Q1 2020 Earnings Call

Good morning, My name is Maria and I'll be your conference operator today.

At this time I would like to welcome everyone to drive Shack first quarter 2020 earnings conference call.

All lines have been placed on mute to prevent any background noise.

After the prepared remarks, we will have a question and answer session.

Instructions will be given at that time.

Today's call is being recorded.

At this time I would like to hand, the call over to Austin <unk> head of Investor Relations. That's true you may begin.

Thank you and good morning, everyone I would like to welcome you to drive shocks first quarter 2020 earnings call. Joining me here today or what have you done our chairman of the board Vantacore, Our Chief Executive Officer in President and Larry Good field, our Chief Accounting Officer interim Chief Financial Officer, Yes.

Posted an investor supplement on our website, which we encourage you to download if you have not already done so I.

I would like to point out that certain remarks made today will include forward looking statements.

Actual results may differ materially from those considered by these statements.

We encourage you to review the disclaimers in our press release and Investor supplement interview the risk factors contained in our annual and quarterly reports filed with the FCC now I would like to turn the call over to Hanna.

Okay actually.

This is a wes good morning, everybody thanks for calling in.

For a panic goes into the.

Specifics of the quarter and in the period that we're in right now that'd be helpful to get a little bit of context in terms of the extraordinary events in the last few months I'm. The the tail. The first quarter is really the tale of two very different periods.

Period from January 1st through March 13th.

We actually had.

Very good quarter, we had actually extraordinary results at our venues we had lots of activity. We have some very exciting new initiatives that we think are going to provide a platform for substantial growth for us there's lots of positive things going on a than than I had a march 11th.

Yeah, I'm, sorry can be a suspended or suspended or you know to see the the basketball season, we closed our venues as most folks did two days later and basically have gone through position now they and operating business. There was a vibrant an act of one to one that like the rest of the retail America shuttered and waiting for.

Reopened.

Oh, the Oh, the businesses in our category, which I'd say that obviously entertainment. The you know the food and restaurant businesses et cetera.

We're actually very well positioned in that group and that number one the majority of our spaces outdoors number two our space actually naturally provides for physical separation between the days and so we feel very good about our characteristics versus others, but the start reality is that the company has no revenues.

Today, although that's just about not ready to change.

Hana and her team did an extraordinary job in a very short period right as soon as the Oh, the denny's or shut down to basically furlough activities cut overhead reduce our own under management teams all sheltered voluntary pay cuts. They did an extraordinary job, creating a good job for us and actually on on Bell.

Once we're in a very very good position, we have a substantial and unleveraged balance sheets, we have effectively no asset level that very little corporate debt, we have modest amounts of liquidity, but we're a public company have access to.

Liquidity, either through additional borrowings or through capital raises so it's actually a good place and most importantly, we think we're on the verge of reopening a number the side you're over the next couple of weeks. So I'm really an extraordinary period really an extraordinary job in my opinion by the entire team or did it not not just the executive group, but.

All the operating people to people in the field etcetera, and we look forward to reopening the stores and being part of reopened in America without really turned over to hand and huh anyway.

So before we get into the deck I just wonder if you step back and talk about what has happened over the last couple of months in where we are today.

At the beginning of Q1, we were really on track to have a strong quarter as west said and what that showed that isn't we now have proof of concept. We have some of the best assets in the Gulf Entertainment space and those assets are situated didn't really desirable locations. The three that we opened last year Raleigh, Richmond, and Westcon has absolutely blown away with every cell.

Okay.

But around March 17th we were forced to shut down or opinions and nearly all of our golf courses, which resulted as having fewer revenue not just not a great place to be.

But we acted really quickly to preserve liquidity and I had to make a lot of difficult decisions.

In a very short period of time, I'd West said and I Furloughed 4000 over 4000 to our staff, we went down to skeleton team at our corporate offices, we deferred all of our capital spending and we caused all of our construction projects across HTC and drive shack.

Just a few measures amongst many others. It served to put us in a more favorable financial position.

Today, we had none of our entertainment golf properties open and about 35 of our 60 golf courses open which has acted as some sort of liquidity for the business.

Right now, we had around 14 million and liquidity and a monthly cash burn of about one point sixmillion.

We haven't unlevered balance sheet with only a small amount of corporate debt assets worth a few hundred million dollars.

