Digital Brands Group, Inc.

Greetings and welcome to the Digital Brand Groups, Inc. Third Quarter 2021 Earnings Conference Call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If you would like to ask a question, please press star 1 on your telephone keypad. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Hill Davis, Chief Executive Officer at

Good morning. Thank you, Donna. Good day and good morning to everyone, and welcome to the Digital Brands Group third quarter fiscal year 2021 earnings conference call and webcast. All participants will be in listen-only mode. We will open the call up for question and answer at the end of the listen-only period. This earnings call may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933 as amended, including statements regarding, among other things, the company's business strategy and growth strategy, Expressions which identify forward-looking statements speak only as of the date the statement is made. These forward-looking statements are based largely on our company's expectations and are subject to a number of risks and uncertainties, some of which cannot be predicted or quantified and are beyond our control. Future developments and actual results could differ materially from those set forth and contemplated by or underlying the forward-looking statements. A lot of these risks and uncertainties, there can be no assurances that the forward-looking information will prove to be accurate. The company will be hosting a Q&A session at the conclusion of these remarks. Please note that this event is being recorded and will be available. And with that, that is the legal portion of our earnings script. So what I'd like to do is I'm going to start with the third quarter results, and then we'll move to discuss our trends, our 2022 guidance, and acquisitions. So with that, for our Q3 results, net revenue increased 1 million to 2.2 million versus 1.2 million in the comparable period a year ago. This is an increase of 75% year over year. Importantly, we experienced an increase in revenue across all our brands. Please keep in mind that we only benefited from one month of stateside revenue due to the timing of the acquisition on August 31st. Our Q3 revenues would have been meaningfully higher if all three months had been included. We also experienced a three week delay on most product deliveries through the backlog and air shipments associated with other brands shifting from their shipments from sea cargo to air cargo due to the port backlog. This meant some product landed in October versus September, which is Q4 versus Q3. To be very clear and upfront, all our product has landed across all our brands, so we do not have any risk around any more delays for fall or holiday. but it did have an impact in timing of landing in Q3, i.e. September, versus Q4, i.e. October. Our gross profit margin increased 96% year-over-year to 55.9% from a negative 40.1% in the comparable period a year ago. We experienced an increase in gross margin across all our brands. And we also expect our gross margins as a percentage of revenue to be higher in Q4 and even higher than that in fiscal year 2022. So we continue to expect this gross margin expansion in Q4 and in the next year. Our gross profit increased by 1.7 million for the three months ended September 30th, 2021 to a positive 1.2 million from a negative 0.5 million for the corresponding fiscal period in 2020. We expect our gross margin dollars to increase in Q4 due to higher revenues and higher gross margin profit, which will create additional dollars to cover our fixed cost of business versus our previous quarters this year. I think this is really important because this is about getting leverage on our fixed cost of business. We cannot stress enough that we are finally getting this leverage due to the higher revenue, due to higher gross margin percentage, and also due to our shared expense model, which we are finally seeing the full effect of since we were able to launch it this summer. We believe that this will result in profitable fiscal 2022 and much improved profitability in Q4 versus Q3. Our operating expenses increased by 6.2 million for the three months ended September 30th, 2021 to 9.1 million compared to 2.9 million for the corresponding fiscal period in 2020. This net loss included two non-cash expenses. The first is associated with a change in the fair value of contingent liabilities of 4 million. And the second is a non-cash expense associated with a change in the fair value of our convert note of 0.6 million. The other increases were due to hiring our marketing team, the addition of stateside operating expenses for a month, and an increase in our marketing spend. As we stated, we've begun getting leverage on these investments that we made in the summer to ramp marketing, and we expect those to drive incremental revenue growth in Q4 and in 2022. Other expenses increased by $0.5 million to $1 million in the three months ended September 30th, compared to $0.5 million in the corresponding fiscal year in 2020. The increase in other expenses was primarily due to $0.6 million in other non-operating income, which we do not expect to continue going forward. I think what's really important is our net loss to attributable common stockholders was $5 million, increased $5 million to $8.9 versus a net loss of $3.9 a year ago. The net loss included two non-cash expenses, which I noted above. The first is associated with the change in the fair value of contingent liabilities of $4 million, and the second non-cash expense is associated with