Q3 2021 Educational Development Corp Earnings Call
[music].
Net Corporation fiscal 2021 third quarter earnings conference call I per day.
Gross remarks, we will have a question and answer session to ask a question. During the session. Please press Star then one on your telephone. Please be advised today's conference is being recorded and if you require any assistance press Star Zero. It's now my pleasure to hand, the conference over to Chief Executive Officer Randall White. Please go ahead Sir.
All right. Thank you very much great introduction there that.
First on my to do his thing I'm on a day is introduced here on the call with me Ive got.
Craig why Hughes, our Chief operating Officer, I've got Dan O'keefe, Who's our Chief Financial Officer, and I've got together, QAD, Chief sales and marketing officer and.
I think the first on agenda today that.
I'm on a handheld to day in and just.
Give us the information about our third quarter results Dan.
On trend your third quarter results net revenues for the third quarter fiscal 2021, or approximately 66.8 million.
26 million or 64% and approximately 40.8 million reported in the third quarter of fiscal 2020.
Pre tax profit for the third quarter totaled 5.8 million, an increase of 2 million over the pre tax profit of 3.8 million reported in the third quarter of last year.
Pre tax profit as a percent of net revenues decreased from 9.4% and the third quarter of fiscal 20, 28.7% in the third quarter of fiscal 2021.
Earnings from the third quarter of.
Fiscal 21 total.
Totaled 4.3 million compared to approximately 2.7 million reported in the third quarter of fiscal 2020 net earnings grew by 59.3% over the third quarter last year.
Earnings per share on a fully diluted basis increased 18 cents per share from 33 cents a share reported in the third quarter of fiscal 2020 to 51 cents a share reported in the third quarter of fiscal 2021.
Earnings per share for the quarter increased 55%.
Over last year.
This concludes the earnings growth and I will pass the call back over to Randall.
Okay, Dan Thanks, well I think you can see that we keep reporting record sales are very happy about that and I think one most critical.
Critical things. He is doing just busy Christmas season, we kept up with the shipments and truly important and you have on Internet business and we think we may have been right. There with the leaders on shipping and I think we were in two or three days from receiving or hitting isn't it shipped out the door.
However, along with that we had some nonrecurring expenses and I thought I would tell you that.
We increased our shipping charge to the consumer for the first time and about eight years, we added a dollar blocks and of course, we're very concerned about that we didn't know what it was due to their total revenue.
But it seemed to and very little thing. So we're happy about that so we were able to increase from the revenues. Unfortunately during that same period of time. If he has had a freight rate increase as well as the surcharge.
Yes, the surcharge on their largest customer because apparently we were plugging the system not quite familiar with that said economic theory, but that was there and it will tell you that the surcharge has now expired and we have negotiated a new contract and lower price for yes coming.
A year.
We had the net the net of those two things our increase in revenue and the increase in your shipping actually was a negative $350000 and so for the quarter. So the fact that they will not be recurring but our price increase will touch will we think that we'll see.
Question on margins just coming up on.
Also I've got a couple of other things I don't want to talk about that for one thing because it putting and an extra nine ships and another temporary line. We have estimated that this quarter was impacted about $575000. This additional cost sales.
And shift certainly not as efficient as per shift.
But you got to do it and we were happy about customer service not happy about the cost.
Now why do I think these are non recurring well I'm on Toyota Craig here for a minute and what do you think that a heavily on do we don't have these recurring charges.
I think you Randall so just to kind of reiterate little bit and we put up a temporary PICC line and the middle of the third quarter.
And it was assets just should it was it was completely a cheaper and line it was up and running and.
On October and we actually took it down and mid December.
Two and make.
Make room for a new Capex projects now why only lasted six day weeks, we did ship about 45000 orders on the two free pick on shows necessary, but not.
Not the height of efficiency.
We tore down she started our and our.
Our new Capex project and that same space, which is a double decker.
On a pick and pack and ship lines using a mezzanine. So it's two stories.
So we were basically a little bit more than double our current capacity, which would allow us to not have a second shift this next year.
So it should be up and running and project should be complete.
