Q2 2023 Boqii Holding Ltd Earnings Call
[music].
Yeah.
Good day, ladies and gentlemen.
Thank you for standing by and welcome to evoke is fiscal 2023 first half earnings conference call.
Currently all participants are in listen only mode.
Later, we will conduct a question and answer session and instructions will follow at that time.
As a reminder, we are recording today's call.
If you have any objections you may disconnect at this time.
Now I will turn the call over to Oh, both who's head of Investor Relations Bell.
Well. Thank you all three chair.
Morning, everyone before the conference starts I need to explain DOCSIS eye on corn seed at home and my Cat is sake.
So there may be some voices and I hope you could understand it.
Okay and welcome to board. She is basically 10 to 23 first half earnings conference call. Joining us today are Ms. Lisa song Co C. U N CFO , Mr loyal day hour and I shall AP and AR me a lot of our head of Investor Relations.
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Yeah, She's our new age I'm sure that I can really say on Dallas, Austin being alcohol, especially a whole showing that actually in Egypt.
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Sure.
Oh, They released results earlier today. The press release is available on the company's IR website at IR Doc what she dotcom as well as from Newswire services with many of the call will be available on the site today.
That engine sales outlets, just anything fireball easy from golf Cleat tackles, the arawak that I, Oh boy, she dotcom, well talk or England tool she ensures hashi.
So hold you'll have laid off but its all you wish all timetables to I don't want that.
Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995.
Forward looking statements involve inherent risks and uncertainties.
As such the company's actual results may be materially different from the expectations expressed today.
Information regarding these and other risks and uncertainties are included in the company's public filings with the M. D C.
The company does not assume any obligation to update any forward looking statement, except as required under applicable law.
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It seems that you go through sound Lake, Washington, Valuate, all way to tease out the hotel again dongle because they feel that he also holds the jamba turned down real cool goodness in conjunction trust that you.
Please note that certain financial measures, we use on this call such as non-GAAP net loss non-GAAP net loss margin EBITDA and EBITDA margin are expressed on a non-GAAP basis, our GAAP results and reconciliations of GAAP to non-GAAP measures can be found in our earnings press release.
So when she has haynesville even city, Ohio, we shall she owned them most years, how would you be all noncash increased non-GAAP .
It would be that we'd be the only really she.
non-GAAP. This you should find him Yokohama My God. They used to do cool you pick up in non got Belgium, Tucana counsel Suzanne called human call.
Also please be reminded that unless otherwise stated all figures mentioned during the conference call on the Chinese RMB.
Cause I had plenty of forming you'll probably against all of those we were supposed to be weighed down weight.
With that let me now turn the call over to our co CEO and CFO , Mr. Nissan town to go over our first half performance and highlights over to you Lisa.
Send out of Washington delegate Coincidently uncle, so citrus in Guangzhou. So she's had one ship how have they won't know who is somebody I, though you said Garcia Lisa.
Yeah.
Thank you al and a minister.
And Neil as you will recall that's too.
Many thanks to everyone for joining our call today.
During the first half of the cold shutdown Chinese Chinese right.
Thanks, Judah athletes of all County, and then many of intuitive costumers and the behind.
Despite the uncertainty okay.
Panic, we still achieved a domingo said before.
And our company, Canada pad optimization from obtaining accuray, Cathy and then integrating upstream and downstream.
And to fulfilling the Guinea, Laurie Edison candidly also rationally and that as I say inside of.
They are an environmental factor.
And Timna if they change it.
You go in the Trs manufacturing and logistics.
Jesse.
Which further improved the integration time than you and Rick.
It can also efficient.
Oh, Yeah, Oh, Yeah, that's something all of the palace you want to handle it.
The council.
Hidden gems Doyle tens that Johan laid Cleveland.
Arnie I think hanging there something that you think you're going to feel at.
Who shouldn't be.
Yeah.
I think let me in the jungle.
For children.
Yeah, she's done that keeping the mobile lunch and that's what she sees a new young adult English only now you did you mention or you don't.
Don't show them at that it seems like you're going down like what are you.
In doing I know, Sean Zhang she she's done.
Tsang Chi, which he showed no new people when they're traveling she thought you come up with it.
Due to the impact.
