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Operator: Hello, and welcome to the ACCO Brands Third Quarter 2024 Earnings Conference Call. My name is Elliot and I’ll be coordinating your call today. [Operator Instructions] I would now like to hand over to Chris McGinnis, Senior Director of Investor Relations. Please go ahead.

Chris McGinnis: Good morning. And welcome to the ACCO Brands third quarter 2024 conference call. This is Chris McGinnis, Senior Director of Investor Relations. Speaking on the call today is Tom Tedford, President and Chief Executive Officer of ACCO Brands Corporation. Tom will provide an overview of our third quarter results and update you on our 2024 priorities. Also speaking today is Deb O’Connor, Executive Vice President and Chief Financial Officer, who will provide greater detail on our third quarter results and update you on our outlook for full year 2024. We will then open the line for questions. Slides that accompany this call have been posted to the Investor Relations section of accobrands.com. When speaking about our results, we may refer to adjusted results.

Adjusted results exclude amortization and restructuring costs, non-cash, goodwill, and intangible asset impairment charges, and other non-recurring items and unusual tax items and include adjustments to reflect the estimated annual tax rate on quarterly earnings. Schedules of adjusted results and other non-GAAP financial measures and a reconciliation of these measures to the most directly comparable GAAP measures are in their earnings release and slides that accompany this call. Due to the inherent difficulty in forecasting and quantifying certain amounts, we do not reconcile our forward-looking non-GAAP measures. Forward-looking statements made during the call are based on the beliefs and assumptions of management based on information available to us at the time the statements are made.

Our forward-looking statements are subject to risks and uncertainties and our actual results could differ materially. Please refer to our earnings release and SEC filings for an explanation of certain risk factors and assumptions. Our forward-looking statements are made as of today and we assume no obligation to update them going forward. Now, I will turn the call over to Tom Tedford.

Tom Tedford: Thank you, Chris. Good morning, everyone, and welcome to ACCO Brand’s third quarter 2024 earnings call. Last night, we reported third quarter results with our revenue and adjusted EPS in line with our outlook. As expected, we are seeing improvement in our revenue trends compared to the first half of the year as the top-line impact from the exit of low-margin business in North America lessened in the quarter. Our team continued to make solid progress on our multi-year cost reduction program and we are on track to realize over $20 million in savings this year. This program includes our footprint rationalization and other supply chain initiatives, which are a key part of our strategy to enhance operational efficiency and drive long-term profitability.

Our focus on operational excellence is yielding tangible results with improved service levels to our customers, lower inventories, and a smaller operational footprint. We remain dedicated to optimizing our cost structure as we adjust to the demand realities of our categories. Further reductions are under consideration. We are committed to a balanced approach to capital allocation. In the quarter, we paid our quarterly dividend, which is currently yielding 6% and repurchased more than 2 million shares of ACCO Brands stock. We reduced debt and have an improving balance sheet. We ended the quarter with a leverage ratio of 3.5 times, down from the same period last year. I am also pleased to announce that we successfully refinanced our credit facilities extending the maturity date from 2026 to 2029, providing us with financial flexibility.

Deb will provide additional details on the refinancing in her prepared remarks. Now I will provide more details regarding our third quarter revenue performance. In the Americas segment, the rate of the revenue decline improved in the third quarter, which benefited from the reduced impact of low-margin business exits as well as stabilizing trends across several categories. The growth in Technology Accessories was offset by lower demand for Back-to-School categories in Latin America. In North America, our Back-to-School season was down year-over-year with the all-important student Notetaking category in line with industry expectations. While sell through of our branded Notetaking products at the retail level was good indicating strong consumer demand, we didn’t see there are anticipated replenishment orders from our customers.

Retailers took a more conservative approach than last year to inventory levels. They decided to sell through our products and not restock leading to lower-than-expected sales for the season. However, the solid sell-through in Five Star and Mead enabled us to sustain our position as the branded leader in the category. This year’s performance sets us up well for next year’s important Back-to-School season. In Brazil, our next largest Back-to-School market sales today have been softer than anticipated. The Back-to-School sell-in season, which runs from the fourth quarter and into the first quarter, has experienced later customer orders versus the prior year. As the season progresses, we’re closely monitoring consumer behavior and market trends.

