Earnings Call Transcript - OXM Q4 2021

Operator, Operator

Greetings. Welcome to the Oxford Industries, Inc. Fourth Quarter Fiscal 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I'll now turn the conference over to your host, Jevon Strasser. You may begin.

Jevon Strasser, Host

Thank you and good afternoon. Before we begin, I would like to remind participants that certain statements made on today's call and in the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees, and actual results may differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results of operations or our financial condition to differ are discussed in our press release issued earlier today and in documents filed by us with the SEC, including the risk factors contained in our Form 10-K. We undertake no duty to update any forward-looking statements. During this call, we will be discussing certain non-GAAP financial measures. You can find a reconciliation of non-GAAP to GAAP financial measures in our press release issued earlier today, which is posted under the Investor Relations tab of our website at oxfordinc.com. Due to the material impact of COVID-19 on our business in 2020, we will also include comparisons to our 2019 results. And now, I'd like to introduce today's call participants. With me today are Tom Chubb, Chairman and CEO; Scott Grassmyer, CFO; and Anne Shoemaker, Treasurer. Thank you for your attention. And now I'd like to turn the call over to Tom Chubb.

Tom Chubb, Chairman and CEO

Thank you, Jevon. Good afternoon and thank you for joining us. We are pleased to be reporting on what was an extraordinary fiscal 2021 year for Oxford and our plans for an even better year in fiscal 2022. Scott will provide additional detail in a moment, but here are some of the highlights. Each of our happy upbeat lifestyle brands, Tommy Bahama, Lilly Pulitzer, Southern Tide, The Beaufort Bonnet Company and Duck Head, had its best year ever in 2021. All five brands posted strong top and bottom line growth, not only over 2020, but also as compared to pre-pandemic 2019 levels. Compared to 2019, excluding Lanier Apparel, which we exited in 2021, net sales increased 9% for the full fiscal year and 8% during the fourth quarter. On an adjusted basis, our consolidated fiscal 2021 gross margin of 63%, operating margin of 15% and earnings of $7.99 per share were all records for Oxford while a terrific year for all. The biggest contributor to our record earnings was the performance of our largest brand, Tommy Bahama, where sales grew 7% versus 2019 to a record $724 million and adjusted operating margin nearly doubled to 16% over the same timeframe. Our outstanding results are a testament to strong execution of the strategic priorities we established to drive our recovery out of the pandemic combined with our straightforward formula for success. From a branding perspective, across all five brands, we remain true to our happy upbeat brand positioning and then supported the brands with the classic three pillars of any great brand, A+ product, A+ distribution and A+ communication. From a product perspective, we delivered innovative and differentiated products that are true to the DNA of each of our brands while at the same time being relevant to today's marketplace and consumer. Among the hundreds of new products we delivered during the year, prime examples include our Tommy Bahama men's IslandZone chip shot short and women's palm modern swimwear; in Lilly Pulitzer, our Luxe cotton French Terry Harriet dress, along with numerous Luxletic editions; and in Southern Tide, our Sunterra capsule collection. All of these products are on brand and play well with the ongoing trends towards casualization, easy-to-wear and easy care and the desire for performance-inspired products. And our customers absolutely love them. From a distribution perspective, we continue to evolve our premium full price selling platform to ensure that we are making our brands, products and services available to our customers when and where they want them. In our view, a customer-focused modern distribution platform for any fashion brand should include a balance of company-owned retail stores and company-owned e-commerce complemented by a strategic wholesale business. By strategic, we mean a wholesale business that is brand-enhancing, profitable for us and our wholesale customers, and exposes us to a broader base of consumers who might not otherwise be aware of our brands. We also believe it is important for modern brands to provide an experiential element. We provide exceptional guest experiences