We have meaningful sources of liquidity in the value of our assets and as we look at reopening our opinions were planning for a few different scenarios.

The first scenario would be that we could open up sometime in May This website, which were hopeful and around 50% capacity for a month or two and ample capacity by the end of the yeah I.

I think that we're all hoping that there's going to be a vaccine or a cure for crown embarrassed by then and the people feel more comfortable going out in the same way that they did at the beginning of the year and care.

However, we know that this could I'll take a little longer. So we're all we're also making plans for the scenario that has its operating at a greatly reduced capacity through 2021.

As we are making these reopening plans. We are also thinking about the safety of our gassner employees and we've done a great deal to make sure that everyone feel safe not only to come back out to drive shack that to be able to enjoy themselves whether there.

In addition to Rijkaard P.P. and daily temperature screens of our employees were also going to administer anybody testing them before they come back to work.

Additionally, we're going to require their guests are to mature screens when they arrive.

To be sharing more details about a reopening measures in the debt, which I'd like to turn she now.

So I'm looking at page four and I really just want to highlight again. The fact that our company was on pace to have a very strong Q1 prior to the closures.

Our total company revenue for the quarter is around $61 million, which is 13% prior year.

I also want to point out that through the close your period, we continued to work internally on the development of the urban box as a reminder, the urban bucked experience will generate unlevered development yield of at least 25% to 35%. We expect it over time those returns will be even higher I'll speak more to that and just a moment.

On page five and again, our response to coping with critical and we worked really fast to reduce expenses in spending across the company as part of that reduction expense, we elected not to pay the Q1 preferred dividends.

Additionally throughout the period in the closure, we worked really diligently to create that reopening plan it was safe and financially responsible.

[noise] on page six when we speak about the focus it drive shack, we remain steadfast, but with one minor tweaks, which isn't we're first focused on safely and responsibly reopening our been years.

We are we're still focused on the entertainment industry and are excited about the filling our development plans for both drive shack and urban box.

Turning to page seven and again, we have more dry check the news committed New Orleans, Chicago at Newport and Manhattan. In addition to the for that are already in operation.

The two ever been boxes and use it we have committed aren't Dallas in Charlotte and we're focusing on maintaining an urban box pipeline, which has an active identified sites of over 60.

And we're looking forward to really no looking forward to resuming that site selection process as soon as things normalize.

[noise] page nine really again highlight how well our opinions did this quarter. Despite the business interruption caused by cobot 19.

Our opinions generated around $10 million, which is only 10% below internal projections and again due to the current run a virus as a reminder, we closed these things around March 15th.

So really incredible results. We also believe that we're going to be able to reopen as early as in the next couple of weeks maybe as soon as the end of next week and in a couple of our properties.

On page 10, and I went to highlight three of the initiatives that we had during the closure. It was really important to me to get the team, which was suddenly much smaller focused on the things that would set us up for success once we reopened.

First we wanted to focus on promoting cost efficiencies across the business and we looked at ways. We could further streamline our operations by reducing overhead and another thing.

Second it was important to me that we developed an operation strategy and for how we were going to operate coast Cobot 19, and the reality is once we reopened things will have changed a lot has changed over the last several weeks and we're not going to be able to operate in the same way we want to did before the virus at least for the foreseeable future.

We're going to be contending with things like mandated capacity restrictions smaller group sizes, and social distancing, which thanks to the way our buildings are set up it's actually very doable for us.

So our goal here was to really be proactive and to get our team engaged and coming up with innovative operation strategies for that's been years once we're able to reopen.

And third it was really important to me that we maintain our focus on growing the business.

I wanted to make sure that the innovation that makes dry shacks especial continued even in a modified state things like reservation development and game development continued.

On a smaller scale. We also began talking about ways. It technology can help us with this new world of social distance thing and we're discussing initiatives such as mobile ordering from your bank, which will begin working on scene.

As we talk about reopening safely I went to highlight on page 11, and in addition to the measures that I already discussed we're going to be providing training to all of our employees prior to their return to work. This training is going to enforce CDC guidelines and teach them how to where P.P. properly and most employees had never had.

Wear masks and gloves and pay shields when they when they come to work. So we want to really make sure that they feel empowered with the knowledge that they need in order for them to feel safe and also forget to feel safe.

As we look to the future on page 12, Chisom renderings of the side of our drive shack been used in New Orleans, and Chicago as well the urban box the news in Dallas in Charlotte.