We still expect our brands to perform well but are tempering expectations based on the slower start to the season. Turning to the International segment, the pace of revenue decline also improved. Sales were positively impacted by growth in our Technology Accessories categories. In our office product lines, we’ve launched several new ergonomic and business machine products that have helped mitigate sales declines in other categories. EMEA and Asia had particularly good quarters, driven by new product introductions and improved customer engagement. Our Technology Accessories categories, including Computer and Gaming accessories, performed well this quarter. Both experienced growth in the third quarter across each of our segments. This is the second consecutive quarter of growth in Computer Accessories, which can be attributed to an improving demand environment as well as new product launches.

In Gaming Accessories, growth was fueled by the successful rollout of new products as well as our international expansion efforts. I am optimistic about the continued improvement in revenue trends. We have gained valuable insights from the Back-to-School season in North America this year, particularly around customers cutting replenishment orders to better control their inventory levels. We will be collaborating closely with our customers to ensure initial buy decisions are adequate to capitalize on critical seasonal sales opportunities. Additionally, we experimented with broadening our Back-to-School offerings and non-traditional channels this past year with promising results. We plan to increase our presence in these channels while aiming for further distribution gains across all channels and categories.

And finally, our robust cash flow and strengthened balance sheet offer us a solid foundation to invest in and support our leading brands while positioning us to evaluate accretive M&A. As I conclude, I’m excited about the opportunities ahead of us at ACCO Brands, and am confident in the actions we are taking to reset our cost structure and improve future revenue trends. Globally, our category shares are strong, our brand awareness remains high with the consumer and our brands are valued by our customers. Our experienced leadership team has shown its ability to navigate dynamic operating environments. Our strong balance sheet with no debt maturities until 2029, and low fixed interest rates on more than half of our debt put us in a sound financial position as we invest in growth and improve productivity for a brighter future for ACCO Brands.

I will now hand it over to Deb, and we’ll come back to answer your questions. Deb?

Deborah O’Connor: Thank you, Tom, and good morning, everyone. I’m pleased to report that our third quarter results for both sales and adjusted EPS were in line with our outlook. We are encouraged by the sales trend improvement versus the first half of the year as we continue to execute on our strategic initiatives. However, we remain cautious as the demand environment for both consumers and businesses remains muted and we will continue to prudently manage our cost structure. We continue to make progress in improving our operational efficiency. We have consistently improved our gross margin rate over the last two years. Year-to-date, our gross margin has expanded 90 basis points. In the quarter, we also lowered our SG&A costs by 7% compared to the same period last year.

These improvements were led by our cost-reduction efforts, especially in the U.S. I am also pleased to share that, earlier this week, we successfully refinanced our credit facilities, extending the maturity date from 2026 to 2029, while maintaining the same covenant structure and a similar pricing grid. We ended the quarter with remaining revolver availability of $569 million, a significant amount. With the refinancing, we have rightsized the revolver to be more appropriate for our current liquidity needs, lowering the fees charged on unused revolver capacity. Now turning to sales. Reported sales in the third quarter of 2024 came in as we expected and decreased 6% versus the prior year despite greater foreign currency headwinds. Comparable sales, excluding foreign exchange, were down 5% versus the prior year.

This is a solid improvement from the rate of decline in the first half of the year, benefiting from the lessening impact of our planned exits of lower margin business and stabilizing trends across certain categories. Gross profit for the third quarter was $137 million, a decrease of 6% due to the lower sales. SG&A expense of $92 million was down 7% versus the prior year due to our cost reduction actions and lower incentive compensation expense in the quarter. Adjusted operating income for the third quarter was $45 million, slightly below last year. The sales decline was offset by 30 basis points of adjusted operating margin improvement. Now let’s turn to our segment results. In the America’s segment, sales declined 9% with FX having a larger negative impact than previously expected.

Comparable sales declined 7%. The exit of lower margin business accounted for about 3% of the decline, which is a lower impact than in the first half of the year. We also had lower sales for our Learning & Creative products in Latin America and weaker Back-to-School replenishment in North America. Our Business Essentials product category continued to decline. These decline were partially offset by solid growth in technology accessories. The Americas adjusted operating income margin for the third quarter improved 10 basis points to 14.2% compared to the prior year due to the improvement in the gross margin rate as well as the cost reduction efforts. Now let’s turn to our International segment. For the third quarter, comparable sales declined 2% as the demand environment remains soft for our office-related products.

