Greetings and welcome to the Citi Trends first quarter 2021 earnings conference call. During the presentation, all participants will be in a listen-only mode. Afterwards we will conduct a question and answer session. At that time, if you have a question, please press the one followed by the four on your telephone.

If at any time during the conference you need to reach an operator, please press star, zero. As a reminder, this conference is being recorded Tuesday, May 25, 2021. I would now like to turn the conference over to Nitza McKee, Senior Associate. Please go ahead..

Thank you and good morning everyone. Thank you for joining us on Citi Trends’ first quarter 2021 earnings call. On our call today is our Chief Executive Officer, David Makuen, Chief Financial Officer Pam Edwards, and Vice President of Finance, Jason Moschner. Our earnings release was sent out this morning at 6:45 am Eastern time.

If you have not received a copy of the release, it’s available on the company’s website under the Investor Relations section at www.cititrends.com. You should be aware that prepared remarks today made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance, therefore you should not place undue reliance on these statements.

We refer you to the company’s most recent report on Form 10-K and other subsequent filings with the Securities and Exchange Commission for a more detailed discussion of the factors that could cause actual results to differ materially from those described in the forward-looking statements.

I will now turn the call over to our Chief Executive Officer, David Makuen.

David?.

number one, African-American centric; number two, melting pot or a mix of African-American and Latinx populations; and number three, Latinx centric.

As I’ve mentioned in the past, the role of the physical store is more important than ever as we develop relationships with customers in the heart of their communities, often literally a stone’s throw from where they live. The experience of shopping in our stores is highly unique with a community culture vibe that is unparalleled in retail today.

Also during the first quarter, we are thrilled to announce the launch of a Citi Trends lab store along with a second lab store opening this week. These labs represent a testing ground that amplifies and takes our intimate specialty store experience to the next level.

We will take a methodical test, read and react approach to this initiative and, like others we’ve embarked on, we will anchor our go-forward rollout decisions utilizing fact-based rigor. We anticipate using these learnings to inform the new CTX, which stands for Citi Trends Experience, and will plan on rolling out CTX in 2022.

I’m so very excited because this initiative will truly bring to life in more compelling ways than ever before our exclusive trends, sought after brands, and head to toe looks, combined with a renewed focus on what we call customer care, or enhanced customer service in our stores.

I look forward to updating you on our learnings and progress on future calls. Now for an update on our second strategic initiative, optimizing our product mix. This is an area that is really starting to hum yet is still in the early innings.

Our teams are embracing the concept of operating within the construct of six Citis or categories and each lead buyer is assuming the role of mayor of their respective Citi, with responsibility for bringing that Citi to life. Within each Citi, there are multiple zip codes that keep our Citis vibrant and fresh.

For the first quarter, although our performance was exceptional across the board, we were particularly pleased with the continued strength of our women’s and men’s apparels Citis coupled with outsized growth in our home and lifestyle Citi. The quality of our assortment is stronger than ever before and gets better and better every quarter.

We are uniquely qualified to meet the needs of under-resourced African-American and Latinx families.

Fashion and trend matters so much to our heroes, our customers, and I can assure you that our dedicated vendor and supplier ecosystem is delivering at a very high level to ensure we execute the right tie-dye, the right bold graphic, the right all-over pattern, and perhaps most importantly determining the right time to pivot to the next trend.

My favorite example of trend evolution is found in our men’s Citi, of which I’m a shopper. Early in the year, it was all about the paint splatter as an exclusive treatment on tops and bottoms, and as the quarter progressed it became more about a paint smear, and then it became rhinestones and patching.

The attention to these small but important details is what makes a trend brand a great trend brand. We’re so excited to deliver the trends in Citi Trends, filled with freshness and excitement for our customers, resulting in improved inventory turns and healthy gross margins. Moving to our third strategic focus, reinvesting in our infrastructure.

It’s all about taking a strategic approach to reinvesting free cash flow from our strong and consistent operational results to make systems and infrastructure improvements across our buy, move and sell pillars of our operation. I will first focus on the move, or the supply chain pillar of our operations.

With our outsized performance, we have candidly run into some bottlenecks getting plenty of available products to our DCs and into our stores fast enough to meet consumer demand. We quickly evaluated the situation and have engaged external partners and amped up our drop-ship capabilities to meaningfully expand our ability to move goods to stores.

