Earnings Call Transcript - HELE Q4 2020

Operator, Operator

Greetings, and welcome to the Helen of Troy Limited Fourth Quarter 2020 Earnings Call. At this time, all participants will be in a listen-only mode. A brief question-and-answer session will follow the formal presentation. Please note that this conference is being recorded. At this time, I'll turn the conference over to Jack Jancin, Senior Vice President of Corporate Business Development. Sir, you may begin.

Jack Jancin, Senior Vice President of Corporate Business Development

Thank you, Operator. Good afternoon, everyone, and welcome to Helen of Troy's Fourth Quarter and Fiscal 2020 Earnings Conference Call. Today each member of our earnings team is in their homes and in different locations across the United States, and since this is the first time we're conducting our earnings call remotely we hope you will pardon any technical glitches. Before discussing today's agenda, I would like to call your attention to a change in how we define our sales. As detailed in this afternoon's earnings release, we now define core as strategic business that we expect to be an ongoing part of our operations, and non-core as business that we expect to divest within a year of its designation as non-core. Previously referred to as core business, organic business now refers to net sales revenue associated with product lines or brands after the first 12 months from the date the product line or brand is acquired, excluding the impact that foreign currency measurement had on our reported net sales. The agenda for the call this afternoon is as follows: I'll begin with a brief discussion of forward-looking statements. Mr. Julien Mininberg, the company's CEO, will comment on the financial performance of the quarter and year, our response to the COVID crisis, and discuss current business trends. Then Mr. Brian Grass, the company's CFO, will review the financials in more detail and reflect on considerations from the COVID-19 pandemic uncertainty as we enter fiscal year '21. Following this, we will open up the call to take your questions. This conference call may contain certain forward-looking statements that are based on management's current expectation with respect to future events or financial performance. Generally, the words anticipates, believes, expects, and other words similar are words identifying forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties that could cause the anticipated results to differ materially from the actual results. This conference call may also include information that may be considered non-GAAP financial information. These non-GAAP measures are not an alternative to GAAP financial information and may be calculated differently than the non-GAAP financial information disclosed by other companies. The company cautions listeners not to place undue reliance on forward-looking statements or non-GAAP information. Before I turn the call over to Mr. Mininberg, I would like to note that a copy of today's earnings release can be posted to the Investor Relations section of our website, at www.helenoftroy.com. The earnings release contains tables that reconcile non-GAAP financial measures to their corresponding GAAP-based measures. The release can be obtained by selecting the Investor Relations tab on the company's homepage and then the News tab. I will now turn the conference call over to Mr. Mininberg.

