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spk01: Greetings and welcome to the Berner Technologies Fiscal Year-End 2021 Earnings Conference Call and Webcast. As a reminder, this conference call is being recorded and all participants are in listen-only mode. Before turning the call over to Brian Ganz, Berner Technologies Chief Executive Officer, I will read the Safe Harbor Statement. Some discussions made today may include forward-looking statements. Actual results could differ materially from the statements made today. Please refer to Berna's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these projections and assumptions. The company assumes no obligations to update forward-looking statements as a result of new information, future events, or otherwise. As this call will include references to non-GAAP results, please see the press release in the investor relations section of our website, ir.berna.com. for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results. I'll now turn the call over to Mr. Brian Ganz. Sir, please go ahead.
spk06: Thank you very much. Good morning, everyone. I just want to make one clarification. This is the first quarter fiscal year 2022 earnings call. David North will be discussing our Q1 fiscal year 2022 results, after which I will provide some additional color on the quarter and discuss recent developments. So I'd like to start by turning the call over to David so that he can discuss our first quarter financial performance. David and I will be taking questions at the conclusion of the presentation.
spk05: David? Thanks, Brian, and thanks everyone for joining us. Now I'll review the financial results for the fiscal first quarter ended February 28, 2022. Revenues were $8.0 million this quarter, a decrease of $0.9 million compared to $8.9 million in last year's first quarter. Orders received during the quarter increased substantially, however, up 45.6% to $8.9 million this quarter from $6.1 million in the first quarter of 2021 when sales included the fulfillment of $2.8 million of back orders received in prior quarters. Sales for the quarter were lower than expected due to a large $2.2 million order backlog that didn't ship by month end. In addition to $1.6 million of international orders that were held pending export permits, part of the backlog was comprised of the initial Sportsman Warehouse order, which shipped in March. Lower sales volume caused only a slight decrease in gross profit, which declined to $4.6 million compared to $4.7 million in the first quarter of last year. This is because gross profit margin has improved to 57.8% of revenue compared to 53.3% last year. The improvement in gross profit margin despite lower production volumes is due to improved operating efficiencies of the factories. These improvements were partially offset by higher inbound freight costs, which we believe peaked during this last quarter. We expect to see continued improvements in gross margins due to both increased production volumes and reduced per unit freight costs. Operating expenses were $8.0 million in the first quarter of 2022, up from $5.2 million in the first quarter of last year, but lower than $8.8 million in the fourth quarter of 2021. The increase in comparison to the same quarter a year ago is due to corporate growth over the last year that drove up structural costs, primarily payroll-related and non-cash compensations, and also drove up regulatory and insurance costs. That increase is also partially due to increased investment in discretionary marketing costs. Net loss this quarter was $3.2 million, or 14 cents per share, compared to a net loss of $0.3 million or 2 cents per share in the first quarter of 2021 due primarily to the growth in operating expenses. Excluding non-cash incentive and stock-based compensation and one-time severance costs, non-GAAP adjusted net loss for this quarter was $1.8 million or 7 cents per share compared to non-GAAP adjusted net income of $0.2 million or 2 cents per share in the first quarter of 2021. adjusted EBITDA was a loss of $1.7 million versus income of $0.3 million in the same quarter a year earlier. Taking a look at the balance sheet, cash and cash equivalents decreased $11.7 million from $56.4 million at the start of the quarter on November 30, 2021, to $44.7 million on February 28, 2022. Excuse me, 2022. $5.4 million or about half of this reduction was cash used to build inventory balances, which rose from $6.6 million at the fiscal year end to $12.1 million at the end of the first quarter. $2.7 million were used to repurchase 296,000 shares of stock during the quarter under a stock buyback plan announced earlier. This step of the plan was successfully completed during March with 1,050,249 shares purchased for $10 million. We have no plans currently to continue stock repurchases. The adjusted EBITDA loss accounted for another $1.7 million of negative cash flow, and another $0.9 million was used for capital expenditure. Now I'll hand it back over to Brian. Thank you, David.