We are also actively reimagining our move-work processes, sparked in part by current labor and freight cost headwinds that you’ve all heard from across our and other industries.

These macro headwinds are similar in some ways to those we experienced throughout the pandemic as they have forced us to take a hard look at how we currently operate and how we find new ways to operate more effectively and efficiently.

Our culture is built on the premise of agility and working not only hard, but smart; but let me assure you, we are in the midst of attacking these opportunities head on. Investment in our buy and sell pillars continues as well.

In buying, power users of our cloud-based systems are emerging, giving us confidence that applying data and analytics to our inventory planning, buying and allocation decisions will reap many successes down the road.

In sell, in addition to new store growth, our teams are getting traction around using cloud-based work flow tools as well as successfully rolling out a new POS system that will speed up checkout and eventually enable customer data capture. Lastly, our fourth strategic focus, making a difference within the communities we serve.

As I mentioned on our last call, our board of directors formed a corporate social responsibility committee. The committee is overseeing our initiatives around ESG and social responsibilities.

Anchored by our Citi Cares Council, our future efforts will not only make Citi Trends a better company, it will also help serve our melting pot of diverse employees and loyal customers. Furthermore, we believe that a diverse and inclusive team is critical to our success.

We strive to foster an intentionally inclusive, diverse, and productive working environment where our employees are valued and respected. We continue to focus on attracting, developing and retaining team members that reflect the diverse communities we serve.

I am proud to say that nearly 80% of our employees are African-American or Latinx, 83% of our employees are female, and that more than 90% of our store management positions are filled by women.

Along these lines, as we announced today in our press release, I have pledged on behalf of Citi Trends to advance diversity and inclusion within the workplace by signing a CEO Action for Diversity and Inclusion Pledge, joining many other CEOs. Joining this group will help us accelerate our continued dialog on these matters.

Now I’d like to turn the call over to Pam Edwards, our CFO to discuss the first quarter results and our thoughts around the balance of fiscal 2021 in greater detail.

Pam?.

Thank you David. As mentioned, we are very pleased with our first quarter results and strong start to the year, building on our momentum from last year. In addition, we are well on our way to achieving our three-year strategic plan goals.

Before reviewing our results, I just want to echo David’s comments in expressing sincere appreciation to our incredible teams. We delivered record results in the first quarter and could not have done so without the hard work and dedication of our associates.

Turning to a review of our results, first I would like to remind you that for comparison purposes, the first quarter 2020 was significantly impacted by the COVID-19 pandemic, which caused the temporary closure of our stores beginning March 20, 2020; therefore during today’s discussion, for certain line items I will review our performance versus the first quarter of 2019, which we view as a more comparable period.

Total sales in the first quarter were $285 million, an increase of 39.2% compared to 20190. Comp sales versus 2019 grew 35%. Growth in the quarter was driven primarily by healthy increase in average basket size.

Sales were strongest in March and April, which benefited from the earlier Easter, gradual tax refund distributions, relaxation of pandemic-related restrictions, and government stimulus payments. All categories saw double-digit increases to 2019 with the exception of footwear, where we had strategically planned the business down.

We achieved gross margin in the quarter of 42.6%, an increase of 1,530 basis points compared to 27.3% in the first quarter of 2020. Gross margin versus 2019 increased 510 basis points. The increase in our gross margin rates continued to be primarily the result of strong full price selling and fewer markdowns.

In addition, included in the first quarter margin results is a favorable shrink credit of $2 million. This is reflective of an inventory loss rate which is trending lower than historical levels. Adjusting for this credit, our margin would have been 41.9%, or a 440 basis point increase compared to 2019.

SG&A leveraged 1,930 basis points on the significant increase in sales versus 2020. Compared to 2019, SG&A dollars increased 23%, leveraging 365 basis points to 27.3% from 30.9%. Operating income of $39 million in the quarter was an increase of $67 million versus 2020 and the operating income rate was 13.7%.

Compared to 2019, our operating income increased $30.3 million. Our net income was $30.9 million for the quarter compared to a net loss of $20.9 million in the first quarter of 2020 and $7.8 million in 2019.

Earnings per diluted share was $3.23 compared to a loss of $2 per share in the first quarter of 2020 and compared to $0.65 in 2019, for an increase of 397%. Turning to the balance sheet, total inventories ended the quarter down 16.5%.

