Shift Technologies Inc (SFT) 2021 Q1 法說會逐字稿

Good day and thank you for standing by. Welcome to the Shift Technologies First Quarter 2021 earnings call. (Operators Instructions). Please be aware that today's conference is being recorded. (Operators Instructions) I'd like to hand the conference over to your speaker today, Henry Bird, Vice President of Strategy and Finance. Please go ahead.

Good afternoon and welcome to the Shift Technologies first quarter 2021 earnings call. Joining me on the call today are Co-CEOs, Toby Russell and George Arison; and CFO, Oded Shein.

During our remarks, we will make some forward-looking statements, which represent our current judgment on what the future may hold, and while we believe these judgments are reasonable, these forward-looking statements are not guarantees of future performance and involve certain assumptions, risks and uncertainties.

Actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. Please refer to our filings with the SEC for a full discussion of the factors that may affect any forward-looking statements. We undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise, after this conference call. During the course of the call, we will be referring to non-GAAP measures, as defined and reconciled in our earnings materials.

With that said, I will now turn the call over to Toby.

Thank you all for joining us today. I am excited to report today on a fantastic quarter, which is set Shift up for an incredibly strong 2021. In Q1 with focused execution on our business plan, we drove record financial results including revenue of $106 million, up 254% year-over-year and adjusted GPU of $1690, up over 3x sequentially from the fourth quarter.

Both measures are above the targets we set out on our last call. We achieved this with an adjusted EBITDA margin that was also better than we had previously implied in our guidance. Given Q1 success, our continued confidence in the strategy we previously laid out and our success in executing our key initiatives, we are raising our full-year 2021 guidance across all key metrics, which Oded will outline in detail later on this call.

Our previously communicated growth strategy laid out 3 core drivers for our growth, deepening penetration within our existing market, enhancing our ancillary product offering and expanding our geographic footprint. This year, we are successfully delivering on all of these. We expanded our reconditioning capabilities, which has enabled us to drive both growth and higher Adjusted GPU results. Additionally, our national brand awareness campaign is helping us drive strong growth.

I'll take a moment to walk through each driver in more detail. In the first quarter, we delivered extraordinary revenue growth, more than triple last year's level, including strong sequential growth quarter-over-quarter. We tripled our e-commerce unit sales and nearly all of this growth came from the same six West Coast core market we had last year.

Given our full spectrum inventory capabilities and our unique model of test drives delivered to the consumer's home, we see a significant opportunity to further deepen our penetration and grow sales volume in existing service territories by continuing to capture more share. And as we scale, we continue to invest in our technology platform to support our accelerated growth model and industry leading customer experience.

Our core market growth is complemented by the new marketing strategy, we implemented in mid-February. This strategy supports immediate and mid-term sales efforts, while also building durable, nonperishable, brand impression, both within these markets and beyond to benefit Shift now and for the long term. The immediate positive results are extremely strong, as evidenced by outperformance on volume and revenue in the latter part of Q1 and our strong guidance for Q2, which Oded will the detail in a moment.

Given the success, we will continue our investment in consumer brand building and as we've discussed before, the full benefits of this strategy will come in the months and years ahead. As Q1 marked the changeover from our old marketing strategy to our new marketing strategy, it also marked the high point of our 2021 advertising expense due to overlapping spend between our previous strategy and the new one.

We expect our total Q2 advertising spend to be substantially lower than Q1, reducing our CAC roughly in half and we expect continued improvement in CAC through the second half of the year. Q1 saw an historic supply shortage in the new and used car market. One of the core differentiators of our business model that allowed us to grow despite significant lack of supply across the industry is that we source the vast majority of our cars directly and indirectly from consumers, 87% in Q1. This model mitigates our risk related to auction and wholesale market volatility that impacts other industry players.

Our tremendous revenue and volume growth was coupled with strong improvement in adjusted GPU, which grew to $1690 in Q1, more than 3x improvement over Q4. In November 2020, we outlined actions to improve and expand our in-house reconditioning operations by mid-year 2021. We succeeded in accelerating that timeline significantly and achieved our goal in early Q1. As anticipated, bringing our in-house reconditioning volume back to target levels was the primary driver in our improved front-end GPU in Q1 and that improvement will sustain going forward.

