Good afternoon, ladies and gentlemen and welcome to the Columbia Sportswear First Quarter 2022 Financial Results Conference Call. At this time, all participants have been placed on a listen-only mode. And we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Andrew. Sir, the floor is yours.

Good afternoon, and thank you for joining us to discuss Columbia Sportswear Company’s first quarter results. In addition to the earnings release, we furnished an 8-K containing a detailed CFO commentary and financial review presentation explaining our results. This document is also available on our Investor Relations website, investor.columbia.com. With me today on the call are Chairman, President and Chief Executive Officer, Tim Boyle; Executive Vice President and Chief Financial Officer, Jim Swanson; and Executive Vice President and Chief Administrative Officer, Peter Bragdon. This conference call will contain forward-looking statements regarding Columbia's expectations, anticipations or beliefs about the future. These statements are expressed in good faith and are believed to have a reasonable basis. However, each forward-looking statement is subject to many risks and uncertainties, and actual results may differ materially from what is projected. Many of these risks and uncertainties are described in Columbia's SEC filings. We caution that forward-looking statements are inherently less reliable than historical information. We do not undertake any duty to update any of the forward-looking statements after the date of this conference call to conform the forward-looking statements to actual results or changes in our expectations. I'd also like to point out that during the call, we may reference certain non-GAAP financial measures, including constant currency net sales. For further information about non-GAAP financial measures and results, including a reconciliation of GAAP to non-GAAP measures and an explanation of management's rationale for referencing these non-GAAP measures, please refer to the supplemental financial information section and financial tables included in our first quarter 2022 earnings release and the appendix of our CFO commentary and financial review. Following our prepared remarks, we will host a Q&A period during which we will limit each caller to two questions, so we can get to everyone by the end of the hour. Now I'll turn the call over to Tim.

Thanks, Andrew, and good afternoon. I hope everyone is well. Before reviewing our financial performance, I'd like to take a moment to focus on the Russian government's tragic and unjustified invasion of Ukraine. Our hearts go out to the people of Ukraine and those impacted by this humanitarian crisis. Since the invasion, we have made it a priority to work with multiple aid organizations to deliver products and other support to refugees from Ukraine, as well as displaced persons within Ukraine. We have also matched all employee donations to non-profits delivering humanitarian aid. Columbia Sportswear does not have any direct operations in Russia and has operated in that market through a contract with a third party international distributor on an advanced order basis. During the first quarter, we paused taking any new orders from this distributor. Turning to our financial performance in the quarter. 2022 is off to a great start. First quarter net sales increased 22% year-over-year and diluted earnings per share increased 23%. Our strong financial performance demonstrates that our brands are resonating with consumers and our strategies are excelling. I'd like to thank our worldwide employees, their diligent work and perseverance has enabled the company to navigate operational challenges and achieve another quarter of record net sales performance. Business momentum was broad-based with growth across brands - all brands, channels and geographies. SOREL in Colombia led the charge, growing 37% and 22%, respectively. SORELs compelling new sneaker styles and a resurgence in the wedge category contributed to phenomenal demand heat. Columbia's success is rooted in the brand's differentiated innovation, value proposition and authentic outdoor heritage. During the quarter, Colombia continued its long history of innovation with several new product technologies, including the ODX Mesh fabric in outerwear and tech light plush cushioning in footwear. For the purpose…

Absolutely. Thank you. Okay. The first question is coming from Bob Drbul with Guggenheim. Your line is live.

Hey, Bob.

Tim, can you - I think you talked about the order books improving since the last time we talked. Can you elaborate a little bit more on that? And I think just in terms of how you see the inventory flow -- your inventories that you have on hand, but where you see retail inventories are? If you could give us a little more color on that, that would be helpful?

Certainly, we take the bulk of our orders for seasons well in advance. So as an example for fall 2022, we took the bulk of the orders in, call it, October, November, December and to a certain extent, January, but we take orders beyond that period, clearly during the season itself. So we have visibility to the order book all the way through, and it was quite strong and strengthened all the way through the order taking cycle. So we feel very comfortable where we are with the book. We also know that based on the amount of inventory we were able to deliver for fall '21 and the late winter weather in early '22 that we're going to have a very receptive group of retail partners and consumers looking for winter merchandise.

