Barnes & Noble Education, Inc

Good morning, and welcome to the Barnes & Noble Education Earnings Call. At this time, for opening remarks and introductions, I'd like to turn the call over to Andy Millivoy, Vice President, Corporate Finance and Investor Relations. Please go ahead.

Good morning, and welcome to our fiscal 2022 fourth quarter and year-end earnings call. Joining us today are Mike Hughesby, CEO, Tom Donahue, CFO, Jonathan Scharr, Executive Vice President, B&ED Retail, and President, Barnes & Noble College, David Henderson, President of MBS, and David Nenke, President of DSS. Before we begin the call, I would like to remind you that the statements we make on today's call are covered by the safe harbor disclaimer contained in our press release and public documents. The contents of this call are the property of Barnes & Noble Education and are not for rebroadcast or use by any other party without prior written consent of Barnes & Noble Education. During this call, we will make forward-looking statements with predictions, projections, and other statements about future events. These statements are based upon current expectations and assumptions that are subject to risks and uncertainties, including those contained in our press release and public filings with the Securities and Exchange Commission. The company disclaims any obligation to update any forward-looking statements that may be made or discussed during the call. Please note that we will be referring to slides during Tom's financial review portion of the earnings call. For those of you joining via webcast, you should see the slides as part of the webcast. For those joining via phone, you can access the slides on our corporate website at investor.bned.com. under the events and presentations section. And now I'll turn the call over to Mike Huseby.

