BJ's Wholesale Club Holdings, Inc. (BJ) Earnings Call Transcript & Summary

Hi. I'm Robby Ohmes from BofA Global Research. We are very pleased to have Lee Delaney here, the President and CEO of BJ's Wholesale Club. We've also got Bob Eddy, EVP and Chief Financial and Administrative Officer. BJ has made great strides last year, as I think all of you know, executing its initiatives and growing the member base. They remain very busy. So I want to thank both Lee and Bob for joining us today.So to kick it off, Lee, I think to start, look, after a very challenging but actually a very strong financial year for guys, can you kind of walk us through how you're thinking about the environment for 2021? It's probably not going to be the same environment through the year. Probably be changing. But maybe just the puts and takes that you would recommend the investors kind of think about as you look through the year?

Sure. Thanks Robby for having us. We're delighted to be here. I'll talk a little bit more about our story and what we're seeing in the market. I think last year was such a transformative year for us, where pandemic-related shopping behaviors, particularly the need to buy in bulk and eat at home, just led to much higher levels of engagement with our franchise than we've seen historically. Clearly, that's still happening in the times we see today. And we expect that to continue for considerably longer. I think as the pandemic continues, as offices are closed with people not traveling, with schools still in a remote or hybrid model, people find themselves at home. They're out of restaurants. And our expectation is you'll see elevated levels of at-home food consumption and shopping, in particular, at our clubs through at least the first half of the year. And we're seeing that in our business now. As you think about the vaccines taking hold as we get closer to a level of community immunization in the country, our current expectation is you would see that begin to work off in the back half of the year. We'll see offices reopen. We'll see schools reopen. And I think we're hopeful that we'll see something that looks a bit more like normal life. That all said, neither Bob nor I are epidemiologists or public health professionals. And so appropriate to take that with a grain of salt. We're, just as many of you are doing, are reading the headlines and looking at the vaccine progress and saying, gee, it looks today like the world will be a bit more normal. We'll see a more normal level of business in the back half of the year. Clearly, that could change. If people don't get immunized, if there's a variant, if there's not a snapback in behavior in the back half of the year. For us, really, under any scenario, we're anticipating levels of sales performance that are well above any historical norm. In the front half of the year, that's kind of a continuation of pandemic-related shopping behaviors. Not at quite the level we saw last year when there was huge stock-up behavior, particularly right around this time of year when there was a national emergency. The NBA canceled their season. But we're still seeing considerably elevated levels. And we've added members. We've transformed our business in so many ways. Our expectation is we'll have a much stronger franchise going forward. So let me stop there.

No, that's really helpful. You guys gained a lot of members in 2020, the new members. Any -- would love to get your thoughts on how well you're going to be able to keep them? Is it going to be maybe better than usual? And also, how are those new members behaving versus new members in the past or existing members?

Yes. This is such a critically important question for us. It was really this time last year when we saw an inflection in our business and an inflection in the membership. So over the course of the coming weeks and months, we will be lapping a big influx of members. And retaining those members at strong rates will be a huge and important deal for us. And if we're able to do that, you really reset the business at a higher level going forward because as you all know, first year renewal is the most challenging renewal point. Once you get over first year renewals, which are historically in kind of the 50% to 60% range, our second year renewal has been steadily moving up and is now at 88%. So first year renewal is the key. The encouraging thing, as we look at that today, we feel great about the current ability to renew those members. There are some macro factors that are at play here. So pandemic-related shopping behaviors continue. There has not been a material change anywhere in our footprint, including some of the less restrictive states as you move further south. We're still seeing strong shopping behavior across the board. And then you have stimulus that will soon be injected into the economy, which we assume will bode well for our business, both shopping and for membership renewal. But closer to home, we have terrific data on these members. And so we know that the members that are coming up for renewal exhibit all kinds of favorable behaviors. Their baskets are about 20% bigger than a typical group of members. They're engaging in our digital platforms at multiples higher levels than we would typically see. So BOPICs, same-day delivery, curbside are 5 to 6x the levels we would expect for new members. They're shopping regularly. They're engaging in a broad set of categories. They are at the same or better levels of credit card penetration. They're at higher levels of easy renewal. And so every leading indicator of renewal that we typically would look at is flashing green, which we're very, very encouraged by. But the caveat to all of that is, it is outside the norm of behavior. So while every measure looks great, we're going to find out over the course of the next 4 weeks to 3 months, our ability to lap that cohort, which is critically important and I know of great interest to all of our investor base. And I would just say, right now, it looks very promising, and we're doing everything we can to engage those numbers and make sure that we do well with that group.