Additionally reconditioning improvement not only supported strong GPU growth but also enabled us to increase our sellable inventory position 93% from beginning Q1 to beginning Q2, which has allowed us to efficiently meet heightened consumer demand, even in a supply constrained market. Concurrently with strong improvements on the front end, our back-end GPU also performed strongly in light of our continued strategic focus on expanding our F&I offerings and delivery. F&I GPU reached a record $938 per unit, representing growth of 58% year-over-year on our path to our mid-term goal of $1200 to $1300 per unit and F&I gross profit. This growth was primarily driven by the continued investments we've made in our consumer experience and product delivery, resulting in improved attach rates across products.

There is still significant upside here and we are excited by the opportunity to have F&I expand our GPU margins over time.

Turning to geographic expansion. Earlier this week, we announced that Austin and San Antonio, Texas have been converted to our full omnichannel offering, including test drives brought to consumers' home within 145 miles of each city.

Additionally, last week, we launched our car acquisition in the Las Vegas metropolitan region. This is our first expansion into Nevada and we are now able to purchase vehicles directly from consumers in 11 super regions across the western half of the United States. In addition to selling cars direct to consumers across the whole of the U.S.

Our very strong first quarter results and Q2 guidance are evidence that our strategy is working. Digital adoption in the used car market is still in its infancy with tremendous opportunity to capture share from offline sales. By executing against our plan, we are positioning shift to be a leader in the automotive ecommerce transformation.

Importantly, I would like to thank our Shift team members for their continued hard work and dedication, especially in overcoming the challenges brought about by the pandemic environment to deliver record results. I will now turn the call over to our CFO, Oded Shein to review our financial results.

As you recall Oded joined shift in March and brings extensive public company financial experience including roles as CFO of both Stage Stores and the Fresh Market. Oded is also a Board member and Chair of the Audit Committee at Conn's HomePlus. Oded?

Thank you, Toby and good afternoon everyone. It is a pleasure to speak to you for the first time today since joining the company in March. I joined the Shift team because I see the long-term opportunity to bring the used car market online and significantly improve the consumer experience. I believe Toby, George and the entire Shift team has the right strategy in place to capitalize on this opportunity, and I look forward to achieving our long-term strategic priorities.

I will first review our Q1 results and then address our guidance for the second quarter in the fiscal year. Total revenue for the first quarter grew to $106 million, up 254% year-over-year. Total units sold were 5979, an increase of 181% with the e-commerce channel growing to 4453 units, up 213%. E-commerce average selling price was nearly $20,000, 30% higher than a year ago. The increase in ASP was due to change in our inventory mix as we increased purchasing and selling high line and luxury cars which has historically been strong performers for Shift and we're deprioritized in 2020. We also decreased the value segment slightly as a percentage of total sales while growing get in aggregate to support our reconditioning team's efforts to increase throughput.

Adjusted gross profit increased to $7.5 million from $3.5 million in the prior year period. Adjusted gross profit per unit was 1619, significantly higher than our expectations and sequentially up from 514 in the fourth quarter of 2020. This sequential increase was in large part due to the return to in-house reconditioning operations as Toby has described.

SG&A was $50.2 million in the first quarter versus $13.4 million a year ago, reflecting the investments we made to support our strategic priorities including a meaningful growth in headcount to meet consumer demand and enhancing key leadership positions.

Marketing investment also increased primarily due to our new brand marketing initiative. Expenses were also up year-over-year due to public company costs including stock-based compensation of $8.2 million versus $0.3 million last year. Adjusted EBITDA for the first quarter was a loss of $34.4 million versus $9.7 million a year ago. Please note that the Q1 EBITDA loss was within our stated guidance range.

Now turning to the balance sheet and cash flow. We ended Q1 with cash and cash equivalents of $177 million. We also had approximately $43 million in net inventory after giving effect to our flooring line of credit. Cash flows for the quarter declined by $56.8 million from year-end as we invested $25.2 million purchasing cars into inventory to support growth and meet customer demand.

Accounts receivables also increased by $12.8 million due to a timing shift in our collecting process that is expected to reverse during the fiscal year. As a result of this impact to working capital in Q1, the cash used for the quarter was higher than we expect to use in future quarters. Given the current cash balance, we have a strong liquidity position.

As we have said in the past, we are always evaluating our liquidity and capital management options to ensure that we are able to continue our high growth rate into the future and achieve operating scale and strong profitability.

