Tanger Inc. (SKT) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to the 5 p.m. session at Citi's Global Property CEO Conference. I'm Katy McConnell with Citi Research, and we're pleased to have with us Tanger Outlets. Before we get started, this session is for Citi investing clients only. So if media or other individuals are on the line, please disconnect. For those joining in person, feel free to ask questions up at the microphones in the center aisle or you can type them into the webcast question box. And now, Steve, I will turn it over to you to introduce the company and team and provide some opening remarks.

Thank you, Katy. Good afternoon, everybody. I'm Steve Yalof. I'm the President and CEO of Tanger Outlets. Joining me today is Cyndi Holt, who's our SVP of Investor Relations; and Jim Williams, who is our EVP and Chief Financial Officer. Tanger Outlets is the only publicly traded REIT specializing solely in the development, leasing, marketing and operations of upscale, open-air outlet centers in the United States and Canada. The fourth quarter of 2021 punctuated a year of continued improvement as customers demonstrated their desire to shop our brand and retailers recognize the benefits of being in our open-air shopping centers. We are excited about the growth for our business in 2022. Value has historically outperformed other market segments in inflationary times, and we are building the team and the technology to execute organic growth strategies focused on 3 core elements of our business. Accelerating our leasing, reshaping our business operations and commercializing our marketing strategy. This year, we have a unique opportunity to increase rents with 19% of our space coming up for renewal against the backdrop of strong sales productivity and low occupancy cost for our tenants. In fact, in January, our blended 12-month spreads turned positive and in-place rents represented an occupancy cost ratio of approximately 8%. This is meaningfully lower than any other retail distribution channels despite tough comps due to January winter weather. Our rolling 12-month tenant sales sustained a record high level achieved in December. Leasing activity is accelerating as demand is growing for space in our open-air portfolio, and we did not recapture any space during the fourth quarter due to early terminations and are now seeing open to buys from retailers and alternative uses like home, food and beverage and other experiential brands. Our nonstore revenue initiatives are one important way that we've reshaped our operations discipline. Nonstore revenues remain a strong contributor of our earnings growth, as evidenced by our other revenues line item, increasing more than over 70% during '21 compared to '20 and almost 40% compared to 2019. Our high-traffic open-air shopping centers provide an opportunity for our retailers and other national brands to connect with our shoppers through marketing partnerships and on center sponsorships through events, amenities, product sampling and digital and static media. In 2021, we hosted activations for such brands as Heineken, Tesla, Unilever, GEICO and Hilton, just to name a few. Currently, in its infancy, nonstore revenues represented about 3% of our total revenues, a level that we believe can increase significantly over time as we grow this revenue-generating platform. We continue to invest in our people and our systems in order to scale our business. Last year, we promoted our EVP of Operations, Leslie Swanson to Chief Operating Officer. And additionally, we added a Chief Commercial Officer, which is a new position at Tanger and the gentlemen named Andrew Wingrove to our management team. The creation of this new role demonstrates our commitment to commercializing our marketing strategy through digital transformation, modernizing our loyalty programs and creating an experience through all touch points that engage our customers. Andrew has extensive experience in achieving marketing programs, loyalty strategies and customer centricity at companies that included Macy's and Delta Airlines. Additionally, we're pursuing a number of value-enhancing investments, including solar, electrical vehicle charging stations and other projects to reduce our energy and water usage and it underscores our commitment to sustainability. Our peripheral land team is aggressively pursuing opportunities to monetize our outparcel portfolio, unlock new opportunities to enhance our offering and generate new revenue streams and create long-term portfolio value. Tenant interest in our Nashville project has been strong, and we are on track to break ground in the first half of this year with grand opening scheduled for fall of 2023. We entered '22 with a well-positioned balance sheet, which we proactively strengthened in 2021 in anticipation of higher interest rates and inflation. Low leverage, limited floating rate debt and ample liquidity, combined with a clear path to sustain the center NOI growth and long-term growth initiatives create a compelling opportunity to grow our cash flow and increase the value of our real estate.

Great. Thank you. So to start off each session, we're asking the same opening question, which is, what are the top 3 reasons why investors should buy your stock today over other property REITs?

