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Section 1: 8-K (8-K)

20180308 8K

 



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): March 8, 2018



PEAK RESORTS, INC.



(Exact name of registrant as specified in its charter)



Missouri

 

001-35363

 

43-1793922

(State or other jurisdiction of

 

(Commission

 

(I.R.S. Employer

incorporation)

 

File Number)

 

Identification No.)



 

 



 

 

17409 Hidden Valley Drive

 

 

Wildwood, Missouri

 

63025

(Address of principal executive offices)

 

(Zip Code)



(636) 938-7474

(Registrant’s telephone number, including area code)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act.

Soliciting material pursuant to Rule 14a-12 under the Exchange Act.

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).     Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     






 

Item 2.02. Results of Operations and Financial Condition. 

On March 8, 2018, Peak Resorts, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended January 31, 2018. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated into this Item 2.02 by reference. The information contained in the website is not a part of this Current Report on Form 8-K.

The information under this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits. 

(d) Exhibits.  

8

 

 



 

 

Exhibit No.

 

Description of Exhibit

99.1

 

Press Release of Peak Resorts, Inc. dated March 8, 2018.




 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.





Dated: March 8, 2018



 

 



PEAK RESORTS, INC.
(Registrant)



 



 



By:

/s/ Christopher J. Bub



Name:

Christopher J. Bub



Title:

Chief Financial Officer














(Back To Top)

Section 2: EX-99.1 (EX-99.1)

20180308 Exhibit 991

Exhibit 99.1

Picture 1

For Immediate Release

News Announcement                               



PEAK RESORTS REPORTS RECORD FISCAL 2018
THIRD QUARTER REVENUE



Wildwood, MissouriMarch 8, 2018 – Peak Resorts, Inc. (NASDAQ:SKIS) (“Peak” or the “Company”), a leading owner and operator of high-quality, individually branded U.S. ski resorts, today reported financial results for its fiscal 2018 third quarter as summarized below:









 

 

 

 

 

 

 

 

 

 

(in thousands, except per share data)

 

Three months ended

January  31,

 

 

Nine months ended

January  31,



 

2018

 

 

2017

 

 

2018

 

2017



 

 

 

 

 

 

 

 

 

 

Revenues

$

59,272 

 

$

56,385 

 

$

75,630 

$

71,986 

Resort operating costs

$

35,982 

 

$

33,669 

 

$

64,642 

$

58,448 

Income (Loss) from operations

$

16,031 

 

$

16,715 

 

$

(7,194)

$

(3,538)

Net income (loss)

$

9,181 

 

$

8,165 

 

$

(8,328)

$

(7,712)

Income (Loss) per share (basic)

$

0.62 

 

$

0.58 

 

$

(0.68)

$

(0.55)

Income (Loss) per share (diluted)

$

0.53 

 

$

0.47 

 

$

(0.68)

$

(0.55)

Weighted average common shares outstanding

 

13,982 

 

 

13,982 

 

 

13,982 

 

13,982 

Vested restricted stock units (“RSU”)

 

100 

 

 

35 

 

 

68 

 

31 

Dilutive effect of conversion of preferred stock

 

3,180 

 

 

3,145 

 

 

-

 

-

Dilutive effect of unvested RSUs

 

44 

 

 

61 

 

 

-

 

-

Reported EBITDA*

$

20,996 

 

$

19,924 

 

$

4,070 

$

6,104 



*See pages 3-4 for Definitions of Non-GAAP Financial Measures



Timothy D. Boyd, President and Chief Executive Officer, commented, “Peak Resorts generated 5% revenue growth in the fiscal third quarter and a 5% increase in Reported EBITDA on what was a good start to the 2017/2018 ski season. Despite challenges posed by significant weather volatility, including a stretch of record cold weather across the Northeast during the Christmas holiday and unseasonably warm weather prior to the Martin Luther King weekend, our snowmaking and mountain operations teams delivered exceptional conditions for our guests. With favorable weather trends to-date in March, we are set up for a  strong finish to the ski season, with many of our Northeast resorts expecting to remain open into April.



