Q1 2023 Rocky Brands Inc. Earnings Call
Speaker 2: Good afternoon ladies and gentlemen and thank you for standing by.
Speaker 2: Welcome to the Rocket Band's first quarter 2023 earnings conference call.
Speaker 2: At this time, all participants are in a listen-only mode.
Speaker 2: Following the presentation, we will conduct a question and answer session.
Speaker 2: Instructions will be provided at the time for you to queue up for questions.
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Speaker 2: I would like to remind everyone that this conference call is being recorded. And we'll now turn the conference over to Cody McAllister of ICR. Please go ahead.
Speaker 3: Thank you and thanks to everyone for joining us today. Before we begin, please note that today's session, including the Q&A period, may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995.
Speaker 3: Such statements are based on information and assumptions available at this time and are subject to changes, risks, and uncertainties, which may cause actual results to differ materially. We assume no obligation to update such statements.
Speaker 3: For a complete discussion of the risks and uncertainties, please refer to today's press release and our reports filed with the Securities and Exchange Commission, including our 10K for the year ended December 31, 2022.
Speaker 3: And I'll now turn the conference over to Jason Brooks, Chief Executive Officer of Iraqi Brands.
Speaker 4: Thank you, Cody. With me on today's call is Chief Operating Officer Tom Robertson and Chief Financial Officer Sarah O'Connor.
Speaker 4: After Tom and I's prepared remarks, we will be happy to take questions.
Speaker 4: Marketing conditions during the first quarter of this year were much more challenging than at the start of 2022 and more difficult than we anticipated.
Speaker 4: Despite industry and broader macroeconomic headwinds and the tough year-over-year comparison we discussed on our last earnings call, consumer demand for our brands remains solid with sales through our direct e-commerce sites.
Speaker 4: nearly in line with year-ago levels in many of our key accounts reporting positive sell-through.
Speaker 4: Unfortunately, our wholesale performance didn't translate into increased sell-in, as many of our retail partners are in the process of working down elevated inventory levels and have recently adopted a more cautious approach to reorders.
Speaker 4: While the year has started slower than expected, we are confident that the strength of our brand portfolio puts us in a good position to accelerate growth once the operating environment improves.
Speaker 4: In the meantime, we think it's prudent to adopt a more conservative outlook for the remainder of the year and are taking actions to reduce expenses and protect profitability. These cost-saving measures are not included.
Speaker 4: are on top of the $2 million in annualized interest expense savings we are generated by utilizing the proceeds from our sales of the service brand in March to pay down more than $17 million of our senior term loan. Before I hand it over to Tom to cover the numbers in more detail.
Speaker 4: That includes Georgia, Rocky, Muck, and Extra Tough.
Speaker 4: Together, this segment had a slower than expected first quarter driven by a few factors.
Speaker 4: While we have retained much of our share gains earned over the past 18 months,
Speaker 4: When compared to the first quarter of 2022 in which wholesalers over ordered to accommodate difficulties in securing product, competitors brands are better able to fill demand today leading to a more competitive and price-driven marketplace.
Speaker 4: This, coupled with large inventory positions at some of our key accounts, has led to a lengthened reordering cycle that dampens sales activity in the quarter.
Speaker 4: Despite this evolving market dynamic, there were a number of bright spots for each of our work brands in the quarter.
Speaker 4: Solid consumer demand for our Georgia brand, along with higher bookings compared to a year ago, have the brand positioned to outperform our initial full year forecast as long as the current environment remains constant.
Speaker 4: We are very focused on the competitive landscape and have a number of seasonal releases that we believe will trend positively in the coming quarters.
Speaker 4: We also saw a number of key partners have strong success with our Rocky Work product in the first quarter, driving solid volume for our Spring 23 product. Pre-books for Rocky Work were very solid in the first quarter as well.
Speaker 4: and we expect good sell-through due to the strong response our campaigns have generated.
Speaker 4: Shifting to our rubber-based work product, despite being down this quarter, the Muck brand saw improving trends with our field accounts in certain key regions and also ended the quarter up year over year in the important farm and ranch channel.
Speaker 4: Despite the slow start, an increased focus on new accounts in sporting goods and hardware store channels has us cautiously optimistic for the remainder of the year with Munk.
Speaker 4: Turning now to our Western business, demand has been steady at the consumer level, though the inventory builds that impacted our work business also are impacting Western. This led to a sluggish start to the year for the Durango brand.
