Good day, ladies and gentlemen, and welcome to the Mattel First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder this conference is being recorded. I would now like to introduce your host for today's call, Mr. Dave Zbojniewicz, Head of Investor Relations. Mr. Zbojniewicz, you may begin.

Thank you, operator. And good afternoon, everyone. Joining me today are Ynon Kreiz, Mattel’s Chairman and Chief Executive Officer; Richard Dickson, Mattel’s President and Chief Operating Officer; and Joe Euteneuer, Mattel’s Chief Financial Officer. As you know, this afternoon, we reported Mattel’s 2019 first quarter financial results. We will begin today’s call with Ynon and Joe providing commentary on our results and then we will provide time for Ynon, Richard and Joe to take your questions. To help guide our discussion today, we have provided you with a slide presentation. Our discussion, slide presentation and earnings release reference non-GAAP financial measures, including gross sales, adjusted gross profit and adjusted gross margin, adjusted other selling and administrative expenses, adjusted operating income or loss, adjusted earnings or loss per share, earnings before interest depreciation and amortization or EBITDA, adjusted EBITDA and constant currency. Please note, that the sales figures referenced on this call will be stated in constant currency. In the first quarter of 2019, we modified our gross sales reporting structure and present revenues by categories and reorganized our international sales regional reporting structure. In addition, we have provided supplemental gross sales disclosures by brand. Further detail regarding the brands that are included in each category, as well as the changes made to the international sales regional structure, can be found in the exhibits to the earnings release and Note 23 to Mattel's Quarterly Report on Form 10-Q for the first quarter of 2019. Prior period amounts have been reclassified to conform to the current period presentation. The information required by Regulation G regarding non-GAAP financial measures is included in our earnings release and slide presentation and both documents are available in the Investors section of our corporate website, corporate.mattel.com. Before we begin, I’d like to remind you that certain statements made during the call may include forward-looking statements relating to the future performance of our business, brands and product lines. These statements are based on currently available information and they are subject to a number of significant risks and uncertainties that could cause our actual results to differ materially from those projected in the forward-looking statements. We describe some of these uncertainties in the Risk Factors section of our 2018 Annual Report on Form 10-K, our 2018 Quarterly Reports on Form 10-Q, our earnings release and the presentation accompanying this call, in other filings we make with the SEC from time-to-time, as well as in our other public statements. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so, except as required by law. Now, I’d like to turn the call over to Ynon.

Thank you everyone for joining our first quarter earnings call. It was another strong quarter, demonstrating meaningful progress in the execution of our strategy, a significant improvement in profitability and a solid performance in our top line. The positive momentum exiting 2018 has continued and is reflected in our operating results. While this is a multi-year turnaround and there is still a lot of work to do, I continue to be inspired by the commitment, resilience and capabilities of our organization ,as we transform Mattel into an IP-driven high-performing toy company. Our first quarter results set a solid foundation for the year and we remain on track to achieve our goals to restore profitability and regain top line growth in the short to mid-term and capture the full value from our IP in the mid to long-term. While the first quarter may be small seasonally in terms of revenues, we did well in the face of a number of adverse comparisons including the timing of Easter and foreign exchange as well as the evolving retail environment due to the Toys “R” Us liquidation. Our first quarter results exceeded expectations with significant improvement across the P&L. Some of the more notable financial highlights in the first quarter compared to the last year include; gross revenues were up 2% in constant currency, adjusted gross margin was 38% up 670 basis points, adjusted operating income improved by $147 million, adjusted EBITDA improved by $136 million, and our operating cash flows improved by $81 million. Moving on to our gross sales by category. Our doll category gross sales grew 3% in constant currency driven primarily by Barbie, which was up 13% as it kicked off its global 60th anniversary celebration and continued momentum in Polly Pocket partially offset by declines in American Girl. As…

