Earnings Call Transcript - GNLN Q3 2022

Operator, Operator

Good afternoon, and welcome to today's conference call to discuss Greenlane Holdings Third Quarter 2022 Financial Results. A press release detailing the financial results for the quarter ended September 30, 2022 was distributed earlier this morning and is available on the Investor Relations section of the Greenlane website at investor.gnln.com. As a reminder, today’s conference is being recorded. A replay of this call as well as a copy of the supplemental earnings slides will be archived on the company's IR website at investor.gnln.com. On the call today are Nick Kovacevich, Chief Executive Officer; Darsh Dahya, Chief Accounting Officer; and Craig Snyder, President. Before we begin, Greenlane would like to remind listeners that today's prepared remarks may contain forward-looking statements and management may make additional forward-looking statements in response to the questions received. These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them. These statements are based on current expectations of the company's management and involve inherent risks and uncertainties and other factors discussed in today's press release. This call also contains time sensitive information that speaks only as of the date of this live broadcast, November 15, 2022. Factors that could cause Greenlane’s results to differ materially are set forth in today’s press release and in Greenlane’s Annual Report on Form 10-K for the year ended December 31, 2021 and quarterly report on Form 10-Q for the three months ended September 30, 2022, previously filed with the SEC. Any forward-looking statements made today on this call are based on assumptions as of today, and Greenlane assumes no obligation to update these statements as a result of new information or future events. During today’s call, Greenlane management may discuss non-GAAP financial measures, including adjusted gross margin, adjusted SG&A and adjusted EBITDA. Greenlane has included a reconciliation of these non-GAAP measures in today’s press release, which is available in the Investor Relations section of the company’s website at investor.gnln.com. I would now like to turn the call over to Mr. Nick Kovacevich, Chief Executive Officer of Greenlane. Please go ahead, Nick.

