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Buckle Inc
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Ladies and gentlemen, thank you for standing by and welcome to the Buckle’s Third Quarter Earnings Release Conference Call. We will begin today’s call with a Safe Harbor statement.
Members of Buckle’s management on the call today are Dennis Nelson, President and CEO; Tom Heacock, Senior Vice President of Finance, Treasurer and CFO; Kelli Molczyk, Vice President of Women’s Merchandising; Bob Carlberg, Senior Vice President of Men’s Merchandising; and Brady Fritz, General Counsel and Corporate Secretary.
As they review the operating results for the third quarter, which ended October 31, 2020, they would like to reiterate their policy of not giving future sales or earnings guidance and have the following Safe Harbor statement, Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. All forward-looking statements made by the company involve material risks and uncertainties and are subject to change based on factors, which maybe beyond the company’s control. Accordingly, the company’s future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Such factors include, but are not limited to, those described in the company’s filings with the Securities and Exchange Commission. The company does not undertake to publicly update or revise any forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.
Additionally, the company does not authorize the reproduction or dissemination of transcripts or audio recordings of the company’s quarterly conference calls without its expressed written consent. Any unauthorized reproductions or recordings of the calls should not be relied upon as the information may be inaccurate. As a reminder, this conference is being recorded.
I would like to now turn the conference over to our host, Mr. Tom Heacock. Please go ahead, sir.
Good morning, and thank you for joining us today. Our November 20, 2020 press release reported that net income for the 13-week third quarter ended October 31, 2020 was $41.6 million, or $0.85 per share on a diluted basis compared with net income of $26 million, or $0.53 per share on a diluted basis for the prior year 13-week third quarter ended November 2, 2019.
Year-to-date, net income for the 39-week period ended October 31, 2020 was $64.5 million, or $1.32 per share on diluted basis compared to net income of $57.5 million, or $1.18 per share on a diluted basis for the prior year 39-week period ended November 2, 2019.
Net sales for the 13-week third quarter increased 12% to $251 million compared to net sales of $224.1 million for the prior year 13-week third quarter. Comparable store sales for the quarter increased 12.4% in comparison to the same 13-week period in the prior year and online sales increased 72.5% to $46.4 million.
Year-to-date, net sales decreased 7.4% to $582.4 million for the 39-week fiscal period ended October 31, 2020 compared to net sales of $629.3 million for the prior year 39-week fiscal period ended November 2, 2019. Comparable store sales for the year-to-date period were down 7.1% in comparison to the same 39-week period in the prior year and our online sales increased 67.3% to $124.4 million.
For the quarter, UPTs increased approximately 1%, the average unit retail increased approximately 3%, and the average transaction value increased about 4%. Year-to-date, UPTs increased approximately 2%, the average unit retail increased approximately 2%, and the average transaction value increased approximately 4%.
Gross margin for the quarter was 46.6%, up 490 basis points from 41.7% in the prior year third quarter. The year-over-year increase was the result of a 160 basis point improvement in merchandise margins and 330 basis points of leverage occupancy buying and distribution costs, given the strong top line performance for the quarter.
For the year-to-date period, gross margin was 40.7%, up 110 basis points from 39.6% for the same period last year. The year-over-year increase was a result of 130 basis point improvement in merchandise margins, partially offset by deleveraged occupancy buying and distribution costs.
Selling, general and administrative expenses for the quarter were 25% of net sales compared to 26.9% for the same period a year ago. The year-over-year reduction is the result of a 220 basis point improvement in store labor-related expenses and a 50 basis point reduction in travel costs, along with leverage across several other SG&A expense categories. These savings were partially offset by a 75 basis point increase in shipping costs due to our continued strong e-com performance and an 85 basis point increase in expense related to incentive compensation accruals.
SG&A expenses for the year-to-date period were 26.4% of net sales compared to 28.2% for the same period a year ago. The year-over-year reduction is the result of a 275 basis point improvement in store labor-related expenses and a 45 basis point reduction in travel costs. These savings were partially offset by a 105 basis point increase in shipping costs due to continued strong e-com performance and a 35 basis point increase in expense related to incentive compensation accruals.
