Olaplex Holdings, Inc.
Q4 2021 Earnings Call Transcript

Published: 8 Mar 2022

[Operator:]

Ladies and gentlemen, thank you for standing by and welcome to Olaplex Inc.'s Fourth Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. I would now like to turn the conference over to your speaker for today, Allison Malkin. You may begin.

[Allison Malkin:]

Thank you and welcome to the Olaplex's Fourth Quarter 2021 and fiscal year 2021 Earnings Call. With me today are JuE Wong, Chief Executive Officer and Eric Tiziani, Chief Financial Officer. For today’s call JuE will begin with highlights of our fourth quarter and fiscal year as well as the priorities we have set for the business in fiscal 2022. Then Eric will review our financials in more detail and provide our guidance. Following the prepared remarks, the operator will open the call so that we can answer your question. Before we start, I would like to remind you that management will make certain statements today which are forward-looking, including statements about the outlook of Olaplex's business and other matters referenced in the company's earnings release issued today. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected and/or implied by such statements. Additional information regarding these factors appears under the heading Cautionary Note regarding forward-looking statements in the company's earnings release and in the company's filings that it makes with the Securities and Exchange Commission that are available at www.sec.gov and on the Investor Relations section of the company's website at ir.olaplex.com. The forward-looking statements on this call speak only as of the original date of this call and we undertake no obligation to update or revise any of these statements. Also during this call management will discuss certain non-GAAP financial measures, which management believes are useful in evaluating the company's performance. The presentation of non-GAAP measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. You will find additional information regarding these non-GAAP financial measures, and a reconciliation of these non-GAAP to the most directly comparable GAAP measures in the company's earnings release. A live broadcast of this call is also available on the Investor Relations section of the company's website at ir.olaplex.com. With that, I will now turn the call over to JuE Wong.

[JuE Wong:]

Good morning every, and thank you Alison. I am pleased to speak with you to share our fourth quarter and fiscal year 2021 results. Our performance marked an excellent finish to a strong year of growth at Olaplex and surpassed the guidance we introduced on our Q3 earnings call. reflective of the power of our technology and able approach to hair care and the focused execution of our strategies by our team. I would like to thank all our team members for their valuable contributions. As more and more consumers and professionals have come to know, our success is a direct result of our products that work to improve hair health from the very first use. Olaplex repairs hair bond with a unique system so that hair can be a healthy canvas to receive other treatments, whether chemical, color, straightening or otherwise. Olaplex is also highly beneficial as a standalone treatment as we damage our hair bonds daily. Hair bonds are hair agnostic serving any hair type, regardless of a person's age, gender, or ethnicity. This gives us a vast white space opportunity from which to grow and has led to Olaplex being part of millions of consumers' haircare regimen, and a must have treatment for stylists to apply on their clients. We see the skinification of haircare as an ongoing trend, and one that we believe has tremendous runway ahead as we apply our patent protected technology to meet current and new consumers’ needs for products that are used every day for hair protection and repair and products for style. With 11 established products and more than 100 patents for existing and new technologies, we have a competitive mode and are confident in our ability to deliver consistently strong sales growth at robust EBITDA margins into the future. The fourth quarter saw net sales increased 79% and adjusted EBITDA increased 68.2% with an adjusted EBITDA margin of 66.5%. For the fiscal year, net sales rose 112% and adjusted EBITDA increased 105.1% with an adjusted EBITDA margin of 68.3%. The year marked several noteworthy accomplishments, which we are proud to share. Olaplex was honored with 33 industry awards, the most ever in our history, surpassing the combined number awarded to us in our seven-year history. According to the NPD Group retail tracking data, in the U.S. in 2021 Olaplex had the best selling prestige hair products with our No. 3

[Eric Tiziani:]