Thanks, Andy. And good morning, everyone. As we entered into fiscal 2022, we were relatively optimistic that high vaccination rates coupled with strong vaccine efficacy would help curb the spread of COVID and return most schools to a traditional on-campus environment for learning, social activities, and events. Unfortunately, both the fall and spring semesters were disrupted by different variants of the virus. Further affecting our performance, higher education continued to experience enrollment declines. According to the National Student Clearinghouse Research Center, undergraduate enrollment declined 4.7 percent this spring as compared to a year ago, and even more startling, the undergraduate student body is now 9.4% or nearly 1.4 million students smaller than before the pandemic. Further exacerbating these trends, based on a recent NACS faculty watch report, course material sales have also been diminished due to faculty assigning fewer course materials for their classes. On average, faculty adopted 4.1 materials for 3.8 courses versus 6.0 materials in 2020. Despite these headwinds, we are highly encouraged by the progress that we've made against our key strategic initiatives in fiscal 22 that include expanding the footprint of our inclusive access offerings, growing our general merchandise business through our partnership with Fanatics and LIDS, and growing our subscriber base for our digital student solutions offerings. As we continue to focus on supporting student success via our institutional partnerships, we're constantly examining the best ways to meet students where they are on their academic journey. Our key initiatives are directly aligned with improving student outcomes through access, affordability, and achievement, which is why they are resonating as strongly as they are in the marketplace. Additionally, first day by course and first day complete provide schools with a solution to reverse the long-term declines in course material sales. In fiscal 22, our inclusive access offerings contributed to a 2.3 percent increase in comparable course material sales, completely offsetting the significant industry headwinds and representing the first time course material sales through an over five years. We believe this is a significant inflection point and validation of our strategic transformation. PNCs, the first day by course and first day complete, are innovative course material delivery models that ensure students have access to all of their course materials on or before the first day of class, ensuring that there are no gaps in learning while providing the time-saving convenience of having all of their course materials bundled and delivered to them through a concierge-style service. Based on theories that we've conducted, 83% of students felt the program had helped them be better prepared academically and that it had a positive impact on their classroom success. And over 73% felt it helped them achieve better grades. With these perspectives in mind, it's not surprising that our inclusive access offerings are very attractive to our campus partners. During fiscal 22, Our first day complete program grew to 76 stores representing approximately 380,000 undergraduate students with revenue growing more than five times over the prior year to $106 million. For the upcoming fall term, 112 of our campus stores are committed to utilize first day complete representing undergraduate enrollment of approximately 547,000 students. As Tom will highlight further, when we look at our first-day complete schools that utilized the program during fiscal 22, they experienced a 67% increase in total course material sales as compared to less than 1% for non-first-day complete schools and an 83% increase in year-over-year total course material gross margin dollars versus 6% for non-FDC schools. Beyond our inclusive access offerings, we also see a great opportunity to grow our logo and emblematic sales through our partnership with Fanatics and Lids. We made significant progress with this new partnership throughout fiscal 22. As students return to campus for the fall term of the 2021 to 2022 academic year, they experience an expanded and enhanced logo and emblematic product assortment within our stores, benefiting from our partnership with Lids. For those shopping online, we integrated the Fanatics experience on our websites throughout fiscal 22, significantly enhancing the online user experience for logo and emblematic products. As a result of these initiatives, during fiscal 22, our gross comparable general merchandise sales increased 76%, which included an 85% increase of our logo and emblematic product sales. With our enhanced product offerings, fiscal 22 was another outstanding year in both gross and net new business wins, and the third year in a row of over $100 million in gross sales and new business wins. Furthermore, we have been intensely focused on enhancing our store-level economics, which encompasses both winning profitable new business and increasing profitability within the existing store footprint through our inclusive access offerings. We believe that VNC's offerings and compelling value proposition facilitates the student academic journey and drives improved student outcomes, while also supporting and enhancing the brand of the institutions that we serve. Our wholesale business continue to be impacted by supply constraints from the lack of used book inventory available for sales, resulting from the disruption to the traditional on-campus buyback activity over the last two years, as well as lower overall demand due to declining enrollments, and the transition to digital course materials. Fiscal 22 wholesale revenue declined 32%, while EBITDA declined by $14.8 million to $3.8 million. ESS continued its growth trajectory in fiscal 2022. Revenue grew over 30% on a year-on-year basis, with Bartleby revenue growing 40% to $13 million, and student brands revenue growing 25% to 22 million. We are continuing to strengthen our offerings and make investments to provide a hyper-personalized and differentiated user experience driven by data insights that further support and enable students' academic success. In the spring of fiscal year 22, we launched our institutional product and signed Delgado Community College as our first institutional partner. We're continuing to develop institutional capabilities and are leveraging our relationships with institutions or programs that want to provide targeted academic support for their students. We're very encouraged by the early feedback we are hearing and are laser-focused on unlocking the opportunity to scale the Bartleby institutional business. As we look out to fiscal 2023, while we do expect certain challenges to persist, we expect a significant improvement in our business over the last few years. As Tom will discuss in greater detail, our results within the retail segment are expected to improve significantly over fiscal 2022. Our wholesale business will continue to be pressured by inventory constraints and inflationary pressures, and DSS is expected to continue to grow revenue while simultaneously investing in its future growth. Despite the tremendous amount of change that's occurred over the last two years, we can say with confidence that that much of the value of a college education is still rooted in its core elements where in-person learning and social experiences remain extremely valuable for students and schools. We're excited by the progress we've made to date on our key initiatives and see substantial upside ahead. As we look to fiscal 23 and beyond, we expect our key strategic initiatives centered on growing course material sales through our exclusive access offerings growing our general merchandise business through our partnership with Fanatics and LIDS, and scaling our digital business to drive earnings growth and shareholder returns. And now I'll turn it over to Tom, who will provide a financial review as well as a comprehensive discussion on the changes that we've experienced within our retail business and the performance of our inclusive access offerings.

