Good day, and welcome to the Waldencast First Quarter 2025 Earnings Call. All participants will be in listen-only mode, and a question-and-answer session will follow the formal presentation. Please note that this event is being recorded. I will now hand you over to Allison Malkin, Partner ICR. You may proceed.

Thank you, and welcome to the Waldencast plc first quarter fiscal 2025 earnings call. Here with me today are Michel Brousset, Founder and Chief Executive Officer; and Manuel Manfredi, Chief Financial Officer. For today's call, Michel will begin with an update on our business and vision. Manuel will follow with a review of the first quarter and provide our fiscal 2025 outlook. Following this, Michel will share the strategic growth initiatives for our Milk Makeup and Obagi Medical brands. After the prepared remarks, the operator will open the call to take questions. Before we start, I would like to remind you that management will make certain statements today, which are forward-looking in nature, including statements regarding the outlook of Waldencast's business and other matters referenced in the company's earnings release that was issued yesterday. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected in or implied by such statements. Additional information regarding these statements appears under the heading Cautionary Note regarding Forward-Looking Statements in the company's earnings release and in the company's filings that it makes with the Securities and Exchange Commission, which are available at www.sec.gov and on the Investor Relations section of the company's website at ir.waldencast.com and should be read in conjunction with the section entitled Risk Factors in the company's annual report for 2024 on Form 20-F filed with the Securities and Exchange Commission on March 30, 2025. The forward-looking statements on this call speak only as of the original date of this call and we undertake no obligation to update or revise any of these statements. Also during this call, management will discuss certain non-GAAP financial measures, which management believes can be useful in evaluating the company's performance. The presentation of non-GAAP measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. You will find additional information regarding the definition of these non-GAAP financial measures and a reconciliation of this non-GAAP to the most directly comparable GAAP measures in the company's earnings release. With that, let me now turn the call over to Michel Brousset.

Thank you, Allison, and good morning, everyone. I am pleased to speak with you today and share our first quarter performance and outlook for the year. During the quarter, we made strong progress against our growth strategy, elevating our powerful brands, launching breakthrough innovation, expanding points of distribution and increasing community engagement and love while investing in support for our future. As anticipated, Q1 presented some challenges as we had to anniversary strong growth and launches from a year ago, a decelerating beauty market and a fluid macro and retail environment. We're encouraged, however, by the end of the quarter performance, which gives us confidence that our brands and businesses are poised to achieve our annual growth and profitability goals. As we have discussed in previous calls, it is important to highlight that while we have a strong focus on quarterly, monthly and even daily performance, we manage our business against our annual targets in order to maximize value creation. We're building a unique and strong platform for growth and profitability that creates, acquires, accelerates and scales the next generation of beauty and wellness brands. Our strategies are working very well. We're strengthening our brands, driving industry-leading innovation and expanding our brands' footprints, so we can reach more consumers around the world. However, we're only at the beginning of our journey and much remains for us to do. One key area of operational focus in the coming quarters is to continue to strengthen our supply chain. We have achieved or are close to achieving our cost efficiency objectives, but we need to now work more on improving the need and flexibility of our supply chain to drive even greater reactivity given the increasing levels of demand for our brands and innovation. Today, we have two powerful brands that have garnered critical mass, while still having substantial runway for multiyear growth. With Milk Makeup and Obagi Medical we have a solid foundation in prestige and skin color. We have a core business in the US and a growing presence internationally. We're achieving strong growth in attractive channels including professional, specialty, retail and online and expect this momentum to continue as we drive awareness of both brands beyond our core communities, continue to introduce more blockbuster innovations and expand into other regions and categories. Our increasing success with both brands and the power of our unique pure-play beauty ecosystem in an industry that requires deep expertise gives us a distinctive competitive strength in attracting other brands and founders into our platform. Let me now turn the call over to Manuel to go over our financial results in more detail.

