Q2 2020 World Wrestling Entertainment Inc Earnings Call
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Hello, and welcome to the webcast.
Second quarter.
Yes.
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I will now turn the call over to Michael Weitz.
<unk> financial planning and Investor Relations. Please go ahead Michael.
Thank you and good morning, good afternoon, everyone welcome to W.W. Inc. second quarter.
While earning conference call, leading today's discussion Hargens get man or chairman and CEO as well as Fred Reading arc interim Chief Financial Officer.
Our remarks will be followed by Q1 eight.
Our second quarter earnings release earlier this afternoon.
Our earnings presentation, and other supporting materials on our website corporate got that you got me dot com fold slash investors.
Hey, it's got certain.
Forward looking statements.
Maintenance reflects our current you are based on various consumptions and are subject to risks and uncertainty disclosed.
Oh.
Actual results may differ materially and undue reliance should not place.
Hi, Jason.
We believe disgusting thing.
Financial measures reconciliation of non-GAAP to GAAP information is set forth in our earnings release presentation are available on our website.
Finally, as a reminder, cutting conference call is being recorded at the replay will be available on our website later today.
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Lastly, strengthening our leadership team.
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<unk>.
Yes.
Several key topics, which would be like you today.
Moving a discussion of our financial performance clearly need capital structure and I'll be itself.
Generated second quarter revenue approximately 223 million an adjusted 73.
It's more than doubled.
Wow.
A significant gross profit lower revenue highlighted the production expenses and we've been able to realize.
Although government mandates associated with my team has always been cancellation of live events.
And your degrees.
Same center.
Cost, which helped offset the loss of chicken the new merchandise sales.
During the quarter revenue declined 45 million basketball I mean, this distribution agreements with more than offset by the absence of licensing in sales and the timing of on large scale that Saudi Arabia, which was held in first quarter. This year.
Second quarter last year.
Just to note, however, freeze nearly 40 million driven by lower production costs as well as it used to.
Moving on the cost saving measures.
The broken adjusted or where the also reflected a reduction from.
Compensation.
<unk> lower all of your 2020 warms expectations versus on city plant performance targets.
Coming into the corner.
And our business to continue producing or televised programs raw smack down in the next D.
We also maintained our focus on Burlington engagement by developing new content for multiple platforms.
I like this effort includes production of undertakers last rod sales from the Batman V that weren't.
The development of New series the quest for lost track it builds on our partnership with any.
We also completed its been Caesarstone Abella, total Dallas, which achieved 9% degrees of yours to nearly 1 million viewers episodes and announced the six seasons near on he fall.
These examples or just generally ice.
During the quarter, we produced more than 600 hours.
WWD constant guard garnered more than 1.4 billion hours of consumption across television social digital platforms.
You should note we transitioned the production to work televised programs, Georgia Training Center and began broadcasting without Fasadistan, it's on more.
Television ratings raw and Smackdown reflect the importance of alive audience two weeks segment of our guns.
Benchmark surging brings for raw and Smackdown of a down approximately 19% begins on spec.
As compared to the proceedings encoding period here of course. This decline also reflects the seasonal pattern post Wrestlemania eating industry backers channel performance.
Despite the challenging environment during the quarter Monday night wrong here next T. ranked highest rated third highest rated programs respectively on using that.
In contrast to on performance on televisions assumption of WBB Anja on digital platforms, such as we view the Facebook increased 15% to 371 million hours digital video views receptor second I'm really not only in Q2 0.1.
And he has to make these figures would've been approximately 25% higher had we not agreed to do you have lost certain beverages and on social media.
Support our TV licensing agreement in that country.
It's more expertise consumption by are paid subscribers on.
He network as measured by digital video views increased approximately 55% quarterly as measured on a year over year basis.
<unk> Wrestlemania which occurred in April so viewership records with nearly 1 billion video views across platforms and generates the highest level, we had subscriber additions in our history.
Importantly, we capitalize on this environment to successfully launched the free version of the Wi Fi network, which was designed onto himself.
Ultimately a subscription.
Paid subscribers in the second quarter were up 6% from a part of your quarter.
First such increase since the fourth quarter 2018.
Given these outcomes demonstrate our creativity adapting our content production in marketing Unprecedent sounds.
Reviewer business performance in the quarter, let's turn to page four of our presentation.
Shows the revenue operating income adjusted.
By segment as compared to prior year.
