iMedia Brands Inc (IMBI) 2016 Q1 法說會逐字稿

Greetings. Welcome to the EVINE Live first-quarter 2016 earnings conference call.

(Operator Instructions)

As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Jason Iannazzo, Vice President, Investor Relations. Thank you, and you may now begin.

Thank you. I'm joined today by Chairman and Interim CEO, Bob Rosenblatt, and CFO Tim Peterman.

Comments on today's conference call may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as anticipate, believe, estimate, expect, intend, predict, hope should, plan, will or similar expressions. Listeners are cautioned that these forward-looking statements may involve risks and uncertainties that could cause actual results to vary materially from those expressed in any such statements. More detailed information about these risks and uncertainties and related cautionary statements are contained in EVINE Live's SEC filings.

Comments on today's call may also refer to adjusted EBITDA, which is a non-GAAP financial measure. For a reconciliation of this measure to our GAAP results and for an explanation of why we use it, please refer to today's news release available on our Investor Relations section of our website.

I'd like to remind you that all information in this conference call is as of today, and the Company undertakes no obligation to update these statements. Now I'd like to introduce Bob Rosenblatt, our Chairman and Interim CEO. Bob?

Thanks, Jason. Good morning, everyone, and thank you for joining us. We saw a lot of positives in our first quarter, including revenue growth, stable average selling prices, improved gross margin, and a decrease in inventory. While we are celebrating these achievements, it would be premature for us to proclaim victory, but we have made significant progress. We're approaching the growth of our business in a thoughtful manner to drive sustained revenue and positive cash flow, and that progress is in its early stages.

Last quarter, we discussed the importance of driving profitability through a more balanced approach, and with a more cohesive strategy. I would like to reiterate that our strategy has not changed. We continue to broaden our merchandising mix, introduce new and exciting brands and products that our customers prefer, improve our discipline around maximizing merchandising mix profitability, find new ways to attract new customers, and continue to surgically plan our gross profit and cost structures to ensure that we are achieving acceptable profitability.

We have placed an intense focus on our merchandising strategy, and to help drive this effort we're pleased to welcome Michael Henry as our new Chief Merchandising Officer. Michael brings extensive retail experience to EVINE Live including 10 years in the TV shopping business at HSN US, QVC Italia, and Eastern Home Shopping, as well as stints at L'Oreal, Coach, and Saks Fifth Avenue. While at QVC Italia, Michael was responsible for all merchandising, planning, and programming, and will drive our balanced merchandising approach while maintaining the high quality of products that our customers demand.

As in the case with any retail business, our success over the long-term is dependent upon finding that right mix of products to attract and retain customers. Our customers demand a compelling shopping experience, and our ability to introduce new merchandise from brands such as V by Vanessa Williams, HRP by Holly Robinson Peete, and Paula Deen's array of products, in addition to our existing strong performers like One World Fashions, Waterford Crystal, Consult Beaute, Beekman 1802 is what keeps them coming back. As a result, our customer retention, purchase frequency, and items per order all continue to improve, which tells us that our existing customers like what we're offering them.

However, it is essential that we grow our active customer file by attracting new customers. Nicole Ostoya, our newly appointed Chief Marketing Officer and her team are off to a great start, with developing an active marketing program to aid in our customer acquisition efforts. We recently implemented changes to EVINE.com to improve the look and feel of the user experience, created commerce-friendly landing pages for some of key brands, and we are testing numerous customer acquisitions and targeting campaigns. Together with Michael Henry and Nicole Ostoya, our merchandising and marketing teams are working together to optimize our business mix, while refining our strategy to grow our customer base.

In addition to these internal changes, we have also partnered with Alison Brod Public Relations to help us with our brand placement and positioning. We have already seen the benefits to that engagement following the successful placement of our proprietary fashion brand, Kate & Mallory on NBC's Today show, which garnered 2.6 million television viewers to the Today show segment, and an additional 20.6 million unique online visitors for the placement on the Today show website.

Digital sales for the quarter accounted for nearly half of total Company sales at 48.8%, compared to 45.2% in the first quarter of 2015. Along with that, mobile sales as a component of digital sales also increased to 45.6%, compared to 39.6% in the first quarter of 2015. Digital continues to be a high growth channel for us, and we believe that this digital penetration will ramp even faster, as we attract more customers that are comfortable using smartphones and other touch-screen devices as a shopping medium.

