Good morning. My name is Marcella and I will be your conference operator today. At this time, I would like to welcome everyone to the Acushnet Holdings Corp. Q2 2019 Earnings Conference Call. [Operator Instructions] Thank you. Tony Takazawa, Vice President of Investor Relations, you may begin your conference.

Thank you. Good morning and welcome to Acushnet Holdings call to discuss the financial results for Q2 and the first half of 2019. This morning we are joined by Acushnet President and CEO, David Maher. David will provide his observations regarding the first half, the cadence and timing of our business this year and how we are positioned for the rest of 2019. Next, Acushnet’s CFO, Tom Pacheco, will spend some time discussing the overall financial results for Q2 and the first half and our outlook for the rest of the year. We will be making forward-looking statements on the call today. These forward-looking statements are based on Acushnet’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations. For a list of factors that could cause actual results to differ, please see our filings with the U.S. Securities and Exchange Commission. Throughout this discussion, we will be making references to non-GAAP financial metrics, including items such as revenues at constant currency and adjusted EBITDA. Explanations of how and why we use these metrics and reconciliations of these items to a GAAP basis can be found in the schedules in today’s press release, the slides that accompany this presentation and in our filings with the U.S. Securities and Exchange Commission. With that, it is my pleasure to introduce Acushnet’s CEO, David Maher. David?

Thanks, Tony and good morning everyone. We appreciate your time today. I am pleased to report Acushnet’s first half results and provide an overview of our various business segments. There were many highlights during the period, including healthy gains in golf balls, gear and FootJoy, all driven by exciting new product introductions in each of these categories. New Pro V1 and Pro V1x golf balls are off to a great start and meeting the high expectations of the game’s best players and golfers across the globe. Our team’s commitment to the golf ball product development process and the continuous advancement of Titleist precision golf ball manufacturing capabilities have enabled us to provide golfers with the game’s highest performing, highest quality and most consistent golf balls. While club sales are off for the period due mainly to the cadence of product launches, we are pleased with the overall health and market momentum of our Titleist club business. Affirming the strong acceptance of TS metals with the game’s best players, Titleist drivers have won the count on the PGA TOUR in 28 of the past 35 events dating back to last fall. New products are also generating momentum in both gear and FootJoy golf wear. Our new line of Titleist golf bags and travel gear have been well received and FootJoy is in the midst of a great run of new footwear launches with Fury, Flex and SuperLites models complementing strong apparel and glove results. Our recently acquired Links & Kings business, while relatively small, continues to develop nicely with first half sales more than doubling versus last year. We are enthused about the long-term outlook for this business as we continue to organize the structure and supply chain for long-term and sustainable growth. And KJUS, the newest addition to the Acushnet…

Thanks, David and good morning to everyone on the call. I would like to echo David’s comments and thank all of our associates and trade partners for their tremendous effort and dedication so far this year. I will begin by discussing our results for the first 6 months of 2019. As you know, we manage the business with our annual goals, 2-year product life cycles and long-term strategy in mind. This approach has served us well over the years as our business results can be impacted in the short term by many factors, including the timing of product launches and the weather. As a result, we look at our results on a cumulative basis to better measure our progress as we move through the year. For the first 6 months, consolidated net sales were $896 million, down 2.6% from last year, but essentially flat year-over-year in constant currency. We showed solid growth in Titleist golf balls, gear and FootJoy. We also had higher sales volumes in TS drivers and fairways, but this was offset by the expected decline in irons and wedges. Gross profit was $468 million, down $10 million versus last year. This decline was primarily due to lower gross profit in Titleist clubs as a result of the lower sales volumes in irons and wedges. First half gross margins were 52.3%, up 30 basis points versus last year. SG&A expense was $326 million, up less than 1% over the first 6 months of 2018. Research and development expense was $26 million or about 3% of net sales. Operating income was $113 million, down $14 million from 2018 resulting primarily from the impact of sales and gross profits on the planned decline in Titleist clubs. Interest expense was $10 million, up slightly from last year. Our effective tax rate…

Thanks, Tom. Marcella, can we now open up the lines for questions? Thanks.

Your first question comes from the line of Steven Zaccone from JPMorgan. Your line is open.

