Build-A-Bear Workshop, Inc. (BBW) Q1 2018 Earnings Report, Transcript and Summary

Greetings, and welcome to the Build-A-Bear Workshop First Quarter 2018 Results Conference Call. [Operator Instructions] As a reminder this conference is being recorded. It is now my pleasure to introduce your host Ms. Allison Malkin of ICR. Thank you. You may begin.

Good morning, and thank you for joining us. With me today are Sharon Price John, CEO; and Vojin Todorovic, CFO. For today's call, Sharon will begin with a discussion of our 2018 first quarter performance and review the progress made on the priorities we set for the business as we began the year. Vojin will review the financials and guidance, and then we will take your question. We ask that you limit your questions to one question and one follow-up. This way, we can get to everyone's questions during this one-hour call. Feel free to re-queue if you have further questions. Members of the media who may be on our call today should contact us after this conference call with your questions. Please note, this call is being recorded and broadcast live via the Internet. The earnings release is available on the Investor Relations portion of our corporate website. A replay of both our call and webcast will be available later today on the IR site. Before I turn the call over to management, I will remind everyone that forward-looking statements are inherently subject to risk and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors, including those set forth in the Risk Factors section in the company's Annual Report on Form 10-K. We undertake no obligation to revise any forward-looking statements. And now, I would like to turn the call over to Sharon.

