Laird Superfood Inc. (LSF) has showcased a robust performance in the first quarter of 2024, with a notable 22% increase in net sales year-over-year. The growth has been primarily fueled by a 33% rise in e-commerce sales, spearheaded by a 48% surge on Amazon (NASDAQ:AMZN). Direct-to-consumer (DTC) sales also climbed by 25%, with subscriptions accounting for half of these sales.
The company's wholesale segment saw a 10% growth, led by coffee and instant latte products. Effective supply chain execution by the operations team has resulted in a solid 40% gross margin, successfully mitigating cost hikes. Laird Superfood ended the quarter strongly, with $7.3 million in cash reserves, no debt, and has updated its full-year guidance to project net sales between $38 million and $42 million, with a gross margin forecast of 38% to 41%.
Key Takeaways
- Net sales increased by 22% compared to the same quarter last year.
- E-commerce sales, particularly on Amazon, grew by 33%.
- Direct-to-consumer sales saw a 25% increase, with subscriptions making up half of the sales.
- Wholesale business grew by 10%, with coffee and instant latte products leading the category.
- Gross margin stood at 40%, reflecting strong supply chain execution.
- Full-year guidance raised to net sales of $38 million to $42 million and gross margin of 38% to 41%.
- The company has a cash balance of $7.3 million and carries no debt.
Company Outlook
- Laird Superfood anticipates ongoing growth throughout 2024.
- Plans to reduce marketing expenses while maintaining sales momentum.
- Intends to expand into the conventional grocery channel in about a year.
Bearish Highlights
- The company has not observed a significant impact from the popularity of the drug Ozempic on their business.
Bullish Highlights
- Strong performance on Amazon, surpassing company expectations.
- Growth in the hydration business, particularly the Greens product.
- Expansion of product availability to retailers.
- Introduction of Daily Reds as a new heart health product.
Misses
- The company recognizes seasonality in their business, with fall and holiday seasons being peak sales periods.
Q&A Highlights
- Jason Vieth emphasized the company's focus on health-conscious consumers and the trend of viewing food as medicine.
- Vieth highlighted the success of the Greens and Reds products and the strategic shift in DTC sales to enhance content and reduce promotions.
- The company has seen an increase in DTC subscriptions and improved trade and promotional strategies, leading to reduced return rates and discounts.
- Laird Superfood is optimistic about future growth and confident in meeting its updated guidance.
In conclusion, Laird Superfood's first quarter of 2024 has been marked by strong sales growth and efficient operational management. The company is well-positioned for continued expansion, with a clear strategy to capitalize on health trends and a growing e-commerce presence. With a healthy balance sheet and strategic initiatives in place, Laird Superfood is setting a positive tone for the remainder of the year.
InvestingPro Insights
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Full transcript - Laird Superfood Inc (LSF) Q1 2024:
Operator: Good afternoon and thank you for joining the Laird Superfood First Quarter 2024 Financial Results. My name is Kate and I will be the moderator for today's call. [Operator Instructions] I would now like to turn the call over to Trevor Rousseau. You may proceed, Trevor.
Trevor Rousseau: Thank you and good afternoon. Welcome to Laird Superfood's first quarter 2024 earnings conference call and webcast. On today's call are Jason Vieth, Laird Superfood's President and Chief Executive Officer; and Anya Hamill, our Chief Financial Officer. By now, everyone should have access to the company's first quarter earnings release filed today after market close. It is available on the Investor Relations section of Laird Superfood's website at www.lairdsuperfood.com. Before we begin, please note that during the course of this call, management may make forward-looking statements within the context of federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and other filings with the SEC for a detailed discussion of these risks and uncertainties. With that, I'll turn the call over to Jason.
