Sleep Country Canada Holdings Inc. Q1 2023 Earnings Call
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Good morning, I'd like to welcome everyone to sleep country's Q1 2023 results conference call yesterday sleep country released their financial results for the first quarter of 2023, a copy of the earnings disclosure is available on their Investor Relations website and includes cautionary language.
[noise] about forward looking statements risks and uncertainties, which also applies to the discussion during today's conference call I would now like to turn the call over to Stewart Schaefer, President and CEO . Please go ahead.
Thank you and good morning, everyone and thank you for joining US with me today is Craig the Presto our CFO .
Looking at the first quarter of the year, despite ongoing tightening in consumer spending and macro economic uncertainty. Our results were very solid when compared to Q1 2022, which was the best Q1 in our company's history. We were pleased to maintain steady revenues, while continuing to drive our business Board.
To deliver on our multiyear strategic plan and maintain our position as Canada's leading sleep retailer.
With our strategic plan in place and the strength of our balance sheet. Our team continued to execute well with our focus on building the country's best sleep ecosystem of multiple leading retail brands that continue to disrupt and Ria manage and re imagine candidates sleep space.
As a spotlight on the quarter, we continue to see our brick and mortar stores contribute strongly with online sales softening as consumers choose to shop more in person, we expanded our retail footprint by opening two new sleep country stores, and Shawinigan cut back and Thunder Bay, Ontario, bringing our store count to 209.
D locations, we continue to invest in our brand portfolio and officially welcome silken snow at the start of the quarter the brand and the team have been incredible addition to our family of brands as we continue to focus on growing the brand through differentiating it in the market and with his aesthetically appealing.
Unique products and its world class digital marketing.
Subsequently subsequent to the end of the quarter, we were thrilled to acquire 100% of Casper sleep Canadian operations. Casper is the original disruptor of the mattress industry in North America that has invested over $1 billion globally to build a leading brand focus on delivering a frictionless and elevated.
Leap experience this acquisition aligns perfectly with sleep country's strategic omni channel journey.
With Casper, we are adding one of north America's leading retail brands to our growing family of sleep brands, which now includes sleep country Dormie U N D harsh and silken snow reinforcing our 29 year brand statement of why buy a mattress anywhere else.
We are incredibly grateful to our entire team who have worked tirelessly over the last few years to transform our business into Canada is leading sleep ecosystem and deliver on our purpose driven strategy to ensure all Canadians get a great night sleep. We are proud of the team's efforts to drive awareness and and one.
The conversation around the importance of sleep to Canadians wellbeing with a five week digital and Influencer campaign for sleep awareness month and World Sleep day. This past March.
We are also very proud of endy for winning best workplace for women by Great Places to work for the second year running we continue to focus on our commitment to equity diversity inclusion and belonging across our workplaces.
Our strategic investments have enabled us to create the ultimate Omnichannel sleep experience for our customers. We continue to establish a loyal customer following as our business and brands continue to grow along with our channels and product lineup and with ongoing investments in supply chain distribution logistic.
<unk> and digital platforms, we are well positioned to deliver a seamless customer experience and grow our market share for years to come.
Looking ahead, we remain cautiously optimistic for the back half of 2023, while focusing on our multiyear strategic plan investing in our house of brands innovative products, our people and delivering a best in class experience for our customers.
Thank you once again to our Fabless teams at sleep country, Dormie view entity Hush Silicon Snow and now Kasper added to all our partners for their commitment and support for all our businesses with that I now turn it over to Craig to discuss our financial results.
Thank you Stuart and good morning, everyone.
As Stuart noted earlier in the call. We are pleased with our Q1 2023 results, especially considering the macro environment we operate in.
We saw a decrease in our revenues by <unk> 5 million or 3% from $207 million in Q1, 2022 to $206 5 million in Q1 2023.
This change was mainly driven by a 6.2% decrease in same store sales, partially offset by incremental revenue.
Earned from the Silicon Snow acquisition in early January 2023, one net new store opened in 2023 as well as our wrap stores opened in 2022.
Although we had a negative same store sales growth in Q1 of 'twenty three we would treat it we achieved a strong three year stack same store sales growth of 21, 1% for the period ended Q1, 2023 and achieved a CAGR of eight 5% from Q1 2019 to Q1 2023.
Our Q1 revenues from our E Commerce platform increased 150 basis points from 28% in Q1 2022 to 22, 3% in Q1 2023.