Thanks, Allison, and good morning, everyone. For the start of the year, we noted and anticipated headwinds from the negative impact of the changes in revenue recognition, the significant comparative challenge of the January closure of our most productive store in Anaheim and continued traditional traffic declines in traditional retail. In addition to these anticipated hurdles, the quarter saw what we believed to be a short-term negative impact from the liquidation sale Toys“R”Us, which seem to exacerbate the traffic situation in the quarter. These factors combined, some anticipated and some not, resulted in first quarter sales and profit which trailed the prior year's quarter and fell below expectations. In contrast, the quarter showed positive results across key operational metrics including improved conversion, dollars per transaction and units per transaction even with simultaneous disciplined management of expenses and inventory. Additionally, the ongoing engagement and consumer affinity for our brand is demonstrated through the sales growth in our proprietary products although not enough to overcome the comparative double digit decreases in licensed movie sales versus last year when we were enjoying carryover success of properties that excelled against our core growth segment and had broad appeal, which aids in capturing traffic from nontraditional guests. These shifting dynamics plus the Toys“R”Us liquidation, which by the way we believe to be a positive for us in the long run led to a larger than expected double-digit traffic decline in the first quarter. With that, our goal is to stay focused on advancing our strategy to evolve and transform our business model away from primarily being an in-line mall-based retailer to becoming a more diversified multi-faceted consumer brand. To that end, notably, we recorded a double-digit increase in e-commerce and growth in franchise revenue which was buoyed by the exciting addition of our recent China franchisee to our roster. Before I go into some more specifics about our key initiatives to address traffic trends and progress on strategic programs, let me highlight some of the first quarter financial results. Revenue totaled $83.2 million reflecting an 8.8% decrease. While traffic decline pressured our topline, it's important to note that approximately one-third of the $8 million revenue declines in the prior year was due to the adoption of the new revenue recognition standard and closure of our top performing location at Disney Anaheim. Merchandise margin expanded 30 basis points. SG&A declined by almost $3 million, and consolidated inventory declined by over 10%. Also, we remain debt free as we invested in supporting business evolution to drive further future growth and utilize $5.3 million in cash to repurchase over $600,000 common shares since the end of fiscal 2017. As noted, although these financial results did not meet our expectations, we continue to make improvements on many of our more direct controllable including, generating the aforementioned increases across operational metrics including improvement in conversion and achieving the highest dollars per transaction in units per transaction in the company's history, delivering positive results in e-commerce as we leverage our recently upgraded Web platform and started to roll out new capabilities, increasing revenue from our diversification initiatives including international franchising and outbound licensing, and continuing to evolve our retail store footprint prioritizing new openings in tourist locations and smaller alternative formats that generate higher sales productivity and stronger four-wall contribution margins. While we are aggressively taking action to evolve our business model to be able to more predictably and successfully operate in today's economy, it is critical that Build-A-Bear Workshop’s retail locations remain a popular destination for kids and families to make special memories. This fundamental tenet is the basis for us to continue to advance our efforts to become a multi-dimensional brand that can be monetized in a variety of ways beyond the very retail experience that created it. So, while we expect to benefit from our overall diversification efforts in a variety of ways, we are acutely aware of the importance to ensure that our stores are as productive as possible even as the broader strategy continues to be executed. We strongly believe that continued improvements in our core store operations, plus a more efficient retail footprint will bode well for Build-A-Bear Workshop in the long run. We also believe there are opportunities on the traffic front, and we are taking action to implement a variety of initiatives in an effort to increase both trial and repeat purchases at our store. These efforts include, one, we intend to leverage the existing traffic as much as possible. In fact, even though we have already seen strong conversion improvements over the past few quarters due to our extensive training efforts, we recently implemented a successful test of a real-time conversion tracker and reporting system to further enhance these new skills at the store level and just completed a rollout of this valuable tool across the balance of the chain. Second, we intend to improve traffic trends to both consumer acquisition and increased repeat purchases. In addition to the ongoing effort to elevate the use of our data driven systems to both find and remind consumers about Build-A-Bear, we are elevating our efforts to drive core Girls business and reinvigorate our overall party and birthday business. On the Girls front, although we've recently enjoyed broadening consumer appeal, Girls remain our single largest consumer group. As such, given the anticipated comparative decrease in key girl-focused license movie partnerships this year versus prior years, we developed a pipeline proprietary product offering for our various girl segments to be strategically rolled out throughout the year. In mid-March, we successfully introduced our Girl Scout line and recently launched the new Beary Fairy collection. This will be followed by an enhanced assortment of our popular Rainbow Friends line in the second quarter and an innovative new anime inspired collection targeted to older girls that is slated for a launch in July. That offers an expanded merchandise selection including non-plush toys, a graphic novel, and gaming platform within the dedicated app. Importantly, the new partnership with the Girl Scouts in North America leverages our exclusive S'mores Campout Bear to actively build both the girls business and the party business. Girl Scout troops around the country look forward to planning a fun and engaging event at Build-A-Bear, it's a way to celebrate and utilize their hard earned cookie money. Since the launch, we have seen a significant increase in Girl Scout party bookings which has contributed to an increase in total party bookings across the chain. Speaking of parties, these important in-store celebrations not only serve as a powerful way to drive margin accretive revenue with higher dollars per transaction, but also as a mechanism for consumer trial as invitees are often first-time guests. And, although, we're currently enjoying exciting results from the Girl Scout party effort, our number one reason for parties has always been and remains to be birthday. In fact, our data indicates that our birthday business including a birthday party or a birthday of one, represents up to a third of our revenue with kids visiting our stores three times more often for their birthday than any other known occasion. Although our total reported birthday business remains strong as a percent of sales, our birthday parties, which we defined groups of six or more, has seen some softness in recent years likely due to increased party competition and a reduction in overall birth rate. Research, however, tells us that a visit to Build-A-Bear Workshop is practically synonymous with childhood, revealing that parents think that Build-A-Bear is a rite of passage for kids. Because dollars spent on birthday party celebrations for kids is on the rise and Build-A-Bear provides the perfect millennial mom, social media shareable moment, we believe there is an opportunity to more