Next, our guidance for the second quarter, we expect total revenue for the second quarter to be in the range of $120 million to $130 million, 270 % to 300% higher than Q2 last year. Our Adjusted GPU is expected to be between 2000 and 2200 reflecting our internal improvement in reconditioning capabilities and benefit from favorable appreciation in car prices that we have experienced since March.

We expect adjusted EBITDA loss for the quarter to be in the range of $28 million to $31 million. The midpoint of this range implies an adjusted EBITDA margin loss of 23.6%, a significant sequential improvement to Q1, due to our improved gross profit and reduction in marketing cost.

Based on our strong year-to-date results and improved operational execution, we are again raising our annual guidance for 2021, across all metrics. We expect total revenue to be in the range of $480 million to $520 million, an increase of 145% to 166% year-over-year and we expect to sell 21,000 to 23,000 ecommerce cars, a growth exceeding 120%.

We are raising our full-year expectation on adjusted GPU to exceed 1800, an increase of $200 per unit compared to our previous guidance. This increase was driven by our higher-than-expected Q1 results and the Q2 expectation, I just discussed. This guidance is also based on the possibility that the favorable car prices, we enjoyed since March may not continue for the rest of the year.

Finally, as a result of the above expectations, we now project our EBITDA loss margin for the year to be better than 24%. I will now turn the call back over to George for closing remarks.

Thank you Oded and Toby. We're extremely pleased with our results for the first quarter, as we outperformed expectations for revenue, adjusted GPU and EBITDA margin, due to immediate benefits from our new branding strategy and dramatically improved reconditioning profit. We have great inventory and awesome momentum heading into Q2 and the remainder of 2021, which positioned us to far exceed the revenue growth targets discussed when we became a public company last fall, while delivering growth with improved operational leverage and strong gross profit.

We believe that Shift is uniquely positioned to be a leading and transformative ecommerce platform for auto sales and our performance this year is setting us up well to achieve this call. Operator, we are now ready for questions.

(Operator Instructions). Our first question will come from the line of Marvin Fong from BTIG.

Hi, good afternoon and thanks for taking my questions and welcome Oded. I guess I'll start just on the marketing spend, it's good to hear that it will be spent stepping down in future quarters. I just -- just some additional color on just how you're thinking about that? Do you, I mean you guys are obviously enjoying fantastic growth. Do you feel like -- if you could be spending more to drive additional growth or do you feel like you're just trying to balance profitability and growth from here on out? And then a second question just on the days the sales, 47 in the quarter, I think last quarter George, you had said like a range of 48 to 58 would be optimal, so just curious if you were able to optimize margin in the quarter and how are you thinking about that for the second quarter and the balance of the year, do you think day of the sale will get into that range that you feel the sweet spot?

Thanks for the question on the marketing portion. We're actually extremely excited about the brand building and marketing strategy that we have put in place, as I mentioned at the outset, the Q1 overlap of our previous strategy and our current strategy is what really drove -- what we would describe as a peak or a high point in our marketing spend, we expect to have significantly lower spend and significantly better like by half (inaudible) going forward, but at the same time be growing unit volume and we do think that this is the right level of investment in marketing because we're building, not just near-term impact as you're seeing from our rapid growth, but we are also seeing the brand awareness and long-term non-perishable growth and brand equity that we're creating within our existing footprint and beyond. That's the needle that we've been threading with our new strategy. Q1 has been a cut over and we're very excited about what we're seeing and the early days and expect us to continue investing in that consumer branding.

And on the inventory, time to sell question. So obviously we are seeing great growth in Q1 and we are guiding to really strong growth in Q2 and 47. Okay. On those slightly slower time to sell would be better from our perspective in terms of what we hope to do. Hence the guidance of 48 to 55 although kind of what we want to do for the full year. We are seeing really strong growth in our sellable inventory. We discussed in our shareholder letter that we've had over 90% growth in our sellable inventory from the beginning of Q1 to the beginning of Q2, so that's really good and really be positive and we continue to invest in ensuring that we have the right amount of inventory and then we finish net inventory. So obviously demand is very strong. We sold more units in Q1 towards the end of the quarter than I think we had initially anticipated by some amount and so that obviously helped with the revenue results for the quarter and we believe that demand will continue to be very strong in Q2. Hence the guidance that Oded provided.

