Oxford Industries, Inc.

Q1 2021 Earnings Conference Call


spk_0: reading and welcome to the oxford industries and first quarter fiscal twenty twenty one earning conference call at that time all participants are analyst and only mode the question and answer session will follow the formal presentation if anyone should require operator system during the conference please press start zero on your telephone keypad please note the conference is being recorded i will now from the conference over to your host an shoemaker treasurer thank you you may begin
spk_1: thank you and good afternoon before we begin i would like to remind protect the pill that certain statements made on today's call and in the queue and a session they constitute forward looking statements within the meaning of federal security flaw forward looking statements are not guaranteed an actual results may differ materially from those expressed or implied in the forward looking statements important factors cause actual results of operations for our financial condition to differ are discussed in our press release issued earlier today in documents filed by us with the fcc including the risk that contained in our for and ten k we undertake no duty to update any forward looking statements during this call we will be discussing certain don't get financial measures you can find a reconciliation of non gap to get financial measures and our press release issued earlier today which is posted under the investor relations tab of our website at oxford and dot com due to the material impact of covert nineteen on our business and siskel twenty twenty we will also include comparisons to our fiscal two thousand and nineteen results and now if i introduce today's called participants with me today or tom chubb chairman and ceo and scott breath meyer cfl thank you for your attention and now i'd like to turn the tall over to talk just trying the ram and thanks to all of you for joining us this afternoon we are too
spk_2: removed please to be reported an incredibly strong start to fiscal twenty twenty one we take decisive action says the started a pandemic to protect our people our brains and are liquidity those combined with our focus over the past year on delivering happiness toes her smooth and investing in incentives digital marketing and store capabilities as well as and or bars and restaurants have strength nor foundation for profitable groans as consumers would become increasingly more comfortable returning the physical sharpen our overall a judgment levels have greatly accelerated leading to strong momentum across our entire portfolio brands given conditions last year it is not surprising that we were able to post strong sales games across all brands and old sales and distribution during the first quarter of fiscal twenty twenty one as compared to the first quarter of physical twenty twenty was much more impressive about our first quarter twenty twenty one performance is how it compares to the first quarter of two thousand and nineteen we believe that the comparison to twenty nineteen is much more informative for most purposes than comparing to twenty twenty cordingley during our discussion today we will focus on the positive tracked him we have made towards were turning to and even exceeding or twenty nineteen level of performance first quarter sales came in at two hundred and sixty six million dollars compared to two hundred and eighty two million dollars in fiscal twenty nineteen and vs are thousand swing to two hundred and twenty to two hundred and forty million dollars it is worth noting that fourteen of the sixteen million dollar sales decreased from the first quarter of fiscal twenty nine team is due to lower sales and limb europe harold willis as you know we're in the process of bags of on an adjusted basis awnings percent increase to a dollar eighty nine compared to earnings of a dollar thirty in the first quarter of fiscal two thousand and nineteen sky will provide more detail on a few minutes but these results were driven by very strong performance in our the customers businesses and outstanding gross margins are bar and restaurant business also perform very nicely during the quarter in our bricks and mortar stores with really so sequential improvement in traffic in sales and the quarter with regions in florida the southeast and taxes showing the most strength while the mid atlantic the north east in the midwest are recovering a somewhat slower pace there is no question that we are benefiting from some and the man so far the spring and summer and me alignment of our brains focus on products related to travel they challenged him and social occasions with the consumers desire to travel and reengage socialize we expected to continue as more regions of the country begin to know normalize that said we believe that the results we have seen those folders here and that we're projecting for the balance of the year also demonstrated the value of straying trees to our friends during the challenges they face last year our move into that happy up beaten optimistic messages of our brains in delivering those messages charge consumers through our products and services is paying off handsomely as the world reinventions in addition we are seeing positive return somebody investment we have made and continue to make in in the hansen brains creative content in improving around me channel customer service and continuing to hone or digital marketing capabilities and in our stores bars and restaurants in our biggest brand tommy bahama we are third in the relax time when lifestyle we deliver this lifestyle to our go through amazing products are wonderful stores and commerce website and very importantly through our bars and restaurants by staying true to our lives the island life brand medicines and making the types of that doesn't himself and above we were able to deliver outstanding first quarter results sales her role came close to twenty nine teen levels driven by healthy games me commerce and restaurants while stores and the wholesale continue to improve sequentially very importantly increased full price selling and stronger initial i am use coupled with it's excellent expense control helped contribute to a marked improvement in gross margin operating margin and of thirty six percent increase in the operating income over first quarter twenty nine we're delighted with the margins we achieved for the quarter finally we were pleased to see that while performance and our memes business was strong are women's business as tommy bahama was even stronger we are honored that the dedicated cowdrey improved tommy bahama fans that complies are very loyal customer base that said we believe there is room on the island to the like even more customers through the investments we're making in the priorities we have established we are intent on expanding our customer read while continuing to serve