Thanks, Mike. And good morning, everyone. As Andy mentioned earlier, please note that I will be referring to slides in our financial review presentation, which are available on our corporate website. This morning, I'll start with a brief overview of our fiscal 22 results and then share insights on the transformation within our course material business and why we are so excited by the results we've experienced with our inclusive access offerings first day and first day complete. Before we dive into the financial review, I want to point out that we restated our fiscal year 2021 results by $8 million as we identified certain out-of-period adjustments related primarily to the recognition of an income tax benefit related to the recording of an additional deferred tax valuation allowance, totaling approximately $7.5 million, and restructuring and other charges related to severance costs totaling approximately a half a million dollars for the 13 and 52 weeks ended May 1st, 2021. It is very important to note that this restatement did not impact any of our non-GAAP EBITDA figures we typically review or our net cash flows. Now let's begin the financial review. Our fiscal 2022 fourth quarter and year-end periods consist of 13 weeks and 52 weeks, respectively, ended on April 30, 2022. All comparisons will be to the respective fiscal 2021 periods unless otherwise noted. Total sales for the quarter were $260.8 million compared with $222.8 million in the prior year. Sales benefited from the significant improvement in our retail segment as compared to the prior year period. On a gross comparable store basis, retail sales increased 32.6%, comprised of a 4% increase in course material sales and a 63.2% increase in our general merchandise business. Our textbook sales benefited from our rapidly growing first-day offerings, which collectively grew over 150% to $35.1 million during the quarter, while our general merchandise business benefited from more students returning to campus their resumption of social activities, and from our partnership with Fanatics and LIDS. DSS sales increased 15.6% to $9.7 million, while wholesale sales were nearly flat with the prior year period. Selling and administrative expenses increased $4.3 million over the prior year, primarily due to higher store payroll associated with store reopenings in the current year, which were temporarily closed due to COVID-19 in the prior year, as well as higher investments in our DSS business. Consolidated non-GAAP adjusted EBITDA improved by 25.2 million to a loss of 6.2 million. Now let's look at fiscal 22 as a whole. For the full year, total sales increased 97.5 million, again benefiting from the rapid growth of our inclusive access models, coupled with more students returning to campus, and the greater resumption of on-campus social activities. First day by course and first day complete revenue grew 91% to $234 million, offsetting the negative macro effects of lower enrollments and fewer course materials being adopted. Further breaking them apart, first day complete revenue increased 451% to $106.1 million, while our first day by course revenue increased 24% to $128.1 million. Benefiting from this growth, our retail gross comparable store sales increased 19.6% for the year, with comparable textbook sales growing 2.3%, and gross comparable general merchandise sales growing 76.1%. Much like the fourth quarter, selling and administrative expenses increased $45.2 million, primarily due to higher store payroll associated with store reopenings, and higher investments in our DSS business. Consolidated non-GAAP adjusted EBITDA improved $60.8 million to a loss of $4.8 million. As we look to fiscal 23, we expect to see significant improvement in our retail business being driven by new first-day complete implementations, growth within our general merchandise business benefiting from greater on-campus traffic, and new business wins. We expect the challenges within our wholesale business to persist, including less used book inventory and higher inflationary pressures on wages and freight. As a result, we do not see any significant improvement over fiscal 22. We expect DSS EBITDA to be near fiscal 22 levels as we continue to grow revenue and invest in the product enhancements. On a consolidated basis, We expect fiscal 23 adjusted EBITDA to be in a range of $30 million to $40 million. Now I'd like to take some time to review some of the significant changes that we've experienced in our course materials business over the last few years and how the power of our inclusive access models are turning the tide on the negative long-term enrollment trends impacting the broader industry. Let's begin by taking a look at our course material sales over the last few years. Since 2019, our course material sales have been affected by declining student enrollment, fewer course materials being adopted in the transition to lower priced and lower margin digital materials, all of which were further exacerbated by the lower on-campus traffic due to COVID-19. The implementation of remote