proactively take a larger share of the total kids birthday business. With that in mind, this summer, we are planning to introduce an exciting new program designed to drive both our birthdays of one and birthday parties with the goal of positively impacting a number of key areas of opportunity throughout the remainder of the year including improving overall traffic, driving new guest acquisition, and increasing total revenue. As you may recall, at the end of last year, we noted that our strategic goals for 2018 were to continue to diversify our retail store base to focus on places where families are increasingly going to shop or going for an entertainment and making memories, continue to diversify our revenue base by both growing our existing franchise partners and adding new international franchisees while further expanding our outbound brand licensing, and continue to grow e-commerce sales. Let me give you a quick update about where we are on these goals. As to the effort to diversify our retail footprint to reflect where families now go to shop or for fun in entertainment or memory making, we've been actively identifying and securing more tourist locations and are pleased to share that we have now opened new Build-A-Bear Workshops at Pier 39 in San Francisco and the Inner Harbor in Baltimore. We also have a number of additional tourist location deals in advanced stages that we expect to be able to announce in the coming months. Successfully executing this strategy takes tremendous planning and time, but it is important as Build-A-Bear Workshop tends to over index on key metrics in tourist locations where we are able to take advantage of natural traffic that these areas generate, as well as the increased tourist mindset that drives the higher than average dollars per transaction in in-stores. Our destination specific procure products for these stores makes Build-A-Bear a great souvenir in addition to being a fun family experience. Given that, locations such as these also tend to outperform our average annual store sales volume of around $1 million with some of these stores already generating or expected to generate multiple millions of dollars in revenue each year. For clarity, our tourist location definition not only includes standalone stores in places like New York City, Myrtle Beach, South Carolina, or Pigeon Forge, Tennessee, at the foothills of the Smoky Mountains, but locations like Mall of America. Although technically a mall, we count it as a tourist location given the composition of the consumer base. So, we are especially excited to announce the planned opening of a new Build-A-Bear Bakeshop in Mall of America to complement the flagship Build-A-Bear Workshop also located there. Therefore, we will soon have three locations in Mall of America given that we also operate a concourse shop. As I alluded to earlier in the comments, we have continued to optimize our real estate by remodeling and relocating existing stores to be a more profitable and highly productive concourse shop. In 2017, we added 23 concourse shops to our mix. As a reminder, these 200-square foot standalone locations require a significantly less capital, operate on shorter lease terms that are generally percent based and generate comparatively high dollars per transaction or excuse me dollars per square foot. Additionally, concourse shops can be easily relocated providing higher flexibility to effectively react to the changing traffic environment. We expect to have 40 to 45 concourse shops open by year-end. Finally, as it relates to our real estate evolution, we continue to carefully evaluate the fleet as a substantial portion of our leases come to an end. Each one of these natural lease events provides us with a moment to make the best decision possible for that location. First, in certain more favorable mall locations, the cost of our new discovery format tends to outperform heritage stores on key metrics. We expect to selectively invest in remodels throughout the balance of the year. Separately, we also expect to continue to operate certain heritage locations as is by extending the lease on a shorter term basis with more favorable terms. Although in these heritage locations, we believe it is possible that traffic and sales could continue to show some erosion. Given that the location is fully depreciated combined with these new terms we expect to be able to generate meaningful profitability, which is in part enabling us to self-fund our transformation. If we open these new more diverse locations albeit smaller foot plants, we are making meaningful progress in repositioning our experience on retail stores to be higher productive locations in a range of formats. As we roll-out these sites, we expect to have more total locations and less total square footage. Initially, much of the volume from these stores is expected to replace the lost revenue from both the recently closed Anaheim door and the impact of anticipated continued softness in total traffic in traditional retail locations. On the e-commerce front, historically, we have under indexed in dot com sales as a percent of brick-and-mortar sales when compared to industry norms which we believe provides tremendous opportunity for growth. Accordingly, many of the changes we've been making as a company are designed to allow Build-A-Bear to more fully participate in the digital economy in an additive way. Our goal is to continue to optimize our new Web platform to drive online sales by adding new features and capabilities while identifying and driving sales opportunities that are not as reliant on, nor cannibalistic to our experience of retail model. As an example, late in the first quarter, we launched a dedicated gifting section on our website directed to the adult gift giver as we called the Build-A-Bear gift shop. The gift shop is our first step in a comprehensive plan to participate in a larger and growing online gifting business. As we believe our wide offering of personalized and affinity selections from sports licenses, to collector driven movie properties provide unique gifts for a wide variety of recipients, from new graduates to new babies. Separately, far from grandparents can also send the gift of our in-store experience. They have an option to ship an unstuffed furry friend so that the recipient can take the product to a store near them and engage in all the fun Build-A-Bear has to offer. Of note, this type of transaction often generates additional in-store sales that are incremental to the original online sale. On the international franchise front as noted, we are very pleased with performance over a new China franchise partner who currently operates two locations with up to 10 more planned for this fiscal year. We expect to add a number of new territories that have been in development for some time as we finalize agreements from current LOI status and secure additional commitments from other parties. And on the outbound licensing front, have signed new agreements designed to expand the consumer reach of Build-A-Bear both categorically and demographically. These new licenses bring our total to 13 license arrangement with more in the pipeline across nearly 20 categories, thereby extending our ability to bring our brand to existing and new consumers while adding margin accretive revenue to our company as 2018 progresses. As a reminder, we intend to use total revenue and profitability as a key measurement as we expect to see ongoing choppiness in comparable store sales, while we aggressively evolve our real estate footprint and portfolio. In closing, I remain confident and encouraged about our ability to deliver sustained long-term profitable growth. Our iconic brand remains at the center of this effort, giving us the permission to not only deliver a great retail experience, but to leverage the power of the brand to create new, more profitable revenue streams. With that in mind, we are committed to delivering our stated goal of transforming this multigenerational company from a retailer that happened to build a strong brand to a global branded intellectual property company that happens to have vertical retail as one of its channels. Now, I would like to hand the call over to Vojin to provide some more details on the financial side.

