Q1 2022 Local Bounti Corp Earnings Call
[music].
Good afternoon, and welcome to the local valleys first quarter 2022 earnings conference call.
All participants will be in listen only mode.
After today's presentation there'll be an opportunity to ask a question.
Please also note today's event is being recorded.
At this time I'd like to turn the conference over to Jeff Sonic Investor Relations for ICR. Please go ahead.
Thank you and good afternoon.
Today's presentation will be hosted by local borrowings co Ceos, Craig Hurlbert and Travis Joyner.
President, Brian Cook, and Chief Financial Officer, Kathleen <unk> the.
The comments made during today's call contain forward looking statements within the meaning of the safe Harbor provisions of the private Securities Litigation Reform Act of 1095.
All statements other than statements of historical facts are considered forward looking statements. These statements are based on management's current expectations and beliefs as well as a number of assumptions concerning future events.
Such forward looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward looking statements. Some of these risks and uncertainties are identified and discussed in the company's filings with the SEC, we will refer to certain non-GAAP financial measures today.
Please refer to the press release, which can be found on the Investor Relations website investors don't local Bonnie dot com for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures.
I'd now like to turn the call over to Craig Hurlbert co CEO .
Thank you, Jeff and good afternoon, everyone.
Since we last spoke with you in mid March we closed our acquisition of peaks and Ive been busy integrating the team into our business.
And as a reminder, for those new to the local bounty story, we acquired peaked in early April .
It's a very important transformational and accretive transaction for us in many many respects.
From a distribution perspective, Pete Springs, a national footprint and existing relationships with retailers covering some 10000 doors.
The opportunity that this creates for our entire business can't be overstated the.
The relationships with customers and the demand that they are generating is informing our build out strategy and we expect it to accelerate local batteries brand building and market access on a national level in terms of operations the transaction enhanced our set of capabilities and Derisked, our near term execution.
Our ability to taps peaks wealth of knowledge and experience and growing techniques is invaluable as we embark on our own continuous improvement of local batteries growing systems and contemplate new designs.
Enabled by our patent pending stack and flow technology.
And of course, the financial considerations the transaction brought with it a degree of scale that we otherwise would have had to build from scratch consuming precious time.
Including our Georgia facility, which is nearing completion and is expected to come online in July we will have three commercial facilities in production not including our Montana facility, which was temporarily refocused on research and development activities in support of Pizza acquisition and other commercial.
<unk> plans.
As we look ahead to the balance of the year, we expect commercial production at the Montana facility to ramp up significantly in support of our pent up customer demand in the Pacific Northwest.
Upon the Georgia facility, reaching full production, we expect to be generating run rate sales of at least $30 million on an annualized basis, producing positive gross margins and driving hard toward our goal of reaching breakeven cash flow in the near term.
The actual leadership and capital efficiency remain at the forefront of the local about strategy.
With that I'll pass it over to Brian .
Okay.
Thanks, Craig over the past months, we have been on the road meeting with customers sharing the wonderful benefits of our combined enterprise and most importantly, reinforcing our commitment to quality and service across our network.
Our conversations have been very productive and is reinforcing our build out strategy. So that we could be one of the key players to meet the demand present in the marketplace for high quality controlled environment agricultural Brody.
We expect to create immense efficiency for our operations as we execute the commissioning of the Georgia facility and begin the process of ramping up production we.
We have been working hard to put the staffing in place to ensure a smooth ramp up and are excited to get to work.
Our customer interactions are also enhancing our visibility to the build out of our next facility. While we are still in the planning stages. We have several key regions and focus that have strong customer overlap and we are demonstrating strong demand for our brands and products at <unk>.
And as we are able we look forward to sharing the results of this work and our plans for the next phase of growth.
With respect to our Greenfield Buildout in Pasco, Washington, I'm pleased to share that construction activities have recommenced after a brief hiatus.
As we noted during our last conference call. We have been working on are designed to account for the learnings from both local bounty mb's operations to ensure that facility is optimize in every sense, whether that be operational design or capex again as travelers loves to say, we do the math and this dovetails back to our ongoing quest for capital efficiency.
And maximizing returns on capital.
We continue to see an opportunity to drive significant value creation with our United front.
<unk> growth has been constrained for years and with local <unk> balance sheet and access to public capital market. Our combined organization is energized to put our growth plan into motion.
Customer response has been very positive, which is a wonderful endorsement of the trust we built the value of both brands and the strategy that we will employ to capitalize on the exciting opportunity that lies ahead.