Our operating margin for the quarter was 21.6% compared to 14.8% for the third quarter of fiscal 2019. For the year-to-date period, our operating margin was 14.3% compared to 11.4% for the same period last year. Other income for the quarter was $1 million compared to $1.1 million for the third quarter of fiscal 2019 and other income for the year-to-date period was $2 million compared to $4.4 million last year.
Income tax expense as a percentage of pre-tax net income for both the current and prior year fiscal quarter was 24.5%, bringing third quarter net income to $41.6 million for fiscal 2020 versus $26 million for fiscal 2019. Income tax expense as a percentage of pre-tax income for both the current and prior year year-to-date periods was also 24.5%, bringing year-to-date net income to $64.5 million for fiscal 2020 compared to $57.5 million last year.
Our press release also included a balance sheet as of October 31, 2020, which included the following: inventory of $118.7 million, which was down approximately 14.5% from inventory of $138.9 million as of November 2, 2019 and total cash and investments of $356.1 million, which compares to $249.4 million at the end of fiscal 2019 and $261.5 million as of November 2, 2019. We ended the quarter with $102.3 million in fixed assets net of accumulated depreciation.
Our capital expenditures for the quarter were $1.2 million and depreciation expense was $4.7 million. For the year-to-date period, capital expenditures were $4.7 million and depreciation expense was $15.7 million.
Year-to-date capital spending is broken down as follows: $3.6 million for new store construction, store remodels and technology upgrades and $1.1 million for capital spending at the corporate headquarters and distribution center.
During the quarter, we completed two full store remodels, which brings our year-to-date counts to three new stores, three full remodels and five store closures. We also still have one additional full store remodels scheduled for completion in Q4.
Based on current store plans, we expect our capital expenditures for the year to be in the range of $6 million to $8 million, which includes both planned store projects and IT investments. Buckle ended the quarter with 446 retail stores in 42 states, which compares to 449 stores in 42 states at the end of the third quarter last year.
And now, I will turn it over to Kelli Molczyk, Vice President of Women’s Merchandising.
Thanks, Tom. I would like to start by highlighting the performance of our women’s merchandise category. Women’s merchandise sales for the fiscal quarter were up approximately 12% against the prior year fiscal quarter.
For both the current and prior year fiscal quarter, our women’s business represented approximately 48.5% of net sales. Average denim price points increased from $73.35 in the third quarter of fiscal 2019 to $75.15 in the third quarter of fiscal 2020. And overall women’s price points increased about 5.5% from $41.70 to $44.10.
We are pleased to report another nice quarter for the women’s business with key categories being our denim, sweaters, knit-tops and footwear. For denim, we continue to evolve our assortment building upon key exclusive denim and broadening our offering in rises and bottom openings. The expansion of the flared bottom opening within our mix has been a nice addition and well received by our guests and teammates.
In denim, the footprint of our private label brands continues to build, as back-to-school was delayed for a large part of the country, the later traffic along with the delays in guest readiness for fall apparel aligned well with their release of key fall categories. Soft fabrics, ease of wear fashion knits, graphic tees and statement sweaters drove top purchases to pair well with our denim. Our casual footwear assortment continued to drive our shoe business as we expanded our exclusive selection and added several new silhouettes into our mix. For industry, fragrance, fashion hats and branded handbags help drive dollars in the department. In addition, our youth business has gained momentum as we evolve our Mini Me assortment offering smaller versions of adult key items. For youth, denim and knit-tops continue to drive the majority of our business.
We continue to manage our inventory closely allowing us to react in season to best sellers, offer a consistent flow of newness to our guests and respond to opportunities in the market. As we move into holiday, the team continues to do an amazing job reacting to changes in the market and working alongside our vendors to build and deliver unique and exciting products fit for our guests.
And with that, I will turn it over to Bob Carlberg, Senior Vice President of Men’s Merchandising, to discuss the performance of our Men’s Merchandise category.
Thanks, Kelli. Men’s Merchandise sales for the fiscal quarter were up 13% in comparison to the prior year fiscal quarter. For both the current and prior year fiscal quarter, our men’s business represented approximately 51.5% of net sales. Average denim price points increased from $82.95 in the third quarter of fiscal 2019 to $84.60 in the third quarter, while overall men’s price points decreased slightly from $49.65 to $49.55. For Q3, denim, knits, accessories, footwear and youth led the way with strong increases. Markdown inventory is down substantially and overall inventory is in good balance.