From a category by category perspective, let's start with our beauty category which was up 19% for the quarter. We're very excited about our beauty business, and how our customers are responding to the brands we're offering. As you know, two of our largest brand success stories reside in this category, with Beekman 1802 featuring reality TV personalities from the fabulous Beekman Boys, and Consult Beaute featuring the renowned plastic surgeon and TV personality, Dr. Terry Dubrow and his wife, Heather, who is also a TV personality featured on the Real Housewives of Orange County.

Both brands celebrated their one year anniversaries in the quarter, and in just one year both brands have already reached the top 10 of total brands that we feature on EVINE Live, based on revenue. Both brands are also sources for huge new name generation, and have had tremendous success in that arena as well. Other category highlights for the quarter included launching two new brands in Active Argan and Cailyn Cosmetics, and having EVINE Live serve as the sole sponsor of the Indie Brand Expo in LA for new and emerging beauty brands.

One large success within our beauty category, which has also been a success in home as well is in our auto delivery business. Our customers are able to sign up for advanced automatic replenishment at a reduced shipping and handling rate on future deliveries. Auto delivery grew by more than 40% in the quarter versus the first quarter of last year.

Turning to our fashion and accessories business, which has also had an exceptionally strong quarter. Net sales increased 18% and gross margin increased by roughly 90 basis points, driven across all apparel buying areas, where overall apparel sales increased 39% and gross margin improved by 110 basis points. Fueling the apparel growth were successful launches of the previously mentioned Paula Deen and Vanessa Williams apparel lines, along with continued strong results from our proprietary brands.

Additionally, EVINE Live was a sponsor at the Phoenix Fashion Week event, which afforded us the opportunity to meet with a number of exciting new designers, and expand awareness of EVINE Live as ready-to-wear destination. As part of our enhanced marketing strategy, we expect to be more active at these types of events in the future.

In addition, we had incredible success in our Spring Fashion event in February and March that turned inventory faster than expectations, thus allowing the delivery of a higher penetration of new receipts heading into the second quarter, where additional events and new concept launches are planned. We did see some challenges in footwear and accessories, due to nationwide weather issues and industry-wide sluggishness in hand bags, but overall it was a very strong fashion and accessories quarter.

Turning now to our watches and jewelry categories. Combined jewelry and watches sales declined 2% due to the deliberate sizable reduction in jewelry air time during the quarter. As a result, jewelry productivity increased during the quarter, and we saw significant growth in key areas of the category. We continue to see growth in customer engagement in key jewelry events. The Tucson Live Jewelry event delivered a 16% sales growth compared to the first quarter of 2015, and our luxury designer diamond category maintained its resurgence, delivering a 15% sales growth in our March Diamond Day event versus the prior year.

The gold business also performed well, with sales up more than 90% versus the first quarter in 2015. This further supports the notion that EVINE Live is a preferred destination for premium and distinctive jewelry. We also had two successful launches in the quarter with Montana Silver, and the iconic designer Betsey Johnson. Lastly, a strong complement to our jewelry business is our expanded online assortment which delivered a sales increase of more than 60%, becoming a key strategy in this category mix.

Regarding watches, sales were up significantly on increased air time and strong growth in ASP. We celebrated our annual Spring Forward with Invicta event live from Miami in early March, delivering an 11% sales increase, with a 20% increase in profitability. The customers were fully engaged with over 50 live hours of exciting programming, which delivered in excess of 5,000 new EVINE customers.

Our luxury watch brands sales grew 43%, which maintains that we live in a branded world, and that our customers want and expect the same in the watch category. We had the successful launch of ARAGON watch brand which delivered productivity 85% greater than department average for the quarter. We also continue to aggressively expand our online assortment which delivered sales growth of more than 50%, becoming an increasingly important area of growth over the next several years.

As for our home and consumer electronics category, sales declined by 4% based on our deliberate reduction of air time. Our home category saw a nice transformation in the first quarter, with success occurring from improved productivity across all segments of the category. We shifted air time from prime time to day, and took a more focused approach with this category.

Some things I'd like to highlight specifically, Paula Deen textiles was a huge new name driver and success, our first ever remote from Ireland with our Waterford anniversary event was a huge success, and we've had great results in our fitness, health and wellness areas. Our BoKU brand, as well as new launches such as LABlast Dance Fitness, the Fluidity Barre program and Slendertone Core Fitness have grown more than 100% compared to the first quarter of 2015.