Julien Mininberg, Chief Executive Officer

Thanks, Jack. Good afternoon, everyone, and thanks for joining us. On behalf of Helen of Troy I would like to share my heartfelt hope that you, your families, and loved ones are staying safe and healthy during this extraordinary time. As we all know, COVID-19 has brought unprecedented disruptions to the global community, which in turn is experiencing an unparalleled impact on the economic activity across most sectors in all geographies. The situation is so dynamic that each day brings new developments. In response we are rapidly and continually adapting our business and leaning into categories where our Leadership Brands play a vital role right now, such as Vicks, Braun, PUR, and part of Honeywell and OXO. We have also taken major steps to protect our people, increase our liquidity, temporarily reduce our costs, and safely continue our operations. We have done all of this guided by our values with a focus on preserving the outstanding capabilities and systems we have built during our transformation. We came into the crisis with momentum, and believe our actions have positioned us to serve all of our four major stakeholder groups, our associates, consumers, customers, and shareholders. We will give details in each of these areas during today's call. Given the highly unpredictable nature of the COVID-19 situation we will not be providing guidance for fiscal '21 at this time. While we are taking actions every day to work through the current crisis, we remain focused on our Phase 2 plans and financial targets. With such a broad range of topics to discuss, my comments will first give perspective on our excellent fourth quarter and full-year results. They marked an outstanding conclusion to the first year of our Phase 2 transformation. Next, I will discuss our response to COVID-19 and how we are positioning Helen of Troy to navigate the current crisis. Finally, I will share recent trends we are now observing related to our business as the crisis evolves. Brian will then share a deeper view into our financials, including more insight on the business and environment as we move forward. Now, I would like to turn to our performance in the fourth quarter of fiscal '20. We finished the quarter well ahead of our expectations. Net sales grew 14.9%, with organic business growth of 13.4%. Sales growth was double-digit in each of our three business units. Leadership Brands led the way, growing 15.7% during the quarter. The online channel continued to be a major growth driver, up approximately 39% year-over-year, and contributing 24% of total fourth quarter sales. Customer replenishment continued to be healthy following the strong sell-through of our products during the holiday season. Separately, and late in the fourth quarter, thermometer demand further increased as COVID-19 began spreading across the globe. Turning to the full-year, across nearly every key measure, fiscal '20 was the strongest result in Helen of Troy's history. We grew both total and organic net sales 9.2%. We are delighted to deliver that acceleration on top of the 5.8% total net sales growth in each of our last two fiscal years, particularly in light of tariff-related disruptions, unfavorable foreign currency exchange, and the operational challenges from three consecutive years of significant organic growth. Leadership Brands grew 9.4% in fiscal '20, and accounted for approximately 80% of overall sales. Six of the eight Leadership Brands grew over the year. Our digital initiatives continue to generate results with online sales up over 34% during the fiscal year, to represent 24% of total sales. Adjusted operating margin expanded 50 basis points in a year when we raised our growth investments to the next level. Adjusted diluted EPS grew 15.4%, a meaningful acceleration on top of the 11.3% growth in fiscal '19, and 11.6% growth in fiscal '18. Operating cash flow grew over 35% year-over-year, demonstrating the strength of our flywheel and helping us maintain strong liquidity and low leverage even after the Drybar acquisition. On a strategic level, our multiyear growth investments in Leadership Brands, digital marketing, ecommerce, consumer-centric innovation, and global shared services have added flywheel momentum. We are proud to share that, last month, our two Housewares leadership brands were recognized by the NPD Group during their Seventh Annual Home Industry Performance Awards, for calendar year 2019. Hydro Flask was recognized for delivering the largest dollar share increase in the portable beverage category. OXO won the award for the largest dollar share increase in food storage, and OXO also earned NPD's new award as the brand delivering the largest overall market share increase in the total U.S. housewares industry. This is the third consecutive year in which OXO's market share gains have been honored by NPD. I would like to turn now to our business segments during the fourth quarter and the full fiscal year. I'll begin with Beauty, which delivered an outstanding quarter, and its best year of sales growth in at least a decade. Total Beauty sales increased 23.1% in the fourth quarter, well ahead of our expectations. This included approximately five weeks of Drybar sales. Beauty organic revenue growth was 16.1%, also ahead of our expectations, and representing its fifth consecutive growth quarter. For the full fiscal '20, total Beauty sales increased 10.4% including Drybar, very strong. For Beauty Appliances fiscal '20 marks the third consecutive year of growth momentum, resulting in substantial market share gains. Over the past three years the improvement to our Beauty segment has accelerated under new leadership. Significantly more focus on developing the online channel, digital marketing, new products based on deep consumer insights for the retail and also the professional markets, and further improvements to the caliber of our organization have all paid off. Similar efforts were also made internationally in Beauty over the past two years, especially in EMEA, leading to growth and greatly improved profitability in Europe. During fiscal 2020, we increased Beauty investment and digital marketing to support new appliance innovation in both brick and mortar and online. These efforts, along with highly innovative new products have helped grow the overall appliance category itself, a welcome turnaround from a shrinking trend in recent years. Syndicated data shows that during the latest 52-week period, Helen of Troy further grew its number one share position in the online channel for U.S. hair care appliances and now holds a significant lead. Syndicated data in brick and mortar shows that during the latest 52-week period, we grew our number two domestic share position in U.S. retail appliances. First mover innovations such as the creation of the volumizer category of appliances continue to be a major driver and are a key focus area for us going forward. The Revlon and Hot Tools one step volumizer innovations have earned more than 40,000 consumer reviews with ratings of 4.4 stars and up depending on the site. We're extremely proud of this accomplishment and plan to build on our success with new product offerings later in fiscal 2021 and incorporate further consumer-centric insights across our Beauty appliance portfolio, including Drybar. In Housewares, we certainly capped an outstanding year by delivering an impressive fourth quarter with net sales up 15% also topping our expectations. Housewares grew a remarkable 22.4% for the full fiscal year against a very tough year-ago comparison. Both OXO and Hydro Flask finished strong and both posted healthy growth for the full year. Our investments in innovation, distribution, marketing and e-commerce are paying off with customers and consumers online and in brick and mortar, providing solid ROI and growing our market shares. OXO's unique and enduring excellence in universal design and clearly defined positioning influences all touch points across the consumer journey. OXO is all about better performance through better design and quality that makes everyday better. The two NPD awards for OXO mentioned earlier confirm what we are seeing in our customer POS data: OXO's overall excellence and meticulously planned stream of consumer-centric innovation resonate with consumers and win in the marketplace. Hydro Flask has had simply a fantastic fiscal 2020. Its distribution continues to expand as it did itself, resulting in high double-digit growth for the quarter and the year. According to third-party syndicated data, the 52-week period ending in February, Hydro Flask added incremental market share gains to further expand its position as the number one player in the U.S. metal beverage bottle market. During the quarter, we continued to grow the brand internationally. Domestically, we began to see high-volume customers strategically expand OXO shelf and Hydro Flask shelf space to meet growing consumer demand. In February, we began shipping our 2020 Spring Collection. The new product lineup includes a variety of innovations, such as the new Trail Series, which is 25% lighter with no reduction in thermal performance, new colors, and a new finish texture. Spring collection also further expands Hydro Flask beyond the bottle with new lunchboxes and packs. The Just One More strategy for Hydro Flask continues to produce results in the quarter with loyal customers and consumers adding new sizes, colors, caps and accessories to their collection. Looking ahead, we expect Hydro Flask to continue benefiting from multiple long-term growth drivers. These include further expanding distribution and shelf space, Just One More — okay maybe just two more — among households that have already discovered Hydro Flask, new innovation in existing categories, new entries beyond the bottle, further growth and expansion internationally, more direct-to-consumer, collegiate, and much more customization. Net, we think Hydro Flask has a wide array of whitespace opportunities. Turning to Health & Home, our largest and most global business, we are focusing on delighting consumers with trusted solutions for healthy living and peace of mind, especially when they need us most. Health & Home's excellent fourth quarter results were ahead of our expectations with net sales up 10.5%. Sales in several of our Health & Home categories are highly correlated to the severity of winter weather and cough, cold and flu incidents that are generally more concentrated in our fourth quarter. For the recent 2019-2020 season, fall and winter weather was milder than historical averages, and the incidence of cough, cold and flu symptoms was only slightly greater than last year's below-average season. Pediatric fever was the one symptom area where we did see higher incidence. Additionally, and separately, the spread of COVID-19 during the month of February through Asia, Europe and into the U.S. added to Health & Home sales in thermometry, humidifiers, inhalants and air purifiers. Now turning to our response to COVID-19, we came into the crisis very healthy. We have strong business results, a trusted and diversified portfolio of leadership brands with significant market positions, exceptional people united by a powerful culture, highly capable global systems under our shared services, and a proven ability to stay nimble. As the crisis unfolds, we acted quickly and decisively to protect our people and reduce our costs doing so in a way