Vital Farms - Q3 2020

Transcript

Operator (participant)

Ladies and gentlemen, thank you for standing by and welcome to the Vital Farms Third Quarter 2020 earnings call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you need to press star one on your telephone. If you require any further assistance, please press star and zero. I would now like to introduce our today's conference call, Ms. Ashley DeSimone from ICR. You may begin, ma'am.

Ashley De Simone (Partner)

Thank you. Good morning and welcome to Vital Farms Third Quarter 2020 earnings conference call and webcast. On today's call are Russell Diez-Canseco, President and Chief Executive Officer, and Jason Dale, Chief Financial Officer and Chief Operating Officer. By now, everyone should have access to the company's third quarter earnings press release filed this morning. This is available on the investor relations section of Vital Farms' website at investors.vitalfarms.com. Before we begin, please note that all the financial information presented on today's call is unaudited, and during the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in those forward-looking statements.

Please refer to today's release, the company's quarterly report on Form 10-Q for the quarter ended September 27th, 2020, filed with the SEC, and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Please note that on today's call, management will refer to Adjusted EBITDA, which is a non-GAAP financial measure. While the company believes this non-GAAP financial measure provides useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Please refer to our earnings release for a reconciliation of Adjusted EBITDA to its most comparable measure prepared in accordance with GAAP. I'd also like to note that we are conducting our call today from our respective remote locations.

As such, there may be brief delays, crosstalk, or other minor technical issues during this call. We thank you in advance for your patience and understanding. I'd now like to turn the call over to Russell Diez-Canseco, President and Chief Executive Officer of Vital Farms. Russell?

Russell Diez-Canseco (President and CEO)

Thank you, Ashley. Good morning, everyone, and thanks for joining today. On today's call, I will briefly review our third quarter financial highlights, provide an update on progress toward our growth strategy, and discuss our continued commitment to serving our stakeholders who, as many of you know, are the fabric of our business. Jason will then review our third quarter financial results in more detail, as well as our updated outlook for the remainder of this fiscal year. We then look forward to taking your questions. We're pleased to report another strong quarter. For the third quarter of 2020, net revenue increased 57% to $53.4 million compared to quarter three last year. We also continue to see positive trends in our key profit metrics.

Gross profit margin increased over 300 basis points year over year, and Adjusted EBITDA improved 101% from the third quarter of 2019 to $3.7 million, demonstrating our continued profitability. In the last 52 weeks ending September 6th, 2020, we were the number one pasture-raised egg brand with 80% dollar share of the U.S. pasture-raised egg market and the number two overall egg brand based on retail dollar sales. Now I'll turn to our growth strategy, which includes: one, expand household penetration through greater consumer awareness, two, grow within the retail channel, three, expand our product offering through innovation, and four, expand our footprint across foodservice. With respect to foodservice, the headwinds that persisted in the third quarter limited our ability to attract new customers.

foodservice remains a small segment of our business, and we look forward to bringing additional focus to it in the medium to long term. We believe our continued focus on these areas will position Vital Farms for long-term growth. We made significant progress on our growth strategy this quarter. First, with regard to household penetration, we continue to see strong engagement both in the number of consumers choosing our products and in repeat purchases as a result of trends associated with COVID-19. Repeat users are converting at a high rate, which we believe demonstrates that our mission to bring ethically produced food to the table is resonating with new consumers. Our household penetration increased to 3.6% as of September 2020, up from 2.3% as of December 2019, and up 40 basis points on a sequential basis as of June 2020.

During the COVID stock-up period, the eight weeks ending April 19th, 2020, approximately 440,000 new-buying households purchased Vital Farms eggs. In the following 20-week period, ending September 6th, 30% have already become repeat purchasers, and 72% of those repeat purchasers purchased Vital Farms eggs multiple times during those 20 weeks. We believe these strong household penetration metrics demonstrate consumers' willingness to pay a premium for our brand. We also believe increased demand for natural food and a willingness to pay a premium for brands focused on transparency, sustainability, and ethical values will continue to be a catalyst for our growth. We believe that Vital Farms is positioned well to meet consumers where they prefer to shop, especially given that COVID-19 has accelerated the demand for e-commerce and grocery sales of Vital Farms products.

