Greetings. Welcome to the Tilly's, Inc. Second Quarter 2021 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Gar Jackson, Investor Relations. Thank you. You may begin..

Good afternoon and welcome to the Tilly's fiscal 2021 second quarter earnings call. Ed Thomas, President and CEO; and Michael Henry, CFO; will discuss the company's results and then host the Q&A session. For a copy of Tilly's earnings press release, please visit the Investor Relations section of the company's website at tillys.com.

From the same section, shortly after the conclusion of the call, you will also be able to find a recorded replay of this call for the next 30 days.

Certain forward-looking statements will be made during this call that reflect Tilly's judgment and analysis only as of today, September 2, 2021 and actual results may differ materially from current expectations based on various factors affecting Tilly's business. Accordingly, you should not place undue reliance on these forward-looking statements.

For a more thorough discussion of the risks and uncertainties associated with any forward-looking statements, please see the disclaimer regarding forward-looking statements that is included in our fiscal 2021 second quarter earnings release which is furnished to the SEC today on Form 8-K, as well as our other filings with the SEC referenced in that disclaimer.

Today's call will be limited to one hour and will include a Q&A session after our prepared remarks. I will now turn the call over to Ed..

Thanks, Gar. Good afternoon, everyone. Thank you for joining us today. Fiscal 2021 has been a record-setting year for us thus far. Our second quarter results included a record level of net sales and earnings per share for any quarter since our 2012 IPO.

On a year-to-date basis, the first half of fiscal 2021 produced earnings per share that exceeded the results of any fiscal year since becoming a public company.

We believe these results were driven by considerable pent-up consumer demand compared to last year, aided by government stimulus payments, compelling merchandising offerings and excellent execution by our store and corporate teams.

Compared to fiscal 2019 second quarter, our total net sales increased by 24.9% which was driven by a total comparable net sales increase of 18.3% and operating 15 net additional stores.

Store comps are positive in all markets and was strongest in our two most recent primary expansion areas, New England and Texas, each of which posted comp sales increases over 20% compared to 2019.

In terms of merchandising, men's and women's apparel were very strong, led by our proprietary brands, RSQ and Full Tilt which were our number one and number two overall brands in both the second quarter and first half of fiscal 2021, as well as strong performance from our curated assortment of iconic, global and specialty brands.

Apparel growth has been driven by new trends in bottoms, a surge in graphic T-shirt business and a high adoption rate on newness generally. Comparable net sales of accessories and girls increased by a single-digit percentage relative to 2019, while boys and footwear decreased by a single-digit percentage relative to 2019.

Hardgoods which we did not have as a material part of our assortment in 2019 produced $2.1 million in total net sales during the second quarter and portions of this assortment are now in nearly two-third of our stores. We anticipate that all stores will have at least a portion of our hardgoods assortment by the coming holiday season.

We expanded our sustainable merchandise program during the second quarter, ending the quarter with over 1,000 items from over 40 brands and our sustainability shop on our website that contains features, such as the use of certified recycled materials, certified organic cotton or reusable accessories.

During the third quarter, we have launched over 40 styles under our RSQ brand that features similar sustainability attributes. We also just launched a collection of vintage and upcycle products with over 200 unique pieces, along with selected products in 25 of our stores. These collections currently represent roughly 4% of our total inventory.

Outside of merchandise, we are continuing to reinvest in our business. We have opened eight of our planned nine new stores for fiscal 2021 and continue to seek attractive opportunities for additional stores in 2022. We've also launched several initiatives this year designed to improve convenience and efficiency for our customers.

These customer experience initiatives include an upgrade to our website platform from our current version of sales force to their latest more mobile response of SFRA version, upgrading our mobile app from a simple ramp of our website to a version that offers greater mobile functionality, including loyalty and in-store experience features and continuing to improve our omnichannel capabilities, including in-store pickup, curbside pickup, same-day delivery and ship from store.

We are also reinvesting in distribution efficiencies to expand capacity for anticipated future growth. We do not currently expect our total capital expenditures for fiscal 2021 to exceed $20 million.

Due to our strong cash position resulting from the strength of our business performance and our disciplined inventory and expense management through the pandemic, our Board of Directors approved a special cash dividend to stockholders of $1 per share during the second quarter which was paid on July 9.

