Lindblad Expeditions Holdings, Inc. (LIND) Q3 2019 Earnings Report, Transcript and Summary

Good morning, and welcome to the Lindblad Expeditions Inc. Reports Third Quarter 2019 Financial Results Conference Call and Webcast. All participants will be in a listen-only mode [Operator Instructions] Please note this event is being recorded.I would now like to turn the conference over to Mr. Felenstein, Chief Financial Officer. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for Lindblad's third quarter 2019 earnings call. With me on the call today is Sven Lindblad, our Founder and Chief Executive Officer. Sven will begin with some opening comments, and then I will follow with some details on our third quarter results before we open the call for Q&A. You can find our latest earnings release in the Investor Relations section of our website.Before we get started, let me remind everyone that the company's comments today may include forward-looking statements. Those expectations are subject to risks and uncertainties that may cause actual results and performance to be materially different from these expectations. The company cannot guarantee the accuracy of any forecast or estimates, and we undertake no obligation to update any such forward-looking statements. If you would like more information on the risks involved in forward-looking statements, please see the company's SEC filings.In addition, our comments may reference non-GAAP financial measures. A reconciliation of the most directly comparable GAAP financial measures and other associated disclosures are contained in the company's earnings release.And with that out of the way, let me turn the call over to Sven.

Thank you, Craig, and thanks to all joining our call today. We're all very, very pleased by the third quarter this year. It was our first full quarter with our four U.S. flagships in Alaska. And it was extremely gratifying to see that all of them sailed with very high occupancies and net yields. In fact the quarter broadly hit on all cylinders both operationally and financially.Consolidated revenue was up 16% and EBITDA was up 41% over 2018. Available Guest Nights at the Lindblad segment were up 14% and occupancy was up two percentage points. Of course, Craig will go into much more detail in a few minutes but our success this past quarter is the latest example of our ability to take advantage of the growing demand for adventure travel given our strategic investment in expanding capacity and a proven track record of delivering high-quality and authentic experiences.Given that we have nearly tripled our available inventory in Alaska over the last two years, one of the factors that was of great significance to us was the increase in the number of ships operating in the region overall this summer. We watched this season very closely because we wanted to see the effects of competition.But despite increasing our capacity from 124 to 316 berths on three ships -- on four ships we were able to expand net yields and maintain very high occupancy levels, which certainly highlights the robust demand in the marketplace.When adding capacity in a region you always want to be sure that cannibalization does not materialize and that has definitely not been the case with the National Geographic Quest and the National Geographic Venture.Looking at the company overall, the booking environment remains very strong with bookings made during Q3, roughly 13% higher than in 2018. And revenue on the books for 2020 already approximately 25% higher than at the same time last year for 2019.A big part of that booking strength is the excitement over our two new ice class vessels. We are now just a few months away from taking delivery of our first blue-water build the National Geographic Endurance. She is clearly going to be a magnificent ship both from the perspective of strength in order to perform her mission and in terms of comfort and elegance.The keel was laid for her sister ship earlier this month and we expect delivery of the National Geographic Resolution in the fourth quarter of 2021. Just a quick mention of the name, the HMS Resolution was Captain Cook's second vessel which circumnavigated the globe further south than had ever been done before. It also set a record crossing of the Antarctic Circle on January 17, 1773 and set a record for farthest south that would stand for 49 years. Captain Cook a great hero, navigator and explorer has always been a beacon to all of us at Lindblad Expeditions.These two ships will, because of their ultra-high ice class and specialized hollow shape, be able to go places where literally no human has gone before. Our diverse audience of loyal and new guests are extremely excited about both the ships and the unique itineraries they will offer from crossing the Northeast Passage