the change in the fair value value of our convert note of $0.6 million. Let me talk about these a little bit more so everyone understands what this is. This contingency is related to the guaranteed valuation one year post our IPO for our Bailey 44 and Harper & Jones acquisitions. If the value of their shares are lower than the same value as the IPO, then the management and certain board members will make up the difference with their stock. The management and certain board members, not the shareholders, will make up the difference for their stock. this is a non-cash expense that's a mark to market per gap that will have no impact on shareholders as if there is a true up it will come from management and certain board members so this is really critical this is um this will also set up an easy comparison for our second and third quarters next year as this contingent liability will go away as we anniversary our ipo in may 22 and Again, there's no cost to shareholders that will come from management and certain board members. Our net loss per share was $0.76 versus a net loss of $5.89 per diluted share a year ago, an improvement of 677% year over year. The two non-cash expenses mentioned above resulted in a loss per diluted share of $0.39. So we would have lost $0.37 including those losses versus $5.89 a year ago. As you can see, as we get leverage in our business, as we drive revenue, we are definitely getting more and more positive toward the EBITDA, and that's what led us to the Q4 EBITDA positive, I mean, to 2022 positive EBITDA. This concludes our quarterly financial review, which leads us to what we believe is the most critical trend for our company. This is the sequential quarterly revenue trend through this year and into Q4. We have doubled our quarterly revenue sequentially from approximately $400,000 in Q1 to approximately $1 million in Q2 to approximately $2.2 million in Q3, and we are forecasting approximately $4 million in Q4. Please keep in mind that this revenue for fiscal 2021 only includes four months of contribution from stateside and seven months of Harper and Jones. In addition to that, we had no inventory for six months at Bailey 44 and no limited inventory for seven months at Distilled. And finally, we spent very little marketing dollars across any of our brands. So when you look at our increase in revenue and you look at the fact of where our inventory levels were, the minimum contribution from our acquisitions due to the timing of those acquisitions and very little marketing dollars, we are still doubling revenues sequentially. We continue to increase our gross margin significantly, and we expect these increases to continue. And then finally, we are leveraging our fixed cost of the business due to higher revenue, higher gross margins, and shared operating expenses. We expect all these factors to continue going forward into Q4 and also into 2022, which will lead to profitability in 2022. One thing to weigh in on is that these results have been driven only over four and a half months since our IPO and includes only partial contribution from two cash flow positive acquisitions, Harper & Jones and Stateside. This has been done over four and a half months. I cannot stress how critical that is. We have turned a business that was losing money and that were two turnaround brands in four and a half months into something that will be incredibly creative and cash flow positive in 2022. As we discussed in our S-1, we are an acquisition vehicle. We expect to acquire more companies this year and also next year. We believe in acquiring positive cash flow brands, which would lead to an increase in our cash flow next year before any incremental cash flow from one cost savings from our shared expenses, which we've already seen works, And two, revenue synergies from our cross-marketing platform, which you've also seen that works. In four and a half months since our IPO, we are now generating revenue momentum, gross margin expansion, and operating leverage, which we, again, continue to expect in Q4 and in fiscal year 2022. Given that, we are providing fiscal 2022 revenue and EBITDA guidance. we expect to generate net revenue guidance of $37.5 to $42.5 million in fiscal year 2022, an increase of a minimum of 350% revenue growth year over year from 2021. Our forecasted increase in revenues is driven by the following factors. I think this is really important and Given that we've now had four and a half months in the business with some operating cash, we can detail what the drivers are. The addition for distilled, one, the addition of wholesale revenue with limited key accounts for brand awareness. And some of these are major department store chains. Two, a meaningful increase in digital marketing advertising, which was minimal in 2021. Three, a full year of selling on the Amazon. Four, a full inventory stock for the entire year versus only three to four months this year. And finally, five, new product expansion driven by a recently hired women's designer, of which we did not have a women's designer before for Distilled. For Bailey 44, there are three main drivers. One, a full year of wholesale revenue versus six months in 2021, of which most of that was back-end loaded this year. Again, a full year of wholesale revenue. A meaningful increase in digital marketing advertising, which was minimal in 2021, and which we are seeing being incredibly effective this year since we turned it on this fall. And then also a full inventory stock for the entire year. As we have limited inventory even now because most of it went to