Lastly, it was a quiet quarter for consumer electronics where we dialed back the air time, and stuck mainly with our core brands such as Samsung and Panasonic. Our performance in the first quarter is a reflection of our renewed discipline and commitment towards building a cohesive merchandising strategy that delivers sustained growth and improved profitability. This includes all facets of the business, from improving the air time mix, to establishing the right blend of internal talent.

Finally, we were asked several times during our past analyst calls, whether changes in senior management would result in any key vendors or personalities leaving. I'm happy to report that not one vendor or one personality that we wanted to keep at EVINE exited our business.

Also as we mentioned last quarter, we enacted a reduction of workforce and other related costs that will result in approximately $5 million in annualized expense savings that will help absorb other pressures across the organization, and we will enable us to reinvest in other key strategic initiatives. We will continue to look for more ways to make our business more efficient.

The Board continues to work with Korn Ferry to identify qualified candidates to assume the permanent role of CEO. We will update you as needed, but until then I am committed and comfortable remaining as the interim CEO of this Company.

Finally, as it relates to our Boston television station, WWDP, we are participating in the FCC auction. Details on the timing and eventual outcome of this process are still to be determined, but we are restricted by FCC regulations from commenting on this any further.

I will now hand the call over to our CFO, Tim Peterman, to walk through our 2016 first quarter results in more detail. Tim?

Thanks, Bob. Good morning, and thank you for joining us today. I would like to discuss several financial results, and update you on some key operational initiatives.

Consolidated net sales for the first quarter were $167 million, compared to $158 million for the first quarter of last year, which represents a 5.3% increase year-over-year. Our return rate improved 110 basis points year-over-year in the first quarter from 20.3% to 19.2%, continuing our improvement trend from the fall of last year. Lower return rates were primarily the result of improved quality of merchandise and operational processes.

Gross profit dollars increased 7.2% to $61.4 million during the first quarter, and I'm happy to report that our gross profit as a percentage of sales increased 60 basis points to 36.8%. In terms of other first quarter takeaways, our average selling price in the first quarter was $62, a 5% decrease year-over-year. This was primarily attributable to mixing out of watches, jewelry, and consumer electronics and into fashion.

First quarter operating expenses totaled $65 million compared to $61.2 million last year, which is a 6% increase over the prior year. $1.4 million of the increase is attributable to an increase in variable cost due to an increased merchandising sales of 3%, a 5% reduction in ASP which all-in resulted in an 8% increase in units. Variable cost as a percentage of sales increased 30 basis points to 10% versus 9.7% last year.

I'm pleased to report that our Verizon HD launch and our EVINE Two launch in the fourth quarter of 2015 are exceeding our internal performance expectations. We feel our distribution strategy of also pursuing additional channels in the productive homes we are already in, is a balancing approach to our historical focus on just securing new untested homes.

As we reported earlier today, our total number of homes at the end of Q1 declined 1% year-over-year, primarily related to the AT&T and DirecTV platforms, offset with small growth on our traditional MSOs. All that being said, our distribution strategy also includes an opportunistic element focused on additional video distribution in emerging technologies.

For example, our new over-the-top apps are close to completion, and will allow our customers to use Roku, Amazon Fire, Apple TV and certain Samsung smart TVs to watch our programming without a cable or satellite subscription. We expect to have these apps fully functional for those services in the second quarter of 2016.

We are also entering into agreements with broadcast television stations to distribute our programming over the air, and on a part-time basis in certain strategic markets. This multi-platform video distribution approach, complemented by our strong mobile and online efforts will ensure that EVINE Live is available wherever, and whenever our customers most prefer.

I'm pleased to report our continued progress on our implementation of our new warehouse management system, and our fulfilment center in Bowling Green, Kentucky. At the beginning of May, a material percentage of our inventory on hand went live in the new WMS system. This migration went well and on plan, and we expect to transition the remaining inventory on hand into the new WMS system during the second quarter.

The completed rollout of this new system is still expected to result in improved labor productivity and shipping efficiencies that will result in variable rate declines in the back half of 2016. This new WMS system and the related processes available to us with this new system, will also improve the speed and accuracy of our shipments to our customers, and therefore improve the overall customer experience here at EVINE Live.

