HBB - NYSE

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to Hamilton Beach Brands Holding Company Fourth Quarter 2023 Earnings Call and Webcast. [Operator Instructions]. I would now like to turn the conference over to Lou Anne Nabhan, Head of Investor Relations. Please go ahead.

Thank you, Denny. Good morning, everyone. Welcome to our fourth quarter 2023 earnings conference call and webcast. Yesterday, after the market closed, we issued our fourth quarter 2023 earnings release and filed our 10-K with the SEC. Copies are available on our website. Our speakers today are Greg Trepp, Chief Executive Officer; and Sally Cunningham, Senior Vice President and Chief Financial Officer. Our presentation today includes forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in either the prepared remarks or during the Q&A. Additional information regarding these risks and uncertainties is available in our earnings release and our annual report on Form 10-K for the year ended December 31, 2023. The company disclaims any obligation to update these forward-looking statements, which may not be updated until our next quarterly conference call, if at all. And now I will turn the call over to Greg.

Thank you, Lou, and good morning, everyone, and thank you for joining us. I will take the next few minutes to provide an overview of our performance for the full year 2023. Then Sally will discuss our fourth quarter results, after that, we will take your questions. Before I review our 2023 results, I would like to discuss our exciting news of last month when we announced that our Board of Directors appointed Scott Tidey as President of our company effective February 19, 2024. Scott's appointment was part of a long-standing succession plan. I will continue in my role as Chief Executive Officer. Scott joined the company in 1993 and increasing responsibility in marketing most recently as Senior Vice President, Global Sales. Scott is an incredibly effective member of our executive leadership team. In addition to his broad experience in sales and marketing, Scott has been involved in most aspects of our business, including managing business partnerships, sourcing, supply chain, engineering, quality more, has been instrumental and successful execution of our strategic initiatives to expand diversify and grow business. Given the strong team we have in place, combined with Scott's depth of experience, the company is well-positioned as Scott increases his role. I look forward to working with Scott on a smooth transition of the duties at President. Scott is away this week on a long-planned family vacation, which we wanted him to be able to enjoy to the fullest, so he is not participating in our call today. Scott will rejoin us, when we hold our call to discuss our first quarter 2021 results. Now for our results. For the year 2023, we delivered considerable progress across several key aspects of our business, positioning us for success over the long term. We were excited to carry the strong momentum we built last year into 2024. Our top line outperformed the small kitchen appliance industry. Our gross profit margin expanded by 290 basis points. Our operating profit increased 22% compared to 2022 on a one-time insurance recovery of $10 million is excluded from the prior year results. We generated cash from operating activities of $88.6 million, the highest in our company's history, reflecting considerable progress with our focus on working capital improvements. Priority uses of cash included significantly reducing debt and returning capital to shareholders through dividends and share repurchases. We continue to make meaningful progress with our six strategic initiatives. The successes we achieved are attributable to the outstanding capabilities of our industrious team. Our culture is centered around good thinking, which incorporates customer focus, innovation and teamwork, and inspires everything we do. We believe our good thinking culture is a core strength. We aim to capitalize on our strengths in 2024 and beyond as we continue our efforts to increase long-term shareholder value. As we discussed in our previous calls, we expected a solid performance for the full year 2023, with a soft first half and a stronger second half, which is how the year unfolded. We introduced nearly 40 new product platforms in 2023 across high-demand categories like single-serve coffee, blenders, ovens, grills, garment steamers and many others. Our team did an outstanding job securing placements and promotions for our products across a broad range of customers and channels. We also gained market share in several categories in 2023. These wins enable us to deliver a strong second-half performance and created the momentum that carried into 2024. For the full year 2023, our total revenue of $625.6 million increased 2.4% compared to 2022, outperforming the industry decreased to 2.4% compared to 2022 outperforming the industry's more than 5% decline. The year got off to a slow start, which was reflected in our first-half results and retailers continue to manage inventory conservatively. As the year unfolded, however, market conditions improved as consumer spending and retail sales showed resilience. For the full year, gross profit margin expanded by 290 basis points to 23.0% compared to 20.1% in 2022 and was attributable to lower product costs and a favorable product mix. Selling, general and administrative expenses were $108.4 million compared to $90.1 million, primarily reflecting higher personnel-related expenses, the benefit in 2022, the one-time insurance recovery I mentioned earlier. Operating profit was $35.1 million compared to $38.8 million, well ahead of 2022, excluding the insurance recovery. Net income was $25.2 million or $1.80 per diluted share compared to net income of $25.3 million or $1.81 per diluted share. Referring to our strategic initiatives. We made meaningful progress with our 6 strategic initiatives, which support our overarching goal of long-term value creation by driving revenue growth, expanding margins and generating strong cash flow over time. Four of our initiatives are focused on expanding our presence in markets where we can increase the sales of higher-priced, higher-margin products. These include the premium home health and global commercial markets as well as our core market that focuses on our flagship Hamilton Beach and Proctor Silex brands. Initiatives to accelerate our digital transformation and leverage partnerships and acquisitions support our growth plans in all markets. Let me briefly summarize each initiative. Accelerating growth of our Hamilton Beach Health is the first one. I would like to begin with our newest initiative and our related acquisition last month at Health Beacon, a medical technology company and a strategic partner of ours since 2021. We began to focus on the fast-current home medical market in 2021 in response to the rapidly evolving use of at-home health care solutions. Drawing on decades of experience as a trusted resource in the home, we created the Hamilton Beach Health brand. In February 2024, Hamilton Beach Health acquired Health Beacon. Their focus has been on developing connected devices that enable patients with chronic conditions