Talking a little bit about the timeline, New Orleans has been delayed until 2021 due to trend of Iris.

And then some construction restrictions as well as and the two being used for urban by North Dallas menu and are sure I live in you will open. However, they will open in 2021 instead of at the end of this here.

[noise] I'd be turning to page 13, I've really been looking forward to announcing that we now have a name for urban box, which will now be name, but which will now be known as the pottery, we couldn't be more excited about the experience and again just to remind everyone.

The battery will really serve to bring food and beverage and technology together to elevate and put a modern spend on the experience of indoor many though.

The design process is on track and we began we plan as of right now to begin construction in the fall.

On slide 14, and bring your attention to the urban box or the pottery as we will now referred to it.

With the development cost of seven to 11 million on the high end and even to a two to 3 million, which we believe is on the lower and the development yield to the urban box or 25% to 35%.

We expect these yields to be even higher as we progressed due to end efficiencies in construction and operation. So we really do you believe that urban box is going to be a real positive growth path gross brasenose business.

So with that I want to handed over to Larry.

Thanks, Anna and it's great to talk to you all this morning.

If you turn to slide number 16, I'm going to first start out with a discussion of our first quarter performance.

And even though substantially all of our golf and Dolphin attainment was close by mid March our revenue for the first quarter 2020 was $48 million. After adjusting for me in of course reimbursements and this represents rod increase of $3.6 million or 8% compared to the first quarter of 29 gene That's me.

Mainly the result of our golf entertainment venues.

Raleigh, Richmond, and West Palm being aligned 2020.

But our traditional golf business did better than the comparable period, and 29 team or any more revenue during the payable days before we close.

So overall demand for golf was up in Q1, and what we're hearing on the courses.

It's that it's in demand for Q2 as well.

And given the you know given the company suspension of operations in March we are very pleased with the year over year growth.

And we would obviously have done better if it were not for the pandemic.

Now that the jumped a little more detail on the business unit level, our for drug venues contributed 10.1 million revenue before the close.

Which is good and frankly, probably would've been better it's device not entered into the popular consciousness around late February when we first started feel it's hard to say whether seasonality here played an impact with the overhang from coal that but or instinct is that Colby drove stone volume before we close to that.

On the American golf side revenue for the first quarter 2020 was around $38 million and that's already after adjusting for managed course reimbursements of $13 million.

And prior to the suspension of operations in mid March our same store revenue increase relative to the same period in the prior year by approximately 11%, which we see as a very meaningful jump from the prior years quarter.

And for US this is really due to an increase in total rounds of 14% aided by.

30% more playful days on our public courses and so what we know from this information.

Is that our warm weather locations in California, Florida showed a surgeon interest in green grass play during the first quarter 20 Twond.

And and all my final point on liquidity.

As west and had a mentioned.

In response to cover 19 and to manage our existing cash balances.

We reduced spending broadly including for long substantial majority or employees and we deferred payments certain operating corporate expenditures awful I mentioned earlier by Hannah and so as of May 1st.

We have around $14 million unrestricted cash and we estimate that are not weekly cash burn is probably $1.6 million per month.

You know, obviously excludes any new capital expenditures, which had been placed some temporary hold and with that all that concludes the financial section I'll turn it back to handle.

Thanks, Larry and I want to really quickly take this opportunity just say thank you to everyone for joining us today and as we work through this difficult time, I'm really proud of our team and and their dedication and as you. All have had heard and can tell we're down to very very small team and they have been relentless about.

Making sure that that drive shack and drive Shack vision had has been carried for which we cannot appreciate more.

[noise]. We're also really grateful for the continued support for our guests who have experience to have expressed their enthusiasm and excitement for our doors to reopen tweak hope to be very soon we're working tyres tirelessly to apply the lessons we're learning today to our business moving forward.

So that we come out even stronger on the other side more prepared.

For anything that can come our way so with that I'd like to turn it back to the operator for questions.

Thank you the floors now open for questions.

Ask a question at this time. Please press Star then the number one on your telephone keypad.

So at any point. Your question has been answered and you wish to removed himself from the Q press the pound key.

Our first question comes from a lot of Aaron Heck of J M. P Securities.

Hi, guys. Thanks, Travis call today, and I hope everyone on the drive Shack team is is healthy engines remain waldron independently.