This was somewhat offset by growth for Technology Accessories. International adjusted operating income margin for the third quarter increased 20 basis points to 10.6% with adjusted operating income flat. The improvement in adjusted operating income margin rate was due to our pricing and cost reduction actions. Switching to cash flow and balance sheet items. Historically, due to our seasonality, we generally use cash in the first half of the year and generate significant cash flow in the second half of the year. Through the first nine months of 2024, we have improved our free cash flow by $26 million versus the prior year. This reflects strong customer collections and the timing of vendor payments. Free cash flow was $87 million through September 30, positioning us well to achieve our free cash flow outlook of approximately $130 million for the year.

We ended the quarter with total net debt of $812 million, $83 million lower than the same time last year. Our cash balance was $102 million, which is higher than a year ago due to timing of cash flows in Brazil. We finished the quarter with a consolidated leverage ratio of 3.5 times, down from the 3.8 times leverage ratio in Q3 of last year, and well below our four times covenant ratio. Longer term, we are still targeting a ratio of 2 times to 2.5 times. Last quarter, we spoke to you about expanding our capital allocation strategy as we continue to make progress on improving our balance sheet. During the third quarter, we returned $13 million to shareholders in the form of share repurchases and $8 million in the form of dividends. We will continue to use our free cash flow to deploy capital using a balanced approach.

This strategy, whether through debt reduction, dividends, share repurchases or strategic M&A is designed to drive value accretion to our shareholders. Now let’s move to the full year outlook for 2024. We are reiterating our full year outlook, which calls for reported sales to be within a range of down 8% to down 9% for the full year. We expect adjusted EPS to be in the range of $1.04 to $1.09 per share. We continue to expect full year gross margins to be improved compared to 2023. SG&A costs will be down to the prior year as savings from our cost actions are somewhat offset by inflationary pressures related to labor and other costs. The adjusted tax rate is expected to be approximately 30%. Intangibles amortization for the full year is estimated to be $45 million, which equates to approximately $0.32 of adjusted EPS.

We are also maintaining our free cash flow expectations for the full year to be approximately $130 million. We now expect to end 2024 with a consolidated leverage ratio of approximately 3.2 times, a level not reached since 2019. Now, let’s move on to Q&A, where Tom and I will be happy to take your questions. Operator?

Operator: [Operator Instructions] Our first question comes from Greg Burns with Sidoti & Company. Your line is open.

Greg Burns: Good morning. When you look at the dynamics of what’s happening now in Brazil and maybe Mexico, if you look back a couple of quarters ago or maybe a year or so ago, that part of the business was outperforming the U.S., but now it seems like you’re seeing a slowdown there. Is what you’re seeing there macro-related? Or is it some of the more secular headwinds that face your categories catching up to these other geographies?

Tom Tedford: Greg, it’s a good question. Good morning. This is Tom. Yes, so obviously we’re comping a really good year — prior year, and that’s part of the challenge that we face. I don’t know that we see secular trends accelerating. I think this is more of local issues in both Brazil and Mexico. We’re in the midst of the Brazilian Back-to-School season. We’re selling in product right now. So it’s probably a bit premature for us to discuss the full season with you at this moment, other than to tell you that we are behind what we were prior year, and we’re keeping a close eye on the situation and we’re growing a bit concerned. But we don’t anticipate that our brands are going to lose share. We’re not losing listings of key customers.

We think this is a bit of a timing issue, a bit of issues in the macro environment with the consumer, and a bit of conservatism with our retailers in Brazil. They’re just ordering lighter, they’re ordering smaller quantities due to the uncertainties in the local economy. And in Mexico, there’s just a number of things that are also locally driven that we’re keeping a close eye on. But I think that business is showing some signs of positive momentum as we get into the fourth quarter. So right now Brazil is the one that we’re keeping a close eye on.

Greg Burns: What’s the historic split between fourth quarter and first quarter in Brazil typically?

Deborah O’Connor: Yes, it’s a good question, Greg, because it’s a different timing this year. We saw last year paper prices were increasing in Brazil, and so there was a lot more ordering and buying earlier in the season than we’re seeing this year. So that shift has occurred out of the fourth into the first this year. And so we’re, as Tom said, watching orders come in to understand the ship-out dates and the replenishment at the retailers. So it’s a little bit different timing this year out of the current year and into the next year.

