Prestige Consumer Healthcare - Q1 2025

Transcript

Operator (participant)

Good day, and thank you for standing by. Welcome to the Q1 2025 Prestige Consumer Healthcare Inc Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Phil Terpolilli, Vice President, Investor Relations and Treasury. Please go ahead.

Phil Terpolilli (VP of Investor Relations and Treasury)

Thanks, operator, and thank you to everyone who has joined today. On the call with me are Ron Lombardi, our Chairman, President, and CEO, and Christine Sacco, our CFO. On today's call, we'll review our first quarter fiscal 2025 results, discuss the full-year outlook, and then take questions from analysts. A slide presentation accompanies today's call. It can be accessed by visiting prestigeconsumerhealthcare.com, clicking on the Investors link, and then on today's webcast and presentation. Please remember, some of the information contained in the presentation today includes non-GAAP financial measures. Reconciliations to the nearest GAAP financial measures are included in our earnings release and slide presentation. On today's call, management will make forward-looking statements around risks and uncertainties, which are detailed in a complete safe harbor disclosure on page two of the slide presentation, which accompanies the call. These are important to review and contemplate.

Business environment uncertainty remains heightened due to supply chain constraints and high inflation, which have numerous potential impacts. This means results could change at any time, and the forecasted impact of risk considerations is the best estimate based on the information available as of today's date. Further information concerning risk factors and cautionary statements are available in our most recent SEC filings and most recent company 10-K. Now I'll hand it over to our CEO, Ron Lombardi. Ron?

Ron Lombardi (Chairman, President, and CEO)

Thanks, Phil. Let's begin on slide five. We are encouraged with our start to the year. Q1 exceeded our sales and earnings expectations set back in May. Our diverse portfolio continues to experience solid consumption trends, thanks to our proven brand-building strategy and investments. Sales of $267 million declined versus the prior year, largely due to supply chain challenges in Clear Eyes that were expected. However, the impact was better than forecast, thanks to improving production trends and our ability to expedite shipments to retailers that aligns with our focus on service. Meanwhile, the quarter also benefited from continued strong international growth that was broad-based and led by our Hydralyte brand. The additional shipments were executed largely with temporary air freight that resulted in a slightly lower gross margin than forecasted.

In total, adjusted EPS of $0.90 declined less than anticipated, thanks to the sales upside. Free cash flow of $54 million grew versus the prior year and continues to enable capital deployment that is used to enhance shareholder value. In Q1, we reduced debt by $35 million, while still repurchasing about $25 million in shares and maintaining a leverage ratio of 2.8x. Now, let's turn to page six for an update on Summer's Eve. As discussed last quarter, we are making progress in our women's health franchise, which is represented by two distinct number-one market share brands, Monistat and Summer's Eve. Our action steps have led to largely stabilized Monistat sales trends, allowing us to further focus our efforts on returning Summer's Eve to growth. Summer's Eve begins with a long heritage and connection with consumers.

It offers one of the most comprehensive product offerings in the feminine hygiene category, made up of washes, wipes, sprays, and other products designed for feminine hygiene needs. Within this wide assortment are two separate trends for our brand. Certain on-the-go offerings, such as sprays and mists, shown on the pie at left, continue to face pressure from consumer behavioral shifts away from on-the-go sprays due to numerous factors. On the other hand, cloths, and especially washes, which make up about 65% of brand sales, are performing comparatively well and are set up for long-term growth. We believe new marketing and new innovation will help each of these form factors drive a return to sales growth. For Summer's Eve, our latest media campaign highlights its key consumer benefit of odor protection and gets back to communicating and connecting with consumers based on the brand's heritage around freshness and confidence.

The recent launch of Summer's Eve Ultimate Odor Protection, which emphasizes this attribute and utilizes a patented odor-reducing formula, is one of our best-performing new product launches of the last several years. This leaves us with conviction that the brand-building campaign we've put in place is the right one and should build momentum as the year progresses. Now, let's turn to slide seven for an update on Hydralyte. A reminder for our U.S. investors that are not familiar with Hydralyte. It is a great-tasting and efficacious oral hydration product that defines the category in Australia. With a 20+-year history in the market, the majority of Australians recognize the brand immediately and continue to turn to it for numerous usage occasions, like sickness, sport and exercise, and excessive heat. The brand remains a large portion of our international business and represents a majority of our sales in Australia.

