Q2 2022 Chuy's Holdings Inc Earnings Call
[music].
Good day, everyone and welcome to the choice Holdings second quarter 2022 earnings Conference call.
Today's call is being recorded at this time, all participants have been placed on a listen only mode.
And the lines will be opened for your questions. Following the presentation.
On today's call, we have Steve Hislop, President and Chief Executive Officer, and Jon Howie, Vice President and Chief Financial Officer of Chili's Holdings incorporated at this time I'll turn the conference over to Mr. Howie. Please go ahead Sir.
Thank you operator, and good afternoon by now everyone should have access to our second quarter 2022 earnings release, if not it can be found on our website at <unk> Dot com in the investors section before we begin our review of formal remarks, I need to remind everyone that part of our discussion today will include forward looking statements. These forward looking.
Statements are not a guarantee of future performance and therefore, you should not put undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect we refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future opera.
Results and financial condition with that out of the way I'd like to turn the call over to Steve. Thank you John and good afternoon, everyone and thank you for joining us on our second quarter earnings call today.
Second quarter began with a positive top line momentum as we continued to enjoy the strong demand from our guests craving the unique unique chili's experience.
This was demonstrated by solid comparable sales growth, particularly in April and May as compared to both last year and 2019 with that said, we have not been immune to recent sales volatility seen across the consumer landscape, resulting in flat to slightly positive comparable sales as compared to last year for the month of June .
<unk> entered the third quarter to date.
It's also worth noting that we haven't heard the hottest may June and July on record in Texas, which has had a negative impact on our traditionally strong patio sales and alcohol mix.
Furthermore, despite the unprecedented unprecedented inflationary environment, our teams ongoing focus on cost management and operating efficiencies efficiencies resulted in over a 19% restaurant level operating margin one of the best in casual dining segment, and 190 basis point improvement over our pre pandemic level.
At Chili's, our goal has always been to provide.
Fresh made from scratch food and drink at an incredible value.
Spite the cost environment, we are continually working to maintain our strong value gap versus our peers, which we believe will benefit us in the long run with that in mind, we have taken an approximately three 5% price increase in the third quarter in order to maintain a balance between protecting our store level margin and maintaining our value proposition to our guests.
Importantly, even with this price increase our value proposition remains strong relative to our peers, which we believe will continue to give us future pricing power should the need arise with that let me update you on certain key aspects of our business starting with staffing. We're pleased with the improvement we made in terms of hiring during the second quarter.
And are comfortable with the progress we've made in our staffing levels. We believe the key to proper staffing and retention of our team members both hourly and managerial during the quarter. We continued our retention bonus program for our managers provided referral bonuses to our team members for.
Riding successful new applicants and most recently rolled out a new mental health and personal counselling benefit for all of our team members.
We continue to be successful with our off premise business mixes at approximately 27% during the second quarter. This was above our targeted low to mid 20 off premise call and we remain pleased with our team's execution.
Also with regard to off premise, we made progress in expanding our catering business, which is now in 16 markets. We are on track to complete the rollout system wide by the end of the year in.
In terms of menu innovation, if you recall, we streamlined our menu offerings at the onset of the pandemic can have been slowly adding certain popular items back into our menu as we return to a more normal operating environment to that end starting in the fourth quarter. We are planning to introduce quarterly specials, we call CK OS our choice.
Accounts with a combination of old favorites and exciting new items offered on a limited time basis. This includes new items, such as the macho burrito pork bundle <unk> and chewy fried chicken tacos, all of which will be supported by our marketing initiatives.
During the quarter, we continued to utilize digital media to not only introduce and highlight new menu items, but also as a recruiting tool. This includes the use of tictoc organic influencer programs on Instagram Youtube video advertising and promotional advertising partnerships with door dash combined.
With the launch of our new website. Later this year, we are excited about the potential of our marketing initiatives, allowing us to reach broader audience groups and to better connect with both new and returning guests before I turn the call to John Let me quickly touch on our development plan during the quarter. We successfully opened a new restaurant in Midland, Texas and are pleased with.
This performance to date as we look ahead, we have adjusted our development expectation for the year to four new restaurants as a result of external challenges related to supply chain and construction, we have pushed the rest of our openings.