Thanks, Sharon, and good morning, everyone. Before I begin, I want to note that given our previously-announced fiscal year-end change, all the references to prior-year results are based on the recast 13-weeks ended April 29, 2017. This change, along with the strategic evolution of our business model, will create more complicated quarterly comparisons while we are going through this transitional phase. As such, we are focused on total revenue and profit as key measurements of our business with a long-term goal of sustained profitable growth. Turning to the first quarter of 2018, our performance was below expectations. We anticipated challenging traffic trends, the negative impact of adoption of the new revenue recognition standard, and the closure of our most productive location in Anaheim to result in lower sales and profit for the first quarter versus the prior year. We did not anticipate that Toys"R"Us liquidation proceedings and its negative impact on our business. That said, we are pleased with the strength that we saw in a number of areas of the business we not only progress made in our operational initiatives such as rebalancing our footprint to more productive locations and formats. Financially, the quarter saw expansion in merchandise margin and lower expense versus the prior year quarter and a continued strong balance sheet. Now, I will review the first quarter financials in more detail. Total revenues were $83.2 million, a decrease of 8.8% compared to the first quarter of fiscal 2017. This reflects an approximately $3 million negative impact from the adoption of the new revenue recognition standards and the January closure of one of our most productive stores, which was operating in the prior year. In addition, as I mentioned, sales during the quarter were unexpectedly impacted by the Toys"R"Us liquidation. Approximately, 75% of our stores had a Toys"R"Us location within 5 miles. And we have seen a greater correlation between negative sales impact and the proximity of our store to their liquidating site as well as impact on our e-commerce site. Retail gross margin declined 340 basis points to 44.3% driven by de-leverage from lower sales and partially offset by a 30 basis point expansion in merchandise margin. We continue to control costs in number of ways including managing our real estate portfolio to lower average store occupancy expense and reducing cost within our supply-chain. In the quarter, these benefits were more than offset by the negative impact from lower revenue on fixed expenses. SG&A declined $2.9 million to $36.3 million or 43.7% of total revenues including a $600,000 reduction in pre-opening expenses as we continue to maintain disciplined expense management. Lower sales and gross profit more than offset a reduction in expenses leading to first quarter GAAP pretax income of $600,000 inclusive of the estimated $600,000 negative impact from adoption of the new revenue recognition standards compared to GAAP pretax income of $4.4 million in the prior year. Net income was $0.4 million or $0.02 per diluted share compared to net income of $2.6 million or $0.16 per diluted share in the first quarter last year. Turning to the balance sheet. At quarter end, cash and cash equivalents were $18.9 million and there were no borrowings under our revolving credit facility. The cash balance compared to last year is lower due to the timing of cash payments primarily between account payables and inventory reflecting the impact of the fiscal year calendar changes. We ended the quarter with $49.4 million of consolidated inventories representing a 10.5% decrease compared to the prior year. Our store inventories down by 5%, driven by a lower cost in unit mix as our units are less than 1% down to last year timing of our in-transit inventories contributing to the rest of the decline. Capital expenditures totaled $3 million for the first quarter of fiscal 2018 and depreciation and amortization was $4.1 million. Separately, as we previously shared, our board approved the change in our fiscal year-end to the Saturday closest to January 31 from previous end date of the Saturday closest to December 31. This change was effective immediately following the end of fiscal 2017. This resulted in a five-week transition period before the first quarter of the new 2018 fiscal year. We have included the transition period, financial results within today’s days press release. Turning to guidance for fiscal 2018, covering the 52-weeks ending February 2, 2019, compared to 53-weeks ended February 3, 2018. We expect total revenue to be in the range of $345 million to $355 million. For the remainder of the fiscal year, we expect revenue to be flat to a slight increase compared to the unaudited recast fiscal year ended on February 3, 2018 excluding the balance of the negative impact of previously mentioned accounting changes affecting second quarter through fourth quarter representing $3.3 million and the $6 million in revenue from the one extra week included in the recast 2017 fiscal year. Our revenue guidance reflects the expectation that our growth initiatives contribute for the rest of the year including a full year double-digit increase in e-commerce as we are able to better leverage our upgraded Web platform. Growth in revenue generated from our diversification initiatives including international franchising and commercial sales inclusive of outbound brand licensing and the experiential wholesale. These channels are expected to have combined growth of approximately 10% on a full year basis with this contribution skewed throughout the back half of the year. And on the retail store front, we expect to benefit from the annualization of the 23 concourse shops opened last year as well as from the tourist locations Sharon mentioned earlier. We now expect GAAP pretax income to be in the range of $8 million to $11.5 million. As a reminder, 2018 results are reflecting an estimated $3.9 million negative impact due to the adoption of the new revenue recognition standard on both total revenue and pretax income. Diluted earnings per share to be in the range of $0.40 to $0.57 using an effective tax rate of approximately 27% excluding discrete items and capital expenditures to be in the range of $15 million to $18 million with depreciation and amortization in the range of $16 million to $17 million. Finally, we expect fiscal 2018 year-end cash balances to be in the range of $25 million to $30 million compared to $21.5 million as of the end of transition period. This concludes our prepared remarks and we will now turn the call back over to the operator for questions. Operator?

