Q1 2021 PlayAGS Inc Earnings Call
Sure.
[music].
Yeah.
Okay.
Yes.
[music].
Good afternoon.
Well sure.
A G S first quarter 2021 earnings conference call.
All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After today's presentation there'll be an opportunity to ask questions. Please.
Please note this event is being recorded.
I would now like to turn the conference over to Brad Boyer Vice President of Investor Relations Corporate development and strategy. Please go ahead.
Thank you operator, and good afternoon, everyone. Welcome to Ags's first quarter 2021 earnings Conference call with me today are David Lopez, CEO and chemo akio on our CFO.
That presentation, reviewing our key operational and financial highlights for the first quarter 2021 can be found on our Investor Relations website investors that play Ags Dot com on today's call. We will provide an overview of our Q1 2021 financial performance and offer perspective on our current financial outlook. This conference call includes forward looking.
Statements any statement that refers to expectations projections or other characterizations of future events, including financial projections or future market conditions is a forward looking statement based on assumptions today actual results may differ materially from those expressed in these forward looking statements and we make no obligation to update our disclosures.
For more information about factors that may cause actual results to differ materially from forward looking statements. Please refer to the earnings release that we issued today as well as the risks described in our annual report on form 10-K, particularly in the section of these documents titled risk factors.
I'm sure you today will also include non-GAAP financial measures, we believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends.
Measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP reconciliations between GAAP and non-GAAP metrics for our reported results can be found on our earnings release issued today. Please refer to our filings with the SEC for more information with that I would like to turn the call over to our CEO David.
Lopez.
Thanks, Brad and good afternoon, everyone as I sit here on my part from a past fall months.
How well the gaming industry has endured throughout the COVID-19 pandemic.
It's hard to believe it has only been a year since we and our industry peers.
Talking about the status, we were taking to preserve our liquidity in the face of unprecedented adversity.
At the onset of COVID-19 as casinos across the country began shutting down I, often heard industry executives and other constituents utter the phrase.
Never underestimate the spirit of a gambler.
Looking by our first quarter financial performance, the gambler spirit is alive and well.
As you've heard from our casino operator partners and seen in the state reported G. G. R data, but first quarter was all about momentum.
Although lingering casino closures occupancy restriction and several unprecedented weather events got the quarter off to a bumpy start trends began to rapidly improve as the quarter progressed to.
To that end relax COVID-19 related operating restrictions declining case counts improve vaccination efforts and other macroeconomic tailwind allowed our U S casino partners to benefit from the release of significant pent up demand across their businesses throughout the month of March four.
<unk>, we were able to leverage our nearly 16000 unit domestic Aegean installed base to benefit alongside our operator partners as March domestic RPT increased 13% over on March 2019, driving our first quarter RPT, 3% above the corresponding.
Ending 2019 levels.
While pleased with the performance of our domestic installed base in the quarter and despite some of them mark strength carrying into April we acknowledged the culmination of several events played a role on the results, we and our customers were able to achieve that.
That said, we encourage investors to keep the first quarter market dynamics in mind, while modeling our business forward as we believe broader gaming trends are likely to stabilize overtime. As this initial surge in pent up demand transitions to a new normal.
Looking beyond the broader market dynamic further execution upon several strategic initiatives enhanced our gaming operations performance in the quarter.
On the premium gaming front demand for Star Wars remained steady as we added 120 units in the quarter, bringing our total footprint to over 400.
In April we introduced new Star wall configuration to this to the market, which we believe have the potential to stimulate customer demand for the product as part of our strategy to further penetrate the lucrative premium recurring revenue segment. We recently initiated a field trial of our Orion curve premium package.
With the products slated for broader rollout on the back half of the year. We continue to be excited about the prospects for curb premium as it will be offered on a naturally distance per cell layout and will feature an extension of our player favorite Reagan break and brand.
All told we believe the combination of Star Wars, and curb premiums favorably position us to command a greater share of the 70000 unit domestic premium market, which generates over $1 billion of annualized gross gaming revenue.
In addition to our premium effort, we continue to look for opportunities to prune lower yielding units from within our installed base. As this strategic initiative has the potential to streamline our cost and improve our fair share operating performance over time in the first quarter, we pruned and sold approximately 430 units from our.
<unk> installed base no. These units are not included in our product sales kpis for the quarter.
Ultimately, we believe pruning could allow us to generate comparable or higher revenue from a smaller capital footprint further enhancing the overall return on capital efficiencies of our gaming operations business.