to our epic Antarctic expeditions. And the National Geographic Endurance is already extremely well sold for 2020.While the longest itinerary on the National Geographic Endurance is a very high ticket expedition with over 30 days, very robust deals, we also recognize the need to have a diversified platform. As we launch new ships and venture to new geographies, we've also put a lot of effort into developing short itineraries, four to five nights with various new options on land. We branded these Wild Escapes and have rapidly expanded participation in 2019, doubling 2018 results by offering 11 different itineraries, including expeditions to the Channel Islands, the North Coast of Costa Rica and whale-focused program in Baja's Magdalena Bay.These Wild Escapes allow for development of new audience who simply may not have the time for our traditional voyages and last an average -- that last an average of nine nights.Early analysis suggests that the median age on these itineraries is considerably younger than our traditional voyages. And given our repeat rates this represents significant potential from a lifetime value perspective. One of the biggest opportunities we are exploring at the moment is developing the optimal balance between our four U.S. flagships outside of Alaska and the Pacific Northwest.Historically, traditional accessible geographies have provided more than enough interest for the National Geographic Sea Lion and National Geographic Sea Bird in the shoulder season. Given the increase in the U.S. fleet, we are working aggressively to build new programs in itineraries, like Wild Escapes, to maximize the opportunity during this time period with particular emphasis on developing new audiences that will become a bigger part of our growth in the future.As a reminder, our U.S. ships do deliver the majority of their earnings in Alaska and the Pacific Northwest, but we do view the optimization of shoulder seasons as an additional growth prospects moving forward.As many of you know, as we focus on strategically planning -- expanding our fleet and developing new itineraries, we have committed to a significant increase in marketing and technology investment to efficiently support our expanding enterprise. Our increased marketing efforts are focused on four components; drive short and long-term growth, test and learn, further scale, the most effective tactics and reduce overall media waste. The first of our new media efforts were implemented in May and June and were initially concentrated on increasing our engagement of audiences that were likely in market for expedition-type travel and have expanded since to include exposing entirely new audiences of qualified prospects to the Lindblad experience.Although only the tip of the iceberg early results have been promising. Visits from media impacted channels are up over 145%. And our new-to-file names are up 72%. And we are beginning to see some real transactions from this newly acquired group with new-to-brand transactions up 14% to-date and most recently in September, up 39%.At the same time, we continue to make critical progress on the technology front. Our new CRM platform went live during the third quarter providing us with a technology platform to deliver a more seamless and enhanced guest servicing experience while also improving our ability to follow up on both proactive and reactive sales leads. We also continue to make significant progress on our new reservation system as well as our new marketing Cloud and website.Once fully online, which we anticipate in Q1 next year, we expect these new capabilities will provide a complete 360-degree view of the guests, allowing us to create personalized and automated multichannel journeys improving our engagement and conversion rates. Additionally, our new reservation system will allow us to provide a more frictionless reservations experience and enable more seamless yield management including dynamic pricing capabilities.The significant investment this year on both the marketing and technology front is a planned effect on our 2019 results as most of the benefits will develop in the out years. However, we continue to deliver very strong financial results as we strategically invest and without question we will be better off over the long term having committed to this increased investment.In summation, it's been a really good year-to-date both in terms of results and preparing the organization for increased growth. Clearly, the appetite for expedition travel is continuing to exponentially grow. People want experiences above all else. And, we will continue to lead the way going where the awesome is, and fulfilling the aspirations of our ever-growing number of guests.Thank you again for your time this morning. And now let me turn the call back to Craig.