Looking at our media segment, adjusted OIBDA increased 53 million, reflecting the impact of lower production goals revenue increased modestly escalation of domestic rights fees for a Ross knockdown programs offset by the unfavorable timing of our Super shared Alabama.
Everybody networks average paying subscribers declined 1.5% from the prior year quarter to approximately 1.66 million.
Indeed paid subscribers increased with higher paid subscriber additions and on the board.
Well executing the launch of the networks free version, we also made progress introducing localized pricing in select international markets.
Further developing their networks advertising capabilities.
We continue to believe in the viability of the alternative strategic options for the network as our potential partners have been impacted by code. The v. discussions have been extended.
Currently we are unable to estimate when an alternative options.
It's still believing the potential for transformative transaction.
Turning to our lives that business is shown on page six of our presentation.
Yesterday, we give them a lot of has declined 17.5 million.
On a 47.8 billion reduction in revenue.
Yes declines were primarily due to the government mandates cancellation indoor relocation of exams, which contributed 76 fewer jobs and the filing before.
Jumping in March we were unable us.
I need all the whole arena and stadium based against by spending audiences. During the quarter, we held no such events at this time, when you're not able to accurately predict.
Hosting fans and our venue, but its into returns like this with an audience is complete and say okay.
And our consumer products segment higher sales of merchandise our ecommerce site.
And you shop, nearly offset the absence of in UK merchandise sales.
No it increased 1.9 million, primarily due to lower operating costs.
During the quarter the growth of our ecommerce business was supported by growth in our collectibles category. The introduction of new design six new titles, such as block from a bowl title and the privilege signature series title.
I don't see instrument sales license console and bowl games continued to benefit from recent industry growth trends you are getting revenue also reflected the licensing somebody superstars and IP integration is popular titles, including finger fighters gallstones, while the company's bowl games.
Are you Supercard, everybody can champions, both generated more than 50% revenue on the fired report.
We will expand or game portfolio with the launch of an arcane style gain doubling of each UK battleground for 24.
Hey, Jay to her presentation shows selected elements of our capital structure.
As of June 30, we held approximately 548 million cash and short term investments.
This includes 200 million that we borrowed under our revolving credit facility to ensure we haven't necessarily capitals executing our strategy to deliver long term value to our shareholders.
The second quarter, we generate approximately 68 million in free cash flow as compared to a $2700 use of cash in the second quarter of last year.
The increase was driven by stronger operating performance improved working capital to a lesser extent flow accomplished and insurers.
Spread of coated 19 unrelated government mandates that impacted our business. We've been directed cancel postpone are we looking or light of them since mid March today, you've been able to offset the loss of ticket and merchandise sales at our live events by reducing operating expenses across all areas of our business.
Right and by the introduction of a new model for producing content.
Mitigate program in central restore financial performance, we evaluated all operations limited the comprehensive set of short term cost reductions and cash flow through actions.
To enhance doesn't w.'s liquidity birds, depending on the company's new headquarters temporarily suspend the reverse stock under a 500, there's no program.
In June 200 million from our revolving credit facility.
For 2022, we would use capital expenditures for by approximately 140 million and now as to make total capital expenditures of 40 or 50 million for you.
We're continuing to adapt our business to the changing environment with a focus on enhancing the production onto furthering fan engagement.
Currently we are evaluating the personal the forms to meet these objectives as well as potential investments to support our long term growth strategy.
We drive further intervention innovation, we intend to demonstrate financial discipline balancing near term performance and our long term growth objectives.
We gave him zoom or 500 million dollar stock repurchase program, which was temporarily suspended in April as reminder, we view our stock repurchase program as a vehicle return excess capital to shareholders after consideration of available investment opportunities.
The stock purchases under the plan will be executed optimistically that is when the repurchase prices below that begins these intrinsic value is conservatively estimated by.
Subject to doesn't have to use beans outlook and liquidity and when the returns and share repurchases compare favorably to other capital allocation.
Going forward potential impact of Cowen 19 on our business, which could be material remains uncertain.
Accordingly, we previously lived through our full year 2020 guidance based on the sustained economic uncertainties. We are not reinstate guidance at this time.
As I indicated last quarter, we continue to believe that our growth prospects remain strong.
Because he is well positioned to take full advantage the change in media landscape and the rising values and why sports content over the long term.
We're focused on developing new content or global distribution platforms, and increasing audience engagement in new and exciting ways.
