Advantage Solutions Inc. (NASDAQ:ADV) Q1 2025 Earnings Call Transcript

Advantage Solutions Inc. (NASDAQ:ADV) Q1 2025 Earnings Call Transcript May 12, 2025

Advantage Solutions Inc. misses on earnings expectations. Reported EPS is $-0.12 EPS, expectations were $0.06.

Operator: Greetings, and welcome to the Advantage Solutions First Quarter 2025 Earnings Call. At this time all participants are in a listen-only-mode. After the speakers remarks there will be a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Ruben Mella, Vice President of Investor Relations. Thank you, Ruben. You may begin.

Ruben Mella: Thank you, operator. Welcome to Advantage Solutions first quarter 2025 earnings conference call. Dave Peacock, Chief Executive Officer; and Chris Growe, Chief Financial Officer, are on the call today. Dave and Chris will provide the prepared remarks, after which we will open the call for a question-and-answer session. During this call, management may make forward-looking statements within the meaning of the federal securities laws. Actual outcomes and results could differ materially due to several factors, including those described more fully in the company’s annual report on Form 10-K filed with the SEC. All forward-looking statements are qualified in their entirety by such factors. Our remarks today include certain non-GAAP financial measures, which are reconciled to the most comparable GAAP measure in our earnings release.

As a reminder, unless otherwise stated, the financial results discussed today will be from continuing operations and revenues will exclude pass-through costs. And now I would like to turn the call over to Dave Peacock.

Dave Peacock: Thanks, Ruben. Good morning, everyone, and thank you for joining us. Before we get started, I want to thank my teammates for their relentless commitment to our clients in this highly unprecedented time. Their unwavering focus on our clients and customers is commendable. Our first quarter revenues of $696 million and adjusted EBITDA of $58 million were down 5% and 18%, respectively, from the prior year. While the headline figures highlight a year-over-year decline, intentional client exits and anticipated transformation-related investment represented the majority of the adjusted EBITDA decline in the quarter. We were also negatively impacted by the calendar with a late Easter and 1 less working day weighing on Q1 results as we expected.

As the quarter progressed, consumer confidence waned, followed by increased uncertainty caused by tariff concerns. This led to lower-than-expected consumer purchases, resulting in some clients and customers reevaluating their spending levels and the timing of events and programming. We also saw lower year-over-year order volumes in many CPG categories as consumers pulled back and retailers reduced inventories. The result was a softer environment in the first quarter, which created some near-term volatility for our business, particularly driven by channel shift, trade down and overall reduced consumption. While we primarily service consumer staples categories where product demand is traditionally more stable, we are not immune to shifts in consumer sentiment and pricing.

All that said, the environment also brings potential opportunity for our business as we partner more closely with our clients and customers to focus on solutions that help them reduce their costs and drive overall efficiency. At this point, despite turbulence in the macroeconomic environment, our near-term new business pipeline is robust, and we will continue to help existing clients navigate any tariff impacts through our breadth of product offerings. We will continue to monitor the situation very closely. And while we may experience the challenges in the near term, we remain optimistic about the future. Advantage has a track record of performing well through recessionary environments and as a largely domestic services business with no manufacturing, we do not have meaningful direct tariff exposure from a supply chain or cost perspective.

The first quarter performance was impacted by a more challenging labor market, which resulted in difficulties fully staffing events and projects across both our Experiential and Retailer Services segments. These shortfalls were exacerbated by intentional turnover and attrition designed to upskill our talent acquisition teams in some of our field management. We’ve implemented new processes and have added resources to our talent acquisition teams to help close the gap. These process enhancements are already beginning to yield benefits in Q2, and we are confident that our high-volume talent recruitment optimization and broader labor utilization investments will drive greater access to talent, a higher level of retention and enhanced efficiency in the back half of this year and beyond.

Turning to our segments. In Branded Services, we’re seeing expected headwinds related to a contraction in consumer spending, retail inventory destocking and reductions in discretionary marketing budgets. In response, we’re continuing to adapt and invest behind our go-to-market next-generation selling model and feel very good about the state of our business development efforts. Retail merchandising and supply chain support, in particular, are examples of services that we provide our CPG clients to help manage their P&Ls with a tangible cost advantage during this uncertain environment. We are confident in those businesses continuing to perform well throughout this year. In Experiential Services, demand remains strong for our solutions across regions and retail banners.

