Q4 2022 Barnes & Noble Education Inc Earnings Call

Good morning and welcome to the band naval education earnings call at this time for opening remarks and introductions, I'd like to turn the call over to Andy mililleroboy, Vice President, corporate finance and Investor Relations. Please go aheadgood morning and welcome to our fiscal 2022 fourth quarter and year end earnings call. Joining us today? Our Mike qb CEO .

Good morning and welcome to the BN naval education earnings call at this time. Opening remarks and introductions I'd like to turn the call over to Andy. militpoy Vice President corporate finance and Investor Relations Please go aheadgood morning and welcome to our fiscal 2022 fourth quarter in year end. Earnings call joining us today are Mike qub ceotom Danny CFO .

Jonathan Shar, Executive Vice President bna retail and President farnsble college.

David Henderson, President of MBS, and David NIKE, President of dsss.

Before we begin the call, I would like to remind you that the statements we make on today's call are covered by the safe harbor disclaimer contained in our press release and public documents.

The contents of this call are the property of barginable education and are not for rebroadcast or use.

By any other party without prior written consent of Barn's Noble education.

During this call we will make forward-looking statements with predictions, projections and other statements about future events.

Speaker 1: These statements are based upon current expectations and assumptions that are subject to risks and uncertainties, including those contained in our press release and public filings with the Securities and Exchange Commission.

The company disclaims any obligation to update any forward-looking statements that may be made or discussed during the call.

Please note that we will be referring to slides during Tom's financial review. Portion of the earnings call.

Speaker 1: For those of you joining their webcast. You should see the sides as part of the webcast.

For those joining viaphone, you could access the slides on our corporate website at Investor vnet com under the events and Presentations section.

And now I'll turn the call over to Mike qb.

hes Sandy, and good morning everyone.

As we entered into fiscal 2022, we were relatively optimistic that high vaccamation rates coupled with strong vaccine efficacy would help curb the spread of COVID-19 and return most schools to a traditional on-campus environment for learning, social activities and events.

Unfortunately, both of all and spring semesters were disrupted by different variants of the virus.

Further affecting our performance. Higher education continued to experience enrollment declines.

According to the national student Clearinghouse research center.

Undergraduate enrollment declined 5%. This thing as compared to a year ago and, even more startling, undergraduate student body is now 9%, or nearly one point four million students smaller than before the pandemic.

Enrollment declined 5%. This thing as compared to a year ago and, even more startling, younundergraduate student body is now 9%, or nearly one point four million students smaller than before the pandemic, further exacerbating these trends.

Based on a recent NACS faculty watch report.

Speaker 2: Course material sales have also been diminished. Dto faculty assigning fewer course materials for their classes.

On average, faculty adopted four point W materials for three point eight courses, versus six point ow materials in 2020.

Despite these headwinds.

Speaker 2: We are highly encouraged by the progress that we've made against our key strategic initiatives in fiscal' 22. that include.

Expanding the footprint of our inclusive access offerings.

Growing our general merchandise business to our partnership with Fanatics and Lids and growing our subscriber base for our digital student solutions offerings.

As we continue to focus on supporting student success viaour institutional partnerships, we're constantly examining the best ways to meet students where they are on their academic journey.

Our key initiatives are directly aligned with improving student outcomes through access.

Affordability and achievement, which is why they are resonating as strongly as they are in the marketplace.

Additionally, first day by horse and first day complete, provides schools with a solution to reverse the long-term declines in course material sales.

In fiscal' 22, our inclusive access offerings contributed to a 2% increase in comparable course material sales, completely offsetting the significant industry headwinds and representing the first time course material sales grew in over five years.

We believe this is a significant inflection point and validation of our strategic transformation.

pmc- the first day by course and first day complete- are innovative course material delivery models that ensure students have access to all of their course materials on or before the first day of Class, ensuring that there are no gaps in learning while providing the time-saving convenience of having all of their course materials bundled and delired to them through a contier style service.

Based on theies that we've conducted, 83% of students fealth the program that helped them be better prepared academically and that it had a positive impact on their classroom success, and over 73% it helped them achieve better grades.

With these perspectives in mind, it's not surprising that our inclusive access offerings are very attractive to our campus partners.

During fiscal' 22, our first day, complete program grew to 76 stores representing approximately 38 thousand hundred graduate students, with revenue growing more than five cents over the prior year to $106 million.

