Q1 2021 Container Store Group Inc Earnings Call
[music].
Greetings and welcome to the container store's first quarter 2021earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
And what should require operator assistance during the conference. Please press star zero on yourself on keypad. As a reminder, this conference is being recorded I would now like to turn the conference over to your host Caitlin Churchill from Investor Relations.
Good afternoon, everyone and thanks for joining us today for the container store its first quarter of fiscal year 2021earnings results conference call.
And they're still keeps Malhotra, Chief Executive Officer, and Jeff Miller, Chief Financial Officer After institution and Jeff have made their formal remarks, we will open the call to questions.
Before we begin I need to remind you that certain comments made during this call regarding our plans and strategies expectations regarding liquidity and goals, our anticipated financial performance and our plans and our response to COVID-19, and the potential impact of COVID-19 on our business may constitute forward looking statements and are made pursuant to.
And within the meaning of the safe Harbor provision of the.
Securities Litigation Reform Act of 1995.
Such forward looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements.
Important factors are referred to in the container store and press release issued today and in our annual report on form 10-K filed with the SEC on June 30, 'twenty 'twenty 1.
Forward looking statements made today are as of the date of this call and the container store does not undertake any obligation to update the forward looking statements.
Finally, the speakers may refer to certain adjusted or non-GAAP financial measures on this call a reconciliation schedule on the non-GAAP financial measures.
The most directly comparable GAAP measures is also available in the container store its press release issued today.
A copy of today's press release, and Investor Day may be obtained by visiting the Investor Relations page of the website at Www Dot container store Dot com.
I will now turn the call on participation to teach and thank.
Thank you Caitlin and thank you all for joining our call today.
I'll first discuss the highlights of our fiscal Q1 performance followed by details on our growth initiatives.
Jeff will then review on financial results and more depth and discuss our outlook.
We're just thrilled with our first quarter performance, where we delivered profitability for the first time and over a decade with record first quarter sales.
This achievement is really worth repeating we delivered profitability for the very first time and over a decade during our first fiscal quarter, which has traditionally been and lossmaking quarter due to lower sales and the inability to leverage on our fixed expenses.
For the quarter, we achieved consolidated net sales of $245.3 million growing nearly 62 per cent compared to last year and 17% over first quarter 2019.
Our record sales combined with strong gross margins and disciplined expense management drove a 10, 8% operating profit margin.
And adjusted EPS of <unk>, 36 cents and improvement of 68 cents compared to last year and 44 cents of.
The first quarter 2019.
We also saw continued growth of our pop loyalty program with total members enrolled at the end of Q1 of almost $10.3 million members signifying a total increase of approximately 15% on a year over year basis.
And as a reminder, about 75 per cent of our sales are linked to our pop program.
My better mining this rich data, we can offer our customers more personalized and targeted interactions, which we believe will increase their frequency and spend with us.
And it's important to note we achieved record breaking results in Q1, all while pressure testing our strategic growth initiatives.
For example, we materially changed our promotional cadence and our approach to our custom closet and general merchandise categories and Q1.
As previously mentioned on our last call, we see considerable growth opportunities and selling premium closet spaces over $2000, but we have minimal share it.
That and we executed our first Standalone Vera event, which attracted a healthy percentage of new customers to the container store.
We sold a variety of custom spaces that average $6000 per space ranging from traditional closet spaces to entertainment.
This is my room and even basement spaces.
Moreover, the aver event also produced a halo effect and growing full price sales and all other closet lines Elfa classic Elfa decor and Lora.
I'm pleased to say the success of the Advair event validated the growth, we see from premium closet spaces, and our ability to capture it.
Additionally, as mentioned before a small percentage of our general merchandise customers are also custom closet customers and we see growth opportunities and converting these customers to custom closet.
Our recent alpha for the wind event demonstrated our ability to drive growth within our existing customer base.
This event, we wanted customers to purchasing additional alpha starter set and spaces for a better overall discount.
We are pleased to share 1 third of the spaces sold during the event were to first time custom closet customers of which more than 2 thirds came from existing general merchandise customers.
Additionally, over 60 per cent of the sales during the event came from customers purchasing 3 or more alpha started sets and spaces, and we generated $6 million and alpha component sales, which were not even part of the event.
Lastly, we are delighted with the customer response, we received to our front of store transformation.
