Gale Pacific Limited (GAP) Earnings Call Transcript & Summary

With me today is John Paul Marcantonio, CEO; and Sheryl Smith, CFO. I'll give -- hand over to John Paul in a moment. He's going to run through a presentation, he and Sheryl. We'll get to the end of that session, and then we'll open up to Q&A. At the bottom of your screen, you can enter those questions in Q&A, and we'll work through all of them as we proceed through the actual morning. So without any further ado, let me hand over to you, John Paul, to get us underway.

Thank you, Adrian. Good morning, everyone, and thank you for joining us on this morning or this evening's call depending on which part of the world you're in. As Adrian mentioned, I'm John Paul Marcantonio, CEO; and I'm the -- of Gale Pacific. And with me on today's call is Sheryl Smith, Gale Pacific's Chief Financial Officer. We'll take you through results for the first half of the financial year '23. I will speak a bit about the company, the brands that we have in our portfolio. We'll then transition to results overview where I'll ask Sheryl to give the group overview, and then I will take you through the regional results following, then followed by a reiteration of our company's strategy and then a review of our outlook for the balance of this financial year. Gale Pacific is a global company, and we're a market-leading manufacturer and innovator of technical fabrics used in a number of consumer and commercial applications around the world. For those of you that have been following us longer than this call, you'll note a few changes to this chart. I'll speak about this in the regional sections and in the overview. But Charlotte, North Carolina is now the company's head office in the United States. And as we've mentioned in the release, we've transitioned our formerly known regions of Middle East, North Africa and Eurasia to a combined developing markets entity and our sales office that once used to say Eurasia in the box that's joining our facility in Ningbo, China is now our Asia sales office as well. The rest of the footprint across the world remains. We have 2 primary go-to-market master brands. In the commercial space it is Coolaroo, which is known for consumer shade and pet products around the world, and it's sold at many of the world's largest online and brick-and-mortar retailers. And then our Gale Pacific commercial fabrics brand is known in the world over for commercial knitted and coated fabrics that play in a number of -- and are used in a number of end-use markets globally as well. I will first go to our results overview for the globe and giving you a bit of an overview on what has occurred in the first half of the 2023 financial year. We did experience historically wet and very unseasonably cool weather across the East Coast of Australia, which had unfortunately a negative effect on both our consumer and our commercial business in the front half. We've started to see the rising interest rate environment start to impact global consumers around our global markets, and we have experienced some normalization in consumer demand in our categories post pandemic. As we've referenced in our media release today, we did experience continued impacts from the COVID-19 pandemic in the front half of the year, most notably a mandated 10-day shutdown to our manufacturing facility in October in Ningbo, China. That had an impact, obviously, on our business, but also our suppliers' businesses as well. But despite this, we were able to maintain our high service levels to our customers around the world. In the first quarter of the year, we started to see early signs of improving scalable supply chain conditions. And as we got into the second quarter of the first half, we started to notice improving shipping and transportation capacities, which have led to pleasingly downward pressure on pricing in those markets. So throughout the second half of the first half, we experienced some normalization in the supply chain factors. We have seen some stabilization in input costs. Materials still remain at high levels. And so those the labor we've seen stabilization and the beginning signs of some cessation in those costs. We did deliver and maintain our price increases and invoice increases to the market, as we noted in the full year release and at the AGM as well. As I mentioned earlier, we've had some changes to how we operate and manage the company, first and most notably, the team reorganization and our relocation of the company's North American headquarters to Charlotte, North Carolina. And as previously mentioned, organizing the Middle East, North Africa region and the Eurasia regions into developing markets region for our company. We continue to drive toward business improvement throughout this time frame. We've mentioned in our release this morning that we started to see the improvement in global supply chains. This has allowed us to draw down and beginning to draw down some inventories in our selling regions, and we continue to invest in line with our stated and detailed growth acceleration plan as we move through the front half of the year and into the second half. Now I'll turn the call over to Sheryl Smith, who will take us through the financial results for the front half of this financial year. Sheryl?