wholesale, so our digital spend is smaller in Bailey's because the inventory levels But we are seeing unbelievable responses to our digital advertising for Bailey's. And imagine what we can do with full inventory loads for e-commerce. For Harper and Jones, a full year of revenue contribution versus approximately seven months in 2021. New showroom openings. The full year benefit of new clothiers who have started in the fall of this year. And there have been several. and a meaningful larger ready-to-wear offering versus 2021, which we just launched this month and have already sold over half of the ready-to-wear inventory in less than two weeks. For stateside, a full year of revenue contribution versus four months of 2021. New product categories in women's knits and woven tops, which we'll be showing at Coterie in February for fall wholesale and we'll also have online. This is one of the largest categories, two largest categories in women's wear in which Stateside has not had any product in, which we'll have product in. And Stateside will double this year from last year in terms of revenue, excluding these new categories. So we expect great things from Stateside next year. And then a meaningful increase in digital marketing advertising, which was super minimal in 2021. And we're already seeing massive returns on that as well. And again, very limited inventory there because when we bought it, they were predominantly wholesale, only $300,000 in digital revenue. And we're seeing it work incredibly well with minimal inventory. So we are buying into e-commerce inventory that we can also sell into the wholesale channel for spring and going forward. I think what's really important is our 2022 guidance does not include any additional acquisitions this year or next year. To reiterate, we are an acquisition vehicle. We expect to acquire more companies this year, and we also expect to acquire several companies next year. We believe in acquiring positive cash flow brands. I cannot stress how critical this is. because we've seen the effects of acquiring cash flow brands. We will continue to acquire cash flow brands both this year and next year. This will of course lead to an increase in our already projected EBITDA positive numbers for next year. And we believe we'll generate this incremental cash flow from cost savings from shared expenses and revenue synergies from our cross-marketing platform. So we're talking about acquiring cash flow positive companies and then being able to leverage those fixed costs with our cost savings and our revenue synergies. I'm extremely proud of our team, as we have completely transformed this company in four and a half months since our IPO. We took two brands that needed to be turned around, one that was denim and leather and cashmere, which were not hot items during COVID. And two is Bailey 44, which is women's date night, which was also during COVID, not a popular category considering most people weren't leaving the home. Both those trends have changed. We had minimal revenue, minimal inventory due to the COVID impacts. And now you're seeing us come out of that. And you're seeing what we can do when we have cash on the balance sheet. We've done this in four and a half months. So imagine what we can do over the next 12 months with the cash flow and the acquisitions that we have just made and will be making. What's most interesting is our acquisition pipeline is the strongest it has ever been with the most high-quality brands we've seen since we announced this idea two years ago. We have over $175 million in revenue in our acquisition pipeline. And these aren't just targets. These are conversations that are well-passed. Hi, how are you doing? And as we scale that we're generating and we'll only make, we'll generate only make future acquisitions easier, faster, and more accretive. I think what's really important that people don't understand necessarily, nor did I, when we first started this is you have a gap significance test, which is driven by three items. If you trip any of those items, you have to do audits. The one that we keep tripping is the purchase price to market cap. So as we acquire, brands that starts to go away because our market cap grows and the purchase price that market cap does not create that trigger which is really critical to give you an idea if it's zero to twenty percent there's no audit if it's twenty to forty percent you have to do a one-year audit and if it's forty percent plus you have to do a two-year audit we're having to do several two-year audits but once these come through the market cap will reflect our revenue which will then most likely eliminate, which we believe strongly will eliminate the fact that we'll have to do these audits, which then is a lower cost to the company. And also you can move a lot faster as well because you don't have a six to eight week audit process. And I think that's really, really critical. So we understand that. With that, again, I can only tell you this team has done an unbelievable job in four and a half months. And I think for our investors, if you go back and you look at the p l and the revenue and the state of the business at the s1 filing and where we are today and especially our guidance for next year which we strongly believe in then i think you can see what we've done and what we're going to do and we're seeing the numbers show up so with that i'll turn it over to q a please ma'am thank you the floor is now open for questions if you would like to ask a question please press star 1 on your telephone keypad at this time

A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star 1 to register a question at this time. Our first question is coming from Eric Fetter of SCC Research. Please go ahead.

Good morning. Congratulations, and thank you for the information.

Yeah, thank you.

Could you talk a little bit about the infrastructure? You know, you have been ramping up. When you go from four brands where you are right now to six or eight, how much more do you see in terms of the infrastructure beyond what you have in terms of adding people and systems to the mix?

Yeah, so I'll take people first and systems second. The nice thing is on the people side, because we have this shared marketing platform, the You don't have to add a lot of people because we've already kind of added that first base layer of people. So as we add more brands, you're not adding senior-level people. You're adding more junior-level people, more what I'll call product managers, people that will help go back and forth, make sure communication is flowing properly, products to photo shoots, discussions, things along those lines. So we will need to ramp. but we look at everything in a pod system versus a brand-by-brand system, and I think that's really important. So we will need to hire a president of a pod as we continue to scale, and a pod, as an example, could be Bailey's, Distilled, and Harper & Jones, but you don't need a brand president at each of those. You don't need a CFO at each of those. You don't need a CMO or SVP of marketing at each of those. You would have basically a pod president And then you would have a controller at each of the brands. And then you would have someone who is like a PM at each of the brands that would interact with Laura Dowling and her team in the marketing shared services platform. So we almost have an internal agency, if you will. And so that allows us to get a lot and lots of leverage, both in terms of scale and people, but also in terms of buying power, whether it be digital ads, whether it be catalogs, whether it be TV. whatever it may be, we buy as digital brands group versus buying as a single brand. So that's the big piece there. So we're able to kind of keep a much slimmer brand org chart and have a lot of shared cost at that level. And so you think about the investments we've made, Eric, over the last four and a half months in expensive talent at the marketing level, then what we're able to do is layer in more talent, but it's not going to be at that same cost level because you kind of brought those people in first and then you're building in a much lower per employee cost. And I think that's also what allows us to get a lot of leverage. In terms of systems, what's great about the world today is you pretty much run on a core backbone, which is NetSuite, Shopify Plus. And so when we buy some of these brands, they might be working on some wholesale some old erp systems we yank those out drop them into net suites we have a standard basically p l classification system that everyone converts to so we can roll up the numbers a lot more effectively and then everything is either on shopify or shopify plus so we move it over there so we can we can get we can we keep that backbone it's very simple backbone in that regards i mean You know, NetSuite is probably one of the better ERP systems out there in terms of flexibility. They all have their own issues. But you have some pretty, like, to give you an idea, Bailey 44 was on this thing called Pacific, which is really old and antiquated, doesn't provide a lot of leeway to do stuff or changes. So you just pull them out of there and drop them into the NetSuite space. And so that also gives you a lot of leverage because you're not running a bunch of different ERP systems. You don't have a lot of additional resources. cost for those systems because you're on a single backbone. Does that answer the question, Eric?

Yeah, I think so. You're getting much larger. When you look longer term, how does licensing and how does owned retail fit into the mix here, or does it?

I don't necessarily say we see a licensing play yet. If we did, it would be in Europe, most likely. And we have looked into different things there, and there are some opportunities that we could pursue when we think we're ready. I think we feel like we need to do a little bit more brand building first here before we do that. So Europe would potentially be a play there, but that would be probably the only opportunity, and we'd want to build the brands a little bit more. In terms of own retail, we believe strongly you acquire in the physical and you retain in the digital. This concept of omni-channel is like saying you've got to ante up in poker. that's the given. You've got to be in all channels all the time. And I think what everyone's realized is wholesale doesn't work if you're just relying on wholesale and direct consumer doesn't work if you're just relying on direct consumer. You need both, which is why we opened up Distilled to wholesale. And I think the key there is when you think about owned stores, I mean, if you look at Warby, they just reported numbers this morning, I believe. You look at Allbirds, they have a ton of stores and they're losing money. We do believe in stores, but the difference is we believe in basically our own boutique of stores. So for instance, Stateside, Bailey's, and Acquisition Coming are a great store set. And it's much more interesting for the customer. You're able to leverage your fixed cost of doing these brands together. And then same thing with catalogs, same thing with photo shoots. So all of a sudden now, you're taking something like, let's say it would cost you $500,000 to do a catalog. Well, now you're doing it over three or four brands, so it's $100,000 to $150,000 a brand, and now you can do more catalogs for the same cost, and you're actually showing looks across all the brands. So you've got one bottom brand, one top brand, vice versa, and we think you'll get higher revenue, but you'll also really strip out a ton of the cost. Single brand stores we think do not work, or they work, it's very difficult, but a multi-brand store of our brands when we've modeled out the economics, should work very well.

Yeah, I agree. Last question. You had, again, thank you for all the points about the M&A. When you look at what you're looking to acquire, beyond the cash flow and positives, what are you looking to acquire in terms of the brand or in terms of their focus on what are they focused on?

Yeah, so we look at what we call closet share. So how would it fit into our current brands? Can we build looks and styles around those? And if not, we're a little – we probably and we have passed on some interesting companies that just don't make sense. We also want to make sure we buy right in terms of valuation. We're not looking for the cheapest deal, but we're also not going to pay 13, 15 times EBITDA. So there is some discipline there. But what we really look for at the end of the day is already something that's a strong brand that's got a lot of brand credibility with the customer. And that could be brands as low as $5 million to – 35 million, right? Even 50 million, some brands we're looking at. And the key there is that growth piece. Some people may or may not be aware I have an equity research background. And I just think I underestimated the power of growth when I first started in that business. And I now truly understand the power of growth and scale, both in terms of what it can do for the company, but also what it does for investors and shareholders. And so we need to know that this brand can grow, that either we can add a new category, for instance, stateside, which was really, really strong, but super narrow, had very limited wholesale doors. We're adding knits and wovens and wovens and knits are a massive business in women's much more so than t-shirts, which is a very crowded segment. Things along those lines, open up the number of wholesale doors, open up digital. So we need to see those growth drivers, whether it's digital. like one of the brands that we are basically working through right now and just finished the audit of is has 25% digital, but they barely spend anything. It just so happens that they got a lot of brand awareness during COVID and they took off. Those customers are super sticky. So when we look at that and we're like, wow, there's hardly any digital spend here. And they're literally doing millions of dollars in digital and, what if we could open that up with digital and then what if we open athleisure underneath this concept where does that go because they've already got all the doors so that's an example of what we look for in a brand you know or do we look for something like an accessories business like in candles where you can actually start to really add that to the cart as either a gift with purchase or it's got great uh retention women's intimates same thing unbelievable retention so you can acquire a customer by saying if you buy this You get a free candle, get a free intimate, and the cost on that is less than $3. The value is really high, and there's really high retention in the numbers that we see. Those are kind of some ideas that we look for. So it's got to have strong brand affinity. It's got to have the ability to have strong growth drivers, whether through limited doors, limited digital, different product categories. So those are the different things we look for is that we need to know that this thing is just going to grow 10, 15% a year that we can grow it. Like just broadly speaking, we need to generate 30 to 50% organic growth annually, and we need to 30 to 50% acquisition growth annually, plus drive gross margin and operating margin. That's it. It's that simple. Those are the four points, period, end of story. That's what we're focused on. We also know that when you hit 70 million in revenue, you become a very different company in terms of institutional investor demand and And that's not lost on us. And when we think acquisitions, we understand that that's the first number, the second's 150 in revenue, and the third's 200 plus. So everything we do is driving toward that. We have Wall Street experience. We understand how the game's played. We understand the critical pieces of driving 30 to 50% organic growth annually, 30 to 50% acquisition growth annually, expanding gross margins, expanding operating margins, and Everything else takes care of itself.

