Q2 2022 American Outdoor Brands Inc Earnings Call
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Good day, everyone and welcome to American Outdoor brands, Inc. Second quarter fiscal 2022 financial results Conference call. This.
Call is being recorded at this time I would like to turn the call over to Liz Sharp Vice President of Investor Relations for some information about today's call.
Thank you and good afternoon, our COO.
Comments today may contain predictions estimates and other forward looking statements. Our use of words like anticipate project estimate expect intend should indicate suggest believe and other similar expressions is intended to identify those forward looking statements.
Forward looking statements also include statements regarding our product development focus objectives strategies and vision.
Our strategic evolution, our market share and market demand for our products market and inventory conditions related to our products and in our industry in general and growth opportunities and trends.
Our forward looking statements represent our current judgment about the future and they are subject to various risks and uncertainties.
Risk factors and other considerations that could cause our actual results to be materially different are described in our securities filings.
You can find those documents as well as a replay of this call on our website at <unk> Dot com.
Today's call contains time sensitive information that is accurate only as of this time and we assume no obligation to update any forward looking statements our actual results.
<unk> could differ materially from our statements today.
I have a few important items to note about our comments on today's call first we reference certain non-GAAP financial measures are non-GAAP results exclude amortization of acquired intangible assets stock compensation transition costs, COVID-19 expenses technology implementation relate.
Third party interest income.
Other costs and the tax effect related to all of those adjustments.
The reconciliations of GAAP financial measures to non-GAAP financial measures, whether or not they are discussed on today's call can be found in our filings as well as today's earnings press release, which are posted on our website.
Also when we reference EPS, we're always referencing fully diluted EPS.
Joining us on today's call is Brian Murphy, President and CEO, and Andy former CFO and with that I will turn it over to Brian.
Thanks, Liz and thanks, everyone for joining us.
I am very pleased with our performance for the first half of fiscal 2022, we are in the midst of a growing outdoor market that is welcome new participants to the outdoors. We have a collection of authentic brands that continue to resonate with our core consumers we own a unique doc in a mock process that is organically created innovative brands and products and.
And we have built an operations team that has successfully navigated recent supply challenges to keep our products moving.
In addition, we have achieved key milestones and establishing our post spinoff standalone infrastructure.
Together these elements form a strong operation that will allow us to continue servicing our customers and delivering growth for the balance of fiscal 'twenty, two and for the long term.
With that let me share some details of our recent performance.
During our second fiscal quarter, our E Commerce net sales grew nearly 5% year over year and over 228% on a two year basis, including a meaningful increase in our direct to consumer business.
While our total net sales decline in the quarter. We believe this primarily reflects the timing of orders from our traditional channel customers and.
In our second quarter last year certain customers increase their orders to address depleted inventories as they reopen from COVID-19 related closures.
This year many of our largest customers indicated that they accelerated their orders into our first quarter to mitigate supply chain concerns.
These fluctuations in timing of our the reason we view our six month performance as a more meaningful comparison and the shorter term quarterly comparison.
For the first half of fiscal 2022, we delivered net sales growth of one 5% versus the year ago period, and net sales growth of over 62% versus the first half of fiscal 2020.
These results reflect our dedication to building authentic lifestyle brands that help consumers make the most out of the moments that matter.
If the markets, we serve fishing camping hunting shooting sports in the rugged outdoor lifestyle have all benefited from a new higher level of participation that began in our last fiscal year and continues to provide us with an expanded consumer base containing millions of new participants.
Not to mention our increased reach into adjacent markets with wholly new consumers, such as land management meat processing and home security.
We continue to identify opportunities within this expanded consumer base utilizing our brand lane structure, and our docket unlock strategy or.
Brian Lane's defender marksman Harvester and adventure organize our brands by consumer activity and provide us with an ideal competitive advantage for developing innovative new products year after year that turn consumers into long term advocates as we take our brands from niche to known.
Once the brand is dock into its appropriate brand lane, we begin to unlock its potential by leveraging the lanes resources, which include brand marketing creative product development sourcing and ecommerce.
Duncan on lock continues to fuel innovation drive future growth and support our objective to deliver a compound annual organic growth rate of 8% to 10% over the next four to five years.
During the second quarter, we benefited from a strong consumer preference for our brands across our portfolio, especially the hunting related brands and our Harvester brand Lane.