Well, first of all, I think we're undervalued. Second of all, I mean, with the 8% OCR, I think there's tremendous amount of upside for us to push rents. I think we've got a best-in-class leadership team and management team right now to execute to not only the commercial strategies, the operational strategies and our leasing initiatives. And lastly, I think we've got a great balance sheet that's going to position ourselves to take advantage of opportunities that will present themselves.

So since the stock's relative valuation, you mentioned it's still lagging. What do you think the market is penalizing your stock for the most today? And how do you plan to address that?

Well, first of all, I think we took back 1 million square feet during the pandemic. And for a portfolio our size, that was a very big impact. We quickly stood up our management teams in each one of our shopping centers to become leasing agents. We understand leasing, leasing, leasing is the name of the game, thinking to get as much of that local traffic into our shopping centers as possible and to try and take advantage of a lot of the other shopping centers that we're also seeing similar attrition in their formats. So by doing a lot of this temporary leasing, I think we've got more temporary leasing in our shopping center that we've had before. I think a lot of people are looking at that as though it's a negative. We look at it as a positive. We like to keep the lights on. We like to keep the shopping centers commercially interesting and especially like to keep them cash flowing. And I said it before, I'll say it again, I think that a lot of our shoppers don't know the difference between a short-term tenant and a permanent tenant, but they definitely know the difference between a closed store and an open store, and we like to keep as much commercial vibrancy in our centers as we can.

So your sales metrics reached a high last quarter. As we think about momentum going forward, do you think the consumer spending environment will continue to be as strong this year?

Yes. We anticipate that. I think as we made our plan for 2022, we made it our point to reach out to a lot of our retailer partners and see what their plans were looking like. I spent 20 years of my career in the retail space, working for brands like Gap and Ralph Lauren, both on the real estate side, but understand the value of the plan and how they were pushing their retails. So through some of those contacts and connections and a lot of the retailers that we do business with, we reached out and said, how are you guys thinking about your business. Variable rent is a big part of our business, where they are a partner in a lot of these cases. So we thought we should have some knowledge base relative to how they're going to grow their business. And I think there's a lot of optimism out there, especially in the outlet channel, where I think that value is, I think, an inflationary times values the way channel will be it.

And how have tenant or customer conversion rates evolved coming out of the pandemic? And what about average time at your centers?

Well, dwell time is a metric that we're starting to study a little bit more closely now. We do have an average dwell time for each of our centers. I think we've set a pretty good baseline over the last couple of months. So we'll start to watch as that number grows or falls and pull the appropriate levers accordingly. But as far as conversion rates are concerned, I think one need only look at the traffic pattern. So our traffic growth, which is now at least outpaced the 2019 levels, but not growing as quickly as our sales per square foot is growing, which would indicate that the retailers are converting at a far more rapid rate and squeezing a lot more sales out of each of the individual customers that shop our center.

And we have a question on that online here. So the traffic that you're seeing in your centers, why do you think those figures are fine even with increases we're seeing in e-commerce?

Why do you think -- say it again?

The question is, why do you think the traffic in your outlets -- I guess, the outlook for traffic is fine despite the increase we're seeing in e-commerce for [ LS ].

Well, first of all, I think people like shopping live. I think that's an important part of the omnichannel experience of shopping. I think that people are spending a lot of time online looking at product window shopping and when they actually come to the shopping center, they know exactly what they're going to buy. I think it's incumbent on us as developers of shopping centers to make sure that they spend more time at the center when they're there, but also shop more stores. So that's a big push for us. How do we get the shopper? We can get them to our shopping center, but how do we get them to spend more time to get into more stores. And we're doing that through amenities. We're doing that through more experience and giving that customer who may have other places to transact more reasons to come and spend time in our centers.

And another one from online. With logistics and supply chain challenges, do retailers have enough merchandise to sell through outlet channels?

Well, Q4, we really didn't see a material reduction in product during Q4. In fact, I think just the opposite. I think whoever came up with the strategy of if you see it, buy it was brilliant. We saw that as early as October, where holiday shopping started really early. We started our holiday shopping season November 1. We started to decorate our shopping centers, which was pretty early compared to years past, but the customer responded. And they shopped early. November sales were strong. December sales were even stronger. And the products, I think the product held evidenced by ourselves per square foot growth during that same period of time.

And has Omicron had any impact on those trends or rent collection levels so far in the first quarter?