spk06: Well, the first quarter of 2021 presented a number of challenges On balance, we're actually quite pleased with the continued improvements we are seeing in production, order flow, and gross profit margins. Like many companies, during the first quarter of this year, Berna had to deal with supply chain disruptions and navigate logistics challenges, including greatly extended shipping times and dramatically higher freight rates. With many of our key suppliers not being able to keep up with their production schedules, due to the cascading effect of their own supply chain problems, and many of our freight carriers taking much longer to ship componentry from our vendors to our factories, Berna was perennially out of stock on a number of critical components required for the production of our flagship Berna SD launcher. The problem became so acute early in Q1 of this year that our primary manufacturing facility in Fort Wayne was in operation only 36 days during the entire quarter. With limited production, Burna produced just shy of 19,000 units during the first quarter, compared to a production plan of 30,000 units. This resulted in many products being listed as out of stock on Burna.com, Amazon.com, and at our dealers' locations. I'm very pleased to report that the supply chain disruptions and ensuing shortage of componentry and raw materials seems to be behind us. During the month of March, Berna produced 14,000 launchers, a run rate of 42,000 per quarter. In our last earnings call on February 11th, we projected that we would produce 6,500 launchers between the date of the earnings call and the end of February. In fact, we produced 6,544. We also projected that we would have enough componentry on hand by the end of February to produce 30,000 launchers. We achieved that goal. And even today, we have enough componentry on hand to produce 20,000 launchers, even if we don't receive another shipment from our suppliers for the balance of the quarter. As a result, Berna is not out of stock on any SD launcher, nor are we out of stock on any of our ammo offerings. We do plan to run at these elevated production levels for the balance of this quarter to rebuild our finished goods inventory level so that we are able to handle any spike in sales resulting from renewed civil unrest or a celebrity endorsement. On the demand side, the demand for self-defense products has softened considerably in recent months. The industry is seeing somewhat of a reversion to mean this year as sales of all classes of self-defense products from handguns to pepper spray are showing significant declines from prior year. In 20 and 21, the pandemic year, so to speak, gun sales, which are a proxy for the self-defense industry writ large, average 20.3 million units per year. So far this year, gun sales are trending back to pre-pandemic levels of 13.5 million units. Based on the FBI's National Instant Background Check, or NICS check, as it is commonly known, which tracks with gun sales. Gun purchases are down 34% in the first quarter of 2022, running at the same level as 2019. Yet, despite the general industry trend being off by 34%, Burnett's orders were up 45.6% year over year, even though last year's numbers included the January 6th insurrection spike in demand for all self-defense products. This trend is continuing in March with orders on Burna.com being up 86% versus March of 2021. And this is all the more meaningful because Burna products are also now offered on Amazon. Amazon sales are also showing steady growth. While there is no direct year-over-year comparison as Burna products were not offered on Amazon in Q1 of fiscal year 2021, Over the last several months, we have seen continuous improvement in sales on Amazon.com. Average daily sales in January of this year were $7,500 a day. In February, this climbed to $8,600 a day. By March, the average daily sales eclipsed $10,000 a day. And so far in April, we are above $12,000 per day. Amazon has now increased Burna's allocated shelf space to more than 18,000 units. And while we have not yet filled this shelf space, we expect to do so in the next several weeks. We believe that as we fill this space, we will see continued steady growth in Amazon sales. Margins, as David pointed out, were also up nicely in Q1, coming in at 57.8% compared to 53.3% in Q1 of fiscal year 21 and 51.1% in last year's fourth quarter, where the margins were hurt by Black Friday specials and the closeout of the Berna HD. We are very pleased with this significant margin improvement. As David pointed out, Margins in the first quarter of this year were negatively impacted both by the very low production volumes and very high inbound freight costs. As production levels improve, as they are this quarter, and as we reduce inbound freight through better packaging and by shifting some shipments to ocean freight from air freight, we expect to see gross profit margins steadily improve throughout the year. On operating costs, as David mentioned, they were up $2.9 million year over year, but down $800,000 compared to last quarter. This indicates a leveling off in Berna's operating expense budget. Excluding non-cash items, operating expenses for Q1 were $6.45 million, which we believe should be the run rate for the balance of 2022 with the exception of any one-time charges or the variable expenses such as credit card fees, Amazon fees, and outbound freight, which will naturally increase as sales increase. The year-over-year increase stems from Berna's investments in growing the business. Advertising and marketing spend was up 1.1 million year-over-year as Berna significantly increased its advertising budget to build brand awareness and to drive consumers to Berna's website. This resulted in sessions for the first quarter growing from 852,000 in Q1 of 21 to 1.6 million in Q1 of 22. People costs were also up 850,000 as Berna added staff in the areas of IT, R&D, supply chain, accounting, sales and marketing in order to grow the business. Travel was up by 100,000 as Burna's employees hit the road after two years of quarantine. And the top-line growth and our uplift to the NASDAQ added a half a million to Burna's public company costs with higher D&O insurance costs and higher franchise taxes. Yesterday, we put out two press releases. We announced that in March, Burna signed and began shipping initial