Recent Posts

DENN (Post-Call): Two-Year Same-Store Sales Positive in June and in July

After today’s (Tuesday’s) market close, Denny’s reported adjusted Q2 EPS of $0.18, coming in ahead of our $0.11 forecast and sell-side consensus (according to Consensus Metrix), which had ticked up to $0.12 in recent days. Second-quarter adjusted EBITDA amounted to $25.3 million, above consensus of $20.6 million. Factors behind the EPS beat in Q2 include: (1) Company Restaurant Sales of $47.6 million (vs. our $39.9 million forecast and consensus of $40.4 million), (2) Product Costs/Company […]

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6:06 PM

DENN: Updating Our Same-Store Sales and EPS Estimates

Although family dining segment same-store sales seem to be lagging those of most other U.S. restaurant sectors on a two-year basis, they have still come in somewhat better than we have been anticipating. As such, we raise our full-Q2E same-store sales forecast for Denny’s to +121.0% (from +105.0%). This implies a two-year projection of about -5%. As of this writing, sell-side consensus — according to Consensus Metrix — for the Q2E one-year number is at […]

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4:31 PM

DENN: Denny’s Virtual NDR Updates Investors on Virtual Brands, 24/7 Operation

Yesterday, Kalinowski Equity Research hosted Denny’s for a virtual non-deal roadshow (NDR). We thank our buyside participants, as well as the participants from Denny’s: (1) President Mark Wolfinger, (2) EVP and CFO Robert Verostek, (3) VP – Investor Relations and FP&A Curt Nichols, and (4) Director – Investor Relations and FP&A Kayla Money. This report details some of the highlights from the virtual NDR. We maintain our Neutral rating on Denny’s (DENN; Neutral, $17.75) and […]

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8:46 PM

DENN: Tomorrow! Virtual NDR Featuring Denny’s on Wednesday, June 9th

*** On Wednesday, June 9th, Kalinowski Equity Research will host a virtual non-deal roadshow (NDR) featuring Denny’s. Anticipated participants from Denny’s include: (1) President Mark Wolfinger, (2) EVP and CFO Robert Verostek, (3) VP – Investor Relations and FP&A Curt Nichols, and (4) Director – Investor Relations and FP&A Kayla Money. Institutional investors interested in participating in this virtual NDR are encouraged to contact Caroline at caroline@analysthub.com,or your sales contact. ***

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8:52 PM

DENN (Post-Call): Q1 U.S. Same-Store Sales > Our “High on Sell-Side” Forecast

On Wednesday, June 9th, Kalinowski Equity Research will host a virtual non-deal roadshow (NDR) featuring Denny’s. Anticipated participants from Denny’s include: (1) President Mark Wolfinger, (2) EVP and CFO Robert Verostek, (3) VP – Investor Relations and FP&A Curt Nichols, and (4) Director – Investor Relations and FP&A Kayla Money. Institutional investors interested in participating in this virtual NDR are encouraged to contact Caroline at caroline@analysthub.com or your sales contact. After today’s (Tuesday’s) market close, […]

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1:18 PM

DENN: How Does Denny’s Trade Heading Into, and After, Earnings?

Denny’s likely will release its Q1 2021 earnings in late April or early-to-mid May (with after the market close on Tuesday, May 4th a distinct possibility). How do DENN shares tend to trade heading into earnings, and the day after an earnings release? To answer those questions, we compiled data for the 24 prior earnings releases from Denny’s, examining the stock’s absolute performance, and performance relative to the S&P 500, for two time periods: (1) […]

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4:37 PM

DENN (Post-Call): U.S. Same-Store Sales -25% for First Two Weeks of February

After today’s (Tuesday’s) market close, Denny’s reported adjusted Q4 EPS of -$0.05, lower than our +$0.01 projection and sell-side consensus (according to Consensus Metrix) of -$0.04. Relative to our model, we attribute the Q4 EPS shortfall primarily to Payroll and Benefits/Company Restaurant Sales (44.4% actual vs. 41.5% projected). Fourth-quarter adjusted EBITDA amounted to $8.0 million, below our $8.5 million estimate, but above consensus of $7.0 million. Fourth-quarter U.S. system same-store sales declined by -32.9%, as […]