Speaker 4: Additionally, sales were challenged due to the tough comparisons to Q1 2022, and which nearly 8 million in holdover products shifted from 2021 into the first quarter of 2022.
Speaker 4: To help offset some of the intermediate term wholesale demand pressure, the Durango team is focused on two areas within our control. New business accounts and cost deficiencies.
Speaker 4: Today we have added 74 new doors for the Durango brand and these accounts are off to a great start.
Speaker 4: On the cost front, the team has identified measurable opportunities with our Durango factories.
Speaker 4: These efforts have resulted in cost reduction that we plan to pass along to our wholesale partners.
Speaker 4: We anticipate a more attractive opening price point will help our accounts drive incremental consumer demand in increased replenishment order frequency.
Speaker 4: Rocky Western saw similar pressures in the quarter, though the brand did see solid gains at some key Western retailers across the country. Additionally, there were some bright spots from a product perspective as new color and textured leathers, along with new silhouettes added to the women's collection, and new
Speaker 4: contributed solid sales activity in the corner. Turning to Outdoor, which includes styles under our Rocky, Muck, and extra tough brands.
Speaker 4: This category was the most impacted segment for the quarter.
Speaker 4: Not unique to us, the entire outdoor segment has experienced a slowdown as the pandemic error trend toward outdoor activity has lost momentum.
Speaker 4: which is led to the channel being over-immentory.
Speaker 4: Despite the tough conditions, extra tough salt improvement as the quarter progressed heading into the peak spring selling season with retail sales continuing to outpace reorders.
Speaker 4: which is a strong indicator that the brand and man remain strong. Looking at Ed, we are implementing initiatives to help mitigate some of the current headwinds our outdoor businesses facing.
Speaker 4: including a renewed program with a large online retailer, and anticipating that once inventories level normalize, the category will return to growth.
Speaker 4: With respect to our commercial military and duty footwear, we saw positive booking trends in the first quarter. With commercial military, we saw increased bid activity along with our a fees retail partner adding new products to stores.
Speaker 4: Meanwhile, duty sales trended positively on the strength of our police and postal uniforms this quarter.
Speaker 4: Shifting to our retail segment, Lehigh, our B2B business, was once again the bright spot.
Speaker 4: Sales continue to improve year-over-year, up 9% driven by both retention growth and new account additions.
Speaker 4: This is despite some deliveries getting pushed out to the second and third quarters. We continue to see employers embrace employee PPE such as footwear, orthotics, and compression socks as a method for driving employee retention in this tight labor market.
Speaker 4: Leye has been extremely well positioned to capitalize on this trend and we expect continued strength in our B2B business in the quarters ahead.
Speaker 4: As I mentioned at the start of the call, directed consumer sales for our brand-a-de-commerce websites were down just lightly versus a year ago despite software spending trends across the category.
Speaker 4: Finally, with respect to contract manufacturing, there wasn't much activity in the first quarter, but we were pleased to have recently been awarded a new three-year VLA Army Combat Hot Weather Contract. We expect to start shipping the first order under this contract.
Speaker 4: for our portfolio of brands at the consumer level.
Speaker 4: despite the impact from broader economic factors in the current retail inventory landscape that weighed on our first quarter results.
Speaker 4: I'm confident in our ability to manage through this current environment as retailers work through their inventory positions in the coming quarters. We'll remain focused on the factors within our control, including cost, management, and operational efficiencies. Our continued work on these fronts, along with our brand's ability to resonate with consumers, and to help our customers.
Speaker 4: Positions are business to reach new heights once hold them in whole sale demand returns.
Speaker 4: I'll now turn the call over to Tom.
Speaker 5: Thanks, Jason. As we outlined on our fourth quarter call in February , we were up against a tough comparison in early 2023 from the delay in fulfilling some shipments in late 2021 due to the disruption in our distribution centers as we pushed sales into the first half of 2022.
Speaker 5: And as Jason discussed, steady consumer demand for our portfolio of products your date has been overshadowed by inventory related selling pressure within our wholesale channel this quarter.
Speaker 5: reported net sales for the first quarter decreased 33.9% year over year to $110.4 million. Buy segment on a reported basis, wholesale sales decreased 40.2% to 80 million, 80.1 million. Retail sales increased.