This represents the fifth consecutive year where we have provided a direct return to our stockholders in the form of a special cash dividend. Turning to the third quarter of fiscal 2021; the back-to-school season is off to a strong start.

Total net sales for fiscal August were up 94.4% compared to last year, partially due to operating 39 additional stores than at this time last year. 33 of our California indoor mall stores were closed throughout August of last year and we opened six net new stores in the past year.

Compared to 2019 total comparable net sales for fiscal August increased 20.4%. Despite ongoing concerns about the current resurgence of COVID-19 cases, across the country, retail supply chain disruptions, labor challenges and increasing costs generally, we remain cautiously optimistic about our business prospects for the second half of 2021.

I will now turn the call over to Mike to provide additional details on our second quarter operating performance and to introduce our third quarter outlook.

Mike?.

Thanks, Ed. Good afternoon, everyone. Details of our second quarter operating performance compared to last year's second quarter were as follows.

Total net sales were a record $202 million, an increase of $66.1 million or 48.7% compared to $135.8 million last year, partially due to the impact of the various periods of government mandated store closures we experienced during last year's second quarter which resulted in only 65% of total store operating days being available to us during that period but also due to strong consumer response to our merchandise offerings this year.

Total net sales from physical stores were $164.6 million, an increase of $80.8 million or 96.3% compared to $83.9 million last year. Net sales from physical stores represented 81.5% of our total net sales for the second quarter compared to 61.7% of total net sales last year.

E-commerce net sales were $37.3 million, a decrease of $14.7 million or 28.2% compared to $52 million last year which we believe was primarily due to going up against our peak triple-digit e-comm comps in May and June of last year when consumer spending shifted online during the period of significant store closures.

E-comm net sales represented 18.5% of total net sales compared to 38.3% of total net sales last year. E-comm comps have been negative since the second week of April but turned positive for the final week of the second quarter and have remained double digit positive since then.

We ended the second quarter with 244 total stores compared to 238 total stores, of which 205 were open at the end of the second quarter last year. During the second quarter of fiscal 2021, we opened six new stores in May.

Total comparable net sales compared to fiscal 2019 second quarter increased 18.3% with increases from physical stores of 11%, with positive comp sales growth across all markets and from e-commerce of 63.4%.

In the second quarter of fiscal 2019, net sales from physical stores represented 85.9% of our total net sales, while net sales from e-commerce represented 14.1% of our total net sales.

Gross profit, including buying, distribution and occupancy expenses improved to $74.7 million or 37.0% of net sales compared to $41.7 million or 30.7% of net sales last year.

Buying, distribution and occupancy costs improved by 800 basis points collectively despite increasing by $1.7 million in total due to leveraging these costs against higher net sales.

Product margins decreased by 170 basis points due to going up against last year's strong full price selling upon the initial reopening of stores relative to certain valuation reserves taken on idle store inventory at the end of the first quarter last year when all stores were closed.

Compared to fiscal 2019 second quarter, product margins improved by 190 basis points, primarily due to reduced markdowns. Total SG&A expenses were $48.3 million or 23.9% of net sales compared to $34.0 million or 25.0% of net sales last year.

SG&A improved by 110 basis points as a percentage of net sales despite increasing by $14.3 million due to leveraging these costs over higher net sales.

Primary causes of the SG&A dollar increase were higher store payroll and related benefit costs of $10.2 million, primarily due to operating all stores for the entirety of the quarter and serving significantly higher net sales compared to last year and corporate bonus accruals of $2.7 million due to our strong operating performance thus far in fiscal 2021.

Operating income improved to $26.4 million or 13.1% of net sales compared to $7.7 million or 5.7% of net sales last year, primarily due to the significant increase in net sales. Income tax expense was $5.9 million or 22.5% of pretax income compared to $2.8 million or 34.3% of pretax income last year.

The reduction in income tax rate compared to last year was primarily due to deferred income tax benefits of $0.9 million derived from employee stock option exercise activity this year and the prior year impact of the CARES Act which allowed for operating losses in fiscal 2020 to be carried back to earlier tax years with higher income tax rates.

Net income improved to $20.4 million or $0.66 per diluted share which are records for us as a public company compared to $5.3 million or $0.18 per diluted share last year. Weighted average shares were 31.1 million this year compared to 29.7 million last year.