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5:03 PM

DENN: Updating Our Stock Rating and EPS Projections

With this note, we change our rating on Denny’s (DENN; $17.41) to Neutral (from Buy). This change reflects: (1) lowered EPS estimates for 2021E and 2022E, and (2) a reduced same-store sales forecast for Q1E 2021, despite what appears to be some meaningful help from a calendar-shift effect related to Denny’s 2020 being a 53-week fiscal year, and (3) being mindful of DENN shares’ run-up from their 52-week low of $4.50 (intraday March 19, 2020) […]

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2:57 PM

DENN Adjusting Our Q4E Forecasts

Given greater-than-expected deceleration in same-store sales trends for the U.S. family dining sector during December, we reduce our Q4E Denny’s U.S. same-store sales projection by -400 basis points, to -32.0%. According to Consensus Metrix data, this places us as the low estimate on the sell-side in this regard. As of this writing, sell-side consensus is at -23.9%. FYI, in recent years Denny’s has pre-announced its Q4 same-store sales early on during the ICR Conference. If […]

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12:00 AM

Family Dining Market Share Opportunities for IHOP, Denny’s, and CBRL (Updated)

About six months ago, we published a report examining market-share opportunities within the family dining sector. In this report, we update our numbers. One of the important changes is that we now look for 10%-25% of the family dining restaurants in the U.S. that were in operation as of the start of 2020 to be closed permanently by the end of March 2021. (Previously, we were looking for 5%-10% of family dining restaurants to be […]

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12:00 AM

DENN Adjusting Our Q4E Forecasts

Given deceleration in same-store sales trends for the U.S. family dining sector, we reduce our Q4E Denny’s U.S. same-store sales projection by -600 basis points, to -28.0%. According to Consensus Metrix data, this places us as the low estimate on the sell-side in this regard. As of this writing, sell-side consensus is at -22.2%. Due to our reduced Q4E same-store sales estimate, we lower our Q4E adjusted EPS estimate by -3 cents, to +$0.04. As […]

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12:00 AM

Updating our Q4E Kalinowski Family Dining Same-Store Sales Index

With this report, we update our data-driven Kalinowski Family Dining Index for Q4E to -23.2%. This figure is based on our latest proprietary checks/data as regards samestore sales performance for this segment during October and November. Our implied numbers for this October, November, and December are approximately -20%, -23%, and -27%, respectively. Optimists (including us) will point out that at some point in 2021, perhaps even in early 2021, trends should start to improve again […]

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12:00 AM

Large Restaurant Concepts Closing a Lot Less Units than Independent

Looking at unit closures announced and planned by large restaurant chains, and comparing these to unit closures from mom-and-pops/independents, goes to show just how large a market-share shift is going on in the U.S. restaurant industry. We look for most, if not all, of this market-share shift in favor of large concepts to persist in the years after 2020. By our math, we look for large restaurant concepts — representing about 37% of the U.S. […]

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12:00 AM

DENN Conference Call Highlights Opportunities in a Rapidly-Changing World

Yesterday, Kalinowski Equity Research hosted its latest “Ask the Experts” conference call — this time around, featuring Denny’s. The call included multiple participants from Denny’s: (1) President Mark Wolfinger, (2) Senior Vice President and Chief Financial Officer Robert Verostek, (3) Vice President Investor Relations and Financial Planning & Analysis Curt Nichols, and (4) Director Investor Relations and Financial Planning & Analysis Kayla Money. We thank them for their time! In today’s rapidly-changing world, full-service restaurants […]

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12:00 AM

DENN Conference Call TODAY Featuring Denny’s

Kalinowski Equity Research invites you to participate in our latest “Ask the Experts” conference call, to take place today — Tuesday, November 10th — starting at 11:00 AM Eastern time. The featured speakers from Denny’s will include: (1) President Mark Wolfinger, (2) Senior Vice President and Chief Financial Officer Robert Verostek, (3) Vice President Investor Relations and Financial Planning & Analysis Curt Nichols, and (4) Director Investor Relations and Financial Planning & Analysis Kayla Money. […]

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12:00 AM

DENN (Post-Call) Q3 EPS and Same-Store Sales Surpass Sell-Side Consensus

After Tuesday’s market close, Denny’s reported adjusted Q3 EPS of +$0.01, which was ahead of our -$0.03 forecast and sell-side consensus (according to Consensus Metrix) of -$0.03. We attribute the Q3 EPS beat largely to higher-than-anticipated company-owned restaurant margins (1.7% actual — or roughly -3% to -4% excluding an approximate “$1.5 million of favorable reserve adjustments and tax credits related to the CARES Act”) vs. our forecast (-6.5% projected). This more than offset higherthan-anticipated G&A/Revenues […]