Leveraging its clear number one market share position, Hydralyte focuses its efforts on finding ways to grow the category with consumers using proven brand-building tactics. Most recently, Hydralyte continues to emphasize the reason to hydrate with more than just water through both retail and digital touchpoints. These robust efforts continue to yield results. Compared to five years ago, the Hydralyte brand has grown at a mid-teens CAGR, thanks to improving both usage rates as well as expanding household penetration within its core Australian market. We see a runway for further growth with these tactics, along with long-term geographic opportunities beyond Australia and New Zealand. With that, I'll pass it to Chris to walk through the financials.

Christine Sacco (CFO)

Thanks, Ron, and good morning, everyone. Let's turn to slide nine and review our first quarter fiscal 2025 financial results. As a reminder, the information in today's presentation includes certain non-GAAP information that is reconciled to the closest GAAP measure in our earnings release. Q1 revenue of $267.1 million declined 4.4% from $279.3 million in the prior year, and 4.3%, excluding the effects of foreign currency. As expected, EBITDA and EPS both declined in Q1 from the prior year, with the majority of the change driven by lower revenue and the quarterly timing of certain costs. Let's turn to slide 10 for detail around these consolidated results. As I just highlighted, our Q1 fiscal 2025 revenues decreased 4.3% organically versus the prior year.

By segment, excluding FX, North America segment revenues decreased 5%, and International segment revenues increased 5.3% versus the prior year. As Ron noted earlier, we exceeded our Q1 sales forecast, owing primarily to our ability to move supply-constrained Clear Eyes product to customers more rapidly than anticipated to meet demand. This helped eye and ear care category performance exceed our expectations, along with strength in our TheraTears, Debrox, and Stye brands. This performance was more than offset by declines in women's health and cough, cold categories, where we faced continued pressure in on-the-go Summer's Eve offerings, as Ron discussed, as well as the planned impact of retail ordering in the cough and cold category. We experienced impressive double-digit year-over-year growth in the e-commerce channel, continuing the long-term trend of higher online purchasing.

Total company gross margin of 54.7% in the first quarter was approximately flat sequentially, but below the prior year due to continued cost inflation and the use of higher-cost air freight on Clear Eyes product, which was only partially offset by pricing actions and cost savings efforts. For the full fiscal year, we now anticipate a gross margin of approximately 56% due to the higher air freight costs incurred in Q1. We still expect the increase from the prior year to be driven by pricing actions and cost savings that more than offset inflationary cost headwinds. Q2 gross margin is estimated to be approximately 55.5%. As expected, advertising and marketing was up in dollars and as a percentage of sales, coming in at approximately $39 million or 14.7% of sales.

For fiscal 2025, we still anticipate an A&M rate of just over 14% of sales and up in dollars versus the prior year. G&A expenses were 10.8% of sales in Q1 due to the timing of certain expenses. We still anticipate full-year G&A of approximately 9.5% as a percent of sales. Adjusted EPS of $0.90 compared to $1.06 in the prior year, down from the impact of lower Q1 revenues, air freight costs, and the timing of A&M and G&A spends. For full-year fiscal 2025, we expect adjusted EPS growth of approximately 5%-6%, as well as an EBITDA margin in the low-to-mid 30s, consistent with our long-term trends. Finally, looking below the line, interest expense of approximately $13 million benefited from the effects of our continued debt reduction efforts.

Our Q1 adjusted tax rate of 22.9% excluded an unusually large discrete tax item we do not anticipate repeating. We anticipate a normalized tax rate of just under 24% for the remaining quarters of fiscal 2025. Now, let's turn to slide 11 and discuss cash flow. In Q1, we generated $53.6 million in free cash flow, up double digits versus the prior year. We continue to maintain industry-leading free cash flow and are maintaining our outlook for the full year of $240 million or more. At June thirtieth, our net debt was approximately $1.1 billion, $1 billion of which is fixed, and we maintained a covenant-defined leverage ratio of 2.8x.

In the quarter, we repurchased approximately 400,000 shares for $26 million and will continue to evaluate further repurchases opportunistically for the remainder of fiscal 2025. With that, I'll turn it back to Ron.