Great. Good morning guys. Thanks for taking my question I want to start off, David, with a higher-level focus on the U.S. golf market. We’ve sort of seen some challenging weather year-to-date, but the market’s held up nicely. When you survey the market and talk to industry participants, what do you attribute this strength to? And do you think this can continue into the back half of the year? And I just have a follow-up after that.

Yes, sure. So when we look at the U.S. market, the first vital sign would be to assess rounds in weather, which off 1% year-to-date, but really is a tale of extremes. You look at some markets in the west down double digits, and you look at some markets in the east up double digits. So it’s commentary on the volatility of the weather we’ve experienced in the first half. But as we look at our business globally, the U.S. has certainly been one of the highlights, in many cases, beating our expectations and posting growth in all categories, with the exception of clubs, which was really more a function of product life cycle. But we’re seeing – when weather is decent, we’re seeing the market perform pretty well. And if there’s one market we’re most pleased with, it would be the U.S. market this year. Offsetting that is the rounds decline is what we’ve seen around the world. There’s been a nice rebound around the world from a round supply and participation standpoint. And most major markets outside the U.S. have posted rounds increases, but as we look at our global picture, the market that’s got the most buoyancy and vibrancy is clearly, Steve, the U.S. market.

Great. And then if we – I mean if we could shift to Japan, like what’s really driving the weakness there and do you expect that country to return to growth in the second half of the year?

Yes. Japan – and we called it out on what happened in the quarter. Again, I’ll take a look at a couple of vital signs in Japan, and it’s not a single narrative story. Rounds are up, by our estimate, 3% for the half, a bounce from last year where they had some tough weather. As we look at the ball category, we see the ball category has grown, really commensurate with rounds, our business growing similarly, gear and apparel, roughly running flat. As I did note in my earlier remarks, we saw club and footwear inventories in particular running heavy, not just our products, but also the entire market, and we think this was probably a result from some soft early-season sell-through. Clearly, we would expect this is tied to some of the broader economic pressures we’re facing in Japan. As we look at the back half, we think our field inventories are in pretty good shape. And we do expect – we’ve got wide range of product launches, but we expect them to go off very much as planned in Japan, and we’re excited about what that’ll mean for the market in the back half of the year. I think, Steve, commentary also warranted on just the broader Japan golf market. It is the most inventory-dependent market in the world, given it’s – what it would be best described as a big-box approach. Other markets tend to be more fitting-dependent, and this, in many cases, results in far less field inventory and in turn, less risk. So I think the commentary on Japan, we had a couple of areas where inventory got heavier than we’d like. We dealt with that in the quarter. But again, conversely, rounds are up a bit, golf balls sell-through in positive grounds. So again, there’s not one single narrative. But we’re certainly watching the market. We’re watching the consumer in that market, and we’re being cautious with our outlook for Japan. But again, that said, what we can see in front of us in the next quarter to two looks solid, really predicated on what we’ve talked about earlier and that is a robust launch calendar. Thanks Steve.

Your next question comes from the line of Dave King from ROTH Capital Partners. Your line is open.

Thanks, good morning guys. I guess first, can you talk about the supply chain issues that weighed on Phantom X? What sort of impact did that have on overall revenue? And then to what extent have those issues been resolved?

Well, you can imagine, Scotty Cameron putters are made of incredibly high-quality materials, and they tend to be made with, what can best be described as, a complicated manufacturing process. We frankly got behind on it. We weren’t getting the supply at the rate we anticipated. We’ve resolved that issue. We worked with a couple of suppliers. One of them got behind, we’ve resolved that issue. So it did affect the second quarter. We do think some of that’s going to be made up in the third quarter, but not all of it. If you miss a 4 to 6 to 8-week window in Q2, it’s hard if not impossible to make that up. But we did – we were really able to get back on track from a supply and production standpoint with Phantom putters, and we’ll see some of that uptick in the third quarter, but really a function of our ability to manufacture and supply the heads on, again, what is a fairly complicated production process.

Okay. That’s good color. And then switching gears, how should we be thinking about sizing up the T-Series launch versus some of your prior iron launches? How much the benefit you think should come upfront. Since I think irons are more fittings-driven typically at least in markets outside of Japan? And then any notable changes to how you’re thinking about messaging it versus AP?

