Hello, and welcome to Xcel's Second Quarter 2023 Earnings Conference Call. My name is Krista, and I'll be your conference operator today. We will have a question-and-answer session at the end of the call. I will now turn the call over to Andrew Berger from Investor Relations. Please go ahead.

Good evening, everyone, and thank you for joining us. Welcome to the Xcel Brands' Second Quarter 2023 Earnings Call. We greatly appreciate your participation and interest. With us on the call today are Chairman and Chief Executive Officer, Robert D'Loren; Chief Financial Officer, Jim Haran; and Executive Vice President of Business Development and Treasury, Seth Burroughs. By now, everyone should have had access to the earnings release for the second quarter ended June 30, 2023, which went out this evening. And in addition, the company plans to file with the Securities and Exchange Commission its quarterly report on Form 10-Q tomorrow. The release and quarterly report will be available on the company's website at www.xcelbrands.com. This call is being webcast, and a replay will be available on the company's Investor Relations website. Before we begin, please keep in mind that this call will contain forward-looking statements. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from certain expectations discussed here today. These risk factors are explained in detail in the company's most recent annual report filed with the SEC. Xcel does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. The dynamic nature of the current macroeconomic environment means that what is said on this call could change materially at any time. Finally, please note that on today's call, management will refer to certain non-GAAP financial measures, including non-GAAP net income, non-GAAP diluted earnings per share, and adjusted EBITDA. Our management uses these non-GAAP metrics as measures of operating performance to assist in comparing performance from period to period on a consistent basis and to identify business trends relating to the company's results of operations. Our management believes these financial performance measurements are also useful because these measures adjust for certain costs and other events that management believes are not representative of our core business operating results. And thus, they provide supplemental information to assist investors in evaluating the company's financial results. These non-GAAP measures should not be considered in isolation or as alternatives to net income, earnings per share or any other measure of financial performance calculated and presented in accordance with GAAP. You may refer to the attachment to the company's earnings release or to Part 1, Item 2 of the Form 10-Q for a reconciliation of non-GAAP measures. And now I'm pleased to introduce Robert D'Loren, Chairman and Chief Executive Officer. Bob, please go ahead.

