Movado Group Inc (MOV) 2014 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Movado Group Incorporated second-quarter fiscal year 2014 earnings call.

At this time all participants are in listen-only mode.

Later we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, ladies and gentlemen, this conference is being recorded and may not be reproduced in whole or in part without permission from the Company.

I would now like to introduce Rachel Schacter.

Please go ahead.

Thank you.

Good morning, everyone.

With me on the call is Efraim Grinberg, Chairman and Chief Executive Officer; Rick Cote, President and Chief Operating Officer; and Sallie DeMarsilis, Chief Financial Officer.

Before we get started I would like to remind you of the Company's Safe Harbor language which I am sure you are all familiar with.

The statements contained in this conference call which are not historical facts may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties, all of which are described in the Company's filings with the SEC, which includes today's press release.

If any non-GAAP financial measure is used on this call or presentation of the most directly comparable GAAP financial measure to this non-GAAP financial measure will be provided as supplemental financial information in our press release.

Now I would like to turn the call over to Rick Cote, President and Chief Operating Officer of Movado Group.

Thanks, Rachel.

Good morning and welcome to our conference call.

We are pleased with our second-quarter results, which continued our strong performance from the past 14 quarters.

Our consistent strength demonstrates the ongoing success of our strategies that focus on capitalizing on the unique aesthetic of our brands with compelling product offering while maximizing our improved operating platform to deliver sustained profitable growth.

Our financial results were strong in the second quarter.

Total sales increased 17.2%, fueled by strong growth across all of our business units with double-digit increases in our licensed brand, luxury, and accessible luxury categories.

Overall we continue to see broad-based strength across our business with strong consumer demand and customer sellthrough.

We are particularly pleased to achieve this performance despite challenging economies in China and parts of Europe.

Operating income was $17 million, an increase of 59% from the $10.7 million reported in the prior period.

This improved level of operating income was driven by sales growth and leveraging of operating expenses that more than offset the planned reduction in gross margin percent.

Earnings per share came in at $0.48, an increase of 50% from the $0.32 reported in the prior period.

With this improved financial performance, we are pleased to announce an increase in our full-year sales and earnings guidance.

We now anticipate sales growth of approximately 13% for the full year and earnings per diluted share of approximately $1.90, up from our previous guidance estimate of approximately $1.80.

Our balance sheet remains strong with a net cash position of $152 million and shareholder's equity at $436 million.

Due to the strength of our balance sheet and financial performance, we are pleased to announce that our Board of Directors has approved a 60% increase in our regular quarterly dividend, declaring an $0.08 dividend as per this morning's press release.

Now let me briefly discuss some global trends and provide some specific brand highlights for the quarter.

From a global perspective, the watch category continues to perform well and we continue to experience strong sellthrough performance across our retail partners.

From an economic perspective, we continue to anticipate moderate growth in North America, modest growth in Northern Europe, a continued recession in Southern Europe, solid growth in South America and conservative growth in Asia.

From a brand perspective, the execution of our Movado and ESQ Movado brand strategy continues to produce particularly strong results.

Globally accessible luxury sales grew 14% in the second quarter and 19% for the first half of fiscal 2014 as compared to the same periods in fiscal 2013.

Our Movado brand in the United States continues to hold the leading market share position in our key price points of $500 to $1500 and a strong market position in the $1500 to $3000 price segment.

Additionally, Movado continues to outpace the market and increase its market share in total in the $300 to $3000 price segment and in virtually every category within this segment.

Indicative of our market share growth in the United States, the $300 to $3000 price category has grown 1% excluding Movado for the trailing 12 months, while Movado has grown in excess of 15%.

Product segmentation and our strategy to offer a compelling product at key price points continues to help drive our growth.

Great performers in the second quarter included ceramic and steel Cerena with diamonds for women and in the men's category, our classic Museum, Sports Museum bracelet, and sapphire product offerings.

New products which we are excited to introduce for the fall season include the new Museum Thin Classic Collection, the SE Pilot, and Mary, a 20 millimeter dot watch.

Movado Bold, part of our Swiss trend pillar, is still exceeding expectations.

Strategically limited to approximately 700 doors worldwide, Bold continues to add a fresh younger perspective to Movado.

