Q1 2020 Earnings Call
At this time I would like to welcome everyone to the Barnes <unk> Noble education fiscal 2021st quarter earnings Conference call.
All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session.
If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad, if youd like to withdraw your question press the pound key. Thank you Tom Donahue CFO you may begin your conference.
Good morning, and welcome to our fiscal 2021st quarter earnings call joining us today on my kids be CEO and chairman.
Sorry, Burberry VP of operations and he's not hold true president of digital student solutions.
It's a mile It Chief operating officer Barnes <unk> Noble College as well as other members of our senior management team.
Before we begin.
I would remind you that the statements we will make on today's call are covered by the safe Harbor disclaimer contained in our press release and public documents.
The contents of this call in October for the property of Barnes <unk> noble education and enough for rebroadcast or use by any other party without prior written consent appointed all education. During this call we will be making forward looking statements with predictions projections and other statements about future events.
These statements are based on current expectations and assumptions that are subject to risks and uncertainties.
Including those contained in our press release and public filings with the Securities and Exchange Commission.
The company disclaims any obligation to update any forward looking statements that may be made or discussed during this call at this time I'll turn the call Mike Huckabee.
Thanks, Tom Good morning, everyone and thank you for joining us Tonight.
Our fiscal 2021st quarter results were consistent with our expectations for this quarter, a seasonally low sales activity for be any d.. We continue to make important strides in our areas of strategic focus for the company. For example, we are investing in growing our BARDA be learn digital study product.
We're driving that new business wins in retail and we're strengthening our retail segment through important initiatives in both our general merchandise and course materials business first I will discuss the performance of bar will be in our DSS segment, which continued to build momentum as we improve and refine our offerings.
We invested in new solutions and leverage our unmatched insights into student preferences and of course materials consumption.
It's been barely or since our new Didnt digital study product part will be learnt soft launch.
We have accomplished a great deal in that time, our product team has made continued enhancements to battle be learnt to ensure his best serving students by providing them with academic assistance available anytime and anywhere.
We continue to grow the number of titles and subjects covered on Bart will be learn and to increase the number of step by step solutions available in our content library.
And this fall semester, we are approaching approximately 2 million solutions available for students a problem.
More than 1 billion solutions, we offer it at the end of our last fiscal year just in April .
With our first in footprint Barbie sales push in the spring we acquired approximately 50000 subscribers leveraging what we learned during the spring rush. We have now improved our sales strategies enhanced bookseller trading increased in store marketing and continue to incentivize our field sales force.
Our thousands of student booksellers are hard at work offering this product to students to supplement their classroom learning and ensure that they are equipped for success.
In addition to enhancements to the bar will be learn product. We also recently soft launched a new bar will be offering branded bridal be right.
Our goal is to provide innovative suite of digital products and services that support the learning ecosystem and provide students with the tools they need to succeed both in and out of the classroom.
Pardon me learn Mark the first offering in our plant suite of services and just a few weeks ago, we launched a bar will be right as Bart will be learns companion.
Bobby White right was developed on a foundation of a writing product we acquired two student brands in August 2018, our teams have been working diligently to grow and enhance the offering into a best in class writing product.
Probably right allow students to check grammar detect plagiarism and receive an AI generated preliminary score. So they know what their paper may benefit from improvement before they submitted.
We believe part will be right solves multiple pain points for an even larger addressable market of students.
We're excited to grow our suite of services and look forward to adding active barley users.
Moving now to our retail segment, and specifically new bookstore business.
After just one quarter with our new go to market strategy and unified sales team in place Weve already started supposed positive results.
Currently we have contracts to open in fiscal year 20, approximately $78 million of new business grow sales or $39 million net after store closings.
This includes both full service and virtual store Myles.
Of this $39 million approximately 21 million is attributable to our virtual stores demonstrating the strong value of the virtual operating capabilities provided to be any D by Mds.
Our ability to adapt to the different needs of current and prospective partners is critical the complexities of our industry are becoming increasingly challenging for institutions to manage on their own that gives us the unique advantage to deliver the physical virtual or custom store solutions best do it for them.
A great example of the value we offer our college partners is our new BNC adoption and insights portal or IP.
Hey, IP is our innovative new platform for faculty and academic leadership to submit and monitor course material adoptions enhance affordability and drive student success.
This platform has helped us win new accounts and to retain existing ones.
Hey, IP is not live at our first wave schools and we will continue to implement this platform for current and new partners on a rolling basis throughout this fiscal year.