Great. Sounds fantastic. Good luck for the holidays. Thank you, sir.

Once again, that's Star 1. If you'd like to register a question at this time, our next question is coming from Mo Yassin, a private investor. Please go ahead.

Hello, sir. Good morning. Just like to know, you mentioned acquisitions for this year and next year. Are you expecting to make an announcement this year before the year is up? Thank you.

I will say this. Yes, thanks for the question. We just finished a two-year audit, and that puts us in a very good spot to move forward. And like I said, we do plan to make acquisitions this year and next year. So hopefully that will allow me to answer the question in an appropriate legal way. But I think what you ask is really interesting, I think, and this is a question we actually got via email last night. is why do acquisitions always take this long? And the reason is, like I said, we trigger or have been triggering this third concept of purchase price to market cap. And if it's zero to 20%, there's no audit. 20% to 40%, it's a one-year audit. Plus, it's a two-year audit. So stateside was a one-year audit. This current one we just finished is a two-year audit. So that kind of gives you size and scale. And we expect that with acquisitions, the stateside acquisition, plus the two-year audit we just finished, we should probably be clear of tripping most GAAP significant tests. All of a sudden, you take that audit process out of this acquisition timeline, and acquisitions go really fast because audits take a lot of time. They take a lot of resources. They're very expensive. Those go away. So, you know, we kind of had two paths. One is to make a bunch of small acquisitions, And constantly, hopefully not trigger it, but do you really get what you need? Or by really strong brands, much higher revenue and cash flow, maybe you have to go through the gap audit process, but then you get scale faster. And that's the path we decided to take. And there's not a right or wrong path. This is just the path we decided to take. And so that's what we believe in because we understand the power of scale for businesses. cash flow. We understand the power of scale for leveraging our P&L. We understand the power of scale for our investors and market cap and driving revenue and driving profitability. So that's really what it takes. What's also interesting for what it's worth is we're shelf eligible in May of next year. And this is a big deal because now you can basically sell into the market for acquisitions so you can raise capital very quickly. Versus if you're not shelf eligible, it's a much longer process and a lot harder and actually more dilutive. So when you think about what's coming down the pipe and then what happens in May when we're lapping easy comparisons, when we don't have to do two-year gap or one-year gap audits and we're shelf eligible, think about how quickly acquisitions can move. So given that, we understand that timeline. We understand what that calendar looks like. And so we are loading up the pipeline now. to basically be able to put ourselves in the position to move that fast with really great brands that have a lot of growth opportunity. And I can't stress that enough. We're in the hardest part of our acquisition piece because of the GAAP significant test, because we're not shelf eligible, and that all starts to go away. Does that help answer the question?

It does. It does. Great. I really appreciate it.

Thank you. At this time, I'd like to turn the floor back over to Mr. Davis for closing comments.