Above market environment, leading.
Our yearly, yes, 1983, Oh shoot one more percent in revenue to a and b.
And the $89 6 million during the third huh.
By companies with U S pin based search market opportunity I.
Adjusted book appropriately.
<unk> tried to do and a cheap that hits that change was out in the first half.
As we continue to integrate upstream and downstream up doesn't mean that chill chain optimize our product mix and a jacket for that category.
So you should count on easily sell women shall banyan jumbos hang in there shouldnt.
Really sat down and jargon.
Yeah.
And when they get here.
She told US you're trying to do what she issue that couch and it sounds like that you can tell you to watch them.
Sure Yeah, you'll watch.
Collagen.
Jumping beans.
Thank you so much.
Hum.
During the third Oh.
Physical yet Chinese Julie I'll, let G N G with quality the unknowable increased to 240 basis points to 21 point the other potential among each the GMT private label increased from 27.4% sure sudden.
Right place presence.
How's the fulfillment margin also increased 100, and a sudden basis points to nine 5%.
Right I mean on a suntan you know siobhan yet she tonnage and Gamal any new home builds in Jonah audience, Dogger Bank and yet I shouldn't you don't feel he had them all you need is home button, Josh its Dan.
He shouldn't all up I think she says she said.
You don't have the money to do things.
Thanks, Donna and thank you didn't talk about that yet.
The other passengers Jordan.
Company management, we also further optimized our causes gesture and achieved.
Most extent operating that this wont able to show with hunt shoot 'twenty, one quite Darryl again.
Year over year just tweak.
In the first half in terms of revenue, we also jumped to from starting to apply to a percentage of total revenue to 21, 1% of total revenue highlighting our effectiveness inconsequential.
Thanks, Glenn need for meal, and see why that trend then vehicle being she doesn't interest him well.
But Nate and they told me that you all know that Josh.
You can see younger huge anti itch once you end up choosing to shop.
Sure Yeah, that's been shot like Union, that's what's been shutdown of Indian done.
Joshua.
Yes, I know that sometimes country Shaanxi and stuff.
That leaves your foundation, well narrowing loss from operation and does that at all.
Equate to by <unk> four point to present, your I N b changing $9 6 million from a N V eight in true point.
Mhm and 52, 1% to <unk>, 29th one 5 million from I E 81, 9 million excuse me.
These have demonstrated our business resilience and improve the profitability.
Oh, she's actually Sean Penn's hang in the equation and the Showtime if it comes out in the in the Anyhow beginning question Joan I can now buy one of them would be home not doing enough I've been here.
Well there can be no tangible value of Schwent Crimson issued some brightening Jewish one <unk> went.
I don't know if that's introduced.
Thank you and I'm sure that.
Sure I will mention grocery in motion again.
When you need the needle implication.
Looking back to our journey with you.
Maiden position I don't go to permanent hedge that's one China I, creating values for pets.
I noticed in the pet parents, we will continue to expand our ecosystem in the future and hope to become their preferred channel.
Yeah.
And as well as the leading market.
Mike.
Yeah.
That's why it's worth it and scan their well production well, it's actually action and their network reach.
What's your what's your total age and watch what have you done any thinking behind each union actually you between the whole Joseph Bank the entre when you're trying to attention when when I don't shoot you pulled that shouldn't touch into her door. She thought you can watch on a treadmill to acknowledge who didn't you need high assigned yet.
With a show in Shanghai.
Now, let me pass it tend to L. Again, she was right or do you own the market insights and Oh Wow operation in the first half since all that she didn't jump maybe ill. He would tell me that that you show in Shanghai, and Tianjin, Michelle Daniel Yeah, Yeah.
Yeah.
Oh, Okay. Thank you I'll leave that for the reveal of hopefulness and business highlights I'll go through these how do you see you know we don't get in a way cool.
Despite our own certainties and challenges we remain optimistic about the future of China's pet market.
Holding to the Irish search watch paper.
It is projected that the industry will reach RMB 445.6, though an invaluable which U S. Dollar 66, Kuwait, one, though and by 'twenty two 'twenty three.
With steady growth of the markets and the possibility of continued growth in the future hence.