in our beautiful retail stores and in our very unique Tommy Bahama bars and restaurants. We believe our sales for fiscal 2021 are reflective of the very balanced and modern distribution platform, with 39% coming from company-owned retail, 32% from e-commerce, 9% from restaurants and bars, and 20% from wholesale. From a communication perspective, it's as important as ever to have creative content that is compelling and in the modern marketplace that is specifically tailored to the digital media that dominates the attention of today's consumer. In addition, it is critical that brands be able to understand and serve the needs and desires of existing customer audiences and identify potential audiences that share those same needs and desires. Finally, brands need to have the techniques, disciplines and skills to effectively and efficiently deliver compelling creative content to those existing and potential consumer audiences in a way that attracts new customers, retains existing customers and encourages all to increase their engagement and spending with the brand. The measuring stick for our success with these efforts is our customer KPIs where our customer count finished the year at over 2 million active brand customers compared to roughly 1.8 million at the end of fiscal 2019. Our talented, highly engaged teams will continue to evolve and update our products and brand messaging to ensure they stay relevant for today's consumer and remain true to each brand's unique DNA. This has been and will continue to be the key to our success as we deliver long-term value to our shareholders. As terrific as fiscal 2021 was, we believe the prospects for 2022 and beyond are even brighter. The momentum that we created during 2021 has continued into the early part of 2022, and we have outstanding plans to deliver double-digit top and bottom line growth on a consolidated basis. Our focus during 2022 will be on four strategic pillars, supported by the foundation of our business, our incredible team of people. First, we will grow our brands for the long term. To do this, we have detailed plans to continue improving our clarity on brand positioning and voice. As stewards of our lifestyle brands, we are in the dream business and ensuring that each brand inspires optimism and aspirations for happiness is paramount. Our brands will continue to deliver A+ product, A+ distribution and A+ communications. Second, we will continue to enhance our digital and omnichannel capabilities to attract new customers, retain existing customers and drive frequency and spend. Across the enterprise, we have numerous people, processes and technology-related initiatives in place, particularly related to unlocking consumer insights in more effective ways and providing amazing, seamless customer experiences that will support and enhance our capabilities in these areas. Third, we will drive operational excellence across the enterprise to better serve our customers and make sure that we are operating as efficiently as possible. To support this initiative, we are focused on topics such as fulfillment and distribution, retail real estate strategies, process improvement, technology across the enterprise and effectively communicating our ESG initiatives. Fourth, we will continue to manage our portfolio and align our capital structure to drive sustained profitable growth. Detailed plans include assessment of market opportunities to better direct future growth plans, refining our brand health metrics to help us better manage our businesses, evaluating both organic and acquisition-based growth opportunities, benchmarking ourselves against competitors and monitoring our capital allocation strategies over time, including returning capital to shareholders. Lastly, we have plans to continue to develop our people and our teams to make rewarding careers possible for our people and to ensure the Company can execute our strategy now and in the future. To do this, we are focused on the acquisition and development of exceptional and diverse talent, leadership succession, minimizing the impact of the so-called great resignation and maximizing engagement and effectiveness of remote and hybrid workers. People are our most important asset, and we will continue to invest to ensure that we continue to have the best. We look forward to updating you on the progress of all these plans as well as our results as this year progresses. I'll now turn it over to Scott for more detail about the results in fiscal 2021 and our strong forecast for top line growth and operating margin expansion in fiscal 2022.