For example, our online fresh grocery sales at a key retailer have increased 342% over the 24 weeks ending September 5th compared to the same time period a year ago, and our click-and-collect sales at one national brick-and-mortar retailer have increased 246% over the 26 weeks ending August 28th compared to the same period last year. Turning now to our growth within the retail channel. In the third quarter, Vital Farms store count increased by over 600 to a total of over 16,000 stores, primarily comprising growth within the mainstream grocery channel. We also continue to expand the number of Vital Farms products distributed at key retail customers across the natural and mainstream channels. Despite the year-over-year expanded distribution, our total brand velocities in both the mainstream and natural channels remain robust.

This expanded distribution and robust brand velocity growth has led to Vital Farms capturing an increased dollar share of the total retail egg category, and finally, we remain focused on extending our product offerings through innovation in both new and existing categories. In August, we launched Egg Bites, our new line of single-serve refrigerated bites made from ethically sourced ingredients, and we have successfully ramped up distribution to over 850 stores. Now for an update on our leadership team and our diversity initiative, both components of our broader commitment to our stakeholders, who include our customers and consumers, our employees, whom we call crew members, our farmers and suppliers, our communities, the environment, and our stockholders. First, I'm pleased to share an update on talent we've added to our senior leadership team. In late October, Peter Pappas joined Vital Farms as our new Chief Sales Officer.

With over 30 years of experience leading sales for both multinational and emerging consumer food and beverage companies, Peter brings a deep understanding of our categories and channels, and we believe he will play an instrumental role advancing our growth strategy. As Chief Sales Officer, Peter will oversee sales of Vital Farms products across retail and foodservice. And finally, as our country continues to navigate the COVID-19 pandemic, as well as a nationwide reckoning with race, we are committed to supporting our community stakeholders, including those who are vulnerable and marginalized.

This quarter, we commenced a number of initiatives, including partnering with Feeding America to donate over 7 million pasture-raised eggs to food banks that serve food-insecure communities, donating to the NAACP Legal Defense Fund and Boys & Girls Clubs of America, and partnering with the National Diversity Council to grow in our knowledge of diversity and our ability to practice empathy for others. We believe Vital Farms is incredibly well-positioned as we remain committed to our values and stakeholders. These principles guide our day-to-day operations and, we believe, help us deliver a more sustainable and successful business. I'll now turn the call over to Jason, who will walk you through our third quarter financials and outlook for the remainder of the year.

Jason Dale (CFO and COO)

Thank you, Russell. Good morning, everyone. We're very pleased with our third quarter financial results and what we believe are significant opportunities ahead. We've made meaningful investments building a trusted, ethical food brand that is poised for long-term growth as we increase our penetration in the retail channel in particular. Net revenue in the quarter was $53.4 million, up 57% compared to the third quarter last year. Our strong quarter gives us confidence in our expectation to exceed total net revenue of $210 million for the full year of 2020, representing a growth rate in excess of 49% compared to 2019.

Growth in net revenue for the third quarter of 2020 was driven primarily by an increase in egg and butter sales, a high turnover rate of sales to our retail customers, and new distribution at new and existing customers, some of which resulted from stay-at-home trends associated with COVID-19. The increase in net revenue was partially offset by sales incentives offered to customers in connection with egg and butter sales. Gross profit was $18.4 million, or 34% of net revenue for the third quarter of 2020, compared to $10.6 million, or 31% of net revenue for the third quarter last year. The $7.8 million increase in gross profit was primarily due to the increase in net revenue, with a portion of the 329 basis points expansion in gross margin attributable to lower material costs for eggs and butter and volume leverage of our direct labor and overhead costs.

Total income from operations was $2.4 million in the quarter compared to $1.2 million in the third quarter last year. The $1.2 million year-over-year increase was primarily due to the expanded gross margin. Net income was $1.7 million, or $0.04 per diluted share, compared to $0.8 million, or $0.02 per diluted share in the third quarter of 2019. Total operating expenses were $15.9 million, or 30% of net revenue compared to $9.4 million, or 28% of net revenue in Q3 last year. This primarily includes SG&A expenses of $12.2 million, a $5.1 million increase compared to Q3 last year, and shipping and distribution expenses of $3.8 million, an increase of $1.4 million year-over-year.

