Greetings. Welcome to the YETI Holdings, Fourth Quarter and Full Year 2018 Results. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator instructions] At this time, I would please like to note that this conference is being recorded. And I will be turning the conference over to Tom Shaw, Vice President Investor Relations. Please go ahead Mr. Shaw.

Good morning, everyone, and thanks for joining us to discuss YETI Holdings fourth quarter and full year 2018 results. Before we begin, we would like to remind you that this conference call will include forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. These statements are detailed in our risk factor discussions that can be found in this morning's press release as well as our filings with the SEC, all of which can be found on our website at investors.yeti.com. We undertake no obligation to revise or update any forward-looking statements or information. During our call today, we will also reference certain non-GAAP financial measures including adjusted items. Reconciliations of GAAP to non-GAAP measures as well as the description, limitations and rational for using each measure can be found in the supplemental financial tables included in this morning's press release and in our filings. We use non-GAAP measures as the lead in some of our financial discussions as we believe they will accurately represent the true operational performance and underlying results of our business. Today's call will be led by Matt Reintjes, President and CEO of YETI; and Paul Carbone, CFO. Following our prepared remarks we'll open the call for your questions. So with that I'll turn the call over to Matt.

Thank you, Tom, and good morning, everyone. Thanks for joining us for our call today. Let me begin by welcoming Tom Shaw to the YETI family as the Vice President of Investor Relations. We look forward to Tom's contributions as he draws some of his experience with exceptional brands most recently at Starbucks and prior to that at Under Armour. I would also like to thank ICR for their significant efforts to help guide our company through the IPO process to where we stand today. Now turning to our results. We ended a great year on an exceptional note as the YETI brand and product portfolio continue to resonate with consumers through the fourth quarter and the holiday season. Total revenue grew 19% in the fourth quarter and 22% for the year with broad-based growth across channels and categories. These outstanding results reflect the power of our omnichannel strategy. We were very pleased with the performance of our Wholesale segment, which grew 4% in the fourth quarter and 10% for the full year. Our direct-to-consumer business continued to be our standout growing 45% in the fourth quarter and 48% for the full year 2018. We believe expanding our omnichannel capabilities enables an enhanced consumer experience with the brand. I will elaborate further on this initiative when I discuss our four strategic growth drivers. From a product standpoint, we had a number of successful new product launches during 2018, across both our Drinkware and Coolers & Equipment categories. We also experienced strong performance in our legacy products as brand awareness continued to build. We were particularly excited about the exceptional growth in our Drinkware business as we believe this category broadens our reach and creates a great entry point into the YETI brand. The customer passion for our products continues to…

Thank you, Matt, and good morning, everyone. And thank you for joining us. I too would like to welcome Tom to the YETI team and share my thanks to the entire ICR team. I will begin with a review of our fourth quarter and fiscal 2018 financial results, followed by our fiscal 2019 outlook. Starting with the fourth quarter. Net sales increased 19% to $241.2 million compared to $202.1 million in the fourth quarter last year. Turning to net sales by channel. Direct-to-consumer net sales for the fourth quarter increased 45% to $110.5 million compared to $76 million for the same period last year, with strong performance in both product categories, particularly Drinkware. Direct-to-consumer growth was driven by increased purchases on yeti.com, Amazon, as well as increased consumer and corporate customized Drinkware sales. Wholesale net sales for the quarter increased 4% to $130.7 million as compared to $126.1 million with the increase largely coming from growth in Coolers & Equipment sales. By category, fourth quarter Drinkware net sales increased 24% to $143.5 million compared to $115.9 million in the prior year quarter, primarily driven by the expansion of our Drinkware product offerings, new Drinkware accessories and the introduction of new Drinkware colorways during fiscal 2018. Coolers & Equipment net sales increased 10% to $91.2 million compared to $83 million during the same period last year, primarily driven by the expansion of our hard cooler and soft cooler products such as the Tundra Haul as well as the introduction of several new bags and outdoor living products during fiscal 2018. Gross profit increased 37% to $127.8 million, or 53% of net sales compared to $93.1 million or 46.1% of net sales during the same period last year. The 690 basis point increase in gross margin was primarily driven by cost improvements…

[Operator Instructions] Our first question today is coming from the line of Robbie Ohmes with Bank of America Merrill Lynch.

