PetMed Express, Inc.

Q3 2022 Earnings Conference Call


spk_0: good afternoon everyone and thank you for joining the pet not express third quarter earnings conference call my name is doug the operator for today's call i would know like to pass the conference over to our host mister bryant print of of investor relations sir the floors years now
spk_1: thank you operator and i'd like to welcome everybody here today to the pet met express fiscal third quarter earnings call i would also like to remind everyone that the first portion of his conference call will be listen only until the question and answer session which will will be later in the call also certain information that will be included during this call may include forward looking statements within the meaning of the private securities litigation reform act of ninety ninety five in the securities exchange act ninety three four as amended that may involve a number of risks and uncertainties the statements are based on our beliefs as well as assumptions we have used based upon information currently available to us because these statements reflect our current views concerning huge revenge the statements involve risks uncertainties and assumptions actual results could differ materially from those projected there can be no assurance that any forward looking results will occur or be realized and nothing contained in this presentation is or should be relied upon as a representation or warranty as to any future matter be cooling any matter and respect to the operations for business or or financial condition of them that met undertakes no obligation to update publicly these forward looking statements based on subsequent events except as may be required by applicable law regulation or other competent legal authority we have identified various risk factors associated with our operations in our most recent annual report and other filings with us securities and exchange commission also during the course of today's call the company will be discussing one or more non gap financial measures reconciliations of these non gaap financial measures to the most directly comparable gap measures are included in the press release we should this afternoon now let me introduce our see on president magically met
spk_2: thank you brian thank you for making a time today to participate in our earnings call or anyone new to the pet met express company and story that as the company that delivers prescription and non prescription medications food supplements supplies and that services you're right to the consumer our expert online pharmacy is an established and trusted brand as evidenced by the fact that we have served over eleven million pet parent customers over our company's twenty six year operating history pubmed a leading pet retailer about prescription and non prescription medication we have a loyal customer base a pet parents that value our brand service and quality however we believe our company and this industry can be more the millions a pet parents across the country and our goal is to be the market leader in pet wellness and healthcare or as we like to say the the trusted pet health experts because we believe every pet deserves to live a long happy and healthy life we will be walking through the following components in today's earnings call one an update on our strategic road map including our recent agreement to acquire pet care of our axe to a detailed review up our all year que three earnings and three an overview of our go for thoughts related to our capital allocation strategy the management perspective we are pleased with our results this quarter as well as the progress we've made on the complete transformation next line please over the last year as has been in a rebuilding mode with a new and experience management team and updated strategy and a revised overall approach to the market as we transition to a growth oriented business i will provide an overview of our third quarter results and then are cfl christine chambers will go into greater depth later and a presentation on our financial performance third quarter sales were fifty eight point nine million compared to sales of sixty point seven million for the same period the prior year while this equates to a decrease in sales of three percent year over year compared to a double digit decline in fiscal year twenty twenty two one of the reasons that we're pleased with the quarter was that we saw an increase in that new customers of nine percent year over year this is an important milestone for the company does we've not seen an increase in that new customers and que one of twenty twenty one most importantly we achieved this was thing discipline in terms of our customer acquisition efficiency metrics or new customer account for the quarter with approximately seventy two thousand compared to sixty six thousand in the prior year and r l to be the cat for the quarter was one point six our average order val it was eighty eight dollars relatively flat to last year and last quarter we also saw continued growth in a recurring revenue side of our business our our ship and say program continues to grow and expand and approximately forty two percent of our revenue was recurring revenue derived from our our ships subscription program during the second quarter this part of our business increased eight percent on a sequel your basis and doubled your every year our continues to be an important strategic lever for patna especially considering that the focus of pet meds business has historically been solely focused on a prescription refilled business later mispresentation we will walk through in detail our product catalog expansion strategy especially as it relates to our agreement to acquire pick rx we believe that there are clear expansion opportunities for more customer engagement and the non medication space which will increase our pet parent wallet year generate more recurring revenue news and lead to an increase in customer lifetime value simply put with a broader catalog assortment we see an opportunity to attract new customers while selling more to our existing customers we have previously discussed what the company's strategy have been historically and what it will be going forward at met is shifting from being simply a leading pet medication retailer to being