ZVIA

LLM Evaluations

Transcript Summary

Zevia PBC delivered a strong Q1 2026, with net sales growing 21.2% to $46.1 million and adjusted EBITDA turning positive at $0.9 million. Growth was fueled by successful marketing campaigns, including a high-profile partnership with Cardi B, and the rollout of new vibrant packaging and fruit-forward flavors like Orange Creamsicle. Distribution expanded significantly through a national Costco rotation and space gains at Kroger and Walmart. Despite the top-line momentum, the company faces $11 million in incremental cost headwinds from rising fuel and aluminum prices. Consequently, while Zevia raised its full-year revenue guidance to $170 million–$175 million, it lowered its adjusted EBITDA outlook to a loss of $2 million–$4 million. The company is also discontinuing its tea line to focus on its core soda portfolio. Analysts questioned the impact of these cost pressures and the timing of future distribution rotations. Management emphasized a cautious stance on the 'K-shaped' economy but remains optimistic about long-term growth as its brand refresh reaches full national distribution by the end of Q2 and marketing spend peaks during the summer months.

5-year share-count history (top 10 holders by peak, incl. exited) + price

Revenue Segments

Filing Risk Scores

Zevia PBC: Sweetened Growth Masking Shadow TRA Liabilities and Aggressive Equity Issuance

Full Earnings Call Transcript — Q1 • 2026-05-07

Operator: Greetings, and welcome to Zevia PBC First Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Jean Fontana, Investor Relations. Thank you, Ms. Fontana. You may begin.
Jean Fontana: Thank you, and welcome to Zevia's First Quarter 2026 Earnings Conference Call. On today's call are Amy Taylor, President and Chief Executive Officer; and Girish Satia, Chief Financial Officer and Principal Accounting Officer. By now, everyone should have access to the company's first quarter 2026 earnings press release and investor presentation made available this afternoon. This information is available on the Investor Relations section of Zevia's website at investors.zevia.com. Before we begin, please note that all financial information presented on today's call is unaudited. Certain comments made on this call include forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release 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. During the call, we will have some non-GAAP financial measures as we describe business performance. The SEC filings as well as the earnings press release, presentation slides that accompany today's comments and reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are all available on our website at investors.zevia.com. And now I'd like to turn the call over to Amy Taylor.
Amy Taylor: Thank you, Jean. Good afternoon, everyone, and thanks for joining our first quarter 2026 earnings conference call. We're off to a strong start to the year with record sales growth of 21% and adjusted EBITDA of approximately $1 million, both exceeding our expectations for the quarter. This is clear evidence that our strategy is gaining meaningful traction. Across channels, we're seeing encouraging momentum spanning from consumers discovering Zevia for the first time to long-time Zevia drinkers enjoying our new flavors. Importantly, this performance reflects the deliberate actions we've taken over the past several quarters to rightsize our cost structure and reinvest in marketing, sharpening our innovation pipeline and driving new distribution. Taken together, these efforts are translating into a strong setup for the remainder of the year. The momentum we're seeing today reinforces our confidence that we are on the path to long-term growth and profitability. Now I'd like to walk through our progress across our core pillars, starting with marketing, continuing through product innovation and rounding out with distribution updates. On the marketing front, we delivered two engaging brand campaigns to start the year as we bring to life Zevia's distinction as the radically real people's champion. First, our Ztox campaign in January invited consumers to detox from artificial soda with a simple swab to a Zero artificial better-for-you alternative. The campaign came to life through experiential marketing, sampling and digital and influencer activations and helped kick off a strong start to the year. And second, our timely and shareable Real Soda for real humans campaign ran in March and April, making it clear that only robots should drink chemical cola and Zevia is the soda for humans. Paid advertising across digital platforms and live TV, including March Madness games was the primary driver of reach. Offups at high-profile events like South by Southwest, where consumers had to approve they were humans to get Zevia swag further amplified the campaign. Sweepstakes activated on social generated thousands of entrants and engaged new consumers. We believe our mix of advertising and grassroots marketing and more than ever, our differentiated brand voice is proving efficient and effective in building awareness, trial and ultimately demand for Zevia. In March, we announced Zevia's biggest marketing news to date, a partnership with Grammy and Billboard Music award-winning