Lastly, the company repurchased approximately 537,500 shares of its common stock at an aggregate cost of approximately $45.5 million in the quarter. Now turning to our second quarter and fiscal 2021 outlook, we are encouraged by our fiscal 2021 second quarter to date sales performance, which is above our internal expectations.

As we continue to look forward to the remainder of the fiscal year, we have tremendous optimism and are well on our way to achieving our strategic plan and achieving it earlier than our original plan suggested; therefore, given our outstanding results to date, we are raising our full year guidance.

Specifically, for full year 2021, we expect sales in the range of $970 million to $990 million with earnings per share of $4.55 to $4.75 versus our previous EPS guidance of $2.85 to $3.05, or an increase in our guidance of 56% to 60%.

This updated guidance reflects great top line momentum driven by structural improvements in our model, which helps offset some of the freight and labor pressures impacting retail today. Similar to last year, there are dynamics that are still playing out, and we will continue to update our numbers accordingly.

Lastly, as David will speak to shortly, we are exploring new capital allocation strategies specifically designed to accelerate our new store growth. As a result, we are pausing our share repurchase program after the completion of our current authorization in early June.

This will allow us to refocus our efforts in pursuing a more aggressive program of investing in our stores and our infrastructure. Now I’ll turn the call back over to David for closing comments.

David?.

Thanks Pam. This is another outstanding quarter for Citi Trends. Our transformative journey continues to position for many years of profitable growth and I am truly grateful for our employees, our customers, and our leadership team.

We look forward to amplifying the Citi Trends brand and expanding our reach to many more underserved communities across the country. Looking to the rest of 2021 and beyond, we feel very good about our overall positioning as a differentiated specialty value brand catering to underserved Africa-American and Latinx communities.

As we continue to enhance the Citi Trends experience for our customers and execute against our strategic priorities, we are well ahead of our previously shared long-term plan, and we expect to exceed $1 billion in sales sooner than we originally expected.

We are confident that our growth strategies and the advantages of our business model will continue to fuel market share gains and drive long-term sustainable growth. We’ll update you on future calls as new details emerge. Thanks for tuning in. We are now ready to take your questions. .

[Operator instructions] Our first question comes from Jeremy Hamblin with Craig Hallum Capital Group. Please proceed..

Thanks and congratulations on the terrific results. Wanted to start, David, by coming back actually to the last comment around the share repurchase program and accelerating store growth. You guys finished the quarter with over $130 million of cash, $14 a share based on our math roughly.

In terms of thinking about--you know, we project you generating positive free cash flow.

In terms of wrapping up that buyback program, does this suggest that you are on a path to accelerate your unit growth here, maybe beyond that mid single digit unit growth level? It certainly seems like with average investment of only $350K per store, it seems like something that you clearly could do if you want to.

Any color you can share around that?.

Sure Jeremy, thanks for tuning in. Nice to hear from you. Now, you’re really on the mark - for us, capital allocation is going to take on a broader definition in terms of how we best use our free cash flow generated by positive operations, so at this point we are looking at the advantageous real estate market that we see ahead of us.

We’re bullish on bringing this new CTX experience that I referenced in the call to more neighborhoods and towns around the country, and we are very much in the throes of figuring out how do we best do that at the right pace, but certainly at a potentially quicker pace. We’ll update you more as the months and quarters unfold, but you’re on the mark.

We’re excited about accelerating store growth.

I’ll add one more color commentary, which is we also want to start accelerating some of our infrastructure investments because in order to scale this business, as we’ve mentioned in prior talks and calls, we do need to invest in some systems and infrastructure needs within our buy, move and sell pillars, and so that’s also part of the conversation in terms of how do we deploy that cash.

Does that make sense?.

Absolutely, understood. Let me shift gears here and talk about a couple of the headwinds you noted - freight, and I think some labor shortage.

In terms of thinking about the impact of that, one, Pam, I wanted to get a sense for freight’s impact in Q1, maybe the basis point impact on gross margin; and then two, can you give us a sense of the impact expected here, Q2 and maybe second half of the year? Let’s just start with that..

Okay, thanks Jeremy. Overall, freight for the first quarter wasn’t as significant as we see that going for the rest of the year, so for the Q2 through Q4, for example, we think that freight is deleveraging about 170 to 190 basis points for the balance of the year.