The increase in SG&A was primarily due to an increase in employee-related costs due to increased overall headcount to support our operations, an increase in professional fees and commercial insurance costs due in part to our status as a newly public company, and increased spending on marketing programs and associated expenses. The increase in shipping and distribution expenses was primarily due to an increase in sales volume, which resulted in increased costs related to third-party freight associated with distribution of our products. Our adjusted EBITDA was $3.7 million for the third quarter of 2020, compared to $1.9 million in the third quarter of 2019, which represents a 101% increase. The improvement in adjusted EBITDA was primarily due to volume increases to our distributors, expanded gross margin, as well as leverage over fixed operating costs.

The increase was partially offset by an increase in SG&A due to increased overall headcount to support our operations and an increase in professional fees and commercial insurance costs due in part to our status as a newly public company. With all this in mind, we expect adjusted EBITDA to be in the range of $16-$18 million for the full year of 2020. Now shifting to our capital structure. At September 27th, 2020, we had a cash balance of $112.6 million and total debt outstanding of $7.6 million. Adjusted net cash from operations was $15 million for the 39-week period ended September 27th, 2020, compared to adjusted net cash from operations of $0.1 million for the prior year period. CapEx was $6.7 million for the 39-week period ended September 27th, 2020, compared to $3 million for the prior year period.

The increase in CapEx was primarily driven by purchases of equipment used in ongoing operations, as well as our continued expansion of Egg Central Station. As we look ahead at what we believe will continue to be a robust market for ethically produced food, we remain confident in the opportunity Vital Farms has to achieve strong results today and for many years to come. With that, now I'll turn the call back over to Russell.

Russell Diez-Canseco (President and CEO)

Thanks, Jason. We remain focused on driving value for shareholders as we stay true to what consumers trust and expect from our brand, a commitment to pasture-raised, ethical food production. Thanks for joining the call today and your interest in Vital Farms. We now look forward to taking your questions.

Operator (participant)

Ladies and gentlemen, if you have a question or a comment at this time, please press the star then the one key on your touch-tone telephone. If you wish to move yourself from the queue, please press the pound key. Our first question comes from Pamela Kaufman with Morgan Stanley.

Pamela Kaufman (Executive Director and Equity Analyst for Packaged Food and Tobacco)

Hi. Good morning.

Jason Dale (CFO and COO)

Good morning, Pam.

Pamela Kaufman (Executive Director and Equity Analyst for Packaged Food and Tobacco)

Good morning. I wanted to ask about the assumptions embedded in your growth outlook for the fourth quarter. Obviously, it implies a deceleration relative to the growth that you've seen year to date. So I just wanted to get a sense for how conservative the outlook is and what assumptions you're embedding about the virus into the back half.

Jason Dale (CFO and COO)

Russell, you want me to start there?

Russell Diez-Canseco (President and CEO)

Yeah, that'd be great.

Jason Dale (CFO and COO)

Okay. So yeah, a great question, Pam. So I can't really comment specifically on the quarter, but I think the way that we're looking at it is we definitely saw a change from Q2 in the peak of what we saw in the midst of the kind of pantry stocking trends we saw in that quarter. And so I think as we look forward in this through the end of the year, we're kind of just pulling through a very similar thing that we saw in Q3 and having that exist throughout Q4 as we close the year out. So I mean, I think that the range that we're giving gives us confidence in that to deliver within that range and not be. I wouldn't say it's ultra-conservative. I would say we're extremely confident about delivering the range, but not a ton outside there.

Yeah. The only thing I would add to that is if you remember our kind of integrated supply chain, we buy eggs exclusively from our small family farm partners. And so there's a lead time to changing our volume. So in the short run, our supply is pretty darn predictable, and there isn't unlimited upside in any given quarter.

Pamela Kaufman (Executive Director and Equity Analyst for Packaged Food and Tobacco)

Got it. That's helpful. And then obviously, it seems like you've added a lot of new retailers during the quarter. Can you talk about your visibility on further distribution gains and what the consumer reception has been like within the new retailers added in the quarter? How did the velocities and SKU counts compare at the new customers?