Great. Thank you, John Paul. Good morning, good afternoon, good evening, everyone. So for the first half of FY '23, revenue, net revenue came in at $92.6 million. This was down about 3% versus the prior year, which came in at $95.9 million. On the EBITDA side, we came in at $7.9 million. This was up 25% versus the prior year, which was at $6.3 million. EBIT, we came in at $2.1 billion. So again, this was up versus the prior year comparator at $1.5 million. The PBT number was $0.6 million. This is down a bit compared to the prior period last year, which was at $0.7 million. And then net profit after tax was $0.1 million, down slightly, I'm sorry, up compared to prior period. And then earnings per share of $0.03, and we also declared an interim dividend of $0.01, which will be franked at 100%. So a couple of things to highlight for the first half. The net cash from operating activities came in at negative $11.7 million. This is basically due to our elevated global inventory level. This was a result of the lower demand in Australia due to the poor weather that John Paul just mentioned and we'll talk more about in a minute as well as building inventory for the summer selling season here in the United States. On the net debt side, we came in at $24.7 million. For the first half of FY '22, we were at $12.8 million. And again, this was being driven by higher working capital, primarily from that higher inventory as we look to ensure that we can service our customers going into the summer season here in the U.S. So the table there with the results, EBITDA increase, as I mentioned, 25% on the first half of the FY '22. This was, thanks to improved earnings in both the ANZ New Zealand region as well as in the Americas region. And you can see there as well the interim dividend and the basic earnings per share that I mentioned as well. John Paul, with that, I'll hand that back to you.

