Sleep Number Corp (SNBR) 2010 Q4 法說會逐字稿

Welcome to Select Comfort's fourth-quarter and full-year 2010 earnings conference call. All lines have been placed in a listen-only mode until the question-and-answer session. Today's call is being recorded. If anyone has objections, you may disconnect at this time. I'd like to introduce Mr. Mark Kimball, General Counsel. Sir, you may begin.

Thank you, Angie. Good afternoon and welcome to the Select Comfort Corporation fourth-quarter and year-end 2010 earnings conference call. Thank you all for joining us. I'm Mark Kimball, Senior Vice President and General Counsel. With me on the call today are Bill McLaughlin, our President and Chief Executive Officer, Jim Raabe, our Senior Vice President and Chief Financial Officer, and Hunter Saklad, Vice President of Finance. In a moment, I'll turn the call over to Bill. Following our prepared remarks, we will open the call to your questions. Please be advised, this telephone conference is being recorded, and will be available by telephone replay. It also will be archived on our web site at SelectComfort.com.

Please also refer to the details set forth in our news release to access the replay on our web site. Please refer to the news release for a reconciliation of certain non-GAAP financial measures included in the release, or that may be discussed on this call. The primary purpose of this call is to discuss the results of the fiscal period just ended. However, our commentary and responses to your questions may include certain forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties outlined in our earnings release and discussed in some detail in our annual report on Form 10-K and other periodic filings with the SEC. The Company's actual future results may vary materially. I will now turn the call over to Bill for his comments.

Good afternoon, and thank you for joining us as we discuss Select Comfort's recent accomplishments and highlight future opportunities for the Company. As you can see from today's news release, the quality of our fourth-quarter and full-year earnings represent a strong finish to an important year for us, a year where we moved from stabilizing our financial position, to achieving consistent profitable growth.

We accomplished two very important things during 2010. First, we delivered strong financial results with consistent sales and earnings growth throughout the year, including in the fourth quarter, as we lapped a strong prior year period. And, second, we achieved significant operational advances that position us well for profitable growth in 2011and beyond. As it relates to financial performance, the fourth quarter marked eight consecutive quarters, two full years of consistent profit improvement in an uneven macro economic environment. Net operating profit in the year increased 153%, with EPS of $0.57, $0.13 of that in the fourth quarter.

For the full year, net sales increased 11%, on a 21% increase in same-store sales. And, we continued growing ahead of the industry in the fourth quarter. Our net sales increased 9% and same-store sales 12%, versus the industry at 3%. Lastly, the Company generated $71 million in cash flow from operating activities during the year, and ended 2010 debt-free with a cash balance of $81 million.

In 2010, we also made significant progress in our core operations, particularly in three areas. First, attracting more consumers to consider Sleep Number products. Unit sales in Company channels increased by 11%, despite reduced store weeks. Second, we better satisfied those who became customers. Referral and repeat increased approximately 15% in 2010. And, third, we leveraged growth for greater margin and cash flow in order to fund investments for future acceleration.

Key contributors to our 2010 operating improvement included media investment. During the year, we increased media investment by 14% or $8.8 million, while achieving our second highest level of media efficiency during the past ten years. And, brand focus, we also strengthened our brand focus and the consistency of the message around the Sleep Number Bed's unique differences. We also converted all store marquees to Sleep Number and all of our advertising and consumer communications now have a consistent look and message. In distribution, we continued to restructure our distribution base of Company-owned stores. Our focus for now is on productivity rather than on number of stores. In 2010, among stores opened for at least 12 months, we increased the average revenue 24%, and we did this by working on store locations and formats, local marketing programs, and sales team selection and training.

We also continued to enhance our unique end-to-end customer experience, which is critical to consumer adoption of our revolutionary individualized technology. Investments over the years in product quality and customer care are paying dividends. Sleep Number customer satisfaction, as measured by our net promoter score, improved nearly five-fold during the past two years, and we are now firmly in the range of top performing companies and we believe we can advance even further to join the elite. And, our internal employee engagement reached a record high during the year, which is important, as engaged in employees lead to satisfied customers. Lastly, we increased operating leverage and built cash, which allowed us to begin investing in longer-term growth initiatives. These investments position us to accelerate growth in 2011 and beyond.

