Ladies and gentlemen, thank you for standing by, and welcome to The Buckle's Second Quarter Earnings Release Call. [Operator Instructions] And as a reminder, today's conference call is being recorded. Members of The Buckle's management on the call today are Dennis Nelson, President and CEO; Tom Heacock, Vice President of Finance, Treasurer and CFO; Kelli Molczyk, Vice President of Women's Merchandising; Bob Carlberg, Senior Vice President of Men's Merchandising; and Kyle Hanson, Vice President, General Counsel and Corporate Secretary. As they review the operating results for the second quarter, which ended July 29, 2017, they would like to reiterate their policy of not giving future sales or earnings guidance and have the following safe harbor statement. All forward-looking statements made on the company involve material risks and uncertainties and are subject to change based on factors which may be beyond the company's control. Accordingly, the company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Such factors include, but are not limited to those described in the company's filings with the Securities and Exchange Commission. The company does not undertake to publicly update or revise any forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. Additionally, the company does not authorize the reproduction or dissemination of transcripts or audio recordings of the company's quarterly conference calls without its expressed written consent. Any unauthorized reproduction or recordings of the call should not be relied upon as the information may be inaccurate. I would now like to turn the conference over to Mr. Tom Heacock. Please go ahead.

Good morning, and thanks for joining us this morning. Our August 17, 2017 press release report that net income for the 13-week second quarter ended July 29, 2017, was $11.5 million or $0.24 per share on a diluted basis compared with net income of $15.5 million or $0.32 per share on a diluted basis for the prior year 13-week second quarter, which ended on July 30, 2016. Year-to-date net income for the 26-week period ended July 29, 2017 was $27.8 million or $0.57 per share on a diluted basis compared with net income of $38.6 million or $0.80 per share on a diluted basis for the prior year 26-week period ended July 30, 2016. Net sales for the 13-week second quarter decreased 7.8% to $195.7 million compared to net sales of $212.2 million for the prior year 13-week second quarter. Comparable store sales for the quarter were down 7.7% in comparison to the same 13-week period in the prior year, and online sales decreased 4.5% to $19.5 million. Year-to-date net sales decreased 10.5% to $407.9 million for the 26-week fiscal period ended July 29, 2017, compared to net sales of $455.7 million for the prior year 26-week fiscal period ended July 30, 2016. Comparable store sales for the year-to-date period were down 10.3% in comparison to the same 26-week period in the prior year, and online sales decreased 6% to $41.3 million. For the quarter, UPT has increased approximately 1.5%, the average unit retail decreased approximately 6% and the average transaction value decreased approximately 5%. For the year-to-date period, UPTs increased approximately 2%, the average unit retail decreased approximately 6.5% and the average transaction value decreased approximately 4.5%. Gross margin for the quarter was 37.9%, up approximately 20 basis points from 37.7% for the second quarter last year. The increase…

Thanks, Tom. Good morning, everybody. I'd like to start by highlighting the performance of our women's merchandise categories for the quarter. Women's merchandise sales for the quarter were down approximately 13.5%. Average denim price point decreased from $87 in the second quarter of fiscal 2016 to $81.25 in the second quarter of fiscal 2017. For the quarter, our women's business was approximately 49.5% of net sales compared to 51.5% last year, and average women's price point decreased approximately 6.5% from $43.40 to $40.50. Women's overall price points were down as a result of our assortment in higher dollar branded product being off from a year ago in our denim and footwear categories. In regards to denim, our total denim inventory as well as our inventory in markdown denim are down from a year ago. In addition to the inventory changes, we are faced with the shift of our existing inventory to more entry-level price points. Entry level price points in denim ranging from around $40 to $70 increased as a percentage of our total denim assortment with our higher-priced branded mix of denim being down as a percentage of our total denim inventory close to 50%. We continue to see nice turns on our higher-priced denims starting around $80 and we'll have a bigger presence in that category moving into Q3 compared to the second quarter. Positive responses have been towards broadening our selection in different denim fits and bottom openings, as well as offering unique details. We've also expanded our selection on offering in our private label brands like DayTrip and Buckle Black. For footwear, we continue to perform well with spring-type products further into Q2 than a year ago. We're seeing a nice response to footwear under $50 as well as better branded products in certain markets. With…