First quarter wasn’t as impactful because it really didn’t start toward the end of the quarter, so that’s going forward we think will impact the gross profit number.

The DC expense is all in our SG&A and we believe that due to the incremental processing capacity as well as some of the three PLs, it’s going to negatively impact our SG&A rate by 20 to 30 basis points. But as a reminder, all of that’s included in our higher guidance that we’ve given, so we’ve already incorporated that in our forecasts..

Great, that’s helpful.

Just honing in a little more on the SG&A, in thinking about, as you called out, sales up 39% from 2019 levels, SG&A up 23% from 2019 levels and store count’s up 4%, in terms of thinking about the total dollars in SG&A, I wanted to get a sense for how much of that was coming from DC expense--you backed into the math there on the implied 20 to 30 basis points, but just in terms of thinking about the leverage here on the remarkable sales performance, how much of this is embedded corporate costs that are higher versus 2019 levels, versus we had a huge sales lift and we needed more staffing at our stores and/or at our DCs? Can you break that down into components?.

Yes, so just as a reminder, I’m comparing to 2019, so that you keep that in mind as well, because 2020 comparisons aren’t as comparable.

When I look at the composition of the SG&A increase from a dollar perspective, so that’s what we quoted in the script versus 2019, the majority of the increase was in stores, and that’s primarily due to the sales increase, and so that’s driving the leverage overall across the SG&A, is just the pure increase in the first quarter of sales versus ’19, which was up $80 million.

I think that and some corporate overhead associated with equity and bonus round out the overall increase from a basis point standpoint. Appreciate your questions, Jeremy. Let’s go onto the next caller..

Our next question comes from Chuck Grom with Gordon Haskett. Please proceed..

Hey, good morning. Thanks. If I look at the first quarter and compare it to ’19, like you do in your sales per store, it recovered nicely, up over 33%, which is 2x what you did in the fourth quarter.

I guess I’m curious if you could help us understand why you think your business accelerated so much, and then as a follow-up, when we look ahead to the balance of the year and embedded in that $970 million to $990 million sales outlook, how we should think about the sales cadence throughout the year relative to ’19..

Hey Chuck, it’s David. Thanks for calling in today. Good question. I’ll take the first one and I’ll pass it to Pam. I think the first one really, I’ll give you a couple factors.

I think most importantly, the quality of our assortment across our Citis and the growth in particular of our home lifestyle Citi, which as you know is in the last couple of years a growth trajectory, that all contributed to some really nice lifts comparing ’21 to ’19, so the team led by Lisa Powell, our Head Merchant, is really dialed into what our customers want in particular on the trend side, delivering on the basics in a consistent manner, and then filling in with everyday fashion.

I think I’d give that a lot of credit.

Then I think the other thing is we’re building brand awareness, and some of that is coming from the nature of what 2020 looked like, meaning we drew a lot of newbies into the fold during 2020, and what we’re hearing and seeing through some of our research is they’re coming back, and those were folks who weren’t in the fold of course in ’19.

Then lastly, this lapsed comeback effect is almost equal to the newbie effect, and it’s great to see, so we’re basically bringing people back in the fold who had attrited in ’17 and ’18, even, and they came back in 2020 and they’ve stayed in the franchise in ’21, again helping provide that lift against ’19, so I think I’ve pointed toward product and customer attraction.

Then if you don’t mind, can you repeat your second question?.

Yes, I’m just curious when we think about your guide for the full year, how we should think about the sales per store or comp recovery, however you want to frame it, from 2Q through the second half..

Yes, good question, thank you. We see Q2 moderating a bit from our run rate that we experienced in Q1, and then I’d say that we’re up against pretty good Q3 and Q4. I’ll start with Q4 - we’re up against a 17 comp in Q4, so we’ve got, I think, plans incorporated that kind of reflect going up against that.

Then our Q3, our last year comp was up plus-6, and as you know it was clouded by a strange and weird back-to-school season, so we think--if I were you, I’d think about it like Q3 has a little more upside than Q4, and that’s kind of how we’re flowing it both against ’20 and ’19..

Okay, great. Thank you. My second question would just be on the gross margin performance, Pam, just relative to ’19, obviously way above ’19 levels. Do you think you can continue that momentum, i.e.

basically better than ’19 even with that freight headwind that you just called out, the roughly 180 basis points, give or take?.