We have pushed the rest of the openings. Originally scheduled 2022 to early 2023 with that I'll now turn the call over to our CFO , Jon Howie to discuss our second quarter results in greater detail. Thanks.
Thanks, Steve revenues for the second quarter increased two 6% to $110 9 million compared to $108 2 million in the same quarter last year. The increase was primarily related to $2 1 million of incremental revenue from new restaurants opened subsequent during the second quarter of 2021 for the second quarter.
2022, and 2021 off premise sales were approximately 27%.
Total revenue in total we had approximately 250 operating weeks during the second quarter of 2022 comparable restaurant sales increased one 7% versus last year driven by a three 4% increase in average check slightly offset by a one 7% decrease in average.
Weekly customers comparable restaurant sales increased <unk>, 6% versus 2018.
Turning to expenses cost of sales as a percentage of revenue increased 420 basis points to 27, 8% driven by a substantial increase in the cost of beef chicken as well as fresh.
<unk> cheese and grocery items overall commodity inflation during the second quarter was approximately 24% and partially offset by menu price increases taken during the year.
Based on the current market conditions, we expect our third quarter commodity inflation to remain in the mid 20% levels as compared to 2021 labor cost as a percentage of revenue increased approximately 110 basis points to 29, 1%, primarily due to hourly labor rate inflation of approximately.
11% at comparable restaurants, as well as an improvement in hourly staffing levels as compared to last year.
This was partially offset by menu price increase taken during the year as we look to the back half of the year, we expect our hourly labor inflation to remain at elevated levels of approximately 10% for the third quarter of 2022, 6% to 8% for the fourth quarter of 2022 as compared to 2020.
One.
In addition to a continuation of the year over year increases in staffing levels operating costs as a percentage of revenue increased 110 basis points to 15, 8% due to higher restaurant repair and maintenance cost and increase in credit card fees as well as cost pressures on utilities and to go supply.
In addition, our delivery service charges were also higher year over year due to a change in our delivery menu pricing structure.
Marketing expense as a percentage of revenue increased 40 basis points to one 5% as company reinstated its digital advertising campaigns across the nation.
Our occupancy costs as a percentage of revenue decreased 10 basis points to six 8% as a result of sales leverage on fixed occupancy expenses.
General and administrative expenses decreased to $6 5 million in the second quarter from $6 7 million in the same period last year, driven by lower performance based bonuses and professional fees, partially offset by an increase in travel related and other expenses as a percentage of revenue G&A decreased 40 basis points to five.
<unk>, 9% in summary, net income for the second quarter of 2022 was $7 9 million or <unk> 41 per diluted share compared to $11 5 million or <unk> 57 per diluted share in the same period last year. During the second quarter of 2022, we incurred $7 million or <unk> <unk> per diluted share.
In impairment in closed restaurant and other costs compared to $1 4 million or <unk> <unk> per diluted share in the same period last year. The decrease was a result of the reduction in rent and holding costs paid on closed restaurants as the company continues to exit out of these related leases.
Taking that into account adjusted net income for the second quarter of 2022 was $8 4 million or <unk> 44 per diluted share compared to $12 6 million or <unk> 62 per diluted share in the same period last year.
Moving to liquidity and balance sheet as of the end of the quarter, we had $96 3 million in cash and cash equivalents, no debt and $35 million of availability from our credit facility. During the second quarter of 2022, we purchased 58700 shares of our common stock for a total of $1 3 million and as of.
June 26, 2022, we had approximately $26 million remaining under our $50 million repurchase program, which will expire on December 31 2023.
Lastly, we'd like to provide an update on the following guidance for fiscal 2022 as Steve noted, we now expect to open four new restaurants in 2022 with two of those planned for late in the year net capital expenditures are now expected to range between $30 million to $33 million restaurant Preopening expenses are now expected to be at.
Approximately one $5 million to $2 million and we still expect our effective annual tax rate to be between 12, and 14% with that I'll turn the call back over to Steve.
John while we can't control the macro environment. Our team remains focused on doing what they do best providing our guests with a unique chili's experience. They have come to expect we can accomplish this goal by being fully engaged in executing against our key pillars of safety convenience and value in closing, we believe our underlying business.
<unk> strong and the initiatives we've put in place have positioned our company to capture a healthy pent up demand for our high quality made from scratch food. Most importantly, none of our accomplishments to.