“Business at our flagship Mount Snow resort got off to a very strong start in the third quarter thanks to our early November opening, which marked one of the resort’s earliest on record. Our snowmaking capabilities, dramatically expanded as part of our successful West Lake project, allowed Mount Snow to provide guests with great conditions throughout the quarter while making it possible for the facility to remain resilient in the face of some less than ideal weather. Visitation numbers have been very strong this season as skiers across the Northeast have come to our resorts to experience for themselves the investments and improvements we have made. Along with Mount Snow and Hunter Mountain, our resorts have never been more favorably positioned to capture market share in one of the largest ski markets in the country and we are leveraging our broad range of amenities and snowmaking capacity to enhance our prospects for growth.



“Our Midwest resorts are also enjoying a strong season with favorable weather throughout most of the fiscal 2018 third quarter. The 3% and 28% year over year increase in lift and equipment rental revenue during the


 

Exhibit 99.1

quarter was driven primarily by strong business across our Midwest portfolio. These facilities are key contributors to the winter options for outdoor recreation in their respective communities as skiers and boarders came out in increasing numbers throughout the quarter to experience the great conditions our facilities offered.



“The Peak Pass, our season pass offering for our seven Northeast resorts, remains a critical piece of our long-term strategy and the 2017/2018 ski season showed continued strong progress in our ability to build this high value and stable part of our business. These season passes represent an attractive subscription business that provides Peak Resorts with a more predictable source of recurring revenue. In particular, the Drifter Pass, which targets the highly sought after 18-29 age demographic, experienced a very healthy 23% increase in unit sales during the 2017/2018 ski season. In an industry environment where season passes are becoming increasingly important, we believe the Peak Pass offers unmatched value in the Northeast. Our 2018/2019 passes went on sale yesterday, March 7, and we anticipate continued growth in our Peak Pass sales going forward.



“Finally, and as we look to the future, we have major development projects underway which we expect will further position Peak Resorts for long-term growth. Importantly, construction of the new Carinthia Ski Lodge at Mount Snow remains on schedule to open for the 2018/2019 ski season. In addition we continue to work through the approval process for the Hunter Mountain terrain expansion and expect to open the expanded terrain ahead of the upcoming season.”



Fiscal Third Quarter Results Review

Fiscal 2018 third quarter revenue increased 5.1% year over year to $59.3 million as the Company benefited from a 28.2% increase in equipment rental revenue, a 3.4% rise in food and beverage revenue and 3.0% growth in lift ticket and tubing revenues. In particular, the Company’s resorts in the Midwest generated a strong increase in lift ticket and equipment rental revenues, compared to the prior year, driven primarily by favorable weather. While results in the Northeast were impacted by significant weather volatility, overall Northeast revenue was up as a result of strong Peak Pass sales, relevant, effective marketing initiatives and ongoing improvements to the guest experience.



Resort operating expenses in the fiscal 2018 third quarter rose 6.9% year over year to $36.0 million, with the 3.2% increase in labor expenses driven by higher wages as a result of the significantly earlier opening of Mount Snow and several of our other resorts to start the 2017/2018 ski season as well as increased attendance. Other operating expenses in the quarter included higher advertising costs primarily as a result of the timing of certain promotional and go to market initiatives, and increased maintenance and supplies expenses largely driven by continued spending to catch up on projects across the resort portfolio deferred from the prior year. General and administrative expenses were down 24.5% to $1.4 million driven primarily by a decline in performance-based compensation.



Reported EBITDA for the third fiscal quarter of 2018 was $21.0 million, compared to $19.9 million in the year-ago quarter.



During the quarter, the Company recorded several one-time items which impacted its results, including a $1.6 million fixed asset impairment charge, which was offset in part by a discrete net tax benefit of $0.1 million in connection with the passage of the 2017 Tax Cuts and Jobs Act in December 2017.



Balance Sheet Update

As of January 31, 2018, the Company had cash and cash equivalents of $19.1 million and total outstanding debt of $181.5 million, including $12.4 million drawn against its revolving line of credit and long-term debt of $165.0 million.




 

Exhibit 99.1

Christopher J. Bub, Chief Financial Officer, added, “Peak Resorts exited the fiscal 2018 third quarter in a healthy financial position, reflecting our ability to address the occasionally challenging 2017/2018 ski season weather. With our expanded snowmaking capacity, facility enhancements and enterprise-wide commitment to guest satisfaction, our operating and snowmaking teams are succeeding in delivering great experiences. In addition, given recent weather trends, we are optimistic that we can finish this fiscal year with further improvements to our financial results.