In anticipation of the fall hunting season.
This includes meet your maker, our internally developed direct to consumer brand of meat processing equipment.
Meet provides an outstanding case study of our dock and unlock process in action.
Launched in March of 2020 and sold exclusively in the direct to consumer channel meat products are winning over consumers at a very exciting pace.
In October <unk> achieved its first million dollar Mark a record it surpassed again in the month of November.
And by the end of November, including orders through Black Friday, and cyber Monday meet achieved trailing 12 month net sales of just over $6 million.
From a starting point of zero less than two years ago.
To sum it up we identified a consumer opportunity and the growing field to table movement.
A gap in our offering and a lack of appealing acquisition targets.
From there <unk> kind of locked led us to design build launch and take market share with an organically developed brand that has delivered growth of 414% in the past year alone.
In addition, we have identified additional new products under the <unk> brand that we're launching as we speak more on that next quarter.
Meat is an outstanding example of the strength that lives in investing our capital into organic growth opportunities made possible by Doc in a mark.
This ability to invest in ourselves as a key driver for our future growth I.
I see no reason that our meat brand cannot become a meaningful percentage of our revenue in the future and I see every reason for us to create exciting new brands in the future that have the same potential.
We had other new product developments in the quarter as well, resulting from our <unk> strategy.
Bubba, our fishing lifestyle brand known for its high quality angling equipment and apparel, which is situated in the adventurer brand Lane entered an entirely new product category by launching its newest product line the kitchen series.
Our collection of high end culinary knives designed to complement the water to plate lifestyle.
Borg are very popular lineup hunting gear engineered for the unknown resides in our harvester Brambling fog products often incorporate our proprietary technology and then September bog expanded its tripod family to include two new camera design patterns.
Bob also announced an expansion of its family of ground blinds to include a hay Bale blind design for open field hunting and a larger hub blind design for rifle crossbow compound bow hunters and spacious enough to accommodate multiple hunters at the same time.
Two exciting developments in our defender brand Lane included our Crimson trace brand, which introduced the <unk> series, a comprehensive family of 10, new rapid gaming sites in both Red and green illuminated options as well as micro compact and full sized platforms.
And lastly, our lockdown Brown, which offers connected solutions designed to protect high consequence, valuables rolled out the new Lockdown logic app.
Belt by our in House R&D team, which include App development resources.
The new App enhances the consumer experience unlocks new functionality and features and lays the foundation for future product launches in the Lockdown brand family.
Yeah.
Our customers tell us regularly that we are without a doubt the innovation leader within our product categories and in the second quarter, new products comprised over 25% of our revenue.
This innovation is the direct result of our dock and lock strategy and new products, resulting from this process drive our long term organic growth and generate healthy accretive and sustainable margins.
In fact, the strong margins we demonstrated in the second quarter are a direct reflection of this power and action.
In fiscal 2022, we will launch over 350, new products, surpassing our annual average.
New product launches will occur across all four of our brand lanes with the highest new product growth rate coming from the hunting related brands and our Harvester brand lane and the camping and fishing related brands and our adventurer brand Lane.
Turning to brand performance, we believe that brand growth in the quarter reflects the same timing fluctuations. We discussed earlier for that reason, we believe that here as well. The six month comparison is a more accurate assessment of performance.
For the six months of fiscal 'twenty to over half our brands deliver growth over the same period in fiscal 'twenty one.
Our top selling products within the six month period came from each of our four brand lanes, demonstrating the range of our brand portfolio as well as our diversity across multiple consumer activity driven markets.
We believe this diversity will serve us well as we continue to expand into larger addressable markets that have the ability to transcend near term secular trends.
In addition to providing diversity a number of our brands are highly complementary to one another.
Our brand lane structure combined with our E. Commerce platform allows us to identify and implement a number of cross marketing opportunities among those brands to drive growth.
For example, the consumers that purchase our bulk products are typically hunters.
It stands to reason that they will likely be interested in processing the meat they harvest on their homes.
So we saw cross marketing opportunity and during the second quarter, we utilized our e-commerce platform to reach out to our bog audience introducing them, perhaps for the first time to meet your maker meat processing equipment, enabling us to complete that field to table concept for our consumer while we expand our customer base.
We see a number of opportunities across our portfolio, where our highly complementary brands can work together in this fashion.
