Welcome to the Fourth Quarter 2017 Crocs, Inc. Earnings Conference Call. My name is Jackie, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. And now, I would like to turn the call over to Marisa Jacobs, Senior Director of Investor Relations. Ms. Jacobs, you may begin.

Good morning, everyone, and thank you for joining us today for the Crocs fourth quarter 2017 earnings call. Earlier this morning, we announced our fourth quarter results, and a copy of the press release can be found on our website at crocs.com. We would like to remind everyone that some of the information provided on this call is forward-looking and accordingly is subject to the safe harbor provision of the federal securities law. These statements include but are not limited to statements regarding future revenues, gross margins, SG&A expenses, income from operation, adjusted EBITDA, interest expense, and our product pipeline, some of which are non-GAAP financial measures. Crocs is not obligated to update these forward-looking statements to reflect the impact of future events. We caution you that all forward-looking statements are subject to a number of risks and uncertainties described in the risk factors section of the company's annual report on Form 10-K. Accordingly, actual results could differ materially from those described on this call. Please refer to Crocs' annual report on Form 10-K, as well as other documents filed with the SEC for more information relating to these risk factors. Joining us on the call today are; Andrew Rees, President and Chief Executive Officer; and Carrie Teffner, Executive Vice President and Chief Financial Officer. Following their prepared remarks, we will open the call for your questions. At this time, I'll turn the call over to Andrew.

Thank you, Marisa, and good morning, everyone. I'm pleased to share that our fourth quarter results demonstrate that we finished 2017 on a high note. Throughout 2017, our ongoing initiatives resulted in improved product, more impactful marketing, and a stronger brand. We centralized our focus around three strategic objectives. Firstly, simplifying our business to reduce cost; secondly, improving the quality of our revenues; and thirdly, positioning ourselves to drive sustainable profitable growth. I'm happy to report that we made meaningful progress in each area; and furthermore, we expect additional progress in 2018. In our most recent quarter, we exceeded our revenue and gross margin guidance, making this the fourth consecutive quarter in which we met or exceeded these metrics. A big driver of our performance is the work we've done to eliminate a large number of unproductive stores along with the related infrastructure and overhead, and to pursue operational efficiencies that advance our SG&A reduction plan. We also improved processes and leverage systems to significantly reduce inventory and improve the quality of that inventory. Through better working capital management and improved profitability, we increased our cash generated from operations and resumed our buyback activity. These actions contributed to meaningful improvements in shareholder value. During the call this morning, I'm going to review the three strategic objectives that underlie all of this activity, recap the progress made against them in 2017, and touch on our plans to further advance them in 2018. I'll then turn the call over to Carrie, who will give you an update on our fourth quarter financial results and present our 2018 guidance. Our first strategic objective is to simplify the business, so we can operate more efficiently and reduce cost. At the beginning of 2017, we announced our SG&A reduction plan, calling for the elimination of…

Thank you, Andrew. Fourth quarter revenues were $199.1 million, up $11.7 million or 6.2% from a year ago. This exceeded our original guidance of $180 million to $190 million, as well as our updated January guidance of $195 million to $198 million. It was great to deliver topline growth while closing stores and absorbing the impact of the sale of our Taiwan business at the end of 2016, and our Middle East business during the second quarter of 2017. Those activities reduced our revenues by approximately $14 million in the quarter. From a channel perspective, we also saw strong results in all channels, with wholesale up 15.2% and a positive DTC comp of 6.2%. Let me provide additional color around these channels. As just noted, consolidated wholesale sales increased by 15.2%. Our customers and distributor partners are encouraged by the success they have been having with our brand, particularly by embracing our Always Summer philosophy and deemphasizing winter product. As a result, accounts are expanding their assortment, placing product in additional doors, and keeping our product on shelves longer. Our retail comp was a positive 3.7%, while retail sales declined 6.3% as we operated 111 fewer stores at the end of 2017 compared to the same time in 2016. Customers embraced our Fall/Holiday 2017 collection which emphasized clogs and sandals, and we continued to improve execution resulting in higher conversion rates. Retail is benefiting from the strength of our product, better in-stock positions and impactful marketing. And because we are reducing the number of full-line stores, outlets which are the more profitable format, now make up almost half of our store portfolio as compared to approximately 40% at the end of 2016. Our ecommerce business grew 11.6% during the quarter with a strong growth in the Americas and Europe. We…

Thank you, Carrie. Like Carrie, I'm very pleased with our results. We have made significant progress in our product to marketing efforts, as well as our strategic initiatives to simplify the business and generate cost savings. As we look forward, we're focused on sustainable profitable revenue growth. We are confident that our product, marketing, and distribution channel initiatives will deliver that growth, and that the benefits from this work will drive meaningful EBITDA increases in the future. The progress we are making could not have happened without the hard work of our incredible associates. I want to thank each one of them for their efforts last year and their commitment to the future success of Crocs. We are all aligned in our commitment to deliver topline growth, greater profitability, and increased shareholder value. Now, operator, I'll open the call for questions.