Bold was also well positioned to continue bringing the consumer desired newness to the market with new products such as Bold with diamonds priced at $1395 and $1495.

Great product along with a focused omni-channel marketing program continues to help drive our strong Movado sales performance.

ESQ Movado, powered by Movado, product and brand positioning is virtually fully implemented at retail.

Our new product collections include line extensions of the mesh bracelets in Capital, new diamond pieces in Origin in both round and rectangular cases, and the new Classica and Status collections.

We are pleased with the launch of ESQ One, an eye-catching watch of unisex appeal that is cool, colorful, fashionable, and fun, allowing us to offer Swiss fashion on a silicon strap with a Swiss movement at $150 retail.

Our luxury category, which represented 6% of our total sales in the second quarter increased 22% versus the prior period.

In Ebel, we continue to focus on our key markets with our new and distinctive [Owned] and ESQ One collections, along with Ebel's core collection comprising the Wave, Beluga, and Brasilia models.

In Concord, we continue to focus on the Middle East market with the reintroduction of Saratoga, which was launched in the second half of last year, and Mariner, which will be launched late this fiscal year.

Our licensed brand division continues to perform extremely well.

In the second quarter, the licensed brand global team grew sales an impressive 23% and 11% for the first half of the year as compared to the same periods last year.

Growth in our licensed brand division is being driven by innovative product designs at key price points that are resonating well with consumers.

Some of the leading product performers for licensed brands during the second quarter were the Coach Tristen and Boyfriend Mini product offerings, the Tommy Hilfiger Ensley and Harrison models, the HUGO BOSS Airliner and Ultra Slim watches, the Juicy Pedigree and Stella Bling lines, and the Lacoste Borneo and Seattle collections.

We are well on our path of repositioning Coach watches as fashionable modern classics offering the quality and authenticity inherent in Coach with an improved price value proposition to consumers within the fashion watch category.

Early results certainly meet our expectations.

We are now in our fifth month of the initial rollout of our Scuderia Ferrari brand globally and it is off to a great start.

Our core product offerings range in price from $125 to $695 and we have opened approximately 1500 of the planned 2300 doors this year.

We are excited about the initial sellthrough results.

Our outlet retail division remains an important contributor to our business from both a sales and profitability perspective.

The greater emphasis we have placed on branding and customer service at our existing stores has helped fuel sales conversion and profitability.

Our sales for the second quarter increased 7% and our profitability continues to be strong.

We just recently opened a new store in Phoenix, Arizona, keeping our store count at 34 outlet stores.

We remain excited that the initiatives we have been diligently working on have succeeded in creating momentum on our business.

We believe our combination of powerful brands, superior infrastructure, and our talented global management team position us to continue the path of above average sales and profit growth.

Now I would like to turn the call over to Sallie to discuss our financial results and fiscal year 2014 guidance.

Thank you, Rick, and good morning, everyone.

I am very pleased to speak to you today and present our financial results for the second quarter and the first six months of fiscal 2014.

For today's call, I will first review our income statement and balance sheet and then discuss our outlook.

For the second quarter, our reported sales increased 17.2% to $138.3 million.

In constant dollars, sales rose 16.4%.

Our US sales grew by 21.8% driven by accessible luxury and licensed brands and our international sales grew by 12.4% driven by our licensed brands.

Sales in our wholesale segment were $123.8 million or 18.5% above sales of $104.5 million for the same period of last year.

In constant currency, wholesale segment sales rose 17.6%.

By geography, our US wholesale business increased 26.1% to $58.4 million compared to $46.3 million last year.

Our international wholesale business increased 12.4% to $65.3 million compared to $68.1 million in the prior year.

Sales were up solidly in Europe and the Middle East.

Sales from the Company's retail business were up 7.2%.

At the end of the period, we operated 34 outlet stores.

Gross profit was $74.8 million or 54.1% of sales compared to $65.8 million or 55.7% in the second quarter of last year.

The decrease in gross margin percent was driven by a planned shift in channel and product mix partially offset by the leverage gained on fixed costs and the favorable impact of changes in foreign currency exchange rates.

Operating expenses were $57.8 million, an increase of 5% year-over-year.

The increase was primarily the result of the following, a $2.1 million increase in marketing expense and a $1.2 million increase in other operating expenses, partially offset by a $500,000 decrease in compensation, benefits and the accrual for performance-based compensation.