Thank you, Ynon, and good afternoon, everyone. Our operating results in the first quarter reflected strong performance and significant improvement across key financial metrics. In addition to gross margin, operating income, EBITDA and earnings per share, which Ynon just mentioned, we also improved our working capital and operating cash flow. Importantly, we are demonstrating our ability to consistently execute on a quarter-by-quarter basis. Looking at our first quarter results, gross sales were down 2% as reported and up 2% year-over-year in constant currency. The increase in gross sales in constant currency was driven by dolls, vehicles, and action figures, building sets and games. Partially offset by a decline in infant toddler preschool. As expected, because of the shift in Easter, POS from Mattel was down low-single-digits in the quarter, excluding the impact of Toys “R” Us. As Ynon mentioned, Fisher-Price recently announced a voluntary recall of the Rock 'n Play Sleeper, which was conducted in partnership with the Consumer Product Safety Commission. The estimated total impact of the voluntary recall on our operating income in the quarter was $27 million. This consisted of a negative impact to cost of sales of $22 million based on the impairment of our owned inventory and estimated consumer return rates and a $5 million net sales reduction related to returns from retailers. Separate from the loss of future Rock 'n Play product sales, which I will discuss more in a few minutes there may be additional recall related expenses in the year, but we do not expect them to be material. Our reported gross margin was 34.8% of net sales, up 390 basis points from the 30.9% in the first quarter of 2018. This included a negative impact of the $27 million in estimated cost related to the voluntary recall and the benefit from…

Thank you. [Operator Instructions] Our first question comes from Eric Handler with MKM Partners.

Thank you very much. I wonder if you could talk a little bit about how the profitability of the North America market was versus Europe. And where are you seeing improvements in Europe, and your outlook for that region? A –Joe Euteneuer: Yeah. So, I mean, North America has benefited from the partnerships that exited with in the fourth quarter with Walmart, Target, et cetera. The growth in profitability really comes from a result across the globe Structural Simplification. We have used that as the driving force to really increase profitability. And as you look at the benefit of an exiting run rate of $610 million right now really comes from an expense take out through gross margin advertising SG&A across the globe.

I want to add a couple of comments on Europe which is currently in its turnaround. And the team is doing a tremendous job to show a growth of 4% in constant currency in the phase of challenging conditions. And the marketplace is nothing short of a great tribute to their performance. And we remain very confident that they will continue to execute well for the year remainder of the year.

Great. Just as a follow-up. Can you talk about may be specific countries? Do you expect this to be still in the U.K. problematic throughout the year? How are other areas doing?

Yes. We haven't really given that specific information on a country by country basis. But overall, the turnaround plan is really performing good in most of the countries that we have.

Thank you.

Thank you. Our next question comes from Gerrick Johnson with BMO Capital Markets.

Hey good afternoon. Thank you. Thanks for the POS data, but do you have a number for year-to-date including Easter over Easter?

So in regards to Easter, Easter probably -- the year-over-year comparison probably had a negative 3% to 4% impact on POS for the quarter.

Okay. So...

So think about it this way. POS excluding TRU was down low single digits had a 3% to 4% impact as a result of Easter. So basically for the quarter you were up low single digits.

Okay, great. And then also regarding Rock 'n Play, do you anticipate legal cost or legal reserve associated with that?

So right now, we are not commenting on anything. You're talking about litigation, so we really don't comment on outstanding litigation. But right now we've provided for all of the returns et cetera. And any other costs that miscellaneous related to legal or customer service is something we believe is immaterial for the year.

Okay, thank you.

Thank you. Our next question comes from Arpine Kocharian with UBS.

Hi, thank you very much. I wanted to clarify a comment you had in slides where you say tracking to exceed $200 million in realized savings for 2019 before investment. I think a comparable comment a few months back was about $129 million of run rate savings. And it seems like your EBITDA guidance is unchanged. Excluding -- offsetting I guess the Fisher-Price about 27-plus or call it $40 million, it seems like you're expecting incremental $30 million, $40 million. Why isn't EBITDA guidance going up if you're tracking ahead of your cost savings flow-through?

So I think you have to let me give you an update on your cost savings flow-through. So first of all, there's $149 million of actions that happened in 2018 that were part of the exiting run rate. In regards to the $129 million for the full year, we've said that $50 million to $75 million would be in-period P&L savings of which for the quarter we had $68 million of in-period P&L savings of which probably three quarters of that is a result of the exiting run rate from 2018. In regards to our overall EBITDA, we ended up EBITDA on an adjusted basis of negative $26 million and have guidance to get to $350 million to $400 million. I think that will be a pretty good effort for the last few quarters of the year.

Okay. Maybe I can follow-up after the call because I still can't reconcile those numbers. In terms of -- I was surprised to see Toy Story shipments this early. In fact in your prior guidance at Toy Fair, you had Toy Story specifically falling in Q2. I usually think of this entertainment shipment being six to eight weeks prior to when the entertainment theaters. Did it ship a little bit earlier than you expected, or was there any initiatives that you took on earlier on?

Arpiné, it's Richard. Nothing unusual. We ship to plan, and we are executing against the plan that we set forth.