Thank you. We will now begin the question-and-answer session. Our first question comes from Jonathan Komp. Please go ahead. Jonathan R. Komp - Robert W. Baird & Co., Inc.: Yes, hi. Thank you. I wanted to start off and ask if you had any more color looking at the Americas wholesale performance, it was quite strong up nearly 30%. And I'm wondering if you can just give more color around any kind of timing issues there or not. And then, when you look across channels, maybe where you're seeing the most momentum for that business?

Yes. Thank you, Jonathan. I apologize for my voice upfront. You may have heard on the earlier prepared remarks, I'm suffering from a cold. So, I will do my best. But, yes, we were really pleased with the Q4 wholesale performance, particularly in the Americas, but also across the business. I would say, from a channel perspective, the thing that really stood out was e-tail. I think we saw a particularly strong performance in our e-tail channel. And by that, I mean our wholesale sales to our e-tail wholesale customers, where we saw very strong at-once business that we had underestimated frankly. So, that was on the plus side. But, overall, I also think it was due to how we positioned ourselves from a clog, sandal, and lined clog perspective; I think that worked really well. So, we're really pleased with that. From a timing impact, I think you are kind of alluding to, was any of that pull-forward from Q1 or what was shifting between Q4 of 2017 and Q1 2018, there was almost no shift between the quarters. So, from our perspective, it was completely clean. Jonathan R. Komp - Robert W. Baird & Co., Inc.: And just as a follow up, Andrew, I know back in early 2016 you started very strong from the wholesale perspective, and then saw a couple of more challenging quarters after that. Is there anything you can give comfort that what you're seeing in sell-through and kind of the product pipeline that you have that you won't see any give-backs there in terms of the strength in the wholesale?

Yes, I understand your question. So, I think what we saw – we did see that in the early part of 2016, as you alluded to. But I think what we saw throughout 2017, frankly, so for pretty much four quarters now in a row is improving wholesale sell-through of the product. And that's really related to kind of two big things. I think our product focus, clogs and sandal, is where the DNA of Crocs is most apparent. It's what the consumers are looking for from us. It's due to our effective marketing which has been driving sell-through. And it's also due to I think a lot of work that was done over the last couple of years to improve relationships with key wholesale customers and clean up the channel. Make sure that they are positioning and marketing the brand in the way we want it to be positioned and marketed, and they're buying the appropriate amount of inventory to support that business, and we're doing the appropriate activities to ensure that we can supply that inventory as it's required. So the channel's an awful lot cleaner, the brand is better positioned, and the product is right.

Yes, and I'll just add to that, remember back in 2016 especially as we got into second and third quarter in what we were dealing with was retail which essentially is scaling back significantly. They're open to buy in order to right size their inventory levels, given a lot of the challenges the retailers were facing. So, I think that has shifted already, that took place in 2016 and hence the results that Andrew mentioned in terms of our performance in 2017. Jonathan R. Komp - Robert W. Baird & Co., Inc.: Okay great. And just last one from me, Carrie, I want to follow-up on your comments about the SG&A. I think you referenced kind of underlying reductions about $40 million so far baked into the 2018 guidance. I'm just wondering if you'll get the remaining $40 million or so that you're targeting at the midpoint in 2019 which I think would get you down in kind of the mid-$430 million range, but I just wanted to clarify that.

Yes, absolutely. I think what you're seeing is you've got partial year benefits of the store closures and the activity that's going on, and so we get to the full run rate. Certainly, we have other things that we're executing against in 2018, as well, that will give the full-year benefit in 2019. So, we absolutely feel very confident in our ability to deliver the full $75 million to $85 million by 2019. Jonathan R. Komp - Robert W. Baird & Co., Inc.: Okay. Thank you very much.

Thanks, Jonathan.

Thank you. Our next question comes from Scott Krasik. Please go ahead.