Nick Kovacevich, CEO

Hello, everyone, and thank you for attending our third quarter 2022 earnings call. We continue to make great progress on our key initiatives, setting this up for success in 2023 and beyond. However, we believe many of the results from these efforts are lagging indicators and will not be fully represented in our financial results until several quarters down the road. Today, we will discuss the results of Q3, but more importantly, also discuss some of our recent accomplishments and how those initiatives will benefit Greenlane in the long run. Liquidity is obviously extremely important in today's macro environment and we continue to make strong progress on our liquidity initiatives. First, we are pleased to update everyone on our previously announced 2022 plan to raise $30 million of non-dilutive capital. To date, we have brought in over $27 million in accordance with our plan, which includes disposing of non-core assets such as our interest in Vibes, LLC, excess financial, the sale of our European various assets, and the sale of our company headquarters building in Boca Raton, Florida. Second, monetizing previously written-off E&O inventory, and third, securing a $15 million asset-based loan. In addition to the progress on our 2022 plan to raise non-dilutive capital, we recently announced the closing of a public offering for gross proceeds of $7.5 million. Raising capital in this challenging environment is extremely difficult, and so we were encouraged to see strong participation from institutional investors in our recent offering. Lastly, as the company looks to exit our packaging business and further streamline our remaining industrial businesses, we believe we can free up meaningful working capital throughout Q4 and 2023 by significantly reducing the overall inventory required to run this business. We believe we can run a profitable, higher margin consumer business with far less inventory on hand. The success from our previously announced 2022 plan to raise $30 million of non-dilutive capital, the $7.5 million investment from the recent public offering combined with our plan to significantly reduce our inventory exposure should position Greenlane to be properly capitalized well into 2023 where we intend to inflect to profitability. In other words, we believe we have removed the financing overhang, which will now allow management to focus on executing our business plan and driving growth in the right area. Liquidity has been our number one focus, while rightsizing the business is not far behind. We were able to make continued progress on cost cutting in Q3 with a couple notable items being the September reduction in force, which reduces our annual labor expense by approximately $1.8 million and our exit of the Orange County Office Lease, which will save the company over $500,000 annually. Our continuing efforts to rationalize every aspect of our operations, including plans to exit our packaging business, will provide a significantly lower cost model for Greenlane in 2023 as we transform to a smaller, more profitable house of brands business. We will continue to remain focused on managing liquidity, reducing our expenses, and expanding our margins. However, by design, we do not expect overall revenue to grow. In fact, we expect it to decrease in many areas, especially packaging. We, like many others in our industry, are rejecting the revenue-at-all-costs models from the past. We believe our company is not being valued on revenue alone and more revenue doesn't necessarily help us achieve our profitability and cash goals. Moreover, we are more focused on finding accretive high-margin and sustainable revenues that comport with our strategic plan. What are we looking for? Well, one, consumer revenue, ideally with our own high-margin house brands and also with higher-margin third-party products. Two, automated revenue, either via our new business-to-business portal website at wholesale.greenlane.com, via our e-commerce sites like vapor.com or direct-to-consumer brand sites, or via Amazon, Walmart, Leaf Trade, and other consumer platform sites. And three, large customer revenue, producing revenue from large MSOs who are increasingly adding new cannabis storefronts or large convenience store chains with a national presence will move the needle for us in much bigger ways than smaller mom-and-pop smoke shops and head shops can. So in summary, not all revenue is created equal, and as Greenlane continues to work to drive revenue from our more accretive channels, we expect to shed some top-line revenue that is not contributing to our overall strategic goals, the main one being profitability. We are keeping our prepared remarks brief today as we covered a lot in our most recent Q2 earnings call. And we are actually live in Las Vegas at the largest annual industry conference, MJBizCon. However, before turning the call over to Darsh, I would like to point out that as I look to transition my role as CEO over to Craig Snyder by the end of the year, Greenlane is moving into a strong position to benefit from what looks to be a turning tide in our cannabis industry. With President Biden's recent cannabis pardon, combined with stellar Democratic midterm performance, which keeps, if not expands their control over the Senate, the opportunity for federal reform has never felt closer. Recent positive developments in Maryland and Missouri point to a continued cadence toward federal legality. If our industry can finally garner long-overdue federal legislative progress, we believe institutional capital will start to pour back into the sector and picks and shovels providers like Greenlane will benefit tremendously. We believe that the work we have done positions Greenlane to be an outsized recipient of any industry windfall due to the strides that we have made with, one, properly capitalizing the business and removing the financing overhangs. Two, pivoting into an owned brand consumer model with higher margins and higher value in the form of brand intellectual property. And three, reducing expenses to allow for a clear path to profitability in 2023. We can only control what we can control, but I am extremely proud of the progress we have made to date, the efforts from our entire Greenlane team, and I remain extremely optimistic about the future of our company under Craig's leadership and for the future of our industry in light of the recent political tailwinds. And with that, I will now turn the call over to Darsh, our Chief Accounting Officer, to go through the financial performance of the third quarter.