Thank you, Sheryl. Next I'll take us through the regional overviews and results for our 3 operating and selling regions globally. First, starting in the Americas. First half revenue in the Americas was a record for the region for the company in the first half of a financial year. This helped drive EBITDA expansion, and we also benefited in this region from invoice price increases in this market to help offset cost inflation, while the inter-country transportation route from China to the U.S. for container shipping. As I mentioned earlier, we saw cost deflate in the second quarter of the first half. Customers broadly across this market, destocked on inventories, on shelf inventories in the first half with the improvement in global supply chains. And many retailers and many of our customers had mandated company-wide inventory reduction initiatives throughout that period as well. So we partnered with our customers in this region to manage that -- manage these strategies with them. We did experience moderate declines in unit sell-through across Americas customers in the front half as compared to the prior year periods. We did further distribution and household distribution expansion and household penetration initiatives, as outlined in our strategy. And we have secured key commitments for a strong start to the coming Northern Hemisphere summer selling season, which is beginning as we speak now. And we continue to invest in our strategic growth plan in the region by expanding team capability and capacity in the front half, while building a strengthened, I would call best-in-class marketing and selling team while transitioning our office to Charlotte, North Carolina, where we will move into a purpose-built facility on March 14. So just a few weeks away. In Australia and New Zealand, we saw a decline of about 12% in revenue in the front half, driven primarily by unseasonably cool and historically, weather across the East Coast of Australia. That impacted both our consumer and our commercial end markets businesses, constrained retail sell-through for many of our categories in the front half. We also saw slight demand declines for our company's range of coated products in the front half as well. We did expand earnings in the front half due to the improvement in global supply chains, lower shipping costs into Australia and our invoice price increases in an effort to offset input cost inflation. And while sell-through rates for our shade solutions at retail were impacted by both the weather conditions and the normalization, a continued normalization of consumer demand post COVID. The company was successful in bringing new shading products to market and either maintain or gain shelf share and market share across core consumer categories while expanding distribution in the front half. Turning next to our developing markets region. Revenue was down 20% in the front half as compared to the first half of FY '22, driven primarily by demand regulation in our Japan market post COVID and spending pattern changes in that market as well as our strength in credit policies and collections and disciplines across Middle East markets, having downward pressure on our revenue delivery. This achieved a material reduction, though, in both overall and long-dated debtors in the region, in the Middle East, primarily, and we deployed an increasingly stringent credit management and debt collection policies in the front half of this year, which are making improvements in those categories. We did see demand for our leading range of commercial architectural shade fabrics hold up relatively well in the front half of this year, and we did introduce a new range of shade fabrics designed to help us gain market share and further market expansion in the commercial end markets to drive further share growth in the coming periods as well in the half. So -- and as I've mentioned earlier and is contained in the release, we've reorganized our developing markets team under a single leader with an operating model that will be efficient as we drive market entry and market development. And that repeatable model, we think, will scale up over the coming years as we work to enter and develop new markets for the company in addition to our anchor markets of Australia and the United States. Before turning now, look, I'm going to reiterate our company strategy in the context of the operating environment that we're participating in today. And our core strategy remains the same, and that's to build Gale Pacific into a faster-growing world-class global fabrics technology business through product innovation, driving category growth, improving our operations and by entering and developing new markets. For those of you that attended our Annual General Meeting either or have seen the release materials from several months ago, we articulated and outlined our growth acceleration plan by outlining the ways in which we will grow the company over the coming years through growing our categories, markets, supply chain capabilities and our people. We've made significant steps in the last 6 months against a number of these categories, and we'll continue to do so over the coming years as we look to deliver improved results for Gale Pacific. We'll drive the growth in our categories by developing and launching innovation in our core. You'll see some of that new innovation, as I mentioned at the AGM, come to market in the second half of this year in North America. We'll accelerate our entry into new and near neighbor categories, which we do not participate in today, but do leverage our core competencies in knitted and coated manufactured commercial and consumer fabrics. And we'll accelerate further penetration into both households and channels of distribution through leadership brand activation and communications. For those of you on the call that are in the Australia market, you've seen examples of this over the last 2 summers through our partnership with Cancer Council Australia in the manner in which we activate that partnership, both at shelf as well as online through digital advertising techniques. We'll look to further grow our markets by driving category growth at retail and commercial end markets, our end customers in both Australia and in the United States. We're on our way to rapidly expanding distribution for our core and new products in the United States today. That work continues in the second half of this year. And as I mentioned last time, we're early, but -- we're early days, but as we're working to extend our borders beyond those markets into other attractive markets for Gale Pacific over the coming years to expand our footprint with our core competencies in a way which we know how to go to market. And we'll grow our supply chain by leveraging our reorganized and efficient global Gale supply chain, aligning our planning, procurement, manufacturing, delivering, distribute and service functions to a greater degree over the coming years. And I will tell you that it's been a source of strength for us over the last few years as we've had to navigate the difficult global supply chain environment for the company. We'll further enhance utilization of our manufacturing assets and our distribution assets. We'll increase efficiency and flexibility across our global supply chain and operations while we do so. We've put increased measures in place for the second half of this year as well. And we have a very detailed process for identifying and attacking trapped cost of failure in the business and opportunities for making our operations and our teams more efficient as we move forward. Growing our capabilities, while we're delivering the results is very important to the future of the company. We've simplified our business and how we work together over the last several years, benefiting from innovation in our operations necessitated by the restrictions that COVID brought. We'll take those forward into this new era for the company, and we'll build and implement the right strategy for our information technology team and systems and enable our growth plans to a greater degree, which you will note, we are on track to deliver our migration of our ERP systems to cloud-based Dynamics 365 later on this calendar year. And look, the journey is never done with understanding our customers and more importantly, our commercial end users and our consumers. And we have a long way to go and plenty of opportunity for us to increase the depth and the breadth of our insights to fuel our innovation funnel over the coming years around our markets. And I had this last for a reason because it's the foundation upon the rest of the -- the foundation upon the rest of the strategy sits, and that's our team and our people. And we've made great strides over the last several years by developing our functional leadership capabilities throughout the organization. We've really embedded a new way and an efficient way and effective way for the company to attract, engage and develop our organization throughout the growth period over the last several years and carrying on to this day. And we really have taken, I think, pretty large steps around our teams to build and empower a team to double the size of this company over the coming years and really become a place where top talent chooses to come and grow their careers. In closing, I'd like to outline what we believe is the outlook for the balance of this financial year. As we stated in the Annual General Meeting in November, we thought the company would have significant revenue and earnings expansion throughout the back -- the balance of the front half and into the second half. Based on a number of factors, which I'll outline in a second, we now believe revenue and profit before tax to be comparable year-on-year for the second half and for the full year as compared to FY '22. We have seen continued stabilization in global supply chains, as I've outlined, and we anticipate that will continue throughout the second half. We have evidence of excess shipping capacity across global supply routes, and that's enabled comparatively low international container rates that we're experiencing now, and we think will continue for the balance of the second half of the financial year. We'll continue to further reduce manufacturing and procurement lead times as the efficiencies of the global supply chain somewhat normalize. And as a result of that, we'll be able to lower our global on-hand inventories throughout the second half of this year. We do expect the consumer behavior will further normalize in the second half of this year in both markets. And then we'll experience some further declines in year-over-year unit sell-through, specifically in the U.S., but those will be offset by invoice price increases and market share gains in line with our growth plan. In Australia, we'll see -- we expect to see further marginal declines in year-over-year sell-through in the retail channels. And we do expect that there will be lower than anticipated demand across our commercial end markets in the second half of this year, and that's reflected in this outlook statement. Despite this, we'll continue to invest in line with our growth acceleration plan that I just outlined. We'll make sure that we are focused on building medium and long-term shareholder value through the expansion of the company's core product portfolios into those expansion markets, and we'll deploy appropriate cost management measures throughout the balance of this year and into FY '24 as we look to manage the operating environment that we're in. So with that, I would like to say thank you to everyone that's on the call. And I now turn it over to Adrian for Question-and-Answer Session.