Scott Grassmyer, CFO

Thank you, Tom. Our operating groups executed well during 2021 and delivered record performance within each brand, as Tom mentioned earlier. We had a record-setting fourth quarter that capped a terrific fiscal 2021 driven by continued strength in e-commerce, greater full price sell-through, and higher gross and operating margins. In fiscal 2021, consolidated net sales were $1.142 billion. Excluding Lanier Apparel, sales increased 9% over fiscal 2019 to $1.117 billion, with a continued shift in the composition of our revenue towards full-price direct-to-consumer. Our full-price e-commerce business grew significantly, up 58% versus fiscal 2019, with meaningful double-digit increases in each of our brands. On the bricks-and-mortar front, our retail stores and restaurants saw a particular strength in Florida, the Southeast and Texas compared to fiscal 2019. In fiscal 2021, our adjusted gross margin was 63% compared to 57.6% in fiscal 2019. This 540 basis point improvement was fueled by strong full-price sales, a shift in sales mix towards full-price direct-to-consumer channels and higher IMUs, particularly in innovative new performance offerings. Higher freight costs, including the use of air freight, negatively impacted gross margin by 160 basis points for the full year with a 300 basis point impact in the fourth quarter. For the full year, our operating margin increased 650 basis points on an adjusted basis to 15% of net sales driven by improvements in gross margin and leverage within SG&A. I'd now like to walk you through our projections for fiscal year 2022, which began January 30. As we look to 2022, we expect our business to remain robust. Our e-commerce business is expected to continue to expand driven by enhanced digital capabilities, focused on new customer acquisition, retention and increased spend. Our physical locations are seeing traffic continue to improve, and we anticipate year-over-year sales growth in all regions. Our strategic positioning to emphasize direct-to-consumer channels, which represent 80% of our business, has enhanced our continued ability to execute well within a disruptive supply chain as our talented merchandising teams continue to create compelling assortments on our sites and retail floors as product arrives. Our ability to navigate supply chain challenges, along with our product innovation, are also driving a robust forward order book in our wholesale channel. We expect modest gross margin expansion as we continue to see benefits of higher IMUs, partially offset by what we expect to be a somewhat more promotional environment. We expect modest SG&A leverage despite inflationary cost pressures, including a challenging labor market. Putting together these dynamics, we expect to deliver double-digit top and bottom line growth with operating margin expansion in fiscal 2022. First quarter sales are expected to increase from $266 million, which included $12 million of Lanier Apparel, to a range of $315 million to $335 million, reflective of very strong quarter-to-date results in both direct and wholesale channels. Full year sales are expected to increase from $1.142 billion in fiscal 2021, which included $25 million of Lanier Apparel, to a range of $1.245 billion to $1.285 billion in fiscal 2022. Increased sales reflect double-digit increases in our direct-to-consumer business and a healthy wholesale order book. Our effective tax rate for fiscal 2022 is expected to be between 24% and 25%. On an adjusted basis, we expect EPS in a range of $2.65 to $2.85 in the first quarter of fiscal '22 compared to $1.89 last year. For the full fiscal year, we expect adjusted EPS in the range of $8.75 to $9.15 compared to $7.99 in fiscal 2021. Our business is supported by our strong balance sheet. Here are some highlights. We ended fiscal 2021 with inventory in excellent shape. On an as-reported LIFO basis, inventory decreased $118 million at the end of the fourth quarter compared to $124 million in the prior year. While on a FIFO basis, inventory increased by 12%, excluding the impact of Lanier Apparel. We expect efficiencies gained through our enterprise order management systems will continue to allow us to do more business with lower inventory levels. Our liquidity position is strong with no debt and $210 million of cash and short-term investments at the end of fiscal 2021. Capital expenditures in 2021 were $32 million, and we expect capital expenditures to be approximately $50 million in fiscal 2022, reflecting continued investments in information technology initiatives, new store Marlin Bar growth and the remodeling of certain existing locations. I'm pleased to share that our Board of Directors increased our quarterly dividend from $0.42 per share to $0.55 per share, a 31% increase over the prior level. To date, we have repurchased approximately 430,000 shares at an average price of $87 per share for a total of $37 million, including $8 million in fiscal 2021, following the December announcement of our Board's new share repurchase authorization. We are pleased to find meaningful ways of returning capital to shareholders. Thanks for your time today, and we'll now turn the call over for questions.

Operator, Operator

Thank you. And at this time, we will be conducting a question-and-answer session. Our first question comes from the line of Susan Anderson with B. Riley. Please proceed with your question.

Susan Anderson, Analyst

Nice to see some momentum continuing in the business into this year. I was wondering if maybe you can talk about the pricing that you're expecting for this year versus last year. And then also just the positioning of inventory, are you expecting units to be up this year, really growth to be driven more by pricing?

Tom Chubb, Chairman and CEO

Yes. So I'll comment on this a little bit and let Scott provide you with a little additional detail on the impact on the financials. But we are taking price increases in a very strategic and selective way. Some of those have already rolled out, and there'll be more coming in the second half of the year. And again, Scott will elaborate on this, but I think those will keep us ahead of the product cost inflation that we're seeing so far. And from an overall growth standpoint, if you look at the double-digit growth that we're projecting, that's not just price increases. That's unit growth as well. So, we feel really good about where the business is, Susan. I think that the momentum that we generated in 2021 was really about actions that we took in 2020. And even prior to 2020, we realized the benefits of those actions in 2021, and we'll continue to see it in 2022 and beyond. And then as we elaborated on, we're not done yet. We've got great strategic priorities for the year that I walked through in my part of the call that I think are going to continue to enhance our ability to reach and serve the needs of even more customers. Scott, do you want to elaborate more on the pricing?