Darsh Dahya, Chief Accounting Officer

Thanks, Nick. As we discuss the details of Q3 2022, I want to echo the statements earlier with regards to the team's efforts to navigate through the challenges we faced in the third quarter of 2022. Despite the decline in revenues, the company managed its liquidity tightly and during the third quarter, ended with a cash balance including restricted cash of $10.2 million, a net increase from Q2 2022 of $1.1 million. This was primarily driven by the company's efforts and transitioning activities during the third quarter. Revenues decreased $12.6 million or 31% to $28.7 million during the third quarter of 2022 compared with the prior year. Third-party consumer brand sales decreased $14.3 million, and Greenlane brands decreased $3.6 million. This was offset partially by higher KushCo post-merger sales of $20.1 million. The reduction in third-party sales was due in part to our strategy to focus on proprietary brands and transition away from lower-margin third-party brands. Revenues were down $11.3 million sequentially from Q2 2022 to $28.7 million. Gross margin increased to 17% for the three months ended September 30, 2022 compared to 4% for the same period in 2021. Excluding write-offs of damaged and obsolete inventory associated with post-merger and ongoing product rationalization efforts, gross margins decreased by 1% to 21% versus 22% during the corresponding quarter in 2021. Sequentially, gross margin was 20% in the second quarter of 2022 or 24% excluding inventory write downs. Salaries, benefits, and payroll taxes were $7 million during the third quarter, down 21% sequentially from $8.8 million in the second quarter of 2022. General and administrative expenses were $8.5 million during the quarter, including a $2.2 million net gain on assets sold during the quarter. Excluding this gain, G&A expenses were $10.8 million, a sequential 2% increase from the $10.6 million reported in the prior quarter. As discussed in the October 21 pre-announcement, we recorded a goodwill and intangible asset impairment charge aggregating $66.8 million, reflecting our lower market cap, consistent with reductions that we have seen across the cannabis industry, as well as our plans to reduce our product offering to new and existing Greenlane brands and a very small but highly accretive subset of our third-party brands portfolio. Excluding the impairment expenses, operating expenses including depreciation and amortization were $17.7 million, down 19% from $21.8 million in the prior quarter. The company's net loss for the third quarter of 2022 was $79.2 million, which included $66.8 million related to the goodwill impairment charge. The net loss in the third quarter of 2021 was $28.7 million and $14.5 million in the second quarter of 2022. Cash flows used in operating activities for the first nine months of 2022 were $22.5 million versus $32 million in the same period of 2021. Cash flows from investing activities were $12.5 million for the first nine months of 2022 versus an outflow of $14.3 million in 2021 related to acquisitions. The inflow of $12.5 million in 2022 resulted largely from the disposition of our interest in VIBES, and the proceeds from the sale of the company's headquarters in Boca Raton, Florida. Net cash provided by financing activities during the first nine months of 2022 was $7.5 million versus $28.9 million in 2021. These transactions helped to offset cash used in operating activities, resulting in positive cash flow of $1.1 million for the quarter, ending with a cash balance, including restricted cash of $10.2 million at September 30, 2022. During the quarter, the company completed its efforts towards improving its financial structure by securing an asset-based loan of $15 million, which closed on August 11. The company also repaid over $8 million owed to a senior secured lender as well as an $8 million mortgage connected with the sale of the company's headquarters as mentioned earlier. Looking to the company's balance sheet, we saw the company move a significant portion of its inventory in 2022 through to the third quarter of the year, with a $19 million decrease in inventory, which was driven by strategic initiatives designed to deplete third-party, lower-margin products as well as lower purchases of inventory during the quarter, as a result of the decrease in revenues. The company's adjusted EBITDA loss for Q3 2022 was $11.2 million versus $6.9 million for the third quarter of 2021. The company's adjusted EBITDA loss for the nine months ended September 30, 2022 was $24.6 million versus $15.8 million in the same period of 2021. I'd like to turn the call back over to the operator for Q&A. Thanks everyone for joining the call.

Operator, Operator

Looks like our first question is coming from Aaron Grey with Alliance Global Partners.

Aaron Grey, Analyst

So my first question is with the cost savings initiatives that you spoke about with the SG&A levels, the $1.8 million from September and then $500,000 from the office, what SG&A levels do you expect to be at once all the savings are realized? And what sales mark do you believe you'll need to hit to reach profitability? And what gross margins would you associate with that?

Nick Kovacevich, CEO

This is Nick speaking. Craig is on the line as well, and we have Darsh here too. Cost reductions are crucial, and we are working diligently to lower our expenses. Looking into 2023, we anticipate significant reductions, primarily driven by the sale of the packaging business. Although packaging accounts for approximately 20% of our revenue, it occupies about 55% of our storage space due to the bulkiness of those jars. Exiting that business will allow us to drastically reduce our warehouse footprint, and we expect to save over $5 million annually with these changes. Additionally, we have already realized almost $2 million in annual savings, with another $500,000 saved from vacating the Cyprus office space. Larger savings are expected to come with the final consolidation after selling the packaging division and focusing on the consumer business. We have not set a specific target for our expected outcomes, but we anticipate seeing the full impact beginning in the latter half of 2023. I am not sure if my colleagues have further insights or if Craig has anything to add, but we hope to provide more detailed information soon. For now, we aim to fully recognize the reductions we've discussed for the second half of the year.

Craig Snyder, President

This is Craig. I believe we have aligned our approach to work through our gross margin accounting for any previous discussions. The packaging business will certainly aid in achieving precision, and we are also focused on managing SG&A and labor costs to ensure we reach profitability. Our aim is to accomplish this by the middle of next year. We have been analyzing our anticipated revenue and gross margin, considering any excess and obsolete products, and have also been addressing SG&A and labor in light of our divestiture efforts. Additionally, the business has undergone significant changes, including two acquisitions with ICE and another European entity prior to the merger. Many of these acquisitions required integration, which can be costly for public companies. We have tackled what I would describe as the main components of that integration, including our transition to D-365 and unifying our accounting and inventory management systems. Currently, I would estimate we are about 80% finished with these system upgrades, which has incurred various expenses due to the prior lack of IT capabilities in the traditional businesses. The good news is that many of the integration aspects are substantially completed, and we believe this will facilitate our path to profitability in the latter half of next year.

