Oxford Industries, Inc. (NYSE:OXM) Q4 2018 Earnings Conference Call March 28, 2019 4:30 PM ET
Anne Shoemaker - VP, Capital Markets & Treasurer
Thomas Chubb - Chairman, CEO & President
Scott Grassmyer - EVP, Finance, CFO & Controller
Conference Call Participants
Matthew Degulis - KeyBanc Capital Markets
Susan Anderson - B. Riley FBR, Inc.
Steven Marotta - CL King & Associates
Rakesh Patel - Needham & Company
Ross Licero - Telsey Advisory Group
Good day, everyone. Welcome to today's Oxford Industries fourth quarter earnings call. Today's conference is being recorded. At this time, for opening remarks and introductions, I'd like to turn the floor over to Ms. Anne Shoemaker. Please go ahead.
Thank you, John, and good afternoon, everyone. Before we begin, I would like to remind participants that certain statements made on today's call and in the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees, and actual results may differ materially from those expressed or implied in the forward-looking statement. Important factors that could cause actual results of operations or our financial condition to differ are discussed in our press release issued earlier today and in documents filed by us with the SEC, including the risk factors contained in our Form 10-K. We undertake no duty to update any forward-looking statement.
During this call, we will be discussing certain non-GAAP financial measures. You can find a reconciliation of non-GAAP to GAAP financial measures in our press release issued earlier today, which is posted under the Investor Relations tab of our website at oxfordinc.com.
Please note that all financial results and outlook information discussed on this call, unless otherwise noted, are from continuing operations, and all per-share amounts are on a diluted basis. Our disclosures about comparable store sales include sales from our full-price stores and e-commerce site and excludes sales associated with outlet stores and e-commerce/clearance sales. Because fiscal 2017 has 53 weeks, each fiscal week in fiscal 2018 starts 1 calendar week later than in fiscal 2017. To provide a more accurate assessment of our fiscal 2018 comparable store productivity, we are presenting fiscal 2018 comparable store sales on a calendar-adjusted basis by comparing the fiscal 2018 period to the comparable calendar period in the preceding year. Thus, comparable store sales for the fourth quarter of fiscal 2018 compare sales in the 13-week period ended February 2, 2019 to the 13-week period ended February 3, 2018.
Now I'd like to introduce today's call participants. With me today are Tom Chubb, Chairman and CEO; and Scott Grassmyer, CFO. Thank you for your attention. And now I'd like to turn the call over to Tom Chubb.
Good afternoon, and thank you for joining us. I want to begin my comments today by briefly recapping our 2018 consolidated results and then spend some time on each of our brands: Tommy Bahama, Lilly Pulitzer and Southern Tide as well as Lanier Apparel. Fiscal 2018 was a solid year, and I am very pleased with our overall results. Net sales increased 2% to $1.107 billion in a year with 1 less week than the prior year. More important than the total figure was the composition of our growth. Our comparable sales grew by 4%, fueled by strong gains in our e-commerce business and positive overall bricks-and-mortar comps. E-commerce remains our fastest-growing channel of distribution, increasing to 21% of total revenue this year.
At the same time, we continued to strategically prune our wholesale distribution, which was $25 million lower than last year. And our adjusted earnings grew significantly, up 18% to $4.32 per share. We are proud of our accomplishments in 2018, and our results included important contributions from each of our brands.
Here's a bit more about our lifestyle brands. I'll start with Tommy Bahama. At $675 million in revenue, Tommy Bahama is an authentic brand that differentiates itself in the retail sector through its compelling casual product assortments and fun, relaxed experience for our guests in our stores, restaurants and online. In 2018, with a laser-focus on improving key operational areas of the business, we achieved gross margin expansion and growth in Tommy's adjusted operating margin. Tommy Bahama's position in the marketplace is enhanced by its stores with food and beverage adjacencies. We've been in the restaurant business for over 20 years, and we see our expertise in running integrated F&B retail locations as a true competitive advantage that allows us to deliver a one-of-a-kind experience. Locations that feature adjacent retail and restaurant operations represent almost 1/4 of Tommy Bahama revenue. In addition to the 15 locations where we have full-service restaurants adjacent to a retail store, we have 2 locations featuring the Tommy Bahama Marlin Bar. Our full-service restaurants offer our guests a traditional sit-down dining experience. In contrast, the Marlin Bar is a walkup concept that features a large patio offering a full bar and a food offering featuring small bites, salads and bowls.