Thanks Sven. The strong financial results Lindblad generated during the third quarter perfectly demonstrates the opportunity we have by combining expanding capacity with a growing audience for high-quality adventure travel. The targeted strategic investments that Lindblad has made over the last several years is delivering strong financial results today, while we continue to invest in additional capacity, upgrading our technology infrastructure, and expanding our sales and marketing capabilities to provide us the ability to sustain this momentum for years to come.Turning to the third quarter of 2019. Total company revenue increased 16% versus the third quarter a year ago led by 19% growth at the Lindblad segment, and 7% growth at Natural Habitat. The strong growth contributed to a 41% increase in total company adjusted EBITDA led by 40% growth at the Lindblad segment and 43% growth at Natural Habitat.Looking at the individual segments, the Lindblad segment generated revenue of $76.6 million as compared with $64.5 million during the third quarter of 2018. The 19% year-on-year growth was primarily driven by a 14% increase in Available Guest Nights, mostly from the launch of the National Geographic Venture in December 2018.On top of the capacity expansion, we were also able to increase occupancy to 94% this past quarter, while growing net yield 7% to $1,054 per night, predominantly due to higher ticket prices across the fleet, and from the impact of changes to certain itineraries, most notably from transitioning some of our inventory on the National Geographic Orion from the South Pacific to the Russian Far East.Turning to the cost side of the business. Lindblad segment operating expenses increased 14% on a reported basis, primarily driven by an 11% increase in cost of tours led by the addition of the National Geographic Venture to the fleet in December of 2018.Fuel costs in the quarter increased 4% versus prior year, due to this fleet expansion. Fuel was 2.9% of revenue as compared to 3.4% of revenue in the third quarter of 2018, reflecting lower fuel prices across the fleet and the impact of these changes in itineraries.Sales and marketing costs increased 28% versus a year ago, due to higher commission expense associated with the revenue growth as well as from the planned marketing investments we have discussed previously, including costs associated with the rollout of our new CRM and reservation system, and increased marketing spend as we look to further capitalize on our increasing capacity and the growing demand for expedition travel.G&A expenses increased 1%, primarily due to higher personnel costs and transaction costs associated with our warrant exchange, partially offset by lower VAT taxes in Ecuador. The third quarter of 2019 also included $1.2 million of increased depreciation and amortization, mostly related to the addition of the National Geographic Venture to the fleet.Excluding stock-based compensation, depreciation and amortization and transaction costs Lindblad segment operating expenses increased 12% versus the third quarter a year ago. Overall, adjusted net cruise costs on a per night basis increased only 1% to $729, primarily as a result of the increased marketing and technology costs, as well as from some additional costs on the National Geographic Orion in conjunction with its new Russian Far East itineraries.Overall, the Lindblad segment generated strong operating leverage this past quarter, with a 19% revenue growth driving a 40% increase in adjusted EBITDA to $20.6 million, despite the investments in future growth initiatives. Please note that, the third quarter did also include the unexpected government shutdown of the Bonneville lock on the Columbia River for repairs during September of 2019. This impacted several voyages and slightly reduced our overall results for the quarter.The Natural Habitat segment also generated real operating leverage this past quarter, with revenue growth of 7% to $24.4 million, due to additional departures and higher pricing driving a 43% increase in adjusted EBITDA to $3.5 million. The revenue growth was partially offset by a 3% increase in operating expenses from costs associated with additional departures as well as from the timing of marketing and personnel spend to drive additional future growth.I should also note that, we continue to see real benefits of combining the Lindblad and Natural Habitat businesses with cross-selling expanding further in 2019, including a 40% plus increase year-to-date in Natural Habitat sales of Lindblad itineraries.Total company net loss available to common stockholders in the quarter was $493,000 or $0.01 per diluted share versus net income available to common stockholders of $5.1 million, or $0.11 per diluted share reported in the third quarter a year ago. The $5.6 million year-on-year increase – decrease rather was the result of increased operating results being more than offset by higher taxes of $4.7 million, a $2.7 million deemed dividend related to the warrant exchange, $2.3 million of foreign currency losses due in large part to forwards associated with the second installment payment on our second blue-water vessel, and $1.2 million of higher depreciation associated with the launch of the Venture.Please note that, the weighted average diluted share count also increased during the quarter by 1.2 million shares, predominantly due to the issuance of 3.9 million shares in conjunction with retiring all of the outstanding warrants of the company.Turning to our balance sheet. We remain extremely well positioned to invest in future growth opportunities. We ended the quarter with $104 million in unrestricted cash. Free cash flow for the nine months year-to-date was a use of $35 million, but that primarily reflects $64 million spent on the new builds. Including only maintenance CapEx, free cash flow was $30 million year-to-date.During the quarter, we also borrowed $30.5 million under our export credit agreement and used the proceeds for the second installment payment for the National Geographic Resolution. This loan will bear a floating interest rate equal to LIBOR, plus a margin of 3%. The next contracted installment payment of approximately $31 million for the Resolution is anticipated to be paid in the second quarter of next year.Turning now to the full year 2019. Lindblad segment ticket revenue is currently pacing 11% ahead of the same point a year ago and we are already at 100% of our full year projected ticket revenues for the current year. While we continue to see very strong bookings each month at this point the vast majority of these reservations relate to 2020 and 2021. So we do not anticipate booking significant additional net ticket revenue for 2019.Given that the strong current reservation trends are concentrated in future years for both Lindblad and Natural Habitat and given some of the inventory utilization, we are still balancing outside of Alaska and the Pacific Northwest with the U.S. fleet. We expect total company tour revenue between $341 million and $346 million, or 10% to 11% growth versus 2018.Our adjusted EBITDA guidance of $67 million to $70 million or 22% to 28% versus 2018 remains unchanged. Our ability to maintain adjusted EBITDA expectations despite a slight reduction in our revenue forecast reflects the margin profile on some of our shoulder season revenue and our ability to control our variable costs. We will provide further financial guidance for 2020 on our year-end call in March. But please note that bookings for future travel remain very strong and we already have over $45 million more booked for 2020 at this point than we did for 2019 at the same point a year ago.Thank you very much for your time this morning. And now, Sven and I would be happy to answer any questions that you may have.