Yes. So T, a couple of things as you compare maybe to AP a couple of years ago. The launch is happening about a month earlier, okay? We were late September, we’re now happening later this month. There’s a price increase on the T-Series line, which is of note. It’s an entirely new lineup. And any time, we go to the lengths of changing and introducing a new model name, for instance, the move from 917 to TS drivers was borne out of – the product was distinctly different. The same product process applied here in irons. We’ve had a great run with AP. We’ve got a new technology called max impact, which we think is significant enough to change the presentation and branding of our iron franchise. So the T-Series is quite different from its predecessor. And then further to that, you may recall, Dave, we did bolster our advertising in the back half of the year in 2017 in support of AP. We’ve done that again in support of the T-Series, both because we think the opportunity is terrific and notably also any time you come out with a new model name, you – you have to typically invest more to get the message out. So again, a couple of changes from what we did a couple of years ago, but most notably, new technology and an increased level of A&P that you’re going to see here in the back half of the year.

Great. Thanks David.

Yes thanks.

Your next question comes from the line of Daniel Imbro from Stephens Inc. Your line is open.

Yes hey good morning thanks for taking my question. I wanted to follow up on a earlier comment on international markets. Outside of Japan, it did look like Europe was also under some pressure, kind of down mid single constant currency. Can you talk about what you are seeing in that market? Is it particular countries that are weaker than others? And what are you thinking about in your guidance for the back half of the year?

So hey Dan, this is Tom. How are you?

I am doing great.

So overall, the EMEA market performed pretty well. There was some really – weather benefits that sort of normalized. But the performance was in line or perhaps a little ahead of our expectations. In terms of guidance, we’ve not really changed our expectations for the European market for the second half and so we expect growth there. But we haven’t really changed our expectations in the second half.

Dan, one final point I’ll make. We had a fairly conservative approach with regards to notably the U.K. You may recall, they had a retailer that was struggling, and we were uncertain about where that would go. That’s stabilized. So we had a fairly conservative approach. That market got off to a really fast start as it relates to weather and rounds of play. So again, conservative expectations and we’re actually running a little bit ahead of those conservative expectations, notably in the U.K., but across EMEA. You can imagine with the pending uncertainty around Brexit, we’re rightfully being cautious about that market.

Got it. That’s helpful. And I do have a quick follow-up just on the golf ball segment. You noted in the release that AVX sales softened given they launched last year. Can you update us on how you are thinking about the timing of that launch? Should we think about that being a 2-year cycle that’s on a non-Pro V year? There’s – how should we think about that going forward? Have you finalized any plan?

Not finalized, but close enough to give you some insights as to how we’re thinking about it. So we launched AVX last year in the U.S. in the second quarter and outside the U.S. in the third quarter. Our expectations are that we will sync that up likely with Pro V1 and launch – excuse me, we’ll sync that up next year, so you’ll see something in the middle of next year so, the middle of an even-numbered year. But those aren’t yet finalized in terms of how we’re thinking about that market opportunity, but we do have some intention at this point of launching a new AVX in 2020.

Thanks guys. Best of luck.

Thanks Daniel. Next question please.

Your next question comes from the line of Kimberly Greenberger for Morgan Stanley. Your line is open

This is Ed on for Kimberly. We had a couple of questions. Just recognizing that it’s early, do you have any color just on the announcement regarding List 4 Tariffs, and how do you think that impacts the business?

Sure, Ed. I can take that one. Before getting into List 4, perhaps I’ll give you a little bit of reminder of our overall situation as it relates to tariffs across our various businesses. So starting with golf balls, if you think about our manufacturing footprint there, golf balls are manufactured here in New Bedford in the U.S. and in Thailand. So there’s really no exposure on tariffs in the golf ball area. If you think about our clubs business, we have very limited exposure to some materials that are sourced in China, but all of our clubs that are sold in the U.S. market are assembled here. So again, very little impact tariffs in the club’s business. Within our gear business, we’ve mentioned before that our headwear and golf and travel bags have some exposure to China, with about half of our headwear and one-third of our bags imported into the U.S. from China. And then finally, in FootJoy, our FootJoy business, our golf gloves are manufactured in Thailand, so there’s no exposure there. And about 25% of our apparel is sourced from China and imported to the U.S. and about 50% of our footwear is manufactured in China and imported to the U.S. So thinking about the impact on the gear business, those tariffs, which are currently set at 25%, were raised to 25% midyear at a point where we’d had most of our receipts come in. And so between that and a number of mitigation actions we’ve taken, we were able to really minimize the impact of those tariffs on 2019 so the impact on the gear business not material. And we believe that the mitigation actions we’ve put into place will significantly contain any potential impacts in 2020 based on what we know at the moment. So now the List 4 – getting back to List 4, that List 4 is really where the FootJoy footwear and apparel come in. We are pretty late in the year at this point by the tariffs – by the time the tariffs get enacted. Those are at the 10% level at this point. And we think that absent any mitigating actions, the impact could be about $2 million for the balance of the year. We are looking at mitigating actions though and expect it maybe less than that. If you think about 2020, absent a – absent any mitigation actions for the full year, the impact could be in the $7 million to $10 million range. But again, we are currently evaluating and putting in place mitigating actions and would expect those numbers to be much lower than that $7 million to $10 million range. Of course, this is a very fluid real-time situation, and we’re going to continue to monitor it and react accordingly.