the pet health experts a market leader and pet of care expertise we want to be every pet parents go to destination for holistic health and wellness from nose to tail and be that go to destination over a pet entire life cycle on that journey to becoming trusted pet health experts we believe the strong relationships we've established with pet parents through pet medications prescriptions is an entryway to providing them with further goods and services including prescription food tell that services supplements and soon pet insurance the four point some are popular or medication care nutrition and wellness we view these point as been key to building a differentiated brand and experience to pet parents everywhere we recognize the ships that are occurring in the regulatory landscape which led us to our first big investment pet telemedicine our investment in and partnership with best their enabled pet meant to become what we believe to be the first pet retailer to offer pet tell medicine at scale that live our new cobranded offering that that's their connect pet parents two thousand of them license veterinarian providing quality online that services through video chat appointments twenty four seven and is exclusive to the pet meds platform we see the virtualization of that services as being a key pillar of the pets business and a differentiator in the pet space the that live as a strategic advantage that will continue to develop as regulation changes and as consumer education and awareness develops the pending acquisition a pet care rx represents a significant opportunity to expand our pet med catalog with a broader set of consumable products and nutrition get care are active catalog offerings include over thirteen thousand of the best known medication health and wellness products including food supplements and other similar products they also bring us an incremental distribution center capability outside of our core medication distribution we have been rapidly filling in the strategic pieces of our strategy to take advantage of a growing industry which is the topic of our next slide as we have covered in our previous earnings calls pet met operates in a growing addressable market because of are pending acquisition partnerships and corn privilege and the pet meant business pubmed does now able to actively participate in a broader addressable market across the pet wellness space with our investments in that care and a broader products election we are in an enviable position to gain market share and expand our relationship with our customers over time we expect our revenues to be more diversified as we address a broader range of pet parents needs management is excited about how with position pet meds to be a growth company the pet space has proven to be a resilient vertical even and recessionary times pet parents either path as an extension of their own families and increasingly demand premium pack your options here are some reasons why management is excited about pet meds growth opportunities on a macro perspective one pet parents are less likely to reduce their pet purchasing budget especially in the consumer both and medication categories to us household pet ownership has increased over time and today seventy percent of us households now own a pet the pet parents will need and seek health and wellness care provided by trusted brand read consumers also now expect everything to be real time staff and digital h ran impacting every industry the ecommerce channel continues to expand rapidly we expect the pet vertical to follow this expansion just like we have seen in other digital ecommerce verticals the day or addressable market is largely he dominated by offline sales but we see the growing trend to purchase all mine as an opportunity which would be very favorable for us or we also see a real trend towards the digitization a pet health care just like we have in human health pet parents are thinking through the entire spectrum of the pet care from diet to veterinary services from infancy through old age and are examining the channels through which they axis those products and services we believe pubmed is uniquely positioned to take advantage of these trends by focusing on total wellness we can offer products and services to pet parents that are died and help focus in the air is a pet medication freeman prescription and nonprescription food supplements and tell that services before we dive into the corley financial results i want to remind our stakeholders of several important achievement that they know the beginning of the transformation of pubmed into a quote business net new customer grow your be your customer growth shows the vitality of any growing business and we shared good news on this front of on today's earnings call as we expand our product catalog over the longer term we anticipate that pet medics grass will benefit from having a higher lp be and more obering leverage to acquire customers at scale more subscription revenue we have seen substantial progress year in will continue to see more recurring business that enables pet meant to be a more predictable business model with higher lt be an increased more np bell more non medication products the expansion of our product catalog and services has been it a t initiative for us we decided to turbocharges effort to the pending acquisition a pet care rx that meds will benefit by having more recurring sales increase regular visits thus delivering a higher ltd our customers desire a wider selection from us and we look forward to working with the pack your are eckstein once we close the transaction to worked or these expansion opportunities unique and differentiated services be a digital based health care services our goal is to continue to move more health and wellness services online with our long term perspective that this will be driven by pet medication and veterinary care our next slide summarizes how these products and services are tied together at math is uniquely positioned as a starting point with a highly regulated and complex pharmaceutical segment of the pet industry last month we announced agreement to acquire petcare rx a leading supplier pet medications premium food and supplies the combination the too long operating companies will greatly impact the longevity and happiness a pat on