Interparfums Inc (IPAR) 2014 Q1 法說會逐字稿

Greetings, and welcome to the Inter Parfums first quarter 2014 earnings call.

(Operator Instructions)

As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Russell Greenberg, Executive Vice President and CFO. Mr. Greenberg, you may begin.

Thank you. Good morning, and welcome to our 2014 first quarter conference call. Following the financial review, I will turn the call over to Jean Madar, our Chairman and CEO, for a business overview, and then we will move on to your questions.

Before proceeding further, I want to remind listeners that this conference call may contain forward-looking statements which involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from projected results. These factors include but are not limited to the risks and uncertainties discussed under the headings "Forward-Looking Statements" and "Risk Factors" in our annual report on Form 10-K and the reports we file from time to time with the Securities and Exchange Commission. We do not intend to and undertake no duty to update the information discussed.

In addition, Regulation G, Codifications for the Use of Non-GAAP Financial Measures, prescribes the conditions for the use of non-GAAP financial information in public disclosures. We believe that the presentation of the non-GAAP financial information included in this presentation is important supplemental measures of operating performance to investors, because it provides readers with a more complete disclosure and facilitates a more accurate comparison of current results to historic results.

The information required to be disclosed for the presentation of non-GAAP financial measures is disclosed in our quarterly report on Form 10-Q, which has been filed with the Securities and Exchange Commission. The information is available on our website, at www.interparfumsinc.com.

Once again, when we refer to European-based operations we are primarily talking about sales of prestige fragrances that is conducted through our 73%-owned French subsidiary, Inter Parfums SA. When we discuss our United States operations, we are primarily referring to sales of prestige and specialty retail products as well as travel amenities, all conducted through our wholly owned domestic subsidiary.

I must preface this financial overview with a bit of history. In the 2012 fourth quarter, our Burberry license terminated and Burberry paid us a $239 million early termination fee. We also entered into a transition agreement with Burberry to operate certain aspects of the business during the first quarter of 2013.

The important point for the discussion of comparative first quarter sales and profitability is that during the transition period there were negligible advertising requirements associated with the sale of Burberry products. As a result, our 2013 first quarter reported sales, gross margin, operating margin, and net margin were unusually high.

Therefore, in our discussion of first quarter results, when I speak about ongoing brand sales, I am excluding Burberry brand sales from the 2013 period. However, when I discuss quarterly margins, selling, general and administrative expenses, and net income figures, keep in mind that last year's first quarter was atypical.

So, moving on to first quarter results. Net sales of ongoing brands increased 17%, to $121.7 million, from $104.1 million. At comparable foreign currency exchange rates, net sales of ongoing brands increased 16%.

European-based operations generated sales of ongoing brands of $102.3 million, up 20% from $85.4 million. Sales by US-based operations were $19.4 million, up 4% from $18.7 million.

Gross margin was 56.9% of net sales, compared to 63%.

SG&A expense as a percentage of net sales was 42.6%, compared to 31.6%.

Operating margin was 14.3% of net sales, compared to 31.3% of net sales in the prior year.

Net income attributable to Inter Parfums, Inc., was $12.2 million, compared to $42.9 million.

And basic and diluted earnings per share came in at $0.29 in 2014, compared to $1.03 in 2013.

We have covered the subject of the sales drivers in our Q1 news release. So, I will move on to other P&L points.

Our blended gross profit margin was 56.9% of net sales, which was in line with our expectations. The gross margin for our European-based product sales was 59.6%; and for US-based product sales, the gross margin was 42.5%, down from 45.9% in 2013, primarily due to a shift in product mix during the period.

Selling, general, and administrative expense as a percentage of sales was 42.6% in the first quarter of 2014, slightly below the more normalized levels for this reporting period due primarily to the decrease in royalty expense.

SG&A at 31.6% of last year's first quarter sales was clearly an anomaly. To put this in perspective, in the first quarters of the three prior years, selling, general, and administrative expenses as a percentage of net sales was 45.3% in 2012, 45.8% in 2011, and 46.7% in 2010.

One more P&L point worth mentioning. There was a negligible foreign currency gain in this current first quarter, versus a $1.4 million foreign currency loss in last year's first quarter.

Cash flow from operating activities was a use of $27.3 million in the first quarter of 2014. This primarily resulted from an increase in accounts receivable which was due to sales growth, and decreases in accounts payable and accrued expenses reflecting payment of 2013 advertising liabilities.