Yes, our goal is to maintain in the high 30s, low 40s, so even with the freight we’re definitely looking to continue in the high 30s perspective. I think [indiscernible] incorporate it..

Okay, and then if I could ask just one bigger picture question, it sounds like you’re ready to accelerate stores.

I’m curious - you’ve hopefully disclosed this in the past, but just your current DC capacity today, how much can the system hold? You’re talking about accelerating store growth, but that also comes with a cost, so I’m just curious the capacity and how much you think you can actually grow within what you have today. .

It’s a good question, Chuck, thanks for asking. Yes, I’d couch that under our reinvesting in our infrastructure strategic initiative, with a big focus on investing in our move capabilities.

The short answer is we’re good for two, three years and then we really start to tax the system after that, so we’re in the middle of deploying some capital against improvements in both our own distribution centers. I’m confident that we’ll put in the right infrastructure, physical plant kind of stuff as well as some system improvements.

We’ve divulged it in the past - we’ve got to get on that, and given our accelerated sales growth, it’s even more important that we do so..

Great, thank you..

Thanks Chuck..

As a reminder, to register for a question, please press the one followed by the four on your telephone. Our next question comes from Dana Telsey with Telsey Advisory Group. Please proceed with your question..

Good morning everyone and congratulations on the terrific results. As you think about the second quarter, and you mentioned that you’re still above internal plan, how much of the improvement in the first quarter would you say came from stimulus, and was there anything regional to note about the performance? Then I have a follow-up..

Hi Dana, thanks for your kind words.

Was your last word, did you say regional?.

Yes, exactly..

Right, thank you, appreciate that.

Overall as you know, it’s hard to break out the impact of everything that’s going on in our business, because we’re going through such a transformation even on the foundational, kind of structural level, and then you layer on stimulus, you layer on a very different tax season that occurred this year, etc., so it’s tough to gauge.

But what I would tell you is the monies that flowed into our customers’ hands were definitely--was definitely meaningful, and made a difference in our momentum.

It also, I think, changed the lives of a lot of our customers in the sense that some of them saved more than they used to, and some of them I think deployed their, quote-unquote, open to buy against things they really needed.

In this case, they needed to buy bigger clothes for their kids, and often when they came for their kids, they bought some stuff for themselves and so on. I think it’s a combo of all the factors. In terms of looking forward, what we’re most bullish about is the improvement in the product and this idea of new customer capture and lapsed comebacks.

Look - if we do our job and execute against what they want and need, I think we’ve got a nice bright future ahead of us. That’s how we look at it.

The stimulus, call it a one-time event, that certainly helped our quarter and probably has some halo impact into future quarters, but far more important to us is just how much we’ve improved our product assortment, and as you know, getting that right is a high majority of the battle, so we’re excited about that.

From a regional perspective, not really. I mean, more of the regionality might have been from weather, and as you know, we had some abnormally cold weeks mixed in with some now hot weeks that, frankly, is bringing back some of the business that we maybe lost in the cold weeks.

But from an overall macro Q1 perspective, all stores rose for us, just like all of our Citis or categories rose.

In particular, we saw markets worthy of noting that had lower awareness, that grew phenomenally well, and that gets back to that previous answer I gave - we’re clearly growing brand awareness and expanding our customer base, which is a really nice thing to see in the underlying fundamentals of the business..

Then the $39 million that you’d previously talked about capex, how does that adjust now, and when you’re thinking of accelerating store growth, are you thinking about 50 stores this year, and do you have the labor and store managers to staff the stores given the growth ahead of you?.

Yes, good question. Let me sequence that out a little bit and make it super clear. This year, we really won’t impact our capex spend much.

We’re going to open, as we’ve announced, at least 30 new stores this year coupled with 20 or so remodels, and then a lot of that $39 million spend is going against some of our investments in our DCs and investments across our buy and sell pillars.

Really what we’ll work on now, and we haven’t announced it because we’re still in the middle of evaluating it, is what does ’22 and ’23 look like, and that gets to your question of store count and other investments we’ll make in the business.

We’re not quite ready to announce that, but in terms of the number, we also said over the course of ’21 Q2 and Q3, that we would open at least 100 new stores. That’s the number that we’re really studying, which gets back to my answer earlier in the Q&A here where we’re going to study that really intently and maximize the real estate opportunity.