To date would have been possible without the hard work and dedication of each of our team members with that we're happy to answer any questions. Operator, Please open the lines for questions.
Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star Q1.
Moment, please while we poll for questions.
Thank you. Our first question comes from Mary Hodes with Baird. Please proceed with your question.
Good afternoon, Thanks for taking the question and thanks for the color on the quarter to date I guess looking ahead, if the consumer were to continue to slow or is there anything youre thinking about.
Doing differently from a menu and marketing perspective to respond to that or I guess, how would you encourage us to think about what levers you have to pull or how you'd respond to that type of environment.
The key levers for us as the value that we already have within our menu.
That's the key for US I think our price points are a phenomenal our value equation as well and I think we've just been talking about pretty much that in value and the convenience of our to go.
Got it and on the margin outlook. The prior 300 to 350 basis point goal seems like it could be tricky for 2022, just given the inflation expectation you shared but how would you think about the opportunity to get back to those levels in 2023 at this stage.
You're absolutely right Mary I mean, we werent expecting 25% inflation. So I think long term that is still our goal and I think that is definitely achievable. This year it may be.
Be a little difficult given the inflation situation, but I think as that calms down I think we can get back to that long term.
Great. Okay, and then last one from us would just be on.
Understand the development challenges impacting 2022, and the slippage there for some units to 2023, but how are you thinking about your prior goal of accelerating unit growth to the double digit range in 2023 at this point.
Yes, we feel good at this point again, we started the year with a lot of them on the back end of the year and obviously as you mentioned that the development difficulties has been there, but we are expecting in 2023 to get back to the 10% growth a year.
Great. Okay I'll pass it on thank you. Thank you so much.
Thank you. Our next question is from Crystal Cole with Stifel. Please proceed with your question.
Hey, guys good afternoon.
Hey, John I appreciate the wage rate pressure that you talked about in the <unk>.
10% increases Youre talking about could you help us understand where the wage rates are relative to 2019.
Okay.
They are just slightly higher than that to be quite honest I can give you that exactly but I think they are right around 15% when youre looking at 2019.
Let me look that up and if you have another question, we'll be looking that up as you.
Asset, but I think it's around <unk>.
Later.
15% above 19 levels.
$16 six so it's a little off $16, 6% above 2019 levels, yes.
Okay and then the company ended another quarter with a $100 million in cash on hand, but this quarter you only spent $1 million on share repurchases. So.
What are the plans for the cash on hand.
Why not be a little bit more aggressive with the buyback.
Great question.
We only have 15 days during the period from which to buy.
We do have a 10 I mean, we can put a <unk> one and we have.
Those instructions just weren't hit.
During the period as often as we'd liked.
But we tend to be aggressive at these levels again so.
That's kind of all I can tell you there will we plan to be aggressive at the levels that they are but we've got to do it within the window.
Or change change that <unk>, one and if we can't really do that within the year and we will be aggressive where the stock prices yes.
What's the optimal cash level you'd like to have on the balance sheet.
It's been at this level for some time now I'm just curious.
Why the elevated cash level, especially given the debt capacity you have and in the.
Improved margin structure that you have for the business.
Yes, I mean, we're looking at that right now Chris we're looking at it at the executive level.
Board level from basically a capital allocation standpoint on where we want to go with that right now I mean, we'd like to do growth, but I mean, we don't want to do growth for growth. We're looking at about 10% and so we won't be able to spend all of that we're also looking at.
Also buying properties, maybe and doing sale leaseback to reduce that overall investment long term in those investments.
And then buyback the stock so to answer your question.
The ultimate.
We operated for years and years with about $13 million to $15 million.
20% to 25 million is probably a good number to keep on our balance sheet and keep operating.
We're looking at other capital allocations at this point.
As we've mentioned before Chris we were comfortable sitting on this cash as we're continuing to go through Covid.
Especially through 2022.
And that's why I think it's because I don't think we're 100% done with Covid. So that's something that gives us a pause a little bit also.
Okay, Great I'll pass it on thank.
Thank you.
Thank you. Our next question is from Brian Vaccaro with Raymond James. Please proceed with your question.
Hi, Thanks, and good evening.