And, before we move in to our 2011 outlook, we want to touch on a transition in our marketing leadership. Our Chief Marketing Officer for the past two years, Tim Warner, has decided to move away from the corporate world as a career path, in part to spend more time with his family. We respect his decision and appreciate his willingness to stay actively involved through the transition over the next several quarters, Tim will continue to lead the development and launch of our evolving creative campaign, we will take our time to consider permanent leadership options, which includes a comprehensive external search. We are excited about the significant advancements in our marketing efforts, and confident in the depth and experience of the team responsible for those advances.

Turning to 2011, we will build on what we've learned, with a goal to accelerate profitable growth. Our primary focus is on increasing consumer awareness and consideration of the Sleep Number brand. This includes helping customers understand not only the unique individualized benefits of all Sleep Number products, but also the exclusivity of the Sleep Number sales experience. We've learned that our opportunity to broaden awareness and consideration is both national and local. National to take advantage of our coast-to-coast distribution presence through online, direct and Company-owned stores, and the efficient media options to reach target consumers across the country, and local market development is also important.

Our local markets have differing levels of brand awareness and store presence. This represents an opportunity to better leverage our retail presence, as well as efficiently develop markets to achieve their full potential. Our approach will be to layer different levels of marketing, based on each market stage of development, coordinated with investments in real estate. Local market development also offers opportunity to manage risk, piloting new creative or new concepts before making national commitments. We expect that, by continuing to execute our proven programs from the past two years, we will outpace industry growth again in the 2011 and provide continued margin leverage to fund investment. Our plans assume little revenue lift in the year from those investments, as they are not yet proven. Some may in fact accelerate 2011 performance, and others may take longer and require some modification.

As I stated before, our opportunity is to broaden awareness in consideration of the Sleep Number brand and our stores. We're developing and executing several initiatives designed to advance growth in this area. First, media investment is expected to increase 15% or more in the year, which is a clear catalyst to increasing awareness. Second, we will also evolve our Sleep Number advertising. We will continue the current focus on product benefits but also capture the unique experience of our stores. That experience includes consumers interacting with our sleep professionals in our stores, engaged in fun and excitement of discovering their personal Sleep Number settings. We expect to pilot this new creative at the end of the first quarter.

Third, over the course of the first half, we plan to also accelerate tests of incremental digital advertising, as well as relaunch our web site. Our digital efforts allow us to take advantage of the increasing number of consumers who research products and retail experiences online when buying. Finally, as mentioned on the last call, we expect to have approximately 20 non-mall stores open by year-end. Our objective is to understand the ability of high visibility stores in high traffic areas, to accelerate brands and store awareness. We will likely take a year or more to definitively understand the potential of this new format. Very early signs are encouraging.

As we shared in our news release, we are targeting an earnings per share increase of 20% to 30% in 2011, and further strengthening our balance sheet. We are planning on sales growth greater than the industry rate, with high single-digit same store growth. We are also planning to increase our profit margin and our cash balance, while funding the expense and capital investments of the programs that I outlined. Long-term, we expect earnings per share growth of 15% to 20%, with the opportunity for higher percentages of growth in the next few years. It is also important to note that we intend to double investment in R&D, with the benefits expected in following years.

2011 is already off to a strong start. We look forward to an exciting and rewarding year. The bottom line is that we are very confident in our outlook and the priorities we have chosen. We believe that we have struck the right balance in our planning, with upside potential should the macro economic environment improve faster than anticipated or earlier returns on investments than planned. I will now turn it over to Jim to provide additional context around our 2010 performance and 2011 opportunities.

Thanks, Bill. As Bill noted, we're very pleased with our financial performance throughout 2010. Sales growth has been consistent, and operating margins continue to improve through leverage. Operating profits increased by 153% for the year, and 53% in the fourth quarter. Net income per share increased by 137% for the year, and 62% in the fourth quarter, compared to as-adjusted numbers in 2009 and reconciled in the attachment to the news release.

In the quarter, total sales grew 9% on 6% unit growth, in a slightly stronger mix. Same store sales increased 12%, as we lapped 23% same-store growth last year, and continued to outpace mattress industry growth, even with 7% fewer store weeks this year. On a two-year basis, same store sales grew 35%, and retail sales per store increased to approximately $1.3 million. On a macro level, our fourth quarter sales patterns indicate improving consumer environment.