Guys, and I'd also like to welcome Tom Shaw. Great to see you join YETI. I actually have two questions I think you guys know what the first one is going to be. Paul I guess for the 2019 guidance, could you give us some color on how we should think about the relative growth of coolers versus equipment?

Yes Robbie. So as we think of both Coolers & Equipment and Drinkware, we expect them to grow in 2019 within our long-term guidance of 10% to 15% of the top line growth. And then I'd just say as you think about that throughout the year you know quarter-to-quarter, we will see variations based on product launches and things of that nature. But overall in 2019, we would expect both categories to grow in that 10% to 15% range. Q – Robbie Ohmes: And the wholesale D2C split that we should be thinking about for 2019 growth? A – Paul Carbone: Yes. So what I would say there is kind of if we go back to what we've talked about and even in our long-term guidance is, we would expect D2C to grow in the mid-20s and we would expect wholesale to grow in the mid-single digits. And we would expect that also to be true in 2019 as well. Q – Robbie Ohmes: And then just one last question, I was hoping, could you guys talk about the customized Drinkware business and remind us how large it is? And then expanding capacity like what do you actually -- what goes on there? How expensive is that? Are you running way behind on capacity so could this drive a big acceleration in the customized business as you bring on capacity? Any help on that would be great. A – Matt Reintjes: Yes, thanks Robbie and good morning. I'll touch on the capacity piece and then let Paul come back on how we talk about customization within our D2C business. It's something we continue to build capacity over the last two years. As a reminder, we acquired our exclusive customization partner in the first half of 2017. And we did that…

The next question comes from the line of Alexandra Walvis with Goldman Sachs. Please proceed with your question. Q – Alexandra Walvis: Good morning. Thanks guys for taking the question. I wanted to ask on gross margin. So the gross margin expansion in the quarter was stronger than we had expected. Can you talk us through what the major drivers were in there? In particular, you mentioned product cost improvements. Where are those coming from that's exceeding plan? And then just perhaps as a follow-up on the gross margin guide, can you talk to us about the sort of magnitude of gross margin expansion that you're expecting next year? And any color on the core drivers of that. A – Paul Carbone: Yeah. Good morning, Alex. So thanks for the question. So on gross margin in the fourth quarter, I think if you go back we were originally expecting about 600 basis points of improvement. And that 600 basis points of improvement was from the factors that we talked about in the press release of mix to DTC, cost improvements and then the non-reoccurrence of inventory reserves from last year that we booked those. We took reserves last year we didn't take them – we didn't have as many this year. And that was offset by MAP changes, so price changes that we took earlier in the year. The 690 – so it was about 100 basis points above our expectations. And that 100 basis point delta was from higher direct sales in the fourth quarter. So if you look at, it our direct-to-consumer mix in the fourth quarter was 46%, so very strong direct-to-consumer above our expectations so that helped drive that. And then cost improvements were also a little bit ahead of where we were expecting in the fourth quarter. So that added to – those two added up to the 100 basis point beat to our expectations. As we look to 2019 and on an adjusted operating income basis, we said we'd be flat to up 40 basis points, the guide relative to 2019 – 2018 excuse me. And most of that's coming from gross margin offset by some SG&A deleverage. So we do expect gross margin to expand in 2019. Those same factors the mix shift the product, cost benefit offset, we are totally offsetting tariffs in 2019 as we've discussed several times. So we do look for gross margin expansion. And then the last piece, I would say in gross margin expansion just as we think about it throughout the year the greatest gross margin expansion will occur in the first quarter as we roll over first quarter of last year that had the highest product cost, right? So last year, so we have a year of lower product cost, but the biggest gross margin expansion will come in Q1. And that's very in line with what we shared in our modeling during the IPO as well.

Great. And then one more from me on innovation. So I'm sure you've got lots of new innovation coming in 2019. Anything you can share with us on the cadence of that or what else likely to be focused?

Yeah. Alex, the – we do – innovation is obviously a central part of this business and brand. We're also extremely pleased with how our legacy products continue to perform as I mentioned in our prepared remarks and we talked both at ICR and some of the things that those who saw news on the outdoor retailers. So innovation is a big part of what we have. What we have announced for the first half of the year is a number of new color ways as I mentioned. We're going to be bringing some products that were direct-to-consumer only into more broad channel distributions as we built up brand awareness momentum behind those products. And we'll continue to do that, throughout 2019 and 2020 and beyond. From a cadence perspective I think you'll see products continue to flow out throughout the year. They'll be concentrated a bit in the first half and then concentrated a bit in the second half that's the cadence that we've picked up over the last couple of years. And I think you'll – as we've talked about you'll continue to see similar rollout from us as we roll through 2019 and really start to plan towards 2020.

