Duluth Holdings (DLTH) Q2 2020 Earnings Call Transcript

Duluth Holdings (DLTH -1.38%)
Q2 2020 Earnings Call
Sep 03, 2020, 9:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Duluth Holdings second-quarter 2020 earnings conference call. [Operator instructions] Please note this event is being recorded. I would now like to turn the conference over to Donni Case, investor relations for Duluth Holdings. Please go ahead.

Donni Case -- Investor Relations

Thank you, and welcome to today's call to discuss Duluth Trading's second-quarter financial results. Our earnings release which we issued this morning is available on our investor relations website at irduluthtrading.com, under Press Releases. I am here today with Steve Schlecht, chief executive officer; and Dave Loretta, chief financial officer. On today's call, management will provide prepared remarks, and then we'll open the call to your questions.

Before we begin, I would like to remind you that the comments on today's call will include forward-looking statements, which can be identified by the use of words such as estimate, anticipate, expect, and similar phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts, and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Such risks and uncertainties include, but are not limited to, those that are described in our most recent annual report on Form 10-K and other SEC filings as applicable. These forward-looking statements speak only as of the date of this conference call and should not be relied upon as prediction of future events.

And with that, I'd like to turn the call over to Steve Schlecht, chief executive officer of Duluth Trading. Steve, go ahead.

Steve Schlecht -- Chief Executive Officer

Good morning, everyone, and thank you for joining today's call. I am pleased to report that net sales for the second quarter grew 13% to $137 million, driven by a 67% growth in direct sales year over year. In the quarter, we also saw a meaningful improvement in earnings and cash flow. Of course, we're far from taking a victory lap in the COVID environment, yet I can clearly see the Duluth Trading story playing out according to our long-term strategy.

Our company was built on three brand pillars: solution-based design, humorous and distinctive marketing, and an outstanding and engaging customer experience that continues to set us apart regardless of the competitive landscape. I'm very proud how our agility, brand strength, and business model are serving us well during these unconventional times. The solid results we reported this quarter reflect our unwavering commitment to our customers. First, our heads-down focus on creating innovative and solution-based apparel and goods that consumers value.

When comfort was key, our spring and summer product assortments had widespread appeal to both men and women. The men's business was especially strong this quarter. It was up 15% over last year and our drive to deliver the newness factor to customers, such as the launch of a men's swimwear line accounted for close to 18% of total men's sales for the quarter. Women's apparel delivered a 10% year-over-year growth rate.

Comfortable basics like No-Yank Tank, base layers, NoGa, and outdoor favorites like gardening and overalls were especially strong. The second factor was the investments we made to strengthen customer engagement before the pandemic reshaped consumer shopping. Our outstanding online performance this quarter was supported by enhanced website and mobile capabilities that easily accommodated the surge in demand. Total site visits increased 34% in the second quarter.

Mobile traffic was up 42%. Sales from mobile doubled versus the comparable period. Investments in our distribution system also paid off. We continue to fulfill online orders from both warehouse and store inventory through our ship-from-store process, as well as BOPIS and contactless curbside pickup at store locations.

In fact, our omnichannel capabilities are a leading competitive edge for us, with 26% of digital orders fulfilled by stores. Third, we shifted our focus to more digital marketing versus traditional media spend. Digital, when combined with relevant product messaging and promotions, drives higher and more customized engagement. This has been notably effective in our direct channel where we saw a 130% lift in new buyers during the second quarter.

Strong digital capabilities will become especially important in the third and fourth quarters if traditional media opportunities like sports events are curtailed. Fourth, the omnichannel model continued to validate our commitment even in the face of store closures and lower traffic as stores began to reopen. Our thesis that having a store in a market builds overall brand awareness once again proved out in the second quarter with direct sales growth of 80% in store markets, outpacing that of non-store markets. We can also draw a very strong correlation that when in-store shopping was curtailed by the pandemic, customers readily adapted to online shopping.

The ultimate value of a true and strong omnichannel is that a retailer does not lose precious customers when it offers an alternative path to purchase. As we move into the back half of the fiscal year, I have a couple of observations. First, we were fortunate that our strong online capabilities filled the gap created by store closures in the first half of this year. Second, while no one has a crystal ball on how things will ultimately shake out over the coming months, we know there will be some headwinds.