Jason Vieth: Thanks, Trevor. Good afternoon and another big thank you to everyone who has joined us again. Today, I am excited to share that the Laird Superfood turnaround story has officially become a growth story once again. During the first quarter, we grew the net sales of our business by an impressive 22% versus the same period 1 year ago. Our sales growth during this period was led by our e-commerce segment which grew 33% year-over-year despite another sizable decrease in marketing spend across those periods. Amazon led the way this quarter with an astounding 48% growth rate driven by our continued improvement in product availability, marketing effectiveness and inventory management. We have continued to hone our execution, driving out unauthorized resellers of our products and winning the buy box to ensure that our brand sales on the Amazon platform are being filled by our Laird Superfood team. Perhaps the biggest surprise to DTC industry observers will be our impressive 25% growth in our own DTC business, where we continue to demonstrate our ability to convert viewers into buyers, buyers into repeat buyers and repeat buyers into subscribers. Approximately half of our DTC business is now made up of subscription sales. Over the past months, our team is focused on creating a website and e-mail platform where we can share health and wellness, nutrition and lifestyle tips and stories with our consumer base, thereby giving them a reason to continually interact with our branded website. And by continuing to leverage Laird Hamilton and his wife Gabby Reece, we have been able to create highly relevant, authentic and original content that provides a competitive advantage for our brand. Further, our customer service and Net Promoter Scores remain best-in-class and our consumers clearly recognize and appreciate the care with which we handle their orders from their website interaction to arrival at their door. On the wholesale side of our business, we grew net sales by 10% year-over-year during Q1 which is even more impressive since it was done without the benefit of a price increase during the last 12 months. Even more encouraging is that retail scanner sales for our Laird Superfood brand were up significantly more than our net sales during this quarter, reported as plus 30% across U.S. food for the 12-week period ending March '24. Given the growth rate discrepancy between retailer scanner data and our LSF' internal sales, there was clearly a deloading of inventory across our 2 large distribution partners. And so, we expect to see continued strength in this channel of business as we move forward. Within wholesale, our business grew during Q1 across all our measured categories in terms of both units and dollars led by our coffee and instant latte products which now combined to be our largest category at retail. Our club business also remains extremely healthy and we continue to see growth in our sales velocities behind our improved product following last year's quality event. On the operations side, our team continues to demonstrate strong results driven by supply chain execution across procurement, production and distribution, as well as favorability in our trade spend. Our gross margin was 40% during Q1 which was several points ahead of our own internal projections despite a planned write-down in the value of our coconut milk powder. That planned write-down was actually a positive result for us as it was driven by the recognition that we are now able to procure our largest commodity ingredient at a significantly better rate than we had previously been able to. With our supply chain team executing at a high level, we have been able to effectively offset various cost increases and at this point, expect to be able to do so throughout 2024. As we shared previously, the first quarter is a strategic investment quarter for us as the marketing activities that we fund early in the year are able to be leveraged during subsequent quarters. That said, we were able to once again reduce our year-over-year marketing expense during Q1 behind better execution and more efficient activations. Our marketing expense for the quarter was just over 20% of net sales which obviously represents a dramatic decrease from prior years. As we move forward, our midterm goal is to continue to press this down into the low-teens and eventually into the high single digits. But with the opportunities in front of us and a return to solid brand growth in the first quarter, we are quite pleased with where this currently stands. In fact, we are very pleased with the first quarter results where we over executed our internal plan and are now on pace to exceed our stated goals for 2024. With this in mind, I think it's time to change the storyline on Laird Superfood from a turnaround project to a growth story, one in which we are growing our consumer base across our various sales channels and preparing ourselves for the next chapter of expansion. With that, I will now turn it over to Anya to discuss our first quarter 2024 results in more detail.