Aaron Grey, Analyst

And then my second question regarding the consumer brands business, can you speak to the margin outlook there and maybe break that out between your own brand and the third-party brands? Are there any supply chain issues that are making it difficult to keep the business attractive on the margin side with the third-party brands? Or is that more due to the use of sub-distributors and giving up some margin there?

Nick Kovacevich, CEO

I'll take the first part. It’s Nick. So, you hit on a good point. And when you're looking at margin sometimes it's not only the margin, but you have to talk about the channel in which you're selling the product. The margins can be very different whether you sell it in sub-distribution or sell it in the retail segment. In some cases, the gross margin can be 5x to 7x difference depending on how you sell it. I would say in our house products, any product that we try to develop, we expect to have close to, or in excess on an aggregate basis of a 40% margin. That's been our goal. And so far haven't seen anything being sourced or manufactured that's going to prevent us from hitting that goal. Of course, there's a little bit of tailwind in the logistics side as well where some of the pressure from previous logistics costs have dropped. So that's our goal there. On the other side, I think you're seeing this move through a more, what I'll call normalized consumer goods market, where companies will be incentivized for their sales in the third-party space. So you'll see things like rebates, returns, and MDF funds continue to flow into the market. We're seeing that now and we think that's a net benefit. Our goal next year is to get margins on an aggregate basis upwards of 25% to 30%. That's our goal in this marketplace, and we think we can do that combining both segments of that business, and also working on and making sure that the channels in which we're selling it at are performing well as well.

Operator, Operator

The next question is coming from Scott Fortune with ROTH Capital Partners.

Scott Fortune, Analyst

Real quick, where are you at with the product rationalization? You've been working on that for a little while here, and with that in mind kind of talking about inventory. You mentioned getting inventory down, and working at how much more do you have to work through kind of old inventory to get that down to a level that you like going forward here into 2023?

Nick Kovacevich, CEO

Yes, I can start with that. This is Nick. Thanks for the question, Scott. I would like Craig to give his commentary after me. This will be a part of our liquidity plan. We discussed this in our prepared remarks. The ability to raise capital in such a challenging climate speaks volumes about our team's efforts to attract institutional capital. However, this is not our preferred method for funding the company moving forward due to the dilution. Our goal is to implement several initiatives that will help us significantly consolidate our inventory to better serve our core consumer base, which will be about half of our current stock. I believe we can operate our consumer business with approximately $20 million in total inventory, though we're currently much higher than that. It's important to note that we have packaging inventory that will go with the sale of our packaging business, contributing to a considerable reduction. We are also examining smarter ways to manage our lower-margin industrial operations, including the CECL and energy businesses. Ultimately, narrowing our focus to the consumer business, which has much higher margins, is key. As we grow this business, we will require more inventory, but at our current levels, we can operate with significantly less and still achieve the same or even greater sales due to the improved margins. This will generate the working capital we need. We believe there has been a financing overhang on the stock for a while, and it’s clear people know we've been in need of additional funding. If we wished to maintain our entire business with $55 million to $60 million in inventory, we would indeed need to raise more capital. However, that’s not the path we are taking. We are selling our packaging business and reducing overall inventory, which should result in cash returning to working capital. We expect this to happen throughout 2023. We successfully secured the funds we needed through the public offering, and now we anticipate the benefits of our initiatives, allowing inventory to decrease naturally. This will bring money back into working capital, enabling us to run the business effectively and invest in new product areas that Craig is currently leading. This strategy positions us well to return the business to profitability, which we aim to achieve in the latter half of 2023. That's my perspective, but I’d like Craig to add his thoughts as he takes the lead on our 2023 plan.