Thank you, Michel. It is a pleasure to be here today to discuss our first quarter performance and also the continued progress of our strategy. So let's begin with a review of our financial performance. For the first quarter, we have reported a net revenue of $65.4 million representing a decline of 4.1% from the first quarter of last year. Our adjusted gross profit margin remained strong at 76.4%, an increase of 10 basis points year-over-year. Our adjusted EBITDA was $4.4 million or a margin of 6.7%, which reflects our continuous focus on investment in sales drivers in support of our growth. Now let's look at each brand-specific performance. Starting with Milk Makeup, we saw revenue decline 15.1%. However, we saw solid domestic performance despite a broader slowdown in the prestige beauty category with Milk Makeup ending the quarter on a strong note fueled by the highly successful launch of Hydro Grip Gel Skin Tint which sold out quickly due to demand greatly exceeding sales forecasts. We're also very pleased with the brand's launch into Ulta with sales beginning in late February. Both initiatives contributed to the brand's high single-digit growth in the US retail sales. Now this solid domestic performance was offset by the construction of international sales which faced a difficult comparison against last year's Q1 distribution expansion as well as inventory adjustments by retail partners. Additionally, the international launch of skin tint occurred later than in the US resulting in minimal impact on our Q1 international performance. As I will share shortly, we anticipate our growth drivers to accelerate strongly going forward. Adjusted gross profit margin of 69.5% represents a sequential increase of 460 basis points from Q4, but a 180 basis points decrease from Q1 last year reflecting added setup costs from our launch into Ulta Beauty. Adjusted EBITDA totaled $4.4 million and the brand maintained a healthy adjusted EBITDA margin of 14.9% of net revenue. Moving to Obagi Medical. So we achieved net revenue of $36.2 million increasing 7.1% from the first quarter of 2024. This growth was tempered by out-of-stock issues in key SKUs. We're actively advancing our supply chain transformation including consolidation of our third-party logistics providers and the optimization of the distribution center network. These strategic changes are designed to enhance operational efficiency and support long-term scalable growth. Adjusted gross profit margin remained strong increasing 60 basis points to 82%. And adjusted EBITDA totaled $5.9 million or 16.3% of net revenue reflecting increased marketing investment and higher supply chain costs in support of our future growth. Now let me turn to a review of our revenue drivers for the quarter. The quarter saw us build significant positive momentum across both brands that we believe position us for accelerated growth going forward. Starting with Milk Makeup innovation continued to be a major driver. The launch of Hydro Grip Gel Skin Tint which was another standout success for the brand and in a more strategic complexion category than last year's Cooling Water Jelly Tints success one category that has high levels of repeat and loyalty and that help us drive our trust metrics on the brand. Digitally both Milk Makeup and Obagi Medical saw continued growth driven by our successful consumer acquisition and retention efforts. We were especially pleased with Obagi's performance which reflects the increasing desire for the brand as we have now fully lapped the transition to a first-party model with our primary e-commerce distributor. Milk Makeup also entered Ulta Beauty representing a major new US distribution for the brand. The launch saw high consumer demand with a strong initial sell-out and contributed to the delivery of the high single-digit growth in US retail sales in the quarter. We are very pleased with the strong partnership with the Ulta Beauty team. Now, despite these wins there were three main headwinds that impacted our results and we're actively addressing this one. First product availability. At Obagi Medical, our ongoing restructuring led to some supply chain disruptions causing lower fulfillment rates and out stocks on certain key products. We have accelerated our supply chain transformation to fix this, consolidating third-party logistics partners, redesigning our network and boosting our operational capabilities to drive better fulfillment, greater reliability and long-term growth. Milk Makeup also experienced stockouts with demands for Hydro Grip Skin Gel Tint far outpacing expectations. We expect to be in a stronger inventory position by the end of Q2. Second, Milk Makeup's international performance faced a