PLBY Group Inc. Q1 2023 Earnings Call
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Speaker 2: Greetings, and welcome to PLBY Group's first quarter 2023 earnings conference call and webcast.
Speaker 2: At this time, all parts of INS are in a listen-only mode. A question and answer session will follow the formal presentation.
Speaker 2: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ashley DeSimone with ICR. Thank you. I'm Ashley DeSimone, and I'll see you again.
Speaker 3: Good afternoon everyone and welcome to PLBY Group's first quarter 2023 earnings conference cuddle. I'm Ashley Ducinone from ICR.
Speaker 3: Hosting today's call are Ben Cone, Chief Executive Officer, and Mark Crossman, Chief Financial Officer, and Chief Operating Officer.
Speaker 3: The information discussed today is qualified in its entirety by the Form 8K that has been filed by PLBY Group Inc., which may be accessed on the SEC's website and PLBY Group's website.
Speaker 3: Today's call is also being webcast and a replay will be posted to PLBY Group's Investor Relations website. Please note that statements made during this call, including financial projections or other statements that are not historical in nature, may constitute forward-looking statements.
Speaker 3: Such statements are made on the basis of PLBY groups' views and assumptions regarding future events and business performance at the time they are made, and we do not undertake any obligation to update these statements.
Speaker 3: Forward-looking statements are subject to risks which could cause PLBY Group's actual results to differ from its historical results and forecasts, including those risks set forth in PLBY Group's filings with the SEC.
Speaker 3: and you should refer to and carefully consider those for more information.
Speaker 3: This cautionary statement applies to all forward-looking statements made during this call. Do not place undue reliance on any forward-looking statement.
Speaker 3: During this call, PLBY Group will be referring to non-GAAP financial measures.
Speaker 3: These non-GAAP measures are not prepared in accordance with generally accepted accounting principles.
Speaker 3: A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in the earnings release PLBY group filed with its Form 8K today.
Speaker 3: I will now open the call to Ben Kong. Ben, please go ahead.
Speaker 4: Thank you, Ashley, and good afternoon, everyone.
Speaker 4: Before we get started, I would like to introduce Mark Crossman, our new chief operating officer and chief financial officer who joined us just about a month ago.
Speaker 4: Mark brings a wealth of operating experience both in consumer products and the technology sectors to the team.
Speaker 4: As you will hear in a few minutes, Mark is in the beginning stages of helping me rebuild our cost infrastructure and has already identified millions of dollars of cost reductions not previously identified that we will be going after in the coming months. With Mark now on the team, I have reorganized our management team.
Speaker 4: Mark will be taking over consumer products in addition to his CFO responsibilities, and I will be focusing on our Creator Platform and Licensing. I am pleased to report the MQ1 GMB on our Creator Platform increased 2.4 times over Q4, since our last early call on March 16th.
Speaker 4: Our weekly GMB as of last week has increased a further 70%. We have also made significant progress transitioning the business to a capital light model.
Speaker 4: This afternoon, I'm going to share updates in three key areas. First, I'm going to dive into more detail on the growth of our creator platform and why we're so excited about the momentum we're seeing.
Speaker 4: Second, I'll share an update on the work we've done to improve the long-term economics of our JB in China, as well as other updates on our licensing business.
Speaker 4: And third, I'll expand on the progress we've made streamlining our operating model, and reducing both our operating expenses and our gross debt.
Speaker 4: provide you with more detailed financial information.
Speaker 4: First, on our creative platform, as shared at the start, Q1 was up 2.4 times and we have grown an additional 70% since our last already call.
Speaker 4: and revenue that our creators continue to generate on the platform. As of last week we now have approximately 2,200 monthly earning creators and approximately 1.9 million registered users which means that our creator and fan bases are not only growing, but also growing.
Speaker 4: but also individually spending and earning more than they were last quarter. And lastly, as we're scaling, we're seeing economies to scale with our cost structure, and we're continuing to renegotiate more favorable terms with our key vendors. For example, we just added a new payment processing partner that lowers our fees by approximately 50%. Next, also grants as well.
Speaker 4: Since we last spoke, our product engineering and design teams have remained focused on continuously improving the creator and fan experiences.