Speaker 5: gross profit was $43.8 million or $39.6% of sales compared to $62.8 million or $37.6% of sales the same period last year. The 200 basis point increase in gross margin as a percentage of sales.
Speaker 5: was mainly attributable to increased retail and wholesale segment gross margin and an increased mix in retail segment sales which carry higher gross margins than the wholesale and contract manufacturing segments.
Speaker 5: Gross margins by segment, whereas follows. Poll sale of 60 basis points to 36.6%, retail of 30 basis points to 48.7% and contract manufacturing down to 8.1% from 16.2%
Speaker 5: Operating expenses were $39.6 million or $35.9% of net sales in the first quarter of 2023 compared to $49.6 million or $29.7% of net sales last year. Excluding $800,000 of acquisition related amortization, this quarter in a million
Speaker 5: 1% of net sales in a year ago period. The decrease in operating expenses was driven by a decrease in variable expenses associated with the lower sales and improved distribution center efficiencies compared with a year ago period.
Speaker 5: Income from operations was $4.2 million or 3.8% of net sales compared to $13.2 million or 7.9% of net sales in the year ago period.
Speaker 5: Adjusted operating income, which excludes the expenses related to the acquisition in both periods, was $4.9 million or 4.5% of net sales compared to adjusted operating income.
Speaker 5: of $14.2 million or 8.5% of net sales a year ago.
Speaker 5: For the first quarter of this year, interest expense was $6.1 million in a year ago period.
Speaker 5: The increase reflects increased interest rates on the interest payments on our senior turn low facility and credit facility.
Speaker 5: On a gap basis, we reported a net loss of
Speaker 5: $0.4 million or $5 cents per diluted share compared to net income of $7.3 million or $99 cents per diluted share in the first quarter of 2022. Adjusted net loss for the first quarter of 2023 was $0.8 million or $12 cents per diluted share compared to adjusted net income of $0.3 million.
Speaker 5: $8.2 million or $1.10 per-deleted share a year ago. Turning to our balance sheet. At the end of the first quarter, Caching Cache of Clivelands stood at $4.9 million and our debt totaled $219.8 million.
Speaker 5: consisting of $95.8 million in our senior secured term loan facility and $126.5 million of borrowings under our senior secured asset-back credit facility.
Speaker 5: in our senior term loan and $16.8 million of borrowings under our credit facility.
Speaker 5: Inventory is at the end of the first quarter. We're $224.1 million down 22.5% compared to 289.2 million a year ago and down 4.8% compared to the end of 2022. With respect to our outlook, based on the first quarter results,
Speaker 5: the sale of the service brand in March, and a more cautious view of the remainder of the year. Given the current industry and economic headwinds, we are adjusting our guidance.
Speaker 5: We now expect full year 2023 net sales to be approximately $500 million compared with our previous outlook of approximately $565 million.
Speaker 5: The sale of service brand represents roughly $25 million of our overall reduction with the remainder coming lower projected wholesale sales across our categories, partially offset by a modest amount of contract military sales in the fourth quarter.
Speaker 5: We still expect gross margins to be approximately 40% in 2023 compared to adjusted gross margins of 36.6% in the prior year as the higher projected mix of retail sales is offsetting the costy leverage from the lower overall sales outlook.
Speaker 5: With regard to SGNA, we have already made some adjustments to expenses and response to the software Q1 and we're currently evaluating additional expense savings.
Speaker 5: That said, we are now expecting some additional de-leverage compared to 2022 on top of the modest, modest de-leveraged we were planning at the start of this year.
Speaker 5: Finally, interest expense is coming down. Thanks to the $37 million of debt reduction we achieved in Q1, including paying down our more expensive senior term loan by $20 million, interest expense is now projected to be 18 and a half million dollars in 2023 down from our prior guidance of 21.
Speaker 1: That concludes our prepared remarks. Operator, we are now ready for questions. Thank you.
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Speaker 2: One moment please, more than both of the questions. The first question is from Jonathan Combe, update.
Speaker 2: I am
Speaker 6: John are you there? Yeah, thank you. Can you hear me?
Speaker 4: Yeah, we got you.
Speaker 6: Sorry for the delay there. No problem. A couple of questions. First, I just maybe to ask more about what you're seeing at the consumer level and you know the way you report your business it looks like.