Ron Lombardi (Chairman, President, and CEO)

Thanks, Chris. Let's turn to slide 13 to wrap up. Our business is building momentum, and our fiscal year is off to a good start. We are reaffirming our full year outlook, thanks to our diverse and leading consumer healthcare portfolio that is helping to offset near-term supply chain headwinds in eye care. For fiscal 2025, we continue to anticipate revenues of $1.125 billion-$1.140 billion, and organic revenue growth of approximately 1% versus fiscal 2024. We're expecting Q2 revenues of $282 million, down slightly year-over-year, again, due to Clear Eyes timing. We continue to look for ways to improve Clear Eyes shipments into retailers to support in-stock levels. However, this doesn't change the full year outlook, but may shift sales from the second half into the first half.

For EPS, we continue to anticipate adjusted EPS of $4.40-$4.46 for the full year. For Q2, we'd anticipate EPS of a dollar rate. Lastly, we continue to anticipate free cash flow of $240 million or more, with the benefit of capital deployment optionality that has a history of maximizing value for our shareholders. With that, I'll open it up for questions. Operator?

Operator (participant)

Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star one one and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. The first question comes from Rupesh Parikh with Oppenheimer. Go ahead, your line is open.

Rupesh Parikh (Analyst)

Good morning, and thanks for taking my question. So just going back to the supply chain, it sounds like from your commentary, you guys are on track in resolving the supply chain issue as you guys expected. Just want to confirm that. And then, you know, as you look at the eye category, you know, have you seen any shelf or share loss, or is it playing out, you know, exactly as you guys would have expected on the consumption basis?

Ron Lombardi (Chairman, President, and CEO)

Good morning, Rupesh. In terms of the Clear Eyes supply chain, we continue to be in line with what we talked about back in May in terms of production. Q1, we saw the ability to use some airfreight to get stuff in a bit sooner at the end of the quarter than what was originally anticipated. And as I just said in the prepared remarks, we're looking to see if we can get a bit more into the first half versus the second half by continuing to use airfreight. Clear Eyes supply chain on track at this point. We continue to feel good about it. In terms of share and consumption, Clear Eyes continues to be well positioned at shelf, so we've been focusing on making sure that we've got product available at shelf.

So maybe not all the SKUs, but SKUs that can meet consumer demand at the shelf. So, so far, so good in terms of consumption and share.

Rupesh Parikh (Analyst)

And then maybe just one follow-up question. Just given some concerns on the pharmacy channel, you know, Walgreens closing stores, it looks like CVS is rationalizing their supply chain. Just how do you guys feel about, you know, inventory in the channel within pharmacy and, you know, any concerns about inventory stocking going forward?

Ron Lombardi (Chairman, President, and CEO)

Yeah, at this point, in total, we haven't seen really any headwinds from retailers reducing inventory in total. You know, certainly some channels have some activities going on that's being offset by growth in other channels. And then the other thing I'll comment on is what you may be hearing from others in the industry is it's really more cough, cold, and other categories that we don't play in a big way at this point. So, we'll see how that plays out, but at this point, we continue to be well positioned to get through that.

Rupesh Parikh (Analyst)

And then just my final question, just given some concerns out there on the consumer, you know, as you look at your categories and, you know, are you seeing any shifts to private label or any other new consumer dynamics during this past quarter?

Ron Lombardi (Chairman, President, and CEO)

Yeah, you know, as we've talked about over the last couple of quarters, Rupesh, what we've seen is consumers shifting where they buy, looking for better value for the brands that they've bought historically, rather than any change in what they buy. So at this point, you know, we continue to believe that taking care of your health or someone in your family, it's the last place you look to make a change or save a few pennies.

Rupesh Parikh (Analyst)

Great. Thank you. I'll pass it along.

Ron Lombardi (Chairman, President, and CEO)

Okay, thank you.

Operator (participant)

One moment for our next question. The next question comes from Susan Anderson with Canaccord Genuity. Go ahead, your line is open.

Susan Anderson (Analyst)

Hi, good morning. Thanks for taking my questions. I was wondering, just in terms of the North America business, can you maybe give us an idea of how much the decline was due to Clear Eyes versus the women's health versus the, weaker cold cough season? And I guess, should we expect that same trend as we look into next quarter? Thanks.