Scott Grassmyer, CFO

Yes. As Tom mentioned, it's related to both pricing and units, and it's fairly balanced between the two. Our price increases are already in place for spring, with more expected for summer and even more for fall resorts. The objective is to adjust prices to stay ahead of input cost pressures. I believe we will achieve that. We anticipate a modest expansion of gross margins, even though we may adopt a more promotional stance due to increased inventory. Overall, the market is likely to be more promotional this year than last, but we still expect to expand gross margins in this environment.

Susan Anderson, Analyst

Great. That sounds pretty positive. And then if I could just add one follow-up. Maybe if you could talk about what you're expecting from growth by brand for this year. And then also just on the Tommy brand, Tommy Bahama. Can you talk about the performance or give us an update on men's versus women's and kind of how you're expecting that performance also for this year?

Tom Chubb, Chairman and CEO

Sure, I'll begin and then Scott can provide more details. Overall, growth across all our brands is very balanced. We're forecasting a strong year for each brand, similar to last year's record performance, with impressive growth for both top and bottom lines. This year, we anticipate continued success across all five brands. Regarding the Tommy brand, when comparing men's and women's, I want to emphasize that men's is performing well, but women's is excelling even more right now. It's truly remarkable to witness the growth in our women's business. Recently, we achieved a significant milestone of $1 million in women's sportswear sales online in a single day, which we had never accomplished before. Throughout most of February, our women's online sales even surpassed men's. While men's sales are growing robustly, women's are increasing at an even faster pace. This isn't a coincidence; it reflects our strategic efforts in sourcing and product design over the past few years. We’ve shifted our inventory from a two-thirds fashion and one-third basics approach to a more balanced focus on core products, which drives better business outcomes. Although we still offer fashion items, our inventory is now more balanced. In terms of marketing, we've heavily invested in our women's swim category to attract female customers and showcase our brand. We've executed substantial marketing efforts online, which have successfully drawn women in. Once they explore our offerings, they become enthusiastic buyers. Overall, our business is remarkably strong. While men's performs well and is rapidly growing, women's is currently outperforming even more, and we are excited about it. It's a fantastic story for us.

Susan Anderson, Analyst

Great. And what percent is women's now of the business?

Scott Grassmyer, CFO

It's a little over 32% in our full-price retail and e-commerce business, and that was up from about just over 30% in '19. And it was around 29% in '20. But in '19, it was a little over 30%. Now, we're a little over 32%. So we gained two points of share in '21. And as Tom mentioned, we're on pace to gain again in '22.

Tom Chubb, Chairman and CEO

Gaining two points in women's when it's at 30% and men's is growing indicates strong performance. It's encouraging to see this progress.

Operator, Operator

Our next question comes from the line of Steve Marotta with CL King & Associates. Please proceed with your question.

Steven Marotta, Analyst

Congratulations as well on a terrific fourth quarter. Tom, can you talk a little bit about the supply chain at this moment? What flow of goods looks like right now? What do you expect that to look like, say, three to six months from now? And maybe what you expect it to look like by the end of the year?

Tom Chubb, Chairman and CEO

Yes, we are experiencing some supply chain challenges like many others in the industry. However, I want to emphasize that our teams have done an excellent job managing these issues with agility and adaptability, which has helped mitigate their impact. We are facing delays in factories due to COVID-related workforce shortages and occasional shutdowns. Additionally, there are delays in inbound shipping and at ports in the United States, which you may have read about. Overall, these factors have likely extended our product cycle time by about six to twelve weeks. We have adjusted by purchasing significantly earlier than in the past. On the receiving end, we're being very flexible with the product we have available. Sometimes, items arrive late, but we re-merchandise our offerings and incorporate the late arrivals effectively. This approach has been quite successful for us and has provided valuable lessons. While we prefer a return to more normal conditions, we are managing well under the current circumstances, and it's not negatively impacting our results.

Steven Marotta, Analyst

And then as the year progresses, do you see it getting any easier? Or do you still see a six-week-ish delay, three to six months from now and maybe towards the end of the year as well?