These locations are performing well, and our pipeline for additional Marlin Bar locations is building.
From a financial perspective, we like the lower capital, lower rent, lower labor Marlin Bar model. From a guest experience perspective, the upscale, fast casual style is aligned with the way many people increasingly want to eat out. We believe opening additional locations that include a food and beverage element will continue to help fuel customer acquisition and growth for Tommy Bahama. To that end, we expect to open 3 of these exciting Marlin Bar locations in Florida later in 2019, 2 of which are relocations of existing stores in Jacksonville and Fort Lauderdale.
In addition to the food and beverage element, Tommy Bahama continues To develop exceptional product. The plan for 2019 is to build on the powerful equity of selected items like Boracay pant and the Emfielder Polo and supplement our line with exciting new offerings like the dressier Newport Coast shirt collection and the Palm Coast performance polo.
At the same time, Tommy Bahama has supported growth of its women's business through a few key initiatives. They include the creation of dress shops in our stores, so it's easier for our guests to appreciate the breadth of the assortment we have for her. We have also made some additional investments to bolster the sales expertise on the sales floor, again with a focus on women's. Last year, we significantly increased our marketing spend at Tommy Bahama and tried a variety of digital and more traditional marketing techniques. We learned a great deal about what is effective in attracting, activating and retaining our target customers. As a result, in 2019, we will be able to be more efficient in our marketing spend with a focus towards digital and catalog spend as this is a proven method for driving traffic in store and online. Overall, I am pleased with the progress Tommy Bahama made in 2018 and their plans for continued progress in 2019.
Shifting gears, Lilly Pulitzer remained strong, aspirational and relevant to an affluent and multigenerational customer base. In 2018, Lilly Pulitzer delivered another year of outstanding results with 9% top line growth, positive comps in all 4 quarters and an operating margin of over 17%. Fiscal 2018 was also highlighted by the opening of 5 new Lilly Pulitzer stores, including an iconic flagship store on Worth Avenue and Palm Beach in November and the brand's first location in the Hawaii last summer. Lilly also now has a retail store in California, as just a few weeks ago, Lilly opened its stores at Fashion Island in Newport Beach. We are carefully evaluating the reaction to these stores located in new markets and are pleased with what we are seeing to date. If early positive trends continue, we expect expansion in both of these markets in 2020.
Lilly's e-commerce business, while strong in 2018, was tempered by some issues with their new website. The team has been working vigorously to remediate these issues around search, navigation and taxonomy and are making excellent progress. We expect this channel to grow in the high single-digit range in 2019. Having product that is inspired by and expressive, the Lilly Pulitzer resort lifestyle has been critical to this brand's enduring success. Lilly's plans for 2019 include building on newer product categories like swim, tennis and golf. Luxletic activewear will continue to expand, and you will see more of what we call family moments which highlight children's and men's apparel. As always, beautiful printed dresses well remain central to the collection, and 2019 assortments will include an expanded size range. Being best in class in dresses has been key to Lilly's ability to serve girls and women of all ages throughout its 60-year history.
Southern Tide had a nice year with sales growing 11% and operating margin expanding 150 basis points to 13%. In 2018, Southern Tide tend to shift its sales mix towards signature stores with 8 new locations opened to end the year with 14 in total. We were really pleased with the results Southern Tide achieved in 2018 and believe they will take another step forward in 2019.
With respect to our Lanier Apparel group, 2018 was a challenging year. The Lanier team has worked hard to position this business for future top line growth and improved profitability, and we are optimistic about their plans for 2019. Anchoring the growth opportunities is Lanier's Cole Haan tailored clothing license, which we've launched in 2018. It is off to a strong start with excellent distribution, and we expect good growth driven by door expansion in 2019.
As we look forward to 2019, we will continue to focus our efforts on driving long-term value to our shareholders. Our consolidated plan calls for modest top line growth with e-commerce growth outpacing our other channels of distribution.
In 2019, as we carefully manage our investments in bricks and mortar, store growth will be at a measured pace. We expect a solid increase in operating income and EPS in fiscal 2019. As has been widely reported, retail results in February were soft due to the weather, and this has been reflected in our guidance. As the weather improved, so has our business. And we are confident in our plans for profitable growth in 2019. Our commitment to returning value to our shareholders through dividends is well established. We have paid a quarterly dividend for over 50 years. And today, we were pleased to announce a 9% increase in our dividend on the heels of a 26% increase last year.