that focuses on protecting the capabilities built during our transformation. On the product side, a key response area for us has been to provide essential health products that consumers need now. Thermometers under our Vicks and Braun brands, humidifiers and inhalants under the Vicks brand, and air and water purifiers under our Honeywell and PUR brands — all of these are critical at this time, are highly trusted and are in high demand. We're working 24/7 to maximize supply and support customers and consumers. Outside of the health arena, with families nesting at home, spending more time in the kitchen and more focused on cleaning and storage as they pass the load, our largest leadership brand OXO is also seeing elevated demand online and in those brick and mortar stores that remain open. We have adapted our shipments and marketing focus to meet the major shifts toward online shopping as key retailers temporarily close major portions of their brick and mortar footprints. Our response to the area of protecting our people has been comprehensive and proactive from the start. It's led by a taskforce of senior leaders coordinating across all of our local sites. Measures include a work-from-home policy, social distancing in our distribution centers, frequent and elevated cleaning protocols across all sites and a lockdown on nearly all business travel. Such a dynamic situation we will continue to adapt quickly to changes. Our cost interventions fall into two major categories, personnel cost reductions and significant delays in our fiscal 2021 discretionary spending. Most became effective earlier this month. We're treating the reductions like light switches that we're dimming or turning off now, and by preserving our underlying infrastructure of people and systems, we can turn them back on just as quickly and with minimal disruption when business conditions warrant. We greatly prefer this approach to permanent layoffs or reductions. It preserves our ability to run the business now, as well as the speed with which we can respond if the environment changes. On the personnel side, we have temporarily reduced salaries and wages across almost all parts of the company, effective April 6. While this was a very difficult decision to make, we chose this approach versus widespread layoffs in order to retain talent, protect what we have built and preserve as many jobs as possible. Hiring freeze, suspension of merit increases and promotions and other personnel measures have also been implemented. This approach of shared sacrifice, reaching all levels of the organization is highly consistent with our culture. Our people supported this approach and continue to do exemplary work, driving the business and keeping the company fully operational. I'm proud but not at all surprised that they are doing so with the passion, the dedication, and the ownership mindset that is the signature of all Helen of Troy people all around the world. In our distribution centers, we're reducing our external temporary labor and furloughing some full-time employees to match demand. For furloughed associates covered under the company's health insurance plans, Helen of Troy is paying both the employee portion and the company portion of the premiums so they can maintain their coverage during the health crisis. Our second category of temporary measures focuses on reductions and delays to discretionary spending, such as brand and product spend, travel and certain capital expenditures. Our fiscal 2021 budget earmarked several substantial and incremental investments in our leadership brands and in key Phase 2 strategic initiatives. We believe we're making the right short-term business choices to delay some of these investments until later this year. And some will likely now fall into fiscal '22. The largest bucket for discretionary spending is marketing expense for our leadership brands. And we have also taken action on this front. We are adapting our spend to match consumer demand and our supply. For some initiatives, spending has been reduced while for others, a meaningful portion will be delayed until we have better visibility on demand and recovery. For those brands that are extremely relevant right now, we will continue to invest. In all cases, however, to keep the pump primed for the recovery period, we will make appropriate, but reduced investments needed to help our brands stay top of mind. We continue to fully invest in new product development. Consumer-centric innovation is the lifeblood of our leadership brands. Innovation keeps them differentiated and is a core strategy in our transformation. Launches we are working on now will be key building blocks in the recovery period in fiscal '22 and beyond. And now I'd like to turn to the third and final area of my prepared remarks. Reflecting on some current trends related to the COVID-19 pandemic that we are seeing during our first quarter and thoughts on the future as we navigate the crisis and plan for growth on the other side. One key trend area, already mentioned, is the greatly increased need for health-related products and awareness of their importance in people's lives. With the current intensive media focus on health, all generations are getting a rapid-fire education on the importance of owning the types of products we sell under the Braun, Vicks, and Honeywell brands. As an example, households are reminded that they should have a high-quality thermometer. On ear thermometers, compliance and demand for probe covers is way up as users look to ensure accuracy and hygiene and reduce the risk of contagion. Businesses are increasingly focusing on monitoring the temperature of their employees to help keep them safe and their sites operational. Inhalants, such as Vicks vapor pads and cost-effective inhalants like Vicks VapoSteam are in increasing demand as consumers take care of their families. Also in high demand, and getting additional media attention, are our highly rated and market-leading humidifiers, such as our Vicks and Honeywell models. Demand is also strong for our air purifiers, including our highly rated and market-leading Honeywell models, which help improve indoor air quality. The strong sales in the fourth quarter and supply constraints from the COVID-related factory shutdown in China have created challenges. We are working very hard to maximize production and delivery from our factory partners in China, Mexico, and the United States. Another key trend is wellness. People are looking to protect themselves and their family through hygiene and cleanliness as they spend more time at home, and more time with families together. Water purifiers like PUR Pitcher and Faucet Mount play an increasing role as do their replacement filters that are certified to reduce a wide range of contaminants. Demand is up for both, especially as water in single-use plastic bottles remains increasingly undesirable and unavailable. Cleaning is top of mind to help protect the wellness of families; cleaning products from OXO are seeing elevated demand online and in stores that remain open. A third trend is the necessity of keeping more food and home essentials on hand, and cooking more at home. Families are discovering and rediscovering the joy that comes from cooking and baking together, especially with kids home all day. Several core categories of OXO products are seeing elevated demand online and in stores that are open, particularly in food prep, baking, home organization and storage containers. The fourth trend we are seeing is the continued consumer interest in our highly popular beauty volumizer appliance franchises. Demand online and in the stores that are open is higher than our supply. The steps we are taking to ramp up to full capacity at our key suppliers and add new ones are healthy, which will in turn allow us to meet much more of the demand and position us to be more fully in stock now, and also post crisis. As we look to the future, we are fortunate to have a seasoned leadership team, and a capable infrastructure. While this is not the first crisis many of our leaders running Helen of Troy have worked through, it is our first pandemic of this magnitude. We believe the set of carefully considered actions we have taken to bring the company through the crisis will make a substantial difference in protecting our cash, our business, our people, and our high performing organization. We will continue to adapt quickly as the situation evolves. Once the economy returns to some level of normalcy, we expect to lean back into all parts of our flywheel, including the key initiatives for the second year of Phase 2 of our transformation. Examples on a shared service side include further geographic diversification of our supply chain and upgrading our IT capabilities to match our growth. Meanwhile, we remain focused on other key aspects of our strategic plan, such as continuing to invest in our leadership brands. A key example is OXO. OXO recently entered into a partnership with 1% for the Planet, an organization that champions environmental awareness and action, enabling brands to give back to a global network of nonprofits that champion environmentally responsible initiatives. OXO has spent 30 years making high quality products that last, engineered for functionality and durability. It's why we guarantee our tools for life. Approximately 90% of the impact a product will have on the environment is decided in the design process. OXO's core competency in design and engineering makes us uniquely qualified to develop tomorrow's tools, which will continue to be thoughtfully designed through the lens of environmental responsibility. OXO's partnership with 1% is a perfect fit for the brand and parallels the rapidly growing interest that all of our stakeholders have in environmental and social responsibility. Another key example is Drybar integration, which remains on track and is a very positive reflection on the high level of collaboration across all departments; the Drybar team is now rapidly becoming a fully integrated part of Helen of Troy. We are proud that nearly all of the Drybar people we asked to join us in January accepted our offer and are hard at work on the brand. In conclusion, while things are difficult right now, we believe tomorrow can be improved by successfully managing the challenges we are all facing today. I remain optimistic that we are making the right choices for our associates, consumers, customers, and shareholders. While much uncertainty remains the current crisis will eventually pass and a new normal will emerge. We entered the crisis with momentum. We see plenty of reasons to believe that Helen of Troy will brave the crisis, and we are confident that we will come out strong on the other side. Before turning the call over to Brian, I would like to share that Bill Susetka, a Director serving on our Board since 2009 announced his intention to retire at the end of his term in August. Over the past decade, Bill provided the company with a wealth of global consumer products industry knowledge, and leadership experience from his very successful 30 years in marketing and senior management for Clairol, Avon and later at the LPGA. The rest of the board and I are thankful and grateful to Bill for his service to Helen of Troy. His grace, exemplary character, consumer mindset, and counsel have been an instrumental part of our success. We wish him the very best. With that, I will now turn the call over to Brian.