So not quite ready to say that that 100 goes to, but we’re definitely keen on understanding where we can take it and what represents the greatest opportunities, market by market and demographic by demographic, based on our three buckets of types of stores. More to come on that..

Lastly just on inventory, which I think was down around 16.5%, 17%, where do you expect inventory to be as we go through the balance of the year, and any changes to how you’re planning back-to-school, given that it will be a more important back-to-school this year since kids will go back to school?.

Sure. From an inventory perspective, we think it’s absolutely the right thing that we continue at the levels we are. I think getting fresh new trends in the business is important, therefore we want to continue to turn fast, and it’s just an important element of our overall strategy.

Given that, we will meet the customer’s demand, so we will monitor the forecasts and making sure that we’ve got the right trends as well as the right levels of inventory in our stores in order to meet the sales demand overall that the customer’s asking for, so that’s inclusive of expectations for back-to-school this year.

Overall, I think again, continue to manage the inventory at a reasonable level, but down to previous years..

Thank you..

Thanks Dana..

Our next question is from Jeremy Hamblin with Craig Hallum Capital Group. Please proceed..

Thanks. Wanted to also just follow up on the remodels.

One, can you give us a sense for the comp lift that you’re seeing on the remodels, and again, given that you’re looking at higher--potentially higher unit growth, are you also thinking about potentially doing more aggressive remodels along the way? I know you said that you’re expecting 20 for this year, but is that also something where that could become 40 or 50 in 2022?.

Thanks Jeremy. Yes, good question, certainly a part of the formula of what we plan to execute against. On the remodels thus far this year, we’re seeing pretty much what we expected, kind of mid-single digit lifts, edging up a little higher than mid here and there. That’s what we’ve modeled across the three years that you’re in the know on.

Then the second thing, what I would focus on is the rollout of our new experience, which I referred to as CTX. That kicks in, in 2022, and your gut reaction is right - if that works in the early innings of 2022, there’s a high likelihood we would accelerate and hit some more stores in our fleet that would benefit from an enhanced experience.

I think the key thing I’d leave with you is this idea of enhancing our experience is a tremendous opportunity for us as we seek to better understand what the customer expects from us, what they like from an adjacency and floor set layout perspective, and all that matters, as you know, in our brick and mortar world, so we’re really digging in on that.

Our two lab stores will inform that experience, and if it works, to your point, we’ll start amping up the numbers of stores that get it..

Great, thanks. Last one from me, and appreciate you taking the extra questions, just in terms of the promotional environment that you’re seeing out there. It seems like your inventory is obviously very clean, I think across the inventory.

Inventories seemed pretty clean, but as we start getting into these reopening periods and people start lapping some tougher comps, what are you seeing out there from the competition? Do you feel like it’s starting to get back to a more normalized promotional environment or still relatively benign and therefore we should think product margins continue to be pretty strong here the rest of the year?.

Good question. Yes, I think I’d probably direct you towards your words of clean inventory.

For the Citi Trends environment, so to speak, we don’t anticipate having to use promotional levers in any great stretch or any big difference versus prior year, and in fact, as you know, we’ve been trending quite a bit down in terms of having to use the markdown lever.

Of course, it sits there and we’re able to use it strategically to exit goods that have reached their end of life, but from a macro perspective, we don’t see any promotional reliance popping up.

I think competitively, it’s getting back more and more to normal, and as you know in our space of everyday value, it’s not really a lever that we need to use all that much.

In our case, our competitive circle, if you will, is more limited perhaps than others given where our stores sit and given the customers that we cater to, so I think for us it’s just staying very focused on turning fast, buying smart, not getting over our skis, and getting into a trend, getting out of a trend, moving on, and creating this freshness and newness factor that I think if we keep our eyes on that prize and not worry too much about the noise around us, I think it really bodes well to feed our specialty store-like environments.

.

Thanks for taking the questions. Best of luck this year..

Thank you so much..

Thank you..

Our next question comes from Alex Silverman with AWM Investments. Please proceed..

Hi, good morning. Our questions were all asked and answered. Thank you..

Thanks Alex..

Mr. Makuen, I’ll turn the call back to you for your closing remarks. .

Very good, thanks Silvana. Thanks everybody for tuning in and listening in. Great to hear from you. Have a great summer. We’ll see you at the next one. Take care, stay safe and healthy..

That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines..