U.S. markets closed
  • S&P 500

    -19.27 (-0.38%)
  • Dow 30

    -62.30 (-0.16%)
  • Nasdaq

    -20.57 (-0.13%)
  • Russell 2000

    +12.28 (+0.61%)
  • Crude Oil

    +1.11 (+1.45%)
  • Gold

    -8.50 (-0.41%)
  • Silver

    -0.46 (-1.99%)

    +0.0031 (+0.28%)
  • 10-Yr Bond

    +0.0390 (+0.92%)

    +0.0013 (+0.11%)

    +0.2010 (+0.13%)
  • Bitcoin USD

    +3,016.63 (+5.83%)
  • CMC Crypto 200

    0.00 (0.00%)
  • FTSE 100

    -21.98 (-0.29%)
  • Nikkei 225

    +135.03 (+0.35%)

Charles & Colvard, Ltd. (NASDAQ:CTHR) Q4 2023 Earnings Call Transcript

Charles & Colvard, Ltd. (NASDAQ:CTHR) Q4 2023 Earnings Call Transcript October 13, 2023

Operator: Good day, and welcome to the Charles & Colvard Q4 Fiscal Year 2023 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] This earnings call may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933 as amended including statements regarding, among other things, the company’s business strategy and growth. Expressions that identify forward speaking statements are based largely on our company’s expectations and are subject to a number of risks and uncertainties, some of which cannot be predicted or quantified and are beyond our control. Future developments and actual results could differ materially from those set forth and contemplated by or underlying the forward-looking statements.

In light of these risks and uncertainties, there can be no further assurance that the forward-looking information will prove to be accurate. Accompanying today’s call is a supporting PowerPoint slide deck, which is available in the Investor Relations section of the company’s website at The company will be hosting a Q&A session at the conclusion of the prepared remarks. Should you have any questions you’d like to submit, please e-mail Please note this event is being recorded. I would now like to turn the conference over to Don O’Connell, President and Chief Executive Officer. Please go ahead.

Don O’Connell: Good afternoon, everyone, and welcome to our fourth quarter and fiscal 2023 financial results conference call. The challenging macroeconomic backdrop, a weakened consumer outlook and a softening engagement market greatly impacted our quarter and fiscal year. We are not alone, as these circumstances and heightened downward pricing pressure on both lab grown and mine diamonds created significant headwinds for the entire jewelry and gemstone industry. Until now, these challenges have not greatly affected our overall business. These trends in the diamond market have now put considerable pricing pressure on moissanite, affecting our overall traditional wholesale business and consumption of raw materials. This has caused us to reevaluate our supply chain and gemstone cost, pricing methodology and go-to-market strategy, as we experienced margin erosion and softer sales.

In addition, late in Q4, we identified a cybersecurity incident that temporarily disrupted the company’s IT network and resulted in some limited downtime for certain systems. Our investigation revealed no evidence that any sensitive customer data was compromised as a result of this incident. Our relationship with our customers has not been negatively impacted and no payments were made to the ransomware threat actors. We have, however, incurred costs in the first quarter of the fiscal year ending June 30, 2024, and expect to continue to incur some additional cost in the future related to enhancements to our cybersecurity measures. Despite these challenges, our balance sheet remains strong, and the company continued to manage cash effectively, closing out the quarter and fiscal year with over $15.6 million.

Top 5 Jewelry Exporting Countries in the World
Top 5 Jewelry Exporting Countries in the World

Copyright: dimjul / 123RF Stock Photo

The company remains debt free, all the while making strategic investments in support of our future growth opportunities and initiatives. Other notable highlights for Q4 include; we launched both successful Mother’s Day and Father’s Day campaigns on As we look to expand our repeat customer base, highlighting men’s and unisex jewelry, we hosted a private invite-only spring preview in New York City in April with more than 30 editors and influencers from well-known publications and websites such as The Knot, NBCU, TODAY and U.S. Weekly to showcase our new expanded fine jewelry styles. We launched the company’s new owned B2B web property, Selling loose moissanite gems, Forever One and moissanite by Charles & Colvard to selected retailers.

See also 20 Creative Ways to Attract Customers and 15 Most Popular Sparkling Wine Brands in America.