Great. And if I could just sneak one more in, just curious, you know you did highlight the strength in used car pricing, the wholesale channel, obviously seeing a lot of volatility, you guys mentioned that you're getting most of your cars through the consumer channel, I just would like some additional color. Just kind of on the interplay of that, for instance, does that with your competitor and other dealers getting a lot more of their inventory from wholesale, does that cause them to raise prices and you guys can take advantage of that without having realize the same cost than you're sourcing, just kind of help us think about how things stand right now and how you're positioned to take advantage?

Totally, so we acquired about over 80% of our customers directly from consumers or from partners and we think that's super advantageous to us in this environment. Because as you mentioned, wholesale prices have been very high which results in people having to pay a lot for the car when they buy wholesale which reduces the margin in terms of what they can sell at core to the consumer. Just the overall car prices in the market is also high. So you're selling it up higher priced to market than you historically would at this time and that's I think true for everybody, but there is a margin compression between what you sell for and what you buy for when you go wholesale as less of the margin compression when you buy from consumer and that's why we think consumer acquisition is such a valuable thing and have always going to fight that that gives you the best inventory at the best possible price.

The other kind of reality on the wholesale versus consumer side is that wholesale side, much more of a commodity, they tend to all be kind of bunched up in that 2 to 6 year range and even more so in that 2, 3, 4 year range for a lot of them are off lease. And so they very commoditized in the market, whereas consumer cars or not., so that's another benefit to buying consumer cars and we think that what we've built in terms of consumer acquisition for car purchases as well as view of the price and your fleet and then be able to spend by that price, when we go out to the consumers home or office to pick up, the car worked really, really well, and we'll continue to push that forward as we scale the business.

Our next question comes from the line of Mike Baker from D.A. Davidson.

Okay, thanks. Couple of questions, first on the F&I drivers, you talked about greater testing rates, but I also think you're making some changes to some of the vendors that you use in some of those -- for some of those products, is that helping to drive that the better F&I or is it really simply just better training, better attachment, et cetera?

So in Q1, we have not yet made -- had not yet made any changes, we are working unchanged that we might make later in the year, but they are not coming in Q1 or in Q2 just yet. So right now, the results that we're seeing in F&I is around and the kind of the planning and so forth. And that is still as we mentioned in this but a kind of opportunity to grow that and improve there. But then there is additional kind of benefit from being able to change the agreement that we'll have with our lab partners which we're working on, but that has not yet come into that.

Okay, makes sense. Another thing I want to ask for is just a bigger picture, free cash flow outlook, cash burn, when -- if you sort of use your mid plenty of your guidance and you said, better than 24% EBITDA margin, but what's the use 24% versus 25% before. It speaks to a cash burn of about $113 million. Sorry about $120 million, which is actually higher than it was on your previous guidance, where I think it was about $113 million. So I just wanted to ask about that. And then as you burn through that cash, what's the outlook for next year and sort of when do we become cash flow positive or when do we sort of run out of cash.

Just a couple of start about that. As we sit here today, we're in a really good liquidity position, we have cash in the bank. We plan to grow our inventory, we can do that through the traditional methods in the industry, which is a fourth floor plan facility. So that's always there. And thinking about the future, we want to continue to grow at an accelerated pace and if we are in that position, we can always reach out to the capital markets and think about our capital management to make sure that we continue to grow at that level. As for breakeven. Well, you, the company said in the past that 2023 was a target date it has to do with getting scale and operational efficiency. We talked about some mid-term goals, especially for GPU with 2500 again, which is a function of efficiency in reconditioning and F&I and we are making great progress towards all of those, so that's directionally where we're heading.

Okay, makes sense. Thank you. One more quick one, if I could, you had -- you took down the value percent maybe by design, because it was easier. You didn't have to do as much reconditioning. So I get that, but now that you've caught up on the reconditioning. Should we expect value penetration to go back up to me at least that was one of the differentiating factors for Shift versus some of the competitors, I'm wondering if that's sort of being downplayed a little bit or was that just a temporary issue because of the reconditioning situation.