Thanks, Kelli. Good morning, everybody. Men's merchandise sales for the quarter were down approximately 5.5%, average denim price points decreased from $92.80 in the second quarter of fiscal 2016 to $87.55 in the second quarter of fiscal 2017. For the quarter, our men's business was approximately 50.5% of net sales compared to 48.5% last year, and average men's price point decreased approximately 5% from $50.25 to $47.85. And to add color to the numbers: Overall, men's held up well in a continuing difficult environment. Inventories are well online and most of the dollar lost came from targeted lower retails. Denim, overall, has a good response to the new brands, fabrics and the aforementioned retail. So we see denim price points to continue slightly down in Q3 as they have been. Introduced these and continue to see expansion in our brands, Departwest and Outpost in all categories with BKE continuing to do well. The fishing themes this spring and summer and screened print t-shirts have been good. The button-fronts had been in the down cycle for a few years, but new fashion prints and solids are starting to impact our overall business there. As Kelli mentioned, the true summer categories were better in Q2 as expected with our guests in a buy now, wear now mode. As part of that trend, we move sweaters and outerwear deliveries out to mid-September to focus on lighter weight and easier to transition product during early Q3. Strong accessory categories continue to be hats, sunglasses, both in our premium Oakley brand and also in our under $15 price points, with our fragrance cologne business growing again. On the marketing front, we continued our normal campaigns with us just finishing our 50 anniversary event, which was well received by our team and guests. We tried the new concept of getting our great sales people in front of new guests by putting a booth up that we best -- with some of our best partners. The country event drew 130,000 people, letting more people experience our great service and product. Now going back to kind of the overall numbers. On a combined basis, accessory sales for the quarter were down approximately 8.5%, while footwear sales were approximately up 1%. These 2 categories accounted for approximately 10.5% and 6.5%, respectively, in second quarter net sales, which compares to 10% and 5.5% for each in the second quarter of fiscal 2016. Average accessory price points are down just slightly and average footwear price points were down approximately 3.5%. Again, on a combined basis for the quarter, denim accounted for approximately 32% of sales and tops accounted for approximately 34%, which compares to 33.5% and 32.5% for each in the second quarter of fiscal 2016. Our private-label business was up slightly as a percentage of net sales and represented approximately 32.5% of sales. And with that we welcome your questions, thanks for being here.

[Operator Instructions] And our first question will come from the line of Simeon Siegel with Nomura Instinet.

This is Julie Kim, in for Simeon. So it looks like this quarter saw online continue to decline. Can you give any color on what drove that in the quarter and if you expect continued deceleration moving forward?

Julie, this is Dennis. I believe the online in the second quarter outperformed the stores slightly. The lower retail price points and the reduced inventory in the company probably had some effect on there. We continue not to be promotional online and I think that has the main effect of the results.

Great. And do you expect any changes in that strategy moving forward or do you think that that's working well with you in supplement to the stores currently?

So we're continuing to review the marketing as well as the position of online and would expect to make improvements on there, so we would expect to do better in the future.

Our next question will come from the line of Tiffany Kanaga with Deutsche Bank.

Would you dig into the drivers behind the merchandise margin increase in the quarter, excluding the benefit of loyalty, and if you think you're positioned to see further year-over-year increases in the back half of the year? And additionally, what's driving the increase in markdown inventory and how does that compare to how you plan the inventory levels heading into the second quarter?

On the markdown inventory, that's more a timing issue of when we've marked things down compared to the year ago. We feel very comfortable with our inventory level and do not see any changes to our original plans of continuing to provide new selection for the stores. And the first part of that question again, Tiffany, please.

Yes. Just hoping to get a little more color around the drivers behind the merchandise margin increase in the quarter, not counting the loyalty shift.

I believe the kind of an increase in some of our private label, improved initial margins and sell-throughs and we feel good about our selection as we move into the third quarter. So we would be positive on our inventory at this point.

And if I could ask a follow-up question. So we were surprised to see selling dollars up in the quarter for the first time in 2 years, I know you touched on it in the prepared remarks. But can you dig further into what drove the increase and how you're thinking about that line item ahead?

I think on the selling expense, like we've called out, there were really 2 places where we saw increases. It was store level payroll, and I think we commented on the first quarter call that that's something that we review with sales being down, just making sure that we're continuing to watch this close as we can but continuing to invest in our people. And the people are really key to our success and they're going to be who drives the business, and so we want to take care of those people and make sure that we retain that talent to be able to move the business forward. So I think that's strategic as how we're investing in people and we'll continue to watch it and be as smart as we can with payroll. But again, we want to invest and take care of our people. The second area we called out was marketing spend. I think that's, again, a continued thing of making sure that we're investing and driving traffic to the stores, driving traffic to the website, driving the business, but being as smart as we can. So it's really across a lot of different categories and included loyalty as well, and our loyalty rewarded -- related to our private label credit cards, so I think the increase in marketing was pretty consistent first quarter and second quarter and probably would continue.

