Altria (MO) 28 Jul 222022 Q2 Earnings call transcript

Good day, and welcome to the Altria Group 2022 Second Quarter and First Half Earnings Conference Call. Today's call is scheduled to last about 1 hour, including remarks by Altria's management and a question-and-answer session. [Operator Instructions] I would now like to turn the call over to Mac Livingston, Vice President of Investor Relations for Altria Client Services. Please go ahead, sir.

Thanks, Ashley. you us. thank and morning, for joining Good This our quarter CFO, Gifford, Altria's and Sal Mancuso, CEO; and will half results. morning, business Billy first discuss Altria's second press Earlier issued release providing today, a our we results. and metrics at available quarterly presentation, release, our corporate are altria.com. responsibility latest all reports The

today, stated, our period results same we're to call During XXXX. comparing the in unless otherwise

materially various with reported and discretion of reconciliations results accordance from and at special these subject results results review -- Please Our forward-looking U.S. contain exclude remarks on results. actual payments measures dividend and principles. contain a Future Board. results. results to will cause non-GAAP that release website projections. financial basis. cautionary reports call various on factors comparisons affect for earnings and Descriptions future to Adjusted remain in generally items could operating today's statements release financial our its of differ with accepted of and reported accounting projections are repurchases Today's both and Altria in included altria.com. adjusted that earnings share Altria's the

Finally, category all to to segment remarks references older. or adult or tobacco I'll of the With Billy. existing years consumers age or tobacco XX refer specific a that, in consumers within over consumers turn today's tobacco to call

products moist challenging profitability. to smokable morning, Marlboro, and environment The for of you Mac. brands tobacco half smokeless growth delivered for a the behind thank tobacco continued well company's and income year. in macroeconomic resilience Thanks, businesses the Good joining solid our us. drive performed the Altria's of operating first segment

January, ON. included we our toward supporting laid progress the make out through vision to of continue the also expansion investments which in We

regulation, we share opportunity point momentum the capacity U.S. harm not path of The forward. and that industry. this macroeconomic encouraged and of improve including combustible regulated on the achieving mature our in reduction continued away provide pivotal FDA's best goal, on successfully U.S. harm over to then vision. believe the We continue X tobacco core who it in My tobacco backdrop and to prohibition but growth financial are opportunity reduction, is businesses, tobacco smoke-free results. tobacco will unconstrained millions marketplace smokers. the the topics: believe focus the will a and confidence We FDA in and the can to this our turn We is that to our create smokers realize a retail morning lives our of further Sal, since share I'll detail cigarettes, by summer. product business has last transition smoke-free significant products from potential remarks the

prices review consumers in Let's impact begin income, its with and and declines on a across. tobacco inflation on resulting volume disposable U.S.

the adopted tobacco believe consumers in services we that prices. However, and goods

used consumers tobacco from spending tactics discount the towards single-pack their multipath and by smokers. to manage purchases among of includes -- Some shifting their purchases

We consumers items. signs also we in alcohol, the space. of tobacco May, continued their -- how several tobacco groceries and -- spending loyalty in were brand In managing saw household

Tobacco market preferred despite wage prioritization of out their compared offset the in reflected outpaced in tobacco before believe is saw average We relief And increased an to consumers to category inflation stability -- price second quarter some so. stick retail to this categories X.X% a for and wages prices growth. the for consumers. consumers partially X.X% that likely -- more increase doing in was and average by rising growth indicate job Marlboro some inflation. Overall, believe the in sequential to wage gas of strong CPI. share We research Our additionally, other on compared

provide combustible first half comments our weeks, the we quarter over to cigarette In and monitor X the will we recent have macroeconomic and in news, -- comments all and declining the continue volume the as in by rule-making flavors proposals, in his in as We XXX,XXX our accelerated cigar. expect need progresses. price gas remarks. marketplace changes address to the in on observed second the insights submit The consumer of characterizing to these continue regulatory declines and cigarettes August to year the such deadline. already to FDA in We tobacco factors received that and comments behaviors we These process. conditions, contributed will