tough comparison to Q1 last year, when the brand launched in several international markets. In addition, the international launch of Skin Tint occurred later in the US and therefore, did not contribute meaningfully to the Q1 results. And third, as expected, we saw some adjustment in inventory levels at certain retail partners compared to Q1 last year. Overall, when we look at the fundamentals of our brands, we remain optimistic about the road ahead and expect our net revenue growth to accelerate going forward. Now our confidence is grounded on several key growth drivers. First, we continue to benefit from the introduction of breakthrough innovation, fueled by a robust pipeline of category-defining products that include both strengthening our core offerings and expanding into new categories. Second, the expansion of our digital channels. Here we're seeing strong momentum supported by continued progress in acquiring and retaining high-value consumers that are incremental to our brands. Third, the continued growth in our retail footprint. Milk Makeup's launch at Ulta Beauty is off to a strong start, which is allowing us to reach incremental consumers to the brand. And finally, we expect to significantly improve product availability by the end of the second quarter. While these growth drivers give us confidence, we remain mindful of the broader macroeconomic environment. We are expecting some pressure from softer consumer sentiment and spending, particularly if tariffs and other factors continue to impact the broader macroeconomic environment. When it comes to tariffs, the majority of the impact for us falls within our cost of goods and we believe it is quite manageable. The good news is that over two-thirds of our cost of goods originate right here in the US. Thanks to the proactive work of our team over the past years, our exposure to China is now quite limited, representing only about 10% of our total cost of goods, mainly in packaging components. Taking this into account and assuming the current tariffs remain in place for the whole of 2025, including the latest news on China tariffs, we expect a low single-digit percent increase in cost of goods sold for fiscal 2025 and that is already reflected in our guidance. That said, we're actively working to mitigate the impact of tariffs through three key actions. First, we're optimizing our supply chain flows to further reduce our exposure to China. Second, we're preparing to implement selective pricing action likely in the low single-digit range where needed. And third, we are deepening our collaboration with supplier partners to unlock additional efficiencies. So now let's take a look at our balance sheet position. At the end of the first quarter, our cash position was $10.8 million and we had an additional $22.5 million available on our new revolving credit facility. Our net debt totaled $172.1 million compared to $154.2 million at the end of 2024. The increase coming primarily from the cost related to the refinancing of our debt that extended our maturity profile to March 2030. Cash consumption in Q1 reflects a low adjusted EBITDA and an increase in inventory levels in both brands to support expected sales growth in future quarters. Looking ahead to the full year, we expect a strong positive adjusted EBITDA to cash conversion supported by disciplined working capital management and low capital expenditures. In addition, we are very pleased to report a substantial reduction in our nonrecurring legal costs. Based on our current forecast, we expect this cost to continue declining versus prior year. We had little changes in our share count. And as of April 30, 2025, we had 123 million shares outstanding. Now, turning to our outlook. While we remain mindful of the broader macroeconomic environment and assuming no further material change to current tariffs, we continue to believe that the successful execution of our growth strategy along with ongoing enhancement to our internal capabilities, position us well to deliver on our full year guidance. We are targeting net revenue growth in the mid-teens and an adjusted EBITDA margin in the mid to high-teens. The key drivers behind this expectation, as mentioned earlier, include the expansion of Milk Makeup across both brick-and-mortar and e-commerce channels in the US, the improvement in fulfillment rates at Obagi Medical as we complete our operational initiatives and the continued rollout of blockbuster innovation on both brands along with growing returns from ongoing marketing investments, which are driving brand awareness trial and long-term loyalty. And with that, I will turn the call back over to Michel to take you through our brand accomplishments in more detail.