We already anticipate that seep discounting will continue, holiday deals will begin even earlier, and shipping networks will be constrained by increased volume. And there are other external factors that can have a meaningful impact on consumer sentiment. Even so, we are already executing our plan for the peak selling season, which basically boils down to doing what works and lean into it. We will continue to drive home messages that are resonating with customers, shop your way, online, curbside pickup, and BOPIS.

We will ramp up digital marketing, especially around events like our Big Dam Birthday and the launch of 40 GRIT, which, as I mentioned on our last call, is a new price point category aimed at younger shoppers. Through email and digital campaigns, we will market newness to past purchasers of similar products and categories and target 2020 new customers to make additional purchases. As we move into the fall and holiday seasons, I am confident that our team is focused on doing our level best to keep momentum going. While we must fasten our seat belts for a bumpy ride, we have the talent, agility, and conviction to meet the challenges ahead.

Now, I'll turn the meeting over to Dave to discuss our financials and operations.

Dave Loretta -- Chief Financial Officer

Thanks, Steve, and good morning, everyone. We're pleased with our second-quarter performance, especially during such a challenging economic environment. We're fortunate to be in a sweet spot for what our customers are craving at this time, functional, comfortable collections that serve a purpose for the active lifestyle but also satisfy customers' needs with working at home and getting the most out of outdoor activities during the hotter months. As Steve mentioned, for the second quarter, we reported net sales of $137.4 million, up 12.6% compared to $122 million last year.

The momentum in digital sales we saw in the back half of the first quarter continued throughout the second quarter with total direct sales growth up 67%. Within non-store markets, the direct business grew 59% and even more encouraging, within store markets, the direct business grew 80% year over year as customers shifted from buying in-store to buying online. Stores began reopening in the first week of May, and we're fully operational by Father's Day. Overall, we saw a healthy reopening ramp up with a gradual leveling at 70% productivity compared to the prior year.

From the time that all stores were reopened, we've seen the direct business in those store markets absorb entirely the shortfall in lower store traffic. In fact, for markets with a store that opened prior to 2019, total sales growth was 9% in those markets. This accounts for 76% of our full-line store base and this positive same market sales trends have continued into August. Customer traffic through digital channels continued at a strong pace in the second quarter with 15 million site visits, up 34% to last year.

The efficiency and productivity of our digital marketing campaigns allowed us to generate incremental sales of $12 million in the second quarter compared to the first quarter, even though actual site visits were down 16% versus the first quarter. This efficiency improvement led to conversion rates in all digital channels of 7.2% in the second quarter, an improvement of 230 basis points over last year. Our product offerings hit the mark in the second quarter. Our men's business improved significantly, driven by a successful Father's Day sale that was up 7.4% over last year.

We realized strong sales in new summer styles, taking advantage of our CoolMax and Armachillo fabrication, as well as new underwear styles and pants that benefited from improved store layout and signage based on fit. Continuing on pace for Q1, our women's business grew 10% over last year largely due to a 30% sales contribution from our Summer Solved collection. Women's full-price business reflected strong sales in shorts and comfortable basics and the plus business grew 11% of total women's apparel. While many customers continue to shop online, we offer deeper discounts in several categories to continue moving inventory early in the quarter while our stores were closed.

As a result of more aggressive product promotions, our gross margin overall for the quarter decreased 30 basis points to 52.8% compared to 53.1% last year. The selling product gross margins reflected the steeper discounts were down 250 basis points in the quarter, but favorable return rates and retail shrink results from our physical inventory accounts offset roughly 200 basis points from the heavier markdowns. SG&A expenses for the second quarter increased 2.6% to $62.7 million, compared to $61.1 million in the comparable period, driven largely by higher selling costs associated with increased direct sales. This included an increase of $4.8 million in selling expense and the $2 million increase in general and administrative expense, partially offset by a decrease of $5.2 million in advertising and marketing expense.

As a percentage of net sales, SG&A decreased 450 basis points to 45.6% compared to 50.1% in the second quarter last year. Selling expenses as a percentage of net sales increased 190 basis points to 16.3% due to a higher mix of direct sales as a percentage of total sales. General and administrative expenses as a percentage of net sales decreased 110 basis points from last year to 21.2%. In dollars, G&A expenses increased $2 million largely due to new store growth over the last 12 months and higher depreciation related to technology and logistics investments.