Thanks, John Paul. And just to remind everybody on the call, to lodge your question just in the Q&A section on your screen, if you could just lodge those. John Paul and Sheryl, we've got a bunch of questions. So let's sort of work through them. First one that popped in. Interested to know the split out of the $20 million in inventory build into Australia versus the U.S.

Yes. So I can -- do you want me to take that, John Paul?

Sure, Sheryl, please.

Yes. So we have seen inventory grow in both of the regions. The Australia inventory growth is primarily due to, as John Paul mentioned, the cooler weather in the spring and into the summer in Australia. The -- there is probably a little bit more significant growth in the Americas inventory as we come into the summer selling season, wanting to ensure that we can supply our customers and meet their service needs as well as when the inventory started to build as well, as John Paul mentioned, really in Q1, we still saw some of that supply chain complexities. We've certainly seen that pull back, which is really helpful. I think our supply chain team has done a fantastic job reacting quickly to those improvements and ensuring that we can get the inventory levels back to where we would expect them to be coming into the end of the fiscal year.

Great. Sheryl, that probably answers another question, but you might want to add any context on this one. Just on the inventory levels, with destocking among your customer base, how are you managing your inventory? And what is the likely profile of this over the remaining part of FY '23? I think you've answered most of that. But did you want to make any additional comments?

Yes. I mean I would say, again, I think the supply chain team did a really good job recognizing that. We have looked at sort of safety stock levels and things that we can do to ensure that we're managing our inventory as efficiently as possible. One of the positive impacts we've seen, especially over Q2 is the normalization in lead times out of China. So as you can imagine, China going into the U.S., when those lead times are better managed, I think now they're around 30 days or so, it's much easier for that team to really efficiently and effectively manage that inventory. So I would expect a fairly significant decrease in our inventory in the second half of the year.

And Sheryl, just -- and just extending that, another question has popped in, do you anticipate discounting due to the excessive inventories?

I'm not expecting a discount at this point.

Right. Okay. Okay. Changing gears a little bit here. So another question, with the economic uncertainty and inflationary pressures, we are seeing many consumer goods and tech companies announcing layoffs. Why aren't you doing this?

Yes, I'll take that one, Adrian. I think, look, we've seen significant growth in the company in the revenue line over the last several years. And I think that we've been smart about how we've added resource to the company during that time frame. We've not underinvested nor do I think we've overinvested. And so I think we've appropriately managed that investment on the way up and gives us the opportunity now to manage it well given the environment that we're facing. And we believe at this stage that we have a really talented, committed team and many functions in many regions and in many locations around the world. And we feel like we're appropriately staffed, given the environment that we're in, and we'll continue to take a hard look at costs moving forward as we always do. But we're going to make sure that we don't throttle too hard the medium and long-term growth in service of a short-term gain. So I think we've managed and balanced that reasonably well over the last several years. And the goal is to continue to do that effectively ongoing.

Okay. John Paul, the next one is to do with pricing. And you made some comments in your presentation. So how are you managing to recover through pricing, the impact of elevated input costs? And how consistent has the reaction been across your customer group? What has happened with customers as a result?

Yes. So I think, look, it's the most inflationary time from an input cost standpoint that we've seen probably in business, right? I mean it's hard to find another period that we've experienced this level of increase this fast. So we -- as you'd imagine, most people don't like a price increase, but we've been able to achieve reasonable double-digit type price increases across broad markets in every jurisdiction that we participate in, quite frankly. And so we work hand-in-hand with our customers to make sure that the objectives for both our invoice pricing and then the market pricing that they then choose to present to consumers is a reasonable level to achieve strategic objectives for both companies. And I think we still have a ways to go before we see the elevated input costs fully working their way out of the system from an efficiency standpoint. And so we'll work together with our customers to make sure that as cost normalize, we can pass along some of those benefits back to our customers who we hope then pass along those benefits directly to our joint consumers and customers in the marketplace. If I'm honest, in the front half of this year, that wasn't always the case in what we've seen. So in many instances, we've had customers that have taken significantly higher average retail pricing to consumers and markets than we've passed along in an effort to recoup some of the inefficiencies in the supply chain. So part of the destocking in efficiency you're seeing as supply chains unwind now is resultant from the pure supply chain aspect of this, but then there's another side of it, which is pointing toward consumer elasticity and retail pricing. So look, I think we've been a good partner through this last several years. We made significant investments in our infrastructure and inventory in our facilities to make sure that we can deliver at these elevated levels, and we'll continue to make sure that as we wind down inventories, we still maintain service over the coming years.