Our friendship store presentation focused exclusively on curated products at full price supported with compelling before and after a customer testimonial graphics.
And the front of store presentation provided customers with an opportunity to learn and discover and engage with key merchandise offerings from our kitchen and closet category.
The bold changes, we made and our custom closet promotions and friendship store transformation. So.
To drive both sales as well as gross margin expansion during the first quarter.
Another area of change during Q1 was on in store and online customer experience.
We positively enhanced our in store customer experience through the addition of greta's and selling specialist.
As a reminder, this was funded by reducing our non selling payroll hours.
Through our partnership with medallion and we were able to learn that customers who agreed in our assisted in store experienced a significantly higher than average ticket and net promoter score as compared to those that were not.
To date, our in store and net promoter score as tracked by medallion is that a 77, which again is higher than many other known retailers.
Based on these positive results, we will now be zoning specialists and key areas of the store to help assist and engage with our customers.
From an online perspective during Q1, we made some modest improvements to the site navigation with the goal and making it easier for customers to find what they were looking for.
We also made significant improvements from a shipping perspective with 96 per cent of all direct to customer orders being shipped within 48 hours of order placement.
The changes implemented in Q1 combined with the dedicated work of our stores distribution centers and support teams fueled our outstanding Q1 performance.
As we look forward, we are optimistic that our actions will continue to support our goal of driving continued growth.
A quick update now on our previously communicated strategic initiatives.
We are making good progress on our first initiative deepening our relationship with our customers by winning product and invoking emotion through branding.
In July we launched our newest line of sustainable products.
And it wouldn't collection. This incredibly lightweight collection is made up Halloween or would 1 of the fastest growing hardwood trees and the world.
The line celebrates the home and its passion from multi functional solutions to maximize spaces throughout the home by storing everything from toys pantry items and kitchen utensils.
We are equally thrilled about moving condos upcoming Netflix series, sparking joy available for subscribers on August 31st.
The show will include transformations of spaces beyond the home.
And celebrate the show customers can expect to see our exclusive sustainable Con marine product line merchandise at the front of our stores and late August.
From closet to kitchen to office we.
It'll help customers find the right cornbury solution for their need.
And the spirit of listening to our customers. We are also using the strength of our private label assortment known for its outstanding durability quality and value to launch new exclusive products that our customers are craving.
For example, and late Q1, we launched the highly anticipated extra large drop from shoebox.
Shoebox holds up to a size 16 shoe enables you to see the shoes or shoe box store inside and it's proudly made in the USA.
This product was requested by a sneak ahead fan base and also delivered on their ask for a stronger door hinge.
Our exclusive dropped from products will be prominently displayed in our stores beginning in August.
Another example of our private label strength is the introduction of the container store Trashcans and chrome and the cabinet rollout.
Those private label products are already delighting customers and positively impacting our margins.
While it was 50% of our sales come from private label products. There was still untapped growth opportunity to deliver unique solutions to meet our customers' needs.
When it comes to branding, we just completed work without agency partner preacher to move our brand purpose from a functional too and emotional state.
I'm delighted to share our company's purpose is to help transform the lives of our customers through the power of organization.
Without new brand purpose, we intend to bring awareness to the enriching benefits of and organized life.
We have seen first hand, the transformation of our customers' lives wafer Exempting example, decluttering can truly lead to distressing.
And we've challenged ourselves to in light and new customers to the power of organization, while still delivering for those customers who are already aware of the life transforming benefits of organization.
As it relates to our second strategic priority expanding our reach we are still in the early phases of the strategy, but we are seeing momentum and business to business sales after bringing the program in house and organized and get under 1 central leader.
We have secured new contracts with private luxury residences and high rises senior living communities and mixed use development.
Additionally, we are re envisioning, our trade program, which kicked off with our sponsorship of the 2021 American Society of Interior designers conference. We are pleased with the attention we have put on our b to B and trade programs, which are beginning to show positive growth side.
Also this quarter, we opened a new smaller format store and Annapolis, Maryland, and early results are exceeding our expectations.
The customer response has been outstanding from opening day.
Recently, we announced plans to open and even smaller store at 12000 square feet, and Colorado Springs, Colorado, and 2020.2.
We're excited about the demand a vast doors and different market.