And maybe a follow-up on that. BOPIC and delivery, obviously, surged during COVID and Bob might have some commentary here. Just how do you think about the digital penetration? And where do you want it to be? And do you want it to stay here? Do you want to go higher? What does it do to the profitability under different scenarios? Is it a big profit pressure, that shift to BOPIC? That would be really helpful.

Maybe, why don't I take the first part of that question and then ask Bob to weigh in on the economics. So we're really excited about the current state of our Digital business. We've explained before that we think we have an advantage when it comes to digital economics. Our rings are bigger, our baskets are bigger. And the ability for us to pick in a limited SKU environment should be favorable versus what you might see at a mass merchandiser or a grocery store. So we go into this saying we have some structural advantages. And we've invested pretty meaningfully in our digital properties. Where historically, we've been building capability, we're now really turning in that -- into much more of a commercially oriented business. And so the center piece of that is our app, where we have 5 million downloads, about 30% engaging regularly with the app, which we think stacks up really well on any kind of scale-adjusted basis with some pretty formidable omni players. So we're quite happy about that. And we know when we get someone engaged with the app, there's real utility. They can shop. They can fulfill in a variety of different ways. They can clip our coupons. We can send them personalized promotions based on their shopping history. We can put shopping lists in front of them. And those things translate into increased behavior, increased shopping, better retention. It's really a nice ecosystem where we have good economics and good shopping behavior. But Bob, why don't you elaborate a little bit more on just some of the obvious cost pressures you see in that type of model and how we think about it?

Yes. So Robby, we hit the highlights where we feel like we have advantaged economics, but there's no doubt it's a bit of a pressure on our P&L as we go forward, most particularly in buy-online-pickup-in-club sales and curbside sales. Obviously, our team members are doing the picking in those environments that a member may have done themselves in a traditional environment. But let me hold the same-day delivery off to the side because that's a little bit different in the way that we've structured it. So certainly, as we push more business towards BOPIC and same-day delivery, it will be a bit of a pressure. We certainly experienced that last year as the predominance of our omni growth was in BOPIC and curbside and same-day delivery, to be fair. As we look at it, it is certainly a pressure, but it feels like it is overwhelmed by the fact that the members that do business with us in this fashion are far more engaged. They have much bigger baskets. They feel like they are exhibiting incrementality in their -- in their shopping behavior. And that, we believe, foots the bill for the incremental investment in this class of trade. Perhaps the biggest thing to me, though, is really the fact that we've become a much more relevant competitor, a relevant product in their minds when they can get 30% off their groceries at a much more convenient -- in a much more convenient fashion, right? The closed-door club model is wonderful at delivering value, but it is somewhat inconvenient, right? It's a little bit further away from your neighborhood grocery store. It's a big store to roam around. You have to buy in bulk. There are some drags. You have to do some work to get 25% or 30% off your groceries. But if we could do some of that work for you, and as a consequence, you shop with us more, that's a winning proposition. Same-day delivery is a bit different. So those sales look, in our P&L, just like a traditional sale. And that's a virtue of the way that we structured it. We offer the members the same pricing as if they shop in our stores themselves, and we tag a delivery fee on the top of their order. That delivery fee serves to fund Instacart, picking and delivering that order. And so it's -- it provides the members tremendous value. Obviously, on a typical $100 basket, you're going to pay $115, including the delivery fee. But against a grocer, you're going to pay $125 or $130, and you have to go get it from them where we will have it brought to you. And so it's great from a member perspective. And from our perspective, it looks just like a traditional sale. So we're content to invest in these avenues of growth almost without limit as the increasing relevance is what we're really after here.

That makes a lot of sense. That was really helpful. Another -- maybe somewhat related to the conversation. It seems like BJ's is positioned to keep getting less promotional, either being less promotional when it comes to memberships and maybe remind us what you used to do and what you're doing now to drive new memberships? And also, we were mentioning, it sounds like you're targeting people sort of individually, digitally with promotions and maybe that's even linked to membership promotions. I mean, am I right about that? Or are you kind of setting up to sort of drive more members and top line while almost being less promotional in a sense?