Thanks, JuE and good morning, everyone. I'll be covering our fourth quarter 2021 and fiscal year 2021 financial results as well as the introduction of our fiscal year 2022 guidance. As JuE noted, the fourth quarter capped off an outstanding year for Olaplex. I'd like to begin by acknowledging the Olaplex team who made this possible. We more than doubled the business, having $316 million of net sales and $210 million of adjusted EBITDA in 2021 amidst a volatile macro environment. This is a testament to the depth of our competitive moat, the resilience of our operations, and the passion that we have to serve the Olaplex community. Our growth was broad based across products, channels and geographies and we expect this to continue in 2022 and our growth was very profitable with adjusted EBITDA and adjusted net income, also growing triple digits. We entered 2022 with strong momentum. Our outlook for 2022 has only improved since our IPO in September 2021 and we have strong conviction that our strategy will continue to deliver healthy growth with robust profitability. Now turning to our financial results, my remarks will focus on our adjusted results. You can find reconciliation tables to the most comparable GAAP figures in our earnings release, which was also furnished on our forum 8-K with the SEC today. Highlights of our fourth quarter included the following

[Operator:]

Thank you. Before we begin the Q&A portion, I would like to turn the call over to JuE for a few remarks.

[JuE Wong:]

Thank you very much and first of all thank you everyone for taking the time to attend our earnings call. We would like to start by saying that our thoughts are with those in Ukraine and the innocent lives being lost due to this horrific war. The impact on the people of Ukraine is obviously top of mind, but we do appreciate you being here with us today to discuss our results. I also want to address the misinformation surrounding Olaplex and Lilial upfront in view of taking questions on it during the Q&A. In the last 10 days, misinformation on Olaplex had started with regards to Lilial and our products. We have been actively communicating across all our channels to ensure that our customers have access to the facts and to alleviate any anxiety that has been caused by this misinformation. Lilial is a fragrance ingredient commonly found in beauty and household products. In September of 2020, the EU Regulatory Authority announced their intent to phase out the use of butylphenyl methylpropional which is Lilial. On March 2022 out of concern that Lilial when used at certain quantities could have negative impacts on women's fertility and reproductive system if ingested. In response to the EU's phase out of Lilial, we no longer produce products with Lilial. Prior to the EU's phase out, our No. 3 Hair Perfector product contained very small amounts of Lilial to enhance the product's fragrance. Lilial was never an active or functional ingredient in our product and independent medical and chemists experts have confirmed that a very small amounts of Lilial 0.0119% previously used by Olaplex. in its rinse off No. 3 Hair Perfector product had no impact on fertility and the reproductive system. We have provided updated and detailed information on our website under the FAQs. There is also a link to an article citing experts from the medical and science community, as well as the original study that led to the phase out of Lilial. We take pride in our investment in R&D and our commitment to ensuring that our products are designed and produced with the safety and health of the consumer at heart and we will continue to abide by health and safety standards as they evolve. And as we have always been, we will continue to proactively and transparently communicate with our customers and the market to ensure they are well informed about our products. Well, thank you for your attention and I will now turn this over to the operator for Q&A.

[Operator:]

Thank you. Our first question comes from the line of Dara Mohsenian with Morgan Stanley. Your line is open.

[Dara Mohsenian:]

Hi, guys, good morning.

[Eric Tiziani:]

Good morning.

[Dara Mohsenian:]

So I wanted to ask about the Ulta rollout, it sounds like it's going well, even better than expected so far. Can you just be a bit more specific on the ultimate level of contribution you might see there as the business builds out going forward? And then so far, can you also talk about the incrementality you're seeing to your total business from Ulta sales so far through early March here, versus may be cannibalizing some of the rest of your portfolio? And then last, just in a broader sense, what type of impact you expect on your household penetration of the Olaplex brand in general from the Ulta launch and what are you guys seeing so far there? Thanks.

[JuE Wong:]

Thank you and this JuE. Let me take that question and Eric, please feel free to build on it. So first of all, your question in terms of how our business is doing, we have obviously monitored very closely and we are happy to report we are the number one brand at Ulta for haircare. And in terms of services 25% of our callers services at Ulta uses Olaplex as an additive and that service is ahead of plan. In terms of cannibalization as you can, as you all know, Ulta really does almost close to 90%, 95% of their business with their 35 million loyalty customers and we have now the ability to be exposed to that 35 million customers that we have -- probably would not have gotten full exposure to had we not been in Ulta. And the other thing that you know the questions that you asked in terms of impact on household, obviously we don't see that because we are getting into new markets and given our results thus far, where it is both, our expectation as well as Ulta's, we are very confident that we will continue on the path of delivering what the consumers are looking for and what they need from us, that is the Ulta gas techniques and wants things from us. Eric, do you have anything to build on this?

