Q1 2021 Delta Apparel Inc Earnings Call
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Ladies and gentlemen, thank you for standing by.
Thank you and good afternoon to everyone participating in Delta apparel fiscal 'twenty, one excuse me 'twenty 'twenty, one first quarter earnings conference call joining us from management are Bob Humphreys, Chairman and Chief Executive Officer, and Deb Merrill Chief Financial Officer, and President of the Delta Group.
Before I begin I'd like to remind everyone that during the course of this conference call projections or other forward looking statements may be made by Delta apparel executive search.
Such projections and statements suggest predictions and involve risks and uncertainty and actual results of weight excuse me may differ materially. Please refer to the periodic statements filed with the Securities Exchange Commission inclusion of the company's most recent form 10-K.
This document identifies important factors that could cause actual results to differ materially from these contained in the projections or forward looking statements. Please note that any forward looking statements are made only as of today and except as required by law. The company does not commit to update or revise any forward looking statements. Even if it becomes apparent that they may.
You.
But excuse me any projected results.
Not the realized.
I'd now like to turn the floor over to Delta as Chairman and Chief Executive Officer, Bob Humphreys. Please go ahead Sir.
Good afternoon, and thank you for joining us one of our fiscal 2000, the 'twenty one first quarter earnings call.
I'll start the call with a brief summary of our first quarter performance and then turn it over to our CFO Deb Merrill for additional business highlights the financial results.
We were off to a great start in the fiscal year with first quarter sales will hit out of the bar of internal expectations for both sales and profitability.
Two of combination of strong order demand and the outstanding manufacturing and operational execution at all levels. Our December 2020 quarter sales were nearly flat with the prior year levels. We achieved the herself. Despite notable headwinds from inventory constraints hurricane related disruptions in cash.
For the old aircraft and for.
For a carrier limitations during the holiday season.
Our profitability also significantly expanded this quarter with improved gross margins and operating profit in both of our business segments.
Adjusting for the Hurricane disruptions, our operating income increased over 65 per cent for $4 million for the December quarter and the earning.
The earnings more than doubles, the 28 cents per diluted share.
We were particularly pleased with the celebrating success of our own demand retail model.
BTG together as we gain traction the traditional retailers expanding their business utilizing digital print.
The net sales in this new retail channel of the BTG. The go business for four times the level they were a year ago.
The diversified base of customers. So you get the benefit of our unique vertically integrated on demand supply chain.
We also kept lives of market opportunities the fuel growth and expanded profitability in our activewear business.
We're coming to the challenges caused by the port constraints and continued disruption in certain channels of distribution as a result of the ongoing COVID-19 Viking paying debt.
Within our Salt Life Group segment, our strong results and improved margins were driven from the direct to consumer sales for robust store performance all of them.
Same store sales basis, as well as our recently opened retail doors across Florida.
At the same time Salt life continued to service and perform well for our independent and regional wholesale customers. The slide despite the disruptions they've been experiencing during the pandemic.
We go into the spring shipping season, with the strongest wholesale order backlog and salt lifes history.
I'll now turn of the discussion that we can stay up to go into more detail on the first quarter performance and financial results.
Thank you Bob.
Looking first at our D. T G to go business. It clearly remains a market leader in the on demand director of government digital print and fulfillment industry.
Turning off of the very strong back half of fiscal 'twenty 'twenty. Our overall unit sales during the first quarter were down about 7% despite being up double digits during the holiday season.
Well not what we initially expected there were some notable achievements and key takeaways that are important to understand.
It appears the across the board the overall consumer spending pullback in September which continued into October and November of consumers grappled with the rise of Covid infection. The election uncertainty regarding the additional stimulus package.
Many of our customers saw their sales of altering 20 to 30 per cent compared to the prior year during these months.
Picked up significantly with our customers of Thanksgiving approached driving a strong start to the holiday season of D. T D to GAAP, we're proud of our employees at our nine print facilities across the U S where we operate at all facilities 24, seven fulfilling orders at a record pace as you probably saw on the news with the surge of.
The online shopping major freight carriers imposed shipping limitations and moved guaranteed holiday delivery cut off earlier, thereby hampering the holiday season potential. Despite these headwinds D. T D to go sort of double digit growth in units shipped during the holiday.
Strength was not enough to overcome the start to the quarter, resulting at first quarter units being down for the prior year.