artist, Cardi B. She, like Zevia, is a champion for the radically reel. Famous for her humor, honesty and openness, she has the 25th most followed Instagram account with over 200 million social media followers in total spanning across demographics and interests. Cardi B joins us at the perfect time as we roll out our new packaging in store, our 2026 innovation with spring resets and our improved taste across most of the portfolio. This will be a step change in reach and awareness for Zevia, supporting our objective to expand the user base. Between Cardi B and other marketing programs during the month of March, Zevia saw its highest ever organic social media reach and the highest level of social media engagement of any month since the brand's launch. The partnership announcement alone generated 152 million editorial impressions in just the first week. To kick things off, Zevia was a key sponsor of the Little Miss drama tour with a super fan giveaway and a brand presence at each stop. We plan to fully activate this partnership through social media, event activations, sampling, paid media campaigns and at retail, including potential new product innovation in the future. We look forward to sharing more on our broadest reaching brand campaign plan yet, debuting in the next couple of months. Turning to product innovation. We're pleased with the overall response to our on-trend fruit flavors as they continue to roll out nationally. While still early, initial reads show that our new items are outperforming medium velocities for our broader portfolio. At two top national retailers, for example, these items are driving incrementality of 38% and 53%, respectively. Orange Creamsicle Fruit Punch and Peaches & Cream launched its spring resets at the end of the first quarter. These flavors are on shelves now attracting new consumers and providing variety for our loyal base. Package design is our most efficient communication vehicle and a key driver of trial. Our new, more vibrant designs look delicious and bring to life our points of difference as a clean label, great tasting soda with zero sugar and zero fake ingredients. Along with our innovation and our enhanced taste profile in stores as of Q2, this refresh has supported space gains as it bolsters retailer confidence in Zevia's ability to bring in even more new valuable shoppers and to drive repeat purchases and finally, to deliver incrementality. Looking ahead, we'll continue to surprise and delight consumers with seasonal offerings such as the forthcoming holiday limited edition pack, but more to come on that in the future. So now let's move to our third growth pillar, distribution. We're pleased with our results across channels, especially our same-store distribution gains in existing channels such as grocery and our new activity in the club channel. The club channel is expected to help accelerate household penetration and growth. In the first quarter, we executed a successful national Costco rotation, broadening our reach to new consumers in emerging markets where we see potential for year-round distribution or additional rotations. In our more penetrated permanent markets, we saw strong velocities continue. In the mass channel, we saw an acceleration in velocity with notable outperformance in sales through digital platforms, a key priority for Walmart. Additionally, we are pleased with the expansion into Canadian Walmart stores and momentum in Walmart chain-wide bodes well for future opportunities with other customers in the mass channel. In grocery, spring resets are underway, and Zevia has made some strong space gains. Kroger has expanded our in-store distribution, adding incremental flavors and boosting Zevia's visibility. The brand made similar gains through new item distribution and improved shelf sets at major regional players such as HEB and Publix. These developments helped the brand drive market penetration nationally and in underdeveloped regions such as the South and the East Coast. And finally, Zevia's e-commerce business continues to grow at an impressive rate, outperforming expectations. The introduction of smaller packs across multiple flavors has helped to drive trial and assist the strategy of major e-commerce operators as they seek to compete with grocery and mass. We also see strong performance from our existing 24-pack and variety pack offerings with our subscription business super serving a heavy user. As the only zero-sugar clean label offering at an accessible price point, Zevia plays a unique role in modern soda. We're positioned to win as young consumers increasingly reject conventional carbonated soft drinks and choose better-for-you options. In closing, we've made tremendous strides in advancing our strategic growth pillars and strengthening Zevia's financial position. While we see uncertainty in the macro, we're focused on what we can control, and that is capitalizing on the opportunity to leverage Zevia's distinct market position as a great-tasting zero-sugar, clean label and affordable better-for-you option. As we continue to execute across marketing, product and distribution, we are confident in our ability to deliver sustainable profitable growth over the long term. And so with that, I'll turn it over to Girish.