Thank you, Andrew. Good evening, everyone, and thank you for joining us. I would like to start today's call with an update on our strategic transformation efforts and how our business is performing under the new operating model. After that, our CFO, Jim Haran, will discuss our financial results in more detail. Starting in the first quarter of 2023, we began to restructure our business operations, shifting from a working capital-intensive wholesale business model to a business model that is working capital light, highly profitable and focused on high-touch licensing, livestream shopping and social commerce growth strategies. During the second quarter of 2023, we continued to execute on this plan, and I'm pleased to report that we have substantially completed this transition of our operating businesses. As a result of all of our restructuring efforts going forward, we expect to save approximately $13 million in operating expenses on an annualized basis as compared to 2022 expense levels, including approximately $6 million of reduced payroll costs and $7 million in lower operating costs. These cost savings began in the first quarter of 2023 and are expected to be fully realized by the end of the third quarter of 2023. Our current financial forecast indicates that we will return to profitability by the end of this year, driven by these cost savings combined with revenue from our new licenses and brand launches in 2023 that will continue to ramp and grow in 2024. To effectuate this transformation, we have engaged with best-in-class business partners and entered into multiple new licensing agreements, some of which I spoke about on last quarter's call and some of which are new this quarter. We believe that the evolution of our operating model through these new arrangements powered by extraordinary livestream and social commerce technology that solves many of today's challenges in e-commerce, will provide our company with a competitive advantage and significant cost savings going forward, while offering our customers exceptional quality at attractive prices. We also believe our live streaming technology will enable us to fully engage with and entertain our customers in ways that were not possible in the past. In May, we signed a master licensing agreement with G-III Apparel Group for the Halston brand, under which G-III has taken over and assumed all of the existing licensing contracts for the brand together with apparel wholesale operations and distribution in department stores, e-commerce and other retailers. This is a 25-year license agreement, which includes a market rate royalty, certain royalty advances, escalating guaranteed minimum sales requirements, certain guaranteed minimum payments, and a right for G-III to acquire the brand at the end of the license term. We started to realize revenues from this agreement in the second quarter of 2023 but expect that more meaningful growth will come in fall of 2024 when G-III plans to launch their Halston line at better department stores. Our partnership with G-III, given their extensive production and distribution capabilities, provides us with a tremendous opportunity to grow the brand and take Halston to the next level. G-III management has publicly stated that they have assigned some of their premier talent to develop the brand, and they are targeting to grow the Halston brand globally to $250 million in annual wholesale sales by year 4 of the license agreement. We are excited about our long-term partnership with G-III, which we believe is one of the best wholesale companies in our industry. For our Judith Ripka brand, we entered into a new licensing agreement in the first and second quarters to move all segments of our Judith Ripka business to Jewelry TV. JTV, as it is known, has rapidly become one of the largest jewelry retailers in the U.S. The brand launched on jtv.com on July 1, and is scheduled to launch on air on JTV in October with a surprise celebrity appearance planned for the launch. We expect the brand will have dramatically increased airtime compared to QVC with significant on-air presence for the JTV network in the first year and beyond. Also, JTV launched the wholesale and judithripka.com business under their management last month, we believe this presents a fantastic and exciting opportunity to grow the brand on TV, on judithripka.com and in wholesale distribution with our partners going forward. This license agreement provides for royalties on net retail sales generated through JTV's television, e-commerce, and other direct-to-consumer outlets and royalties on wholesale sales as well as a profit share on the wholesale and judithripka.com businesses. In connection with executing the JTV licenses, we sold JTV all of our remaining jewelry inventory in April of 2023. For our C. Wonder brand, we launched on HSN at the end of March with the first show achieving over 200% of planned sales and sales continued to gain strong momentum during Q2. During the second quarter, HSN reported it had its best week of 2023 and noted Christian Siriano's appearances in the earnings call. The wholesale production for our HSN business has been licensed to One Jeanswear Group or OJG. OJG is an industry-leading supplier of apparel across multiple points of distribution. This license commenced during the second quarter, and we are working on some exciting license extensions in other categories for the C. Wonder brand. Finally, we expect to be announcing sometime in September a new brand launch on HSN with an iconic American supermodel. This continues our push into building a brand portfolio of influencers and creators to drive our TV and direct-to-consumer livestream and social commerce platform. With respect to the Longaberger brand, we are in the process of launching our latest version of our social commerce technology that we believe will revolutionize social commerce and e-commerce in general and plan to incorporate Longaberger into a home product social commerce marketplace. Finally, regarding our QVC interactive television business, the logo by Lori Goldstein brand is performing well on QVC with sales in the second quarter of 2023 exceeding quarterly sales for the last three sequential quarters. The Isaac Mizrahi brand was below plan for the quarter in net sales during the second quarter of 2023 due to a one-time increase in return rate on certain items and scheduling conflicts with Isaac. In this connection, we worked with QVC and Isaac to coordinate on-air scheduling and are making improvements to Isaac's Remote Studio and expect sales to rebound in the latter half of 2023 and return to planned level. And now I'd like to turn the call over to Jim to discuss our results and financial highlights. Jim?