Hi, everyone. Thanks and good results. Just a question sort of on the margins now, obviously ex-FX, you're still seeing the benefits of your promos and favorable mix. So just wondering sort of how you think about the molded business, what that can grow to as a percentage of sales, and then where you are in terms of your promo close-out reductions? Thanks.

Yes.

And then I have another follow up.

Okay. So, as we think about gross margin, we've seen obviously pretty significant improvement in 2016 and 2017. And a lot of the benefits that we've seen in those years has really been driven by that cleanup of our promotional activity, the cleanup of our inventory, and having less excess and obsolete sales at lower margins. The other benefit that we've definitely seen and probably the more of the shift to that benefit in 2017 was the shift to more molded product. We'll continue to see that shift occur, but not necessarily at the levels, given that we took a big step forward in 2017. So, as we think about gross margin going into 2018, we do have a little bit of a headwind associated with the regional and channel mix especially as we have significant number of the retail stores closing. But that is being offset by the currency benefit that we're seeing based on currency rates right now, as well as some – again, some of the product mix moving more to the molded product, as well as some supply chain efficiency. So, we think that we still have gross margin rate improvement ahead of us, but we think it's more modest than what we've certainly seen in 2016 and 2017.

And without giving guidance, is that a multiyear comment or that's strictly just about 2018?

Yes, what we've said, as we think about our framework to deliver our double-digit EBIT margins, is really having gross margins in the low-50%. So, for sure, we see that improvement in 2018, but I'd like to continue to see that improvement as we move into 2019.

Okay. Thanks, Carrie. And then just the Hong Kong distributor shift, sort of when and how did this come about? And then when did that start to hit the P&L? And lastly, are there any other meaningful markets where you would think that – consider that?

Yes, thanks, Scott. So, let me take that. Obviously, the Hong Kong distributor shift is the force of these business modeled transitions that we've completed. And all of those have been in Asia, right? So, there is Hong Kong, the most recent one; but just also to recap; Taiwan, South Africa, and the Middle East, and those are all captured in our Asia region as we report it. It came about, as I think we talked about historically, as we've – we've targeted a number of small businesses where we don't think we're particularly efficient. The cost structure to support the business is in excess of the size of the business and the potential for the business, and we think other partners are better equipped to run that business for us and to grow it in the future. As we look back at all of those transitions, I think we're really satisfied with how they've gone. We've selected really strong partners, and we feel that way obviously about Swire in Hong Kong, which is a major presence in that marketplace. And in terms of others in the future, I think we will continue to look very selectively of places that meet those characteristics, which are small, probably low potential, and highly complex markets where other partners may be more advantaged, but obviously we can't say more at this stage.

And then the one thing that I'll add to that is essentially we transferred the wholesale business to Swire group in January.

Yes.

And the retail stores complete that transfer in April. And I think the other question...

So sort of a blend in 1Q?

Yes. The wholesale in 1Q, the retail starts in Q2, and then the other call out that I think was important that we made in the prepared remarks was we operated in 2017, 15 retail stores in the Hong Kong market. The annual revenue for those retail stores was approximately $15 million.

And your comment to get below 500 stores or 400 stores, sorry, by the end of this year, did that already contemplate those 15 stores or is that incremental?

Yes, that contemplated those 15 stores. Our opportunity has really been, can we do something that's sooner than what we expected, and so we really have an acceleration in terms of the timing of this transaction.

Great. Okay. Thanks. Good luck.

Thanks, Scott.

Thank you. Our next question comes from Erinn Murphy. Please go ahead. Erinn E. Murphy - Piper Jaffray & Co.: Great, thanks. Good morning and nice work on the progress. I guess I wanted to go back to the first question just about the Americas business and your comment on just the at-once strength that you saw. I guess bigger picture, how are you seeing retailers in this market just balancing between – for your business, obviously balancing between pre-booked versus what they're leaving for the at-once business into your quarter?

Yes, good question, Erinn. For our business, we don't see a material shift. I think every retailer would like to place fewer pre-books and do more at-once business. But as we look at the proportion of our business today, it's not materially different than it was last year or the year before. So we kind of see that in the same way. So it's kind of a risk mitigation strategy. I think as we looked at 2017 and we were able to see relatively strong sell-throughs – stronger sell-throughs in our wholesale business particularly in North America, we were able to capitalize on a growing at-once business. And I think as you see, some of the e-tailers in particular are very dynamic in terms of chasing inventory and chasing opportunities. So we don't see it as materially different, but obviously, it represents an opportunity for 2018. Erinn E. Murphy - Piper Jaffray & Co.: Okay. And then you've obviously come off a number of trade shows recently whether it's platform or outdoor retailer, I know there's a couple of others you attended, can you just talk about how fall is shaping up right now, what are you seeing in those pre-books, and any kind of qualitative commentary you can kind of provide us?