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12:00 AM

DENN “Ask the Experts” Call Series Denny’s

Kalinowski Equity Research invites you to participate in our latest “Ask the Experts” conference call, to take place on Tuesday, November 10th starting at 11:00 AM Eastern time. The featured speakers from Denny’s will include: (1) President Mark Wolfinger, (2) Senior Vice President and Chief Financial Officer Robert Verostek, (3) Vice President Investor Relations and Financial Planning & Analysis Curt Nichols, and (4) Director Investor Relations and Financial Planning & Analysis Kayla Money. If you […]

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12:00 AM

Updating our Q3E Kalinowski Family Dining Same-Store Sales Index

With this report, we update our data-driven Kalinowski Family Dining Index for Q3E to -29.0%. This figure is based on our latest proprietary checks/data as regards samestore sales performance for this segment during July 2020 and August 2020, as well as our best guess for what September 2020 is bringing us. The approximate monthly figures we use are -35% for July 2020, -29% for August 2020, and -25% for September 2020. As part of this, […]

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12:00 AM

DENN Introducing Some EPS Estimates

With this report, we introduce our quarterly EPS estimates for Denny’s (DENN; Buy, $10.87) for 2021E as follows: Q1E: $0.12 Q2E: $0.08 Q3E: $0.13 Q4E: $0.17 These quarterlies sum to our (unchanged) full-year 2021E EPS forecast of $0.50. With this report, we also introduce our full-year 2022E EPS projection of $0.70. We reiterate our Buy rating on DENN, and briefly note the following: * Denny’s last provided same-store sales results on July 28th. This update […]

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12:00 AM

DENN (Post-Call) Adjusting our Q3E U.S. Same-Store Sales Projection

After today’s (Tuesday, July 28th’s) market close, Denny’s (DENN; Buy, $8.96) reported Q2 adjusted EPS of -$0.25, in between our -$0.28 projection and sellside consensus (according to Consensus Metrix) of -$0.20. On the other hand, Q2 adjusted EBITDA of -$5.1 million was better than our -$11.6 million estimate and consensus of -$6.9 million. Denny’s indicates that its U.S. systemwide same-store sales fell by -37% for the week ended June 17th, and by -29% for the […]

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12:00 AM

Family Dining Market Share Opportunities for IHOP, Denny’s, and Cracker Barrel

Is it possible the Street is underestimating sales and market-share opportunities in 2021 for some — if not all — of the three large publicly-traded family dining concepts? The “big three” family dining concepts in the U.S. — IHOP (owned by Dine Brands [DIN; Buy, $44.45]), Denny’s (DENN; Buy, $11.81), and Cracker Barrel (CBRL; Not Rated) — together combined for about 25.2% market share of the family dining sector’s $33.4 billion in U.S. sales during […]

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12:00 AM

Comparing Casual Dining & Family Dining Concepts Same-Store Sales Trends

A number of full-service restaurant companies have been generous as of late in terms of providing weekly same-store sales data. In this report, we compile and compare the recent same-store sales trends of various casual dining and family dining concepts. We also look at some segment trends, and see what this may imply for recent same-store trends of these concepts that have not yet provided samestore sales results for the last few weeks. The following […]

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12:00 AM

DENN (Post-Call) Sunny Side Up

After yesterday’s (Thursday, May 14th’s) market close, Denny’s (DENN; Buy, $8.77) reported Q1 adjusted EPS of $0.17, coming in ahead of our $0.11 forecast and sellside consensus (according to Consensus Metrix) of $0.07. In fact, the $0.17 adjusted EPS actual for Q1 is better than the $0.15 forecast we had prior to updating our model to (try to) take into account the effects related to COVID-19. First-quarter adjusted EBITDA amounted to $15.7 million, which was […]

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12:00 AM

DENN Updating Our Same-Store Sales and EPS Estimates for 2020E & 2021E

We lower our U.S. systemwide same-store sales estimates for Denny’s (DENN; Buy) as follows: Q1E 2020: down by -10.0 percentage points to -8.0% Q2E 2020: down by -61.0 percentage points to -60.0% Q3E 2020: down by -31.5 percentage points to -30.0% Q4E 2020: down by -11.5 percentage points to -10.0% Full-year 2020E: down by -28.5 percentage points to -27.5% Full-year 2021E: up by +11.0 percentage points to +12.5% Read the Full Report