Thank you, Manuel. Now, let's look at our performance by brand starting with Milk Makeup. Our vision for Milk Makeup is to be the number one next-generation beauty brand. It is already a cult beauty brand among Gen Z, increasing Millennials and haloing to Gen Alpha. In recognition that the next generation see themselves and their values represented in the brands they use, our brand mantra to Live Your Look is a celebration of individuality and self-expression. It is not how consumers wear their makeup. It is what they do in it that matters. We have maintained a disciplined focus on three growth pillars. First, continue to launch market disrupting beauty innovation while expanding into high replenishment categories such as complexion. Second, expand our brand and community reach by broadening awareness through strategic brand partnerships, strengthening our core loyal Gen Z audience, and welcoming new audiences where our brand mantra, beauty point of view and products, resonate strongly such as Millennials and Gen X. And third, broaden our footprint by expanding the brand's presence online and offline both in the US and internationally. In March, Milk Makeup made its bold entrance into a large and highly competitive complexion category with the launch of Hydro Grip Gel Skin Tint. Building on the insight that most existing skin tints or tinted moisturizers don't last, thereby causing dissatisfaction with consumers, Milk Makeup launched the first gel skin tint that lasts for up to 12 hours. Rooted in the brand's cult favorite Hydro franchise, the product is strategically positioned to attract new consumers in a category known for strong loyalty and high repurchase rates, particularly among Millennials, a key incremental audience for the brand. This marks the first step in unlocking the complexion opportunity, the largest category in Prestige Makeup representing 47% of the face segment and a staple in consumers' makeup. It is a critical category to win and position the brand to the next level. Resonating strongly with our community and beauty enthusiasts, it has become a viral success story, generating already $18 million in earned media value and over 245 million impressions since its launch in March, resulting in a sold-out launch shortly after release with an average of one unit sold per minute in Q1 and has already been recognized with the 2025 Cosmopolitan Holy Grail Beauty Award winner for the Best Skin Tint category and 2025 Well+Good Beauty Award for the Best Tinted moisturizer. Now broadening our brand and community, I am excited to announce that Milk Makeup has partnered with the iconic Nike brand. This is the first step in our partnership is the Nike Dark Tour in Los Angeles, bringing sport and self-expression together. The makeup partnership kicked off at Milk Studios in March, and continues through Race weekend in June, and there is much more to come. Also, our strong March launch in Ulta Beauty's top 600 productivity doors presents a compelling potential opportunity for future expansion, as Ulta's broader footprint includes over 1,400 stores nationwide and 500-plus Ulta Beauty at target locations, reaching an incremental consumer that we were not previously capturing. We are very excited about the early results and we're already achieving top rankings in the primer and set blush and skin tint categories. Now, moving to the world of high-performance skin care with Obagi Medical. Our vision for Obagi Medical is to be the number one physician-dispensed dermatological brand in the world. Today, we are the leading US physician-recommended brand for the top three skin concerns, pigmentation, fine lines, and wrinkles and sagging skin or loss of elasticity which together account for two-thirds of in-office skin care sales. We are now very proud to be the fastest-growing top 10 professional skin care brand in 2024, by a very long margin showing the potential and ability to still grow domestically as we expand internationally. We have maintained a disciplined focus on three strategic growth pillars. First, drive cutting-edge science-backed innovation that delivers transformative results supported by market-leading clinical data. Second, double down on our dermatological brand DNA re-anchoring in our medical heritage through a modern lens, with impactful clinical testing acceleration of open development and deeper physician partnerships. And lastly, growing brand awareness and expanding our footprint by increasing consumer recognition for Obagi Medical both domestically and internationally fueling our physician-centered ecosystem. Our two blockbuster innovations ELASTIderm Lift Up & Sculpt Facial Moisturizer and ELASTIderm Advanced filler concentrate compete in one of the top skin care segments within the physician channel, delivering visible clinically proven results. Both have earned significant editorial recognition with Lift Up & Sculpt facial moisturizer awarded Best Moisturizer for Fine Lines by New Beauty in 2025. In Q1, we also expanded the Suzan Obagi, MD collection with two new products including the super antioxidant serum and the moisture restore hydration replenishing cream. These clinically backed innovations are inspired by in-office patient needs identified by Dr. Suzan Obagi and designed to be incremental and complementary to existing portfolio. Looking ahead to Q2, we just launched the Retinol and PHA Refining Night Cream, a super exciting advanced dual action formula, clinically proven to deliver smoother, more even looking skin in just four weeks. Designed for consumers with lower retinol tolerance, this high-performance gentle product offers an effective alternative. As an incremental addition to a nighttime routine, it attracts a new consumer, while expanding usage within our existing base. We showcased our dermatological brand DNA in two major physician center conferences the American Academy of Dermatology Annual Meeting in the US and the IMCAS World Congress in Paris. Today, these events welcome over 38,000 professional attendees, further strengthening our presence and leadership in the global medical aesthetic space, as we continue to see convergence of health beauty and aesthetics worldwide. Driving our dermatological brand DNA is growing all of our channels, including the digital world of obagi.com. This strategy has driven a 30% increase in homepage conversion following the implementation of updated brightening elements, whilst also broadening awareness directly with consumers with a Q1 year-over-year earned media value growth of 61%, building a flywheel to drive consumers to practices. To conclude, we're very pleased to share another quarter of strong progress towards our ambition. With a strong desirability for our brands globally and initiatives in place to accelerate our growth, we are confident in our ability to deliver our 2025 outlook and continue to drive sustainable profitable growth well into the future. Let me share why. First, we begin with the operational scale to manage a multi-brand platform with only two brands today, and more to come into the future. Second, we possess a highly talented team with expertise in managing global beauty brands at scale with significant growth opportunities in both geographic and category expansion. In addition, our portfolio is balanced in structurally attractive segments of the beauty category. And all of this is supported by an asset-light agile and efficient structure that unlocks speed at scale. And finally, management incentives are strongly aligned to drive long-term value creation. Now, that concludes our prepared remarks, and let me now turn the call over to the operator, to bring the question-and-answer portion of the call. Thank you.