Q&A Session

We expanded our assortment of new Forever One moissanite and Caydia lab-grown diamond fine jewelry styles on across all categories, including our signature and exotic collections, along with our fashion jewelry assortment, in both lab-grown diamonds and moissanite and our maiden color collection in unisex bands and lab-grown diamonds. We launched three new drop-ship partnerships featuring Moissanite by Charles & Colvard fine jewelry. We attended JCK in Las Vegas in June to engage with customers and our vendors in support of growing our customer base and product assortments. We launched an ad campaign promoting the company’s signature showroom in the local Midtown magazine. We showcased and highlighted our brand in the Direct Selling Association’s Annual Conference in Scottsdale, Arizona in June, to further build our brand awareness and establish non-traditional partnerships.

We appeared in 34 brand and product placements and 23 features including notable outlets such as Marie Claire, The Hollywood Reporter, Brides, JCK, The Knot and AC Magazine. And revenue on our owned property increased by 64% for the quarter, which enabled us to capture a greater market share of those consumers seeking lower priced fine jewelry items. We believe responsible inventory management is crucial for maintaining competitiveness amidst a challenging economic landscape. Given the seismic shifts in the industry, pricing pressure, and constrained consumer demand, we have taken a position to write down $5.9 million of certain lower grade non-Forever One moissanite and lab-grown diamond raw material and gems. The company’s inventory level remained solid at $26.75 million, which we deem adequate to support the demand for our Forever One product category for the foreseeable future.

We are confident that advancements in our technology are proprietary cutting and fastening methods and our ability to procure alternative SiC material as needed enable us to navigate the fluid environment more responsibly. As we look ahead, let’s take a moment to look at the positives that we believe will better position us for future growth beyond the macroeconomic and industry headwinds in the short-term. The holiday season fast approaching, has historically been our strongest quarter as consumers are predisposed to purchase. Our proprietary signature collection continues to resonate with the consumer as we seek to differentiate the brands and products we have to offer, supported by a 36% increase in revenue for Q4 compared to one-year ago.

In addition, during the fiscal year and quarter, the company’s AOV or average order value remains stable, which reflects that we’ve been able to maintain our price points despite the macroeconomic backdrop. While we believe the lab-grown diamonds have gained significant market penetration and that our Caydia lab-grown diamonds will become the highest growth product category for us, witnessed by more than a 20% increase over the comparable periods, we also believe that moissanite will remain an integral part of our overall business composition as it continues to offer an attractive value proposition to the price-conscious consumer looking for quality fine jewelry products. The increased demand for lab-grown diamonds amplifies the need to grow our Caydia lab-grown diamond business in a responsive way as we seek to migrate our diamond products into existing channels to capture a greater share of wallet.

We believe that the lab-grown movement plays into our hands, and as more consumers come to understand that lab-grown diamonds are identical to their mined counterparts, the only difference being the origin. According to the, a wedding planning website, of the 12,000 couple surveyed, more than one-third opted for lab-grown diamonds as their ring centerstone, double the number just three years ago. As a result of these trends, sales of lab-grown diamonds are expected to double to $55.5 billion by 2031. As we move forward, we will continue to evaluate the competitive landscape and the value proposition between moissanite and lab-grown diamonds and its overall impact on our business. We will continue to invest responsibly and seek opportunities to make our brand and products top of mind.

Look to us to stabilize our current state, amplify our brand, diversify revenue streams and strategically adapt our technology. Now I’d like to highlight our upcoming strategic initiatives. For fiscal 2024, the company’s core focus will be to continue to enhance its global brand awareness campaigns, diversify its product categories and innovate its technology to stay ahead of the competition to deliver additional products and services, unlocking new revenue streams. More specifically, as it relates to global brand awareness, we plan to continue strengthening the fine jewelry brand we have been building for nearly three decades. As the consumer landscape continues to shift and factors beyond price, craftsmanship and origin are driving decisions to purchase brand equity is more important than ever.

We believe we will continue to invest in paid media campaigns targeting the trade and consumers as we reinforce our Made, not Mined providence. We will also remain steadfast in our quest for sustained top line organic growth as our brand messaging resonates with new audiences. To diversify our product categories, we will continue to evaluate opportunities for growth with synergistic brands, products and verticals beyond our current offerings. Emerging consumer trends and data will inform new product lines, collections, partnerships with designers and influencers. We will explore strategic allowances to fuel growth and deliver incremental long-term shareholder value, while prioritizing our sustainable practices and our core values. Lastly, evolving technology continues to shape how consumers discover research and ultimately purchase.