Consumers continue to seek out value and respond to promotional offers that accompany traditional shopping periods. Sales growth has led to significant profit improvement, demonstrating our disciplined approach and the leverage potential of our business model. On a sales increase of $61 million, or 11% in 2010, our operating profit improved by $32 million or 480 basis points to 8.6% of sales. Some of the improvement is the annualization of benefits from our restructuring efforts in 2009, but a good part of it is attributable to normal operating leverage.

For the quarter, operating margins were 7.7%, 220 basis points better than last year. Operating margin expansion was primarily generated through the leverage in our selling expenses, where expenses as a percentage of sales improved 210 basis points to 26.5%. In addition, gross margins increased, and G&A leverage improved, funding a 70 basis point increase in marketing as a percentage of sales, to 19.6%.

With our gross margin improvement, our cost of production benefited from fixed cost leverage and lower warranty costs. Our Six Sigma efforts are paying dividends in cost reductions, as well as customer experience. Modest inflationary pressure offset some of these benefits. Marketing costs include media spending of $18.5 million, or 12.4% of sales, in the quarter. This spend rate is slightly higher than recent quarters as we accelerated media investments in the last several weeks of the year, to support first quarter 2011 sales.

On a cash flow basis, our 2010 EBITDA totaled $69.7 million, a $27 million increase, compared to 2009. One administrative note before moving on to our outlook. Historically, we've reported comps for stores, separate from direct and e-commerce selling channels. Beginning in 2011, we will combine all Company-owned sales channels in to a single same-store growth number. We believe this better represents our performance as a multichannel retailer, and simplifies our reporting and your modeling. The impact of this change on 2009 and 2010 comps is shown in the attachment to our news release.

Looking forward, we are issuing our 2011 guidance for earnings per share of between $0.68 and $0.74. This earnings outlook assumes Company-owned comp growth of upper single digits. Store count will decline slightly in the first quarter, as we close some remaining unproductive stores, followed by an increase in subsequent quarters, getting back to around 380 stores by the end of the year. Longer-term, we expect approximately 5% square footage growth on an annual basis.

As Bill noted, we are accelerating investments in new media creative, digital and local market development, including local media tests and we are significantly adding to our R&D efforts. Overall, we expect core growth and resulting leverage to more than offset the incremental spend, resulting in an increase in operating margins of around 100 basis points in 2011.

In order to provide a bit more context for those modeling our business, our outlook factors in the following. First, gross margin should improve by more than 50 basis points. This improvement factors in continued productivity gains in our manufacturing and home delivery operations, selective tactical price increases on a few sizes of mattresses and services. These increases represent less than a 2% increase to our customers. Finally, we are assuming some inflationary pressure. We factored in a 10% increase in the price of oil which impacts the cost of foam, plastics and diesel. We expect to offset any labor cost increases with productivity, and we predict that the cost of air will remain free, so we don't expect further inflationary pressure there.

We plan to increase our media spend by more than 15%, in 2011. About half of this increase is the core media programs, and the other half will be focused on local market development. Media, as a percent of sales, is planned to increase to approximately 12.5%, from 11.6% of sales in 2010. As Bill mentioned, we expect to double our R&D investments compared to 2010, while G&A and dollar terms should be roughly flat to prior year. Tax rates should improve to around 37%, while we estimate a modest increase to share count for EPS purposes. And, finally, we plan to increase our CapEx investments to between $25 million, and $30 million, as we accelerate growth investments and catch up some of the deferred capital spending from the last two years. When we spend a combined $10 million.

In summary, we're very pleased with our fourth-quarter and full-year results, and we're excited about 2011 and beyond. We are confident that we are making the right investments for the near-term, and for the long-term, to allow us to continue to improve our year-over-year performance. I'd now like to turn it back to Bill for final comments.

Thanks, Jim. I'd like to wrap up our remarks on 2010 by thanking and recognizing the Sleep Number team for a great year. We worked hard with passion and persistence, execution of focused strategies was both disciplined and creative, and our customers appreciated our efforts. Importantly, we continued to learn and to evolve, making real and long-lasting advances to what matters to customers, and that reinforce our unique competitive advantages.In 2010, our priority was to stabilize our financials and our core programs.