Yes. So there's a lot there. Let me try to talk about both the membership marketing side and then the shopper marketing side because they're a little bit different. So it is absolutely the case when it comes to recruiting new members that we are becoming less promotionally geared. And so when I started at the company roughly 5 years ago, it was relatively common practice to offer free trials for the membership. And we have largely moved away from that practice. So it is now less than 1% of our members are originating from trials. We will still occasionally do it because there's a group of members for whom we would like to have them come in the building, and a trial is a useful mechanism, but it is done meaningfully less frequently than it had been done historically. And we've been focused on increasing our tenured renewal rate and doing that in a couple of different ways. One is driving higher tier penetration into our membership tiers, our rewards program, getting people enrolled in the credit card, getting people enrolled in easy renewal. But then stimulating their shopping behavior. And Robby, we've gone from roughly 84% second year renewal to this year, 88% renewal, which sounds like good progress. Another way to think about that is 84%, you were losing 16% of the members every year. So the number would be in the funnel for roughly 6 years. At 88%, you're losing 1/8 a year, so you've got members in the funnel for 8 years. It is -- on a basis from 84% to 88%, it doesn't seem like much, but if you think about it in years of engagement, it's pretty considerable progress that we've made holding on to that tenured member base. That obviously lightens the need to do discounting at the point of new members. And then finally, we haven't been opening, historically, as many new clubs as we have done last year and this year, and that's a great way to add new members to the franchise. And as we do that, we're just tapping into new markets where we can grow share. On the shopper marketing side, which is getting members to shop, what we're trying to do is just use a lot more advanced analytics, digitization and personalization. So we have the benefit of knowing what every member shops and knowing what other members like them tend to spend money on. And so we're constantly looking at ways to better engage our members and give them highly relevant promotions to shop categories they haven't shopped before, to reengage in a category that they may have lapsed. And we're increasingly doing that in digital means. So it used to be that we would send an offer to your home. We can now do it quickly -- more quickly and less expensively by doing that digitally. And we're just constantly mining the membership data to the core for opportunities. And so we're getting just a bit smarter on both sides of that trade, enrolling members and holding on to members and then making sure that they're shopping.

That's really helpful. And I'm going to shift into merchandising. Lee, what are the most important changes that you're making to the product offerings at BJ's right now? And how should we think of overall SKU count? And maybe work in there kind of the Michigan store offering versus the other stores? And is there a convergence there? Maybe help us understand what's going on in the merchandising side.

Yes, sure. So there's 3 things that I'd like to touch on, all of which are a little bit complicated by the pandemic. So I'll bring that to life as we go. But the 3 things are simplifying our assortment to enter new categories, focusing on own brand penetration and then growing our Services business. So when it comes to simplifying our assortment to grow, this is a trend that we've talked about for a while. We've tended historically to offer way more choice in a narrow set of categories than we needed to. And that choice wasn't differentiated. So essentially, multiple national brands of the same basic product, but not competing in a whole host of categories that you would see Costco and Sam's compete in. That tends to over-index on our General Merchandise business, but it's true across the board. So in Food, we've gone through a pretty meaningful reset to add less traditional center store grocery categories and to build out our fresh offering to add more organic choices, more natural choices, more better-for-you snacking choices. A lot of the kind of biggest sectors of growth in food, we just weren't participating in. And so we're investing there. We're doing the same thing in general merchandise. So that can involve, like in our audio categories, not having 6 or 7 choices of the same headphone, but instead saying, we'll offer the best headphone or 2 choice and then make sure we're in connected homes. Make sure that we're not offering 10, 65-inch TVs, but we're carrying the 85-inch TV, which is very on trend. Making sure that we are deepening our participation in very relevant categories like fitness equipment, where we never carried a high-end bike or treadmill. And thankfully, we made the decision to do that before the pandemic. So we have that product in line. And we're just finding across the board that there's huge opportunity to extend our category participation. It can be the one-stop shop, be the treasure hunt that we know others have been quite successful with, and that's working well. I will say that's a little bit affected by the pandemic because there were such shortages across so many categories that we made some compromises along the way, and we're excited to see more normal shopping behaviors because that trend will continue. When it comes to own brand, we're at 21%. We grew our penetration a little bit versus last year. Again, product availability was influenced by pandemic, and there were periods where we were going all over the world to find paper towels and kind of sundry items. But as we look at the business today, we know that leading competitors have own brand penetration that is significantly ahead of ours. And so we'll continue to lean into that. And it provides a few benefits. One is it provides real competitive insulation. It's something unique to us. Two, it offers better margin profiles. And then it allows us to work with our national brand partners to make sure we have the right offering. We will still be, prominently, a branded company in what we offer, but there's plenty of room in a limited SKU assortment for us to grow own brands and have a bigger, more differentiated, more profitable business there. The final piece of the -- what I would highlight from a merchandising standpoint is Services, where we know that our competitors broadly are investing in services and have large businesses. So think about, what Walmart is doing in financial services and fintech, what Costco has done for a long period of time in places like home improvement and their optical shops. And we had never -- until last year, really organized in a scale way [behind this]. And we're making good progress. Now a lot of that behavior in the typical business models were changed by the pandemic. So something like home improvement, we would have associates in-store talking to members about that. That doesn't work in a pandemic. The optical shops, they were closed for a good portion of the year because no one was out buying glasses. But we've made some real progress funding exclusive partnerships where we can offer terrific values and can see real growth. So I'll give you 2 examples of that. One with cell phones, we have an agreement with AT&T, where if you buy a phone and you get a line from AT&T, you get a $250 incentive below their lowest price in the market, and it's a phenomenally good deal for our members. In major appliances, where we know our competitors have massive businesses, we negotiated an agreement with Whirlpool where they're our exclusive partner, and we have terrific values on those appliances. And you'll see us continue to make progress in that realm. And I think there's just -- there is considerable growth for us in a whole set of categories where we just, historically, have had a light footprint. So that was a lot on merchandising, but hopefully, I've brought to life some of the themes that we're pushing on.