So you expect it to ship Toy Story in Q1 and Q2?

Yes, yes. We will ship in both Q1 and Q2. But yes, we ship to plan for in Q1.

Okay. And then, any way to give some indication of the extent of capital light model cost savings that you guys are looking at beyond 2019 into 2020? I guess which product lines would you outsource? What would the savings look like? I know it's still early on. You probably don't want to share most of that detail. But in terms of sort of giving an initial sizing of what those plans look like would be helpful. Thank you.

Hi. Arpiné. We just completed several months of work, of diligent work in putting this plan together. And as we've said before, it is a multi-year plan across the entire supply chain end-to-end. But we look to optimize the manufacturing footprint. But this is more than that, because it's not just about the factories. It's also about the way we run the entire system from demand planning all the way to putting product on the shelves with the retailers. At this stage, we are not sharing specific details because of some confidential or competitive market information. But we will update you as we go forward. But we are saying today that we have started that process. We do expect savings to flow through starting 2020 that will be incremental to the Structural Simplification plan.

Thank you very much.

Thank you. Our next question comes from Drew Crum with Stifel.

Okay. Thanks. It actually number one. Just a point of clarification to start. Joe, I think you said there will be $30 million to $35 million of sales were gone from the Rock 'n Play Sleeper. Is that product specific or is that Fisher-Price as a whole? And if it's not, why not any impact on the brand as a whole?

So we said $30 million to $35 million is product specific.

Okay.

As far as – yes, so it's product specific.

Okay. And no anticipation of any spill over to the brand?

Hi, Drew. The answer is that Fisher-Price has a long heritage of safety and quality going back almost 90 years. It is beloved by children, and has the confidence of the parents. We always said that we worked very hard to earn this trust, and we will continue to work hard every day to maintain it. So while we will -- there maybe some short-term impact. We believe that long-term the Fisher-Price brand will remain strong and continue to be trusted by parents all over the world. Obviously we didn't plan for this. We didn't expect this challenge, and we didn't build it into our 2019 plan. But we are confident in the brand leadership, in the strategy, in the product offering, and in the rollout of the new segments later in the year.

Okay. And then maybe for Richard, can you talk about the benefit you saw for the 60th anniversary promo for Barbie? Does that continue through the year? Can you talk about some of the other puts and takes for the brand that needs to be addressed through 2019?

Sure. I mean, Barbie's momentum continued certainly into the first quarter. The sales at 13% plus in constant currency is a great reflection of the consistency that we've had in fact six consecutive quarters of year-over-year growth. The 60th anniversary is off to a great start. Role Model, Dream Gap Project, we had a great event in New York got incredible accolades all over the world. In fact landmarks all over the world were lit pink including the Empire State Building, Tokyo Sky Tree, Mexico City's, History Museums, Jakarta's History Museums, Toronto's CN Tower, Sydney's Bondi Beach. I mean, I can go on and on. But we garnered over six billion media impressions, which is truly spectacular for any brand let alone world event. So we are really excited. We continue the success. The programs will continue to rollout. Our segment specifically on careers is really driving the business. But we've got lots of new product and lots of new items throughout the year and are confident in the Barbie program.

Thank you. Our next question comes from Linda Bolton-Weiser with D.A. Davidson.

Hi. So your cash flow improvement in the quarter was pretty good. And I guess just in terms of my projections based on your comments about working capital I think you said being neutral-ish for the year in your CapEx guide et cetera. I had projected a small free cash flow for the year. But now I'm thinking maybe it can be bigger more substantial. So can we just assume that that's going to be used for debt production? Or can you just give some thoughts on use of cash now that maybe you'll start to actually generate more substantial amount?

So at this point we are not going to give any future guidance on how we are going to use the cash. But obviously, we will look at it at that point in time and use it most effectively for our shareholders.

Okay. And then, can you give a little bit of color on how your performance at retail is going in terms of new shelf space or additional new retailers that you've garnered to kind of build that Toys 'R' Us haul. Are consumers becoming accustomed to shopping for your brands in those places? And can you also comment on what your e-commerce growth was in the quarter and your market share positioning there as well? Thanks.