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12:00 AM

DENN (Post-Call) Beyond Refranchising

After today’s (Tuesday’s) market close, Denny’s (DENN; Buy) reported adjusted Q4 2019 EPS of $0.23, ahead of our $0.16 forecast and sell-side consensus (according to Consensus Metrix) of $0.17. Factors in the Q4 EPS outperformance include: (1) better-than-expected Product Costs/Company Restaurant Sales (24.3% actual vs. our 24.8% forecast), (2) better-than-expected Payroll & Benefits/Company Restaurant Sales (37.6% actual vs. our 38.1% estimate, (3) better-than-expected Other Operating Costs/Company Restaurant Sales (14.2% actual vs. our 15.5% projection, (4) […]

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12:00 AM

DENN Takeaways from New York City NDR Leave Us More Bullish

We recently hosted a Denny’s (DENN; Buy) non-deal roadshow (NDR) in New York City. We thank Denny’s CEO John Miller and Senior Director Investor Relations Curt Nichols for their participation! Following the NDR, we feel more confident in our bullish thesis on DENN. We maintain our Buy rating on DENN, and note the following: * We believe we have a better understanding of Denny’s acquisition-related comments that it made on its October 29th conference call. […]

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12:00 AM

DENN Does Anybody Want to See Denny’s Acquire Another Concept

Since reporting its third-quarter results and hosting its related conference call late last month, Denny’s (DENN; Buy) stock has mostly drifted downward. We believe that one factor contributing to this slide has been concern on the Street that Denny’s might acquire part or all of another restaurant concept. In our view, it would be a mistake for Denny’s to do so. We believe the odds do not favor Denny’s pursuing this route, although we (of […]

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12:00 AM

DENN (Post-Call) Moves Closer to Beyond Refranchising

After Tuesday’s market close, Denny’s (DENN; Buy) reported adjusted Q3 EPS of $0.18, coming in ahead of our $0.16 forecast and sell-side consensus (according to Consensus Metrix) of $0.16. We attribute the EPS beat to a combination of: (1) better-than-expected Payroll and Benefits/Company Restaurant Sales (37.4% actual vs. 38.3% projected), (2) better-than-anticipated G&A/Revenues (13.2% actual vs. 13.8% estimated), (3) better-than-expected D&A/Revenues (3.5% actual vs. 4.2% forecasted), (4) lower-than-anticipated interest expense ($4.2 million actual vs. $5.3 […]

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12:00 AM

DENN New York City NDR Planned for Wednesday November 20th

Kalinowski Equity Research will host a non-deal roadshow (NDR) with Denny’s (DENN; Buy) in New York City on Wednesday, November 20th. Management attendees will include: (1) CEO & President John Miller, (2) Executive Vice President, Chief Administrative Officer & CFO Mark Wolfinger, (3) Senior Vice President, Finance Robert P. Verostek, and (4) Senior Director Investor Relations Curt Nichols. This should be an excellent opportunity for institutional buysiders to hear from Denny’s leadership about its refranchising […]

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12:00 AM

DENN (Post-Call) Accelerated Refranchising and Grand Slam Same-Store Sales

After today’s market close, Denny’s (DENN; Buy) reported adjusted Q2 EPS of $0.23, ahead of our $0.18 estimate and sell-side consensus (according to Consensus Metrix) of $0.18. We attribute the EPS beat to some “tax provision benefits” — the Q2 actual (adjusted) tax rate was -1.2%; a more normalized tax rate of approximately 20.0% would have led to an adjusted EPS number of about $0.18, by our calculations. U.S. systemwide same-store sales rose by +3.8%, […]

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12:00 AM

DENN 2019 Franchise Disclosure Document Review for Denny’s

Not too long ago, Denny’s (DENN; Buy) filed its 400+ page Franchise Disclosure Document (FDD) for 2019. In this report, we cite some of the highlights from that document following our review of it, including our review of it in comparison to last year’s Franchise Disclosure Document. For example, the 2019 FDD reveals that Denny’s is testing Presto, providing these details: “Presto is a table top ordering option that we are testing in 2019. The […]

