Q3 2020 Valvoline Inc Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to the Valvoline fiscal third quarter. Two all all lines have been placed on.
Well mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If he would like to ask the question at that time. Please press star one on your Touchtone phone.
Mr., Sean Cornet head of Investor Relations. Please go ahead, though [noise].
Good morning, and welcome to Valvoline third quarter fiscal.
2020 conference call and webcast hopes for the quarter ended June 32020 at approximately five PM Eastern time yesterday August Threerd and this presentation remarks should be viewed inc.
A copy of which is available on our Investor relations website at investors.
[noise] Dot valvoline dot com preliminary until we file our form 10-Q a.
A copy of the news release has been.
Furnished to the FCC on a form 8-K.
With me on the call today are goblins, Chief Executive Officer, Sam Mitchell and Mary Michaels.
Hi to any of our remarks today that are not statements of historical fact are forward looking statements.
These forward looking statements are based on current.
And are subject to certain risks and uncertainties that may cause actual results to date.
Babbling assumes no obligation Jason to update any forward looking statements unless required by law.
In this presentation and in our.
Marks we will be discussing our results on an adjusted basis unless otherwise noted.
Adjusted results exclude key items, which are unusual non operational or restructuring in nature.
We believe this approach enhances the understanding of our ongoing business.
A reconciliation of of our adjusted results to amounts reported under GAAP in a discussion of management to use of non-GAAP measures is included in the presentation appendix.
The non-GAAP information provided is used by our management and may not be comparable to similar measures used by other companies.
Our financial results for the quarter.
For the fiscal third quarter Valvoline delivered reported operating income of 88 million net income of 59 million and as the third.
Cash flow from operating activities was 271 million.
The key items in the quarter were non service pension and OPEB income of 7 million after tax followed by legacy and separation related expenses of 1 million after tax.
In Q3 of fiscal 2019 key items totaled $5 million of after tax expense, including business interruption expenses of 4 million.
Restructuring related expense of 3 million, partially offset by pension and OPEB income of 2 million.
Excluding key items results for the current quarter, Inc.
6 million in adjusted EPS.
Year to date free cash flow was 106.
And move to slide four let me turn the call over to stem to discuss our results in operations in more detail.
Thanks, John Good morning, everyone.
My Hope is that you and your families are doing well and staying healthy and so that's the Kelvin 19 crisis unfolded, our business was impacted by the abrupt decline.
The restrictions designed to limit the spread of the virus.
As those restrictions began to ease our business bounced back quickly as you saw the sequential updates that.
It continues to perform well.
As we monitored the development.
Health and safety of our people and other key stakeholders to increase our financial flexibility.
Our results for the quarter arc.
Quite strong and came in ahead of our expectations considering the scale of the impact that we saw in April blind was led by our quickly tubes and core North America segments.
And quickly UBS, we saw an increasing contribution.
Within core North America.
Jeff DIY category led the recovery.
Well do it for me lagged the why the combined impact of our retail volume performance and lower costs and expenses benefited core north America's profitability.
In fact segment adjusted EBITDA grew 20% over year over year.
Significant sequential improvement in volume during the quarter for the pace of.
Q3 results also include generating $80 million in free cash flow.
Okay.
45% increase from last higher to co the 19 and our performance.
In Q3, so that the underlying business remains healthy and demmons of our preventive maintenance model.
Let's take a closer look at the recovery.
Okay.
New customer acquisition as a fundamental.
Component of our approach and quickly attracting and retaining new customers. Since we entered the business that's been especially.
Store sales growth.
Were impacted by covert 19, beginning in the second half of March.
We saw an increase mix of new customers in April and May then in June we saw a significant increase in new customers in same store sales performance.
Despite the fact that we reduced our marketing efforts during the quarter.
This is due in part to the strength of our stay in your car service.
Bushel distancing.
In company owned stores, we saw an 8.5% growth from new customers versus Q3 last year. This increase a new customer acquisition was a key part of the recovery and same store sales during that have advantages helped to.
Drive this growth and new customers.
We worked hard to keep our franchisees healthy and unlike some competitors in the DIFM space, we were able to keep our stores open and prepared for the recovery we've seen.
Combined with their excellent new customer acquisition opportunities.
Yes.
We also made some health focused enhancements to our in store experience that are meaningful to both new and existing scores and favorable comments in our survey results.
The source.
First of these new customers is also signet.