[noise] [noise] also all George on liquidity side, and they got to sit on a $14 million of cash monthly cash burn I think you guys and 1.4 million that doesn't sound that God given everything going on.

Obviously, you're going to open up the traditional golf course, and some already open can you get cash flow positive here near term evolve the traditional golf courses are reopened.

Yeah, Erin and Tennessee. Thanks for the question, we can absolutely I get to cash flow positive with all of our 60 golf courses open. We have this is we have about half of them open right now 35.

And we are expecting that very quickly and the next call. It two weeks and that will had hopefully the remainder open the courses are spread across California, and and other states, but majority are in California, and they all kind of have different rules around when we can reopen in when we can.

Reopened and based on the six counties. So that's been something that we've been really working to navigate and the team they've done a great John but every day, we're getting word that we can open even more course it too as an example yesterday, we got whereas three more of our courses could reopen and we're hoping to to get Oliver early County.

He courses back up and running and so yeah. The answer to your question is is yes, and we did you see an up and running and with our the reductions that we made we can absolutely get there.

That's good to hear and then on on the demand side for the courses.

What do you see and what's changed in terms of your ability.

To maximize volume given social dispensing and then you know on food and beverage side or what's going on there on this new environment.

Yeah. They the great thing about golf courses is that there outside right. So we don't have a lot of the issues that we have or that we you might see with an a mall or a restaurant. That's just indoors. Similarly, we're positioned in a in a great way it drive shack because were mostly outdoor all of our bayes rock door, but specifically.

We're looking at the golf courses that team and the AIDC team has done a lot to manage the t. sheets and to ensure that there aren't groups of depending on the local rule and it could be singles that have to play it could be you can only playing groups of three or four and it largely Barry.

Right I can tell you the demand has been and it has not actually subsided at all in fact, we saw a surge in demand for on T. times across all of our golf courses when Corona virus kind of shut down everything else because in many cases golf with outlined its an activity that was.

Still permissible even under locked down I'm due to it being you know, it's a great way too to get your exercise and be outside because the virus Kent Kent spread outside it's essentially what they were saying at one point. So yeah I think to answer your question very directly we've seen a.

A surge in demand, we are managing and social distancing requirement course by course, it's very different it every quarter.

And as far as FNB goes.

In most of our courses were at grab and go FNB, so and they'll be a food and beverage cart outside or will we will socially distance folks coming inside and but no. One in the majority of our courses we are not doing sit down food and beverage that will change in the next couple of weeks and we're managing that my just spacing.

Tables out and rearranging furniture to be to be totally honest with you.

Much of that I've done makes perfect sense and then on the entertainment side, you talked about the unused potentially opening up over the coming weeks.

I think that they're going to be staggered in terms of the opening are you gonna have certain geography isn't it down but you open first and where do you. If that's the case, where do you have seen in those areas and politicians in terms of time frames across the different locations.

Yeah, Great question, we we've been watching it very closely and as Florida is that the first kind of state that comes to mind and it's looking very positive that west Palm Beach will be able to be open as early as at the end of next week and we're ready for that and you know it could take a bit.

Longer, but and we're seeing that that Florida is largely open but they they kind of slowed down three of the counties just due to the that the Corona virus outbreak in those in those areas and the prevalence of it and Palm Beach County was one of those but as of last night and the officials in Palm Beach County, where meet.

Turning to try to come to an agreement on how to accelerate and actually be able to not be locked down anymore.

Same for for Orlando, right, where in a position that we can and we can open.

As soon as we open west Palm.

As far as Richmond, and North Carolina go and Richmond, Virginia, North Carolina, North Carolina is operating under the same board based plan as most of the country is right now as a as of right now [laughter] North Carolina has bars and entertainment venues very specifically called out at.

Part of phase two they have not gotten into phase one yet so once they hit phase one it says in two to three weeks from that time. They will move on phase two we are in phase two and that is where we would fall in terms of opening.

What we think will happen is as other states begin to open up and that will also kind of.

Be accelerated and if what we're seeing across the rest of the U.S. as any indication and in Virginia.

We're looking at a similar circumstance with and being poised and ready to to reopen and but we're just kind of waiting to see what what the government said has there watching very closely everyday but it really looks like Florida is going to be first.

We're all watching really closely [laughter] yeah.

[laughter], yes for sure.

So when you get the green lights to reopen certain venues how long do you think it'll take to get operations up what maybe talk about the process a little bit.