Our financial position remains very strong. We closed the quarter with $409 million in working capital, including approximately $273 million in cash, cash equivalents, and short-term investments, and no long-term debt.

At this time, we are maintaining our 2014 guidance calling for net sales of approximately $495 million, which represents nearly 15% growth in sales of our ongoing brands. Our current expectations for net income attributable to Inter Parfums, Inc., are in the range of $0.93 to $0.98 per diluted share. Guidance assumes the dollar remains at current levels.

Jean, please continue?

Thank you, Russ, and good morning, everyone. Once again, thank you for your participation on today's conference call.

2014 started on a strong note for our ongoing brands. Several launches took place during the first quarter, most notably our men's and women's signature scents for what we expect to become one of our leading brands, Karl Lagerfeld.

We also launched Extatic, for Balmain, a fragrance for women, and Emblem, from Montblanc, a fragrance for men.

[Come before,] we had our first Jimmy Choo scent for men, aptly named Jimmy Choo Man, and it is likely that our ad campaign will be aligned with [the advertising] for the Jimmy Choo Man [special lines] which will feature Game of Thrones star Kit Harrington.

We also have [S.T. Dupont] coming to the market this summer, new fragrances, one each for men and for women for this brand.

Also, under a partnership with S.T. Dupont and Paris St. Germain, Europe's premier football franchise, we [will look forward to seeing] a sport team men's fragrance line for launch in September.

For US-based operation, we recently shipped our first new products for Agent Provocateur, called Fatale and Fatale Pink.

Late in the year, we will begin shipping an upscale men's scent for the Alfred Dunhill brand. Plans are still fluid, but we are looking to initially place the product in a limited number of high-end department stores and [available] boutiques, followed by worldwide distribution in 2015.

As I mentioned before, we are gearing for a great new program for Shanghai Tang. During the last call, I said it was an eight-product collection, but it is now up to nine -- six for women and three for men -- with fragrance, packaging, and promotional material evoking the glamour of Shanghai of the 1940s.

Product distribution for the collection will be customized for specific geographic markets. At this time, plans call for the new Shanghai Tang collection to be in the 50 or so Shanghai Tang stores late in the year, with worldwide distribution in the following year.

We are doing a select distribution on a number of Anna Sui scents. [For instance,] we are doing Sui Dreams in Pink exclusively in Japan. It was launched in February.

We also have new products coming to the market for Bebe, Brooks Brothers, and Gap, plus a new men's [fragrance] of Banana Republic called Modern that will ship in August or September.

Also -- obviously, this is preliminary -- I will give you a sneak peek into some of our new product plans for 2015. As we have said before, our first Oscar de la Renta women's scent comes to market next year, and it's looking like a spring debut.

We have a men's scent in the works for Lanvin, for Balmain, and a women's scent for Montblanc and Van Cleef & Arpels and also for Boucheron.

We are slowly [building] our travel amenities business [eventual] brands, with Lanvin (inaudible). We are now developing travel amenities for brands with Oscar de la Renta, which is in [the peninsula] right now and Shanghai Tang in the future.

To sum up, we remain enthusiastic about the growth prospects for our brands and the effectiveness of our business model. We have the financial flexibility to support expected growth, as well as to make [judicious] acquisitions, [add new lines], and pursue other growth initiatives that may arise.

Financial strength is one reason we are regularly approached by brand owners wishing to team with us. We are also an attractive partner because of our global distribution in over 100 countries. And most of all, we have a great track record of developing successful new products [and in] the hands of brands of our fragrance partners [and their brands' reach].

So, with that, I would like to open the floor for questions. So, please, Operator?

Thank you. (Operator Instructions) Joe Altobello, Oppenheimer.

First question, I wanted to just go back to your sales guidance for this year, the 15% growth for your ongoing brands. Could you parse that out for us a little bit in terms of how much is from the brands you had before your last year and what's incremental for the brands that you didn't have for a full year of last year: the Shanghai Tang brand, Agent Provocateur, Oscar de la Renta, obviously the Lagerfeld incremental sales this quarter, and Alfred Dunhill?

I'm just trying to get a sense for what the like-for-like sales growth we should expect this year versus last year.