As it.
$450 million oil changes per form than a typical year in the EU.
Let's do it forming market.
Valvoline instant oil change has agree but a relatively low share in the broader DIFM space.
This creates a large addressable market for our convenience based safety oriented most of our new customers have come from.
Slide the quick groups category for sometime in Q3.
We are folks.
Yes on maintaining this momentum and winning new customers in July we launched a new AD campaign that highlights the convenience and safety aspects of our in store experience targeted at customers, who havent yet tried valvoline.
Representing further opportunity for us to grow share.
Let's turn to the next slide.
Turnaround in same store sales during Q3 was remarkably fast.
In fact June system wide same store sales growth was nearly back to our points back to those levels and company owned store.
Concentration of franchise stores located in regions that were hardest hit by the vice.
Our also recovering but not as quickly.
Transactions, reflecting changes in miles driven.
Had been the driver of same store sales average ticket has remained strong.
Throughout the pre the recent over 19 period.
At a level consistent with recent pre cobot 19 history.
With the recovery that we've seen we have not slowed.
We expect to open 20.
Newly built company owned stores as part of our plan to add about 40, new stores across the system in Q4.
These addition.
40.
Excuse me of nears.
Unit growth this fiscal year.
With newly build company stores accounting.
For more than a third of the growth first for fiscal 2021 supports our roughly 100 stores per year goal and.
In 50 newly built company.
Slide eight shows the rapid recovery of volume and core North America.
Which ones don't nearly a 50% growth in June.
The improvement in volume through Q3, with well data from the DIY category suggest that motor oil sales bounce back quickly in the quarter there are still below.
Our retail volume performed similarly in Q3 with some promotional.
Quarter.
While the recovery in DIY was rapid pace in DIFM lagging comparison.
The significant destocking impacts we saw in the install a channel early on mostly.
Despite more normal inventory levels in the jet fuel and our continued success winning new accounts overall installer volume was down substantially versus last year.
Overall, we expect core North American volume to improve.
Prove as miles driven recoveries miles driven declined an unprecedented 40% in April year over year trends have improved.
5% decline and based on when gasoline demand data.
June decline in the mid teens with of July declines trending in the house.
Hi single digits.
Core North America profitability improved substantially year over year.
And helped drive strong cash generation.
Driven by higher as well as a lower level of expenses.
Margin improvement was driven by three main factors.
Air margin retail channel volume was the most significant contributor.
As installer channel volume recovers, we expect a more normalized mix in Q4.
Second we also saw positive price cost lagged benefits due to lower raw material costs, which we don't expect to continue going forward.
Third.
Savings initiatives continued to provide meaningful reductions in costs and expenses. So we should begin lapping these impacts in Q4.
With mix and price cost lagged benefits not anticipated to be as meaningful.
For Q4 to be near $4.
The underlying health of the business remained solid and we expect to made continued progress in stabilizing segment performance moving forward.
Let's review International results on the next slides.
Turning to progress during Q3 continue.
And with volume and international as performance in June.
While China saw strong growth.
Every and volume was driven by several regions.
So in India had to shut down at the plant in late March at Par district, Lockdown measures across the country.
So we reopened at the end of May on restrictions.
Many countries across Europe, and Asia, and a few locations in Latin America began to reopen leading to improved volume in those areas as well during the quarter.
There continues to be disparity in the severity of restrictions across geographies and we expected timing of recovery will vary by region.
Over the next quarter or to India in Latin America are generally seen.
Richter limitations on activity and are likely to lagging recovery.
Anticipated to see more steady performed since.
We remain closely.
Paul So that we can meet their needs and capture any opportunities that might come up long away.
Margins were primarily impacted by foreign exchange headwinds and reduced fixed cost absorption from lower volume.
The decline is rapidly internationally.
Often acts as a counterweight.
Overall segment profitability was also impacted by lower contributions from Jvs they'll partially offset.
By reduced discretionary expenses.
While near term opportunities remain we expect underlying market dynamics to drive growth in key regions over time with can.
Continued expansion of the car park expected in should grow as engine technology.
And need for premium lubricants will grow as.
As for our business and we plan to make ongoing investments in channel development and Brett.
Let's review our recent.
Okay.
If I mean, our brand is important across the business. We recently launched our original motor oil campaign across our lubricants business in core North America.
And international campaign builds off of Dalvance heritage of being the first trademark motor oil brand Premera.