As for the balance sheet, we ended the quarter with cash and restricted cash of $33.2 million, compared to $12.3 million at the end of the fourth quarter. Net cash increased in the first quarter by approximately $20.8 million, primarily driven by adjusted EBITDA of $3.4 million, a net working capital decrease of $8.7 million, and $17 million provided by the issuance of the GACP term loan, partially offset by capital expenditures of $1.6 million, payments of $1.3 million for deferred financing costs, and $600,000 of term loan debt payments.

Along with our cash of $33.2 million, the Company ended the quarter with $17.1 million in additional availability on the PNC credit line, which gave us a total liquidity position of approximately $50 million. Free cash flow in the first quarter of 2016 was $5.7 million, compared to a negative $12.5 million in the first quarter of 2015, and a negative $4.4 million in the fourth quarter of 2015. This $18 million improvement over the same period last year reflects our improved focus on working capital management, and a slowdown in capital spending related to the technology and facility upgrade at our fulfillment center.

Our inventory for the quarter finished at $64 million, which is a 6% decrease from this time last year, and the largest decrease since January of 2012. As a comparative, fourth quarter inventory growth was a 7% increase year-over-year. Third quarter inventory growth was a 10% year-over-year growth, and first quarter of last year was a 27% growth year-over-year.

The new measures that we have put in place to better manage inventory are allowing us to effectively drive sales and margin, while improving our inventory turnover. In addition, the overall quality of our inventory is good, and we expect to continue to carefully manage inventory in the coming quarters.

Moving on to our financial outlook for the second quarter and full year 2016, we anticipate delivering second quarter sales growth in the low single-digits, and second quarter adjusted EBITDA similar to the first quarter results in 2016. The Company expects full year sales growth percentage relatively in line with the 2015 growth percentage, with improved adjusted EBITDA year-over-year. As a reminder, we are focusing on adjusted EBITDA as the main metric to showcase our improving story, and the entire team is laser-focused on driving sustained profitability.

With that, let me turn it over to the operator, and we will be happy to take your questions.

Thank you.

(Operator Instructions)

Our first question is from the line of Mark Argento with Lake Street Capital. Please go ahead with your questions.

Good morning, guys. Congrats on a nice quarter.

Thanks, Mark.

Looking at the mix of the business, you obviously talked about how some of the new brands are performing, it sounds like they're performing well. Watches, it seems like you guys have reallocated some time to watches.

Could you talk a little about, how you see some of the new brands that have been launched over the last 12 months or 24 months now? Talk about just kind of the mix, and how you see that mix kind of playing out, relative to some of kind of the longer term, more existing brands? And just trying to figure out kind of you how you look at that balance to optimize margins, and continue to generate decent revenue growth?

Hi, Mark. Sure, it's Bob. I guess, really the key to this for us, is to look at contribution margin. And we look at the new brands and we look at the existing brands, and we look at the brands that we've had for a long time, and we're always trying to balance the appropriate approach for that. The new brands are performing very well, and we hope to be able to continue to maximize those brands on-air and online as much as possible.

It's essentially what we're looking at, is the balance between contribution margin and new customer names, and those new good customer names and lifetime value of those customers. And it's an iterative process, but one of the things we I think haven't done as good a job in the past, that I think we can do a better job in the future, is to make sure that the we nurture the right, the new brands that are coming in, in the appropriate manner. Because it does -- there is some time that it takes for new brands to actually be able to start getting some traction.

So as a place that wants to engage new brands, and have customers learn about new brands, we're going to be relatively patient, in terms of having and embracing new brands that come on, to ensure that we give them the appropriate support and opportunity to be able to succeed, as opposed to quickly looking at them and doing kind of a one and done, and moving forward with them. So it's going to be a very iterative process.

As you said, we did purposely move back on some of the brands, some of our core brands because the productivity was able to go up, and because we were fortunate enough to have some other brands that were able to fulfill those white spaces to be able to drive more profit. But it's all, for me, it's all based on contribution margin, and driving the best opportunity to be able to get to a positive cash flow position in an appropriate manner.