I'll pass it back to Craig for his additional remarks.
Capital efficiency continues to be at the forefront of our strategy, we intend to be direct with the deployment of capital towards revenue generating activities. This is visible in our buy versus build approach repeats, which brought what will be three facilities into our production network.
So that's our presence in the west coast market with its two California locations.
We'll add improved bicoastal service to customers via the pending Georgia facility.
The accelerated nature of our footprint growth is pointing to see but the quality of our team isn't valuable which is an element that has had increasing value in today's tight labor market.
As we look ahead, we expect buy versus build to continue to be a key consideration for us and we believe we are uniquely able to leverage this strategy on an opportunistic basis, given the advantages inherent in our flexible stack and flow technology.
Back in flow provides the ability to unlock one and a half to two times yield improvement compared to a traditional greenhouse operations.
This is highly disruptive and highly differentiated and why we are so excited about opportunities that lie ahead as we continue to execute on our plan to be the leader in CE.
Simply put our technology strategy gives us an advantage to make a direct iterative improvement on existing infrastructure and a capital efficient manner, which we expect will ultimately drive higher return on investment while minimizing required capital.
That's what is foundational to our rationale for the pizza transaction and the integration strategy that is underway we.
We expect to implement stack and flow into existing operations with minimal disruption to production levels and continuing to build capacity around the operations to enhance throughput and drive higher unit level returns with that I'll pass the call to Travis for a few additional remarks.
Thanks, Craig <unk>.
Integrating stock and flow with our existing facilities is one of our highest priorities and the testing and optimization of those systems is an area that we're keenly focused on at our Montana facility. In fact, we nearly doubled the rate of annual crop terms for our commercial had let us since last year.
And we made some exciting advancements in our commercial loose-leaf, let us as well.
As of March 31, 2022, we generated approximately 26 crop turns annually, which compares to approximately 17% to 22 turns annually as of December 31 2021.
To put it into context in both instances this performance already exceeds our long term assumptions that we previously reported.
We also have been hard at work translating our innovations into a robust IP portfolio across process improvements genetics computer vision, AI and controls, which will protect our investment and positioning the business for long term growth.
I mentioned all of this is a window into the importance of stock and flow to our long term strategies to drive additional capacity at the lowest possible cost, thereby optimizing our unit level economics, which will enable value creation for our shareholders.
We believe there is an immense amount of facility capacity that can be improved upon and we intend to do just that.
In summary, the integration of Pizza is progressing nicely. There is an incredible amount of learnings happening across the organization and I'm pleased with how our cultures are coming together.
We have an amazing opportunity ahead of us within the <unk> landscape.
And we are focused on capitalizing on it quickly.
As we move our business ahead in the coming quarters and years, we expect to continue demonstrating wise strategy and sound capital allocation all geared toward our goal of establishing a formidable CA leader with a corresponding financial profile that investors can have confidence in over the long term.
Now I'll turn the call to Cathy for her review of the financials.
Thank you Travis and good afternoon, everyone as previously announced the company closed its acquisition of peak in April for $122 5 million, creating a scale.
And over the national distribution footprint that reaches approximately 10000 retail doors.
I'll cover our first quarter 2022 results briefly which represents local county on a standalone basis prior to the transaction and it reflects the performance of our Montana facility, which was temporarily geared toward innovation and R&D activities. While we were closing the <unk> transaction as Craig mentioned we.
Expect commercial production at this facility to ramp up significantly in support of pent up demand from key customers in the Pacific Northwest first quarter 2022 sales were 282000 as compared with 57000 in the prior year period.
Pete Standalone sales for the first quarter were $5 9 million.
<unk> gross profit was 48000, representing a gross margin of 17%.
<unk> depreciation to make an apples to apples comparison to our long term projections that we provided during the process.
Gross margin was approximately 39%, which was consistent with the prior year period.
Our results reflect a temporary increase in R&D or in Montana facility associated with the development of additional skus and crop cycle yield improvements. This is a critical element of our strategy behind the <unk> acquisition and other commercial facility plans, including the pending opening of the new Georgia facility.
Looking ahead to the second quarter and beyond our Montana facility is shifting back towards commercial production and so we expect improved revenue and margin performance at that facility.
Net loss was $25 8 million in the first quarter 2022, and includes approximately $3 9 million of expenses associated with the <unk> acquisition as well as $11 million and stock based comp $1 6 million and interest expense and 5 million of depreciation adjusting for these and.