And Bob, geographically, that growth in the order book, I'd say there's a high concentration of growth that's focused in North America where we've been stronger as well as in our European direct business.

Got it. Okay. And I guess just in the inventory that you have on hand, can you just tell us like with the increase in the order book, how are you approaching your DTC, your outlet stores a little bit more on the inventory as you think about the rest of the year?

Yeah. We're buying - what our customers want from us, what our wholesale customers want from us, and we're buying merchandise also for the stores. But we have the ability to put that merchandise if it was required into the outlet stores later in the season. So we have a number of levers we can pull in the event that we've got inventory back up for whatever reason.

Got it. Thank you, very much.

Okay. Up next, we have Jim Duffy with Stifel. Jim, your line is live.

Thanks. Hi, guys. I want to start with the question on the footwear business, first off, congratulations on the SOREL momentum. Can you speak to the gender mix within SOREL, and how that's changing? Is it one gender or the other that's really driving the momentum? And then the strong footwear outlook for the year, is that led by SOREL, or is it balanced and Columbia is participating as well? And then lastly, I guess, what's the impediment to securing more capacity? Is it simply that the larger brands are getting the priority as capacity comes online?

Certainly. Well, let me tell you the - it's led quite evenly across the two brands, but SOREL is by far the fastest growing. And it is primarily women's product. I have the numbers wrong, but the scale is about right. This is probably in the neighborhood of 70%, 75% women's product in SOREL. And especially in the first quarter, we had the benefit of some winter merchandise, but it's really the sneakers and the wedges that are leading for SOREL, what's happening here. So we're very excited about that brand and the possibilities for it. Columbia's product line has been led with the new bridge, which is a hiking style, one that's been very popular throughout the pandemic and before. It's one of our mainstays. And it's a terrific style and done very, very well for the company across the board. And then as it relates to enough inventory, we're concerned specifically in the wedges for SOREL, there are specialty factories that need to build that merchandise. So it's more narrow for the company than we'd say, the opportunities for the sneaker business, which is factories are much more - there are more factories able to make that kind of product. But we're building relationships and strengthening our relationships with our Asian partners on footwear production, and we expect that in '23, we'll have as much as we want, which is frankly more than today.

Yes, Jim, and just one other comment. As it relates to our full year outlook for footwear the mid-20% growth and it's relatively balanced across both Columbia footwear and SOREL. In the prior quarter, when we reported, I think we indicated that SOREL would be up in the - at or near the 30%. That's come down a little bit, and that's mostly - or that's entirely supply side effects with the anticipation of some of our fall 2022 production being a little bit late relative to the market, if it happens to get in a little bit earlier. Certainly, what we're seeing from a consumer demand standpoint, and you see it in the first quarter, where demand is quite strong, but balanced growth between the two brands.

Thank you, guys.

Operator?

The next question is coming from Laurent Vasilescu with Exane. Your line is live.

Good afternoon. Thank you very much for taking my question. I wanted to ask about China. China is a mid-single-digit percentage of your overall sales what are you baking into the 2Q guide of mid-singles for China? And maybe for overall for the year in your revised guide? And then I would love to hear if you're seeing I know China is an important hub f or supply chain. If you're seeing any disruptions or are you seeing that the factories remain open with the strict COVID policies in China?

Certainly. Well, we all know that there's been quite an amount of closures of almost everything in certain sections of China. And so we're not immune from that. Our headquarters are in Shanghai and our distribution center is in Shanghai. So we've been hampered there certainly of late by the zero tolerance posting. We expect that China still will be a very important marketplace for the company and we are treating as such. Although the current opportunities that we expect to happen in that market are baked into the guidance we've given you today. As it relates to the supply chain, we have a very small amount of finished goods merchandise that enters the US from China. But China is still a significant provider of componentry and raw materials for the company to be used in construction and other markets around the world. So we have some visibility on the supply side for our factories. And what we've given you today would indicate where we expect the final deliveries of merchandise to be.

Yeah. And then as it relates specifically to Q2 that's the one quarter where I would anticipate China being the most impacted. As you look at the first quarter on a constant currency basis, we were flat. We had a really solid January, February. So we were really encouraged by consumer demand early in the year, but as the quarantines and lockdowns began to take effect that had a pretty detrimental impact on parts of our business in different geographies. So we've taken the Q2 down quite significantly. And then obviously, there's a fair amount of uncertainty, and we've baked in that into our outlook as well as best as we can.