That concludes this portion of recall and I'll now turn it back of the Mike. Thank you brain.
Justin ready for questions. Please open the line.
Well. Thank you if you would like to signal with questions. Please press star one you touched on telephone.
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If you would like to ask questions.
Our first question today comes from Macquarie Baker with Guggenheim Securities.
Hey, good evening guys. Thanks for the question.
My first thanks for vets the ratings have been soft recently I think we all understand that that could be.
Impacted production.
And the product how concerned are you about the ratings can you tell us what insight you guys have into you know what you believe is behind the softness and what's the strategy to turned the ratings around both.
In the near term given we have co the constraints, but also longer term.
Okay.
As far as rate was concerned guns.
More than any other sports.
Surely our audiences and part of the program.
Its audience interaction that always use the plus it's antibody and audience.
Got it was more doctors.
Origination.
So you can do.
The audiences.
Our success in our television ratings.
Yes.
Matching or lack thereof.
Notwithstanding.
That said, we came out I wouldn't characterize their story lines.
Ah character is coming into where we are right now.
And more of.
Content, that's not necessarily bring but yes, one that's right.
Personalities and their story outside of money.
Okay. Thanks <unk>.
One for I think Frank you guys have been able to do a lot on on the expense line here in the second quarter.
Should we expect similar cost savings and cost discipline to continue in the third and fourth quarter.
It looks like we're still going to be walking in a a code at world.
During those quarters as well or is there anything else.
To think about on the on the cost line going forward.
Well, we continued to be well you know disciplines in controlling costs, but going forward to the extent that we restart live events, particularly in a code constrained environment.
Yeah, we will see likely some increasing cost, but we're being very.
Cautious in the way that we're.
Deciding to add costs and it will depend on what the environment is and what we're able to do particularly around live events. So we have learned a lot through the coated process.
Oh, it was the events and process, we've used to analyze business on when we got identified something's that.
Likely turned into permanent cost savings or differences in the way that we operate.
Same time as I mentioned in my remarks were you're looking at some potential investments mindful of the long term and want to be well positions or content rights comes through renewals. So at this point, we don't have you forecast as I said, because we're still trying to figure out exactly how has the coding.
Situations went online in the impact on our business.
Okay. Thanks.
And our next question come from Ben Swinburne, <unk> with Morgan Stanley.
Thank you [laughter].
I would ask about the network you mentioned that there's nothing new to report on the strategic review, but how are you running the business today in terms of investing in new product.
No, bringing new content or new international offerings, Tiering et cetera, you had a product pipeline for that for that product over the last few years.
Before you started to talk about potentially you know offloading their rights and just wondering what you're doing today and what the plan is in terms of investing in that product and improving in any event you end up retaining it over the next couple of years and if you're able to spend what do you want to spend on it in this environment or are you seeing a little more cautious around resource Alex.
Yes.
Kick of CPG, our donlin.
As a better answer other than I know there, we can turn collaborative robot robust area of entertainment, but to Jr.
That's about four three.
Yeah happy to rent and your first I touched on the content piece that still were obviously investing in content under that some really successful forays recently with things like undertakers last rider result aggression.
Talk about the product road map there are few things that have happened recently with localization as weve localized price currency and are you I in a handful of lots end markets.
And we're also moving forward on on advertising. So we've developed that capability. We're still test end user experience I'm, considering the economic value and essentially evaluating does our general perspective on rolling out further capabilities.
That's helpful. I just didn't know if you guys had any update at this point on the Saudi event. Later this year I think the expectation is it probably is not going to happen, but I didn't know if they're a a decision had been made yet.
Yes.
Although that based on where they are in their economy.
Yes.
Right.
Okay. Thank you.
Thank you. Our next question will come from Eric Handler with MKM partners.
Yes, good afternoon, and thank you for the question sort of piggy backing on on this last question I wondered if you can give some perspective on the initial feedback for the free tier launch of the WB network and at what point do you expect to be able to layer in.
That advertising.
As well as I'm going with.
Alternative pricing for certain markets, rather than sort of straight line 999 level.
We'll go to jail excellent financial health care.
I'll take the pricing component for so.
I touched on we've done that in a couple of markets.
Oh already.
So one of the front end of your question.
Can you can you give us some statistics around the success of the free tier launch of the debit every network and at what point do you think you'll be able to layer in a that advertising component.
