Academy Sports and Outdoors, Inc. (ASO) Earnings Call Transcript & Summary

Good afternoon. My name is Chris Horvers. I'm the broadlines and hardlines retail analyst here at JPMorgan, and thank you for everybody participating in our Seventh Annual Retail Roundup. It's my pleasure to have with me the Academy Sports and Outdoors team, including Chairman and CEO, Ken Hicks; CFO, Michael Mullican; as well as Matt Hodges from Investor Relations. And thank you, Academy, for participating today.

My pleasure.

In terms of the format, I will start with questioning, but we'll reserve time at the end for investors to ask questions. [Operator Instructions]

So maybe we can start at a macro level here. You have the benefit of being on the front edge of reopening given your Southern and Texas-dominant footprint. Can you talk about what you've seen from the consumer over the past few months as spring has broke and as you've seen more vaccinations and mask mandates? Presumably, people are going to restaurants more often, but at the same time, getting outdoor. So would love to hear what you're seeing at a macro level given your footprint?

Yes. We're not going to comment on specifics for this quarter. But you were right. We never closed. We were open throughout the pandemic last year because we were deemed an essential retailer because of some of the categories we sold. And we saw literally the customer move through a category at a time. And it would be 2 weeks, it was all about survival, and then it was 2 weeks about -- all about exercise equipment, then it was 2 weeks about grilling. And then not -- and by the fall, every category started to come back. And we saw, with the exception of back-to-school and the licensed team apparel, we saw every category come back. And so the fall, most of our markets were pretty well open. And this spring, we are seeing people out. In fact, I had a person who visited me this weekend who was from Boston. And we were visiting stores, and he commented, he said, "You would never know that, outside of everybody wearing mask, that there's something going on." Because there are people out. They're keeping their distance and wearing mask, but we've been opening. And pretty much all categories are back now, people playing sports again, so team sports back. They're starting to buy the licensed apparel, which was the last to come back. And those categories which people picked up that were strong last year, some of which are a little unusual, fishing was a very strong category, people are still continuing that. Building out their home gyms, exercise equipment, those are still strong. So we're seeing people are continuing the habits that they picked up last year, and they're adding on top of it back to more normal life.

And the one thing that's been fairly consistent since the beginning of the pandemic is we've seen more new to category customers than ever before. And we're seeing those customers come back to that new category a second, third and fourth time with greater velocity than in years past. That's continued. So I think the longer that this, frankly, environment continues, the stickier these behaviors are becoming. We're also seeing activities that really started as a socially distancing activity that's becoming communal in nature. And Ken and I were in a store a few weeks ago and saw 2 different gentlemen helping their girlfriends buy fishing poles.

When he says gentlemen, these are like 18-year-old kids. And they were -- I mean, that's what you do on a Saturday afternoon as you take your -- when you were 18, you took your girlfriend and -- to buy our fishing pole. And I talked to them, both of them. And I asked them, "So what are you doing?" And he said, "Well, we -- he took me fishing, and I was using his -- one of his fishing poles. Now I'm here to get my own fishing pole."

Wow. And you've seen that in the hunting category as well?

Yes. And camping is one we're seeing people doing that. But it really is people picked up these hobbies. The home gym, the number of people who came in and they bought like an elliptical or treadmill. And again, in a store the other day, and a guy was buying his teenage son, a weights set. He said, "Well, we bought a treadmill so he could work out, and now I'm buying him a set of weights." Now the kid probably weighed 100 pounds, and I said, "Well, we've got these 125 and 150." He said "No, he needs of 225." And I go, "Okay." But no, people are coming back. And it is, as Michael said, that they came back once and they're coming back again. That's the other thing that we saw this past weekend in a store, so 2 different people come in and they bought a bike seat and an air pump. And obviously, they bought a bicycle, because bicycles, there was a worldwide shortage of bicycles last summer. And they didn't like the seat, and they bought the seat and they obviously had either had or were preparing for a flat tire. But it was interesting that I'm in a store, and I just see 2 different people come in and do the same thing, just like we saw those kids. So it's not a random person. It's more than -- it's more what people are doing.

And hunting is a great example of a category where you've got leading indicators where folks will purchase something today to use in the future. Great example, the deer stand or tether. And we are seeing increased purchases in some of those categories and other ones as well that indicate that there will be some spend that's still to come. So look, business is -- the trends that we've seen have continued the stimulus has been helpful to that. And we've got a lot of working in our favor.