Guests and teammates have responded well to our new and unique product for fall. Both graphic T-Shirts and hats have been especially good as we have expanded our brand selection along with two of our private brands in Veece and Departwest. Denim continues to grow with our private brands providing the majority of our business. Footwear also had good success with our casual shoes leading the way, although wanted to comment about our new BKE boots along with our private Outpost boots brand has been well received. It is exciting to see the collective efforts of all our Buckle teams come together for such a great quarter. I also wanted to thank our brand and sourcing partners who helped us deliver great product quickly to the floor as our guests came back strongly from the closings. These relationships allowed us to add some new product towards the end of Q3 with more to be added for November and December.
Now, turning to results on a combined basis, accessory sales for the fiscal quarter were up approximately 15% against the prior year fiscal quarter and footwear sales were up about 36%. These two categories accounted for approximately 8.5% and 10% respectively of third quarter net sales, which compares to 8.5% and 8% for each in the third quarter of fiscal 2019. Average accessory price points were up approximately 5.5%, while average footwear price points were down about 25%. Again on a combined basis for the quarter, denim accounted for approximately 42% of sales and tops were approximately 32%. That compares to 42.5% and 34% for each in the third quarter of fiscal 2019. For the quarter, our private label business represented approximately 39% of sales. And with that, we welcome your questions. Thank you for being part of the call.
[Operator Instructions] We do have a question from the line of Ujjval Dave with Ujjval Investments. Your line is open.
Hi, this is Ujjval Dave from Ujjval Investments. I have a question on how Buckle managed the impressive same-store sales growth lately? Buckle has been struggling with negative same-store sales since beginning of 2014. Every year since then, it has reported negative growth rate all the way through mid-July 2019. If we ignore this becomes from last – the three months of lockdown for last 12 months or so, Buckle has started reporting impressive comp growth. This pandemic should be one of the toughest period for mall-based apparel retailers.
However, managed – Buckle managed to out-sign the peers. Could you provide us the insight to what has changed with Buckle during last 12 to 14 months to report this positive turnaround? I see that Woman’s Merchandise has started showing positive comp growth. But is there anything else that we are missing out? Any insight would be helpful? Thank you.
Good morning. This is Dennis. Well, I think, the part of your question we finished the last third and fourth quarter last year pretty well as a solid finish to our year. In the first five or six weeks of this year, we were – had another good start. And I think it goes back to continued improvement among all our different departments. Our sales team has been doing great has improved the payroll.
The product has been excellent. And some of those negatives, sales growth over those years were a lot of it was branded denim that we have talked about in the past have been very high price points. And as we evolved to other brands and our own private brands, the retail difference was substantial and caused a lot of the depression in the sales.
And since then, we have kind of leveled that out. The denim prices are actually up a little bit this quarter and we are having very good success and sell-through on both our men’s and women’s denim. And so on affecting the sales in the past, that was probably the largest issue.
We have also improved our e-commerce site, the marketing of it. We – our teams have done a very good job of giving the guest several ways to shop. And so how they want to shop us, they pretty much can. We have improved our fourth quarter last year we started doing ship-from-store, which expanded our inventory, we kind of worked and tested on that. And then through this year, we have expanded that to cover most of our categories and that’s been a plus for our e-commerce business.
And so we have a lot of good things that the teams have been working on and improving. And our specialty store approach in the stores has been great. We have received a lot of new guests that hadn’t shopped us before this year during the change of what’s going on. There are several loyal guests that used to shop us that are now back and enjoying the experience. And naturally, our loyal guests continue to return and responded very favorable to our product for both men’s and women’s. Hopefully, that answers your question.
Yes, thanks for the detailed answer. I have another question, but I will go back to the queue. Thank you.
Yes.
Thank you. And our next question comes from the line of Alan Glenn with Concord and Main. Your line is open.
Yes, congratulations on the quarter. I would like to know, I noticed that inventory was down about $20 million or so this quarter year-over-year. And I wondered if you were having any difficulties sourcing inventory due to the challenges in the economy, internationally and domestically?
Well, there is always some challenges, but I think the teams are doing pretty well. There was some product that just the vendors did not make. In the early part of the year, there was some orders that we cancelled. But responding back, a lot of our vendors were having nice receipts come in and now this month. It’s difficult to react in time for October with the changes. So, we have a nice flow of product coming in over the next six to eight weeks. So we think we will be in good shape on that.