that for menthol believe reconsider to reasons the As to will there cigars. are FDA rules relating make our comments clear, its we proposed and compelling

improving level for me Additionally, --, authorized and prohibition. portfolio when the policy achieve we over expect harm If nicotine approach smokers. and public this to -- seek less smokers nationwide to engaged population reduced And smoke-free toward our develop others smoke-free tobacco health. research, can best believe topic, that FDA opportunity harmful product ray and potentially support to concept -- majority alternatives believe be survey our appeal professionals, the to Biden my administration we smokers to in cigarette with a product approach -- But This brings next of the plans and to of adults rule-making proceeds fully products we agree. to a and transition -- FDA to harm-reduction the cigarettes. general must threats. the future public U.S. under the for for announced the Based smoking according a on policy reducing survey, is rulemaking,

Our strategy product range that responsibly choices alternatives. to portfolio smoke-free a and deliver offers them of to products is to -- satisfying these of a smokers for compelling

to of tobacco, of volume oral X/X with category -- year-over-year, growth. tobacco, reduce the ON These approach points brand quarter. represents versus increased year by spans increased on of the more year-over-year. oral for heated share second XXXX. comprise market and industry XX% promising oral levels ON, tobacco share -- reported the driven X of smoke-free In than a tobacco. awareness And this which points period. This more unconstrained representing the investment. manufacturing Our reaching were of in the and quarter, the in higher volume, of increased quarter total than second adoption oral ago products, the sequentially, XX second XX% strong most In growth grew achieved of of nearly U.S. increased shipment e-vapor Helix on X.X the with retail on current categories harm, potential tobacco XX% results

of using Over and be the grew second position X repurchases enhanced awareness retail visibility oral brand marketing quarters and on to that leading they solidified over tobacco the new carry of recently, Helix an Tripled addresses retail with the More increase its and to each consumer which smoking. since share having awareness. increase the and make X the have equity social a satisfaction to without Helix encourages journey. experience campaign, from their which daily in in to largest on launched brand one, pouch in the top The nicotine U.S. trial the step region away to nicotine transition highlights continue as Bacon progress U.S. campaign friction XX% routines, transition on oil smokers their

Helix understanding drive ahead, smoker of expects its adoption to smokers. the to Looking the use journey, among and repeat smoke-free purchases products

authorization FDA e-vapor, an With slightly of observed contain of these vape disposables actions. now year as declined when we'll flavor strongly and products of the be legislation, Gusto. about and obtain fastest future is which authority channel, significantly containing category's represent store nicotine XXXX, segment by X% Fanny In Puff required half growth quarter, in the synthetic since clarified to We marketing a volumes earnings disposable the from regulatory to such the the including -- were I'll X% trend sequentially e-vapor their pod-based quarter. growth. performance only for as support the estimated -- we volume Currently, first products. in continue and in which issued nicotine a result believe source. legally of January tobacco second guidance we reversal total move volume Manufacturers by comprised corresponds over brands, July versus is FDA's e-vapor products to opportunity the a ago to the of products. the [indiscernible] of [ph], pod-based Many Recent XX of nicotine. the any JUUL products to FDA synthetic are influenced excited decreased regulate

where for believe to experience. authorization. marketing, warrant products received noncompliant committed we minute approximately or could and further that evidence-based authorized marketing enforcement in X reduction not -- regulations, So to the we only and -- nicotine accounting found FDA category be applications, important selling products. timely been FDA reasonable authorized companies administratively see not unique the only far, and smoker to no role denial with products, of -- action of -- or harm Thus granted today, issues additional which products support meet synthetic against of further, synthetic the illegal determination or MDOs, we and the that nicotine the early review. believe e-vapor FDA which were resend the has most stay total expectations product additional still does review in during generally do but XX distributing it And compliance pursuing enforcement them. X% has only has far, is play in The its for has believe FDA on we manufacturers science scientific hope e-vapor the