Thank you, everyone. We will now begin the question-and-answer session. Our first question comes from Aaron Grey of Alliance Global Partners. Please go ahead.

Good morning. This is John Chapman on for Aaron Grey. Thank you for the question. So, on Obagi, you referenced supply chain restructuring for Obagi in the PR. Could you expand upon that initiative and how you plan to improve operations? And does that also potentially allow for greater success from the innovation you alluded to, given streamlined operations?

I appreciate the question. As I mentioned earlier, we are in the early stages of establishing what we believe will be a very successful future platform. One area we need to improve is the flexibility and responsiveness of our supply chain. We have managed the costs effectively given our gross margins, but the reliability and speed of our supply chain are not where we would like them to be. Lead times are still quite long, and the system is relatively inflexible, preventing us from meeting the heightened demand generated by our marketing efforts. To address this, we have streamlined our warehousing process from two steps to one, which will enhance our responsiveness. We are also integrating this with our online warehousing capabilities. This transition has taken some time and caused a bit of disruption as we adjusted our inventory. Looking ahead, we believe this will allow us to respond more effectively to demand peaks, which in the case of Obagi in Q1 had a negative impact as we ran out of stock on several key items, hindering our growth.

Thank you. Our next question comes from Ashley Helgans of Jefferies. Please go ahead.

Hi. This is Sydney on for Ashley. Just wondering, can you discuss a little more the slowdown you saw in the physician channel? Wondering if that's fewer visits to providers or maybe just seeing fewer basket add-ons to appointments? Thank you.

I don't think we experienced a slowdown in the physician channel. The main factor affecting the slowdown for Obagi compared to previous years is that we don't have the same advantages we had with our Amazon business last year. Last year, we transitioned to a new model on Amazon, and while we are still seeing substantial growth in the low to high 20s percentage range each month, it's not as high as it was last year due to the impact of the distributor conversion. Therefore, this is the primary reason for the slowdown in Obagi. I don't believe there's a decline in demand or physician visits; the channel remains strong and we anticipate it will be a significant source of growth this year.

Great. Thank you.

Our next question comes from Jonna Kim of TD Cowen. Please go ahead.

Thank you gentlemen for taking my question. Could you provide more color around the sell-through trend versus sell-in just on Obagi and Milk? And also would love to hear your perspectives on how you're thinking about pricing strategy given the tariff dynamics and where the category is would love any additional color there? Thank you very much.

Thank you, Jonna, for your question. I'll begin with Milk, where we see a significant difference between sell-out and sell-in. As mentioned during the call, our U.S. retail sales, or sell-out, was up 9%, showing strong growth month-over-month, especially with the launch of Skin Tint and the introduction of Ulta. The difference between sell-in and sell-out is largely due to the mechanics of inventory flow between Q4 and Q1. We believe that our inventory levels with retail partners in the U.S. and Europe are healthy. The dynamics we are experiencing are simply related to the timing of sell-in, sell-out, and our initiatives. Globally, we are facing some retail sales pressures in two main areas. The first is in the EU for Milk, where we see increased pressure on both retail and sell-in side as our main retail partners adjust their inventory. The second is in the U.S., particularly with MilkMakeup.com and our online business at Sephora, where last year's Jelly's launch generated an unusually high volume in our digital channels. Comparing this year to last year for Jelly's in the U.S. digital channels has proven more challenging. That's the situation with Milk regarding sell-in and sell-through. For Obagi, there’s essentially no discrepancy between sell-in and sell-through because our model is primarily physician-dispensed, meaning we record net sales only when products are sold to physicians. In other parts of our business, especially in digital channels, there is likewise no significant difference between sell-in and sell-through. Regarding price increases, we are closely monitoring tariffs, similar to others in the industry. It's been unstable regarding their direction. Even if we revert to the highest tariff rates we saw initially, we believe that would be manageable due to our low exposure to China. We can manage both physical and financial flows in a moderate manner. In the worst-case scenario, if we took no action, which we do not intend to do, we could offset substantial tariffs with a modest price increase that we are assessing based on how the tariff situation evolves. Overall, we do not consider the tariff situation to be material or unmanageable based on our current understanding.