We will continue to invest strategically in technology to service customers in existing and new outlets. We believe that our investment in innovative technology and predictive analytics will further maximize our ability to be agile and efficient in our business. We will enhance our consumer experience to immersive virtual selling and fully customizable products driven by actionable data. Additionally, we’ll continue to capitalize on our leading-edge streaming broadcast technology to digitally attract new audiences, each with unique characteristics while broadening our footprint and ability to drive organic growth. Fundamentally, our goal is to find ways to reach consumers more efficiently and cost effectively while strengthening our moat and overall position in the market.

Expanding our business to directly interface with the consumer, while controlling the customer experience is critical. As highlighted by the challenges in our wholesale channels, a quick look at the numbers shows that our traditional segment which is comprised primarily of wholesale loose gemstones was down 61% during the fourth quarter. This shrinking segment is in part by design and a primary reason we will continue to seek and open new channels that enable us to interact directly with the customer at all points along their buying journey. To achieve this, we are building an environment to meet today’s consumers with shoppable, interactive live streaming on connected TV, linear broadcasting, satellite and social media platforms. Taking a step back for those not familiar with it, we believe this is a growth opportunity for the company.

This technology is being embraced by industry leaders such as Roku and Shopify’s recent announcement of a strategic partnership. Amazon’s announcement of Amazon Live and Pinterest’s announcement of Pin TV. Fueling these trends is the increased usage of smart TVs, along with the new payment alternatives, which makes shopping via TV easier and more streamlined. The global TV shopping market size is vast and expected to grow by 6% annually to $440 billion by 2030. In addition, among the several product categories within the TV shopping market, jewelry is expected to dominate this space and be the largest offering within this selling vertical by 2028. We’re excited to introduce this beta phase of our interactive shopping initiative by going live on select cable and satellite TV providers broadcasting, our Made shopping content, highlighting our Made, not Mined, Forever One Moissanite and Caydia lab-grown diamonds to over 20 million households weekly and streaming via YouTube, Facebook, LinkedIn to potentially millions of households.

We believe the holiday season is an ideal time of year to debut. In addition, we believe this will be accretive to our existing business as we view this as a new channel opportunity, utilizing our existing infrastructure and resources to enhance our growth opportunity and control our destiny and perhaps meet consumers in different verticals. While our operations have been negatively affected by the macro elements of the economy and pricing disruptions, we believe our strategic initiatives of enhancing our global brand awareness campaigns, diversifying our product categories and innovating our technology will help drive measurable growth in the years to come. I will now turn the presentation over to Clint Pete, our CFO, to provide detailed insight into Q4’s financial performance.

Clint, please proceed.

Clint Pete: Thanks, Don. Today, I’ll provide a summary of key financials for the fourth quarter ended June 30, 2023. Additional details can be found in our earnings press release that we issued this afternoon and our Form 10-K, which we expect to file this evening. Please note that all percentage comparisons are to the fourth quarter ended June 30, 2022, unless specified otherwise. First, we’ll start on Slide 8 with the comparative analysis of the fourth quarter of fiscal 2023 compared to the same period 1 year ago. In total, net sales for Q4 2023 totaled $5.6 million versus $9.3 million, a decrease of 40% due primarily to the factors Don previously mentioned. Net sales for our online channel segment, which is primarily direct-to-consumer and includes,,, marketplaces, drop-ship retail and other pure-play outlets, totaled $4.2 million for the quarter or a decrease of 27%, but now representing 75% of total net sales, up from 62%, 1 year ago.

Net sales for our traditional segment, which consists of wholesale and brick-and-mortar customers totaled $1.4 million for the quarter or a decrease of 61%, representing now 25% of total net sales, down from 38% of net sales in the year ago quarter. Finished jewelry net sales decreased 23% for the quarter, represented 84% of total sales in the quarter, up from 65% of sales in the fourth quarter 1 year ago, as we further position ourselves in the fine jewelry market. Loose jewel net sales decreased 73% for the quarter, as we mentioned in prior calls, due in part to our shift towards finished jewelry and direct-to-consumer strategies, while many domestic and international distributors reduced their forecast and overall inventories through the softer economic environment.