Hence, we will continue to be committed to enabling the industry upstream and downstream precise product for positioning and expand our online and offline wage filled out we will further establish ourselves as the leading path ecosystem in China.
And to become the go to platform for pet parents and brand partners.
Gensia audience, you should come down this year, but <unk> seen the ink, so well no you're not doing well with what looks like a little Guan. Thank you I was finishing up here for you to Dol RDR Sonya, who also don't win more down that all renminbi assertions about Lilly either maybe I should know about Louis L E N.
Face it hasn't gotten there with 10 feet, we like where she was in donlin chronology install them and downstream should leave you for known how he is Shantallow syndrome, Timekeeping way being pulled I want the same functions as he put it seemed well that's all from calling things out what wasn't touchy feely totally onshore formal Philippine health was a whole bunch of ocean peanuts.
Traffic approaching we put in notable efforts I'm breaking circle linkage and user I'm.
Sorry.
During the first half hour number of orders increased by 4.1% year over year to five points three mowing.
Oh, we also delivered a strong well.
Either increasing 16 points, 4% year over year to a record high of about 3.8.
81 million.
Our CEC also reported a 54 points, 1% year over year decreased to RMB five point to around RMB 11.3 in the same period last year.
She is our record low.
All of these pointed to the fact that online community remains wide runs with new traffic and highest thickness laying a solid foundation for future growth.
I would tell you don't find me a woman's there's somebody in Guangzhou <unk> that challenging Unfortunately, I don't eat dips usually all the time you do.
That's all got to see a woman Philippine packing downfall at home being found something that's interesting I eat your body somewhat where you'll what homebase shall show that lingers Lillian suit or with that I'll turn it back to you on that cause that you're trying to cingal when the whole trend lines when chantal, we'd see the sheep and sang them Tobey.
Shop Island Jewish Sydney E. G. I mean be when they are you see a short leash so DCP.
Shall pseudo genes so Jason Scherer on those central I'm sure She's day senior 19, Goldcorp, when you and seen a tissue that you unbox shortly.
Cause I only want willadsen jumped in.
That's useful.
And as one of the company's strategies. We also made great strides in our private label business in the first half as a key lead ship built close cooperation with upstream and tap into new product categories that will drive so satisfaction and customer thickness hour.
Legals business reported and encouraging performance during the first half with revenue increasing 30.
0.29% year over year to RMB 105 points, one the limb and gross profit margin, increasing by 560 basis points year over year to 33.
Percents from 27.44%.
The revenue contribution of such high margin business has also increased from 13.3% of total revenue.
Last year to 17.8% this year.
So we won't see the John Lewis tree Womens Philippine pay it's actually I'm Danielle.
Sachin Tango, who have shown you all don't think meaningful talk how towards indoor championship late.
A woman pinard tweedle, social copel naive to eat your opinion seen that's undrawn.
And Bob I'll, just a neighborhood.
Yeah, well, so little torn beads and gone back and just ask again, Joe Jeremy B E N E N.
So it was done between she and the passengers kazanjian jokes in downtown opinion, the bathroom to study them.
All you do your opinion home she got back on geography that stood at home Beach, you show will be up a little bit about funding you about fungicides.
Yeah.
I also believe when they need battery infrastructure and support along the supply chain.
So that we can maintain our.
Competitiveness and expands our ecosystem hence.
Hence we are actively exploring potential cooperation investment or acquisition opportunities without other upstream and midstream players and we will be more than happy to update you in the future.
Actually when I travel Mercury's agenda.
Uh huh.
He says you know the judge not only it sounds seeing we like what you don't see I'll go with my son, though if you go to each of you.
Check me and they're going into this year, it's like a woman does seem generally you'd see sometimes you know whole should toward that.
There will be a day.
Fishing jobs, so I'm telling you.
Well, it's all towards the goal of being called if you let me answer that.
We like where you're Gonna go way towards the truth that you'd want me it wouldn't go to tell you.
Oh, what they'll leave our improving financials should be translated to an increase in western but.
Especially as we demonstrated our improving profitability four successive quarters.
On the other hand, they increase in financial strength should also allow us to pursue more options in boosting shareholders' return in the long term future.