We saw remarkable strength in the retail channel with our new on demand D. C service model, which provides the retailers immediate access to utilize E. T. T. The goes broad network of printing fulfillment facility, while offering the scale ability to integrate digital fulfillment within the retailers own distributions.
The silly.
With the launch of D. T. G to go first on the Liana D. C of partner was able to more than double the on demand business. During the December quarter from a year about providing a better consumer experience, while also benefiting from reduced shipping cost.
We believe our Ondemand D. C solution is a compelling value proposition, the brick and mortar retailers and brands alike operating their consumers limitless merchandise selection personalization options and seamless fulfillment across a broader supply chain, but no excess inventory of your at.
This channel of distribution offer significant future growth to the T. G. The dose with the significant size of this market combined with the giant leap forward in service speed and economic benefits offerings of the supply chain.
The T. G to go continues to grow and service platform to reach consumers quickly. We're now operating line fulfillment facility, including our first onto the N D. C opened in Nashville, Tennessee, and our new Phoenix, Arizona integrated distribution and fulfillment center.
With the addition of Phoenix, we are now operating five of our facility well, we integrated with our Delta group distribution centers. This is part.
The seamless supply of garments eliminate the significant amount of non value added cost and further leverages our fixed facility costs are fully.
Integrated geographically diverse fulfillment network and the strategic advantage to D. T. G to go and our customers are seeing the benefit.
During the quarter, we shipped of consumers in all 50 states and over a 130 countries worldwide.
We're already making plans to further expand our network in the future. We would anticipate there being more integrated facility within Delta distribution centers additional Ondemand D C locations as well as an international footprint for D. T G. The Doe, most likely targeting Canada and Europe.
Our customers continue to realize the benefits of the seamless supply chain of Delta apparel promise within the on demand model with BTG to go usage of Delta catalog blanks, reaching a new record of approximately 45 per cent utilization in the December 2020 quarter compared to 28 per cent in the prior year.
For quarter. This trend is promising as it creates a more efficient operations.
For the pharma cost for our costs.
Customers and lower working capital needs in the business.
Overall the T. G to go had notable accomplishments during the quarter in key areas that should pay dividends for the business in the future the pipeline.
The pipeline of new customers is strong and we are particularly excited about the expanding channels of distribution for digital credit.
Anticipate further investments being made in D. T. G to go as the year progresses with these investments focused on technology to expand service capability across sales channel and equipment and facilities to increase capacity and expand our network for the anticipated growth of the business.
I'll now move onto our Activewear division, which incorporates our delta catalog and private label businesses as well as the Sofia group.
We continue to see a strong recovery in our activewear business with year over year sales growth in our December quarter, overcoming the challenges caused by inventory constraints.
I wanted to remind everyone of the 15 week shut down of our off for manufacturing operations for Covid and the strong sales recovery as we progress through the back half of fiscal 2020, which with the achieved sales growth in our September quarter.
Left us with $31 million less of finished goods than a year ago to start fiscal 2021.
Of this reduction about 27 million was in the activewear business.
Thinking about this in and out once shipping business that turns of finished goods inventory slightly over two times a year the law.
Lower inventory levels at the start of the year created about a $17 million sales hurdle for us in the first quarter for more than overcome this hurdle and achieve of 1% sales growth of this business in the December quarter. It was quite remarkable.
We are seeing notable strength in the retail licensing channel as well as in our recently launched E retailer channel. We also saw year over year growth of about 9% and our private label business. The.
The customer diversification of our supply chain management and fulfillment business for major brands and retailers is serving us well and we are encouraged by the new programs. We have secured in the direct to retail channel and the future opportunities we see in the pipeline.
The elevated success retailers have seen with our quick turn fully stocked graphic tee displays gives us confidence we can expand this model with both of our existing partners and into new retailers.
Our Delta group integration strategies designed to foster sales growth and improved operating efficiencies are on schedule. The recently published <unk> 'twenty 'twenty, one Delta Activewear catalog that only features our delta product, including our more fashion forward. The platinum collection, but also for the first time includes our anti.
Sophie product line with.
With the inclusion of Sophie we've expanded our activewear and athleisure product categories with our military collection, including our famous Soes the Ranger Pany, our fundamentals in the essentials, including the iconic so the short and our core layers, which include the warm ups and other layering products.
We also highlight intensity by Sophie which focuses on outfitting the female athlete.