Yes. And another one is pools. Last year, we basically sold out our pools in early July. And normally, we would sell out in September. So we -- bought pools better, are much bigger, and pools are selling like crazy. At some point, you would say, you're going to reach saturation, but we haven't seen that yet.

Interesting. You touched on this a little bit. I'm just curious as you've had 3 round of stimulus. You weren't really closed last April. There's some in January, obviously, more recently. But at -- from a category perspective, trying to take the temperature of like where the consumer's interest is lying, have you seen any different category performance in different periods of stimulus? Like, for example, Lowe's earlier talked about, it's been consistently been bigger ticket, a lot of appliances and things like that. Curious if there's been any observable difference over these 3 stimulus periods in terms of category performance.

It has. We have seen a pickup when the stimulus came out. There's no question. But we have seen consistently even before and somewhat after the bigger ticket, kayaks, bicycles, treadmills. So we've seen some good business in big ticket, but it was even after the stimulus would have worn out or before the stimulus was granted. And our big ticket has performed exceedingly well across the whole store. And like I say, kayaks, treadmills, trampolines, tents, big tents, exercise equipment. The -- so I wouldn't say it was a stimulus that did that. What the stimulus did is it raised everything.

Yes.

And everything went up.

Yes, remarkably consistent performance across the board amongst our 4 divisions. All 4 were up double digits in the fourth quarter. So the entire business is strong across all 4 of our main divisions, to Ken's point, that the stimulus just raised the tide on all of them.

Understood. Given the sort of focus of your geographic footprint, you had talked a little bit on the fourth quarter call about the storms in Texas. Lowe's also talked about this morning, seeing a lot of rebuilding activity down there and Texas outperforming for them. So just curious, can you put into context how much of a headwind you were referring to when you spoke about it in the fourth quarter call?

Yes. We had about 100 stores that were closed over a 4-day period, and let's say, average about 2 days. And our dot-com business, because of shipping and some system thing, was down for several days. That said, somebody on the earnings call made a comment about it like, "You had this little hiccup." I said, "It was more belch than a hiccup." But that said, our job is to make it into a hiccup.

Got it. Ken, can you talk about what are the -- I think parts of the Academy story that's really come into focus since you've come public is you're improving relationships with the really important vendors in the sporting goods space. Can you talk about and maybe share some anecdotes of what the relationship or what the store was like, and from like a Nike and an Under Armour and Adidas perspective and how that relationship and how maybe those allocations have changed since your arrival?

Yes. I've known and dealt with Nike and North Face and those people for literally decades, and I've known them a long time, obviously. And they were very frank with me. Back when Houston got the Super Bowl 4 years ago, I guess it was, yes, they came and visited. And they were ready to drop Academy because it was so bad within presenting them. It was not a good situation. And we worked very hard with them to improve their presentation, to improve what we sold, to make sure that we stayed within their guidelines and to build up the things that were important to them like sport, female customers, getting people started in athletics. And when they came back, they were amazed when they saw what the stores looked like, how we were treating them. And it significantly changed how they treated us. And we started getting new products. We have Nike Invincible, Nike Air now in our footwear department. They gave us Nike Yoga, which is the newest thing they have in women's. They've invested in us in collateral in the stores, in our presentation. And it's not just Nike. It's the same thing with North Face, is another good example. North Face has now expanded to all stores. And we were putting in camping, North Face camping, so we have the tents and sleeping bags. Adidas, the same thing. And so the relationships, what they see is what we bring to them.

YETI, the YETI shop. Yes.

YETI shop. YETI has invested a significant in us with the YETI shops and their new product. What they see in us is we bring, first of all, a customer that they have trouble getting through their own channels and other channels, women, families, young people, a more ethnic customer. We also scream sports. It's our first name. And that's something that they don't do as much with, but it's critical, particularly for Adi, Nike and Under Armour, that they keep that feeling of sport in their brand. And we're not -- there are some people who deal with that elite athlete, they're trading up here. We bring from the beginner to the enthusiast, so where you buy your first pair of soccer cleats or you get your first football. We also, as you move through, up to a level, keep that family in sport, or if you're a weekend enthusiast, where you will come. If you're going to play in the NCAA, we're probably not the place. I -- the analogy I use is we trade from like Chevrolet to BMW, and other competitors trade from BMW to McLaren. There are a lot more people buying in our space than the other space, which is one of the reasons why our stores are more productive.