Brian Grass, Chief Financial Officer

Thank you, Julien. Good afternoon everyone, and thank you for joining us. I'd like to echo Julien's comments and pass along my sincere wishes for the health and safety of you, your families and your colleagues. The health and safety of our associates has been our greatest consideration since COVID-19 began, and it will continue to be as we move forward. As humbling as it has been, I've never been more proud of the company in the spirit of togetherness within it. I want to start by reiterating that the fundamentals of Helen of Troy's businesses remain strong. Even though the current operating environment has presented its share of challenges and uncertainty, our view of the longer-term opportunities we see ahead to further grow our business has not changed, nor has our view of the key strategies we have chosen in pursuing them. With our proven diversified business model and product portfolio, efficient and scalable operating platform, strong balance sheet and ample liquidity, I believe we are well positioned to actively manage the things in our control and successfully navigate the current crisis, and a protracted economic downturn if that should occur. For discussing the quarter in more detail, I'd like to make a couple of broad points. First, consistent with our strategy of focusing on our leadership brands, during the fourth quarter of fiscal 2020, we committed to a plan to divest certain assets within our mass market personal care business and recorded an after-tax non-cash impairment charge of $36.4 million related to its goodwill and intangible assets. The assets to be divested include intangible assets, inventory, and fixed assets related to the company's mass channel liquids, powder, and aerosol products under brands such as Pert, Brut, Sure, and Infusium. We expect the divestiture to occur within fiscal '21. Accordingly, we have classified the identified assets as held for sale. In conjunction with this change, we now define core as strategic business that we expect to be an ongoing part of our operations and non-core as business that we expect to divest within a year of its designation as non-core. Previously referred to as core business, organic business now refers to net sales revenue associated with product lines or brands after the first 12 months from the date the product line or brand is acquired excluding the impact foreign currency re-measurement had on reported net sales. Today's earnings release contains tables that show core and non-core revenue by segment for the fourth quarter and fiscal years into 2020 and 2019. We've also included tables that present consolidated core and non-core revenue and adjusted EPS for fiscal 2020, 2019, and 2018. Finally, our upcoming investor presentation will include four years of consolidated core and non-core revenue and adjusted EPS. Second, as we noted in today's earnings release, we are deferring providing our outlook for the current fiscal year due to the rapidly evolving COVID-19 pandemic and the related business uncertainty. We expect to return to our historic practice of providing annual outlook once visibility improves. Now we'll turn to a discussion of our fourth quarter results. We achieved strong results in the fourth quarter with adjusted diluted EPS growth above our expectations, largely due to stronger than expected net sales in all segments and in particular Beauty. We made the growth investments we referred to in our third quarter release, and we're able to lean in even further behind the strength of the fourth quarter. This resulted in compressed margins for the quarter, but still allowed for adjusted EPS that was ahead of our expectations and even more support behind our leadership brands, another example of the value-creation flywheel at work. Consolidated sales revenue was $442.4 million, a 14.9% increase over the prior year, driven by double-digit organic growth in all three business segments and five weeks of contribution from Drybar. Consolidated sales in the online channel grew approximately 39% year-over-year to comprise approximately 24% of our consolidated net sales in the fourth quarter. The sales from our leadership brands grew 15.7% in the quarter, which includes 1.8 percentage points of growth from Drybar. This was another great quarter for our Housewares segment, which posted an organic business increase of 15% on top of 8.1% organic business growth in the same period last year. We saw robust demand for both OXO and Hydro Flask brands both online and in-store. Health & Home organic increased 10.8% primarily due to new product introductions and increased demand, particularly in thermometry due to higher pediatric fever and the impact of COVID-19 toward the end of the fourth quarter. These factors were partially offset by lower sales due to net distribution changes year-over-year. Beauty organic business increased 16.1% primarily due to growth in both online and brick and mortar in the appliance category, partially offset by a decline in personal care. Drybar contributed net sales of $6 million or 6.7 percentage points of beauty sales growth resulting in total segment growth of 23.1%. Consolidated gross profit margin was 43.5%, compared to 40.9% last year. The 2.6 percentage point increase is primarily due to a more favorable product mix within all three business segments and a lower mix of shipments made on a direct import basis. These factors were partially offset by lower mix of personal care sales in the beauty segment. Consolidated SG&A was 34.4% of net sales, compared to 29.2% last year. The 5.2 percentage point increase is primarily due to higher advertising and new product development expense, higher royalty expense, an increase in amortization expense, and higher annual incentive compensation expense. These factors were offset by lower share-based compensation. As mentioned on our third quarter call, we had a shift in advertising and new product development expense from the third to the fourth quarter, and we were able to lean into spending even further than originally planned during the quarter. Year-over-year increase in advertising spending increased our SG&A ratio by approximately 2.9 percentage points while still allowing us to exceed our full-year adjusted EPS expectations. We believe the investments made in the fourth quarter will benefit our businesses and keep our brands resonating with consumers in both the short and long term. GAAP operating loss was $2.7 million or minus 0.6% of net sales, and included non-cash impairment charges of $36.4 million. This compares to operating income of $44.1 million or 11.5% of net sales the same period last year. On an adjusted basis, consolidated operating margin was 12.2%, compared to 13.9% in the same period last year. The 1.74 percentage point decrease primarily reflects higher advertising and new product development expense, higher annual incentive compensation expense and an increase in royalty expense. These factors were partially offset by a more favorable product mix and increased operating leverage from sales growth. Turning to segment performance, Housewares adjusted operating margins decreased 6.3 percentage points to 11.8% primarily reflecting higher advertising and new product development expense to support strategic initiatives and higher freight and distribution expense to support retail customer strip shipments. These factors were partially offset by the impact of a more favorable product mix and increased operating leverage from sales growth. Health & Home adjusted operating margin decreased 1.4 percentage points to 11.2% primarily reflecting higher royalty expense and higher new product development expense. These factors were partially offset by the margin impact of a more favorable product mix and increased operating leverage from sales growth. Beauty adjusted operating margin increased four percentage points to 14.4%, primarily due to the margin impact of a more favorable product mix, increased operating leverage from sales growth and lower freight expense, partially offset by an increase in advertising and new product development. Income tax benefit as a percentage of pre-tax loss was 48.1%, compared to income tax expense as a percentage of pretax income of 7.9% for the same period last year. The year-over-year change is primarily due to the recognition of a tax benefit from the impairment charges reported in the fourth quarter of fiscal '20. Loss from continuing operations was $3.2 million or $0.13 per diluted share, compared to