Thank you. That’s very, very helpful. And a quick follow-up question, just regarding guidance. Is it fair to assume that the second half, that’ll still be a little more third quarter-weighted just regarding the launch cadence? And is that also a good way to think about the adjusted EBITDA as well?

Yes and yes. The – definitely more than 50% in the third quarter in both the – both sales and EBITDA and on the back of the product launches that we’ve discussed.

Thanks again.

Your next question comes from the line of Michael Swartz from SunTrust. Your line is open.

Hi good morning guys. Just wanted to talk about the KJUS acquisition, just maybe a little more color on the strategic rationale there, is this a distribution play? Is it a product development play? And then I didn’t hear it. Maybe I missed it and I apologize. Did you size up how large that business is because as I look at your full year guidance, you did maintain your constant-currency growth and your revenue outlooks? So, I’m trying to get a sense of just how much KJUS is adding to that.

Okay, Michael. I’ll certainly jump on the first part. We first encountered KJUS about 2 or 3 years ago. We started seeing it gain traction really first with our target golfer audience and then we saw more and more of the brand as it quickly gained distribution across several prominent clubs in the U.S. They really did a great job proving their product merits to our target and equally did a great job with, what we would call, very high-quality distribution. And, that’s really where the interest was founded going back a few years. Early on, it became evident that the KJUS golf and ski businesses were very much synergistic, in that much of the KJUS’ success in golf outerwear originated from their technical expertise and capabilities in ski wear. So, from that point forward, we realized that ski was an important component of the golf opportunity, and it made no sense really to pursue golf without ski. And as we got deeper into the research process of ski, we saw a brand with a great reputation, seemed to be making the finest technical performance outerwear in their space. And importantly, their approach to ski was near identical to how we think about the golf opportunity of Acushnet, which really starts with a focus on the most dedicated participants. And add to this some very talented leaders on the ski side and we soon became very comfortable that ski would be a good fit within the Acushnet operating model. So, as you think about the KJUS acquisition, golf will still represent all-in golf business, inclusive of KJUS, will still represent 99% of close to 99% of Acushnet’s revenues. And the KJUS ski business is remains a very important, small in the total of Acushnet but a very important segment for us, which we intend to continue to operate with excellence. We do see and this is the unlock for us, we do see faster growth in golf than ski, which is really consistent with the size of the market opportunity with the addressable golf opportunity being some 3x the size of the addressable ski opportunity. And as to size of the business, we’re not for competitive reasons, we’re not disclosing the size of it. However, I did comment earlier that it’s 60% ski and 40% golf.

And maybe I can add a couple of data points for you as well. As the ski business today represents the larger portion of their business, the results are skewed towards the second half. As we talked about guidance, if you think about the puts and takes, we certainly took into account the shortfall in the first half, which we size at about $15 million to $20 million as we thought about being near flat is what we were expecting. So perhaps $15 million to $20 million of impact there. We our second half guidance remains largely intact, and then we added KJUS. And so, when you take those 3 pieces, we get back to our original guidance. So that should give you a little bit of a sense of how much of the guidance is related to KJUS.

Okay. And then just a follow-up, and I think you answered some of that. But just in terms of the full year guide, and this might be simplistic, but I think if we go back to the second half of ‘17, you saw EBITDA growth of 10%, 11%. That was the last time you had a large club irons launch. This year, your guidance implies about 30% to 40% growth. So I’m just trying to bridge the two and understand a little better how we should see that type of growth in the back half of this year.