We not only see great growth opportunities and new market, but also expansion opportunities and existing market with a smaller footprint store using a hub and spoke model.
While we are still early in the process of determining and refining our store growth plans, including a possible store within store concept, we remain focused on optimizing the productivity of our existing store base.
Finally, I will conclude when and update on priority number 3 strengthening our capabilities.
With the recent hiring of I see I O. We have put in place a robust technical roadmap to enable and support our growth plans.
For example, we are actively working on technology that would allow us to ship from store further approved improving upon our last 3.
We have it and taken advantage of managing our inventory on an enterprise wide level.
We're also working on a mobile point of sale solution.
And this will allow us to dramatically improved checkout speed will make our online assortment available in store and will support our even smaller store format concept.
Additionally, we are diligently working on enhancing our customer e-commerce experience through our fastest site engaging content more relevant site searches and recommendations and additional payment options.
These enhancements are on top of the improvements and fulfillment transparency through our new partnership with Nava, which was launched in July on the heels on launching after pay on line.
Our partnership with after pay is already attracting new customers and delivering a higher than average ticket both in store and online.
I'll now turn the call over to Jeff to discuss our financial results in more detail.
Thank you so dish and good afternoon, everyone.
First I'd like to reiterate how pleased we are to have delivered the first profitable Q1 and over a decade with record setting sales.
For the first quarter.
Consolidated net sales were $245.3 million, reflecting a year over year increase of 61, 7% and an increase of $17.1 per cent compared to the first quarter of fiscal 19.
As a reminder, due to the COVID-19 pandemic, we lost approximately 20% of our operating days during the first quarter of fiscal 2020 as a result of a complete store closures and addition to lost operating hours due to modified schedules and capacity limitations and our stores.
By segment net sales for the container store retail business were $228.7 million, a 64, 1% increase compared to $139.4 million last year and.
And a 17, 2% increase compared to $195.1 million and the first quarter of fiscal 2019.
Custom closet sales were up $58.6 per cent compared to fiscal 2020 and contributed 29, 1% of the 64, 1% year over year increase and net sales.
Other product categories were up 69, 5% and Q1 and contributed the remaining 35% of our net sales increased year over year.
Compared to Q1 fiscal 2019 custom closets were up 22, 6% and other product categories were up 12, 7%.
As a reminder, the disruption from COVID-19, spurred a strong acceleration and our online channel and Q1 and fiscal 2020.
And Q1 and fiscal 2020, 1 we saw a shift back to the brick and mortar stores as expected with that said for the first quarter of fiscal 2021, our online channel decreased 57% year over year.
However, when compared to the first quarter of fiscal 2019, our online channel increased by $44.1 per cent include.
Including curbside pickup our website generated sales in Q1 were down 45, 3% from last year, but up 61, 6% when compared to the first quarter of fiscal 2019.
Website generated sales represented a total of 22, 5% of Tcs net sales in Q1 of fiscal 2020.1.
Third to 67, 5% and Q1 last year, and 16, 3% and Q1 and fiscal 2019, we.
We ended the quarter with online orders taken but not ship totaling approximately $2.4 million compared to $4.8 million and the prior year period.
We also had unearned revenue of $21.6 million this year versus $14.6 million last year, driven by a large increase and custom closet orders taken but not yet installed associated with the highly successful avera and alpha events that cities you mentioned.
Elfa third party net sales of $16.6 million increased 34, 8% compared to the first quarter of fiscal 2020.
Excluding the impact of foreign currency translation Elfa third party net sales increased 17, 2% year over year and were consistent with the first quarter of fiscal 2019.
From a profitability standpoint, our consolidated gross margin for Q1 was 59, 6% compared to 51, 6% last year and 57, 2% and the first quarter of fiscal 2019.
By segment gross margin at the container store improved 840 basis points compared to last year, primarily due to the previously mentioned.
Sales shift back into our brick and mortar stores, which resulted in less direct to consumer shipping costs. This year combined with less promotional activity and partially offset by mix.
Compared to the first quarter of fiscal 2019, the container store gross margin improved 80 basis points, primarily due to less promotional activity.
Elfa gross margin decreased 610 basis points compared to last year, primarily due to higher direct material costs and unfavorable customer mix.
Elfa gross margin and the first quarter of fiscal 2020, 1 is slightly improved as compared to the first quarter of fiscal 2019.