Rent collection, we haven't talked about rent collection in the year, thankfully. I think the one great statistic about rent collection that I'd love to share with this group is when the pandemic first hit in March of 2020, we immediately and proactively reached out to every one of our customers and said, we are going to defer your rent for the month of April and May of '20, and pay us back in January of '21. This was at a time that nobody knew how long stores were going to be closed, nobody knew how long stay at home mandates were going to be instituted, yet we made that offer to our retailers. I know on a number of earnings calls, I was asked by analysts at the investor meetings, we were asked, is that just an elegant way to delay abatement? And the answer was, and I'm proud to report 99% of that reference paid. So I think it was a smart strategy. I think in addition to looking out for our retailers to make sure that they took care of what was important first and that was their people. I think we were rewarded and continue to be rewarded with strong open-to-buys and getting a big share of the customers' new stores.

You talked about how shoppers prefer value in an inflationary environment. To what extent are you already starting to see that impact on your tenants performance?

Well, I would say that February was probably a month that was impacted with rising gas prices and other inflationary pressure. And we're pretty happy with our -- how our sales trends performed and our traffic trends have performed in the month of February.

So it feels like the tenant environment is fairly healthy today and that we're seeing continued positive leasing momentum. What do you see as the biggest risk to your tenant base over the next 12 to 24 months?

Get a phone ring. This is [ Billerman ] calling because he's like give me shelter is planning. So that is a signature ring tone on my phone. The biggest risk to tenants right now, I think there's a lot of unknown in the economy right now, particularly with what's going on in Europe. So I'm -- but I -- from what I'm hearing from tenants, I think people are looking at '22 -- late '22 and '23 open to buys. They're not making decisions, they're making decisions for '23 right now. So as they sort of take a look at the macroeconomics, we're still very pleased with the amount of new deals that are in our pipeline and very optimistic that we'll close on most of those new deals that we're currently working on.

Maybe you can provide some more detail on the retail leasing environment, just in terms of what tenants are looking for states that might be new to outlets or any other notable changes that you've seen?

Sure. We were very heavily invested in apparel and footwear. And I think a lot of the -- a lot of outlet retail leans into those 2 categories. But we've been challenged to try and change our format a little bit just to add some more variety to the centers and be less dependent on apparel. During the pandemic, when I said we lost 1 million square feet of space, a lot of those brands were old legacy apparel brands. So we're trying to diversify our mix a little bit more. We went after a lot of the home stores Restoration Hardware, Crate & Barrel, Williams-Sonoma, West Elm, Mitchell Gold, all had a great degree of newness to our shopping centers, all brands that have clearance strategy or outlet strategy and particularly in our shopping center and Riverhead has really become quite the home destination. So we're looking to take those types of stores and retailers on the road. We also had a lot of success we'd sit down restaurants across our portfolio. And it's interesting because that's a new category, particularly for the outlet business. Food has always been suspect in outlet centers at best. I joke that the Wetselpretzel is the official snack food of the outlet shopper, but now what we're finding is that people want to spend more time. People are shopping a lot more during the week, and it's not just a weekend shopper visit. And I think a lot of the sit-down restaurants are definitely benefiting from there. We added, I think, 7 of these new sitdown restaurants this year, which is about 20% of our portfolio.

What's your appetite to increase luxury tenant offerings within your centers? And where else do you think you have gaps in terms of tenant concentration?

Well, I think direct-to-consumer is really important. In fact, we just brought on board a Director of Business Development to help us think about some of that direct-to-consumer brands through a lot of the relationships that he's had and things that he's done in his past experience. He's made tremendous contacts and great inroads. I think a lot of these direct-to-consumer brands started out digitally native. Now our first getting into the retail business. I mean, obviously, we've seen a lot of retail growth from some of the bigger brands, but some of that middle of the pack that are starting to think about their first foray into the retail business, we think that outlet will ultimately become an important part of their business going forward. So we're spending a lot of time getting in front of those brands now and setting ourselves up for future successes, thinking that they may be one of the big theater tenants in the future.

And what are you seeing in terms of outparcel leasing demand? And I know you spoke earlier about how that presents a monetization opportunity for you in terms of land sales. But to what extent do you think about retaining that for future densification opportunity?