[Eric Tiziani:]

Hi, JuE, hi Dara. I would only add one thing, Dara to put it simply, when you think about our 2022 full year guidance, you see basically the rest of our business is on plan and this over performance that we're seeing in Ulta is leading to the strong guidance that we've been able to report.

[Dara Mohsenian:]

Okay, that's very helpful. And if I can slip in one more, Eric, on that point, just as you think about 2022 guidance, obviously the broader market concerns about the indirect fallout from Russia, Ukraine, and weaker consumer spending for beauty companies in general, particularly premium ones like yourself. So just how do you think about the potential impact if weaker consumer spending develops on your business? Obviously, you guys don't have a long history through economic cycles, but maybe the experience during COVID, and how that might form any impact? And as you think about your 2022 guidance, have you built in some conservatism on that front, either directly for weaker consumer spending, or maybe other areas as you think about your 2022 guidance, and the clarity behind that? Thanks.

[Eric Tiziani:]

Yes, Dara I'll take that and, JuE please add, as you see fit. So first, let me just address the question about Russia and the Ukraine, just for everyone's information. We have no direct operations in Russia, Ukraine, or Eastern Europe. Our direct exposure to Russia and Ukraine is very small, much less than 1% of sales, and only between one and 2% if you include all of Eastern Europe. Your question is more broad than that Dara, what about consumer spending? What about our macro outlook for the year? And we've reflected our assumptions in that guidance. We haven't seen an impact yet to the prestige haircare category, which has proven to be resilient through multiple crises. And I'll point to the market growth that we saw in the U.S. in 2021, at least as measured by NPD, so that's the U.S. retail market was 47% and we expect that same market to grow double digits again in 2022.

[Dara Mohsenian:]

Great, that's helpful. Thanks, guys.

[Operator:]

Thank you. Our next question comes from the line of Andrea with JPMorgan. Your line is open.

[Unidentified Analyst:]

Thank you, good morning. JuE, Eric, just wanted to perhaps bridge the top line, the sales growth that you have embedded for 2022. I know you normally don't break it down between new doors and distribution or same door, but you did say many times innovation is the biggest component. So I was hopeful if you can kind of elaborate more, I'm assuming and correct me if I'm wrong, you're not embedding any haircare or I'm sorry, in any skincare or nail care, or even color, hair color on this top line, so I just want to clarify that. And then part of also the concern that investors had is the cost pressures to your third party manufacturing. It looks as if it wasn't like a big impact this year. So I was hopeful to see if the contracts are broadly long-term, and then you're not seeing much of a pressure that would need to be passed on to pricing at this point, if there is any pricing embedded in your guidance? Thank you so much.

[Eric Tiziani:]

Thanks, Andrea, I'll take that. So first, on the breakdown of our 2022 growth guidance, I won't break it down specifically for 2022, but I'll reiterate the way that we've described our kind of long-term algorithm here, which is broad based growth. And in that sense, about a third from our core, about a third from the impact of innovation, new products, and about a third from new distribution. And it won't exactly be that in every single year, but that's more of a long-term algorithm that you can think about and that's very similar to how we're looking at 2022. In terms of the cost pressures, and your question on third-party manufacturers, yes we are seeing cost inflation on average, not just, not with our third party manufacturers, but more broadly, in terms of market indices in the mid to high single digits, which we expect to partially offset with our cost savings initiatives and tactical pricing. Our contracts with our third party manufacturers are long-term. We work with them on a quarterly to six-month basis or as needed to review cost increases that they're experiencing, but also the increased volumes that we're driving at those third-party manufacturers as well and leveraging those efficiencies. So we built our assumptions on cost inflation into this guidance, and we'll continue to evaluate it as more information becomes available.

[Unidentified Analyst:]

That's helpful. And just to clarify, so there is no major innovation outside hair for this year?

[JuE Wong:]

And that's correct, yes. I mean, as we have accretive sales, the runway and the opportunity for hair is tremendous and we only have 11 established SKUs at this time, so the focus is going to be on hair, yes.

[Unidentified Analyst:]

Thank you very much. I'll pass on.

[JuE Wong:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of Jason English with Goldman Sachs. Your line is open.