We're very excited about it do you think this is a significant differentiator for VNC in the marketplace as we increase the penetration of digital packages and pricing models. The IP platform, coupled with our efforts to integrate it into the learning management systems and the student information systems of our campus partners will be a critical tool that will make our relationships with campus partners, even more valuable and therefore more sticky.
We are seeing positive trends in our general merchandise business with GM sales, increasing 4.9%. This increase was driven by strong consumer response to our enhanced product assortments in the apparel category and strong trends in our graduation business.
While we are already excess successfully driving growth in general merchandise sales. We also have the opportunity and plans to significantly increase the growth rate of this high margin business.
We are implementing key started strategic initiatives supported by targeted investments to accelerate our comp store and new store sales growth and our general merchandise business.
Our goal is to provide customers with the best in class shopping experience, no matter, which channel they shop through.
Within our e-commerce offering we have been focused on an important initiatives to significantly expand our online product assortment. This quarter, we added new vendors and products that are available online only and therefore do not require stores to carry the inventory. This direct ship capability allows us to increase the product volume and assortment available to our customers without increasing inventory costs.
We've also begun accused strategic initiative to greatly improve our e-commerce shopping and fulfillment experience with the design and development of a new next Gen ecommerce platform, which we expect to invest in primarily during this fiscal year. This new platform will provide an improved customer experience and is expected to significantly benefit our general merchandise growth beginning next year.
In fiscal 2019, our online GM sales grew 5.6%.
We believe we should be able to grow this business at a much higher rate beginning next fiscal year with the experience that will be offered by our new E Commerce platform.
In our physical stores, our competitive advantage lies in our location in the heart of campus.
We remain a trusted source for all things college students and their families looked to the cap the store for everything they need for social and academic success.
As discussed during our fiscal 2019 year end earnings call. We are reimagine, our brick and mortar space to create dynamic highly curated concept shops that are driving traffic and increased sales to our stores.
After seeing positive sales trends from last quarter's pilot concept shops, and four stores. We've now expanded across 70 locations with over 200 shops.
The concept stores will change four times throughout the academic year, focusing on touch points, such as tailgating holiday and graduation, including a dedicated champion shop with products found only on.
Barnes and noble.
College campuses.
Additionally, we are partnering with exciting brands that our students are not currently using to see our I'm sorry are not currently used to seeing in our stores, including eight TNT and urban outfitters to be a part of the unsaid enhanced in store experience in two of our stores. We're piloting 18, T. lounges, where students can study relax and interact with a CMP products.
In August we also launched an initial 10 you all on campus concept shops in partnership with urban Outfitters.
These shops offer students urban outfitters home decor and trend products right in the center of the campus store. We are encouraged by the very positive response from students as we bring a highly relevant Gen Z bran right to the heart campus.
As retailers and brands are finding ways to edge closer to college campuses.
Our location on campus work is a powerful media channel.
With over 67 million annual visitors to our ecommerce sites and foot traffic across our 777 physical campus stores, including students parents and alumni.
We offer a way for brands to meaningfully connect with a college audience by leveraging our physical and digital footprint.
We currently partnered with over 50 brands in this capacity and continue to grow this unique area of our business.
Moving to course materials.
Of course material sales were down 11% on a comp basis for the quarter driven by trends, we have seen in previous quarters, including lower enrollments lower average selling prices and students buying fewer course materials.
To mitigate these trends we have put a strong focus on programs such as inclusive access, which drive penetration and sell through rate and benefit be any de publishers and the institutions we serve.
Inclusive access models, including our BNC first day platform continued increase in popularity as institutions look for ways to drive affordability and access on their campuses in fact, the number of institutions using VNC first date has grown more than 60% in the past year and inclusive access revenue has increased 46% year over year.
To ensure we are offering our current and future partners the strongest possible inclusive inclusive access platform, we recently announced a new exclusive agreement with our longstanding partner vital source.
Under the agreement vital sources technology will power. The BMC first date inclusive access platform, bringing together vital sources advanced technology, and BNC is unparalleled campus and publisher relationships.
Transitioning our platform to vital source of state of the art technology allows us to accelerate and optimize the Etsy first day implementations.
And focus even more be any de resources on our core strength, providing exceptional service and support to students faculty academic leaders and administration.
This agreement drives cost savings related to the development and maintenance of our platform technology and will enhance value for our partners by offering new functionality and expanded content offerings.
We're very excited about this partnership and we look forward to driving BSD first day adoptions at an accelerated rate as we begin this transition in the coming months.