Sure. So, we are certainly anticipating fairly sizable growth in the second half, as I said previously, skewed towards Q3. That the operating margin and EBITDA growth is really coming from both leverage and growth in gross margins and in operating expense leverage. On the gross margin side, the launches are oversized. And so, when you have a sizable launch, you have a pretty sizable increase in your gross margin and with the oversized nature of these launches we’re having, perhaps a larger impact on the gross margin line. And then as you think about SG&A and operating expense leverage, while we’re certainly we’ll be increasing spending in the second half to support all of these launches, the increase in advertising, promotion in the SG&A line and the SG&A line in total is certainly much smaller than the growth that we’re expecting in sales. So again, leverage on both the gross margin element and the operating expense element driving that growth of operating margins and ultimately EBITDA margins.

So, Michael, I’ll add just two or three fine points on that. As I think about your question, ‘19 versus ‘17 what’s different ‘19 versus ‘17 also. Again, made the comment earlier, irons are going to go a month earlier, which is an extra month of fitting and sell-through. That’s a positive. We’ve got a price bump on T-Series. We do have new metals in the line. We have TS1 and TS4 that weren’t part of the story a couple of years ago. FootJoy has a more expansive launch calendar than it did in 2017. So, we’ve got a handful of events that prompts you to hopefully understand how Q3 ‘19 in particular is going to differ from Q3 in ‘17.

Okay wonderful. Thank you.

Thanks Michael. Next question please.

Your next question comes from the line of Joe Altobello from Raymond James. Your line is open.

Thanks. Hi guys good morning. So, first question. I apologize if I missed it, what drove the gross margin improvement this quarter year-over-year? It seems like this is a little surprising given the sales shortfall and the supply chain issues that you guys talked about?

Yes. So gross profit dollars were down as a result of the lower volumes, but as we think about gross margins, the largest contributors to the growth in gross margins in the quarter were coming from higher ASPs, both in our, primarily in our FootJoy apparel business and also in clubs when on a quarter-over-quarter basis.

Got it. Okay. And just shifting gears to clubs. It sounds like it’s pretty second half-weighted obviously with the timing of the launch and the delays in putters from 2Q into 3Q. Do think you could get club sales flat this year?

So, while we certainly don’t guide on a category-by-category basis, our hope on our, in an odd-numbered year is to get clubs to a place where they are flat. So that is certainly where we’re working towards.

Yes, Joe, just we’ve talked about this before, the couple year cadence with clubs, we tend to have a greater opportunity for growth in even-numbered years based on product launch timing. And then the intent is to get close to flat in the following year. That’s how we think about the business from a long term. I will add, we had quite a robust club business last year, which makes getting back to flat more challenging. But that is how we think about the business long term.

Okay great thank you.

Your next question comes from the line of Casey Alexander from Compass Point. Your line is open.

Hi couple of questions. First of all, I didn’t quite hear the number, how much is left on the share repurchase program?

So, Casey, it’s Tom.

Good thank you.

So, on the share repurchase program, there’s sort of 2 answers to that question. So, we purchased $6.2 million worth of shares during the quarter on a $50 million authorization, so that leaves you with $43.8 million remaining. But keep in mind, we filed an 8-K during the quarter indicating that we would be buying an equal number of shares from our majority shareholder as we buy in the open market. So, we really have less than $19 million worth of shares to buy in the open market, and we will buy an equal number from our majority shareholder.

Okay. So, but it will still total $43.8 million for the remainder of the year, assuming you finish it up for the year as we calculate our share counts?

That is correct.

Okay. Secondly, do you have a number for the overall forex impact on the quarter?

We do. On a top line basis, it was hold on while I look for it here. I know it was about $24.5 million for the first half on the top line and it was about $12 million in the second quarter on the top line.

Okay. My last question is, first of all, I can’t even imagine what the competitive reason for not giving us an idea of what type of revenues KJUS can do now that the acquisition is complete. But if I understood your comments, is it fair to say that had you not done the KJUS acquisition that it is likely that you would have had to take your guidance for the full year down?

We would have considered that, yes, Casey. We would have our second quarter results would not have been made up for the full year, so we certainly would have been considering targeting the low end of the existing range.