Yes, so really good question, we estimate it will take us no more than three days, which it sounds very short, but there's good reason, we have been really preparing and specifically in Florida, considering that looks to be poised to open first we have restarted all of our I T systems.

Testing all of the bays and all of the equipment to make sure that their online and operational and fully functional AARGM to started to call die and to make sure that they have a team that is intact. When when we're ready to when we're ready to reopen at that time will bring them and we will.

No I'm conduct anybody testing, we will give them there we give them their training on their P.E. and on CDC guidelines, which they they already received before we close but we obviously want to do a refresher it's been a while are all of our vendors have drop ship orders that they have on.

Hand, and they are our ops teams have given them. So as soon as we're ready to go we essentially just have to to let our vendors knowing now have all of the product that we need to lessen it in a timely manner within a day Saar vendors have been really really great through this whole process and they're part of the reason a big part of the reason that three day timeline.

On exist for us.

Gotcha and then.

HM.

Profitability or entertainment venues with the new social doesn't seem guidelines as you kind of.

Sure.

Facilities, but what does that too.

Oh, you know the profitability as you season ended being normal.

Yes. So we've looked at this we've looked at it if we take the phased approach to that so.

In our minds when we open we're hoping that were open at 50% capacity and 50% capacity for high is greater than what a 50% capacity for a restaurant would be because were largely where outdoors.

So we will look at limiting the group size is to help with social distancing and we will see people outdoors. So we're looking at potential EBITDA loss in the first month.

In the second month, if we're able to scale up from the 50% say 75 or 80%, we're looking at being EBITDA positive and that is.

With agency being you know its current state right now, which is 35 to 60 courses open.

So let me just on the final 20%.

Right.

And if we stay at 50% Forever worst case, we will make other adjustments to our operating model to ensure that we are EBITDA positive. We're looking at things like our operating hours and our day. The days that were open for operation and then we'll take a further look at her overhead and what it would really take.

To to run these many years, we've done that and we feel really good about where we are we've been really really aggressive with that but obviously this is a very fluid situation. So as things change, we we want to be able to change with that to ensure our success.

Easing eventually are going to be able to charge more for bay.

More space is available just in general and the facility.

And you know I don't think that that's something we would want to do I'm simply for our guests and and others. I think we want to have our operations be is normalized is as possible and we would never want our guests to feel that we were capitalizing on the situation in any way because like everyone.

Yes, I think there's a lot of pent up demand here I think a lot of folks are just itching to to get out safely right and responsibly and I think that the appetite is going to be there would we look at increasing prices sometime in the future.

Maybe yes, absolutely that's never off the table, but where do we do it simply as a result of Oh, you know cobot 19, no. It's not something I would look at doing just just because of that yeah.

The development you guys announced that it was pause makes sense to conserve capital are there any negative implications that can come from that.

You have any construction loans, but no maybe there's something like that could be called.

Or the ability to underwriting target that impaired a little bit is any thoughts around development.

For the time.

Yeah, I mean, there's there's always.

There are always kind of repercussions to hitting pause on development.

The cost it the money that we put in will not be lost I can tell I can tell you that with certainty that money that we put into new Orleans as well as the urban box. It is simply on pause.

And it has it we don't have to start all over as far as our agreement with with the counties in the municipality that we're going into in New Orleans and.

And Dallas and Charlotte Dallas in Charlotte or are not an issue for us and with New Orleans, we've been they've been really really great about about working with us and alongside US during this time and to make sure that that we're set up for success when we were able to resume construction.

Gotcha and then the pottery.

It seems like that's setting has always been predicated on higher customer density. So how do you kind of navigate that challenge.

Know allocating capital to that given what's going on with Hogan.

Yeah, interestingly enough with the pottery and we kind of have enforced social distancing before social dispensing with the thing on our on the course itself and so when you're playing on the courts, you're limited and your your group size on the courts that doesn't mean that you won't be able to go with a large group. It just means that part of your group might be play.

Saying five steps ahead of you literally five steps are one whole ahead of you or behind you. So I don't see it being as as much of an issue and it especially during game play as far as the bar and the interior spaces of the pottery goes we're not planning on making any adjustment.

To our current design.

Once we went to release the renderings for the colony as an example, which is going to be our first venue that we open that is the pottery.