Our priority in 2011 is the disciplined acceleration of profitable growth. We will continue to focus on our core business and maintain tight expense controls for leverage and margin improvement. We intend to selectively invest to advance consumer awareness and consideration of the unique and exclusive Sleep Number product, and customer experience. Next quarter, we expect to share with you more specifics about our programs and pilot and their potential impact on 2011 and beyond. Angie, I'd now like to turn the call over to questions.

Thank you. (Operator Instructions).Our first question comes from Budd Bugatch. Please state your company name, and you may ask your question.

Good evening everyone. This is actually Chad filling in for Budd from Raymond James. First of all, let me offer my congratulations on a great quarter and a great year. If I could, in keeping with the theme of the housekeeping questions you gave us a tax rate around 37% for fiscal 2011, how should we be thinking about interest expense or potentially income in fiscal year 2011. Are you modeling kind of netted out to zero, or will you see interest income?

Probably net out to zero.

Great. You talked about a long-term EPS growth bogey of 15% to 20%, and longer-term square-footage increases of about 5%. So to get to the 15% to 20%, how do we think about the comp square footage growth and operating leverage, maybe share with us some of the assumptions that get you to that number.

I think as you said, I would say that our objective is to continue to grow share, so we are assuming in that a normalized mattress industry growth and that our comp growth would be above that industry growth, and then the square footage in the sales from new store would add on top of that. With regard to the 15% to 20%, that's a longer-term number, I think our view is that we should be able to sustain a good healthy growth rate over the long-term and we should be able to continue to grow our operating margins. As Bill said in his comments, there is certainly potential to outperform that in the near-in years, just based on where we are coming from. But longer term we look at 15% to 20%.

Sure. Would you mind repeating the commentary you made about the store, the trajectory of the store decrease and subsequent increase in the guidance?

Sure. We ended the year at 386 stores, we will be down about 12 or 13 stores in the first quarter and then it basically builds back from there to about 380 at the end of the year, and then that growth will continue into 2012.

Great. I noticed that inventory was up sequentially and year-over-year, could you share with us a little bit what drove that? Is that the right normalized number to work off of going forward or how do we think about that?

Yes. The inventory closed the year just under $20 million. The year before that it was about $16 million, some of that year-end was a little bit timing related. Some of it was related to -- we have a very large QVC show right at the end of the year. Sometimes we end up building a little bit more inventory. I would think about inventory in that $20 million to slightly less on a more sustained basis going forward.

Okay. Last one for me that mattress ASP was down about 3%. How should we think about that? Was it driven by promotions? Driven by mix? Maybe a little bit of both?

You will note on the schedule, the mattress as ASP is down a little bit. That has to do with a switch in mix in our foundation penetration. What we have historically measured ASP is with our traditional foundation, and we've seen an increase in the mix towards our Flex-Fit adjustable foundation, and so the way we traditionally measured ASP has seen less and less of the traditional foundation. We are going to transition to a more full mattress set including Flex-Fit if that's what we end up with, and on that basis, we are seeing a little bit of increase in ASP.

Thanks for taking my questions, guys. Congrats again and good luck in 2011.

Thank you. Brad Thomas, please state your company name, and you may ask your question.

Yes, Brad Thomas with KeyBanc Capital Markets. Good afternoon, Bill and Jim. Let me add my congratulations as well. Wanted to just take a step back and think about how you all are going to be approaching the growth investments and the capital allocation over the next couple of years. It seems obvious there is still a huge opportunity for growth ahead of this company with less than 2% market share. When you look at the areas of investment today, from a philosophical and practical standpoint, how do you think the Company approaches the business differently than perhaps it did prior to the last couple, prior to last period of growth for the company.

I will give you my answer and Jim can chime in, having a little more time to think about it. But for me it's pretty straightforward, that just as you said we have a significant opportunity in from of us, we now have the fundamentals locked in. I think what is going to be primarily different is our more focus on leverage and productivity as a first step wherein before we had average sales per store, we got it up to about $1.5 million but we were adding a lot of stores and stores on top of that. That was not increasing significantly. Our first opportunity is to just leverage the heck out of the stores that we can. That's going the be done primarily on a local basis. So I would say some of the difference in our investment is going to be on a more market-by-market basis, combining the investment of marketing and real estate.