Ron Lombardi (Chairman, President, and CEO)

So, we had a little bit of a hard time hearing you at the beginning. I think, Susan, you're asking us to give a little detail behind the makeup and what drove sales decline year-over-year?

Susan Anderson (Analyst)

Yeah, correct.

Ron Lombardi (Chairman, President, and CEO)

Yeah.

Susan Anderson (Analyst)

Between those three things. Yeah. Hi. Hi, Chris.

Christine Sacco (CFO)

Hi, it's Chris. So, as we look to the various categories, women's health, I would say, as expected.

... You know, you'll be able to see these categories versus the prior year, it was down about $5 million. Cough, cold, again, as expected, down similarly to women's health. You know, we're expecting cough, cold trends to be flat to down slightly, right? The seasonality of and versus the comps of last year is what's gonna drive the improvement in the second quarter versus the first quarter. Women's health seeing improvement, as Ron mentioned in his prepared remarks, but likely to be a bit challenged, still in the second quarter. Have a little bit of FX headwind in the second quarter that we're planning for, but sequential improvement in eye care expected.

And remember, as we commented in the remarks, if you heard, the ear and eye care category also saw strong performance from TheraTears, Debrox and Stye. So really all the brands in that portfolio hitting on all cylinders.

Susan Anderson (Analyst)

Okay, great. And then I guess maybe just a follow-up. So on the eye care business, it sounds like, the manufacturing plants are not necessarily quite up and running yet. Is that correct? And I guess, you know, when do you guys expect them to be, and should we expect more air freight to impact gross margin in the second quarter? Thanks.

Ron Lombardi (Chairman, President, and CEO)

Yeah. So production levels really through the end of July continued to be in line with what we anticipated. So we've got two suppliers, and they're again both largely as expected, and we anticipate that they'll be continuing to ramp up the output level as the year continues. And then for the second quarter, I think, as we mentioned earlier, we anticipate some additional air freight to continue to focus on service levels. So if we can expedite, get it in and get it back out to the retailers to help with in-stock at shelf, that's what we're gonna be focused on.

Christine Sacco (CFO)

That's obviously included in our guide.

Susan Anderson (Analyst)

Yeah. Okay, great. Thanks so much. I'll pass it along.

Ron Lombardi (Chairman, President, and CEO)

Thank you.

Operator (participant)

Thank you. One moment while we prepare the next question. The next question is from Linda Bolton Weiser with D.A. Davidson. Go ahead, your line is open.

Linda Bolton Weiser (Analyst)

Yes, hi. So I was wondering, in terms of the track channel POS data, which I know doesn't tell the whole picture, but still the data actually look really pretty strong for Clear Eyes, like, you know, oddly strong, actually. Can you shed a little light on how the POS does look so strong, even though there are some supply issues? Is it just that, retailers had enough inventory, or just... Can you kind of give a little more color on why it actually does look so good?

Ron Lombardi (Chairman, President, and CEO)

Yeah. So consumption is outpacing our shipments into the retailers for Clear Eyes. So that's the first part of it. And the second is, you know, we've been focused on making sure we've got some product available that we can ship so that there's something at shelf. So when consumers are showing up at the shelf, Linda, there's product there for them, which is what's driving consumption. And really, it's the continuation of strong performance for that brand. It's really nothing new for us. We've got some new products out there and some campaigns that we've had going on for a while here that continue to do well in the marketplace.

Linda Bolton Weiser (Analyst)

Okay. And then, just on the women's health business, I know you commented that Monistat is largely stabilized. Can you just refresh us on exactly the actions taken and what is kind of stabilizing that business? I mean, given that it's driven by illness incidents among women, so how can that be controlled? So what are the marketing actions that you've taken that have stabilized that?

Ron Lombardi (Chairman, President, and CEO)

Yeah. So a couple of things. First, the marketing campaign and the messaging was refined over the last year to better connect with consumers. So our digital and TV messaging is more on point than it was kind of a year and a half ago. And then there's really two parts of the Monistat business. We've got cure, which you're right, Linda, it is linked to incident levels, yeast infection incident levels. And then there's the care line of products, where we've got a number of new products out, the boric acid wash, that is really doing well. So it's never one thing that turns a brand around, but it's those elements around Monistat that have repositioned it to really being positioned back for growth.