Okay. Very helpful. And then with 2Q, you're guiding revenues mid-singles, gross margins down 200. So on a year-over-year basis, it looks like gross profit will be equal to last year. And then last year, 2Q is about $0.61 in EPS. I am just trying to understand, why you would have minimum EPS contribution in 2Q. Is there something like onetime expense that you're baking into the SG&A or just outsized profitability from China, just trying to figure that out to understand the 1H EPS guide?

I think, Laurent, it's effectively - when you look at our Q2 outlook at plus 5% on the top line, this is really a function of the top line in change in our outlook relative to what we've previously provided because we previously indicated that the first half would be up high teen to low 20% and pretty balanced between the first and second quarter. And with us having removed sales to our Russian distributor from our outlook, coupled with what we just spoke of related to on the downward revisions to our China business. Those are fundamentally the two most significant changes we've made to our outlook. Aside from that, in the first half, we've actually increased our outlook from a gross margin standpoint as we've seen slightly lesser effect from ocean freight relative to what we previously estimated and continued strong oil price environment in which we're not as promotional. So I think it's really a function of that top line and fixed operating costs of the business that create that breakeven point that you see in the second quarter.

Very helpful. Thank you, Jim and looking forward to the Investor Day in September.

You bet.

The next question is coming from Jonathan Komp with R. W. Baird. Your line is live.

Yeah, thank you. Maybe more of a near-term question when you look at the US or your Europe direct business. Any insight to what you're seeing from consumer behaviors more recently? And then when we think to the back half and the higher sales growth rate relative to Q2, could you maybe just bridge some of the pieces to think about to the higher overall revenue growth rate?

Yes, it relates specifically to the US, Europe from a direct-to-consumer standpoint more recently, we saw solid demand throughout the first quarter. As we began to lap certain of the economic stimulus, certainly, you'd expect that growth would be a little bit more subdued than it was for us, but we didn't go backwards. It was relatively on par with the elevated levels we achieved last year, which we're incredibly pleased by that. Europe, likewise, very strong demand throughout the quarter in the DSC business. And then as we've planned it for the balance of the year, and as we've previously discussed, we've moderated some of that growth that's factored into the outlook that we've provided, and how we thought about that from -- in the back half of the year.

Yes. And I just might comment that the growth in the outdoor business during the pandemic was very significant, and we expect that, that's going to continue to grow, people will spend more time outdoors, as well as the casualization of the workplace. So I know we're out here handle on the West, but there's not many neck ties in our building.

Yes, there's a lot fewer here as well. But maybe as a follow-up question for the Investor Day since it will be your first I know you've signaled the pathway to $1 billion or more of sales for SOREL. But are you planning to sort of lay out longer-term financial targets for the whole business? And when we think of the Columbia brand, can you share kind of the main drivers that you for some of the growth drivers after 2022?

Yeah, certainly, we'll be much more expansive when we get to the Investor Day, but we will have presentations from all of the brands during that period. And they will be focused primarily on the products that we're providing and how we expect our products to evolve and go forward with the consumer. We're also going to talk about specifically as it relates to the Columbia brand the increased demand creation spend and focus that we're going to be talking about. So we've talked for every quarter really about the increased investment in demand creation, and we'll be able to show you our plans as it relates to that. We believe that we've got the right product and the right investment in infrastructure to provide a very large growth for the company. We just need to supercharge the brand awareness on all brands, but specifically on the Columbia brand.

Yeah. And then, John, I think to your question on long-term, certainly, we look to include in that Investor Day, our point of view in how we're driving growth across each of the brands and what that equates to from an overall growth and earnings algorithm perspective.

Great. Looking forward to that. Thanks again.

Thank you.

All right. Next, we have John Kernan with Cowen. Your line is live.

Good afternoon. This is Krista Zuber on for John. I just wanted to circle back first on the SG&A, and then I have one follow-up. So the prior guidance, if I understand it was for first half SG&A to grow at a slightly slower pace than sales, and obviously has been revised to somewhat faster than sales growth. Could you just give us a sense of what -- for the second half, I guess, of 2022, is it potentially possible then to have some leverage in order to get to the full year guide, which is, I guess, moderate leverage for the full year?