The momentum outside of traditional sampling also continues to grow. That being said, we experienced temporary headwinds related to last quarter’s customer loss and the aforementioned staffing challenges. Our staffing and execution rates are already improving in Q2. In Retailer Services, ongoing effective price and cost discipline were offset by regional staffing shortages, which limited activity in some places in the quarter. We remain optimistic in our outlook as client demand remains solid, and our teams continue to make progress executing our strategy to expand in adjacent services and channels. Our support for retailers is especially important in this moment as they seek to rapidly reset assortments based on disruptions to traditional product supply in some categories.

Turning to our investments. We are pleased to highlight that we are making significant progress on our efforts to modernize our tech infrastructure and enhance our ability to leverage analytics and to drive effectiveness and efficiency. We remain committed to establishing a leading data architecture and system foundation to yield operational savings for Advantage and better and more cost-efficient service for our clients and customers. In April, we successfully rolled out Phase 2 of our ERP implementation across our international operations without notable disruption. We are on pace to complete the implementation of our foundational data platform in the second half of 2025 and the broader cloud migration by the first quarter of 2026. We have ingested significant syndicated and internal data into our recently established data lake, which is enabling more rapid deployment of AI use cases as we aim to drive more precision and speed through insights with our sales and field teams.

This is manifested in how we review categories with buyers to how we determine the next best action at retail for our clients to how we deploy labor in our Retailer and Experiential segments. We have begun the process of rationalizing duplicative and outdated systems, which will result in significant OpEx savings over the next 2 to 3 years. Specifically, we believe the savings from this effort will offset the degree of incremental costs we are absorbing in 2025 from more modern systems. In addition, we also expect to achieve broader business efficiencies as a result of our new simplified IT ecosystem. Our IT and data investments are foundational to helping support our teammates in better serving our clients from the deployment of proprietary analytics in our selling process to greater utilization of field personnel through enhanced scheduling and routing.

Another focus area of our transformation in 2025 is improving our labor utilization. We have mobilized the task force to take immediate action in both driving efficiencies across the millions of labor hours we manage at retail and improving the overall teammate experience. We have several related strategic initiatives underway. We are seeing positive results from our pilot of a new field operating organizational structure and experiential services with the efforts scaling to larger markets this quarter. The benefits include higher event execution rates and better teammate retention. We continue to have confidence in our target of over 30% uplift in availability of hours for our part-time teammates that are looking for additional hours. Our broad-scale initial rollout for a centralized labor model remains on track for the second half of 2025.

This program will cover the majority of our total part-time labor hours in the near to medium term. We feel confident in our ability to be a cost-leading solutions partner to CPGs and retailers in this challenging environment. Despite the confidence we have in our people and investments, we must be realistic and acknowledge a softer growth environment in the broader consumer market. Therefore, we are lowering our revenue and adjusted EBITDA outlook to flat to down low single digits. From where we stand today, we believe the tariffs and the corresponding CPG and consumer reactions can have a modestly adverse net impact on the business. While we may experience benefits from growth in private label and supply chain services, these could be offset by demand softness in certain brokerage, retail and sampling services.

We can reiterate our adjusted unlevered cash flow guidance of greater than 50% of adjusted EBITDA, noting that the ERP implementation could bring greater cash flow benefit through the year as we better utilize our new systems and processes. While this year and especially the first half of this year continues to be affected by transformation investment and intentional client exits, we are confident about the long-term earnings power and cash generation potential of Advantage. I’ll now pass it over to Chris for more details on our performance and guidance.

Chris Growe: Thank you, Dave, and welcome to all of you joining the call today. I will tick through our first quarter 2025 performance by segment, discuss our cash flow and capital structure and reinforce Dave’s guidance commentary. In Branded Services, we generated $257 million of revenues and $28 million of adjusted EBITDA, down 9% and 19% on a year-over-year basis, respectively. Results were driven by the aforementioned intentional client exits and client loss, partially offset by continued cost discipline. Additionally, we continue to see challenges from CPG spending pullbacks, most notably in our omni-commerce marketing business. In Experiential Services, we generated $221 million of revenues and $12 million of adjusted EBITDA, down 1% and 28% on a year-over-year basis, respectively.

