Good morning ladies and gentlemen. Thank you for standing by. Welcome to the Vera Bradley second quarter conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. As a reminder, today’s conference call is being recorded. Now I would like to turn the call over to Mark Dely, Vera Bradley’s Chief Administrative Officer. Please go ahead.

Good morning and welcome everyone. We’d like to thank you for joining us for Vera Bradley’s earnings call. Some of the statements made during our prepared remarks and in response to your questions may constitute forward-looking statements made pursuant to and within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from those that we expect. Please refer to today’s press release and the company’s most recent Form 10-K filed with the SEC for a discussion of known risks and uncertainties. Investors should not assume that the statements made during the call will remain operative at a later time. We undertake no obligation to update any information discussed on the call. I will now turn it over to Vera Bradley’s CEO, Rob Wallstrom. Rob?

Thank you Mark and good morning everyone, and thank you for joining us on today’s call. John Enwright, our CFO also joins me today. I am extremely pleased with our second quarter results, which exceeded our expectations and last year’s performance despite facing the headwinds of COVID-19. I credit the agility, tenacity, collaboration and ingenuity of our entire team for making these results a reality. We proved that by focusing on innovation that enhances the customer experience and product marketing and technology and controlling what we can control, we can drive strong results, produce strong cash flow, and position ourselves to emerge a stronger company. Total company year-over-year second quarter revenue grew by 10% driven by the addition of Pura Vida for a full quarter and Vera Bradley’s ecommerce sales doubling, offset by a decrease in Vera Bradley store revenues due to COVID-19 related store closings for a portion of the quarter. At both Vera Bradley and Pura Vida, customers responded to new product launches and marketing initiatives and sales of cotton masks drove meaningful revenue growth. We significantly expanded our consolidated gross margin rate in the quarter through sales of cotton masks, product collaborations, careful inventory management, and tightly controlled promotional activity. We carefully managed our expenses, achieving expense leverage in the quarter. Our balance sheet remains strong. Even after paying $30 million down on our ABL facility during the quarter, we ended with cash and investments of $77.1 million. On May 5, 2020, we began reopening our Vera Bradley stores in a phased approach with 58 out of 82 full line stores and 64 of 65 factory stores open by the end of June. All factory stores and all but three full line stores were open as of the second quarter end, although with reduced hours, lower staffing…

Thanks Rob, and good morning. Let me go over a few highlights for the quarter. As a reminder, financial results have been consolidated to include Pura Vida beginning July 17, 2019, the first full day following the acquisition. Prior period numbers have not been restated. The numbers I will discuss today are all non-GAAP. For a complete reconciliation of GAAP to non-GAAP numbers, please reference the schedules attached to today’s press release. The current year non-GAAP second quarter income statement numbers exclude the intangible asset amortization and Project Novus expenses. Non-GAAP EPS for the current quarter also excludes the ASC for a new measurement adjustment described in today’s release. The non-GAAP income statement numbers for the prior year second quarter exclude the Pura Vida acquisition related charges and Project Novus expenses. Consolidated net revenues totaled $131.8 million for the current year second quarter, an increase of 10% over the prior year. Excluding Pura Vida, Vera Bradley net revenues totaled $99 million, a 13.5% decrease from $114.4 million in the prior year second quarter. Cotton masks represented over 10% of consolidated revenues for the quarter. Excluding charges, Vera Bradley incorporated non-GAAP consolidated net income was $10.9 million or $0.32 per diluted share for the second quarter compared to $8.7 million or $0.25 per diluted share last year. Vera Bradley direct segment revenues totaled $81.2 million, a 13.9% decrease from $94.4 million in the prior year second quarter. The decline primarily resulted from stores that were temporarily closed as a result of COVID-19 for approximately half of the second quarter, partially offset by a 99.1% increase in ecommerce revenues for the quarter. We closed 12 full line stores and opened five factory stores in the last 12 months. Vera Bradley indirect segment revenues totaled $17.7 million, an 11.4% decrease from $20 million…