So you know we've built the AD tech capability right now and we're evaluating our our philosophy around advertising I would say and this will result on the free version are promising and again the strategy being this encouraging sampling of the contents and those guys that were looking at are active users and how we convert.
As active users to the pay service no specific metrics to share right now I think we'll we'll have more as we have more history with the free version, but again the initial results are very encouraging.
Great. Thank you for it.
And our next question from from Silly Carson with Cannonball research.
Thank you good afternoon, a couple of quick ones. So I believe this was the first quarter when they in Dan contract switched to the new pricing. So can you. Please I come from that.
Let's see if a this a bit pricing increase or change in pricing I mean do contributed to year on year chance and a quote content revenue and then I have one about buyback. Thanks.
Yes, we are under the new contract in this quarter you know, we don't disclose the specifics, but did not have an effect on your revenue period security change in content.
Thank you and then I bought a buyback I think Jim but now a lot of companies suspended.
You are one of the first a first one on that I heard of who says that you may resume what can you give us a little more detail why your thought now would be a good time to do it that doesn't try you wanted to communicate it to the investors can also.
Did you up criteria and sort of approach chance compared to how you can conducted your buybacks in twentynine team. Thank you very much.
Well the approach in the analysis did not change course, we suspended purchases buying stock.
Since I hadn't bought any stock since April I think the reason we're.
He said that we may.
Repurchases based on our analysis.
We think there may be an attractive opportunity in the same time generating very strong cash flow and feel very good about our wondering if position again of course final decisions on that haven't been married and subject to the business environment. Your age of changes from here.
We may not be purchased stock why don't like things were going well enough that we should we initiate.
The analysis and be prepared by backstop, if the opportunity for loans.
Thank you very much.
And next will be Eric Katz with tool research.
Thank you good afternoon so.
So it looks like you ended the quarter with more paid network subs and your average for Twoq, which I believe you mentioned earlier, which is interesting since you asked the free version on your first so is there any particular reason that you noticed in the data.
Our generics I got one point.
No. There there are few things going on I'm, not going to touch anything specific on the free version, but obviously.
Launching not as a contributor but I just think general part promotion across our platforms. We are doing new things across the digital and social ecosystem as well as with our TV partner as you would have been able to sample content on Oh, yes, piano Fs, one driving back to the network.
Some of the compelling content, we've had everything from undertakers last ride.
And weren't attraction definitely we've had some really fantastic cinematic mats attractions in our recent pay per views.
And then the last piece would be there to spend some macro industry factors. There's just a general growth in digital viewing in some that's accelerated post killed it [noise].
Thanks, I guess up on that topic is there a way to sort of maybe understand like what percentage of digital views increase as it relates a three network and then secondly.
To your point on social it looks like a kick out metrics. So the first time I can remember social media followers falling followers falling was their mobile reason why maybe a one off that was worth calling out I don't know affects the gossiping restriction in a certain market I don't know if that's the reason.
So on social media <unk> the impact on viewership was affected by the Sony deal that we mentioned, we're geo block uncertain.
And those numbers are no longer showing up particularly user generated.
Right.
Okay. That's it how much of the digital views increases related to the free network or is it just too early.
Right now we can you know it's too early to discriminate what's driving.
We usually have been viewership is up.
For prepaid subscribers as well through subscribers.
We can't really split the percentages right now.
So to say, okay, maybe just.
We didn't hurt ourselves by going through the three as opposed to read every trial for we have not hurt ourselves.
Yes.
That's helpful. Maybe just one more if you don't mind.
What we've seen cord cutting accelerated the pandemic, which has made it easier for streamers to acquire subs than just even six months ago at same time, which we've talked about the rates being the challenge, which is understandable. Some stars in the sideline, but for some of the also looking and it would seem like maybe you're negotiating leverage potential license or the network could have potentially taking a hit all the deals on hold.
So they would be helpful to understand what really stands out about the network to the Licensors and then what gives you sort of confidence this deal looks the same whether its 612 months from now when the deal gets done instead of maybe coming in a bit lower than initially expected.
Well I think you.
Obviously, as we talked about continuing to invest in the network and driving further subscribers and engagement building very compelling content, which makes it attractive.
Potential partners. The other part is just the way.
With the addition of.
Streaming services with a number of entity gives me.
Comcast et cetera, we believe that there there's.
The product will be very attractive for some of those platform so and the overall macro trends as you mentioned on the nursing increases in screening and we're seeing some changes in some of the limited streaming properties that are that are not doing well, so they're gonna be put or winners and losers and.