Our next question comes from the line of Carlton Getz with Winter Harbor.

A few questions on the larger macro sense. Looking at the balance sheet as of the end of the quarter there's, I think you mentioned $262 million plus or minus $1 million on the balance sheet right now. And relative to competitors, that's a significantly higher percentage of revenues than most similar companies and about 40% of the company's market cap right now as of today. So we are curious about the company's justification for holding that level of cash and investments in the company on an ongoing basis, despite the previous record of relatively strong dividend and special dividend.

Well, that's something we review at each board meeting and we'll continue to do so. We found it very advantageous to play from a very strong balance sheet in this type of market and with retail going through transition. So it works well with our business partners as far as landlords, vendors and such, to know they have a very strong and experienced retailer to work with. And so -- but that is something that the board will continue to review at each meeting.

Okay. And then relative to SG&A, realizing the comments earlier about investing in employees and staff and the marketing. At the same time, that number has essentially been unchanged since 2013, 2012, in terms of cost, while revenues obviously have declined quite a bit. Is the company's plan to continue at roughly that rate in the light of the revenue declines? Or is that something that's being closely looked at in terms of percentage and the growth in percentage of revenues over the last 5 years?

Well, as all parts of our business, we continue to review and look at our expenses and such. And I think part of that is in the -- a few years ago, we were not spending extra even though we had -- the business was at a high point. It takes a certain level of investment and expense to maintain the quality of service in our stores and to manage the business and also with some increased IT investments in people and software has added to it. So in a combination, I think we are, overall, looking at what's good for the business over a longer period of time and not just looking at it by quarter.

Our next question comes from Ujjval Dave with Ujjval Investments.

This is Ujjval from Ujjval Investments. First of all, congratulations to Tom for the promotion to the CFO. I have a couple of questions, so I will ask 2 and then go back to the queue. First is, I noticed that you guys have been cutting the costs for selected merchandise and there's more markdown and everything, and that must be playing the role towards -- come down toward the quarter. Now since quarter dropped is nearly 7.8%, would you be able to give the breakdown how much is due to price decline and how much is due to transaction volume decline during the quarter?

I think we gave that in the prepared remarks. And for the quarter, we commented out on those transaction metrics and the average transaction value was down about 5% with the average price points for the quarter being down 6%. So a good chunk of the comp is related to -- from the transaction value and actually price point.

Okay. So a little -- that seems to be doing better compared to previous months, it looks like. I mean even though it's negative, it's still an improvement. Should we characterize it that way?

As far as transactions?

No, the come down. So it's not people are not buying stuff, people are buying stuff, but you guys are lowering the price points. So the transaction, overall, it's -- would you consider that as an improvement?

I would say so. I think, I mean, like Bob and Kelli called out, we're seeing a lot of positive trends in some of the categories, but continue to face the headwinds of lower price points as we've changed -- the fashion changed some of the brands. And that was the tailwind a couple of years ago as price points, and especially in denim were going up and now they're moderating a little bit. And so that has been the pressure and hopefully that eases as we move forward.

Yes. I mean, we have seen some 23%, 24% come down so probably, hopefully, it's a positive sign. Now it appears that you have been spending more on Facebook, Instagram and probably other social networking sites. How do you measure the effectiveness of such marketing spend and how it has been working out so far?

I think we view the return on investment as we do e-mails and look at our different social media investments, and some of it is testing with the Instagrams and different points. So we're trying to get better handle on that and we'll continue to do so. We feel we have room for improvement in the social marketing, and so we will be continuing to work on that particular part of the business.

But are you noticing that you have been getting more customers because of that approach? Or there is no clear way to measure that?

That's difficult to measure. I would say, it would be in a small way at this point.

Our next question comes from the line of Steve Marotta with CL King & Associates.

You mentioned earlier that the total markdown inventory as a percent of the total is up year-over-year. Could you quantify those proportions in each year?