Thanks John. First, let me update you on our recent technology system transformation. In early August after more than a year of hard work and dedication, Project Novus, our net technology platform went live. We migrated our ecommerce sites to a best-in-class cloud-based Shopify Plus platform. Cloud-based Microsoft D365 replaced our existing ERP, POS, business intelligence and order management systems, streamlining and simplifying our work and providing for additional capabilities such as mobile POS. This conversion not only lessened the complexity of our IT systems but has provided us with a more efficient technology platform that will enable the entire enterprise to achieve our future objectives. To thrive in this environment and in the future, we must be able to make quick database informed decisions and to further enhance our customer experience. We are excited about the capabilities and possibilities of our new systems and we will continue to invest in technology and build our capabilities as we move forward. Through these systems, we will be able to harness customer data and feedback earlier and more instantaneously to drive innovation across product, marketing and stores. We have also added new warehouse automation systems to our distribution center which should enhance productivity, increase our capacity, and enhance the consumer experience. Now let’s shift to an update on our two brands. We remain focused on propelling both the Vera Bradley and Pura Vida brands forward through innovation and product marketing and technology. The way that customers live and work has dramatically and permanently changed due to COVID-19, and we are especially well positioned with our casual and comfortable brands that dovetail into this shift. Let me start with Vera Bradley. Our products will remain authentic and true to our brand heritage, but innovation is becoming more and more important to our existing…

[Operator instructions] We’ll take our first question from Mark Altschwager with Baird.

Good morning. Thanks for taking my question, and congrats on a strong quarter in this really tough backdrop. First, I wanted to clarify a couple of things on the mask sales. I think you said 10% of total sales in the quarter - maybe just confirm that that’s correct. What was the mix between direct and indirect there, and then just finally on the masks, I know you said you expect that to moderate in the back half, but just given that it’s been so significant of an impact, any further help you could provide on what the monthly run rate has been looking like in August?

Yes Mark, the 10% was the number we commented to, and it was of total revenue, so it was above 10%. The mix between segments, it was a little bit more, call it 60/40 direct to indirect, close to those values, so that if you’re looking to kind of split that out. In regards to future quarters, we don’t anticipate--again, the unpredictability of COVID and the economy going forward, we expect to have some mask sales in the back two quarters but we don’t necessarily anticipate it to be about 10% of sales. It’s hard for me to give you any forward guidance associated with that because we think it’s going to be unpredictable, but the current run rate in August is something similar to what we have seen in the July time frame. It’s not significantly different right now, but we anticipate that to moderate as we go throughout the year.

That’s really helpful, thank you. Then switching gears, store productivity, I think you said 70% was the number for July. Curious if that’s shifted at all in August as you kind of move into the meat of the back-to-school season, and just from a channel perspective, how has digital trended with stores reopened?

Yes, a couple things, Mark. One, from a store performance, it’s relatively the same, in that 70% number. It’s been interesting - you know, we have seen a softness in back-to-school business, but that’s kind of being offset by some of the other businesses and the innovation that’s driving customers but I would say the run rate’s been similar. In terms of digital, I would say that might be one of our larger surprises that we saw, because when were kind of digital only and ecommerce was up at triple digits, we thought that that would moderate quickly as stores started to reopen, and we didn’t see that. The digital business has remained very strong, so that’s something that we’re really watching as we go out through the rest of the year and how that holds. I think what’s really driving digital was two things. It’s innovation through new marketing. All of the analytics we’ve put in place, all the programmatic buying has really been instrumental in, A, getting customers into the brand as well as keeping customer engaged in the brand, so we’ve seen strong new customer growth across the digital channels. We’ll watch that through the year and see how that moderates, but I think our feeling at this point is that digital is going to be an elevated part of our business ongoing, and we think that some of this consumer behavior is a permanent shift, so we’ll see how that goes going forward.

Okay, that’s all really helpful. Then maybe just bigger picture, the operating margin in the quarter, 16%, really quite an incredible result. Maybe just help us understand how much of this was driven by some of the temporary factors, like the mask sales which are going to moderate, versus or maybe in addition to some corporate cost savings, versus more structural changes to the cost structure within the various segments. In general, with the learnings through this more challenging period, any bigger picture thoughts on how you’re thinking about the margin profile of the business on a go-forward basis?