For the upcoming fall term, 112 of our campus stores are committed to utilize first days complete, representing undergraduate enrollment of approximately 547 thousand stits.

As Tom will highlight further, when we look at our first day complete schools that utilize the program during fiscal' 22, they experienced a 67% increase in total course material sales as compared to less than 1% for non-thursday fromcomplete schools, and an 83% increase in year-over-year total course material gross margin dollars, versus 6% for non-sec schools.

Beyond our inclusive access offerings, we also see a great opportunity to grow our logo and emblematic sales for our partnership with Fanatics Lids.

Speaker 2: We made significant progress with this new partnership throughout fiscal 22. as students return to campus for the fall term of the 2021 to two thousand and 22 academic year, they experienced an expanded and enhanced logo and embleomatic product assortment within our stores, benefiting from our partnership with Lids.

For LO shopping online. We integrated the Fanatics experience on our website throughout fiscal' 22, significantly enhanced in the online user experience for logo and embleomatic products.

As a result of these initiatives, during fiscal 22 our gross comparable general merchandise sales increase 76%, which included an 85% increase of our logo and embleommatic product sales.

With our in-paap product offerings. Fiscal' 22 was another outstanding year in both gross and net new business wins.

Speaker 2: And the third year in a row of over $1 million in gross sales and new business wins.

Furthermore, we have been intensely focused on enhancing our store-level economics, which encompasses both winning profitable new business and increasing profitability within the existing store footprint through our inclusive access offerings.

We believe that vnc's offerings and compelling value proposition facilitates the student academic journey and drives improved student outcomes, while also supporting and enhancing the brand of the institutions that we serve.

Our wholesale business continueed to be impacted by supply constraints from the lack of used book inventory available for sales.

Speaker 2: Resulting from the disruption to the traditional oncampus buyback activity over the last two years, as well as lower overall demand due to declining enrollments and the transition to digital course materials.

Speaker 2: Fiscal 20 to the wholesale revenue declined 32%, while EBITDA declined by $14.8 million to three point eight million.

esss continued its growth trajectory in fiscal 2020 -two.

Revenue grew over 30% on a year-on-year basis, with barleby revenue growing 40% to 13 million and student brands revenue growing 25% to twenty-two million.

We are continuing to strengthen our offerings and make investments to provide a hyperpersonalized and differentiated user experience, driven by data insights that further support and enable student' academic success.

Speaker 2: In the springg of fiscal year 22 we launched our institutional product and signed Del gatto community college as our first institutional partner.

We're continuing to develop institutional capabilities and are leveraging our relationshipi with institutions or programs that want to provide targeted academic support for their students.

Speaker 2: We're very encouraged by the early feedback we are hearing and are laser-focused on unlocking the opportunity to scale the barley institutional business.

Speaker 2: As we look out to fiscal 2023. while we do expect certain challenges to resist, we expect a significant improvement in our business over the last few years.

As Tom will discuss in greater detail. Our results within the retail segment are expected to improve significantly or fiscal 2022. our wholesale business will continue to be pressured by inventory constraints and inflationary pressures, and DSS is expected to continue to grow revenue while simultaneously investing in its future growth.

Speaker 2: Despite the tremendous amount of change that's occurred over the last two years, we can say with confidence that much of the value of the ecolege education is still rooted in its core elements, where in-person learning and social experiences remain extremely valuable for students and schools.

We're excited by the progress we've made to date on our key initiatives and see substantial upside ahead.

As we looked at fiscal 23 and beyond, we expect our key strategic initiatives center on growlling course material sales through our inclive access offerings.

Growing our general merchandise business through our partnership with finmananci Lids and scaling our digital business to drive earnings, growth and shareholder returns.

And now I'll turn it over to Tom, who will provide a financial review as well as a comprehensive discussion on the changes that we've experienced within our retail business and the performance of our inclusive access offerings.

Thanks Mike, and good morning everyone.

As Andy mentioned earlier. Please note that I will be referring to slides in our financial review presentation which are available on our corporate website this morning. I'll start with a brief overview of our fiscal 22 results.

And then share insights on the transformation within our core material business.

And why we are so excited by the results. We've experienced with our inclusive access offerings first day at first a complete.

Before we dive into the financial review, I want to point out that we restated our fiscal year 2021 results by $8 million, as we identified certain out-of-period adjustments.

Related primarily to the recognition of an income tax benefit related to the recording of an additional deferred tax valuation allowance totaling approximately seven a million dollars, and restructuring and other charges related to sever's costs totaling approximately a half a million dollars for the 13 and 52 weeks ended may first 2021.