income from continuing operations of $37.7 million or $1.47 per diluted share in the prior year. Non-GAAP adjusted income from continuing operations grew to $47.8 million or $1.88 per diluted share, compared to $46.6 million or $1.82 per diluted share. This represents a 3.3% increase in adjusted diluted EPS, which reflects higher adjusted operating income and the impact of lower weighted average shares outstanding partially offset by higher interest expense. Despite the lower growth in the fourth quarter, adjusted diluted EPS growth in the second half of fiscal '20 was 18.4%, compared to 11.7% in the first half. Looking at fiscal '20 as a whole, we over-delivered against our full-year outlook, while making greater investments in the short and long-term health of our businesses. We delivered sales growth of 9.2%, expanded our adjusted operating margin by 50 basis points, grew adjusted EPS by 15.4%, and grew free cash flow by 45.6%. I consider it to be the best year in my 14 years with the company. Now moving on to our financial position for fiscal 2020 compared to fiscal 2019. Accounts receivable turnover was 67 days, compared to 68.3 days for the same period last year. Our accounts receivable balance was $348 million, compared to $280.3 million at the end of fiscal 2019. Inventory turnover was three times compared to 3.3 times in fiscal 2019. Inventory was $256.3 million, compared to $302.3 million. Decline in inventory primarily reflects strong demand for Hydro Flask and volumizer products, while strong demand for Health & Home products was driven by COVID-19 at the end of the fourth quarter. Net cash provided by operating activities from continuing operations increased 35.3% to $271.3 million for fiscal 2020. The increase was primarily driven by higher cash earnings and a decrease in cash use for inventory. These factors were partially offset by an increase in cash used for receivables. Total short and long-term debt was $339.3 million, compared to $320.8 million. Our leverage ratio is approximately 1.2 times at the end of fiscal 2020. This compares to approximately 1.3 times at the end of fiscal 2019. Our free cash flow growth in fiscal '20 allowed us to keep our debt and leverage at a very comfortable level, even with the acquisition of Drybar in January, but we are not providing a formal outlook for fiscal '21. I do want to share with you how we're thinking about our business in the current environment and some early trends we are seeing. We're experiencing favorable demand trends for some of our products, while others are being adversely impacted due to retail store closures and consumer uncertainty. During most of fiscal '20, we had strong momentum in our Housewares and Beauty segments, which continued into the beginning of fiscal '21. At the end of the fourth quarter, the company also began to experience increased demand for certain products in the Health & Home segment, particularly in thermometry. So far, this trend has continued into fiscal '21 and become more pronounced in other product categories such as humidification, water purification and air purification. Additionally, at the beginning of fiscal '21, the company began to experience favorable demand trends for OXO products as consumers engage in pantry stocking, cleaning, nesting, and cooking at home. Some of you may recall that our OXO business grew consistently through the Great Recession a decade ago. Products that are more discretionary in nature and more dependent on the retail brick and mortar channel are generally experiencing unfavorable sales trends, despite strong demand for our products in most of the channels that are still open for business, such as online, grocery, mass and club. Overall, our revenue is being adversely impacted by the effect of brick and mortar store closures, limited hours of operation, and lower store traffic, simply because of the weight of brick and mortar in the retail environment of our business. We're also experiencing supply chain disruptions with some major third-party manufacturers, which are adversely affecting our ability to meet consumer demand in those product categories where demand is strong. As such, we expect the net effect of COVID-19 will adversely impact our revenue for the first quarter and full fiscal '21. As part of our comprehensive approach to preserve our cash flow and adjust our cost structure to lower expected revenue, we have implemented a number of measures that will remain in place until there's greater certainty, reopening of retail customer stores and improved consumer demand. These measures include graduated salary reduction for all associates including named executive officers and the other members of the company's executive leadership team, reduction in the cash compensation of the Company's Board of Directors, suspension of merit increases, promotions and new associate hiring until further notice, furlough of associates in specific areas directly tied to sales volume with assistance to those associates to maintain health insurance coverage, as well as a reduction of external temporary labor and reduced work hours. Production and deferral of marketing expense is being focused in the brands with strong current demand and reduced investment in other key brands without sacrificing brand awareness, limited reduction of investment in new product development launches in anticipation of more normalized economic activity, elimination of travel expense in the short-term, with a significant reduction plan for the second half of fiscal '21, and reduction in consulting fees and capital expenditures for projects that are not critical. On March 24, 2020, we borrowed approximately $200 million under our revolving credit facility as part of our comprehensive precautionary approach to increase our cash position and maximize our financial flexibility in light of the volatility in the global markets resulting from the COVID-19 pandemic. After giving effect to the borrowing, the remaining amount available for borrowings under the facility was $536.4 million, and our cash and cash equivalents on hand was approximately $393 million. As previously announced, we entered into an amendment of our credit agreement in March. The amendment extended the maturity from December 7, 2021 to March 13, 2025. Further, the amendment increased the revolving commitment from $1 billion to $1.25 billion. The amendment also reduced the interest spread within our pricing grid and made favorable changes to covenants and borrowing limitations, including a new leverage definition that allows for the subtraction of cash and cash equivalents when calculating our leverage ratio. As a result of our COVID-19 response actions, strong revenue growth at the end of fiscal '20, and lower inventory levels, we continue to generate strong cash flow growth in March and April, and our liquidity has further improved since the pandemic began. As of yesterday, our pro forma net leverage was 0.9 times. We have approximately $380 million of cash and cash equivalents on hand. We have approximately $605 million of remaining availability under our credit agreement. Although we expect our free cash flow to take a step back in fiscal '21 as we build healthy inventory levels and the retail environment looks for stability, we expect our balance sheet liquidity position to remain strong. In summary, while we are humbled by the tragedy of COVID-19 and its unprecedented impact on our society, strong balance sheet, ample liquidity, diversified product portfolio, and scalable operating platform combined with our COVID-19 response actions and the Phase 2 transformation plan lead us to believe we are well positioned to steward the company through the challenges of the current environment. And we are prepared for a variety of longer-term scenarios that could occur. If the economy were to deteriorate further for a protracted period of time we believe we have the balance strength and liquidity to navigate the economic cycle. And we could take further actions to reduce spending and preserve cash flow if it became necessary. If the economy were to improve as we emerge from the crisis we believe we are poised to capitalize on the investments made in fiscal '20, and those planned for fiscal '21. Our businesses had strong momentum leading into the crisis, and we expect to continue to feed that momentum as brick-and-mortar retail stabilizes, the online channel thrives, and the consumer adjusts to a new normal. And with that, I'd like to turn it back to the operator for questions.