The campaign is broadly about innovation celebrating our first and the motor oil category first racing oil versus high mileage oil person.
The across our motor all product lines in 2020.
As we focus on further penetrating internet.
Just to build strong brand equity and awareness, we've learned that the heritage and innovation associated with baffling resonates well with our target customers and consumers.
Original motor oil messaging is more than an AD campaign combined with channel development and a robust value offering with our product technology brand building into key elements of our strategy to profitably grow our share globally over time.
And with that let me turn it over to mix. Thanks Sam.
No it's for Q3.
Steeper declines in volume and sales.
Hi, the rapid recovery across the business sequentially in Q3.
The sales decline impact on profitability was moderated back.
The variable nature of our cost structure, as well as lower costs and expenses and favorable mix.
A higher mix of retail volume and lower raw material costs and corner with America, where the primary drivers of the improvement in all while reduced discretionary expense.
Our broad cost savings initiative was also a contributor to both favorable margin and lower SGN 18.
Mix and lower operating expenses drove adjusted EBITDA growth of 9 million in court corner with America, which was more than offset by declines in quick loops and international.
Based in our recovery in Q3, and full year outlook, we recorded $10 million, a variable compensation expense and unallocated and other.
This partially offset the benefit to SDMA, we recorded in Q2.
While we're pleased with the rapid recovery of business in the quarter Covance 19 did have a significant impact on our results. We estimate that the pandemic reduced EBITDA in the range of $30 million to $35 million nearly all of which happened in Q3.
Without the crisis, we replaced for significant growth this fiscal year, which is a testament to the fundamental health of the business.
Let's move to slide 12 to discuss cash flow.
As Sam mentioned earlier as the covered 19 pandemic spread globally in March we began taking decisive actions to strengthen Alec.
Could it be position and increase our financial flexibility.
The net effect of these actions split to increase our total liquidity to just over 1.3 billion at the end of June while leaving our net debt essentially unchanged.
Our balance sheet remains strong we have ample access to available credit and nearly 60% of our liquidity is held in cash and cash equivalents.
Based on where we stand at the end of Q3, we are well positioned to weather the remainder of the cobot 19 crisis.
Importantly, the business generated positive operating and free cash flow during the quarter, despite substantial topline declines.
Operating cash flow in Q3 increased by $37 million year over year and free cash flow grew by 25 million.
Most of the increase is due to aggressive working capital management as a result of the crisis, we expect to normalize our approach to working capital in Q4.
With our healthy liquidity position and ongoing cash performance, we are ready to capture any opportunities that might arise going forward.
Let's move to the next slide to read.
The covert 19 crisis inspires them over and we expect ongoing impacts for example in our largest market of no North America. There are state specific challenges.
However, the resurgence of cases in recent weeks has not yet had a significant adverse impact to click moves or core North America based on July's performance.
In fact preliminary July results indicate that Q4 is off to a good start with July system wide same store sales growth expected to be above the 7.1% level, we signed June.
Overall topline.
Thank you for with strong sequential improvement, though still below prior year.
Although uncertainty remains visibility has improved since last quarter. So with only a few months left in this fiscal year, we're providing limited guidance.
We expect Q4 system wide same store sales growth and quick lubes to be in the high single digit range with store additions of roughly 40 units.
We anticipate that are.
Full year adjusted EBITDA will be in the range of 475.
I want to emphasize that the guidance, we are providing is dependent on current expectations.
Which could be significantly impact will bid 19.
Such as incremental state regional and country specific restriction.
Miles driven.
Now I'll pass things back to Sam to wrap up.
Thank you Mary.
Discussed on last quarter's call one of the advantages of our business model is its resiliency, which you can clearly.
Three this is similar to our performance during the last recession, a short term impact followed by a quick bounce back.
Whether consumers are buying a new vehicle or taking care of the one they already own preventive maintenance is.
Comers locations to remain steady and for our business model to perform well across cycles.
A multiple routes to market and geographic diversity across our fleet.
The diversification protection during this volatile time.
With core North America benefiting from its highly variable.
It's cost lag and strong right.
They'll channel performance offsetting a deeper cold and making impacts in quick lube and international segments.
Let's turn now to the last swap reacted quickly and made the right moves to enhance our financial flexibility and liquidity as of the coven 19 crisis began to spread.