Yeah, so I did get two more questions that I'd like to answer. One is, if the pipeline is so full, why are you not announcing any more deals, which we kind of got a question about that. And again, like I said, the problem is we had to do two-year audits for some of these acquisitions, and that was the long jam. Those have been recently completed. And we're excited about that. And then that moving out of the way frees us up to move faster. And then that will also help us hopefully limit or reduce or completely eliminate the need for significant tests in GAAP requirements. And then finally, the other one we got, which is why does your stock trade at a lower revenue multiple than your peers like Solo Brands and AKA Brands since they are the same concept as your company? No, that's a really great question. I don't have an answer to that. It's mind-boggling to me, but that is the market's the market, and it trades where it is. I do believe that solo brands is probably more comparable in brands. I think it trades at, I don't know, five or six times revenue. I know that AKA is more of a fashion brand, and I think that trades three to four times revenue. I haven't looked it up. I think that's just roughly what they look like a couple weeks ago. The other reason I can think of is our revenue scale. And when you don't have a lot of institutional investors because you don't have massive revenue scale yet, then that could potentially be the reason. I don't know, but that's the only thing I could think of having been in this business a little bit, which is not lost on us, which is why we decided not to take the small acquisition path and go bigger faster. Because with revenue scale and our growth and EBITDA positive, you do attract institutional investors. And that's critical because it creates stability in your stock. We understand that very well. And I think we know that 70 million is probably the first metric that puts you there. And then you just continue to go. I mean, it's not lost on us that a 250 market cap, a lot of institutions can play. 500 million, more, a billion. We understand this very well. I did it for a living. So we will march toward that. And we understand the faster you get there, especially if it's EBITDA positive, that our investors will be rewarded for that. And that's how we think about it because you're buying great brands with lots of revenue, lots of cash flow that you can scale faster. And then that's going to give you your gross profit expansion, your operating margin expansion, and that has to lead to multiple expansion because at the end of the day, there are not many companies growing 300% plus in EBITDA positive. And that's how we view the world and we're going to continue to do it, but we're I think more than anything, my takeaway from this, and I'll end the call with this, is that we've done this in four and a half months. I think most people, and I didn't understand this until I left Wall Street and worked at Inside Brinker International, which owns Chili's, McGrill, Maggiano's back in the day. And it takes a little bit – like if you think about a battleship, a company, it doesn't just turn on a dime. So if we're already moving our battleship, we're probably not a battleship given our size, but if we're moving this little destroyer this much in four and a half months, imagine what's going to happen with more revenue, more cash flow, more people, more resources as we acquire more brands, generate cash flow. Imagine how that destroyer now moves so fast because the hardest thing is inertia. How do you go from zero to one? One to three is a hell of a lot easier than zero to one. We just went zero to one in four and a half months. So keep that in mind. And I think that's, what's so impressive about what we've done at this team, Laura Dowling and her team on the marketing side, our finance team. I mean, all of it, it's been really, really impressive. And we're just, I mean, we just went from zero to one and again, one to three is a lot easier than zero to one. And I think you're seeing that in this numbers and this guidance, and we understand the importance of great acquisitions. We understand that we need to grow again. We need to grow. organic revenue 30% to 50% annually. We need to grow acquisition growth a minimum of 30% to 50%. And we'll drive gross margin expansion. We'll drive operating margin expansion. And that actually will drive short, mid, and long-term shareholder value. And I think that's really critical. But what we've done in four and a half months, coming off literally a dead stop is really impressive. And it's only going to go faster. And it's much easier every single month we put behind us. And that's the real difference that if you haven't been a part of that process, like I was at Brinker, to see it actually go the other way and then back again, you really start to understand that it does become exponential one way or the other, either in growth or in decay mode. And we just happen to be on the growth side of the mode, but we've gotten through the hardest part, which is zero to one. So with that, thanks everyone for their time. Like I said, we're super excited about where we are and we look forward to continuing to drive these returns for our shareholders. That's why we're here and we're excited about it. And I think you're going to see a lot of fun stuff come down the pipe very shortly and continuing well into next year. Thank you all very much. Bye-bye.

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