Q1 2020 Earnings Call

For a franchisee Partners, we've deferred 50% of April royalties as well as their twenty-twenty remodel a new-build requirements in addition. We've established a support to help franchisees access benefits provided by the cares act legislation with free legal consultation for our smaller franchisees who don't readily have access to these services.

Our employees and franchisee Partners our family and the best way we can ensure that we all get through. This is by taking care of each other.

In response to the covid-19 crisis, we quickly altered our approach to the business to ensure that we not only weather this storm, but are well positioned to take advantage of the future recovery on the marketing side. We've shifted away from our standard 8-week El Tio calendar to a program that focuses on four key themes delivery family meals value and digitally Commerce in early April. We launched a one-of-a-kind free delivery. However long is necessary campaign with off in order to make it as easy as possible for our customers to access our food as they shelter-in-place.

Well other Concepts offer free delivery for limited windows. We are the first to commit to offering it over an extended period of time in order to assist our customers as much as possible while they are confined to their homes at least partially as a result of this promotion and our Partnerships with GrubHub doordash an Uber Eats. We've achieved record delivery with delivery as a mix of our total sales tripling.

The second theme or highlighting is our complete family meals families are spending more time than ever at home. And what they're looking for is healthier and affordable meals that the entire family will love God in addition to our long-standing $20 10-piece familiar dinner promotion. We recently introduced a special weekend offer exclusively for our loyalty members about 12 pieces and legs and thighs along with three large sides tortillas are chips and salsa at the same $20 price point not only does this meal provide incredible value, but this offering to our local rewards members marks a significant step in the evolution of our loyalty program and are targeted marketing capabilities. What is especially exciting is that the sales from this loyalty offer look to be highly incremental?

over all these

Family meal offerings have resonated very well with our customers resulting in record-high family Chicken sales mix during the last several weeks the third marketing theme we're highlighting is one of them the importance of strong of a strong value offering goes without saying in this environment, especially given the growing economic pressure. Our customers are facing the best assist them. We will soon be promoting are extremely popular $5 fire grill combos, which have been a successful part of our sales mix since they were launched last September.

We believe that customers shouldn't have to trade quality for price and expect our $5 fire grill combos to resonate strongly with value seeking customers looking to maximize wage budgets.

The final marketing theme is the growing importance of e-commerce and the digitization of our business. If you can recall last July, we re-launched our e-commerce website and mobile app and have continued to expect significant growth which has only been accelerated by the crisis in the course of five weeks. We've managed to nearly triple our e-commerce business and are setting new record levels of participation in our loyalty program lastly with over 20% of our Media budget now focused on social media and digital we believe we're well positioned to capitalize on Thursday customers are spending the majority of their time these days.

We believe these for marketing Focus areas have been key to our efforts to First stabilize and then begin improving our sales over the last five to six weeks.

As important as these marketing initiatives have been to our sales results just as critical has been the progress we've made on the operations front in addition to protecting our employees replaced a great job of focusing our drive-thru operations, which now make up over 70% of our sales tax changes in labor deployment and other efficiencies have enabled us to enhance our drive-through speed and accuracy. This will continue to be a major Focus as we believe that better drive-thru performance can be a significant sales driver and competitive Advantage for us in the future.

Now I'd like to turn the call over to Larry for a brief discussion of our current Financial operations.

Thanks for the Arts in terms of our financial response to the covid-19 and a MC. Our Focus has been on augmenting our liquidity as previously announced a coughing measure. We fully Drew down our $150 revolving credit facility adding thirty four point five million dollars of cash to our balance sheet. In addition. We have temporarily suspended all but essential Capital expenditures re-evaluated essential supports energy and a and fine-tuned our restaurant labor miles based on dining room closers and lower speeds.

lastly

Preferring company payroll taxes as permitted under the care Zack and negotiating lease deferrals with many of our landlords.

Nissan he's and other actions taken. We feel very good about our financial flexibility and are pleased that at current sales levels. We are cash flow positive before Thursday.

In keeping with suspending all but essential Capital expenditures. We have temporarily halted company-operated news development and remodel activity in addition as Bernard mentioned Faith effort all franchise twenty-twenty new unit and remodel obligations until 2021.

As a result in 2020, we expect to build one new company owned restaurant, which is already in progress and to franchise restaurants one of which was completed in the third quarter and the other is in progress and finally as previously announced given the uncertainty surrounding the duration of the impact of covid-19. We have wage drawn a previously issued guidance for fiscal 2020. We hope to have more visibility and be able to revisit the topic of guidance in the near future.

