Good day and thank you for standing by. Welcome to the Q4 and Full Year 2021 Steve Madden, Ltd. Earnings Conference. At this time, all participants are in a listen-only mode. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Danielle McCoy, Director of Corporate Development and Investor Relations, and please go ahead.

Thanks, Stevie [ph], and good morning, everyone. Thank you for joining our Fourth Quarter and Full Year 2021 Earnings Call and Webcast. Before we begin, I’d like to remind you that our remarks that follow, including answers to your questions, contain statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks that could cause actual results to materially differ from those expressed or implied by such forward-looking statements. These risks include, among others, matters that we have discussed in our press release issued earlier today and filings we make with the SEC. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings conference call, if at all. The financial results discussed on today’s call are on an adjusted basis unless otherwise noted. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release. Joining the call today are Ed Rosenfeld, Chairman and Chief Executive Officer; and Zine Mazouzi, Chief Financial Officer. With that, I’ll turn the call over to Ed.

Thanks, Danielle. Good morning, everyone, and thank you for joining us to review Steve Madden’s fourth quarter and full year 2021 results. We delivered outstanding results in the fourth quarter with revenue increasing 38% and diluted EPS increasing 125% compared to pre-pandemic fourth quarter 2019, capping a record year for the company and saw our operating margin reached 14% and diluted EPS increased 28% compared to 2019. Our success in 2019 was the result of the extraordinary efforts of our employees and their disciplined execution of our strategic initiatives, and we are confident that our continued focus on these initiatives positions us for strong growth and value creation going forward. Our number one initiative, and the one that underpins all the others, is continuing to deepen our connection with our consumers. We are doing this first and foremost by winning with product. By utilizing our proven model, which combines talented design teams, a test and react strategy and an industry-leading speed-to-market capability, we are delivering trend right product assortments that are enabling us to outperform the competition and take market share, most notably in our Steve Madden and Dolce Vita brands. Looking ahead to 2022, our top priority will remain unchanged, continuing to deliver innovative and on-trend products that resonates with our consumers. We are also supporting this great product with enhanced marketing and engagement with our consumers. This includes larger brand campaigns like our Maddenverse campaign in fall of 2021 as well as the always-on digital marketing and influencer activities that have been instrumental in our e-commerce growth. And we will continue to invest in this full funnel approach in 2022. As we sharpen our focus on our core consumers and strengthen our connections with them, it’s fueling our progress on our next strategic initiative, driving our direct-to-consumer business,…

Thanks, Ed, and good morning, everyone. Our consolidated revenue in the fourth quarter was $578.5 million, a 63.9% increase compared to 2020 and a 37.9% increase versus 2019. Our wholesale revenue was $410.5 million, up 56.1% compared to the prior year and up 30.8% compared to 2019. Wholesale footwear revenue was $303.2 million, a 61.9% increase from 2020 and a 29.9% increase from 2019. In the U.S., Steve Madden brand revenue was up more than 50% to 2019 and Dolce Vita revenue increased more than 90% compared to 2019. Private label was also strong, partially due to orders that we were able to pull forward from Q1 2022. Outside the U.S., Europe was once again the highlight with revenue more than tripling from the comparable period in 2019. Wholesale accessories and apparel revenue was $107.2 million, up 41.7% to last year and up 33.3% versus 2019. Strength was broad-based with Steve Madden, Anne Klein, Betsey Johnson and private label handbags as well as BB Dakota Steve Madden apparel all recording revenue increases of more than 40% versus 2019. In our direct-to-consumer segment, previously called Retail segment, revenue was $164.7 million, a 91.3% increase compared to 2020 and a 62.9% increase compared to 2019. Both e-commerce and brick-and-mortar channels saw outstanding performance. E-commerce revenue grew 80.2% compared to 2020 and 144.9% versus 2019. In our brick-and-mortar stores, global comp store sales increased 24% compared to 2019, with domestic stores delivering a 31% comp gain. We ended the year with 214 brick-and-mortar retail stores, including 66 outlets as well as 6 e-commerce websites and 17 company-operated concessions in international markets. Turning to our Licensing and First Cost segments. Our Licensing royalty income was $2.9 million in the quarter compared to $3 million last year and $3.1 million in 2019. First Cost commission…

Thank you. [Operator Instructions] Our first question comes from Camilo Lyon of BTIG. Please proceed.