Well, first of all, as you know the Toys 'R' Us situation is largely in the U.S. and the U.K. The rest of the world is currently under new ownership. And as it relates to the U.S., we are benefiting from a very strong relationship – I should say relationships we have across the board with our core customers and the distribution network built over many years of work. We sometimes need to remind ourselves that we have a distribution network of more than 140,000 doors in North America out of 375,000 doors worldwide. So it's pretty vast and global. Following last year, we kept on working closely with all of our partners and are seeing growth in-store and online with the majority of our customers and have specific plans for the remainder of the year. We also are seeing growth with other type of retail such as grocery stores, drug stores, department stores, value chains, and specialty channels and so forth. So we do see that the market has moved on. And the fact that we are up in North America 6% with the adverse comp to last year of Toys “R” Us without Toys “R” Us is a strong indication for performance in the quarter for life without Toys “R” Us. So we moved on.

How was your e-commerce growth in the quarter?

We are not providing specific breakdown. But it is up and we are satisfied with the direction it's heading.

Okay. Thanks.

Thank you.

Thank you. Our next question comes from Mike Ng with Goldman Sachs.

Hi. Thank you very much for the question. I might just have a few if I could. The first is just on Asia Pac and China. I think originally you were expecting a low single digit headwind from China in the first quarter and I think also in the second quarter. It seems like the Asia Pac numbers were pretty good. Did that low single digit headwind come through and could you just comment on the health of the China inventory? Do you still expect it to be clean by mid-2019?

Hi, Michael. Yes, we are making good progress in Asia in general and in China specifically. I actually just came back from a trip. We spent time with the team. We went to multiple cities, sat down with our partners and we’re definitely seeing progress. We’re still down for the quarter. And as you said we will also be down next quarter. But we do expect to make meaningful progress in the year. As it happens this week is where we -- is when a new Head of China, a new General Manager in China just started. So we also have a new strong team in place and we feel much better about where we are now relative to just a few quarters ago. So, obviously, it's still to be delivered. But directionally we are in a good place.

Great, thank you. And I just have two housekeeping questions. The first back is could you make a comment about the health of the channel inventory? And the second is, do you still expect Fisher-Price stabilization at the end of the year? Thank you very much

So in regards to your first question, I mean we've worked hard over the last couple of quarters to make sure our supply was meeting demand, and not the other way around. So we feel very good that we've worked very hard with our retail partners across the globe to maintain the right inventory levels and their locations along with balancing it at ours. And in regards to Fisher-Price, I think the way to look at it is that the $30 million to $35 million of sales impact going forward for the next three quarters on a $1 billion business is roughly a couple of low percentage points. We've not changed our guidance overall. Fisher-Price has a little more work to do. And remember we were confident that the back half of the year is when the new products are coming. And so we stand pact in regards to our belief in Fisher-Price. And again it's so early in the year it's too early to break any changes at this point.

Great. Thank you both.

Thanks.

Thank you. Our next question comes from Tim Conder with Wells Fargo Securities.

Thank you. Joe just may be there's a lot of question that was alluded to earlier. Can you may be just walk us through the bridge again from where your EBITDA -- adjusted EBITDA ended to the $350 million to $400 million is one. And then if you would have any color on may be by the breakdown of the geographic areas or a couple of the major brands in POS either for the quarter itself or through year-to-date through Easter any additional color they will be appreciated. Thank you.

Sure. So, in regards to the POS, overall, we talked about excluding TRU. Overall, the company was down low single digits. Dolls overall for the globe was up double-digits. Vehicles was down. Hot Wheels was down low single-digits. So, that's some color. If you're looking for regional basis, you see low single-digits down in North America excluding TRU, same thing internationally. So, excluding TRU, we are just down low single-digits from a POS standpoint.

Yes, and I can just add a little bit of sentiment here as well. When you look at particularly in Barbie and Hot Wheels, the consistency that we're experiencing is really encouraging for the balance of the year. Obviously, core brands like that up significantly. Barbie up double-digit. Hot Wheels also trending really well. So, also important to note on Hot Wheels we are up against the 50th anniversary last year. So, we are expecting to have someone of a little bit of a challenge out there. But really experiencing great connectivity with our consumers, our Legends Tour which we built last year is multiplying multiple cities with Walmart this year. It's one of the key drivers of POS. We've introduced also the Monster Truck Show -- live shows that are also driving POS. And as we also mentioned on our partnership brands, particularly with Jurassic, it's had a great start to its second year bucking the trends of what would be movie year two. So, we are quite confident in that line as well. So, overall as we exit the first quarter which while it's small is a good indication of how the year's going we are feeling quite good about where we are.

Yes. So, in regards to--

Okay Joe and then on the -- just to revisit that bridge from 2018, EBIT down the $350 million to $400 million again?