Yes, so let me just correct something I said earlier in regards to mask sales. They’re probably closer to 70/30 versus 60/40 in the quarter, so it’s a little bit higher from a direct perspective than I commented to before. In regards to operating margin, I think what’s having--some of the SG&A savings was associated with the 80-plus percent individuals who were furloughed with our store closures, so we got some benefit there with having the operating expenses being a little bit more reduced, so I would call that temporary definitely in the quarter. But I do believe we have been able to look at some discretionary spend and cut back discretionary spend, and that will be savings as we look forward into the remainder of this year as well as when we plan and think about next year, and you can think of that as T&E - travel. Obviously travel, we think is going to be different for not only corporate individuals but potentially some of our indirect individuals as we utilize technology in order to meet with individuals, so we think there’s going to be some savings there. We also are really looking at all expense structures, all contracts, and we think there’s going to be some permanent savings associated with that, and as we’ve introduced Project Novus, we should see some savings over time associated with that. In regards to masks, obviously we got some significant benefit from a gross margin perspective that obviously moved down to the operating margin perspective, and as we continue to sell masks, we should see some benefit to the operating margin on a go-forward basis. I don’t know if you wanted to add anything, Rob?

That’s helpful. Thanks for all the detail. Best of luck this fall.

Thanks Mark.

Thanks Mark.

Our next question comes from Oliver Chen with Cowen and Company.

Hi, this is Kimberly Hong on for Oliver. Thank you for taking our questions. How are you thinking about back to school this year given the current uncertainty around school re-openings this year? How would you repurpose your inventory that’s targeted to the back to school crowd if there’s not enough demand?

Yes Kimberly, thanks for the question. Back to school has definitely been off to a slow start as we’ve seen around the industry, and so we’ve definitely seen some suppression in the backpack and lunch bag business. One thing that’s interesting as schools are moving around, for example a lot of the school in Texas moving to October openings, we think one thing that’s going to happen is back to school is going to be a very elongated season. It used to be very targeted in the August period and now we really think that’s going to run out potentially for all of fall, and we expect it to be an important part of the holiday season. One thing that’s always been one of our advantages, particularly at Vera Bradley if you think about that brand, the ability for our product to be evergreen in a lot of situations, right? It’s not that we have to rush. If we have lower demand, we can change future on-order and rebalance the portfolio, so we’re not concerned with the inventory levels. At Pura Vida for back to school, it’s also a very important business for them. It drives a lot of business around--they have the whole program where people will buy bracelets as fundraisers and buy packs and do that for sports teams and schools, so they’ve seen some softness there, but we believe right now that the back to school period is going to be soft. We’re going to get through it. We started to get through it in our second quarter performance, and we think it will be similar for third quarter.

Does that answer your question?

Hi - sorry, I was on mute. Thank you. Just one more from me. Based on the math, Pura Vida looks like it’s been pretty resilient in this environment versus the indirect and direct segments that were down year-over-year. Can you speak to Pura Vida’s demand throughout this environment and also if you’ve seen the customer base from Pura Vida, the Gen V and the millennial base transfer over to Vera Bradley’s products over the last year.

Well, a couple things. One, on the Pura Vida business, we definitely are seeing continued strong customer engagement, especially through all their social channels, which is one thing we really monitor closely in terms of consumer health, so we’re very excited about the customer is still engaging with the brand. We have a lot of initiatives going forward, so there’s good momentum there. In terms of their customer migrating back against Vera Bradley, that has not been part of our strategy and we haven’t seen a big push back. The consumer still is really seeing both brands as separate brands, and they both have very loyal followings. We have some crossover, but the plan has always been to let both businesses grow their individual customer communities.

Okay, thank you.

You’re welcome.

Our next question comes from Eric Beder with SCC Research.

Good morning, congratulations. Can you talk a little bit about the ReActive and performance twill? Are you seeing those new fabrics expand the customer base, and is it driving traffic in both stores and online?

Thanks for the question, Eric. Yes, both of the new fabric innovations have been receiving really strong customer response. We’ve seen very good feedback from customers in terms of the product, really understanding what the product is for, how it’s developed. ReActive was our first real jump into the sustainability movement in a large way. That is something that you’re going to see us continue to go after that’s helped bring new customers in the brand. It’s also helped bring a younger, more sustainable focused customer into the brand, so that’s been very encouraging. Performance twill has been off to a really strong start, good feedback, but that one has been a little bit more focused on a slightly dressier lifestyle for us, so as we’ve been through COVID and there’s a little less going to office and those things, that has not been growing at the same rate that we’ve seen in ReActive, but we’re very confident in both. We think that performance twill, from everything we’ve heard from our customers, adds another esthetic, adds another lifestyle piece to our business, and we think that will continue to grow in the future.