[Jason English:]

And sorry JuE, and I know you said you want to keep Lilial out of Q&A and address it up front. But I do have a quick question on it. We see a big spike in like Twitter mentions and Reddit post and Google searches, they all look like they faded sense. But even if there's not substance behind the concerns for perception matters, have you seen any negative impact in retail sales related to this?

[JuE Wong:]

I think you know, what I want to point you back is to the fact that we are addressing it on all fronts. This only happened as in my so early on statement in the last 10 days. So we are monitoring and looking at everything from all angles. But the primary concern now is to really address all of this misinformation because you can appreciate how some of the anxiety that has created for women on when they read about infertility. And we are very happy to be able to cite experts not affiliated with Olaplex nor paid by us citing that there was no impact to fertility.

[Jason English:]

Okay. Then let me move on to the different question and that's China. Can you give us more detail around your strategy? I think as you've entered most markets, you've kind of seated in salons and then scaled beyond. China seems like a very different approach where you're just coming through cross border. Is it going to stay that way? Do you have a salon strategy? If you could just expound upon your plans in that market? Thank you.

[JuE Wong:]

Yes, thanks for the question. So first of all, we have done independent studies with our transformation team, identifying where do consumers really look at buying innovative and even haircare products, and our studies have shown that TIMO, jd.com ecommerce site, bar none is where a lot of consumers are buying their products. That doesn't mean that beauty salons do not factor in. But what I'm trying to convey here is that the fact that we are on the right platform marketing, as far as communicating on who Olaplex is gaining my share and wallet share as evidence from our Singles Day, you just saw where we are the number one brand for haircare on TIMO Global for all causes of trade gives us confidence that our strategy is working. And that while it is still a small piece of our business, it represents an opportunity that we will continue to monitor and to continue to see how best we can continue to get access to that market, watching very closely on their animal testing policy.

[Jason English:]

Got it. Thank you and that's helpful. I'll pass it on.

[Operator:]

Thank you. Our next question comes from the line of Jonna Kim with Cowen, your line is open.

[Jonna Kim:]

Thanks for taking my question. I'm just curious, one of your key strengths is your ability to launch new products that do not cannibalize existing sales. So just curious if you're seeing similar trends with your recent launches, and sort of how should we think about the cadence of new product launches this year? And also just curious about professional channel, as you know, within U.S. as things go back to sort of normalcy do you expect to see sort of higher growth in that channel? So that would be helpful to get color. Thank you so much.

[JuE Wong:]

Well, thank you again for the question. I'll take the last ones first and then build on that. First of all, our professional channel is very important to us. It is a channel that really lends authority and credibility. So we will continue to support that channel, in whether it's in marketing, in communications, in education and in social media connection. So that is well known a focus of ours. The other thing too is that in terms of new launches, while we will continue to look at two to three launches as we say, the way we would cadence the launch is going to be per discussions with our retailers to make sure that we get the best exposure, both on retail, in physical brick-and-mortar, as well as online in the digital presence. So, that will give us a lot of opportunity to really optimize the exposure of the launch as well as on the brand. Obviously, again, this is planned out well in advance. We have those already calendarized, but I'm not at liberty to share the specific date because of competitive reasons. But ultimately, we are not just going to look at one thing at a time. As you have heard from our prepared statements, we are looking at core growth and innovation as well as in international and U.S. expansion. So, all of those triggers are going to be pulled by us, to ensure that we will continue to grow this brand both by leading it, shaping it as well as defining it.

[Jonna Kim:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of John Kapoor with Bank of America. Your line is open.

[John Kapoor:]

Hi, good morning, everybody. I just had two questions, one about the skinification of hair care that you mentioned in the prepared remarks, I was just wondering how that may or may not influence innovation planning for the next few years? And then in terms of advertising, I was just wondering if the mix of that advertising and promotion, the expenditures you guys are planning, is that going to be more of the same kind of social media weighted Facebook groups and towards the professional channel or is there going to be a little bit more traditional and digital advertising and maybe some more influencer type sponsorships and things like that?