Complementing the Delta and Sophie brands, we provide our customers with a broad range of other product categories with nationally recognized brands.
As previously announced and to further leverage the one stop shop experience. We have merged our Delta catalog and Sophie sales customer service marketing merchandising and inventory planning teams to better position <unk> for growth and to reduce redundant costs.
During the December quarter, we began the transition of Sophie into our new Phoenix facility, which will now serve as both of these primary distribution Center. In addition to being a key delta catalog distribution location of BTG to go digital print and fulfillment center.
The point out that we will be incurring incremental costs in the March quarter as we transition of the distribution operations of Sophie cause of the Phoenix facility, having an estimated eight <unk> impact on EPS.
Although the transition comes as a drag on EPS during fiscal 'twenty and 'twenty. One we anticipate annual benefits from this initiative in the range of 12 to 15, beginning in fiscal 2022.
We successfully launched the first phase of therapies transition to the activewear ERP system in early January and anticipate completing all phases of the integration by the end of fiscal 'twenty and 'twenty one.
As the final piece of completed the Sophie brand will be fairly fully merged within the activewear operations, creating opportunities to focus on the growth of the brand while benefiting from significant operating efficiencies.
A critical in Greenville, the ingredient to our success in the Delta Group segment for the remainder of the year will be replenishing inventory level to meet the broad based demand we're seeing in the market.
The two hurricanes that made landfall in Honduras through what's another curve ball, but as we've seen with so many things in the top of our manufacturing leadership team and employee base snapshots of the play and handle the situation with confidence in the east.
We very quickly were off production back online and in total loss of less than two weeks of production you will see the $1 3 million impact of this disruption on our financials in the other expense line.
Our manufacturing and planning teams are focused on efficiently manufacturing and replenishing inventory levels and increasing capacity ultimately expecting for achieved all time record level production output in the back half of this fiscal year.
You'll recall with past increases and our manufacturing capacity the benefits of these expansions of abroad.
The higher outputs leverage our fixed cost of the facility, thereby lowering our overall product cost.
In addition, as part of the expansion it will be adding of equipment that will broaden the capability. We have the produce garments, thereby creating an even more flexible manufacturing platform. Our sales teams are excited about the new items they'll have next year to bring to the market.
The man for the Salt life brand remained strong during the fall season, resulting in a three four per cent growth for the December quarter compared to the prior year.
Consumer sort of for Salt life brand for direct to consumer channel, which grew more than 60% year over year in the quarter. In particular, we saw consumers continue to flock for salt life branded retail stores with notable strength coming from the stores located in drivable vacation destinations.
Sales of the retail doors reached the growth of over 150 per cent propel both by double digit comparable store sales growth as well as exceptional contributions from newer doors kind of opened in Boston, a thorough in Palm Beach Gardens, Florida.
New for this holiday shopping season, we also operated three temporary salt lifes pop up stores in select markets, giving us the ability to test the additional market, while also providing additional outlets to sell through current inventory.
We believe the Randy the branded retail experience is an important element of making the salt life brand real for many consumers and we plan to open the additional salt life retail stores in the back half of fiscal 2021.
Oh like enthusiasm also actively engaged with the brand for all online channels during the quarter.
We're seeing promising engagement metrics on Salt Lake Dot com, such as increased traffic duration and engagement and increase the average order values importantly over a third of the visitors to the site our new users.
Engagement of Salt life can see tumors was across all aspects of social media with 13% more followers on Facebook and 50% more Youtube subscribers compared to the prior year.
We also added over 150% more email subscribers during the December 2020 quarter than we added in the December 19 quarter.
We are proud of our marketing team's efforts to continue to engage with consumers for these channels and we're very encouraged by all of the consumer enthusiasm about living the salt life.
As we prepare for the forthcoming spring and summer season, we see broad based growth opportunities for the Salt life brand.
We will continue to engage with consumers online to grow E. Commerce sales will be opening additional branded retail doors in select markets and we'll continue to partner with our wholesale customers to expand the force base and enhance the salt life experienced within their doors.
As you can see we had a strong start to the year and believe the momentum will continue.
For a few more details on our financial results for the December quarter.
Overall, we delivered sales of $94 7 million, which was about 99 per cent of the prior year level with the Delta group segment down one 5%, partially offset by two three per cent growth in the Salt life Group segment.
Gross margins improved 70 basis points from the prior year, increasing to 21, 4% of net sales.