I don't know that we have a breakout. And again, like Dennis commented, it's really a function of timing so it's just as of that point in time. And to the extent if we take markdowns a little bit earlier, one year or another, it affects that number, but we've never broken that out in terms of what it is or how much it is. But it is higher year-over-year in terms of markdown inventory.

Okay. And my only follow-up question is what online IT initiatives are scheduled for implementation right now and how do you see those rolling out, please?

We've been testing the ship-to-store pickup, and we expect to have that all stores by the end of September. That's probably the newest one. We continue to work with our mobile app to generate awareness of new product in our stores and help set up appointments and they can reserve product on the app to come in and pick up. So we'd like to be moving a little faster, but that's kind of the process right now.

Our next question comes from the line of [ Boris Suvorov ] with [ BOVA ].

First of all, it's actually -- it's really great to see that you guys keep adding new stores and remodeling existing ones, because this is much better in comparison to some of your competition such as Macy's and JCPenney that's closing stores. And my question is actually related to sell the stores. How big of revenue impact do you see in your stores that are nearby to Macy's and JCPenney stores that have gone out of business and clearance sales?

I don't know that we have a good read on the effect of their store closings. I mean, both of those stores are, for the most part, pretty promotional and our product mix doesn't really overlap with Penney's at all and very little with Macy's, so I would say it's kind of a neutral effect. In certain markets, we might gain a little and in some markets it probably has no effect.

So it sounds like -- can you come up with any competition that has similar store closures that always have an impact on your revenue?

It kind of varies by market. I mean, there are certain West Coast vendors that if they leave then our men's T-shirt, short business might pick up in the season. A lot of these stores that are closing have been pretty weak or not doing a lot of business or pretty promotional. Most of our guests are looking for new fashion, quality, a lot of newness, newness in style and fit is very important and the quality of the denim. So most of that, our progress comes from just guests getting to know us, that they can shop in our stores and see what great service and the variety of selection and fits we have for them.

Got it. I see. So is it fair to say that the decline in revenues is mostly related to like general condition of retail in the United States?

Yes. For the most part, I'd say yes.

Our next question comes from the line of Mark Harris with Harris & Associates.

As far as -- can you speak a little a bit about the decline of earnings per share year-over-year in relationship to possibly share repurchases or just a sense of what kind of strategy you are going to take moving forward to maybe improve that number? And also, is the dividend and special dividends safe as far as with earnings per share declining year-over-year?

I mean, that's something in both areas we just review on a continuing business -- or basis and it's kind of futuristic, so I have no comment on that.

We'll go to the line of Kyle Kavanaugh with Palisade Capital.

I have a few questions. So the first one, could you just explain what the professional fees are?

A combination of things and then some of that was related to the data incident that we had and disclosed during the quarter.

Okay. Got you. And my other question is on leases. Could you describe kind of what's going on with your leases? Are you renegotiating everything that comes up every year? Are you getting lower? Are you getting better pricing on leases?

Yes. I mean, we've been reviewing our leases hard for several years now, knowing the change of the mall landscape and what's going on. And I think this last year, we've seen landlords -- they kind of understand what's going on in retail and the difficulty and they seem very open to work with us. And over last couple of years, we're renewed a lot of our leases, some are still month-to-month, year-to-year leases. And so we've had good relationships. They know they have a quality tenant that offers a lot as well as a solid balance sheet to them, and so it's worked out very well for us on our renewals and future leases.

Are you changing locations within the malls ever? And are you getting better locations in the malls?

Yes. On occasion, those come up now. But over the last 10 years, I think we've repositioned what spaces we needed to and we have a lot of prime spaces to begin with, so it's more or less just getting the renewals. And if we need to update our stores to a small amount where 7, 10 years ago, we were doing a lot of full remodels and there's not as many of those needed. It's more smaller remodel updates for our existing stores.

I don't know if you can answer this. But with better leases, could you leverage a flat comp? Could you leverage a minus 1 comp now?

Yes. In certain places that has the potential to, yes.

Okay. And then I wanted to ask the share buyback dividend question in a different way. Just on a purely math point of view and with the stock where it is, does share buybacks make more sense than the dividend at this point?

I mean there's -- I'm not -- I haven't studied that to any extent at this point. But that is -- like we've said before, that will be something we continue to review.

Okay. And then 1 just big macro question. I'm curious about your view on -- and I know you might not have any better visuals than anybody else, but you are closer to it in terms of mall traffic. I mean, do you see any stabilization in mall traffic in the near term at all?