We experienced the ongoing impact from last year’s customer loss, as well as the headwinds from staffing issues, as Dave mentioned earlier. Demand for our services in this segment remains healthy as exemplified by 3% year-over-year growth in events per day, excluding the client loss on execution rates of approximately 93%. In Retailer Services, we generated $218 million of revenues and $18 million of adjusted EBITDA, down 3% and 7% on a year-over-year basis, respectively. This segment was impacted by staffing challenges as well as softness in our agency business. We are starting to see dollars flow into advisory services and feel good about our staffing recovery efforts. Moving to the balance sheet and cash flow. In the first quarter, we continued our capital discipline and made progress opportunistically reducing our debt levels.

We voluntarily repurchased $20 million of debt and $1 million of shares at attractive levels. Our net leverage ratio was approximately 4.4 times adjusted EBITDA, including discontinued operations, higher than year-end 2024 as expected. Our new ERP system rollout in Q1 went smoothly overall, but resulted in a use of cash as we anticipated. We ended the quarter at approximately 70 days of sales outstanding, up from 61 days at the end of 2024 due to the system implementation. This was more than expected, and our team is quickly addressing this and other minor inefficiencies. In fact, we already see improvements to reporting, forecasting and transaction management in Q2, which gives us confidence that DSOs will come down meaningfully in the back half of 2025.

Most notably in the first quarter, we reduced restructuring and reorganization costs by $16 million on a year-over-year basis and $10 million on a quarter-to-quarter basis. We’re optimistic that these costs will continue to be lower over the balance of the year as we move along our transformation journey. We ended the quarter with $121 million of cash on hand. We view the current debt and equity trading levels as attractive opportunities for value creation with our excess cash. As Dave highlighted, we are lowering our guidance to reflect the current market environment. I will focus my comments on the quarterly weighting of performance and touch on balance sheet and cash flow guidance. As expected, seasonality this year is exacerbated by a few discrete items.

These items include retailer inventory destocking trends, weather pattern, fewer working days and a late Easter, all impacting Q1, as well as less transformation expense and known business wins reinforcing the back half of the year. We are also proactively implementing cost reduction programs across the company. Consequently, we continue to believe that this year will be more back half weighted relative to 2024. Turning to cash flow in 2025. We continue to expect adjusted unlevered free cash flow to be over 50% of adjusted EBITDA with the potential for upside from improved working capital management as we more fully utilize our new systems and build back from our ERP implementation earlier in the year. We continue to expect interest expense to be $140 million to $150 million and CapEx to be $65 million to $75 million in the year.

Depending on how the macroeconomic environment evolves, we will selectively consider adjusting our discretionary CapEx spend. We plan to use balance sheet cash to reinvest in the business and opportunistically reduce debt, subject to market conditions in order to track towards our long-term target of less than 3.5 times. We would also note that from a liquidity perspective, we ended the quarter with an untapped revolving credit facility of nearly $400 million. We feel confident in our liquidity position and ability to manage the macroeconomic climate. Thank you for your time. I will now turn it back over to Dave.

Dave Peacock: Thanks, Chris. Despite the challenging quarter and volatile operating backdrop, I remain pleased with our team’s efforts and transformation progress. We are committed to investing behind our strategic initiatives and look forward to being the best equipped service provider for our clients and customers, while generating meaningful cash flow for our shareholders once we emerge from our transformation. Operator, we are now ready for questions.

Q&A Session

Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Thank you. And our first question is from Joseph Vafi with Canaccord. Please proceed with your question.

Joseph Vafi: Hey, guys. Good morning. Thanks for the update to ask a couple of questions. I thought we’d first maybe check in on the macro here. We’re kind of halfway through the second quarter. Any kind of notable changes that you’re seeing kind of real time versus kind of the Q1 print? And then secondly, if we could maybe drill down a little bit on some of the labor challenges in Q1, kind of more specifically certain geos or areas of the country and kind of a little more detail on the progress to get those fixed. Thanks, guys.

Dave Peacock: Hi, Joe, thanks. This is Dave. Let me probably answer both questions with the same information. We put a task force together pretty quickly and actually had anticipated a little kind of bumpiness relative to labor in the first quarter as we were making some changes both in some of our event managers in our Experiential business, but also in our talent acquisitions team and both some in process and some in leadership. And it’s – the good news is there’s yielding from that work. Already in this quarter, we’re seeing much better hiring rates, if you will. And some of these anomalies that we saw in certain regions and certain geographies are starting to smooth out a bit. And wherever we see dispersion relative to our ability to acquire talent in a certain geography, we’ve got, I think, a nimble enough and agile enough team now to go address it pretty quickly.