Those are great anecdotes. Can you share -- one of the things core parts of the Academy brand is the value side, the everyday low price. Have you had to -- has the improved relationship with some of these well-known vendors changed how you go to market from a pricing strategy, a high-low -- force you into a high low versus that everyday discount on those items?

So we have value offered with our own private brand. It's 20% of our overall business, and we use it to fill niches. Like in athletic apparel, we have a brand called BCG. And that is the opening price because the brands, for the most part, are above that. And you can buy a great combed cotton t-shirt for $5. And so we have that, and that's part of the value message we have. We also have some select items where we are everyday value. And we don't -- we try to avoid the high-low. We do participate in the vendors when they have off-map periods, their minimum advertised price. But we also have some items that are every day. But most of the line is that price. But that's x percent of our business. We have a portion of our business that is private brand. We have another portion of our business that are brands that are not on map. And then we have the brands, and they support, because they provide the product, for us to have those prices. But I think the thing that we offer is every day, you can come in and get a value as opposed to, "Well, I happen to be -- in this weekend, no, I'm sorry, that's not on sale." And having lived that life, it creates a tension with the customer because they said, "Well, last week, it was this price. Now, it's this price. How do I know when I'm supposed to shop?" And so we try to keep that everyday value.

Yes. And Chris, I think one of the things we really have to do to improve our relationships with our vendors and our brands is, frankly, get our inventory position in the appropriate place. When Ken joined the company, when I first joined a company, 25%, 26%, 27% of our assortment was on clearance. We had bought it wrongly and in the wrong store. So getting that correctly, I think, has helped everybody involved.

Interesting. It's a good segue. You've got private label. You've got some -- a lot of bigger ticket items that are manufactured Asia. You've got strength, obviously, in the core sporting goods category. Can you talk about your in-stock levels, where you are in areas where you're still chasing? What are those areas? And when do you think you'll be back in stock?

Yes. I would say in almost the entire store now, we're at an acceptable level. Not at the level we would like to be at, not at the perfect presentation level, but we're acceptable. In stores, again, the last couple of weeks, we look very good in bicycles. We've got -- our racks are full again. Now we've got more duplication than I would like to fill the rack. But we've got a good choice. Same thing in exercise equipment and things like that. There are a couple of categories, and they've gotten a fair bit of press, firearms and ammunition. And we're selling those items. We're just selling them literally as fast as they come in. They come in, in the morning, then they're out by afternoon. And those areas, I don't think we'll be back in a reasonable position -- presentation position until the fall, or in ammunitions case, possibly next year. That said, we still are doing business in those categories. Would I like another $75 million, $100 million in inventory? Yes. But what we've learned to do is we're turning faster to make up for that. And we're getting the inventory, and we're flowing the inventory to be able to manage. And the customer surveys that we take show that we've improved our position. We're still not where we want to be, but we've improved our position, and the customer recognizes that.

So I had a question come in, in the Q&A feature of the Zoom webinar, [Operator Instructions] The question is, what percentage of revenues were from firearms and ammo this -- in last year, 2020? And how does that compare to a prepandemic level?

They've been consistently around 10%.

10%, yes.

Both -- because the other thing that happened last year, the whole ocean rose. And so it went up, but so did everything else. And we've managed around 10%. But before Michael and I got here, there were some periods where it went up more than that, but it's been about between 9% and 11% for the last about 5 years.

That's very helpful. You talked -- you've alluded to some of this, but during last year, when you were doing the IPO, you talked about power merchandising initiatives. And Michael, you mentioned the percentage of goods that were on clearance when you showed up. Can you sort of -- what inning are we in, so to speak, on the power merchandising side? Where do you think you are relative to what is like acceptable and then best-in-class? And where are those big opportunities?

Yes I -- it's kind of funny. I learned the importance of the whole merchandise planning allocation and flow when I was at Payless. We made 17% earnings on $10 shoes that cost $3.50. So you have to flow them. So I learned that there, and I put it in place at Penney's and put it in place at Foot Locker. And this is the third place that we've -- that I've done it. And I would say we're at the -- in the -- still in the early innings, maybe the third inning. I won't -- Michael always likes me to use chuckers...

You set them up. You set them up.