and hybrid learning models significantly accelerated the adoption of digital course materials. Since 2019, Digital course materials grew from 11% of our overall course materials sales on a dollar basis to 35% in fiscal 22. To offset the broader industry challenges and the course materials sales decline, we developed our inclusive access models, which in addition to ensuring all students are equipped for their courses on the first day of class, also significantly increases course material sales on those campuses by capturing a greater share of students. For perspective, under the traditional model, approximately one-third of students purchase their course materials through the campus bookstore. Based on our studies, we believe another third buy their materials elsewhere, and the last third forego their materials altogether. When first aid complete is adopted by an institution, which includes all classes and provides students with all their required course materials in both physical and digital form, our sell-through rate increases to approximately 80%. It's important to note, depending on how the program is implemented, that at certain schools, the program includes an opt-out option for students. And in some cases, certain programs are excluded from the offering. Under first day, which is when digital course materials are adopted by a faculty member for a single course, our sell-through rate increases to approximately 98%. We've already begun to see the benefits of our inclusive access offerings, which drove an increase in our course material sales despite lower enrollments in the most recent academic year. Our total course material sales increased 6.6% in fiscal 22, benefiting from the growth of our inclusive access models. As of fiscal 22, our inclusive access models account for 28% of our course material sales as compared to just 7% just two years ago. We expect these programs to continue to gain traction and continue their rapid growth in the years ahead. Many of our institutional partners recognize the benefit of our first day complete offering which has led to rapid adoption of the program. Since the fall of 21, we grew the number of stores utilizing the program from 12 stores to 76. First day complete revenue grew over five times from 19 million to 106 million over the same period. As Mike highlighted, we have commitments from 112 campus stores with total undergraduate enrollment of approximately 547,000 to utilize first day complete for the upcoming fall semester. As a reminder, under the first day complete program, we build a school on a per credit hour fee basis based on the actual student credit hours for the term minus students who opt out. To further support the growth of our first day complete initiative and finance the shift in our working capital needs, we entered into a $30 million term loan credit agreement with Lids and VitalSource on June 7th. In addition to supporting the rapid growth of our inclusive access offerings, we believe this also demonstrates our partner support of our strategic initiatives. Comparing the stores that have adopted First Day Complete to those that are still utilizing the traditional model, there is a tremendous course material revenue and gross profit variance driven by the significant higher course material sell-through rates. Stores that utilize the program experienced a 67 percent increase in total course material sales as compared to less than a 1 percent for non-FDC schools and an 83 percent increase in year-over-year total course materials gross margin dollars versus 6 percent for non-FDC schools. To further highlight the massive impact of our first day complete offering, In isolating the 62 stores that adopted FDC during fiscal 22, the revenue from that cohort increased 90% from $61 million in fiscal 21 to $116 million in fiscal 22, and their year-over-year gross profit more than doubled from $16 million to $37 million. At our Investor Day presentation a year ago, We outlined our key strategic initiatives that are centered on growing adoptions of our inclusive access models to grow textbook sales, accelerating our general merchandise business through our Fanatics and LIDS partnership, growing subscribers within our DSS business, and as a result of these initiatives that increase our value proposition for our campus partners, grow the number of schools we serve. We have demonstrated the power that our first day complete offering can have on course material sales. Our fourth quarter logo and emblematic sales were the highest in the company's history, and DSS grew their subscriber count to over 400,000. We are excited to share these early proof points with you that highlight the impact that these initiatives are having on our business. We expect their impact to continue to grow and help mitigate the broader industry headwinds and challenges within our wholesale business. We look forward to keeping you apprised of our progress. And now we open the call for questions. Operator, please provide instructions for those interested in asking a question.