We weathered a significant impact in Q3, but recovered quickly thanks to the durability and resiliency of our model and the efforts of our teams.
Given the current status of Govan 19.
Which is subject to change and what we're solidly on the road to recovery.
With a strong Q4, we expect our 14th straight.
Year of same store sales growth in last years.
Adjusted EBITDA.
We expect Q4 to be another step.
Stabilized core North America and develop international.
What we have learned during these unprecedented times is that our in store execution is effective because of the quick.
Easy and trusted customer experiences and because of a safety aspects were well positioned to continue to take advantage of the opportunities we have to go quickly.
We also intend to accelerate our share growth by being a consolidator the market.
This is a key aspects of our long term strategy.
Driven business model for now.
Now, we're staying highly focused on finishing the year and a strong position and building momentum for fiscal 2001 with that I'll hand things back to Sean to open the line for Q anyway.
Thanks Sam.
Q any to limit your questions to want.
Have time to get to everyone.
Chris Duff please open the line.
Once again, please press star one on your tech.
Sean filings once again Dec star one to asking audio question.
Your first question comes from the line at Simeon debt.
Thanks, everyone.
On.
Good morning, Sam.
My questions on North America and.
Gross profit per gallon.
You take us back it was a year or two says were rising and it took a little time.
To get price increase I wide channel and now we're seeing moderation in prices do I guess.
John theory prices will come back down to consumers as well and that's why you're calling for a normalization in gross profit per gallon.
Can you talk about the dynamic what occurred in terms of given.
Just any volatility that we can expect going forward.
Right, Yes, historically valvoline.
As always been effective it had passing through cost increases.
Through the different channels, whether its DIY installer heavy duty and.
And yet in DIY, you tend to have a little bit longer price lag impact.
As I have some may recall much of our volume on the installer side also our pricing to the quickly channel.
Is contractual and that adjust based on posted base oil prices on a quarterly basis. So you really don't get much lag effect there for you've got set promotions.
And with the different retailers, it's more of a negotiated price increase and you can see some lag so in a rising cost environment.
Similar to last couple of years, you do see bit of a headwinds from that.
In the current environment in DIY in parts of the installer business, where we had rapidly falling raw material costs. We benefited from that positive lag effect in Q3, and and then going forward than that really and then we have taken actions similar to our competitors and.
Passing through.
Price decrease.
He says so.
Paying down our unit Mark.
Vince from Q3.
And we'll see that across the us.
Particularly the core North American business, both in the retail channel and on the installer side of the business. What it did note. During the presentation is that we expect the margins to be closer to the $4 per gallon range for total core North America.
Which is.
Which is still a very good level when you consider.
Where we were last year and so we're confident that we made some nice steps forward and stabilizing those those margins, particularly with some of the cost savings efforts that we've executed.
Yes, and then my follow up Sam to that would be I think the $4 is still a better number and then I think the pre covidien or 2021 or 2020 guidance in total and so is there anything structural that $4. The for dollar level becomes a normal or is it still subject to the.
In the market.
I mean, there's still a range that we're talking about right. It's an alert it were structurally better than where we were going into 2020 and much of that has to do with the effectiveness of our cost savings initiatives.
And and.
Possibly some improvements on a on a relatively small basis structurally in pricing and margin to different segments.
But.
In that range being in the high threes to low $4 range is is a good good place to be for us.
Thank you.
You bet.
Okay.
Your next question comes from the line up Mike Harrison with Seaport Global Securities.
Okay.
Hi, good morning.
Okay.
Hey, Mike.
Congratulations on a nice quarter in a challenging environment.
Thank you appreciate that.
Sam we typically think of oil change activity is tracking miles driven you mentioned that miles driven.
You know beside gasoline demand still down a little bit year on year.
Hi, guys are guiding high single digit gross.
In the quick Lubes business, you mentioned, the new customer games.
Is that Delta all share gains or do you think that there is some pent up demand.
That we're seeing from still from lower oil change activity that happened in in April and May maybe a little bit more color on how you're seeing.
Yeah demand shaping up right mouse say I really don't see it has pent up demand and the results that were seeing maybe we saw that early on in the bounce back.
In late April in early May that there was some pent up demand.
After thing.
Began to open back up but if you look at our US our comp same store sales performance for the quickly business and what we've been delivering in the last couple of months you had a very consistent with what we're delivering prior to the coven 19 impact. So this really tells me that were back on track.