Well, a lot of the properties that we have, have this collection of outparcel real estate that we've never actually taken advantage of going out and proactively monetizing. I think we've been pretty successful over time, putting a cracker barrel in a space or leasing a pad to a hotel site in some selected markets. But we think that's a real business for us. Typically, an outlet center, about 350,000 square feet takes about 30 acres. In a lot of instances, we purchased over time, 40-50, in some instances more. So that gives us a real good opportunity on approved and improved land to go after retailers and mostly restaurants, other experiential retailers, entertainment uses, uses that are very complementary to what we're doing in the outlet business. But similarly, they bring a whole new customer to our outlet format. So with a new addition -- with the addition of a new hire who is only thinking about outparcel leasing, we think that there's a pretty good new business for us.

In your opening remarks, I think you mentioned 19% lease expirations this year. Can you update us on your progress with renewing that space and what re-leasing spreads have looked like so far? Well, at the end of the quarter, we reported that our leasing spreads for our renewal space was positive, which is obviously a great sign. For the past 4 quarters, our spreads have been negative, although sequentially increasing. So the pass over into positive territory has been a great award and reward for our leasing team. That 19% is a pretty high number, but I think a lot of it has to do with where in '20 and '21, we -- where the market was in a trough. During COVID, especially when leases were rolling, we elected to not do long-term leases with a lot of these traditional retail partners because we didn't want to renew for 5, 6, 7 years at the bottom of the market. They were looking for rent reduction, arguably. There was a lot of unknown in the marketplace. In those instances, we traded going backwards in base rent for a bigger piece of overage in the event that sales returned. And as you know, from the history, sales returned pretty rapidly that overage rent line was a pretty important component piece of our P&L, particularly in '21, something that we reported a $25 million worth of revenue, highest of all time for the Tanger portfolio. And so a lot of those leases that are rolling in 2022, which is -- lends itself to that high number. We are more than 30% through that. A lot of it is big portfolio deals. But I said in the opening remarks, we didn't lose the tenant in all the fourth quarter. And typically, a big -- a time where a lot of retailers will fall out is the January, February time frame. They wait to get that last Christmas bonus and then they go ahead and they close some stores and they move on. But we haven't had any fallout thankfully in January or February either, which I think lends itself to a probably more positive renewal opportunity for us. We also said our sales hit an all-time high, and our traffic continues to improve. So when we get in front of retailers and we make our pitch, the 2 big component parts are improved traffic and high sales. And we use that to drive our rents. We're asking for more rent than we've ever asked for before, and we're getting much higher rents as we start to renew a lot of these. So holding out seem to probably was a pretty good strategy, but we're anxious now to take advantage of this all-time high mark, and we're now looking to make not only deals for '22 and get those completed, but also make deals for '23 and get those -- get a head start on those as well. And as we think about the temporary leases that you signed in the peak of the pandemic, what should we expect just in terms of upcoming rent roll? And can you help quantify the potential upside from converting those from temporary rents to a higher fixed rate level?

Sure. I mean, temporary rents -- temporary tenants come in a bunch of different formats. You've got temporary tenants that are pop-up deals. So a great example of that is Kates Bay, Tory Burch, where we were able to put them in markets that they wanted to try before they buy. And based on their sales success, they converted those short-term leases into long-term leases. Another good example of a temporary lease is take a Flip-Flop store that's a local tenant that takes the space next to Under Armour and Under Armour decides they want to expand. So through that temporary leasing, where we were able to keep the lights on, keep the place vibrant and also keep the space cash flowing. Now I've got a 30-day right of termination I can control that space. So they're not going to hold me up from expanding our Under Armour or putting a new Tory Burch in that location. So we're doing a pretty good job right now converting our temp leasing into permanent leasing, and we're also taking some of those temp tenants that we're displacing, and we're putting them into some of the spaces probably a little bit harder to lease. So where they were in some coveted spaces due to some of that restructuring and early bankruptcy, we're now leasing that space first and then putting our short-term tenants in other space probably not as desirable, but if they want to be there on a short-term basis, and that's the space that they are always willing to take.

Are you still seeing pretty significant demand for tenants that are looking for short-term deals today? And what's your willingness level at this point to sign more of those?