Gross margins expanded in both business segments, driven by favorable product mix, lower raw material costs and manufacturing efficiencies and process improvements within the Delta group segment, and a stronger mix of direct to consumer sales in the Salt life Group segment.
Selling general and administrative expenses decreased 2 million or 11, 3% from cost reductions implemented during the pandemic that have continued including lower personnel cost reduced travel expenses and a more digitally focused sales and marketing strategy.
Operating income for the quarter increased 16% to $3 1 million or 3.2 percentage of sales compared to $2 6 million or two eight per cent of sales in the prior year excluding.
Excluding the $1 3 million hurricane disruption cost adjusted operating income was $4 4 million of $4 seven per cent of sales an increase of $1 8 million or up 67 per cent from the prior year.
Net income for the December quarter was 0.9 million or 13 cents per diluted share consistent with the same period in the prior year.
Adjusting for the 15 cents per diluted share impact of hurricane related disruptions. Adjusted net income was 28 cents per diluted share a 115% improvement compared to the prior year.
With regards to our balance sheet and liquidity total inventory as of December 'twenty, 'twenty was $148 5 million down $48 8 million from a year ago.
The stronger than anticipated December quarter sales, along with the temporary hurricane disruption flow the normal seasonal build of inventory during the quarter.
We started the fiscal year with very low inventory levels and our inventory is now even lower as we head towards the spring selling season.
As previously discussed we're ramping up production at an accelerated pace and expect to free be producing at all time record levels in the back half of the year.
Total net debt increased $7 6 million from September 2022 of $129 8 million at December 2020, cash on hand, and availability under our U S revolving credit facility totaled $43 7 million at December <unk>.
We spent $6 9 million on capital expenditures during the first quarter of fiscal 2021 compared to the tune of half a million a year ago.
We expect capital expenditures in fiscal 2021 to be about $20 million and will be focused primarily on digital print expansion manufacturing equipment to expand capacity and broadened our capability additional salt life retail store openings distribution expansion of business systems and.
All of the advancements to enhance our operational efficiency.
Our better than expected first quarter performance positions us well to deliver against our goals for the year.
We now anticipate sales to be about flat with last year for the first half up from our prior expectation of sales declines in the mid single digits with inventory constraints being our biggest hurdle to achieving sales growth.
That being said, we have improved the cough buses to be successful operating with less inventory on hand, and this coupled with the accelerated ramp up in manufacturing should allow us to replenish inventory over time to service. The it didn't matter do we see in the marketplace and achieved sales growth in the back half of the of.
Our initiatives to achieve stronger gross margins and improved profitability are working and barring any shocks of the system, we should see sequential profitability improvements each quarter.
Let me now turn the call back to Bob for his final thoughts.
Yeah.
Thanks, Dan for some.
Or of our business is performing very well as we continue to ramp or the record levels of production to keep up with the strong demand that we have in our pipeline and the future opportunities we see on the horizon are.
Our first quarter results accelerating momentum income.
The balance sheet, which is stronger than ever that positioned us well to deliver against our goals for the fiscal year.
Our results continue to demonstrate the strength of our fully integrated and diversified business model the power of our salt life.
Lifestyle brands and our unique manufacturing capabilities.
Our sales marketing and operational teams have done in the outstanding job of pivoting our business to the channels of distribution less effect from the pandemic, while continuing to build a foundation to take advantage of future growth opportunities as disruptive channels rebuild to a more normal level of business.
Once again Delta apparel for all channels of distribution have served as well as historical business loans have been challenged.
As disruptive as the pandemic was we delivered on our form of sort of emerging as a stronger company well positioned for many years of profitable growth.
Thank you. We appreciate your continued interest in and support of Delta apparel, Operator, we'll now open up the call for questions.
Yeah.
And ladies and gentlemen, it's for do you have any questions. Please signal by pressing star one on your telephone keypad interest to make sure you have your mute function turned off the loves to receive that signal.
Again, the star one for any questions.
Cause for sports moments.
All right. The first from Telsey Advisory group, we have Dana Telsey.
Please go ahead.
Good afternoon, everyone.
Nice to see the progress that you're making a lot of pivoting the business during the during this time as.
As you think about supply chain and of the inventory levels, given what's happened out there and the constraints can you just frame it how how do you think of inventory of getting to where you need by when should that be and how do you think of margins until we get to that time period. Thank you.
Yeah.