spk_3: our royal house
spk_2: staying true to it's resort seats lifestyle and as we say being the sunshine served little pellets or very well during the first quarter lilies product priority for spring twenty one was feel good pass and with a focus on the happy colored prim easy she's comfortable pieces and a resort state of mind this focus together with the investments that we have made him in the hansen your brain creative and enhancing our store and digital capabilities paid off in strong first quarter results we continue to see strong growth for me commerce while our stores and the wholesale business continue to improve as consumers feel increasingly comfortable engaging in the physical world in total first quarter twenty one fails exceeded first quarter twenty nine sales and operating margin ten men as an impressive twenty seven percent as compared to twenty one percent in twenty nine ten alex leather can lounge product continue to drive groans and we saw a healthy rebound in our dressed business as for social calendar begins to feel loved at the same time or golf and tennis collection i've also been bright spots and the consumers so strong renewed interest and swim as she thinks about travel and vacation this summer a recent results demonstrate that we have the product she was and our brand messages resonating with her we like forster continues to drive a strong business through the balance of the year are smaller brian southern tied to do for vomit company and dark can also had a great first quarter all posting meaningful sales games above first quarter twenty nineteen levels all for your poised to contribute to profitability this year we are very pleased with our first quarter results and are excited about the balance of the year scalpel provide more details and or guidance momentarily but i will say that we do expect have a strong year particularly in terms of profitability or enthusiasm is based on both external factors as well as the internal priorities that we have been focusing on for the last year i'll start with the external factors as the summer progress as we expect some other regions that have been florida recovered for us namely the mid atlantic the northeast in the midwest to pick up memo we also believe that consumers will continue to have a high degree of interest and travel they him and social events through the you found on the after a long pandemic consumers appreciate be highly differentiated happy colorful up the nature of our brains and products more than ever all of these external factors portended strong twenty twenty one we're all so excited about the benefits we're seeing is the result of our internal priority there are many that i will thought highlights sized here first and are brian as as we're taking care to ensure that our message messengers so been true to our core brian values and relevant for today's consumer and marketplace second we have relied more creative teams and are enhancing our creative content to make sure it is delivering the full impact of our powerful brand messages third as part of our efforts to my hands are digital capabilities we are proving our ability capsule and alive customer data and a way that respect from privacy but also puts us in position to server in a better and more personalized way it also helps us identify and reach new audiences some potential customers fourth we are honing your skills of measuring the effectiveness of and optimizing the various channels many of them digital media that we used to reach both existing and potential new customers fifth we continue to in the hands of restore order fulfillment capabilities this allows for us to use inventory located is anywhere in our footprint to satisfy demand for men where the implications for inventory efficiency sell through rates and ultimately gross margin or huge we believe the combination of positive that external factors as well as the benefits from our work on our internal prior to gives us a ample reason to be bullish on twenty twenty one in closing please allow me to express my sincere appreciation for our wonderful and loyal customers and for our world class employees an incredible group of women and men who worked harder than ever over the last year and i have to deliver a happiness to those customers thank you for all you do and now i will turn the call over the scott for additional detail on our results and our outlook for the
spk_4: palin said the scottish thank you tom
