Good afternoon, everyone, and welcome to the Beyond Meat 2022 Fourth Quarter Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask question. [Operator Instructions] Please also note, today’s event is being recorded. At this time, I’d like to turn the conference call over to Teri Witteman, Chief Legal Officer and Secretary. Please go ahead.

Thank you. Good afternoon and welcome. Joining me on today’s call are Ethan Brown, Founder, President and Chief Executive Officer; and Lubi Kutua, Chief Financial Officer and Treasurer. By now everyone should have access to the company’s fourth quarter and full year 2022 earnings press release filed today after the market close. This document is available in the Investor Relations section of Beyond Meat’s website at www.beyondmeat.com. Before we begin, please note that all the information presented on today’s call is unaudited. And during the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management’s current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Forward-looking statements in the earnings release that we issued today, along with the comments on this call, are made only as of today and will not be updated as actual events unfold. We refer you to today’s press release, the company’s quarterly report on Form 10-Q for the quarter ended October 1, 2022, and the company’s annual report on Form 10-K for the fiscal year ended December 31, 2022, to be filed with the SEC and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Please also note that on today’s call, management may make reference to adjusted EBITDA, which is a non-GAAP financial measure. While we believe this non-GAAP financial measure provides useful information for investors, any reference to this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Please refer to today’s press release for a reconciliation of adjusted EBITDA to its most comparable GAAP measure. And with that, I would like to now turn the call over to Ethan Brown.

Thank you, Teri, and good afternoon, everyone. The fourth quarter of 2022 [ends a] (ph) challenging year for our business and category, one marked by persistently high inflation and trading down by consumers among proteins, slowing economy in key markets and increased competitive activity. Against this backdrop, we took decisive actions to set our business on a course to achieve cash flow positive operations in the second half of 2023, a target that we stand behind today. In order to accomplish this important milestone, as I shared in our last quarterly call, we are transitioning our business from an operating model that prioritize growth above all to one that prioritizes cash flow and sustainable long-term growth, and we are executing well against this goal. While there is still much meaningful work to do, we are pleased to report net revenues toward the high end of our guidance range, along with 14 percentage points of sequential gross margin improvement in the fourth quarter and over $12 million of OpEx reduction versus the third quarter. We are achieving these early wins as we focus on the three pillars of our full force pivot. As a reminder, these are as follows: first, the implementation of lean value streams across our beef, pork and poultry platforms with a laser focus on margin expansion and OpEx reduction; second, an emphasis on cash flow accretive inventory management with a near-term focus on profit dollars versus maximizing percent margin; and third, a focus on opportunities to support near-term growth and consumer trial and adoption, particularly in our core SKUs, appropriately balanced against streamlined activities in support of our most valuable long-term opportunities. In my comments today, I will share more detail on our progress with respect to each of these pillars. I will then turn to the…

Thanks, Ethan. Our fourth quarter results were in line with or ahead of our expectations across the P&L, reflecting the progress our team has demonstrated in executing against our operating plan. We recorded net revenues of $79.9 million in the fourth quarter of 2022, representing a 21% decrease compared to the fourth quarter of 2021. For the full year 2022, this translates to net revenue of $419 million towards the high end of the guidance range of $400 million to $425 million that we provided at Q3 earnings. As we have shared on our recent earnings calls, our top line results primarily continue to reflect soft demand in the plant-based meat category, particularly within our core subcategory of refrigerated. And as Ethan mentioned, we believe persistently high inflation, a slowing economy, increased competition and trading down behavior by consumers among proteins are all negatively impacting growth for our category and our brand, but we do believe this is transitory. In aggregate, total volumes sold during the fourth quarter of 2022 declined 16.9% compared to the year ago period, primarily as a result of the macro factors I just described, while net revenue per pound decreased approximately 4.4% year-over-year. The decrease in net revenue per pound was primarily attributable to strategic but limited price reductions in the U.S. and broader list price reductions in the EU, increased trade discounts and unfavorable changes in foreign exchange rates, partially offset by changes in sales mix. Turning to gross profit. Gross profit in the fourth quarter of 2022 was a loss of $2.9 million or minus 3.7% of net revenues as compared to $14.2 million or 14.1% of net revenues in the year ago period. This result reflected a better-than-expected sequential improvement of just over 14 percentage points versus the prior quarter. On a…

Ladies and gentlemen, at this time, we’ll begin the question-and-answer session. [Operator Instructions] And our first question today comes from Ken Goldman from JPMorgan. Please go ahead with your question.