Russell Diez-Canseco (President and CEO)

It's early days to see how our business is trending in our newest doors. But in terms of kind of our playbook, we've got a pretty historically successful playbook around launching a new retailer and ensuring that we get off to a good start. And I can't remember the last time a retailer wasn't pleased with the results. Beyond that, in terms of visibility to kind of future retail growth, as we mentioned in the last quarter, there's with the sort of dynamic nature of COVID and the eating trends resulting from it, we're having to be a little flexible in terms of the portion of our growth that we see from increased velocities and just general household consumption and the amount that we see from new doors.

We're flexing that and monitoring that to make sure that we're striking the right balance between new doors and really taking care of our trusted retail partners.

Pamela Kaufman (Executive Director and Equity Analyst for Packaged Food and Tobacco)

Great. Thank you.

Operator (participant)

Our next question comes from Chris Growe with Stifel.

Chris Growe (Managing Director)

Hi. Good morning.

Jason Dale (CFO and COO)

Good morning, Chris.

Russell Diez-Canseco (President and CEO)

Good morning.

Chris Growe (Managing Director)

Hi. I just had a question for you, if I could, around the new consumers you're attracting to the brand and basically how you're hoping to keep those consumers. So you've got this nice repeat rate amongst these new consumers. Is it incremental marketing? Obviously, and I guess related to that, did you restart some promotional spending in the quarter? Is that helping kind of sustain these new consumers in the franchise?

Russell Diez-Canseco (President and CEO)

Yeah. Thanks for that. Yeah.

It was really gratifying, frankly, to see not just the repeat rate, but then the multiple repeat rates, which to me says, at least if my math's right, that we were able to convert about 20% of those COVID triers at a time when maybe we were one of the few eggs available on the shelf into what looks like potentially loyal customers, which I think is a healthy conversion rate considering it didn't involve a lot of marketing spend. And in the early years of building the Vital Farms brand, we were focused very strongly on education and helping new consumers understand why they should try something so different. And as we have continued to grow household penetration, we've continued to broaden our marketing efforts to look at every part of that consumer journey from awareness all the way through to loyalty.

And so I wouldn't say that we're doing a lot different in terms of retaining this particular consumer versus others that we'd want to retain. We're focused at all points from an education message for a new consumer to the franchise to really fostering great community and giving them great reasons to come back. It's all rooted in our values and our transparency.

Chris Growe (Managing Director)

Okay. Thank you for that. And then just a quick question. You've got your sales guidance going up, call it $5 million, and you've been up about $2 million. I know there's ranges there. I do get there's some variability within that. But that incremental margin just from the midpoints looks pretty strong. I guess I just want to understand, is there just kind of, I guess, the costs for the business underneath that? Is that something that's aiding that incremental margin? And maybe related to that, the degree to which sort of incremental fixed costs leverage is what's helping drive this better margin for the business on these incremental sales?

Russell Diez-Canseco (President and CEO)

Yeah. Great question, Chris. I think it's twofold. I think we're still. I mean, you saw this in the quarter, right? Our gross margin, while sequentially has come down from what we saw in the peak of Q2, is still higher than I think we had talked about our journey of getting to the mid-30s would be at this point in time, absent a lot of movers like us being able to better monetize off-size eggs and things like that and just getting throughput efficiencies at Egg Central Station. So I think there's a portion there for sure. And then from a fixed cost perspective, yeah, I mean, the incremental volume we're getting there is just giving us leverage over those costs.

Chris Growe (Managing Director)

Okay, and then anything around just input costs? I know you mentioned some of your input costs were down. Is that incremental, if you will, from the third quarter? You've seen those move down further? Or just to get a sense of where your overall input cost outlook stands?

Yeah. Again, can't get specific to it, but we would expect things to look very similar to what we're currently doing in this quarter.

Okay. Thanks so much for your time.

Russell Diez-Canseco (President and CEO)

Thank you.

Operator (participant)

Our next question comes from Adam Samuelson with Goldman Sachs.

Adam Samuelson (VP of Equity Research for Agribusiness and Packaging)

Hi. Yes. Thank you. Good morning, everyone.

Jason Dale (CFO and COO)

Good morning, Adam.

Adam Samuelson (VP of Equity Research for Agribusiness and Packaging)

Good morning. So I guess first, I was hoping to get, I know it's early, but any kind of early sense on the traction with the Egg Bites and just what you've seen with the retailers who we've launched with and momentum in terms of putting that in more doors over the next several quarters?