Speaker 6: The retail segment flowed from 40% growth down to 3% growth. So I just maybe want to clarify what's driving that change in trend. And then maybe just reconcile that when you talk about the consumer demand you're seeing how that's different than...
Speaker 6: that step down and growth you're seeing in the retail segment.
Speaker 4: Yeah, I'll start off John and maybe Tom can add in. And when we talk about the wholesale business.
Speaker 4: We had anticipated that at the end of 2022, that our retail partners would have been able to navigate the over inventory positions.
Speaker 4: and get back to a regular fill-in kind of cadence in the Q1. And what we've learned is that that did not happen. The inventory levels were even higher, and they are still working through that.
Speaker 4: really as we speak now. So if you think about some of the large farm and ranch stores or maybe some of the large western retailers or even a outdoor retailer, they are seeing and they are showing us
Speaker 4: reports and we have reports where our product is selling well at those locations, but they just have enough inventory that they're not needing to fill back in as they sell through. So that's really what we're talking about from a wholesale standpoint in regards to needing to get that inventory flushed through.
Speaker 5: commerce. And so, you know, I think if you think about our e-commerce consumers for our brands, they tend to be much more active in Q3, Q4, particularly for the outdoor insulated products. Thinking back to Q4 of 2022,
Speaker 5: we were kind of still working through those distribution challenges that we had. And we were not able to ship our e-commerce orders and execute as well in 2022, or I'm sorry, in 2021 as we were in 2022. And so we had an easier comp from an e-com perspective last quarter. As we move into 2023,
Speaker 5: We're seeing positive sales for e-commerce websites. They're coming in where we had originally planned them. We're optimistic that we'll continue to see e-commerce grow here in the last half of the year as well. And then also in every tail category we talk about.
Speaker 5: the employee wellness and some additional spins right at the end of the calendar years as people utilize their vouchers. And we had talked about the new SMS programs and email campaigns that we're doing in that space. And that drove some sales at the end of the year as well. And so we're going to continue those type of campaigns at the end of 2023 as well.
Speaker 6: Okay, that's all really helpful. Thanks. And maybe a follow-up just on the wholesale destocking, you're experiencing any insight you can share from your partners or any of your past experience, how long that might last. And then how should we think about any...
Speaker 4: incremental risk to that timeline if consumer purchasing actually flows. Yeah, great, great question, John . And we keep asking this pretty much if not every week, every day. You know, our initial thought was.
Speaker 4: Still a tough, a tough comp quarter.
Speaker 4: And maybe Q3 loosens up a little bit. Our bookings going into Q3 and Q4 represent a little better view for us. And so those are not quite as interesting.
Speaker 4: Q3 loosens up a little bit. Our bookings going into Q3 and Q4 represent a little better view for us. And so those are not quite as concerning.
Speaker 4: But I think as we indicated in the prepared notes, Sean, we're being very cautious. You know, we went into the year, I think you would agree, in a different opinion. And so we are being very cautious. I think the retailers are being very cautious to not get over inventory again. And so they're going to be willing to wait.
Speaker 4: and try to count on us to have the inventory. And we're gonna do our best job to balance that and continue to drive our inventories down, but try to have what we think is gonna be here in the fall. But I think Q2 is gonna be challenging another challenging quarter.
Speaker 6: Okay, maybe two last ones for me, but first just to follow up on the pricing comment that you made. Just want to understand your approach there. Are you value engineering new products at a lower price point? Or are you rolling back any prices?
Speaker 6: Price increases that you had implemented given a different competitive dynamic and you have any sense what other you know competitor brands might be doing.
Speaker 4: Yeah, so another great question, John . And what we have found, if you think back, you know, as COVID hit, everybody stops producing and so the factories were starving. And then everybody turned back on and started buying product. And then the factories were...
Speaker 4: overwhelmed with orders. So those factories were able to take price increases that we all really didn't have any option to say no to. And so now we're back into this place where factories around the world even our own factories
Speaker 4: are producing at a much lower rate so they need capacity, or they need orders to fill their capacity. So we've been able to go back to those factories and negotiate at better prices, better raw materials, just better overall. And so therefore we've been able to reduce the cost.
Speaker 4: We have been doing that very targeted and really looking at specific styles that maybe have slowed down more than other styles and where we feel that it may be a price issue at retail.