Looking at sales by geography. Nearly all the sales in the fourth quarter were derived in the U.S. while international net sales reported in the quarter were only $100,000. Direct-to-consumer and finished jewelry opportunities, which remain core to the company were somewhat less impacted as evidenced by the lesser decline in online channels and finished jewelry net sales in our traditional segment, in particular, loose jewel net sales. Moving to Slide 9 to discuss gross margin. We reported a negative gross margin of 90% versus 41% positive gross margin in the year ago quarter or a gross loss of $5 million versus a $3.8 million in gross profit in the year ago quarter. The primary driver for this negative gross margin in Q4 2023 is a $5.9 million inventory write-down as pricing pressure and constrained consumer demand impacted the net realizable value of certain grades of our non-Forever One Moissanite and lab-grown diamond raw material and gems, falling below the current carrying costs.

For Q4 2023, total operating expenses increased 16%, representing 77% of total net sales compared to 40% in the year ago quarter. Sales and marketing expenses increased 11% to $3 million in support of our top-of-funnel brand awareness initiatives and G&A expenses were $1.4 million for the quarter compared to $1.1 million in the year ago quarter or a 28% increase. For sales and marketing, we continue to invest in marketing and brand awareness initiatives that we believe will allow us to build upon our brands and have direct access to the consumer. The primary increase in G&A for Q4 2023 was due in large part to an increase in bad debt expense and legal fees. We reported a net loss for Q4 2023 of $9.3 million or $0.30 loss per diluted share compared to a net income of $40,000 or $0.00 earnings per diluted share in the year-ago period.

The main drivers for our net loss was a $5.9 million inventory write-down noted earlier and increased expenses incurred in support of top-of-funnel marketing. Our weighted average shares outstanding on a diluted basis used in the calculation of loss per share for the quarter or approximately 30.4 million shares for the period ended June 30, 2023 compared to 31.2 million shares for the period ended June 30, 2022. Now let’s move on to a snapshot of our balance sheet. Our liquidity and capital position remained strong as we ended the quarter with $15.6 million of total cash compared to $16 million at the end of the third quarter ended March 31, 2023, and $21.2 million as of June 30, 2022. Working capital remained strong at $17.3 million. In addition, the company continues to be debt-free.

Our cash flow used in operations was $48,000 during the quarter, compared to $500,000 of cash flow used in operations during the same quarter a year ago. In terms of other sources of liquidity, we have access to our $5 million cash secured credit facility with JPMorgan Chase Bank, which was renewed for another year in June 30, 2023. As of June 30, 2023, and through today, we have not accessed funds through our credit facility agreement. Inventory as of June 30, 2023, totaled $26.8 million compared to $33.3 million at March 31, 2023, a reduction of nearly $6.5 million due to the inventory write-down previously mentioned. Inventory as of June 30, 2022, was $33.5 million. Loose jewels inventory was $9.1 million as of June 30, 2023, compared to $15.6 million as of March 31, 2023, again, due to the inventory write-down which was all related to loose jewels inventory.

Loose jewels inventories at June 30, 2022, was $16.2 million. Finished jewelry inventory was $17.3 million as of June 30, 2023, compared to $17.4 million as of March 31, 2023, showing a reduction of $100,000, demonstrating a solid sell-through of our finished jewelry in our direct-to-consumer online channels, while maintaining a higher percentage of in-stock rates above 90% to meet our service level agreements. Plan to remain focused on prudent inventory management strategies going forward. Finished jewelry as of June 30, 2023, was $17.2 million. Book value per share at the end of the quarter and the year was $1.30 per share, sequentially lower to Q3 2023 and at June 30, 2022, due to the inventory write-downs that I described earlier in my comments as well as the tax valuation allowance and cumulative losses over the quarters in FY 2023.

In summary, we remain steadfast in our cash management while diligently deploying capital and support of our ongoing business and technology advancements towards growth initiatives and further brand awareness. With that, I’ll turn it back over to Don.

Don O’Connell: Thank you, Clint. In conclusion, despite the facing headwinds throughout the full fiscal year, we remain optimistic and excited about the future of our company. While we acknowledge the challenges we’ve encountered. We have also made significant progress in implementing strategic initiatives that we believe will drive growth and enhance our overall performance. Moving forward, we are committed to leveraging our strengths, refining our strategies and capitalizing on new opportunities. Our dedicated team, coupled with our innovative approach positions us well for success in the coming years. We firmly believe that our proactive measures, combined with our unwavering determination will enable us to overcome the obstacles we have encountered and paved the way for a brighter future.