Speaker 4: On the creator monetization side, we have significantly improved our onboarding flows to support creators in earning their first dollars more quickly. We've continued to iterate on our profile design to drive more creator fan conversations and engagement, which leads to greater monetization, and we've rolled out the ability to offer bundled subscription offers, promotional discounts, and more. We've also been focused on ensuring a differentiated product experience from...
Speaker 4: Every year from creators every day how proud they are to be on Playboy. And we're dedicated to helping them be discovered and make more money than they can make on other competitive platforms.
Speaker 4: Today, creators earn income on our platform in four key ways. Roughly 60% of creator revenue is generated via messaging, whereby fans engage with creators in ways they cannot on other platforms and purchase content the creators send them in direct messages. Roughly 15% is generated via monthly subscriptions.
Speaker 4: In addition to the continuous work we're doing to improve creator monetization, we also intend to soon roll out value-added features and offerings that allow us to increase our percentage of those economics. Microsoft Word 9.0. Ap Fin DeL
Speaker 4: You can imagine advanced features or special access, such as the ability for a fan to show up at the top of a creator's inbox, or exclusive access to extended Playboy photo shoots, archival playmate galleries, or one of our iconic Playboy parties all over the world, as perks that would become part of a Playboy membership.
Speaker 4: proposition that sits on top of individual creator monetization. We are still in the early stages of developing this membership value proposition.
Speaker 4: and its potential tiers, but our goal is to ensure that as we scale our platform, we can meaningfully expand its profitability with services that have more favorable economics to Playboy. I am very encouraged by the momentum to date with our Creator platform and look forward to keeping you up to speed.
Speaker 4: Next, I am pleased to report that since we last spoke in March, we successfully negotiated amendments over a number of our licensing agreements as part of our recently formed China Joint Center. The goal of these renegotiations was to both support our existing licensees whose businesses were significantly impacted by the COVID shutdowns from last year.
Speaker 4: exclusivity clauses, added stronger audit controls and visibility to sales data, taken back product categories, significantly increased our royalty or percentage of sales, and are working on transferring the ownership of the Partners e-commerce stores to the Playboy China joint venture.
Speaker 4: One thing to note is that during the first quarter, we did not book any revenue related to one of these licensees, as we are in the process of negotiating a revised agreement. We have now signed an agreement with our partner and are now working on collecting those royalties.
Speaker 4: We have also made significant progress with Douyin, the TikTok of China, to establish a flagship e-commerce store that our Playboy China joint venture is expected to own. Douyin is now one of the largest e-commerce engines in China, and Playboy had previously been blocked on Douyin based on our legacy licensing model. Our JV with the fun group and a revised contract with our licensees.
Speaker 4: solve this issue. Moving forward, to solve the Do you issue, we anticipate that our licensing partners will sell through the Playboy China Joint Venture Do you soar, which will help us more effectively control the Playboy brand positioning, pricing, product design, and marketing, and collect cash while our licensing partners operate, manufacturing, fulfillment, and product inventory.
Speaker 4: All of this is part of our larger strategy to diversify our revenue across partners and businesses in China while having increased visibility into direct sales and more directly controlling the consumer facing components of the brand.
Speaker 4: Last quarter, we set forth our intention to transform our US Playboy D2C business to a licensing model.
Speaker 4: We have now signed a binding term sheet with a non affiliated partner who brings a wealth of experience and proven track record of success in developing and executing effective ecommerce strategies and brand development.
Speaker 4: This partner was instrumental in launching several of Playboy's hugely popular collaborations with streetwear brands including Fragment, Anti Social Social Club, and Revenge. Their passion for a brand and understanding of today's customers are unparalleled.
Speaker 4: This transition is underway with the deal expected to close by June 1st, and we are excited for the next chapter of the Playboy Shop and its enormous potential for innovation, including the integration with our creator platform and community experiences that only Playboy can provide. Moving forward, our partner will take over all costs and operations of our shop.
Speaker 4: and we will receive 15% of net revenue. We remain optimistic about the continued demand for the Playboy brand and unlocking its power across new categories and territories around the world.
Speaker 4: Our new sexual wellness licensees surpassed $1 million in total sales since launching in our lover stores and are now rolling out to third-party retailers. We signed an amendment in Q1 to accelerate growth in Latin America, UK, and Europe .
Speaker 4: In Q1, our team closed a total of 15 new licensing agreements, of which 13 were international, across fashion collaborations as well as new men's grooming and home decor categories. Lastly, I'm happy to report on the progress we've made transitioning the business to a Capital Light Model.
Speaker 4: reducing our operating expenses and reducing our gross debt. With the momentum we're experiencing with our Creator platform and the high margin revenue we see from licensing, we have decided to fully exit serving as the operator of our consumer product businesses.
Speaker 4: This means that in addition to selling Yandy, which we previously reported, we will now be taking three additional steps. First, as we just mentioned, we recently signed a binding term sheet to license our Playboy DTC business. Second, we've engaged
Speaker 4: Stage Group takes for all strategic alternatives for lovers. And third, we've engaged most in company to explore all strategic alternatives for Honey Birdette.
Speaker 4: Because of this decision to fully exit the operations of D2C and retail consumer products, we've recently eliminated $3 million of personnel costs.
Speaker 4: As we continue to execute the remaining steps, we anticipate meaningful additional cost savings. We expect this decision to be net neutral to profitable to Playboy, given that the additional cost savings are expected to more than offset any loss in contribution margin from these businesses.
Speaker 4: We also expect that our free cash flows should be higher as we won't have inventory or the CapEx related to store maintenance and openings.
Speaker 4: Lastly, I want to share some positive news on the debt restructure and we financing we just completed. Specifically, we were able to negotiate the assignment of approximately $91 million of our senior debt from certain of our lenders to a primary lender at 87.25 cents on the dollar resulting in a discount of approximately $12 million.
Speaker 4: We also negotiated the exchange of our preferred stock, which is held by one of our lenders, for additional principal of our senior debt at a $7 million discount to the current liquidation value.
Speaker 4: In order to accommodate the restructuring of our senior debt and preferred stock, we amended and restated our senior debt agreement with Fortress and our other lenders.
Speaker 4: The restated facility actually lowers our total cost of capital by lowering the interest rate so that in total our cash interest costs remain substantially the same while eliminating the accrual and payment in kind features of the preferred stock.
Speaker 4: Fortress has also made available to us the $12 million discount obtained from the other Wenders as new cash on their balance sheet.
Speaker 4: In total, we will have $210 million of gross debt outstanding down from our 216 before, inclusive of the preferred stock.
Speaker 4: But we now have an additional $12 million of cash on a balance sheet bringing total cash to an excess of $35 million.
Speaker 4: The bulk of the restated facility has no amortization payments, thus saving the company over $2 million of cash during such periods, and has no leverage covenants until Q1, 2025. The restated facility has no fees associated with it, and has no prepayment penalty. We can elect at our option to prepay it at any time.
Speaker 4: Our intention is to prepay for that facility as soon as we can. To the extent possible, we would like to use the proceeds from the asset to bestetures we discussed, as well as the proceeds we hope to generate from selling our art collection, a process we have recently kicked off to pay down debt.
Speaker 4: Before handing the call over to Mark, I want to conclude by saying how excited I am by the momentum of our greater platform and our singular focus on the Playboy brand. With that, I'll hand the call over to Mark.
Speaker 5: Thank you, Ben, and hello everyone. In joining as CFO and COO, I've been working closely with Ben to rebuild our cross structure and fully move the company towards a capital-like model. As a part of this process, we are aggressively reducing costs, not needed to support our two business lines moving forward, the creator platform and licensing.
Speaker 5: These two businesses have greater potential for growth, higher margins, and lower working capital requirement. Before I get into the financials, I want to share with you a few of the initiatives we're taking at both Lavers and Honeybury Day.
Speaker 5: lifting our margins and diversifying our product assortment to give us the flexibility to run promotions in line with our competitors. Regarding margins, we are leaning into our Playboy Pledgers line of sex toys, a licensed product.
Speaker 5: Playboy Pleasures just crossed $1 million in sales and carries roughly 25 points higher gross margins versus our average gross margin and has only been in stores for a couple of months.
Speaker 5: We have a new Playboy Pledges assortment landing in Q2 and are developing another special line for later this year.
Speaker 5: In the last month of the quarter, we saw an improvement in conversion and average transaction value.
Speaker 5: Starting in June , we plan to bring our promotional efforts in line with our competitors to accelerate our revenue growth.