So how you count it as a total number of cars sold has actually gone up from before, right so, it's increased as a percentage of total inventory, but in aggregate total, it's going up and will continue to go up. In addition to having slightly lower value and the percentage, we have also actually been doing more on the high line and higher price points and that was driven by the fact that in 2020, with the COVID situation and where the economy one, we thought that I'd make sense kind of step back from it a little bit, previously we had done really well with higher more expensive cars in 2018-2019 and so going back to that once we were no longer capital constraints posting public, I made a lot of sense. So we kind of seeing 2 things happen with more on the more expensive side and doing slightly less on the value side because of the commissioning. We would expect value to be an important part of the business. It might not be quite the same percentage as it had been in 2020, but it will be a significant percentage.

Our peers only don't sell those at all and we actually have a huge number of value cars and that was we are selling, and we're seeing very good demand for those. I think more things were kind of thinking you modified how to do more value in the future beyond what we do right now and that's something that is important. We think that that's like you said, a big differentiator for Shift and also a huge winning strategy because of demand for those cars is very, very strong. Those cars are of generally very scarce, there are very few places you can buy them other than independent dealers and so we are the only ones that they're aggregated digital e-commerce first companies that can actually capture share from an independent and we think that's super valuable and we'll continue to and to pursue that.

Our next question will come from the line of Seth Basham from Wedbush.

This is Jesse Sobelson on for Seth. Just piggybacking on the prior cash question here, you guys mentioned the core plan facility, do you currently have a core plan facility commitment and if so, what's the capacity on that? And then looking forward when it comes time to raise capital, would you prefer debt or equity look forward?

The total facility for $50 million at this point, we actually under within the first quarter, we have only $31 million dollars on the books. So we have an opportunity to grow it. And as for the future, going to look at all of our opportunities in the market, whether it's equity, debt or anywhere in between, so they just thinking is we want to accelerate growth and raise more money to get to both scale and profitability.

And our next question comes from the line of Sharon Zackfia from William Blair.

This is Matt Schultz on for Sharon. So first off, congratulations on the first quarter. Can you talk about what offset the revenue upside since Adjusted EBITDA was basically within your expectations. I mean, did you pull forward any investments or was there some unanticipated expense that limited the flow through, it sounds like the marketing overlap may have played a part net, but I was just wondering if you could clarify.

Yes. The topline exceeded our expectation and so did gross profit at the same time, we pushed down the accelerator for growth and comparable growth and also investment in marketing, but at the end of the day, our EBITDA was within our guidance range. We were pleased with that.

[Operators Instructions) Our next question will come from the line of Mike Grondahl from Northland Securities.

Just a question on kind of the reconditioning clearly a lot more efficient than last fall, on a scale of 1 to 10, how would you say your reconditioning efficiency was in the first quarter and in kind of, what else can you do to kind of keep improving it. And then maybe lastly to that like you reconditioning capacity what percent did you operate at in 1Q.

Great question. So we think the reconditioning and then suddenly in a much better place than it was in Q3 and Q4. And obviously, we are really happy with the improvements that we've made. I don't think I can put a number like you're asking because that's not something we're going to publish, but we are definitely much happier than where we are. That does not mean to suggest that we have -- we are much happy with where we are now versus where we want to go -- where we were in the past. That said, there is still opportunities to do better on both in terms of dollars spent per unit, and we think there's improvement that to be made. And in terms of speed of reconditioning and there's also opportunities to do faster, which we think will be better from gross profit perspective, because if you can get a car reconditioned quicker, you can get it on the lot to sell faster, which then allows you to turn that car with better gross profit. So we've had pretty significant improvement and we spoke about that during the earnings call in March and we're really happy with the results.

I think our sellable inventory increase from beginning of Q1 to beginning of Q2, enough to kind of speaks to how well we can definitely has done, but there is still a lot to do in the future and that's not a 1 quarter kind of change that the multi-quarter strategy to make sure that we finishing the cost there where we want them to be long-term, as well as speed is we want to be long-term. Last point, we've spoken in the past about how our midpoint goal is to get $25 in gross profit, of which about above $12 to $13 will come from front end. Obviously driving we finishing the cost down to that an ideal level over the next couple of years is a big part of getting to that $12 to $13 of sustainable front-end gross profit.

Got it and then you guys sound really happy with the marketing and branding campaign. Is there 1 or 2 things you can kind of call out there that's really resonating you think with buyers or sellers of vehicles?