stocking orders to Sportsman's Warehouse and to Shields. Sportsman's Warehouse is a leading national outdoor and sporting goods retail chain headquartered in Utah with 122 locations in 29 states. Since 1986, Sportsman's has been providing outdoor enthusiasts with quality merchandise in a low-key shopping environment. Sportsman's will be offering the entire range of Burna products in all 122 locations. and will also be offering Burna products through their online store. Shields is an interesting company. It's a 120-year-old, all-employee-owned sporting goods retailer based in Fargo, North Dakota. They currently have 31 locations spread across 14 states. For anybody that's been to Shields, you know these are very, very large locations, sort of known as shopping destinations. These stores feature family-friendly attractions, including aquariums, arcade games, and a very famous Ferris wheel. We've initially been rolled out in 17 of their 31 locations. We think that this is a major milestone for Burna, signing up these two extremely reputable brick-and-mortar retailers. These well-respected and well-recognized chain stores, with a combined 139 locations that will now be carrying the Burna product line, will dramatically expand Burna's footprint in high-end brick-and-mortar retail. These chain stores also greatly enhance Burna's cachet, it expands Burna's brand recognition, and we believe it paves the way for other large national retail chains to carry the Burna line of self-defense products. Yesterday, we also announced the kickoff of our school safety initiative with the hiring of Andy Pollack, who has joined the company as our Chief Public Safety Officer. You may recognize that name. Andy has been a staunch school safety advocate and activist ever since his daughter, Meadow Pollack, was killed in the Marjory Stoneman Douglas High School shooting four years ago. After his daughter was killed, Andy left no stone unturned trying to find out exactly what led to the death of his daughter. And he released his findings in a book, Why Meadow Died, the people and policies that created the Parkland shooter and endanger America's students. He also created a charitable organization, Meadows Movement, to continue his efforts to fight for increased school safety. Andy is going to be the public face of Berna's school safety program. We will be creating a dedicated school safety website, berna.com slash schoolsafety, which will provide parents and school administrators with a list of the 10 things schools can do to protect their students from an active shooter, along with training videos and other training materials. We believe that by providing parents with the information they need to make sure that their schools are doing everything necessary to keep their children safe, Burna can build brand awareness and, frankly, drive millions of potential customers to Burna.com. A critical component of our school safety program will be the Burna BallistaPak bulletproof backpack, which converts into full body armor in a matter of seconds. This is from the acquisition we made last year of BallistaPaks. With a molly that can hold a burner or other firearm on the front plate and an anti-bleed kit to treat injured students, SROs, our school resource officers, will be able to immediately engage a school shooter and provide medical care to injured students and teachers. This should shave minutes off the traditional response time in an active shooter situation where every second counts, as SROs are really the true first responders in any school shooting, since 93% of school shootings are over before law enforcement ever arrives. Andy will also be promoting Burna's new backpack insert, the Burna Shield, which is designed to fit into a student's backpack. At less than one pound, this flexible protective plate can stop six rounds from a .44 Magnum. These shields were developed with patented technology specifically for Burna and will allow parents the ability to give their children an invisible level of protection that could save their lives. We plan to donate 10% of the proceeds of the sales of the Burna Ballista Pack and the Burna Shield to Meadows Movement where these funds will be used to provide Burna Ballista Packs and Burna Shields to underprivileged communities where school budgets may be constrained and where parents may not be able to afford a shield for their children. We believe that Andy is uniquely positioned to drive awareness of the need to better protect our nation's schools by providing SROs with the necessary tools to confront an active shooter and by informing parents of the availability of simple, lightweight, flexible shields that could save their children's life. Andy is a very well-known person in this movement. The trial of the Parkland school resource officer that failed to go into the school is coming up later this year. We know that Andy will get a lot of time in front of major news organizations, and we see this as a good opportunity to gain attention from local, regional, and national news organizations for Berna's effort to promote school safety. A quick follow-up on some topics raised in the last earnings call. As David mentioned, we completed the first tranche of our share repurchase program this month. We are pleased that we're able to reduce the total outstanding share count by over 1 million shares at very attractive prices. At this point, we do not have any plans to buy additional shares as we have identified other attractive opportunities to deploy the cash that we raised last summer. Also, last earnings call, we gave guidance of $55 to $60 million for the annual revenues for Berna. Despite the difficult environment overall, we remain confident that we can hit our numbers. And at this time, I want to reiterate our guidance. We do recognize that the year is going to be very back-end loaded because of both the traditionally strong holiday fourth quarter, which generally represents more than a third of Berna's overall sales, and the introduction of new products, including the Berna TCR, the Berna LE, the 7-round magazine, and probably most importantly, the 12-gauge round, which will start shipping in late Q3. These new products will augment sales in the third and fourth quarters of this year. Now, I'd like to turn this back to the operator, and we'll be happy to take questions.