a larger scale take care of our exes than operating as a privately owned a pet health and wellness company for over twenty years the acquisition is intended to provide the the advantages a greatly expanded addressable market beyond our current pet medication market and media revenue and customer growth and greater non medication sales for the poor patronage the we're confident that we will see similar expansion of buying behavior with our pet meds customers and will rapidly move supplier relationships and products from the pack your rx portfolio over department of the next several quarters once the transaction closes at meds will be working towards ingrained the pet care or brands and analog onto the pet may ecommerce platform longer term the when for pet parents and our stakeholders is that pet meds will now be able to serve as a wider range of products and services or what we like to refer to as from nose to tail offering an expanded catalog to a recurring customers is a great place to start but that alone doesn't create an adequate moat around the pubmed business as a result of consumer demand we believe strongly that pet health services will become more digitally enabled a trend that we have already seen in human health we are very excited about our strategic relationship and minority ownership stake investor our exclusive partner that accelerated our entry into the virtual tell a health and hello medicine space we also believe pet element of in is going to be a huge trend over time not unlike what we've seen with other services like online and mobile food and delivery services there are a slew of innovation that you can expect to see compassionate as we integrate the technology them are buried partnerships and unique differentiated and bespoke ways and all of these efforts are designed to provide high ethical the outcomes were pets to live healthier and happier lives expect to see more innovation and product catalog extensions over the coming quarters that will deepen the benefit of a strategic pillows i would like to now turn the call over the christine to walk you through our que three financial performance in the company fundamentals fifteen
spk_3: thank you match
spk_4: at meds has a strong set of core assets and capabilities that we plan on leveraging to stay growth and a pet much business
spk_3: hatton edge maintains a strong balance sheet of over a hundred and two million of unrestricted cash as that december thirty first twenty twenty two
spk_4: our brand is widely known adjusted a market research indicates that fifty five percent of us had parents are aware of the pet meds brand having a strong brand takes years to develop and our customers tell if they look at tech med as they trusted pharmacy and pet medication eg said you have one of the largest direct to consumer debt networks in the online retail space with over seventy thousand centenarians that we've worked with over the company's history
spk_2: because of our industry leading service relationships with bet a prescription medication authorization rates are the highest they've ever been which speaks volumes to the level of that nary cooperation that we receive on a daily basis
spk_4: our customers let our brand and not said it or nps score is over eighty which puts us in the cause causal alongside some of the most beloved brains in the world we provide a one hundred percent satisfaction guaranteed to our customers and we go the extra mile with genuine and patrick an expert service as not previously mentioned our oldest shit program continues to grow and expand approximately forty two percent of our revenue was recurring revenue derived from our oldest shit subscription program during the third quarter this is an eight percent increase on a sequential basis i also want to say that i'm really excited with the speed at which we've begun to see business improvement investment in je ne has provided greater transparency mods decision making and better analytics let me change to our financial results to the quarter ending december thirty first twenty twenty two of the fiscal quarter twenty twenty three my remarks will compare this year's quarterly results to the same quarter last year third quarter revenue was fifty eight point nine million compared to revenue and sixty point seven million in the same period last year while this is a decreases three percent is an important milestone to highlight ness new customer growth we welcome to proximity seventy two thousand new pet parents disclosure compared to sixteen one thousand and deprive what your in sixty six thousand in the prior year this represents growth of of and nine percent year over year and an increase of eighteen percent sequentially we have actively targeted acquisition of let customers to competitive promotions in the quarter to drive new customer acquisition
spk_2: repeat sales of fifty three million dollars for the court and decreased four percent compared to repeat sales the fifty five million dollars in the same period last year
spk_4: gross profit as a percentage of sales a twenty five point nine compared to twenty nine point two percent in the same quarter last year and twenty eight point two percent in the price was it the decline and gross profit is primarily due to high a seasonal promotions during the it as consistent throughout the industry a promotional activity however we specifically focused on reactivating are large piece of let customers with a more modern marketing stack and refreshed marketing team we will lean into optimizing this customer base and fully expect to cross sell additional catalog to these customers in the future while we're always evaluating up promotional strategies we don't expect to repeat the deep promotion simply offered this task cause it to reengage the specific customers said today increase two point nine million year of the year that when normalized the non operating costs relating to the pending pet care alright transaction
spk_2: dna increase two point three million year began