Thanks, Bob, and good evening, everyone. I will briefly discuss our financial results for the quarter and 6 months ended June 30, 2023. Total revenue for the second quarter of 2023 was $6.8 million, representing a decrease of approximately $1.7 million from the second quarter of 2022, but an increase of approximately $0.7 million or approximately 11% from the first quarter of 2023. This year-over-year revenue decline from the prior year quarter compared with the current quarter was driven by a $2.7 million decrease in licensing revenue, primarily attributable to the sale of a majority interest in the Isaac Mizrahi brand in May 2022 and partially offset by an increase of approximately $1.1 million in net sales, largely due to the sale of our Judith Ripka Fine Jewelry inventory to JTV in connection with the entrance into our new contractual arrangements with JTV. On a year-to-date basis, revenue for the current 6 months decreased by approximately $4.4 million from the prior year 6 months to $12.8 million. This decline in revenue was driven by a $6.4 million decrease in licensing revenue, primarily attributable to the sale of the majority interest in the Isaac Mizrahi brand and partially offset by an increase of approximately $2.1 million in net product sales, largely due to the sale of our Judith Ripka Fine Jewelry inventory and C. Wonder apparel inventory to HSN as part of the restructuring and transformation of our business operations and the launch of the C. Wonder brand. Gross profit margin from product sales decreased from approximately 22% in the prior year quarter to approximately 13% in the current quarter and also decreased on a year-to-date basis from 30% in the prior year 6 months to 21% in the current year 6-month period. These decreases in gross margin were the result of exiting the wholesale operations portion of our business, which included the sale of our inventory at discounted prices. The only inventory the company had at June 30 was Longaberger inventory. Our operating cost and expenses were $5.2 million for the current quarter, down by $4.3 million or 45% from $9.5 million in the prior year quarter. On a year-to-date basis, our operating cost and expenses were $12.1 million in the current year period, down by $5.7 million or 32% from $17.8 million in the prior year 6 months. For both the quarter and year-to-date periods, this decrease in operating expenses was primarily attributable to the restructuring and transformation of our business and costs associated with the Isaac Mizrahi brand. We expect that our operating costs and expenses will continue to decrease to reach a run rate of approximately $4 million per quarter by the end of 2023. We did not have any significant amount of interest in finance expense in the current quarter or the current 6 months as we fully repaid all of our outstanding term loan debt in the second quarter of 2022. Overall, we had a net loss excluding noncontrolling interest for the current quarter of approximately $3.5 million or minus $0.18 per share compared with net income of $9.5 million or $0.48 per share in the prior year quarter. The prior year quarter included a $20.6 million gain on the sale of the majority interest of the Isaac Mizrahi brand. The current quarter's results also represent an improvement for the first quarter of 2023 net loss of $5.6 million or $0.28 per share. On a non-GAAP basis, we had a net loss for the current quarter of $1.7 million or minus $0.09 per share compared with a net loss of $3.6 million or minus $0.18 per share in the prior year quarter. Adjusted EBITDA was negative $0.9 million for the current quarter compared with negative $2.8 million in the prior year quarter. The current quarter's adjusted EBITDA of $0.9 million compares favorably with adjusted EBITDA of negative $2 million and negative $5.9 million in the immediately preceding two quarters ended March 31, 2023, and December 31, 2022, respectively. For the balance of 2023, we expect our adjusted EBITDA to continue to improve throughout the year and we currently project that as a result of the restructuring and transformation plan, we will achieve positive monthly EBITDA by the end of 2023. It should be noted that the reported current EBITDA includes an adjustment for certain costs and operating losses relating to the wholesale apparel and jewelry operations as these businesses have been transitioned to third parties. On a year-to-date basis, our net loss excluding noncontrolling interest for the current 6 months was approximately $9.1 million or minus $0.46 per share compared with net income of $6 million or $0.30 per share in the prior year comparable period. On a non-GAAP basis, we had a net loss for the current 6 months of $5.3 million or minus $0.27 per share compared with a net loss of $5.5 million or minus $0.28 per share in the prior year 6-month period. And finally, adjusted EBITDA was negative $2.9 million for the current 6 months, representing a $0.8 million improvement over negative $3.7 million of EBITDA in the prior year 6 months. And once again, as a reminder, non-GAAP net income, non-GAAP diluted EPS, and adjusted EBITDA are non-GAAP unaudited terms. Our earnings press release and Form 10-Q present a reconciliation of these items with the most directly comparable GAAP measures. Now turning to our balance sheet. As of June 30, 2023, the company had cash and cash equivalents of approximately $3.5 million and positive net working capital of $6 million, excluding the current portion of our lease obligations. The new strategic license with our new licensee for the Halston brand, which was executed in May 2023, includes a certain upfront cash payment. Under our current financial projections, we believe this, coupled with our expense cuts and working capital position, provides the company with adequate liquidity going forward. And with that, I would like to turn the call back over to Bob. Bob?

Thank you, Jim. This concludes our prepared remarks. Operator?

Your first question comes from the line of Anthony Lebiedzinski from Sidoti.

Sales on the bottom line better than expectations here. So first, I guess, starting in the third quarter, we will have clean comparisons for the licensing part of your revenue as we're now past the 1-year anniversary of the sale of Isaac Mizrahi. So Bob, you mentioned the challenging retail environment, but you certainly have done a lot of work, you've been busy with signing new licensing agreements. So how should we think about just overall the licensing revenue piece of your business now going forward?

When you say how should we look at it, Anthony, can you be specific?