Sweet items adjusted EBIT loss was $8 5 million. We recently filed an 8-K with some historical peak figures as well as some pro forma combined company financial for 2020, and 2021, including detail of the various adjustments to bring peace reporting and alignment.
With GAAP included within is an adjusted EBITDA reconciliation I'd like to call out a couple of metrics and articulate some influences on those results. So you better appreciate what the business is capable of achieving.
So gross margin is the key kpis for both teams and local Bonnie spoke of boundary has been driving positive gross margin on a lower revenue base.
2021 adjustment gross margin was 45%, which is in the range of our expectation.
Should provide a great base to expand from as we implement our margin Kathryn.
And so the technology.
Further we are just beginning to work through actions to capture the cost synergy opportunity, which we believe could approximate about 10% savings on both about existing cost of goods sold from raw materials and packaging in the first full year of operation. We are working hard to ensure we get our organization is aligned to it.
Track these synergies.
Other key Kpis adjusted EBITDA margin.
You see what the peak performance in 2020, and 2021 is a more subdued margin performance because of the temporary impact of Covid related factors.
Over the long term in the pre pandemic era piece with a consistent 20% adjusted EBITDA margin generated from.
From a capital structure perspective, our balance sheet as of March 31, 2022 reflects the standalone local boundary business.
We ended the quarter with cash cash equivalent and restricted cash of $76 4 million as previously disclosed in April we utilized a combination of $92 5 million in debt through our prior debt facility and $30 million of equity to finance the acquisition piece.
So we had $86 5 million shares outstanding as of March 31, 2022, and on a pro forma basis, including the consideration for the transaction our warrants in our restricted stock units outstanding.
Fully diluted share count of approximately 115 million share.
As we look ahead to the full year 2022, we are really excited about the scale of that piece provides to our business. We are equally excited to begin the implementation of our SaaS and flow technology into peak facilities over 2022, and 2023, we are reaffirming our 2022 revenue guidance of at least $20 million.
Which includes three quarters of contribution from <unk>.
Additionally, we continue to expect to achieve initial run rate revenue from the three key facilities of at least $30 million at full production, excluding the expected future positive impact from implementing our staffing flow technology across these facilities.
We look forward to continuing to update you on our progress as we execute on the achievement of milestones and identify new opportunities to drive growth in this exciting.
Marketplace.
That concludes our prepared remarks, operator, please open the call for questions.
Okay.
Thank you we will now be conducting a question and answer session.
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Please ask one question and a follow up question.
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One moment, please while we poll for questions.
Thank you. Our first question comes from Colin Rusch with Oppenheimer.
Please proceed with your question.
Yes, Hi, good afternoon. This is Christian on for Colin Thank you for taking our question.
I was wondering if we could start first with a little bit of color around the focus of the R&D efforts going on at the Hamilton facility.
What are the levers specifically that you are looking at to drive those incremental churn.
That you've shared with us.
Great Kristen this is Craig Robert Thanks, So much for your question and give our regards to call them. Please.
<unk> why don't you why did you take the first cut at that please.
Yeah, absolutely. Thanks for the question Christian and Colin.
Specifically as it relates to.
Our R&D efforts were.
Using I think kind of a combination of enhancements to the core stock and flow system, and then as well investing in controls and.
And computer vision AI.
And really as we started to have line of sight on the pizza transaction in the first quarter we.
We decided to really broaden and expand our near term R&D at Hamilton to solve or increased in specific SKU demand from pizza customers in California, and Georgia. So remember that piece Theyre really head lettuce King's if you will of CA lots of market share there.
Lots of doors, and they have lots of skus and so specifically pete's living butter lettuce really where we're focused one of the things we're focused on in the first quarter is applying our stock and flow technology and innovating around that technology to pull the crop cycle down and increase the terms that we could.
Out of our facility on a per annum basis, and what that resulted in us through our R&D efforts, we were able to cut the crop cycle by seven days, so pick up roughly four turns per year.
17, three turns per year.
In total so.
Georgia comes online, we'll be scaling down our Hamilton, R&D and increasing commercial production, but the main areas of innovation that we're focused on are kind of core stock and flow patents as well as controls computer vision, increasing the number of recipes.
Et cetera.
That's really helpful and thank you for that Travis.
And then as my follow up wanted to ask about just what are the cycle times with customers you talked about the <unk>.
Change in the tone of your conversation with customers since the <unk> acquisition.
Obviously your ability to demonstrate that the favorable unit economics in that space.