As you know our E Commerce platform is a key element in our strategy to place our brands wherever consumers decided to shop for them, whether online or in a physical retail store.
This approach is particularly important in our current environment when the impacts of Covid are dynamic and consumers alternate between in store shopping and online options are.
Our second quarter e-commerce growth demonstrates the positive impact of this strategy.
Clearly the investment we made long ago, and our websites continues to pay off.
Now turning to logistics, our teams here and in Asia again continue to successfully navigate supply chain constraints and port congestion issues.
Their work helped us achieve the strategic inventory build we have discussed on prior calls.
Inventory that is important to ensuring that our retailers and our own online storefronts are stocked for the hunting and holiday shopping seasons.
Particularly with our most popular products.
That inventory also supports the new product launches as I mentioned earlier.
With a robust new product pipeline in place.
Portfolio of authentic brands in hand, and an energized outdoor consumer market. We are excited about the future and we look forward to sharing our progress as we take our brands from niche to note.
With that I'll turn it over to Andy to discuss our financial results.
Thanks, Brian our performance year to date combined with our outlook for the second half of fiscal 2022 continues to support our long term strategy.
Net sales for Q2 were $78 million compared to $79 $1 million in the prior year, a decrease of 10, 5%.
We believe the decrease was primarily driven by the timing of orders from our traditional brick and mortar channels as certain customers accelerated their inventory purchases into our first fiscal quarter to mitigate their own supply chain risk.
In addition, we believe our second quarter last year reflected heightened demand driven by increased foot traffic at retailers in our traditional channel as a reopened from pandemic restrictions.
Despite the decline in our traditional channel sales during Q2 of this year our E. Commerce net sales grew nearly nearly 5% over second quarter of last year as Brian mentioned earlier.
Net sales for the first six months of fiscal 'twenty, two we're $131 5 million, which represents a one 5% increase over our fiscal 'twenty one.
And an increase of more than 62% over fiscal 2020.
Now turning to gross margins gross margins in the second quarter came in above our expectations at 46, 7% a reduction of just 20 basis points from last year.
Our operations team did a great job staying on top of various transportation options and cost, helping us to minimize the impact wherever possible.
GAAP operating expenses for the quarter were $27 $7 million, which is roughly flat compared to last year.
Within that number were decreases in our variable selling costs, resulting from reduced sales combined with lower website costs as we completed the launch of new web sites for each of our key brands in the year ago period.
Expenses also included a reduction in intangible asset amortization.
These decreases were offset by our planned increases relating to standalone G&A costs, such as infrastructure and insurance as well as increases in freight costs and advertising expense.
Non-GAAP operating expenses in the quarter were $22 7 million compared to $22 $5 million in Q2 of last year.
Non-GAAP operating expenses exclude intangible amortization stock compensation and certain nonrecurring expenses as they occur.
GAAP EPS for Q2 was 30 <unk> as compared with 52 last year and non-GAAP EPS for Q2 was 58 compared to <unk> 77 last year.
Our fiscal 'twenty two figures are based on a fully diluted share count of approximately $14 3 million shares.
Adjusted EBITDA for the quarter was $11 7 million at a margin of 16, 5%.
This compares to adjusted EBITDA of $15 $8 million or a margin of 19, 9% in the prior year.
Adjusted EBITDA for the first half of fiscal 2022 was $21 3 million or 16, 2%, which is in line with our expectations and in fact is above the high end of our guidance range for the full fiscal year.
Turning to the balance sheet and cash flow.
We ended the quarter with $32 6 million of cash and no borrowings on our line of credit.
The sequential decrease in our cash balance was driven largely by two items.
The first is the typical seasonal build in receivables we see at this time of year.
The second is our planned strategic investment in inventory, we've talked about in the past to mitigate supply chain risks.
Specifically, we've been working to build inventory in Q1, and Q2 of our high volume products as well as inventory to support a number of upcoming new product launches and our efforts here have been very successful.
The current challenges, we face from port congestion and container shortages are in line with what we expected and our team has done a great job as usual closely managing these issues on a daily basis.
In addition, we believe our planned pull forward of inventory purchases in Q1, and Q2 positions us well to continue servicing our customers through the second half of fiscal 'twenty two.
Going forward, we would expect inventory levels to decrease in the second half of the year as we fulfill demand for our products.
Our spending for Capex and patent cost of $1 8 million in Q2 included about $1 million for it infrastructure.