Now like to turn the call back over to Bernard.

Thank you, Larry. Before I open up the call for some Q&A. I'd like to reiterate how incredibly proud I am of the extraordinary efforts of our employees and franchisees. They've adapted unbelievably quickly to this new environment and have rallied with their El Pollo Loco family to continue providing a valued service to our loyal customers. We're grateful to be able to do our part to support our communities during these trying times. I feel very good about our position today are healthier and affordable menu offerings and ever strengthening access modes are resonating with customers and we are working hard to capitalize on new opportunities as the economy recovers for these reasons. I look forward to coming out of this crisis even stronger on the other side.

This concludes our prepared remarks. We'd like to thank you again for joining us on the call today, and we're now happy to answer any questions that you may have.

Thank you. We will now begin the question-and-answer session to join the question. You may press * then one on your telephone keypad. If you were using a speaker phone, please pick up your handset before pressing any keys to withdraw your question, please press start then to your first question comes from Jake Bartlett, please go ahead. I'm great. Thanks for taking the question. You might my first question is on the the health of the franchise system and maybe as part of your answering that I'd be curious to hear. You know, what what kind of Leverage levels you think the average might be across the system. But but also what break even in terms of same sort of sales at the Restaurant level what that phone number is. I know you mentioned being you know in a positive free cash flow position yourself, but what for the franchisees and after after loyalties Etc. What is the

What is the level which they're kind of starting to break even?

I'll take that question. So I've done obviously the break even work on our company restaurants, which I think can translate the franchise obviously franchisees play wrong with the same time. They're probably slightly higher on pricing. So on a company basis, I asked them ate at the Restaurant level, you know, we're cash flow positive, you know somewhere around the negative Thirty 35% level is where we're cash flow positive at the Restaurant level. So again, you can probably give a sense of these are probably roughly in that same ballpark in terms of the financial condition of the franchisees, you know, a couple of smaller ones that I am not talk about, you know a little bit challenge, especially those that have in line restaurant, they'll have drive-thrus but overall, I mean quite frankly the system seems to be incorrect.

Health and certainly the improved performance over the last five or six weeks. I think as at least put our minds to ease a bit in certain franchisees Minds these that this is something that they will be able to get through and we'll all get through it.

Got it. Got it. And you know as a follow-up to the kind of the break-even question, you you mentioned free cash flow positive feeling comfortable with with out of the company level. Is that include the deferral of of royal palm and and and rent from the franchise next couple of months.

It includes a deferral of royalty. It does not include any lease deferrals or abatement that we may negotiate.

Okay, so we are we are we are we are currently at current levels cash flow positive before any lease deferrals.

Got it. And and then and then lastly is we look to your Texas having opened up dining dining in at 25% capacity. What is your place your franchise these plans for reopening in in Texas. I'm curious to whether 25% capacity, you know is enough given the store configurations to to make a opening. Uh, how are you looking at that?

So I'll take that one Jake I think on that one, you know, we're not necessarily going to always follow the timing of whenever a state or a city that is the pallet he chooses to open up and and you know, the thing that we always want to do is make sure that our employees and our customers are you know, safety is always the driving decision behind whether we choose to open or not and quite frankly given the amount of business. We've been driving through our drive-thrus through delivery through mobile pick up through takeout were not as hard pressed to necessarily follow Texas has schedule. So we're going to take more of a gradual approach look at it, you know, state-by-state city-by-city and not necessarily be automatically tablets or whatever estate decide and quite frankly at a wage.

5% capacity opening

Certainly given what we're doing in other channels. We don't expect it to negatively affect us in any kind of meaningful way anyway, so so that's kind of the the general approach. We're taking going forward.

Yeah, Jake Paul.

Wait, I appreciate it.

Thank you. Your next question comes from David Tarantino From Bad, please go ahead.

Hi, good afternoon. Hope you both are doing well. Just wanted to ask about a couple of the sales drivers. You mentioned Bernard. I think first the family meal focus and I think you made the comment that that those transactions you think are highly incremental. So I was wondering if you could log on on that and and what what type of either new customer or or or, you know, increase frequency might be seeing behind that program and what it means off or you going forward.