Operator, Operator

Thank you. At this time, we'll now be conducting the question-and-answer session. Our first question is coming from the line of Olivia Tong with Bank of America. Please proceed with your questions.

Olivia Tong, Analyst (Bank of America)

Thanks. Good afternoon. Hope everyone is well. I want to dig further into your visibility on demand across your key business segments over the balance of the year considering all the volatility across your channels. If you can give us a sense of either performance since quarter close, any volatility from early March to now? If you could also discuss the retail relationships, and also how you're going about planning for the next three quarters given potentially very different scenarios we could be in? And then secondly, what you're doing on advertising to create awareness in Braun, Vicks, Honeywell to the extent that you have product to satisfy the demand while also supporting some of the more discretionary businesses? Thanks.

Julien Mininberg, Chief Executive Officer

Got you. Yes, hi, Olivia. Thanks, a bunch of things in there, and nice to talk to you. Sorry it's a virtual one today, but you've come through loud and clear. In terms of the questions, starting with the demand that we're seeing now, in our prepared you heard, I hope, some bright spots. There's some significant attention to our products, first of all starting in Health & Home, and we are seeing a lot of demand in all the categories mentioned, including thermometers. It extends beyond though into humidifiers and inhalants, and cough especially, and in the case of water purifiers and, importantly, also air purifiers. In OXO, the brand has been holding up especially well online, and in stores that are open; the year-over-year comps are very, very good, in fact ahead of a year ago. In the case of Beauty, we're also seeing now, and it's getting better week by week especially as the supply situation unfolds, significant demand, especially around the volumizer franchise, and also to see growth week-over-week depending on which store. Stores like Target, Walmart, Amazon are three very large examples in our top five customer group that are experiencing that trend on Beauty, so that this is good to see. In terms of supporting them, we are supporting them, especially where the stores are open. The company has gotten very good online. We're far from perfect, but we're miles ahead of where we were just a couple of years ago. So we're supporting the dotcoms very precisely, and we can advertise on their sites, and on Amazon, tremendous amounts of support in terms of digital marketing where we have product and where the customer is able to shop. So that's happening. And in the case of demand in general, where it's poor is in the places where the stores are closed, obviously. And with brick-and-mortar still bigger than online in total sales, that's why Brian made the comments of it netting some damage, just like everybody else, but with Helen of Troy more developed online than pretty much anyone else that we're aware of in our industry. We think we're faring better than most, and also having those healthcare products makes a big difference. I think there was another question inside your comments. I may have missed that one, Olivia. Sorry.

Olivia Tong, Analyst (Bank of America)

No, no worries. I guess I wanted to also ask you about the divestiture, why now? Because we know it's not your favorite business, but is there something else you're looking to do, a desire to create liquidity or something else? Just trying to better understand the timing given where deal multiples are now post versus pre COVID.

Brian Grass, Chief Financial Officer

Olivia, it's Brian. I can start, maybe then Julien can jump in. I just want to address it's not liquidity driven. We had made the decision to do this well before COVID-19 had begun becoming what it is today. So no, it wasn't liquidity-driven. We just feel it's the right time to focus on our leadership brands. And we think the asset is better off in somebody else's hands who can give it the time and attention it deserves.

Julien Mininberg, Chief Executive Officer

Again, to build on that, Olivia, we've seen some tremendous strength in the Leadership Brands. You heard the numbers we just reported for the year, also the quarter, and then over the last three years-plus in Beauty now — three years in Beauty — and many quarters in a row we've demonstrated not only the ability to grow in appliances, but now also the ability to grow the appliances sufficiently to make the whole segment the biggest in a decade. In terms of Personal Care, as Brian said, yes, it's probably better off in the hands of a company for which that's core: those types of mass market personal care products. And then in our case it's not only a matter of focus, it's a matter of where we're having success and where we want to put the next dollar. From a liquidity standpoint it's far from our minds. In fact it's not even on our minds. We have a tremendous amount of liquidity now. We have low debt; we have high cash flow coming into the crisis. So it's not like we're selling the furniture. And then in terms of what we do with the proceeds and all of that, those are high-quality problems to have; if the time comes, we'll put it to work on something that's a better future fit for us.

Olivia Tong, Analyst (Bank of America)

Great, thanks. And then just lastly, just a little bit more color around the decision to delay the guidance for fiscal '21. Obviously understand the very challenging backdrop. But can you talk about what your biggest worries are? Is it just COVID-19, is it recession, or is there something specific internally as you look into 2021 that gives you pause, because obviously we understand the term, divergent trends, and all that? Thanks.

Julien Mininberg, Chief Executive Officer

It's a great question, and I'm very glad you asked so that all can hear. The sole reason we're not giving guidance is COVID-19 uncertainty. I think the vast majority of other companies have done exactly the same. It would almost be irresponsible for us to give guidance at this point for the simple reason that not only do we not know the future shape of this pathogen or the course it will take, but I think anyone who says they do is almost certainly wrong. I don't want to judge other people, but I think it would be hard for a serious company to say, 'We've got this, and we know exactly where it's going, and we can see the entire next 12 months.' I don't think anyone can say that with certainty, and in the case of Helen of Troy there's no other reason. Whether it's a V shape, a W shape, an L shape, a U shape — we've heard it all. What we're doing is looking at our business and the prospects that we have, and making what we think are the best decisions, but there's no other reason whatsoever on the subject of guidance. Brian, I know you had a build there.