Thank you. I will go back into the queue. I have another question as well.
Very good.
[Operator Instructions] And we do have a question for the line of Ujjval Dave with Ujjval Investments]. Your line is open.
Hi. I noticed that Buckle has been spending on digital marketing at Google Ads, Facebook, Instagram, Pinterest, et cetera. Do you have any granular way to measure the effectiveness of your marketing dollars? And which channel has proven to be most effective and which hasn’t worked out too well?
I don’t have any specifics on the measurement of the marketing. We have a new marketing manager that’s been with us not quite a-year-and-a-half now. And we have been very excited about the product they have been putting out and the new ways they have been getting Buckle out to the public and they feel good and the results we are seeing has been very positive on that. Tom, do you have any metrics that you know of?
I don’t think there is no one specific metric. And I think as a team, we are continually adjusting and adapting to what’s working well and then looking at traffic drivers in response both in-store and online. And as you walk through each of the different buckets of marketing and we have seen positive response to all of them, which makes it really attractive; I mean, e-mails performed well; social media, as Dennis mentioned, I mean, we have done a nice job and that’s performed well. Search marketing has been performed well. And then o, testing a lot of new things, but always trying and have lots of things that are working well and driving traffic both to the side and getting guests into the stores.
Thank you. And our next question comes from the line of Jon Braatz with Kansas City Capital. Your line is open.
Good morning, everyone. Dennis, I have a question for you on the Buckle Youth stores you have three Buckle Youth stores now. And from what I have gathered, they are doing very well. And maybe there is a void in the marketplace with all the retail disruption that you are able to capitalize on it.
I guess, my question is, what’s your intention with Buckle Youth stores on a brick-and-mortar basis? Is this something that you want to expand and eventually and Kelli mentioned it, she called out Buckle – the Youth revenues have been pretty good. Somewhere down the road you envision men’s category, women’s category and breaking out Youth – the Youth business like you do in men’s and women’s, anyways, any thoughts on the Buckle Youth you can give us that would be great?
Okay, thanks, Jon. Yes, we’ve been pleased with our Youth business. We had three established markets that we have opened Youth stores in and we are still – we know it’s going to be a challenging business, but we are very pleased with our results and we will continue to evaluate, if we are going to add stores in the future or not, but if we do it would be in a very small basis at least at this point.
Okay.
And it becomes more important, we will be glad to break out the Youth boys and girls business.
Sure. Dennis had it not been for the pandemic, would you have opened some new stores this year beyond the 3 do you think?
No. This was all planned and…
Okay.
The first half of the year can be challenging for us at least in Youth. And so if we open a store, we would plan for probably a back-to-school type opening, which we planned early last year and so that had nothing to do with our plans.
Okay, alright. Tom, one question, number of companies have seen there – have gotten favorable terms from some of their vendors. Have you gotten some favorable terms from your vendors and do you think that will reverse? If you did, will that reverse in next year?
Jon, I might take that one as well?
Okay.
We had lease deferrals and we are working with our renewals and such, but we did not have like any one-time cost savings or such that would be different this year from going forward. I mean so we just – we will be working on negotiating leases and other terms with our vendors as we go forward. We had some deferrals of payment to that we setup early on just not knowing what would happen, but that’s all working out fine.
Jon, was your question about leases or merchandise vendors?
Working capital investment that you might have to make next year?
We have extended terms generally with lot of our merchandise vendors as well. So, payables is up a little bit and some of that is extension of terms and a little bit longer to pay and most of that again was in reaction in the March timeframe and has stayed in place.
Okay. Alright, thank you.
Thank you. And our next question comes from the line of Steve Marotta with C.L. King & Associates. Your line is open.
Good morning, everybody. Did the third quarter gross margin merchandise margin in particular benefit at all from the inventory write-downs that were taken in the first quarter?
No, there was not, I mean, it was strong sell-through and the merchandise margins were up 160 basis points in Q3 and up strongly even year-to-date I think at 130 and that’s just I mean reduced markdown inventory in general, stronger sell-through of regular priced product, but not any reversal of write-downs or those kinds of things.
Okay, thank you. And also can you talk a little bit about the online capabilities that you anticipate will be added in the next say 3 to 9 months?