Operating income was $17 million or 12.3% of sales compared to $10.7 million or 9.1% of sales in the year-ago period.

Income tax expense was $4.3 million and our effective tax rate was 25.3% in the second quarter of fiscal 2014 compared to income tax expense of $2.5 million or a 23.6% effective tax rate last year.

The tax provision for last year includes the effects of the application of guidelines related to accounting for income taxes and interim periods as well as accounting for valuation allowances.

The tax provision for the second quarter of fiscal 2014 includes a $1 million or $0.04 per diluted share benefit primarily related to favorable changes in connection with domestic and foreign tax audits in the current period.

Net income in the second quarter was $12.5 million or $0.48 per diluted share.

Excluding the $1 million discrete tax benefit just discussed, adjusted net income would have been $11.5 million or $0.44 per diluted share versus net income of $8.1 million or $0.32 per diluted share in the year-ago period.

EBITDA increased to $20.1 million compared EBITDA of $13.4 million in the second quarter of fiscal 2013.

Looking at the six-month period ended July 31, 2013, sales were $248.3 million, an increase of 12% from fiscal 2013 and on a constant dollar basis, sales increased 11.8%.

Gross profit was $134.7 million or 54.3% of sales as compared to $124.8 million or 56.3% of sales last year.

Operating income was $27 million compared to $19.2 million in fiscal 2013.

As a reminder, during the first quarter of this year, a building was sold for a pretax gain of $1.5 million or $0.04 per diluted share and as mentioned earlier, the tax provision for the second quarter of this fiscal year was favorably impacted by a $1 million or $0.04 per diluted share one-time item.

Net income was $20.7 million or $0.80 per diluted share as compared to $14.7 million or $0.58 per diluted share in the year ago period.

Excluding both the discrete tax benefit from the second quarter and the building sale in the first quarter, adjusted earnings per share for the first six months of fiscal 2014 would have been $0.72 per diluted share.

EBITDA for the six months of fiscal 2014 increased to $32.8 million from EBITDA of $24.9 million last year.

Now turning to our strong balance sheet, cash at quarter end was $151.5 million as compared to $156.3 million last year.

We continue to have no debt outstanding.

Accounts receivables increased to $17.6 million or 29.5% to $77.3 million.

This increase was primarily due to the overall increase in sales including the timing of the Coach and Ferrari initiatives.

Inventory increased $9.5 million or 5.6% to $179.9 million at the end of the quarter.

On a constant dollar basis, inventory increased by only 2.6%.

Capital expenditures for the six-month period were $10.2 million and depreciation and amortization expense was $5.8 million combined.

Once again I would like to remind you that our capital expenditures were planned higher than normal for the first half of fiscal 2014 due to the spending related to the Basel Fair booths and our Swiss corporate offices.

We continue to project capital expenditures of approximately $19 million for fiscal 2014.

Previously we announced a $50 million share repurchase program.

The purpose of this program is to offset normal dilution caused by share awards.

Because this repurchase program will only be in place for a partial period of this year, we do not expect the share repurchase program to have a significant impact on the weighted average number of shares outstanding for fiscal 2014.

For the first half of fiscal 2014, approximately 100,000 shares were repurchased under this program, which began in April.

Now I would like to discuss our increased guidance for the current fiscal year and let me note that we are still taking a cautious view of the global economy and we are assuming no significant fluctuations in foreign currency exchange rates.

For fiscal 2014, we anticipate our sales will increase approximately 13% to a range of between $575 million and $580 million.

Gross margin rate is still expected to be approximately 54%, a decrease from fiscal 2013 due to the planned mix of business, the repositioning of the Coach brand, and the launch of the Ferrari branded watches.

Operating income is projected to increase over 20% to $70 million.

EBITDA is expected to increase to $81.5 million.

Due to the mix of the global pretax results, the estimated effective tax rate for the current fiscal year is expected to be 28% and net income is planned to increase to approximately $49 million.

We expect diluted earnings per share in fiscal 2014 will increase to approximately $1.90.

The guidance we have just provided assumes no unusual items for fiscal 2014 and excludes the sale of the building in Switzerland in the first quarter and the $1 million favorable discrete tax item in the second quarter.

Now I would like to turn the call over to Efraim.