Yes. I mean I think we've been very pleased with the activity that we've seen at those shows. I think we've seen a lot of interest in the brand, we've seen a lot of traffic on our booths. We've been getting very strong feedback around the consistency of line, the logical evolution of the line, the innovation that we're bringing to the table with – particularly with LiteRide and some new styling and graphic treatment. So, we're seeing a real understanding from our wholesale customers about where we're taking the product and a reinforcement that that's the right direction to take it. In terms of absolute bookings, obviously, we don't talk about that; it's a little early for that. But we feel really good about how we're positioned for fall. Erinn E. Murphy - Piper Jaffray & Co.: Okay. And then maybe for Carrie, you gave a lot of kind of good details on the guidance component for 2018 to get us to EBIT. But curious if you're embedding, I'm sorry if I missed, any buyback and how you're thinking about 2018 just given you've beefed up that authorization this morning?

Yes. So, obviously we don't comment on future plans for buyback, but what I would say in that regard is, as we look at the $50 million that we did buy back in 2017, I think that's a result of the fact that we've made significant progress in the strategic transformation, which has resulted in strong cash generated from operations, almost $100 million in 2017. And based on this performance, we feel confident – the Board feels confident in the business, and we believe that share buyback is an appropriate way to create shareholder value. And our goal is continue to be a strong cash flow generating company, and then to use that cash to continue to improve the value of the business. Erinn E. Murphy - Piper Jaffray & Co.: Okay. Thank you, guys.

Thanks Erinn.

Our next question comes from Mitch Kummetz with Pivotal Research. Please go ahead.

Yes, thanks for taking my questions. I guess I have a few. Let me start with Asia, where the DTC comp was down. I think you talked about Singles' Day in China not going that well, could you elaborate on that, or could you talk about what the impact of that was on comp in the quarter?

Yes. You're absolutely right, Mitch, we did highlight that. I think our DTC comp in China is a standout, right? If you look at the global DTC comp, it was particularly strong during the quarter driven by the Americas and Europe. And as we look at Asia in particular, a couple things I'd point out. One is our overall e-commerce comp in Asia was strong in all other countries outside of China. You know who that is? Somebody might not be on mute. So, our overall e-commerce comp in Asia was strong in all countries outside of China and strong in China other than Singles' Day. So, we feel really good about the overall e-commerce performance. What we saw on Singles' Day is we've been a strong participant in Singles' Day historically. And I think – and as we looked at this year, we saw dramatic increases in both the number of companies participating in our category and in broader categories. And we saw very significant increases in the cost of driving traffic and driving customer acquisition. And, frankly, we chose to protect our profitability and not to continue to pay for that traffic. So, it was really a profit orientation that caused us to pull back on that to have an overall impact on the e-commerce performance for the region in this quarter. But if we look at our e-commerce performance in Asia through the year, we achieved a 23% comp for the year, which included that. So, we feel really good about where we are there. I think the other piece you referenced, from a retail perspective, was also our weakest comp in Asia. And this is the market where we've been going through the most significant transition in terms of our store portfolio. It's where we've closed the most stores, 84 stores. I feel good about where we're getting to in that transition, but we're not satisfied with the comp performance and we're focused on improving that in the future.

Got it. Thanks for that color. And then on Europe, I know you're going through kind of a transition there as well in terms of making some channel adjustments and that put a little pressure on the wholesale. When does that normalize? When do you lap those changes there?

Yes. So, we're essentially – as we move into 2018, we've lapped those business model changes as it specifically really relates to the discount channel business. So it's essentially clean in 2018. So as we think about Q4 for Europe wholesale, it was down $600,000, so certainly not significantly. But for 2018, we expect solid European wholesale growth and in fact embedded in our 2018 wholesale channel expectations that we'll see wholesale growth in all regions.

Got it. And then lastly on the stores, I know you guys are ahead of plan in terms of closing stores. You've talked about getting to under 400 or just thereabouts. Has anything changed there? I mean is there opportunity to do more with that, or now that the business has picked up a little bit in terms of your transformation initiatives, is there any thoughts in terms of maybe rethinking about opening some stores or kind of what are your views on that?