Speaker 4: We've been able to lower those in and we're hoping that we'll see some pickup there and that that will help turn some of that inventory and therefore help fill in orders as well. So I miss. No, I think that's, I mean, that's the gist is that we were using kind of the sell-in data that we have.
Speaker 5: from some of our larger accounts and some of our field accounts, so we get that type of information provided to. And we're taking that and we're going back to our source partners and saying, hey, price is impacting these certain styles. And to Jason's point, we've been able to work down some of the first costs for some from styles that aren't meeting our expectations from a sell-through perspective and we've had some success there.
Speaker 4: and adjusting our map or MSRP pricing accordingly. Yeah, the other part of that question you asked, John , I knew there was a second part in regards to competitors. Will we have seen a couple competitors much smaller than us?
Speaker 4: reduce some prices. And if you remember, the Leigh Height Business does a lot of business with some other brands. And so we have seen some price reduction, but again, it's been very pinpointed. So it's been very specific types of products. And then there's been some retail or sorry, some wholesalers.
Speaker 4: that they took their price increases and we haven't seen any reductions. So I think our approach again will be to be strategic around where and how to do that and try to continue to maintain these margins that we share. I think they were in the 39, 40%. So.
Speaker 6: We want to continue to drive the higher margins as well. And just maybe correct me, I'm maybe forgetting some mix or product changes given the acquisition, but just thinking through the rationale why the implied wholesale growth margin should stay well above the pre-pandemic levels given some of the dynamic you just discussed. But still, it's always a meeting response for potential consulting?, allowing us to continue to provide higher post knowledge with more explained diagnosis.
Speaker 5: Just thoughts on what's the right level of gross margin at the segment level? Yeah, I would say in the post-acquisition, the acquired brands carry a slightly higher gross margin.
Speaker 5: then our legacy brands, pre-acquisition. And so we would like to target long-term, and they're going to work to get there, try to get there this year, but could lead into 2024, again, wholesale of those margins, into that upper 30% range, 39%. We're guiding, just to be clear, we're guiding.
Speaker 5: This goes margin of 40% for 2023. But we think that there would be, you know, range to continue to expand those margins as we move through time here. You know, given the inventory position, we got into last year, you know, we're still working through some inventory that was at this higher.
Speaker 6: and the challenges that it's caused, we've certainly seen the relief like everybody else has, but we have to sell through that inventory that came in last year. Great, maybe the last one for me if I could sneak it in and maybe it's for Tom or maybe for Sarah, since she'll inherit some of the comments here I guess, but just thinking through the operating margin, it sounds like the pieces you gave, maybe. Yeah.
Speaker 6: still close to holding the 8% operating margin for the year given some of the cost adjustment. So, maybe I don't know if you had any more specificity on the operating margin this year and then how should we think about what's needed to grow that over time?
Speaker 5: Yeah, I think that's a pretty fair estimate still, John . We're certainly going to try to target coming in above that, and as we work through some of these cost-daving measures over the next quarter, and if we're able to see positive self or, you know, I guess, positive self into retailers.
Speaker 5: in Q3 and Q4 as they work through those inventory. I think you're very familiar with us, and you've seen us being able to really grow our operating income, or operating leverage, or some top line sales growth. So we'll be waiting to capitalize on that moment.
Speaker 7: Okay, thanks for taking all the questions. Yeah, absolutely. Thank you, John . Thanks, John . Any make-rescriptions from Janus Vister, off the CTOG. Please go ahead. Hi, everyone. Good afternoon. First I want to clarify just on some of the commentary around the large charm and ranch doors in the Western retailers. Is there any change they're seeing based on what you're hearing from them in terms of self-doubt there, or is it just purely a more conservative pasturing and just kind of based on the environment?
Speaker 4: but they are being more conservative. And even in some cases, it may not be our inventory that they're concerned with.
Speaker 4: There could be other brands or even other categories that are creating this inventory and balance issue for them. So, like I said,
Speaker 4: I really, we had anticipated that we would move through more of that in Q4 of last year and then maybe a little into January , but it should have opened back up and it just is not. They are being really conservative and...
Speaker 5: and they're selling what they have yet jenny and i think i think one of the ways we can tell the behavior of the retailer has shifted is that the store of the art business review about you know sixty five seventy percent at once uh... you know working to the last couple years that number crap down to you know called fifty fifty five percent depending on the plan
Speaker 5: that 80% mark, which shows you they're ordering more right on time as they needed, replenishing the inventory. And so, you know, that's going to shift a little bit of the burden of having the inventory on new airbooks, and they're going to rely on it. You know, working in the impress and they're going to rely on us to have the inventory as they need to replenish their inventory level. So, we think the rate may be or has shifted.