Consolidated SG&A dollars increased 27, 7% to $110.1 million compared to $86.3 million and Q1 last year. The increase in SG&A dollars is reflective of the restoration of certain expenses that were temporarily suspended and fiscal 2020 as part of our COVID-19 pandemic.
Management strategy.
As a percentage of sales SG&A decreased approximately 200 basis points year over year to 44, 9% per.
Primarily due to the leverage of occupancy payroll marketing and other costs on higher sales during the quarter.
Additionally, as compared to the first quarter of 2019, SG&A decreased 710 basis points as a percentage of sales primarily driven by.
By fixed cost leverage associated with higher sales.
Our net interest expense and the first quarter of fiscal 2020.1.
Decreased 35, 6% to $3.2 million from $4.9 million and the prior year due to lower principal balance on our senior secured term loan facility and pure borrowings on our revolver.
The effective tax rate for the quarter was 24, 3% compared to 29, 3% and the last and the first quarter last year.
The decrease and the effective tax rate is primarily due to the impact of permanent and discrete items on higher pretax income and the first quarter of fiscal 2021.
Net income for the quarter on a GAAP basis was $17.7 million or 35 cents per diluted share as compared to a GAAP net loss of $16.7 million or 34 cents per diluted share and the first quarter of last year.
Adjusted net income was $18.2 million or <unk> 36 cents per diluted share as compared to last year's adjusted net loss of $15.5 million or 32 cents per diluted share.
And Q1 and 2019, we reported a loss per share of 8 cents. So we have and increased adjusted EPS by over 5 times and this 2 year time period.
Our adjusted EBITDA increased over 7 times to $33.5 million and the first quarter of this year compared to $4.5 million and Q1 last year and an increase of over threefold compared to $10.6 million and Q1.2019.
Turning to our balance sheet, we ended the quarter with $10.5 million and cash Hunter.
$166.3 million and net debt and total liquidity, including availability on our revolving credit facilities of approximately $119.8 million. Our current leverage ratio is less than 1 times.
We ended the quarter with consolidated inventory up 32, 8% cash.
Keep in mind that last year <unk> taken actions to cut inventory levels in order to preserve capital. This year, we have increased the unit levels to support strong sales trends and to account for a longer lead times, resulting from supply chain disruption.
And like other retailers, we continue to experience freight and shipping cost headwinds along with higher commodity prices, we have and plan to continue employing multiple methods to help mitigate the impacts of higher costs, which include vendor negotiations and actively managing our supply chain, along with adjusting our retail pricing and promotional cadence.
<unk>.
We used $3.8 million and free cash flow during the quarter compared to last year, when we generated $21.7 million.
As a reminder, due to the seasonality of our business, we typically use cash over the first 3 quarters and generate our free cash flow primarily in Q4.
Last year, we focused on preserving cash and the first quarter of fiscal 2020 due to the uncertainty related to the pandemic, including the just mentioned inventory management actions as well as deferring almost $12 million and cash lease payments to future periods.
On that note, we paid down approximately $2.4 million of the deferred cash lease payments and the first quarter of fiscal 2020, 1 and the outstanding balance as of July 3.2021 was $2.2 million, which will be paid over the remainder of fiscal 2021.
Now for our outlook.
We expect Q2 consolidated sales growth as compared to last year to be approximately 4%.
EPS and the second quarter is expected to be approximately 28 cents.
The expected sales growth and Q2 amounts to a 9% increase as compared to the second quarter of fiscal 2019, and and and and expected EPS improvement of over 20 <unk> over that same time period.
Consistent with our approach on the last call, we're not providing full year guidance. However, given the outperformance in Q1, we are sharing and updated scenario for sales growth and resulting associated margin outcomes and.
And a scenario where sales increases are in the mid single digits compared to last year. We would expect 50 to 100 basis points of operating margin contraction and fiscal 'twenty, 1 compared to last year the.
And the expected operating margin contraction is related to higher SG&A in terms of dollars and as a percentage of sales compared to fiscal 2020.
We still expect year over year gross margin pressure and each of the remaining quarters in fiscal 2021, given the freight and shipping cost headwinds along with higher commodity prices.
However, given the magnitude of our first quarter gross margin outperformance no longer expect a gross margin decline on a full year basis and this mid single digit sales growth scenarios.