As Dennis touched on a little bit and we really feel like this was a big year for us and have come a long way. That’s been our priority to grow our online business both from marketing and insight, guest experience on the side and making that better, but then also our capabilities. We started with ship from store, so you can really expense that inventory and being able to ship those orders from the store to get those to the guests quicker or again just give them access to a broader selection of inventory. So, we tested that last year in holiday with limited SKUs and expanded it starting this year and have continued to expand it and build on that through this year. Just last month, we added buy online pickup in store capability and buy online get-it-today capability, so again, exposing that store inventory to guests, giving them that selection that they can shop their local store, they can buy the product if it’s available, they can pick it up that day. So again, goes really – it really goes back to given the guest choice, giving them access to all of the inventory that we have in the company and giving them choices as far as how they get it, whether it gets shipped to their home, whether they could pick it up in store or how they want to get it. So, we made a lot of progress, but the buy online get-it-today is new. So just in the last month, we have launched it, have seen a nice response to it, and I think this will continue to evolve, but feel like a lot of the foundational pieces are there now. So, it’s – it will be smaller changes going forward.
Regarding the pickup-in-store, can the customer know at the moment that they order that it is available in their nearby store and also how many stores have that capability right now?
Yes, they – I mean, they have the ability to toggle and search there and shop their local store. And so they will know that that product is available they will get a confirmation from the store and get a confirmation that it’s ready for pickup and they can go to the store and pick it up and that is available on all stores.
Helpful. Thank you.
Thank you. And our next comment comes from the line of [indiscernible] Asset Management. Your line is open.
Good morning and thank you for taking my question. First of all, congratulations on your impressive quarter.
Thank you.
You are currently having a higher than usual cash position. And I think this is prudent, but here in Europe, we thought we had COVID under control. And then it broke out again in the second wave. So my question is how do you think about capital management and particularly dividend going forward?
We had, again, in March had deferred our dividend or stopped our dividend for a period of time. We were pleased to with trends and strong cash position reinstate our dividend during the quarter at the rate it was, our approach has always been to manage conservatively to have a strong balance sheet. We like the flexibility that gives us and certainly operating in a pandemic with all the uncertainty that brings. That’s certainly a benefit to play from a position of strength, dividends and capital allocation as part of the board’s normal review at their board meeting that’s coming up in December. They will review that, but no plans now, but we have reinstated our dividend.
Okay. Thank you.
And our next question comes from the line of Kyle Kavanaugh with Palisade Capital. Your line is open.
Good morning, everybody. I have a question about – can you give us your – the percentage of sales that are online? Is that something you are willing to provide?
Yes. We did break out and disclose in the press release, the dollar value of online sales. And so I think for the quarter it was 18.5%. And I don’t remember the exact number for the year-to-date period, but it was over 20%, which are both of those are up pretty significantly from where they were a year ago, which it was closer to 12%, 12.5% for both the quarter and year-to-date a year ago.
Thank you. And then obviously this year is a tremendous year of change. And you have most of the – all of your stores are in malls and just wanted to understand from a strategic standpoint, how you are thinking about mall positioning versus online sales? Are there any malls that are – that you are looking at that are – necessitates some sort of exchange within that part or do the malls have issues versus the stores and things like that? So, as we come out of this, I mean, the consensus is obviously that the mall is even weaker position than it was going in. So, with the significant number of stores that you have mall based, just wanted to understand how you guys are adapting to the environment and whatever strategic changes, I am sure you have talked about it a lot. Just trying to understand what those conversations [indiscernible]?
Kyle, we have been reviewing, as we always do each of our store by location. And we have estimated that over the next 18 months, we will have maybe close to 20 locations that we will move the majority of those would be probably in malls right now that we would move to lifestyle or strip center type locations. And we feel like we have got a good start on that. There is still several malls that maybe would be classified in the industry as a C-mall but still might be the best location or setup for that particular community. So, we review each one on its own merits and feel we got a good handle on that and certainly working, we have done this already on a number of locations that has worked out very well. And so we continue that process and feel good about what we have going on.
So just so I understand so like from my point of view and Wall Street’s point of view, the assumption is like C-malls are pretty much going away. So you are saying kind of in your case, there is certain C-malls that are viable longer term not only as the store economics the mall itself will be able to survive?