Certainly make that nothing content with the valuable for one of those numbers.
That's helpful. Thank you.
Thank you our next question come from Brandon Ross the flight shed partners.
Hello, everyone. Thanks for taking the questions I had but some follow ups and the ratings issues that were identified a little earlier.
First why do you think it's easier for Ben why do you think ADW and exceed have bounced back better from the initial coal. Good shock then brought and snack down and then based on your commentary last quarter. It seemed to have a strategy for fixing walk that indicated.
Patients and quote getting over from the word Cowen.
Did you abandoned that plan in firing he then and more broadly why did you fire he men.
And lastly.
Given Paul's recent relative success with NXT do you think he could be up help on raw endorsed smack down in an elevated level. Thank you.
That was a law.
Sorry, I could we could break it down if you want.
Just first why do you think ADW NXT have bounced back better from the initial kopec shops and branch backed up.
So those are new.
Something good.
And what have you.
Raw and Smackdown feel more equal.
As we are going.
And I just.
As far as continued on actually what would you building paired with Georgia.
Constantly.
Since March.
Over the coming on smack down.
Matt.
Oh, it's always going back in terms of all that we do.
Our goal is concerned.
Britain were big job.
In terms of creating.
Okay, and then lastly, maybe if you guys could speak a little bit to the role you foresee Kristina having well she had for handing company strategy or stick to more traditional CFO duties in other words, it's it's you're going to have sort of.
George and Michelle type role or just be a straight CFO.
Well she's going to have as as towards getting is I haven't you know acquisition strategy data reporting to her so it is abroad CFO role, including including strategy.
Yes.
John the shelves as you know we have nothing you finance so that's fair enough.
Got it thank you guys.
Thank you. Our next question comes from Stephen King held with Wells Fargo.
Thanks.
Sorry to be have you die horse here on ratings, but I was just wondering if you could speak a little bit to periods in the past when you've seen some rating softness.
How long it took to rebuild viewership I think right now there's maybe a concern that some of those viewers have found to streaming services because we've seen such strong sub growth in that part of the market back I would just love to hear what you think the timing is to to recapture stopped that audience. You know just something that gets done in Mysore or does it take.
Years, but a couple of follow ups.
No. It just takes months among.
He used to be in front of an audience.
That's that's the main thing.
From an audience there.
Right.
So to speak and no matter, where you actually we actually.
We are able to shoot.
The audience.
Going into a lot more than any more.
There are subject to report.
So.
I would like to think of months away.
Okay.
Yeah, Okay and that it looks like core content rights for down just a touch sequentially I think you've talked to the past that international is coming down a little bit at U.S. is growing should we think about that trending down sequentially kinda each year, and then stepping up in the fourth quarter or will we start to see that.
Grow sequentially from here because in some of the recent contracts that might have been renewed.
Well I think the impacts in the corner or are you said.
Talk about smaller deals in international markets, which aren't really challenged by going right. Now. So I think some of what you're seeing is are these what's happened because of the environment around.
Around the world.
Media, particularly with smaller partners in smaller markets overall, it hasn't been materials to our company. Even on you know we don't have anything.
For the rest of year, there no major renewals coming off so I wouldn't expect big changes in this line item.
Great and then last one for me could you maybe just speak to incremental margins as revenue does start to come back when you can shoot front of a a live audience. I think in addition to just like travel expense. There is some talent cost if they sell more consumer products that come back says we start to see revenue you know reba.
Regarding how do we think about incremental margins on that Red Mark.
Well he goes just at a high level overall as I alluded to have been talking about the reentry into live events, particularly given the complexity has as we come out of the television is that it's going to be very much market by market is likely to be limitations the situations change in quite rapid.
Liana city by city. So I think we we expected margins declining because expenses are going to go up into short term now that you think that will at some point you know your guess is as good a mom is mine it will return to normal but no doubt we were benefiting greatly along the way that we're producing products today and when you go.
Back to touring live events costs are going to lots of margins will likely get depressed but.
You know at some point, we'll get back to.
Hello audience guidance at some point and then I told you merchandising little ticket revenue, we would expect them to stabilize that where the word at that point, but again, that's very difficult second win.
And the answer.
Yeah, Thanks, a lot.
Thank you next question will come from John Belton with Evercore.
Hi, Thanks.