Well, we're running 95.5% occupancy. So as long as there's vacant space in our portfolio, we're going to go after short-term tenants to fill that space. We think it's a good strategy. Sometimes you find a great tenant that we can transfer and put in several of our centers. Byrd's Cookies in South Carolina is a great example of that. We took them from a local strip center, and now they're in, I think, 4 out of the 5 centers that we have in South Carolina. We'll continue to grow business like that. We also -- when we empowered our field teams, the general managers to go out and do the leasing for us, they decided that they like the leasing business, and they got rewarded for doing some great leasing. So we're constantly looking for new brands, and we're not looking to fill space to fill -- just for the sake of keeping the lights on. We're looking for great uses, complementary, a new brand that will bring a new customer to our shopping center, maybe get them to shop there more frequently. And when they do, ultimately, we'll build bigger baskets, sell more things and collect more variable rent.

So on the new leasing activity, they continue to gradually improve in terms of spreads last year. And I think you said they hit positive territory in January. What's your outlook for the rest of this year? And do you think spreads could start to trend back closer to historical levels? Or is there a longer runway to get there?

We're not guiding with regards to where our rent spends are going to go. But listen, we're optimistic about sales. We're optimistic about leasing traction. When our sales are at an all-time high, we're asking for more rents than we ever asked for before. So I think if we make deals at the levels that we're pushing to make deals, I think that we're going to have positive results across the board.

Great. Maybe we can talk a little bit more about nonstore revenues that you've discussed, the recent growth and also the future opportunity that you think you have to drive that even further.

Well, first of all, the nonstore revenue business is, I mean that's a really important business to us. You got 150 million people a year coming through our shopping centers. Why not take advantage of all those eyeballs. So whether it's standing up a Tesla, test driving station or Heineken doing one of their nonalcoholic beer installations. They see our shopping centers is a great place to engage a customer in an open-air environment. But what's great for us is we've got these national brands that have great brand cachet that if you do one, multiply that by 36 shopping centers across our portfolio, it's very easy to scale. And so we invested in a national sales manager that can go out and actually make deals like that for us, and we're seeing great returns. That's just one of our nonrental revenue avenues that we're pursuing. Others include media, paid media, media boards, when you have a shopping center and you have Michael Kors as your tenant and Michael Kors has their sign over their front door and maybe their name is posted on our directories across the center. But if they're pushing in a particular month because they've got a product that they really want to -- they want to move, they'll buy from us additional marketing opportunities across our portfolio, whether it's banners that we hang on light posts in the center and the common areas themselves or backlit, what we call light walls that show some of the latest marketing and Michael Kors imagery. So we want to make sure that every single customer that shops that shopping center knows there's a Michael Kors in that shopping center and the investment that they make in that additional advertising definitely returns in additional customers coming through their store.

Great. So maybe just shifting to external growth now. With the balance sheet remaining in pretty good positioning, how much of a priority is external growth for the company today? And what types of opportunities, whether acquisitions, additional ground up or minor redevelopment screen the most attractive to you to that?

Well, that's pretty much all we're thinking about right now is how are we going to scale and grow this business. I think we built -- you asked me at the beginning what were our great strengths and why should people invest in our company, and I talk about our management team. I think we've got a management team that's great leaders, best-in-class leaders across their individual disciplines. We've got a great head of leasing. We've got probably one of the best heads of business operations in the industry, and we're very, very optimistic about the new initiatives in digital transformation that our new Chief Commercial Officer is going to lead. And then I mentioned my new Head of Business Development and the new relationships and investments that he's going to bring to us as well being equally important. So we're going to take those -- with that existing management team and the balance sheet that we have, we think not only are we right for acquisition, but we're looking forward to making bigger investments. Nashville is on the horizon. We've been talking you and I about Nashville for a number of months now. It was a property that we invested in a number of years ago. We put it on hold due to Covid. We had announced publicly that we'll be 60% committed before we actually put a shovel in the ground. So we're pleased to report that we will be doing so at the beginning of next quarter with a fall '23 grand opening.

And what types of tenants have been driving most of the leasing demand for new ground-up outlet development today, including at the National project?

Well, I think apparel is really important in the outlet business. So even though we're looking to diversify our mix, I think that apparel mix is very, very important. Accessories, jewelry, athletic footwear, athleisure products, athleisure hard goods, which I think is going to be a new category that we're going to start to see in some of our outlet centers. So I think these are all very important. One of the big growth areas we've seen, particularly coming out of COVID was children's apparel for obvious reasons, kids went into [ Covid ] this big, they came out this big. So a lot of sales are children's apparel lines. This shopping center will be about 300,000 square feet. We have a lot of demand for it. So we're looking forward to keeping it very much individual brands, very little multi-brander. And I think it's going to be a great pure outlet center with some great amenity, local food and great services for the customers in the community and also the visitors' [ attraction].