Turning to product sales, although we sold a modest 289 units in the quarter. We are encouraged by the tone and tenor of recent conversations with our customers.
As a more favorable operating environment continues to support a broad based recovery on gaming revenue. We are slowly starting to see the improved revenue performance trigger a willingness by operators to commit capital for new unit purchases.
This sentiment was reinforced by the results of the recent Eilers Fantini quarterly slot survey, where operators indicated they plan to replace an average of six 5% of their own gains over the next 12 months a notable increase from the five 9% reported last quarter and well above the pandemic.
Low of four 2%, while we believe it could take a few years before we return to 2019 levels. We're feeling confident about the potential for a continued recovery in our unit sales as we progress through 2021.
To accelerate the pace of our AGM revenue recovery, we continue to look for opportunities to efficiently expand our business into areas such as historical horse racing or HHR.
We placed additional gains into Virginia, and Kentucky HHR markets during the first quarter and driven by exceptional Ags game performance our pipeline for the remainder of the year continues to grow looking.
Looking ahead, we believe we have the potential to broaden our presence in the Virginia from Kentucky markets. While also taking advantage of.
Placement opportunities and additional HHR markets before closing I would like to briefly touch on the trends, we're seeing in our table products and interactive businesses.
Within tables, our team continued to relentlessly and thoughtfully grow the business.
As evidenced by the achievement of record EBITDA performance in the quarter.
Okay, So I'm kind of capabilities with additional operators in the future.
In closing I was very pleased with our team's execution on the quarter and an equally is encouraged by the macro level trends and overall sentiment we're seeing across the gaming landscapes net.
Following one of the best strategic planning off sites I have ever been a part of I believe we are strengthening our organizational alignment around key business objectives, which should allow us to improve our operating efficiencies and enhance shareholder value over time.
I would like to thank all our Ags team members for their hard work flexibility intimate in the first quarter and I look forward to sharing our progress with all view in the quarters ahead.
With that I will turn the call over to chemo to provide additional perspective on our financial results liquidity position and current outlook for the business.
Thank you David good afternoon, everyone.
I am proud of the way our team came together to deliver strong first quarter financial performance.
Ah results once again serve as a testament to the resiliency and durability inherent or accompanies recurring revenue centric business model.
Although it remains difficult to predict the degree to which changes in the macroeconomic environment, including those directly related to COVID-19 protocol.
Impact our customers operations or demand for our products I am confident are improved execution and strong liquidity position will allow us to deliver more consistent financial performance that in turn further enhance shareholder value turning to our first quarter of 2021 operating results, we generated consolidated revenue a 50.
Five 4 million, representing an increase of 2% vs. The prior year's quarter.
Our gaming operations, a recurring revenue improved 4% year over year.
Easing COVID-19 related operating restrictions and ongoing vaccination effort unlocked significant pent up demand across R. U S. Operator partners businesses as the quarter progressed.
<unk> turn strength in our domestic EDM gaming operations revenue.
Continued rollout of our industry, leading cablegate progressive products from.
Rodney of our penetration into the lucrative BGN premium day segment and enhance execution within our real money on gaming business. Further supported are improved recurring revenue performance of the quarter.
An aggregate revenue generated from recurring sources accounted for 80% of our total reported revenue from there to 79% and the 2021st quarter.
With respect equipment sales total revenue decreased 6% year over year to $10 9 million.
Revenue related to our ongoing efforts strategically.
Lower yielding units from our Oklahoma EG on installed base increased by $2.1 million.
Ever this increases more than offset the sustained sluggishness in the north American replacement market, reflecting operator current preference to carefully manage capital expenditures as their businesses recover from COVID-19 related business disruption.
First quarter of 2021 net loss of seven 8 million improved compared to on net loss of $14 $4 million incurred in the prior year's quarter.
The year over year decline and a reported net boss reflects are improved revenue performance net for.
For a recurring revenue businesses and recognition of lower depreciation on amortization expense due to several intangible assets, reaching the end of their useful lives.
Higher interest expense related to our incremental debt financing, which we closed upon it made 2020, partially offset the flow through a are improved operating performance to the bottom line.
Consolidated adjusted EBITDA totaled 26, 3 million compared to $24.5 million and the prior year's quarter.
Dusted EBITDA margin was 47, 5% nicely above the 45.1% achieved in the first quarter of 2020.