Yeah. We do have modest SG&A leverage planned for the full year. There's a slight increase in our SG&A outlook for the year. And that's going to be mostly related to inflationary pressure. And with an inflationary pressure, that's impacting many facets of our business and not the least of which is wage pressure, and we've made wage adjustments in the business. And certainly, you're seeing that as it relates to ocean freight, and we've also seen increases in oil prices that are equating to fuel surcharges much of that is up in our gross margin, but it's effectively the inflationary pressure that's impacting that SG&A line.

Okay. Great. Thanks. And then just on the pricing actions, I think I recall that for the first half, you were looking for, at least for Spring 2022, was sort of a mid-single-digit pricing increase and then planning sort of high-single to low-double for fall 2022. I guess any sort of pushback? Or what's the reception been so far? And do you anticipate further increases in 2023 as you start to build orders initially for spring 2023? Thank you.

Yeah. Well, we don't -- obviously, we don't have any consumer reaction to fall 2023 yet, but the reaction from our dealers, which we take as a close for the consumer was quite good, and that's reflected in the strength of our order book. For Spring 2022, the modest increases have not yet been impactful. And so our expectation is that consumers are expecting inflation across the product categories that they buy, and they've been responsive so far.

Okay. Next we have Mitch Kummetz with Seaport Global. Your line is live.

Yeah, thanks for taking my questions. Got a couple. First off on gross margin. So you guys obviously raised your outlook in the -- for the first half. And Jim, I think you mentioned that was largely due to ocean freight and full price in becoming better than previously expected. I haven't been able to do the math on the back half yet as to what's implied. But any changes to your gross margin on the back half? And any thoughts on how you view full-price selling promotions, ocean freight, things like that in terms of the back half versus maybe what you're thinking off the last quarter?

I think the changes in the back half are going to be pretty modest. Most of what we changed in the gross margin outlook is going to be in the first part of the year due to the two factors I talked about in terms of the ocean freight and the less promotional effect. And as we look out at the balance of the year here, we're normalizing the effect of promotions and building in a bit promotions as we lap those. We also, in the last month or so here, finalized our ocean freight contracts. So that gives us some confidence in expectation of not only securing allocation on directly with the same ship lines, which is a bit inverted relative to the freight forwarders that we had to book through last year. So it should be more efficient for us. And then with regard to the rate in those negotiations, we've been, over the course of the last several months, our ocean freight rate has been four times, what you would consider kind of normal or prior levels. And with the negotiations, we'll be in much better shape. We certainly won't be back down to pre-inflationary rate increases. But much further below where we are today. So that will be an offset as a gross margin tailwind, particularly as we get out into the fourth quarter. And that's essentially where we've looked at it when we last gave an outlook in February.

I think your prior thinking on pricing for fall was that the increases would offset the cost with Ocean freight being one of them. I assume the pricing hasn't changed. So are you now thinking that you more than offset those costs? Or is it - are you now seeing maybe more inflationary pressures on kind of wages and raw materials that are maybe offsetting any benefits from ocean freight versus kind of your prior thoughts?

As you know, we're seeing increases across the board in the SG&A functions as well as the cost of labor, et cetera, so...

Yes. If we're just isolating strictly on the product - on the product input costs, excluding freight, we've covered those increase -- those -- we've more than covered those increases with price. And so with freight coming down in the latter part of the year with our new ocean contracts, that will provide a bit of a tailwind. So we would anticipate that third quarter continues to be a bit of a margin headwind overall. But by the time we get to the fourth quarter, knowing that, that ocean freight is playing a little bit more in our favor that our fourth quarter gross margins are actually better year-on-year than last year.

Okay. And then just a quick question on SOREL. Tim, you highlighted, obviously, you led with it with your brand discussion. You talked about it being $1 billion opportunity. You highlighted wedges and sneakers. Is there any way you can say what the split is these days between kind of spring, summer versus fall holiday in terms of the mix and what that opportunity might be over time?

I certainly - the winter product that SOREL so famous for and has historically been the exclusive product that they've made is so expensive that we can't offset completely with spring with the pricing on those sneakers. But the opportunity globally really to increase the revenue on SOREL is going to be led by the sneaker and the more fashion styles. So today, I have to get back to you with a more accurate split. But certainly, the future will be much higher women's component and much higher sneaker and fashion footwear.

Okay. Thanks guys. Good luck.

The next question is coming from Camilo Lyon with BTIG. Your line is live.