Turning to our balance sheet; we ended the second quarter with total cash and marketable securities of $148.5 million and no debt outstanding compared to $148.9 million last year which included an aggregate of $37.6 million of borrowed cash and withheld store lease payments.

We ended the second quarter with inventories per square foot up 25.6% over last year's second quarter and up 14.3% over 2019 second quarter, as we support the current momentum of our business.

Total capital expenditures for the first half of fiscal 2021 were $8.5 million compared to $4.3 million last year, the increase being primarily due to new store openings this year.

Turning to the third quarter of fiscal 2021; total comparable net sales for fiscal August, ended August 28 increased by 20.4% compared to 2019's comparable period with increases from physical stores of 11.6% and from e-commerce of 81%.

Based on current and historical trends and assuming all stores and e-comm remain in operation throughout the third quarter, we would expect our third quarter net sales to be in the range of approximately $187 million to $193 million and earnings per diluted share to be in the range of $0.30 to $0.34.

This outlook range assumes an estimated income tax rate of 27% and weighted average diluted shares of approximately 31.2 million. We expect to have 243 total stores opened at the end of the third quarter compared to 238 at the end of last year's third quarter and 232 at the end of fiscal 2019's third quarter.

Operator, we'll now go to our Q&A session..

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Jeff Van Sinderen with B. Riley. Please proceed with your question..

Hi, everyone. And let me say congratulations on terrific results. I guess my first question, if you can just touch on supply chain because obviously, it's been a topic, I think, of concern for a number of companies. You guys don't -- at least you're not seeing it in the numbers. So I guess, are you seeing any bottlenecks? I'm sure there's some.

But maybe if you could touch on kind of particular categories, how supply chain for private label looks for you, for RSQ and then maybe if you could touch on how you're planning receipts for second half? If you're pulling forward, how much you're pulling forward or any sense of that?.

Sure, Jeff. I'll start and Ed can add in if he has anything to augment what I have to say. So we've been dealing with the supply chain issue all year long, even going back to last holiday to some extent. And as you noted, it hasn't hurt our overall results all that much.

There have been particular instances where we might run really low or sell out of an individual style of an individual item here and there. But it hasn't been so prominent so as to really hinder the performance of the business. We are trying to do everything we can to secure inventory for the holiday season as best we can.

So we are pulling forward to some extent but it shouldn't be anything that creates any kind of unusual distortion relative to the level of business that we expect to do. Again, we've been dealing with this all year long and have been adapting to it on a week by week and sometimes a daily basis.

Our merchant team has worked very hard with all of our key brands, whether third-party or proprietary to make sure we're just in constant communication with them to understand what to expect.

We really had a constant level of inventory that's been delayed anywhere from two to six weeks, again, all year long and we've been having to make adjustments for that as we've gone. We expect to continue to do that, to continue to adapt through the holiday season.

But seeing how back-to-school has behaved, very similar situation, back-to-school is a key season for us. There have been instances of particular items, whether it's a backpack or some footwear, things like that, that we might not be able to get quite as much replenished as fast as we'd like.

But again, the results speak for themselves; so it's not so much that we think it's going to cause a major issue for us..

Okay, great.

And let me just ask you kind of as a follow-up to that, qualitatively, do you feel like the inventory -- or not inventory but the kind of the supply chain timing or receipt delays are getting better or getting worse or about static at that two to six weeks?.

What's really interesting is right now, it has gotten better for a little bit here very recently. But we are anticipating that it's probably going to go back the other way, as we go over the next several weeks on into November. But again, not to such a huge extent that we think it's going to affect the overall season.

It just may temporarily impact our ability to replenish some of our best-selling items..

It's hard to get an accurate read, Jeff, [indiscernible] in terms of -- but I think the way Mike explained to us, very accurate..

Okay, great. Appreciate that. And then, if I could just ask you guys to touch on the gross margin thoughts. I mean, your gross margins were phenomenal in Q2.

I guess, how we should think about gross margins going forward? Or how we should think about the operating expense line as far as Q3?.

Yes. In Q3, we're not expecting the overall gross margin rate to be quite as high as it was in Q2. I think SG&A range that we're looking at is probably $49 million to $51 million, just to have a nice tight area there for you.