Thanks, and good morning. Really great results in a tough environment. I was hoping we could just talk a little bit more about the guidance that you just issued and maybe a little bit more color on how the cadence for revenue should flow. I think you said first half to second half should be more similar to 2019. Maybe just help us understand the inputs into that. And also similarly, how are you thinking about the puts and takes on gross margin, particularly with freight costs, both air and ocean? And how you’re envisioning the markdown to full price mix play out for this year? Thank you.

Great. Good morning, Camilo. And thanks for the kind words about the performance. In terms of the guidance and the seasonality, I think that Zine really said it. First half, second half split, both revenue and earnings, I think it’s best to look to 2019. The comparisons to 2021 are obviously impacted by the unusual seasonality we had last year and the fact that the business was accelerating throughout the year. So if you look at revenue growth compared to 2021, you’ll see it decelerating each quarter just based on the comparisons. In terms of the puts and takes on the gross margin, there are a lot of moving parts there, as you alluded to. But overall, we’re forecasting gross margin for 2022 to be about flat to 2021. So there’s a lot of sort of puts and takes there. I think you asked about the promotional activity. We do – we have built in some expectation of some normalization in promo activity, meaning a little bit more than we saw in 2021, not back to pre-pandemic levels, though. So there’s a little bit of pressure built into the forecast from that. There’s also a little bit of pressure built in from FOB price increases that we’re seeing. The freight impact is approximately neutral to 2021. Obviously, there was a big – a significant amount of pressure in 2021, and we’ve assumed that, that does not abate, but that there’s no incremental pressure for the full year of 2022. And then we’ve offset some of these pressures through our price increases that we’ve implemented. So I hope that’s helpful.

No, that’s very helpful. I mean just to clarify, there is no assumption of the GSP being renewed in this initial outlook, right?

That’s correct.

And was it about 80 basis points last year impact?

I think the consolidated, we had about 50 basis points.

Got it. Perfect. And then just a wrap-up…

This is Zine. As you know for the GSP, the bill passed in the house mainly along party lines and has been pushed back to the Senate now. So they’re currently reconciling the 2 bills, the one that the Senate passed several months ago and the one that the House passed on February 4, I believe. And hopefully, that doesn’t take very long. But as of right now, given that it was straight down party lines, we think that it may take a little bit longer than we were hoping for. The bill has retroactive benefits if passed. Both the Senate version and the House version have retroactive benefits.

Yeah. That’s on the America COMPETES bill, which should get through. And then just a final question on international. Given the strength that you’re now seeing and the ownership of the European business, worse notwithstanding, can you help us understand where the margin, international versus U.S., sits today and how that progression should unfold?

Yeah. If you look at the international business overall, it’s still not as – the operating margin is still a few hundred basis points below the U.S. But we do see that improving and we expect to narrow that gap over time.

Got it. All the best guys. Good luck and great results again.

Thank you.

Thank you.

Thank you. Our next question comes from Paul Lejuez of Citi. Please proceed.

Hi. This is Kelly Crago on for Paul. Thanks for taking our question. I’m just curious about your inventory position. The inventory levels are up almost 90% versus 2019, which I assume is to get ahead of some of the supply chain delays out there. So curious if you could elaborate on your strategy there. And any comments you could make on the current state of the supply chain and if you have any visibility at all into the situation improving at this point.

Yeah, good morning, Kelly. Yeah, I think the inventory you’ve identified the reason for the increase there is related to the supply chain disruption. And as Zine articulated in the prepared remarks, it’s really the in-transit inventory that’s driving the big increase in inventory. The on-hand inventory at the end of the year was up 32%, which we’re very comfortable with. Keep in mind, we just reported sales or revenue up 37% for the quarter. And also remember that the DTC – again, we’re comparing to 2019 here, that the DTC is a much larger percentage of the overall mix. And that carries heavier – or requires more inventory, so comfortable with the on-hand. The in-transit is what’s up 159%, and that’s because of the extended lead time. So we’re working on transit time of about 70 days now on average compared to about 30 days back in 2019 or pre-COVID. And just to do the math, 70 divided by 30 was at 133%. So without any increase in the business, the in-transit inventory should be up 133% based on the transit time. And then obviously, we’ve got the business growing as well. So we feel very comfortable about the inventory position, and we’re doing what we need to do in this environment.