Fantastic. Thanks so much, guys. All the best.

Thanks, Alex.

Thanks.

The next question comes from the line of Sharon Zackfia with William Blair. Please proceed with your question.

Hi. Good morning. I guess a follow-up on the gross margin question. Could you give us an update on what the anticipation is for tariffs as your given -- I think there's still a moratorium in place on part of the tariffs that you're originally including? And then secondarily just as it relates to the Amazon accounting change impact in the first quarter, is there any disproportionate impact on one category that we should be aware of? And how that might affect the revenue growth in the first quarter?

Yes. Good morning, Sharon. So on tariffs, our thoughts on this are consistent as we talked about in January. So, overall, full year impact approximately $13 million to $15 million. I would say from a mitigation standpoint, we are well on track with the strategic project of moving sourcing out of -- many of the items out of China. And then some of the other offsets that we've talked about ongoing cost negotiations, across the product portfolio and then specific cost negotiations on impacted items, and then FX tailwinds that we see this year is currency and as we pay for product in U.S. dollars. I would say as far as the current negotiations, that assumes that the List 3 goes to 25% on March 1, and we'll see what happens if it stays at 10%. Certainly, that would benefit us to a certain degree. But like we've talked about in the past, we certainly believe that the FX tailwinds are interrelated with the proposed tariffs. So maybe that's a little bit of an offset the other way. But we are -- we hope that it stays at 10%, but we're planning for it to go up to 25%.

And then Paul on the Amazon?

The Amazon. Yes, thanks. So it will impact us in Q1. And it's approximately about 300 basis points of impact negative in Q1. In Q2, would actually comes back the other away about 300 basis points. It benefits us, right? So it offsets each other similar to it did in the third quarter and fourth quarter. And then product wise, Amazon, their product mix is similar to the entire company, although, a little bit more Drinkware than the overall company if you look at the balance between Drinkware and Coolers & Equipment, so they're a little bit more Drinkware. So based on that you would see it in the Drinkware numbers more than the Coolers & Equipment. But overall as we look at it for the total company and as the way we look at it internally, there's about 300 basis points of drag in Q1 and about 300 basis points of tailwind in Q2.

Okay. Thank you.

Thanks.

The next question is from the line of Peter Keith with Piper Jaffray. Please proceed with your question.

Hey, good morning. It's actually Bobby Friedner on for Peter. So I want to first ask about marketing. Congrats on the success you've been seeing with your initiatives in 2018. I was just wondering if you could give a little more detail on some of the marketing initiatives you have set for 2019, and how you plan to introduce new customers to the brand. Thanks.

Thanks, Bobby. Yes, we're pleased with what we saw from 2018 as we both continued some of our legacy marketing programs, our experiential, our brand building through our ambassadors, our event-driven activations and have strong deep endemic roots. We also, with the brand Anthem and the expanded YETI Dispatch, and the brand Anthem in the fourth quarter driving 200 million-plus household impressions. The tripling of our dispatch in the results we saw from that both in our prospect list and in our existing list, we like those, how those more broad reaching marketing programs are coming together. With Melisa joining the team, one of the things we're focused in 2019 is the combination between a focus on product marketing and also top of funnel brand building. So, we look at the entirety of our multi-layered marketing and start with building out the top of the funnel, building up the mid-funnel and then driving and using performance in product marketing to really drive, to drive the conversion. So, I would say we continue to invest across the spectrum and invest across the consumer, from consumer to customer. As we think about going into new markets, one of the shifts we've seen over the last two to three years is that shift from the non-heritage market to the heritage markets and the heritage markets as we've spoken in the past now being the larger proportion of our business. That also coincides with 60% plus of the U.S. population being in our non-heritage market. So, we fundamentally believe we're moving into and having success in the larger portion of the market opportunity domestically before we start to think even, and start adding in international opportunity. So, we're seeing success with running a similar playbook that we've run last three or four years augmented with very deep endemic, augmented by broad-based brand awareness. And that's really what Melisa brings to the table is that that linkage between product marketing, direct marketing, direct customer/consumer engagement, all the way up to broader-base brand building.