We opened two new stores after the close of the second quarter, one in Springfield, Oregon near Eugene, and one in Orland Park, Illinois, a suburb of Chicago. This brings our total store count to 64. In addition, we have one more store to open this year in Florence, Kentucky, a suburb of Cincinnati. As a percentage of net sales, advertising and marketing costs decreased 530 basis points to 8.1% compared to 13.4% in the second quarter of last year.

The 530-basis-point decrease was primarily driven by reduced catalog and TV advertising, partially offset by an increase in digital advertising. This extraordinary leverage we realized in the quarter is benefiting from some timing of expenses between first and second quarter. However, the year-to-date ad spend of just under 13% of sales, which is over 400 basis points below last year, represents a better reflection of the efficiencies we've gained and expect to benefit from down the road. We also typically see greater efficiencies in ad spend during the fall and winter seasons.

We expect for the full year that the ad ratio will be in the low double digits as a percentage of net sales. Our adjusted EBITDA for the quarter was $16.8 million or 12.2% of sales, an increase of 75% over last year and 440 basis points of EBITDA margin expansion. Income tax expense was $1.9 million for an effective tax rate of 24% compared to $700,000 in the second quarter last year or an effective tax rate of 26%. The lower tax rate year over year relates to a lower blended state tax rate as we expanded our geographical presence, particularly during the second half of 2019.

For the quarter, we reported net income of $5.9 million or $0.18 per diluted share, compared to net income of $1.9 million or $0.06 in the second quarter last year. While the COVID-19 impact on our profitability weighed mostly in the first quarter, we're pleased that our ongoing objective to expand profit margins are back on track. We can now see the trailing four quarters of operating margin expansion is nearly 40 basis points. Last year at this time, I explained that we are at the turning point of growing operating margins and delivering the growth in bottom-line results.

While we still expect the coming months and quarters to be clouded by an uncertain economic outlook and disruptions in shopping behaviors, we have proven the ability to flex and adjust our business to meet the customers' needs while doing it profitably. Moving on to the balance sheet. We ended the quarter with net working capital of $117.7 million, including $19 million in cash and $79.5 million outstanding on our total line of credit of $150 million. Our net liquidity position improved by $15 million in the quarter as the strong sales, managed expenses, and reduced capex drove positive free cash flow.

Our capital expenditures for the full year are on track to be $15 million. Our inventory position at the end of Q2 was $167.6 million, which is up 46% to last year but improved from first quarter's position of up 68% to prior year. While the competitive discounting has impacted gross margins year to date, it has allowed us to clean up the over-inventory positions we started the year with. We are now projecting end-of-year inventory to be essentially flat to last year's ending inventory of $148 million and back in line to realize improvement in inventory turns.

Year-round inventory, which comprises 62% of total inventory is up $20 million or 28% to last year. With end-of-season inventory still higher than ideal, we anticipate continued discounting into the third quarter, which will pressure gross margin. We are not in a position to give financial guidance for fiscal 2020 based on a number of factors. First, prolonged COVID-19 safety concerns that keep store traffic at subdued levels through 2020, compounded by indecisions regarding additional stimulus money that support consumer spending.

Second, the surge in online shopping is straining the residential last-mile networks, which will potentially result in extended delivery times and high shipping costs that will be forced to absorb. In fact, our primary shipper for customer orders, UPS, has announced steep peak charges and extremely tight daily allocations that are below our forecasted needs. Third, direct fulfillment operations are all competing for staff with entry-level wages and incentives that continue to grow. And fourth, key national advertising channels are in disarray, with fall sporting events being canceled and retailers attempting to pull holiday spend forward even more than last year.

In closing, while we will seek all opportunities to mitigate the likely strains in the near term from fulfillment disruptions and a cautious consumer spend outlook, we are confident in the steps we've taken to invest in our omnichannel model, expand our branded product offerings and bolster our liquidity to position the company for long-term value creation. With that, we'll open the call for questions.

Questions & Answers:

Operator

[Operator instructions] The first question is from John Morris of Davidson. Please go ahead.

John Morris -- D.A. Davidson -- Analyst

Hi. Thanks. Congratulations on all the improvements and the hard work. I wanted to ask --

Dave Loretta -- Chief Financial Officer

Thanks, John.

John Morris -- D.A. Davidson -- Analyst

Yeah, sure. Yeah. Really two questions here. One is very impressed with the new customer growth with your digital file.