Well, Michelle seems fishy shall hold a year, just Dallas and Jon Graf Highway team put it holds a doctorate till the assortment that we wanted to do with Sally Hansen, who don't usually mean elite me formula or for those who didn't sound how to choose three assortment away likely called you can do the fine like you shouldn't be cool.
We bought.
Now I will turn the call over to our financial VP loyal dye, who will share more details on our financials loyal.
Josh you Didnt tell you almost how often how loyal we almost sounds that will come in the front door.
Yeah.
Thank you al.
Please allow me to walk you through our financial highlights in the first of half of our fiscal year.
Before I go into detail.
One numbers presented at E. R M B and for the six months.
So September 10 to 22, unless stated otherwise all percentage changes.
Year over year basis, unless otherwise specified.
Just got a one and done.
All right.
Sometimes.
How long do you tell it sounds like you know what your chin shot that absolutely necessary. If anything it was for me you cancel in Chicago, So how much would you be.
The way, it's been done with it.
Thank you Ginger.
No go ahead.
Towers Watson.
For me, what some of that back.
Have you been taught don't shouldn't you be that'd be ending.
These first half our total revenue a decrease of 2.4% to RMB.
900.
Page nine partners you're familiar pardon.
Primarily due to the recurrence or COVID-19.
Our margins a decrease in product sales revenue of 1.5% year over year to RMB 568 7 million.
So I'm on the young woman that's one for one.
Your audience.
Yeah.
Oh sure you'll you Oh my opinion is I'm glad you can both on from a bunch of them.
I don't have that other women side, you can see Canada trumping their social withdrawal.
That means when you don't.
Sure.
No balance sheet, either in terms of AUM from human REIT it would be great.
Great great good our back office.
And then completely.
Great Oh, seven fulfillment models, such as intelligent sorting and.
Husky's further enhance our probability.
Recently, I mean defense as a response to them.
This increase and the control restrictions.
The market did see some in the Costa.
Koby.
Yeah Bobby.
I mean, you're talking you create some transportation and operation costs.
First the half one fiscal year 'twenty.
In Q3 however.
So I think the crane.
So that's the increased from 10.4% of revenue.
Revenue Russell yard to 11 point of 50%.
Revenue. This year lastly maintained at I M. B 68 pardon me two medium, yes, our parcel fulfillment gross margins.
The increase from eight 2% of lots a year or two nine points five casino this year as a result.
Gross profit margin inquiries that by 200, and a 40 basis points from 18 point.
221%.
Hi, everyone from young woman.
Uh huh.
All that of course, you don't want to announce one on Cimzia you can count on Borgata.
Yeah.
And the other for them.
It will come from Jackie.
In the whole evening should I thought when you own T G.
For the Shandong <unk> signed up on Columbus Ginger.
That I don't mutual Tulsa, Oklahoma some jobs.
And balancing that against them.
Sure, Yeah, and Josh Smith.
Thank God.
Gene you end up back in June .
But then we should that isn't being don't even bother, Australia actually Oh, you women's and home audio newsroom and Jewish thoughtful in Houston on that message once you get all of that and Kashi.
And that woman.
Hold on.
And Oh.
Children.
So by the time, you end up having to GA on.
Our total Jess and the marketing expenses were RMB 53, 5 million by 17, 9% from RMB 18 9 million.
Gary last year.
And the market incentives as a percentage of total revenue was 10.8% down from 14.8% primarily geared towards the cost of Fabian.
Generation from reducing advertising expenses and the Caribbean propulsion revenue generated from more cost efficient channels.
Well, the social Ito film somewhere weight them, you don't see them.
Right.
Got it and then be back into that which won't stop when we sat down a lot I haven't Josh it's Joe.
Total hurting telephone with Johnson, <unk> Johnson with Florida.
You don't.
Don't you should.
Yeah about 10 years, when you see the way passengers just Bob yes.
Gotcha Gotcha.
Oh, okay.
So quick question, then I'll jump you.
C G women die.
Thank you gentlemen.
Sure Jamie.
<unk>.
General and administrative expenses in the period were RMB 22.1 million down by.
48.4, but San from IR.
I am being 42 pardon me that in the same period of fiscal year 'twenty to 'twenty two.
General and administrative expenses as a percentage over total revenue was.
3.7% from seven 1%, primarily geared toward that would be great.