spk_5: this town just mention typical twenty twenty one is after a great store with record earnings in the first quarter a walk you through how we got their sales were stronger than expected and excluding the impact of the accident the with your peril business are comparable to two thousand and nineteen levels are full price ecommerce china was fifty five percent higher than in two thousand and ninety was significant growth over two thousand and nineteen and all of a brand of businesses a retail store performance reflects the significant regional differences in the pace of recovery resolve will strengthen the southeast southwest particularly in florida for retail sales achieved two thousand nine two others however where we are experiencing a much slower recovery and other forces a country where self levels in the northeast mid atlantic and mid west on improving first ski for are still over thirty percent lower than in two thousand and nineteen overall or retail sales were sixteen percent lower than in two thousand and ninety we continue to see improvement so far in the second quarter this that that improvement continuous restrictions left and as some around in these areas or restaurants benefited from the addition of five mormon bars and the strong recovery in certain regions with a sales increased of seven percent compared to two thousand and nineteen all restaurants are now open itself for new york which we plan to reopen this fall we are particularly proud of the work we've done to improve our gross margin which one is adjusted basis expanded five hundred twenty basis points over two thousand and nineteen two sixty four percent his demand remained high over cells in the first quarter were full price than in the first quarter of two thousand and nineteen gross margin also benefited from our focus and investments in our direct to consumer businesses and lower sales and money or peril which has resulted in a meaningful shift in ourselves next to the tire more to and channels of distribution in the first quarter of twenty twenty one or direct business with seventy two percent revenue compared to sixty four percent in the first quarter of two thousand and nineteen we have also increased or i am used by reducing product cost and selectively increasing prices as to in a modest to decrease modestly from two thousand and nineteen levels with lower employment cost occupancy cost variables fences and travel costs partially offset by increase performance based and cent of compensation putting it all together in the first quarter consolidated just operating margin expanded four hundred and ten basis points over two thousand and nineteen to fifteen percent but operating margin expansion and hall operating costs our business is supported by are strong balance sheet cash flow from operations here are some highlights pfeiffer basis him into a decrease twenty nine percent compared to the end of the first quarter twenty twenty excluding when you're apparel which we are accepting five for women toy decrease twenty two percent compared to the into the first quarter twenty twenty tommy bahama fully poulter in southern tied each decreased them to a level significantly year over year the conservative purchases of seasonal him and tories and higher than expected first quarter sales ongoing hansman the enterprise order management systems are also contributing to a more efficient use of inventory iso basis him into a decrease thirty six percent appeared to the end of the first quarter twenty twenty supply chain challenges including higher trans transit cost and production in france the delays are ongoing however with our emphasis on direct to consumer channels gives us more flexibility on product our put it position is strong with ninety two million in cash and know dead at the end of the first quarter in the first quarter of twenty twenty one cash provided by operating activities was forty one million compared to cash used in operating activities of forty six million in the first quarter twenty twenty turning to our outlawed the possum i'm and i'm with spirit in the first quarter has continued and with spent to deliver strong revenue and earnings in the second quarter sales in the second quarter expected to be in a range of three hundred to three hundred and ten million compared to three hundred and two million in the second quarter of two down
spk_6: and nineteen
spk_5: in fact himself in the second quarter the wind down about money or peril business we estimate linear pill revenue to decline to approximately five million in the second quarter of fiscal twenty twenty one compared to twenty million in the second quarter of fiscal two thousand and nineteen strong full price cells a shift of ourselves mix towards or brands and are direct to consumer channels and higher i am using the second quarter or expected to contribute contribute to a meaningful increase in consolidated gross margin of or two thousand and nineteen on an adjusted basis earnings per share for the second quarter twenty twenty one are expected to be in a range of two dollars and fifteen cents to two dollars and thirty five cents compared to a dollar and eighty four cents per share the second quarter of two thousand and nineteen our third quarter stuart lee or smallest sales in earnings quarter due to the seasonality about browns we also player in the season image toy boat the third and fourth quarters with is highly profitable lily pulitzer after party sales that the most notable of our backs high salaries in the first call order and elevated cells plan levels planned the second quarter are expected to reduce the availability of excess inventory for the clearance advance as a result of lower planned revenue from current events in the third quarter and the impact of the guinier curl exit were projected national adjusted waltz in the quarter and a range of twenty cents to thirty five cents per share compared to justice earnings of ten cents per share in the third quarter
spk_6: and nineteen
spk_5: with are better than expected first quarter result combined with our for jackson for a strong finish to the year driven by continued strength strain plant and are fools pricey commerce channel returns restaurant child the distribution we're raising our previously issued guidance for two thousand twenty one we now have that sells and a range of one point o one five billion to one point o five billion
spk_4: compared to net sales of one point one two billion in two thousand and nineteen