Around the first of April to mid April so that should be much more efficient.
Also as Randall mentioned, we did have some increase.
Freight costs from you.
Yes, they had a.
And do make surcharge throughout most of the year and then it peaks surcharge and the third quarter, which and tomorrow.
We signed a new contract also in October which.
Basically kept some of our surcharges that offers such that.
We have a better discount structure going forward. So we we will recoup all of our surcharges that we paid on this last couple.
Quarter so.
Very happy about that.
And also what I wanted to mention was that the second shift it was very difficult to have a steady more work force from a second shift.
And we are constantly hiring and training new people, so that added a bit to our our what we will say onetime non recurrent nonrecurring costs.
Because we shouldn't have that second.
Second shift this next year so anyway.
Thanks, Randall I'll hand, it back to you. Okay. Yeah, we're excited about that and a two day latest technology piggy backing system and it's incredible we feel like that's going on.
And this is installed on line sometime in line.
First April non purchase of April yeah, without these what we call onetime recurring and they are nonrecurring because surcharge free stuff will tomorrow, and we feel like that when we go on.
Analysis that without those charges, we would have hit a little over 10% free tax which is one hour. What's one of the goal is we did about 8.7 now last quarter. We did about 9.5 as we reported $350000 moved already in there from a one.
On revenue of haven't virtual conference.
But without these things on.
On a go forward basis on margins are not declining if someone.
Back room, there is telling you all know alert their margins going down we've got a fixed is fixed guys and and we.
We just have to and this which we have to to make it more efficient, which we're doing now on our growth continues to be driven from our increased volume of active consultants and Youve and division and give us an update on these exits consultant status and Heather Cobb, our chief marketing officer, and you've done it talks about that.
I'd be happy to thanks Randall.
Last November we ended with 32900 active consultants and this November we closed with just over 60000 active consultants and as Weve standard on previous calls and I'll just share again and some of the factors that we believe have contributed to that growth and over the past year.
There's not any one thing, but we do see a combination and things that have had caused this growth half and and we are experiencing an increased demand for supplemental or replacement and non traditional income Q.
Lost income due to come and 19 pandemic and we also started in June and a new lower price in free cash for new consultants in the past. We have died new consultant kit specials, which have lasted about a month and we shifted our focus and made that available.
Everyone and basically every day and we believe that that had a significant impact on the number of people choosing to join our company and they're saying in February and that'd be.
Larry we rolled out a new consultants success program called line and by the time, we entered this quarter and.
We feel like that has really taken hold and people were using that to the maximum potential available.
And we thought technology improvements, that's customer facing and with our consultants.
Product suite as well as continued and increased demand for educational product.
Teams and the home not only for teaching, but also and some of our activity Bucks and items to use for keeping younger siblings and B. If you were teaching and children and while they were distance learning and so we feel like all of those factors combined and really have had an impact.
Over the year and which caused this significant increase so now I'll pass the call back to Randall for further information.
Heather and the Investor day after I think yes real critical because some people think that said our business was aided by code and then once it's if you say resolved by the line that will drop back we're not expecting that all because that's us as Heather says that's what's not driving our sales from right now it's more.
People out their feet on the street, so were expecting the interest continue and it has.
Right along.
Got going again in January and we're pretty happy with was what's coming in now and other element and I might want to mention we're pretty we have a pretty nice balance sheet.
During this past year, we paid $8 million and long term debt. So today, the balance and and and we eliminate all short term debt mentally and today, our current debt levels and we have 9 million I love It and we have $11 million debt and net secured by two buildings, which have a value.
About $35 million. So we think we're very conservative in.
In that area plus we increased the dividend from 24 cents annually to 40 cents.
All from our cash flow you will see on a balance sheet and we have $31 million cash.
And I love that that's great the problem is.
We have to have increased inventory as our sales increase so as we build our inventory is already it's already ordered is on the way it's on the water. Unfortunately, one ship is partially underwater.
That we had 11 containers on but we have significant inventory coming in and by first quarter into second quarter that will be cash will be gone and we may even dip into a bit of the line, but just because we are building and we too.