Anya Hamill: Thank you, Jason and welcome, everyone. Our team's work over the last 18 months has transformed our financial foundation and positioned our business for growth. I am pleased to share with you that our first quarter results have exceeded our operating plan on every key metric. Net sales grew 22% to $9.9 million in the first quarter of 2024 compared to $9.2 million in the prior year period and were up by $700,000 sequentially versus the fourth quarter of 2023. As Jason indicated, both the e-commerce and wholesale channels contributed to Q1 growth. E-commerce sales increased by 33% year-over-year and accounted for 59% of our total net sales. With our Amazon and DTC platforms delivering impressive growth of 48% and 25%, respectively. Amazon sales growth was fueled by tremendous execution on the platform where our team was able to improve our inventory positions, increase our buy box win percentage and drive efficient media spend. Q1 growth in our DTC platform was driven by a steady increase in subscribers and repeat orders, higher order value and lower discount rates due to strategic shift in promotional spend. Wholesale net sales increased by 10% year-over-year and contributed 41% of total net sales, reflecting continued growth in club, velocity improvements and distribution expansion in grocery, as well as more efficient promotional spend. Gross margin was 40% in the first quarter which is a 17-point improvement on a year-over-year basis and was driven by the continued benefit of transitioning to third-party co-manufacturing and distribution model and lapping expenses related to the product quality event in the first quarter of last year. This is the second quarter in a row of gross margin of at least 40% which supports our expectation for sustainably achieving gross margins in or above the upper 30s in the coming quarters. Operating expense decreased $1.1 million in the first quarter compared to the same period last year. This reduction was primarily driven by lower people costs, lower marketing and a broad strategic reduction in spend. Net loss for the first quarter was $1.0 million which is 75% better versus the prior year period, driven by higher net sales and expanded gross margin, as well as continued discipline around G&A spending. Versus the fourth quarter of 2023, our Q1 net loss was $1.2 million higher due to stepped-up planned marketing investments and timing of G&A spend. Now, turning to the balance sheet. We ended the quarter with $7.3 million of cash and no debt as we continue to conservatively manage our balance sheet. Our cash burn in Q1 was $400,000 which is obviously significantly better than our historical burn rate but higher than the last quarter due to stepped-up marketing investment and payout of our company bonus which have been fully expensed during 2023. Our cash consumption rate is steadily improving due to our continued discipline in managing operating expenses and working capital, including significant reductions in inventory. In the first quarter, inventory was reduced by $700,000 or 11% compared to the year-end of 2023, while also supporting 22% revenue growth. Also, we just entered into a credit facility agreement that allows us to access up to $2 million in cash as backed by the sale of our accounts receivables. This will create additional liquidity source should we choose to utilize it. We continue to project that we have enough cash to fund our operations into at least 2026 as we continue to grow our business and make operating improvements that drive us towards breakeven and profitability. Overall, these results strengthen our confidence that the strategic initiatives our team has been implementing during the last 18 months are achieving our intended results. At this point, we are increasing the upper end of our guidance for full year 2024. We now expect net sales of $38 million to $42 million which represents 11 to 22 points growth versus prior year. And we are now projecting gross margin of 38% to 41%, representing a 7 to 11 point improvement versus 2023. And now, I will turn the discussion back over to Jason for any closing remarks.
Jason Vieth: Thank you, Anya and thank you to everyone who has been listening to and supporting us during the past 2 years. I hope you'll agree that we've made good on the expectations that we outlined during those quarters. And while it's been extremely satisfying for our LSF team to achieve these results so far, we are even more excited and motivated for what is yet to come. This concludes our prepared remarks. Operator, we are now ready to open the call to questions.
Operator: [Operator Instructions] The first question comes from the line of Bobby Burleson with Canaccord Genuity.
Bobby Burleson: Congratulations. It sounds like things are definitely shifting to this growth phase. And, I guess, my first question is just trying to understand this Ozempic kind of dynamic food is medicine and food is health and whether or not there's a bigger role for Laird to play within that growth story.
Jason Vieth: Bobby, it's Jason. Thanks for jumping all at this today. Yes, the Ozempic -- kind of the Ozempic craze that's taken the nation, I would say, it's largely not impactful to us. And that's because the consumers that are seeking us out, they truly are convinced medicine. And it's always going to be a smaller than mainstream niche. We still think it's a very sizable and growing niche. But certainly, it's not the mainstream eat whatever you want, take a pill afterwards to cure what you just did to yourself. We are very much focused on the consumer, or I would say, very relevant to the consumer that's going the opposite direction that says what I put into my body is ultimately going to be what determines my future fate as opposed to trying to solve the problems they create. So we watch what's going on. We're interested in it but frankly, very detached from it with regards to our own food and portfolio because the consumers that are interested in Laird Superfood and our direct competitors are really coming at it from a different direction.
Bobby Burleson: Yes. Fair enough. I guess, I probably asked the question in too narrow of a sense. I think what I was getting at was, is there a greater awareness on the part of consumers as a result of a lot of the things we're starting to see within CPG, where there's maybe a food is medicine dynamic where people are paying attention to ingredients and you guys have kind of a vanguard there, where maybe you're not fixing mistakes people are making but you can promote health outcomes to a greater degree to a more receptive audience because of these trends driving greater awareness in that connection.