It is very important to note that this restatement did not impact any of our non-GAAP EBITDA figures we typically review, or our net cash flows.

Now let's begin the financial review.

Speaker 2: Our fiscal 2022 fourth quarter and year-end periods consist of 13 weeks and 52 weeks respectively, ended on April thirtieth 2022.

All comparisons will be to the respect fiscal 2021 periods, unless otherwise noted.

Speaker 2: Total sales for the quarter were 260.8 million, compared with 222.8 million in the prior year.

Sales benefited from the significant improvement in our retail segment as compared to the prior year period.

On a gross comparable store basis. Retail sales increased 33%, comprised of a 4% increase in cocourse material sales and the 63% increase in our general merchandise business.

Our textbook sales benefited from our rapidly growing first-day offerings.

Speaker 2: Which collectively grew over 150% to 35.1 million during the quarter.

Speaker 2: While our general merchandise business benefited from more students returning to campus, the resumption of social activities and from our partnership with Fanatics and Lids.

dsss sales increased 16% to nine point seven million, while wholesale sales were nearly flat with the prior year period.

Selling and administrative expenses increased four point three million over the prior year, primarily due to higher store payroll associated with SRE openings in the current year, which were temporarily closed due to COVID-19 in the prior year, as well as higher investments in our dsss business.

Consolidated non-GAAP adjusted EBITDA proved by 25.2 million, to a loss of six point two million.

Now let's look at fiscal 22 as a whole.

For the full year, total sales increased 97.5 million, again benefiting from the rapid growth of our inclusive access models, coupled with more students returning to campus and the greater resumption of on-campus social activities.

First Day, by course, and first a complete revenue grew 91% to two hundred and thirty-four million.

Offsetting the negative macro effects of lower enrollments and fewer course materials being adopted.

Further breaking them apart. First Day complete revenue increased 451% to 106.1 million, while our first day, by Co revenue increased 24% to 128.1 million.

Benefiting from this growth. Our retail gross comparable store sales increased 20% for the year, with comparable textbook sales growing 2% and gross comparable general merchandise sales growing 76.1 percentmuch like the fourth quarter. Selling and administrative expenses increased 45.2 million, primarily due to higher store payroll associated with store reopenings and higher investments in our DSS business.

Consolidated non-GAAP adjusted EBITDA improved 60.8 million to a loss of four point eight million.

As we look to fiscal' 23, we expect to see significant improvement in our retail business being driven by new- first a complete- implementations, growth within our general merchandise business, benefiting from greater onto-campus traffic and new business wins.

We expect the challenges within our wholesale business to persist, including less used book inventory and higher inflationary pressures on wages and freight.

As a result, we do not see any significant improvement of fiscal' twenty-two.

We expect dsss EBITDA to be near fiscal 22 levels as we continue to grow revenue and invest in the product enhancements.

On a consolidated basis, we expect fiscal 23 adjusted EBITDA to be in a range of three million to Forty million.

Now I'd like to take some time to review some of the significant changes that we've experienced in our core materials business over the last few years and to have a power of our inclusive access. Models are turning the tide on the negative long-term enrollment trend impacting the broader industry.

Let's begin by taking a look at our core material sales over the last few years.

Since 2019, our course material sales have been affected by declining suating enrollment, fewer course material being adopted in the transition to lower priced and lower margin digital materials, all of which were further exacerbated by the lower round campus traffic due to COVID-19.

The implementation of remote and hybrid learning models significantly accelerated the adoption of digital course materials.

Since 2019, isel course materials grew from 11% of our overall course material saled on a dollar basis to 35% in fiscal' twenty-two and.

To offset the broader industry challenges and the course material sales decline, we developed our inclusive access models which, in addition to ensuring all students are equipped for their courseses on the first day of classalso significantly increases course material sales on those campuses by capturing a greater share of students.

four perspective. Under the traditional model, approximately one-third of students purchased their course materials through the campus bookstore.

Based on our studies, we believe another third buy their materials elsewhere and the last third foregrow their materials altogether.

On first date. Complete is adopted by an institution which includes all classes and providide students with all the their required course materials in both physical and digital Form.

Our sell-through rate increases to approximately 80%.

It is important to note, depending on how the program is implemented, that at certain schools the program includes an opt-out option for students and in some cases, certain programs are excluded from the offering.