I didn't want to leave you this afternoon without a few words about our team. Our success has been and will continue to be dependent on the quality of our people. We have an extraordinarily capable team that is well suited to meet the rapidly evolving needs of our business, and we will continue to find ways to leverage this talent across our enterprise.
With that, I'll now turn over the call to Scott Grassmyer for more details on our fiscal 2018 results and our plans for 2019. Scott?
Thanks, Tom. I'm going to spend some time on a few additional 2018 items and some details on our 2019 outlook. Our plans turned out as expected for our fourth quarter, which had 1 less week than in 2017. In the fourth quarter, our results included year-over-year improvements in sales, adjusted operating margin and adjusted EPS. And our fourth quarter consolidated comp was a low single-digit increase. For the full year, our strong 4% comp increase and expansion gross margin generated an improvement in operating income in fiscal 2018 despite a $25 million wholesale sales reduction, $9 million of additional marketing spend and approximately $2 million operating income impact from 1 less week than in 2017.
Our balance sheet remained strong, and we have a capital structure wealth addition to support plan growth. Our inventory balance at year-end was $161 million, up approximately $34 million compared to the same point last year. About half of the increase was due to a shift in the timing of Chinese New Year, resulting in approximately $16 million more inventory on the water and at this time last year. The other half of the increase is primarily to support planned increases in sales at Lanier Apparel and a deeper positioning core products at Tommy Bahama. Cash flows from operations continued to be strong at $96 million, and free cash flow was $59 million. We returned $23 million to our shareholders through dividends in 2018, and we continue to pay down debt. As of February 2, 2019, we had $13 million of borrowings outstanding.
I'd now like to walk you through our projections for 2019. For the full 2019 fiscal year, adjusted earnings per share is expected to grow to be between $4.45 and $4.65 on sales in a range of $1.135 billion to $1.155 billion. In fiscal 2018, sales were $1.107 billion, and adjusted EPS was $4.32. Our operating income is expected to grow in the high single digits. Our interest expense is expected to be approximately $2 million, and our effective tax rate is expected to be approximately 26% compared to 24% in fiscal 2018, which benefited from certain discrete items. The higher, more normalized tax rate is expected to negatively impact year-over-year earnings by approximately $0.12 per share.
Our first quarter results have been impacted by a soft February. While we have definitely seen improvement in March as the weather improved and are optimistic about April, February shortfall would temper our first quarter results. For the first quarter of fiscal 2019, we currently expect net sales between $270 million and $280 million. Adjusted earnings per share is expected to be between $1.15 and $1.25. On a comparable basis, sales were $273 million in the first quarter of fiscal 2018, and adjusted EPS was $1.28.
Our capital expenditures in 2019 are expected to include costs associated with information technology initiatives, opening 3 Tommy Bahama Marlin Bars, a major remodel of Tommy Bahama's Newport Beach retail restaurant location and a new Lilly Pulitzer store in Newport Beach we opened earlier this month. We expect capital expenditures to be between $45 million and $50 million in 2019 compared to $37 million in 2018. Fiscal 2019, we expect cash flow from operations in excess of our capital expenditures and dividend requirements.
Here are some additional details of our plans for each of our operating groups in 2019. We expect the top line at Tommy Bahama to grow in the low single digits with e-commerce remaining the fastest-growing channel of distribution and plans for low single-digit comparable sales. Our 3 new Tommy Bahama Marlin Bars will not open until late in the year so will not have a meaningful impact until 2020. We expect to have another year of operating margin expansion in fiscal 2019. Lilly Pulitzer is expecting a mid-single-digit sales increase driven by e-commerce and brick-and-mortar comp growth. Operating margin at Lilly Pulitzer is expected to be comparable to 2018. For Lanier Apparel, we're expecting a high single-digit increase in sales and a modest increase in operating income. Southern Tide's plans for fiscal 2019 includes a low double-digit top line increase and a low double-digit operating margin. Finally, the operating loss in Corporate and Other is expected to be relatively flat with fiscal 2018.
Overall, we are optimistic about our plans for 2019 and expect to deliver another solid year.
John, we are now ready for questions.
[Operator Instructions]. We will take our first question from Edward Yruma of KeyBanc Capital Markets.
This is Matt on for Ed. So you all have a pretty significant step-up in marketing during the past year, and it seems like you won't do as much in 2019. We were wondering if you could talk through your reasoning a bit and maybe how this will flow through the business for the year for both revenue and SG&A.
Yes. So last year, if you remember, at the beginning of the year this time, we talked about the additional marketing spend that we were going to do, and I think it was the $9 million year-over-year increase. And we also talked about the fact that we were going to try a lot of different things. So we did a lot on the digital front. We did a lot on the catalogs that have always been important to us in all our brands. And we actually did some sort of more traditional media, including radio, TV, some print, some outdoor and really just tried a lot of different things. We've learned an awful lot from that. And as a result of those learnings, I think we'll be able to be more efficient in our marketing spend this year, actually spend a little bit less in dollars and still drive good business results. So I think we're going to see some of the benefit of what we did last year. And the focus this year will be more on digital and catalogs, I think, would be the two primary buckets with some other stuff mixed in, but it will be a lot of that.
Got it. And one quick additional question. Can you talk to the performance of tourist and non-tourist locations?
Well, I think that Florida year-to-date has been really, really good for us, really, across the board, I would say, and that's certainly a tourist location. Out West, where there are also tourist locations, we were not as strong quarter to date, but we think that's mostly attributable to weather. If you paid attention to what's happening out there, they've had a very, very rough winter, including even in places like Southern California and even in Hawaii. So as the weather started to turn, as we've said in the prepared remarks, our business has turned, too. And really, what we've seen over the last couple of weeks has been very, very positive. And looking at our business today, we feel quite good about it. We feel very good about the prospects for April with Easter falling 3 weeks later than it did last year. Last year, it was on April 1. This year, it's on April 21. So everything is setting up well for us to have a great April, and we think we can finish the quarter strong. But we did have a tough February that's going to weigh down the results a little bit.
We will now take our next question from Susan Anderson of B. Riley FBR.
I guess just to follow on the last comment, nice to hear that the better-weather states are doing well. I guess my question is how should we think about the comp cadence throughout kind of the year? Should we think about first quarter being a little bit lower with that slow start and then the rest of the 3 quarters picking up a little bit for the brands?
Yes, yes. We expected Q2, 3 and 4 to be stronger comp quarters than Q1.
Great. And then I guess just in terms of the gross margin opportunity left with Lilly and then if you could maybe just kind of go over also the opportunity with Tommy and the gross margin opportunity for the year, that would be great.
Yes, at Tommy, I think we still have room for some minor expansion there. We've had -- we made some good progress on that over the last couple of years in both gross margin, operating income expansion. And obviously, at Tommy, goal is to continue to expand that operating margin. And Lilly, we expect their gross margins to be kind of flattish. And I think we had a reduction of wholesale last year that should stabilize. And we think they've got really good gross margins, and we think that can maintain.
Great. And then I guess one last one, if I could fit it in. I think I heard you talk about some product expansions within Lilly, few bigger sizes. Maybe if you could just expand on any other category expansions. And then also for Tommy, what you're thinking about for the year.
Okay. So with Lilly, we added golf this year. Back in February, we launched our new golf collection and have been very pleased with what we saw there. We're in our second year of swim and tennis, and we're building on those categories. And then as we talked about the dresses, which is sort of our biggest overall category and really the core of Lilly Pulitzer, we are expanding the size range a bit. And that's something that we're always looking at. Obviously, you don't want to build inventory and sizes that you can't sell, but you do want to serve as many guests as you can. And we think we've got a bit of an opportunity there well. And then in our core, where we're so strong in things like dresses and rompers, we think through innovation and just adding newness in innovation in those categories, we can continue to grow there as well. Shifting gears over to Tommy Bahama, we've really invested heavily in our core in men's, and we've been really pleased actually with what we're seeing in that.