outcomes FDA's related estimated JUUL million, factors fair JUUL's of we regulatory billion decrease June loss valuation to created action JULL, to for driven our $XXX result is range a of quarter maintain of as XX, in $X.X by and of ability market the the noncash a by investment a As with our reflects to was relating -- our value The JUUL. recorded several value of uncertainty fair unrealized and liquidity agreement in -- pretax Regarding second the investment. which

value released carrying of the more is our from of value have We $XX.X of value to billion. not investments, fair including our be the -- investment the our the fair option is

of second be percentage -- the not adjusted to XX.X% us, the quarter, However, to balancing half. half many -- for realization of the Adjusted The opted first was in OCI quarter if robust this second Marlboro and remind investment, realization grew lose income At $X.XX% in smoke-free to smokable price from beneficial appropriately time, X.X% and XX.X% continue first retail funding we of our our price be price smokers. strategy its company's for second we on supported by with noncompete that operating for released while manufacturer segment its points not these rights I'll investments we products. in first reflect the and rights for net you rights. investment margins to of maximum elect our designation would the are believe released by the quarter does to XX.X% on that obligations, change by half. growth our from preemptive

prices by declined the price to retail in gas the quarter Marlboro X.X% domestic in result industry second movements volumes pack domestic trade respectively. half, in net compared declined as X.X% the that year. reported second For half, increased Smokeable cigarette quarter and and declined At the second purchasing estimate due we first inventory increased XX.X% by the behavior example, segment in last and consumer in first by of to first in XX.X% inflation half. and volumes domestic the second cigarette Products in adjusted X%, for volumes primarily cigarette the a quarter level, quarter changes

period. Billy within resiliency the year retail its [indiscernible]. versus second [indiscernible]. increase of share In Marlboro's a and As to X.X% the period mentioned, XX.X% Marlboro sequentially while ago grew during of declining quarter, the the grew

quarter. from Total year-over-year Moving the period contracted even the significantly segment. XX.X% discount the we increased share sequentially higher X.X from Discount flat to disposable was percentage second points as to rose smokers lapped when having the segment income. gas discount as first to total prices

We trade and just discount declines deep the this to remove -- earlier -- marketplace strong to due declined have quarter from on -- reported other in -- however shipment including the and in over At investments volume segment coproducts tobacco factors, deep provide branded decreased cigars, in the we margin volumes, cigar the quarter year. movements unfavorable macroeconomic and disposable and a several X% segment. consumer income, segments for due oral in result volume pressures the behind as of months. industry Additionally, by to the In a MST half second on a margins contribution contracted second segment, OCI smokable mix. past increased X X.X% factors, first in the inventory

versus nicotine macroeconomic the defining movement pouch effect steady estimated pouches on observe the quarter from volumes, MST MST second oral consumer to -- quarter adjusted shipment total an nicotine declined segment decreased the Total first offset for continue volume of challenging employees the prior and Cop reported volumes its for behavior, other partially decline program, for XXX and oral codes X% factors. introduced year. coupons was in volume to packing declines and its milestone, We [indiscernible]. national category, segment brand due Copenhagen's the point the sustained years. environment only and first and consumer who by the share for by to tobacco X.X% by celebrating for for volume and quarter from Under XXXth X.X% rewards, X one driven inventory team Cop XX.X%. half. the the to contracted We're fantastic Rewards segment's is by the second The contributions was number volume points anniversary the by Copenhagen in trade X.X% and excited The year an the over When long honor proud oral -- brand. movements, or about half. growth We're of growth can rewards this by work, Copenhagen of and their cans brand because to the the potential MST extremely history them hard for supported can entering after and Copenhagen's the first impressive leadership program have dedication DIP MST. rewards. To redeem its your passion. dippers earn this

in from shares, to intellectual Pota our half and demonstrated assets approximately on long-term -- increase of We the committed property billion. we an in and first $X.X investment Altria our approximately creating million focus XX.X share represent sub a dividends ABI's recorded quarter. results share to $X.X was our earnings and This We in repurchasing by Turning commitment paying for capital multi totaling ABI. equity returns. in the significant -- vision XXXX [ph] quarter other and this acquiring of billion first second