spk_5: for the four year when their peril cells are expected to be approximately twenty million or seventy five million lower than two thousand and nineteen but no linear apparel ourselves planted in the fourth quarter adjusted earnings per share for two thousand and twenty one are expected to see two thousand and nineteen levels benefiting from meaningful gross margin expansion as seen name for the four years expected to be comparable with two thousand and nineteen lower point call you can see cost and travel costs partially offset by increase performance space and send him compensation and investments in marketing including top of the final expenditures we now expect adjusted earnings and a range of four dollars and eighty five cents to five dollars and fifteen cents per share compared to four dollars and thirty two cents per share in two thousand and nineteen he planned to continue investing in our growth opportunities primarily in information technology initiatives such as the redesign are lot of the bill imports from oh mobile app and additional development of digital marketing and customer service and hands months we also plan to do retail stores and a new mom on board town square and las vegas which will replace or full service restaurant in the summer in two thousand and twenty one capital expenditures for the four years better to be approximately thirty five million comparable to two thousand and nine cheap levels the appreciate your time today and will now turned over the call for questions hillary
spk_0: thank him at this time we'll be conducting a question and answer session like apple question please test i want pass on t toma indicate your line of the questions you start here if you like turn of your questions in the camp every guest speaker clinton it may be necessary to take up your handset before passing jackie one moment please lollipop the question i first question is friend at were a year and that of bank capital markets
spk_7: the question
spk_8: i could after you guys thanks taken a question congrats like great quarter i get first as a lot of clinton a gross margin old that obviously an incredibly up her performance there are times does last year and you had in the twentieth have to wait out with that a set from a cost basis when you kind of thought that i'm quite that come to allow this year and then as a follow up as you think long term about the dtc penetration operatic land and the tommy grand do you think you hit a peak or do you think that the direct illness can continue to grow as the percent of overall sales thanks
spk_2: ah maybe take the first one and then flip it does get around take the second one excuse me and then flip it over to scott talk about and bennett said that we might have the gross margin but i do add believe that ttc as a percentage of that total
spk_9: can can continue to grow
spk_2: certainly yeah will be a larger part this year i think than it was and twenty nine teen as wholesale is recovering i do think our wholesale business is very healthy were performing well at all aboard keep customers which is great to see that over the long term we do expect
spk_10: you know d c t v d c to be the primary driver of grows
spk_5: that do you wanna talk and yellow submarine here are the i don't really know any cosmetic cough different from what we carried over what is that allowed us to do was really not have a lot of excess inventory last year that we are flooding the market where the nothing really help with a brand know that the merchandising teams in a great job of really you know i'm taking what we could merchandise well into that spring line and it just allows us not to have to fire punch him in towards early spring we already had it also help with some of the transit delays because without that on image or it was already here so
spk_11: no delay swear
spk_8: got in one one other call up and a that mentioned you're taking some tactical price increases and have historically got that are you gonna be a product or well that's me functionality and or the price increases on kind of similar basis as you bring out your product to are you taking more had a wholesale approached i to some of that price increases thanks
spk_2: if more selective bad than it is across the board type of pricing increases
spk_5: what else are we getting more performance type products were you know where you know the products it when a decent performance area tender have a higher gross margin awesome
spk_12: great thank you
spk_13: thank you
spk_0: i next question as grandpa was a city please take your question
spk_14: thanks it's tricky token filling in up how am i get requesting i guess the first is on the supply chain i'm i'm wondering if it's like delays you're seeing the are contributing to like he expected having a lack of clearance inventory and in third quarter that really just more of a way to kill yourself really after that my second question was i was just wondering in the comedy yes
spk_2: how much out of business was hurt by lack of international toys and that he could maybe get some color on the difference in performance and in your outlook first injuring your full price stories are delhi in our choice street and versus those that are not and thought okay i'm not supply chain questions and any impact of that may be having on the lily pulitzer
spk_10: after party stay away during the year the way that i would answer that tracy is the primary drivers the root cause of you will love not having as much inventory of far higher self through
spk_2: that we've had your the day however the supply chain is she's made it harder for us to says soon and tory really for full price business as well as as for the third you know about that would ultimately end up leaving us possibly with more inventory for the after party sales so the we we are having some challenges with the ladies and sipping as well as some delays and production at the factory and due to the coburn pandemic
spk_15: as much as possible we've observed for tried to factor all of that in two or
spk_2: forecast
spk_3: and think we've we've sorta captured that but the real causes the the higher than
spk_4: anticipated full price selling during the early part of the year