There's a lot of space, where we can naturally kind of space people out within the bar and still observed social distancing and we haven't exterior space, there as well and outside bar, so I'm not overly and I'm not overly concerned by by having our numbers be hit in the negative way from that at all its.

One thing that we've looked really closely at.

And hopefully I think we all hope that by the time by the time, we opened these and 2021, we're in a different world.

Our next question comes from one of Peter Slate of B T G.

Great. Thanks.

Everybody is doing well.

I just want to ask a having said.

But should be about 50% capacity when do you.

But some of the event.

Yeah, I mean, I think first the 50% capacity, we had to kind of we had to pick a number and I think the reality is none of us really no what will happen when when we're able to reopen we we have good indications that people will still want to come on for all the reasons that I just spoke about.

But the 50% capacity number with was based on what we've done really historically so when you look at our been use we did a range of capacities. If you looked at a Monday or Tuesday on their capacity was much lighter than it was on a Friday or Saturday night, I'm on a friend Friday or Saturday night, we would be somewhere between.

I mean, 98 and 100% capacity in most cases.

And that's just simply not going to be a safe way for us to operate because at that capacity, you're going to require a lot of and a lot of standing room, because that would that would that capacity comes long wait times and we don't want to we don't want how people congregating and are in our lobbies and in our.

Our spaces at least in the initial phases of the reopening.

Okay very helpful on on the pottery in terms of.

The timing I, just delayed until 2021 construction.

Beginning in the fall.

Awesome.

[laughter] 21 or should we be expecting.

Second half 21 on the first two locations yeah. No. Our goal is first half 2021, and obviously a lot of variables to contend with right now, but we want to it we want to kind of get those open its as soon as possible. It's something that we're really super excited about so it's definitely a focus and and I can tell you the goal.

First half of 2021 and as soon as possible.

[noise] [laughter].

Construction side I know, there's obviously lots of little stuff outside your control but.

Anticipate any sort of.

I guess relative to your initial estimates construction cost being maybe a lower.

Okay.

Maybe more available labor.

Consider the construction costs.

Yeah.

Yeah, I think it's possible I'm in the next couple of weeks, we're really going to how better answers for that question, because we'll be able to see for ourselves what what what the labor market and and other things are going to look like but yeah. We are hoping and thinking that the cost could go down and bye bye and amount.

We don't we're not sure what that amount is yet just due to the vast availability of labor and and other things that had been changed by by that.

[noise] aren't very helpful.

Last question on.

On on maybe on supply chain and some of the food and beverage or understand any sort of shocks there in terms of shortage of supply or anything and away from [noise].

One of the restaurant operators are some shortages of products and some spikes.

I'm declines other commodities.

<unk>.

Supply chain.

Yeah, we've we spoken to our vendors in the last week, we can a half about this it because we started hearing about you know hamburger meat and all of these other things that we're going to have to contend with as of right now does not appear to and to be something that will affect us we aren't making contingency plans.

And currently four in case that does happen specifically with with the meat supply in the U.S.

And we're in the process of doing that right now our vendors have assured us that we should see no interruption in supply chain, but obviously as we've seen things have have changed very quickly in a small amount of time. So we just want to be prepared for that possibility.

Uh huh.

Excellent My last question is and estimate on the additional costs.

[laughter], especially incur for now.

Safely.

TB testing that you guys are plant.

<unk> incremental cost out of a lot.

[noise] Yeah early early estimates there it's pretty and.

It's pretty minimal to be to be totally honest with you right now it's under $100000 and again, we only had four venue we had a head of procurement. That's worked really closely with some of these anybody testing companies and to to source.

The best what we believe are the best possible tests for and for a great price, we started and doing the math obtaining the masks in the gloves and all of this other P. P. E. Before there was this massive kind of run on on the need for the supplies. So I believed that we were in a position to obtain.

Jamie supplies at a much better rate and then than we might be if we were trying to do it right now and get a rush shipment and for for the end of next week that said there will be ongoing costs associated with that they were not able to quantify for you right now, but we should expect them to be fairly minimal and by way of just securing.

Gloves, and which we already do and then masks for prime poised to keep them to keep them state.

All right. Thank you very much.

Thank you.

[noise] [noise]. Thank you at this time I'm showing no further questions I would like to turn the call back over to awesome from it for closing remarks.

Thank you all for participating in today's call, especially during these difficult times, we look forward to updating you after Q2 days there.

Thank you that concludes today's call you may now disconnect.

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