spk01: Thank you. Thank you. And I'll be conducting a question and answer session. If you'd like to be placed in the question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1. One moment, please, while we poll for questions. Our first question today is coming from Jeff Van Tenderen from B. Reilly. Your line is now live.
spk02: Great, thanks. Good morning, everyone. First, let me say congratulations on the strong backlog, order trend, and managing the supply chain disruption quickly and effectively. I guess my first question, just kind of to get it out of the way, you've got a pretty good-sized backlog at this point. It sounds like a chunk of that is shipping in Q2. Based on that backlog, and I guess... kind of, you know, the new product launches that are happening in Q3, would you expect a ramp from Q2 to Q3? I guess I'm trying to figure out what sort of revenue progression we might see from Q2 to Q3, especially as you've got this backlog you're shipping.
spk06: Well, we expect the entire backlog to ship out during this quarter. In fact, a significant portion of it has already shipped That said, we do not have any significant new product introductions in Q2, with the exception of the TCR tactical compact rifle, which should go into production later in April and start shipping in May. So we do see a reasonable ramp from Q1 to Q2. In Q3, We believe that the LE, the 7-round magazine, and the 12-gauge will all enter production and enter the stream of commerce. So we see a pretty good ramp in Q3 for that. And then in Q4, we'll have all of these products for the entire quarter, plus we'll have the holiday effect in Q4. So we do see a pretty sizable ramp each quarter, quarter over quarter.
spk02: Okay, that's helpful. And then just touching on supply chain with the new products slated to launch in Q3, are there any concerns around getting components for those new products, or do you think that the supply chain issues for this year, unless something changes, are probably behind you?
spk06: We really do think that the supply chain issues are behind us. The supply chain problems we had in Q1 are really resulted from a perfect storm of, you know, or as they say, a series of unfortunate events where we had Christmas, Chinese New Year, coupled with, you know, coming off an extremely strong Q4. And we just ended up with probably a half a dozen components that we were quite short on, which caused production to shut down. As I said, for the SD, we now have more than 20,000 of every one of the 114 components necessary to produce the launcher. With a good cash balance on the balance sheet, we are making the decision to err on the side of having too much rather than too little inventory, and we're doing that also for the new products. So we don't see... absent some significant world event that simply shuts down commerce, any further supply chain issues this year?
spk05: What we're actually focused on is gaining the benefits of the strength that we've got in supply chain now, having sort of been a child born into brutality in this whole thing with the pandemic and huge surges in sales last year and so forth. So at this point, our real focus is – my real focus is, hey, how can we get – freight costs down. So I'm looking at potential improvements going forward.
spk06: Well, as David alludes to, by having a lot of componentry and finished product on the shelf, we can now start to switch from moving product by air freight to moving it by ocean freight. We're starting that this quarter. with a few components, but that will ramp up through the balance of the year as we ship more and more of the componentry from our suppliers to our factories by ocean freight.
spk02: Okay, good to hear. And then if I could just squeeze in one more, if we could just turn to the outlook regarding M&A. Any more color you can give us on what you're seeing there? I guess any thinking you might share around timing for when we might see another acquisition?