On the SG&A side, we are restoring certain expenses that were temporarily pull back and fiscal 2020 as part of our pandemic management strategies, such as reinstated 401k match and merit increases.
In addition, our planned marketing cadence will also contribute to an expected increase and the second half SG&A dollars and associated deleverage as compared to the first half of fiscal 2020.1.
And this mid single digit sales growth scenario, we expect overall second half fiscal 2020, 1 SG&A dollars to be largely consistent with the second half of fiscal 2020. However.
However, given the currently planned quarterly cadence of our spend and the second half we expect to see increases in Q3, SG&A dollar year over year and slight declines in Q4.
We expect total capital expenditures for the year to be approximately $47 million.
Additionally, we expect interest expense to be approximately $14 million and our effective tax rate be approximately 30%.
I'll now pass it back to <unk> for closing remarks.
Thank you Jeff and.
In closing we are thrilled with this record start to fiscal 2020.1 more.
More importantly, I am so proud of our team and the energy passion and discipline with which they are executing on our strategic growth priorities. Our customers are already noticing the bold changes, we are making and are responding very favorably towards them.
While we are in the early stages on a path to $2 billion and sales. We are pleased with the progress we are making.
We look forward to the continued momentum and our business as we deepen our relationship with customers and expand our reach and strengthen our capabilities to make the container store the best version of itself.
This concludes our prepared remarks, I'll now turn the call over to the operator to open the lines for questions.
Thank you.
We will now be conducting a question and answer session. If you'd like to ask a question. Please press star 1 on your telephone keypad and a confirmation tone will indicate your line is and the Q you.
You May press Star 2 if you would like to remove your question from the queue.
And for participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys, 1 moment, please while we poll for questions.
Our first question is from Steven Forbes with Guggenheim Securities. Please proceed.
Good evening.
And so dish you briefly mentioned the growth growth initiatives right. During the prepared remarks, but I'm curious if you can provide some additional context around the productivity initiatives right. So since there are sort of first on the agenda here.
We look at the store transformation that you've discussed and then also greater sellers and zoning specialists and.
Any color on you know what sort of how many stores are going to be touched this year, how many stores will be operating with that new sort of employee model as we think about the potential impact right across the footprint here.
Hey, Steve Thank you for that question yeah.
Yeah listen I would say.
I'm proud of the fact that are we continuing to focus on driving productivity of existing stores as you well noted.
And we look to do it really and a couple of ways..1 is focusing on product, whether that's debt front of store presentation, which will.
Be impacted across all of the fleet of stores. So that is something we've rolled out and it's something you can actually go into our stores and see today and.
And we continue to also focus on our private label business as I mentioned, whether it be the extra large drop from shoe box or our introduction of Trashcans chrome on the cabinet things. Those are also available across the fleet of our stores and when it comes to even our sustainability source product.
At 10% of our Skus and that's also across the fleet of our stores as well.
You know when you think about what we're doing from an air of excitement point of view from an in store experience and a new breed of program was launched and initially with a few stores as we are testing out the program and now it's rolled out across the entire fleet. What we are looking to do as we move forward now is actually have.
Especially it's been zoned and key areas of the store. So that's a program that has not yet rolled out, but we will be rolling out shortly and what we continue to see quite frankly is each of those areas, whether it's the focus on our product.
And the attention we put on in store experiences has really helped us deliver on improvement both on conversion and our average ticket and our NPS scores as I mentioned we ended.
Q1 at 77, and that's a measure that we're very proud of.
And then just a quick follow up given the planned opening on a smaller footprint store and 2022.
Have you have you thought about are determined.
When when you expect to sort of conclude on the right format and and the anticipated cadence of unit growth going forward.
Is that sort of within the next 12 months 24 months is there any sort of a defined timeframe.
Our internal goal around concluding that.
Yeah, and listen and we are definitely actively working through what our expansion plans look like both in new markets, where we see a tremendous amount of demand as well as on our existing markets.
Which is why we're testing a smaller format format store, so that we could put them put forth the hub and spoke model.
We're still running through what that modeling could look like as I mentioned previously we've had and new Vice President of real estate and is actively working at our expansion plans and not to mention a potential shop within shops concept as well. So it's all in the works.