Brian Grass, Chief Financial Officer

No, I would just say, knowing when retail stores will open in earnest and when consumers will consistently be in those stores is a huge visibility gap that's very difficult to give guidance against. Also, we were chasing demand in a few areas leading into the crisis, and then there was Chinese New Year and the crisis on top of that, which has put a lot of disruption into the supply chain that we also still have to work through. So you combine some supply disruption from COVID-19 along with low visibility on demand, and I think that points you in the direction that giving guidance would be irresponsible, as Julien said.

Olivia Tong, Analyst (Bank of America)

Okay, thanks so much, great to hear from you.

Operator, Operator

Thank you. The next question is from the line of Bob Labick with CJS Securities. Please proceed with your question.

Bob Labick, Analyst (CJS Securities)

Good afternoon and great to hear your voices. I hope everyone on the call is doing well, safe and healthy. Wanted to start, maybe you could talk a little bit about some of the hurdles for some of your brands to shift to nearly 100% online. Is there enough inventory in the marketplace? Are you forced to use air cargo to replenish? And maybe specifically talk a little bit about Amazon; I read that they had shifted to not taking on inventory of nonessential items. How does that impact or how has that impacted Hydro Flask or Drybar or things like that? Just give us a little sense of what's going on with some of the lack of brick-and-mortar retail and how you're trying to get supply to market.

Julien Mininberg, Chief Executive Officer

Yes, you bet, great question, and nice to hear from you, Bob. We've been in our quiet period for a long time, so it's nice to come out and be able to chat. In the case of the shift to online, it is big. Not all brick-and-mortar is closed. In the drug channel the pharmacy stores are open, and in the mass market channel, Walmart and Target are two huge examples; they are generally open. Not every department and not every place are perfect, but there is a footprint out there, and then when it comes to online, stores that are closed still have online activity — bedbathandbeyond.com, Ulta, and so on. There's plenty of online activity that is surging, and is multiples of its historical run rates even taking into account the growth. So if something is growing 25%-30% year-over-year, just double its size and then grow on top of that. This is what we're talking about, so these are big. In terms of us supplying those, your point about essentials is important. Originally, a month or so ago, big players like Amazon were restricting the product assortment to essentials, and they literally had a list of what's in and what's not. Over the course of the last two or three weeks the list of essentials has been growing longer and longer. We, and I'm sure other companies, have been pretty successful in getting many of our products added to the essential list, including probably 90% of Hydro Flask at this point. Our own DTC website — think oxo.com, hydroflask.com — has been very active because consumers are ordering from us directly on the internet, and we're fulfilling from our distribution centers without any retailer involved. We've also kept the post office, FedEx, and all of that in good working order as we ship a lot of that product. So there's enormous activity in this space, and our people are really rising to the occasion. In terms of the amount of demand, as Brian said, it's not enough to overcome all of brick-and-mortar, but for a company that's well developed online, we don't have to shift that much more to online; we're already extremely active in this space. From a digital marketing standpoint, to Olivia's question earlier, we are very active on supporting the businesses to keep things moving, and to make sure we get good ROI and top-of-mind. On the supply side, we're working very, very hard to make sure there's enough product. It's always the SKUs that are in the highest demand and the hardest to keep in stock. We are having some problems, as Brian called out, in those areas with the combination of chasing demand going into the last quarter, Chinese New Year, COVID-19 itself sweeping through the China factory base, and now ourselves replenishing supply as quickly as we can to feed all of that. So, hopefully that gives a little color on the whole cycle.

Brian Grass, Chief Financial Officer

Yes. Bob, it's Brian. I know you asked about air freight. Yes, we've used air freight. It makes sense both from a demand perspective and a speed perspective. There's a situation now where it's become very costly to do that. So we have to be even more choiceful when we decide to do it, but yes, it's something we did in the fourth quarter.

Julien Mininberg, Chief Executive Officer

I want to add on certain areas, especially in health essentials, our standard is a little different for air freight. We will lean in a little bit more there because we appreciate the essential reality, and we want to make sure people get the product they need.

Bob Labick, Analyst (CJS Securities)

Got it, okay, great, and then just a quick one. You mentioned the Drybar integration is on track, but can you give us a sense — I don't remember if we knew this from before the world changed — how is their ability to sell online through their own site and through others? Also, how are the synergies in manufacturing and procurement going, or is that impacted in the short term?

Julien Mininberg, Chief Executive Officer

Yes, the manufacturing integration is not impacted. We're making very good progress on manufacturing. We're able to leverage our scale and broader supplier base. We know the Drybar suppliers well and we've been working with them; one of them is a current major supplier to us and they've been cooperating nicely. So the terms and the scale advantages are going well. On the liquid side, the Drybar team is fully intact and very active supplying the liquids. On the sales side, the salons themselves, which are mostly closed today, represent roughly 20% of Drybar product sales. The other 80% is primarily split between Ulta and Sephora, both of which have brick-and-mortar closures but are booming online. So the Drybar sales online for those two are doing extremely well, but it's not enough to overcome the brick-and-mortar. Drybar's DTC business is very active right now; if you're on their mailing list, you'll see a lot of offers focused on items like dry shampoo and other home-care products. We're working to ensure both the manufacturing and digital sales channels are optimized.

Bob Labick, Analyst (CJS Securities)

All right, thank you very much.

Operator, Operator

Thank you. Our next question is from the line of Rupesh Parikh with Oppenheimer. Please proceed with your question.

Rupesh Parikh, Analyst (Oppenheimer)

Good afternoon. Thanks for taking my question. First I wanted to start on thermometers. We get a lot of questions on your thermometer business, so just want to get a sense of your ability to ramp up capacity and also whether you currently serve the B2B channel and whether that's an opportunity going forward.

Julien Mininberg, Chief Executive Officer

Yes, thermometers are booming in general, and nobody likes the reason — COVID-19 — but we're glad to be part of the solution. We work with production facilities that are third parties in China and also in Mexico. Some parts, for example the probe covers for the infrared ear thermometers, are made in the United States. It's not just a China-only situation. On capacity, we've been greatly improving capacity out of Mexico — significant double-digit increases — to get the maximum number of thermometers into the marketplace now, and we don't have the Pacific Ocean to cross there. So there's a speed advantage. For probe covers, demand has more than doubled; that's made in the United States and we've increased capacity there as well. In China, factories are generally almost back to full strength now. There were government interventions in China in March where product was being directed domestically during their peak of COVID, and as that has eased product is flowing much better now. We work with multiple suppliers across different models, so there are many places to source components. On the B2B side, it is an opportunity. Employers want their facilities to be safe, and they're increasingly wanting to measure temperatures of employees as they come in. We make a lot of forehead thermometers; B2B demand is extremely high. From a sales channel standpoint, it's a development opportunity for us. While I can't predict whether temperature checking becomes a permanent requirement everywhere, it is clearly a growing opportunity.