It's something that we can see but I'm wondering how that's contributing to the nature of the conversation that youre, having with customers.
And any sort of commentary that you can offer around colocation opportunities I'll leave it there. Thank you.
Kristian I want a great question or I guess series of questions. Brian do you want it you want to take that one please.
Yes. Thank you. Thank you for the question because so.
When you think about the overall sales lifecycle.
When someone comes new to the market.
One thing that you have an appreciation for real quick how relational our market is and so it generally takes a you can take a solid year plus four new.
Company to start selling in any kind of significant numbers within our produce arena.
One the blood beauty about this combined effort is that we were already had access to 10000 doors.
And through that just long standing trusting relationships on our new product launches and so what it does is it really reduces the time to market.
Not only for just having more capacity and we will do more with current skus, but also adding additional skus that are in the pipeline.
Thanks, Brad I think that answered part of your question. Let me know if there is something I missed.
Okay.
That's really helpful. I appreciate the color.
Yes.
Thank you. Our next question comes from Chris Barnes with Deutsche Bank. Please proceed with your question.
Hey, good afternoon. Thanks for the question.
I guess just to start I appreciate all the color around the progress on the Georgia facility update but I was just hoping you could comment on the integration of our stack and flow into the other piece facilities out in California like has that process started yet or as much of the time right now been focused on commissioning and ramping up Warner.
Robyn.
And then Relatedly could you share any details around the implementation and integration costs for each of the three facilities.
Yeah.
Thank you Chris appreciate the question again, I'll ask <unk> to comment on the integration of the stack and flow technology in California, specifically Travis.
Yes, so as I said.
<unk> has a lot of doors and a number of successful skus.
Those California facilities, however are very focused on there.
There are core products, including butter lettuce, so a lot of the integration and R&D efforts.
We did in Montana this year were really centered around specifically.
Reducing the crop cycle at the existing peaks facilities in California, and in Georgia, and the result that I kind of highlighted as it relates to head lettuce, which is one of their core products will.
We will be directly applicable to the California facility. So really what we're trying to do within our growth systems right now are getting reps to prepare us to.
To do the full technology integration in both California, and Georgia, So that when we turn those systems on its plug and play.
Okay.
Got it that's helpful.
And then as my follow up I, just wanted to just dig a little bit more into the $30 million per year run rate that you guys are looking to achieve like excluding stack in flow.
It is there is there like any timeline around that that you think that you could achieve achieved these goals like is that like 2023 potential or is that really out in like medium term and then maybe could you hear what snack and flow would add to that because it seems like the crop turns you'd be able to drive.
After implementing stack and flow like <unk>.
$30 million seems very conservative so just any color you can share there would be great. Thanks.
Hey, Chris This is Craig I love that question and.
It's very it's a great question and very intuitive Kathy I'd ask you to kind of chime in on that and then we can maybe follow up with Brian and Travis Kathy go ahead.
Yeah, Yeah sure so.
The $30 million run rate at that Paul.
Full production for each of the facilities so.
And obviously, excluding satcom flows that can flow will improve the yields.
40%, right, which is obviously very significant.
$30 million run rate.
Is it.
Let's start in Q1 2023.
And it is in other words.
In other words, yes, the $30 million run rate is operating the horizontal assets.
Without the benefit of the stock phase.
So when the stock phase gets activated.
In 2023, that's when you'll see that incremental bump.
Great. That's very helpful. Thanks, guys.
Thank you Chris I appreciate the question.
Our next question comes from Ben Clevie with Lake Street Capital markets. Please go ahead.
Thanks for taking my questions.
First question is around piece and kind of a follow up to what you were just addressing.
First of all I guess, congratulations on getting them as close as quickly as you did I was the rest of my coverage could announce the closure of an acquisition. So soon after the announcements so congratulations there.
My first question is around the expected revenue contributions here because.
With the $20 million revenue guidance.
Guidance on the year and $6 million.
<unk> revenue in the first quarter.
It would seem to be that not much is expected to be contributed from the Georgia facility when phase one is complete.
Summer. So can you talk about kind of Georgia contribution specifically in the back half of this year. Please.
Yes, Hey, Ben Nice to hear your voice again.
Why don't we have a combination of Brian and Kathy answer that maybe Kathy to start Brian you can top it off.
Yes.
And great to hear your voice.
What we're trying to do Dan is just be conservative right.
We do say in the release that the.
The Georgia facility Phase one day will be operational in July of this year.
And we anticipate that it's going to do and.