I think it's --. We could try to answer your question, but I don't think it's the right way to look at our business. Sometimes, existing brands could have one launch or two launches in the same year; sometimes, not. So, I understand you like to look at the same-store sales type of numbers, but for us it doesn't work like this.

What is important to know is that we didn't have Lagerfeld last year; we are shipping this year. We didn't have the Montblanc. We didn't have Oscar de la Renta last year; we are shipping this year.

But, for instance, when you take Karl Lagerfeld, we have maybe one month of sales of Karl in this quarter, [Joe].

So, Russ, you'd like to add something?

Joe, I'm just surprised. We issue guidance, and we issue three numbers. And that's all we really want to issue. We do not break out our sales like that for the exact reason that Jean just mentioned. So, I -- respectfully, we just won't answer that question.

I understand. I was looking at it from a numbers perspective. If you did $121 million in sales this quarter, versus $104 million last year, and $13 million of the increase was from Lagerfeld, which is a brand you didn't have last year, I'm just trying to get a sense for what the underlying growth rate of your business is.

And I guess maybe a better way to answer that is, have you seen any deceleration in your underlying growth rate?

Yes, like we have disclosed in our press release, that we had a nice increase in Lanvin -- in [Legend], sorry. But we had a large decline in Jimmy Choo during the quarter. I think the decline in Jimmy Choo for the quarter was around 25%, and the reason is that when we compare with the year before, Jimmy Choo was up by 50% in the comparable quarter.

So, we [want to give you a maximum information] on each of our brands.

What I think is important is that we are comfortable with the guidance for this year of $495 million.

We do not --. For instance, in the US, in the first quarter we have [grown our business already] by 4%, but our plan for the year is to grow the business by around 14%. We do not see any particular brand that is under pressure in terms of sales growth. Things are going quite on plan.

Russ, you want to add something?

I agree with everything that Jean just indicated, and one quarter is not necessarily representative of what the brand is going to do for the year. Jimmy Choo is the perfect example: [something] along a comparison of 50% growth last year to a decline of 25% in the first quarter. Our plans are certainly not for this brand to decline as this year goes on.

So, when you're looking at something on an isolated quarter, you're going to have those kinds of fluctuations.

I think that's the best we can do to try to answer your question, Joe.

Absolutely, Russ. And I certainly understand the impact that timing has on your business. So, I was trying to get a sense for the underlying business, and it sounds like it's still pretty healthy. So, that was helpful.

And I guess, secondly, on margins, if you go back to when the Burberry license was terminated, you guys had mentioned that you did expect, prior to the transition agreement for 2013, operating margins to still be around 10%, or so, even with the loss of that brand. Obviously, you did better than that last year, because you did have the transition agreement in the first quarter.

But if we look at your guidance this year, it looks like you're still looking for that similar 10% operating margin, or at least implying a 10% operating margin, for 2014, where you guys did add a fair number of brands. So, you should get some scale advantages from that. And I would imagine that you did rationalize some of the fixed costs that related to Burberry, as well.

So, I'm just curious why we're not seeing a bit of a margin lift this year?

Joe, we are in the first year of a post-Burberry scenario. And as we indicated, even when we issued the initial guidance for 2014, we said that we would have an operating margin somewhere around 10% to 11%.

We have almost a 60% decline in sales; there are no Burberry sales in this particular year. And it's going to take us a while until we can rebuild to get our sales back up to historic levels.

So, clearly, there's going to be a decline in the operating margin in the early parts, certainly for 2014. Perhaps it will grow a little bit into 2015. The goal, as I mentioned, is that we definitely want to get it back to a 14% or a 15% operating margin. We think we can. We cannot put a timetable on it, because it depends on what new brands.

Jean, you wanted to add something?

This is an important question for us, because the whole idea after losing almost 50% of our sales with Burberry, the whole idea is to regain in two years, three years, four years the sales that we have lost.

In order to do that, we have decided, towards the end of last year, to invest heavily in 2014 with advertising in order to establish momentum for the brands, keep momentum for more established brands like Lanvin. So, it is important to mention today that we are committing to a strong marketing and advertising program in order to maintain and increase sales to a level that (inaudible) for us.

After that, we are -- we think we do not see today any weakness in the sales of our brands in the sub-territories.

Russ, you want to add?

No, I think that pretty much covers it. The idea here is, clearly, we definitely want to get those operating margins back up, but it's just going to take us some time to do it.

Okay.

Neely Tamminga, Piper Jaffray.