Still comparing back to 2019, we think our product margins will be no worse than consistent with 2019 and perhaps a little bit better, maybe not to the extent that we just saw in Q2.

We still will have some leverage on occupancy and distribution, maybe not quite as much, just given it's looking to be a little bit lower sales volume quarter based on everything we know right now than what Q2 ended up being. So, I hope that can help you triangulate your model a little bit better..

It does. Okay, thanks so much for taking my questions. I'll jump back in the queue..

All right. Thanks, Jeff..

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

Hi, good afternoon. A couple of questions.

I guess given the success that you're seeing with some of your proprietary brands like RSQ and Full Tilt, where are those proprietary brands now as a percent of your mix?.

It's gotten just over 30% now currently, looking at Q2 and what we've seen in August so far. So it's inched up a few percentage points from where it's been in recent years and that's just the customer voting. It hasn't been anything overly intentional trying to drive proprietary up to a targeted percentage that customer has just been voting..

We really don't have any plans strategically to increase the total percentage of private versus external brands..

Okay. And then on the sustainability shop, are you seeing any kind of increased price elasticity of demand there where your consumer is willing to pay up for that product? So I wonder if there's any margin implication.

And on the vintage and upcycled product, how are you sourcing that? And I've seen some of it online and you're doing some interesting things with it.

I mean, how big could that ultimately be?.

Well, I think on the sustainability product, I think it's too early in the game to get a really accurate read of how good or how big it can be. But I can't say we've seen any major price resistance to that. But educating the customer is a challenge for sure in terms of that product category.

Vintage we just launched this week and the initial read is excellent. It's really good. We are sourcing that through -- locally in Southern California. And I think it has the potential to become a pretty good part of our business going forward; so just out of the box the demand looks really good..

Good. Thank you..

Thank you. Our next question comes from the line of Mitch Kummetz with Pivotal Research. Please proceed with your question..

Yes, thanks for taking my questions. Let me add my congratulations on the quarter. Inventory, I know that the number you're reporting in the balance sheet is just a snapshot in time but you're up 14% per square foot from two years ago; I don't have any other companies I cover that have that kind of an inventory increase.

So I'm just curious, like how well situated are you with that number? Does that number -- or should I say, how meaningful is that number in terms of how you feel like you're able to service the demand that you're seeing for back-to-school and further into the quarter?.

Well, we run with decreased inventory per square foot for a couple of years now consistently. And I think the inventory level, as we reported it is adequate enough for it to meet the demand than what we're seeing in terms of trends..

Yes. It's still below the sales run rate..

Right..

We've always managed our inventory level beneath the sales comp run rate and that remains the case even at this level of increase..

Okay. And then Mike, on product margin, I think Jeff asked a question about margins. And you mentioned that you don't expect product margin to be strong on as two year basis as you just experienced in Q2. And I'm curious why you're seeing that.

Is that because of higher freight cost, or are you not expecting channel inventory to be as lean in the promotional environment, not to be as good? What is sort of factored into that -- those thoughts?.

Yes, it's acknowledging that there probably will be some actions that we'll need to take at some point on certain things if the rate of sales begins to slowdown. We're thinking about the fact that relative to 2019, Q1 comps were up 22% [ph], Q2 was up 18% [ph].

We've had a nice start to August during the peak of the back-to-school period but we are anticipating that, that rate of growth probably will slow down to some extent. Product margins are still going to be as good or better than 2019. So that shouldn't get misconstrued as though it's a negative.

We think the product margins are still going to be better than 2019. They just might not be 190 basis points better as Q2 was..

Okay. And then, Ed, I think you said that RSQ is your number one brand in the quarter. I tend to think of that as a denim brand, I know that that's not a fair characterization.

But I'm just curious how good denim was in the quarter and how much of an opportunity that might be into the back half?.

Denim -- it is primarily denim brand, not exclusively and it has done exceptionally well. And I'm expecting denim sales to continue strong through the balance of the year; so it should be good..

Yes. Traditionally, RSQ was more of kind of solely a denim brand but we really have fairly recently expanded into other product categories, some fashion tops and tees and fleece. And so it does have an expanded offering compared to what you might remember from two, three, four years ago and longer..