Speaker 5: Turning to Honey Burdette, our sales were down year over year for three primary reasons. First, as we previously discussed, we did not run our March promotional event this year.
Speaker 5: Second, the particularly difficult macroenvironment of Australia, and third, switching our digital advertising agency which impacted our online sales, or about half of our sales.
Speaker 5: While we can't impact the macro environment in Australia, we are planning on running our June sale one week earlier to capture Memorial Day weekend sale.
Speaker 5: In addition, we plan to ramp up our digital advertising spend in the back half of the quarter with our new agency
Speaker 5: as they were able to get META to unblock our advertising and have seen our blended ROAS return to normal. By way of background, META had blocked our advertising in the first quarter because they deemed it to be sexually explicit material. As a result, our blended return on advertising spending dropped from 18 times to 13 times over the year..
Speaker 5: We're also making a couple of additional changes to the business.
Speaker 5: We're going to reduce our SKU count starting in the fourth quarter of this year. It will allow us to make smaller inventory buys per collection without sacrificing the depth of our size scale.
Speaker 5: The result should increase our inventory turnover and free up working capital without reducing the number of new collections we launch per year.
Speaker 5: We are also aggressively cutting our supply chain costs.
Speaker 5: We found inefficiencies in all areas of our shipping and logistics. Given the strategic alternatives we are exploring, we are going to pause on opening new stores. We remain very excited about the brand's position in the market and its long-term growth potential. Turning to Q1 results. We finished the quarter with net revenues of $51.4 million.
Speaker 5: Our direct-to-consumer business was down $12.7 million or 25%. I want to point out that revenues from our Yandy and Playboy.com businesses were down $4.9 million.
Speaker 5: However, Yandy was just sold after the end of the quarter and we recently signed a binding LOI to license Playboy.com. Accordingly, after the second quarter, we won't recognize revenue from Yandy and will only recognize licensing income from Playboy.com, which will be reflected in our licensing segment.
Speaker 5: Revenues from the remainder of our direct-to-consumer segment were down $7.8 million.
Speaker 5: The majority of the decline was attributable to reduced traffic both in-store and online. During the quarter we were not as promotional and allocated fewer dollars to paid marketing in both our lovers and honeybird businesses.
Speaker 5: Furthermore, as we previously communicated, we chose to full go with sale in March at Honey Birdette as compared to a year ago. Not renting the March sale at Honey Birdette alone resulted in a reduction of $2 million in sales in the quarter.
Speaker 5: From our vantage point, it is clear that economic conditions are weighing on our consumer both domestically and abroad, and sales and promotions are increasingly driving the purchase-making decisions.
Speaker 5: Licensing revenue decreased by $5 million versus the prior year period. While there is no doubt weaker consumer demand experienced by our licensing partners in China and the U.S. was a challenge. In the next segment we'llStar CHMan electrode Steroid
Speaker 5: The vast majority of the decline was attributable to the timing of $3 million of cash receipts from one of our largest licensees in China. We book revenue from that licensee on a cash-collected basis.
Speaker 5: However, as Ben mentioned, we recently agreed to a revised deal with that partner and expect to collect the past due cash this quarter.
Speaker 5: Revenue in our digital subscriptions and content segment was essentially flat.
Speaker 5: The growth we are seeing from our Creator platform, 2.5 times in Q1 GMV vs Q4, is offsetting the secular declines in linear television.
Speaker 5: With the gains being made by our creator platform, we should anticipate seeing this segment growing on a consolidated basis in the near future. Adjusted EBITDA was a loss of $10.8 million. However, $1.7 million of the losses were triple the fee-end.
Speaker 5: 2.6 million dollars if the losses were attributable to playboy.com
Speaker 5: In $2.4 million, the losses were related to a reserve against slow-moving Honeybird Ed inventory. Excluding those items, adjusted EBITDA would have been a loss of $4.1 million, and if the China revenue had come in on time, adjusted EBITDA would have been close to break-even. It is also worth noting that the cost cuts we made in March were not
Speaker 5: would have been approximately $2 million.
Speaker 5: This number is only for the actual cuts made in March and not those previously identified to be made in the future.
Speaker 5: Since March, we have cut approximately $3 million of additional annualized headcount.
Speaker 5: And after a continued review of the various business lines and operating processes, we identified additional cost savings through re-prioritizing our spend on critical technology and reconfiguring our supply chain economics.