Thanks, John Paul. Next one, looks like it's on strategy. Has anything changed with your strategy based on the current outlook for the global economy or your business specifically?

Broadly it will remain. I mean, we think that the investments we've made, the markets we're participating in, how we're articulating the growth opportunity in front of us, what we're resourcing to deliver that is broadly on track. We have a yearly strategy review cycle that will be coming up here shortly, probably in the April time frame, which will lead us into operating plans for '24 and beyond. You see us making a large-scale investment right now, which we've noted in the release, nearly a AUD 5 million investment in updated enterprise resource planning system, migration to cloud-based Dynamics 365. We didn't make that investment to make our existing operations run more efficiently. That's a benefit. But why we made -- chosen to make that investment and prioritize it and continue to invest in it despite some of the challenges that may be in front of us is because we believe that it will be a large piece of the puzzle that will help us unlock the scalable benefits of our -- we believe in our business around the world. So our -- is the strategy going to remain exactly the same? No, I don't think any strategy remains exactly the same ongoing, but I think we believe very strongly in what we're doing, and we'll continue to invest in line with it.

Okay. Thanks, John Paul. Next question, another kind of economically based one. We hear anecdotes of the pressure that inflation is causing the consumer in the U.S. Are you able to comment on the U.S. economic backdrop and how this is impacting the market overall and more specifically, your customers and consumers?

Yes. I'll give you my view, and I'll ask Sheryl to give her view as well. I think that depending on what new sources you read, there's been talk of a hard landing. There's been talk of a soft landing. Last few weeks, I've been seeing talk about no landing. And I'm not really sure what that means. But look, what I would tell you is, is that based on what's happening here on the ground, what we can see speaking with our customers and then being citizens here and walking around and operating our lives as well. I think that the American consumer has been more buoyant than probably had been expected. We saw recently in early January, a really strong jobs report coming out of the U.S., you saw a pretty large bounce in the market earlier in calendar '23. And I think broadly across this marketplace, you're seeing a shift from goods to services, which is causing continued inflation across service categories. And as we mentioned, and we talk about here, some downward pressure on goods, which I think is probably good in total for the market. So I think broadly, the consumer is holding up well from a macro standpoint. There are parts of the market that are suffering as a result of this. But across the board, I think the backdrop is still pretty solid. Sheryl, your view?

Yes. Thanks, John Paul. Yes, I would certainly agree with that. I think even if you look at sort of consumer sentiment that came out last week, I mean, that would support that as well. So there's lots of mixed opinions between the soft landing and the recession and I certainly think, as of late, there's more discussion of a soft landing or to your point, just sort of the new landing and we just continue. So we'll go into the summer selling season here and see how things look. But I would agree with that.

That's great. Thanks, Sheryl. That's something more upbeat than probably we would have expected. This next one is probably for you, Sheryl. There's a couple of questions on this. So I might just sort of group these ones for you. So with respect to debt, I noticed the shifting of some long-term bank debt to short-term liabilities as outlined in Note 5 in the accounts. So somebody has had a look at the accounts, clearly. Can you provide some context of this and how your banking arrangements are managed? And just further to that, with respect to the October 2023 facilities relating to the same thing. Are you looking for additional headroom for acquisitions or other growth initiatives?

Yes. Thank you, Adrian. Good question. So we are in the middle of a request for proposal. There were 7 banks that are involved in that. So currently, we are with ANZ Bank and we put out an RFP and the RFP covers our global credit facilities and our treasury management platform. So we put this out to RFP, looking for the best global efficient structure that we can put in place, not just on the credit facility side, but also on the treasury management side. So that piece will allow us to operate more effectively, more efficiently, will help to drive automation in our back-office processes. And all of that will position us to best support our growth acceleration plan. So when you think about aligning our facilities and our treasury management, what John Paul and I have been talking about with our strategy, whether it's organic growth or other opportunities that are out there, we will have the structure in place to be able to support that going forward.