Well, I think in certain markets there's malls that are offering a good experience and good restaurants and some entertainment. And so in certain markets I think, especially if the economy is good, then I think you'll see that level out and maybe progress a little bit. In other markets, it's going to be important to be a destination, and that's the way we've tried to set up our business and our stores is making those guests connects in a lot of appointments and personal service where I think we see guests coming to see us and maybe they're not shopping the mall in total. So I think it will be a combination of that going forward.

Our next question will come from the line of John Deysher with Pinnacle.

I was just curious, we're fairly new shareholders, so this is probably a basic question. But the decline in the denim category over the last few years, is that in your mind primarily from online competition or just a decline in demand for the denim product?

Well, I think the denim demand had some decline with the athleisure knits becoming popular. But in our case also, we were able to maximize the higher-priced denim and the detail and what some people call the bling denim on certain styles and dominate and grow that business substantially. And now that business is -- there's still business there at a different level, but now the fashion details have gone to price points that are probably, in general, $50 to $70 with detail and competition. So that's what's bringing down our total price points in the business and we've adjusted I think pretty well to that, but a challenge when you're selling $70, $80 jeans compared to $120 to $150 in previous years. It's just another cycle in the retail fashion trend and you just have to kind of deal with it and work for what's next on the steps.

Okay. And so as the average sales prices have come down, you're more vulnerable to online competition, it sounds like?

Yes. I mean there's online competition, but it's for -- I don't know that it really affects the new styles and fits and such on there. So there's certainly some competition, but it's not totally for that reason.

Okay. So Amazon and Jet and those people are a threat to you or not so much in your denim category?

I think there's always the risk of business that they can take on that. But what we do is, with our private label brands and as well as our national brands, as we work on a lot of exclusive styles and fits, and so we offer something, for the most part, that they would not offer and we try to be ahead of the trends and what's going in the marketplace. And then the outfitting that our teams do in our stores is excellent as far as not only getting them the right fit, but then put the outfit together as well. So that's the key to our business.

Okay. That makes sense. And I guess, finally, I took a look at some of the websites of your brands and a lot of them have a direct to consumer link, and I'm just wondering if that's a new phenomenon in terms of vendors going direct or has that been in existence? Or how do you view that exactly, vendors going direct?

Yes. Well, I mean, there's some that do but a lot of them treasure our business very much and we work with them and good partners. So even if they're direct to the consumer and they would not [ offer ] our exclusive styles online. And so here, again, we've had a lot of 20-plus years of developing exclusive and special products in our stores because we've always had people who are looking to carry the same brands we do and just try to offer it at a lower price. So that's not brand new, it's just being done differently now. And so we continue to try to give our guests something new each season and not just go back to the same thing.

We have a follow-up from the line of Tiffany Kanaga with Deutsche Bank.

I just wanted to ask much bigger picture. Do you see any requirement for any major shifts in strategy from where we are today in order to get back to positive comp territory and earnings growth? Or do you think you can eventually drive growth without any big changes and instead continuing to work along the lines of shifting the mix to lower price points but keeping the same merchandising and store footprint, online platform, et cetera?

Well, I think a lot of the things we do to change and improve are somewhat subtle or happened -- kind of evolve and they're not just overnight changes. As we mentioned, not only the higher-priced denim, but we were selling more boots and leather boots, footwear in the last couple of years, and those were much higher price points. And now, as Kelli mentioned earlier, our price points, a lot them are under $50 that are selling well. So as cycles change, we adapt to that and offer our guests what they're looking for not only in style but price points. And as the fashions and the products change and evolve, I would guess there'll be different qualities and fabrics that there'll be some higher price points at some time. But we're always looking for new categories and brands and offer in the selection not only of variety of price points but lifestyles, and our footwear business has been good and has grown over the last few years. So we think improving on what we're doing and continuing to look for change will benefit us well, and I guess that would be our approach.

We have a follow-up from the line of Carlton Getz with Winter Harbor.

Just a couple that touched on a couple of the earlier questions and hopefully, expand on this a little. Relative to the denim, which has driven sales for quite some time, there've been some indications recently that the athleisure trend may be peaking or petering out a little and denim is coming back in somewhat into fashion. You touched a little on the trend over the course of the quarter, but I was curious to know if you've seen any pick up in that relative to what it's been before as we enter the back-to-school season?

Do you have the second quarter results on the units? Do you remember what those...

For factory?