And with that the sales that we anticipate and these upcoming event.
And with that.
I hope I will explain that we do.
Feel like that on profit margins increase and once we eliminate these onetime nonrecurring and get our efficiency back from the level. It has been so with that went on and I and if there is absolutely one thing I did not cover head.
Heather or Craig please feel free to ask a question and well have an answer for you.
And ladies and gentlemen, as a reminder, if he would like to ask a question Press Star then one on your telephone keypad. Once again press star one to come into the question queue.
We have any questions and on me.
Oh, we.
We do have some questions. Our first will come from the line of Bill Anderson with Baird.
Pardon.
[laughter], Yeah, R&D and had not fair, but anyway.
I got on the call late and I haven't I don't know if you from.
Really it's the Q.
But I'm wondering.
Is there any leverage and this model and as your sales are.
Increasing.
More than your operating income or earnings per share, even though you're buying back stock.
Did you cover that or is there something I'm missing there.
We haven't bought stock back and while that we talk about is there leverage in our model.
We have a pretty.
Our model basically is we have 25, we allocate 25% for cost of goods, we allocate 50% from marketing cost and about 25% lift to run our operations have a profit and pay dividends. So that model has been the same for about 30, some years and so while.
While we have nice increases in revenue it doesn't fall through incrementally as some capex companies do because we have to make the what falls to incrementally is the fact that the the overhead journey doesn't go up significantly with a with the revenue and other than that I think thats a pretty.
Nice.
Fall through that we have a profit levels on through and nicely is that your question.
Well, yeah, I mean, there's no economies of scale there is no volume discounts from the publishers as.
As you know we get we do we do have Budweiser and.
We get volume discounts for all of them and I guess, that's why we can have profit exceed a profit per sense and.
Exceed revenue growth, which we have so it's it's not I I and see that this quarter you're you're.
Your operating income was up less percentage basis, and the revenue increase and same with the earnings per share.
Right, Okay or am I missing.
No no your non unless he sending out and being light, but I'll I'll forgive me for that we had some non recurring expenses.
Okay.
And we had and Henri occurring expenses, if you want to compare to last quarter last quarter as reported on a $350000 Bluebird because of the profit we made on the virtual convention that didn't occur again, and this quarter of course, but and this quarter. We had a free increase from your peers and we had a surcharge.
And he is they put a surcharge on their largest customers because we were plugging their system.
We also then increased our shipping charge for the first time and eight years, but it didnt totally offset it and that cost is around $325000. We had to put in some and an extra line to accommodate the volume it was as efficient as the regular.
His line should we run and we have estimated that to be about $575000 and the two of those if you and by the way were.
Putting in a complete new.
Two tiered picking and packing.
Just and they'll come on and April that will get everything back on one shift and we think we'll get.
Get us back on the on the margins that we have and we expect that to be 10% on a go forward basis. So these are temporary thanks, when we had a slight difference from the.
The dems from the profit margin and so in the second quarter to third quarter. It was about and dollars 700000, and we have identified about 800 to a million in non recurring charges. So.
Without those we would be at around a 10% pretax margin.
Okay that explains it that's what I wanted to know I guess I didn't see the Q on a one did did you publish the Q yet or.
Yes, It was published the Cadeville.
Morning, Yeah, it's available.
Okay that was so that's what I want to know so say and on a given 10% increase in revenue.
There is a little you should at least on your 10% increase and.
Operating income and earnings per share.
And that's that's kind of what I'm trying to get on.
We thinks we think so we had some unusual things is this quarter that the sales growth like this when you grow like this it doesn't happen next Neil and I will tell you that on the vis thanks and happened to us that we didnt have an outage and the system a lot of companies because of the volume on the Internet this year due to.
I guess Cove, and some fairly large companies had outages and we did and we went right through it and had great customer service, but we hit we spend a little money to do that but we're putting in a new system to eliminate that so yes, I agree with you that if you sell more you shouldn't make more and then right that's what and so.
Is going to happen you think margins are going to be back to normal and Q4.
And for is already halfway done.