Share based compensation expenses.
And the professional fees.
And so there are plenty of film weight them, you don't care about Nokia are not used to buying it.
I'm sure that it can be.
So again I'm not sure why you won't be thoughtful we got done that that audience.
So I feel good about <unk> 71.
Yeah, Yeah huge natural instead of them did she didn't know Joshua Yoyo badge NCD fail, you decided I'm going to button Johnnie.
Can you tell me the finish off what that item.
Yes, it came down to a net loss of RMB 79 five.
5 million in the first half was nevertheless, I M. B 81.9 million in the same period last year, representing just kind of chalk Oh 64, 64%.
You bet wife, either one.
It wasn't a job from a loss of RMB 77, 1 million last year or two.
Oh I M B 22.9 million this year.
So I'm quite content to those inquiries went way down tangible I wish that judge near term into the box antibody Joseph.
Jim question thoughtful shot at that.
But you cannot do.
Uh huh.
Christian you can see that you should not be used off when we got down to <unk>.
Sure.
Indeed.
Yes.
Equivalents and the short term investments Oh, I M B 200, and a 10.3 million.
Our strong cash on hand during and the improving product for them.
Our cash sufficient in our operation.
Is there any are you until you see more of them in them.
And you can download you don't you towards is it wait and be eating thank you and gentlemen.
And Jim on the account for diabetes.
He's in the women's.
When he was asking what's the Giants will go to <unk>.
So with that project.
You know a broader view we are cautiously.
Optimistic about the market conditions, and the remaining 40 cough gains with our strategy and the execution by our expanding brand.
Oh 700, and the four brands in the first half along with an 8% year over year increase in Skus.
<unk>, 20th Paragon and.
Until the tendencies.
<unk> thousand and maybe it would be all that you've kept it too.
And market opportunities.
So I'm talking about all of them they.
Sure Tom.
If you look on the title into women the fund, which as you know when you bought it doesn't I'm kind of thinking.
Come on you someone sends you a woman can parachute out thoughts about U S. K O. You told me you then don't know back in July .
Now I don't know what kind of impact.
As to your woman's Donkey importantly on Nordea.
About what we are actually talking with you.
My family and that's now owns.
The Q&A session operator.
Okay.
Thank you we will now begin the question and answer session.
To ask a question you May Press Star then one on your touch tone poem.
If you're using a speaker phone we ask you. Please pickup your handset before pressing the keys.
To withdraw your question. Please press Star then two.
Once again, ladies and gentlemen was a star then one if you have a question.
Okay.
Yeah.
And so the first question comes from zooming.
<unk> Securities. Please go ahead.
Yeah.
Hello Zimmer you are live please proceed.
Hi, Jonathan.
Oh Credo creator.
Oh sure Yeah, Yeah go ahead Glen.
I'll answer it sounds they'll have to all doors in Japan.
I'll wait till holiday.
What was it in yoga and go shallower and Samsung She got the whole thing you want is serious challenge sometimes tackle yeah.
China total yeah of course, I cannot go back quite a whole bunch of at home. They are both shell and she knows she found some guys that Oh geez why would I go Oh giant junkie, so they could be either.
Yeah, but I wouldn't tie Saturday.
Molly do you see new shapes in fact, I die young equal Oh.
Just get out with that relationship.
Yeah.
Okay. Okay. She said she said this isn't lunch in the lunch Oh, let me translate Shimon, which from the core Shung Securities.
About two questions. Firstly, she can really congratulate shots on our good full bonus in the first half of fiscal 'twenty two 'twenty three.
And.
Her two questions is first is wage texture is the company's strategy because in the future and a second question is.
A D or any expectations for the future revenue.
Propulsion and our gross margin and net margin of private labels.
Okay.
These are patients who got Eagle and teachers are going to go away like the foundries, who don't get shouldn't Alabama.
Uh huh.
Now what does that do you go and T O.
We had our agenda towards you'll have that.
Going in to see what do you want.
That's why it that's all ginger in Angola, well data youll actually be cute she tissue that she should have found quite hopefully see those did youre going in.
She did that when I am done.
The cause them again.
Truth is July one neighborhood Dunkin' Donuts soon until without Philippine Pat.
Okay.
Well don't play that game.