Do very very well, we're just trying to be conservative with the 'twenty.
Okay, Alright fair enough.
And then my.
So to have Brian comment sorry, lets say it Brian I'm, sorry is that economists that he'd like to add.
Yes.
Yeah.
Factually what.
Coffee is mentioning I mean, we were conservative on the number but theres also.
Parent ramp that goes along with it that you wanted to be sensitive too so.
We are strong in that $20 million number so we're and we're hoping to see some significant upside to that.
Yes, Ben it's Craig Craig one question or one comment.
This whole industry has been plagued with what I would call.
Over committing and under delivering.
And we talk about financial leadership in one of the things we want to really emerge.
Over time is that you can count on what we're telling you that.
We will move.
Having in order to deliver on that and I understand your question, it's really good.
And obviously if you just do the math it looks like we're a little light there, but there's a lot of moving parts.
You did comment on the integration moving very quickly I don't want that but I don't want that to go without saying.
Have an amazing team.
<unk>.
In that transaction led by Cathy second Brian on his side and Bill there.
So and I will tell you haven't been involved in many of these transactions.
One of the folks that Pete said it was like a zipper coming together.
That we were we were almost meant to be together.
How much is it Brexit picking it up in that.
Kind of what's played out and it's allowed us.
Go down three layers.
<unk> has gone incredibly smoothly couldnt be more pleased with where we are and really is just just helped really derisked. So many different facets of the business.
Stop there.
Got it.
Hopefully for me to view.
Congratulations and I look forward to seeing the fully integrated business here in coming quarters.
So my second question is around your legacy efforts in the Pasco facility great to hear the construction there has begun again.
But.
Given that you discussed the redesign of the facility and paused construction for a bit I am wondering if you can update us on expectations today for size and.
Total revenue contributions from the redesigned facility and then also give us an update on the expected timing.
For for that to be completed.
Right Great question, Ben maybe Travis you start on that one okay.
Yes.
I'll, just kind of comment and say that.
That facility.
And I'll touch on this point again Pete.
<unk> had a very robust and diverse not only customer base, but also SKU count and so really the pasco facilities being redesigned to account for the demand side of the SKU mix, that's desired by pizza customers. So some tweaks too.
The selection and mix of our growth systems as a result.
And really kind of all around solving for capital efficiencies. So we're still chipping away at the design and I think next quarter, we should have a more wholesome update as to the.
Timeline estimated completion.
Revenue add on a go forward basis.
Yeah, that's a great that's a travis and I think that you can you can look forward to that next quarter.
Okay, we'll stay tuned there.
Thanks, So much for taking my question and then I'll get back in queue.
Thanks, Dan we appreciate it.
Our next question comes from Brian <unk> with Roth Capital Partners. Please proceed with your question.
Hey, Thanks, good afternoon, and thanks for the question.
What it does it get a little bit more.
Clarification on will it consist of phase one a phase one b maybe in terms of square footage is number one for each and number two is it also a function of.
Phase one is kind of the traditional high tech greenhouse and then phase II with the stock and flow or is there are multiple dynamics. So that's just wanted to kind of understand that.
Yeah, Hey, Thanks, Brian I. Appreciate the question it is multiple and I'll, let Brian to tackle that question.
Hi, Brian So <unk> is.
Okay.
So phase one is 130000 square feet of actual production square footage.
And that's in our channel system.
Phase one b is.
As an additional 130000 square foot as.
As part of one a.
The head house.
<unk> that was required.
As Don part of the original design.
<unk>.
Phase B.
Just a bolt on as far as.
Needs requirements from the head house, So theres no additional square footage required on the head outside.
Okay.
Ben.
<unk>.
I understand that the 30th.
We talked about.
And I was kind of going through my notes and I apologize if I have asked this before but.
Yeah.
When everything is kind of full.
Fully ramped up what is kind of the full capacity kind of revenue.
Of the Georgia facility.
Yes, Kathy do you want to take a run at that Im not sure were giving that guidance like Katherine go ahead, yeah, Yeah, Brian . Thanks for the question and Great to hear your voice, we have not gotten that specific on the Georgia facility.
<unk> gotten that specific maybe we can give an update on the next call, but so far reached seven.
Okay, if I could just follow up on that.
And that's totally understandable.
Can you just remind us what the California facility sizes are repeats.
Yes, Hey, Brian .
Yes, no definitely so the carpenter rehab facility.
Is 16 acres.
And the Oxnard facility is 13 acres.
And it's important to note that the.