So, as we think about the store closures, embedded in those numbers are openings. So we're really being clear about net reduction because, to your point, there are places where adding a store makes a whole lot of sense. The key for us has really been shifting our overall portfolio mix more to an outlet portfolio mix with the reductions that we're doing. So we're at about, I think, 40% outlet stores at this point at the end of 2017. So our announced SG&A reduction plan is a net 160 store reductions certainly to the extent that we have opportunity to reduce that store count further basically by closing other stores that we see as not driving the right form of profitability, we will continue to do so. But we're evaluating that on an ongoing profitability and exit cost basis. And there definitely are some stores left in our portfolio by the time we finish the SG&A reduction plan that we wish we could exit and we'll certainly pursue those avenues.

Got it. Thank you.

Our next question comes from Jim Duffy with Stifel. Please go ahead. James Vincent Duffy - Stifel, Nicolaus & Co., Inc.: Thank you. Good morning, everyone. Very nice progress in 2017 and nice to see the brand-building momentum into 2018. In the fourth quarter, the comp strength really stands out. Can you – particularly in North America, can you speak to the split you're seeing between traffic and ticket within that? And then what are you looking for, for the assumptions of comps built into the first quarter and fiscal year guide? Thanks.

Yes. So, thanks, Jim. I think we're very pleased with the Q4 performance both in North America and Europe. As we think about DTC, obviously it was stronger in our e-commerce channels, which is where we see the consumer transition. And in terms of your question around tickets and traffic, I think, the best way to characterize it I would say it was broadly flat in terms of traffic to slightly down in traffic, but that's better than it has been historically. I think if we look at early parts of 2017 and 2016, we were frankly fighting double-digit traffic declines. And so therefore you're seeing some improvement in terms of average ticket. Obviously, our overall ASP continues to be trending slightly down. So, the ticket was more around units per transaction.

Yes, and I'll just make like – ASP is actually for the fourth quarter because of the price increase that we took on essentially the clogs...

Yes, I'm sorry.

...and the classic Crocband was up for the quarter, as well as to Andrew's point the...

In North America, yes.

...in North America specifically, as well as the transaction value, which was also driven by some additional UPT. So, really good underlying fundamentals as we look at that comp performance.

Yes. And as we look at what we see as driving that in stores, it was I think inventory mix. So, how we were positioning both clogs, lined clogs and sandals in that season and selling fewer boots, as well as some significant initiatives particularly in North America that we put behind charms and personalization of product, which has driven I think a higher level of engagement and excitement in the stores. James Vincent Duffy - Stifel, Nicolaus & Co., Inc.: Great. And then the assumptions in the guide on comp?

Yes, so as we look at the 2018 guidance from a retail standpoint, we are still being relatively – I guess I won't say conservative – but we're assuming relatively flat comp, similar to what we assumed in 2017. We think that's the right approach given the traffic challenges across the regions. James Vincent Duffy - Stifel, Nicolaus & Co., Inc.: Very good. And then Carrie, a technical question. The change from average costing to FIFO, the drag in the first quarter, and then the reversal as the year unfolds, that implies you're seeing improvement in costs of goods in 2018 over 2017, is that accurate?

Yes, so on the full year, the change in accounting methodology for inventory has no impact on the full year. So there's a little bit of a bump in impact in Q1, which essentially reverses in Q2 and then we're past it, and then on the full year, no impact. To give a little color on why we changed the accounting methodology is really, as we've kind of evolved over the last couple of years shifted our ERP system, we actually are moving average costing methodology. It was actually quite cumbersome and labor-intensive to operate effectively. And so, we decided to move to the more simplified approach. So, it really drives – it's very consistent with our goal to simplify the business. And quite frankly, it is more in line with industry standards. But I think as you guys think about the gross margin, I think it's important to keep the full year and not let this Q1 really factor in because it washes out pretty quickly. James Vincent Duffy - Stifel, Nicolaus & Co., Inc.: Makes sense. And then the $60 million headwind from store closures anticipated in the year, I believe that was $50 million prior, is the Swire business transition the difference there?

Yes, that's absolutely right. It's really the timing of assumed business model changes in that number, correct. James Vincent Duffy - Stifel, Nicolaus & Co., Inc.: And my last thing is just a comment, thank you for all the good detail on the SG&A reduction progress and plans going forward. I think that's helpful clarity.