Russell Diez-Canseco (President and CEO)

Yeah. I think I would call out two things. One is that relative to our expectations at launch, I think the results have been strong. We're pleased with the results, and I recently saw, and it's a single data point, and I'll keep it disguised, but at one of our launch customers, we've seen that we are in the lead relative to a couple of other products that launched this year as well that appear to be competing. We've taken a clear lead despite having a premium price point. And so the early evidence shows that our positioning in the market with premium products and a premium price point is resonating in this new product.

Adam Samuelson (VP of Equity Research for Agribusiness and Packaging)

Okay. That's really helpful. And then just going back to some of the detail that was in the slide, the gains in household penetration this year seem to be kind of tracking well ahead of kind of where they had been the last couple of years. And you talked to the strength and repeat rate post-COVID stock up. And I just want to get a sense of, if you think about the marketing plan and the growth plan in 2021, does that, do you think those kinds of gains can continue, or do you think that there was this one-time opportunity? We capitalized on it, and now it's a matter of driving the sales velocity in the doors and distribution that we have and driving new products?

Or how do I think about the push there in terms of getting new people into the brand versus just driving distribution and sales velocity with the customers that you have?

Russell Diez-Canseco (President and CEO)

Yeah. Thanks. That's terrific, Adam. So my headline would be that acceleration of new households has not changed our stance on the pillars of growth. So we've been on a steady march of increasing household penetration year after year after year. And while we may have pulled some of them forward, we were going to leverage that and continue to build. I mean, we're still in, as you've seen, low single-digit household penetration, and there's still so much room ahead of us. In addition, with the addition of Peter Pappas to lead our sales function, I think we are really putting even more focus on driving successful retail partnerships, growing doors, growing penetration of our products in existing and new retailers. So we've got our foot firmly placed on the gas pedal in both areas.

Adam Samuelson (VP of Equity Research for Agribusiness and Packaging)

Okay. And if I could just squeeze one last one in. It's been a pretty notable run-up in freight costs and LTL truck pricing over the last several months. And just wanted to just get a sense on any sensitivity or step up in the shipping and distribution costs that we should be mindful of moving forward.

Jason Dale (CFO and COO)

Yeah. That's a great question, Adam. Yeah. We haven't seen anything that would be outsized that specifically impacted us that we would call out. Again, as we continue to look at putting together our plans for next year, we'll certainly be mindful of that and communicate anything as we see fit.

Adam Samuelson (VP of Equity Research for Agribusiness and Packaging)

Great. I appreciate the call. I'll pass it on. Thanks.

Jason Dale (CFO and COO)

You bet.

Operator (participant)

Our next question comes from Robert Moskow with Credit Suisse.

Robert Moskow (Senior Equity Analyst of Food and Food Retail)

Hi. Thanks. I had a couple of questions. Regarding the repeat rates, can you repeat the timeframe that you measured the repeat activity? Because when I look at repeat rates, they tend to go higher the longer the timeframe that you're measuring. So for six months, the repeat rate is higher because you just have more time to capture a repeat sale from the people who initially tried you. But it seems that your data is around 30%, which is pretty consistent with what you had in June. So I wanted to know if it's a different timeframe or a longer timeframe that you're measuring or not.

Russell Diez-Canseco (President and CEO)

The stock up, sort of the repeat rate that we presented today is based on first a new buyer in the eight weeks ending April 19th, and then the 30% repeat and the 72% of those who made multiple is in a 20-week period or a five-month period ending September 6th, 2020.

Robert Moskow (Senior Equity Analyst of Food and Food Retail)

Okay. Because I believe you did a similar measurement back in June. The number was around 30%. Actually, I think you said 36% back then. Is your analysis of this repeat data that this is pretty typical, or am I wrong that maybe post-stock up it could be higher because you have more of a chance to get those households to repeat again?

Russell Diez-Canseco (President and CEO)

Yeah. I think your logic makes sense in terms of an extended period of time. I think we don't have enough data historically in order to make meaningful comparison between people that tried us for the first time during COVID and people that tried us for the first time a year or two or three earlier. My focus is simply on the fact that we retained, it appears to be, as much as 20% of those triers with, frankly, very limited investment in attracting them to the franchise. And so I think, in essence, this was a little bit of a tailwind in terms of reaching new consumers, and we'll take it. We're going to fight like hell to hold on to them.