The surcharge Didnt expires on Tomorrow, a Q4 is the smallest quarter and the in the year, it's hard to increased margins in the fourth quarter, because overhead tends to stay the same and less volume than doesn't believe and well for that but less.
New that out to the first quarter and I would say yes.
Okay, great. Thank you very much.
EBIT.
Our next question will come from the line of Dennis on motto private Investor.
Hi, Thanks.
Thanks for taking the call I add one comment and then one question comp.
Comment was you had a great quarter and the stock didn't respond even in a good market and most respected test to do just with what you guys were talking about a minute ago and it might have been prevented if you could put that explanation in the news release.
Because you know you sort of.
I didn't get the the credit were what was really a pretty good quarter I think because lot of people, probably but just what I heard on the call a minute ago that margins were shrinking when in fact, they werent. So.
So that's my comment on the question can you yes.
Yes, let me let me, let me address Tom and just a minute.
You're right traditionally if you look back I've been doing these I came his accountant and 19, but blur and we've reported its about the same for all these years and repair we reported quarter to the same quarter the previous year and I see because I got a call from what I would call a friendly.
Funds, who said hey, Here's your problem you saw us and we have a great report, what's going wrong and if you will people think margins going down because they're not really in the second quarter Oh, Okay. So see yet from all these years I've been here I still ourselves, we'll we will address and and I agree with you and awfully good.
Reported net of stock of them.
Right.
My question has to do with maybe getting a little more clarity on exactly how you obtain new consultants I know I went on the website. The other day and I noticed there was very little on there somebody heard about your company and who is interested in and becoming a consultant there was very little on the website and Buck how they would go about that.
So I was just curious on that.
Well the process work.
Heather so youre talking about that how do we get new recruits are besides one day down are we love you Yeah. Yeah, we actually don't do you match advertising and or promotion from that corporate standpoint, and you know at this point as I shared at the end of the third quarter we have.
A little over 60000 active consultants and our reliance upon them and to tell their friends and family about the business opportunity without knowing exactly what website you were on.
And our consultants are outfit and basically with and E commerce sites that they have available to.
To offer the opportunity, which has a joint page and different things like that and so they do have three parties. They do it through conversations they do it through and that just wearing you Bam logo and higher out into the community and equal.
Seeing it.
And and so there's various different ways.
And again this I'm going to give you strength and the horses mouth on how we do it because we have a controller who's been here, how long now free or three years. He's a he's a controller and the company and he wanted to know more about how this direct selling multilevel marketing work. So we saw and his wife to be a consultant.
Because he wanted to study and the and he didn't tell us that he just signed are up and net because he wanted to make sure. He was involved in a 100% honest ethical committee. He told me. This later by the way and so.
He did and he is standing here and why don't you tell US you experience that you had with how this works.
Yes, I think you are going into my wife didn't really know much about MDC are you being them at all it was really me pushing on for about two months to sign up as part of the company.
She signed up not actually hosting a party, which I think is probably not the norm. Most people will host the party first they will see the rewards and benefits and they get from that see the success of their consultant and then sign up.
That way, which I think is more of the traditional way and that's actually how her team has been built this through hosting those parties.
But what I can say from our personal experiences. This this company from the consulting side her side of things has absolutely been a blessing not only financially but also for our children stocking up on the bookshelves that we have at home and also being a blessing to other families such as ours.
And.
He had to encourage true there he I'll address dojs kind of shot he had encouraging because she after watching I don't know he's I'll, just keep trying and a little bit and she did and inner first year achieved and this success and she's ever walk across the stage and did I understand that you aren't cheese and a trip.
For two of you to go to Hawaii and right.
I don't know, how that's going to work and employee going away because we in the financial area I guess, Dan He's may take your spot but anyway.
Anyway, I thought you might like to hear that from the person who actually did it he.
Here's what did she is lovely that might have something to do with it that she has had great success with the shed encouragement from or hasn't.
And Dennis.
Actually on the I was on the corporate web site and I was just surprised and is.
During the day, so I was going to add one comment I think.
That'll answer your question, yes, our.