Yes. Sure Tim. We had a good quarter and I think the things you had to think about in regards to Structural Simplification and comparing 2018 to 2019 is that if you remember in the back half of 2018 is when we really started to materialize savings from Structural Simplification versus the first half. And so we have a sort of easier comparison in the first half of the year and a more comparable comparison in the back half of the year. So that's one of the things. In regards to investments, if you saw the investments we reported in the quarter, investments will be more backend loaded so in the back half of the year. And the other comparables we had is remember TRU that we were talking about. And then also remember the PA distribution warehouse that happened last year. That was first half expenses and the benefit in the back half. So, I think it's more of a comparability of timing than actual anything else.

Okay, great. Thank you.

Thanks Tim.

Thank you. Our next question comes from Jim Chartier with Monness Crespi.

Thanks for taking my question. I wanted to talk about the strategic investments you're making at advertising this year. It looks like the advertising will be 50% of the total $90 million of investments in OpEx this year seems like a big number. So curious what kind of sales lift you're expecting from those investments? And if you could talk about may be some of the bigger initiatives either by brand or however you want to talk about it? And then, what kind of gives you confidence to make such an investment in advertising this year? Thanks.

Sure. One of the things that we have been doing is really evaluating the effectiveness of our advertising so that we could over the last few quarters, so that we could target our money more effectively. So when you think about that spend in regards to advertising, you're talking about online content, which includes like animated series, influencer programs, product-related videos all of those things that the new consumers are really watching and trying to make their decision on what to buy. And so when we think about that this effort is going around across the company. It's helping Europe with this turnaround. It's helping North America with this. And obviously in Asia a good portion of what gets sold there is online. So we think we are just moving to where the consumer is going and try to be as effective as we can with our spend.

And then are you assuming any material sales lift from that advertising investment or is this more of across this later on?

Yes. When you talk about sales lift, what we are trying to do is to get to flat for this year and stop the negative losses we've had over the past five years. So I think that's really what's happening, it's allowing us to finally get to flat and then look to turn up going forward.

Great. Thank you.

Thanks, Jim.

Thank you. Our next question comes from William Reuter with Bank of America.

Hi, guys. With regard to the investments you're going to be making this year are those permanent or should we expect that those are one-time-ish in nature and then you will be kind of like I guess thinking about it again freshly in 2020?

Right. Our investment program that we talked about in 2018 and 2019 has really been individual items that we've made investment at that point in time and that's it. So yes, we would have -- we would not give any guidance in 2020, but yes, it's not an ongoing investment. It's a one-time investment.

Okay. And then just as a follow-up with regard to some of these facilities that you're leaving as a result of the capital light, are you going to be receiving some proceeds? And is there anyway to give us any sort of I guess expectations for how large those proceeds could be?

So we are not providing any guidance on that currently just because of the sensitivity and confidentiality of the information. Dealing in foreign jurisdictions and the local governments and the workforce, we want to make sure that we are not triggering anything ahead of time that would cause us an adverse condition.

We've -- and just to say while there might be some benefits in terms of proceeds, this is mostly about efficiency and improving cost structure and gross margin. That's where the focus is, okay?

Thank you.

Thanks, Bill.

Thank you. Our next question comes from Greg Badishkanian with Citigroup.

Great. Thank you. At the TTPM Toy Fair today you had a pretty sizable new toy line up for Toy Story. So how big of an opportunity could that be for 2019? And then if we think about entertainment overall for 2019, should we expect at least some modest growth year-over-year given some of the properties you are tied to?

Hey, Greg, it's Richard. We are very obviously excited about the Toy Story product line up. As our retailers and as the line gets out there, we are anticipating consumers will as well. Early reads although it's just hitting the floor are pretty good. We don't normally size these partner relationships. But I can tell you that we're extremely bullish on Toy Story 4 both from a product and story perspective. We are also well teamed up with Disney around the world in our execution plans. Retailers are supporting the property with significant space and retail marketing. And we really believe that coupled with what will be another very good Jurassic year will be a powerful entertainment year particularly in action figures for Mattel and ultimately the industry as these properties drive excitement into the aisle and drive connectivity to the toy spaces all over the world. So we are very excited about Toy Story. But in general, the action figure business for us is a category that we are excited about 2019.

Great. Also just the line of the BTS dolls as well at the Toy Fair. Is that something that could -- that you sense could still be pretty sizable and incremental this year?