And as you think about external growth beyond Nashville potential acquisitions or additional ground-up projects, how are you thinking about primary versus secondary and tertiary markets in terms of what you're going to be focused on going forward?

I think the tertiary market is a thing of the past for outlet centers. I think we used to put outlet centers, and I've been in this business for quite some time, but we used to put outlet centers as far away from the human population as possible because of that retail sensitivity that a brand would have with their department store business. I think as that sensitivity starts to go away, it lends itself to bringing outlet centers closer and closer into the permanent population. And I don't think that urban outlet is that far away. I think there's some great markets where we could bring our brand of outlet center. And so we're spending a lot of time thinking about that now.

What new markets would you enter if you're able to gain scale immediately at a fair basis?

Well, new markets as far as where do we want to position to. I'm not going to tell you. We're being broadcast. I got to keep a couple of things under the vest. I'm happy to talk about Nashville, but I want to -- I'm going to keep the rest of the pipeline until we're ready to announce to make sure I tell you first.

At this point, are you actively exploring additional ground-up opportunities?

Well, there's some ground up but mostly JV partnerships.

Okay. We have a question online here about that. Just regarding growth, do you think there's room for more square footage of outlets or really a need for more outlet square footage in the U.S?

Well, I do. And I think -- look, I think there's definitely way too much retail in the U.S., but I think outlet is unique. There's 70 million square feet outlets base of 7 billion square feet of retail space for only 1%. I think people like to shop value. I mean look at how packed our parking lots are. Look at the bags that people are carrying around with them when they're shopping in our centers. I mean one need only go to one of our centers to see how much need there is for an outlet center. I think we're in a good space. I think that people love to shop value. I think there's an aspirational customer out there that will never pay full price. They get -- maybe there's an intimidation factor about shopping in some of the high streets across the country. But if they want to engage with the brand, I think an outlet center is a great place for them to trade up and the entry-level price points are priced successible for a lot of these customers. And I think the brands think about that, too. I think they see that as a great opportunity to acquire a new customer. So you're seeing a lot of these higher-end brands put their brand in an outlet center because they're never going to see that customer. And if they engage them and acquire them in an outlet format, they maybe can trade them up to a lifelong customer.

Great. So maybe shifting to the balance sheet strategy quickly. What steps are you taking to protect your balance sheet and plan for a likely rising rate environment? I'm going to turn this over to Jim.

Thanks, Katy. Look, we -- last year, we got ahead of the inflation in the rising interest rate environment by putting in place an ATM program, which we raised $180 million of opportunity to really reduce debt, push out some maturities and get our leverage back down significantly down from where it was. During Covid, our leverage climbed into the 7s on a net debt-to-EBITDA basis. And following -- by the time we ended the year, our net debt to EBITDA was $5.5 million, if you include the pro rata share of our joint ventures. We have a $520 million line of credit that's completely undrawn. We have no significant maturities. We took the opportunity to push [ '23 and '24 ] bonds out. So I really have no near-term maturities, and we have a lot of liquidity. We have $160 million in cash. So I think we're in a very good spot from a balance sheet standpoint to be offensive when addressing these opportunities that Steve has been talking about.

Great. We have one more quick one online. What are the terms on your renewal leases today, length and CPI increases?

Well, we do get an annual increase in all of our leases. But most of the renewals are probably 5 years or better.

Okay. And then we'll move on to our rapid fire questions. What is your #1 ESG priority for this year?

Well, I think ESG is embedded in our culture. So although we don't have a #1 priority, we're investing this year in EV charging stations, and we're working -- we've also made a big investment in solar.

What will same-store NOI growth be for your property sector overall in 2023?

We're the only ones in our property sector. Malls 3% on the low side.

What will the 10-year treasury yield be 1 year from today?

2%.

And will your property sector have more or fewer public companies 1 year from today?

And that's a mall sector. I think fewer.

Fewer. Okay. Great. Thank you so much for your time.

Thank you. Thanks for having us.