Great. That's helpful. And then looking at gross margin, I think this is the highest gross margin we've seen out of the Company for at least six quarters. Could you talk about, kind of how you guys think about a target gross margin? I know previously, there was some idea that you had to lower the margin, to kind of broaden out the audience, lower the product price point, so you could broaden out your audience. But maybe talk about how you see gross margin playing out, and how do you juxtapose that to your ability to attract new viewers in the product?

Yes. To us it, really -- and Tim said it last quarter, and I spoke a little bit about it, when we were talking about what the plan was to go forward for the first 100 days, this is all about balance. Because we have a lot of proprietary brands, as well as exclusive offerings, which means that the merchandise isn't really available all over the place, and we're able to get some really great followings for those brands. And because we source those things ourselves, for us the basic component of it is to make sure that we ensure that the margins going in make sense, and that we track that appropriately.

And we've developed a play-book if you will, and a discipline that I don't think they had here before, regarding the inventory and how long the inventory should be in the process. So starting with the purchase order, purchase ordering and how much from a historic sense we sell, all the way through the life cycle of the merchandise product, we are now looking at gross margin on every component. So the customer, frankly, should only see good news from this, because if we order the appropriate amount up front, and the initial margin is strong, and the offering and the merchandise is -- the offering is strong and the merchandising is great, then we just become a much more efficient machine when it comes to inventory management.

And I think over the last -- and I wasn't -- I, over the last I guess six quarters that I reviewed what we've done, I think the discipline behind having all the DMMs, and all the merchandise mix looking at the life cycle of the merchandise product could have been better. And I think one of the things we very quickly put into place, was a task forces that put together the merchandising organization, the planning organization, and programming organization with the finance group, so that we can see exactly what the appropriate life cycle of the product should be, from the purchase order date, so when we bring in the merchandise, all the way through where we are.

Great. And then, one for Tim here quickly. Congrats on the positive cash flow in the quarter, especially reversing the trend. How do you see that playing out through the rest of the year?

I know you had talked about seeing some improvement, as you get the WMS system up and running. Should we continue to look at kind of more of a positive cash flow scenario here, going throughout the rest of the year?

Hey, Mark. Thanks for the question. Yes, I -- that's the way we're forecasting our business. When you look about the balance sheet, the two main drivers around that are one, inventory. And as we demonstrated, as Bob talked about, the balance around how we manage our inventory, and how we improve our product life cycle, from buying it, to when we sell it on air or online, mobile, whichever method we use, we have a strong mechanisms in place, where we think we can continue to be flat, in the area of flat around inventory, and still be able to drive margin, still be able to drive revenue.

So that's one lever, and then the other lever is capital. As you know over the last two years, we spent a lot of money on the expansion of Bowling Green and the new WMS system. And obviously, all that is behind us now, so we will be seeing normalized capital spending which will be a pretty material reduction from the previous period. So both of those two elements, along with increased profitability move in our favor for positive cash flow.

Great. And last question for Bob. You had mentioned that the Board continues to work with Korn Ferry to identify a potential CEO candidate. Is your name in the hat for that, by chance?

Yes, there is a chance that my name is in that hat. The Board is going through their appropriate search, and they've hired Korn Ferry, as you've said to go through that. The most important thing is to get the appropriate candidate aboard, and I think it's pretty safe to say that my name is in the hopper for going forward.

Great. Congrats on a nice quarter. Thanks, guys.

Thanks so much, Mark. We appreciate it.

Thanks, Mark.

Thank you. Our next question is coming from the line of Mark Smith with Feltl and Company. Please go ahead with your question.

Hi, guys. This is Aaron Steele on for Mark Smith. I was just wondering if you could walk through shipping and handling for the quarter? And if you have seen any benefit from shipping and handling rates?

Hi there, I'll take that question. This is Tim. The shipping and handling margin as we talked about before, when we talk about balance and culture is, that we were much more thoughtful about how we would promote around that shipping and handling lever. And so, the margin in Q1 was more reminiscent of previous years, where we were offering compelling products, and that alone was able to drive the consumer to buy, to increase the response rate.

So we were fortunate to have a solid shipping margin this quarter, and as we did in the fourth quarter. And that revolves just around a more disciplined approach, a more balanced approach.

Excellent. And then, can you walk through cost per home as well?