Under first day, which is when digital course material are adopted by a faculty member for a single course, our sell-through rate increases to approximately 98%.

We've already begun to see the benefits of our inclusive access offerings, which drove an increase in our course material sales, despite loan enrollments. In the most recent academic year, our total course material sales increased 7% in fiscal' 22, benefiting from the growth of our inclusive access models.

As of fiscal' 22, our inclusive access models account for 28% of our cocourse material sales, as compared to just 7% just two years ago.

We expect these programs to continue to gain traction and continue their rapid growth in the years ahead.

Many of our institutional partners recognize the benefit of our first day complete offering, which has led to rapid adoption of the program.

Since the fall of 21 we grew the number of stores utilizing the program from 12 stores to seventy-six and.

First a complete revenue grew over five X from 19 million to hundred and six million over the same period.

As Mike highlighted, we have commitments from 112 campus stores, with total undergraduate enrollment of approximately five hundred and forty-seven thousand, and.

Speaker 2: To utilize first a complete for the upcoming fall semester.

As a reminder, under the first a complete program we built a school on a per credit hour fee basis based on the actual student credit hours for the term, minus students who opt out.

Speaker 2: To further support the growth of our first-day complete initiative and finance the shift in our working capital needs.

We entered into a $3 million term loan credit agreement with Lids and vital source on June seventh. In addition to supporting the rapid growth of our inclusive access offerings, we believe this also demonstrates our partner support of our strategic initiatives.

Comparing the stores that are adopted first, a complete, to those other still utilizing the traditional model, there is a tremendous course material revenue and gross profit variance driven by the significant higher cocourse material sell-through rates.

Stores that utilize the program experienced a 67% increase in total course material sales, as compared to less than a 1% for non-dc schools.

Speaker 2: And an 83% increase in year-over-year total course materials. Gross margin dollars versus 6% for nonftdc schools.

To further highlight the massive impact of our first day complete offering in isolating the 62 stores that adopted ftdc during fiscal' twenty-twothe revenue from that cohort increased 90% from 61 million in fiscal' 21 to hundred 16 million in fiscal' twenty-two.

And their year-over-year gross profit more than doubled from 16 million to thirty-seven million.

At our Investor Day presentation a year ago, we outlined our key strategic initiatives that are centered on growing adoptions of our inclusive access models to grow textbook sales.

Speaker 2: Accelerating our general merchandise business through our Fanatics and lead's partnership.

Growing subscribers within our dsss business.

Speaker 2: And as a result of these initiatives, and increase our value proposition for our campus partners, grow their number of schools we served.

We have demonstrated the power that our first aate complete offering can have on coursere material sales. Our fourth quarter logo and emblematic sales were the highest in the company's history and DSS grew their subscriber count to over four hundred thousand and.

We are excited to share these early proof points with you that highlight the impact that these initiatives are having on our business.

We expect our impact to continue to grow and help mitigate the broader industry headwinds and challenges within our wholesale business.

Speaker 2: We look forward to keeping you apprised of our progress.

And now we'll open the call for questions operator. Please provide instructions for those interested in asking a question.

Thank you. If you'd like to a question, Please ress St followwarded by the number one on your telephone ke pads. Now, if you change your mind and wish to withdraw your question from the queue, please press star for goodbye two we ask that when preparing to ask your question, Please be sure that your device is unmuted locally.

Our first question today comes from Ryan McDonald with Needham Ryan, Please go ahead.

Good morning everyone. Thanks you're taking my questionions. Appreciate the additional color on the first day of first day complete data as well. Maybe starting with that question around those product offering, you reported 106 million a first day complete revenue. In 128 million of just first day course where, when you look at the opportunity to add incremental campus stores or universities over time, how much of that 128 million do you think can be converted to first day complete all the time?

Yes RY, and it's Jonathan, thanks to the question. We do have campuses that we converted, the first a complete, that had robust first day by course programs, but then we also had some that had no first day at all. So I think we'll continue to see that trend over time as we're scaling. Are the number of implementations: first day complete, which for this fall we have commitments for one hundred and twelve.

Stores and that represent 547, approximately 500 or 47 thousand in undergraduate world, and so think we'll continue to see that trend over time, holding a half stores that, that zero per stay, by course, that transition, and we'll see sortres that have robust programs can, like we've seen in the past.