Thank you. If you would like to ask a question, please press star followed by the number one on your telephone keypads now. If you change your mind and wish to withdraw your question from the queue, please press star followed by two. We ask that when preparing to ask your question, please ensure that your device is unmuted locally. Our first question today comes from Ryan McDonald with Needham. Ryan, please go ahead.

Hi. Good morning, everyone. Thanks for taking my questions. I appreciate the additional color on the first day and first day complete data as well. Maybe starting with that question around those product offerings, you reported $106 million of first day complete revenue and $128 million of just first day courseware. When you look at, you know, the opportunity to add incremental campus stores or universities over time, how much of that $128 million, you know, do you think can be converted to first day complete over time?

Yeah. Hey, Ryan, it's Jonathan. Thanks for the question. We do have campuses that we converted to first day complete that had robust first day by course programs, but then we also had some that had no first day at all. So I think we'll continue to see that trend over time as we're Scaling are the number of implementations of first day complete, which for this fall we have commitments for 112 stores that represent 547, approximately 547,000 in undergraduate enrollment. And so people continue to see that trend over time, but we're going to have stores that have zero first day by course that transition. And we'll see stores that have robust programs like we've seen in the past.

That's helpful, Collar. And when you think about the variables that also go into sort of the first day complete, you know, revenue calculation, you know, opt-in rates obviously sounding very strong. I think you said 98%. But what trends are you seeing in terms of, one, on the credit hour side for students, And then two, pricing. And I think at the analyst, they originally talked about $25 per credit hour. I think we've seen some universities comment, you know, $20. You know, maybe that's driven by the shift to digital. But just would love your thoughts on what you're seeing in terms of that mix of price per credit hour and the number of credit hours students are taking.

Yeah, in terms of the pricing, you know, what we provided was illustrative, just to give direction at the time. And we do it on a, you know, like we do in how we support our institutions on a very one-to-one, each institution is a little bit different. We actually price individually based on sort of the overall credit hour mix and weighted average of the book list. So it really does vary pretty widely, but I think that it's in line with our expectations and where we're at. And the pricing relates to also the cost. So those two things are in lockstep when we're looking at the modeling. So the pricing is really customized, but I think it's aligned with our expectations. And from a credit hour and overall credit hour standpoint, I think it's what we've seen that it's aligned with what we reported and what we're pulling from the national reporting on enrollments and the consistency with enrollments. And, Ryan, the other thing on pricing just – We look at that annually with each of our partners to see what their book list looks like, what the pricing of the cost of the content is, what the mix is. So it can change and often does change each year for each individual partner because it is so customized. And we do a lot of work making sure that that is the right price for that right student and the overall weighted average mix of the course list, the book list that faculty select and that's, you know, per, you know, every year that gets locked in and set. So it sort of adjusts with the adjusting both cost and mix of books that are used at an individual campus.

I really appreciate the color, Jonathan. And then maybe just last one, Mike, for you, maybe stepping back more broadly. I know a lot of the discussion and folks from the investment community has been sort of this trajectory and working back towards pre-pandemic levels when you think about adjusted EBITDA. As you look into the fall and maybe more broadly into fiscal 2013, You know, what would you say are sort of the gating factors to getting back towards those levels fully when you think about sort of the mix of, you know, what we're seeing more broadly in enrollments versus the supply chain headwinds that we're experiencing as well?