Hi, this is Mackenzie Boydston on for Camilo. Thanks for taking our question. My first question is just on supply chain. I know you talked about ocean freight costs kind of alleviating in the back half. But in terms of actual abilities you're seeing at the ports, can you kind of talk about where that kind of stands today? Has it improved? Has it worsened since relative to last quarter?

There's been modest improvement, but it's still far and away overall logistics lead times are far greater than they were relative to where we were just over a year ago. And the way we've thought about that as we look out at the balance of the year, it's really keeping it relatively stable with maybe some modest improvement, which is part of the reason why when we think about our outlook for the year and the order book that we've taken from our wholesale customers and the revenue forecast we put out there, we have adjusted that in part just due to certain of the uncertainty and risk associated with the supply chain and just overall economic environment.

Perfect. Thanks. And then in terms of I think I saw in the CFO presentation, $20 million of incremental exit investments that we're making. Can you just kind of talk about in detail kind of what those would be think there'll be some digital, but just any color there would be helpful.

Yeah. There's a handful of investments that are included in that $20 million, and it's going to be comprised of the combination of digital incremental demand creation as we bring our demand creation up to 6%. And then we've got some retail stores, branded stores that we're opening in the year that are also contributing to that. From a digital perspective, I would say that digital kind of far reaching across the company. But predominantly, we want to make sure that we're focused on the product, on the marketing, on the consumer. So amongst the tools and capabilities is capturing an improved level of information around the consumer and being able to have data and analytic capabilities to be able to feed that back into our product engineer and marketing team. So that's an example of one of many digital-based investments that we're focused on.

Thank you so much.

Next, we have Mauricio Serna with UBS. Your line is live.

Great. Thanks for taking my question. I wanted to ask -- I don't know if you have talked about or giving a figure about the revenue impact from supply chain constraints and specifically in the US wholesale business. And also, I wanted to ask about the gross margin outlook. In the CFO commentary, it mentioned that one of the factors that would drive the decline or the contraction in gross margin is on favorable regional mix shift. So I'm trying to understand where would that be coming from what I can recall also the US and Canada are the markets that will likely outperform in terms of sales growth? Thank you.

Yes. I think on the region and mix or region and channel mix side of your question, part of that is due to the fact that our wholesale business is growing at a faster rate than our direct-to-consumer business on the year, and that's implied in the outlook, and that's a little bit lower of a gross margin. So that's going to be part of the channel component of that. And then as you think about the region, I think our -- as we look at our region mix, our highest gross margin region is going to be in the Latin America, Asia Pacific region. And that's just given the higher concentration of retail-based businesses there, relative to North America and Europe. And with North America and Europe growing at a faster rate, again, that's going to create a little bit of a mix shift. And then on the front part of that question as it relates to the supply chain, Mauricio, you asked that in more time kind of miss the context of it.

Yes. If you gave out any figures what was the revenue impact from supply streams in US...

Yes. Nothing specific. And to the degree there are timing shifts. It's -- these are shifts of spring deliveries that are coming in quite a bit later than last year, knowing that we've been impacted by later or longer logistics time frames, coupled with the Vietnamese factory closures last year. So we've got revenue shifting effectively out of Q1 into Q2. We previously provided an indication that our spring order book was up at or near the 30% level. And you can see we delivered 20-plus percent in the quarter. So that gives you a little bit of an indication of some of the shift. And then part of the reason why, as you look at our second quarter outlook, it's plus 5%, you're not necessarily see that catch-up and that's in part because we've reduce the Q2 outlook for the combination of the Russia business and backing those sales out, coupled with the reduction in our China business.

Got it. Understood. And sorry, just one quick last follow-up. On China, is your guidance? I mean, just trying to understand the guidance implies that at some point in Q3, things normalize? Or like what is the time frame that the company is considering in its guidance.

Well, we're certainly looking at the second quarter as being the most challenged. And that's due in part because we've got our wholesale dealers, they've not been able -- many of them have been able to operate either. So we're not likely to ship the bulk of the remaining wholesale order book. As we get out into the third and fourth quarter, there's a lot of uncertainty. We have -- we'd certainly contemplate a recovery in that market, but not necessarily where we planned coming into the year.

Got it. Thank you and congratulations on the results.

Okay. Up next, we have Alex Perry with Bank of America. Your line is live.