Relatively flat. When we think about cost per home or distribution, we think about as we talked about in Q4, with the launch of our EVINE 2 as well as our Verizon HD, it's not just how many homes we're in, but it's the quality and number of channels we are in that home. And those secondary channels in those homes are quite a bit cheaper than just a brand-new home. So we're finding those new channels to be very productive. And so, as we look out into 2016 and our distribution and our opportunity, we don't see an increased requirement for that cost per home for distribution costs.

All right. Thank you.

Thank you.

Thank you.

(Operator Instructions)

The next question is from the line of Mark Rosenkrans with Craig-Hallum. Please go ahead with your questions.

Hey, guys. Thanks for taking my questions, and congrats on a nice quarter.

Thanks, Mark.

Yes, I was wondering if you could talk about the kind of mix in category sales? Jewelry and watches was down 2%, even though watches were strong overall. Would you attribute that more to jewelry weakness, or just overall strength in maybe the beauty and the fashion lines? If you could just talk about that mix a little more?

Sure. That was really deliberate on our part, Mark. We want to make sure that our balance is appropriate, in terms of having a much more broad spectrum of products on-air.

And our -- since we had the ability, and beauty had an amazing quarter, and we have very high hopes for beauty in general. Because to my point earlier regarding contribution margin, it's one of those categories that our customers, our core customers, as well as being able to get new customers to come in, really embrace. It's a very profitable piece of the business for us.

We feel, and a lot of the executives that we brought in recently, have very strong experience in the beauty area at, both Nicole, as well as Michael have strong history and relationships in the beauty area. We have a very strong beauty group in general that has been built over the last year.

So it's really been a deliberate effort by us, to ensure that we are able to have our customers have an array of products, that they're offered in every category that they want. And I think what you're going to see is, since we have the opportunity to have more productivity, and productivity at the end of the day is kind of like shelf space in the retail stores. We feel this is the best way to be able to go forward, to be able to get as much share of the customer's wallet this year, as well as having lifetime value of the customer going forward, to ensure that we are able to maximize sales and profitability. Especially as we get into the point, since we have the extended assortment and e-commerce continues to become more and more important to us, as well as the ability for us to do live streaming video on the web, and on any screen that people want to watch us on.

Okay. Great. That's helpful. And then, a last one from me. You see the gross margin improvement in the quarter, and the inventory reduction. Is it just a general tightening of the operations in the business right now, and like how much more room do you see to kind of improve on that front, as the quarters move on?

This is a business of continuous improvement. I think that, as we continue to get more disciplined in what we're doing -- and I think one of the most important things, and the question wasn't really asked, but I'll throw it out there, in terms of what has happened so differently over the last quarter that hasn't happened in the past, is the fact that from a cultural standpoint, the teams are all working together in terms of whatever our definition of success is. And our definition of success, of course, is to be able to drive this business significantly, and be able to have it make profit, and have positive cash flow quarter on quarter.

And the way to do that is -- and I go back to the days when I was at Bloomingdales, it's that the merchandising organization are really the entrepreneurs of the business and the owners of the business, in terms of understanding all the different components that drive profitability. And what we've done over -- since the first week that I was here, and we will continue to do it, is bring all the key members of management in a room, no matter what area they're in. And make sure that we all discuss what the definition of success is, continue to make sure that we drive towards becoming as profitable as possible, and have it be continuous.

So in my mind, there's never going to be a slowdown. We're never going to be satisfied with where we are. When I look at QVC or HSN, and I take a look at where they are -- and again I was president at HSN during a time when they had the biggest growth era I think of all time, other than when they first started, and the most profitable time, is that I'd love to be able to take the tools here, and the people here who are amazing, and really be able to educate them and foster them so that they're able to make sure that this culture is sustainable, in terms of continuing to drive sales and profit and growth and lifetime value of the customer, as we continue on every screen that we're on.

And my goal is to make sure that we are consistent, and moving forward into the future, not to be at some point, where there's an end point. There really is no end point, other than whatever our imagination is, in terms of being able to be successful.

Fantastic. Thanks for taking my questions, and I'll look forward to hearing more.

Great.

Thank you. At this time, I would like to turn the floor back to management for closing remarks.

Hi, guys. It's Bob. I, just thank you very much for the questions, and thanks for the support so far. We're really excited about what we're doing. We think we have the team in place to be able to be incredibly successful, and we look forward to your comments and questions in the future. So thanks so much, and have a great day.

Thank you. This concludes today's teleconference. Thank you for your participation. You may now disconnect your lines at this time.