spk_4: this is due to an increase of one point four million related to payroll expenses which includes four hundred thousand related to stop compensation five hundred thousand related to the third party resources and some increases in software expenses and of the dna with the exclusion of non operating items we do not expect dna to continue to increase at the same rate next fiscal year we believe the right team is largely in place now and the je they will be fairly flat exiting fiscal year twenty twenty three and going forward please note is be pushed to close the acquisition in the fourth quarter we will expect to see additional acquisition related expenses we received and accrued for sale tax assessment in the second quarter of fiscal year twenty twenty three based on the assessment receive the company initiated a process to evaluate the potential for further sales tax contingencies the result of this evaluation could have a material impact on the company's financial statements we expected complete the review in the quarter ending march thirty first twenty twenty three and we will provide further update after we complete our full analysis net income would break even to the third quarter and zero cents per diluted share and includes five hundred thousand dollars or two cents per diluted share for items not indicative of our ongoing operation this is compared to four point three million or twenty one cents per diluted share the same quarter last year adjusted ebitda for the cause it was two point seven million compared to seven point six million in the same quarter last year the year of a year decline reflects a decline in gross margin and targeted increases aegean dna as we look forward will be primarily focused on clothing and integrating the pending acquisition and driving returns on the recent investment management believes that the organic and inorganic investments that we've made over the last year in the business or sufficient to drive long term sustainable growth going forward therefore been focused on operating execution and integration is paramount in order to realize his future return
spk_2: now about to talk about the pending pet care rx acquisition
spk_4: we covered some of this material in our analysts day in january but we'd like to reiterate the structure and strategic rationale for the transaction total consideration of thirty six million trailing twelve months revenue forty two million
spk_5: two hundred thousand customers
spk_4: more than ten thousand brands and products use around eighty employees and a headquarters and distribution center located in long island new york and gross margins approximately the same as pacman as mentioned we expect the deal to close the schools him while the pet care rx brand will continue to operate independently as part of the pet beds wellness and consumable business it's expected to immediately delivered topline revenue growth over time we expected to be bottom line a accreted as we leverage synergies and streamline infrastructure now i'd like to discuss our capital allocation as we transform the pet meds business the acquisition of pet carrier is the first catalyst that provides and be the it grow as well as the ability to spend more invariable marketing as we work to sample products to a customer base over the long run management remains committed to driving total shareholder returns as such for the third quarter we will pay a dividend at the same rate as we have in prior quarter a thirty cents per share consistent with fry practice the board will evaluate the declaration of dividends on a quarterly basis as part of our normal quarterly business cycle in addition management strongly believe that investors will see a higher return over the long term to stock appreciation with a growing company in a growing market
spk_5: and with that attend a call back to matt
spk_2: thanks christine again management is very encouraged by the performance of the business this quarter as well the impressive acceleration and a long term business drivers we announced today that as is point for growth as we have stated of the last several quarters that man is pursuing a vertical specialty retailers gratitude we aim to be pet parents trusted pet health experts we have been sharing our strategy with you for a little over a year and we have substantially filled in the pieces the building and during profitable and growing pet held company to be crystal clear on the measures for success that new customer grow more subscription revenue we have seen rapid progress here and will continue to see more recurring business that enables pubmed to be a more predictable business model sell more non medication products be a product catalog expansion unique and different his services the a digital based health care services and veterinary care we will continue to add more virtual care and wellness services that will contribute to greater loyalty or less custom richer and uniqueness in the market with over two million customers were a well known and trusted brand and we operate in a market that has brasilia to economic headwinds where they strong balance sheet the provides us with the financial flexibility to take advantage of a large and growing market we're excited to welcome our new pack members petcare rx at meds job is certainly not done we will be working hard to integrate execute and go to market with his new as as an initiatives this and are prepared remarks operator we are now ready to take questions
spk_0: and you ladies and gentlemen at this time will be conducting a question and answer session if you like to ask a question you may per store one on your telephone keep it a confirmation tall indicate your line is in a question do you may press start to if you like to remove your question from the que for participant shooting speaker permit it may be necessary to pick up your handset before pressing starkey our first question come from the line of aaron right with morgan stanley
spk_6: he would your question
spk_7: he craved thanks for taking my questions and birth how should we be thinking about and in congrats on the new customer got that has we be thinking about new customers in the coming quarter do think that we've had an inflection point here are are there any other factors that we should be thinking about in terms of that quarterly progression thanks