Maybe tell us a little bit more about what you're doing to market to them, in particular, to turn them into regular ongoing recurring customers in as much as the mix between TV and digital as well. Is that going to continue to be much more digital on a go-forward basis? Yes, let's start there. Thanks.

Dave Loretta -- Chief Financial Officer

Sure, John. The new customers that we've picked up so far year to date, luckily, what we have right in front of us and we're starting to test it is the implementation of our new customer data warehouse tools through Adobe. With that, we'll be able to segment those customers, specifically with what they purchased, when, and what frequency and tailor some of our outreach through email campaigns or even through web activity, and we'll be able to target them specifically for repurchase secondary items. And that's a tool that we haven't had in the past.

So, so far, quarter to date, year to date, we're seeing retention rates on those new customers equal to what we had in prior years. But what we're expecting to see is that that's going to improve with the implementation of our new tools that we've got in place right now heading into this third quarter. Regarding the mix of TV and digital, we'll certainly see digital take on a larger component of our ad spend. And we've rationalized some of the TV, but we're going to be back on air this week and heading into the rest of the third quarter.

So we'll see that balance come back in place. Where we've really taken some of the dollars out of our ad mix is in the catalogs, removing some of the catalogs in the spring and the summer, but we'll have circulation in catalogs again in the fourth quarter to drive some of that activity as well. So hopefully, that answers your question.

John Morris -- D.A. Davidson -- Analyst

Yeah. No, very complete. Thanks for that added information. The other question is maybe just comment a little bit further beyond the prepared remarks of the August trends, I guess to recap that.

But then what I'm really looking for here is to see if you're comfortable telling us a little bit more in terms of the, I guess, the mix of those trends. You said things were similar in terms of the momentum, I believe. Is it similar in digital versus in-store and men, women's and, I guess, overall start to fall, how you're feeling about that? Thanks.

Dave Loretta -- Chief Financial Officer

Yeah, certainly. Quarter to date through August and even right up through this first week of our fiscal September, we're continuing to see the same growth momentum in direct. And where we have seen improvement is in store traffic relative to the whole second quarter. The second quarter was only had half of the period where the stores were open to full time.

So now they've been open, we're seeing improved traffic there. I had mentioned on the call that they were leveling off at 70% productivity. But as of more recently, they're getting back to 80% productivity. And so we're excited to see that that trend is improving while the direct is maintaining.

John Morris -- D.A. Davidson -- Analyst

All right. Great. Good luck for fall. Thanks.

Dave Loretta -- Chief Financial Officer

Thank you.

Operator

The next question is from Jonathan Komp of Baird. Please go ahead.

Jonathan Komp -- Robert W. Baird -- Analyst

Yeah. Hi. Thank you. Maybe to follow up on direct, maybe a bigger picture question.

I know in 2019, you had a period of four quarters or so where direct was pretty flat. And then this year, we've seen a big acceleration, which sounds like it's continuing. And part of that's been a big improvement in the conversion rate. I just want to ask maybe big picture.

How much of what you're seeing in direct do you think is some of the new enhancements you've made to your business versus more a function of the environment? And any thoughts on those factors sustaining as you look ahead?

Dave Loretta -- Chief Financial Officer

I certainly think there's a combination. But the activity that we really leaned into from a marketing and a digital marketing aspect had a big effect year to date in our direct growth. Combine that with our customers who got very comfortable with shifting some of their spend from the stores when the stores were close to the direct channel. So I think it's the enhancements that we put into place from a functionality standpoint that's been a big part of it.

But we've also seen improvement in our product assortment that I'd say year-over-year is leading to some of that acceleration in the business right now. A year ago, we were looking at some of the spring and summer results and didn't find that we were hitting the mark as well as we did this year. And when we came out this year with some of the fabrications, some of the warmer weather goods and swim line that we talked about for men, that is what the customer ultimately was looking for, especially when they were sheltering at home. So I think it's a combination of those factors.

But once we've got these customers in our database and in our brand, then we can continue to market to them in a more efficient way. So, yes, I think it's more leaning toward what we've been able to do than just the environment but tough to piece it apart exactly.

Jonathan Komp -- Robert W. Baird -- Analyst

Yeah. Great. That's helpful to hear. Maybe one follow-up.

Dave, just on your comments for holiday, are you willing to quantify any of the bottlenecks you mentioned either on the shipping capacity or some of the added expenses that you see? And maybe related to the margin picture, how soon do you think you might be able to get back to more of a full-price selling environment for the brand?