Thanks, Sallie.

We are pleased with our second-quarter results, which accelerated in pace from the beginning of the year and included a 17% increase in sales and a 59% rise in operating income.

Our topline strength was fueled by strong innovation across our Movado and licensed brands and included the continued successful introduction of our Scuderia Ferrari watch brand and the positive response to our newly repositioned Coach watch brand into the fashion watch category.

This combined with the disciplined execution of our growth strategies enabled us to leverage our infrastructure and produce operating income growth of more than triple the rate of our sales.

Our strong balance sheet and planned cash flow generation led our Board to approve a 60% increase in our cash dividend to $0.08 per share.

As we enter the second half of the year, we will continue to implement the strategies that have allowed us to deliver 14 consecutive quarters of year-over-year increases in sales and earnings.

We are excited about the innovative new products that we are introducing across our brand portfolio this fall and expect this along with our high impact marketing programs to fuel continued growth in the second half of the year.

Given our strong year-to-date performance and our positive outlook, we have increased our annual guidance.

We remain focused on our long-term business strategies, which we believe will position us to deliver sustainable profitable growth.

We would now like to open the call up to questions.

(Operator Instructions).

Oliver Chen, Citigroup.

Congratulations on a great quarter.

On your wholesale growth numbers, if you could just help us understand if that is mainly productivity driven versus point of distribution and how you see that evolving?

Also related to your full year net sales guidance of plus 13%, it seems like it's potentially conservative relative to the pretty awesome revenue growth number you just posted.

If you could just explain what informs the way you are guiding there, that would be great.

This is Rick.

Thank you, Oliver, for the compliment on the results for the quarter.

From a standpoint of looking at our sales in the first half, clearly we do have some new door openings as it relates to Scuderia Ferrari.

Those are entirely new doors, so that business is truly incremental and we will continue with sellthrough on those existing doors as well as new door openings for the second half of the year.

Coach, obviously the repositioning will also result in some increase in new doors.

I suspect most of that will happen really in the second half of the year with very little happening of that in the first half of the year.

And also the sales growth is all driven by productivity.

When you look at it -- and I will remind you of the percentages of market growth that took place in the US -- when you look at the Movado brand, and again this is third-party independent data, the market excluding Movado in our price points of $300 to $3000 grew 1% for the 12-month period ended June 30, 2013.

Movado grew in excess of 15%.

So it is very much driven by productivity, the sales growth that we've realized.

Looking forward to the second half of the year, again our sales grew 12% for first half.

We're looking for a heightened level of growth for the second half, so very much continuing the momentum that we have and then also getting some additional benefit because of the Coach repositioning as well as some additional door expansion in Scuderia Ferrari.

So we don't think those numbers are conservative.

We think they are still very strong growth numbers and those are productivity and market share increases that will continue to take place and drive that.

As a follow-up, could you just share with us your view on the potential launch of more smart watches and electronic eye watches in the marketplace and how (multiple speakers) --?

This is Efraim.

I think that's something now that we have been talking about for I guess during most of the first half of this year.

We see it actually as adding interesting to the category.

We are really positioned around design and fashion and product innovation more than from a technology point of view.

So I don't think that -- I think it's an additional entry into the category.

It's not a substitute for anything else especially young consumers and consumers overall have been interested really in watch wardrobing and probably this is another aspect of that watch wardrobing.

Thank you, best regards.

Rick Patel, Stephens, Inc.

Congrats on a really impressive quarter.

It seems like this past earnings season there've been a number of department stores that have posted soft results.

So I'm hoping you can talk about what you are seeing in the department store channel from an inventory perspective and how that affects the way you are looking at the back half.

I'm just curious about your level of confidence on the watch category and your business in particular given some of the softness we've seen recently.

We've continued, Rick, to focus on continuing to drive productivity with our retail partners, so we believe our inventories are in a healthy position at retail and we are basing, as Rick Cote said earlier, basing our improved results for the year on some economic growth in the US but really driven by our product innovation and our strategic initiatives behind Coach and Scuderia Ferrari and then continuing to evolve and innovate in our product assortments in Movado and our licensed brands.

Then a question on gross margins, it looks like they are on track to continue declining in the back half, but I was hoping you could provide some color on perhaps the cadence of gross margins in the third quarter and fourth quarter.