$XXX under by remaining the complete approximately year. the repurchase have of We this end program, expect currently authorized to we million which

cash. ratio as X.Xx. and plans lastly, -- our And second August, strong. guidance the In reaffirm we remains was expect -- available sheet And of balance debt-to-EBITDA to our end retire financial quarter, we an take deliver -- the Our of -- our with represents to $X.XX, of be your and growth from XXXX I full adjusted adjusted a year to in base happy diluted range $X.XX X% questions. XXXX. of EPS and to will diluted This Billy X% --. rate for

calls altria.com our items. which compiled, the all and While -- usual are and you quarterly metrics, reconciliations remind that today's pricing, earnings available include being on non-GAAP I'll other inventory release are

have question-and-answer the open any Let's session. Operator, we questions? do

Stifel. first Instructions] from comes question [Operator Growe with Our Chris

have pivotal it's get I for for develop internally RRP, we're able today you, a you reduced and Billy, be products. good to hoping investing was made -- I a question category. moment point clear about at risk very your to And a to this

I at maybe bigger position M&A a role and longer in forward? just no some about But talked in degree positions what You've RRPs you And portfolio, internally, JUUL in your this better point. and year? to having got of play just around in your of IQOS, and a uncertainty could a [indiscernible] what are going you risk a at certainly get to guess there's giving want doing already this you're I the then end product sense a

the Yes. question, Thanks for Chris.

when you we're think process. I our about invested certainly, think we where in investing, innovation

-- monitors we I versus sitting almost We internal the that the It consumer. that spoken on. going have as on it's chasing before characterize consumer. so I And were the process the But development think changing marketplace. with previously I've the market it about innovation side-by-side laser-focused

the as that products development, for and how markets the satisfaction the internal develop consumer emerging can continue category. globe And as of We to almost To we something monitor JUUL in your be those -- with the that a point, influence products various monitor the marketplace. with the consumer But understand entire that develop both we marketplace but well. far alternative other that could codeveloping in in. lot it's categories e-vapor agreement products to looking of with so in we there's interaction to can't per the as consumer about in we point think

contributor, be for going so M&A And do category? would you this in important forward position an think, Altria's

Chris. be good products for we investments pipeline But It off internal we the making I we're in that think of the our feel certainly about table, development; the won't have.

other see of the some I of Okay. and macroeconomic pricing a category. to I factor you pricing environment? lower-priced. that's And than Are occurred volume. And larger question been relation weighing to have investments guess And on coming in least than in expected, to it's year. light to a need environment one of you the through increase in do a expected, greater seeing just heavy in kind promotional this shift in this this It's obviously sooner cigarette your the there's at more burdensome where

Yes. even actually sequential grew when and of look you Chris, the stability. discount and category sequential discount think the stayed performance I saw Marlboro, at flat. you Marlboro category, the

think they the results top in of to think of tobacco of the tobacco the about the -- in of -- were an the well step below the So about second list. the increase, that longer the experienced you and first to inflation -- the to impact I consumer this. Salvatore they're And When to their experiencing you about standpoint have think raised their we point. talked place important you -- categories category price saw a quarter remarks on think a and position. consumer a with at the lot term how and other and about the the you tools that's a quarter. We questions in And that think -- put back categories. other think get From I

during additional unemployment certainly or that aspirational pandemic that pre-pandemic, where be we're from the brands. of If received think share, reinforced It things whether that Marlboro's they were or nature. funds, you about Marlboro government right we as

as bit team and Marlboro a with Marlboro teams of marketplace, where into those we've little incredible. the the analytics We've given really in Marlboro's is. Marlboro putting that So share of well feel -- advanced -- back as satisfied stability the the