Okay. And the acquisition actually closed did it close in the second quarter or the third quarter? I am just trying to gauge whether or not the balance sheet impact of the acquisition has shown up yet.

It has not. The acquisition closed on July 3, so it’ll be a Q3 event.

That’s when we will see the impact on the balance sheet for what you expect for the acquisition?

That’s correct. So, you’ll see...

So, can you share with us did you pay for it out of cash or did you take down additional debt for it? Or how did you balance paying for the acquisition?

So, you’ll see this afternoon when we file our K that we paid in the high 20s for the acquisition. And we didn’t take on additional debt per se. We funded that out of working capital. We do have a little bit of a balance on our revolving credit lines, so but the balance is not out of the ordinary for this time of year. So, with if you think about cash between the balance sheet and the line of credit being fungible, we didn’t take on any long-term debt for it.

Okay, great. That’s helpful. Thank you very much for taking my questions.

You are welcome.

Thanks Casey. Next question please.

Your next question comes from the line of Brett Andress from KeyBanc. Your line is open.

Hi good morning. I just had a one quick question, following up on tariffs. So, the $7 million $10 million impact for List 4 that you mentioned for 2020, I guess that’s a starting point. But you also mentioned mitigation. So, I guess can you extrapolate a little bit more on that? Does that involve you moving the supply chain? Does that involve you taking price, vendor negotiations? Just how much flexibility or visibility do you have in that?

So yes, I would say it’s all three of those that are under consideration and we are really not sizing how much lower than the range we may be at this point. I think it’s there are too many moving parts and it’s too volatile a situation, but we are confident it would be much lower than that range, and we really just wanted to give you all a sense of what the high end of the range would be, just so you got a sense that, how you could size the potential, but we have a number of mitigation opportunities across all 3 of those possibilities you mentioned, and we’re actively working those.

Thank you.

Thanks Brett. We have time for one more question and then we’ll have a couple of concluding comments from David.

Your last question comes from the line of Tim Conder from Wells Fargo Securities. Your line is open.

Thank you. Gentlemen, just wanted to circle back here on the tariffs too. You said that given the timing of when you brought things in for related to the non-List 4 items has minimal impact obviously on this year, but just wanted to revisit, you’ve got, mitigating factors, but any color or how should we frame that looking into 2020? And then are you seeing, from the consumer in the UK or the continent and Germany in particular, any worrisome signs at this point given ongoing deterioration in industrial production in Germany and again, you said you’d been cautious in the UK on a year-to-date basis.

Sure. I’ll take the tariff question first. So, the non-List 4 tariffs really relate to our gear business as I mentioned. That business is heavy on the sourcing side, and we’ve already implemented a number of mitigating actions around our supply chain and around negotiations with suppliers. So, we really don’t see a material impact to our results in 2020 at this point in those areas, assuming no other changes to the tariffs.

And Tim, your second question really specific to Germany, as we look at that region performing largely as we expected if not slightly better. So, I don’t have any key data points that suggests unusual concerns coming out of that market.

Okay. And then lastly, gentlemen, if I may, I apologize if I missed this portion, but your commentary on the competitive driver market, just in general, how do you feel about your and just the industry channel inventories at this point on drivers specifically?

Yes. Overall, I’ll break it up into a couple of parts. Overall, I mentioned Japan. Japan, heavy, runs heavy all the time, and we saw it run a little bit heavier than normal in the second quarter this year. That was part of our miss in the quarter. In the U.S., inventories, I would say, are in line and we’re I’ll remind you Tim, we were fortunate in many regards that so much of what we do is custom-fit. So, in markets that are fitting-centric, which tend to be across Europe, the U.S., Australia, New Zealand in markets that are custom-fitting-biased for us, we’ve got a real built-in governor in terms of our inventories, so they tend to stay in a nice, tight range. Again, not the case in a market like Japan, but broader inventories for this time of year. I would say they’re within the range of what we would typically see, but given there were so many launches in the early part of the year, they’re probably at the high end of that range.

Okay, thank you gentlemen for the color. Appreciate it.

Okay. Thanks, Tim. And we appreciate all your time this morning and your ongoing interest in Acushnet. We’ve, obviously, got a lot of work to do here at the Acushnet Company over the next 90 days, and we look forward to getting back to you after the close of the quarter. Have a great close of the summer and thanks again.

This concludes today’s conference call. You may now disconnect.