Greg Burns: Okay. And in terms of North America, you mentioned some of the items, I think that you’re — some of the things you are putting in place to offset maybe some of the buying dynamics that you’re seeing in the market with retailers. But it’s been maybe now we’re two years on. Is this just the new normal of how the channel is going to operate and you have to adjust to it, and maybe — you can maybe give us a little bit more color on how you can offset some of those, the new buying patterns?

Tom Tedford: Yes. So I believe that it is, Greg. I think that we’re two years into our retail partners, really focusing on coming out of the Back-to-School season clean with minimal amounts of inventory in years prior. Replenishment really was a defining factor of how we would think about the season. And if replenishment was strong, we would tend to say that the season was strong. I think that is a dynamic that is behind us, it’s not in front of us and so we have to react to that. So we have to be really careful about our build plans and our buy plans for our Back-to-School inventories, which we’re building into our thinking as we look ahead. And we also have to be a bit more aggressive with our initial sell-in strategies with our key retailers.

So, these dynamics are real. I think they are embedded in how we do business moving forward. And our teams are putting in commercial strategies to react to that and optimize the opportunities that we think we see based on what we analyzed late in the season this year with really empty shells and lost sales opportunities for key partners.

Greg Burns: Okay. Thank you.

Operator: We now turn to Joe Gomes with NOBLE Capital. Your line is open.

Joe Gomes: Yes. It’s Joe Gomes. Thanks for taking my questions. I kind of want to follow up piggyback on the last question, but maybe on a broader picture outside of just the Back-to-School. You noted that the demand environment remains muted. And I’m just wondering, as you talk to your customers and look at your data, what are the kind of the key points as to why you believe the demand environment is remaining muted?

Tom Tedford: Yes, I mean, that’s obviously a good question and there’s a lot of things that go into the answer. We’re so broadly distributed across many categories and many channels. Joe, I’ll try to summarize it as really as quickly as I can. So, in the traditional office products categories that we compete in, our reality now is — as people are working in the office two days to three days a week. And that was a big driver of consumption of our products historically. I think many of us, including our customers, anticipated that at some point we would get back to more normalized five days of work in the office. I think we, collectively, our customers and us, don’t see that as being the norm moving forward. So that’s a source of continued demand suppression in our office product categories.

Additionally, what we’ve seen is just an acceleration of the digitalization of records. And so, storage keeping and paper printing is also down probably greater than we anticipated at the beginning of the year. And so, when you think of office product categories, that’s really where the muted demand continues to be a bit of a challenge for us. And so, we’ve shifted our efforts and our product development efforts moving forward to focus on categories that are more hybrid in nature where we meet the consumer, where they’re doing their work with solutions that help them optimize productivity and become more effective in the work that they’re doing. So that’s kind of a shift and a pivot away from what we’ve historically seen. As it relates to our Computer Accessories and our Gaming Accessories, our Technology businesses.

We are seeing improvements there. We noted in our comments that Computer Accessories is now two consecutive quarters of growth, which is encouraging. We see improving demand trends. We see adoption into our new product categories and new product offerings that we’ve made. So we’re optimistic there. And we think Gaming is going to continue to be a bit of an up and down until new consoles are launched. And so, we are offsetting that impact with new products. Much of what we’ve done to drive sales this year above kind of industry trends is through new product introductions. And in Back-to-School, our Learning & Creative categories, we’re in the midst of making that news in Latin America right now. We’ve referenced the slow start to the season there, and we’ve referenced already kind of a new reality of just lower inventory levels for our customers in that category that we’ll have to react to.

So I don’t think demand is really different there. It’s just the way that our customers are purchasing is significantly different, which is driving lower sales for us. The good thing is, across all of our key categories, our market shares remain really strong, really healthy, and, in fact, we’re gaining share in some key categories that we track. So part of this is just kind of adapting to changes in how the retailers are buying our product, focused on working capital, focused on coming out of seasons clean. And part of it is changes in work dynamics that we have to react to as a company. And I think our marketing teams are doing a good job of just that.

Joe Gomes: Thank you for that. And then on the lower-margin business exit. How much of that is left? How much of that impact in the fourth quarter do you think?

Deborah O’Connor: Yes. It has a diminishing return, as we’ve talked about — or a diminishing amount. Fourth quarter would be a little less than what the third quarter was.