Hi, thanks so much. I wanted to ask a little bit about the guidance for 2H 2023 sales to grow in that low double-digit range. Ethan, you mentioned there are some headwinds right now in terms of consumer challenges trading down a little bit, maybe some misunderstandings about your product ingredients. I’m not sure if you’re expecting those to kind of reverse a little bit in the back half? I wanted to maybe get a little bit of a better sense of what the key drivers are that maybe underpin that outlook for growth to rebound that way. Thank you.

Yes, sure. Hey, Ken, thank you for the question. I appreciate it and good to hear from you. So I think, first, I want to ground the discussion in the context. If you look at the third and fourth quarter of 2022, those were not massive numbers that we need to lap. So in part, we have a pretty good starting point for growth in the second half of the year. That’s different from, for example, the much larger or higher bar we have to pass over in the second quarter of this year relative to the second quarter of last. But it’s not so much dependent on cleaning up the health narrative or getting consumers not to trade down. There’s more to do with some of the actions that we feel we have more control over. And that seems like the pricing programs that we put in place and are testing now, where we’re seeing very good unit velocity responses and some pretty solid revenue gains in that regard, those tests are very limited, so they’re not showing up in broader SPINS data. The marketing campaigns that we have in place, both at the top of the funnel in terms of our air game and then also down lower in the funnel towards the ground game, that will be coming into fruition across the summer. We feel good about. And then we have some line extensions that I’m personally excited about as well as renovations. So when we talk about renovation, if you look at our beef, pork and poultry platform, as you know, we’ve always tried to disrupt ourselves and replace our own products on the shelf with better products, and we try to do that on an annual basis. And so this year, you’ll see some activity…

Got it. That makes sense. And thank you for that. I guess, if I can ask a quick follow-up to that. It’s great to hear about some of your tests with price are resulting in some strong unit rebounds. I forget the exact words you said. But recently, we’ve seen both price investments on your part and volumes reduced. And I realize, to your point, there will be much easier comparisons in the back half of next year. And don’t want to stick too long in the subject. But what should we be looking for that’s different this time, right, versus the last couple of quarters when you also had some maybe pricing that was down and volume down at the same time because it sounds like you’re requiring volumes to really rebound in the back half of next year. And again, you mentioned some other reasons why too. I just wanted to make kind of parse out what’s different than what we see in the last couple of quarters.

Sure. I mean I think the other piece, if you take in totality, our comments around the year and you look at the first half of the year, and we’re saying, look, that’s going to be down. So there’s a reason for that right now has to do potentially with distribution across the year. We had very strong orders in the latest part of the second quarter last year as people got ready from the 4th July. We’re not expecting that same level of concentrated buying. And so I think that in part automatically gives you some strength coming into the second half of the year. So on your question around pricing measures, this is not really around trade so much. This is around a kind of strategic look at teasing out what happens when the consumer faces a decision to buy animal protein or Beyond Meat with a price delta that is not as significant as it’s been in the past, right? And so we’re doing these target tests, not only sort of more closely around that question versus just a discount, but also in retail segments that we know the consumer is more likely to respond to our brand than in other segments. So there’s a highly focused nature to the pricing tests. And we’re also applying that same discipline and focus around these pricing tests in the Foodservice space, where instead of offering kind of a blanket discount, we’re looking at segments where the consumer is far more interested in our value proposition, and we’ve talked about this at length, but I’ll just cover it very briefly. For folks that are older 40 and older tends to be really around the health message and the benefits they can derive from going Beyond. For folks who are younger, let’s say, still in school age in their 20s and 30s, they are much more receptive to our climate messaging and the climate benefits that we’re able to bring to their consumption choices. And so we’re coupling our pricing with those types of messages for the right consumer in the right demographic.

Got it. Thanks, Ethan.

Sure.

Our next question comes…

I was just going to – I was going to tease Ken about the Eagles, but I’ll do that for the follow-up call. Keep going.

Our next question comes from Peter Galbo from Bank of America. Please go ahead with your question.

Hey, guys. Good afternoon. Thanks for taking the question. Maybe Lubi, just to start as a clarification point, like in the revenue guidance, understanding the differences between first and second half, but just how much of that is the ship in factor from steak? Obviously, I know you’re going to be lapping jerky from last year, but how much contribution are you at least embedding from steak product in 2023?