Alright. Thanks. And separately on commodity and input costs, can you give a recap on impact of commodities in 2018? And any outlook you have for 2019 considering what looks like lower commodity prices in recent month?

Yeah. So part of the product cost overall in commodities wrapped into that. We have reflected in the 2019 guide and as we talked about expanding gross margins from product cost negotiations and part of that is you know, as we talked about having should cost models as we go to negotiate with our manufacturers. And then we also reset pricing every three months based on FX and currency and input pricing. So, it is baked in and with the guide of margins expanding due to the product cost negotiations or lower product cost that's, our outlook is positive on that.

Alright. Thanks and good luck.

Thanks.

The next question is from the line of Peter Benedict with Robert W. Baird. Please proceed with your questions.

Morning, guys. Thanks for taking the questions here. First question just on the international markets. I mean, you mentioned kind of Europe and Asia as kind of places where you're going to expanding to. But any sense for the timing of when you might be moving into some more markets? Is one of those regions more likely than the other in terms of what's on tab near-term? That's my first question.

Yes, Peter, thank you, it's Matt. The -- good morning. We're actively looking at both the European market and certain Asian markets. The most near-end would be continuing accelerate our brand awareness and penetration in Japan because we've established in early footprint through a dealer partner in Japan in late 2018. As we've gone and used our Google Analytics and what's hitting our website from a demand perspective, it's really helped establish a roadmap of the markets where we're seeing natural demand, the kind of inbound natural inquiry and natural demand. And that's setting up our international expansion strategy. I think as we get through the year, we'll update you all on the progress towards that. But it is -- as part of one of our four big strategic growth drivers, it is a focus area for the business in 2019.

Okay good. Thanks for that Matt. And then how should we be thinking -- or how are you guys thinking about the level of free cash flow in 2019? I mean you talked about the $80 million of debt pay down. Does that assume you're going to dip into the cash balance or just curious on the cash level view for 2019? Thank you.

Hey great. Thanks Peter. So, as you know this -- the company based on the asset light model generates significant free cash flow. And certainly in 2018, we paid down over $150 million of debt from free cash flow. As we look to 2019 and call it a more normalized level I think of free cash flow in $60 million to $70 million range. So, if you look at that to your point of the $80 million pay down of debt, it's mainly from free cash flow and maybe another $10 million on cash on hand. We ended the year with $80 million of cash on the balance sheet which we're comfortable using some of that to pay down debt as well.

All right. Paul that makes sense. Last question. Just the pace of retail expansions. You called out the two stores coming this summer. Is that all we should expect this year? Just thinking about what the cadence of -- what are you thinking about how longer term in terms of new stores? And how quickly you're opening them? Thank you.

Yes. So the two that we called out and we've talked about those, those are the ones we have signed leases for. We are actively continuing to look at sites in lease negotiations. So, I wouldn't say those are the only stores you'll see in 2019. And as you know -- as we're in the lease negotiations, the exact timing of that, but I would expect more than those stores in 2019 and obviously, those would be post the summer time. But Chicago and Charleston are the two in near-end stores that will get open.

All right. Fair enough. Thanks a lot guys.

Thanks Peter.

Thanks Peter.

Operator next question please. [Technical Difficulty] It looks like we have a small technical difficulty. So everyone could please hold for a moment online we'll get back. [Technical Difficulty] Hey, guys the queue is live right now. So just waiting for everybody.

Hey everyone, the operator is still trying to reconnect in...

We are live for the question Mr. Duffy.

Thanks, good morning. Great finish for the year guys. Welcome, Tom. To start, can you guys talk in more specific terms about what you saw on the Amazon Marketplace corporate and custom shop in the fourth quarter? And then maybe some thoughts on expectations for growth in those channels for 2019?

Yes. So -- thanks for the question. So Amazon -- and we don't talk below specifically the direct-to-consumer and wholesale. But let me give you some color on the fourth quarter. So Amazon had a very strong quarter as the entire DTC channel at plus 45%. So Amazon was in line with that number. So there is no significant outperformance, but was in line with the overall DTC growth. And as we talked on color on product to Sharon's question, Amazon does skew a little bit more towards Drinkware. On customization, we had another strong fourth quarter in customization both through the our own web property and then through our corporate sales and to Matt's earlier comments about adding capacity in the later part of this year. And that's really a differentiator for us of us being able to customize our products. It is mainly Drinkware but we also do -- just for the group, we also customize hard coolers and some soft coolers as well so it's not just Drinkware. But overall that corporate sales business is heavily skewed to Drinkware, but they do also customize the coolers as well. But very, very strong fourth quarter.