Sure, so David, when we run that offer, you know what we typically see is anywhere between maybe a three to five percent incremental same-store sales reps during the day during which we run it. That's one to I the thing that gets us really excited and why we're so optimistic about the future is because you know if you can recall

In the middle of last year, we started laying down the foundation for the digitization of our business. We relaunched our website. We we launched our mobile app. We shifted our media strategy which used to be entirely dependent on television and print to uh to digital and social media which now comprises 20 over twenty percent of what we spend on media. And the reason why I'm bringing all that up is because what we're supposed to see our significant Synergy between our family chicken business and the access modes in which we're making Investments. So we're starting to see for instance on our dog is channel fifty percent of what we are selling on the e-commerce channels are family chicken meals

50% nearly 50% of what is going out the door with delivery our our family chicken news and you know as well as I have you covered our business for a while that page one that's our core product. So our biggest differentiator but to quite frankly when we sell more of that product. It's a lot better for our business for a bunch of reasons. We turn more products. Let's not waste pressure plumper product goes out the door Etc. So we're highly encouraged by by what we're seeing in terms of the strategies that we put in place there.

That's great. And then I guess maybe a bigger picture question that perhaps ties into the first question is I think you mentioned sort of getting Beyond this crisis in a better competitive position, but just wondering what your thoughts are on what what the the brand and business model might look like on the other side than than where it was heading into the crisis and and how you think that will be a better position than where you were previously.

Well, I think that what this crisis has done if there's quite honestly any silver lining in any of this is that it is quite frankly accelerated some channels and the work that we were doing to continue to make progress in those channels at a rate that quite honestly surprises and and and a good way, you know, when home or delivery business triple when I see our e-commerce business triple when I see our loyalty program starts to reach double-digit participation level what it really points to me is wow, all these foundational elements that we have been working on for the past two and years. I feel very fortunate that you know, maybe some of its off Monday morning quarterbacking a little bit but the fact that we had this already well underway is indicative that one they were the right things to focus on and two in the face of this crisis.

The proving to be instrumental to our continued progress. So to put a fine point on your question. I do see that the continued investment and acceleration of our digital business via e-commerce via delivery. The our loyalty program will continue to be focused on and invested in I connect you to see a renewed and actually, you know, A Renewed focus on the drive-through where we have been really maniacally focused on winning time and increasing speed of service and accuracy and we've been doing that through Labor deployment and other methods back of house to drive efficiencies there. So I think you'll continue to see that become a major area of focus and quite honestly, the third thing that we're asking ourselves is really, you know, how do we need to adapt and adjust in this new world, you know dead.

We hope that dine-in will come back strong but no one has a crystal ball to know how quickly that will occur not occur. Oh, so therefore we are starting to really look a new channel that we haven't necessarily played in in the past curbside delivery or something that we're testing as well, as you know, continuing to focus around delivery expansion. So, you know, the things like easy catering that we're looking to do in the next couple of months, which will I think will be the last compliment to our full Suite of third-party aggregators Etc so long it was just some of the ways that we're looking at it where I don't know if you have anything so sad. No. The only thing I would add is the other thing we're starting to think about is assuming things continue as they are.

You know, we expect to come out of this in Good Financial condition and really start thinking about you know, what the future has in terms of news development and how we wage against that because we do think one of the things that will come out of this is there will be development opportunities that may not exist a previously and certainly you probably supply of restaurants will be less mate. They were in the past there could be real estate opportunities in so start thinking about the expansion once we come out of this along with all the things that Bernard talked about on the brand and marketing side from a development standpoint. You know, how quickly do we want to move? We're going to be good financial position how quickly and how best to take advantage of potentially situation that will be there as we come out of this. So that's the other piece that we're thinking about.

Great. Thank you very much.

Thank you. Your next question comes from from Jefferies, please go ahead.

Hey guys, good to hear from you. Wondering just following up on the Texas versus you know, Southern California. Are you seeing demonstrable differences in sort of the sales progression in that market? We're obviously you don't have the you know, the brand awareness and penetration like you do in in Southern, California.

Well, I'll talk to to Houston and and more specifically because I think the the thing that we're seeing there quite honestly that is hard to parse through the impact that the oil situation is had on that DNA that City and you know how to sort through how much that is affecting the business versus everything else on top of it. So yes to answer your question there. I mean Houston Thursday, we have seen performance that is trailing what we are seeing elsewhere Dallas hasn't been as affected as Houston but God, but but but has been trailing as well. So but Houston's we're we're keeping a little bit more of a watchful eye right now. Just give him that the oil economy has been particularly harder hit their home. You have anything else you would add?