So things like the Boracay pant, Susan, that you've heard us talk about a lot, we all love wearing that. We're really building on that franchise. And we've now got a Boracay 5-Pocket. We've got a Boracay jean coming. We've got Boracay just in different fabrications coming, all very exciting and good group growth channels for us. And we've invested in the inventory to support growth there, and that would appear to be paying dividends for us. Things like the Emfielder is another one of those core styles that we think we just can continue to build on that franchise, and then we've introduced a couple of new items this year that we're very excited about that we think are -- can be core items and are proving to be that already. The first is the Newport Coast shirt collection, which are a series of dressier sort of pima cotton, long sleeve, woven performance shirts that are very, very wearable in an office environment as well as out for an evening out and then in more casual settings as well. So it's a real go-to shirt for almost any guy, but it is terrific. And the reaction to that has been great. And again, we've invested in supporting growth in that item. And then just recently, we've introduced the Palm Coast Polo, which is a true performance athleisure-inspired type polo shirt. As you know, that's a big part of the marketplace today. And while we've had a very strong polo business in Tommy Bahama for a number of years, this sort of fills a hole in our merchandising grid in polos that we didn't really have that true technical performance polo. And I've just bought one of these myself. It's unbelievable. It almost have me hoping for August in Atlanta, so I can enjoy all the benefits of that performance. But lots of great things happening in Tommy Bahama. And then in Tommy Bahama women's, we've got the cooler weather through -- weather through this early spring, I think has spring sales a bit. Although we are growing in women's, it has held it back a bit. But we're very excited about some of the upcoming deliveries that we've got that we think are going to offer our guests more choices and more things that might meet our needs, particularly in big categories like dresses and swim coverups and swim and things that we've traditionally done really well in. So we're excited about what we've got going on in product, and the same is true in our smaller brands as well.
Great. Very helpful. Sounds like a great offering for the year. So that's the one...
Yes. We've got a lot of great innovation happening.
We'll take our next question from Steve Marotta, CL King & Associates. [Operator Instructions].
If you could you talk a little bit about gross margin expectations for the year and most specifically for the first quarter and maybe overlay that commentary with what is going on quarter to date as well.
Yes. For the year, we should -- we're probably kind of flattish for the year with Lanier. We're expecting Lanier to make up a tiny bit more of the mix. So we're getting some expansion and Tommy kind of flattish in our other branded businesses, and Lanier will make up a bigger piece of the mix. And Lanier will make up a bigger piece of the mix in the first quarter. You have some things in the fourth quarter that kind of slid forward, so they should have a bigger first quarter year-over-year. So it should -- it might pull our year-over-year gross margins down slightly on a consolidated basis, but we're expecting a little bit of gross margin expansion at Tommy in Q1 also.
Okay. So even with that slower start, that hasn't materially affected your gross margins?
No. It's been more of a top line issue.
Yes. That's right.
And again, with the weather breaking a couple of weeks ago, we certainly are seeing a nice pickup. But we had February and then to early March, where it was softer than we would have liked.
I know you don't guide specifically from a comp standpoint on a quarterly basis, but is it possible that the first quarter comp would be negative?
It's possible that it could be. But I think with what we've seen recently and with the Easter shift and the weather improving, I think we -- I don't think we're going to have a particularly strong comp in the first quarter, but I think we're fairly optimistic that we can be at least slightly positive in the quarter. And again, we're -- if it were just about what we're seeing now, we'd be very ecstatic. It's the February overhang that has caused us to moderate our guidance a little bit.
We'll now take our next question from Rick Patel.
I had a question about e-commerce penetration going forward. And correct me if I'm wrong, but I think your penetration is in the high teens at Tommy and mid 30% range for Lilly already. As digital continues to outperform, what do you see is the right penetration across your various brands? And can you also -- as a follow-up, can you touch on the levers that you can pull to use your digital platforms to drive customers into the stores? Just curious if there's anything to call out in terms of loyalty or rewards programs for the new year.
Yes. So I think that the two channels clearly work in combination, and we're seeing that in spades right now in Tommy Bahama where we're actually seeing more than ever customers coming into their stores that have bought something online, and for whatever reason, size, color, whatever, they want to exchange it. They're coming to stores, and we're actually able to not only fulfill their needs, but actually, in a lot of cases, sell them something else while we're at it. So there's a great sort of symbiotic relationship between the two. We do expect e-commerce, as we mentioned in the prepared remarks, to continue to grow as a percentage of total revenue and to grow at a faster rate than the other channels of distribution.
Lilly's penetration is higher already because they've got all the off-price business that they do through e-commerce. Tommy, a lot of that's happening in their outlet stores, but they were at 36% in '18, up from 34% in '17. And then Tommy was at 18%, up from 16% the previous year. And I've got -- both got good growth plans for this year, too, in e-commerce.