When you look at the cotton potential, cotton fabric upgrade, what are you trying to accomplish there? I mean, obviously cotton has always been the core of the Vera Bradley experience, so what are you trying to do there that you haven’t done with other ones, or are looking to do?

In terms of cotton, there are a few different things happening with cotton. If you say short term, we use cotton as really the foundation for a lot of our collaborations. It really is our heritage, it still is an incredibly important part. It’ the most dominant piece of our business, so it’s where all of our innovation around collaboration really focuses in on. But second of all, as we move into next year, we’re really focusing on cotton too as we look at new innovation, so some of the innovation we’re bringing to market will be in our cotton franchise, so watch for more information on that. Then lastly, what’s been interesting during this period with COVID, there’s been a different focus, obviously, for our consumer. The idea of hygiene becomes really important, and what we’ve really seen is our customer responding very well to the washable part of our cotton collection, right - the fact that you can wash it, therefore it improves the hygiene, very comfortable, very wearable. That’s really resonating well with our customers.

My last question on Pura Vida, I know that you pushed back the rollout of test Pura Vida store in September to next year. Is that still in the plans, and how do you see that as potentially driving business going forward?

Yes, we still have plans to open a store for Pura Vida. We were actually out there looking at real estate, but we wanted to make sure in this new COVID world that we were able to find the right location. Obviously more locations have opened up than there were a few months ago, and obviously economics have changed, so we want to make sure that we make the right deal. But we are excited to bring a Pura Vida store to reality over the next year, so stay tuned and we’ll have more announcements about that as we move into next year.

Great. Good luck for the holiday season.

Thanks Eric.

As a reminder, ladies and gentlemen, that is star and then one if you would like to ask a question over the phone today. We’ll move onto our next question from Dana Telsey with Telsey Advisory Group.

Good morning everyone. As you think about this shift to digital for the business model, how are you planning shipping expenses? How do you see that impacting the overall operating margin structure, and when you think about the success that you’ve had with masks, how are you planning masks going forward for the balance of the year and are there other categories that we should be looking for in this post COVID environment that you see adding to the sales base? Thank you.

Thanks Dana. Let me handle both questions. First of all, from a digital shipping perspective, you’re right that as we look out over the rest of the year and the conversations around surcharges and so forth, we believe there will continue to be pressure on shipping costs. We’re looking at different ways of being creative about that, how we charge for shipping, how we motivate less packages. We just did something recently here when we finished our online outlet sale, where we had free shipping prior. We tried a $35 threshold - that worked very well, that helped us consolidate packages. We had a lot of feedback from customers that they just waited and made one purchase as opposed to six, seven or 10. We’re going to continue to manage that. The other thing that we’re working very hard on is driving efficiency through the distribution center. We just put in our automation in the distribution center, so it’s a robotic pick process. We believe that that will also drive long-term efficiency that can help be used to offset some of the shipping costs, and then we obviously continue as we manage the logistics network, continue to look for ways of being more and more efficient and how we build efficiency between the Vera Bradley and Pura Vida distribution platforms. Long term, we think that from an operating margin standpoint, there’s pushes and takes but we still are focused on our long term EBITDA targets, that we don’t think this will have a huge detriment to that.

Yes, the only thing I would add to that, Rob, is there will be a difference in where it is from an accounting perspective. You may see some gross margin pressure with freight expense above, and we maybe get a little bit more of SG&A leverage depending on how we’re able to manage where the sales move to.

Then from the mask standpoint, with masks we’re continuing--we feel it’s an important part of the business. It’s been interesting to watch how the consumers responded. I think what it’s really done is also said not only is there an opportunity today that we can expand upon, and we’ve done other things in terms of other types of PPE type stuff, whether it’s headbands, bandanas, and all kind of plans to continue to use masks as innovation, but it’s also been an opportunity to expand distribution in terms of our relationships with people like Target and Staples, so we think it’s important for that. I think the big lesson there, though, which I think is important both for investors and something we’ve been talking about as a management team, is that the Vera Bradley brand and I believe the Pura Vida brand both have a lot of flexibility because they truly are lifestyle brands, so there’s the ability to find items and find categories and really lean into it, and I think that gives us a lot more flexibility than a lot of brands have. I think that’s part of the magic of why we really wanted to focus on these casual comfortable lifestyle brands. Beyond masks, some other things that we’re continuing to see the consumer respond to are things around home, things around comfort as we move into fourth quarter. The importance of things like our throw blanket, that’s always been so important, or some of the expansion of our fleece program into robes and loungewear and those type of things, we think will continue to resonate well with the customer in this environment, so we think those are other areas to watch.