That's helpful color. And then when you think about the variables that also go into sort of the first day complete may revenue calculation, actin rates obviously sound very strong. I think you said 98%. What? What trends are you seeing in terms of one on the credit hour side for students? And then to pricing, and I think at the analyst you regadinally talked about $25 per credit hour. I think we're seeing some University's comment: $20. Maybe that's driven by the shift to digital, but but just would love your thoughts on what you're seeing in terms of that mix of price for credit hour and the number of credit hours students are taking.

Yes in terms of in terms of the pricing, we provided the loust ER de just to give direction at the time and we do it on a like, do and how we support our institutions on a very one one-to-one, each institution a little bit different. We actually price individually based on sort of the overall credit hour mix and weighted out average of the book list. So it really does very, pretty widely, but I think that it's in line with our expectations and where we're at and the pricing relates also the cost. So those two things are in lock step when we're looking at.

Change and often does change each year for each individual partner because it is so customized and we do a lot of work making sure that that is the right price for that right student in the overall weighted average mix of the course list, the volist that facly select and that's per if every year that gets locked in and set. So it's sort of adjust with the adjusting both cost and mix of books that are used at an individual campus.

arilyappreci, the color of Jonathan, and then and then maybe just last one Mike for you, maybe stepping back broadly. I know a lot of the discussion foks from the investment communities been sort of this trajectory and working back towards prepandemic levels. When you think about adjusted EBITDA, as you look into the fall and maybe broadly into fiscal' 23, what would you say are sort of the gating factors to getting back towards those levels fully? When you think about sort of the mix of what we're seeing more broadly in enrollments versus the supply chain headwinds that we're experiencing as well.

Yes I think that's something we think about all the time I think that com touched on quite a bit in his comments. But in terms of getting back to preco if you look at the Investor Day presentation I think the number you would land that it's like 75 to $8 million something like that one of the big factors. In that is really the change in the wholesale EBITDA that's occurred because of lack of supply. vieuse. Book also greater demand in digital which is is driving our first day business what wholesale for prospective purposes. They generated 35 million of adjusted.

Improve in essence is what we've said it. It puts more obviously more weiting on the improvement that we expect in our wigest core business, the retail business, which is why we spent some much time talking about it today and showing- and now that we have- if this would be your 0.2, really the first year of scale on our per day complete business, we can show the cohboard analysis compared to the prior year can also show the impact that's coming cle in the financialsand if you look at the increase in GAAP revenue and you look at the as increase in GAAP margin.

Gas sales are up 7% or 97 million, but gap growth margins is up 39% or hundred six million and some of that has to do with the netting of fflcs revenues but a lot of it has to do with the fact that our margin dollars are going up substantially, as Slide demonstrate, because of: first they complete and the more we penetrate, first they complete and the more we improve and home the partnership, the ffllc, and generate those person productsy ield that will. And then obviously the gross of DSS, which is kudos to student brand, to turn that around, a David growing DS nicely.

Thanks right.

Our next question comes from Alex periment with Craig Helen. Alex, your line is open.

guysthank you taking my question. You wanted to unpack the guidance a little bit more. You've got first LY complete, starting to generate a pretty meaningful share revenue now and growing very nicely. And it sounds like general merchandise's performing at record levels right now, given the Fanatics and Lids partnership, and yet you know we're still looking for you to thought to be down pretty significantly from precoed level. Can you talk a lot about a little bit about kind of numerically, buckeket by buket, where that's coming from, their an expectation, that enrollment.

andin speaking to the decline in wholesale EBITDA.

Which is really the last full year pre pandemic to fiscal 2019, when wholesale generated and contributed $35 million of EBITDA C consolidated number versus three point five million this year. So you can do that math at a ty million dollar decline wholesale EBITDA and we're guiding to 30 to 40. if we're Perry pass Su at the same level for wholesale EBITDA this year were 2019 we D essentially ebitdthe a precot level. Now we're not obviously counting on that, as we said in our Tom seven his comments, and we also set the outlook.

We expect wholesale not to improve significantly. We expect the efs to be pretty much where it was this year because we're continuing to invest in that business and grow. Grow our new institutional product and the product itself. Improve the product itself.

So a lot of the growth we expect to come from from retail and in terms, in terms of the headwinds, we try to describe what the enrollment figures are, the difference between prepandemic even 2020, when I think I said that the no number of students, undergraduate students down se like nin, 9% and 0%. I think it said So. The beauty of first day complete is that it think ourselves through, as timem was demonstrating in slides, in retail, from something like 30%, what we think should be between 8- 90% and that what we're seeing today.