Strength within our high margin recurring revenue businesses and an increase in higher margin revenues generated from our ongoing strategic pruning initiative paste or improve adjusted EBITDA and adjusted EBITDA margin performance vs. The prior year.
These items were partially offset by normalization in our operating expenses vs. The prior year period, which benefited from our early stage COVID-19 related of liquidity preservation initiatives as.
As we look to the full year, we continue to expect margins to bracket, which is another way of saying land slightly above or slightly below the low end of our targeted 45% to 47% adjusted EBITDA margin range or margin outlook reflects the anticipated impact of investments in our R&D franchise to support from.
Teacher growth initiatives that had of been more pronounced recovery and new unit sales revenue.
I will now provide an update on each of our operating segments, beginning with our AGM business.
Total first quarter of 2021, <unk> revenue was 55 million relatively consistent with the prior year's quarter.
We sold a total of 289 units in the quarter all of which were replacement units compared to 464 units in the prior year period PGM units were sold into 14 U S States and two Canadian provinces, with British Columbia, Virginia, and Ohio emerging as our top free sales markets.
Mystic average selling price or have P was approximately 17500 relatively consistent with the level of cheap the prior year a.
David mentioned, we're starting to see an early indication of modest improvement in customer demand for new units as COVID-19 operating restrictions on east and the health of our customers businesses improves.
However, we continue to believe that North American sales market could potentially take a few years to fully recover to free COVID-19 levels that said I believe we will see a fairly material quarterly sequential increase in our second quarter of 2021 unit sales as a result of a more favorable opening on <unk>.
Spansion demand outlook.
Our domestic ECM installed base at the end on the first quarter comprised 15456 students.
Representing a quarterly sequential decrease of 812 units.
The sequential decline reflects the plans strategic pruning of approximately 430, lower yielding units and the impact of COVID-19 related floor reconfigurations.
After adjusting per these changes we estimate approximately 99% of our domestic units were active quarter and the net impact of the removed units on our domestic installed base was partially offset replacement of opening an expansion units and growth within our HHR and Orion Star Wall unit footprints.
Moving ahead, we remain committed to searching for inefficiencies within our installed base a strategically pruning as situations permit.
Additionally, we believe the upcoming launch of Orion curve premium package further Orion star low market penetration and plan to opening that expansion have the potential to produce modest quarterly sequential domestic installed base growth over the remainder of the year.
First quarter domestic <unk> was $27.10.
Representing an increase of nearly 30% compared to 21 eight.
<unk> in the prior year quarter, we attributed improve RFID performance from a more accommodative U S casino operating environment supported by eating COVID-19 related operating restrictions and improve vaccine distribution.
These measures resulted in the release of significant pent up demand across our casino operator partners businesses.
We also believe the continued growth of our premium footprint and the strategic pruning up lower yielding units further enhanced our quarterly heartbeat performance.
Domestic AGM RPT grew approximately 17% relative to the $23.26 achieve into 2024th quarter and increased approximately 3% as compared to the $26 40, <unk> realized into 2019 first quarter.
Domestic <unk> improved month over month throughout the 2021 first quarter with notable strength witness across several impactful geography's during the quarter final month.
The David mentioned, we believe our first quarter domestic arkady performance benefited from several unique macroeconomic factors many of with we believe were temporary.
Said, we would expect to see some level of moderation and are reported domestic RTD at these macro influences gradually K per off.
Turning to our international GM business on installed base comprised 7985 units at quarter and unchanged vs of 2024th quarter and about 50% of which were active as of the end of the quarter.
International Rspb was $2.94 down 57% year over year, but approximately 15% on a quarterly sequential basis.
A less supportive macroeconomic climate and stringent COVID-19 related operating protocols continue to protracted recovery within our Mexico gaming operations business.
That said, we are seeing signs of additional casino opening and improve customer demand throughout the Mexico market, which has a feeling cautiously optimistic about the potential for international heartbeat to continue to gradually recover as we progress through the remainder of 2021.
Our table product segment generated per quarter revenue of 2.8 million, representing an increase of 11% year over year at 8% on a sequential quarterly basis.
Cable products adjusted EBITDA was one 4 million, establishing a new quarterly record for the segment.
The total table products installed base at quarter end comprised 4362 units, representing an increase of 12% year over year and 108 units sequentially.
We estimate approximately 90% of our table products lease installed base was packed effect quarter and compared to 80% of the start up a quarter.
Looking ahead, operator interest in our growing suite of industry, leading progressive products and our Ags Arsenal site license offering continues to build.