to manage their injectable medication regimens at home, and Health Beacon provides other health services. The revenue for all Health Beacon offerings is from subscription services. We are very happy to welcome the Health Beacon team to the Hamilton Beach Brands family. Together, we believe we will accelerate the expansion of this business opportunity. In 2024, Hamilton Beach Health is expected to have a modest operating loss due to planned investments in the business and as Health Beacon continues in the start-up phase. Hamilton Beach Health is expected to contribute to operating profit in 2025. We believe acquisition of Health Beacon is an attractive investment with the potential to increase shareholder value over time. We expect growth opportunities to be driven by the development of digitally connected tools using in-home solutions, including remote therapeutic monitoring systems. The acquisition combines a trusted brand name of Hamilton Beach and our leadership in innovation, engineering and product development with Health Beacon's digital capabilities and patented technologies. Hamilton Beach Health is focused on improving patient outcomes and accelerating access to more patients and new opportunities. The initial focus is on providing the smart sharp spin with Hamilton Beach Health to patients in the United States principally through the specialty pharmacy channel and globally through conventional pharmaceutical companies. Combined with a companion app, the injection care management system tracks adherence and persistence with medication schedules through the reminders, education tools and artificial intelligence-driven analytics. It provides for the safe and convenient disposal of used sharps through the U.S. Postal Services approved mail back program. Hamilton's health is actively engaged in exploring additional collaboration opportunities with other companies in the home medical market. Our next initiative is to drive core growth. This initiative is focused on driving the growth of our flagship Hamilton Beach and Proctor Silex brands in our core North American market. Our company has been servicing consumers across North America for more than 100 years, earning the trust of millions of consumers annually based on product quality, durability and innovation. Sales of our core consumer brands in 2023 or even with 2022, despite the overall softness in the first half of the year. Hamilton Beach continued to hold the number one brand position for small kitchen appliances in 2023 based on units sold. Next, we are focusing on gaining share in the premium market. We have developed licensed and acquired brands to increase our participation in the premium market, which has grown to account for 40% of industry small kitchen appliance sales. In March of last year, we are excited to announce a new agreement to provide the next generation of specialty appliances for use with Numilk raw ingredients to create a variety of fresh plant-based mote products in the home and in commercial establishments. The new appliances are launching throughout the first half of 2024. An overall 4% decrease in revenue from premium brands in 2023 reflected the impact of inflationary pressures on consumer spending earlier in the year. In the fourth quarter, revenue from premium brands increased 10%. Premium brands accounted for 15% of the total revenue in 2022. We plan to further expand our presence in the premium market with new product development, digital marketing and by pursuing additional licensing agreements and other collaborative agreements. Next, we are focused on increasing our leadership in the global commercial market. This initiative is focused on securing new businesses and increasing sales with existing customers in the food service and hospitality industries throughout the world. In 2023, commercial revenue decreased 15% compared to 2022 when the revenue grew 50%. The prior year robust growth was driven by the continued strong rebound in demand in the food service and hospitality industries following demand softness during the pandemic when many restaurants and hotels were closed. Sales in the international food service market accounted for the decrease from the prior year as several markets were overstocked and unrest in certain countries had an unfavorable impact on sales. In 2023, sales of our commercial products accounted for 8% of total revenue. Growth plans include expanding customer relationships with regional and global restaurant and hotel chains, building strength in our e-commerce, which is becoming more important in the commercial market is also a focus. Next, we plan to accelerate our digital transformation. The e-commerce channel represents a strong and growing part of our business, brand reputation, product features, innovation and star ratings all play a critical role in driving online sales. These are all areas where we excel. E-commerce sales as a percentage of total revenue in 2023 were 39%, increasing 1% compared to 2022. All of our brands earned star ratings of 4.3 or better, and 4 of our brands earned 4.5 stars or better. Our products received favorable reviews from consumers, experts and influencers. High star ratings are a result of our focus on designing and engineering consumer-preferred products and implementing leading quality control standards. We continue to invest in gaining share in the e-commerce channel. Finally, we are focused on leveraging partnerships and acquisitions. This initiative is focused on identifying and securing businesses with a strategic fit to our portfolio. We are actively engaged in the pursuit of additional trademark licensing agreements, strategic alliances and acquisitions to drive growth in our markets, including accelerating growth in the home health market. Over the past several years, we have entered into exclusive agreements with the outstanding business partners, combining our strengths and advantages provided by other companies. As a result, we've entered new large and fast-growing markets and, in some cases, created new markets. Many of our collaborations enable us to serve both retail and commercial markets. Looking ahead, our company has many competitive advantages that we plan to leverage in 2024 and beyond. We believe we are well positioned to continue the momentum we carry into 2024 and deliver a solid performance, all due to the outstanding work of our team. As we emerge from the pandemic and its related challenges, I want to again recognize our team's incredible work enormous success in navigating the massive supply chain disruptions. Our employees took a one-team approach to overcoming these challenges, often going above and beyond the call duty under extraordinary pressures. They kept key steps they ensure a bright future in particular, keeping the pipeline of innovation, new products flowing. Importantly, we kept investing team and company resources into our strategic initiatives. The combination of short-term firefighting and keeping our focus on building for the future requires a very strong team. On behalf of the Board and our executive team, I thank each and every one of our employees and their dedication and contributions to our successes. And now I will turn the call over to Sally.