“During the quarter, we completed $8.1 million of capital improvements across our property portfolio, including $5.6 million on the completion of the West Lake Water project and continued construction on the new Carinthia Ski Lodge at Mount Snow. Peak Resorts remains committed to pursuing return-focused capital projects, such as the proposed zip line at Hidden Valley which is now in the permitting process, that further improve the guest experience at our resorts and allow us to continue growing our operations to support our goal of enhancing shareholder value. With the progress and successes of fiscal 2018 to date, we are excited by what the future holds for Peak Resorts.”



Investor Conference Call and Webcast

The Company will host an investor conference call and webcast to discuss its fiscal 2018 third quarter results today at 4:30 p.m. ET. Interested parties can access the conference call by dialing (844) 526-1518 or, for international callers, by dialing (647) 253-8644; the conference ID number is 1482227. A webcast of the conference call can also be accessed live at ir.peakresorts.com (select “Event Calendar”). Following the completion of the call, an archived webcast will be available for replay at the same location.



Definitions and Reconciliations of Non-GAAP Financial Measures

Reported EBITDA is not a measure of financial performance under U.S. generally accepted accounting principles (“GAAP”). The Company defines Reported EBITDA as net income before interest, income taxes, depreciation and amortization, gain on sale/leaseback, other income or expense and other non-recurring items. The following table includes a reconciliation of Reported EBITDA to the GAAP related measure of Net income (loss):







 

 

 

 

 

 

 

 

 

(dollars in thousands)

Three months ended
January 31,

 

Nine months ended
January 31,



2018

2017

 

2018

2017

Net income (loss)

$

9,181 

$

8,165 

 

$

(8,328)

$

(7,721)

Income tax expense (benefit)

 

3,433 

 

5,346 

 

 

(8,235)

 

(5,056)

Interest expense, net

 

3,529 

 

3,289 

 

 

9,736 

 

9,493 

Depreciation and amortization

 

3,379 

 

3,209 

 

 

9,678 

 

9,642 

Impairment loss

 

1,586 

 

 -

 

 

1,586 

 

 -

Other income

 

(28)

 

(1)

 

 

(117)

 

(4)

Gain on sale/leaseback

 

(84)

 

(84)

 

 

(250)

 

(250)

Reported EBITDA*

$

20,996 

$

19,924 

 

$

4,070 

$

6,104 







The Company has specifically chosen to include Reported EBITDA as a measurement of its results of operations because it considers this measurement to be a significant indication of its financial performance and available capital resources. Because of large depreciation and other charges relating to the Company’s ski resorts operations, it is difficult for management to fully and accurately evaluate financial performance and available capital resources using net income alone. In addition, the use of this non-U.S. GAAP measure provides an indication of the Company’s ability to service debt, and management considers it an appropriate measure to use because of the Company’s highly leveraged position. Management believes that by providing investors with Reported EBITDA, they will have a clearer understanding of the Company’s financial performance and cash flows because Reported EBITDA: (i) is widely used in the ski industry to measure a company’s operating performance without regard to items excluded from the calculation of such measure; (ii) helps investors to more meaningfully evaluate and compare the results of the Company’s


 

Exhibit 99.1

operations from period to period by removing the effect of its capital structure and asset base from operating results; and (iii) is used by the Board of Directors, management and lenders for various purposes, including as a measure of the Company’s operating performance and as a basis for planning.



The items excluded from net income to arrive at Reported EBITDA are significant components for understanding and assessing the Company’s financial performance and liquidity. Reported EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, net change in cash and cash equivalents or other financial statement data presented in the Company’s condensed consolidated financial statements as indicators of financial performance or liquidity. Because Reported EBITDA is not a measurement determined in accordance with U.S. GAAP and is susceptible to varying calculations, Reported EBITDA as presented may not be comparable to other similarly titled measures of other companies, limiting its usefulness as a comparative measure.



About Peak Resorts

Headquartered in Missouri, Peak Resorts is a leading owner and operator of high-quality, individually branded ski resorts in the U.S. The Company operates 14 ski resorts primarily located in the Northeast and Midwest, 13 of which are Company owned.



The majority of the resorts are located within 100 miles of major metropolitan markets, including New York City, Boston, Philadelphia, Cleveland and St. Louis, enabling day and overnight drive accessibility. The resorts under the Company's umbrella offer a breadth of activities, services and amenities, including skiing, snowboarding, terrain parks, tubing, dining, lodging, equipment rentals and sales, ski and snowboard instruction and mountain biking and other summer activities. To learn more, visit the Company’s website at ir.peakresorts.com or follow Peak Resorts on Facebook for resort updates.