And unfortunately, you just need to be a bit more patient with us as we work through that but I think it will be coming shortly.
Okay.
Best of luck and stay safe.
Thank you you too.
Thank you. Our next question is from Tami Zakaria with JP Morgan. Please proceed.
Hi, Thank you so much for taking my questions and.
So my first question and there on the second quarter outlook.
And I think and in your call and forgive me, if I'm I misheard, but I think and your call I heard you say a custom closets had about 22 million on sales that were booked but not delivered so are you expecting all of those.
Unearned revenue to be recognized and the second quarter and if so that's like 9% of growth over last year's second quarters versus your guide of 4%. So just trying to understand how do you get to that 4% guide for the quarter given you have on on.
And revenue coming in.
Hey, Jamie this is Jeff. Thank you, yes, so we do have.
Some orders taken but not installed at the end of Q1 similar to like we typically do and we would expect to have orders at the end of Q2 as well just based on certain promotional cadence that we may be having so and just take all of it.
From Q1 and drop it to zero.
Yes.
We always carry a balance basically deferred sales.
Got it got it okay. So so it's not like all of it flows through and the second quarter.
Right well.
Correct.
Got it Okay and then my other question is I think your gross margin.
Average this quarter was very interested and and you spoke about Laura promotions benefiting debt. So I'm. Just curious is it was there any special campaign that you Didnt repeat.
And this year versus last year or was it just overall promotional management and fewer discounts and stuff like that.
Yeah. Okay. I mean, we were very pleased with the gross margin performance for Q1, and it's really twofold I mentioned, the return of our customer back to the brick and mortar store on a year over year basis. If you remember last year, we experienced.
Higher percentage of our sales.
2 with online and online sales direct to consumer.
So certainly the shipping costs that we incurred last year versus this year benefited our margin. This year. The second thing is as you mentioned the promotional cadence on a year over year basis last year, we are and the process.
Of preserving cash and reducing inventory levels, and we had a number of promotional and much more promotional items out and Q1 last year versus this year and in fact this year.
And the designs were new to container store I mean, the <unk> SL, we'd never done a sale like that and actually lifted at a halo effect on.
Full price closet spaces. So while they have airline was on was on a promotional rate the elfa classic elfa decor, and the layer and lines were not on on promotion and they were sold at full price. So we benefited from that and then the alpha.
When the same thing.
<unk> the more they bought the better discount they received and so they benefited the more they bought but which means instead of selling the full and Ah.
Last year, where we may have had alpha on sale for 25% off across the board.
Our customers this year had to buy more and more space and show the customers about less actually paid garner a higher and higher margins.
Got it and I said, there was a higher ticket.
Purchase this this year versus last year.
Yeah.
Higher ticket.
Yeah and.
And so they were incentivized to.
And by more to unveil a discount that made the difference.
That's correct.
Got it okay, great. Thank you so much.
Mhm.
Thank you. Our next question is from Kate Mcshane with Goldman Sachs Goldman Sachs. Please proceed.
Hi, good afternoon, and thanks for taking my question I just had a quick question around marketing and the second half I Wonder if you could maybe repeat your comment.
And why is.
That looks like and the back part of the year in terms of dollar spend and how it compares to maybe 2019.
And just specifically what are some of the initiatives around marketing.
Okay. Okay.
Sure the marketing spend for the scenario that I outlined.
And I was talking about SG&A expenses on the second half of the year and specifically I was talking.
Debt to total dollar spent on SG&A and the second half will be very similar to what we did dollar wise and fiscal 2020, and where I think I got a little more detail what from a cadence a cadence standpoint within the second half.
SG&A dollars will actually increase and Q3 related to marketing 1 of the items being related to marketing activities in Q3.
Versus dollars being slightly down on a year over year and Q4 and.
And so T spoke to some of our new.
Purpose and branding.
And.
Not only that it's also Q3 and the start of our annual Elfa sale and it's traditionally a heavier weighted from a marketing perspective.
Thank you.
Thank you any other questions Kate.
I believe there are no further questions. So I would like to turn it on a call back to management for any further closing remarks.
Okay.
Well I just wanted to say thank you for joining us today and for your interest and the container store have a great evening.
This concludes today's conference you may disconnect. Your lines at this time. Thank you very much for your participation and have a great day.