Combine we believe progressive site licenses and pass have the potential to simultaneously expand our cable product installed base and increase our average lease price as we proceed to 2021 finally, our interactive segment delivered first quarter of 2021 revenues of two one.
Representing an increase of 41% year over year on.
A real money gaming business less away on the quarter with revenues more than doubling year over year for a record 1.4 million.
Perhaps more importantly are interactive segments delivered positive adjusted EBITDA for the fifth consecutive quarter supported by improve revenue performance.
Looking ahead, we believe our continued success and integrating our online content additional VDC operators.
Producing additional egf's titles into the online domain.
And expanding our suite of online content to include our per online table game offering at the potential to produce improved revenue and profitability within the interactive segment in the quarters ahead.
During our focus to cash flow and the balance sheet first quarter Capex totaled nine $9 million compared to 10 $6 million and the prior year period.
Growth and intangible Capex accounted for the majority of our quarterly capital spend at 5.2 million and three $8 million respectively.
Looking out over the remainder of 2021, we expect our quarterly growth capex per rap and the second and third quarters.
As we learned to broaden our presence in the premium recurring revenue segment prior to moderating in the fourth quarter first quarter free cash flow was near breakeven compared to positive eight $2 million and the prior year per.
Per year over year free cash flow decline reflect the first quarter of 2021 period related unfavorable working capital changes.
As of March 31, 2021, we had 107 3 million of available liquidity inclusive of our 30 million on drawn revolver compared to 111 $7 million on December 31 2020.
For the full year, we remain confident in our ability to maintain are potentially improve upon on December 31, 20 liquidity position with improvement weighted that the back half of the year.
Total net debt, which is the principal amount of total debt less cash and cash equivalents.
Was approximately $543 6 million at March 31, 2021.
548 million at December 31, 2020.
Our total net debt leverage ratio, which is total net debt divided by adjusted EBITDA for the trailing 12 month period decreased from seven five times at December 31, 2020, 274 times at March 31, 2021 on.
Or modified net debt leverage ratio used for company compliance purposes was 4.0 times below the maximum allowable level up $6 several times.
Operator. This concludes our prepared remarks, and we would now like to open the line up for questions.
We will now begin the question and answer session.
To ask a question you May press five and one on your touchdowns from if.
If he's using a speaker phone please pick up your handset before pressing the keys.
To change a question please press Todd and Tim.
At this time, we will pause momentarily to assemble a roster.
At first question is from chat Bennion from the County go ahead.
Hi, good afternoon, and thanks for taking my question match results.
Guys understanding that you are not giving guidance I wanted to focus on the installed base outlook gave.
David U you noted that the premium market comprises roughly 70000 units in North America and it sounds like Star will start wall is performing well and curve is right around the corner can you just kind of help us think about long term, maybe what's the market share goals could be and then near term how are you.
Thinking about rolling out some of the titles that have been successful.
And could drive some some growth in your installed base. This year. Thank you.
Thanks chat so we'll start when.
The second half of the question there.
Because I think on the first half we're not really.
Offering any particular guidance on what we're aiming for on market share of that sort of premium base that premium lease space. As a reminder, we're just getting started and I think an email on Brad and I were talking the other day.
Probably a solid six months and to the launch of our premium product campaign, we're happy with how it's going so far we've been happening with the momentum of the star Wall. We just launched per premium at too early to tell there of course happy because it's early and usually we see good results early with our <unk>.
Looks like that.
But we will be will be.
Rolling out per premium throughout the back half of the year additional on queue too.
Think we've got a great lineup quote on.
Honestly not just in foster we're very pleased chat with our RMB effort there.
Are on games and really with our focus has been on since.
Target and of course on I'm, just going to serve plus the other two dividends to for online and tables have done a fantastic job on R&D, but.
I know on I'm, giving you a high level answered here, but yeah, we're not guiding on on market penetration or ship share right or anything like that just yet it's too early in the game, but as you see on star also far so good we're very pleased with the results and.
Early on curve premium.
But again, we were confident that that's going to do while our first game that we're launching there is racing Bacon deluxe.
It's a non product, it's sort of and we'll call it a fan favorite.
With our players so so far so good and obviously you will get more updates on that online.
Okay, Great and then the other side of that just on the strategic pruning I know you guys.
Went through a lot of time with this during the past six to nine months does the elevated RPT levels that we're seeing right now given strong regional gaming trends does that kind of change how you were thinking about maybe pruning Moore and where does this stand.
As you as you kind of look at it now.