Yeah, that's something we think about all the time. I think that, you know, Tom touched on it quite a bit in his comments. But in terms of getting back to pre-COVID, if you look at the Investor Day presentation, I think the number you would land at is like $75 to $80 million or something like that. You know, one of the big factors in that is really the change in the wholesale EBITDA that's occurred because of lack of supply of used books, also greater demand in digital, which is driving our first day. business. But wholesale, for prospective purposes, they generated $35 million of adjusted EBITDA on fiscal 2019 as compared to $3.5 million in fiscal 22. So if wholesale fiscal 23 adjusted EBITDA were comparable to what we generated in fiscal 19, you can see that in our outlook, we'd already be approaching those pre-COVID levels. So a lot of this has to do with When you're comparing to pre-COVID, a lot of it has to do with the wholesale drop. So what that does is it means that a couple of things. First off, the wholesale, we basically said in our outlook, I think, that we think it's going to be close next year to where we are this year. We don't expect it to improve, in essence, is what we've said. It puts more, obviously, more weighting on the improvement that we expect in our largest core business, the retail business, which is why we spent so much time talking about it today and showing. And now that we have, in fiscal year 22, really the first year of scale on our first day complete business, We can show the cohort analysis and compare it to the prior year. We can also show the impact that's coming through in the financials. If you look at the increase in GAAP revenue and you look at the increase in GAAP margins, you know, GAAP sales are up 6.8% or $97 million, but GAAP gross margins are up 39% or $106 million. And some of that has to do with the netting of FLC's revenues, but a lot of it has to do with the fact that our margin dollars are going up substantially, as the slide demonstrates, because of first day complete. And the more we penetrate first day complete and the more we improve and hone the partnership with FLC and generate those products, you know, that will – and then obviously the growth of DSS, which is, you know, Kudos to Student Brand to turn that around and Davis growing DSS nicely. That over time will really contribute to margin growth and EBITDA growth. That's a lot, but I think people lose sight of the impact of wholesale when they compare it to pre-COVID levels. And, you know, we're working hard to make sure that, you know, all our businesses are optimal from an EBITDA perspective. But wholesale has got the biggest challenge in front of it over the next 12 months for sure.

Thanks for taking my question, Mike. We'll hop back into here. Thanks, Ryan.

Our next question comes from Alex Fairman with Craig Hallam. Alex, your line is open.

Hey, guys. Thanks for taking my question. You know, I wanted to unpack the guidance a little bit more. You've got first day complete, starting to generate a pretty meaningful share of revenue now and growing very nicely, and it sounds like general merchandise. performing at record levels right now, given the Fanatics and Lids partnership. And yet, you know, we're still looking for EBITDA to be down pretty significantly from pre-COVID levels. Can you talk about a little bit about, you know, kind of numerically bucket by bucket where that's coming from. Is there an expectation that enrollments are going to continue to be under pressure or at least not increase this year? Can you talk about your expectation for enrollment that's baked in there? And then can you try to size up for us a little bit the magnitude of the decline in wholesale in EBITDA? I mean, is that what's really driving the majority of of the shortfall relative to pre-COVID levels?

Yeah, thanks. I just tried to address that with the prior question and speaking to the decline in wholesale EBITDA, which is really the last full year pre-pandemic is fiscal 2019. when wholesale generated and contributed $35 million of EBITDA to our consolidated number versus $3.5 million this year. So you can do that math. That's a $32 million decline in wholesale EBITDA, and we're guiding to $30 to $40 million. If we're, you know, peri passu at the same level for wholesale EBITDA this year as we were in 2019, you know, we'd essentially be at a pre-COVID level. Now, we're not obviously counting on that, as we said in our – Tom said in his comments, and we also said in the outlook. We expect wholesale not to improve significantly. We expect PSF to be – pretty much where it was this year because they're continuing to invest in that business and grow our new institutional product and the product itself, improve the product itself. So a lot of the growth we expect to come from retail. And in terms of the headwinds, we've tried to describe, you know, what the enrollment figures are, the difference between pre-pandemic and even 2020 when I think I said that the number of students, undergraduate students, has bounced up to like 9%. 9%, 9.4%, I think I said. So, you know, the beauty of first aid complete is that it takes ourselves through, as Tom was demonstrating in the slides, and retails from something like 30% to what we think should be between 80% and 90%, and that's what we're seeing today. You know, John and his team have put in some new processes where we can manage the opt-out of first aid complete more ourselves and leaving it to the schools, which should help drive the opt-out rate down, or in other words, drive up the sell-through rate, get it closer to 90%. So, you know, that's what we're really focused on is driving the retail EBITDA while we invest in DSS. But, you know, they still are going to throw off positive EBITDA as they did this year. as is wholesale, but when you look at corporate services, corporate services, you know, has been fairly flat over the last, you know, several years. We expect that to continue. Most of corporate services, you would load into, you know, do the retail function because that's the largest business. So retail, you know, we're expecting significant growth in retail, not just this year, but going forward over the next couple of years as we expect wholesale to do better in And wholesale's real strategic value, as we've said before, is as a fulfillment engine to our first day complete product. And really, they're really kind of the last substantive wholesale used book company that's left. So that is a strategic advantage. You've seen the figures that Tom put up about a conversion of physical to digital, but there's still over 50% of the courseware is in physical format. So wholesale and MBS play a very important function. MBS also manages our virtual product delivery and also does a lot of other things for the retail business like customer care and demand forecasting and working closely with our retail group on managing physical book demand forecasting and fulfillment. So trying to unpack the rest of it, it really gets into expenses, I think, like freight, the impact of inflation, all those things we're trying to anticipate in our guidance. And John and his team are actually taking some steps to adjust how we charge for shipping and freight and trying to be as smart about that as we can. But it's one of the reasons we have a range in our guidance And, you know, inflation and the impacts of inflation are hitting everybody, but I think that we're, you know, anticipating all that new guidance as best we can.