spk_2: thanks for the questionnaire and i'll take i'll take that one yeah we're we're pretty excited that we saw that new customer growth at the first time in in a to a half years what couple things are going on behind that number one is and one of the interesting things about pet meds versus an early stage businesses that we've got a huge database of customers that up until recently we really didn't have a lot to talk to about ah so we've done a much better job of we're engaging laps customers as you may recall we change the definition of our new customers to any one that's purchase with with us on the last three years and so we're we're doing more specific target it offers to our our laps customer base which we have found it the largely as being very kak efficient customer acquisition efficient so that's have one theme in the future and that you'll see from us the second theme is a little bit of what you heard round the thesis around pick terrorists and the expansion of are not medication catalog he as well while pack overall ah i'm a in our space has generally platinum terms of trends in terms of tack friends we do see an opportunity increase lifetime value as we start selling more products to both the net new customers that we are bringing on but also existing so i think the trend that you'll see from my us are probably laugh in terms of gross margin hit related to reuniting of laps customers but more focus on getting those customers a purchase more from us and so i go for basis we're leaning more optimistic about our ability to to grow our customer base i hope that answer your question
spk_7: ray yeah no think our son gray color and and then also looking at just the underlying i'm trying to your customer base ah whether it's dynamic around the upcoming three antics he then what your seen internet consumer behavior around trade down dynamics what are you seen in they started macro environment just from an underlying in the in perspectives
spk_0: yeah a great questionnaire and and that such an important questions for us as you know we are a seasonally driven business highly weighted towards the flame taxis and i think who i think it's not our as not
spk_2: and i think this season is is gonna be a very different than last season i did last season was very abnormal on many different actors it was very unseasonably cold we are looking very carefully at what we're seeing in the bed channel and also macri you economically with our supplier partners we are cautiously optimistic that the clean tech season will be much better than it was last year i think it would be very difficult to say be worse bomb but it's too early to tell but i don't think you're going to see as cold temperatures as we did last year but worse thing very attuned to all the macro data in terms of trade downs we're not saying trade down behavior in our business as you know we are very medication focus and very prescription focus in terms of the waiting in our business and those customers effectively diet and health focus customers generally will stick with the brands that they love whether their favorite flame check brand worth it as bran whatever it is we don't see consumers one in the trade down which is good news for us and i would say that trend will will likely continue in were relatively recessionary resilient and we haven't seen a latrine down behavior so in terms of the macro we're going to stay very focus obviously we get an a march that's when bills historically of increase for clean tech and damn good the that watching very carefully run seasonality run temperatures ah that as your questionnaire and
spk_8: yeah thank you to match cricket it thank you
spk_0: or next question for comes on one of puri greedy were jeffries please received your question
spk_9: hi tastic my question i want to follow up on that just talk about of factors that impact customer growth so if in that industry visits down over the past year and this is kind of a seasonally reporter for free in tech so your customers by activating that customers maybe you can talk about what you're saying in the market in terms of like customer and can somehow thinking about you know transit might impact customer growth of the next year that
spk_2: not agree question in terms of the read night of the existing labs customers really that the new conversations that's why we change the definition we we have our huge opportunity and what we've done is a lot of an interesting that new data around what those customers want from a brand like what pet and so it's almost the way we think about it as having a completely new car verse asian some of those customers actually have a strong affinity obviously to the brand but with they haven't really been introduced to us in a while and so we're treating them like they're new customers because they are new customers and those customers that are new seem to want a one stop shop one place to get more of their products vs just one item that could be this is speculation related to in flight inflationary concerns it could be pre recessionary concerns on by going to one place to get all of your needs is is it is a developing theme and i've we've seen this another ecommerce retailers and terms of the net new components to the strategy for about the existing customers as well as new it's hard to predict the customer acquisition trend to dynamic marketplace of we've certainly seen those trends flat in terms of increase in overall customer acquisition our customer acquisition costs an absolute days basis have been relatively flat but we see a lot of interesting demand which was the thesis or pet carer x to add more premium products like prescription food and premium food to the mix and so longer term we see an opportunity to potentially lane and customer acquisition costs and expand our customers more rapidly but again we are not in a position to comment on that yet we have a close pick her our acts and will and focus very much on digesting the acquisition working with that team and executing core did i answer your question
spk_9: yeah you did that's really helpful from i follow up i wanted to just gets more color on gross margin see he talks are going for focusing less on promos and moral cross selling but you know how should we think about gross margin for for for and into next year that
spk_5: score it's christine would you my answering that question yeah sorry for the question am so as i mentioned on the call you know that are gross margin and in the cause it will meet really impacted by the targeted you know acquisition odds at don't let customers and