Joe Gomes: Okay. And then one more for me, if I may. Tom, you talked about expansion in the non-traditional channels. I was wondering if you give us a little bit more color on that, how big of an opportunity do you see that in the non-traditional channels.

Tom Tedford: Yes. You know, Joe, it’s an area that our team, particularly in our mature markets, are focused on. We’ve referenced specifically North America Back-to-School, in which we did some small-scale tests in value channels this year to some nice success. As you know, it’s a growing channel with many doors — many stores. We anticipate that that expands next year. But we also have other initiatives in place in our mature markets to broaden our distribution in all of our categories. That’s going to take some time for it to really start having a material top-line impact. But I’m encouraged by our teams. You have to start somewhere. And our sales teams are doing a good job of opening doors that have historically been challenging for us to get into. And we’re starting to see some positive results that I think will benefit our customers and ultimately benefit us as well.

Joe Gomes: Great. Thanks for that. I’ll get back in queue.

Tom Tedford: Okay, Joe. Thank you.

Operator: Our next question comes from Kevin Steinke with Barrington. Your line is open. Please go ahead.

Kevin Steinke: Hi. Good morning. You discussed stabilizing trends in certain product categories. Maybe if you could just dive a little bit more into the categories you’re seeing stabilization.

Tom Tedford: Yes, Kevin. So, Deb, feel free to chime in if I miss anything. But I’ll start with Computer Accessories. We talked about that just a few moments ago. We are now seeing two consecutive quarters of growth within our Kensington product portfolio globally, which is obviously a great trend. That was a significant drag on sales last year, as you recall. So we’re seeing that continue into the quarter and we’re optimistic about that product portfolio moving forward. Our business machines is doing quite well globally, certainly, better than we did last year, which we’re also encouraged by — I mentioned ergonomics as a category that we see some really interesting opportunities in with new product offerings as well as stabilizing trends.

So that’s a category that’s doing well. And as I mentioned earlier, a lot of the drivers of lower sales were really decisions that we made to exit businesses. And so those decisions and the impact of them are largely behind us. And so, we’re starting to see stabilization in those categories as well. So that’s an example of a few categories that we’re seeing some positive trends in compared to what we’ve seen over the last 18 months or so.

Kevin Steinke: Okay. Good. And maybe just update us on the product development pipeline as you look to adapt to the new world of work. And that’s, I think a big emphasis, right now, innovation, but maybe if you could just update us on your efforts there.

Tom Tedford: Yes, so, we’ve identified that as an area that we must improve upon. So we’ve put a lot of emphasis on really just assessing how we do the work that we do, how we are responding to the changing dynamics in which we are operating in. And we’ve engaged a third-party to assist us in this work to really evaluate across our brands and across our businesses the work that we do and the effectiveness of the work that we do to support our brands, support our product categories, and our customers. So that work is concluding. It should conclude kind of early next year. That will enable us to adapt and perhaps pivot some of our investments towards areas that we think have better returns for the company. And better returns is important for us to improve the top line revenue as well as profitability.

So what we’ve done to date I think is encouraging. I’m really encouraged by some of the work within our Kensington portfolio. We’ve introduced an EQ line of product, which is — which launched in September, which we’re getting good reviews. Our customers are giving us good feedback on, consumers are giving us good feedback on. That’s an example of work that we’ve done. I referenced PowerA. That’s an area that we spent a lot of time trying to figure out ways to get beyond gaming controllers. And so, we’ve launched a number of products in that space that are adjacent to controllers that have been well received by our customers. So I could go on with other product categories. I mentioned ergonomics earlier. We’ve got a number of new products that have launched there that have been well received.

We’ve launched a new shredder called OptiMax in EMEA. That’s really a transformational product we think in that category. So a lot of work has been done, a lot of focus from the executive team is on this area. So much so that we’ve engaged an outside party to help us kind of think through how to optimize it and drive better performance moving forward. So hopefully, that’s an answer to the question. And I know I went through a number of things there, but we’ve got a lot going on in this important area of our business.

Kevin Steinke: Yes, absolutely. That was very helpful insight. I appreciate that. I guess just, lastly, you noted the improved trends or growth in Computer Accessories. Do you think there is some continued momentum or legs where that growth can continue as kind of we move into the fourth quarter and next year.

Tom Tedford: Absolutely, absolutely. I think we are — we’re doing a really nice job there. And I think we should expect continued growth in the Kensington business moving forward.