Speaker 5: Our goal is to simplify our technology stack and cut our supply chain costs while doing so with a leaner organization.
Speaker 5: We believe we can reduce our expenses by another $7 million on a run rate basis after the transition costs will occur over the next couple of quarters. I want to reiterate that the cost savings related to technology, supply chain, and inventory will take a couple of quarters to show up in our P&L. While we are not providing revenue and EBITDA guidance at this time, we plan to resume issuing guidance after we have finished implementing our operational changes.
Speaker 5: on the balance sheet, post debt restructuring, and the changes we are making to the business, we have more than ample liquidity moving forward. With that, I'll ask the operator to please open the line for question. Thank you.
answer session. If you'd like to ask a question you may press star one on your telephone keypad. A confirmation total indicate your line is in the question queue.
In the interest of time, if you could please limit yourself to one question and one follow-up, and then re-cue up for more questions if you have some.
Our first question comes from the line of Jason Telchin with Canaccord. Please proceed with your question.
Great, thanks for taking the question. I guess on the creator platform, could you just maybe talk a little bit about how your revenue share compares to other platforms in the space and if you see an opportunity to potentially give back a little more of the economics, at least as you're ramping the platform to attract creators. Thanks.
Thanks Jason, it's Ben Cohen. Our revenue percentage as a percentage of the GMV or the total creator revenue is exactly the same as the other major platforms out there. I actually look at it differently. I don't see any need to cut that percentage at all.
As we said on the last earnings call, our goal was to get to 10,000 craters by year end. We have grown from 1500 to 2200. If you ran the math on a daily basis assuming averages to the end of the year, you are only talking about 35 craters a day.
What we actually see is the creator sitting at the nucleus or the center of that universe, these core services that we provide today are that 20% bucket. So tipping, messaging, and subscription.
We actually see a second layer of services that would be value added services that could leverage AI or other things that would actually allow us to charge more or increase our percentage of revenue. And then on top of all of that, long term, we see a membership opportunity which would even be a higher percentage of revenue. I want to be clear though, in the short term, we are focused on one thing only.
which is adding more creators and adding more users. Great, thanks. That's really helpful. And just a quick follow-up to that. Previously, when you had the Playboy.com e-commerce platform as part of the strategy, there was sort of an idea of having a flywheel effect where you would have the creators promoting some of the products.
How can you in this new licensing model still sort of leverage the creators to create exclusive collections or to promote the existing merchandise?
Long-term nothing has changed from that. This is a licensing model but with a partner we have done a lot of work with in the past as we mentioned, antisocial, social, etc. That is part of our deal moving forward with them which is leveraging our creators to become affiliates as well as developing select or special merchandise based on various events.
So, you know, whether that be a Playboy Super Bowl party or something tied specifically to a crater or apparel that would only be available to our members, that is all part of the deal we have negotiated with that partner.
a Playboy Super Bowl party or something tied specifically to a crater or apparel that would only be available to our members. That is all part of the deal we have negotiated with that partner. Thank you.
Our next question comes from the line of Alex Furman with Craig Hallam. Please receive your question.
Great, thanks very much for taking my question. You know, it sounds like the creator platform is galing very nicely. What are some, you mentioned other geographies that you could potentially take that to, you know, when, when, like that start to happen and
any update you can give us on your plans for the platform as you think about next year. I know it sounds like you're focused primarily on getting creators. When will we start to see some more significant leverage on the bottom line there?
Thanks, Alex. I'm a little bit confused on the additional geographies. The platform is open to almost every geography, obviously China not being part of that given the restrictions on social media and technology.
But we have creators from all over the world for the most part on the platform today. When you actually look at the geographic distribution of creators, about 67% of those, 68% of those come from North America. So that is our single largest. But we have creators from almost everywhere in the world. When we think about guidance that we've given or what we said in the last earnings.
even the cash flow positive number is obviously on a run rate basis much larger moving into next year. If you did annualize right now our weekly our weekly GMV and you assumed zero growth going forward and we're growing at north of a 10% weekly CAGR right now.
That number would be an excess of $25 million and that's up from the $15 million on our last earnings call.