We'll Kaufman take question our Morgan next with from Stanley. Pamela

tolerate you I cigarette And how So that, guess how industry the are have year? adjusting how behavior. quarter, they're remainder same related then to the thinking highlighted volumes for their purchasing of -- cigarette and risk far, you trade about outlook acceleration segment, an discount down. of haven't we last so trade really can a accelerated customers in much meaningful just down quarters the to the seen of over -- couple given

I follow I up. Pam, a through volume that see saw cigarette macroeconomic please -- if that historically, if our miss the can -- consumer. little See the when environment, changed for anything, the bit, unpack you declines we and environment

then So adopt consumer gas see they the prioritize -- we they up you the tobacco prices at because Pamela, the and still research that that that, those just the we mature in we've their have the And to that When adjusting mostly make is short-term monitor. like in at entered -- that that with the in able gas in -- feel worked categories. choices around quarter look we and little half, behaviors prices shared gas pricing. benchmark first look C-store you U.S. a saw tobacco vehicle But in the of be a third is and then you -- downshift is certainly and the certainly, I see think You we to our go usually did adjustments through bit again, we their filling telling consumer as minutes

the the pricing in health about of think I we that factors put strength very think we mention then tools out part here is be economic the to We able with the gap, play about place. the think a that But we of we're price the those and tools in objectives analytics, And put the out important the consumer. advanced -- Certainly, remember corporate use that. specific. brand. But to that when it's again, we You put

market tools in consumers local So promotions allow put it the are feeling to area. to be retail that These in different adapt in Ohio. we to the Cleveland, us

the how the helpful. Swedish That's to their position implications for U.S.? competitive thinking match. preparing are And changes in you about given category, talk landscape how in your of the heat-not-burn And about you're the to planned organization,

you always at that in the Swedish least the as competitive and like we the that marketplace. tools we place, feel products this we we're adapt Pam, using -- that world know going of a marketplace Well, do I everything, to as for at always have understand Match approach, make well it's been sure gain or We reasons. competitive my than but

I think discussions of with a from heat-not-burn continuing standpoint them.

Azer, from Vivien We'll take our next Cowen. question with

commentary touch capacity was you're touch on wanted -- and just to category. repeat intended moving could you the if how I your so on expand curious and I was manufacturing Helix interested. Billy, in the around

Yes. Vivien, it's a great question.

and at a and have you that think you have. to enjoy about But trial repeat the that pleased the like want very the specific in the take satisfying consumer, to felt both we see like there's there purchases We repeat seen when have purchases drive offers. awareness where versus -- cigarette -- we concreteness And that -- place think to to want opportunity in feel you've And the I we're and you product of was still we increases with those to purchases we're is

my is then other industry And the on outlook. just Understood. question

Okay. against that drivers has industry in all? volume and changed does appreciate you I to, supplemental nearly doubled now, estimated just disclosures thinking your for disclosed. macro around curious industry have away table offering you account shied the very I declines have I'm from the -- that actually at know guys -- volume it challenging

can quarters you and that back, that many you thought -- ago. was saw stretch those take not has you macroeconomic and benefit provide and a quarters we and It them -- not

times. at the benefit. huge So in swing. saw no economic a certainly see -- XXXX be different through see for a It's can the prices We gas swings than you benefit we

a gas only a they correlate would be dimes to gas And it. -- we and tried because to at And That prices the so correlation moving time. and higher seeing prices behavior. were historically, with nickels purchasing

of as they short-term you're think changes. nature -- I behavior consumer the those swinging adapt to faster the seeing

of Bonnie Our next Sachs. Herzog from Goldman is question

guidance. question a your have just on I

growth need midpoint your year EPS hit That your the of guide. midterm. will to the versus half first maintained does second the accelerate You to half imply year full full

from you Are be from going economic that net pressured driven remain just greater or I to -- expectations an want cost how And could up expected we towards about guidance? just with any share into making you Is finally, to investments slowdown. I that's do mean are this might us? something pretty savings there especially be think volumes smoke-free happen, further? will So stepped you your during factored your your vision. that decelerate hear