Girish Satya: Thank you.  Amy. Good afternoon, everyone, and thanks for joining our call today. Our strong first quarter performance underscores the tangible progress we're making against our strategic priorities. The reinvestments we've made across product, packaging and marketing enabled by our productivity initiatives led to a return to growth in 2025 and fueled first quarter growth of 21%, our highest growth rate since becoming a public company. In addition to accelerated top line growth, we drove vast improvement in our adjusted EBITDA. We are proud of what we've accomplished as we believe that Zevia has tremendous long-term growth opportunity. With that, let's turn to our results and an updated outlook for 2026. For the first quarter, net sales grew 21.2% to $46.1 million. The increase versus the prior year was primarily due to expanded distribution in the club channel and higher volume gains in the mass and e-commerce channels. Gross margin was 48.4%, a 170 basis point decline from a record high of 50.1% in the first quarter of last year. The decline reflects the impact of higher aluminum costs and to a lesser degree, the higher mix of club sales. This was partially offset by higher average selling price related to a shift in promotional timing as well as higher price realization. Selling and marketing expenses were $14.5 million or 31.5% of net sales in the first quarter of 2026 compared to $15.3 million or 40.3% of net sales in the first quarter of 2025. Breaking it down, selling expense was $9.4 million or 20.4% of net sales in the first quarter of 2026 compared to $9.1 million or 24.1% of net sales in the first quarter of 2025. The 370 basis points improvement was due to better warehousing and efficiency gains from automation. Marketing expense was $5.2 million or 11.2% of net sales in the first quarter of 2026 compared to $6.2 million or 16.2% of net sales in the first quarter of 2025. The lower marketing expense as a percentage of sales was due to a shift in timing of our national campaign relative to last year. We continue to balance brand and performance marketing with the objective of driving more awareness for Zevia. General & Administrative expenses were $9.1 million or 19.7% of net sales in the first quarter of 2026 compared to $7 million or 18.4% of net sales in the first quarter of 2025. This includes $2.3 million or 490 basis points in litigation expenses in the first quarter of 2026. Adjusted EBITDA was approximately $0.9 million compared to an adjusted EBITDA loss of $3.3 million in the prior year period. Turning to our balance sheet. We ended the quarter with approximately $26.6 million in cash and cash equivalents and have an undrawn revolving credit line of $20 million. Looking ahead, we will continue to build upon the strong progress we have made across our strategic pillars. Our revised outlook reflects the record performance in the first quarter, balanced with the ongoing uncertainty in the macro environment. In addition, our guidance reflects significant cost pressures associated primarily with higher fuel prices as well as additional increases in aluminum costs. Now turning to our outlook. Based on our first quarter results and incorporating increasing macro uncertainty, we are raising our full year net sales guidance to between $170 million to $175 million, reflecting 7% growth at the midpoint of the range. As a reminder, our net sales outlook reflects the planned discontinuation of our tea line, which we expect to impact growth by 1-point to 1.5 points. We continue to expect the first and third quarters to deliver the biggest growth of the year due to timing of promotional and marketing investments. Turning to profitability. We now expect full year adjusted EBITDA in the range of negative $2 million to negative $4 million. This incorporates an incremental $6 million in costs, 2/3 of which are related to the surge in fuel prices and the remainder of which are related to higher fuel-related aluminum costs. This is on top of the $5 million in incremental costs related to aluminum prices that we outlined on our previous earnings call, so combined an $11 million headwind to profitability. This guidance assumes gross margin will be roughly in line with our Q1 gross margin rate with slight pressure in the back half. The aforementioned fuel charges outside of aluminum costs will impact selling expense. Worth mentioning that if you back out the $11 million of incremental costs, our adjusted EBITDA outlook would have been $7 million to $9 million for 2026, roughly a mid-single-digit margin rate. While we expect these elevated prices to come down over time, we're also taking proactive steps to offset these higher costs. We have already taken $20 million of costs out of the business over the last 2 years. And while we see additional savings opportunities, these will take time to realize and won't be taking at the expense of growth. Turning to our outlook for the second quarter of 2026. We expect net sales of between $43 million to $45 million. Once again, this guidance reflects the planned discontinuation of our tea offerings, the lapping of sell-ins to Walgreens and Albertsons in the second quarter of last year as well as a shift in marketing and promotional dollar spend from Q2 to Q3. In addition, we continue to expect to realize the impact of planned price increases. We expect adjusted EBITDA loss of between negative $0.5 million and negative $1 million, reflecting a gross margin rate similar to the first quarter. In addition to higher fuel costs, we also expect to incur approximately $1 million in restructuring costs related to the relocation of one of our distribution centers. In closing, we are very pleased with the overall momentum of our business, which demonstrates strong execution against our strategic growth pillars. Early reads on our enhanced product portfolio, incorporating new free flavors is resonating with consumers, and we look forward to the rollout of our enhanced classic flavors and new packaging in the second quarter. This, coupled with intentional investments in marketing through which we are amplifying brand awareness and driving trial position us well to unlock future growth. As we move past these cost pressures over time, we are confident in our ability to drive healthy profitability for this business. I will now turn it over to the operator to begin Q&A. Operator?