And we’ve always had in our business. I mean if you look at our business, you’ve had kind of better or worse hiring in different areas. It was a little more exaggerated in the first quarter. But safe to say that we feel very good about how things are playing out in the second quarter. And it’s important to note as well is that those businesses that are most exposed to labor that we have actually have more seasonality in second and third quarter. So we have an ability to make up more ground to the degree we can continue this hiring pace.

Chris Growe: Hey, Joe, I might add a comment there. For example, on Experiential, our execution rate in the first quarter was around 93%, and that – so that’s an improved rate. We’re seeing that in a good place. However, it’s just not where we thought it should be or where it could be, as Dave mentioned, due to some of the hiring constraints there. So I think we see that improve in Q2, not only the hiring, but then the kind of knock-on effect for execution, we should see a much stronger performance, especially in Experiential.

Joseph Vafi: Great. Thanks a lot, guys.

Operator: And we’ll take our next question from William Reuter with Bank of America. Please proceed with your question.

William Reuter: Good morning. I have two. So the first, the issues with staffing in the previous question, you mentioned event managers, talent acquisition, you said some in process and some in leadership. Have there been meaningful increases in your labor costs that have allowed your staffing levels to improve over the last month or two? Was that part of the problem? And what types of labor inflation are you seeing?

Dave Peacock: Thanks for the question. We are not seeing what I would call differentiated labor costs from first quarter to second quarter necessarily. We’re seeing labor cost inflation in line with the macro market for high-volume talent. A lot of that is a byproduct of regulatory minimum wage laws in select states. And then obviously, you get some markets that are more competitive and have been for a long time. One example might be like the Southeast of the U.S. But yes, from quarter one to quarter two, we’re not seeing a real difference. And it wasn’t our wages that was the issue. I think it was a little bit on our side relative to our talent acquisition strategy and some of the changes we were making. And like I said, we signaled a soft first quarter in the fourth quarter call 3 or 4 months ago.

And part of that was knowing kind of we’re going to go into this quarter a little bit of risk on the labor side. But the good news is the initiatives that we’ve put underway are really starting to take hold.

William Reuter: Got it. And then in terms of the debt reduction in the quarter, did you repurchase term loan? Or was it bonds? And I guess, how are you thinking about that? You mentioned something about kind of like a balanced approach, I think, in the capital allocation discussion at the end of the prepared remarks, but just thoughts on debt reduction versus share repurchases.

Dave Peacock: Yes. We are – we did repurchase some debt in the quarter. Obviously, we have a narrow window to do that. And I think going forward, as you know, we’re in a year in which we’re not going to generate a lot of incremental cash, we are focused on our – on balancing the cash we have available to use that to repurchase debt. So I think what I’d just say is we’re going to be balanced around debt and cash. And I think we’ll be kind of focused on making sure we utilize our cash appropriately for that.

William Reuter: Okay. And was it the term loan or the bonds that you repaid and repurchased in the quarter?

Dave Peacock: We repurchased the bonds.

William Reuter: Great. Okay. That’s all from me. Thank you.

Operator: We’ll take our next question from Faiza Alwy with Deutsche Bank. Please proceed with your question.

Faiza Alwy: Yes, hi. Thank you. Good morning. I wanted to ask about – you mentioned the macro impact, and you alluded to channel shift. So curious if you could talk about what you’re seeing there and whether you’re starting to see increased business as it relates to private label? And then maybe on the brand side, or I don’t know, maybe it impacts all segments, but what are you seeing? Are there specific categories where you’ve seen a change in consumer or retailer or manufacturer the demand?

Dave Peacock: Yes. It’s a good question, an important one. So one, we all see that consumer sentiment is, I think, the lowest it’s been in 12 years. And consumer sentiment is affecting their shopping behavior. You saw retail sales that were below expectation, for instance, in February. March, they rebounded, but they were on large ticket items largely. And we deal with fast-moving consumer goods. So with kind of limited discretionary spend, we’re seeing in certain categories where consumers may fear tariffs or fear inflation or there’s even in some cases, somewhat exaggerated inflation in the media, they’ll start buying up their stocking up in those categories. And that just affects overall movement of goods across all categories.