And then, to get into Summer's Eve, as I mentioned on the prepared remarks, we continue to make good progress on wash and wipes with new products and digital messaging that are out there, and we continue to focus on the on-the-go to get that segment revived, right? We're the market leader with, you know, more than 50 share for that segment, and it's really up to us to get that element back, to growth, and we're focused on it.

Linda Bolton Weiser (Analyst)

Okay, thank you. That's it for me. I'll pass it on. Thanks.

Ron Lombardi (Chairman, President, and CEO)

Thank you, Linda.

Operator (participant)

Thank you. A reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. I'll now bring up the next question. Your next question comes from Anthony Lebiedzinski. Sorry, I apologize. With Sidoti & Co. Please go ahead. Your line is open.

Anthony Lebiedzinski (Analyst)

Yeah, no problem, and good morning, all, and thank you for taking the questions. So first, can you just give a little bit more details as far as the impact of air freight on your gross margin? And I know there was a partial offset of some pricing action. So if you could be a little bit more specific as to those two things, that'd be great.

Christine Sacco (CFO)

Yeah. Good morning, Anthony. It's Chris. So, air freight was the entire difference, delta to our expectations. We had guided to 55.5% for the first quarter, and air freight was really the difference there.

Anthony Lebiedzinski (Analyst)

Okay. All right, that, that's very helpful, Chris. Yeah, thanks. And then, so I know you guys gave some color as to what you expect for the second quarter. You reaffirmed your full year guidance, obviously. So as we look at the back half of the fiscal year, you know, and we look to update our models for Q3 and Q4, anything there you can call out there as far as how to think about the cadence of sales and earnings? I know, Ron, you had mentioned something that there might be a little bit of a shift from Q- I guess, from the back half to the second quarter. But anything else you can add to as we look to recalibrate our models for the balance of the fiscal year?

Christine Sacco (CFO)

Yeah, Anthony. Hi. So obviously, we're not giving specific guide to the back half quarters, but I would just remind you of the comps that we're gonna be lapping from fourth quarter of fiscal 2024.

Anthony Lebiedzinski (Analyst)

Mm-hmm. Okay. Gotcha. Yep, you'll have an easy comp in the fourth quarter as well. All right, and then, lastly for me, as far as the international segment, so that was up again here in the quarter. Anything you can call out as far as your ability or confidence level in your ability to sustain that performance internationally?

Christine Sacco (CFO)

Yeah, Anthony, so, you know, international, as you mentioned, has had a few years now of a really impressive growth and, you know, coming off of those comps. Hydralyte, we highlighted on the call, had nice growth. Sales were up double digits in the period. A few other brands and geographies were up. We have a brand called Zaditen, that is an allergy eye care in Australia, had a real strong quarter. So really a diversified portfolio over there, in our international segment, similar to what we have here in North America. And as expected, the results, I think organically were up 5.3%, in line with our long-term algorithm of 5%+. And no reason to think that's gonna slow down anytime soon. We feel confident that that can continue.

Anthony Lebiedzinski (Analyst)

All right. Well, that's great to hear. Thank you, and best of luck.

Ron Lombardi (Chairman, President, and CEO)

Thank you.

Operator (participant)

Stand by for our next question. The next question comes from Mitchell Pinheiro with Sturdivant & Co. Go ahead, your line is open.

Mitchell Pinheiro (Analyst)

Hey, good morning. You know, I may have missed it, but cough and cold was down significantly, you know, second consecutive quarter of double-digit declines. I didn't really quite understand why it's that large. And then also in oral care, you know, down in mid-teens, I was curious, you know, why the weakness there?

Ron Lombardi (Chairman, President, and CEO)

So for cough cold, I'll start with Mitch. It's really a comp issue here, right? Last year, retailer order patterns were still different than the historic level of the seasonality. So it's really a comp issue for us. You know, we expect more of a seasonal trend for cough cold stuff, so we'll see the preseason buys maybe at the tail end of our Q2, early Q3. We'll see where that goes, and then we'll wait to see how incident levels play out. But as I think Chris mentioned earlier, for the whole year, we anticipate that the cough cold segment will be flat to down slightly for our shipments into the retailers. And then for oral care, it's really timing for the whole year performance versus the first quarter of last year.