Okay. And then just lastly, as you think about the balance of the year, particularly going to the holiday season, I know that you're going to be better positioned in hardgoods than you were a year ago.

But beyond that, I'm just kind of curious what are some of the things that you might be most bullish on as you're heading into this holiday season?.

Well, there's nothing that sticks out. Obviously, we're concerned with making sure that we don't run into more headwinds like with the Delta variant. And so far, it hasn't been any big impact on our business. But certainly, we are sensitive to the fact that it could occur and it might tighten up things a little.

But the consumer seems to be hungry for newness which I'm very positive about. We have a lot of newness coming into the balance of the year. So that's pretty exciting for our potential. And I think the headwinds will be what we've talked about, the port delays to a certain extent and maybe some tail off in customer demand.

However, lastly, our conversion rate is up really high. It's really improved quite a bit so far this year. And I think what we're finding is, even though traffic is down and is off of prior years, the customer that's shopping is buying; so that's a good thing..

Got it. All right, thanks guys..

Thanks, Mitch..

Our next question comes from the line of Matt Koranda with ROTH Capital Partners. Please proceed with your question..

Hey guys, thanks. And congrats on a great quarter. I just wanted to talk about the trends quarter-to-date. I think you said, up about 20% on the two year stack in August, I think the midpoint of your guidance. So something similar, maybe a slight acceleration from there.

Just wanted to see if you could kind of comment on your views on the rest of the quarter.

And sort of how that transpires? Are there some calendar shifts we should be taking into account in the top line guidance?.

No, I think we're acknowledging the 20% start we've had for August. It's the largest month of the quarter, usually represents a little over half of the quarter, historically looking at the last several pre-pandemic years, last year being an anomaly of course.

As I just mentioned in response to one of Mitch's questions, we're also cognizant that now that we're going to be entering the post peak of the back-to-school season, the rate of growth could moderate to some extent. And looking at the trend line of, again, Q1 comps to 2019 were up 22%. Q2 was at 2018. We had a nice 20% start in August.

But as you think about the lower end of the guidance, that's us thinking about, well, if that trend line does cause some moderation in the start that we've had, we're giving a little bit of room for that.

But really pleased with how things have started off, certainly has been a much more normal back-to-school season this year than what we experienced last year. Consumer response to what we've been doing has been great. So, we're hoping this can carry right on in through the rest of the back half of the year..

Okay. That's helpful, Mike. And then just one more on the gross margins, maybe attacking it from a different angle here. I mean -- so I guess the commentary you've made implies a pretty decent sequential dip in gross margins, if I'm to get to your EPS guidance and using some of the OpEx commentary that you gave there, Mike.

So maybe could you put a finer point on what's hitting gross margins on a sequential basis? Because it looks like the promotional environment probably hasn't eroded a whole lot. Inventory position looks pretty good. So product margins probably don't erode a whole lot. Occupancy costs look pretty good here.

Is there some more significant erosion in distribution or buying costs or any other elements that we should be taking into account there?.

No, there's no big issue here. All we're saying is that we don't think product margins are going to be up as much as 190 basis points. We think they're going to be up relative to two years ago. They might be slightly down relative to last year because as stores reopen, the level of full-price selling was extraordinary last year. It was unusually high.

So there's not a problem here as it relates to product margins. If they're down to last year, it's going to be very modest down. It's not like we're expecting triple-digit basis points or anything like that. It'd be relatively modest and it's likely to be up relative to 2019. So I don't think people should be reading too much into the commentary.

It's just that it might not be up 190 basis points. It could be up something less than that but it's still going to be up relative to two years ago..

Okay, fair enough. I'll leave it there. Thanks, guys..

Thank you. Our next question comes from the line of Janet Kloppenburg with JJK Research Associates. Please proceed with your question..

Hi, everybody..

Hi, Janet..

Ed, I got on a little late. Did you see a slowdown in July in your school outlook -- vis-à-vis your back-to-school outlook and then a nice pickup in August? And what are you seeing regionally in August? Because others are complaining about late back-to-school and that impacting some of the late July, early August trends.

So, I'm just wondering what you guys saw..

August was stronger than July, Janet. So we're consistent with what you're hearing there. And generally, I'd say it was kind of interesting in that it did seem like it took a little longer for our back-to-school ways to kick in. But once they did, they were really good. So it....