Great. And then can you just help on the benefits of consolidating the customization in yeti.com platform? Does that simply just make it more accessible for general consumers to buy the customized offerings?

Yeah, Jim that's exactly right. There are some -- obviously some operational efficiencies. There is consolidation of demand creation and driving consumers to one location versus two locations. In part it's a significant awareness of capability -- high-level capability that we have around customization and bringing it to the main yeti.com property. So we're excited about what that -- what would that bring for our customers and their ability to customize and personalize product directly from yeti.com.

Great. That's all I have. Before I go, I'll just say Matt great pitch on the Camino Carryall. That was very convincing.

Thanks, Jim.

Operator, next question please. It looks like we're frozen again. So please bear with us a moment and we'll get back online.

Tom, are you able to hear me?

Yes, we're back on.

Okay. We're working on the -- we're having technical issue. We're still working on the technical issue. Sorry for delay. Please standby. Ladies and gentlemen, we’re still experiencing technical difficulties. Please remain on the line. [Technical Difficulty] Tom, if you can hear me, if you have questions you can read them into the call.

All right. Well let me read a question here from Kimberly Greenberger at Morgan Stanley. You've hired a number of new executives into the management team in 2018. Any positions you are looking to fill? We'll start with that one.

Thanks, Kimberly. Good morning. I apologize for the technical difficulty this morning and the delay. Hopefully, we get this resolved quickly this time. Kim, it's a great question. We have and we brought in a number of new executives in 2018 that we're really excited about culminating with Melisa Goldie, our Chief Marketing Officer. Our team is complete what I would call substantially complete. We continue to look for opportunities to enhance and add to the talent within YETI as part of what we do and part of continued excellence here. As we expand internationally as we continue to grow that part of the business, we'll look strategically to add the right kind of and right level of talent into that organization. But I would say our team, my team is complete with the addition of Melisa Goldie.

And the second question here, inventory is down $30 million year-over-year. Understanding there was some inventory clean up in 2018, how do you feel about current inventory levels? Are they appropriate to support your rapid growth? How should we think about modeling inventory levels going forward?

Yes, so great question. And we did end the year down 17%. And that really was relative to -- or similar to all year working down our inventory. As we look forward Kimberly, I would say two things. The first is, I would expect inventory to grow slower than sales overall. And then secondly as we go into 2019 you will see it begin to grow year-over-year versus the big declines that we saw in 2018. And then the second part of that question, how do we feel coming into 2019 with the inventory levels? We actually ended the year slightly below where we expected. And that was really two pieces. We actually accelerated some shipments in, as we talked about pre-tariff and before the tariffs increased to 25%. So we thought we're going be a little bit above where our original thinking was. But then we over-delivered against our sales plan which brought our inventories below where we expected. And they were about $4 million below where we expected vis-à-vis with the model that we shared with all of you. So we feel great with the level of inventory and the composition of inventory both between product categories and then inside of product categories. And then we do look for inventory to grow, again slower than sales as we begin to grow that piece and it will grow with the business.

Thank you Tom.

We have time for one more operator.

Thank you. That question would be coming from the line of Randy Konik with Jefferies.

Can you hear me?

Yes.

All right, this is good. I guess you mentioned -- I guess Paul mentioned that on the Amazon Marketplace there's a little more of a skew towards Drinkware. That kind of tells me that given Amazon has -- it's low friction or very easy to use. It seems like that's the place where consumers can start to -- tend to begin their journey with the YETI brand. I guess what I'm asking is how -- do you see any evidence or does any data analytics show you that once the consumer is kind of engrained in the YETI brand that they tend to migrate or not migrate to yeti.com from the Amazon Marketplace? Reason I ask is because, I'm sure that the gross margin on the yeti.com platform is higher than obviously Amazon Marketplace. So it seems to me that -- if more consumers come into the brand start at Amazon then migrate, there is a long-term gross margin benefit that can occur in the business model. So I'm just curious on your thoughts on that, first?