spk_4: we really did lean into that and with somebody that a one time promotions and he did that was it intentional move on our part to acquire those customers because of the opportunity to be see with across selling products and and expanding the the sort of portion of that customers basket going forward and everyone should do but there was this that and also i would say that they wish since we we have to pull up rebates that hit our and cost of goods sold and those can vary from county to court and i both of those things negatively impacted gross margin at this courtroom we really don't expect us to repeat an end to that extent go forward and so we do expect to see our gross margin me more in line with kind of the historic trends and that the scene in the past
spk_9: it thank you
spk_2: thanks corey
spk_0: or next question comes on line of anthony the evidence ski with the dodian company please proceed with your question
spk_1: a good afternoon and thank you for taking the questions so us or the nice to see you order sales guy from and a quarter here as know what your your repeat sales or reorder sales were down about four percent
spk_10: so kind of going forward i mean i'm a you did you expect a bbc you get him and your repeat sales drive around ninety percent of your total revenue of soak are you thinking about the on maintaining that repeat moon moon base of customers would do you expect the perhaps be no more promotion the those cars
spk_1: winners or i are you just just barely you thinking about that you might making sure that you're at least able to be on maintain those repeat customers
spk_2: yeah he christine at that they anthony yankee for that question christie wanting to answer the overall returning revenue transfer then i'll follow up with media strategy answer
spk_4: yeah that is great and hey and think a question and issues we look at the retaining has you're right we did see that four percent decline a year over year if you look at that contextually within the last six as that's the lowest decline in seen year of a year and let them be seen like a say over the last export is to we really do see some of the the trend starting starting to change their and and and that she's starting to am sees at length of the decline in that customer base and and then of course as we thinking about the new customer acquisition and and buildings that of the top of the funnel and then having a repeat and having to repeatability with our ownership program is well as that expanded catalog and we really see that opportunity to drive the greatest sticky this am i'll hang back to matt cause i know hill and have said some additional comments see them
spk_2: those christine now you answered you actually added a couple elements that i was gonna add anthony i would say that on we don't have a lot of shots on goal with our customers today meaning primarily our customer engagement he is over a year around prescription refilled and so that there is ample opportunity for cost rumors to not engage with this and not how are we engage with and and and likely either go to another retailer or or ashley forget that they're on some type of program with us and so we're looking to get more engagement with those customers arthur auto ship but also through selling more products within selling more products and ownership is kind of a one two punch to answer that question on because there is more competition in the market but also our customers want more products from us and so we think the advantage of those two things will really help bolster and stabilize the returning base over time and then as i as i mentioned more speculative investment that we've made on pet telemedicine i think you're gonna be really interesting to see how over the long term the rain the toy environment changes but also how customers view pet messes not just a place to get your meds but it's also a place to get all your other services that you'd expect to get and our customers are very much aligned with how they think about their that and so which is why we really focus on pet tell a medicine and connecting with that through our about live service silver time we think differentiation to services is gonna be another ability for us to lower churn and provide a more meaningful experience for our customers
spk_1: got it thanks for that and then your advertising spending was up seven percent the just wonder are you seeing any changes in and ad rates sale given kind of where the economy is right now i just want to get your thoughts on that
spk_2: the i'll take that that when christine and a good question yeah when i say relatively flat flat obviously there was a little bit of an increase no largely the fluctuating that we've seen our how we get insulted from our supplier partners which add some variants so we feel like overall from what we see inside our marketing spam that we've been relatively flat there can be some variants is based on the amount of discounts the flow through the piano from our supplier partners but overall when we look at the industry whether it's on c b c's or cpm we're not seeing a lot of fluctuation and price right now that that can change in and has changed significantly quarter of a quarter base usually on the macro environment but it has somewhat stabilize in terms of our customer acquisition costs and we're not we're not super concerned about that
spk_10: got it okay well thank you and best of luck
spk_2: and sneath anthony from your questions
spk_0: are no further questions in a queue and like and a call back to management for closing remarks
spk_2: thank you for joining our call today i'm confident that the future we vision for pet mad along with the foundation of within like will meet the market opportunity and unique and innovative ways and will lead to improved operating results and increase shareholder value at meds brown expertise and reputation or parallel we have greatly accelerated or operate road map and we look forward to sharing our progress in positively changing the lives of our pet parents and pets thank you for your continued support
spk_0: ladies and gentlemen to starting to get a teleconference thank you for your participation you may just connect your lying to disarm and have a wonderful day

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