I'm curious if once we reach the fourth quarter if there's any potential for upside once you see Coach and Ferrari scales, Ferrari watches getting a little bit more scale going into holiday?

I will address that, Rick.

This is Sallie.

For this year we did forecast a 54% gross margin, which is pretty much where we are so far, so we would anticipate that this would be the level that we would see the third and fourth quarter at, no significant changes.

And of course we wouldn't talk about any impact of these initiatives on future gross margins.

Thanks very much.

Kristine Koerber, Discern.

Good morning.

First, can you talk about advertising?

The $2.1 million increase in the second quarter, was that for a particular brand?

What are your plans for the back half of the year?

Really our advertising is spread across our brands as we continue to drive our marketing plans within our growth initiatives.

And for the second half of the year, we have really -- we have exciting plans in place.

I think we will talk a little bit more about those in the third-quarter conference call.

But we will be back on television as well as an increased presence in magazines and everything digital.

So we really are focused on driving an omni channel, what we call an omni channel marketing approach.

Okay, I'm sorry, go ahead.

We continue to -- that increase is consistent with increases that we've had over the last four or five years, so we continue to invest behind the strong brands that we have to help fuel that sales growth that we have delivered and plan on delivering in the future.

Okay, great.

As far as the Movado brand, can you talk about how it's doing in the UK because I believe you recently launched it in the UK and what your strategy is for other international markets with the brand?

From a standpoint of in the UK, what -- our strategy on international, we are an international brand and we believe there's opportunities of further expanding our presence globally and our strategy there is to focus with key retail partners throughout the world.

So in the UK we have certainly done that with the Signet Group and we are off to a good start.

But we are taking things -- we are not in a rush to sit there and just have tremendous numbers.

We are in a we believe in doing it in a logical manner and in a very successful manner, and so allowing it to build and grow.

So the UK we started off.

We are very pleased with the results.

We will continue to expand in the UK and we continue to talk and partner with other important retailers as we look at expansion opportunities above and beyond where we are today in a lot of the markets around the world.

Okay, and then just lastly the bigger picture question, just looking at the watch category, can you talk about maybe the change in trends with the consumer, especially that younger consumer?

You've seen the move back to wearing watches again.

Clearly you are taking share but just trying to get an idea what is really going on with that younger consumer, because they were relying on their phones to -- for time and now it appears that they are moving back to wearing watches.

I think the people use both their phones and their watches to tell time and you have always had different places to tell time.

So whether you had clocks on the wall in the classroom or -- and offices, so they are really wearing watches as fashion accessories and our job is really to innovate it and drive that through different initiatives.

So we have been very successful for example within the Movado brand in driving younger consumers into our Bold concept and creating exciting products for them.

We are doing it now again in our ESQ Movado assortment with ESQ One.

So I think as long as we continue to innovate and produce exciting products that are on trend and have a high design quotient and offering great value, we will continue to be successful.

Thank you.

(Operator Instructions).

Eric Beder, Brean Capital.

Good morning, congratulations on a great quarter.

Could you talk a little bit about what -- a little more in depth on what you have learned about the Ferrari rollout?

It's five months into it.

You have the license to go much higher in terms of pricing points in the core you talked about.

How do you think about that longer-term in terms of getting to the higher price points there?

Really we are focused on a core price range where we believe that there is great volume between EUR125 and EUR600.

We are today selling some watches at slightly higher price points than that and some limited editions up to about EUR1500.

But we really think that the great opportunities here are within continued focus of offering EUR125 to up to about EUR600, EUR700 in terms of being able to do volume.

And again, offering a great design quotient tied in with an unbelievable brand that has an unbelievable design philosophy.

So it's been really exciting for our designers and our retailers and consumers around the world that reacted to it.

Okay, in terms of Coach, how should we think about the ramp up in the SKUs?

I know this quarter was -- Q2 with the start of that.

How is that going to roll out?

I think what you are seeing is right now we are really just delivering to customers.

We are beginning to see some initial successes of retail sellthrough particularly at Coach stores of our a new product.

But I think you will really see it full swing in October, November, and December into the holiday quarter as we transition into the fashion watch department within department stores.

And then throughout the coming years, we will continue to evolve newness at a faster pace, increasing our overall assortment and then as well as points of sale with the Coach watch brand.