Just wanted to ask in another way on the expense on the expense area. So that's like your media segment operating expenses were down about $50 million Middleby Murray during the quarter. So just trying to see if you're going to help kind of balked at exactly where that's coming from I'm used to talk about three areas of investment.
So your media business.
There were localization of content Digitization of W.W. network instant internationally. That's it seems like it's still kind of making those things are getting a lot of expense savings I. Just wanted to you can give any color on that went out a quick follow up after that.
Well most of these bids gave some savings is coming from.
Production costs is as I mentioned, because the way we're producing the we show at the equity performance Center also in general expenses operating expenses across the company. They both have been Syria and other areas because the cost saving actions I mean, we're continuing to invest.
In content of the one thing that has been just one of the county.
Just because of the environment is significant investments in developing.
So PC unit International market for example, those have slowed down but the content investments has continued.
And we'll just benefiting from a cost reduction actions in the lower cost.
On the show because it's not boring is in one location.
Got it and second question is good looks like there was a small acquisition you guys did Miss Mike.
I'm wondering if you have any comments on that and more broadly about the M&A opportunities you're seeing I would assume that there's some.
Some assets come in for sale in the current environment to this kind of your thoughts on that as well.
Hey, John we had trouble hearing the first part of your question would you mind repeating that.
Yes, it's just on that the small acquisition all that said, we announced earlier this month.
All right slate.
So any comments on that and then thoughts on the M&A environment more broadly for you.
Well the ball was the content purchase deal I'm very straightforward.
Very very small size in terms of investment.
Right now.
Well not actively looking at any M&A opportunities hopefully they will come along we are actively we do have investments in certain new technologies in new areas and looking for opportunities, but there's nothing.
There.
Hi, Thanks, everyone.
Thank you. Our next question comes from David Karnovsky with JP Morgan.
Hi, Thank you.
As you kind of just talked about I think prior to the prime demo to international expansion for your core brands and actually also was one of the areas where your investment spend let's focus can you just kind of discuss a little bit about how you're thinking about this now invited on global disruption, we continue to see and whether this is still our key long term opportunity career.
Well certainly to keep the long term opportunity we believe.
We believe there you know we have a large audience outside the United States that we can take advantage of I think the new deal as an example that and the you should we get over there just the uncertainty right now and the fact that.
Yes, no compelling reasons to move forward on those at this point time, but as we get out of the Cobiz situation. There certainly will just don't know went on.
Opportunities still there's still believing that both with.
The other potential to have performance centers with our media partners and network growth of the network you know we see continued opportunity.
Okay, and then I mean, it's been mentioned several times I'm kinda, it's called the importance of a lot of audience, but absent that they never run a normal touring operation or any.
Kind of interim solutions, you might consider to performance center is excusable at some point.
The kind of switch production to extend the location the outside with some kind of audience.
Thank you all know northerners.
Instantly.
Okay.
Okay.
Thank you.
And our next question comes from Bernini, turning with Rosenblatt Securities.
Great. Thanks for taking your question.
Hi, just returning to cost here and I know you hit on that with live events, returning cost should be returning as well, but there should be some sort of revenue offsets went live events do returns do you expect that could be a drag on EBITDA as well.
Well I think.
Initially.
Seems that from what were you know it looks like the way that this has been more evolve that the.
Good news in the amount of people we've put in the venues in the cost of doing sort of distancing and other factors.
But on the events would not allow us to fully recoup the incremental costs through the new merchandising ticketing.
All that is highly uncertain.
Yes, no testing.
When and where it will be able to do those events what the size of the audience can be what the appetite and consumer will need to come to those events and so I.
I think it could be prudent and saying initially we know we go back and we think we certainly want to go back as quickly as you can.
Is likely that don't do some drag on profit margins because.
Got it and maybe just one follow up.
Do you do you expect that with live events they'll go back to 100% lives that are right away or whether it be some sort of hybrid approach in the interim.
Well, we believe it's going to be a phased approach you guys. That's what we're hearing from various locales and menus.
Changed.
Probably will be.
Our country and certainly won't be.
What it was last three refills of initiatives.
Got it thank you.
Thank you and that does conclude the question answer session I now turn the conference back over to you.
Thank you everyone. We appreciate you listening to the call today. If you have any question do you do not hesitate to contact me Michael Weitz for Michael you know a narrowing investor relations. Thank you.
Thank you.
And that does conclude today's conference. We do thank you for your participation have a wonderful day.
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