Jason Vieth: Yes. Bobby, I appreciate that twist. I love this question. And I could frankly talk for hours on it but not as eloquently as either Laird or Gabby, who really have been at the forefront of this for a long time. It's really interesting. I'll give you an analog and then I'll use that to expound a little bit. When I came -- I came in from the food industry. I didn't come from big food but I came from WhiteWave Foods who have been at the forefront of bigger companies leading the charge to change the way people eat for the better. But I would say I came in -- and I've been at a couple of other brands after that and they came in not really understanding, if I'm honest, not really understanding Laird Superfood and some of the guardrails that have been placed on us. And so, when I got here, I said, "Oh, man, we can really make this food taste a lot better by using natural flavors as an example. Why aren't we using natural flavors?" And we started to go down a bad path, where we were going to make food taste a little bit better. And the reality is, our food tastes like food is supposed to taste and natural flavors are not actually natural. That's one of the dirty secrets among many in the food space, especially amongst big food and the poison that, frankly, that they have put into bodies over decades now. And so, you're really hitting a nerve with me here. And the reality is -- and I'll just give you this example, natural flavors, they are derived from a natural product but they're chemically extracted in almost all cases, maybe all. And that chemical residue is passed on to the food that they go into. You might naturally extract a bit of tomato flavor but you "and you can call it a natural flavor" but it's got a chemical residue that comes because it was a chemical that derived and was able to extract that flavor from the tomato. And as Laird Hamilton told me several times as we had those discussions early on, you take these products that you put your body every day in a little bit of a small amount, a small amount of chemical but used many times during the day over many days of your week, over many weeks of your month, your year to your life, suddenly, decades down the road, you have health problems and you can't explain why. And there is an increasing recognition and understanding and awareness in that specific issue around natural flavor that's starting to grow but more -- certainly more broadly across the other ingredients that you look at on the back of pack and you don't understand. And we're really marketing that now. If you look at what we're doing with our Greens relative to competitors, we talk about the fact that we're not a supplement, we're a food. When you turn over the pack, you recognize in our Greens, all of the ingredients that are there and it starts with fruits and vegetables, as you would expect and you look at competitors and that's not always the case. So we're using that head-to-head marketing. You have to be careful, people don't always like to be preached to with regards to -- in fact, they usually don't with regards to their diet and the products that they're consuming. So we're doing that in the nuanced fashion. But we're finding more and more people receptive to it, more and more people are searching and researching their foods. And you see a number of podcasters such as Joe Rogan and neuroscientists and dietitians and others that are really getting vocal about these issues. And I think we're just at the beginning of a revolution in this space, Bobby. And your question is a great one. There is certainly more recognition of the ills that people are receiving from the food that they've been eating and the secret. You go to the research, there's a whole lot of secrets in the food industry of what you're putting into your body that people are starting to become aware of.
Bobby Burleson: That's fantastic. I just wanted to ask a quick follow-up on wholesale. Obviously, you guys have a lot of momentum in e-commerce and Amazon has picked up in a big way. At what point do we see kind of the growth baton maybe get handed to conventional, if they have a conventional grocery channel? I know you're doing some work there on expanding distribution and maybe growing your shelf space there but curious like when you see a potential inflection in that particular channel.
Jason Vieth: Yes. That's a great follow-on question. The way that we're looking at this -- the way we've been looking at this strategically is conventional as kind of our last destination because we really -- it's expensive to play. Your turns need to come quickly. There's a lot of competition and there obviously are margin challenges for smaller companies. So we've tiptoed into that space over the last couple of years, Bobby. As you know, the natural channel has been very good to us. Our consumers identify us quickly and shop. That space with the kind of attributes that we have as a product in mind. And so, you're exactly right. What you're seeing is tremendous growth on Amazon. DTC has put up a couple of really nice quarters and really turned -- strategically, turned that corner with the initiatives that was implemented there. The natural channel is still doing incredibly well for us and expanding rapidly. And we do recognize the big piece of the pie sitting out there in the conventional space. But I'd say we're still a year away from really being ready to go and if not even full throttle, at least at an increased throttle in that space because we do want to let consumers catch up to us a little bit on that exact trend you asked about in your last question. We want to allow more of those mainstream consumers to begin to identify the food as medicine type of mentality that you asked about and come to us there. So I would say we're still a year out from really starting to make major headway in that particular channel.
Operator: The next question comes from the line of George Kelly with ROTH Capital Partners.
George Kelly: Congrats on another really nice quarter. So maybe if we could start, I'm still a little confused on Amazon. I was curious if you could just maybe expand a bit on what's been driving growth there? And has inventory fill been a component of that really rapid growth that you just reported in 1Q?