Operator: [Operator Instructions] First question comes from the line of Sarang Vora with TAG.
Sarang Vora: Great quarter, guys. Congratulations. I wanted to start with the new brand ambassador Caridi B relationship. Can you talk a little bit about how you've figured out the brand ambassador as well as how does it change your marketing approach as you go in the second half of the year? Are we expecting a little bit -- the guidance, does it include a little bit uptick in marketing as well with all the plans that you talked about? Just a little bit on marketing and the brand evolution would be helpful.
Amy Taylor: Sure. So Cardi B came on board as a part of our broader plan for 2026, so therefore, within planned budgets. And as we -- as you may have noted in our prepared remarks, we talked a little bit about shifting promo dollars at retail out of Q1 this year to focus on the summer. And so if you think about our focus at retail, the timing of the rollout of our new packaging, the new flavors in market with spring resets, the improved taste profile across our core, all of that with the tailwind that Cardi will provide through increased awareness and through the engagement that she'll bring, it's all timed very nicely. So what you should expect from the partnership is an always-on social media approach from both sides. Not only does Cardi have a really strong reach, but she's highly engaged in social and then her fan base is very engaged with her. So we'll find her to be very supportive of product messaging in a really organic and authentic way. But we're also going to overlay a campaign spend against the partnership right out of the gate. So you'll see a campaign, an advertising campaign this summer inclusive of traditional and over-the-top streaming television and digital that we're really excited about that will really help step change our reach and support our #1 priority, which is expanding the base. So there's a lot more to the partnership that will be within grassroots and driving trial and at retail, but we're excited immediately out of the gate about the always-on social media nature of this partnership given her engagement and then the big summer advertising campaign that comes just at the right time for the business.
Sarang Vora: That's -- and just one quick question. I know there's a lot of cost pressures you talked about, especially tariffs and the fuel prices and stuff. Can you talk about the pricing approach to it? Is there a thought to raise prices in the back half of the year to mitigate some of these costs? Is that baked in your guidance as well?
Girish Satya: Yes. So from a pricing perspective, as a reminder, we passed through a price increase in the first quarter. We've been pleased with the uptick and higher price realization. We are focused on ensuring we can balance value to the consumer and the P&L as well. We're unlikely to be passing through incremental pricing in the back half of the year. We do believe that the cost pressures, although are immediate in 2026. They will subside over time, and we're proactively addressing it via other levers within the business.
Operator: Next question comes from the line of Eric Des Lauriers with Craig-Hallum Capital Group.
Eric Des Lauriers: On a very strong quarter here and very strong outlook factoring in the significant cost pressure that you guys are facing. I mean, very impressive outlook and job done. First question, just kind of trying to level set or just understand where we are in the overall rollout of the new packaging and new flavors, certainly nice progress and some nice callouts in the prepared remarks and in the presentation. But just wondering if you could sort of give us an overall sort of standing of what inning we're in and how long we should look for the rollout of new packaging and new flavors to continue before we sort of effectively reached full nationwide distribution.
Amy Taylor: Sure. So as we sit here today in May, I would say we're in the second inning. The Q1 result was game as it relates to the rollout of new packaging. And what I mean by that is by the end of the second quarter, you should find shelves that are stocked with almost all new packaging. So we've got some early green shoots. We've got some accelerating velocities and some nice results at retail that it's too early to attribute those directly to the new packaging, but qualitatively and anecdotally, both in feedback from consumers and retailers, the new packaging performs very well for us in terms of communicating the Zevia points of distinction and being very clear about our positioning, which is a step change over the packaging in the past. as well as pops well on shelves and kind of does justice to the variety and deliciousness of all of our flavor options. So it's early going, but we will be all the way to bright going into the back half of the year. And so that's partially baked into our presumptions of some acceleration of velocity in the back half.