Rupesh Parikh, Analyst (Oppenheimer)

Okay, great. And then just going back to trends, it appears in recent weeks you see an acceleration maybe driven by some stimulus. For some discretionary product properties like Hydro Flask, have you seen consumers retrench late March/early April and then feel better after stimulus, with trends picking up? Any more color on how discretionary categories are performing recently?

Julien Mininberg, Chief Executive Officer

Broadly we are seeing week-over-week demand improve. This is true in general, especially online, and it's now also true in the brick and mortar stores that are open, and it's also true for Hydro Flask. The essentials list expansion has helped; Hydro Flask has been added to essentials on some platforms which has helped considerably. Consumers may feel more comfortable making purchases as they see stimulus and more visibility, and spring weather is improving for many regions which helps Hydro Flask demand as people want to go outside. Trends have been improving each week over the last couple of weeks. Health & Home is different — it's more symptom and COVID-driven — so that category is being driven by need for humidifiers, air purifiers, water purifiers, and thermometers, which is separate from discretionary purchasing behavior.

Rupesh Parikh, Analyst (Oppenheimer)

Okay, great. Thank you for all the color. I'll pass it along.

Operator, Operator

Thank you. Our next question is from the line of Linda Bolton-Weiser with D.A. Davidson. Please proceed with your question.

Linda Bolton-Weiser, Analyst (D.A. Davidson)

So I just wanted to clarify — your tone is quite positive across categories that I wouldn't expect. In thinking forward, there is a consensus view that we're in a severe recession. In the last recession, your revenue did decline; I think it was in the mid single digits. Your portfolio is largely the same, with the addition of Hydro Flask. How should we think about the overall portfolio this time around versus the last recession? Once we get past this surge and demand for certain COVID-related stay-at-home items, how should we think about your business a couple of quarters out? And maybe you could also talk about the trading down phenomenon in some of your more premium priced product lines — whether you anticipate that might happen? Thanks.

Julien Mininberg, Chief Executive Officer

Sure. Nobody's immune to recession, but it's important to break products into two groups: things people need (staples) and things people would like but might trade down on. Looking back at the last major recession, OXO grew through the Great Recession — for example OXO grew about 25% then — so some of our brands can be resilient or even grow during downturns. We've made significant improvements in our portfolio since then: we now have Hydro Flask and a larger Health & Home presence. This time is different because many stores were closed for an extended period and online penetration is far higher today than a decade ago. Helen of Troy today is much more developed online — 24% of sales — and we believe we are ahead of our peers in online penetration. That gives us an advantage. On the downside, Drybar is higher-end and more discretionary, and will be more impacted short term by salon closures. Over time, however, consumers will return to hair services and pampering, and Drybar has the attributes to benefit then.

Brian Grass, Chief Financial Officer

I would just add that the weight of Beauty 10 years ago was dramatically different. Beauty was a core business then and we had not acquired OXO or the healthcare business. Today we have a healthcare business and OXO, which grew consistently during the prior recession. We also have a lower weight of discretionary Beauty relative to the total company. So I think our portfolio actually works in our favor compared to 10 years ago.

Linda Bolton-Weiser, Analyst (D.A. Davidson)

Okay, that's all for me. Thank you.

Operator, Operator

Thank you. Our final question is from the line of Steven Marotta with CL King & Associates. Please proceed with your questions.

Steven Marotta, Analyst (CL King & Associates)

Good evening, Julien, Brian, and Jack. Julien, would you say that the largest supply-demand dislocation of all your product lines is currently occurring in thermometers? I took diligent notes on what you're doing to remedy the supply chain from a thermometer standpoint; when do you think based on current levels of demand the supply chain can catch up?

Julien Mininberg, Chief Executive Officer

Sure. Yes, I would say thermometers are among the biggest dislocations. It's not alone though — volumizers are also in very high demand. Thermometer demand is off the charts because early symptomology for this disease includes fever and temperature checks have become a central part of monitoring. We've increased capacity in Mexico and the United States for key components like probe covers. China has come back online largely, and we're getting the most we can out of the supply chain every day. We're allocating based on demand, maximizing production and shipments, but demand is very high. We're bringing on other suppliers and expediting key components and doing everything possible to ramp. Brian, do you want to add?

Brian Grass, Chief Financial Officer

Yes, there's definitely a constraint in thermometers, but an advantage we have is some of our key SKUs are manufactured in Mexico, so lead time is shorter. Thermometers are small and lend themselves to being efficient for air freight, which helps get supply where it's needed. Demand is very strong and hard to keep up with from a supply perspective, but our supply chain structure and the nature of the devices make it easier to ramp supply and get product where we need it. Airfreight is expensive right now, so we are choiceful when we decide to use it.

Julien Mininberg, Chief Executive Officer

I also want to highlight probe covers for ear thermometers. We're a market leader by a large margin and probe cover demand has multiplied. We've maxed out molds and shifts and have pushed suppliers to increase capacity by 20%-30% in many cases. In other areas like volumizers, COVID-19 compounded with Chinese New Year disrupted supply and component availability, but we've ramped capacity to near full strength and are adding suppliers to increase production. So across categories we're taking all necessary steps to increase capacity and prioritize essential products.

Steven Marotta, Analyst (CL King & Associates)

Great, that's helpful, thank you very much.

Operator, Operator

There are no additional questions at this time. I will now turn the call back over to management for any final comments.

Julien Mininberg, Chief Executive Officer

Thank you, Operator. We appreciate everyone being here with us today, as well as your support. We're very proud of our strong fourth quarter and the full-year performance we just posted for fiscal 2020. We're also proud of the outstanding start that represents for Phase 2. It was the first year of Phase 2 and it was a great one. We are working very hard to address the COVID-19 crisis, to continue to advance our Phase 2 plan and to emerge strong as the economy reopens. We look forward to speaking with many of you in the coming days and weeks. We thank you very much, and hope you have a wonderful evening. Thank you.

Operator, Operator

This concludes today's teleconference. You may disconnect your lines at this time. We thank you for your participation.