For the balance of the year as far as how should we think about as far as the revenue. Do you expect that to grow even with this challenging retail environment? Just wanted to get a better sense as to what you expect from here.

Overall, at QVC, they are down for the year, but we are performing better than QVC overall. We expect our royalties from our interactive television businesses to meet our forecasts. We were slightly below plan with Isaac due to some high returns, and we've examined the returned items closely without finding any product issues. We're still trying to figure out what caused that and whether it will continue into Q3 and Q4. We don't believe so, but we'll gain more clarity as the months progress. Regarding the new licenses, we've only included the minimums in our projections. G-III will launch in the fall of 2024, and we will continue to collect minimums until then. JTV has launched online and started shipments for judithripka.com and the wholesale business, with an on-air launch planned for mid-October. Assuming that goes as scheduled, we anticipate a strong start due to the number of hours and the major event planned around the launch, along with all the marketing that JTV is conducting. We feel confident in our forecast. Looking ahead to next year, as all these outsourced programs begin to take off, we expect a significant increase in royalty revenues in 2024, 2025, and 2026 as they ramp up. As I've mentioned, these are top-tier partners. JTV has become one of the largest jewelers in the country, One Jeanswear is a major apparel wholesaler across many distribution points, and G-III is well-regarded. We are very optimistic about the potential for royalty growth with our core brands.

Absolutely vivid. That's great to hear. And then, Jim, you mentioned that the only inventory left on the balance sheet is from Longaberger. I know you guys have discussed previously about potentially divesting the Longaberger or maybe doing some other things with it. So do you have any updated thoughts on that brand?

Anthony, I can address that, it's Seth. We're still working on that, but I would say, we should expect to have an update on that in the next quarter, that would be favorable to the company.

Okay. That's good to hear. And then do you guys have any updated thoughts on the launch of your social marketplace and app in terms of timing or anything else that you can share with us? Or is it more or less kind of consistent with what you said previously?

So it's fairly consistent. The technology is done. We're testing it in the Longaberger community now. Of course, it will turn into a broader marketplace approach. We're anticipating that that will be for holiday of this year.

All right. That's good to hear. Thanks. Best of luck. I will pass it on to the next caller.

Your next question comes from the line of Aaron Warwick from Breakout Investors.

Good evening. Thanks for taking the call and congratulations on this great job of restructuring. Several things that I wanted to ask about, I guess, I'll begin with, you have in your latest investor presentation on your website, showing $19 million revenue for next year and $5 million for EBITDA. My understanding is that that's based upon the contract minimums that you have right now for royalties. Is that an accurate understanding?

There's two components to it. One is the contractual minimums and the new agreements that we executed. And then, two, historical licensing revenues coming out of our interactive television businesses. And to help you to compare '23 forecasted top-line of $18 million to $19 million in '24, you would need to back $3.2 million out of '23 because those are wholesale sales that occurred in Q1, and there were a few small sales in Q2. So to get apples-to-apples, it's $15 million of royalties in '23 and $19 million of royalties in '24.

It sounds like though there's some upside potential, that's not really built into that model. And then from what you've said previously in your prepared remarks.

No doubt, particularly as it relates to the G-III royalties. This is not our guidance. It was a statement made in their earnings call; they expect that the business will be at $250 million wholesale by the fourth year. And if you just do some correct math on average royalty rate, you'll see that there should be very significant growth coming out of that license. And quite frankly, I couldn't think of a better partner for us to be in business with for our Judith Ripka brand. At JTV, we're expecting big things there. We're going from 1 hour of on-air time last year with QVC to over 120 hours on the launch here. And as QVC has exited the jewelry business for the most part over the last 5 or 6 years, JTV has picked up a lot of that market share. So we're very excited about the potential there too. And we have a very robust pipeline of new brands going into interactive TV, our C. Wonder Christian Siriano brand is doing incredibly well. In fact, we are live as we speak with the TS today, shooting here from our studio in New York. And we are going to launch a brand with, it's a household name. Everyone knows her. I can't say who it is until we get a little closer to the launch. But we think we have great potential with the brand we've created with the supermodel, both on interactive TV and outside of interactive television. So we're excited about the core business.

Fantastic. So G-III, they made a one-time upfront payment. It sounds like they're going to be making annual minimum payments plus potentially more than that. And then at the end of the 25 years, they have the option to purchase the brand, is that correct, from you?