[Operator Instructions] Our first question comes from the line of Stephanie Wissink with Jefferies. Please proceed with your question.

I want to share and unpack a bigger picture question to start. I understand that Toys"R"Us was disruptive from a traffic perspective in the first quarter and probably a little bit here in the second quarter just given the liquidation activities. But as you think about a post-Toys"R"Us world, what are the opportunities that you see? We know that Toys"R"Us had a very sizable Plush business. Is there an opportunity to step in and take advantage of that specific category in terms of the consumer opportunity? And then secondly, with respect to Toys"R"Us being absent from the market, are there opportunities for you to think about your real estate particularly on some of the licensed properties and maybe pull in some products that wouldn't be traditionally Plush but might be supportive of a larger basket size as you do drive traffic into your stores? Thank you.

The Toys"R"Us situation I think caught everybody by surprise on exact timing. Clearly, this has been a long time coming but I think the timing caught everyone a little bit off guard and that - it’s a $8 billion to $9 billion company. So, that's a lot of product that was dumped into the marketplace at a lower price in a pretty abrupt way. But in the long run, you're pointing out something really important and something that we also have identified. Yes, they did have a very big plush business and we do believe there's opportunity for us to take advantage of that. Then, most importantly and I alluded to it in the comment is the birthday business. Toys"R"Us had a big birthday business, a big birthday club, and we feel like that amping up our birthday program is actually really good timing. We'd already been planning that portion of our sort of reinvigoration and reinvention to recapture a lot of the activity in the birthday side, given some of the research that we've seen on where we’re associated with the rite of passage of childhood and really want to push into that as well. So it's a two-pronged strategy for us to try to assure that we get our fair share of what will be left over from this large toy market that won't all disappear. It will - most of it will be absorbed by other retailers, so that’s inclusive. On the real estate side, yes, we're certainly looking at different options. And as we evolve from not from being just not that long ago and almost exclusively mall-based retailer, we're looking at a lot of different options on where we can reach consumers, where they're going for fun and entertainment. And you're also correct in your assumption on is there a way to broaden our assortment on some key items and get into a bigger toy business. We have certainly started to look at that as well on some specific efforts.

And then if I could just one follow-up, Vojin, I wanted to take on a little bit of the sales cadence. So in the quarter, I think you qualified about a third of the sales decline you had expected. The other two-thirds roughly $6 million was unanticipated. Is it possible to qualify the Toys“R”Us effect if you try - it sound like a good three-quarters of your stores were within vicinity or how should we think about that delta to plan as we kind of progressed through the year, you're going to make up the bulk of it? It sounds like that does imply that the back half is going to see a step function higher. So, help us to bridge that gap between the sales mix relative to what your expectations were and how you plan to grow into a year-over-year increase in the back half?