Craig Snyder, President

You inquired about the brand rationalization. At the start of the year, the business was managing approximately 173 brands, which has now been reduced to around 25. Despite this reduction, we have maintained 95% of our prior revenue. This process has required a sharper focus, and you can expect that our SKUs have likely decreased by about 60% to 70%. We are planning another SKU rationalization that will focus on colors and variations. As a result, our catalog has become more streamlined and focused. Regarding new products, we are set to release nearly three dozen between Q4 and the end of next year, with the majority being proprietary products, likely in the mid-twenties range. Our aim here is twofold. Historically, we have excelled at the high-end market with premium products priced accordingly. We plan to branch into the mid-tier and more accessible segments of the market without compromising on the high utility of our products. This is possible because many of the founders at EYCE and DaVinci, who created these premium products, are now applying their technology and insights across all market segments. Consequently, we will offer products that are approachable and affordable for beginners, as well as those in the mid-tier and advanced segments. In summary, we are focusing on reducing brand complexity for clearer internal focus and ensuring that our new products target higher margins while appealing to the correct market segments.

Scott Fortune, Analyst

And then real quick one, this is more for me. Can you provide an update on the e-commerce discussions you are having or kind of that seems legislation movement could be opening up here? What we are seeing a lot more strategic partners come on board in the cannabis space. But just kind of your discussions here moving down the e-commerce side of things that would be helpful.

Nick Kovacevich, CEO

Sure. I think what you see here is, one that the Europeans are probably a little bit ahead of us in their acceptance of the product set. So we've been able to advance there. And looking at the partners there, Amazon continues to be a kind of lead driver. But there are also other players around the world like Flipkart and MercadoLibre that play a significant role. Then we have eBay and Walmart of course. I think as Paris priest says, we pray in our time and God answers it. I think it's the same way with government regulatory legislation. We are prepared and we are putting all the pieces in place, so we that we are ready to go with all our products. To give you an example of that, one of the things we have done with Amazon is applied for our transparency program, which really allows for brand protection around our products. That requires score labeling or snickering of the product in which case we own the buy box in which case we'd be able to own all the advertising that goes in there, and it helps drive the DSR score down, which is a good thing, because we own that particular segment. So we've put a tremendous amount of energy into our e-commerce assets, not only the e-commerce platforms, but we also vapor.com, pop it up, and Vapo Shop are going through and have gone through revamps, both from an SEO perspective and are going through targeting from an advertising perspective. So you start to see that hit in the fourth quarter, where we're hoping to drive nice revenue on ad spend. So that will start to kick in probably the end of Q4. And then each of the brand sites, whether it's Da Vinci or ICE or others, has gone through their site improvements and metrics. So there's been a lot of foundational groundwork done so that we can do some of the acceleration here in the early part of next year. And that is one of the things related to Aaron's question earlier, that's really important because if the product is sold on one of our websites, whether it be a brand site, one of our aggregator sites, or one of the third-party aggregators, the margins there are in much better stead than doing distribution or sub-distribution. So that's why also we want to have a nice balance across kind of those segments of the marketplace and they're very important to us.

Operator, Operator

The next question is coming from Andrew Bond with Jefferies.

Andrew Bond, Analyst

Andrew Bond on the line for Owen Bennett, thanks for taking our question. Could you just go back to working with some of the MSOs? Can you give a little more detail on that initiative for the consumer segment? Have you seen the number of MSO customers or number of MSO doors increase, maybe just in terms of your own brands in the last quarter or two? Not sure if you can give any exact metrics on that, just how that initiative is tracking or just general thoughts, especially now given cannabis retailers might be looking for more ways to capture additional sales or margin amid industry pressures.