You’ve had retailers destocking a bit, in other words, reducing inventory. And again, that goes back to depending on the category in the categories where we operate being fast-moving consumer goods, you would see a little bit of destocking there, even though you may find other categories like electronics or large durables that there was actually more inventory just trying to get ahead of tariffs. So part of that is how they’re leveraging their overall working capital and their inventory dollars. As it relates to our business, the macro that we’ve seen is that reduction in orders because we’re a commission-based business in much of our branded services area. And then on the private label side, you do see an increase in shift in the private label in the macro when you look at the IRI – or I’m sorry, Circana MULO [ph] data.

But we are exposed more to regional grocery and a lot of that private label growth is occurring with larger retailers, mass merch, club stores. We do have some exposure to, but not as much exposure as you have to the grocery channel and some other channels like that. So I’d say on the other side, when you look at the macro and the reason we gave kind of broader guidance as it relates to our revised outlook is we do provide services that are really necessary for retailers and consumer products companies. And we can help them navigate this difficult time. And so the discussions we’re having with a lot of our clients and customers are just around that. With uncertainty in the market, can we provide some level of certainty, whether that’s in an expense line item or in a specific service to help them navigate and manage the unexpected.

And so we can do that with our supply chain services, as you referenced, some of our private label advisory for retailers and then some of the merchandising work as a lot of consumer products companies and retailers are looking at SKU rationalization that can create work for our teams. So we gave a little bit of a broader outlook, just a range out as far as outcomes for the year because it really is unknown how the consumer and then thereby the CPGs and the retailers are going to behave. But we do see some opportunity to leverage our services and where they intersect with the specific needs of the consumer segment right now.

Chris Growe: I can add a little bit of color here just in relation to – just a couple of things quickly. We did see in our – in retailer inventories about a 1.5 point drag on orders in the first quarter. And we have the benefit of some data from both our retailer and our Branded Services segment that allowed us to get a pretty good read on that. And just an item just to give you some perspective for what we’re seeing across the business. And then just to follow on Dave’s comment, in this environment, private label, supply chain as a service, there’s – these are services that are a nice little offset or balance to some of the weakness you might be seeing on the retailer inventory destocking side. So we are seeing some improvement there and some nice growth there.

And then underneath that, of course, I would just say we’re seeing some good demand signals on the Experiential side, for example, where we’re seeing good demand, get the execution up, get the hiring up. We’ve got the kind of demand there to – if we can get the hiring up to achieve that.

Faiza Alwy: All right. Great. That’s very helpful. And then just on the guide itself, right, just given where we came in, in the first quarter, just help us with a little bit of the quarterly phasing because my impression is that we should be expecting a much stronger EBITDA growth in the back half. And I think you’ve talked about that as being more sort of new business related. So just give us an update on that in terms of how you’re expecting the year to play out from here.

Chris Growe: Yes. So obviously, a little softer first quarter here overall, but a couple of things that come to mind in relation to that. So I think about the seasonality factor will be a little more exaggerated first half, second half. There’s one phenomenon we talked about last quarter, as we talked about our outlook for the year, which was a much heavier level of shared service cost increases year-over-year in the first half. A lot of that’s driven by IT and our new systems. And that is – that persists, if I can say it that way. Obviously, with a little softer revenue in the first quarter, those costs are not changed. So as a result, it did weigh on Q1. Those do come down – actually come down in the second half of the year, and we should be in a much better place in that regard and should allow for stronger growth.

I just want to also add, at the same time, Faiza, we are going through a pretty aggressive look at our cost structure here. And I think there’s some cost reduction programs and ideas we have to push through the business that we’re executing now that I think will be very helpful for the second half as well. So a little more exaggerated first half, second half. And then you’re going to see the lower shared service costs and the cost reduction programs really play out in the second half of the year.

Faiza Alwy: And then maybe just last one. Just with all of the tech transformation that you’re going through, like how are you ensuring that there’s no execution issues that come from it? We’ve often come across situations where as you go through this IP implementation, this every [ph] issue. So just curious how you’re managing through that.

Dave Peacock: Yes. Hi, this is Dave. The team one has been really well organized and has done a great job, especially with our ERP implementation. Obviously, bring in a top-tier systems integrator. So we’re leveraging all the external resources, as well as having what I’d say, expertise within our business and experience having done this before and frankly, more complex businesses. When you do something like this and you undergo this effort in a manufacturing environment, which I’ve lived through in my past or a retail environment where you’ve got stop ledgers and vast elong [ph] data and all kinds of things, inventory across thousands and thousands of SKUs, there’s a lot of risk. In our business, while it’s never simple, it’s a little bit easier and a little less risk.