Yes, at least for the near-term. And like I say, we have a lot of short-term leases. And we would see those particular spots being the best location in the sense in that community at this time. And as I mentioned, every year we look at those and if we see something changing or a better situation opening up, we will be ready to move.
Got it. And then I kind of misunderstood that previous question, you were talking about deferrals. Were you talking about vendor deferrals and do you currently have rent deferrals on any of your stores?
Yes, I think that was what Dennis was referring to was rent deferrals. There are couple of deferred items. There is some payroll tax deferrals that are significantly smaller than the rent deferrals that are on the balance sheet that we took advantage of, but then for certain number of our landlords in April and May, I think if I remember correctly, we did defer that rent and we will pay that back some of it before the end of this year and some of it into next year.
Okay, how many stores are in deferral?
I don’t know the number of stores exactly. The total dollar amount is less than $10 million, but close to $10 million in deferrals.
Okay. So you are just going to catch up – you are not going to extend the lease by the deferral amount, you are just going to catch up by year end?
Correct. It was just essentially just a payment holiday that we didn’t pay rent for those months. And again, we will pay it back later. And that’s really just a cash and a balance sheet item had no impact on lease expense both for those periods or for the rest of the year.
And just one last question about online engagement, you guys have ramped up your online significantly this year, I think that’s been a major positive. And just wanted to understand your learnings, I guess, somebody asked about your customer engagement on online advertising and stuff. So, maybe just kind of like maybe your top three strategic priorities, developing the online again kind of how you view that strategy from your point of view, what you put in there, maybe one top one or two priorities?
I think, I mean – I think, we mentioned it earlier, it’s really about choice and giving our guests choice so – and making it a fantastic experience online just like it is in the stores. I think we have come a long ways in terms of choice and giving them choice and access to all of our inventory, broader selection, I mean, making sure and as we expand the inventory selection, we are reducing stock-outs online. So, that’s been a big driver giving our guests choice about how they want to deliver to them. I think that the next piece and what we want to continue to do our teammates in the stores are an important differentiator and a big driver of our business and the relationships that they have with guests. So, probably our next strategic initiative would be to utilize teams in the stores, utilize our managers in the stores, and have them interact with guests and drive traffic again both to the stores and in-store business, but also online traffic and online sales.
Thank you. And our next question comes from the line of Alan Glenn with Concord and Main. Your line is open.
Hey, thanks. My question was just answered regarding e-commerce CapEx. Thanks.
Thank you.
Thank you. And our next question comes from the line of Ujjval with Ujjval Investments. Your line is open.
Thank you. I have a question on the capital allocation. Though Buckle Board has been providing special dividends for past few years, I don’t see it using cash and buying back its own shares. There was small $3 million buyback in 2016, but nothing since then. I think at least three of you are on the board so wondering what rationale Board uses behind deciding on special dividend or buybacks?
No, I think we just review that at each board meeting of what’s going on, how we look at the future and several points of discussion to make those decisions. I think we did have one buyback since ‘16, right.
We did earlier this year, right, right in March we started the buyback and saw the stock, I mean, attractively priced and started buying back and then as store shutdown, we put that on hold.
I see. And is relatively smaller float is one of the factors in not going for aggressive buyback?
Yes, you are correct. That has always been a part of the discussion.
Okay. Thank you.
Thank you.
And we do have another question from the line of Jon Braatz with Kansas City Capital. Your line is open.
Dennis, we are seeing a lot of new restrictions emerge state and local restrictions emerge over the last couple of weeks. Are any of your stores being affected, their operating dollar has been affected at this point?
At this moment, we have 5 stores in New Mexico that are closed for traffic. They can do curbside which is not a real big part of our business, but those are the – and there is reduced occupancy levels for the stores right now, but that’s kind of where it’s at.
Okay, okay, nothing from California given the new things from the Governor?
Nothing new. Thank you.
Okay. Alright, thanks.
Yes.
We do have a question from the line of Kyle Kavanaugh with Palisade Capital. Your line is open.
The prior question was the question I was going to ask, so thank you.
Okay.
And at this time, we have no further questions.
If there are no questions, we will wrap up the call and thank everyone for your participation and wish you a wonderful holiday next week.
Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T executive teleconferencing services. You may now disconnect.