Yes. I think certainly, steak is going to be a more of a contributor to our revenue growth in 2023, than obviously it was in 2022 because we introduced it pretty late in the year last year. And so it will be a driver, I think, throughout the year. The real driver, I think, of the difference in terms of the revenue cadence, the delivery of revenue for 2023 is related to some of the factors that Ethan talked about, right? So in the near term, we are lapping a stronger first half of 2022. And the category trends, obviously, have been relatively soft in the last several weeks and months. We also, in the first half of 2022, obviously, we had a pretty big launch of our Jerky product. And so we do expect that the decline in revenue that you see in the first half of the year will be obviously relatively - we said mid-teens decline. And then for all of the reasons that Ethan mentioned, we expect the sort of trajectory of the contribution from some of the new products, et cetera, to be much more meaningful in the second half of next year – of this year.

Got it. That’s helpful. And then Ethan, maybe just to follow up on Ken’s question and thinking about more from the cash flow and an inventory standpoint, look, understanding the drawing down inventory makes sense in a harvest mode. But just given if you’re assuming a return to growth in the second half, you’ve drawn down on inventory, how do you kind of thread the needle of making sure that your in-stock rates and your fill rates are up to par with what you need for your retail customers and your foodservice customers, if that is going to be the case of running with kind of leaner inventory? Just would be helpful to get your thoughts there. Thanks guys.

Yes. Sure. That’s a great question. So, I think it gets back to the organization across these value streams, which gives you a lot greater clarity into for each of the pork and poultry, how you’re doing relative to the demand signals you’re getting, it’s just a more manageable set of activities. I think we’ve also reduced the number of large customers that were doing bespoke or novel products for. So it allows us to carry a more common set of inventory across the customer base. And then I think shifting into some of the new business systems we’re using that gives us much greater visibility across our network helps a lot. The consolidation of our manufacturing footprint. As I mentioned, I think, in my remarks, going from kind eight different co-packers the peak in 2022 to 2023 [ph] and then our own internal production process, things just get a lot simpler as you start to implement some of these disciplines. And to major emphasis for our company, the second pillar in our strategy, which is around reducing inventory, the team is doing a great job at it. I think they’re having fun doing it, and we’re pushing ourselves to over the course of the next year move from this growth at all cost model to one where we really start to shine around best-in-class inventory management and to get more in line with companies that are managing their inventory according to a lean discipline. So it’s not without effort. We’ll make mistakes along the way, but we are pretty confident that we can serve a kind of resurgence in demand with a much more efficient inventory and production system.

Great. Thanks guys.

Our next question comes from Robert Moskow from Credit Suisse. Please go with your question.

Thanks. I thought I heard in the prepared remarks some comments about what you intended to do with your revolver in order to provide a source of cash. Can you be more specific about it? And can you tell me, like, does that give you sufficient flexibility that you probably will need during the course of 2023 because you’re still burning and the balance sheet is getting smaller?

Hey Rob, this is Lubi, I’ll take that one. So, we didn’t actually say anything about a revolver in the prepared remarks. We did, at one point, have a revolving credit facility, which we terminated when we did the convertible bond offering. But I think your question really gets to sort of our overall liquidity position, given that we are obviously still – the business is still consuming quite a bit of cash. So look, I think everything that we discussed in our prepared remarks and some of what Ethan was just alluding to kind of speaks to the measures that we are taking to really reduce the rate of cash consumption of the business, right? But we recognize that even with some of the, I think, more – some of the onetime benefits that we believe we’re going to be able to capture as it relates to inventory reduction. Beyond that, we still have a lot of work to do, right? So, we’re not at this point ready to discuss with any real specificity about what the consumption – cash consumption of the business might look like beyond 2023. But it is a focus of ours for long-term to transform this business into one that is a net generator of cash, but there’s still a ways to go before we get there. And I don’t want to speak prematurely about what we will or will not do beyond 2023. And then to the broader, I think this is part of where your question was headed in terms of how we’re thinking about the liquidity position. Our thinking there hasn’t really changed from what we’ve shared on last quarter that we’re very focused on it. We continue to evaluate the various options that are available to us. And if it makes sense for us to do some sort of a raise and put more of a buffer on the balance sheet, we will.