Correct.

And I mean, can you give us a ballpark number, what the expected royalties would be from that and what the payment was?

Yes. I've given this on some of the conference calls, we think stabilized royalties, if you run a model at about $8 million per year, over the 25 years, it's $170 million plus in royalties that the license will generate. And I think that is a great place for us to land with that asset.

Yes. I mean given the fact that it's higher than your current market cap, if you look at the net present value or any sort of discounted cash flow on that, that's extremely positive contract for you guys. I wanted to ask a little bit more about the social commerce side of things. It sounds like you said you should be ready to have that out before the holiday season. Is that what you said to the previous caller?

Yes. We haven't modeled any assumptions about the launch of the marketplace into our model. The investments have been made in the tech. So no spend needed there. We are working with some industry friends, in certain cases, industry competitors that are interested in joining the marketplace because the technology solves a very serious problem in the industry today. Return on ad spend since the privacy rules have changed is becoming something that just is intolerable within the industry; a lot of e-commerce platforms are suddenly losing money. And with this platform, the return on ad spend is infinite because brands don't pay until there is a sale. And for us, it's a marketplace model, not a lot of risk in terms of operations. It's 30% of sales; we pay the influencers and then whatever our operating overhead is. And then, of course, it provides another channel of distribution as the audience grows in that platform for our brands and our celebrities. So we're taking a read-and-react approach, we will get it launched. We will see how it begins to scale, like anything else in social media, we think we'll have a good start with the customer base from the brands that have signed with us and with our own customers. And then, we'll use what we learned over the first quarter after the launch to forecast revenues going forward.

How many brands have signed with you? And what's the nature of these types of brands? Are some of the household names? What should we expect there?

Most of them are big brands, household names, big customer bases and we'll be announcing who those are in connection with the launch. And we're very excited about it. It's been 2 years, a little more than 2.5 years in the works, and we're happy that we'll be launching for holiday.

And so I guess if you could speak maybe just a little bit about how this is going to be differentiated from the current social media platforms and their model of business in advertising, would be helpful?

So to really cut to the chase, it's democratizing marketing dollars. It's shifting ad dollars from advertisers to the people. The technology is, there's a desktop application as well as an app application for the user and what we're really striving to do here is to turn the everyday shopper into a paid influencer. So the app is really easy to use. It's as easy as creating a TikTok piece of content. And if the shopper or the influencer shares it with a friend or a follower and they buy, they get paid. So in many ways, it's shifting ad dollars from the advertisers to the people.

Yes. And I like how you highlight. I know I hadn't thought of it before. I guess how the brands don't have to pay until something is sold. So I guess they're paying the influencer once an item is actually sold, but nothing that they're paying them in advance of that. Is that correct?

Correct. And the problem with the model is the way it works. Now digital advertising is a bit like throwing darts and paying influencers in advance. You just don't know how they're going to convert. So again, it's a bit of a blind shot in many cases.

Your next question comes from Debra Fiakas from Crystal Equity Research.

Good evening. Thank you for taking my questions. I really appreciate it in your opening remarks the sort of chronological rundown on your restructuring effort. And I'm pleased to hear that things are going as you had hoped. Until we got to the part where you gave us a little tease, and of course, I can't just let that go. We've got to ask a question about the celebrity that you're looking for to help with your launch of Judith Ripka on JTV. And I wondered, you probably can't tell the name, but you could perhaps tell us a little bit more about the relationship. Is it expected to be permanent or just sort of a one-time appearance? And then also maybe you could tell us a little bit more about the compensation that, how do you go about luring these celebrities, including the super model that comes along a little later this fall, how do you craft your relationship with them?

So those were a couple of questions. I'll try to answer that on a sequential. So we expect that celebrity will make multiple appearances for the brand during 2024. But for the big kick-off show, she will be on air for a couple of hours with our new superstar guest who is Heidi Ripka, who is the daughter-in-law of Judith Ripka. And if you're not familiar with the Ripka family, Heidi was through this on the study for close to 15 years and has been really great over the years with us in bringing products to the market and is going to do really, really well on JTV. The second part of your question, how do we attract talent? One, I would say, after doing as many hours on HSN and QVC as we have, Xcel has developed the reputation for working with talent and operating on their behalf to make great product to sell over television. As we've said many times this year, we passed $4 billion in sales on QVC by every measure. We're one of the largest players. We have over 10,000 hours of programming time. Talent tends to come to us when they're thinking about doing something like this. We think that will accelerate as we launch our marketplace. And then, of course, we do a lot of outreach to the different talent management agencies and managers of celebrities and have built this pipeline and conversation with celebrities at various different levels coming from different sectors, whether they're designers or television celebrities or film celebrities. We've talked to a lot of interesting people over the years.