Eric Des Lauriers: Okay. Great. That's super helpful. And just to, I guess, clarify there and also, I think, informs my next question here. But did you say that you expect it to be largely complete sort of entering the back half of the year and then.
Amy Taylor: Yes.
Eric Des Lauriers: And then I think -- okay. All right. Great. So then this I would assume is the answer to my next question here. I just -- there was comments on the sort of pace of revenue growth throughout the year. I think it was especially strong in Q1, of course. And I think you called out -- could you just kind of help close the loop there on what's driving that acceleration in Q3? Is it just kind of sting on the gas on this distribution rollout? Or is there any other forces at play, shelf resets, et cetera, that we should be aware of?
Girish Satya: So I think there's several things that are factored into sort of the growth rates being higher in Q1 and Q3. In Q3, we are shifting not only promotional dollars, but also marketing dollars into Q3 to sort of coincide with the peak as Amy alluded to, the packaging will be fully rolled out by the end of Q2. And so we're expecting a bit of an acceleration given all those three factors in Q3, which is why we've been calling out Q1 and Q3 as the sort of higher growth quarters for the year.
Eric Des Lauriers: Congrats again on the very strong quarter and strong outlook here, including the cost.
Operator: Next question comes from the line of Jim Salera with Stephens Inc.
James Salera: I wanted to start maybe some discussion around club. You mentioned you just completed the rotation at Costco. Contemplated in your outlook for the rest of the year, is there any incremental club rotations in the back half of the year? Or anything that we should be thinking about in terms of visibility there? And maybe as a second part to that question, can you talk about the incrementality of the rotation in Costco and how many new households or maybe lapsed users that help you engage?
Amy Taylor: Sure. It's early to quantify the household penetration impact of the Costco national rotation in Q1, but it certainly was additive to the quarter incremental and reflected in our growth. The advantage of the national rotation does a couple of things. Number one is it strengthens our velocities in -- based on increased presence in store in the markets in which we have permanent distribution as well as helps to spur discussions about future rotations for the regions in which we have rotational distribution and then opens up a conversation about two things, increased permanent distribution and/or future national rotation. So those are all on the table and represent upside to the plan. When we perform well in existing market that helps us to move from rotation to permanent and it helps to infuse what we're working on right now, the hope is that we would get another national rotation in the balance of the year. So all of that is promising and largely incremental. But as I mentioned, it does represent upside in the plan. So right now, we're not making a whole lot of assumptions in the back half of the year around incremental distribution at club on where we are today.
James Salera: Great. I wanted to ask a follow-up on the DSD network. Just any updates there and how that's trending? And maybe as we have some of this new packaging that should improve on-shelf visibility, how you anticipate that impacting the kind of West Coast portion of your business that's supported by the DSD network?
Amy Taylor: Yes. I think we're really bullish on the summer window for the markets of DSD for our ability to drive incremental displays in this critical window. We're focused on getting singles in front of the consumer on display. We're focused on leveraging the new excitement around Cardi [ D ] as being part of the reason why against that as well as, as we mentioned before, we focused promotional dollars for the summer. So DSD will have a role in outperforming display execution versus the rest of market there, and we're happy with their ability to do that so far. But in terms of an outlook on DSD, we're just really focused on execution in our, what I'll call regional pilots today, which is, as you mentioned, in the Northwest and the Southwest, so focused on the West Coast, we're a little bit more developed. And we don't have any more plans to expand DSD outside of the existing footprint, but we are bullish on their ability to help us open up new channels and specifically convenience over time. And we've talked about this before, but both the category and the brand are still in very early days in convenience. So we'll pace ourselves there and focus more on same-store penetration and growth in independent channels in the meantime.
Operator: Next question comes from the line of Andrew Strelzik with BMO Capital Markets.