And just any comments on the supply chain situation and how you’re thinking about the visibility into an improvement? Or are you seeing any sort of signs that the situation can improve in the first half of this year?

No, we’re not. We’re really – I haven’t seen any meaningful improvement. The lead times are still extended. Freight is still expensive. But the good news is that we’ve been dealing with this for a while now. So we’ve built this into our planning calendars and we think that we are prepared to be able to meet the demand and to deliver products in the first half.

Got it. And then just curious about your comments on the DTC business. Great to see how strong this business has been. Just curious where DTC EBIT margins sit today versus historical and relative to the wholesale business, is this something that you believe is sort of a driver of EBIT margin expansion longer term at this point?

Yeah, I mean, it’s a pretty – it’s been a pretty incredible story for us. The improvement that we’ve been able to deliver in the DTC business over the last couple of years. Compared to 2019, the business was up on the top-line over 50%. And that’s with actually a slightly smaller store base than we had in 2019. And – but more important to your question what’s been really exciting is the improvement in the operating margin. So again it was sub-4% in 2019, and we delivered a 17.5% operating margin in 2021. So that is pretty exciting and really does – is a meaningful – sort of drives a meaningful improvement to the overall operating margin of the company and what we can achieve as an overall company going forward.

Got it. Best of luck. Thank you.

Thanks, Kelly.

Thank you. Our next question comes from Susan Anderson of B. Riley. Please proceed.

Hi, good morning. Thanks for taking my question. I was wondering maybe if you could give some thoughts on just the SG&A margin and SG&A for this year. It looks like maybe based on your guide, it could deleverage a little bit, if that’s correct? And then also, if you could just talk about the puts and takes there.

Yeah. It’s a good question. So as I mentioned, we’re looking for flat gross margin. And I think you can see in the guide at least at the mid- to high-end of the guide, we’re looking at essentially flat operating margin. So that implies that SG&A as a percentage of revenue is also flat. So I think – you mentioned potential deleverage. That would be maybe at the very low end of the guide we’d be seeing a little bit of delever. But at the mid to high, you’re looking at essentially SG&A as a percentage of revenue being flat. And I’m glad you brought it up because, typically, if we’re looking at the 10% to 13% revenue growth that we have forecasted, we pride ourselves on our ability to control expenses. With that kind of revenue growth, we would typically be seeing SG&A leverage. The reason that we’re expecting that to be neutral to 2021 in 2022 is because there is about a couple hundred basis points of SG&A headwinds that we’re having to offset in 2022 to get to that neutral. And that’s really in about – there are sort of 4 buckets there. The first is benefits that we received in 2021 that we’re not going to anniversary in 2022. So that would be things like some CARES Act and other government benefits in international markets that we got in 2021. That would be rent abatements and concessions that we got in 2021. Then I think the second bucket is the recovery in 2021 happened faster than we anticipated. And so there was a period there where the revenue had come back, but our salaries in corporate and our retail payroll was at, what I would call, unsustainably low levels. We were running unsustainably lean. And so we have had to reinvest in people. And so that’s the second bucket. The third would be, we’re going to continue to really invest in marketing. And so you’re going to see marketing as a percentage of revenue go up again in 2022. And again, this is not just performance marketing on the digital side. This is top-of-funnel brand marketing as well. And we think that’s an investment worth making. And then the last one is smaller, but we have assumed that some travel comes back. We think it’s time to get back and see our customers and see our international regions. It’s not going to go back all the way to where it was pre-pandemic, but we’ve got that line item coming back as well. So putting that all together about a couple of hundred basis points of headwinds. Then, we do get some leverage on the growing – on the remainder of the expenses, some of the fixed expenses, to get us back to neutral for the year.

Great. That’s very helpful. And then if I could just add a follow-up. I’m just curious, wholesale was obviously very strong in the fourth quarter, above 19. Do you expect that trend to continue this year? And if you could give any color just on the orders you’re seeing for spring and fall, and if there’s any risk of cancellation there, either due to late deliveries or just wholesalers kind of over-ordering? Thanks.

Yeah. The momentum in the wholesale business is very good. Our sell-through performance has been very strong. We are taking share in our key customers, in our key brands. And for the year, we think the wholesale business can be up double digits, low doubles, even mid-teens. In terms of the first half versus second half, it’s certainly going to be stronger in first half, again, because of the easier comparisons. And – what was the last part of your question? Was it cancellations? Yeah.

Yeah. If there is any risk due to later deliveries or just wholesalers over-ordering. And I guess since you mentioned the back half being weaker, should we still expect that to be a positive growth?

I think the back half, certainly not positive in Q4. I think that there was – it was a pretty special quarter we just had in Q4. So at least as of now, we’re going to plan Q4 down. In terms of overall risk of – but still up in Q3, by the way. In terms of risk of cancellations, look, there’s always some risk to that, but we don’t see – we’re not terribly concerned about that just given the incredible sell-through performance we’re having and the demand from the consumer for our products right now.

Okay. Great. Thanks so much. That’s very helpful. Good luck.

Our next question comes from Erinn Murphy of Piper Sandler. Please proceed.

Great. Thank you. Good morning. I wanted to circle back to the direct-to-consumer margins and really parse out the growth margin in particular. Ed, I mean, do you feel the 65% range is sustainable going forward, and then any expansion is going to come more from SG&A leverage? Just help us think about what could expand the margins from that 17.5% rate you achieved?

Yeah. So in terms of the gross margin, we’re – certainly, this year, we’re going to plan that approximately flat. Over time, is there some room there? Maybe a little bit. But 65% is pretty good. So we want to be cautious about how much we anticipate we can grow that over time. On the operating margin, I want to be clear. We are not forecasting operating margin expansion in DTC this year. In fact, we’re – we built into the guidance a little bit of contraction there, maybe 50, 60 basis points, something like that. And again, that’s attributable to the SG&A headwinds that I laid out earlier.

Okay. Great. That’s super helpful. And then, I guess, you did talk about the overall DTC top-line continuing to grow as well as just the bottom line dollars. Is – what is e-com looking like within that segment?

For 2022, I mean, we do believe that that could be double digits again. Obviously, moderating from the incredible growth we’ve seen last couple of years, but double digits.

Great. And then I wanted to pivot to your comments earlier on apparel. Can you just remind us how big is that business today? And as you – I think you said in the fall, you’ll be removing the BB Dakota name and just call it Steve Madden. Has that garnered incremental accounts in terms of potential placement for that product?

Yeah. So in terms of the overall business, I think that we’re probably somewhere between $45 million and $50 million and maybe not quite $50 million in 2021. And as I said, we’re targeting to get close to 50% growth for 2022. And part of that growth does come because of the wider opportunity that we see under the Steve Madden brand, some additional accounts that we’re excited about or – and some accounts that are just giving us more doors, expanded assortment, et cetera, because of the new positioning for fall.

Great. And then just last question on the marketing dollars. It sounds like you’re doing some kind of splashier campaigns this year. Is that going to be mostly focused on the Steve Madden brand? Or are you – are there other brands within the portfolio that you’re leaning into in a deeper way this year? Thank you.

Yeah. The majority – I mean, the vast majority of the dollars are devoted to Steve Madden. And obviously, that’s warranted because of the – how much bigger it is than the other brands. But we’re also investing in Dolce Vita and Betsey Johnson as well, because both of those brands have really nice momentum, and we want to continue to engage with our consumers there, too.

Great. That’s helpful. I’ll hop in. Thanks so much.

Thanks Erinn.

Thank you. Our next question comes from Laura Champine of Loop Capital. Please proceed.

Thanks for taking my question. And congratulations on a nice end to the year and good guidance. My question is about the top-line guidance. Of that 10% to 13% growth you’re looking for this year, how much of that do you expect to come from price mix as opposed to units?

It’s a good question. We raised prices – I’d say, it really varies by brand and product. But it’s anywhere from, I would say, 5% on the low end to 12% on the high end. So that’s a good chunk of the overall revenue growth is coming from AUR and ASP.

Got it. Thank you.

Thanks, Laura.

Thank you. Our next question comes from Tom Nikic of Wedbush Securities. Please proceed.

Hey, good morning, everyone. Thanks for taking my question. Just a follow-up on the DTC business. I think – I just want to make sure I kind of have my ducks in row here. I think you said that it should grow this year, but you do have pretty tough compares and probably a slower growth rate than wholesale. Can you kind of like contextualize that a little bit? Like is it kind of mid-single-digit growth, low-single-digit growth? Like – anything like that would be helpful.

Yeah. DTC overall, we’re forecasting mid- to high-singles in terms of overall revenue growth. Again, that’s with double-digit e-com and obviously slower bricks-and-mortar.

Got it. And how about store count? Like should we expect a couple of new store openings this year? Like how do you think about that

Yeah. You’ll see this store count go up a little bit. That’s not the U.S. The U.S. will be about flat, but we are opening a few – a handful of stores in international markets.

Thanks, Ed. And good luck this year.

Thank you.

Thank you. Our next question comes from Sam Poser of Williams Trading. Please proceed.

Good morning. Thanks for taking my questions. Just a few things. One, can you talk about how you’ve shifted where you are with production outside of Asia and the timing of flow of that business. And I’ve got to have a few more as well.

Yeah. Sam, as you know, we’ve talked about moving approximately half of the Steve Madden Women’s products outside of China, primarily to Mexico and Brazil for fall of 2021. And we’re trending in a very similar place for spring 2020. What was that? I didn’t hear the follow-up question about Q4.

No, I didn’t ask about Q4. I guess – the other question is just how long are – on the stuff coming over by boat, how long – it’s taking longer, but how long is it sitting on the docks now? Like – or how quick can you pick it up once it’s been unloaded?

Well, there are delays there, too. But I think when we’re talking about the 30 to 70, we’re trying to incorporate the entire transit time.

Got you. And then, the air freight that you had – your air freight, what percent – or how much incremental airfreight did you have in 2021 over 2019, I guess?

So if you compare 2021 to 2019, it’s really in our DTC that we do most of the air. It’s low-single-digits in wholesale. I think there was a little increase there. But we ended 2021 at around 30%, and that was compared to 17% airfreight in 2019. Is that right, Zine?

Yeah. That’s correct. Yeah.

And can you tell us what those incremental dollars were?

A lot. I don’t know, because – no, I don’t know that off the top of my head. But between the increase in the percentage that we’re airing and the increase in the airfreight per unit, it was significant.

Let me ask you this. How many basis points did it impact gross margin negatively for the year?

In DTC or in the consolidated?

In total.

Overall, freight, we’ve got it about 240 basis point negative impact versus 2019 in 2021.

And so theoretically in 2020, we should see, hopefully, that come way down in 2023, which should – that should be a positive flow through to your gross margin? You might not get it all back because of other issues, but that should be exceptionally positive in fiscal 2023?

We don’t think so. We built it – again, the freight impact in 2022, we have built as – in the forecast as neutral to 2021. Again, we’re going to fly – we intend to utilize less air freight. But the air freight rates, given where they are today, particularly given – compared to where they were in the early part of 2021, there’s going to be a negative rate impact. So overall, the air freight doesn’t give us any incremental benefit.

Got it. Talking about 2023, like next year?

2023, I apologize. [We’re not able to do] [ph] Yes. Yes. I am certainly hopeful that we get a benefit in 2023.

Okay. And then…

Sam, just when modeling the 2023 benefit, and we’re hopeful that we will get that, just keep in mind that the contracts when they get negotiated, they run April through April. So what that means is even in 2023, if you’re negotiating in this environment today, you’re probably not going to get great rates. And in 2023, the first part of it will be still impacted by the freight increases.

But, I mean, if you’re using less air, that cuts – if you’re using a lot less of it, that still helps. But of course the need for air freight should go way down once – hopefully, once these ports get cleared out, I would think.

That’s correct. And the ocean – we do a lot more of our consolidated units via ocean, as you know. So that’s a big driver as well.

All right. Well, thanks very much for continued success.

Thanks, Sam.

Thank you. Our next question comes from Jay Sole of UBS. Please proceed.

Great. Thanks so much. Ed, I just wanted to follow-up on the BB Dakota Steve Madden news. Is it – what’s your vision for the apparel business for Steven Madden? Obviously, 50% growth for 2022 is a pretty big number. I mean what – when you think about 3 to 5 years, what would you like to see the company accomplish?

It’s a good question, Jay. So I think what we’re focused on right now is we just want to have great products that our customers love. And I want it to be an important – I want it be hot for lack of a better term. It’s not about hitting a revenue target. It’s about having great products that are exciting for our customers. And if we do that, the numbers will take care of themselves.