For further information, or to receive future Peak Resorts news announcements via e-mail, please contact JCIR, at 212-835-8500 or skis@jcir.com.



Forward Looking Statements

This news release contains forward-looking statements regarding the future outlook and performance of Peak Resorts, Inc. within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations. These risks and uncertainties are discussed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended April 30, 2017, filed with the Securities and Exchange Commission (the “SEC”), and as updated from time to time in the Company’s filings with the SEC.  Peak Resorts undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.



Investor Contact:

Norberto Aja, Jim Leahy, Joseph Jaffoni

JCIR

212-835-8500 or skis@jcir.com


 

Exhibit 99.1

Condensed Consolidated Statements of Operations

(dollars in thousands, except per share amounts)

(Unaudited)





 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three months ended
January 31,

 

 

Nine months ended
January 31,



 

 

2018

 

 

2017

 

 

2018

 

 

2017



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

59,272 

 

$

56,385 

 

$

75,630 

 

$

71,986 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Resort operating costs

 

 

35,982 

 

 

33,669 

 

 

64,642 

 

 

58,448 

Depreciation and amortization

 

 

3,379 

 

 

3,209 

 

 

9,678 

 

 

9,642 

General and administrative

 

 

1,353 

 

 

1,793 

 

 

4,130 

 

 

4,682 

Real estate and other non-income taxes

 

 

579 

 

 

654 

 

 

1,734 

 

 

1,754 

Land and building rent

 

 

362 

 

 

345 

 

 

1,054 

 

 

998 

Impairment loss

 

 

1,586 

 

 

-

 

 

1,586 

 

 

-



 

 

43,241 

 

 

39,670 

 

 

82,824 

 

 

75,524 

Income (loss) from operations

 

 

16,031 

 

 

16,715 

 

 

(7,194)

 

 

(3,538)



 

 

 

 

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest, net of amounts capitalized of

 

 

 

 

 

 

 

 

 

 

 

 

$206 and $1,151 in 2018 and $411 and

 

 

 

 

 

 

 

 

 

 

 

 

$1,194 in 2017, respectively

 

 

(3,529)

 

 

(3,289)

 

 

(9,736)

 

 

(9,493)

Gain on sale/leaseback

 

 

84 

 

 

84 

 

 

250 

 

 

250 

Other income

 

 

28 

 

 

 

 

117 

 

 



 

 

(3,417)

 

 

(3,204)

 

 

(9,369)

 

 

(9,239)



 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

12,614 

 

 

13,511 

 

 

(16,563)

 

 

(12,777)

Income tax expense (benefit)

 

 

3,433 

 

 

5,346 

 

 

(8,235)

 

 

(5,056)

Net income (loss)

 

$

9,181 

 

$

8,165 

 

$

(8,328)

 

$

(7,721)



 

 

 

 

 

 

 

 

 

 

 

 

Less declaration and accretion of Series A preferred

 

 

 

 

 

 

 

 

 

 

 

 

stock dividends

 

 

(400)

 

 

 -

 

 

(1,200)

 

 

 -

Net income (loss) attributable to common shareholders

 

$

8,781 

 

$

8,165 

 

$

(9,528)

 

$

(7,721)



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

 

$

0.62 

 

$

0.58 

 

$

(0.68)

 

$

(0.55)



 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share

 

$

0.53 

 

$

0.47 

 

$

(0.68)

 

$

(0.55)



 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.07 

 

$

 -

 

$

0.21 

 

$

 -



 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per preferred share

 

$

20.00 

 

$

 -

 

$

40.00 

 

$

 -


 

Exhibit 99.1

Condensed Consolidated Balance Sheets

(dollars in thousands, except per share amounts)





 

 

 

 

 

 

 



 

 

January 31,

 

 

April 30,

 



 

 

2018

 

 

2017

 

Assets

 

 

(Unaudited)

 

 

 

 



 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

19,086 

 

$

33,665 

 

Restricted cash

 

 

1,338 

 

 

11,113 

 

Accounts receivable

 

 

5,967 

 

 

5,083 

 

Inventory

 

 

3,396 

 

 

2,215 

 

Deferred income taxes

 

 

911 

 

 

591 

 

Prepaid expenses and deposits

 

 

10,273 

 

 