[JuE Wong:]

Great question and let me take that. One of the things is that, we are a very data-driven company just as we lead with our science enabled and technology driven innovation pipe. When we look at data, data is telling us and our transformation team is the one to go out there and do all this independent research with independent houses. Again, data shows that 67% of customers tells us that their first source of truth is recommendations from the hairdressers. We are therefore going to double click and double down on supporting the community in helping us message what Olaplex is, how the products are doing so that we get the credibility to redirect interest into specialty retail and direct-to-consumer. We have data to show that 35% of our customers are recommended by their stylists when they buy at brick-and-mortar or online, and that 50% of our online customers actually buy at brick-and-mortar, as well as at professional. So, with that said, we are confident that if we continue to let data help drive us into making that connection, that engagement and ultimately the conversion, we will always win. But as you have heard me say, we have also brought on Charlotte Watson, our CMO. She has a lot of years of experience behind her on both, traditional as well as relevant marketing tactics that we are going to explore. And what is important is that we want to make sure that our communication and our marketing continue to resonate, both with our end consumers at retail and at online, as well as with our clients who are our professional stylist and cohorts.

[John Kapoor:]

Great, thank you.

[JuE Wong:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of Olivia Tong. Your line is open.

[Olivia Tong:]

Great, thanks, good morning. In terms of the retail expansion into Ulta, do you have a sense of what percent of consumers are new to the brand? And is there any difference in the trends you see at Ulta versus any of your other retailers? And then also, just a quick question on sort of quarterly cadence and whether you expect growth to be relatively similar by quarter in 2022 or are there some puts and takes to consider because of launches in the base or launches expected this year and just any impact that you saw from Omicron and if you bounced back yet? Thanks.

[JuE Wong:]

All right. Do you want to take the question on the financial piece and then I'll build on the trend?

[Eric Tiziani:]

Yes, exactly. I'll take your second question Olivia, hi. So, let me talk about the quarters for 2022. On our prepared remarks, you have heard me make a statement that we actually expect Q1 of 2022 to have net sales growth higher than the full year 2022 guidance, and in particular that will be led by specialty retail and professional. We expect professional to have a strong Q1 as well, more so than direct-to-consumer, because direct-to-consumer is lapping a Q1 of 2021. That was especially high around certain consumer behaviours related to COVID at that time and all that is as expected. Q1 growth is going to be higher, we believe, than the full year guidance because last year's new product launches and distribution gains were largely introduced after Q1, so it has a little bit to do with what we're lapping. After Q1 we expect that growth to be, we're not giving quarterly guidance, but stable along the lines of our full year growth guidance. There's always going to be some quarterly volatility, timing of new product launches year-over-year, et cetera. But we see the full year growth guidance and that's what we want to have everybody focus on is very strong, very healthy, and a number that we believe is going to be well ahead of the market. And then you also asked, I'll take the other part of that as well, Olivia. You asked about Omicron, we saw very slight impacts, particularly in our salon channel in January. It related to cancelations lack of workers, but by February that was completely back to normal. So, that was a very small blip.

[JuE Wong:]

Thanks, Eric. And then on Ulta trends, as we've shared the fact that we continue to be the number one hair brand at Sephora and the number one volume driving brand at Ulta, out of the gate in January when we launched with them and continue to do so. It's an indication that the trends are very positive for us, because we are serving customers that do not overly overlap, as you can appreciate, also serves the professional customers, the mass message and the prestige. So, all classes of trade and hair products are represented there and Olaplex has been one of the brands that a lot of customers have been asking for, as well as salon professionals. So, all of this really point to the fact that the opportunity is there, and that's why we continue to be so positive and so enthusiastic about how we can grow this business and when we say we are just at the infancy, we really mean it because there are still many customers who have yet to experience Olaplex.

[Olivia Tong:]

Thanks, that's helpful. And then in terms of the margin, your EBITDA margin guide would assume something around a 500-basis point decline. So, can you just help parse it out a little bit for us, in terms of your views on how much of that is logistics versus incremental sales and marketing versus expenditures and building out additional partnerships whether retail or geographies and other capabilities? Thanks.

[Eric Tiziani:]

Yes, Olivia, I'll take that. You know the bridge from the 2021 adjusted EBITDA margin to what you see in our guidance hasn't really changed in the way that we've been talking about it up until this point. From an SG&A perspective, priorities are the same. We're going to double down on the sales and marketing model that's been working so well for us, even ahead of sales. So, that's an increase as a percentage of sales. We're going to increase our investment in R&D behind our science backed innovation, and we will see increases in hiring people into the organization and building up capabilities to measure it with our growth, also including the cost of being a public company for a full year versus only a quarter of 2021. So, those priorities are exactly the same as what we've talked about. And one other factor in there is an adjusted gross margin that we expect to be moderately lower in 2022 versus 2021, with the cost inflation impacts we're seeing now entirely made up by our mitigation efforts.