Beyond that, we are just getting in to the product development ramp-up again and don't know what the capital requirement will be in that area. As you said our first opportunity is just growth of the stores and the marketing programs to build that awareness. It's impressive when you look at our market development spread, in that we have some major markets where we have very, very low shares. Big opportunities to grow in those markets, as we go forward. I will turn it over to Jim, with any other answers.

The only thing I would add to reinforce Bill's comments, it is about really focusing on the core and the core being defined as our own Company-owned channels and the sleep products, mattresses and bedding collection, where I think earlier we expanded a bit outside of that, that doesn't mean there aren't opportunities around that, but the core growth is going to come from that core, and then the second piece is just being very focused on making sure that we are getting margin expansion along the way. In our earlier growth cycle, we had a lot of very strong top line growth with not a lot of margin expansion. We are going to make sure we maintain that margin expansion at every step of the way.

As we think about some of these investments on the media front and real estate front, over the course of the next year, should we think of them as being still in sort of a testing phase where you would determine if they are suitable to be expanded to a national platform, or is it a case where you are going market by market in some of your maybe less productive markets and would in turn roll that out to other markets. How should we think about the scale and scope and timeline of some of these investments?

Well, let's talk about our investments kind of in pieces. Some of the major investments that are most important here this year are on the creative evolution of our advertising as well as the development of our digital platforms. Those will be developed, piloted, and then, depending on their performance, rolled out more nationally. The third area of primary focus is on this market development standpoint, from our market development, both media and real estate. That will be just by the nature of it, it's going to be a little different market-to-market. We will have to prove a formula here in the, in 2011 and then depending on what that formula looks like, we will judge the rollout of that in 2012 and beyond.

Great, one last follow up on the investments in R&D. Bill, as you look at if current merchandise offering, do you think this would be more of a focus on mattresses, or is there an equal or greater opportunity in some of the accessories that you sell?

I think there are opportunities in both, Brad. The bed though, is our core. The starting point is that we believe we have already the most advanced and differentiated product in the market. Our first priority is to secure that technology and that competitive advantage. We have been doing that with reliability, with continuous improvement of that core product. Incremental resources will then be allocated to broadening the features, benefits reach of individualized comfort, and we'll do that both in the bed, what we will also do corollary advances in the accessories to support that.

Great, thanks so much.

Thank you. Mark Rupe, please state your company name, and you may ask your question.

Hi, it's Mark Rupe at Longbow Research. Congratulations, guys. Could you give us an idea if there was any noticeable changes in the demand flow or trend during the fourth quarter? I know when the ISPA data, which is not the end-all be-all, but it looked like it slowed in December. I was just curious to see if there was noticeable changes in your demand trend during the fourth quarter.

There has been, throughout the year, been some ups and downs. It's never been just a straight, smooth curve. I would say though that as we got closer to the end of the year, there seemed to be a little bit more positive feeling from consumers as a whole. That is, I think we recognize though, and we would expect there will continue to be volatility going forward. I think what we've seen is similar to what you've heard in the broader press about the macro, which is, it seems to be a little bit of improvement in the consumer mindset overall.

As we look in to fiscal 2011, the upper single-digit comp thought process is definitely positive. Curious to see as for as how it progresses through the year, on paper, it looks like the first half is real hard. That said, I know that the first half in the prior two years is weak. Curious to see if you think that for modeling purposes, if there is any kind of difference in flows through the quarters on comps in 2011?

I wouldn't expect anything dramatically, any dramatic swings from quarter to quarter. We felt as if 2010 looked much more normalized from a seasonality standpoint than anything we seen in a couple of years. Fourth quarter still feels a little bit lighter than maybe where it was four or five years ago. Overall the seasonality last year in 2010 was pretty normal.

Okay. Couple of housekeeping, did you say 2X on the R&D spend next year?

Yes.

Okay. And then as far as the non-mall you said 20 by year end. Did you ends up like in the five to 10 range?

We have about six open right now about four just within the last month in the new format.

Thanks, guys, good luck.

Thank you. (Operator Instructions).John Baugh, your line is open. Please state your company name, and you may ask your question.

Thank you, John Baugh, Stifel Nicolaus. My congratulations as well. On the stores, could you tell us, or what are you going to do in the mall, will we shrink 20 or will we shrink, close some and open some somewhere else, or what's is going to go on with the mall base?