Okay. Maybe one follow-up. Can you give us a sense as to what the drag on the business was in 2022 from plant jerky either in cash or in earnings or something? And what the opportunity might be in 2023 to reduce that drag, maybe that has to do with the contract renegotiation you’re talking about?

Yes, that’s exactly right. I’ll let Lubi give you the specifics on it. But it was not insignificant from an impact on the business. And we’ve taken a lot of activity. I was very involved in this toward the second half of this year to restructure the agreements that we have on production and distribution and things of that nature to make sure that as we move forward, we have more favorable economics around margin, that’s not going to show up necessarily right away, but you can already see some positive movement in that area. So, while I don’t think it’s going to be transformative in terms of the entire business, you are going to see better economics on the jerky business.

Yes. And then, Rob, in terms of the specific numbers, so I don’t have that in front of me. We can certainly follow up off-line on that, and we typically disclose that in our 10-Q, which will be coming out soon. But so also sort of as Ethan mentioned, right, we are focused on improving the economics for the jerky business on a go-forward basis. But at this point in time, we’re just – we’re not ready to get into the specifics, but we will share more information around that in the near future.

Okay. Thank you.

Our next question comes from Jon Andersen from William Blair. Please go ahead with your question.

Thanks for the question. Good afternoon guys. Ethan, I was wondering if you could comment a little about the category. And any – I haven’t heard you talk too much recently about household penetration or kind of repeat by the consumer. And the reason I’m asking is just to try and get a better understanding for where you think the biggest challenges are at this point in terms of bringing more consumers into the category into your franchise? Is it taste? Is it the health perception? Is it price? And what you can do as a category leader going forward to help promote more trial – promote more engagement? [Technical Difficulty]

Okay. No, I got the question. It’s a very good one, and it’s always something I think about a great deal. And you hit on the buzzwords that I use all the time, both internally and externally. This category will win over time on three things. It will win around taste, it will win around a proper understanding of the health benefits that our products provide, it will on price. If you look at any history of innovation in the last 150 years, things move forward with breakthroughs in key product attributes. We’re all thinking about or driving. We’re looking at potentially driving electric vehicles someday because of the improvements that were made possible by the lithium ion battery, right? Cell phones, the same thing with some of the technology advances, et cetera. And so, I don’t read the articles, take all my entire day to do so. But the efforts for that people have made to try to call the category, I find sort of just probably not a productive use of energy. There are things that we can move forward on a daily basis, and that’s what we’re focused on. So all the things you just said, improving the taste, making sure the consumer understands the health benefits, and that’s our work with Stanford. We have a five-year program with the medical school there. And the results, I think I summarized in my comments. Our new project with the American Cancer Society, some other stuff we’ll be announcing later this year in the medical space. And even the history of plant-based protein is one that no one is really bothered to look up in all of this effort to call the category. If you look at the work of the Blue Zones researchers, for example, where they talk…

Great. Thanks, Ethan.

And our next question comes from Adam Samuelson from Goldman Sachs. Please go ahead with your question.

Yes, thank you. Good afternoon, everyone. Maybe clarifying questions, Ethan, in the revenue guidance for 2023, what is the assumption on volume and selling prices? I guess as I think about the goal of reducing inventories where especially that problem is concentrated on the raw material side, driving volume would seem to be the biggest more important lever there. But kind of doing so without price reductions gets more challenging if you’re trying to improve the value propositions to the consumer. So what are you actually assuming for kind of aggregate volume and selling prices within the revenue guidance you laid out?

Yes, so, well, I can’t give specifics on it. I think that if you look at the – I laid out the three pillars that are really the core focus for our strategy, lean value streams and margin expansion and OpEx reduction through those systems. Inventory drawdown and then third, focus on near term growth drivers such as product extensions and renovations and pricing. And so that pricing piece is a big lever for us, as you’ve noted. And we will exercise that in certain markets under certain conditions that are time limited because we want to make sure we’re understanding the impact, right? But to your point, the quickest way to drive through this inventory is just to offer more competitive pricing, move through it. It does a lot to spread some positive momentum through our facilities by increasing throughput and lowering or increasing overhead absorption and things of that nature. So it’s – those levers that I talked about within that third pillar of continuing to look at the pricing programs, getting these line extensions out there and getting some of the renovations out and Lubi if you want to add to that.