Great. Thank you, Greg. Good morning, everyone. I will start with our fourth quarter 2023 results compared to the fourth quarter of 2022. We were pleased with our fourth quarter 2023 results. As expected, revenue grew year-over-year. Net sales in the fourth quarter of 2023 increased 5.3% to $206.7 million compared to $196.2 million in the fourth quarter of 2022. The revenue growth reflected increased unit volume and favorable mix, partially offset by a lower average selling price. This growth reflected increased sales in our consumer markets overall, partially offset by decreased sales in our global commercial market. In our consumer markets, revenue increased in the U.S., Mexican and Latin American markets and decreased in the Canadian market. In our global commercial market, revenue decreased compared to the fourth quarter of 2022 when revenue grew by 57.1%. As Greg mentioned earlier, prior year growth in the global commercial market was attributable to a continued strong rebound in demand in the food service and hospitality industries following demand softness during the pandemic when many restaurants and hotels were closed. The year's decrease was due to lower sales in the international food service industry as several markets were overstocked, as well as to unrest in certain key countries that resulted in an unfavorable impact on sales. Our gross profit margin expanded by 940 basis points and mostly reflected lower product costs, which offset a lower average selling price. Gross profit was $55.3 million or 26.8% of total revenue compared to $34.1 million or 17.4% in the prior year. Selling, general and administrative expenses increased to $30.2 million compared to $22.8 million, primarily due to higher incentive compensation, advertising, M&A activities and other expenses. Operating profit increased significantly to $25 million compared to $11.3 million last year, reflecting our gross profit margin expansion. Net interest expense decreased by $1.3 million compared to last year. Fourth quarter of 2023 interest expense was $400,000 as compared to $1.7 million in the fourth quarter of 2022. The decrease reflects significantly lower average borrowings outstanding under our revolving credit facility. The effective tax rate on income for the 12 months ended December 31, 2023, was 20.4% compared to 22.1% for the 12 months ended December 31, 2022. The effective tax rate was lower for the current year due to the favorable impact of foreign operations in the current year. Net income in the fourth quarter was $19.6 million or $1.40 per diluted share compared to net income of $7.1 million or $0.51 per diluted share in the fourth quarter of 2022. Now turning to our balance sheet and cash flows. We continue to deliver significant improvements in net working capital and free cash flow. For the year ended December 31, 2023, net cash provided by operating activities was $88.6 million, the highest in our company's history compared to cash used for operating activities of $3.4 million for the year ended December 31, 2022. This significant increase was driven by progress with our focus on net working capital improvement. Net working capital provided cash of $49.5 million in 2023 compared to a use of cash of $39 million in 2022. Trade receivables used net cash of $18.8 million during 2023 compared to $4.5 million provided in the prior year due to timing of collections and increased sales. We continue to reduce inventory, reflecting our inventory management and control actions throughout 2023. Net cash provided by inventory was $30.8 million in 2023 compared to $26.4 million net cash provided in 2022. Net cash provided by accounts payable was $37.5 million in 2023 compared to $69.9 million of net cash used in 2022. Capital expenditures in 2023 were $3.4 million compared to $2.3 million in 2022, primarily due to internal use software development costs. In 2023, we also issued a $1.6 million secured loan to Health Beacon. We allocated our strong cash flow primarily to reduce debt and return value to shareholders through the quarterly dividend and repurchase of stock. On December 31, 2023, net debt or debt minus cash and cash equivalents was $34.6 million compared to $110 million on December 31, 2022. For the full year 2023, we paid $6.1 million in dividends and repurchased 250,772 shares of our Class A common stock at prevailing market prices for an aggregate purchase price of $3.1 million. Now turning to our outlook for the full year of 2024. The retail marketplace for small kitchen appliances is expected to be modestly below 2023. We believe that continued progress with our strategic initiatives will enable us to deliver above-market revenue performance. For the full year 2024, we expect total revenue to increase modestly compared to full year 2023. Revenue in both the first half and second half of 2024 is expected to increase modestly with the first half expected to be somewhat stronger than the second half, mostly due to comparisons to the prior year. Operating profit for the full year 2024 is expected to increase moderately compared to 2023 based on expansion of gross profit margin. That concludes our prepared remarks. We will now turn the line back over to the operator for Q&A.