Dave Loretta -- Chief Financial Officer

Yeah. I guess on that last point, John, full price is still upwards of a third of our business today. And last year, at this time, it was around 40%. So we're always going to have a blend of what we sell with some promotional activity and full price.

I would expect, when we head into 2021, that the inventory position is going to be much more favorably leaning toward full price as we don't have as much clearance to work through. So 2021 spring/summer, we've targeted to improve gross margins from where they were this year and with less of the clearance activity. With regards to potentially the bottleneck on delivery, that is an issue that's in the works right now, and we're working to find the alternatives for how to make sure we can satisfy the demand. If we're going to see 60% plus increase in demand in the fourth quarter, those are some large numbers that means shipments that today our primary carriers said that they can't handle.

So we're looking at the alternatives to do that. Obviously, we can drive a lot of our shipment out of our stores. And we've proven to be able to do that so far and encourage customers to buy online and pick up in-store in a safe way. But I would expect the cost associated with at least what we're hearing here in these early stages from a percentage of direct sales, we could be saying 100 to 200 basis points of added cost to make sure that we can get all the goods to the customer's home in time.

And the other thing that we don't want to do is miss sales if we can't keep that promise on the delivery time frame. So it's a tricky one. I'll be honest with you. But we're looking at it from all different angles.

Jonathan Komp -- Robert W. Baird -- Analyst

OK. Great. That's really helpful. Thank you.

Dave Loretta -- Chief Financial Officer

Yeah.

Operator

The next question is from Jim Duffy of Stifel. Please go ahead.

Jim Duffy -- Stifel Financial Corp. -- Analyst

Thank you. Good morning.

Dave Loretta -- Chief Financial Officer

Good morning.

Jim Duffy -- Stifel Financial Corp. -- Analyst

I had a question on the advertising and marketing efficiency that you're seeing. That's really nice leverage, the low double-digit rate you're looking for, for the year for the advertising and marketing costs. It suggests you're expecting that to continue. I'm curious, are you seeing any inflation in digital advertising rates or things which could put downward pressure on that advertising efficiency as you look to the back half of the year?

Dave Loretta -- Chief Financial Officer

Well, we aren't in as much as we've seen in national TV advertising, where inflation has continued to increase there. But on digital, because it's much more of a market-driven platform, we can be nimble and only lean into it where we know it's going to be efficient. So we can be very selective on the return of that spend real time versus locking in that spend months in advance. So we think we can navigate through any price cost issues within digital much better than the other channels of marketing, which is good.

Jim Duffy -- Stifel Financial Corp. -- Analyst

OK. And, Steve, with dynamic environment, you must be very pleased with the productivity of the digital business. Can you share some thoughts on store opening plans as you look out to '21 and future years?

Steve Schlecht -- Chief Executive Officer

Sure. We're going to hit -- we've hit the pause button on store expansion for a while. We have one lease that we've signed for '21, which will be in the second half of the year. But with the growth that we're seeing in direct or e-commerce and some of the major internal technology improvements we plan on making next year, they're sort of further our technological set.

This is a good year to sort of take a pause and really rethink our business model in terms of where do the stores fit into the omnichannel approach. Are there stores of different shapes or sizes or places that we should be addressing? And then we'll look into '22, year '22, for probably rethinking that and moving forward. Obviously, California bakes our interest because we have no stores there, and it's the largest area in the country. But we've decided to hold off for there.

Incidentally, we're seeing excellent direct growth out of California without any stores there. I mean, that's been very encouraging.

Jim Duffy -- Stifel Financial Corp. -- Analyst

Yeah. Steve, also encouraging is the return or the productivity improvements you've seen with digital investments that you've made in recent years. Can you talk a little about what you have planned as you look across 2020 and into '21?

Steve Schlecht -- Chief Executive Officer

Jim, from -- sorry, from digital?

Jim Duffy -- Stifel Financial Corp. -- Analyst

From the standpoint of -- you mentioned some -- you were going to make some technology and systems investments?

Dave Loretta -- Chief Financial Officer

Adobe, Stack.

Steve Schlecht -- Chief Executive Officer

Yeah. Go ahead.