Oh, Okay. Okay. Okay. Let me translate for the first question the the Sheila asked us about the company's strategic focus in the future and Oh, we answered that we will further optimize nation.
All of the supply chain.
And well create a rail.
A real mechanism of supply chain with continuously feedback from our big data in the pet industry.
And to make those supply chain to the past and innovation we will.
It was more resources into the private labels and to further develop our private labels.
And at least at the Argo in two Jewish in Philippines, We let our Sogou Giambi home holiday shaping team videotaping shipper, what you'd see a chico's sure I shouldn't be hashed Loyola with either.
Oh, Okay, well, what I put out yoga once you back now since your question Doug you wouldn't.
The Philippine Pie.
So again I think that's your dormant Jacob from on the elements you don't Oh, how does your go to airports and so over time, because once you're in you're insulin shooter genre trends I'm sure would be but I'm just as I'm sure I don't know Sean.
Hum.
Yes sure.
I'm John incidents you shouldn't off once you change a lot back in June of Sunshine.
Oh sure Joe Johnson, Don Joshua G, you're going through the disruption tied down so what you Didnt need you want my old job. Unfortunately, I know you don't we'll watch them huge Stooges, yeah women shoes I. A question does somebody have a tiny home and sure Saddam Saddam that your children.
Thompson.
Well then it doesn't sound like you see I was wondering Sundar. If you ask of you he was.
Even with that submission Saturday insurer.
Did you did you had some age.
Oh man.
Women shoes turned down and she asked me well that's worn out and some of them will go away do choose to me when I Pee paid down with only one quarter Jonathan fruitful.
One oh wait out each of icon.
So against that so what you're telling me you do without joking Pi accounted when you only have to go up and down without women wages, you think auto route.
What I'm talking about the short routes between booties shouldn't wage how ward and teach over to Robyn to Usher.
So enjoy it a lot I'm Joshua with Jamba stripping now.
What are you waiting to see.
For me would you wait til programs are essential.
Okay based on our platforms be it our capabilities and.
Our rich user profile, we adjusted the product mix in the first half year, we are adding some new SQL, such as snacks and the heska products to satisfy the needs of all that.
Pet parents in multiple dimensions, the revenue share of private label has increased from 14 point in mind.
Our first half year last year to $18 five this year.
Is expected to exceed 20% in the short term future.
The gross margin or our private label has also.
Our loss from <unk>.
7.4% to 33%.
And if you had to increase continuously and a recap we already.
75% are in the short term future okay.
That's how every stone thank.
Thank you.
Thank you, ladies and gentlemen, as a reminder, if you would like to ask a question. Please press star one at this time.
Pause momentarily to assemble our roster.
Yeah.
And our next question today comes from my Mom with China Securities. Please go ahead.
Yeah.
Yeah.
And then on your hauling Jacob Fisch oncological contributing.
Not either Jim or me and I'm kind of going through that Jacob.
Oil, Portugal and should all the checks.
With each of which I'll talk to each other as you well know what do you mean, you always go into these won't she enjoys hydro should hold somewhere like ship, what they call the cold weather things should know.
Okay houses in the lunch <unk>.
Okay, Let me translate first.
Doesn't that's not a wish from China Securities asked us.
About a will the company consider buying back or increasing shares in the future.
Hum Josh here.
Uh huh.
Especially at lunch.
Well I won't be quick.
Wake them, Judah and see those should Huntsville, polos Shirting G cool Waco with it since the beginning of the Orient in Shanghai and Suzhou.
So are you sure you hopefully.
Oh sure Google want me it was shocking to us I'll still hold with us again.
Yeah.
Okay.
And I was like Oh, so about a four the a question about the buyback buyback and increased chairs, we answered that a we will evaluate market conditions to.
Determining the timing and details of the buyback or increasing shares program.
Okay.
I finished my answer.
Uh huh.
Oh I should shortly be of Merrill Lynch.
J D.
Uh-huh fishing.
Yeah.
Hmm.
This concludes our question and answer session I'd like to turn the conference back over to the management team for any final remarks.
Yeah.
Yeah.
Okay.
Do you have any closing remarks.
Yeah.
Okay.
Hello, everyone and it appears there are no closing remarks today. So this concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.