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Steve Wieczynski with Stifel. Please go ahead.

Good morning, guys. So Craig, I don't know if I missed this, and I think you did talk about it right at the end. But when you look at your tour revenue guidance, I think it's down about 3% relative to where it was back in July. Can you just go into a little bit more detail about, what drove that down from where – from now where it is?

Sure. So, I would say, it's really three distinct items. The first is we did have some minor impact due to – there was this closing of this lock in – on the Columbia River which did lower the ability to deliver on the revenue expectations for those itineraries. So that was a short term third quarter impact, but that obviously translates to the full year. The second aspect is we are seeing more bookings now for 2020 rather than 2019.So, the booking I would say, volume has shifted a little earlier than we anticipated to next year. And while the bookings for next year are very, very positive it does have a slight impact in this year. And the last piece is we are still in the process of really rebalancing our inventory in the shoulder season for having four vessels outside of Alaska. And when we do that, we've had some very strong success with layering in our inventory.But we are still working through some of the, what I would say is, demand curves associated with each of those itineraries. We'll certainly improve upon that every given year and Sven can talk about how we build itineraries over time. But those will be the three primary drivers.Importantly, when you look at all of those things, they are relatively low-margin pieces of our business, which is why we're able to keep our overall EBITDA guidance right where we expect it to be. Sven, do you want to talk a little bit about building itineraries?

Yes. So we really look upon the shoulder season very differently now than we used to, because before we only had two U.S. ships and we -- so the shoulder seasons were not something that we had to get particularly creative around, the demand exceeded capacity.Now we've added capacity and that creates an opportunity, but it also requires creativity. And the main opportunity is, we've created a whole massive -- well, when I say massive, it's all relative in relationship to our size, but expansion of the short entry-level programs.These are four and five nights, as I mentioned previously, and they -- it's all up and down the West Coast and the Pacific Northwest in Alaska as well in Costa Rica, in Baja California. And we found that, first of all, there's a very just generally speaking a high demand for short itineraries, as we've labeled them Escapes.And we believe that this will be a feeder program. The average age -- the average median age is about 10 years lower. And that's really, really meaningful for us from the perspective of how these guests that come in the door first on these programs can be transitioned to the longer programs over time. So whenever you start something absolutely new, you don't hit it out of the park necessarily day one. But we believe this is going to be an absolute home run in the long term.

Okay, great. That's really good color. Thanks, guys. And, Sven, you talked about for next year, you guys are 25% higher books at this point. And obviously that incorporates some of the -- or that incorporates Endurance, which you didn't have this year. So, I guess, the question is, if you stripped out Endurance, is there any way to give us a little bit of color on how your like-for-like bookings are trending at this point for next year?

Sure. So let me provide you a little bit of color. I will answer your question. Before I do, I think it's important to note that, it's a hard question to answer, mostly because a lot of the folks for us that would have booked the Endurance would have booked other things with us, if they hadn't booked the Endurance. So it's not the same as stripping out of same-store sales that you would see in another business.But that being said, we feel pretty good about next year. And that, if you stripped out the Endurance, when I look at the year-on-year performance of the rest of our fleet, it's very much in line with where it was a year ago.So all-in-all, we're seeing nice increases across the fleet in totality. The traditional businesses -- or traditional shifts are not being cannibalized in any real way. And we're seeing an additive boost from obviously booking the Endurance for 2020 and frankly 2021.

Okay. Got you. And then last question, again, probably for you Craig. But, I know, you don't want to give quantitative guidance for 2020 at this point. But are there any things we should be thinking about for next year as we kind of go through and really kind of build out our models, whether that's from a timing perspective or a cost perspective? Anything like that would be pretty helpful.