Andrew Strelzik: First one I wanted to ask on the quarter. Obviously, a nice upside to your expectations, your guidance for sales and EBITDA in the first quarter. So I was hoping you could maybe talk about what played out more favorably than you initially expected?
Amy Taylor: Yes, I can talk about the sales side and then just quickly turn it over to Girish. But I think the key point here is that our base business is and was strong in Q1. And as mentioned, we shifted promo out of the quarter to focus on the summer and yet retail sales came back stronger than anticipated. So we saw some good velocity acceleration even as we lap new distribution, so across grocery at Whole Foods and a few other accounts where we're actually gaining share as well. And then in some other cases, there was contribution to the Q from new distribution, be it that Costco national rotation or a few other same-store expansions within grocery. And then we're pleased to see price increase more fully realized and then realized faster than anticipated. So on the net sales side, those were the major drivers. And maybe Girish could round us out.
Girish Satya: Yes. And I think the other 2 factors were the Costco rotation was less dilutive than we had anticipated. As Amy alluded to, we also saw higher price realization, which obviously helps flow through the rest of the P&L. And we've just continued to ratchet down expenses that are not consumer-facing and continue to drive cost discipline throughout the organization. So I think you see all of that sort of playing out in Q1 results.
Andrew Strelzik: Okay. Great. And maybe building on that, you guys beat your 1Q guidance by, call it, $5 million and only raised the revenue outlook for the year by $1 million to $2 million. Are you seeing anything that's making you more cautious about the outlook? Is there anything from your internal plans that's changing? Maybe it's just conservatism? I just want to take your temperature on the forward look.
Girish Satya: Yes. No, thanks for that. And look, we're really pleased with the outperformance thus far, and there's really nothing in the business itself that makes us more cautious. As a reminder, we have a very broad demographic base, and we're simply seeing sort of the K-shaped economy that all others are and the value consumer is getting squeezed. And so really out of an abundance of caution, we didn't pass through all of it, and we're still early in the year. And we'll -- we have a lot of exciting new initiatives that are in front of us, which gives us a lot of positivity heading into the rest of the year. However, as noted, the macro continues to give us a little bit of pause. So really, we're trying to be prudent in our outlook.
Andrew Strelzik: Okay. If I can maybe squeeze one more in. On the $6 million of cost, is that ratable through the year across the three remaining quarters? And in the past, you guys have done a nice job finding incremental cost saves to offset that. I know you said that those will take some time to play out. I guess, how long do you think it will take before you start to maybe realize some of those potential offsets?
Girish Satya: Absolutely. So yes, we've already begun to see the impact of the increased fuel expenses, primarily as noted in our freight expenses. We started to see that in the back half of March, more fully in April and May. And so you'll begin to see that impact in Q2. And as noted, it will be ratably throughout the year. Of course, to the extent that there is cease fire and diesel prices come down, you'll take 90 to 120 days to really see the full offset of that come back into the P&L. That being said, as a reminder, we've taken $20 million of cost out of the business. We see an incremental opportunity for $3 to $5 million that probably won't begin to flow into the P&L until Q4, but really most likely Q1 of next year. And so we'll continue to look for opportunities, but we're not going to do it at the expense of growth. And as just a reminder, on a trailing 12-month basis, we're basically breakeven from an adjusted EBITDA standpoint despite all the cost pressures. And so we do believe in the long run, this can be a very solidly profitable business, especially as we sort of lap some of these more macro cost shocks that are out of our control.
Operator: [Operator Instructions] Ladies and gentlemen, we have reached the end of question-and-answer session. I would now like to turn the floor over to Amy Taylor for closing comments.
Amy Taylor: Sure. Thank you. Just very briefly. Thanks for joining us, everyone. I'll just reiterate, we're really encouraged about the progress we're making across our strategic growth pillars, and I'm really proud of this team, the leadership on down. And 2026 will be a pivotal year for Zevia as we introduce exciting new product innovation, powerful marketing campaigns and then package design evolutions, all of which really support our unique positioning within better-for-you beverage. And while we're, as Girish mentioned, navigating macro-related cost pressures and some uncertainty, we really believe we have laid the groundwork for long-term future growth and profitability, and Q1 seems to be a reflection of that. Excited about the future. Thanks very much.
Operator: Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.