spk_5: and then on that outlet stores here or outlets are down similar to a total retail or we don't really benefit that much from international travel not the way some brands mine in our our stores or while the sales are down the gross margins are very healthy and or outlet so we just how much leaner and them and torreon him and tortillas very good him and tory
spk_14: and i were able to get you know little bit better pricing having to discount hello less than we had to and in previous years sober or our businesses are in sales are down but margins are a source for shot
spk_16: thanks very much
spk_0: thanks to tracy
spk_17: i next question as from susan anderson as be riley
spk_18: that your question i can be being nice to see them prevent the quarter it an answer is i think you mention that you expected that northern states to pick up as is i'm sorry to open and and have you seen that and penetrate right seen and start to pick up just yet and then also it's the south has continued to
spk_2: forms of wow and then also curious what you're seeing and hawaii is that opened up now
spk_19: doused so as to the mid atlantic northeast and midwest which were day three sort of lagging regions that we pulled out they are improving if he's like at a more recent performance versus the performance
spk_2: earlier in the year the the general trend mayor is good map think it's as you would expect as people start to get out more feeling more comfortable and some of the restriction start to get lifted and more people are vaccinated if you know people want to be out shopping and and buying stuff and we heard that actually plays out for us really well
spk_4: in those states summer time is a really good time to have people out shopping
spk_2: for our brand switch are of how warm weather and sunshine and and all those types playing them in the south i'd say that you know relative to any other year the performance continues to be very good we're pleased with workers seeing their i will point out that florida always slows the for as during the summer time a bit versus other tan said the year and not saying you know you'd have that
spk_3: is won't be as well as to slow down as compared to other years but it will
spk_2: the last of our our overall sales picture during the summer months and then as to hawaii it's a bit of a mixed bag they are the places that rely heavily on international tourists especially people coming in from japan or australia and that would be the island about why who because they're still issues with travel from those places dave not recovered as fast as some of the the locations like mowing him the big island that are more driven by us tourism there are still restrictions in place that we are seeing you know a nice recovery you not think that will continue as the year progress is ah thank all up hawaii will continue to get better which is is you know positive for us we're thrilled with the results that we saw him the first quarter but again that was with certain region still you know
spk_3: as
spk_18: depressed from where they were in two thousand and nineteen and as they come back on line we think that bodes well for us
spk_2: great a very helpful and and then i'm just curious are you seeing new customers come into our that ran an or the existing customers that are coming back now that may be were shot in the grand prix kobe the had a shop and completed had an indication or something and now they're coming back or if you're also capturing new customers and if that's and store or online or both the answer's yes yes yes world customer accounts are building we're seeing customers that that customers that we've had the past and we're adding new customers both online and in stores worsen it's really across all brands and some of that got a little choppy during the pandemic obviously
spk_10: it was hard dad new customers in stores when the stores were closed
spk_3: and there was like islam now and later but all the customer metrics or really
spk_18: looking for to get through the first quarter of the year and we think will be able to continue
spk_0: that trend is obviously an area a lot of focus for us and well
spk_17: great that some positive for thanks so much because accuracy or
spk_20: next question has been as healthy celsius celsius please state your question
spk_2: hi good afternoon and congratulations on the terrific results as you think about ecommerce and i believe last year he commerce reach nearly forty three percent of sales and you had sixty five percent increase in full price now how are you thinking about percentage of total sales that comes from ecommerce and the large increase in relative toys that free to the band yeah serve as high as penetration or with the as you know really has a higher penetration to be commerce and tommy does that both took a big step up last year last year was a very unusual year as a percentage of the total it will be a bit smaller this year than it was last year that it'll still in both brands be significantly higher
spk_3: than it was in twenty nine teen in overall total enterprise
spk_21: think we're estimating it be and about thirty three percent
spk_10: for twenty twenty one would still be up to be significantly younger where it was
spk_2: in in two thousand and nineteen thanks you know twenty two is probably the first year where you're really be able to see where that's gonna have sort of what the do baseline a be commerce's because you do still have stores in the wholesale still in a bit of a recovery mode this year diner
spk_3: instead of twenty twenty two probably get that based on that them from mayor in i think he can probably continues to be the fastest growing
spk_2: part of the those sin if we like it
spk_5: it is very profitable business for how less thought maybe
spk_22: elaborate a little more on the margin impact of those yeah yeah your income is a very profitable business even though some extra cost around it
spk_20: hi tech which is growing or average ticket has been growing and are unusual gross margins are higher so on we are able to you know usually fun the extra cost or with with sports so we really do like the commerce business and we have been investing in an investment to been paying off continue to invest