Yeah, Good question and something we've obviously discussed but.
We're pretty confident that the pruning process and what we've been marked on here and chat is the right thing to do.
As far as the.
Integrity based and what we've done there we think it's been very effective.
Whereas renting on closing innings of that.
We will continue to look at other areas that business.
Something's not generating revenue or it's generating very low revenues, because I'll location or something on the like we're still gonna get absolutely on in furniture, because from a cap allocation and efficiency point of view.
We want to be smart.
With our money and with shareholder money and we continue to think it's the right strategy to get underperforming units out and as we continue to roll out whether it's class too.
For release product or it's class three Leafs in class free premium lease. We think this is going to continue to improve our performance efficiency RPG and the like so we're sticking to our guns on and obviously.
That it does change the equation when you look at a particular unit at any particular point in time. So of course, if our team we have our team and product management on game off that they are looking at a unit now of course, it might not look might get ready to be premium.
Vs Navy would it look like in the past so it does impact some things about the high level strategy, we're sticking to you at.
Thanks, David appreciate it best of luck.
Thanks, John.
<unk>.
Our next question is from Fairytale net from two security go ahead.
Mister very.
Oh, sorry about that I was from cute David in the industry starts to recover can you maybe talk about the general pricing environment I imagine there was some pricing and discounting pressure on the highest COVID-19, but where are we now.
So thanks, Barry and thanks for being on you because we do that all the time it wouldn't feel like anything near COVID-19. If somebody wasn't on mute right. So I think pricing is is not really changed a whole a whole bunch from even 2019 2000 22020.
One obviously during 2020, that's like Hey.
Can sort of take that off the table and set it aside but I don't see average sale price is changing dramatically you can look at certain pockets with certain vendors and of course see some changing from modulation there on pricing, but I think that largely it will be.
Rather consistent and we don't have anything in our plant sales, there's going to be some dramatic shift and pricing from I think what's good and it was in the prepared remarks is that.
Number one we're starting to see obviously with this performance.
Everybody listens to the to the operator calls with the performance for hearing from.
From the operators on there cause it's freeing up some capital it's not it's not just sort of looking down the pipe and saying Hey, we're starting to see sort of some some capital loosening up it's loosening up I think it's due to obviously, they're they're great performance on.
So for US Q2, we can say is going to be something better than a modest income going over Q1 and it will be.
All of our own is part of our queue two numbers.
On he should be a modest portion of those figures that we that we are due on queue too so.
Asp's airline no big changes and capital capital allocation from me.
That's great and then there's a follow up.
Like I know margins can move on mixed with you guys.
The whole industry I think you've done a great job rainy and costs as a result of COVID-19, but first we look forward to their meaningful items, you could call out that.
That are starting to come back or are you going to need to come back.
Yes, I would say if you look at look at the cost structure I think it's fairly evident things like <unk> has been seriously reduced price as we come off of last year, but as.
The sales force start meeting with customers, even more so face to face and he got traded shows are picking it back up you'll see some of that a sales price related cost structure come back into the organization. I think is obviously the macro environment improves we get more comfortable spending and some error.
<unk> that we probably.
Maybe tightened up for over tightened up price coming off of last year. So.
Some cost come back into the business I think that's why I barely we tried to give some parameters right like historically, we've already spoken about a 45% to 47% margin, but for the full year.
We're trying to talk more down towards the 45 per cent range.
And anything you should call out that would be fixed terminal it doesn't have to come back.
I mean, a craft organization, we did you did do some.
Headcount reductions.
I think we were pretty low, though about we reinvested some of those savings we took in certain areas back into R&D right. So although it may be permanent one we kind of just reallocated back to R&D.
For the seventh day, that's got it anything else I mean.
Very I think.
I am not China sent any messages hear anything and and I know, our marketing folks lesson I think our marketing spending and how we approach it might shift going forward, we might see some doctors reallocated from something like <unk>, meaning will spend.
Either a modest or significant portion less than what we used to <unk> and really reallocate those dollars and a number of different directions I would say most of them are.
Marketing itself.
But I think that COVID-19 has taught us a few things.
And we believe this might be one of the areas, where it may not be true clawback, but reallocation of dollars to become more efficient and more effective with our Spanish so we can get a better ROI on.
On those dollar so we'll price <unk>. This year on the next year and then we'll let you be the judge of the direction, we're taking with that.
Oh, that's great sounds good thanks, so much guidance.
An experienced designer.