This probably is for both Russ and Jean. If you could help us, again, rethink around now that you've had more time under your belt for both Karl as well as Oscar, could you give us a sense of how you're thinking about each one of these brands in terms of their ultimate size, maybe relative to your existing brands in your portfolio?

And then, does it matter if it's like a Jimmy Choo, where it's just two titles, versus Montblanc and Lanvin, where it's multiple titles, to get down that path? It would be great to hear that.

And then, I have a follow-up question around the distribution of Karl. Are you [full-door] distribution -- I don't know if I heard that, specifically -- at this point on Karl in the March distribution? Or, are there more global doors to go on this initial launch?

I will answer maybe the second part of the question regarding the Karl. Karl, we increased distribution [now]. We have shipped for [almost a 10-day], almost 10 weeks, I would say, in most of the [branches], men's and women's fragrance.

It's a little bit early to talk about sales flow, but we are on plan for our. We are on plan on our selling.

Russ, you want to add something?

I'll try to (inaudible) on the first part of Neely's question. With respect to most of the brands that are in our portfolio, when we look at brands like Jimmy Choo, Montblanc, and I'll even include Karl Lagerfeld into that scenario, we never know exactly how big or how large a particular fragrance will actually become when we first --.

We have ideas for it, and certainly we have seen significant success in brands like Montblanc, which in the first full year did $40 million, which grew to almost $50 million in year two and almost $80 million in year three. Jimmy Choo followed a very similar trajectory, slightly lower than the growth rate of Montblanc.

And our initial expectations for a brand like Karl Lagerfeld is that it can potentially reach those levels as well. Whether or not it can become a $50-million or a $100-million brand, time is going to tell a little bit. Once we start seeing the sell-through data on the initial launch results, we'll have a little bit more of an idea, and then we will continue to formulate our plan for additional new product launches.

I think the second part of that question was also regarding launch schedules or additional families of fragrance within our brands. And as we do with pretty much all of our brands, every year for two years we come up with a new family of fragrances to try to reach a new demographic or new customer who is looking to enter into the world of that particular brand. And that is clearly what the plan is for Karl Lagerfeld as well as Oscar de la Renta as well as Dunhill, and we'll continue to do that with all of the brands in our portfolio.

Russ, and then just for clarity, I just want to make sure this is crystal clear. Your full-door distribution on Karl, that [release] was in Q1? Or, did some of that go over into Q2?

No. The initial launch was done exclusively at certain distributions, at certain stores, and in certain countries, which occurred in March of 2013. But the continued global distribution is going to happen and is expanding as we move into Q2.

Okay.

Absolutely. We started to ship in the first quarter. So, it is in stores at the end -- around the beginning of March. We are continuing to ship. We continue to ship in the second quarter to [open the second tier].

As of -- we say that by the end of the second quarter, we should be in full distribution. Because of the global reach of Karl Lagerfeld, we have decided to go a little bit faster than usual. And even though in certain markets, we have even some exclusivity. Important in the French market, we have given the exclusivity to (inaudible), because we want to keep France exclusive. But in Germany, we are in a full distribution, more than 500 doors.

So, we are --. As we said [initial], Karl Lagerfeld is an important franchise for us. We think it has the potential to become a pillar, and we will know very soon -- we think in two or three months we'll know, based on sell-through, if we are right or not.

And then, if I may, again, I know this is more of a 2015 type question, but just trying to think about the mapping here. When you guys reintroduced yourselves with Oscar, I know you're working, I believe, on a new title or family altogether? And I think [it's to do, in part], I think there were two existing ones to begin with? Are you reworking those two, similar to what you did, I think, with -- was it First, when you brought on that family of brands? Or, are you just letting them be the business as they are in the channels that they are and then just adding in an element of prestige with that third title?

I am impressed by the quality of the question. Thank you.

For Oscar, we have decided to leave the existing fragrance the way they are in their distribution, and really concentrate and put our energy and spending money for the new fragrances [that] will happen in spring of 2015.

So, we will --. I would say that in 2014 we will maintain the business at the level it was given to us, and we'll be looking at growth and new distribution more in 2015.

That's true as for Van Cleef, for First. We didn't choose a [temp] strategy. We reworked immediately the existing fragrances. For Oscar, we decided not to do the same way.

Thank you. Good luck, you guys.

[Linda Bolton Weiser], B. Riley & Co.