No, that was very helpful. And just -- I think pre-pandemic you would have talked a lot about the general merchandise opportunities versus your kind of over-indexing to the food side versus your larger competitor there. How are you thinking about that? It sounds like Fresh has kind of hit a home run. Are you more focused on doing more there? Or will you be working hard to really push the General Merchandise side of the business over the next few years?

Yes. I think our biggest opportunities that you'll see that kind of change the mix of the business will tend to be in General Merchandise and in Services. There's just more white space there, Robby, than we would normally see. But our Fresh business is the core. We are relatively over-indexed in Fresh Foods. We know that Fresh Foods drive frequency of shop. And we need to make sure that we continue to just offer a great assortment there. This is a place where we're happy to have a bit more choice than some of our competitors and happy to have slightly smaller pack sizes, happy to have really good values because it's driving frequency in our model. And so we'll continue to kind of renovate our Fresh Food business. But it's a little bit of a different shape, where the General Merchandising/Services is just a lot of white space for us.

That's helpful. I'm just going to pause for a second to remind everybody if they want to ask a question, just -- I think there's a way for you to do that. So please do, if you'd like to ask a question, and then I will relay the question. I want to shift over to store growth. You guys have called out you're accelerating, I think, to 10 stores or so next year. Where has the confidence come from in accelerating store growth? Because I think some people would get nervous and say, well, are you accelerating because you had great results during COVID? And what if COVID takes away some of those great benefits you had? Like anything you would say to us to think about the acceleration in store growth.

Do you want to take that one, Bob?

I'd be happy to. So where the confidence comes from is many years' worth of work. So Robby, you know the story as well as anybody. We paused our new store openings way back in 2015 because we weren't doing a very effective job of opening new stores in a successful fashion. We have followed that up with a couple of years of opening 1 club in each year as a means of reinventing that process by which we open new clubs. The clubs we've opened under the new model have been very, very successful, pre-pandemic and certainly, during the pandemic, as well. And based on that mix of experience, that gives us the confidence to go even further. It's, frankly, one of the more exciting parts of our transformation over the years. It's been a tremendous amount of work and really a great thing to be part of. We've taken a company that really couldn't open a new club and have a prayer to be profitable to opening clubs in the last year where we're drastically outperforming our membership estimates and bringing in sort of better-than-average returns. And you couple all of that work with the environment that we find out there, which is providing to be a bit more accommodative from a real estate perspective. We're seeing great real estate. I mean, like true, Class A real estate because we are one of the only retailers opening big boxes. And so we're seeing great stuff at a bit of a bargain these days. And our team is excited to really jump all over those opportunities. And you layer on top of that the fact that we have a tremendously different balance sheet today than we did a year ago or 5 years ago when we were private. And that affords us a tremendous amount of flexibility in being aggressive and considering different deal structures. And so where we once would only lease new stores, now we're looking at all sorts of different deals from plain vanilla leases to ground leases to purchasing property to land banking property: all sorts of different ways of doing it with an eye towards being as aggressive as possible to grow. Because one of the knocks on our company over the past several years is we haven't had an embedded tailwind in our comps from the maturation of new clubs. And most successful retailers out there have that component of their costs. We've gone from 1 club a year to 4 clubs in this past year, all of them successful; 6 in this coming year with the first one in Q2; and then 10 next year and then beyond. And once you get to that level, if you're consistently doing 10 clubs a year, you've got about a 1% comp just coming out of the maturation curve of the new clubs. So it's been a heck of a lot of work over many, many years. And I'm tremendously excited about it. It's not a side benefit of the pandemic. It really is allowing us to really highlight our overall transformation of this company over a long period of time.