Our next question is from David Cat from Jaffray's go ahead.
Afternoon, everyone. Thanks for taking my question.
I wanted to just talk about something a bit more specific wishes, Kentucky historical racing machine market, which.
Seemingly is growing and getting some traction.
What.
Dated thoughts or initiatives might you have around participating bear with some of your stronger content.
So.
The HHR face.
Or solid laid squarely in the middle of that with one on one of our partners that.
Alright, and enables our games to be served from those jurisdictions.
Our HHR game contact in performance has been phenomenal.
No rencen talking now.
We do quite well down there.
We will see orders throughout the balance of the year.
And there's some new jurisdictions that are also opening up over the next I'll call six to nine perhaps as long as 12 months old say over the next six to nine months, we'll probably see on.
Another jurisdiction or to open up so we're bullish on HHR, we like it it's.
Obviously fair and are prepared remarks that we've.
We've invested their because it helps bolster our product sales.
We look forward to the new jurisdictions opening up and everywhere, where we are right now our game performances nothing short on a fantastic.
Excellent. Thank you so much.
Thanks Man.
Again, if you want to ask a question please press star than what.
Our next question is from Jeff Chantelle from Steve from go ahead.
Hey, great. Thanks afternoon, guys. Thanks for taking my questions.
I wanted to start and ask on the international operations, you talked to it a bit in the prepared remarks still lagging a U S just where Mexico stand on.
On the casino closer to restrictions type basis, but my question is David Yes, we look further out.
Sorry to get on market opening backups, we expect to see a similar.
Or narrative of pent up demand on line as we saw here in the U S and I know you called out the lack of stimulus, but just curious if there's anything else to contemplate as well as a way to potential fur international ops that the sort of mirror, what we're seeing here right now in the U S. Just just more on a lag basis.
Yeah, I hate I hate that gives you this answer but I have no idea I don't for debt a huge pent up demand in Mexico and in Latin America, I don't see that.
On the vaccine rollouts or slow I think they're going to drag out for quite some time. So I think it's going to come back on.
Sort of it and patches or in smaller geography's within Max an extra on Latin America stimulus dollars don't really exist there.
There could be there could be a little something there but to predict something like that I think the dynamic in the U S vs. Next on Latin American is very different maximum on go off of work on the border to Canada.
I think the interesting is there no matter what technique K Canadian casinos has come back yet.
Sadly COVID-19 is sort of respect their again.
Thank you could see some pent up demand in Canada.
Good news is our Canadian customers have remained active with us and haven't really gone away. They are spent a little bit of.
Business going on there and we opened the casinos reopen their we'll see some capital dollars release and things like that but if we're looking for this.
This surge that we saw on the U S. I would say that unlikely to be the case.
Okay. That's helpful and I appreciate you offering comments.
Comment in spite of free.
Limited visibility for everyone here on the call. So that's really helpful. Switching gears here over to your premium least growth strategy in particular I wanted to talk about how you guys do class to vs. Klatt free market those products segment I think in the past year.
Commented on something to the tune of 15% of Star wall units being placed in class to market. This this sort of consistent with how you view the mix of the total premium least exposure on a growth opportunity moving forward just trying to get a sense of where the most upside potential here is if you look to grow your footprint there.
So that's good.
Getting into the specifics.
What percentage on which jurisdiction because I don't I don't have it in front of me and ran out I'll stand up quoting and number incorrectly.
I would say in class too we continue to be pretty strong when I look at.
Saw law and what I anticipate with per premium.
I anticipate that both products will be very well on class too. So it will it will have free.
Any significant representation of our footprint that said class three is I don't want us to A&D price. It is one of the prizes because she's very productive force. The class three is a very nice.
Price for us as we get move into the jurisdiction rollout from our star wall at the moment.
Been on we're actually rolling out a new configuration, we're sort of refer to it as a football shaped star wall, which creates a little more I know social distancing is not a term we may feel like we used forever, but it takes the middle seat is star wall and it makes it much more productive in other words it performed from.
More like an end cap seat.
So we expect some good thanks from that and factory and as we rollout Raycon bacon blocks on per premium.
Premium.
We're gonna be attacking class three mark with that no again, no bold predictions about the mix.
We're going after both markets were certainly very strong and fast too and we're looking to improve our situation on five three.
Okay, great. Thanks, it's really helpful. Thanks, again, and congrats on to the next quarter.
Thanks.
Again, if you have a question it's star then one.
Okay. The conference has now concluded thank you for attending today's presentation.