And so on the -- on Lilly e-commerce, I think you're planning it to grow high single digits for the year. Is it safe to assume that the website issues you had, are they behind you at this point? Or do they still remain a work in progress with good visibility?
No. They -- some of them are behind us. Not a lot of them are behind us. I don't think we'll be full -- have them all behind us until the end of the year. So going into 2020, we would expect and hope that we would have the website exactly where we'd like it to be, but we're continuing to chip away. And obviously, we're prioritizing things based on how difficult they are to implement and what the payoff is in trying to maximize the return on our work there and get the most bang as soon as we can. But to be very transparent about it, it will be the full year, I think, before we've got it all worked out. And that's why the growth rate for Lilly e-commerce we've said is in the high singles. I think if the website was everything that we wanted it to be right now, I'm sure we'd be in double-digit growth forecast for Lilly e-com as we are in Tommy.
And just the last one on the partnership with Pottery Barn with Lilly Pulitzer, it remains a focus for the spring. So just curious, is this going to be a longer-term partnership? And can you remind us of the economics of this?
So it's basically a licensing deal, so we had a royalty on what Pottery Barn sells. So it's a very capital efficient sort of arrangement for us. We like it a lot. Our customer loves having the furniture available to her and the home goods available to her. And Pottery Barn is a great partner to be able to do that with, and it certainly has opened our eyes to the reality that, that category exists as a business opportunity for us. I don't want to comment at this point exactly what the future might look like on that beyond this year, but we do believe there's -- it's something that our customer wants to be able to buy. And it's been great to have a partner like Pottery Barn to help fulfill that need.
We'll take our next question from Ross Licero, Telsey Advisory Group.
Just had a question -- I think you mentioned going deeper in some key inventory items. Just wanted to see what your rationale was behind that, if it was getting better pricing. Or were you running out of popular product? Just a little more color there.
Yes. I think certainly we wouldn't do it just to get better pricing. We wouldn't buy more inventory, but that is certainly a side effect that's a pleasant one is that when we do have that greater volume in key items, we can help drive prices down, which has happened in Tommy Bahama. And that's part of where the gross margin expansion is coming from. But it was really just to make sure that we weren't missing demand. So there are 2 parts of making sure that we don't miss demand, and one of it is just owning more inventory and having more of it out in the stores so that when a guy goes in to buy a pair of Boracay pants, we've got his size in stock. And then the other piece of it, which we're working on, we expect to have implemented by the end of the year is as a systems fix, and it's the implementation of an enterprise order management system, which basically, to paraphrase it, allows us to fulfill demand wherever it's occurring, from inventory, wherever it may reside. So it will give us full ability to both see and access inventory anywhere in the system when a guest walks in the store. And the way that we've been thinking about this internally is that when a guest walks into the store and he's got a picture of a shirt, and he says, "Do you have this in a size large, color maybe blue?" We want to be able to say, yes, we have that because we know somewhere in the system, we've got it, and we can get it to him within a day. That's the objective. So buying a little more inventory and addressing the system so that we don't miss sales last year. We definitely miss some demand in some of these key items.
Okay, great. And then just on the Marlin Bar. To clarify, are you guys opening one net new Marlin Bar this year?
No. Two of those are -- there are three opening. 1 is entirely new. Two of them were just standalone retail stores that will be moving within their centers, and then -- or one of them is actually a street location. One is in the center. So they'll be moving and reopening as Marlin Bar, so with a store and the bar with some food offering all in one location.
Okay. Got it. And then given the success that the Marlin Bar has been having, why not accelerate those openings?
It's really just the challenge of finding the right real estate. It's a very different kind of concept that doesn't necessarily fit easily into every retail venue, and it's working on getting the landlords to understand what the requirements are and what we need for it to make a good Marlin Bar location and then finding those. But the pipeline is building. We've got several in the queue already for 2020, and we're looking at more opportunities. So I think we'll be able to -- provided we continue to see positive results and are pleased with what we're seeing, I think, as we get into the 2020 and beyond, there will be an opportunity to pick up the pace a little bit.
There are no further questions. I would now like to turn the call back over to Tom Chubb for any additional or closing remarks.
Thank you very much for being with us today. We appreciate your attention and your support, and we look forward to talking to you again this summer.
This concludes today's call. Thank you for your participation. You may now disconnect.