I was hoping you could elaborate on the on the comp moderation that youre seeing in recent months and yes.
Yes, I'm just curious if that's primarily a traffic or check dynamics any difference as you can see in the data months different consumer cohorts or any changes in order patterns that you're seeing as consumers navigate the menu.
Sure I mean, it's pretty broad based Brian and like.
Like Steve said on his comments.
We've had three months of the hottest months in Texas, We lost close to $3 million in patio sales this quarter, which equates when youre looking at.
Alcohol mix alcohol mix on the patio is probably around 25% to 26% compared to dine in of 2021%.
And so you are losing a lot in the way of alcohol sales and not from attachment rates, but I think just from patio sales. So that that's been really a driving force for our Texas stores.
Okay, great and on the commodity front, John I think you said you expect mid twenties inflation in the third quarter I know, it's an uncertain environment, but I guess everything you know today how.
How do you expect that to trend.
Looking into the fourth quarter, and then could you just give us an update on your contracts for the second half and any areas in particular that you are not contracted on.
Sure and so our proteins, obviously chicken, we can't contract and we have a fixed rate over earn or barriers. So as that comes down and we will benefit from that in the numbers that we're giving is if it stays as is so to the extent that we get.
Two areas that can really help us out and thats produce and chicken.
Produce though once it starts you would see avocado has come down and then I will go back up so.
We've seen elevated produce prices if they come down we could see some benefit there chicken that that continues to come down we'll see benefit there. Our beef is locked in we continue to look at opportunities to buy at lower cost and mix into those contracts.
Which may help us but that.
That will mainly be in next year were purchased through the end of the year in beef.
And then oil I think we locked up in oil, which we make our own mayonnaise and things like that so we contract through oil soybean oil and all of that through the end of the year as well so to the extent that we can contract further out and mix that into the contracts. We can see some benefit but what we know today that's kind of.
Where we're seeing in Q4, we're seeing it come down a little more but I think your overall inflation.
Inflation for the year is going to be in that high teens low twenties.
Okay, Great. That's very helpful. Last one I just wanted to ask about was on labor could you expand a bit on the pace in which your staffing levels have been increasing over the last few months, maybe a snapshot of where your staffing levels were early in the quarter and maybe more recently and I'm just trying to understand.
And sort of where the staffing levels are compared to your current needs given that traffic is obviously still down somewhere in the teens versus 2019. Thank you.
Yes. Thank you we started the quarter probably in that 85% to 90% staff right and wed say were at 95% plus right now we feel real good about it as we continue to move forward and again. This is on our new power levels. As we continue to move forward. So we feel strong with that obviously, we're going into about to be a slower part of our year one.
Index or quarters into the third so we feel great about it we're always constantly looking for great great talent, we're never going to ever say, we're fully staffed because we're always hiring and that's how we'll continue to look at it but we feel real comfortable with where we're at today.
That's great I'll pass it along thanks. Thank you.
Thank you. Our next question is from Andrew <unk> with BMO capital markets. Please proceed with your question.
Hey, good afternoon. Thanks for taking my questions. My first one is just on pricing I guess.
My notes you have got from last quarter that you were looking at three to three 5%. So that came in at the high end.
But I guess with inflation continued to run as high as it is.
Why is why is that still the right level, how are you thinking about pricing beyond understanding.
We have some consumer uncertainty and the value proposition is obviously very important I'm, just I guess trying to get a sense for.
How do you continue to think about it beyond the three now.
Yeah again, it's important to note that we started at the beginning of the year at the beginning of the third period, we took about a three three and a quarter is what we took.
And the second period of about three and a quarter and we came back and took another three so we're a shade under 7% for the year.
And we think Thats, a push I think thats still a little bit better than some of our competitive set in casual dining having said that with us looking at everything going on with inflation and not only to restaurants, but towards the regular consumer we felt the value was huge part of our business as we continue to move forward like I mentioned in.
In my talk earlier that we definitely feel like we have the best value out there in casual dining I will continue to monitor that and we feel we have some pricing power as we move forward, but we're comfortable going into a shade under 7% for the rest of this year and we look at it for 2023.
And I might add something here too if you look at the Black box and you look at sales.
Ed versus traffic.
Starting in February of this year, our traffic levels, although still negative has.
<unk> higher than.
The overall casual dining has.