So, yes, definitely Toys“R”Us liquidation impacted our sales and impacted traffic coming into our stores, as we talked about the proximity of the liquidating sites closeness to our existing stores. We saw definitely some real correlations and the strength of the performance in stores further away from these Toys“R”Us liquidation, was definitely better. Now, it's, again, across the whole chain, it's tough to really quantify what that impact was and all these liquidations and timeliness of them across the country. But we believe that there was definitely an impact both in our stores, as well in our website from these Toys“R”Us liquidation. Now, we expect over the course of the year that our traffic trends compared to the Q1 and impact of Toys“R”Us are going to improve. But also we are working, as Sharon talked about, a lot of these new initiatives in our prepared remarks and about things that we are doing to really drive traffic for the rest of the year. In addition to that, we expect our e-com business to continue to grow. We expect the diversification initiatives, both from our commercial revenue, as well as from our international franchise segment to continue to drive growth, as well as we expect some of these new tourist locations that are in the pipeline to continue to drive the topline. We have done good work to really manage our expenses, our inventory to position this to deliver the full year profitability. We also, as we mentioned, we had 23 concourse shops that are going to be annualized plus we said that they're going to be opening some concourse shops expecting to finish the year with about 40 to 45 that they'll also help drive the topline revenue for the rest of the year. Again, most of those initiatives that are in the pipeline are going to impact the second half of the year more than Q2.

I also just wanted to highlight the tourist location piece of that. That's been a long range strategy for us. And those are - as I mentioned specifically in the script, it takes tremendous planning and tenacity for us to find the exact right tourist location and get the exact right deal. And it's a longer horizon than perhaps it used to be to be able to roll out new stores in malls for example. And Disney, for example, if you just straight line about what we're applying to the Disney revenue impact from the first quarter which is about $2 million, could you straight line that is an $8 million hole right out of the gate. Right. So, that eight average doors for us. And we're rebuilding that and you might recall that Disney had a radius restriction on us that was keeping us from really taking complete advantage of the Los Angeles marketplace which is the second largest market, of course, as you know in the United States and one of the largest tourist markets in the United States. So, it takes a while for us to rebuild that $8 million revenue and we knew that going in but getting some of these tourist locations like Pier 39 right beside the merry-go-round or New York City right - basically right beside the Empire State Building, picking these exact locations that we believe will have a 10-year bonus for us in many cases depending on the ways, it’s not an everyday activity. It's a long process to get the exact right deal and the exact right place. And we're being both I think cautious but properly aggressive.

[Operator Instructions] Our next question is a follow-up from Stephanie Wissink from Jefferies. Please proceed with your question.

Lonely out here guys. Wanted to just follow-up on the leases, I think Vojin you mentioned you're driving down your average store occupancy. Can you talk a little bit about where you are in that progression? How should we think about not just the next 12 months but maybe the next two to three years of store level costs? And then on the contrary side to that labor how should we be thinking about the labor equation at the store level particularly as you get in to more of these events around birthdays. Does that mean you need the staff specifically for that and how should we think about that labor model? Thank you.

Yes. First from the lease perspective, we continue to put tremendous amount of emphasis on bringing those costs down and we are seeing some nice results as we continue to drive those cost down and really create more flexibility for the organization. We are extending a lot of our leases short-term really a bit more favorable lease terms and that's partially offsetting and allow us to keep those stores open as they are still very profitable, and these rent concessions are offsetting some challenges in traffic that we are seeing in these malls. In addition to that, we are trying to get more advantageous leases in form of percentage deals, what we have in our concourse location, and that's really helping on the downside if the traffic challenges continue. When we think about the store labor, definitely in a lot of our stores, the declining traffic is putting more pressure from the hourly wages, as well as from the hours that we have in stores. We continue to manage those expenses and continue to find ways to be more efficient and effective. We actually are applauding for more and looking forward for more parties and different events in our stores because again, it's multiple people coming to the stores and really driving all these additional sales helps us leverage the labor cost. But definitely, there are some headwinds from the increasing labor cost across the entire country.

Right. If you think about it, Steph, that’s one person managing on average 6 or 7 people through the process which is usually a really high value transaction.

Thank you. There are no further questions at this time. I would like to turn the call back over to Ms. Sharon Price John for any closing remarks.

Thanks for joining us today and we look forward to updating you on our progress next quarter.