Well I think we will be inventory constrained.
You know for the next nine months or so our best case would just you know normal market conditions are oh the industry.
The ships more in the spring and summer than it can produce and so we'd normally pull down the inventories and then rebuild them in the fall. So we will be operating we believe the full screen, but probably not catching up.
So it wasn't really the.
The next call.
So I think there's going to be a market constraints. You know there's you know outside of just what we produce in Central America and in this country Theres constraints of shipping from China and the other parts of Asia.
So for our type of apparel, we believe will be a relatively tight on inventory.
For a while but we learned from that and as debt was saying earlier learn how to turn our inventories more in service of our customers with lesser of a board.
Thank you and then any how is the hot topic program going and new customers for that business model.
Well the Ana as we mentioned on you know, we were able to true that customer and the other customers. Other retailers that are currently using our existing platform don't have their own all the man D C.
But utilizing our digital network that we have a we saw great fix out the as Bob mentioned on the units and that type of sales channel.
You know were four times as high as they were a year ago.
And so again, we think that that means that things are pivoting in that direction that they're seeing the benefits of this ondemand on supply chain that are out there and really have only for gone on that path.
We believe the future of this is just the beginning of it and it will continue to expand.
As more and more retailers get onboard and more and more products to get out there for delivery.
Thank you.
Yeah.
And then moving on from DB advisors all of it looks like next question will come from Bill for.
Hello, and good afternoon.
Yeah.
Can you hear me.
Yes, yes, we can good afternoon.
Okay, great congratulations on a great quarter. It seems like you guys are firing on all cylinders and the only issue is really a product out there. So just to give me a feel for for how strong. The demand is if you didn't have inventory constraints.
How much supply do you think the market.
In terms of growth in your revenue.
As currently out like how much are you under serving the market versus where it would be once you get up the full speed in terms of inventory.
Yeah.
Yeah.
Well, it's always hard to judge.
George that precisely.
But you know my estimation is that we would be you know of high single digits.
Particularly in our basic activewear business and I think the.
The important thing to realize about the there's still several channels of distribution that we normally participate in that or well all of their for pandemic levels, you know anywhere from <unk>.
40% to 70% so.
My Hat's really off to our sales and marketing people and partnered with our manufacture the people to not let it debt.
We ended the fee. It really go after these new channels of distribution that require different service levels of different ways of doing business and doing that quickly.
So our belief is it will keep the big pieces of that business, but we are still expecting some traditional channels that are well below their prior your levels to rebound as business gets back to a more normal place in this country.
Okay, and then also with Delta.
Has demand currently for the Delta to go product right.
So the debut of negotiation.
The answer of several large companies that are like a similar deal for the hot topic. How are those negotiations going or should we just assume debt you get from deals for geared up and all of the off somehow.
All of the communicated.
The other communicate that.
Yeah.
For the.
Yeah absolutely.
So you know as I mentioned you know we are currently working with other retailers out there in the market, they're currently participating utilizing our.
Fulfillment network and I think one thing people have to keep in mind is that the on demand D. C has that as an offering that we are and would be willing to put things in their own distribution centers, but as you can imagine with a network of nine fulfillment facilities strategically located across.
The country, there's a lot of benefit for the just simply using the network that we have and you know works for Enlink, good with that as well. So I think the announcements can come.
In the future, but as well as you can imagine.
Theres confidentiality or with certain ones of as well. So we have to respect that the good news is is that it isn't a ray of it is multiples of different retailers that we are servicing right now.
And I think that that broad base for us will continue to get to all of us get stronger as we go through the upcoming quarters.
Thank you and the final question before I jump back in the queue. If that's okay.
Is it what kind of growth that we are we're hoping for that you can fulfill in the back half of the.
In the back half of the year, Firstly and then secondly on the recent conference you had noted the near term the 56 million of EBITDA potential of the combined.
The business by near term what did you mean bad debt.
Six months to 12 months 12 to 18 months.
Yes.
So all of the I'll jump in.
The guys I'll jump in with a little bit on that and do keep in mind I mean, it is what we talk about growth in the back half you know when we get two of the June quarter. You know certainly that was the hardest hit quarter the cause.
Of the pandemic and then as you roll through the fourth quarter of the fourth quarter, we were able to have sales growth in that fourth quarter of last year. Some of that of course was the the the pent up of not selling during the June quarter. So you know their world.