The Georgia facility.
Has the same system.
Our newer.
Retrofit that we did in part of our Oxnard facility, which is about a little over an acre.
And so that's been.
Producing for about a year and a half now.
So just kind of give.
I don't want you to.
The week between what those three acres in Georgia to the 2009 acres that we're doing in California.
On an apples to oranges comparison.
Okay. Okay. Thank you.
Mhm.
Great Brian anything else.
That'll do it for now.
Thank you Brian I appreciate the question.
Thank you.
This last question comes from Pamela Kaufman with Morgan Stanley . Please proceed with your question.
Hi, Good afternoon. This is about on for Pam.
I just wanted to touch base on the Companys long term facility expansion plans, so going back to your Investor Day. The company. Initially you provided a facility outlook project and have been around the operational facilities in 2025 and this was prior to your Pizza acquisition. So now that the company gained two facilities in California.
And.
It seems you have another operational facility in Georgia.
What are the current projections facilities through 'twenty five.
And then kind of related to that can you discuss the strategic priorities considered when it comes through time and breaking ground for a new facility and then also determining the location of that facility.
Great questions, Rob. Thank you so much.
I appreciate the questions.
I guess, maybe I'll take a start at this and then others can add in.
I think with the acquisition of Pete's what's happened is.
We're now in 10000 doors, we're now in conversations with people.
That.
<unk> kind of accelerated the conversations we were having prior and as a result of that we're really looking at the customer conversation backwards to where we're going to locate.
And there are some very hardy conversations that are in the works around where we shouldnt, replacing facilities. So while local bounding pre Pete had a plan.
Place.
Local bounding with Pete.
We will be developing that plan over time kind of customer backwards and I think we can all agree there's a lot of change going on in the world right now and I think supply chain. Many many customers are looking to.
That is all for.
Having quality.
Product and also guaranteed supply or a higher risk of supply. So we're in a lot of very interesting conversations and that that plan will develop over time and we will be announcing.
Each quarter kind of what we're thinking upon as it relates to that and I'll stop there Travis maybe you can add on top of that.
Well I think I think you're pretty well handle that cathie I don't know if you wanted to give any specific.
Guidance around 2025, though.
Yes, So I think what we've said in public forums that we're comfortable with the numbers as we had set forth.
Last year in terms of the financial metrics right in other words, we're going to get their projects going to get there in a different in a different way like right now or as Craig alluded, we're not counting facility, we're counting hey.
Talking to the customer and then making sure that we fulfill all of their needs.
And we're also spending quite a bit of time also considering build build versus buy consideration.
Right, Thanks and important thank you.
Yes, sorry, I interrupted you go ahead.
Yeah.
No no problem. Thank you that's helpful for the color and then just as a follow up question regarding capital allocation.
You mentioned, how you assess the return on invested capital when it comes to greenfield opportunities versus buying in and retrofitting stock and flow technology. So I guess on that basis do you see more room for M&A as the company continues to scale and at what point might you be ready to consider another transaction.
Alright, Great question really good question I think an important question I think you have to start answering that question by understanding what's happening at the ground level inside the industry of controlled environment agriculture.
And that is it's a very cluttered space today. There is a lot of smaller players most of which may be considered under capitalized.
And I believe that consolidation we've talked about this ever since we started is inevitable and I think us and pizza combining has us emerging as if not the leader one of the very key leaders in the space.
And I think what's going to happen is.
There's going to be more of this that plays out over time.
But it will be as we like to say, we will do the math and we will do that geography, and we will listen to our customers. We will stay focused on delivering delicious products.
And I think.
With all of that said, we will be making great decisions from a position of strength, which is really where I believe we sit today.
Inside of the industry so.
Yes.
I hesitate to give you a timeline, but I would say that as a possibility over the pro forma period.
Great. Thank you so much.
You bet. Thank you for the question.
Ladies and gentlemen at this time I am showing no further questions.
To end the question and answer session and turn the conference call back over to management for closing remarks.
Well, we certainly on behalf of all 250 employees at local Bonnie.
Certainly like to thank everyone for their time today your interest in the company. Please reach out to us directly and I will put the software out there as well we would love to have you come tour, our facility and see with your own two eyes, what we're doing and how we're doing and I think it will really help all of your question Gil So so.
On behalf of all of US. Thank you so much for your time and your attention today, everybody have a great day.
Ladies and gentlemen, this does conclude today's conference call. We do thank you for attending you may now disconnect your lines.
Okay.
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