Hi. Thanks for taking my question. So, I just wanted to ask a little bit on -- to give some more color on the phasing of the sales guidance. So the -- the first quarter came in well above, but Q2 comes down quite a bit. And then it seems like the back half comes up a bit. The 2Q guide, is that all Russia and China? Is there something else sort of embedded in there? And then what are the assumptions in the rebound in the back half?

So as it relates to Q2 take down, it's almost entirely related to those two factors between Russia and China. To a lesser degree, there might be some timing shifts as we begin receiving and shipping our fall season in that June time frame, but that would be much smaller. And then as it relates to the back half of the year, we do anticipate that our fall deliveries or fall inventory receipts and shipments are much earlier than they were last year, albeit not back to what we would consider normal levels. But with that in mind, that would skew revenue growth pretty heavily to the third quarter, still growing in the fourth quarter. And that's really going to be the acceleration of growth, if you will, in the back half of the year. A lot of that is just going to be driven by the strength of the overall wholesale order book, our D2C business has grown up more modest rate in the back half of the year.

I also might point out that Q2 is our lowest quarter of the year from a revenue stand point. So any slight changes in the mix will be impactful.

Great. And then could you just give us a little more color on maybe how the DTC business has trended in the quarter? I think you may have called out some moderation in growth in March. Was that mostly sort of stimulus comp? And then what is sort of embedded in the Q2 guidance in terms of DTC? Are you sort of assuming that sort of trend rate, the moderation you saw in March sort of continues? Or what's sort of embedded in terms of DTC, I guess, both for the second quarter and for the balance of the year?

Yeah. Well, as you know, we consider ourselves to be a wholesale company. So we don't provide many of the matrix details that a retailer would provide. But we're seeing solid numbers out of our own DTC business, and it's impacted as well by the delivery issues that we've been talking about during the call. So the expectation is that the business will continue to be -- continue to grow. And when we present our merchandise in our own stores the way we'd like to have it presented everywhere, we see great results.

Yeah. And Alex, maybe just a little bit more color. I mean, January and February were exceptional months aided, I think, embarked by cold weather and want to pick a speaking specifically to US D2C and then March, as we began to lap the stimulus, we did -- business did not contract. So we held our own. So we're quite encouraged by that knowing the increase in volume during that stretch. And then just in the last two weeks, we've begun to get further away when the stimulus checks are written and out to the public, we've seen business be quite healthy and strong. And I think that's a testament to getting our – more recently getting our spring product out to retail and on the floor for the consumer.

Perfect. That's incredibly helpful. Best of luck going forward.

Thanks.

Up next, we have Paul Lejuez with Citigroup. Your line is live.

Hey, thanks, guys. Can you just quantify what the size of the Russia business was in the second quarter of last year? And is that business typically greater in 2Q versus the quarters in the back half and any quantification you can provide there? And then also, I think you mentioned in the presentation, there's some year-over-year unfavorable changes to debt. And just curious if you can talk a little bit more about what drove that? Thanks.

Yeah. As it relates to Russia, we'll get down in a quarterly breakdown of that. There was an indication that Tim provided in the prepared remarks that it equates to 2% impact on our full year outlook on a -- for a full year basis. I would say that the second quarter is typically the most significant shipping quarter into the Russian distributor because that's when we ship the bulk of our fall product, so it will have a disportionate impact, which you see that in the outlook that we're providing. And then as it relates to the unfavorable comparisons on bad debt, that’s going to largely relate to the fact that in 2020, we booked up reserves for bad debts in light of the risk from the credit environment in the midst of the pandemic. In '21, we released some of those reserves because things didn't pan out as bad as we thought they would. So we're just lapping against more difficult comps having release reserves last year and more kind of a normalized environment, if you will, this year.

And where are your current reserves relative to like a pre-pandemic and sort of level?

They're on par with where we were from a pre-pandemic perspective, and that will be in our - -maybe I think it's in the release stock. And if you go back into the balance sheet there, you'll see it's on par with where we were back in '19.

Got it. Great. Thanks and good luck guys.

Thank you.

Okay. We have no further questions in queue. I'd like to turn the floor back to management for closing remarks.

Well, thank you all for listening in. We're very anxious to show you the products and plans for the future of the business in September right here in Portland. So we hope you can all make it. Thank you for your attention.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.