That's really helpful. And while we're talking about -- while we've got you talking Bob, maybe you could remind us kind of the long-term puts and takes on EBIT or EBITDA margins. And is there a lot of opportunity over the longer-term for BJ's to have a higher EBITDA margin than you're currently seeing?

I think there is, Robby. I don't I don't want to give you the impression that the 2020 EBITDA margin is the new run rate because certainly, last year is a bit of an anomaly. But I do think when you look you look at what we'll see this year and beyond against 2019, you should definitely see some leverage falling down the P&L. And it's quite simply more members, more sales and not a commensurate increase in the expenses as you go forward. And of course, layer in there a bit of gross margin growth that comes out of many of the things that Lee talked about. Not only the continuing success of our category profitability improvement initiative, but as we push further into own brands, that provides a tailwind to gross margin rates. And Services is a very margin-dense business in general. The example that I tend to use is our Optical business. That runs around 40 points of gross margin versus the chain in the teens, right? So the more we push towards those margin-dense businesses, you get a mix impact as well. So I think gross margins will increase. I think EBITDA margins will be higher than historical levels as we go. And we're excited to see the future.

That's helpful. And then maybe following up on gross margin, we might as well go to the expense line. Wages rising is the big focus point right now. And I think you guys had been looking at about $100 million of cost savings from Project Momentum before COVID. Maybe, how are you thinking about expense growth over the next few years? Above normal or what are the puts and takes, I guess, I should say?

Yes. It's a great question. So for those that don't know, Project Momentum was a commitment we made just about 2 years ago at this point to our Board to go out and find enough cost efficiencies out there to invest in our business. We set a $100 million target. We achieved $40 million in the first year, and we're on track to complete that $100 million target during this fiscal year. It's come a little bit differently given our friends and our operations team are dealing with the pandemic so their commitment changed a little bit. And some of our home office teams outperformed their targets and so on the whole, we've done pretty well. That allows us to invest in all sorts of growth, the likes of which we talked about, Digital and new stores and other things. I think the areas that we'll see cost pressure are largely the areas we have seen cost pressure in the past, but for Digital. And so you likely will see continuing wage pressure. As a reminder, we deal with that on a regional basis because what makes sense in Boston doesn't necessarily make sense in South Carolina. But we pay very close attention to the market, what our competitors are doing, what our individual clubs are dealing with from a turnover perspective and we always want to really be out in front of this issue. We've been investing for many years in the wages of our team members in advance of mandate and minimum wage increases. I don't think that stance will change. We will look to invest in our team going forward because they are the most important thing in our business. They run our business for us. So the level of pressure that we'll see in this current year is pretty close to what we've seen in past years. And so it shouldn't be a tremendous burden, but it is there, and it will continue. I don't expect it to get terribly worse if there is a federal minimum wage enacted along the lines of what they're talking about in Washington, as we are above all those thresholds currently. And so we'll just sort of focus on our knitting and invest in our team members and enable them to run the businesses as well as they can.

I would just add to that -- just quickly, Robby, I would add to that point. I think our East Coast geography means that there are a number of places in the states: Massachusetts, New York, Florida, have already enacted, policies that are more aggressive than what the federal government is contemplating. So as Bob says, we're ahead of these trends already.

That's really helpful. And then just maybe 1 more on the kind of income statement side. I think 2020 was a pretty good year, profit-wise, in Fuel. Maybe just remind us how we should think about the Fuel comparisons for 2021? And how you guys think that could play out?