We are confident our long-term business strategy will yield favorable results and create long-term value for our shareholders. We extend our gratitude to our valued investors, employees and stakeholders for their continued support and trust in our company. Together, we will navigate these challenges, and we believe, emerge stronger than ever. At this time, I will turn the call back over to the operator, who will open the lines for any questions.

Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions]

Adam Lowensteiner: Hi, Sarah. This is Adam Lowensteiner from Lytham Partners. I’m going to pose a few questions to the management team.

Don O’Connell: Hey, Adam, go ahead. Sure.

Adam Lowensteiner: Hi, Don and Clint. Where do you see the company streaming, Made Shopping, going?

Don O’Connell: Well, thanks for bringing that up. So basically, we’re about a week into Made or Made Shopping, which is our digital streaming, broadcasting, interactive shopping experience, allowing the consumer to shop anywhere they want, whether they want to stream through Facebook, Instagram, YouTube, LinkedIn, wherever they are, we’re going to give them the ability to see the products that we offer and be able to click and buy right there. In conjunction with that, we’re also spread across in a beta phase, but the broadcasting side where we’re streaming through DirecTV and those type of mediums like satellite and also different cable providers, look to us to gather the data that we’ve kind of learned and the learnings from where our customers are shopping and where they’re located from a demographic standpoint and be able to geo-target them and be able to buy either cable, either direct response-type opportunities and be able to target those customers.

And also, it allows us to be more diverse in the product offerings that we bring. So moving ahead and moving forward, we believe and anticipate that we’re broadcasting a really beautiful signal. A really great show. I mean, for those interested, right now, we’re actually broadcasting You could find us, you can find us streaming. So if you just go there, you can look at the quality of the show and what we’re putting out. And we believe that it’s state-of-the-art, we believe it’s probably the best of the best in technology. We’re producing 4K, HD. Also we’re producing and streaming in 1080p too as well. And really, we’re pretty excited about this new initiative. We think this is another way that we can reach a bigger, broader audience.

It’s also an answer to this incredibly expensive performance marketing, cost per click that’s going up and really just enabling us to navigate in a different way to be able to clear the noise of all the other competition out there and showcase our product and showcase our product brands, like we’ve never been able to do before. For example, Forever One is the premium moissanite. We innovated it. We created it. We developed it and brought it to market. We need to let the consumers know that that’s really what they’re looking for. And this enables us to create long-form content that we can actually educate those consumers in a much better way and show the competitive advantage as to why they need to be shopping with our brand and all the brand equity that comes along with it.

For example, lifetime warranty on your gemstone, certifications, different things like that, that will separate us from the moissanite perspective. And also in the lab-grown diamond market, it’s a very crowded space and very short order, and it’s very price sensitive, and the pricing is coming down across the board for everyone. So we need to be able to bring our own brand forward, which is Caydia, Cay means pure in Greek symbolic – I think some symbolic – I can’t pronounce that word, so sorry about that, Adam. So we believe in diamond is diamond. So lab-grown diamonds are pure diamonds as far as we’re concerned, same chemical and physical properties, and we’re bringing them to market in a beautiful way through our incredible designs.

And we believe that in order to be a leader in the lab-grown space, we need to push out our brand where customers are gravitating more to brands. So stay tuned for a bigger footprint. Stay tuned for seeing Made in a much different light. And also the shopping network or the Shopping Made will enable us to bring different brands forward to be able to highlight those brands and be able to offer those brands in this stream. So not just limiting to just primarily fine jewelry, but anything that we believe that’s aligned with the brand and aligned with what we stand for as a company, and enables us to grow in a much bigger way, and we believe brings a lot more value to the shareholders and to Charles & Colvard. I know that was long-winded, but I figured out how to get that out there.

Adam Lowensteiner: I appreciate the color. Was the decline in wholesale revenue a surprise?