Our corporate web site, you know is more geared towards we have two sales divisions, we ever you Bam Division, which is our primary division driving our growth right now, but we also sell through our retail division, which we call publishing and we have about 4000 different retail accounts and so our corporate website is kind of not geared towards either one of those.
Two is more inclusive of both of them.
Yeah, and I understood I was just surprised there wasn't from placed a quick to find more information about how to become a consultant.
I think if you will that you'll get way more teaching and you might imagine.
[laughter].
Well that helps thank you.
Okay. Thank you.
Our next question will come from the line of Joseph <unk> private Investor.
Hi, I have two questions actually so the first question is on.
No you said that the the.
The increase on sales you think now is being driven by the number of active consultants rather than by you and people are educating more at home because of the pandemic I'm wondering what's the basis for that conclusion is that the type of titles that are being sold or or or why are you, making a conclusion.
Well I'm actually conclusion because on.
On what's driving it now is we have some very very successful people in the organization. We we allocate 50% of every retail dollar from marketing and and retail store that means you sell a 10 dollar book to Barnes and noble for five they sell for 10.
And and then the direct selling division they sell it for 10, but just $5 of commissions overrides and seeing these what have you you now have people, who make a lot of money and we have to be careful about this because FTC, which and give averages so lock and I can tell you.
We're working on that but also will tell you a story that will bring a tiered you either five years ago. This Lady who is a school teacher and Texas tried to join and their credit card decline on $75 charge. She had no money. So we worked it out with or somehow I didn't know about it and last month and November she made $60000 well while we're.
And while she is limited and telling people that because everybody didn't make 60000, including me, but she actually did and that drives people say you can make that much money selling days and yes, you can't and while EBIT by doesn't make 60, we have a pretty high average on a.
What people actually on compared to the industry. Because we have to include every person who signs up even if they don't sell a book and the average, but I will tell you people talking to each other or maybe not posted it on and Facebook are just talking to their groups about oh come over to me and not because this is in our new.
Home and it's not a lie they that's how they occurred and how they bought it but we have to be very careful now that we don't have exaggerated income claims and they're not exaggerating there just that persons.
Income so that's what driving it now when people hear that you actually can stay at home with your children.
And be with them and earn enough money to stay home.
Is the real driver in and recruiting and I think Heather wants to add a little bit more to that I cannot comment I know you asked specifically about and if we saw a difference and the type of success and they're buying I would say not necessarily that as much as just seeing the categories and theyre buying from.
We offered some learning from home categories and very early on and during the pandemic and back in late March early April and and saw those categories being shopped from whole lot more than they are now and which has one and the indicators to assets that we have reached basically pure and.
And then as opposed to just what ended up being a little bit of the catalyst for that Fred.
The second question on how does this sort of related which is I know you said that part of the and the reason for the increase and the and the number of active consultants is people looking for additional income or other jobs and given that the pandemic economy as hopefully that improves dramatically over over the course of the year. How much attrition are you expecting if you then have a forecast.
Are you gonna get and the in the number of consultants from people going back to work and and so on.
Well, that's that's a hard one to guess that shift to gas because what a lot of people are finding out is when they thought they had a solid job and work. There for 10 years also said and I got furloughed and will it ever come back or are they in the back of their head you know what this has been kind of fun on Michael and money I'm on and keep it going on the side just in case.
And I think the bulk of our people are part time and so if they go back to work and they keep doing.
Doing this on a side that's fine too by the way we missed an entire market and this covert thing from the school and library, we missed we've missed probably $35 million, but not being able to have school book fairs, or what we call faced base and on like if you have a green Green River Festival and ill have loose out there and per.
We'll sell that looks that way, we haven't had any of that so we think we can have an increased volume from that and the fact that that people have.
Have wonderful stories about what this thing is done for their family and been those stay at home and and be with the children. So you know there's an awful lot of factors here that I'm not sure that I have the answer to that I think that we're going to continue to grow I appreciate it.
And our next question will come from the line and Ed nor Seaney private investor.
Hello, and on Yeah, how are you.
Good habits I have a question about the pick and pack line.