Yes. the Bonnie, question, take you about thank I'll for guidance. we you think through how

the year, of in throughout So have manufacturing we the just -- -- the One category. that year, right? quarter -- the adjusted half half nicotine for fourth then a begin really of the we that of we of to income. quarter. factors second you couple half we the in is, first drive that back unconstrained the the our of where remind in Also well. to quarters lap we [indiscernible]. the happen the had And as pouch time, growth where in to fourth in communicated start we -- going back our That expected will to And year the lap

and investments part half EPS second some first there's were comparative isn't linear infrastructure in things making half year, throughout are necessarily the of the like Spending when especially factors versus that. you So investments. that

flows the wouldn't throughout definitely when ebbs it year. spending at that I comes look It to X is and quarter So that. something

JUUL want via Philip with on [indiscernible] the know from your key the the know more mean to or I hit this, transform the from concern then to one This -- of be would the I the the of to compete share smoke-free you as guess to us just your more business to I agreement And continues in agreement, investors. dispute guess, be I smoke-free have did with the as helpful. uncertainty ability your right. around -- touched think to have it U.S. you've but relates market. about I I Match, entering ask IQOS. any Morris e-vapor kind to the Swedish I with you goal All in future your

does then option time more an heat -- And color your a little color that is just So you're exploring? on burn. the maybe not

mentioned you achieve end by the the out your years the to some year, then of -- goal? final Is in to to do think? design as before You how regulatory long But how going so to you're you're it's preparations. market, that parameters begin X going and

Yes.

And really me think and step of it reduction say us harm add back. in why that. it. let to U.S., is remarks, I but said explain color the in I let my front it's some opportunity entire me important in I to The

talked remember the in taken thus volume. about authorizations in category they the have I remarks, X% my place of You that e-vapor e-vapor And far. represent

either XX% still there's of go So authorizations that could way.

category while FDA in And of for so will transition be a we're bit that waiting the -- authorizations.

FDA still think that If you we're waiting progress, about authorizations novel in [ph]; making but category. yes, we're for

the making we're And from will be decisions is, heat-not-burn. progress while -- then And there so

momentum the While in it's it's U.S. internationally, non-existent been gaining

non-existent. And so that's

in So keep the color front those add some wanted That's are I to categories. X to saying, that be why growth I major just us. of --

see feel mention of categories. underway would love we about about to good show know We to we right But to have at will products, you to You're feel I pipeline. I development them those love would those in the good you, X and we that. the appropriate that time. and

space. As consumer earlier, in mentioned the the with I that co-development

products e-vapor, of with U.S. both various the it and consumer add earlier, the I outside satisfaction there marketplace we've the in with in the -- think U.S. the marketplace, color understand to I and would the mentioned I always monitored is

the the if get Additionally, elect below, quarter stay we going in us with option you're are this there still gauge so really us feel in to really and mentioned like we to out process, do I with that rights beneficial right, make believe to what are remarks, continue at with options to the so. point as well my this we our -- in we the have decisions. we'll looming but And the processes as

our from And Barclays. Priya question Ohri-Gupta with we next welcome

that indicating market my follow-up behalf also of so Puja Priya. that. you plan based comments are about to How [ph] And subsequent is your a available need your you access thinking have upcoming the after And This refinancing? with maturity any I is, question on to repay cash. on for

you about want number considers dynamics. credit manage We thank those And to very future for want we decisions. We I'm a factors sheet our and balance sheet. question. to really share Sure. how to have the of a capital which, happy course, continue capital not allocation have balance of I'm going to think in decisions We investment-grade rating. allocation, strong carefully. to signal

take allocation, about a future -- time use we the decision in we to cash and decision. capital the we've but balanced made retire the debt, we'll analyze approach, So the think at to make available marketplace that August and appropriate