Robert Moskow (Senior Equity Analyst of Food and Food Retail)

Okay. And then my other question is, can you give us an update on your new CFO? I believe that there was mention of that a couple of months ago.

Russell Diez-Canseco (President and CEO)

Absolutely. So Bo Meissner joined us, I believe, back in August with the intent that he would transition to CFO at the beginning of 2021. That plan is still on track. He's performing well, and we're excited to have him take on that role and allow Jason Dale to focus specifically on the COO portion of his role. So everything's on track, and more to come on that as we get closer to the new year.

Robert Moskow (Senior Equity Analyst of Food and Food Retail)

Great. Okay. Thank you.

Jason Dale (CFO and COO)

Thank you.

Operator (participant)

Our next question comes from Ken Zaslow with Bank of Montreal.

Ken Zaslow (Senior Analyst)

Hey. Good morning, everyone.

Russell Diez-Canseco (President and CEO)

Hey, Ken.

Jason Dale (CFO and COO)

Good morning.

Ken Zaslow (Senior Analyst)

Just a couple of questions. One is, how quickly can you increase your egg production for 2021? Do you have any constraints? It sounds like just what you said earlier that you were limited in this quarter by, and I might have misheard, but can you talk about that?

Jason Dale (CFO and COO)

Yeah. So we've talked about this previously. The lead time to put down new supply for us comfortably is about a year. We can definitely speed that up a little bit closer to the eight-month timeframe. But again, 12 months is comfortable for us. And so we have actively been working, as we always do, on looking forward and measuring what we think we need to have down in terms of growth to support the demand profile that we see in the business ahead of us. Again, I mean, as you remember previously, we have to be very mindful about how we do that because of the long lead time and forecasting out what that demand looks like in the future. We don't get in a situation where we end up too long or too short.

And so we're doing that work kind of every week, every month, looking out beyond the year and planning about what farms we need to put down.

Ken Zaslow (Senior Analyst)

Would you think that given the household penetration increasing higher, would you think about increasing what you would have thought your initial plans would have been for the next four to eight months? It seems reasonable to believe that. Would there not be a reason to believe that on our side as well?

Jason Dale (CFO and COO)

I think so again, if you just do the timeline on that lead time that it takes us, I think a lot of what we're seeing in that growth rate, we can start to put some of that down in 2021 and support that. Most of that will actually start to come to fruition in 2022.

Ken Zaslow (Senior Analyst)

Okay. My next question is, given the volume increases, how sustainable is the margin given the volume leverage and the operating leverage versus how much is short-term in nature? It seems like if the volume stays at these levels and you're able to grow into it, your margin structure should be more sustainable. If it's the operating leverage, if it's not the operating leverage, maybe it's the less sustainable. Can you talk about the sustainability of your margin structure? And I'll leave it there. Thank you very much.

Jason Dale (CFO and COO)

You bet. So again, I think we directionally talked about our long-term goals for gross margin for the business and for the brand was in the mid-30 range. We're hovering around that range. I think we certainly are still getting some tailwinds from the leverage side. I would say that's probably a smaller portion of it. But we also still have some noise just in promotional spend and things like that just because of the COVID-19 environment and what's happening out in the retail space. So I think it's sustainable within range. It's not dramatically different than what we're seeing where we're at today.

Ken Zaslow (Senior Analyst)

Great. Thank you very much. Stay safe.

Jason Dale (CFO and COO)

Thank you. You too.

Operator (participant)

I'm not showing any further questions at this time. I'd like to turn the call back to Russell for any closing remarks.

Russell Diez-Canseco (President and CEO)

Thanks, everybody, for joining us today. Vital Farms embarked on a mission to bring ethical food to the table 13 years ago. At our core, it has always been a commitment to our stakeholders. We wholeheartedly believe that treating our stakeholders as partners delivers positive outcomes for everyone, whether it's our small family farmer partners, our crew members, consumers, the community, or shareholders. I appreciate your interest in our business and your belief in ethical food. Finally, as we approach the end of this extraordinary year, I wish you all good health and happiness. We look forward to speaking with you again soon.

Operator (participant)

Absolutely. Thank you, Jon. This concludes today's presentation. You may now disconnect and have a wonderful day.