It sounds very interesting.
Correct me, if I'm wrong and this kind of like.
I have and the train going.
On down the road and putting another container on top of the trade and the train two containers and settle one is that something like that.
And other work putting on analogy.
That's a pretty good analogy because I was just out there and what happened is you got to pick and pack and then you got a mezzanine right above it and they'll be people work and above isn't too. It's two floors and the technology is way improve because you can introduce and order at the front. The line instead of the back on line were asked to go through all the sanctions so.
Not only only increasing our output we are significantly increasing technology that handles the older and so we're we're pretty excited about that is pretty space for us.
Well. So so you actually don't need to hire more people to do the same due to double output that correct sort and that well and others. What Greg was that second floor. If theres still has to have people up there doing it so what was on fish and but it is all going to be on the day shift and not shift can be fairly and.
And I say, okay. My other question Randall.
Last year.
You had about 30000 consultants in January and February 20, Twond I know you have probably 50000 your inventory last year was that 30 million.
Check yet, okay and killed inventory now that 47 million is that an adequate and.
And toward the handle your Kate.
Capability right now.
Well are you you.
And you plan to the day.
And I would tell you if you could contact all of our 60000 people and ask him how much they're going to sell and next year and be a little more confident and the answer.
We think that we have adequate inventory, although today, we probably still have 100 or more titles out of stock and generally that kills you. When you have an out of stock and Adam but this year. The <unk>. We sold so much that we saw what we had and I think our consultants just said hey, we're going to make a very.
Best to this we got their very best thing going on it's not baseball and we're going to sell what we got and they've done that and we're getting it back and as fast as we can and we're geared up to have a significant increase in sales and you can only do it you can't do it from an empty shelf. So we have inventory coming and that we think will adequately.
Service the amount of sales we have.
I see.
Also for gas and I'm looking at the balance sheet.
Last year about this time towards like 9 million and accounts payable right.
Right now there is 45 million and accounts payable.
Why on we still get and pay.
Hey, Dan wanted and let me tell you why because that three years ago, we kind of got behind.
And I called all the suppliers and got increase terms and.
And so now instead of having 30 to 60 day terms, we have 120 day terms from most of our.
Most of our vendors. So we have credit so that we have $31 million cash yeah, we got a bunch of payables, but you know that's what we've got to inventory were solid and from my viewpoint. So that's my fault that we got the vendors to give us better terms than talk now [laughter] I think you've done a great job answering that just.
Just on your conscious there and we do pay all the bills when there do you.
Good day.
We've got 31 million of cash and we've got a 10 million dollar line of credit that's not tap. So we definitely have the ability with cash and her line and credit to cover every payable and its on the balance sheet and.
Okay, great on so I have you on file again.
To summarize the HEICO and did they pay on the rent last year, and 2020 and going forward 2021.
Let's make any concessions to them.
Yeah, Yeah, so and we.
And we've kind of talked about this on some of the previous calls and some of the previous disclosures and the cues from Hilti is a is a worldwide tool manufacturer there the second to the wall I think on worldwide sales. They do about $5 billion a year in which they do about two and a half and North America and.
The total so campus that we're on we call it the Hilti campus because they originally built and in the Eightys and about four years ago. They made a worldwide decision to divest of all real estate and just investing in growth.
Which gave us.
Randall.
And Craig and Heather the opportunity to come over here and by this.
Wonderful complex on 40 acres 400000 square foot building on 40 acres for $23 million and.
It is a fantastic facility and helped to use rent.
And now it is more than our mortgage payment.
Well it was more than our original mortgage banking.
Yeah, we pay down $8 million for that mortgage payment.
So when we originally so their lease payment covers our our original note now it's a source of income to us this year.
When the pandemic kit Hilti worldwide win there and every city with with office space. They went to every landlord and such and we have 90 days of of rent deferral.
Help through the pandemic and any exchange for that 90 day deferral. They offered to extend their leases 90 days on all their locations.
And Randall.
In a in a very.
Thoughtful way immediately jumped on it and said absolutely hope to do that for you guys. Because they are such a great tenant for us they do so many things here on the call.