Great and we should think about -- I know this year is a decline in gross margins driven by some one-time items.

How should we think about gross margins on a longer-term basis like your terms if we are a four-year plan for gross margins and other pieces as you anniversary kind of one-time things happened this year?

I think I will let Rick take -- why don't you take that, Rick and Sallie?

When we look at the gross margin again the 54% guidance that we have this year, we think that's kind of our base level as we look at moving forward.

Obviously we will continue leveraging and getting some benefit of some of our fixed costs in there and then obviously it is our job to look at opportunities of being able to move that forward.

But we think it has been very important for the last couple of years and we see this really for the next couple of years as well of having a great price value relationship for consumers out there.

So when we are done, we are not afraid of having a 54% margin for the next couple of years.

Obviously we'd like to move that up a little bit but we are comfortable with doing that because when we are done we see our operating expenses growing at a significantly lower level than our topline sales growth, so we see our opportunity and our strategy of being able to grow our operating profit percent of sales to a very nice level.

So it's an opportunity above and beyond, but we see ourselves in that 54% range for this year and probably the next year or two.

Okay, great.

Thank you.

Mike Richardson, Sidoti.

Good morning and thanks for taking my question.

With regard to the Ferrari door openings, can you tell us what geographies they've been focused in and what is the goal for number of doors?

For this year so far we've opened about 1500, most of that throughout Europe.

That's probably the biggest area so far.

Second followed probably equal Asia and the US.

Expanding into 2300 doors is our plan for this year.

We'll see a lot more door activity in the United States, North America as well as South America.

And the overall door plans are over the next couple of years to get to that 5000, 6000 or level.

We will pretty much be in all geographies and all major countries around the world, so it is more about managing the pace to be able to manage as well the inventory availability that we have and making sure that we can support strong levels of sellthrough that are taking place.

So we see that over the next three years expanding to that 5000, 6000 door level.

Okay, great, so Ferrari is not being offered in South America currently?

No, it has some.

I'm just saying when we look at the number of doors that we have to open another 800, most of those will probably happen in North America and South America, so we have some already certainly but we will continue to expand.

So what we've done initially in the rollout is all of our key customers around the world certainly were offered product and then we continued to expand and add doors and other customers in a priority basis.

Okay, just one more.

I know you touched on it briefly in your opening comments, Rick, but I was hoping you could talk a little bit about what you guys might be seeing in Europe.

We've been hearing about some improvements in some of the European economies.

I'm just wondering if you've been seeing that as well.

As I said, our plans are to have modest growth in Northern Europe.

Southern Europe is still a little bit tough from a marketplace, the Greece, Italy, the Spain markets.

From our business, we were up strong double digits, so we continue to do well.

We are pleased with it.

We seem to be outperforming what the economies theoretically are doing and that's a testament to the strong brands and the great product innovation that we have out there.

Obviously it helps with launching Scuderia Ferrari that from our standpoint even though there's a recession in the southern part of Europe, we continue to do well.

Part of that is because of a major new launch that is very exciting for those consumers in that part of the world.

Great.

Thank you, guys.

Oliver Chen, Citigroup.

Thanks for taking my follow-ups.

I just had a quick couple of broader questions.

What are your thoughts on M&A within the sector and what you are seeing in the marketplace and if there may or may not be consolidation opportunities on the brands out there?

Secondly, if you could just talk to us a little bit about your feelings on the back to school sentiment, overall outside of your subsector there has been pretty much caution around traffic and the health of the consumer.

It would just be good to have your insights there.

Thank you.

I think in terms of M&A and I think what we have said in the past is that our internal plans and the ones that we have shared with everybody and our strategic plan basically call for executing our plan based on organic and internal growth.

So that's what we are planning right now.

On the other side, I think it's a little too -- I think back to school is not indicative overall for the watch category.

Our big season is really the holiday season coming up and as we said earlier, we have really exciting plans in place for the holiday season.

Thank you.

At this time we have no further questions.

I would like to turn the call back over to management for any additional or closing comments.

Okay, I would like to thank everyone for participating on today's call and we look forward to talking with you again after our third quarter and we wish all of you a great holiday weekend coming up.

So thank you very much.

That does conclude today's conference.

We thank you for your participation.