Operator: Ladies and gentlemen, thank you for standing by and welcome to the Sally Beauty Holdings' Fiscal 2012 Fourth Quarter and Full Year Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct the question-and-answer session. Instructions will be given to you at that time.
I would like to turn the conference over to Karen Fugate. Please go ahead.
Karen Fugate - VP, IR: Thank you. Before we begin, I would like to remind you that certain comments including matters such as forecasted financial information, contracts or business and trend information made during this call may contain forward-looking statements within the meaning of Section 21-E of the Securities Exchange Act of 1934. Many of these forward-looking statements can be identified by the use of the words such as may, will, should, expect, anticipate, estimate, assume, continue, project, plan, believe and similar words or phrases.
These matters are subject to a number of factors that could cause actual results to differ materially from expectations. Those factors are described in the Sally Beauty Holdings’ SEC filings, including its most recent Annual Report on Form 10-K being filed today.
The Company does not undertake any obligation to publicly update or revise its forward-looking statements. The Company has provided a detailed explanation and reconciliations of its adjusting items and non-GAAP financial measures in its earnings press release and on its website.
With me on the call today are Gary Winterhalter, Chairman, President and CEO; and Mark Flaherty, Senior Vice President and CFO.
Now, I would like to turn the call over to Gary.
Gary G. Winterhalter - President and CEO: Thank you, Karen, and good morning, everyone. Thank you for joining us for our fiscal 2012 fourth quarter and full year earnings call. I will begin today's discussion with a high level review of our full year financial results, and Mark will then take you through the fourth quarter in more detail.
As you saw from our press release this morning, Sally Beauty Holdings had another very strong year, delivering record results in both businesses.
Consolidated sales in fiscal 2012 exceeded $3.5 billion, for growth of 7.8%. This strong sales performance was primarily the result of same-store sales growth of 6.4% and new store openings of 1.8%. The impact of unfavorable foreign currency exchange of 70 basis points partially offset this growth.
Gross profit ended the year at $1.7 billion, growth of 9.3% achieving a gross profit margin of 49.5%. Gross margin expanded 70 basis points, primarily due to the shift in customer and product mix in both our businesses.
Consolidated SG&A including unallocated expenses was $1.2 billion, an increase of 8.5%. SG&A as a percent of sales in fiscal 2012 was 33.5%, up 30 basis points over the prior year.
Included in the Sally Beauty Supply segment in fiscal 2012 is a $10.2 million charge related to a potential settlement of litigation. In fiscal 2011, SG&A included a favorable impact of $21.3 million credit from a litigation settlement, net of the non-recurring charges. Excluding the 2011 credit, fiscal year 2012 SG&A, as a percentage of sales would've been favorable to the prior year. Operating margin in fiscal 2012 improved 50 basis points to reach 14.2%. This increase was primarily the result of gross profit margin expansion.