Moving on to gross profit our gross profit margin decreased by 30 basis points from 34, 6% in Q1 2022 to 34, 3% in Q1 2023, mainly due to deleveraging occupancy costs tied to lower sales, which were partially offset by an increase in average unit selling price.
Going forward, we expect the sequential step up so you have seen over the past year and gross profit margin to settle and be more consistent going forward and fluctuate may fluctuate based off of the seasonality in our business.
Total G&A expenses increased by $5 million or 11, 6% from $43 1 million in Q1 2022 to $48 1 million in Q1 2023. This.
This change was mainly driven by an increase in media and advertising costs impacted by the incremental spend by Silicon Snow acquired in Q1, 2023, as well as increases in warehouse occupancy costs credit card and financing charges, driven by higher finance sales compensation and intangible depreciation expenses.
As a reminder to the market that our D to C brands harsh silicon snow are earlier in their growth cycle, resulting in a deleveraging on marketing and fixed costs in the near term.
EBIT decreased by $4 5 million or 10, 3% from $44 2 million in Q1, 2022 to $39 7 million in Q1 2023.
Adjusting our EBITDA for al tip, ERP and acquisition related costs, our operating EBITDA decreased by $5 3 million or 11, 5% from $46 7 million in Q1 2022 to $41 4 million in Q1 2023. It should be noted that Q1, 'twenty twenty-three adjustments to EBITDA of $1 7 million.
I'm in lower versus $2 5 million in Q1 of 2022, resulting in our operating EBIT margin decreasing by 260 basis points quarter over quarter.
Finance related income and expenses increased by $3 5 million from 3 million in Q1 2022 to $6 5 million in Q1 2023. This change was mainly due to an increase in interest expense in the company's senior secured credit facility as a result of higher effective interest rates and the change in fair value on the interest rate swap year over year.
And lastly, an increase in interest on our lease obligations.
Net income attributable to the company decreased by $7 1 million from $18 4 million in Q1, 2022 to $11 3 million in Q1 2023, adjusting for ALS hip ERP and acquisition acquisition related costs as well as accretion expense related to Hudson Selcan Snow adjusted net income attributable to the company decreased by 7.6.
From $20 8 million in Q1, 2022 to $13 2 million in Q1 2023 daily.
Diluted adjusted earnings per share decreased by 19 or 33, 9% from 56 cents in Q1 2022 to 37 cents in Q1 2023.
Just on capital allocation items during the first quarter, we repurchased for cancellation 299000 common shares for total consideration of approximately $7 3 million, we received approval for.
For a new and CIB, which commenced on March 9th 20 twenty-three to purchase up to a maximum of approximately $2 6 million of the company's common shares representing approximately 10% of our public float.
Really we receive T X T S X approval and establish a new automatic share purchase program in connection with her in CIB.
We intend to continue to execute against our N CIB as opportunities arise in 2020 three.
On May eight 2023, the board approved a 10, 2% increase in our quarterly dividend to $23.07 per share, which will be payable on may 31, 2023 to shareholders of record at the close of business on May 24 2023.
Regarding our capital our Capex spend for 2023, we plan on opening a minimum of six new sleep country, Canada.
Canada Dormie these stores and once we finalize our new and innovative store formats. Later this year, we plan on renovating a minimum seven a new store our seven stores in 2023 under this format.
Later this month in May 2023 we're opening our new kitchen or warehouse and we plan to consolidate two of our existing warehouses. Later this year. Additionally, we will continue to invest in our ERP technology to further enhance our digital capabilities omni channel experience and spend approximately 1% of our revenue for ongoing store N D C maintenance.
Thank you and I'll now pass the call back over to Stuart for closing remarks.
Thank you Greg our performance demonstrates our unwavering commitment to our strategic plan and our team's ability to adapt and thrive in challenging times, we continue to invest in our business by building a remarkable house of brands with the most innovative and expansive product line up a strong focus on expanding our channels of.
<unk> and our touch points with all Canadians and the most robust omnichannel sleep experience for our customer.
As we close out the quarter and we look ahead to the remainder of the year, we continue to be cautiously optimistic of the macro environment, while remaining steadfast in our commitment to drive efficiencies and results seeking out the best opportunities that support our long term strategic goals with a constant focus on managing our strong balance sheet.