But I'll use baseball because -- to save a little time in explaining what a chucker is. We're about the third inning because we've got the systems in place, the people are using them. But we still have the learning. And unfortunately, we lost some of our opportunity to learn because of what happened last year with inventory. And it didn't normalize. So those systems continually learn and evolve about what's the right quantity at the right store at the right time in the right sizes, and making sure that you have sizes. And you have to continue -- the system continues to feed itself. And we continue to add some new system capability. We still have one of the -- we're making investments this year in improving some of those systems capabilities. So we have systems that we continue to improve and add, and we've got the learning to go through. And you never get to the ninth inning, quite frankly, because it's one of these things that continually learns. But we're still in the early phases and benefit in both sales and margin, in both.

Yes. If we had it our way, to Ken's previous comment, we'd have about $75 million, maybe $80 million more in inventory. That would put our inventory levels about where they were in 2019. So able to support 16% -- 17% sales increase on that inventory level of a few years ago, I think that really shows our initiatives here working, and we're much more productive on the inventory. And the things we're working on are the right things.

And it goes -- one of the things on the earnings call, and I know you were on it, people ask about, "What about January, wasn't as good as it was -- had been. What happened?" And that was because we had a good December. Show me a good January, I'll show you bad December. We had the goods in the right place, in the right time, so we were able to sell them. And we didn't have the clearance that we historically had in January. And that's one of the things that we're finding. During some of the clearance periods, we don't have as much clearance. That's a good thing because we're getting full price sales on more items than we used to.

Understood. Can you maybe talk about on the supply chain side? I recall talking to you about this, Michael, last year, which is -- and I remember the chart from the road show. It talks about like supply chain. We're really just on the front edge of that.

Yes. We're passing out the lineup cards literally.

So maybe could you elaborate on that? Because I don't think investors really appreciate the opportunity on the supply chain front.

Yes. I'll start off, and then Mike will go through some of the specifics. We -- when I got here, we have our strategy, it's up over here to my left, and one of it is to make our assets more productive. And supply chain was okay. We've got an okay supply chain. It's not bad. And we had other things that we needed to work on more. So we focused on those. But we also can improve things like dock-to-dock. We don't do that. We have about 1% dock-to-dock. We don't multi-ship to stores. So we send a truck out. Whether it's half full, 3 quarters full or full, that truck is going to that store on that day, and it doesn't go to another store. And an example is here. We have 5 stores within 10 miles of our distribution center here. We don't have to send a parcel truck. It could go to 2 stores. And so we have that. We also -- everything we bring in, we unpack and then repack to go out rather than sending -- like T-shirts, leaving it in the box and sending the full box to a store, we can take it all out of the box and then put it in totes and send it to the store.

And human hands put it in totes. So it comes off of the box, human hands unpack the box, they move it through the supply -- the distribution center that takes several days, they repack it. So a lot of manual work.

And so it did the job. It got the merchandise to the store in a reasonable time. But again, we're not as fast as we should be through that. And so the handling, the transportation, the time, if you could take a day out of all your DCs, that's worth about 0.2% or 0.3% in inventory turn. And so that's the type of thing that we're working on. And literally, when I say the cards, we've got some people in helping us now to lay the road map out about how we can do what we need to do. Another example is we built a beautiful new DC in Cookeville, Tennessee. And it's got all the modern, everything, but we put the same processes that we have in our facility here in Katy in Cookville, instead of saying, "How do we take advantage of this new facility that we built?"

Yes. That's one point I want to make clear. This is not an infrastructure issue. We actually have 2 relatively new DCs. Even with these kind of antiquated processes, they're only at half capacity. So this is a process issue. And we've got some consulting help that's helping us work through it. We're just now sizing up all these opportunities. We can kind of walk through and talk about these anecdotes and look and say, "Hey, this is not optimized." We're really still sizing it up, to be quite honest. This will be a gross margin rate accretive item, as you well know. Most of it will be -- some of it will hit the G&A line, but looking forward to reporting back on this one as we move through it.

And again, this is going to be something that will evolve over a couple of years. And one of the things that we want to do -- continue to do is make continual progress. One of the lines I use -- in fact, Michael reminded me, I told him -- the first thing I told them when I met them is, "I live in a state of permanent dissatisfaction."

It's going to be fun.

What can we do to improve? How do we improve?

Michael, you precluded my question on sizing it.