And again, consumption is another example where consumption is outpacing our shipments into the retailer, so it's a timing issue.

Mitchell Pinheiro (Analyst)

Okay. And with, with, you know, I mean, obviously you're a needs-based, have a needs-based portfolio. But, you know, are you having conversations with your customers, you know, regarding either pricing or promotion or anything? Are they asking for anything more in terms of sort of, you know, helping with price to get, you know, I don't want to say consumers back in stores or, or, or buying branded, but is there any, any, and I don't want to say pressure, but are, are, are they asking asking for any discounts or promotions more so than normal?

Ron Lombardi (Chairman, President, and CEO)

Yeah, really no change in that dynamic, Mitch. You know, we're not like the food aisles, where inflation has had a different kind of impact on, on those, that part of the store. For us, we're needs-based, and consumers are looking for those trusted brands with products that have proven to work for them. So, at this point, we really haven't seen any changing in that kind of dynamic.

Christine Sacco (CFO)

Yeah, Mitch, to highlight that, in our original guide, we talked about expecting about half, half of our growth from price and half from volume. So we're still anticipating volume growth, which we have now for several years. So I think to highlight Ron's point, you know, a little different than some other categories you may be hearing about from others.

Mitchell Pinheiro (Analyst)

... Thank you. And then, hey, Chris, on G&A, you know, it's up. What were the discrete costs or items that caused the little bump this quarter?

Christine Sacco (CFO)

Yeah, so, really just timing. You know, and I'd expect that to step down now for the remainder of the year, just the timing of initiatives. Nothing, no one thing within G&A.

Mitchell Pinheiro (Analyst)

And then finally, just, I'd just love to hear your comments, any, any change or anything unusual that you could call out in the, in the M&A environment, over the last, you know, quarter?

Christine Sacco (CFO)

Yeah, no, the pipeline continues to be consistent with what we've seen over the years. We continue to look at things, and we'll remain disciplined. We have a lot of capital allocation optionality during the quarter. We repurchased some shares, right? We paid down some debt, and we'll continue to keep M&A as kind of our number two priority for cash flow allocation after investing in our brands. But, nothing, no change to what we've been seeing, Mitch.

Mitchell Pinheiro (Analyst)

Okay. Thank you.

Operator (participant)

As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. Our next question comes from Trevor Sahr with William Blair. Go ahead, your line is open.

Trevor Sahr (Analyst)

Hi, thanks. This is Trevor on for John. Just one question for me. Kind of scanning through the 10-Q here and looking at some of the categories and the category performance, would love to hear just a little bit of an overview. Looking at some of these, eye and ear care is up and outperforming. A lot of the other ones aren't performing quite as well. I think we've walked through a couple of them, but from a high level, you know, what are you seeing broadly across the rest of the portfolio that are leading to some of these declines, if these are long-term impacts or kind of short-term that you're lapping?

Just kind of any other detail you could provide over some of the segmenting and category information in the quarter.

Ron Lombardi (Chairman, President, and CEO)

Good morning, Trevor. First of all, I think I'll start with, you know, we generally feel good about the overall consumption trends for our brands and our portfolio. We talked about a few of them already this morning, and as you just mentioned, you know, we've got some funny comp stuff going on. Oral care and cough, cold for different reasons, but we've got some funny comp things that were the big drivers behind the declines year-over-year for those categories. We do have the supply chain challenges in Clear Eyes, but it's really being way more than offset by very strong performance in TheraTears, Debrox, and Stye, which is the majority of the driver and performance in the ear and eye category, to call out.

And then, as Chris mentioned earlier, the international business at 5% continues to have good performance. So a lot of noise this quarter when you look at the category performance, which is why I would encourage you to continue to listen around our full year guidance of, up, you know, +1% or so, with the offset of the Clear Eyes supply chain. So again, we feel good with what's going on here.

Trevor Sahr (Analyst)

Thanks, Ron. That's helpful.

Ron Lombardi (Chairman, President, and CEO)

Okay. Thank you.

Operator (participant)

I'm showing no further questions at this time, so I would now like to turn the call back over to CEO Ron Lombardi for closing comments.

Ron Lombardi (Chairman, President, and CEO)

Thank you, operator, and thanks to everyone for joining us this morning, and we look forward to providing another update after Q2. Have a great day.

Operator (participant)

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.