While growing and returning value to our shareholders. Thank you again to our teams partners shareholders for all your support in the first quarter with that we conclude our remarks and open the floor for questions.
Thank you, ladies and gentlemen, we'll now conduct the question and answer session. If you'd like to ask a question. Please press star followed by one on your telephone keypad, if you'd like to withdraw your question. Please press star full by two if you're using a speaker phone. Please lift the handset before pressing any keys one moment.
Your first question.
Okay and your first question comes from Martin Landry from Stifel GMP Martin. Please go ahead.
Hi, good morning.
Martin.
My My first question is on your EM sales of accessories, and the continued to perform well they were up six 5% this year.
Wondering you know how do you ensure that there was customers that are buying these accessories come back to your store when theyre ready to purchase a mattress I would assume you have a customer database and you do some outreach, but it'd be great to hear more about your strategy on that.
Sure and Great question and Ah just also I'm going to touch on strategically how we look at our accessories Martin but.
So.
You are correct that cross the lease line, whether it's online or within our stores for customers to engage with our brands on accessories for US is a huge lead generator when the confidence returns to make the bigger purchase which is the mattress. So in anticipation of a softer Q1.
Watson.
That we were feeling a little bit from Q4 that there was a strategic shift on some of our marketing to be able to generate traffic in our stores with the exacerbates as well as obviously our mattresses.
And that paid off really well for us and as you noted in your report with a thousand.
Basis points higher in terms of the gross margin. So accessories is a very important part of our business is a very profitable part of our business, but for us as long as we are continuing to have customers engage with our brand and.
That is the most important thing that we watch for.
Okay. That's helpful I'd like to switch gears, a little bit and talk about Casper you know it looks like a great acquisition a great brand for you guys wondering what's the first steps for for you to integrate Casper or to work on Casper dish.
Year, and what are their long term plans for that brand.
So were about three weeks in so we'll give probably more color as time goes on.
So forgive me.
I'll tell you. The first thing is to welcome the team and make them feel a very important part of our entire ecosystem and that's happening right now.
We're also going to learn from Casper and see the Casper personality and make sure that we preserve the caspersen alley, because she was one of the reasons why we bought this retail brand.
And slowly we will learn with the team side by side on how do we engage the brand with more Canadian consumers. We do believe that the brand awareness of Casper is well under developed the brand is very well developed compared to the revenue that this brand is.
Creating so we're excited about the opportunity of expanding both its retail footprint.
As well as its digital footprint, so more on that to come out probably over the next couple of months.
Okay. So you're talking about an expansion of their retail footprint. So there's a there's a potential for you guys to to add more store to their to their network 100%. This is this for us is.
Perfect.
Besides that the brand and the awareness of the brand.
And the fact that they only have six stores in all of Canada of which four are in Toronto.
We see a great opportunity to be able to expand that retail footprint that that being said, we like to walk before we run.
And we're going to plan a methodical.
In terms of how we're going to execute that and what markets and what customer segmentation that we wanted to particularly drive.
So you should see more of that happening within Q1 of 2024.
Okay. That's it for me. Thank you. Thanks.
Thanks, Martin Thank you Burton.
Your next question comes from Stephen Macleod from BMO capital markets. Stephen. Please go ahead.
Thank you good morning, guys good.
Good morning, Steven.
Just a couple of quick questions. Just wondering if you can give a little bit of color on.
Just around the outlook specifically, if you can give some color around Q2 to date and in.
The wording in the press release is such that you talk about cautiously optimistic for the back half of the year and I'm, just curious what kind of sort of confidence or visibility you happened to that does that outlook.
Yes, our visibility is as good as yours are Steven.
Unfortunately, nobody has a crystal ball.
And that Q2 start start off similar as Q1.
Finished so which is why we talk about the back half we do feel that we have easier comps in the back half because we did see the market begin to slow down and consumer confidence dropped.
At the mid summer last year, So we had Q3 and Q4.
That we saw the momentum of this slowdown.
So we are cautiously optimistic that the back half will be better I also believe and hopefully this is the case that the bank of Canada and the fed have now stopped with the interest rate hikes and maybe this is the new norm some conversations about than cutting but even if this is the new norm.
Think consumers are healthy.
We're still seeing that we're seeing that by even the accessories that they're buying and the price points that they are buying unemployment is still incredibly low. So this is unusual slowdowns last recession whatever it is so.