I think it said -- maybe it was in your French press release -- that all regions of the world were really strong, up 20%-plus, except for eastern Europe because of a weakness in Russia. How much was Russia down? And how big is it for you in percentage of sales terms? And just can you give a little color on what's going on there?

Yes. Yes. We need to speak about that. Thank you for this question. Russ, you're wanting to start? I will follow.

As the release indicated and I think we even reiterated some of it in our quarterly report, all areas were up almost double digits, almost 15%, almost 20% in some of the areas. The two areas that declined was Asia, which was primarily in China, and eastern Europe, which was primarily Russia.

The sales in Russia were actually down about 13%. I'm not sure if that's something that was just specific with respect to this first quarter, because our -- overall, looking at the area it doesn't appear to be any significant problem in that territory. It's just, or could be just a product mix situation that occurred during the quarter.

China, on the other hand, it was not negative. Just, it's growth was limited compared to historic levels that we've seen in China. And, again, keep in mind we're coming off a much bigger base, because we do quite a bit of business in that territory.

I believe, if my memory serves me correct, that Asia was actually up around 6%, or so, overall, not specifically China itself.

Jean?

I would like to say that we are -- when we reviewed our numbers, we have decreased a lot our projections for Russia, and we do not think that the situation is going to get better. It was not good in the first quarter, [and] we are not expecting an improvement. But again, all this is included in our guidance.

And I would like also to say that for Far East, [it started this year still strong], but we are seeing a slowdown in the growth in China in general. Maybe also the first quarter of last year was strong for us in Asia. So, the comparison was difficult. So, we are expecting also a certain slowness in China for 2014.

But I repeat, our guidance takes this into account.

And what percentage would you say Russia is? 3% of your sales? Or, less than that?

All of eastern Europe is around 7.5%.

So, I would say Russia is around 5%.

Okay. Great. And can you just comment on --? The SG&A expense, if you exclude advertising and promo and royalties, it looks like it went up in absolute dollars sequentially from the fourth quarter. It went up a couple million dollars, to $30 million from $28 million. So, I'm just wondering, given that your sales are still down and you're rebuilding, why would that have inched up like that? Is that temporary? Or, is that a go-forward level, would be $30 million per quarter, [Russ]?

Most of the other stuff outside of the royalties, [servicing fees], and advertising are the fixed expenses associated with our business, including salaries and things of that sort.

As we move into a first quarter, there are some adjustments that are made in some of those fixed expenses, and I would expect that it would remain at that level throughout the year. I don't see any reason, especially if they're fixed expenses, for them to go down.

To the extent that some of it is variable -- and, yes, some of it is -- but most of those are the remaining fixed expenses, and a couple million dollars increase from one year to the next in a budget the size of that of Inter Parfums I don't think is astronomical.

Okay. And then, would you say that the Karl Lagerfeld shipment level that we saw in the quarter, which you said was $13 million, was that as expected or higher? And also, the little bit that you have of the POS results, is that moderately better than expected, a lot better, or just in line with your expectations so far on Lagerfeld?

The $13 million is a little bit higher than we initially anticipated, as far as the initial sell-in during that initial launch period.

Okay. Any color on POS so far? Or, is it too early?

It's a little early. You're going to be a little heavier on POS on the initial launch, but then as we move into the holiday season, you're going to be even higher on the POS. So, it's a little early to go into details on that question.

Okay. And then, on the Jimmy Choo, when you said you expected to grow this year, is that partly because of the launch of Jimmy Choo Man? And is that going to be in the third quarter shipments?

If I may, on Jimmy Choo today, we have two lines. We have the Jimmy Choo original and we have Flash. What is interesting to say is in the first quarter and even in the first quarter of the second quarter, we see the original line growing. So, it's always a good sign. We think that it has find its target, and we are able to [convert a little more of] customers.

We see the weakness into Flash, the second line. And I would say that the men's line is going to bring us -- the men's line is definitely not cannibalizing anything, because we are going to reach another customer. So, we expect the Jimmy Choo business to be strong.

It was a challenge to decide to launch a men's line, the men's fragrance line, for Jimmy Choo, but the [strength], when we presented the first prototypes, really liked it and they asked us to advance the launch. So, we have some great expectation, and I think this will round out well the Jimmy Choo franchise.

And that, the Man, will ship in the third quarter?