Nick Kovacevich, CEO

I’ll start by saying that the MSOs have been quite active lately, trying to manage the challenges in the market. They are busy with mergers and acquisitions and integrations, but they also see that consumer products present both a challenge and a significant opportunity. What we’re observing with the MSOs is a variety of different purchasing methods. Some store managers are buying online through platforms like Leaf Trade or wholesale.greenlane.com, while others are using petty cash to buy accessories locally. There are some with enterprise relationships, but overall, the purchasing methods are scattered. This means that MSOs aren’t leveraging their scale effectively to get the discounts they should, and they lack a consistent customer experience across their expanding retail locations. They are aware of these issues but don’t have full visibility into their spending due to multiple people making purchases. That's where we come in, and our discussions with MSOs in Las Vegas about addressing this problem have been very positive. While it may not be their top priority, they acknowledge the issue and appreciate that Greenlane offers a solid solution. We are close to launching comprehensive programs for some of these clients, which we hope to announce soon. Are the MSOs purchasing from us right now? No, not entirely, due to the reasons mentioned, but we are getting some of their business. We don’t disclose specifics about individual MSOs, but as we’ve noted before, our engagement with them is quite broad, even if it’s at a small scale. The program I mentioned is resonating well, and we are on the verge of solidifying our focus on this opportunity. Greenlane is strategically shifting towards the consumer business. We have been working on our brands for some time, and in the current market, MSOs face significant pressures, especially smaller ones. The industrial side of the business, including packaging and related products, is also under pressure. This makes it the perfect time for us to focus on consumer products. As these MSOs face margin compression, particularly in states like Illinois and Massachusetts, they are finding better margins in the accessories and consumer products we provide. We’ve seen this trend in Canada, where the market shifted quickly, leading retailers to focus more on consumer products. Although Greenlane has a smaller presence in Canada, we aim to capitalize on a similar effect when it arrives in the U.S., which we anticipate happening soon. Strategically transitioning from the industrial supply side—which will likely face increasing price pressures—to the more lucrative consumer side is a wise decision for us. We are ready for this shift. Working with large MSOs can take time, but we are making progress. Greenlane is uniquely positioned to offer the comprehensive solution we discussed, supported by established relationships. We may wish things had moved faster, but we know the outcome will greatly benefit both Greenlane and our customers. Ultimately, adding value is what drives a successful long-term business. The program and solutions we’ve outlined are highly valuable to the MSOs, which gives us great optimism for our future, especially in those channels. I realize I’ve shared a lot, but Craig, if you have anything to add, feel free. This highlights our passion and enthusiasm for the opportunity ahead and how we intend to leverage it in the upcoming months and quarters.

Craig Snyder, President

Yes. I think it's an opportunity that contemporarily has come up quite a bit. The MSOs, as you're well aware, are engaged in a lot of M&A and rolling up a number of brands. And now they're really working hard to decide how they are going to run the retail stores. And even though the end commodity is cannabis, they realize that the goal of each of the stores is driving revenue per square foot, driving average order value, and driving attachment rates, all what I'll consider fundamental or old school type fundamental store metrics. Some of the things that we've worked with them on are things like merchandising and placements very closely. And if you were at the show this week, you'll see a lot of work that we've done in the last six months in preparation specifically on merchandising. But I think that's what you see, them all moving towards a model where they have a more consistent look and feel whether it's one brand or multiple brands, and that driving revenue per square foot is an important part of that metric. We play a role there because we're one of the few that can have the scale and scope of products, along with the merchandising to help them out.

Operator, Operator

We have no further questions in queue. I'd like to turn the floor back to management for any closing remarks.

Nick Kovacevich, CEO

Thank you. And thank you all for dialing in. I know we are here live in Las Vegas, as I mentioned at MJBizCon. I know a lot of analysts are here traveling and appreciate you guys making the time. Obviously, 2022 has been a rough year for the cannabis industry. Greenlane has been making our adjustments, setting us up for success in 2023. So we appreciate everybody bearing with us as we are doing that. Again, as I mentioned, I think our platform is still unrivaled, right? Nobody is really out there doing what we are doing and offering it at scale like we are. So is this industry going away? Absolutely not. More people are consuming cannabis every year than the year prior. So the future is bright in that respect. And we are positioning the business to get through these tough times and to be able to capitalize on those future opportunities, and we feel very good about that. So again, we appreciate everybody hanging with us through that. This is actually bittersweet for me, because it’s going to be my last earnings call as CEO. When I step down at the end of the year and transition to Craig, it will be exactly 7 years running a publicly-traded company in the cannabis industry and that involves us being really back at Kush Bottles, the first company ever to have research coverage from analysts. Thinking back to 2016, what a ride it's been. But I'm not done. Right, I'm staying on here at Greenlane. I believe in Craig, his leadership and his vision for the company and where the company is going really aligns well with his skill set. So I'm going to stay in a corporate development role, and I'll still be involved in these calls. But just as my last call here as CEO, I want to just issue a very warm thank you to the analysts and investor community that supported me, supported Kush Bottles and supported Greenlane. I really appreciate it, it means the world to me and I look forward to seeing some of you guys here in Las Vegas. I do appreciate you guys continuing to support the company as we transition to our new model, as we transition to new leadership. The future is very bright. We're excited. And again, we are happy to be here telling the story and hope to see some of you guys around. Hope everyone has a great rest of your week, stay safe, good holiday season, and we will talk to everybody soon. Thank you.

Operator, Operator

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.