Structure and was consistent with our expectations.
We are still planning total capital expenditures for the full fiscal year of between $7 5 million and $8 5 million.
We've discussed previously that our spinoff last year included a transition services agreement with our former parent company that provides us with two years of support while we stand up our own independent platform by August of 2022.
In November we completed a major milestone in the project with our successful migration to our own independent it infrastructure.
This was an important and complex stepped in the project. So I applaud our team for leading it successfully and our employees for supporting the transition.
With that important accomplishment behind us we're preparing for the implementation of our ERP platform. Microsoft D 365, which is on track for go live next summer.
Our cost estimates for the it infrastructure project remain unchanged and we expect the total will be about $8 million over the course of fiscal 'twenty, two and 'twenty three.
In fiscal 'twenty, two we expect capex of about $3 $5 million and onetime operating expenses of about $1 6 million.
We also expect to record $1 $2 million of duplicative expenses in fiscal 'twenty two.
These are the cost of operating both our existing and new platforms in parallel during the system changeover period.
We will treat both the $1 $6 million and the $1 $2 million as technology implementation cost and G&A when calculating our non-GAAP operating expenses and adjusted EBITDA.
Back to the balance sheet, we ended Q2 with no outstanding bank debt and the full capacity available on our $50 million line of credit.
This facility provides an additional $15 million of availability under certain conditions.
Turning to our capital allocation strategy as we've stated since our spinoff organic growth remains our top priority.
As Brian detailed earlier in the call our ability to create brands internally such as meat.
That deliver purely organic growth and healthy gross margins is a unique benefit of our dock and unlock process and they merit our primary focus.
At the same time, we also believe that locating in acquiring tuck in brands that can benefit from docker and unlock can fuel our growth well beyond the 8% to 10% organic CAGR. We've established for the next few years.
For that reason, we continue to actively seek out attractive acquisition targets that will complement our current brand portfolio, while remaining disciplined in our focus on only those that meet our criteria.
In fact, we've come close on a few opportunities recently that ultimately didn't meet that criteria.
We expect the acquisition landscape will remain active well into calendar 2022, and we look forward to finding the right fit for our business.
We believe the strength of our balance sheet provides us with multiple options to effectively deploy our capital to help drive growth.
Our cash balance combined with our capacity on our line of credit provided us with almost $100 million of available capital as of October 31.
Looking ahead, we expect our normal seasonal cash bill to occur in the second half of the year further strengthening our balance sheet.
Our solid financial position enables us to execute on our capital allocation priorities, including investing in organic growth and potential acquisitions as well as opportunistically returning capital to our shareholders.
As a result, we are pleased to announce that our board has authorized a share repurchase program of up to $15 million of our common stock through December 2023.
Now turning to our guidance.
As we exited the second quarter, we were pleased to receive data from our retail partners, indicating that Pos trends for our products remains strong.
Based on our first half results combined with what we believe is the consumers' preference for our strong portfolio of brands and our current visibility into the second half of the year. We are narrowing our guidance range for fiscal year, 2022, which represents growth over fiscal year 2021.
We estimate that net sales for fiscal 'twenty, two will be in the range of $280 million to $285 million, which at the midpoint would represent growth of roughly 2% over the prior year and growth of nearly 69% over fiscal 2020.
With net sales in that range, we expect full year GAAP EPS in the range of $1 to $1 19.
And non-GAAP EPS in the range of $2 <unk>.
To $2 21.
Our expectation for adjusted EBITDA margins of between 15% and 16% for the full year remains unchanged.
Now for a bit more detail on the guidance.
Our full year outlook for fiscal 'twenty, two puts net sales growth during our second half at about 15% over the first half.
As we look out across Q3 and Q4, we would expect to see Q3 net sales slightly higher sequentially from Q2, followed by another slight sequential increase in Q4 as retailers restock after the holidays and we commenced several new product launches.
With regard to gross margin, we would expect to see gross margin percentages in the second half of fiscal 'twenty two fairly similar to our percentages in the second half of last year.
On the expense landscape a reminder, here that shot show and the <unk> show will take place in Q3.
In addition, Q3 will reflect our ongoing infrastructure and R&D investments.
Finally, we expect our effective tax rate will be approximately 25% for the balance of fiscal 'twenty, two and our fully diluted share count will be about $14 5 million shares.