Thank you very much.

Our next question comes from Susan Anderson of Canaccord. Please go ahead.

Hi, good morning. Alex here on behalf of Susan. I have a question about Ulta. The displays look really nice. Do you have any early feedback? Are you attracting a new customer base that may not have previously shopped the brand at Sephora or online? Additionally, in your presentation, you mentioned an increase in store count. Are you planning to exceed 600 stores at Ulta or possibly hinting at a new retail partner for Milk?

Thank you for the question. We are very pleased with the early results at Ulta. This launch was carefully crafted with our Ulta partners to achieve two important objectives. The first is to provide incrementality to the brand. Currently, we are present in only 600 Ulta locations, which were selected to focus on both incrementality and productivity. Most of these locations are chosen based on their distance from other Sephora stores. While not all of them meet this criterion perfectly, the overall goal is to create high productivity and additional impact on the business. As mentioned earlier regarding Milk, we are taking a disciplined approach to our distribution expansion. Rapid distribution without adequate brand awareness and consumer trial can harm makeup brands, so we are cautious about expansion. We are currently in those 600 doors and, given our success so far, we are evaluating the possibility for further expansion within the Ulta network or potentially at Ulta inside Target. However, this is purely in the assessment phase as we analyze the initial results from Ulta, which we are happy with. We believe that our presence is indeed quite incremental and productive, and we will continue to monitor the situation.

Thanks. And then just a quick follow-up, a clarification question on the tariff impact. So you said low single-digit increase in COGS. Is that before or after any potential action could be taken to minimize that? Thanks.

Yes, I'll get Manuel to answer that. Manuel, go ahead.

That impact will be with the latest news on the China tariffs at 30%. And in any case, as we mentioned our exposure to China is relatively low. It's around 10% of our cost of goods. So even if these tariffs were to go back to the 145%, the increase will still be not material for us.

Thank you. Our next question comes from Olivia Tong of Raymond James. Please go ahead.

Good morning. This is Lillian on behalf of Olivia. I wanted to inquire about SG&A. As sales grow, can we anticipate that SG&A will remain stable as a percentage of sales, or will it increase with sales? Additionally, regarding your plans for increased marketing investments, are there any new strategies you are implementing? How are you planning to distribute the additional spending? Thank you.

Yes, thank you. We expect SG&A to grow in absolute terms as we build our business, but we anticipate significant operational leverage with G&A increasing considerably compared to sales. There are two components to G&A: one at the brand level and another at the central level. At the central level, we believe costs will remain relatively flat year-over-year, even as we expand capabilities that contribute to cost savings in other areas. We will continue to increase G&A to support the international expansion of our brands, particularly at the brand level. This growth will largely follow sales, creating operational leverage. And I apologize, I missed your second question.

Yes. Regarding the increase in investments in marketing, are you doing any? Yes.

Yes, we will continue to invest in our brands in terms of both dollars and percentage of sales as part of our growth and efficiency model. You will see a notable shift in our marketing approach for Milk, which is now at a critical mass level. We plan to invest more in advertising to reach and engage more consumers, inviting them into the Milk community. We're evolving our Milk model from a previously organic approach to a more user-generated and influencer-based strategy, complemented by increased top-of-funnel media efforts that we are beginning to implement now and will continue in the future. Regarding Obagi, we are increasing our investment as well. A significant change since acquiring the brand has been our shift from mainly targeting professionals and physicians in advertising to also reaching consumers outside of medical practices, encouraging them to ask for Obagi at physician offices. This strategy is proving to be a significant driver for our business, both in practices and through digital channels. There is still ample opportunity for us to evolve our marketing as the market changes. Our priority remains to enhance our investment in marketing and in our brands, which are essential for our long-term competitive advantage.

Thank you, sir. Ladies and gentlemen, we have reached the end of the question-and-answer session. I will now hand you back to Michel for closing remarks. Thank you.

Thank you all for joining the call. As you may have noticed, Q1 presented some challenges, which we anticipated, but we remain very confident in our ability to meet our full year outlook. We are more excited than ever about the prospects of our brand, the strength of our brand, and the programs we are implementing for both Milk and Obagi. I believe we are well positioned to create long-term value for our shareholders. Thank you.

Thank you. Ladies and gentlemen, that concludes today's event. Thank you for attending and you may now disconnect your lines.