But Debra, this is Seth. In terms of how we compensate celebrities or spokespeople, we have been doing this for 12 years and have generated over $4 billion on television. We have a strong understanding of what works and what doesn’t. Many celebrities may not be effective, so we have a clear idea of who does. We specifically look for qualities and characteristics that have proven successful on QVC or HSN, as well as in direct response television and social commerce. Additionally, we seek out individuals who are interested in partnering with us. We are not focused on making large payments or upfront fees; rather, we want people who are amenable to collaborating, growing the business together, and earning money collectively.

We have found that the alignment is there. It works. And the only thing I would add to that is there's a very big difference in doing something scripted as opposed to doing something live unscripted. And you can tell whether someone is going to work or not in a 1-hour meeting. So we think I'm good at it. We do have the number one and number three fashion shows on QVC. We've learned what works.

Excellent. Thank you. That was very helpful. And I also wanted to bring up, of course, a big announcement that was made this morning in your industry, Tapestry agreeing to acquire the Michael Kors group that's now Capri Holdings. Some big numbers being tossed around. And I wondered what kind of impact do you think that big deals like that and all the consolidation we see at the luxury level. What impact, if any, does it have on your aspirations to acquire additional brands? Is there any impact on valuation in the groups where you're looking? Or does it actually increase the number of targets that are showing up and saying, hey, we want to find somebody to talk to?

So it's an interesting question. As these companies begin to consolidate, it takes another very big transaction for them to move the needle. So in some ways, it's good for us because we're not looking for $1 billion transactions. We're looking for brands that fit into our economic profile, if you will. And quite frankly, new social media brands are not something that, at least for the moment, are a high focus for Capri or companies like that. So we think we're uniquely positioned as a company to attract mid-tier companies and/or smaller players to come to a platform that is very forward-thinking and understand where everything is going at the moment with streaming and social commerce. So we're excited. Today's acquisition was certainly big within the industry.

Debra, I would also add, when you look at the environment, there's a lot of brands that are either direct-to-consumer or traditional brands in our industry. As Bob mentioned on the call, it's a challenging time in retail in our industry, especially as interest rates have come up, a lot of these brands that went through COVID and survived COVID in the era of cheap financing no longer have that option. So we're seeing a lot of brands, a lot of businesses that in the M&A world, we feel like it's our opinion that M&A in the apparel industry is going to actually skyrocket over the next 12 months. As always, and as Bob mentioned, we are very careful in terms of what we look at and the types of brands and what we look at, but we do see a lot of deal flow right now and we think it's only going to increase over the next 12 months.

Excellent. Thank you. And then if I could just squeeze in one question that probably has a very simple answer, for Jim. I just want to clarify a $4 million quarterly run rate for operating expenses. Jim, I think you said this was to be achieved by the end of 2023. And might that then be suggestive of seeing the $4 million for the first time in, say, the first quarter of this next year?

So Debra, if you look at our last two quarters that we filed, I believe we had a million-plus pick-up or I should say a reduction in expenses in the second quarter compared to the first quarter. I believe our operating expense was $5.1 million. So we're continuing to see those cuts come into play in the third quarter, we'll probably be down somewhere another $600,000. And by the fourth quarter, we'll be at a $4 million run rate on a quarterly basis going forward. And I would like to add, we are still looking at ways to even cut costs further to 2024. So we'll get down to $4 million this year and hopefully, we'll get even below that outside of any other expansions that could arise that would change that.

And we currently have no questions in our queue at this time. I will turn the call back over to the presenters.

Thank you, Christen. Ladies and gentlemen, thank you for your time this evening. We greatly appreciate your continued interest and support in Xcel Brands. As always, stay fit, eat well, and be healthy.

And this concludes today's conference call. You may now disconnect.