No, I think that's right. The only thing I would add is I think what we saw in in Texas was a a larger drop-off relative the base business and it has been coming back. Also, I guess as we talked about it last five or six weeks sequential Improvement. We've seen it also in Texas, but the current levels are still a little bit below or or or below are based business.

Understood and then on the on the new sort of Labor deployment that's been going on, you know, you guys had started, you know this last year with the New York chicken cooking and kind of a focus on some different things with your labor. There's some some learnings and kind of some permanent changes maybe that you know that come out of this, you know, our business continues to evolve.

Yes, absolutely. So, you know one of the things that we've been hard at work on is our deployment maps in our restaurant where we're not only just focusing on what labor deployment looks like the drive-thru, but what deployment looks like in every role in the restaurant, I mean this is starting to you know, I described it as starting to look like a you know, a beautiful well coordinated coordinated ballet where I have to admit, you know, two years ago, you know, sometimes it looks a little bit more like organized chaos. And so what we are doing is we've got a deployment Maps but very clear role definition around each restaurant team members responsibilities and how those are supposed to be executed with accompanying training programs to ensure that that level of coordination occurs. So I just think we've been taking it up and ratcheting it up another level and certainly the wage.

Isis has quite frankly not.

In this area but across the board. I think the thing that I've been just so proud about is we have probably done I would say a good you know, eight twelve months work in what feels like six or seven weeks time and a lot of things that were that was work already underway. We just managed to really accelerate and focus on as part of just kind of our Vital few Focus. So so that's the best way I could describe describe it to you Randi.

Gotcha. Just one more on on the free Postmates deal. How is that you know being paid for if you will I know you guys, you know had worked on sort of some curated many issues and higher, you know higher prices for the third-party aggregators. Um, how is you know, how is that progressing or specifically on that on that offer?

So, you know, we've had our bifurcated menu strategy in place for a while. Now. We're naturally if you want the full menu you go to El Pollo Loco, and you pay essentially what you would pay in our restaurant. If you go to when you one of our third-party aggregators Postmates included, it's a more curated menu heavier concentration on family chicken meals and you pay anywhere between let's call it a 15% premium that hasn't changed. We believe that's still serving Us in good stead in regards to Postmates. They had been a terrific partner in born in in working with us provide what quite honestly we feel is a unique one-of-a-kind promotion that we have put a lot of Television effort behind which is took delivery from now to however long is necessary for however long is necessary and it was intended to really be a very consumer-centric approach recognizing full. Well that people are confined to their

Homes, and this is just a small humble gesture to be able to help our customers during a very difficult time where we have what inspired this was that we tend to see virtual All Brands, you know offer free delivery for maybe two weeks to four weeks at a time. What comes customer standpoint? It's really tough to track who's offering what as a result switching Behavior tends to affect you tend to go wherever the free delivery thing is and so we said is let's try to take that off the table and Postmates took a very enlightened approach and working with us. And so we are willing to offer offer this for the foreseeable future and so we kind of work ourselves through the worst of this crisis. And so we plan to continue offering it at least through the early part of the summer.

Thank you guys. You're welcome.

Thank you. Your next question comes from Sharon from William, please go ahead.

How many hours have you been able to kind of surgically take out of a company owned restaurant? How do we think about any kind of permanent labor efficiencies that you might have on the other side of this month? I'll let Larry answer the labor portion. I'll take the front portion Sharon and then we'll tag him that way. So in regards to the first part of your question were seeing growth in day Parts specifically, we are seeing a slight shift of our business, you know, where we just start. We been stronger at lunch in a sense of where the growth over the last few years has primarily, more more. I should quit consistently come we starting to see more of the growth and the shift occur at the dinner Day part so long, so we're encouraged by that naturally that coincides with the exponential growth the record level growth. We've seen in our family chicken meals

I talked about the tripling of our delivery business. I talked about the tripling of Commerce business, but quite frankly what we're starting to see now, which is really remarkable for a brand my God. It's forgive me if you're a Wendy's or a or a McDonald's or a Taco Bell your kind of historically used to doing about seventy percent of your business in the drive through it, right? We were not we were doing about 40% of our business through the drive-thru. So to see us go from 45% to well over 70% and be where everyone else historically had been and to do it. Well, I think also opened up our eyes to wow. Okay, we knew this could be a gross channel for us. But how much more can we grow it? How does this influence the way we look at the drive-thru going forward. So I think that's another thing that you should take note of as well. And then naturally our loyalty program has seen some really nice participation levels. We set a goal

For ourselves before this crisis hit we set a 2020 goal of ourselves to get the 13% of sales driven from our loyalty program as a percentage of sales tax. We're starting to see in any given week anywhere between ten to twelve percent participation our loyalty program as a total percent of our sales mix so very quickly off. You know, what we thought would be a 1 year ago. Looks like we're going to be able to achieve probably a lot sooner. So for all these reasons quite honestly, I know a lot of people are looking at the situation as if a zoom and Gloom, I'm I'm not I know my teams not because all the things that we were working on are are starting to bear fruit and you know, the things that are within our control are starting to bear fruit. So I'm I'm actually as I mentioned earlier encouraged about where this will ultimately lead for El Pollo Loco.