Yes. Well, look, I think we want to be known for doing the things we say we're going to do. And when we size it up and feel good about it, we'll tell you. We know it's not a small opportunity. It's one of the top 4 or 5 things we're working on now. We just haven't gotten that far yet. We're still working through it. But look forward to sharing more out in the coming meetings here.

Understood. So I'm going to -- I guess, I'll try to go at it another way. Maybe you can talk about from like a distribution cost perspective, how would -- and Ken, you've been other organizations. So have you, Michael. From a distribution cost perspective, how wide is the cost of Academy's distribution relative to other companies you've been at? Is it 200 basis points? Is it 100 basis points? Is it 300 basis points as a percentage of sales?

Yes. Look, I think this is a significant enough opportunity for us to make it a top 5 priority. And certainly, that would be a triple-digit basis point opportunity, I think, and probably, frankly, could be even larger than that. Don't know for sure. We'll, again, report back as we know more. I will tell you, though, collectively, all of the things that we're working on, we feel pretty good, even in an environment that may become more promotional in the future. We think we're working on the right things to offset some of that pressure going forward. We feel good about being able to expand our gross margins and our operating margins in connection with that.

Yes. I would say, Chris, that we're -- we would be in the third quartile in terms of where we are with our supply chain, not bottom quartile, but third quartile. And we've got to move up. We want to be the best. We've got to move up to top quartile. So we've got a ways to go.

That's really helpful. Michael, you gave me my segue there as well, promotional environment. Obviously, you talked about would like to have more inventory. 2020 was a year of a lack of promotion for many retailers. So how are you thinking about the -- when promotions would come back into your category, which force you to react, so to speak? And how much of that did you put into the outlook for 2021?

Yes. I think from a promotional standpoint, Ken, you'll tag on. I mean, there's promotions that you plan and you want to have, and then there's some that you don't want to have because you've either got a counterpunch to match your competition or you frankly bought incorrectly and have to clear product. We're not planning, frankly, on a whole lot of the latter. We'll react if we need to. But there are some promotions that we're going to run this year that we typically run around certain holidays that we've now bought for and can plan for. Again, overall, I think that we're managing the business in a way and we're working on the things that will still allow us to expand our gross margins.

Yes. I don't think you're going to see it this year, Chris, because of the overall inventory. And quite frankly, supply chain situation, a lot of promotions. What you will see is promotions that go with Father's Day, Mother's Day, some back-to-school. And they won't be as deep and they won't be as broad, but they're going to be to get some interest and get some -- build some excitement. The one thing that we have is we do those more as marketing tools because of our everyday price. There are other people, because of the promotional nature of their pricing strategy, they have to do those. And for the most part, we're at those prices anyway. So I don't think it's going to be -- and we do have our plan for this year, has those built in.

Last year, for example, we would have featured around 4th of July, a low opening price point grill to get people into the store to create some excitement. That's an example of a planned promotion that we weren't able to do last year because we didn't have the goods. So this year, we're able to get them.

Yes. We'll have the $199 grill that will be out there and bring a lot of people in. And we'll sell a lot of $399, $499 grill.

That's right, yes.

Yes. But that's planned for, and it's built into the margins.

And so the type of promotions you don't want to have, which are like clearance promotions -- unplanned clearance promotions, to what extent did you include those in your outlook this year on gross margin?

Yes. We certainly believe there will be some more promotionality at some point. Again, what we're going to benefit from is the continued advancement of the power merchandising initiatives that are still early stage. Again, a lot of machine learning behind those. The other thing that we're really going to benefit from is a more normalized mix of business and the return to prominence of -- not all of our categories benefited last year. We had several of that really struggled, including licensed apparel, back-to-school, back-to-sport, in certain cases, backpacks. All of our categories that struggled last year are margin rate accretive. So that will be helpful for us as well, and we think, more than offset some of that.

Yes. And our systems have -- that's one of the advantages that they have. Now they have built them. We used to not take markdowns until too late. And we -- for example, take football cleats, we would mark down football cleats in March and April. There's no price for football cleats in March and April. And so we would have to go too deep. Our systems have those built into the plan. And so we've got those markdowns planned, and our inventory is much cleaner and continues to be much cleaner because we're moving through it so fast that, that won't be a big issue for us, for sure, this year. The one -- the third or the middle one that Michael talked about, the ones where somebody just -- the competition does something crazy, there's 2 things, I think, that will preclude that from happening this year. One is that there's not that much inventory, so they don't have to or they're not able to. And two, they've either shut down. A lot of those people have shut down or they've been shut off. You think about who's been cut off from these suppliers. And it's not just Nike, it's Under Armour, it's Adidas, it's North Face, it's Colombia, it's Crocs. They've shut those people off. So you abused our product, you must have too much, you're not getting any more.