[Olivia Tong:]

Thank you.

[Operator:]

Thank you. As a reminder, ladies and gentlemen, we ask that you limit yourself to one question please? Our next question comes from the line of Robert Ottenstein with Evercore. Your line is open.

[Robert Ottenstein:]

Great. Thank you very much. I was just wondering if we can go back to Q4 and then looking at Q1 just in terms of how the channel growth developed. If you give us a little bit more detail on that, retail was much better than expected, Pro was better, DTC was a little bit less and then you also just noted that you expect Pro to be very strong in Q1. So, maybe just discussing a little bit more detail, what's going on between the different channels compared to your prior thinking, as well as any impact that may have in terms of your margins, given the fact that DTC obviously has much higher margins and that was a little bit weaker? Thank you.

[Eric Tiziani:]

Thanks, Robert. I'll take that one. So, if we look first at the fourth quarter of 2021, we came in ahead of the guidance that we had given with our Q3 results, and that beat was broad based. Actually, we'd like to mention that it was actually a little bit of a beat on each of the three sales channels. So, it was largely as we expected and then the beat was broad based. We already talked about Professional in the call script, which is really about what we were lapping in the prior year. We expect Q1 2022 Professional to be strong. The biggest beat we had by channel and Q4 was actually indirect to consumer, where we just saw a really fantastic result in both Olaplex.com and with our e-commerce partners. As you then extend forward to Q1 2022 like I said, Pro retail, strong. You know, we're adding significant distribution points in retail, as well as having a very strong core and healthy base of existing distribution and direct-to-consumer, while still very healthy, we expect the growth to be a little bit lower in direct-to-consumer in Q1, again really, because of what we're lapping in Q1 of 2021. So, I wouldn't focus too much on that volatility by channel on a quarterly basis and point to all three channels being important for us, all three channels growing nicely, as we assume in our full year 2022 guidance. And yes, direct-to-consumer comes at a higher margin for us. So, that does provide a little bit of a margin tailwinds when you look at the longer arc of the time horizon full year versus just one quarter.

[Robert Ottenstein:]

Is there a big difference in those trends between the U.S. and Europe?

[Eric Tiziani:]

Not particularly. Particularly again, if you look at the full year basis and get away from sort of the quarterly noise, we see consistent trends by channel in both the U.S. and International.

[Robert Ottenstein:]

Great, thank you very much.

[Operator:]

Thank you. Our next question comes from the line of Korinne Wolfmeyer with Piper Sandler. Your line is open.

[Korinne Wolfmeyer:]

Hi, good morning and thanks for taking the question and Congrats on the quarter. Just wanted to touch on, you mentioned in your prepared remarks the potential for inorganic growth opportunity. Just curious what kinds of things you'll be looking at here? Is this eventually a way for you to expand more out of haircare? Would you be targeting larger assets or smaller, just any colour here would be helpful.

[JuE Wong:]

Thank you for the question, I'll take that. Basically when we say organic and e-inorganic, is that we want to be able to be open, if there are opportunities that come to us as you can appreciate, we have a really strong cash flow and we have ability to assess what it would mean for our business. So, we will leave no doors closed, so to speak, and we'll look at opportunities and we seize it.

[Korinne Wolfmeyer:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of Lauren Lieberman with Barclays. Your line is open.

[Lauren Lieberman:]

Great, thanks. Hi everyone. This call has gone on a long time and we've covered a lot of ground so I'm just going to leave it and we can follow up offline. Thanks.

[Allison Malkin:]

Yes, operator, if you could please turn the call back over to JuE Wong for closing remarks. Thank you.

[Operator:]

I will now like to turn the call back over to JuE, for closing remarks.

[JuE Wong:]

Well, thank you again for joining us today. We look forward to speaking with all of you at an upcoming investor conferences and when we report first quarter results in May. Have a great day everyone.

[Operator:]

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.