Jason Vieth: Yes. George, thanks for the question. It's good to hear from you. Yes, we're really excited about Amazon. We expected to have strong growth in Amazon. Honestly, we planned it at about half of this growth rate. And we knew that there was an opportunity in the channel for the first half of the year relative to the quality event that we had last year, where we had to pull inventory. And I know you all know we talked about that at nausea [ph] last year. So I won't into so much detail but we ended up having to pull our inventory out as a slow pull on the creamer products, only creamer products. So we knew there was an opportunity as we lapped it this year but we are well in excess of our expectations on that platform in this quarter. We -- what we saw is really strong growth across a number of different segments. So not only the creamer products that did really well but our coffee, our performance mushrooms, our Greens, our bars, everything is really doing well on Amazon right now. And a couple of things happened. One was we got inventory back into place just as you asked about. So we've done -- I would say our team has done an exceptional job of reselling and managing, especially in light of the surging demand because there's a little bit of a lag to restock into their micro DCs. Team has done an excellent job in that space. But they've also gone out and won back to buy box for our products where we had resellers. You're always fighting resellers. It's a little bit of a game of whack-a-mole, honestly, as one -- you knock one down and then another one pops up with your product at a discounted price where they happen to pick up 2 or 3 products at their local grocery on sale. So we've been doing a really nice job of knocking that down. We've hired an agency to help with some of that. And we -- I would say that we've just been executing that channel really well operationally. And at the same time, we did invest, we found -- we've got some really strong returns on some of the ads that we've created and the search that we've been able to execute. And so, we've had really great commercial and operational execution there for the last quarter.
George Kelly: That's helpful. And then next question, I wanted to ask about your hydration business grew a lot year-over-year. My sense is, maybe that's driven from the Greens product. Correct me if I'm wrong. If that's the case, I'm just -- I'm wondering how you're going to keep sort of pushing -- like what's the plan behind your expectation to continue growing that product? And like how are you going to continue to kind of broaden it? So anything there would be helpful.
Jason Vieth: Yes. Your intuition is exactly right, George. It is largely the Greens product that has been providing that growth. And I would say the Greens and the reds, we launched a sister product to our Greens, called the Daily Reds which is a kind of a heart health ancillary product. And similar to the Greens, each of the -- both of those are made exclusively from fruits and vegetables. They are the cleanest products on the market. We're marketing them as such. And what we're finding is that, there has been -- there's a significant market that's been created in the country for Daily Greens product. And I'll just stay with that for a moment because that's the 95 to the 5 probably of the category, if not more. And what we're finding is that, based on our cost structure, we can have the best tasting, best efficacy product on the market at a lower cost than -- or lower price than some of our competitors. And that's turning out to be a tremendous opportunity for us. And I think we're just getting started in this space. We have some really strong marketing that's coming behind it, some really great activations that we're doing. And what we're finding is that, once consumers flip over to become subscribers on that product, they really stick with us on a daily basis that turns into a great long-term relationship with them.
George Kelly: And is that product sold exclusively online?
Jason Vieth: It's not. It's where we started. We launched and it's -- I would say this is generally our launch pattern is to launch first on our own website, our Laird Superfood DTC website. We take all the learnings behind that and use that also as a way by offering those early exclusivities to consumers as a reward for shopping on our site. But then we broaden it from there. So we've launched it into Amazon. And in fact, we have it out now in a number of retailers, growing number of retailers in the natural food space.
George Kelly: Okay. Great. And then last question for me. I'm just trying to sort of map out your year when it comes to getting to your annual revenue guidance and how that should look quarterly? Is there much seasonality? The business has been kind of influx for a little while now. And so, I'm just trying to map out like what's normal seasonality? Maybe there still isn't any kind of normal seasonality now that you're sort of back in growth mode. But any help on mapping out the year would be appreciated.
Jason Vieth: Yes. George, I'm going to give that to Anya. She's been dying for someone to ask a question she could answer. So this is -- I'm going to give that to Anya.
Anya Hamill: George, yes. So yes, there is some seasonality to our business. So fall with the pumpkin creamers and then also holiday season with the peppermint creamers are big seasons for us. So those shipments happen ahead of those times, so in Q3. So that's where we expect to see our seasonality most pronounced is in that quarter. No, I was going to say --. There must be a delay or something happening. And e-commerce, of course, with the prime day happening actually maybe 2 prime days in the second half, that's also, we expect higher seasonality driven by that.
Operator: The next question comes from the line of Alex Fuhrman with Craig-Hallum.