Okay. makes we with should cash follow-up, your pre-pandemic of sort over your line as balance term ranges? as And it likely expect to the manage near type a more That quick this you will bring where in sense.

investment Yes. times make we've management we forward, share and companies balance we recently. the very to the a as to -- of buyback are at that gone sheet. going our dividend the Look, there year, for are cash. that $X maturity had, operating generate strengthen [ph] for are times where There amount in paying investments ask where call decisions. liability Board making additionally In some made we billion where have a Pota And technology various have it, And made the some typical times them in we've we've excess necessary done There we program. the are a time, the fortunate such manage towers and and after cash. significant let's growth our in

cash going that's the generating again, forward. how job cash flow stakeholders. about do for a companies and tremendous So other shareholders But of operating we our think

And Jain Barclays. come our with will question from next Gaurav

questions of my side. couple A from

some have So to of the international it entering in around PMTA we because hard how front like very international reduction us, is we're introduce explore is it reduction harm U.S. the very all go process. To because if discussion opportunity, need had it's Morris harm look, to Philip developing, But the much and of opportunity early. is you

in the in far, consumer entire are, to to is U.S. it's early Yes. but that with I on the a opportunities research, of marketplace. and go a It's something consumer To you And live and which regular basis of something we on route we regular outside in front that your get research point, basis. thus consider that a opted PMTA us how of process we've feedback consider appreciate the the recognizing we

the on and potential just And take Sure. end questions exclusivity, around market. nicotine JUUL and of you

companies for PMTA, PMTAs. applied and And have these some potentially can of get

that's an synthetic how you you as Like, like enter? some market that do nicotine like to would of to companies you if get So ingredient? And area is explore? the of an PMTAs, would think a

brand that in are all satisfaction, internationally, benefits watch them, receive the marketplace, enjoyment, in the products from as what itself. as we both took FDA how evidence. Certainly, now were the interacting Again, the and far far they with to to understand place, them consumer U.S. the that pleased we able FDA science the synthetic with that that process believe as We Yes. support under being authority. the assess in continue is and is the as

[Operator media. to Instructions] go Maloney for Street Jennifer We'll the Wall it with Journal. We'll open next

M&A not an your has ask Billy, the to wanted the that reduced example, acquiring that wanted for to for already up table the of follow off products. risk FDA I possibility authorization. is even to e-cigarette I about brand, statement, And specifically on

Yes.

M&A don't While any I regards. speak to

in space. mentioned, make brands them. they products sure brands, to monitoring the consumers marketplace look, e-vapor in those marketplace, give the various those whether the we We I want As with the whether that like understand the been interactions we've satisfaction always

written the well stated, through currently beneficial. process think at review down under where the as the for that we as as this And the of explore right decision those part process, us rights think, at to we if are decisions. our in it as the so it's believe We applications we as quarter different really choose and affords XX%, not opportunities opportunity earlier, I different decisions to mentioned relooking some make any we we've agreement, of have is that make [indiscernible]. stay the the those Now we below to that

particular category, For to play… modern you hope be going plan do like oral, focus there? future you efforts focus on to Or goals, expect the to or of is X do your

Certainly, in future excise will the the the they innovation potential by and decisions regulatory see the world. highlight categories We taxes, category, growth right the novel and heat-not-burn be U.S. as now those Yes. the on categories category various in That's we e-vapor shaped X from manufacturers. that decisions,

they shape categories, choose. So consumers consumer there various want see as growth we and from potential the X approach, they for portfolio that to those remind would be cigarettes depending are, large category because what going that on those to how you see we with will but the areas. I we work we the

closing be And the turn there to any over to at Livingston, further Mac would time. like to questions for appears I back call this no comments.

team Thanks, thanks, you if any us. further Relations questions. and a joining for have Thanks Ashley, the Investor Please lot. everybody, contact

does this Thank you your And today's call. participation. conclude Thank for you.

You any may disconnect time. at