So the first quarter is a relatively low sales activity for BTD. We've used this time to make important progress in enhancing our offerings and strengthening our value for the students Faculty Institute and institutions we serve.
We are taking important steps to actively manage and restructure our cost elements in response to the changing industry environment, and we continue to allocate capital and manage our cost structure to maintain an acceptable level of short term profitability and strong free cash flow.
Entering the fall rush.
We are confident in our ability to drive sales, while delivering exceptional service. We're known for we continue to make important investments for sustainable long term growth of the entity and expect to begin recognizing the results of these investments throughout this year and into fiscal 2021.
All of our team members, who have been working tirelessly to execute our initiatives to make bold our current fall rush and be any these future as successful as possible.
We have as much of our people and I would like to thank all of them for their continued hard work and dedication to the success of our company as well as the success of the students faculty and institutions we serve.
I will now turn it over to Tom for the financial review.
Thank you Mike.
Please note that the first quarter ended on July 27th 2019 and consisted of 13 weeks all comparisons will be for the first quarter fiscal 2019, unless otherwise noted.
During the fourth quarter of fiscal 2019, we realigned our business and sales organization into the following three reportable segments retail wholesale and DSS.
The retail segment combines the operations of the former BNC segment with the MBS direct virtual bookstore operations. The wholesale segment is comprised of the MBS wholesale business and the DSS segment remains unchanged.
On April 28, 2019, the first day of the first quarter fiscal 2020, we adopted SC 842 leases in connection with the adoption of this accounting guidance. We recorded 277 million of operating lease right of use asset and a 294.7 million operating lease liability.
As of the end of this fiscal first quarter, our balance sheet includes $314.4 million operating lease right of use asset and a 337.7 million operating lease liability.
Total sales for the quarter were $319.7 million compared with $337.5 million in the prior year. This decrease of $17.8 million or 5.3% was comprised of a 12.4 million decrease in the retail segment, a 17.6 million decrease in the wholesale segment and a zero point Threemillion decrease from the DSS segment, partially offset by lower sales eliminations up 12.5 million.
Comparable store sales in the retail segment decreased 3.5% for the quarter as compared to a decrease of 2.5% in the prior year period.
Comparable of course material sales for the quarter decreased 11% as compared to a prior year decrease of 4.7%.
Course material sales continued to be impacted by lower average selling prices of course materials enrollment declines and student purchases from publishers directly and other online providers.
General merchandise comparable store sales for the for the quarter increased by 4.9% compared with a 1% increase in the prior year driven by strong school spirits clothing, and accessories sales as well as graduation product sales.
Net sales for the wholesale segment were $72.3 million, a decrease of $17.6 million or 19.6% as compared to the prior year period. This decrease is primarily due to a shift in buying time buying patterns, a decrease in supply and a decrease in customer demand, including our own retail segment.
DSS sales were $5.4 million in the quarter, a decrease of zero point $3 million or 5.3% as compared to the prior year period.
DSS sales were down primarily due to lower subscriptions at student brands, partially offset by growth in certain foreign language properties and increases in part will be subscription sales.
Sales eliminations were $32.7 million, a decrease of 12.5 million as compared to the prior year period.
These sales eliminations represent the elimination of wholesale sales and fulfillment service fees to retail and the elimination of retail commissions earned from wholesale.
The consolidated gross margin rate for the quarter was 22.4%.
Up from 19.7% in the prior year period.
This is primarily attributable to lower contract costs related to contract renewals and new store contract as well as a favorable sales mix of higher margin general merchandise sales.
Selling and administrative expenses in the first quarter decreased by $1.4 million or 1.5% compared to the prior year period.
The decrease in the retail segment of $1.4 million for the quarter was primarily the result of decreases in physical store payroll and operating expenses a decrease in Loudcloud digital operations, a decrease in the virtual store payroll and operating expenses and a decrease in the corporate payroll and infrastructure.
Wholesale expenses decreased in the first quarter by zero point $9 million, primarily due to lower payroll expenses and operating expenses.
DSS selling and administrative expenses increased in the quarter by 1.3 million, primarily due to ongoing cost associated with the development of R&D as well as costs related to student brands and other digital offerings.
Corporate services in the quarter decreased by zero point $5 million as a result of lower bonus and operating expenses, partially offset by higher stock based compensation expense.
Our cash balance at the end of the quarter with 8.2 million, a decrease of $5.1 million compared to $13.3 million in the prior year period.