Yes. We'll give a lot more color in late February early March when we do our earnings call for year-end. But what I would say is, when you look overall next year assuming that everything goes according to plan, we expect to have certainly inventory growth somewhere in that mid-teens range, because we're going to have our new ship, the Endurance launched in April, which will certainly add to the overall capacity of the company.We would anticipate start-up costs associated with that vessel in the first quarter, will run hotter than it will the rest of the year, because you'll have cost before you launch the ship in April. But other than that, I'm going to steer clear of giving any additional color until we finalize the 2019 results.

Okay. Great. Thanks guys. Appreciate it.

The next question comes from the line of Greg Badishkanian with Citi. Please go ahead.

Hey, guys. Good morning. It's Fred Wightman on for Greg. Could you just give us the revenue or EBITDA impact however you want to phrase it for the Columbia River itinerary disruptions? I think that'd be helpful, just getting to sort of the underlying changes to the guidance outlook.

Yes. I don't want to portray this as being a massive impact for us over the course of the year. Certainly, it was a -- it reduced our growth slightly during the quarter. So it has a nominal impact overall the course of the year. That was not the big driver of the revenue change year-on-year.The biggest driver was really the timing of bookings for 2020 and 2021 versus 2019. And certainly, as we build up these U.S. voyages in the fourth quarter to bigger and broader opportunities this is the first year of that build and has lower occupancies in the fourth quarter than probably originally anticipated.

Okay. That's fair. That's really helpful. And can you just sort of give us a debrief or some feedback on the Alaskan market in Q3, how that sort of trended versus your expectations? I know you said that yields were up.It doesn't really sound like you're seeing any cannibalization, but as we look out to next year I mean there's still a decent amount of capacity growth at an industry level. I know that you guys don't necessarily compete with everybody who's growing capacity there. But anything that you're sort of planning to change, as we look into next year versus this year?

Sven here. Not really. The only thing we've changed is, we changed one of our itineraries on one of our ships. It was a 10-day itinerary into two more 5-day itineraries that could be blended together into a 10, should people wish. So that's just a little bit of itinerary tweaking. But aside from that we're not anticipating any changes.We've been in Alaska since 1981 consistently every year. And so, we know this place really, really well. And we always tweak in relationship to new opportunities and what we've learned from one year to the next. But that's about it. And we feel very, very positive about the Alaskan market. I mean there's such an enormous demand. And we are so differentiated from other ships in terms of what we can do there. So we feel very, very confident.

And when you think about what happened in the third quarter for us. It really is the -- what I would say, the first big proving point of our expanded capacity theory, which is that we were going to add ships to high-demand destinations. And we were going to do that because we knew we had excess demand out there in the marketplace versus the capacity that we had.And we did that this past quarter and we filled it at, as Sven mentioned, really high occupancy rates in line with where we've been historically and frankly higher yields that we've been at historically. So, I think, as a stepping stone for the future growth of this company, it's a great data point for us moving forward.

Yes. Totally agree. And then just, could you touch on sort of what you're seeing from a new ship premium perspective? I mean, how is pricing holding up? Or how are you thinking about pricing some of the newer hardware that you guys have like the Venture and the Quest, just given that we do have the Endurance and the Resolution coming online? I mean, is the pricing in those newer ships holding up? Are you seeing sort of your legacy repeat customers looking to swap out to some of the future hardware to you?

Yes. Sure. So thanks for the question, Fred. So when we look at the pricing across our fleet. One of the things that we've been pretty consistent with for many years now is, that the ship is part of the opportunity. The geography is a large part of the opportunity.And the places that we're selling and the experiences that we're delivering is really what our guests are coming to us for. We have some of our highest yields on some of our older inventory, because the experiences are so fantastic. So when we look at the new hardware, it will raise the overall price point of our yields, predominantly because the cabin categories on those ships is at a higher cabin category.But when you compare ships at the same cabin category level, they're going to be very similar price points, because the geographies are so special. So we will see yields raise over time, certainly as we add new inventory, but it's a byproduct of the cabin category mix more than anything else versus the age of the hardware.

Great. Thanks so much.

Thank you.

The next question comes from the line of Greg Pendy with Sidoti. Please go ahead.

Hi, guys. Thanks for taking my question. Can you just kind of remind us -- I guess, as your EBITDA guidance, I guess, holding that for the year kind of implies a bit of a bump in the fourth quarter. Can you imply -- remind us of some of the, I guess, one-time costs associated with the Venture last year in the fourth quarter that we won't anniversary this year?