Okay, that's really helpful. Thank you. And then if we could just touch on new business and new contract opportunities for new bookstores. I mean, how does that rank for you? In terms of your priorities for capital and time, when you compare that to the opportunity to keep growing first day complete and invest in the digital business, how much of a priority are going after new bookstore wins over the next few years?

That's a really, really great question. I think that we're being very careful in how we allocate our capital. Many of the new stores that we're looking at go hand in glove with the first day complete strategy. You know, if we're not insisting that they go on first day complete the first year, if that makes sense, then, you know, in many cases it's year two. We're not deploying a lot of capital into new stores. We just opened five new stores. in Notre Dame in March. And those capital costs were co-funded by our great partners at Fanatics and LIDS. And, you know, other than that, we're not, you know, we have some maintenance capital and that type of thing. But because of the shift in our model, which is really focused on Thursday complete from a coursework perspective, and then the Fanatics-LIDS partnership from a GM perspective, We're being very careful how we allocate capital. We do want to allocate capital to DSS to keep that growing and competitive because that's important to our strategy, the bundling of our digital self-study suite of services into our first day complete offering. It's something that David and his team working with John in retail are very, very focused on. And we think the return on invested capital is there to warrant allocation of capital to DSS. But we're not interested in really adding a lot of new stores just to add new stores. In fact, we're carrying out stores, protein stores, so to speak, that we think should be on FTC that are not going there. And we'll probably see a big increase in that, what I would call kind of the bottom part of our store portfolio as we head into the end of 23 and 24.

That's really helpful. Thank you very much.

Yeah, I mean, the only thing I would add to that is that because of the product and the differentiated product offerings that we have through emblematic clothing and gifts and the enhanced product assortment and user experience both in-store and online through Lids and Fanatics as well as the first state complete offerings that we have there is significant demand for schools we don't serve to uh to work with us and so we have been very successful in uh in transitioning both self-operated stores and stores operated by other vendors to us and i think it's the third year in a row of over 100 million in gross sales and new business wins And while, you know, we're going to continue to work with campuses, bring new campuses on, we're going to do it in a very fiscally responsible way, as Mike said, but there's still a lot of demand because of the, you know, the differentiation in our product offering and the value we're adding, and especially for that really want a partnership with us, to work with us to support their key goals and objectives and their key priorities, which I think we've been able to demonstrate that we can do. So I think there's a lot of exciting new business to be had out there, and we're working hard with schools, but just in a slightly different way.

As a reminder, for any further questions, please press star, followed by one on your telephone keypads now. At this time, we have no further questions. So, Andy, I'll hand back to you to conclude.

Great. Thanks, Emily. And thank you all for joining us on today's call and your continued interest in B&ED. Please note, our next scheduled financial release will be our fiscal 2023 first quarter earnings release in September. Have a good day, everyone.

Thank you for joining our call today. This concludes today's event, and you may now disconnect your lines.