There were 174.1 million in outstanding borrowings compared to 230.2 million in outstanding borrowings in the prior year period.
The 56.1 million decrease at the end of the quarter is primarily in terms of do attributable to improve free cash flow.
Our current and projected liquidity remains strong despite declining sales trends in physical course material and the significant investments we are making strategic change initiatives.
In fiscal 2020, we expect the average debt to be approximately 100 million with peak borrowings of approximately 200 million, which we would expect to fully repaid during our fall rush and then have incur additional borrowings until the end of the fiscal year, a similar pattern to fiscal 2019.
Capex for the quarter was $8.3 million compared with $8.2 million in the prior year, a slight increase was due to our continued investments in digital.
Currently our retail segment operates 1400 91 College University in K 12 School book stores.
Comprised of 777, physical bookstores and their ecommerce sites as well as 714 virtual bookstores.
As of today, we have contracts to open an additional seven stores in fiscal 23 additional known closings. This will bring our total physical and virtual store count to 1495 locations that have closed stores.
For fiscal 2020, we expect consolidated adjusted EBITDA to be between 90 and $100 million.
As previously mentioned due to continued investments in digital capital expenditures are expected to increase from the fiscal 2019 level by approximately 10 million are expected to be in a range of 50 million to $60 million.
We expect free cash flow to be between 25 and $40 million as compared to the $39.7 million in fiscal year 2019.
Please note, we define free cash flow and adjusted EBITDA less capital expenditures cash interest and cash taxes.
With that we'll open the call for questions. Operator, please provide instructions for those interested in asking a question.
Certainly at this time I would like to remind everyone in order to ask a question. Please press Star then the number one on your telephone keypad, we'll pause for just a moment to compile the Q and a roster.
And our first question comes from the line of Ryan Macdonald of Needham. Please go ahead. Your line is open.
Hi, Good morning, Mike and Tom Thanks, a lot for taking my questions. Just wanted to start out I guess on on the Bart will be business and Bart will be right product. That's your soft launching can you talk about sort of the.
Plans for the pricing strategy around that and then you called it a companion product to borrow be learned is is there an intent to bundle. This at all moving forward.
I think Brian just unusual answer this one yes, hey, Ryan This concludes.
I'll start with the bundling concept, it's too early to tell we first want a better understanding of the student demand student reaction to the product experience and what did solid from the need state, but it certainly does present opportunities to bundle as you suggest with the learn product.
So we're early days, we'll be able to better understand once we get through some of those additional demand was the fall rush period.
Got it and I guess just following.
It's probably just to be clear it started gets priced.
99.
Like learn no bundles currently.
Got it okay thats helpful. Thanks.
And then on in terms of the back to school season, obviously were very early days in it but can you kind of talked about some of the strategies or any promotional activity you put in place.
Just sort of continue to drive adoption for Bart will be amongst students and maybe how you're feeling just at the beginning of this this fall rush.
This was can you again I guess the first thing I'd say is we're very excited because it's the first time, we've really been in a position to promote the product jury.
A fall season.
With as much content as we have and we're excited about what we think we can do with this new cohort of fresh lemon incoming first year students. So we've continued to see full lessons that we've learned from last spring and were following what we do in terms of trading for our booksellers. The entire store is oriented around it both booksellers are the oral as well point of sale. So it's really just learning from where we are at a Sunday that hard and getting more efficient in the selling and marketing techniques. You go to any of those stores, we think we've improved or signage or communication of the product benefits.
And there's a ton more content in the product.
Outside the four walls of the campus. We're also expanding.
Our social influence your strategy and brand ambassadors on attempts as we serve as well as campuses that we don't have an actual physical footprint as well. So we're very excited about where we may be at the end of the fall. It's too early to comment we're we're smack Dab in the middle of.
Yes, we'll run so.
We'll know more in a few weeks.
Great, great and shifting to sort of the BMC business great to see some additional net new store openings expected for this for this year can you talk about the impact that adoption insights is really having on on driving net new store wins and perhaps how it's impacting discussions around the renewals with existing University partners.
Yes. This is least amount I mean, certainly course material affordability is number one on the mindset as many of you know many or most of the schools. We are speaking with so just the visibility into.
The savings for the students to be able to get the faculty that transparency into what the options are.
And to be able to give the administration visibility into how they're succeeding against their own portability goals has been.
I've been very very well perceived private colleges and universities, we are speaking with.
One other comment on that this is Mike Brian .
You may have seen the press recently Onondaga.