spk_2: in that business and then just to my follow up one i think it sounds like you had learned coming out a kobe it is how to run the it's more efficiently regarding store labor as to reopen is this part of the flow through beyond the gross margin of what's leading to the operating margin increases and how do you think about labour go forward dana would say yes it is part of the floater third we did learn how to operate more efficiently and i think we're benefiting from that right now there's a part of that that you know that we're sort of intentional if he will a deliberate man i think there's actually a little bit of a of the have to do with
spk_3: trouble was many employers are having right now and filling open
spk_2: to two and and were actually running a little thinner than we live in a you know as the at the margins of probably costing us a few
spk_10: sales dollars or will you know i'm not sure it would
spk_20: heard says labor polished as a percentage of sales but in the absolute dollars
spk_5: it's probably worth spending less discuss we can't have people with him will work and then i have and then as you think about inventory going through the balance the year how do you think about it didn't enjoy it is approaching the fourth quarter and how long this congestion last everything we hear it seems like it continues to be extended yeah does in one thing we as by adjusted merchandising calendars to order earlier dear to build in a little more time for any kind of transit away so especially for that you for course special region and to resort and then into are generally delivers the spring which so some of those in the first quarter we plan on attempting major we sort of and tory earlier and hopefully our he'd always will be you know that cushion that way it is celebrated the orders will absorb so
spk_23: and him a toy levels some you know we we are operating more you efficiently was them inventory arm you is far as we we expect to be below twenty the whole year and ah well be quite as a percentage or not i'm not quite sure that should be
spk_0: your lower our year i think we can just run the business for bless and mentor do some investments
spk_24: thank you
spk_25: a final question isn't season as the out question good afternoon tom scott and and some maybe you could address given how this year is shaping up and there's the reopening performance is actually very good very very good
spk_2: the to the then i know can't talk about next year from a guide and standpoint that maybe you can talk at a very high level about what you think optimal operating margin is for the business and for the long term tonight i'd like to ask you how you expect to lack this next year but as i would be maybe giving too much this if a guides or next year you get you get just frame it a little bit on on where you are in where you think you can have this can you could build off as this or it may maybe you know the margins are playing a little bit about themselves at the moment given all of the dynamics in the industry yeah thank you say thanks for the question and i'll let my partner's god's chime in here in a minute with some further the pale and thinking on the operating margin long term that what i would tell you at the very highest levels the businesses a message that we've been trying to deliver since this time last year is you know the first couple of months for the pandemic we were very focused on making sure that we would get through at and you know financially survive and as you know we did that with flying colors but really about this time last year we also have visited to make sure that we were doing everything we threw it across all a bar brands to emerge from the pandemic even stronger than with when in to read in this was part of our prepared remarks today is that we believe that we are seeing the only the benefit from the reopening that also the benefits of the priorities that we have internal am that those are paying off and we do believe that we have come out of this is brands
spk_10: we're told to minutely drive our bills most i in a stronger position and what bad helping us do is drive sales no doubt the reopening in part of it
spk_2: we think the strength of our brains activities and priorities that we've done to bolster those are also paying off that's resulting in the hiring gross margins we develop skills instead of the help or help helping us operate more efficiently from a operating expense whispers standpoint as well as him inventories efficiency
spk_10: standpoint
spk_5: i and we're also focused on and while we you know we love the wholesale as we wanna continue our wholesale business
spk_26: we're very focused on driving or direct to consumer businesses i am when you look at all of those what i would tell you is
spk_5: it's really hard for me to predict what next year look for it but over the long term i do believe we will be expanded your or enterprise wide operate modes and and scottish wanna yeah yeah total called me and me we really expect to be double digit operating margin tommy i think we can in or that doesn't just a territory this year and damn it tommy bahama we've always felt there was a lot of room for operating margin improvement this year
spk_27: have a lot of progress and they can get the double digits this year also we want to get them twelve and north and only that what happened this year
spk_28: i think that certainly you know and the not too long term future to get on their selves and then he has great operating margins they always have that we think they can now maybe it's fans slightly over nineteen margin level sell off and to we think i'm a margin profile was certainly improving and
spk_0: nothing to do to improve
spk_2: that's very helpful thank you i'll take the rest of my questions offline thanks again
spk_0: thank you steve

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only. Earnings Call, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.