Our past experience has shown that consumers need to get comfortable with the new norm and if this is the new norm.
We're more positive of how the consumer is going to return in the back half.
Right. Okay. That's that's helpful. And then I'm just curious just along those lines.
You know how.
Same store sales.
Being down six 2%, which.
It was better than we were looking for in a better on a sequential basis too like what or is there anything in them and the macro or.
And the general news flow cycle that you see.
More negatively or positively impacting consumer sales like is there anything you can correlate strongly to based on things based on what you can see.
Yeah.
I mean, we're all watching the same thing unfold.
In the news and on television.
And I have no scientific proof of this but when you see banks failing in the United States.
When you see defaults and that rising.
I mean, the the new it.
I haven't been so great yet and that usually has an impact on consumer confidence in this past quarter Q1.
And even into April and May and a lot of things that are happening in the United States definitely spilled over in terms of the confidence of the consumer so more than that no.
Because I mean, we saw a little tick up in unemployment, but still these are fabulous numbers in the world seems to be very hot in terms of the.
And employment engagement so.
Not bigger signs than than that yeah.
Yeah.
Great and then maybe just one more if I could.
Just wondering if you can give a little bit of color around how sales unfolded through Q1 on a month to month basis, I know you'd given that color in the past, which has been very helpful. And then and then any any any strength youre seeing on a relative basis by price point.
Yes so.
On the quarter on Q1.
January actually was the strongest of the three months, which was a bit of a spillover that came in because we report on delivered business from the end of the year of Q4 February March were consistently softer both about the same thing April was about the same thing as as a February <unk>.
March.
On the high end to answer your question on price points at the high end consumer seems to be holding in.
Well, our lifestyle beds, which is usually for our mid to higher end consumer.
Was actually up on the quarter pillows were up on the corridor, a headboard and footboard were up on the corridor and off of a strong Q1 of 2022.
On the low end and our Bloom collection, we saw some interesting shifts.
That started to.
Grow again, reignite, which we actually look at it as a positive sign because those that was the first consumer to back away as of last year. It was the the low end that stopped buying.
Or slow down on their buying.
A lot quicker than the maintenance to the high end, so it's a little bit of a barbell effect that we're seeing right now in the middle consumer which is usually our price point between 1015 hundred which is a very important price point and that one seems to have slowed down except those customers.
Where the greatest purchasers of our accessories. This this quarter so.
They've been still engaging but they didn't do it by the mattress.
That's great. Thank you for the color.
Cool pleasure Steve.
Your next question comes from John Some PARO from CIBC John Please go ahead.
Thanks, Good morning, guys.
Morning, John .
I wanted to start on the renovation plans and it looks like there was a change to those you previously targeted 20% to 30 Reynolds now thats a minimum of seven.
It was a similar change to the warehouse plans, where you were going to consolidate four notes too I Wonder is this just a function of leverage following the Casper deal or was it related to your outlook for the year or something about it.
And so the returns of those projects just would like some more color there.
Yeah.
It's less about the the leverage it's more about.
Watching the macro environment and testing our two new stores, we're going to be opening our new.
4.0 design to two stores are going to be opening in this in the next couple of months.
The next two to three months, one in Montreal, and one in Toronto, and we're going to test it and we're going to learn we don't renovate just for the sake of renovating because our stores are pretty look pretty good we renovate to make sure that we're driving a higher dollar per square foot in those stores and there was a plant specifically about driving more of our accessory business and bringing in a.
Little bit more of our digital footprint into the stores.
And so we need a little time and data to watch that happen if all goes well.
Matt.
That will probably we have a smaller window for the year to be able to do it we won't do it.
In the fourth quarter, because fourth quarter has turned out to be.
Growing in strength for us over the years and Q3, which is our biggest quarter of the year. It doesn't give us that much room, either and we're gonna be selective in terms of the markets and the regions that we do it. So we just don't want to close to many of the stores on the warehouses.
Montreal is original warehouse.
Leases coming due and we had two additional.
Is that we opened over the last few years, one that was out in blood drawing in the West Island and the other one in the east and to support our growing business in Quebec, we closed down the volt duroy one.
Already and the one in the east that was just lined up to expire this year with our Montreal facility. So it was really like three.
I know Craig said too because it is only the second one now three becoming one.
In the West Island, that's going to handle that and years of growth and so.
So John on the on the change in the outlook, it's just that we the Montreal consolidation.