Yeah, I'll just follow up on on the labor model and sharing the two areas where we've really been able to reduce labor hours are one is just around opening and closing times and I think probably a lot of the companies have done that also in terms of shortening the time. And being able to reduce hours that way because you're you're basically closing earlier that day Parts times of the day when you're really weren't generating the sales the cover the labor, but the other big area where we reduced labor is looking at our minimum hours being a once a restaurant drops below a certain level. We have a certain minimum amount number of hours that are required to run a restaurant.

And with the Ops Team we went back and really reviewed those.

That's the area where we were able to cut back on hours from you know, especially in non drive thru restaurants and so as we look in the future, it's hard to predict because I'm not sure what the the dining room requirements will be based on the laws regulations about what it's going to take to run a you know, reopen a dining rooms. So we see that plays out but I'd say I'm a little bit optimistic that given the cut down in the in the minimum hours is you could be starting at a low base on Thursdays restaurants and maybe you can actually reduce labor hours going forward on that basis. So we have not done anything in terms of our model. That's a transaction driven labor our money. So that is still stayed intact where we've really looked at. It's just a minimum hours. And so that based on what you're starting from. But again, as I said going forward, we'll see how it plays out when you start looking at, you know, some of the club

And requirements and other things required to open up dining rooms in our business.

Thank you.

Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced your next question comes from Matthew difrisco from Anaheim, please go ahead.

Thank you. Glad to hear you guys are doing well. I just wanted I saw in the press release. I think you detailed currently 192 or 195 company and 279 in the 283 franchise stores are open house that changed at all and how is that being accounted for with in the comp? Were you earlier on whether more stores closed or the more stores open? And is that being factored into the cop or you're doing the excluding store closures? The cop is done excluding store closures. So we adjust every day based on a a restaurants are closed. I mean we've, you know during his time. You know, we've had number restaurants that need to be closed and then we're quickly reopened at the time. If you look at the company numbers, you know, we have three restaurants that given the sales volumes. We just decided let's not rush to reopen. These will leave them closed from a while and a franchise size.

Basically the same thing the franchisees had a a number of restaurants. I think it's four and total couple of those were college campuses. So there's really no traffic there one may have been near mall off again. They've been left closed on a temporary basis to plan is a reopen then once the traffic comes back to those areas, but that that's the way those have been handled and I will with us in the franchisees a little to reopen those restaurants as the traffic comes back.

Okay, but then again, so the comp Improvement is purely sales coming back to a similar store base. It's not as though you're adding or have reopened a significant amount of stores over the last couple of weeks.

No, no, and again any time we close the restaurant and gets taken out of the copies. So we've had to close a restaurant temporarily during this time. It comes out of the top base and then when it reopens it goes back in the competition, excellent and then just some other some other brands have mentioned also that not only is there an opportunity perhaps for rents to be renegotiated lower bumper. So some of those um, uh municipalities that might have been resisting a drive-through or a pickup or a designated parking et cetera have been a little bit more open to those ideas. But now you're doing about a million dollars. It looks like now through the drive-thru if that's if the mass seems if I did the math, right, how many stories do you have now in the overall base that are drive-throughs and is there a potential to convert a non drive-thrus into drive service?

Yeah, so top my head. I believe the number in the system the time system of non drive-thrus. I think it's somewhere around in the mid-fifties. I think it's around fifty five or so, you know, give or take in that range. I'm going to guess that most of those would not be convertible to a drive-through just because they're in line and there's really going to be a drive-thru option there.

So I think that's right. So again that opportunity is probably not they're obviously the opportunities would be around. You know, do you relocate some of those or going forward? Can you find our drive-through is where previously municipalities are saying? No, we don't allow drive-thrus maybe some of those open up and you can find some pads there. But as of now, we're about you know, mid-fifties in terms of non drive-thrus across the system and I don't need any of those will be convertible into drive throughs.