We've adjohn in the team to put in some some new thought that where we can manage the opt out of Birthday complete more ourselves and leaving it to the schools which should help drive the the opt out rate down or other words drive off the sell through rate. Get it closer to 90%. So that's what we're really focused on is in driving the retail EBITDA all the invest DX but they still are going to throw off five the EBITDA this year as a wholesale. But when you look at corporate services.

Corporate services has been fairly, fairly flat over the last several years. We expect that to continue. Most of corporate services who have moad into through the retail function because that's a large business. So retail: we're expecting significant growth in retail not just this year but going forward over the next couple of years as, as we expect wholesale to do better in wholesales, real strategic value, as we've said before, is as a fulfillment engine into our first day complete product and really they're really kind of the last substantive wholesale use book company that's FL.

So that is a strategic advantage you've seen the figures that Tom put up about a conversion of physical to digital but there's still over 50% of the course where is in physical format. So it wholesale and MBS played a very important function. Mbs also is manages our virtual product delivery and also doess a lot of other things for the retail business like customer care and demand forecasting and working closely with our retail book retail group on managing physical book demand forecasting and ful fulfillment. So.

Trying to unpack the rest of it. It really gets into expenses, I think like a frase: the impact of inflation, all those things we're trying to anticipate in our guidance and John than the team are actually taking some steps to to adjust how we charge for shipping and pray and trying to be smart about that as we can, but it's one of the reasons we have a range in our guidance and inflation and the impact of inflation are are getting everybody. But I think that we're anticipate all that, the guidance that we can.

Okay that's really helpfulthank you and then hope LY get to touch on new business and new contact opportunities for new bookstores. I mean, how does that rank for you in terms of your priority for capital and time when you compare that to the opportunity to keep growing first day complete and invest in the digital business? How much of a priority are going after new bookstore wins over the next few years?

idon' a really really great question. I think that we're being very careful. How we alloccare capital. Many of the new stores that we're looking at go hand in glove with the first a complete strategy. If we're not consisting as they go on perfectday complete the first year that makes sense then in many cases. It's year two We're not deploying a lot of capital in the new stores. We just openened five new stores and in notre nameme in March and those capital costs were cfunded by our great partners at atics and Lids and.

Other than that? We're not. We have some maintenance capital might type of thing, but because of, because of the, the shift in our model which is really focused on firstthday complete from a course ware perspective and then the Fanatics fls partnership from the GM perspective, we're we're being very careful how we allocate capital. We do want to allocate capital to df to keep that growing and competitive because that's important to our strategy: the bunding of our digital self-study suite of services into our firstthday complete offering.

It's something that David and his team, working with John in retail, are very, very focused on and we think to return on invested capital is there to warrant.

Allocation of capital to DS.

But we're not interested in really adding a lot of new stores, just to add new stores that we're carrying out stores, pruning stores could speak that we think should be on SEC, that are not going there, and we'll probably see a big increase in that. What I would fall out of the bottom part of our store portfolio as we headed into end of 23 and twenty-four.

Really have you. Thank you very much.

Yes I mean. The the only thing I would add to that is that, because of the product, of a differentiated product offerings that we have through emblematic clothing and gifts, to the enhanced product assortment and user experience, both in-store, online through with, and Fanatics, as well as the first state complete offerings that we have, there is significant demand for's. We don't serve to work with us, and so we have been very successful in in.

Transitioning both self-operated stores and stores operated by other vendors to us, and I think it's the third year in a row of over one million in gross sales in new business wins.

And whileall, we're going to continue to work with campus, bring new campus on. We're going to do it in a very fcfully responsible way, as Mike said, but there's still a lot of demand because of the, the differentiation in our product offering, in the value our at, especially for campuses that we want a partnership with us, to have to work with us to support their key gold and objectives and their key priorities, which I think we've been able to demonstrate that we can do so. I think there's a lot of exciting new business to be add out there and we're working hard of the school, but just in a slightly different way.

Speaker 3: As a reminder for any further questions, please press star foed by wonandering your telephone keyippads now.

At this time. We have no further questions, sir Andy, I'll hand back to you. To conclude.

Great thanks Emily, and thank you all for joining us on today's call and your continued interest in bme. Please note: our next scheduled financial release will be our fiscal 2023 first quarter earnings release in September . Have a good day everyone.

Thank you for joining our call today. This concludes today's event, and you may now disconnect your lines.

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