It's a great question Mike. I would say two things are quite important on that front. One, our channel mix, the way we reach consumers always changed substantially versus how we did that previously as part of the new strategy and I think that that's a guess that one of the most important thing that we've talked about in the past, the problem with Shift as then people just don't know about us and us reaching out to folks and creating awareness using our Full Spectrum multichannel approach has proven successful, we talked about, we saw early signs of that in Q4 and now the full rollout in the latter part of Q1. Part two, we believe in our unique brand positioning and the creative assets that we've created to stand behind that positioning. Our value proposition, used cars never felt so new. We believe that consumers face a difficult challenge in choice that is they say I want quality and trust, so I think I should go buy a new car, but I'm going to get over overcharged buying that new car, why.

The second you drive that thing off a lot, you're going to lose thousands in depreciation and so what we're doing our fundamental thesis as a company and our brand proposition is breaking that trade-off for consumers is what great products do, you get the new car peace of mind, we have used car value that is the core of what we're presenting. We're not saying hey, like where that we're just better the better channel etc., we're talking about why the customers at the center of what we do, we're talking about why what we offer is meaningfully better than what's available in the market and we're doing it, we believe in a clever way that resonates from a creative asset point of view that we have seen to really land well.

Our next question will come from the line of Zach Fadem from Wells Fargo.

This is Eric on for Zach. I know you guys had the 5 markets in Texas that were only one sided for all Q1. Was there any GPU headwind from that. And is it ease as now you flipped San Antonio and Austin into two-sided market.

Any business that we did in Texas was a miniscule scale in the first quarter, obviously we didn't sell any cars on 9 to 10 GPU.

And it looks like San Antonio and Austin you started one side, 6 months ago. It took six months to flip to buying. what sort has been, is that the typical run rate, you've had in other markets and should we expect the other remaining markets in Texas and Las Vegas to switch to two-side model in about six months from when they opened.

So we haven't published timelines from when it is automatic launches through the point at which we would flip it over. That's part of our competitive advantage in secret sauce, as it were as to when we're going to be launching markets and we also have a shared which additional markets, we have plan for subsequent launches. And we've been actually really excited about the velocity with which cars came online in Texas. We are very, very excited about the Nevada launch with Las Vegas comes online as well. Part of what is helpful there is that we can both turn cars to wholesale where necessary, where they're not retail level. And because we have an International selling capability. Are those cars were resourced can flow into the main flow. So as Oded mentioned, we didn't sell necessarily cars locally in market with our omnichannel offering that we have now launched in Texas, but the -- and the total volume was relatively small, as we are ramping up, but we're really excited about how those markets have come online and we actually are bullish on being able to add additional markets.

Overall, though, I will note that we are ahead of schedule, relative to what we had said we would do in terms of market launches and we're thinking about these market launches in terms of adding real growth for next year, because our current strategy is to grow primarily in footprint in 2021 and we're putting in place foundations and footprint to add additional growth for next year as we get further and further down the past of expanding Shift.

And our next question comes from the line of Mike Baker from D.A. Davidson.

Hi, sorry. Comes one more real quick, just to be clear on the marketing costs going down. First of all, if you could quantify what to think about in the second quarter that would be helpful, we just cut in half is that we're saying, but more importantly, just to be clear, I think it's obvious from your previous comments but you're not pulling back at all on the new marketing campaign as you set the old marketing campaign goes away and so can you confirm that and are we going forward or even accelerating the new marketing campaign, which seems to be so successful right now?

Thank you for that question Mike. Yes, confirmed the reason for the spike in total spend in Q1 was we had overlapping strategies occurring bringing on a new one as sun setting the old one and that created that overlap and a spike. We, as I mentioned in the outset how expect a substantial decrease in total spend and the resulting decrease like by half in CAC with continuing decrease in CAC over the course of the year, as we see that efficiency, but we are doubling down and in fact, really leaning in on the new strategy and it was really that seem that changeover that caused essentially the high point, but what we expect to be quarterly spend by a good amount in advertising in Q1.

All right, okay. So that makes perfect sense so I just want to make sure. Thanks, I appreciate that.

Thank you. No further questions in the queue, I'd like to turn the call back over to George Arison for any closing remarks.

Great, thank you very much and should everyone join our call and we'll get into that in a few months when we report on Q2.

And this concludes today's conference call. Thank you for participating. You may now disconnect.