[Operator Instructions]. Your first question comes from the line of Adam Bradley with AGB Capital. Your line is open.

Really good quarter. It looks like a record for Q4 income and cash flow is even more impressive. So, all good to see from a shareholder perspective. I have a few questions. I'll start with one or two of them and then pause for a minute. I would like to dive a little bit more into the Health Beacon opportunity. What do you see is like the kind of longer-term commercial opportunity with Health Beacon?

Sure, Adam. The -- so Health Beacon, as we mentioned, is really a subscription services business. So, it certainly is very different than the rest of our business and it is focused on the current device is focused on the ability to help folks manage their injectable medication regime. And so, we feel like based on current customers and current uses that are approved, that it should be a very attractive opportunity as more and more subscribers come on that will increase the monthly subscriptions coming in. And if we can expand additional customers or different medical or drug regimens over time that could expand it further. So, it's a brand-new area, where we sort of -- we're partnering with Health Beacon now or have acquired them and implementing something that doesn't exist right now. So there certainly are unknowns or it could unfold in a different way than we think, but we feel it's a very attractive opportunity. And as each month and the year goes on, and we build that subscriber base that should drive additional subscription revenue and profits over time.

Okay. So, are you also getting revenue from the selling of any of the physical devices? Or is it all subscription?

It's all subscription. So, the devices are provided to end users in return for a monthly subscription from the specialty pharmacy companies or the pharmacy companies. So, it's an opportunity really to help patients stick with their regimens better which provides a lot of benefits to the end user as well as the specialty pharmacy companies. So, it's really not purchasing the device rather than placing it and getting a monthly subscription.

Okay. That helps. And then just to finish this on Health Beacon. The distribution channels, at least in the U.S., you mentioned specialty pharmacies. Is this new ground for Hamilton Beach? I mean I know you're selling some items in there, but what is the access to distribution look like, with HealthBeacon can be in Ireland, they may know that market well. What is the -- what's the plan for here in the U.S.?