Don O’Connell: Well, we’ve kind of been diluting quarter-over-quarter that we’ve been pushing more direct-to-consumer. Now that’s not to say that the wholesale brick-and-mortar business is not top of mind for us. And the brick-and-mortar partners are very dear to our heart and part of our strategy moving forward and we support them. And as a matter of fact, we didn’t make the press announcement yet, but I can go ahead and make the statement that we did launch lab-grown diamonds Caydia in Helzberg stores. So we just launched that basically 1.5 weeks ago, so brick-and-mortar in our wholesale segment is still very, very strong. We’ll continue to support our brick-and-mortar partners. On the wholesale side, we’ve been talking about a declining market on the wholesale.

And that could be because of the downward pressure on the pricing. It starts from the top, right? So it’s no secret that everybody in the industry has been talking about the downward pressure of natural diamonds dropping nearly 40%, I believe the number is. I mean, we can get the actual facts on that into quotes. But I believe it’s a 40% drop on natural because lab-grown diamonds is pushing downward and becoming also a problem, as I alluded to in my prior remarks for moissanite pushing down and the moissanite pricing. So what we need to do is and what we have been doing is looking at that very closely over the quarters focusing more on direct-to-consumer, maintaining our brick-and-mortar presence and strength with our customers in brick-and-mortar, supporting them and our brand, all the while looking at our wholesale business and saying, okay, maybe we need to consolidate a little bit here.

Maybe we need to kind of key in on our strategic partners within the distribution model. And then also, we just spoke about Charles & Colvard Direct, so Charles & Colvard Direct, we just launched recently here, and that’s also in beta. So we have a select amount of independent retailers that we have direct relationships with and that basically we can be more competitive and give them better pricing on certain quality of goods that are outside the Forever One. So we believe this could be a solution to an automated process to be able to support the entire wholesale market. But right now, our focus is really pushing more direct-to-consumer becoming a brand that’s meaningful, that resonates with all consumers in all products, in all categories.

So how do we do that? We do that through this new streaming technology. We do it through analyzing where that customer is located and giving that customer what they’re looking for to purchase. So make no mistake, this could be something that’s very significant for us, and we believe that it’s really important to the business. And given the decline in the wholesale side, now again, it’s difficult because we have to report quarter-over-quarter and say, okay, wholesale is declining by x number of percent. But the reality is it’s going to continue to decline as long as we keep pushing more to direct-to-consumer. And then we anticipate some strength on the brick-and-mortar side, some strength in additional product brands that we’ll introduce to more brick-and-mortar partners as we expand more in the lab-grown diamond too as well.

So again, long-winded answer there, but hopefully, I covered it – what you were asking for.

Adam Lowensteiner: Given the move towards lab-grown diamonds, how should investors view the company’s inventory? Will you build more lab-grown diamonds and less moissanite going forward?

Don O’Connell: That’s a great question. So in our history, we’ve accumulated a pretty solid amount of inventory through a supply agreement that we had with our strategic partner. And if anybody has been tracking or following the company over the years, we’ve maintained a significant silicon carbide or moissanite inventory. We’re pretty comfortable that we have ample inventory to support our overall business, and as I said earlier, for the foreseeable future. That inventory has down – has recently come down a little bit through this write-down that we just did. But it’s a much different business than the diamond business. So from the lab-grown diamond business, there’s so much material that’s in the market readily available with our strategic alliances and partnerships and relationships in the vendor community, we’re able to buy more and just in time.

Now that’s not to say that there wasn’t some of that material bundled up in the write-down, and that was large in part due to our early entry to market of getting into lab-grown space which we believe was a great move for the company, and now we offer the choice to that consumer. But the difficult scenario there was the market really pushed down and the pricing pressure was intense on the lab-grown side, from the early days to where it is today. So we believe that with this consideration that we just did in the write-down, we’re in a great position as far as on the diamond inventory and then purchasing just in time our needs. And then the moissanite, we’ll continue to kind of look at that and weigh that, but we have a lot of options there.

But if you look at our consumption of material, if anyone wants to look back from our supply agreement, year-to-date – not year-to-date, but for the full year, we purchased $1.8 million worth of material, which you can kind of understand what the consumption was. So we didn’t feel that we needed any more material. We had plenty of material. We’re servicing all of our customers, all of the needs, and we believe that Forever One, is the pinnacle and it will continue to be so for the foreseeable future and beyond.

Operator: [Operator Instructions] I would like to turn the conference back over to Don O’Connell for any closing remarks.

Don O’Connell: Thank you, Sarah. I’d like to thank you and everyone else for your attention and continued belief in our company. We look forward to sharing our progress and achievements with you in the future.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.