Executing our plan executing a very strong customer experience.
At the marketing programs are working so for us to be delivering that while.
Driving behavior hasn't quite returned to normal.
Does imply that our share growth is even.
Increasing at a faster rate than it was prior to Copenhagen.
Okay. So.
Im really impressed with the performance of the quickly business and.
The momentum that we've got there right now and you did call out that the safety aspect is becoming a more important benefit to consumers and and so while we're working hard to introduce valvoline instant oil change to more and more consumers in the and the markets where we compete.
The safety benefit and the fact that you stay in your car really resonates well with.
Our customer base, and so were messaging into that with our advertising and some of the safety processes that we have in the stores really we're getting some great feedback from the customers. So I just have a lot of confidence that we're going to be able to continue to grow share and execute at a high level in driving same store sales performance in Q4.
And into fiscal 2001.
And Mike I would add to that we're seeing.
Almost 60% of our new customers coming from car dealerships and.
Tire and repair shop.
It's it's it's really showing that the competitive advantage of our quick easy trusted and safe model.
Relative to some of our competition.
So I do think that.
Thats been ad.
The reason why we've seen some divergence and miles driven still being down year over year, but our comp store sales.
Being up in June and then in July.
Better than we were in June so.
As Sam said, there might have been some pent up demand, but I really think that the broader.
And this is really taking share.
Yes, and it's like backed here just question regarding the demand environment.
We do see it is is very much dependent on miles driven we see the impact that has had in quarter with America. We know that has an impact.
On Valvoline instant oil change too and certainly of international businesses. So it's something that we watch closely and.
The fact that it hasn't returned to normal implies that theres some good upside as.
As miles driven improves hopefully through the balance of year, but we have to admit that in this environment with the still the high level of cases that we're battling.
In the U.S. and other markets.
Ed that recovery of miles driven it's hard to predict.
The the key point that I think.
Everyone should take away is when you look at our performance in this environment. It's it's obviously, we feel like we can deliver.
Our strong results into Q4.
All right thanks for that and then.
Sure costs I wanted to ask.
You about three different buckets number one the core North America SGN eight number appears to have had a lot of discretionary cost taken out how and also.
The advertising JMP quick lubes, how much additional costs as a source.
We'll comment on incentive comp.
And whether we're going to see another headwind in that corporate unallocated.
Segment.
Yeah.
The let me speak to the advertising.
There you can speak to in incentive costs and.
In Q4, we are increase.
Using our advertising spend both the core North American business, and then also the quick and and in both businesses.
You cut back significantly.
During Q3, so we expect to see a more normalized level next year spend and.
Both core North America, and and the quickly was business so.
Fair enough people want to provide a more detail, yes, the only thing I would add on the other discretionary spend pullback in corporate America, we certainly saw pull back in.
It travel expenses, our field sales force largely in the quarter.
And we did benefit as well with.
Well, then discretionary projects and other.
Discretionary spending in the clean I think the travel will.
Well for a period of time.
And then.
The consumption.
While we have resumed reinstituted.
The advertising as Sam said based on the strength of strengthening.
And the business that we've seen and we expected.
Good return on that investment from an advertising both in core North America and quick lube.
[music].
As it relates to the answer.
Date in back in second quarter.
We pulled down the incentive compensation accruals, because we really thought we would not make fire thresholds on those.
You know a pleasantly surprised with the rebound on then the business that we saw.
In Q3 that allowed us, but not all of that we still have about a $4 million of expense in that unallocated.
Segment, and if were thats.
With that we've provided.
Current outlook.
We think that Weve where were properly a crude.
Payout.
Understood Thanks very much.
Your next question comes from.
And the line Olivia Tong with Bank of America.
Thanks, Good morning, and good morning Mary.
Yes.
Hi, there again.
Yes, I wanted to ask you a little bit about what you're seeing in terms.
The environment quake limits because.
Clearly those numbers are tend to be coming back in small business owners right now.
Probably fairly exhaustion might have current environment.
Futility chair and quickly just via M&A.
And what are you doing to explore that thanks.
The opportunity is significant for us and.
We last few years, we've had some very good success and bringing in some solid regional operators and that continues to be our focus.
With and developing those relationships with operators of 10 plus stores.
And that at that strength in a given market.
Again, we're.
Very much focused on.
The stronger operators and those with good solid real estate those make the most sense for us.