Yes. Adam, the only other thing that I would add to that is, when you look at the change in net revenue per pound that we realized in 2022 versus the previous year. Part of that was driven by, we did take pretty broad price reductions in our international business in the EU in particular because we felt that the price point of our products relative to the competitive set there was much wider than we needed it to be. And so we took pretty significant and broad price reduction there. We also had the negative impact of FX in 2022. And so I would say that even though we are running some of these more aggressive pricing programs that we’ve described, I wouldn’t necessarily be looking at the change from 2021 to 2022 as sort of an indicator of what may be to come in 2023.

That’s helpful. And then if I take the aggregate revenue, gross profit or gross margin, OpEx, CapEx guidance that you laid out. It would seem that kind of adjusting for the non-cash items in there [indiscernible] and stock comp in particular, that before kind of working capital release, the cash burn for the company is something on the order of $175 million in 2023. So I mean, is that a, correct and b, kind of if so, what level of working capital release and functional free cash kind of burn would that – would you actually have in 2023? And understanding there’s a cadence in sequencing that you could get to free cash – potentially get to free cash flow positive in the second half if you execute the plan. But in aggregates with the year, kind of what’s the cash burden implied by the operating guidance laid out?

Yes, so Adam, the estimate that you just mentioned over there sounds pretty high. I think we will be substantially below that for the full year. But we will be a net consumer of cash for the full year even though we do have the subjective to the cash flow positive within the second half of next year. And you called out some of the different components or the buildup to that, right? So, we gave you, I think, pretty detailed guidance around revenue, gross margin, OpEx and CapEx. And so, the big lever – some of the big levers there that are not included, obviously there’s the depreciation and stock comp pieces, but inventory or the working capital benefit, you obviously, for us to get to cash flow positive needs to be pretty significant, and that’s what we’re targeting. And so, Ethan mentioned the focus, the level of focus that we’re placing on inventory reduction and some of the new tools that we’ve invested in to help us be much more efficient in that regard. And so, it is an aggressive target, but we do think we have a pathway to get there.

Okay. I appreciate that call and I’ll pass on. Thanks.

And our next question comes from Michael Lavery from Piper Sandler. Please go ahead with your question.

Thank you. Good evening. Just wanted to touch on the brand spending, that’s the key to pricing power or just competitive dynamics and lower…

Sorry, can you repeat the word? We didn’t catch the word.

Just the brands, the marketing and brand spending.

Brands. Got it. Thanks.

And I think you’ve called out in the 2020 – 2022 results how some lower marketing spending was one of the components of the bill to your results. Can you just give a sense of how you’re thinking about where that goes in 2023? And how to think about just making sure that you build the brand equity and try to make sure that that’s not part of the cost cuts?

Yes. No, that’s a great question. So I think just in terms of the timing of spend, I think you see us during the first half of the year, emphasize some marketing spend for various launches we’re doing and things of that nature. But I would say that the difference between – we had a much broader marketing platform in the past that maybe was less refined in terms of the most receptive consumers for our products, and that made sense for the time. But as we move forward and again, it gets back to this kind of third pillar and the strategy, focusing on near-term wins with consumers that are most receptive to our value proposition, it gives us the ability to market much more efficiently. I mean I’ll give you an example, which is kind of making up the civics here, but people who are receiving statins, right? I mean they should know about our products, and they should understand the relative health benefits of the Beyond Steak versus animal protein steak right? And so can we spend efficiently in that direction? Younger people who are focused on climate and the environment, how do we reach them as they come into the consumer set that’s going to be shopping in grocery. So we’re doing a lot deeper dives in those type of areas to understand how to maximize each dollar we’re spending. With our QSR, our strategic partners, some really good activity going on there. I think some of the marketing that they’re doing, particularly in Europe, is really actually brilliant. I mean it touches on the kind of generational change that’s underway here. And so we’re happy to be co-funding that. And if you look just by the way, while I’m Europe, we didn’t really get much questions on that. But I want to emphasize some of the transition that’s occurring in Europe around the consumer. If you look at a country like Germany, over the last 10 years, there’s been a remarkable reduction in animal protein consumption on a per capita basis. And I think that bodes very well for what we’ll see here in the United States at some point as people begin to understand better the health and climate benefits of what we’re doing. And so in our marketing, reaching those consumers, we can do that more efficiently than we have in the past, and we’re looking forward to doing that.