Yes, Randy. Thanks. It's a great question and something we -- as we talked about on the last call we're -- we are and continue to invest heavily in our data analytics and our capabilities to understand the consumer basket, the lifetime value and what their shopping pattern is? We believe as we've talked about that Amazon along with our wholesale channel, along with yeti.com are truly part of the omnichannel strategy and being where the consumer wants to shop when they want to shop. We -- as Paul indicated we see some slight bias on Amazon towards Drinkware versus yeti.com and what we see in the channel. And we do believe that from a customer introduction from a reach perspective that creates a realistic opportunity for us. We believe that as you want a more immersive YETI experience as you want to learn more about the product as you want to make a more considerate purchase and in some cases a higher ticket item purchase that traffic does flow to yeti.com. And I think we're excited about what we saw from yeti.com in 2018. We think the combination of yeticustomshop and yeti.com to the question that Jim asked earlier we think is another powerful tool to drive reason to come to yeti.com. So with the combination of what Melisa brings to us and the build-up capabilities in our e-commerce business plus the overlay of what we're doing in analytics that's absolutely something that we're driving and focused on.

And then Randy, let me just add one piece to that. So your pull through of the question is absolutely right, but just from P&L geography. So the gross margins of Amazon and our YETI-owned properties are actually similar, right? The fees – and this is the pull through of your question the Amazon fees fall into OpEx. So your question of it is – or your inference which is correct it is more profitable for us, gross margin and OpEx to transact on one of our own web properties versus Amazon. But just overall the gross margin are similar at that line item.

Understood. And then a question on again the corporate sales, when you look at the B2B opportunity have you done some benchmarking on what you envision? Other – what do you see in other companies that have a B2B presence in terms of the ability? Or what you shoot for your organization? And just curious what is the margin structure of B2B sales kind of look like if we're looking at like custom things et cetera? Just curious of what you're seeing there.

Randy, I'll take the front end of the question and then Paul can address the margin and how it relates to the overall margin within our D2C business. We haven't pegged a benchmark number to the market. We know that that corporate gifting market is a large and highly fragmented market that covers a lot of different price points. We think it is – part of the reason we call it out as a meaningful contributor to D2C and a meaningful opportunity for us in the future is because we think in that highly fragmented market that has traditionally been fairly price-sensitive and driven down that we're seeing really good response to premium price points premium product for brands that we want to associate and use that corporate gifting or that corporate reward channel. So we continue to be positive on the corporate sales, and continue to invest behind going after that opportunity.

And then from a margin profile, so inside of the direct-to-consumer channel corporate sales is slightly below on a margin profile than yeti.com for instance, our web properties. But if you compare it to the other channel wholesale, it's above the wholesale margins. So it is high-margin business, but slightly below yeti.com.

Understood. And I guess last question for Matt. You've got a lot of as you mentioned earlier some good additional executives into the organization. Just curious as to give us some perspective on strategic direction over the next 12 to 18 months, what are I'd say the top three things you're personally focused on for the organization to try to accomplish in the next down to 2019 and into 2020 high level? Thanks.

Yes. If we lean back on those four strategic growth drivers and I talked about some of the talent we brought in the organizations, some of the focus we brought, really continuing to expand and evolve and evolve the brand in conjuncture, working with Melisa and getting her onboard up to speed and leveraging her outside-in perspective as we talked in the past about opening our brand aperture, keeping our legacy and heritage in middle of that and then continue to expand the outward nature of that. And that's both domestically and internationally, which ties into the fourth of our growth drives international. International is a big area of focus for me in 2019, in setting up the business for long-term sustainable success internationally. We started that effort, as we talked about, in Canada and Australia in 2017, early days of that effort in 2018 in Japan, and then to a question earlier around Europe and Asia. So combining that brand growth in domestically and then internationally. And then the third one would be, continuing to work with the team and talent we brought in operationally and infrastructurally to build the business to support the growth that we believe is coming and the growth that we see on a global scale. We've made incredible progress since 2016 on getting a number of things in place in control, getting the right systems, getting our footprint, and now we're in that moving onto that next phase of operational excellence.

Very helpful. Keep up the great work. Thanks, guys.

Thanks, Randy.

Thanks, Randy.

Thank you. At this time, I'll turn the floor back to Matt Reintjes for closing remarks.

Thank you. Well, I would be remiss to not wish everyone a Happy Valentines Day. Thanks for joining us today. We look forward to 2019 and we look forward to updating you all in early May on our progress. With that, we wish everyone a wonderful rest of the day. Thank you.

Today's conference has concluded. You may disconnect your lines at this time. Thank you for your participation.