The the information that we shared to over the last year.
At Investor day to Cagney presentation.
Is that a large opportunity with the small operators that may operate 123 stores.
That.
Our solid operators good real estate.
And and yet.
The efforts or two.
To reach them is going to be a little bit different than.
Working with some of them.
Larger operators. So this is a focus of our quickly team our development team and reaching out more aggressively to those small operators, where we think they can.
Benefit from being part of the developing system.
And so that.
Our feeling is that this is going to be very important for us to ramp up and have success.
In 21 22 years ahead to further consolidate the space, we had kind of gets back to the growth rates for valvoline as we laid out but we expect to grow at 100 plus stores a year.
About half that is going to come from building stores and in developing some of the markets that we've been pressing into over the last couple of years, but the other half of that growth is going to come from combination of franchisee growth. We continue to work with our franchisees to support their growth opportunities.
But also making acquisitions and and so that that that focus that we have on.
More than 1000, plus locations out there that we think potentially model well to be part of the filing system, we're going to be working hard to develop those relationships.
Hi, Thanks, and then just on the advertising you talked about sort of feeling confident enough to we've seen a bit of that so obviously none of US now what happened in the next couple of months, but the environment, but can you talk about your flexibility to either.
Sure pull and frequency of advertising how quickly can you change the content, whether national or regional depending on the market I'm just trying to understand.
Flex that Tom that piece and thank you.
Yes, yes, we can move very quickly with regard to advertising both in terms of the spend in the messaging.
Typically within 30 days.
So this shift to digital enhances our ability to move quickly.
With regard to messaging and media spend so theres theres good flexibility there obviously with that quickly business when we get very.
Very quick feedback upon what's working and enables us to continue to.
Improve the effectiveness of that spend and advertising in the marketing.
And quickly UBS has become such a key part of.
Reaching new customers and continuing to grow the customer base that it's one of the reasons why we have confidence in growing our same store sales.
That we continue to have a really nice balance between growing transactions and then the opportunities to improve ticket.
So that combination allows us to deliver these these very strong comps that we've been.
Delivering now for quite sometime.
Thank you.
You're welcome once again and what did you ask a question. Please press star one on your Touchtone phone.
Your next question comes from the line of Jason English with Goldman Sachs.
Hey, good morning folks thanks for taught me.
Good morning.
I want to build off of Olivia's question.
On the quickly build out.
Your 2022 vision calls were quick Lucy generate 51% of company EBITDA by fiscal 22.
How has that changed in the wake of Koby 19, just organically if at all.
How is that changing contracts it sounds like in response to Olivia's question and accelerated.
M&A story and also what are you seeing on the real estate side.
We're seeing a lot of depressed real estate values out there are the new opportunities opening up for you to perhaps accelerate overview on the 50 store count your your own store build plans.
Yeah.
Jason.
If anything the in the.
You know Covidien 19 environment and post Coven 19, I think it helps us accelerate the transition to a more service driven business and seeing faster growth from the quick lube business, we're seeing that in our operations and then I do feel like there are going to be more opportunities on the acquisition from.
And the real estate front as you mentioned to real estate is been tight and highly competitive over the last couple of years and we're seeing some signs of that changing and more opportunities. So.
That's that's very encouraging for us.
And then and then of course we.
Really been developing our internal capabilities and all our businesses that.
You know that Valvoline is Eric.
Yeah.
In a really good position to be a strong consolidated for the high quality systems out there. So just getting back to that target that we shared for 2022.
I have more confident today than ever before that that will exceed that that the and this is what's so important for I think investors to understand about valvoline is that our mix continues to improve.
Towards retail, where we have significant competitive advantage and where we have long term growth opportunities. So vis vis can serve to enhance our margins.
Over time and helped drive faster growth rates. It is important of course, there that we continue to make progress on stabilizing core North America, but when you look at to the performance in the EBITDA deliveries over the last six.
Quarters, I think you'll see pretty good consistent performance us I feel like we've we've made some some real good progress.
And there's still steps to go but.
Last piece of course is international growth and it's it's a tougher environment internationally right now, but long term trends.
The and the opportunities are still quite significant for traveling.
The Sam was was 100 still the right target if you've got new M&A opportunities opening up new real estate opportunities open up why not one that really slam on the accelerator and go for it for a higher targets in just 100 bills you had before.
Yes, that's a great question.
And.