Yes. Fuel was certainly an interesting business during 2020. When the world stopped in Q1 the price of oil dropped precipitously. And that means in our business that we make more profit. So we sell 4 to 5x on average, the number of gallons that a normal gas station would sell on your local street corner. And so in a rising price environment, we're buying more and more expensive inventory than the guy on the street and the retail price is more or less steady. When prices fall, costs fall, the opposite happens, right? Our margins expand tremendously. And so Q1, we had about $30 million extra fuel profit in last year's first quarter. That trend continued, but moderated quite a bit for the rest of the year. So on the whole, there's probably about $40 million of what I would call, unusual benefit in 2020 that we would have to lap in 2021. So that's what I would think about in the income statement. The interesting part of the gas business other than the lapping, is our ability to gain share in that business has been tremendous. So in Q4, our comp gallons were up 5%. The industry in our markets was down about 15 points. So we are garnering tremendous share, not just inside the box, but at the gas pumps as well. It's been fun to see.

That's amazing. Kind of a different question. I wanted to -- maybe for you, Lee, just can you talk about the higher tier membership penetration? And remind us how important that is to keep driving the growth of higher tier members and -- from a sales and profit standpoint? And is there -- are there other -- are you looking at enhancing what you get for the higher tier member program? Or any kind of thoughts on that would be great.

Yes. Absolutely. This has been a big multiyear focus for us. And so just briefly, the core, what we call Inner Circle membership is $55, which allows you to shop the club, shop the website. There are a couple of variations on that core membership. For $110, you get 2% back in the form of rewards in the club. And then for each of those membership tiers, there's an associated credit card offering that takes the rewards to 3% and 5%, respectively. And so if you're in kind of our best credit card offer and you get 5% back, you also get $0.10 off a gallon of gasoline. You get savings outside the club. It really is a phenomenally good and rich credit card offer, which has terrific economics because the bank is effectively underwriting this and allows us to invest back in member value. And so we're very much focused on -- and driving penetration. I'm very happy that we saw pretty significant gains throughout the pandemic. It's usually the case that newer members have lower levels of penetration because they're just getting to know us and understand the value. And you see growth in credit card and higher rewards levels over time. But we focused on engaging people earlier in explaining the benefits. And as I've grown both our penetration with first years, but our overall penetration by 300 basis points this past year. So we're seeing great engagement, but with still plenty of room to run. We know if you were to look at some of our competitors, they see higher tier penetration that is well above where we are. But it's so important to the model because as you move people up that tier, you see terrific levels of renewal. So it is absolutely the case. People at the highest tier are renewing well into the 90s in terms of a renewal rate. And so as we move people up that stack, they spend more. They engage across the box and our Digital properties, and they renew at a higher level. So a huge area of focus for us is continuing that transformation. And we're excited. We're seeing that both with new(s) and with tenured. So I think I answered your whole question, but if I missed a part...

That was very helpful. We're running out of time, so I'm going to try and squeeze in 1 more question. It looks like you -- BJ's gained a lot of share within Grocery. Your transactions were positive through most of the pandemic. That's not the case for the grocery industry. Why wouldn't you keep a lot of that?

Yes, sure. So there's no doubt we gained share. Just look at our comp growth rate. We opened new clubs. We saw positive traffic throughout the year. We saw bigger baskets throughout the year. So we undoubtedly gained share. Look, I think a lot of that will come with long-term benefits to us, right? We've got better assortment. We've got better digital engagement. We've got more members. We've got more boxes. All those things help drive share. At the same time, we know that they need to buy in bulk to eat at home. Drove some share gains as well. We saw 7, 8x the rate of category growth in some of the categories where people just have a unique need to buy in bigger quantities. I think as the pandemic lessens, there will be less of a need to buy in bulk. But what we're so excited about is the structural gains that we've put together through all of the strategic initiatives, give you a reason to believe that we should be able to hold on to at least a portion of that share gain going forward, just not all of it driven by some of the unique shopping behaviors.

That was really helpful and we've run out of time, but I want to thank Lee and Bob for a great presentation. Thanks so much for joining us today.

Great. Yes. Thank you, Robby, so much for having us. We always enjoy the engagement, and thank you to everyone on the line today for taking the time to listen to our story and engage. We really appreciate it and hope you all stay healthy, safe and well. Take care. Bye.