Yes. Thanks, Greg. I'm not going to get into the specific cost for any individual vessel, because we try to avoid that. But I think -- I'm glad you asked the question, because that is an opportunity for us when you look at this current year fourth quarter.Last year, as a reminder, the Venture launched in December, so she had operating costs in both October and November with regards to crew, with regards to getting the ship ready to sale that we will not have again this year, which is one of the reasons that we expect to be able to have really high margins in Q4.The other opportunity for us in Q4 is that, we had one of our ships, the Endeavour II which was in drydock last year in the fourth quarter. It was a drydock this year in the third quarter. So, a lot of that had to do with timing. So those two items together give us a lot of comfort that we'll be able to deliver on our EBITDA expectations for the year. And we also have the ability to control some of our variable costs when I look out to the fourth quarter, things with regards to certain expenses that we spend from an office perspective as well as certain expenses that we spend throughout our drydocks on the rest of our ships. So, we feel very confident with our full year expectations.

Got it. That’s helpful. Thanks a lot.

The next question comes from the line of George Kelly with Imperial Capital. Please go ahead.

Hi guys, thanks for taking my questions.

Hi, George.

So just a couple for you. First, wondering if you could give us an update on the competitive dynamics versus maybe a year ago? Have you seen any major changes in your key geographies?

Yes. So, I think we all know that there are plenty of ships being built. Some are -- a few are coming out on time. Most of them are coming out late. We've been watching this very very keenly obviously, because, we have this theory and it still is a theory that this is going to -- the advent of these ships is going to increase interest in this niche so to speak or this category. That's one of the reasons we elected to increase our spend significantly in marketing because we wanted to capture that increased interest.And we do believe that, with all the research we've done, we know that guests, potential guests, they hear about one company, one idea then they go to the web, they do their own research and we feel very very confident that as a consequence of that research, we have a really really good chance of capturing their interest.So, we're not underplaying the specter of competition, but we've been watching it very very closely. And we have not seen any appreciable effect as a consequence of that except possibly although we can't prove this yet that the notion of increasing demand has in fact helped us despite the fact that there are more competitors out there. The amount of increased activity in Alaska this summer was very very significant. And we didn't lose an inch of ground. And it is possible that that noise of that increased activity in fact did help us. We can't prove it, but we believe it's highly likely that it did. And if that in fact gets borne out, that would be very very meaningful as we go forward. Does that make any sense? It's a nuanced answer, but it's something we're very very very closely paying attention to.

Okay. Thanks. And then second question for me. Sven, you mentioned in your prepared remarks that all the tech initiatives for next year and one thing you mentioned was the reservation process is going to become more frictionless. So, I was just wondering if you could sort of compare and contrast what the current reservation experiences? What are the pain points that you are hoping to ease?

Well, I think above all else, it gives us the capacity to really have a better understanding of the people that have already transacted with us. We'll know more seamlessly what they've done, what their likes are, when they tend to want to travel, what the -- there'll be a lot of information that can be very very helpful to our reservations people in that regard. And so, now, it's a bit more primitive than that. So if you for example have traveled this before, there are some steps that have to be taken now which are not necessary, which are waste of your time and waste of our time. And all of that will be improved rather dramatically.We can also -- with the CRM system, we can also provide people with -- if you think about a traveler there are three points or three different experiences. There's the pre, there's the during and there's the after. And what we want to be is much more relevant to people in the pre and the after. So, for example, if you booked a trip to Antarctica nine months in advance, we would want to be able to seamlessly send you things that would be of interest in that period leading up to your departure. It could be anything from camera information to an interesting article that appeared in National Geographic of the Smithsonian to some film that is just coming out that may be of interest to people. So that we just -- the relationship starts much earlier. And then afterwards, we want to have the same opportunity. And particularly at that point, lead them in the direction of some subsequent idea with us. Do you know what I mean?

Yes. Okay. That’s helpful. Thank you.

I mean it's really wanting to have a more personalized connection, which is not easy when you're dealing with tens of thousands of people, but to the best of our ability, we want to make ourselves really really relevant to our guests at all three stages of the engagement.

Okay, understood. Thanks.

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Felenstein for any closing remarks.

Thank you, everybody for joining us this morning. We appreciate your time. And if you have additional questions, please let me know. I'll be happy to answer them once this call is concluded. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.