Denim. The -- I mean the men's denim has been very good and stabilized. On the ladies side, we have brought down the inventory substantially, both in total inventory is down and markdown denim is down, and so we're trying to flow the product and the newness. So at this point, we can't comment that we've seen a change in the ladies.

Sure. And then just on the format question and the macro change. What has Buckle's thinking been recently about sticking with the mall-based concept versus looking at the possibility of stores that are not based in the mall-type setting. Has that been something that's been on the company's radar?

Yes. I think we've always looked at not just malls but what's the best shopping center or shopping area in each market. So the majority of our stores are in malls. We do have some stores in lifestyle centers. One of our remodels this year went to a strip center with some other tenants that -- that was a new development instead of staying in the mall, so we review each situation of what is the best long term for us in these markets. So we're not opposed to moving out of malls, but in a lot of cases, in the markets we're in, they're still the best shopping center for that particular community.

We will follow-up from the line of Ujjval Dave from Ujjval Investments.

I think most of my questions have been answered, but I just want to extend more on that. So on the calls, Dennis mentioned that by December, you are trying to rollout pick up from the store, you can order online and pick up from the store. Is that a confirmed thing? Because I think earlier it was planned in spring or summer then fall and now it's going to the -- towards December. So I just want to make sure that, that is the actual confirmed date?

Yes. We see no reason that won't be in effect by the end of September. I think there was hope that we would be able to maybe do that sooner, but I don't believe we had a confirmation date on that before.

Okay. Yes, that's a pretty good news for customers that you are meeting midway. In the early question by somebody, you mentioned that you guys have lease renewal that you guys negotiate annual basis rents, monthly basis when the leases are month-to-month. But the leases which are long term, do you still negotiate midterm or only during the renewal time you take the opportunity?

Not sure I understood the question.

For renegotiating the rates, do you guys renegotiate the rates in the midterm for the lease, during the middle of the lease term?

I would say if you're in the middle of the lease it would be difficult or there might be some reasons to do that. But in -- we also have situations where after a certain period of time, we have some kick-out options, which give you the option to renew or negotiate the rate as well. So I think we're pretty well positioned in the majority of our leases on this and we have a lot of great relationships with a lot of our key landlords, so things work out pretty well in most cases.

Okay. Now as you might be knowing, people are going to the Amazon as a preferred place to do their shopping. And if I understand right, most of your things are exclusive. So of course, Buckle brand is your proprietary brand, but even for the private label you guys go for the very exclusive merchandise. And I believe you guys have tried this approach in the past, but are you guys -- what are the talks on selling Buckle product on Amazon, since that is not going to be -- the product won't be competed out by other sellers, so you are the exclusive seller, what are your talks on that? Why that approach hasn't been taken lately or what was your past experience on that?

Well, we find the expense of selling on Amazon that we don't feel is necessary. And we feel that exclusive product in our stores and in our online, when the guests are familiar with it, will drive the business without Amazon. So at this time, we have no plans to work with them.

To your credit, the merchandise you guys have been having are amazing quality. I have done -- that similar survey I have done, I have visited various forums and the consistent theme is people are very pleased with The Buckle products. And when your merchandise is so good and there are loyal customers out there. I think only thing which is missing out is people are not coming to the mall, your online store -- online purchase is expensive because there is no free shipping and people are moving more on Amazon and few other online retailers, online places. So I think if you can meet them there and make it easy for purchase there, it would be a viable option. But of course, you need to consider the cost and the margin loss on that front. Just a comment on that. Now as far as the Board of Director is concerned, I've been told that there will be some new nomination, probably younger board member since most of the people are quite -- they are there for many years and overall the board is having a higher age, so is there any update on any new nomination on the Board of Directors?

Not at this time. And I don't recall making comments on the board or changes. But at this time, we have no comments.

Okay. Well, the comment has been made on the one-on-one call we had, I think after 2017, that I've been told that there is going to be some shuffling, but okay. So I don't have any further questions.

[Operator Instructions]

As we come to the top hour, if there's no further questions, we'd like to thank everyone for your participation today and we'll wrap it up, so thank you very much.

Thank you. And ladies and gentlemen, today's conference call will be available for replay after 11:00 a.m. today until midnight, August 31. You may access the AT&T TeleConference Replay System by dialing 1 (800) 475-6701 and entering the access code of 428167. International participants may dial (320) 365-3844. That does conclude your conference call for today. Thank you for your participation and for using AT&T Executive TeleConference Service. You may now disconnect.