Mark, nice to make your acquaintance. Then I'm going to send this one your way. It sounds like a lot of hard work relaying the business model. You gave some great detail on what changes, what's no longer part of the go forward strategy. Let's just take a high level view. Can I ask you to detail what's left? Simplistically, what's the team of businesses you'll have on the field at the end of it all? What's the game you think?
boy. And specifically our Quater platform will be our hero product. You know, the growth we're seeing with that, a warrant that and licensing providing high margin cashflow to support that. That's what's left and what we look at, you know, from a organization is a much simpler organization.
In fact, when you look at sort of a working capital situation as well, you're almost in a negative working capital situation based on how the cash flows in that business work.
Okay. Mark, I wanted to ask on Honey Burdette, this was at the time of acquisition, high 30s EBITDA margin business with an eye towards what you might be able to realize in strategic alternatives. Where are those margins now?
What do you think is realistic for margin structure for that business?
Yeah, pleasure, Mitch Jim. The margins right now, what we're seeing is they're a little bit below where they've been historically. And a lot of that has been, you know, due to the macro environment in Australia and what I've outlined. But I think going forward, we can get back to those numbers. Um, um,
And I don't think, you know, well, we can't control the macro environment. We can control our internal costs. And I think that's where you're going to see a lot of the, a lot of the upside because everything I talked about in terms of fast changes and supply chain, and then ultimately getting into sourcing, you know, all of that's coming at the.
to the benefit of Honeyberg Act. Okay. So, recue, you're the uptight for another. We have time for another one for you. Okay, great. You mentioned the new...
payment processor lowers fees by 50%. What are the payment processing rates? Have you been able to get that to the single digits with this new payment processor?
the new payment processor lowers fees by 50%. What are the payment processing rates? Are you, you know, have you been able to get that to the single digits with this new payment processor? We have.
Yeah, so, you know, historically, I think, you know, I won't speak to our specifically, but I would say that, you know, in general, when you sometimes are dealing with not safe for work content. You're 10% to 12%, and we've been able to reduce those fees, as we said.
by approximately 50%. And so when you look long-term, that is a significant margin improvement long-term. And there are things that we're doing to improve that even further down the road through content moderation and bifurcating content potentially between safe for work and not safe for work.
Hopefully, I'll leave it at that. Thank you.
Hopefully, I'll leave it at that. Thank you. Thanks, Jim.
Our next question comes from the line of George Kelly with Roth Capital Partners. Please proceed with your question. Hey, everybody. Thanks for taking my questions. So first one, curious if you could talk about your expectations, and I may have missed this in your remarks, but I want to know what your expectations are for the next question. If you could talk about your expectations, and I may have missed this in your remarks, then I would love to hear your thoughts.
your expectation for Honeybird debt revenue this year, I think it was just over 80 million bucks last year. Just curious what kind of growth you're planning on this year. Yeah, I think right now, given the transition we're making, we're not giving guidance, but as I said earlier in my comments.
We are seeing a pretty tough macro environment and particularly in Australia where the It's underperforming the US by about two times.
a pretty tough macro environment, and particularly in Australia, where it's underperforming the US by about two times.
So I'd leave it at that until we start giving guidance again. Okay, okay. And then the second question for me is, in your prepared remarks you talked about the new Chinese deals and how they carry lower guarantees. So I was just wondering if you could quantify that at all. You've given those kind of 10-year outlooks.
And what I would say is I don't want to get into the specifics right now, George, because we're still with one of them discussing things.
But what we are focused on is diversifying that revenue stream. The question is how do you
How do you do that? So we've taken back product categories, we've taken back exclusivity on product categories, we've taken over the e-commerce stores or in the process of transitioning those e-commerce stores. We've actually increased our percentage of sales in those contracts considerably.
And so all of that is to build a more diversified China business. It was all part of our plan. And that also plays into Douyin, which has taken the massive share of the China e-commerce market, where historically we have been banned or blocked on Douyin. We now are in the process of opening a flagship e-commerce store.
where it's our intention that our licensees will sell through us on that.
And so, in the future when we're done with negotiations, we can talk about what it looks like. But we've also signed multiple new licensing deals with new partners in China. And so I just don't have the total MGs in front of us moving forward. But our intention long term is to offset the
any declines with a much more diversified revenue base. Okay, thanks. As a reminder, it is star one to ask a question. No additional questions, I'd like to hand.
at this time and have a wonderful day.