Sure. That's a very good question. So fortunately, the Health Beacon team had really done -- has been doing a great job of positioning the company for start-up and launch. And so, while they're a number of the headquarters based in Ireland, there's a number of employees already based here in the U.S., and they have strong relationships with -- and building relationships with specialty pharmacy players. So basically, we're going to be taking the relationships and the contacts and the business arrangements that already exist, both overseas as well as in the U.S., but the primary focus has been the U.S. by that group already. So, we feel like we'll bring strength in sourcing the unit that is required to place into consumers' homes. We'll be able to do that very well. We can shift the unit’s person by person as they become onto the program. Fortunately, the Health Beacon team already had relationships and the know-how on the -- not only the software and the patents and all the IP goes with it, but also the relationships with the customers. So, I think really, when we get together here, we're really bringing a lot of our strengths with strengths they already had. And over time, we'll -- we are now one team and we'll both learn from each other. So, I think the access to and understanding of those customers is not new to the Health Beacon team, it is new to Hamilton Beach team, and we'll just keep learning and growing and building over time.

So, from an accounting standpoint, should we expect that the cost of the units will be amortized over the subscription? Or is there an upfront charge that expensing and then recovering through? Can you help like investors understand what the P&L might look like when we start to see the impact from actual sales and distribution?

Sure. Sally, you want to take that one?

Sure. Absolutely. So yes, as the units are placed into service, they'll be capitalized in the fixed assets and then the amortization will show up in the cost of sales number. It was more of a lease accounting type of approach is what you would expect to see.

Okay. That makes sense. So finally, on this, you mentioned there will be a loss in '24 as you kind of build the business. Are you going to break that out so investors can separate that from the rest of the business?

Sally, do you want to take that one, too?

Sure. At this point, we don't plan to. It's not a significant portion of the business. But certainly, as the business would grow, then I would to be more meaningful, and we will be breaking out Hamilton Beach Health as a whole.

[Operator Instructions]. Another question from Adam Brady with AJB Capital. Your line is open.

Yes. So, moving down the P&L to the SG&A line, this is -- this number from -- just from a financial reporting standpoint has been pretty predictable in that $100 million to $105 million range over the last couple of years that has grown COVID volatility aside. $108 million for that line this year, should we expect that to be the baseline for '24? And how much of the $108 million was maybe performance-based comp that's more variable? Just help me understand that number a little better.

Sure. Yes, I'll give you a little bit of color and Sally jump in as well. But I think we have some normal variability as you said. So there one year might be a little more incentive comp than the other, depending on our goals at the beginning of the year. We're investing -- we went through a phase of some heavier investing in parts of our business. And as we go forward now, I think we expect really, I think, a modest growth in SG&A. We are considered things like putting more money into [indiscernible] dependent on customer support. So, I think this is a pretty good line where it could float up a little bit or flow down a bit based on the level of advertising based on incentive comp results or some other investments. But I don't predict -- I don't believe it's changed dramatically up or down from that level. Hopefully, I said it okay, Sally.

Yes, yes. Absolutely, absolutely. I mean I do think that when we talked about the growth drivers, there certainly was some personnel costs and incentive comp. We also had M&A costs in this year that we haven't had in the past. And then we also -- with our growth drivers, I would expect for us to see additional kind of advertising costs. So, for this year, maybe think of it as maybe these are going to be round numbers, like maybe 30%, 30%, 30%, like 30% comp, 30% M&A and then advertising. And then from a baseline perspective, I think as we look at M&A, you could expect that number to go up in the future. And as we look to continue our strategic investments, that could go up. But I continue to believe that, that 108 to 110, 115 level is probably the right place for us right now.

Okay. And kind of looking more broadly at your strategic initiatives and your capital allocation plan is very, very helpful. You guys have been consent in your reporting on it. I think what would help is if we -- if you could help us dive a little deeper into it to understand it. They're stated each quarter and do you -- could you help us understand the specific financial performance of each plan? When you restate them, I think like for today, could you just kind of give us a little bit of a better understanding of the specifics of each initiative, which one has a greater impact on the P&L? I think we understand core, I think we understand some of the premium, but just diving a little bit more to the health market and what the opportunities there are.