With that operator, please open the call for questions from our analysts.
As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key again Thats star one on your telephone to ask a question. Please standby, while we compile the Q&A roster.
Our first question comes from the line of Eric Wold B.
B Riley Securities Your line is open.
Thank you Greg.
Afternoon, everybody.
A couple of questions I guess one.
Can you help us bridge.
Expectations of moving from.
<unk> percent growth rate this year to.
To the 8% to 10% range over the next coming years against.
It can be a pretty tough comparison on a two year stack and how dependent is that growth rate on M&A.
So hey, Eric This is Brian So I would tell you that it's not dependent upon M&A at all that just purely based on our organic growth rate.
And what drives that is really comes down to new products and new distribution. So if you recall new products represent for us anywhere between 25% and I think it's been as high as 35% of.
Of our total net sales.
We have an incredibly robust new product pipeline.
If you look at this year alone most of those new products are coming out in Q4, so part of that in Q3, but the majority are coming out in Q4 kind of giving us a nice tailwind headed into next year.
And we've got some big plans for our brands that we'll be excited to share and honestly at the at those higher asps that we've talked about so innovative new products higher asps.
So we feel very comfortable with the range, we've set out there.
Got it and then.
Given kind of what you saw from our retailers in terms of.
Ordering.
Earlier in the year.
Where are you where are you right now retail shelves and your own E. Commerce in terms of inventories versus where you'd like them to be are they are they perfectly in line with inventory levels.
Respect and want or just still left that you can be sure on that.
Sure. This is Bryan again.
The kind of the.
The first part of your question when we say that our customers accelerated purchases that is like from conversations we've done top to tops and we do those every quarter to make sure. We know how we can best support our biggest customers. So we heard that across the board that they were looking to mitigate supply chain challenges.
And then in terms of kind of restocking some of those.
We feel like there is in certain areas continued sort of hand to mouth, depending on what that is harvester and our harvester. Lionsgate example, in Q2, we saw that there was an elevated hunting season and participation over last year, which kept our replenishment just chugging along to make sure that we could.
Keep up with those service levels. So to me that was more hand to mouth.
But overall I think mostly those those retailers that pulled forward those purchases. We're also gearing up for the holidays and wanted to make sure they had sufficient inventory.
So it's a mix between the two.
Got it thanks, Brian.
Yep.
Thank you. Our next question comes from Scott Stemmer of CL King.
<unk> please.
Thanks for taking my call guys.
Hey, Scott.
You talked about in the release and your prepared remarks about how.
POS is looking pretty good right now are we talking.
On a year over year basis at least as we stand right now in the third quarter.
Yes, I mean coming out of Q2 Pos was strong it was positive over last year. So we are seeing.
The positive trends in Pos.
Okay.
And could you talk about is there any promotional activity going on I would imagine probably not but just wanted to see as we get into a little bit more of a normalized atmosphere.
What youre seeing.
Yes, Scott this is Andy great question. So.
My comments I talked about gross margins in the second half of the year part of that is.
Compared to last year.
Part of that is planned holiday promotions, not a significant amount, but part of it is.
But now but nothing out of line from historically this is all sort of just happens every year.
Got it.
Okay. That's all I have for now thank you.
Yes, Thanks Scott.
Thank you. Our next question comes from John Kernan of Cowen Your line is open.
Yes. This is John <unk> on for John Kernan.
Building off of Eric's earlier question can you parse out expectations for how youre thinking traditional versus E com.
Contribute to your organic 8% to 10% growth target going forward. Thank you.
Sure Yeah. That's a great question this is Brian.
Very very high level I would expect that our E. Commerce business continues to grow relative to our overall company overall business.
And that E Commerce number if you recall is direct to consumer and we just gave you a snapshot a small snapshot of what one of the brands. The one that's exclusively.
Direct to consumer meet how that's performing so you can begin to see at least one brand how thats impacting our numbers.
So we do see direct to consumer continuing to rise.
I still believe attendants infancy.
But over time that.
Has ranged depending on the quarter and coming out of Covid and going back into Covid and et cetera.
Range from call. It 20, 25% up to as much as 50%, 50% feels a little high in the near term, but I could see us continuing to drift up to something around that range longer term as direct to consumer continues to be.
Become a larger share of our revenues.
Great. Thank you.