2,183 

 

Total current assets

 

 

40,971 

 

 

54,850 

 



 

 

 

 

 

 

 

Property and equipment, net

 

 

203,044 

 

 

188,143 

 

Land held for development

 

 

37,607 

 

 

37,583 

 

Restricted cash, construction

 

 

17,459 

 

 

33,700 

 

Goodwill

 

 

4,825 

 

 

4,825 

 

Intangible assets, net

 

 

745 

 

 

788 

 

Other assets

 

 

675 

 

 

648 

 

Total assets

 

$

305,326 

 

$

320,537 

 



 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 



 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Revolving lines of credit

 

$

12,375 

 

$

4,500 

 

Accounts payable and accrued expenses

 

 

17,751 

 

 

12,371 

 

Accrued salaries, wages and related taxes and benefits

 

 

2,460 

 

 

1,035 

 

Unearned revenue

 

 

18,990 

 

 

14,092 

 

EB-5 investor funds in escrow

 

 

 -

 

 

500 

 

Current portion of deferred gain on sale/leaseback

 

 

333 

 

 

333 

 

Current portion of long-term debt and capitalized lease obligation

 

 

2,405 

 

 

3,592 

 

Total current liabilities

 

 

54,314 

 

 

36,423 

 



 

 

 

 

 

 

 

Long-term debt

 

 

165,044 

 

 

174,785 

 

Capitalized lease obligations

 

 

1,637 

 

 

2,708 

 

Deferred gain on sale/leaseback

 

 

2,595 

 

 

2,845 

 

Deferred income taxes

 

 

2,347 

 

 

12,474 

 

Other liabilities

 

 

513 

 

 

540 

 

Total liabilities

 

 

226,450 

 

 

229,775 

 



 

 

 

 

 

 

 

Series A preferred stock, $0.01 par value per share, $1,000

 

 

 

 

 

 

 

Liquidation preference per share, 40,000 shares authorized,

 

 

 

 

 

 

 

20,000 shares issued and outstanding

 

 

17,401 

 

 

17,001 

 



 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 



 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Common stock, $0.01 par value per share, 20,000,000 shares

 

 

 

 

 

 

 

authorized, 13,982,400 shares issued and outstanding

 

 

140 

 

 

140 

 

Additional paid-in capital

 

 

86,577 

 

 

86,372 

 

Accumulated deficit

 

 

(25,242)

 

 

(12,751)

 

Total stockholders' equity

 

 

61,475 

 

 

73,761 

 

Total liabilities and stockholders' equity

 

$

305,326 

 

$

320,537 

 




 

Exhibit 99.1

Supplemental Operating Data

(dollars in thousands)

(Unaudited)





Three months ended
January 31,

 

Nine months ended
January 31,



 

2018

 

 

2017

 

 

2018

 

2017

Revenues:

 

 

 

 

 

 

 

 

 

 

 Lift and tubing tickets

$

31,398 

 

$

30,470 

 

$

31,398 

$

30,470 

 Food and beverage

 

9,248 

 

 

8,946 

 

 

14,813 

 

14,161 

 Equipment rental

 

6,264 

 

 

4,886 

 

 

6,264 

 

4,886 

 Ski instruction

 

4,866 

 

 

4,683 

 

 

4,866 

 

4,683 

 Hotel/lodging

 

2,782 

 

 

2,883 

 

 

6,637 

 

6,743 

 Retail

 

3,566 

 

 

3,314 

 

 

4,236 

 

3,935 

 Summer activities

 

 -

 

 

-

 

 

4,459 

 

4,549 

 Other

 

1,148 

 

 

1,203 

 

 

2,957 

 

2,559 

    Total

$

59,272 

 

$

56,385 

 

$

75,630 

$

71,986 



 

 

 

 

 

 

 

 

 

 

Resort operating expenses:

 

 

 

 

 

 

 

 

 

 

 Labor and labor related expenses

$

18,779 

 

$

18,202 

 

$

36,389 

$

33,719 

 Retail and food and beverage cost of sales

 

5,271 

 

 

4,876 

 

 

7,141 

 

6,549 

 Power and utilities

 

3,809 

 

 

3,736 

 

 

5,398 

 

5,167 

 Other

 

8,123 

 

 

6,855 

 

 

15,714 

 

13,013 

    Total

$

35,982 

 

$

33,669 

 

$

64,642 

$

58,448 






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