So we actually surpassed that in traffic, we haven't caught up with overall sales yet because of our pricing.
But I think what Steve was talking about is starting is working as well because it's driving is driving the traffic.
Got it okay that makes sense and then I guess.
What did you call them choose knockouts I believe but just wanted to start with you.
So you guys are going to start to roll those out and I guess I'm just curious obviously theres been a big push behind.
The streamlining of the menu through the pandemic you've added some items back in now starting to pull some of these things and is there any reason to believe or is there an outcome through those LTE. Those I guess are the specials that you could think that maybe you need to continue to selectively I guess beef up the menu where are you.
You do not see a scenario where that would play out.
No I feel great about the existing menu at that 44 45 item menu. Currently I think its offers a lot of choice and a lot of variety well, we'd like to do starting in the fourth quarters Youre going to see us two to three items a quarter will run six weeks in.
In the quarter of time, and what might be an old favorite that used to have one might be special that we ran over the last 10 years.
And Thats, how we will do that and so yes, Max would always be three items two or three every single quarter for a six week period of time as we move into 2023, specifically the mid part of the year, you will see us take a little bit of a different approach to these <unk> knockouts and mobile use on one of the items, we will always probably have.
Our barbell approach to one of them.
And where there was something that probably wont come onto our menu will be a little higher cost item and a higher priced item that will be.
Added into the <unk> in the middle part of next year, but that's our approach just to keep some new and exciting as we can bring and again keep things that we're ready to talk about in that.
Not only are consumer excited but our employees excited so that's what we'll do but we're very comfortable with the size of the menu currently with just a couple of the three specials every quarter and that's how we'll continue to move forward.
Okay, and then just last one for me.
Obviously, the marketing levels have gone back up, but we're going into where we are and what is the choppy environment. I guess I'm. Just curious does that make you think one way or the other about marketing levels higher or lower.
Now that you've had that for a couple of quarters at the higher levels.
I guess the more normal levels, you're seeing the type of returns on that that you would have expected or liked to say yes.
Yes.
But what we've what we've done is returned back to our 2019 levels as what we've done.
Just adding back into the social part of our business and a little bit of the stuff I mentioned in the call, which is the sum of the video now we're comfortable with that level of roughly one.
Four of 515% of sales.
And we think thats optimized for us and we will continue with there.
Okay. Thank you very much thank you.
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Our next question is from Nick.
With Wedbush Securities. Please proceed with your question.
Thank you in the past you've said that the limited staffing.
Keeping.
Lines, a little bit longer maybe you guys had less tables than you'd like customers were waiting outside I mean is that still happening. So there is still excess demand that you could convert if you. If you were fully staffed.
A little bit negative, but like I said, we're right around that 95% one thing thats a permanent though is in our model, we definitely change the model of how many.
Specifically, how many tables are in our restaurants. They are right in that 40 to 42 size is perfect for US. That's also part of our new power system on our lease and that was forced a little bit and thats in our new model is definitely more profitable hours and then what we're also doing is.
<unk> reduced some hours of operations in our restaurants from 2019 levels. We did an analysis on those and they just really what you'd call profitable hours for us and we.
That's going to continue and that's where we're at today.
Got it okay.
The court date flat to slightly positive did that include the incremental price increase in Q3, one is that incremental price increase was that early in the quarter.
No.
At the end of actually Q2.
And it's right at the end of it so it just started in Q3.
Okay. So to coordinate commentary included incremental price increase yes, yes.
Okay.
In terms of just what Youre seeing.
From from consumer behavior are you seeing trade downs.
There are regional differences across the system that makes you called out, Texas and the heat in Texas anything you'd comment there would be great household.
Again, it's broad based.
We haven't seen any big change in anything like that so far I think you mentioned it a second ago.
But now that it's been pretty even all the way across.
Got it Okay, and then just the incremental price increase by my math its about six five maybe six 7% in Q3 now.
With the.
Food cost inflation commentary.
Yes.
By my math it keeps Cogs right around 28, maybe maybe low 28 is that fair.
Yes, that's fair.
Okay, Alright, thank you very much thanks.
Thanks, Nick.
Thank you. Our next question comes from Andy Barish with Jefferies. Please proceed with your question.
Hey, guys good evening.