Yeah. Look as you saw and as we all see BTS is a phenomenon. It's a great anticipated bet that Mattel has made. We quickly reacted to a trend and executed against product that is taking shape. We've introduced this product through a really innovative social media strategy. As we've been revealing the dolls and characters, we are garnering incredible traffic associated with what they called the BTS Army, who are the fans that ultimately are the ones that we're attracting to at least on the forefront buy the dolls. Retailers are getting more and more excited about it. We've got some great commitment from a space perspective. And we hope and anticipate that it will be a really fun and lucrative new line for us.

Great. Thank you very much.

Thanks, Greg.

Thank you. Our next question comes from Felicia Hendrix with Barclays.

Hi. Thanks for taking my question. So Richard, well, the whole team you guys did better than everyone anticipated in the quarter. But Richard I was hoping you could lay out for us what the biggest surprises were in the quarter for you?

Felicia, I would be honest and tell you that there were no real surprises. I think we had some big expectations on some brands and some small expectations on others and overall on balance. We met exactly what we thought we were going to do. It is a small quarter as you know. A lot of it obviously takes place in the back half. But it's a good indication of where we are headed. Retailers are just setting up, a lot of their lines, the floors get set, we get early reads on some of our product lines, and so far so good. I will tell you, of course, we are most pleased with the performance of the Barbie brand. As you know, it's been a real work in progress in the last several years and the consistency that we've seen consumer takeaway, retailer support, and frankly the press reaction to the programs has been terrific. So, overall, I would tell you that we've got a great portfolio coming together. And I think our partnership brands with Toy Story 4 that's going to be a great one for us. Jurassic year 2. In our games business, I'm really pleased with UNO. I think you're going to see in the back half a lot more strength in the games category coming from Mattel with some terrific new items. So, in general, I would say, I'm pleased and I would say we are poised for a good year with execution in mind.

So that's helpful. And then just flipping just around and I know you guys are trying to kind of transition from prior patterns in terms of giving guidance, but it just seems like with all the momentum so strong -- and Joe you said in the beginning of the call, you just – there's a lot of year left in the year. So you don't want to get ahead of yourselves with the guidance. But when you think about the rest of the year, what are you cautious on then?

Well – and, I mean, when you think about the first quarter for ourselves internally, I know the numbers look good to you externally. To us, we're performing to our plan. So when I look at BTS and some of these other things that look like they're going to be great in the marketplace, we've already built those into what we have going forward. Now is there upside? Potentially. But there's still so much of the year left. We don't want to get ahead of ourselves before we really sort of have an idea of where things are going to go.

Okay. Understood. And Joe, while I have you, just a balance sheet question, just with the high-yield market. It's at near recent heights and your 2020 – I'm sorry, 2025 are back over par, would you consider paying off the 2020 with available liquidity or terming them out as bonds?

You know what, we are looking at that. We haven't made any decisions yet. So we will come back to you on that.

Okay. And then just with the...

And, Felicia…

Okay.

Sorry, go ahead.

I want to say, welcome to Dave Z. Welcome back. I wanted to say that.

All right. Great.

All right. Thanks.

Thanks, Felicia. I just want to tag on Joe's comment on the rest of the year. Our job is to do the best we can and we clearly are very focused on execution and are very proud of the fact that we are able to do that consistently now and improve numbers, especially profitability for three quarters in a row. This quarter was performed better than expectations, but it is a small quarter. And as you said, with a lot of the year to go, it's just too early to make any changes. Notwithstanding that, we are doing what we have to do and just keep at it and keep performing. But there's a long -- there's a lot – if we do perform per the guidance, I just want to remind everyone, it will mean that we will achieve flat revenues up to five years of consecutive decline. And if we hit the top end of our range, i.e., $400 million adjusted EBITDA, it will mean that we double EBITDA year-on-year, adjusted EBITDA year-on-year. And if these things happen, it will be the highest improvement in operating income in 10 years. So this is not an easy task and we appreciate the confidence and the recognition, the momentum. But we want to do things in the right cadence, in the right order and recognize that this is a multi-year turnaround and things will take time. Next questions. No more?

I'm showing no further questions at this time. I'll turn the call back over to management for any closing remarks.

Thank you operator and thank you everyone for joining the call today. The replay of this call will be available via webcasted audio beginning at 8: 30 PM Eastern Time today. The webcast link can be found on our Investor page. Or for an audio replay please dial 404-537-3406. The passcode is 6689495. Thank you for participating in today's call.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may all disconnect and have a wonderful day.