Tom Chubb, Chairman and CEO

Yes. I think some of the freight will start to alleviate somewhat as the year progresses on the COVID side and delays at the factory. I certainly hope so, but I don't know that we're in a position to prognosticate on that too much. And I think what we'll do is we'll keep hoping it gets better and keep dealing with the situation as it unfolds. And I'm very confident in our ability to handle it. I think if we proved over anything over the last two years is that we can deal with the delays and other supply chain issues.

Scott Grassmyer, CFO

With our pricing and margin structure, air freight does present some challenges to our gross margin, but we still maintain a healthy margin. Currently, we are using air freight a bit less than we did in the third and fourth quarters. However, if necessary, we can still put goods on a plane if there are disruptions.

Steven Marotta, Analyst

That's helpful. And Scott, it looked like there was a step function in royalties in the fourth quarter. Can you talk a little bit about why that was and if that's expected to occur in the current fiscal year?

Scott Grassmyer, CFO

Yes. The $33 million for the year included about $15 million in gains that we excluded from our adjusted earnings. This portion was related to the sale of a minority interest and the sale of a distribution center associated with Lanier Apparel. These are nonrecurring items that we hope will not be repeated.

Tom Chubb, Chairman and CEO

Yes. The $33 million figure for the year included about $15 million in gains that we removed from our adjusted earnings. This $15 million was from the sale of a minority interest and the sale of a distribution center related to Lanier Apparel. These are nonrecurring items that we hope will not happen again.

Scott Grassmyer, CFO

Yes. Yes. And then the rest was just we have had good growth in just most of our licensees also even after you adjust that $15 million out. So, I think as our business has been strong, so our licensing business has been strong.

Steven Marotta, Analyst

That's helpful. If I could just slip in one more question, I think I know the answer, but I want to confirm. Considering your demographic, I doubt the stimulus actions from last year had much of an impact, but did they help at all on the margin? There are several consumers in the soft goods sector that are mentioning a challenging comparison from late March to early May due to the increase in consumer activity during the same period last year. I'm curious how much this affected your results last year during that timeframe and whether these expectations are factored into your guidance for this year.

Tom Chubb, Chairman and CEO

We certainly don't think that's what fueled our business last year, and we don't really expect much of an impact this year at all, Steve.

Scott Grassmyer, CFO

Yes. There was an improvement as we entered early February, which was a bit weak last year. It improved, but we don't believe it was driven by stimulus, and our business is performing well right now, with expectations for it to remain strong.

Tom Chubb, Chairman and CEO

And Steve, you've no doubt seen all the macro stats on the level of demand deposits in the United States. And I think there's $2.5 trillion more in checking account or demand deposit accounts more than there was at this point in 2019. There's a lot of cash out there, and we just haven't seen any indication to date that people are slowing down in their spending.

Operator, Operator

Our next question comes from the line of Dana Telsey with Telsey Advisory Group. Please proceed with your question.

Dana Telsey, Analyst

So nice to see the progress. As you think about the shaping of the year, first quarter, obviously, $265 million to $285 million, the guide, it seems like the highest first quarter we have had. And typically, second quarter is the best quarter of the year. Anything we should be watching on the shaping of the year in terms of the nuances that are out there? And I just have a couple of follow-ups.

Scott Grassmyer, CFO

Yes. Your point that yes, the first quarter year-over-year, we would expect to be our strongest year-over-year compare, but we still would expect, as always, Q2 should be a little bit bigger in Q1, and then Q3 is always our softest quarter. So, we expect that cadence to be somewhat similar, but just not the year-over-year growth in the out quarters that we'll see in Q1.

Tom Chubb, Chairman and CEO

And that's not a slowdown. Last year's first quarter wasn't as strong as the remaining three quarters. It was a good first quarter, but it didn’t compare to how well the other quarters performed. This was because the business didn't pick up until about mid-March last year, so we were already halfway through the quarter before things really started to improve. This was largely affected by the country's situation and people's mindsets regarding COVID.

Dana Telsey, Analyst

Yes. And then regionally, Florida, Texas, Hawaii, what are you seeing regionally? How is that doing? And what was so impressive is that with Lilly Pulitzer, obviously, the flash sale, it was much clear and so it was higher margin and exiting the Lanier. The sales from the existing brands actually were higher and made up for it. So the opportunity for sales growth going forward, if you were going to have better than expected in 2022, would it more likely come from the sales or from the margin side in your perspective?