Alex Fuhrman: Congratulations on another really good quarter here. I wanted to ask about your promotions and discounts. I noticed for most of this year now, there has been substantially less discounting activity on your direct-to-consumer site. Really any sales you've done, look like they've been pretty targeted either to specific items or very, very limited time type sales. So just wondering if you've had any meaningful customer churn as a result of this. Or if maybe some of your customers have been ordering less as these discounts have come down? Obviously, customers of yours aren't pulling back too much considering you're raising your revenue guidance for the year. But if you can just talk to us at all about how customer behavior may have changed as you've become a lot less promotional? And has it been a little bit harder to go out there and get new customers without these periodic sales?
Jason Vieth: Alex, good to hear from you and good question. Yes, we just had this discussion -- we had discussion quite a lot recently because this really what this was -- this is the result of a big strategic shift that we had on the DTC side. A couple of years ago when I came in, our DTC site was essentially a big sales platform. We had a bunch of products listed, not really any content. And we ran increasingly after the iOS changes that busted Facebook (NASDAQ:META), we ran more and deeper sales in order to draw consumers in. And what we found, as I came in to look at this is, we had really taken our brand downmarket. And so, there has been a strategic shift underway for the last 18 months that what you're seeing now is a manifestation of that, where we now have to go to the DTC site, you're going to stand into our e-mails, what you'll see is, we have an enhanced content strategy. So we're really bringing news, cultivating some of the stories that are out there that we're aware of that we want to make sure our consumers are aware of with regards to health and wellness and fitness and nutrition and lifestyle and overall wellness around it. And so, we cultivate those. We bring in some Laird and Gabby specific content. We include other content that we're able to link to that we feel is advantageous to our consumers and give them a reason to be there. And in doing that, we've also pulled back on the level of promotion. We did take price up on the channel a while back. We pulled back promotion but we left a really nice subscription benefit. But what this has done behaviorally to your question is, it's allowed us to pick up a much larger set of subscribers. So I mentioned in that prerecord that we've turned consumers into buyers and buyers into repeat buyers and repeat buyers into subscribers. And that's the funnel kind of that virtuous cycle that we're really trying to pull people through. And as we do that, they improve their health and we are able to lock in a consumer for a longer period of time, obviously and usually into more products. And so, it's really a harmonious win-win for the consumer and for us when we're able to do that. So about -- right around 50% of our total DTC sales are now subscriptions. All those subscriptions are coming at a discount. So you're getting essentially our best sales, typically our best sale that we run is going to be that free shipping plus 20% off that subscribers receive. We do now a couple of -- just a couple of events through the year with very few sales but what we do it's a very big event. So Black Friday is one of those. And we try to execute those very minimally so that we're able to really retain that premium brand image that we're seeking to have.
Alex Fuhrman: Okay. That's really helpful. And then just one on the numbers here, your returns and discounts, as you report your sales by category. It looks like the lowest rate of returns and discounts you've had in about 1.5 years, kind of continuing on that trend moving in the right direction last quarter. Is there anything in particular that's really driven that improvement? And should we expect to see the improved results sustained throughout this year?
Anya Hamill: Yes. Alex, this is Anya. Thanks for the question. I'll take this one. And yes, so I'd say that was also the outcome of our strategic shift and how we think about trade and promotional strategies. So DTC that you just talked about is certainly contributing to that trend but also our wholesale business with retail and club business specifically, we have reinvented our promotional approach there to really try to cut out any inefficient trade and really focus on programs that directly impact consumers and drive our velocities at shelves. Yes. And we expect this to continue throughout the rest of the year.
Operator: Thank you. At this time, there are no further questions registered in the queue. [Operator Instructions] All right, team, we do not have any further questions registered in the queue. So I will turn the call back over for any final concluding remarks.
Jason Vieth: I just want to say thanks to all of you for once again joining us on the call. For us, this has gotten more and more exciting each quarter. This has clearly been a story that over the last 6 quarters or so has been a turnaround. And it's nice to be coming through that and be able to indicate that we're on the cusp of really putting some big growth numbers against this business. And in this quarter, I think it was the first to really bear that out but it's still very much in line with the guidance that we had previously given. So I feel like we're doing what we said we were aiming to do and really excited to bring the next quarters in and continue that same story. So, thanks everybody for joining.
Operator: That concludes today's call. Thank you all for your participation and you may now disconnect your lines.
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