Thank you.

Absolutely. You're welcome.

Appreciate it, Jim.

Thank you. Our next question comes from Sam Poser with Susquehanna. Please go ahead.

Good morning everybody. Thanks for taking my question. I guess just to confirm, you're aiming at around 398 stores by the end of the year. Is that – am I in the – am I thinking about that correctly?

Yes, it's about that number, Sam, yes. Less than 400, but...

And then – and can you give us some of the flow of those store closings?

Yes, I mean...

We haven't – yes, we haven't I think issued that kind of details, Sam. But they're not all at the end of the year. They are through the – they're scattered through the year. That's the best way to think about it.

With a good chunk in the first quarter because of that 15 stores...

Certainly, because of the Swire group, for sure.

Yes, because of – yes, exactly.

Thank you. And then secondly, in the press release, you commented that you wanted to – you expected to be able to return to growth in 2019. Can you give us some color as to what that means as far as – what kind of growth you're going to see because you've had some underlying growth ex the store closures for quite some time now. So, you're going to be up against slightly more difficult comparisons when you get to 2019. So, I mean, how should we think about sort of the longer-term topline situation here?

Yes, good question, Sam. So, I think – first I'll highlight exactly what you said, which is if you look at 2018, our guidance incorporates an embedded mid-single digit growth for the underlying business to overcome those $60 million of headwinds from business model change in store closings, right? And if you look at 2017, we've had underlying growth in 2017 as well. And so, your question is, I think, essentially does that continue or does that potentially accelerate or decelerate, right? So, we're not really...

I guess, and how do you have visibility on any of that at this point?

Right. So, we fundamentally believe that we have the right strategy in place to continue to grow this brand on a global basis, okay? And so, we are confident that beyond the immediate period that we've guided for, we have the opportunity to continue to grow the brand, and we think we can grow the brand based on a number of critical product marketing and distribution strategy to be put in place. The first is our focus on clogs and sandals. Clogs represent about half of our business with the market share leader on a global basis. I think we've demonstrated that we can grow our business in that category, and that category is, in fact, growing if you look at North American NPD data. So, we think we can grow half of our business probably at more moderate rates but certainly at low to mid-single digits. Then if you look at the sandals piece of our business, which is our kind of secondary focus, we think that represents a pretty significant upside on a long term basis for the company. It's a $23 billion global category. It is highly fragmented from a competitive perspective. There are no other competitors that own big pieces of that market on a global basis. Our product has proven to be successful in that arena and we believe that we can continue to build out a stronger and stronger product assortment within the sandal arena. So, we think that represents a long term growth strategy for the brand. Secondly, as we look at our focus and emphasis on digital commerce, we think that's absolutely critical. It's very, very clear on a global basis the consumer is shifting from shopping in physical stores to shopping online. We can capitalize on that both through our own…

Okay. Thank you. And then I guess – okay, I've got everything else I needed for now. Thanks so much and bye.

Thank you, Sam.

All right. Thanks, Sam.

Our next question comes from Jim Chartier with Monness, Crespi, Hardt. Please go ahead. Jim A. Chartier - Monness, Crespi, Hardt & Co., Inc.: Good morning. Nice quarter, and thanks for taking my question. I just want to talk about the Asia wholesale business, which inflected positive for the first time in a number of quarters. Can you just discuss what drove that improvement, do you think it's sustainable, and then where are you in rebuilding the wholesale distribution in China? Thanks.

Yes, so look I think we're definitely optimistic that it is sustainable. You referenced wholesale distribution in China. Really the drag that we've been seeing overall in Asia is that's the place where we would be going through the most business model transitions. The fall that we highlighted have all taken place in what we call our Asia region over the last two and a bit years. And if we look at China, we feel like the transition that we've gone through there has been completed and we're well-positioned for future growth. We did see double-digit wholesale growth in China during the quarter, and we feel really good about our wholesale customer mix. The investments those wholesale customers in China are making relative to their own installed base and distribution, and our ability to grow that business in the future. So, I think as we look at Asia, it has been a drag on our overall performance for the last year due primarily to the business model transitions. But we think we're well positioned for growth in the future. Jim A. Chartier - Monness, Crespi, Hardt & Co., Inc.: Great. Thank you.

Thank you.

Thank you. I'll now turn the call back over to Andrew Rees for closing remarks.

Good. Thank you. Let me just close by thanking everybody for joining us and their continued interest in the company. We appreciate it. Have a good day.