Yes, sure. I mean the core just given the magnitude of our core business received a lot of investment in team members, new product innovation, engineering quality, making sure that our -- all the things we talked about our products. We have fresh new products. We're supporting our customers' needs, both in brick-and-mortar and online. So that definitely receives a high portion. And if we can keep growing our market share in our business that will stay close as a percent of net sales, but should grow in raw dollar amount. I think our hope is that the premium market will see an increase in investment as things like Numilk and some of our other things we're working on come closer to launch. And certainly, home health, the Hamilton Beach health area will not only with Health Beacon, but with other opportunities we're considering and pursuing could come in would certainly drive some additional investment in that area. The digital focus underpins all areas as does -- and the acquisitions could be a large spike in investment when other things come along. But I think from a standpoint of thinking about maybe as a percent of net sales, we would see consistent percentage higher dollars as time goes on, on the core and then increasing premium and then a larger increasing in the HP Health.

So, it sounds like, in general, you are maybe entering a phase of more investment because you see sales and profit opportunity generally speaking, is that accurate? Now that we're through COVID, am I hearing you correctly?

Absolutely. I think again, we're mindful of -- we want to expand our operating profit dollars and percentage. And so really what will happen is if we can achieve our goals -- both goals over time that will help support this additional investment if the Health Beacon business or the HP Health business were to be sort of turn around slower than we thought or grow slower than we think. We're going to still invest in it, but we're not going to pour money into it at a rate that is not supported by the results. So, I think what you hopefully will see is these investments, we will pull back or lean in as they are successful or maybe take a little more time or take off work out. There's been some in the past that we walked away from because we tried and they didn't work. So, I think you'll continue to see us pushing hard on all of these. We're very, very optimistic on all of them, but we're going to be very mindful of the P&L as we move forward and the impact that the investments will have.

Okay. And then finally, what are you seeing on the M&A front? Multiples in the consumer goods space have been like at or near Lowe's over the -- if you look back over a longer period, like forget COVID, but keep looking back further. So maybe there's good opportunity out there. Can you tell us a little bit about what you're seeing without having to be specific from just a pure acquisition standpoint? Would you do a big deal if you saw one? Would you like to do a bunch of smaller ones? Like just help a little bit with your thinking on acquisition.

Sure. I'll take first stab at that and Sally, you chime in, please. But I think it's been -- the flow of opportunity has actually been pretty low. It hasn't been zero, but it's been pretty light, much lighter than it was during COVID. And -- but I think our appetite is if there's a good opportunity to build long-term shareholder value, whether it's small or medium, we're very, very interested in that. So, its potential for a very large deal, some sort, but those often are hard to make those things work. But I think we are definitely open to really in all these strategic initiatives areas, additional acquisitions. I will say the Hamilton Beach Health is probably a very interesting area, number one, because we feel like there's a lot of opportunity to grow there, but also, we found there's a lot of times that not only from an investment standpoint of funds, but also just capabilities. There's a number of companies out there that are -- have a really interesting position but don't have all the capabilities that we have. And so, when we come together, it can make a pretty attractive opportunity like the Health Beacon opportunity. So, I think we're going to be careful. We don't want to get into something is too early, but I think we think there's a lot of opportunity in that space as well. So, I think right now, we have our hands full with our initiatives and our programs, but we are very, very interested in analyzing anything that comes along that would support one of our initiatives.

Yes. I think that's exactly right, Greg, right? So, with the emergence of Hamilton Beach Health, we're certainly looking at a pipeline of opportunities and talking to different folks as we do think that is an area for us in the future. And then for our other commercial and consumer brands, we always take an opportunistic approach and always looking and we'll assess each one as they go along, but absolutely possible that we could have a deal, but nothing in the pipeline right now.

Okay. So, thank you for all of that, really not only a good quarter but long very good performance kind of coming out of COVID. It's great to see cash flow and working capital coming back in line. This is, in my view, been a cash-producing business given where it is in its life cycle and just all around good, so thanks for answering my questions and great job.

There are no further questions at this time. I turn the call back over to Greg Trepp.

Okay. Thank you. So today, we discussed our continued efforts to build long-term shareholder value, supported by our many competitive advantages and our strategic initiatives. We benefit from our leadership in the small kitchen appliance industry, which has a long history strong durable demand. Our team is experienced with strong industry, customer and consumer knowledge. We are a proven innovator, a retailer relationship span a broad group of customers in the brick-and-mortar and omnichannel and e-commerce-only channels. We have an asset-light global infrastructure. We plan to leverage all of these strengths in 2024 and beyond. That concludes our report for today. Thank you again for joining our call.