don't think consumers are eating fewer calories. Some companies have talked about consumers sort of managing waste a little bit more closely, going down a little bit more. I guess what are you seeing in terms of sort of recent consumer behavior? I guess what's your thesis and maybe where these clients go? Is it summer travel? Because it's a little bit puzzling, I think, still to a lot of folks here in the room.

What we see in the data and what we hear from consumers, there's kind of 3 things that are affecting the [ rung ] right now. So one is we should not forget we are lapping the big price increases of late last spring and summer. So you're still getting through those. So the licensing impact of those pricing is still in those numbers. So that's number one. I think you'll get through -- we'll get through most of that in our portfolio within the next month or 2. There's usually like a month or 2 lag as you get through it because of the way consumers purchase frequency and the response that happens. So that's one. Two, our portfolio is quite sensitive to in-home and out-of-home consumption. So I know people are saying, well, foodservice traffic or away from out-home traffic is kind of stabilizing out. But it was pretty -- it was higher than a year ago for the first 4 to 5 months of the year. So we saw some volume softness earlier in the year that we attributed to year-over-year ending number. And when we started '22, you had Omicron, you had partial lockdowns, we had to go back to some of those pandemic behaviors. You saw them kind of cut down their out-of-home consumption. So I think that out-of-home, in-home shift is still part of this equation, which I think goes away, it's starting to stabilize. The last thing that I think is happening also is we're reducing our inventories. Retail customers are reducing their inventory, trying to get more efficient, I mean not by a massive amount. We also hear that from consumers. Like, we also hear them saying, "I'm going to either reduce my pantry stock or I'm going to operate with less supply." Like, I remember a woman saying to me, I used to buy a new bottle of Crisco oil where that was in half, now I might wait till it's down to 1/4. So they're stretching out kind of some of their purchases and managing their own inventory. I think that's what's happening. And my personal belief is that we'll begin to see us lapping those effects in the kind of the into the third quarter, fourth quarter this year as we get through all the comparisons to last year and maybe consumers kind of work out their inventory a little bit. So that's my thesis.

Yes. It feels a lot like the industry just almost whooshing fast forward 6 months basically through this sort of journey to a more stable environment and get back to a more normal operating cadence. So yes, maybe we'll get there sooner than later. Simplification has been a theme, obviously, we've seen across the packaged food space over the last several years. Earlier this year, we saw you guys complete this out of Back to Nature. I guess you continue to evaluate additional asset sales, going further to simplify the portfolio, obviously, with a lot of brands in a lot of categories. And if so, which are the areas within the portfolio would you think could be less central to your go-forward strategy versus maybe which ones look like this is a definite keeper.

Yes. And probably the two things I've learned about talking about M&A is one, the less you talk about it, the better because it's just so hard to predict. And really, until you actually have something signed, sealed and announced, it's uncertain. And then the other part of it is it's really fun to talk about M&A and speculate on what makes sense and what all the moving pieces are. And so we do it anyway. And so for us, M&A, I think over time, we're going to be an acquirer. But in short to medium term, there are some things we want to do for the investors. And really, a lot of this has come out of the business unit strategy, looking at where we want to invest to grow what we own and what we would want to buy going forward, and then also what things pop and what fit in that structure. Back to Nature was a perfect example of this doesn't make sense for us in 2023, right? At some point, it'll probably mean something. Since we bought it, we were trying to build out our snacks and better-for-you portfolio. It no longer makes sense, and that's not where we want to be. And so we executed that transaction quietly. It's been a very, very quiet M&A environment for the last 1.5 years. There's been chatter that activity may pick up. And maybe it does, maybe it doesn't. We're in an uncertain world for a lot of reasons. What that's led to is a lot of the M&A transactions that have gotten done, we've done them quietly, not a lot of big auction processes. Back to Nature, that's how it was done. It was a transaction where actually it didn't make a lot of sense for us. It really made sense for somebody else that really wanted it. And there'll be a good caretaker for it, and so that works. Are there other things for us out there like that? Probably. Is this the right environment to be found in the table trying to get things done? Probably not, but we expected to see things normalize. And for us, that M&A strategy that we'll need to divest is again what doesn't fit the portfolio. There are other things like Back to Nature that, with 50 brands, some of them don't fit today. And we'll evaluate that. And when it's appropriate, we'll talk about it.

Yes, we've identified the assets we think don't lead the criteria where we want to go, and it's probably like more like 10% to 15% of our sales. And I would like to get 1 or 2 of those done in the next 6 to 12 months, but we're going to be diligent about are we getting the right value, do we find the right buyers. We're going to make sure that we do that in a responsible way. But clearly, we do want to kind of reshape the portfolio some more and improve kind of the structure where we're going.

And I assume the hope would be also to do it in a way where it can help you deleverage a bit as well.

That would be secondary, yes, we would want to try and accomplish. The minimum, pay down debt. Sure.

Sort of to wrap it up, as you mentioned, B&G has a long history of value creation in a bit of a different way than maybe some others, right? As you said, it's really about stable top line growth, really high-margin, profitable brands, generate all that cash flow, smart capital allocation decisions, particularly around M&A and finding other sort of smaller, maybe under the radar, brands that can dominate a certain category with a high-margin structure, and a company out -- away from that a little bit. Prior to your coming onboard, it seems like you're now squarely getting back in line with that model. So maybe you could talk a little bit about that model and just how that's created the sort of value that it does because it is a little different, right, than maybe the other companies that are still pushing on sort of growth for growth's sake.

And so I think a lot of the brands that we own where we've done very well are brands that have been around for a long time, so not necessarily innovator brands. I'm not saying there's not a place for those, but we haven't demonstrated expertise in taking a brand from $5 million and making it $100 million. But we've been pretty good at managing these cash flow brands, brands like the Cream of Wheat, things like an Ortega, things like a Crisco. We're learning. Clabber Girl, some of these recent acquisitions. That's where we're really good. We also need to be priced right, right? And current cost of debt will be a factor in that. We've got to buy brands that can generate cash after capital, after CapEx and after covering the interest expense. And when we can do that, that's when we'd be successful. And I think it's really been disciplined with following that business unit strategy and saying these are the areas that we want to play and where we want to invest and expand and then also knowing we can be a little bit opportunistic in that specialty business unit, but it's got to be stuff that's priced right. It's got to be stuff that's not working capital intensive or CapEx intensive and is going to generate cash.

I think we've got to have a solid foundation. So we've got to have a business that's stable as a platform for future acquisition. And then when we get to acquisitions, we got to be more choiceful. Where are we going to add value? Where do we create value by bringing things in our portfolio? And how do you make sure that we're eyes wide open on what business just fit that and be really selective about it, so that when we bring businesses in, whether it's specialty for cash flow, we drive stronger cash flow or whether we want to build up our pillar in spice and seasonings or in Mexican at home, that we're clear about how that happens and what to do with that moving forward. So I think maybe it's not a wholesale change in strategy, but it's really refining that strategy to make it more actionable.

Staying Disciplined.

Yes.

Yes.

Perfect. Good. Maybe that's a great place to wrap it up. Join us right next door here for the breakout for any further questions you've got. And thank you, Casey and Bruce for joining us. .

Yes.

Thank you.