Yes, that's great. Thanks, Sheryl. It could go to either of you, John Paul. So there looks to be a planned uptick in CapEx for FY '23. Why is this? And why are you making this investment now?

Yes. I think it's -- I'll kick it over to Sheryl, that releases through the financials over the coming periods. But look, the major project you see there, the major increase outside of our more structural maintenance CapEx, which is usually somewhere in the neighborhood of $3.5 million to $5 million a year for safety initiatives, efficiency initiatives and overall general CapEx and maintenance across the company is for our upgrade to cloud-based Microsoft Dynamics D365. We actually have our team on site here in Charlotte going through test pilot 1 today. So we're reviewing our design documents and we're not going to overly complicate or bore everyone with the details here. But the ability we'll have to efficiently and reliably and safely operate our business and understand what's happening across in a much more granular level and much more quickly is really encouraging based on the early signs we're seeing here. It also gives us the ability as we enter new markets through our developing markets' growth strategy or as we add new customers or if we add new categories, to efficiently scale and structure and have insight into how our business is being measured and how it's performing. And as it becomes much larger, which we intend to do over the coming years is to make it much larger, it will -- that investment will enable us to scale much, much more effectively and efficiently while we do so. It's also going to significantly enhance our cybersecurity posture throughout this year. So that's an exciting investment that we're making, and that's the main reason for the doubling in the CapEx. And Sheryl, I don't know if you have anything to add as well to that.

Yes. No, I think that's right. Thanks, John Paul. I would just add the -- as part of the process, obviously, we are standardizing policies across the globe. And so when you think about driving operational efficiencies and scalability, that is a key part of that. So it's exciting. We're looking to go live later in this calendar year. And it is the CapEx portion of that is about AUD 4.8 million.

Thanks, Sheryl. Next one, could be the last one. So you mentioned the strengthening of the team in your release, John Paul, and how Gale Pacific is becoming a destination for top talent. How are you achieving this?

Yes. Thanks for the question. I think, look, I've had several calls with people and they said, what's one of the things that keep you up through either the COVID period or following it. And I said, making sure that we have enough of the right people to help drive our -- to deliver our results, drive our company forward, deliver on the growth opportunity to build a strong operating culture, full of really strong professionals dragging and building and managing the company forward. And we're very respectful of those that have built the company in the past. Since 1951 there's been many wonderful operators that have come through the doors of Gale Pacific. We're lucky to inherit the company that we have today. But I will tell you that over the course of the last bit of time here, we've significantly strengthened our bench across the company. We've added a lot of great talent to the group. And I think we've done that in an effort to drive the growth agenda for the company forward. And I think that we offer a really nice opportunity for people and professionals in the market to come and develop their careers. And we give people an opportunity to not only learn, but to do. And we have people in professional roles and executive roles, but also at the shop floor who are coming up with fantastic new ways of making our operations safer and more efficient. And that's attracting other people that want to be a part of a company that operates in that way. And so I think over the next several years, you'll see an increased level of output and fidelity in how we're operating. And hopefully the results follow that. But I'm very confident in the group that we've been building and putting together. We've had an opportunity to do that through our headquarters move from Orlando to Charlotte recently. And as I mentioned, we're very respectful of the people that have been here over long periods of time, but I think we've added some really, really special talents to the group through that transition, and I'm really excited to see where they'll take the company over the coming years alongside us. So really encouraged about what I'm seeing there, too.

John Paul, that's great, and Sheryl. It looks like we've exhausted the group. So I'll just pass back to you for any final remarks.

Thank you, Adrian. I just want to say, first of all, thank you -- to you, those of you who are on the call, specifically our shareholders and our owners. Thanks for your continued support and your belief in our team and our business. I'd like to thank our -- my fellow board members for their continued guidance and their continued belief in our team and our plans. Our customers for continuing to work collaboratively with us to serve our joint consumers as well. And our Gale Pacific team who has had an interesting last several years as we've been transitioning into and out of different operating environments. We have a collaborative group who is finding ways to best the challenges we're experiencing, and I'm very confident in the -- in our ability to do so over the next several years. And so would like to say thank you, and I hope to have the chance to speak with a lot of you over the next few weeks as we have several meetings to discuss one-to-one. So thank you all. And with that, Adrian, I think we're close.

We're done. Okay. Thanks, John Paul. Thanks, Sheryl. And Good morning to all.

Thank you.

Bye-bye.