Understood. That's really helpful. There is a lot of discussion out there on freight and wage pressures. How are you thinking about that in the context of your business? Do you think you're at the right wage structure? Are you seeing issues in terms of hiring people? And then similarly, we talked a little bit about distribution, but any issues you're seeing on the freight side?

Yes. The freight side, that's a real issue. And we're working hard to mitigate the impact of it. All of the supply chain work we're talking about will help that. On the wage side, we've been steadily doing things there over time that will help us. One of the things that we've done is we've gone to what we call an enthusiast model in our store, where we're hiring higher wage talent, frankly, and you get more productivity out of them. They love the category. So that's one of the things we're doing. We've also, in lieu of hero pay, gave our associates, everybody raised in the middle of the year to help blunt the impact. But the main thing that we've done, which is really kind of focused on some process work and remove, what we call, tasks out of the store, moving planograms across the store without any return on investment there. We've been able to reduce our hours in the store to offset the wage increases and actually give more hours in front of the customer. So it's been a huge win for everybody.

Yes. Michael said that well. We have not had an issue in hiring at this point. Now that may change over time, but we have not had an issue and we've been open, and this is even during the pandemic. We've been able to keep our store staff and our distribution center staff and have more people. And we actually have gotten choosier. We put in a system called HireVue, where we test the people. And it's basically a reasonably simple personality test and find people who really want to work in a store or work in a distribution center. And that's -- we've seen significant improvement in both productivity and retention.

Got it. Maybe a little bit on capital allocation. You've delevered the balance sheet so rapidly.

Yes.

I think you're already at your leverage target that you wanted to get to. Is that right? And so as you think about going forward, you're going to have plenty of excess cash to both fuel the growth initiatives. What do you do with it? And how are you thinking about the timing around that?

Yes. We're studying it right now. I think we want to make sure we're either clearly on the other side of this pandemic or most of the way to being on the other side of the pandemic before we announce any plans. I think the flexibility that our cash position has given us has been very helpful, again, as we pull inventory, pull us forward and kind of skip the line in the supply chain, that cash position has been helpful. We're studying it. We're going to have, to your point, a lot of options between dividends, further deleveraging, share buybacks. We've got all 3 of those options available to us. And really, we may choose to do all 3. I mean, we do have a lot of flexibility. But we're looking at it now and probably a little bit of ways for making a decision, but not too far away.

Yes. Our 3 priorities are, one, security, making sure that we've got the financial stability to weather and last whatever occurs. Two, growth. We have growth opportunities that most other retailers don't have. We're in 16 states with 259 stores. And the third would be our stakeholders and how we reward and take care of them. And that's -- those are the priorities, and that's the order of priority.

I don't know if you hear about the AutoZone model, the AutoZone pitch on share buyback. You don't have a lot of shares, and your stocks are not really expensive. So any thoughts on how you balance share repurchases versus dividends?

Yes. We -- first of all, just so you know, when I was at Payless, our largest stock owner, and I had the opportunity to meet with them quarterly for 2 years, was Eddie Lampert. So I know the AutoZone model very well. And that is an option. But we're going to look at the best option. We have seen, over time, the market rewards growth, first, deleveraging dividends and share buyback. As Michael said, we have the capability to do all or some of those, and that's what we're evaluating right now.

In a kid form, we want to grow -- we want to grow faster, but we want to grow faster well. And so next year, we have to...

We don't do growing faster poorly.

Yes, exactly. So if we open 8 to 10 next year and those go well, we'll open a lot more quickly the next year. So that's our priority. We'll be able to do that, I think, comfortably and look at the other options that we discussed. And we'll talk more about it, I think, in the future.

Well, excellent. With that, I know we're up against time right now, and I want to keep you on schedule. Really appreciate your participation today and all the information.

Thank you.

Thank you. I appreciate yours, and the questions, good questions and all the people participating on the call. And I want to thank them for listening, and also, hopefully, that they're as excited as we are about our story because it's a great story.

Thank you.

Thank you, guys.

Thank you. Thanks. Have a great day.