spk06: We're continuing to explore opportunities. As I mentioned, we are suspending our own share repurchase program because there are a few interesting things, but nothing that we can speak about at this time.
spk02: Okay. Fair enough. Thanks for taking my questions and best of luck. Thank you.
spk01: Thank you. As a reminder, that's star one to be placed into question queue. Our next question is coming from John Hickman from Latimer. Your line is now live.
spk04: Could you elaborate on the school safety products? Are they available right now?
spk06: No. John, the school safety products are going to be kicked off on April 15th. So right now what we're doing is we're building up inventory of the Burna Shields and we're constructing the school safety websites. We have also, in addition to Andy, our head of law enforcement training, Josh Gerard, is a highly decorated law enforcement professional who spent 10 years as an alert instructor training law enforcement professionals and civilians on active shooter response. He was the tactical commander of over 1,000 professionals in the response to the Santa Fe shooting incident. and has spent a lot of time lecturing and writing about school safety. So between Josh and Andy, we're trying to build a really robust school safety website that will allow people to make sure that their children are doing the right things. You know, I'll tell you just as a quick example, one of the things that Andy explained to me is this issue of hard corners. where you can put students into a place that when the shooter walks by the classroom, when the door is locked, they're unable to see the student. It seems like a very simple concept, but it's not a concept that's embraced yet by every school. In fact, as we've visited schools, we've seen a lot of schools do not even know what the hard corners are. But in Sandy Hook, believe it or not, law enforcement thinks of that as a success and the reason it was a success is that they did have the hard corners marked out all of the classrooms that were locked down and the students were in hard corners no student was killed all the students were killed in one classroom that had a substitute teacher that was unfamiliar with the protocols so we know that there are things that work there are things that can save lives and we're spending time now building the website so that we can inform parents But this program will kick off on April 15th.
spk04: Okay. And then my additional question is, you talked last time about moving or adding suppliers so that you had more of your supply chain coming from maybe countries or locations that were closer to Fort Wayne. Can you talk about how that's going?
spk06: That is progressing. We anticipate that we will have 85% of all of the components produced in the U.S. by the end of the year and 100% of all the components produced in the U.S. by the middle of next year. Again, a lot of this means building molds and moving molds, and I don't want to give the impression that that 100% of the products will be produced in the U.S. We will be able, in an emergency, to produce 100% of the products in the U.S., but we will still work with redundant suppliers. So if we have a supplier in the U.S., we will also have a secondary source either in the U.S. or somewhere else. And the 80-20 rule will apply, where 80% will be from our primary supplier, 20% will be from our backup supplier. And that decision will be based on lead times, pricing, and quality. But we are continuing to pursue that. I think that with this recent outbreak of war in Ukraine, it just brings home the issue that you never know what can happen. You never know what factories may be embargoed or shut down or even natural disasters like a fire or a strike. We need to be able to have redundant supply. So we are well on our way to achieving that goal.
spk04: Okay. Thank you. That's it for me.
spk01: Thank you, John. Thank you. Next question today is coming from Ryan Rackley from Raymond James. Your line is now live.
spk03: Hey, guys. Thanks for taking my question. So, yeah, very solid quarter given the backdrop. And I'm sorry if I missed this. I caught the commentary on OpEx and the top line. But really, you know, aside from the very strong backlog and orders, gross margins came in favorably relative to our expectations. I mean, is it possible as we make our way through the year to bump up into that 60% range and get closer to the low end of your long-term target as the top line scales?
spk05: This is David. I'm going to jump in here and talk. Lots of things are possible. We are a young company. We've got a lot of potential things that we're working on to improve those margins, but I think it's too early to set guidance here and make promises of when we will get there. I think that when we look at something like 60%, it's very realistic. It's a question of how long it will take. We are We are right now moving our Fort Wayne factory to a better facility, but that takes time. As Brian said, we are well down the road of improving and increasing our supplier options that we can work on freight and we can work on prices, but there's still road to be covered, and that is a very big job. So I think realistic, yes. when, not time to make promises on that. Yeah, of course, that's why David is the CFO and I'm the CEO.