Just touching a little bit more on the product pipeline going forward I know you've touched on a couple of product areas already but are there any in particular.
I am pretty excited about going forward as we think about the back half of the year that we should keep our eyes on.
Yes, great questions, Brian again.
So we did talk about the new rods Bubba routes that were coming out with and those will be shipping in our Q4.
I would definitely keep a lookout for those we every every piece of feedback we've heard from our retailers as they are very excited about it it sounds like we're going to get great placement of those.
And in many stores, even like a store within a store concept, which is which is really need for that brand as we're trying to tell that water to plate lifestyle and really that's a good example, too I think we have talked about in times past.
Partnering with retailers or customers.
Who can help us tell those stories over a longer period of time that just gives us the benefit when we come out with these new products to be able to tell that story and then you can begin to do what youre going to see in Q4, which is the store within a store concept across several retailers. So we're really excited about that one we also have.
New products plan for <unk>, Ust Xrayed Wheeler.
Honestly most of that falls on what I'd refer to internally as the right side of the wheel, which would be our harvest or an adventurer brands.
Great. Thank you for the color, we will definitely keep an eye out for those that's it for me. Thank you.
Yes. Thank you thanks, Tim.
Thank you. Our next question comes from Mark Smith.
Blake Street capital your line is open.
Hi, guys, you talked a little bit about it but can you just dig into inventory as we look at retail or distributors, how you and your comfort level with the inventory we've seen it maybe build too much in an instant.
Or are there any places maybe where are there holes in retail doesn't have what they need.
Yes market. This is Bryan I think it's a little bit of a mixed bag I think we saw the retailers stock up pretty heavily ahead of the holiday seasons.
And I.
For them.
I think the open to buy is going to be limited for a little while and that goes for all consumer products, but I think as they begin to sell down as they took that risk out of their pipeline will begin to see that coming back up like I mentioned earlier, the Pos trends are very positive.
So the product is selling through.
A doubt so I think as they continue to chip away at their inventory levels you'd begin to see a more normalized buying pattern from those retailers, but.
But I think they are continuing to look at other things too you've got potentially this next summer longshoremen strike that.
People have been talking about you've got some other factors, obviously Chinese new year. So we're keeping an eye on those as well, but I would I would not be surprised if theres going to be some.
Some of this type of behavior from these retailers for the next few quarters as they look to mitigate supply chain risks.
Okay, and does that fit in with a little bit of the sequential kind of cadence of sales as you expect April sales to sequentially would be a little stronger than January as some of that just the flow through of that inventory.
Yes, Mark this is Andy that's exactly right.
Now we're seeing it.
Perfect and then what are you guys seen as we look at the M&A.
M&A environment anything that's changed out there.
Yes. This is Brian it continues to move along nicely.
And you made a few comments about.
How about us getting close on a few deals and we were we were at the altar.
On a few different opportunities.
To be honest with you one of my mentors said some of the best deals are the ones that you don't do.
And we want to be very careful that these are the right deals for us and our shareholders.
But we do remain actively engaged with several other targets as we speak.
We're excited about those so it remains robust.
Okay.
The last one for me you called out hunting category kind of been strong here as we look at the marksman Lane.
Some of this falling into the defender lane as well how do you help a consumer evolved from let's say, a new firearm owner to a marksman if that makes sense.
Yes.
That's a great question. This is Brian again, so when I made mention to the ways. Our brands are collaborating with each other and we called out.
Bug and meet so Crimson trace in Caldwell is a fantastic example that gets exactly what you are asking so youll see collaborations between those two brands as we kind of migrate those $8 million to $10 million of firearm owners up through to shooting sports and.
What when you go to the range what are the types of things that youre going to need hearing an eye protection and steel targets.
So we certainly help the consumer with that journey no different than we did at Borg and meet and sort of finalizing that field to table movement, it's really about that from the counter to the to the range movement with those two brands.
Excellent great. Thank you guys.
Yes. Thank you.
Thank you at this time I would like to turn the call back over to Brian Murphy for closing remarks, Sir.
Thank you operator before we close please note that we'll be attending shot show in January excited to be exhibiting at this important event for the first time in two years, we hope to see some of you. There. Thank you everyone for joining US today, we wish you a happy and healthy holiday season, and we look forward to speaking with you again next quarter.
This concludes today's conference call. Thank you for participating you may now disconnect.
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