Dave Loretta -- Chief Financial Officer

Yeah. I think what we're referring to there is the enhancements with this customer data warehouse replatform and the tools that we're going to have in place in the third quarter here. That's where we're going to expect to see even greater efficiency in that ad spend because not only can we target customers better, but we can avoid costs for mailing or emailing or trying to get in front of customers that aren't going to be as relevant to us. So it's a function of cost avoidance as much as it is looking for the highest value spend.

Jim Duffy -- Stifel Financial Corp. -- Analyst

Great. Last one for me is on product. You've seen some good return on innovations. Can you speak at all about the innovation pipeline as you look into holiday and into 2021?

Dave Loretta -- Chief Financial Officer

Yeah. Certainly, we've got a new line that's coming out very shortly here that Steve referred to, the 40 GRIT. While I'll say doesn't need to be on the cutting edge of innovation, but in some terms, it's the simplicity of the product, and it's the price point that really makes it interesting. Other areas though that we are looking from greater innovation is we've had success on the men's side with some sort of entry-level swimwear.

We'd like to be doing that in the women's category. We're also working on other outerwear items that are really taking advantage of some of the synthetics that we've got that are working well in some small collections, and we'll expand that. But where we see success in certain fabrications like, as I mentioned, Armachillo or CoolMax, we can extend that into other base layer products, as well as sort of tops and bottoms. And that's how we're finding some of the opportunity to create newness in the product assortment.

Steve Schlecht -- Chief Executive Officer

You're also going to see, very shortly, some really clever, humorous TV ads that are new that will be addressing our double flex denim pants that they'll be showing in the next 10 days. So stay tuned.

Jim Duffy -- Stifel Financial Corp. -- Analyst

Very good. Thank you, guys.

Dave Loretta -- Chief Financial Officer

Thank you.

Operator

[Operator instructions] The next question is from Dylan Carden of William Blair. Please go ahead.

Dylan Carden -- William Blair -- Analyst

Yeah. Thank you very much. Just curious, I don't know if you've looked at it this way, but the new customer additions and the growth there in the quarter, have you broken that down between kind of store markets and non-store markets? And do you think it's safe enough to assume or sort of forecast that you're kind of gaining new customers at a very efficient rate in store markets that can translate longer term from an awareness standpoint to store traffic?

Dave Loretta -- Chief Financial Officer

Yeah. We have looked at that, and we've estimated how much of the new customers that we got in store markets that were likely a store customer, but they hadn't transacted with us in a way that we could capture their information. But we know that there's another good amount of new customers in store markets that are new to the brand. And we'll be able to market to those customers just as effectively as the customers in non-store markets.

But the benefit, too, is let them know that we can drive them to a store as well, so we're looking at that. We don't have a lot of more details to share at this time, but we're looking at non-store versus store in a very granular way.

Dylan Carden -- William Blair -- Analyst

OK. Thanks. And then the other one, you kind of addressed it there in the last question, but the new product pipeline feels like it's kind of accelerating here. I want to know if that's sort of fair.

And then the underperformance, I don't want to make too big a point of it because it was relatively minor. But in the women's business, is that a factor of maybe some lack of innovation or lack of new products, so to say? And is there sort of more to come for women sort of beyond maybe the swimwear go forward? And that's all I got.

Dave Loretta -- Chief Financial Officer

Yeah. Well, underperformance is simply relative to men's.

Dylan Carden -- William Blair -- Analyst

Right.

Dave Loretta -- Chief Financial Officer

Yeah. I don't think we consider it underperforming. It's really performing as well year to date at a level that we're pleased with. Men's really took a sharp improvement with some of the new product we had coming out for the guys and hitting a Father's Day window that surrounded it with some better marketing this year.

But no, we have new product in the women's category that we believe is just as compelling and is going to continue to see growth in that category.

Dylan Carden -- William Blair -- Analyst

Awesome. Nice work, guys. Thank you very much for taking my question.

Steve Schlecht -- Chief Executive Officer

Thank you.

Dave Loretta -- Chief Financial Officer

Thank you.

Operator

[Operator signoff]

Duration: 42 minutes

Call participants:

Donni Case -- Investor Relations

Steve Schlecht -- Chief Executive Officer

Dave Loretta -- Chief Financial Officer

John Morris -- D.A. Davidson -- Analyst

Jonathan Komp -- Robert W. Baird -- Analyst

Jim Duffy -- Stifel Financial Corp. -- Analyst

Dylan Carden -- William Blair -- Analyst

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