It's likely to push just into Q1 of next year and that's why there is the adjustment on the outlook.
No fundamental.
<unk> from the original plan, which is more of a timing of when when that renovation will be complete.
And I want to add one last thing around.
How we look at our capital allocation.
We do believe these are very interesting times and we do believe it allows for interesting opportunities. So we like to have keep our war chest full and.
Where the strength of our balance sheet does put us in a unique position in a market that is a little bit more difficult. So as we deploy capital.
We are very thoughtful.
In terms of the return on it for our Cheryl shareholders, whether it's a dividend increase whether it's NCI b, whether it's another acquisition or whether it's deploying that capital in terms of renovations or.
It investment so we're just.
Watching and waiting how the world unfolds, and making sure that we deploy our capital in the best possible way.
Alright I appreciate the color one quick follow up on that is there any current plan to change the.
Capital allocate capital you allocate to buybacks this year given the Casper deal are you still targeting that $50 million level.
Yeah, I mean, we're going to continue to be opportunistic boat.
The returns on buying back shares.
The lack of any sort of execution risk against against buybacks, we still think thats, a very attractive use of capital.
I think you can expect.
Or a similar ranges to.
Last year or to that to that target that we disclosed a year ago.
Got it okay.
On your Walmart Express or sorry, your sleep country Express stores in the past you've said you'd potentially look at 80 to 100 locations that you could open over time.
Given the change in your renovation plans has there been any change to the total number or the pace of store openings for you Express stores.
We know them well, we don't we caught we count that as growth and not our renovation.
And so we're still.
Having conversations with Walmart to make sure that we position ourselves in the best locations within the Walmart space.
So that plan is going to continue to unfold.
Got it okay and thinking longer term about your store footprint you'd spoken on the Q4 call about potentially looking to open up stores for different brands under the sleep country portfolio is is that kind of related to pausing renovations that you might want to introduce these stores sooner rather than later.
For your other brands or you are looking at ways to integrate them with.
With your current footprint I'm curious, how you're thinking about expanding brick and mortar for your other brands.
Yes.
Yes, yes, John so.
There is going to be a couple of tests that we're going to be doing over the next few months.
With the store within a store.
There is going to be a test at all.
On taking one of our digital brands and creating a first test footprint for them.
Store location.
And.
Very close to launching another concept that we are going to test on the high end side.
In a category that we're going to talk about it a little bit more next quarter in New York Dale malls. So we got a.
I think what the pandemic.
That that showed the whole world does that.
There's a reason why whatever it is 65, 70% of GDP his consumer spendings that consumer spending, it's an activity and people love to shop, and especially for our tactile items in the brick and mortar.
And the DTC component.
Bonuses.
Businesses are very important to our entire ecosystem.
But that brick and mortar omnichannel component is important too. So we do see wonderful opportunity ahead for us for each one of our our retail brands and that's how we look at our business sleep country, <unk> and D. Hush Silicon Snow and Casper are all retail brands.
That we believe we're going to be very thoughtful in terms of geography, very thoughtful in terms of customer segmentation and very thoughtful in terms of merchandising hierarchy that we believe we have lots of room to grow.
Alright, that's very helpful. Thank you for that and one last one just because it's topical I wonder if you could get your thoughts on the mattress firm acquisition. This morning, if theres any relevant implications for sleep country.
I am sorry did they announced it this morning, because I didn't hear yet.
Oh yeah.
She is buying mattress firm.
It's a bad.
Barry first impressions, yeah, exactly well, it's the worst kept secret because I've been hearing about it since last October so first of all let me reach out and say congratulations to the Tempur Sealy team Scott Thompson.
Oh, and and Monte the president of <unk>.
Canada.
That's fantastic I think they.
They will do an amazing job with that business and and they are very important partners to us and I think it shows a very interesting path in terms of how partnerships between retailers and manufacturers, which is why we've never gone into.
Our manufacturing business is key to the future of this industry. So that's a that's a big congratulations out to that team.
Okay got it thank you very much.
Thank you.
Ladies and gentlemen, as a reminder, should you wish to ask a question. Please press star followed by one. Your next question comes from Brian Morrison from TD Securities. Brian . Please go ahead.
Hi, Stuart sorry, I want to follow up on that because the acquisition was done in a multiple of nine three times EBITDA, which is significantly higher than you were trading currently.