Certainly forecasted to the growth compared to the 'twenty 'twenty year.
On the thought will get a little of kind of a little pocket of quarter to quarter there.
Taking a look at that as what we think both of those quarters, we'll be there historically strong quarters of the full fiscal year.
When we presented at the conference the and for those of you that that were not on back of that is on our website at Wow on debt you can take a look at that but that near term in that presentation.
It's really kind of focused in that kind of two to three year Mark would.
It would be probably the time line you know the different pieces of it come in at different times of anywhere you know 18 24 36 months is the the timeframe that we would be looking for that near term goals.
Okay. Thank you very much and congratulations again.
Thank you.
It looks like next question will come from willing management we.
We haven't Jamie Wilen.
Once again from Star Wars, the nice quarter and demonstration of all that.
It was the headwinds.
Couple of questions on <unk> and the Bill.
The auto when you talk about working with hot topic kind of looking at the from their perspective, the death of the volume, but you also mentioned the lowered their shipping costs, even though you were handling all of that for them how much does that impact.
The increased volume how much dosed all of the cash impact.
For the hot topics.
You know and in an overall you know I can't answer that but when you think about every package. You know you ship of package with a share in it I mean, you're probably on average talking about a $5 package. So the fact that now those packages instead of having an incremental $5 for every package.
The ship out of.
Now it's going in the same package as your other that that can add up quite significantly on over the course of the year to them.
And so I think that that's a big dollar benefit on again, coupled with a better consumer experience. They receive your package that you order on line altogether in one in one bag as opposed to them coming of different time, but it's just a better overall consumer experience.
So I think they are very very pleased.
With the path, we're on and I think it's just just beginning.
We just launched that right before holiday.
So lots more to come on that on and ultimately I think with other retailers.
The expanding you talked about the growth of the can choose to go.
Domestically and abroad.
You mentioned kind of in Europe.
International the debt.
And for integrated warehouse facilities.
When you look out for the for years.
How many fully integrated facilities would you see domestically and internationally.
The true broad scope of where you can be in it for years.
Okay.
Well I think there's a lot of when you're talking about international there's a lot of potential opportunities for us to bring both of our delta catalog goods over.
Internationally, along with our D. T G to go fulfillment of digital print and fulfillment facilities. So more to come on what that strategy will be but I think there's opportunities across the board to go internationally with a full integrated solution.
So some exciting things that can happen there and ultimately I would think in the U S. On the of the good news is that we have expansion capabilities within the for the nine facilities that we're currently operating in the ultimately I would see that we would have digital print and every distribution center.
That we have in the U S. So that every one was fully integrated eye for ultimately do the digital print on the Delta garments.
Okay, and then overseas as the digital printing industry.
As for one trend of the which the leases at versus where we were at the stage.
Yeah, I would say it is not as far as advanced as it is in the United States, but their growth rates are higher all of them and so I think it's certainly coming I think there's big opportunities for it.
Which is why again, we're going to take advantage of that in due course, I think that certainly would have been.
And we don't earlier had it not been for the pandemic and you know that you know for some things down, but I think you're in in short order, you'll see us moving in those directions.
And lastly on the cash side.
No we're just true.
The other way.
A significant percentage.
Will you be able to maintain some of that or for spectrum.
One time kind of a reduction in cost.
I'll start to creep up ahead of the U S. The literature.
Sure.
Sales volume increases.
Yeah, I would say certainly as we mentioned some of those costs are you know differences in the business I think some of our are here to stay and we will be able to keep them.
As I mentioned, we figured out ways to run our business, even more efficiently than we were.
Moving a lot of our marketing and sales strategies on.
More digitally and we already were doing a lot digitally but that continued migration of that on and I think a lot of that is here to stay now is there some incremental cost that ultimately will come back into the business of.
Yeah. So I think there are.
Some of the more traditional things just in the industry come back.
And you know more of the the country opens back up and different things like that but I do believe that overall, we have figured out a way.
Two to operate our business and continue to grow with overall lower SG&A costs.
Great job because at the time, so you got it thank you.
Thank you.
Once again folks star one for any further questions.
So it doesn't look like we have anything further from the audience at this point.
Okay, well. Thank you all for joining us today, and we look forward to of the new owner of second quarter results here in just a few months of a good day.
Okay.
Once again, ladies and gentlemen that does conclude our call for today. We do appreciate you joining us for me now disconnect.
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