Where you’re seeing it manifest is on the cash flow side, which we know is short term because it has to do with billing cycles and how we’re able to actually use a system that’s actually going to help us compress our time to invoice and improve our DSOs over time. But you see that hiccup in the first quarter or two when you’re implementing. And then as it relates to visibility, I can tell you that the visibility we’ll have within a granular level of our business is going to be much greater than where we’ve been with disparate systems. And we’re already seeing the benefits of faster and richer data. So what used to take several hours for our team and FP&A to run a full run of our financials now can take minutes. And all these things will come with efficiencies over time.

And then I’d also want to add that as we’re implementing these new systems, and I’d say there’s really kind of think about it in a few ways, there’s foundational systems like our EPM, which was finished last year, our ERP and then our human capital management system, which will – project kicks off in the second half of this year. It’s a smaller effort, but an important one for our people. And then we’ve got our cloud migration and the data lake that we’ve constructed that will enable us to perform all kinds of AI use cases and leverage the speed of data. These will come with efficiencies in the overall business, some of which Chris just mentioned that we’re trying to pull forward as we look to realize cost benefits this year. And then as we implement new, more modern systems over the next 2 to 3 years, we’ll actually be shutting down systems that will save us the expense that we’ve added to our P&L relative to newer systems.

So you’ve got the benefit of ultimately having older systems being decommissioned, effectively paying the price for the new systems and then ultimately, the efficiencies within the business that come with streamlined operations and better data visibility.

Faiza Alwy: Great. Thank you.

Operator: And we’ll go next to William Reuter with Bank of America. Please proceed with your question.

William Reuter: Hi. Just a couple of follow-ups. The first, is there ever any way to figure out what the impact of staffing shortages would have been on EBITDA in the first quarter had you had sufficient labor?

Chris Growe: Yes. I mean I think if you look at the first quarter and I look at our execution rates, for example, across our Retailer and Experiential segment, I would just say that the vast majority, actually probably more than the decline in EBITDA is associated with the staffing shortages. So when I think about other cost pressures or other items that are affecting those segments, I think the main driver of the weakness and decline in profitability was related to the staffing shortages.

William Reuter: Got it. And then secondarily, is the destocking that you had previously or you saw, I think you mentioned a 1.5% increase or headwind in the first quarter. Are you continuing to see destocking into the second quarter? Or is that largely complete?

Chris Growe: I know that it certainly got better as the quarter went on, but I want to just say I’ve not seen like April data yet, for example, to say that it stopped or is not occurring. I just want to also add that we saw this a year ago in the first quarter, and it went even lower this quarter – this first quarter of ’25. So I think what we’re seeing is just a tighter lock on inventory by the retailers that is causing the year-over-year effect. My point then would be that it’s unlikely we’re going to see that continue at certainly the same rate in Q2, but I just have not seen the data yet to validate that.

Dave Peacock: Yes. The other thing to think about, William, is you’ve got an Easter shift, which was pretty substantial. And that can play a part in a retailer and how they stock, especially fast-moving consumer goods that have a much more efficient supply chain, and they tend to carry less inventory overall. So theoretically, you should see more of a flushing out of that volume with consumer demand in April and then shipments starting to kind of catch up again.

William Reuter: Got it. And then a last one for me. And this is kind of a big picture question. Branded services, the breakdown of consumer products versus food companies, is there kind of a rough estimate you could give me on how that breaks down?

Dave Peacock: And you said food versus like beverage, household product, is that what you’re getting at?

William Reuter: Well, I was thinking more like food consumables that I think would have largely more consistent demand versus – I’m sure there’s consumer products in there as well that – and when I say consumer products, I’m thinking about, I don’t know, batteries or non-consumables of that nature.

Chris Growe: Yes. I mean the vast majority of our portfolio is going to be in the food and we’ll call personal care. It’s 70% food. And then we’ve got a very strong presence within the personal care and household goods segments as well. So we’re not as exposed to things like electronics or kind of these other consumer – obviously, not apparel and things like that. It’s much more fast-moving consumer goods.

William Reuter: Perfect. Very helpful. Okay. That’s all from me. Thanks, again.

Operator: There are no further questions at this time. I want to turn the call back over to Dave Peacock for closing remarks.

Dave Peacock: Yes. We thank everybody for joining the call, and we appreciate your attention and your questions, and we look forward to connecting with you for second quarter.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.