Speaker 7: And so we're going to be watching that at once number very closely as we move through the next couple quarters. All right, thanks. It's really helpful color. And then on the Durango business, I think you mentioned going into new doors. Any color you can give there. And then are there similar opportunities at other brands just to offset the more cautious environment that you're seeing? Yeah, absolutely. So I think what we found with Durango is
Speaker 4: moving more into maybe work stores versus just through western stores or farm and ranch stores. We've had some success with some new product there in that market. And then the extra tough brand, we've also seen new opportunities there, more inland, right? So that brand is really popular along the coasts, which makes a lot of sense around water. But we're seeing some success inland and maybe more lakes in that kind of environment. So we're seeing some success there. Yeah, we run reports around this.
Speaker 5: And we know that this year alone we've opened more doors than we're not positive indoors across all brands, but the Jason's point to Rangel and Extra Club, I think we're meeting the charge from a door cap perspective. Great, and then the last one for me is just on inventory. I think you had said
Speaker 5: down 45 million this year, is that still the plan, and will you put that towards that paydown? Yeah, so we're maintaining our targets to get inventory down to approximately $185 million in sales, but it didn't be year. And the plan for that will be to use those proceeds to pay down that. All right, perfect. Thank you very much, and best of luck.
Speaker 2: Thank you. Thank you. Great. Women's Christian'sowa J. Blake of the
Speaker 5: Go ahead. You know, I think, hey Jeff. So I think we were looking at our, I think the biggest area for us is the key account, right? And we're not to continue to harp on the moving to the room in Tori, but the little visibility that we do get into their data. We can see the inventory levels coming down. And so I think we anticipated very replenishments and bigger fulfillment orders. And to Jason's point, even though we've seen some of those retailers through inventory come down, they're still being incredibly conservative. And we're hearing, as Jason said earlier, that they could be over inventory in other categories.
Speaker 5: and still fill in slightly on our brand of products. The other area that surprised me at least was e-commerce fell off a little bit in March. It has since recovered in April , but that also had a scratch in her heads a little bit.
Speaker 4: Yeah, and I would just add that I think in general, the rubber boot business probably surprised me the most as being, you know, down. And then in the same breath, this extra tough new store opening is surprised me in a positive way. So I'm excited to see that. I think it broadens the horizon for that brand.
Speaker 5: You know, we just got to navigate this inventory stuff right now. I think to, you know, once we got past, everyone's everybody got past your end. We've had a lot of, you know, management, demand management meetings and stuff like that with our key partners. And we're just hearing them be more cautious. And so I think we're going to kind of mirror that mindset.
Speaker 8: Yeah, just to follow up, Tommy alluded to April in Ecombe, you know, a little better. I was just kind of curious if you characterize, you know, as the quarter transpired, you know, when you left the quarter in March, it is fair to say we kind of went out of the quarter and on a low note or what is there any bounce on the bottom and a bit of a bounce back, you know, you know, just as you, as we think about going into Q2, how is it trending? Was your question, as to make an ancient question correctly?
Speaker 5: Are you referring to just the e-commerce or are you talking about sales in general in total? Just in general. I think that we look into Q2. We're going to be cautious, as Jason said, and we probably have sales flat as to down slightly in Q2.
Speaker 5: But recovering in Q3 and Q4, they get to that $500 million dollar number. I think it is really just a wait and see on when our retail partners start filling in more regularly. And we're seeing a little bit of that, but we're still going to be cautious.
Speaker 8: Great, well, best of luck and keep a dangerous fight.
Speaker 8: Great. Well, best of luck and keep up the good fight. Thank you. We'll talk to you soon. Thanks, Jeff. Thank you.
Speaker 4: There are no further questions at this time. I would now like to hand the call back over to Jason Brooks, President Cummings. Please go ahead, sir. Thank you very much. I just want to thank the entire Rocky team for...
Speaker 4: You know, a challenging Q1, but we have all worked hard to get here. And I am positive that we will continue to fight the fight for 2023 and do the best we can to make the best.
Speaker 1: This concludes today's conference. Thank you for joining us. You hard work now.