Kevin Steinke: Okay. Thanks for the comments. I’ll turn it back over.

Tom Tedford: Thank you.

Operator: We now turn to Hale Holden with Barclays. Your line is open. Please go ahead.

Hale Holden: Hi, good morning. I have two questions. Tom, you mentioned in your script the potential for additional cost savings in ’25. And I was wondering if we should be thinking about that as sort of normal course of ACCO programs or something bigger like you’ve done in the past.

Tom Tedford: Yes, Hale, a good question. So we’re looking at our 2025 operating plans literally as we speak. Certainly, we’re committed to our ongoing productivity program, so you can absolutely expect that. And then, we’re looking for other areas to potentially optimize our cost structure. No decisions have been made, but we’re certainly evaluating opportunities beyond our normalized productivity program.

Hale Holden: Okay. And then just as a follow-up to last answer you gave. The outside party that’s working with Kensington and it sounds like also PowerA. That’s to help you streamline into new product categories or lean into product categories that are working or is that potentially, to evaluate divesting product categories?

Tom Tedford: Yes. Hale, let me just spend a moment to clarify. They are looking across the entire product portfolio, not just Kensington and PowerA, and they’re really looking at how we can improve revenue outcomes from our NPD efforts. So bigger opportunities, better consumer insights, better commercial launch plans, things of that nature. So it’s really about improvement on what we do today.

Hale Holden: That’s exciting. Thank you. I appreciate it.

Tom Tedford: Thank you, Hale.

Operator: [Operator Instructions] We now turn to William Reuter with Bank of America. Your line is open. Please go ahead.

William Reuter: Good morning. So you mentioned clearly that Back-to-School inventories at Retail are low. You also said this is two consecutive years a bit. Are inventory levels at Retail below where they were last year such that it could contribute to better Back-to-School sell in at the early parts of next season?

Tom Tedford: Yes. Good morning, Bill. Yes, inventory levels are in a better position than they were this time last year. And we believe we positioned ourselves well as we look ahead to 2025 Back-to-School in North America.

William Reuter: That’s good to hear. And then, I think this is maybe the second consecutive quarter that there’s been some mention of M&A. I guess, is there increased interest in doing acquisitions at this point. You’re clearly still above your leverage target. And then, if so, would these be more kind of traditional product categories where you may be able to purchase things at low multiples or are they kind of faster-growing opportunities where the multiples are going to be higher?

Tom Tedford: Yes. So we’ve aligned with our Board of Directors on a strategy related to M&A moving forward. And, we believe that our historic approach to M&A is the one that unlocks the most value for our shareowners. So we’ll look at opportunities that are in or close to categories that are highly synergistic — that have strong financial returns for our investors. That’s going to be our area of focus. And we think that’s a formula that we know works for us and we know works for our shareowners. So that’s going to be kind of how we think about M&A opportunities moving forward.

Deborah O’Connor: And as you know, M&A is opportunistic, so it’s when it can happen. But we’re going to take that balanced approach overall to our capital allocation.

William Reuter: Got it. So I guess just as a little follow-up to that. The fact that you put it in the press release, I don’t remember that being in the press release before. Does it indicate that there’s a greater interest in M&A than maybe there would have been 12 months ago?

Deborah O’Connor: I think the environment is just better too, right now. Things are opening up. Interest rates are coming down. You know, I think it was more difficult to even think about it. And I think we’re in a better position with another year of $130 million of cash flows paying off debt. We’re positioned better to be thinking about it now than we were 12 months ago.

William Reuter: Got it. All right. I’ll pass it to others. Thank you.

Tom Tedford: Thank you.

Operator: We have no further questions. So this concludes our Q&A. Now I hand back to Tom Tedford for any final remarks.

Tom Tedford: Thank you, everyone, for joining us. We were pleased to deliver third quarter results that were in line with our outlook, while also improving our balance sheet, supporting our quarterly dividend, and repurchasing shares with our strong cash flow. Our proactive actions at the beginning of the year to reset our cost structure are yielding positive results and better positioning us for long-term profitable growth. We appreciate your interest in ACCO Brands and look forward to talking with you when we report our fourth quarter results in February.

Operator: Ladies and gentlemen, today’s call has now concluded. We’d like to thank you for your participation. You may now disconnect your lines.