Okay. And then last question, can you talk a little bit about that the the Loyalty customer? What are you seeing from that as far as that ten to twelve percent better now doing that. Is that a presumably that's a larger check probably a person that comes a little bit more frequently or their certain characteristics more about that customer that you've learned and that might even be of assistance in the recovery here as uh, the black the primary core consumer that you can get to come back more frequently.

Yeah, so what we are seeing with that customer is that one it is very encouraging to see how highly engaged that loyalty database is Thursday. When we you know, when we do send something out that resonates with them the reaction that we've been getting has been very very encouraging to see I I would say I'd say the following what we start I believe is, you know are Hispanic consumer our bread-and-butter customer. The customer that has been loyal to us from from day one continues to provide us with our greatest source of strength, but I think what we are we we believe we're starting to see is that we have cast a wider net certainly with the expansion of our loyalty channels Anthrax program that we are starting to broaden our base a bit more get a younger skewing more Millennial younger more Millennial customer more General market customers coming in.

Into the franchise and what we're seeing through the oil.

To program again is record-setting levels of check roads driven by our family chicken meals which is where we've been putting the focus. So we're seeing this in delivery where the where the check luggage is, you know, 25 + dollars twenty $24. We're seeing this via our loyalty program Etc. So it's it's encouraging to see, you know, the segmentation of our database with something that had been well underway before this crisis started. We believe we we we've adjusted the way we're targeting wage folks within that give and segmentation given that the crisis has forced us to do so, but a lot more to come with a loyalty program, but clearly this additional three to five pounds in sales Comp lift that is coming directly as a result of offers driven via that program is is is super encouragement.

That's fine. And then just a follow-up question. I'm sorry just came to my head. If you're doing a 10% down 10% cop now and forty-five or fifty percent of your base has drive. Thru. Is that are seeing that type of growth presumably there's a good portion of your base. Then that's probably positive comping right now.

Yeah, I have two. I haven't I haven't booked at store by store in a while.

I'm not sure. I don't I'm not sure. There's too much of our basis actually positive cost right now.

Okay, thank you. I know we see it sporadically, but it's understood.

Thank you. Your next question is from Todd Brooks from Seattle King and Associate, please go ahead.

Hey, good evening. Thanks for taking my questions. First of all just amazed that the shape of kind of where you bottom the same store sales wise and what the recovery has looked like with with the speed of the recovery to the down 10% same-store sales. Could you talk about your team at the Restaurant level have you actually been able to retain mobile your teams intact or how did that how did that work out with the speed of the recovery as far as keeping? Um, the people that you you already have

That's a great question. And it's one that's a source of Pride for us because as we got in our q1 turn over numbers we have been able to make sure with all of you over a protracted period of time is that our turnover numbers continue to go down virtually across all positions. So year-over-year and quarter one or two phone numbers down. We haven't had the furlough or let go a single employee throughout the company during the situation. If anything, you know, maybe at the at the Restaurant level because we are operating under a slightly reduced hours format, you know, each crewmember each restaurant team members, maybe being shorted about two hours per week. Thursday would typically work.

but generally

Speaking. We have been in a very fortunate position in that our turnover levels have been extremely low and year-over-year have actually reduced once again cuz it seems to have been it's been an ongoing trend for the vast majority of of 2019 going into twenty-twenty. And so we're very very proud of that point.

That's that's a great result. Second question would be I know you at one point well prior to covid-19.

Yes, I'll take that one. So so the plan right now is we have suspended, you know, non-critical Capital spending for now having said that I would expect that as we watched things evolve over the next month or two and things continued on the current trajectory. Then I would look to us to reopen and look to do some re miles back half a year to the the new asset design. Yeah at the same time. We are currently working on we're looking at the new acid design and thinking about well given the covid-19 and how that may change consumer Behavior going forward are some are there some tweaks that we need to make that design before we actually go out and do the remodel so that work is is going on now. Yep.

I said I'd be hopeful that if things continue that we would look to do two or three Re miles back half the year using that new asset design.

Okay, great. Thanks. Thanks so much and continue to be well.

Thanks.

Thank you that concludes the question and answer session. I would now like to turn the conference back over to mr. For any closing remarks.

Thank you very much operators. I just want to thank everyone for joining us today. Hope you guys continue to remain safe and healthy with your families, and we look forward to not only speaking with you, but hopefully seeing most of you really soon, So be well. Take care.

Dead dead dead.