Tom Chubb, Chairman and CEO

The sales are looking good, and I believe the margins are quite strong. However, we are facing some margin pressures due to inflation and an expectation that the market might become more promotional this year. While we don't anticipate any decline, we expect modest gains compared to last year. The real potential for growth lies in sales. Regionally, the strong areas from last year, such as Florida, Texas, and the Southeast, continue to perform well. Additionally, we're seeing positive signs of improvement in the Northeast, Mid-Atlantic, and Midwest, which presents more opportunities for us.

Dana Telsey, Analyst

And the uptick in CapEx, so the $50 million from the $32 million, how would you bucket that?

Scott Grassmyer, CFO

Technology accounts for approximately 60% to 65% of our expenditures. We are undertaking significant system initiatives at both Lilly and Tommy. We have opened new stores, and even our smaller brand, Southern Tide, finished the year with four locations. We have signed three leases and are hoping for another one. Beaufort Bonnet, which launched its first store late in the year, has secured another lease and is exploring additional options. Lilly and Tommy will also be opening new locations. The Marlin Bar expansion is still a work in progress; currently, we only have one Marlin Bar. Our goal is to return to the pace of opening four to six each year, and we are diligently working towards filling that pipeline for 2023. However, for 2022, we anticipate opening no more than one additional location due to the extensive timeline involved. Technology remains a significant focus for us, and we are also planning numerous remodels as necessary, which involves a substantial investment. Technology is our main priority.

Tom Chubb, Chairman and CEO

And the biggest piece within the technology space, I would broadly define as digital and omnichannel sort of capabilities that we're really trying to step on the gas. We like what we have, but we want to keep our foot on the gas there.

Operator, Operator

And our last question comes from the line of Paul Lejuez with Citigroup. Please proceed with your question.

Tracy Kogan, Analyst

It's Tracy Kogan for Paul. I had a follow-up on the questions about freight and supply chain before. I think you guys said you're expecting it to get better as the year progresses. And I think you said it was 300 basis points of pressure in the fourth quarter. I'm just wondering what your guidance assumes for actual freight pressure for the year? And then I have a follow-up. Thanks.

Scott Grassmyer, CFO

We were fully impacted last year, and we experienced 160 basis points of pressure, primarily in the second half. This year, we are facing some challenges in the first half, but we anticipate conditions will improve in the second half. Overall, we expect to see slightly less than 160 basis points of pressure for the entire year.

Tracy Kogan, Analyst

I wanted to ask about your customer counts and how they have grown since 2019 for both Tommy and Lilly. Additionally, I was curious about your rewards program for the Tommy restaurant business, as well as any loyalty programs for Lilly and Tommy in the apparel sector.

Tom Chubb, Chairman and CEO

I'll start with the loyalty programs. We have them in our smaller brands and are currently developing one for Lilly Pulitzer, and I believe we will introduce one for Tommy Bahama in the future as well. Our goal is to create distinct loyalty programs that are meaningful for us and our customers. This is an opportunity for us looking ahead. We're enthusiastic about what we have in store for Lilly and the other three smaller brands. Regarding customer counts, as mentioned in the prepared remarks, our active customer count increased from 1.8 million to 2 million between 2019 and 2021. This growth occurred across all five brands, and each brand saw significant increases in their customer counts during that time. This growth suggests the strength of our brand, products, and our capability to identify and reach our target audiences, engage them with appealing content, and encourage them to visit us, maintain our existing customers, and attract new ones. The evidence is in the results, and the numbers support that we've achieved this.

Tracy Kogan, Analyst

What do you guys define as an active customer?

Tom Chubb, Chairman and CEO

That's somebody that shopped within the last 12 months. So, those are trailing 12-month numbers. So if somebody bought 18 months ago, they don't show up in that count. And that's something that we're continuing to look at and study. A lot of those people probably consider themselves very loyal customers. They just haven't been in, in a while. But the way that we're counting that for purposes of this reporting is trailing 12 months.

Operator, Operator

And we have reached the end of the question-and-answer session. And I'll now turn the call back over to Tom.

Tom Chubb, Chairman and CEO

Thank you very much, Shamali. We appreciate all your interest today. Stay safe, and we look forward to talking to you again in June.

Operator, Operator

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.