Thank you.

We’ll take our next question from Steven Marotta from CL King & Associates.

Good morning Rob and John. I know that you do not provide specific guidance, but can you talk a little bit about the expectations to generate cash in the third quarter and the ability to pay down the last tranche of that little bit of debt, and if not in the third quarter, when would you anticipate having that off the books?

Given that we’re not giving guidance, I think it’s hard to project, but the fact that we paid down $30 million, I think is a good indication that we don’t anticipate needing to borrow any additional funds from the current ABL facility. Based on different models that we’re looking at, we think that there’s probably an ability to pay it down by the end of the year.

Very helpful, thank you.

We’ll take our next question from Rick Fearon from Accretive Capital Partners.

Hey Rob and John, congratulations on a really impressive quarter. I just want to thank you for the really bold steps you took on March 19 to reduce the operating costs. Your actions were decisive and [indiscernible], particularly the substantial salary cuts you yourselves took and even your board of directors. These are qualities of a great company, great management team, and we really appreciate it. I just have a few quick questions. Prior to the pandemic, Pura Vida’s EBITDA margin was running in the high teens to 20 range, and it sounds like we’re not far from there currently. Is this a realistic target for Pura Vida going forward, or is additional margin expansion expected?

Yes Rick, I believe from a Pura Vida perspective, even in the second quarter we generated, call it 20%, 20.5% margin, EBITDA margin for Pura Vida, and we anticipate on the long term to continue to be in the high teens margin profile for Pura Vida.

That’s great, because I know that customization probably brings the margins down a little bit, but the growth, I’m sure is helping you leverage your infrastructure. Along the same lines, Vera Bradley achieved a full year EBITDA of $65 million last year on $495 million in sales. It’s better than a 13% EBITDA margin. As you continue to expand your ecommerce presence and make the investment into your systems and the digital infrastructure, is a higher EBITDA margin or something closer to that mid to high teens a realistic goal?

Yes, I think over the long term. Obviously this year it will be a little bit different given some of the challenges with COVID and some of the challenges with what we had in the first quarter, but over the long term we’ve commented to expecting an operating margin in the low to mid teen range, and that would be inclusive of Pura Vida. You can use that as a proxy for what we think EBITDA margin would be.

That’s great, thanks. It sounds like the collaborations with Disney and Crocs and Warner Bros have been phenomenal successes, and I was wondering if there are additional collaborations, such as the recent focus on colleges and the military, perhaps K-12 schools or the very large and fragmented club sports market across the country, are those areas that you foresee Vera Bradley and/or--I know Pura Vida is already sort of targeting that K-12 market, but are there collaborations that could be capitalized upon in those areas?

Yes Rick, I think there’s two different ways to think about that. First of all in terms of the collaboration particularly around some of these licensing products, like Disney, Harry Potter, I think that that’s an opportunity both for Vera Bradley to continue to explore and continue to expand, as well as Pura Vida. I think that you’re going to see that that will be something that will be ongoing. I think the second thing that you’re really mentioning is the idea of being able to get into more of the teen spirit space in terms of how we address that, and that can be through both brands, right? It’s an area where Pura Vida has had a lot of success in the fundraising side, but it’s definitely something that’s on our radar. We believe that helps. Again as you look at these collaborations, we talk a lot about the character in terms of Disney and in terms of Harry Potter and the big success, but it’s broader for us too, so collaborations is not just there. We’ve also had great success with Gillette and Venus and we’ve seen that expansion not only at Target but around the world. Crocs, this has been our second collaboration with them. That grew in year two over year one, and we have a lot more exciting collaborations coming up next year that we’ll be talking about. We believe that’s a really important part of the strategy because it brings new customers to the brand, expands the customer reach, it gets people to think about Vera Bradley in a new way, and I think as we’ve seen with masks in our collaborations that our brands can go beyond just their traditional category and move into other areas, so we look forward to doing more of that across both brands. The other thing maybe just to mention too, which I didn’t talk about, is we have a tendency to speak o four collaborations around product all the time, but I think in this new world, collaborations around marketing and how you use influencers, what Pura Vida is doing in their partnership with Charli I think just shows the power of collaborations that are marketing-focused too, so be looking for more collaborations on the marketing side as well as on the product side as we move forward.