College medical jump in.
Upstate New York.
The IP that portal and what it can do for administrations really good as leases as better transparency into curriculum and adoptions in the timing of adoptions and managing adoptions is really important.
For managing that kind of a program it on a dog, which we call Thursday complete.
Which is the first institution, where we really deliver courseware completely through tuition one price. That's the same for all students basically.
We can talk more about that but the IP will give a tool to the administration. So that we can.
Intelligently cost out and price at the right time, the courseware, so that we're able to offer and get those reduced discounts to students, making a transparent through tuition et cetera. So that it's important for a lot of reasons, but it's really important to our digital packaging and pricing strategy and being able to implement it.
Great and then just last one from me is around the first day and vital source announcement.
How long do you expect this transitions to take for first day onto vital source in any any expected disruption to I guess existing first day users at all.
Thanks.
Yes, we were we've already started the teams working together that is that agreement was announced I think last week with that.
Those efforts.
Started early they have an ongoing relationship for example, we we have a new.
Sizeable State College system Ivy Tech that we took on that was already by the source customer and so we're working on on that to keep vital source.
And Sir so at the right point.
Because under this agreement, we will own the customer we will own the building.
What we're as we said taking advantage of his bio sources technology. This makes it a lot more seamless for us to sell inclusive access interacting with the publishers basically have now red shelf in it and bile sources. The two primary inclusive access.
Systems that publishers want to interact with so it gives kind of a standard technology of sorts so from the publishers views, making it.
Easier and faster to ingest.
Digital content.
Timing is as we said we are doing it already will start rolling it out within this fiscal year in the next fiscal year It will scale.
The teams are know each other well we've already have a relationship. We buy are you both content from bio source has been a great partner so.
We expect the integrations to go well, we don't expect them to disrupt any of our current exclusive access programs.
Great. Thank you very much.
The next question comes from the line of Alex Fuhrman of Craig Hallum Capital. Please go ahead. Your line is open.
Great. Thank you very much for taking my question I wanted to ask just a little bit more on on the digital services and bartel be in particular sounds like you're having some good success marketing that on campuses in finding students up.
What is your expectation that this could really start to become a revenue grower for the company. Just looking obviously you got other assets in that in that DSS segment, but it has been down revenue year over year for a couple of quarters. It with with the strong rush. Your is it your your expectation that the tide is starting to turn there just wondering how we should think about that that product and services as part of your your your go forward here.
Yeah, without giving any specific guidance on revenue from Barclays subscribers at that we're expecting the.
The results to exceed what we did in spring obvious maybe not obviously, but we are and so it gets to your definition of what do you think is meaningful obviously, it's a very high margin product. So we expect that to start having an impact on.
On the margin of DSS this year.
And the revenue DSS to share, but really really growing.
With this with the scale of the product as the product improves.
Introducing BARDA be right will help it's we don't really want to forecast.
What.
Impact on revenue and margin means at this point in time, we're really as canoe set at the first point, where we're able to market part will be too.
With a with a really good strong competitive product bar to be learn and.
Encouraged by the initial results but.
I'll hold off on the on calling the ball on that one Alex So we get through.
Through rush.
The next.
This is kinda said several weeks to six weeks really.
We are excited about it.
The reason, we're putting this kind of money and effort into it as we do expect it to scale and we do expect.
In our at our next two to three year plan, let alone our long term plan for this to be a huge contributor to the actual growth of the of the cash flow the company.
Okay. Thanks for that and that is definitely helpful. And then also wanted to ask about some of these new partnerships that you're doing in your in your book store locations. You mentioned, some some partnerships you're testing out with a TNT and urban outfitters, certainly that that sounds like a huge opportunity just given your strategic locations right right on college campuses seems like could certainly be a lot of opportunities for partnerships like this.
My questions here are.
I'm trying to understand is the is the initial.
Agreements with with a TNT and urban Outfitters, one that you had initially expected these stores to become more profitable or is it really more of a of a test and learn and then curious what the reaction has been from your University partners. As you think about maybe doing more of these partnerships and to you specifically need universities to approve these are or is it more or less within within your contractual rights to bring in someone like that into your store.
Now there's a lot of questions in there, but we could let's try to unbundle that a little bit I'll take this is Mike I'll do a general answer than lease a mallet who's done a great job of.
Driving this these kinds of relationships can you give more detail.
First off yes, we do discuss these kinds of arrangements with our University partners in advance they do share in the benefits of them.
Our mutual objective with our University partners is to bring services to students that benefit them.