Obviously, there is a lot of good distribution with wholesale partners online. I mean, is that the distribution strategy going forward? I mean do you want to have more of like a physical presence within the company’s own channels? What do you see is the distribution strategy for apparel going forward?

Well, we do want it to be important on stevemadden.com. I think as far as our own bricks-and-mortar stores, I put it in a handful of doors. But our stores really are not built to carry apparel So that would be – if we ever do that that would be a much longer-term strategy. So it’s going to be wholesale and stevemadden.com for the near-term.

Got it. What signs do you have that Steve Madden brand has brand permission from the consumer to sell apparel? Obviously, everybody knows footwear. And obviously, you mentioned how hard you’ve worked on handbags to build that into really big strong growing business. What about apparel? I mean do you – just from what you’ve learned over the past couple of years, I mean, how confident do you feel that the consumer is ready to buy Steve Madden apparel?

Yeah. We’ve been at this a couple of years with the co-branded line. We’ve been selling – seeing the success in the wholesale channel. And we’ve also been doing – monitoring what’s going on in stevemadden.com. And obviously, what we’ve seen gives us the confidence to take BB Dakota off and to go full force with Steve Madden. So we’re excited about it. We understand we’ve got – I can tell you, but we’ve got to show you. And that’s what we intend to do.

Got it. Okay. Thank you so much.

Thank you. Our next question comes from Dana Telsey of the Telsey Group. Please proceed.

Good morning. Congratulations on such a nice fourth quarter. A couple of things. As you think about just the current trends, are you – did Omicron impact you in January? And are you seeing that recovery as we’re hearing from others. And then, when you think of the shape of 2022, as you talked about the flat gross margins and flat SG&A, is there any other shaping or cadence that we should think as we go through 2022? Thank you.

Thanks, Dana. Yeah, we did see like it just about everybody else, a bit of a slowdown in January, and then we’ve seen a nice rebound in February, which we do attribute to the trajectory of Omicron. In terms of the cadence, look, I think we tried to give you a sense for the split of revenue and earnings for first half, back half, some color around gross margin and SG&A as a percentage of revenue. So I think that’s about it. I don’t have anything else for you.

Dana, I think, Ed gave a little color on Q4 as well for the wholesale side and the [same last quarter] [ph].

And price increases, how are you thinking about price increases this year? Is it – does it differ by category, timing of price increases? And how much of the headwinds, whether freight or product cost is it able to offset?

Yeah. It does vary based on the brand and the products, and we’re trying to be thoughtful and surgical about it. But the range is anywhere between sort of 5% to 12%. And we’ve really got those implemented for spring. And that is how we are able to achieve the flat gross margin for the year in the context of the headwinds that we’re seeing on FOB cost and assuming some normalization of promo activity, et cetera.

Thank you.

Thanks, Dana.

Thank you. Our next question comes from Steve Marotta of CL King & Associates. Please proceed.

Good morning, Ed, Zine and Danielle. Ed, you mentioned earlier in your prepared remarks, that there was a private label pull forward from 1Q into 4Q. Can you talk about that magnitude? I’m basically trying to reconcile the size of the beat in the fourth quarter with not a lot of let up in the supply chain. So I’m trying to understand the differential between original guidance and the beat with the exception of the pull forward from private label?

Yeah. We had – I think, when we are on the last call, we talked about $30 million moving from Q3 into Q4. And then, we anticipated that maybe $20 million was going to fall out from Q4 into Q1. I think that would ended up being a little bit better than we anticipated, because of some of this pull forward of private label. It was still probably $15 million that fell out. So – but that’s a net number. So we had more than that in branded goods that moved out from Q4 into Q1, and then private label offset that as we pull forward, so.

Okay. That’s helpful. And just reiterating the comments about sourcing from Central and South America. There’s no material variance expected in 2022 versus 2021. Is that correct?

Correct.

Okay. Excellent. Thank you very much.

Thanks.

Thank you. I would now like to turn the conference back to Ed Rosenfeld for closing remarks.

Great. Well, thanks very much for joining us this morning, and we look forward to speaking with you on the next call. Have a good day.

Thank you.

This concludes today’s conference call. Thank you for participating, and you may now disconnect.