That’s helpful color. And can I just follow-up on the part of the release where you give the distribution points by channel. I appreciate the transparency calling out how it looks, excluding Turkey, just because that’s such a big jump in the U.S. in 2022. But slip down just a bit sequentially from Q1 to at least 4Q at 34,000 versus 35,000, it’s not a big drop, obviously, and I’m sure there’s some rounding that maybe it’s even less than it looks. But what’s driving that down? And with your velocity is lower, even if you’ve got roughly constant distribution points and sales down around 20%, your velocity is obviously are off. Do you have risk of de-listings, or could that number get lower?

Yes. From a – in terms of total distribution points, I think where we’ve seen a little bit of a loss of just number of doors has been in the sort of foodservice channels. And in international, in particular, I think there was a little bit of a reduction there. And then – sorry, can you repeat the second part of your question?

Sure. Yes. And it’s – I mean, maybe these numbers aren’t accurate, but the international foodservice had ticked up. That’s also coincidentally 34,000. But just looking at the sales trends and your conversations with the retail trade, do you get the sense of more de-listings that could come? What – how do we measure the risk of how that looks going forward?

Yes, we haven’t, I mean – no, we haven’t – that certainly hasn’t registered. I talk with our sales team every day. And I haven’t heard concerns around that. The only kind of area there that, that ever comes up is in areas of shelf life, where we may not have the right shelf life for a particular ambient case at a particular retailer or something like that. But no, we haven’t seen that. And if you look at – if you kind of break into the data set for Beyond in retail, there has been obviously some impact in the fresh case. But in the frozen, right, we are seeing pretty good growth. And so when I meet with retailers, I was just with the largest one in the U.S. that we deal with outside the big box area, and I’m very pleased with our performance and looking for what else can we bring them. I think they see the short-term nature of this disruption as clearly as we do. And so no, I don’t see any sort of dramatic correction in that area, no.

Okay. Thanks for the color. That’s great. Thanks.

Sure.

And our next question comes from Peter Saleh from BTIG. Please go ahead with your question.

Great. Thanks. Ethan, given the declines in sales in the back end of the year and expected declines in the front end of 2023, have you reconsidered your position on private label?

Not really. I think it’s – I mean I think about it gets to – if you go through the three things that I’m always focused on relative to consumer taste, health and price, where my mind goes in that area is around price. That what products can I offer and aggressively price them, and maybe we stride our brand a little bit and we create higher cost items and lower cost items. But no, for private label. I mean so much what we’re doing right now is about efficiency of our production system. And so introducing a whole another set of activities would be the wrong idea right now for us, I think.

Great. And just curious on the price in the trials. I think you said that you’ve done some tests. Just trying to understand how confident you guys are in some of these tests that they’re actually, you’re seeing some repeat purchases and not just driving some trial with some of these price tests?

Yes. Some of them – they’re small, so they may not be selling up as much as they will. But they’ve been going on for a while. And so we do have some data there that suggest that it’s not just kind of onetime thing, it will be whether it helps to grow the category. That’s the biggest question that I’m looking to answer that will bring new consumers in that before, I saw a price as a major barrier. And again, there’s a lot of distortion in the channel with very high rates of inflation, changing consumer consumption habits, but my belief is that as we continue to get taste right and continue to get the health message right and then reduce that price barrier, it will grow the category.

Yes. And Peter, maybe just to add to that a little bit. When we look at our panel data metrics for the most recent quarter across buying rate purchase frequency and repeat rates, those were all up sequentially relative to Q3. So there’s nothing that we’re seeing yet in the data that’s necessarily showing any sort of anomaly in terms of repeat rates or things like that.

Great. Thank you very much.

Sure.

And at this time, we will end today’s question-and-answer session. I’d like to turn the floor back over to management for any closing remarks.

I’d say thanks for the questions today. Thanks for joining. We set a change in direction in the second half of last year. And I think this quarter; you’re seeing the initial results of that. And we’re sharpening it every quarter. I think you’ll continue to see progress across this. The management team we have in place is a really strong one. We’re working well together and feel really optimistic about where we’re going. Part of the range that we gave is an effort by me to make sure the team is not focused on chasing growth to the point where some of these other more important things around, expanding our margin and keeping operating expense where it needs to be and driving through our inventory, those are all the things that I want us focused on right now, and they’re doing a great job doing it. And I look forward to coming back next quarter, talking more about it. Thanks.

Ladies and gentlemen, with that, we’ll conclude today’s conference call and presentation. We do thank you for joining. You may now disconnect your lines.