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12:00 AM

DENN CHANGING OUR RATING ON DENNY’S TO…

With this report, we upgrade the shares of Denny’s (DENN) to Buy (from Neutral). Our ratings change is due primarily to improving same-store sales trends in the familydining sector, of which we believe Denny’s has been a beneficiary during Q2. As a result, we increase our Q2E same-store sales forecast for U.S. systemwide Denny’s by +100 basis points, to +2.8%, placing us as the new “high-on-the-sell-side” forecast according to Consensus Metrix data. We are now […]

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12:00 AM

Updating our Q2E19 Kalinowski Family Dining Same-Store Sales Index (Again)

With this report, we increase our data-driven Kalinowski Family Dining Index for Q2E for the second time this quarter. This time, we increase the figure by +60 basis points, to +3.0%. Our updated figure is based on our latest proprietary checks/data as regards same-store sales performance for this segment over the course of May 2019. At present, sell-side consensus is less optimistic than us as regards Q2E. When we weight the segment components identically as […]

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12:00 AM

Updating our Q2E19 Kalinowski Family Dining Same-Store Sales Index

With this report, we update our data-driven Kalinowski Family Dining Index for Q2E to +2.4% (up from +2.1% previously). Our updated figure is based on our latest proprietary checks/data as regards same-store sales performance for this segment during April 2019 and the first half of May 2019. At present, sell-side consensus is a touch less optimistic than us as regards Q2E. When we weight the segment components identically as they’re weighted in the Kalinowski Family […]

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12:00 AM

DENN Valar Grandslamus (All Men Must Eat Breakfast)

After Tuesday’s market close, Denny’s (DENN; Neutral) reported adjusted Q1 EPS of $0.13, matching our $0.13 forecast and sell-side consensus (according to Consensus Metrix) of $0.13. First-quarter U.S. systemwide same-store sales were up by +1.3%, as opposed to our +1.1% projection and consensus of +1.1%. Denny’s reiterates a number of its full-year 2019 financial targets, including 0%-2% same-store sales growth, “flat net restaurant growth,” and adjusted EBITDA of $95- $100 million: Read the Full Report

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12:00 AM

Updating our Q1E19 Kalinowski Family Dining Index

With this report, we update our data-driven Kalinowski Family Dining Index for Q1E to +2.2% (down from +2.8% previously). Our updated figure is based on our latest proprietary checks/data as regards same-store sales performance for this segment during the second half of February 2019 and all of March 2019. The second half of February 2019 was… bad. Adverse weather clearly played a role in this. However, what has been perhaps equally concerning to us is […]

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12:00 AM

DENN INITIATING COVERAGE ON DENNY’S WITH A RATHING OF …

We initiate coverage of Denny’s (DENN) with a Neutral rating. At present, we do not view the multiple opportunities and positives of the company (and its stock) as enough to overcome the concerns and risks that we have. Amongst those risks are: (1) the possibility that sell-side consensus EPS for 2019 is too high as of this writing, (2) a likely lack of possible upside to current Street expectations as regards U.S. same-store sales, and […]

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12:00 AM

Introducing our Q1E19 Kalinowski Family Dining Index

With this report, we introduce our data-driven Kalinowski Family Dining Index for Q1E at +2.8%. This figure is based on our latest proprietary checks/data as regards samestore sales performance for this segment during January 2019 and the first half of February 2019. January 2019 appears to have been solid, rivaling December 2018’s same-store sales (and as best as we can tell, December 2018 offered up the best monthly same-store sales for the family-dining sector during […]

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12:00 AM

Updating our Q4E19 Kalinowski Family Dining Index (Again)

With this report, we update our data-driven Kalinowski Family Dining Index for Q4E from +1.6% to +2.0%. This 40 basis-point increase is based on our latest proprietary checks/data as regards same-store sales performance so far for this segment during the second half of November and the first half of December. (We would note that this increase follows the 40 basis-point increase we already made to this index back on December 3rd; for more details please […]

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12:00 AM

Updating our Q4E18 Kalinowski Family Dining Index

With this report, we update our data-driven Kalinowski Family Dining Index for Q4E from +1.2% to +1.6%. This 40 basis-point increase is based on our latest proprietary checks/data as regards same-store sales performance so far for this segment during October and the first half of November. Sell-side consensus is currently more pessimistic than us regarding the outlook for Q4E same-store sales for the family dining sector. When we weight the segment components identically as they’re […]

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12:00 AM
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