Complex that we're at that is.
You know not only community based but just to help us as well just.
It's just a great great relationship you see this building the room, we're in right now all the furniture everything in here was left to us by healthy every time, they get new furniture, we get new furniture there.
They left over a million dollars, where the pallet racks and the warehouse. They left I don't know how much the lighted cubicles they left and the space. So I'll tell you we have an incredible tenant and when they want it a three month deferral on rent us are giddy up on it.
We got the best deal here that you could ever imagine and we're very happy about it and they're great customers. We've got 10 more years on their original lease with the five year option. So hilti is.
There there are incredible and we love them they take care of us.
Okay great.
Once again to ask a question press Star one. Our next question is a follow up from Bill Anderson with Baird.
Yeah, I, just like to reiterate what the one gentleman sort of on the web site.
I think could be who viewed and spend a little money on the site and.
Pretty archaic I guess would be the word.
I think Ed I think the answer to that is we don't.
Really.
Put much emphasis on that because the main emphasis on the web site for the direct selling side.
Side of the business.
That day when people didn't want to go to that website. Maybe in addition to find something and a if you get and that's now she got a phone number on their call me from and only thing we just don't use that website for it in to.
To your point, there and we do and to Bill's Bill we do have that as a project Craig do you want on.
And we.
Yes, and yes, I mean are we almost doubled our IP staff from the last 12 months. So that is a project for for probably the first quarter.
Next fiscal years.
It's not a high priority force because we don't recruit from it.
And then another way is just out there and and yeah, We may look our cake and.
It's just not our emphasis because we don't think its a revenue generating project, but not to say couldn't be better. If you think that websites that you are looking on a front door.
[laughter], what it'll depend on the door and afford us.
No no they got a big fancy when they spend a core Romania and on and we got a a door that the gray and goes into sort of the warehouse that we're happy because we're very conservative you hear and don't want to spin shareholders' money excessively because on the largest one.
And I'm well I'm speaking as a as an investor and I think you want on all.
Yes, Bill sorry, just to touch.
To further kind of some of Craig's comments.
And and Heather's too, we do have a very robust.
You Bam website and every one of our 60000 consultants has their own web site that we host for them.
And so we have.
Over 60000 different web sites that we host.
Net are all tied to our E commerce, just and so I think what we're trying to say you're not necessarily seeing the business side of our E. Commerce, you are seeing or just our corporate website, which.
To your point is needs to be updated we agree completely but.
I encourage you to go to my you Bam Dot Com Www Dot you might you be from dot com and kindness.
And it was not an image of the on the web sites and all of our consultant shoes, Yeah, we're not we're not exactly.
Yes, hey, and our teeth and Oklahoma, It's just not decide that we.
Had just to.
To work on because let me tell you when you go from 20000 to 60000 consultants that are female.
Female there are a lot of needs that are expressed there and we try to stay up within the very best we can.
Well I know you've been spending money on technology over the years on so I assume there had to be a better interface with your consultant, but from the standpoint of and investor.
It's it's not a good sign so no I agree and that's where I'm thinking from total.
Hey, Jay you last I actually saw it but I hear you and it's a little bit and embarrassment, but is not as bad as our front door.
Okay fair enough.
Okay, Let me on the questions not at this time.
Okay, we must have covered everything and good I say, one more time for everybody goes.
Our profit margins are not declining.
So if thats why you sell on stock off all you guys. It shorter that stock too bad for you because the news is only going to get better but you. Just you just pick your poison short our stock people have done it before we'll see how that comes out Oh my off the call.
So anyway, hey, and by my shown decisions I want you to have every bid and knowledge you have about this company because its and a nice income and can be more proud of it and we're growing and is profitable seven years 60 years ago, we made $875000 pre tax for the whole year. This year, we will probably do I don't know 16 18.
A million dollar so.
We're doing something right here and thank you guys from being investors or future investors and if you have any other calls you actually calling and I'll talk to you thanks for being on the call.
Once again, we'd like to thank you for participating on today's conference call you may now disconnect.
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