And they've stayed good..

Yes. And they've stayed good post their peak. So that's the dynamic we're seeing..

Do you think it will be in a long dated season? In other words, you might get some strength in week two September, week three September. I mean, I know you have strength but something above and beyond, what historically you would have expected..

It's possible, especially -- and thinking about the fact that it seemed like entering into what we thought was going to be the starting point of the waves, it did seem to be a little slower than anticipated that maybe there is something to that. Truth will be told as we get through this period but I think that's a possibility..

Yes. And some of the early -- really early back-to-school stuff have been strong, have continued strong..

Yes..

Post them going back-to-school. So I'm hoping that it translates into the rest of the balance of Jan [ph]..

All right. And other retails that I've talked to -- well, first, just a question on back-to-school.

The Northeast is the latest market to go back-to-school, what are you seeing vis-à-vis the company average on comp productivity?.

Well, we don't have that many stores in the Northeast but those that are there….

I knew you're going to say that. I almost thought of that point with that. Go ahead, yes..

So next time answer the question before you ask it..

Can you just help me with that, please?.

Yes. We really don't. But the reads we're getting from the few stores that we have are good. So....

Okay. That's good. All right.

Then moving on, how should we think about e-comm sales vis-à-vis last year, given the trends? What does that mean for margins? And the second question is some of the companies that I talked to that have third-party vendors like you do are feeling that their AUCs are going up because that incremental freight that vendor -- the brands are building in that incremental freight into their costs.

Can you just address that for me, please?.

Address the e-comm and I'll talk about the brand..

Yes, as it relates to e-comm, we've seen actually a resurgence to stores relative to e-comm here for the last few months. E-comm is sitting right around 18% of the total business. We're really rather agnostic these days about whether it's a store sale or e-comm sale.

Our e-comm business has gotten so much more profitable going through the COVID period and then the things that we learned through that and have carried with us going forward. E-comm's much more profitable than it ever was. And it's pretty in line with what the average four-wall of stores is, maybe just slightly below but nothing meaningful.

So with all the things that we've done, whether it's ship from store, curbside pickup, same day, all these things that we've invested in to just be as convenient as possible for our customers, we really truly are rather agnostic about which channel they choose to buy from us in. And then you asked about....

Yes. We are hearing that, yes..

We are seeing from and hearing from some of our brands about expected cost increases, really more talking about 2022 at this point than in the immediate term but we are starting to hear those kinds of things as well..

And will you be able to absorb that with some select price increases?.

Yes. Yes. I mean we'll have to do some select price increases. But we can definitely absorb it, yes..

And do you guys have any outlook as to when these freight pressures and logistics supply chain issues they start to wane? Do you have any visibility there?.

No..

No, not at all. And as you know, we were dealing with a lot of different brands and big brands and smaller brands. They're kind of a little lost in terms of -- they're not seeing a lot of -- they're not getting a lot of visibility to it either. So it's something that we're on every day and we don't really see anything yet..

And then, lastly, on store productivity is something you and I talked about.

Can it get back to pre-pandemic levels? What are you thinking?.

Yes, I think you can. I definitely think you can. I mean we have to see more consistency in traffic. It's not going to happen with continued declines in traffic throughout the industry. But that's like I said earlier, conversion is good. So where the traffic is -- the traffic we're getting is a quality shopper, they're actually buying.

So that's encouraging. And I think that we'll see -- over time we'll see traffic increase. Does it get back to what it used to be, I don't think so. But....

Yes, for Q2, just to give you a sense, our traffic was down high single digits relative to 2019 but the conversion rate was significantly better and the average sale was significantly better. Through the August period, the peak of back-to-school, traffic was actually slightly positive for the first time in a really long time.

So that was a good thing to see. We hope that's something that will continue. I don't know if it will or not but it was at least nice to see in the August period that traffic was slightly positive for us relative to 2019..

That's very encouraging and something I haven't heard. So, congratulations..

Thank you..

Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session. I will now turn the call over to Ed Thomas for closing remarks..

Thank you all for joining us on the call today. We look forward to sharing our third quarter results with you in early December. Have a good evening..

This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation and have a wonderful day..