spk06: Don't promise him too much. But I think, look, the things that are driving this, we recognize that if the mix, the customer mix remain the same, I would say that I would be highly confident that we would eclipse the 60% this year. But keep in mind that We're also expecting large increases in international sales, which occur at lower margins. We're expecting a significant growth in our dealer sales with the signing up of sportsmen and shields and, frankly, others that are in the wings. So that, of course, has a negative impact on margins. And I think that's why it's hard for us to really project when this will happen. But we do expect the improving trend to continue.
spk05: Yeah. And also, just introduction of new products will improve it. But Timing there matters. So quite a lot of variables there. So that's why probably best to not set timing.
spk03: Right. No, that's very helpful. Okay. So maybe drop it down to the OpEx line. Can you provide an update of what you're seeing with the marketing campaign? I know you've been doing some new things over the last quarter. Maybe how your view of the efforts have evolved, where you're seeing successes, where you're seen areas that you might move away from over the balance of the year?
spk06: Yeah, look, when we started off with this, we had no idea what would work and what wouldn't work. And the promise that I made to you folks is that, you know, we would follow the data and we would closely analyze how everything is working. I would say that all of the campaigns are effective. Not all of them are cost-effective. we have ratcheted back the spend on billboards. Not that billboards aren't working. We see a spike in sales in every location that we put billboards, but it doesn't seem to justify the cost of the billboards. That said, there are a few unique opportunities that do seem to be cost effective. We've been using mini billboards in LA. These are smaller billboards on city streets that only cost us $200 each, and those seem to be very effective. We also have been running an OTT and linear television campaign, which, again, we've been doing it in select cities. As we've done that, it's been effective, but ROAS has been, frankly, in the 2X range, and that's not something we'll stay with unless we can find some levels of improvement. We are modifying those programs slightly to run the ads for shorter periods of time. It does appear that they're most effective the first week, and then each subsequent week they become less and less effective. I think the issue for us is we're not necessarily trying to build brand awareness so that when you go to the supermarket you choose Coke versus Pepsi, but we're trying to build product awareness And I think people, when they see this product, they either go to our website because they're interested or they don't. And seeing it more and more times doesn't help. I would suspect that we will also probably be ratcheting back our linear and OTT television advertising campaign. The two things that work extraordinarily well for us is obviously word of mouth, which is still the single biggest reason for growth. So, you know, we benefit from the two people tell four people who tell eight people who tell 16 people. So we think that, again, the more we're in the market, the more that that helps drive sales. The other thing, which has been obvious from the two Hannity mentions, is organic content. So very interestingly, when Sean Hannity played that 30-second clip on on his show and said, you know, I find this product interesting and I own it, we can attribute $9 million of sales to that mention. We have advertised on Hannity's show playing the 30-second clip, and that doesn't really move the needle very much. So there's an enormous difference between paid advertising and organic advertising. And frankly, it is a very big reason for Andy Pollack to come on board. Andy Pollack has been interviewed by dozens of news organizations. He has written dozens of op-ed pieces. He has over 200,000 Twitter followers. He is the recognized industry expert when it comes to school safety. And we know that as the Parkland shooter trial comes up later this month, And as the trial of the SRO in Parkland that didn't go in the school comes up in August, that Andy will be front and center and that we're hoping that he will have the opportunity to organically introduce the Berna brand. We also think, frankly, that if you look at what is the addressable market for Berna, you know, maybe there's $10 million adults that would be willing to point a Burna SD at somebody at an assailant and pull the trigger. But there's 50 million or 100 million parents that would be willing to consider putting a shield in their child's backpack to save their lives. So we think that the introduction of the Burna shield and our ability to organically get in front of parents is going to be a big mover for us in terms of driving people to the website. And a lot of the funds that were up until this point going to billboards and to linear and OTT TV will most likely be repurposed to trying to get the Berna School Safety Program front and center and to become part of the discussion in America on school safety.
spk03: Great. That's fantastic. I really appreciate the time. Thanks, guys. Thank you.
spk01: Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over to management for any further closing comments.
spk06: Thank you very much. Again, I just want to thank everybody for your continued support of BRNA. As we discussed, we think that, you know, despite the hiccups that we've had, that the trend remains very favorable. We're really looking forward to bringing out these new products over the balance of the year and to really kicking off our Berna School Safety Awareness Program. Thank you very much.
spk01: Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
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