We're going to ship at the end of the third quarter.

Okay. And then, finally, can I just ask you about, obviously there's been a lot in the press and in the business news about Elizabeth Arden possibly being up for sale. It's kind of a big business for your guys to take a bite off of that, but do you have any thoughts on their product line? And if any of those brands were to be shed --? Do you just have any thoughts on the whole Elizabeth Arden situation?

I don't think it's appropriate for us to talk much about it. Suffice it to say that we are aware of what's happening at Elizabeth Arden. We are aware that they've hired Goldman Sachs to look at alternative strategies. But other than saying that, there's really not much I really would -- that we would really like to add to this part of the conversation.

Yes, [for sure].

Okay.

(Operator Instructions) David Cohen, Midwood Capital.

So, you usually give some detail in the MD&A and the 10-Q, but in advance of that being released, can you give more specifically the royalty expense and the advertising and promotion expense?

Yes. The 10-Q has in fact been filed. But royalties came in at $7.8 million, or 6.4% of net sales, as compared to $18 million last year, which was 8.4% of net sales. And promotion and advertising came in at $14.5 million, which is 11.9% of net sales in 2014, and that compares to $14.7 million, or only 6.9% of net sales for the three months ended March 31, 2013.

And how good of a benchmark as a percent of sales are those two numbers for the last three quarters of the year?

From a royalty standpoint, that 6.4% of net sales, I think it's a very reasonable number. That's probably where we should be. It could vary a little bit, because we do have some lines that we sell that don't require royalties. But a 6.4% rate is pretty much in line with expectation.

As far as the promotion expense, at a little less than 12% of net sales in this first quarter, it may be typical for a first quarter, but certainly not for the rest of the year, and as we've indicated in the past. Historically, promotion and advertising expense was 18%, 19%. More recently, it was north of 20% on a full-year basis.

So, at 11% is clearly very well and more typical of a first quarter where you don't have -- you're not doing as much advertising.

And do you expect your --? As far as the [cave-in] across the last three quarters of the year, what's the, in terms of your advertising promotion, timetable? Are we going to start seeing that in Q2? Or, would it wait until Q3 before we start seeing that step up?

You'll start seeing a step-up in Q3, and then it usually is at its highest level in Q4.

Okay.

Rommel Dionisio, Wedbush Securities.

I wondered if you guys could just chat a little more on China, specifically? I know that expanding your distribution there, that's certainly been a goal of yours. And I wonder if you could maybe update us and perhaps quantify the number of doors that you're in versus last year?

And also, just in terms of some of the markets, if you could quantify you comments earlier, Jean? I think you mentioned the market was relatively flat for you in Q1. Was that just the timing of product launches? Or, maybe it was just a little bit of market softness there, as well?

One of the catalysts in eastern Europe that affected us in the first quarter is Anna Sui sales were actually down 17%, overall. I understand. That's all of Asia. [Yes, it's definitely hit home with the Asian market.]

You want to talk specifically about China?

(inaudible) We have three (inaudible), I would say, two brands that are very strong in the Far East and China. One is Montblanc, [which is in the top 10]. In terms of number of doors in China, we have I would say close to 600 centers for Montblanc in department stores plus (inaudible).

The second brand that has a lot of traction in Asia is Anna Sui. And we saw a [decrease] in the first three months of the year, a slowness in selling, in sell-through. We haven't seen there, and we are [entering] very carefully (inaudible).

What is interesting to know is that our travel retail sales in the region are [over responding], are doing very well. So, we see some weakness in the local Chinese market, counterbalanced by a certain strength in the activity in the duty-free market.

And another piece of information is the sales in the other countries besides China in southeast Asia are on track.

So, our plan is to increase advertising spending in third and fourth quarter in China to maintain market share. So, we have reallocated out of our budget more dollars for advertising in China. So, the [total budget] will not change, but we will switch from one territory to another.

Very helpful.

Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comment.

One last point, just to let everybody know that I will be presenting at the B. Riley investor conference in Santa Monica on May 20. I will also be at the Citi global consumer conference in New York on May 28. And then, on June 10, I will be speaking at the Piper Jaffray consumer conference, also in New York. I hope to see some of you during one or more of those events.

And, again, thank you for your participation this morning on this conference call, whether you are on the line live or listening via our webcast. And, as always, if there are additional questions, I am available by phone.

Thank you, and have a great day.

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.