That’s great, thanks. Obviously part of the magic of Pura Vida are the ambassadors, the influencers. Is that an area where Vera Bradley considers there’s opportunity as well?

Yes, we do believe there really is an opportunity to build out that ambassador base, and we have some work underway right now that we’ll be talking about more in the future.

Okay, great. Look forward to that. Just a couple quick additional questions. The wonderful story about Barbara and Patricia founding the company 38 years ago and the authenticity of that story, it just seems like there’s a great message here of empowering women to achieve their dreams and that this really would resonate with your customer base to the extent that it can be showcased or featured in some of the social media, or even possibly talk shows or that concept. Are there efforts to do that underway as well?

There is some around that. Barb wrote a book a year ago. Pat and Barb still do some speaking out there, but what we want to do is not only continue to highlight that story, but what we’ve actually found from our customer is whether it’s at Vera Bradley or whether it’s been at Pura Vida, the idea that them being able to participate in some of these stories is even more important, so being able to do things like become involved with us in supporting these different charities that we’re working with, and whether it’s the ones we work with at Vera Bradley between our foundation and New Hope Girls and Blessings in a Backpack, or the charity bracelet program at Pura Vida, what we’re finding out with this younger customer is it’s not only about the stories that are told but it’s more about the stories that they can help write. For us, we’re spending a lot of focus on really bringing our customer into these stories in addition to maybe talking about our heritage, and we think that’s where the most power lies.

That makes sense, and it sounds like you’ve been giving back to the community exactly the same way Pura Vida does, and that’s a shared cultural approach which I know also resonates with that demographic. I guess the last question, Rob, with what appears to be just great success with the Pura Vida acquisition, do you consider this a template for growth possibly via future acquisitions?

Yes, I think two things, right? One, we don’t peak a lot about future acquisitions, but at the same time we’ve been very happy with the Pura Vida acquisition. We think it’s gone really well. We think it’s a very special company. We think what Griffin and Paul have done there is really unique and special, and I think both brands are really helping each other, which I think is a great model. The integration’s gone well, we’ve been very pleased so far, and I do think that we have a lot of optionality. We still have a strong cash flow model between the two brands that allows us to have capital to potentially invest in other brands going forward. If we did that, we would still want to find companies that feel like Vera Bradley and Pura Vida - you know, lifestyle driven brands with a strong ESG focus. It could be in the future, but we’re not commenting specifically on that being a focus at the moment. Right now, our number one focus is continue to strengthen the Vera Bradley and Pura Vida brands and continue to show growth.

Understood, and you’ve got plenty of organic growth opportunities, so totally understood. Rob and John, thanks for all your hard work on behalf of all Vera Bradley stakeholders and look forward to staying in touch.

Thanks Rick.

Thanks Rick.

There are no further questions at this time. I would like to turn the conference back over to Rob Wallstrom for any closing remarks.

Well, thank you very much for joining us on today’s call. Vera Bradley Inc. is an authentic, iconic lifestyle company with two powerful brands and passionate, emotionally connected customers. We are focused on continual innovation and improvements in product, customer engagement, and technology. We have strong cash flow, a solid balance sheet, and ample liquidity. We are fully committed to continuing our long-term commitment to all stakeholders with a strong ESG focus. This quarter demonstrates that we can not only survive but thrive in this environment. We have a talented and engaged team that is agile, tenacious and innovative. We could not be prouder of how the team has worked together to address the challenges and create new ways to do business and reach our customers. We are poised to emerge a stronger, more agile company. Thank you for your interest in Vera Bradley Inc. and our two powerful brands. We hope you can join us on our third quarter call on December 9.

Once again ladies and gentlemen, that concludes today’s conference. We appreciate your participation today.