John, what we are really looking at is on a market by market basis what is the right distribution of stores in those markets. A lot will depend on the market. We are opening some new mall, we are relocating some mall. Within markets, we're also relocating out of malls to the non-mall site. But we are also improving our enclosed mall presentations as well. We are trying to find the right way to develop each market.

You commented that very early results, I guess you only had two of the non-mall base stores open for a while. Is there anything you can give us numerically or in terms of color about how those are going?

As I said, it's real early, we've got four of them that have just been open a month or so, and it's going to take a year to see the whole seasonal trend in all. What we are watching for is the absolute traffic and for both the store and the market impact of these. Again, early indications are positive in that we are seeing sales about in the area that we were looking for. We will comment more on the next call as we get another quarter under our belts.

Are any of the stores that you are opening, either mall or non-mall in any of the markets where you vacated or went dark or in the big markets like New York or Boston or Chicago, where you more or less vacated, or are these fill ins to leverage existing media spend?

They are primarily focused markets we have more of a presence in, so that we can leverage our marketing efforts there a little better.

Okay. On the attach, could you go over that commentary again, what you have done, it sounds like you have two adjustables, there is a price difference between the two, you're seeing a mix shift and then comment on the tax rate, thank you.

Sure. John, what we have is we obviously have a mattress and then we have our foundation, which is commonly referred to more as a box spring by the other spaces. What we have always done is when we quoted average mattress prices, it's been mattresses divided by bedding sales, which includes foundations and mattresses but what we haven't included in that number, the Flex-Fit, which is the adjustable foundation. More and more, we're seeing an increasing number of consumers that come in and choose the Flex-Fit rather choosing than the traditional foundation. What we saw, what appears to be a decrease in the average selling price, in the way we were measuring it before, was a migration from the traditional foundation to the Flex-Fit. We are not seeing a change in penetration of people buying a base to the bed, we are just seeing more of them take the foundation, which is a higher-priced unit and as a result we are going to this more complete measure.

Got you. Okay. That makes sense. Then, warranty liability dropped, I notice. What drove that, number one, and was there a credit to the income statement anywhere in that result?

Yes. I think you are referring to the decrease in the balance sheet on the warranty liability line, and just to clarify a little bit, there is a line item that's broken out in non-current liabilities that's warranty, there is also warranty liability that's in current liabilities, but it's smaller so it's buried in other current liability. You don't get the full picture just looking at the balance sheet, but to answer your question, we did see a reduction in our warranty liability as a result of trends that we have seen on improving warranty claims, as result of our Six Sigma and our improved quality in our manufacturing processes. There was a benefit in the P&L that is flowing through gross margin, and as I mentioned, that's part of the reason for the improvement in the gross margin rates in the fourth quarter. Some of it is also due to the fact that we did reclassify some of the long-term liability into a current liability. The decline is not as big what looks like on the balance sheet. When we file the 10-K later in the month, there is a more complete breakout in that document.

Okay. That will be great. My last question is on the guidance, and there was some commentary about how you are not assuming benefit from some of the, I think you said growth investments. I'm curious, you did announce you are going to increase media spend at least 15% or greater. I'm assuming that's incorporated and you are thinking about sales guidance, but just clarify for me, what is assumed that's going to benefit versus non-assumed.

You are right, John. We did say we are increasing our media at least 15% in our plan. What is not assumed for example is, as I said ,we are working on new creative or creative evolution of our current spots, we are not assuming in our outlook that has any significant increase or decrease. We are working on a new web site redesign, are we are not assuming that has any significant upside, and we are working, we are investing in a lot of this local market development and we are not assuming that goes beyond what historic rates of return on investment would be, so we are not really assuming any significant lift from some of those investments. That's the kind of -- that's what we were referring to as we taken a pretty balanced look, where we have built in expenses and haven't built in all of the upsides that could occur.

But Bill, the timing on all those, the website was a Q2 event, what about the new creative and the local?

That should be out in March.

Then the local development.

Local development is phased in quarter-by-quarter through the year, depending on the market, some will start here in the first quarter.

Thank you. Appreciate it.

Thank you. At this time, I would like to turn the call back over to the speakers for closing remarks.

Thank you, Angie. If there are no further questions at this time, then we will conclude the call. Thank you all again for joining us, and we look forward to reporting further following the first quarter of 2011. Thank you.

Thank you. That does conclude today's conference. Thank you for your participation. You may now disconnect from the audio portion.