Wonder if you think there's any desire or if theres anything preventing the suppliers that's more direct access to the consumer in Canada.
I'm sorry.
In Canada or in the U S. Brian It was your question I'm sorry.
Specifically in Kansas, but like is there any risk that these guys potentially come in and.
We're interested in having more direct access to the Canadian consumer yeah.
Yeah. So first of all let me comment on the first part of that at a 9.3 EBITDA. It should send shockwaves two Canadian investors, how cheap sleep country stock is for one of the most profitable mattress retailers out there so put that is that.
And your bond it for a second.
Second no I don't think so I actually think there is some cost efficiencies that happens when at this.
I mean, we buy from manufacturers and they add a premium onto it and then they sell it to US and then we added premium on onto it.
For example, this acquisition with Casper, which is a retailer. We're also going to be now having others manufactured the product and not buying it from another retailer is doing it so youre going to see the Casper prices come down.
As the new lineup rolls out so the consumer is actually going to do better on that.
That sealy Tempur mattress firm.
Scott Thompson and the team are very very smart guys and they understand that brands are important to the consumer and I don't know what their plans are for their floor, but even if that happened within the Canadian landscape brands matter and being being able to maximize that for the consumer is very important.
And keep in mind Sealy Tempur also sells to all the other retail brands within Canada, and that's a huge part of their business same thing within the United States. So this is not the first for them. They did an acquisition of dreams and the U K and again I don't want to comment on their business, but the landscape in the U K Hasnt changed.
Much so I actually think.
It's a good thing for the consumers in the yen because it showed reduced.
Cost for the consumer longer term.
Well I certainly do you think it highlights your valuation I wonder just in terms of the number of acquisitions that you've done recently, whether youre content, just digesting, what you've got right now or through our more opportunities on the horizon.
It must have been in the in our board meeting yesterday, Brian . So the answer is for the moment, yes.
Listen at the Casper T Casper deal was opportunistic.
And yet.
It was a fast and quick deal because of the timing on that which we were really excited to do but we really believe that R. R.
Our portfolio now.
In terms of how we are going to serve the Canadian consumer from all different price points from all different choices from all different brands.
<unk> is going to add more choice in terms of product pricing.
So we think.
It's time to buckle down and take what we have and really take the magic of sleep country and put that together, we see our DTC brands, forming interesting relationships and partnerships and efficiencies that we're looking to drive within that category. Our wheelhouse has always been brick and mortar and.
Our DTC brands are excited about that and we see a long runway for that within Canada. So to answer your question in a very long way.
If the next six months, our only focus is to drive efficiencies within our business focus on the growth of these fabulous brands that we have.
We are very excited in our hands will be full.
And Stuart can you update us with the acquisitions that you've completed what you think your market share is in both mattresses and accessories currently.
So hard to tell and we get some of the data from Canada would get some of the data from the United States.
So I'm going to say, 40%, maybe it's more maybe it's less.
Part of me wonders if also part of our success in Q1, Besides our marketing shift that we did on our accessories was also because of bed Bath <unk> beyond closing so.
That is a 500 million dollar business that just disappeared within Canada, and we do hope that we are going to pick up.
Part of that business. So we've always said that our accessory business, we thought was around 8% to 10%.
For sure it's growing and it's helping US now 50% of their business is accessories and 50% is mattress and how she is also a strategic point so.
I don't have good numbers, Brian around that but if.
If you get something please share it with us.
We just know it's going in the right direction.
Understood last question Craig.
Can you just comment on the timing of the closure of the converts and the asset purchases Casper why they're separate.
Or why the convert looks to be backdated.
Yeah. So it was it was.
Essentially grouped up as a package deal, but there was.
A diligence period required.
In addition to the converts due diligence on the convert was fairly fairly quick, but then on the broader asset purchase deal.
And putting together the transition services agreements and Master services agreement. The two parties do you need to work together as we transition.
Is is why there was an additional.
Out of time tacked on you will see in the financials that a portion of the convert is actually treated as a prepayment of.
Part two of that deal. So that's why there's a little bit of a difference in terms of.
The timing was.
Really tied to some of the diligence required just on the on the second portion of the deal.
Alright, Thank you both very much.
Thank you Brian .
There are no further questions at this time I'll turn it back to you.
Well. Thank you very much again for all of your support and have a great summer and we'll chat with you folks in August pretty well.
Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.