And clearly.
Brands like urban Outfitters, eight TNT, who are trying to reach this demographic offer outstanding services that they offer some cases at discounted prices in some cases, just bringing for example, urban outfitters as we've done into the 10 stores to as an initial.
The seed quality expanded test really generates a lot of baus associates us with.
Hot brand for our students and drives more traffic into our stores. So.
That's a big advantage of lease and I were just out of one of the stores in Delaware last week with urban Outfitters, founder and CEO and I think they're very excited about it as well.
With respect to the deals themselves and how they're structured theyre, they're individually structured and they are different in terms of the expectations of what they will bring to both parties.
Obviously bring exposure to the coveted demographic of 6 million students a $5 million in a physical stores that we serve are very.
Sought after demographic by these organizations are we're a very effective way.
To reach them Weve talked about target in the past and yes.
Urban Outfitters is.
As a great example of how we can also utilize our store space in a different way lease or a team have done a great job of dealing with.
Concept stores now expanded as we said is 200 shop the other to fill in.
Yes, I mean, just going back into your question about how do we how do we discussed this or partner with deep colleges universities I will tell you that you know a lot of the conversations we're having right now with.
Colleges and universities as we as we have talked about new business opportunities around relevancy. So many many of the.
Many of the schools out there, even though did that have.
Really well done retail spaces are asking the question. Yes, we're educators were not retailers. How can you help us drive traffic how can you help us be more relevant to our students how can you create.
These community harvest on campus.
That's been a really add value and energy to our mission.
Well. Thanks, Thanks, everyone Thats it Thats really helpful and I wish you all the best of luck with the rest of the fall rush season.
Thanks, Phil.
And again, if you would like to ask a question that is star then the number one on your telephone keypad.
Your next question comes from the line of Greg Pendy of Sidoti. Please go ahead. Your line is open.
Hi, guys. Thanks for taking my question.
Can you just give us a little bit of color on the trends you saw I guess in summer classes were they down year over year I know, we're starting to anniversary some some pretty weak trends and then what we should be thinking about.
Fall Rush has just enrollment trends.
Hey, Greg it's been a very broad over the summer has consistently been slower year over year on as far as cost offerings by colleges and universities.
As they cut back and better manage.
So you know obviously textbook is a smaller part of the summer session.
During the summer, it's a lot about prepped for fall and our GM sales, which is a high percentage of the summer business as you can see the strong comp growth there.
As we go into the fall semester at this point, we're excited about where we're positioned our first day product our first day adoptions and a lot of the major initiatives to grow our textbook business as well as our GM business are in place.
You know we're in the middle of the season right now so hard to comment on where the fault will.
End up but were certainly excited about how well we are positioned.
Okay. That's helpful. And then can you just give us a little bit of color on just a bump up in the SDMA costs for the.
Digital business.
Some of that head count that's going to continue throughout the year or is that was that a lot of I guess just spend that's that should fall back down throughout the year.
No it's definitely a head count related as well, we will expect moderately to that but it's really building out.
Product marketing and development competency in terms of the digital team of relating to support will be principally some of it is the bar with the right product, but it's principally hurdle we're.
Okay, Great and then just one final one.
I guess just with the first initiative is that going to replace a lot of the.
The I. I guess communicating the message of price matching or you're going to be talking about sort of both both fronts going forward into the fall rush.
Yet there.
Our objective is to present, all affordable solutions solutions that help with the affordability objective price matching is one.
It's not mutually exclusive from exclusive access or any other program that we put in to help individual schools are more broadly she that affordability.
Option is one of the things regardless of access is that you do have substantial discounts to the students that are realized primarily digital or how the other.
Courseware as bundled price matching is really a competitive response.
To to various other.
To competitors, we have such as Amazon will will match their prices and that type of thing so they're a little different in their orientation are all aimed at trying to provide the most affordable courseware decisions, but inclusive access is something we're driving.
Towards with publishers and schools to try to take a model for delivery, primarily digital whereas price matching is primarily related to.
The physical.
Got it and are you price match on the virtual stores as well or is that just in the physical stores.
Well, we price match out all of our stores, where we decide that it makes sense to do so physical or virtual.
Got it thanks a lot.
And there are no further questions at this time I turn the call back over to Tom John to you for closing remarks.
Thank you and thanks for joining todays call.
Please note that our next scheduled financial release for our fiscal 2022nd quarter earnings on or about December . Thank you.
This concludes today's conference call you may now disconnect.