First just wondering on the on the <unk>.
Do you expect to drive menu mix.
Positively or is that something we'll have to kind of wait as you move through 'twenty three and start to implement some of those may be higher cost barbell items.
Yes, I think what Youll see and again, just the excitement level from our consumer and our employees in Q4, and Q1 start and probably in Q2, when we do a little bit more of the barbell approach is when you'll start seeing a menu mix change a little bit there Andy.
Got it and then.
I may have missed something but.
Can you clarify that.
Delivery menu price comments just.
Are you seeing.
More pressure.
Fair or is it is it less pressure from delivery fees hitting the income statement I wasn't sure where that was going.
No it's more Andy as we started about three years ago to try to combat those those fees right.
Did that final price increase this year, that's now covering 100% of those fees.
But that fee goes in our operating expense and so that's what's driving that a little bit higher. So that's that's running about 100 basis points higher than just because those fees from where we were in 2019.
Because that's kind of how we have to record it you've got the extra revenue on the revenue side, but then you still have to record the operating fees.
Down there in the operating statement.
Gotcha Okay.
And then finally just on on.
Store pipeline can you give us a sense just on kind of how much flexibility.
You have to open up let's.
Let's say those 10 or so units for next year and how many of them are.
Kind of on the on the on the smaller 5000 square foot prototype or maybe it's.
Yeah.
A little bit easier not that opening anything is easy right now.
Yes.
Youre right I mean, it's not easy, but we're flowing that some of those over into 'twenty, three and with those going over we feel pretty comfortable with our pipeline for 2023 that we can accomplish that 10%.
Unless it gets a little more restrictive than it is now we think that.
Delay and May even give us a little benefit from a pricing standpoint, as you've seen lumber come down drastically.
But it's really kind of supply issues right now getting there getting the labor getting the contractors and getting the equipment on site. So hopefully that alleviate some but as far as from a site selection and site.
Pipeline, we feel pretty comfortable at this point for 2023, and as you know Andy all our expansion over the next one.
I've said it about three years, it's going to be probably in.
For the five states that we've talked about where we currently already have units and we have good awareness already so we feel pretty comfortable going into those areas.
Got it thank you very much.
Thanks.
Thank you. Our next question is from Todd Brooks of the Benchmark Company. Please proceed with your question.
Hey, good evening everybody.
Hey, Todd.
Couple of questions is just leftovers here one.
Steve you pointed to gross man.
General manager retention and actually paying the manager retention bonuses again can you size. It is it is it equivalent to what we paid out across Q2, and Q3 last year or what's the structure of how those retention bonuses are working correctly, yes, no nothing like that I think last year was around $1 6 million I believe.
Youre talking in the $150000 range currently on a quarter basis.
Okay perfect. Thanks.
Then the second question I have is if you.
You spoke to catering being in 16 markets now all markets hopefully by year end, just how how does demand shaping up for catering and as you start to think about maybe work in mix out in the fourth quarter, how big of an opportunity is this year over year. Thanks.
Yeah. Great question. So we currently are blown away kind of any numbers that we've had in the past we're hitting all time highs close to double what we were in 2019. So I think we've said this before I mean, we're close to about 3% of sales right now in catering we think that can grow easily to four 6% once we.
We start promoting it and get it in all markets.
Yes, the big thing.
Alright, so the big change on that is in 19, when we were doing and were doing big Big Big parties there.
They are starting to come back now.
Through the last year, we've been doing a lot of 'twenty thirties, and forties instead of the 100 to $150 that we had in 2019, but we're just now starting to see the weddings coming back a little bit more bigger weddings and thats, rather we're excited about seeing that.
And then just to put a finer point on this seasonally as you get to Q4 and Thats just holiday based celebrations would.
Would you expect it to mix higher Jon maybe towards the high end of that four to six range.
No it's going to take a while for that to get there I mean, if you think of private dining right.
And events like that generally you're a year in advance before you start building that business and going to wedding venues and how far in advance. They plan. So its going to take a while to build up to that so we don't expect that in Q4, but I think ultimately we can get there yes.
Okay, great. Thank you both.
Thank you.
Thank you there are no further questions at this time I'd like to turn the floor back over to Steve Hislop for any closing comments.
Okay. Thank you so much John and I. Appreciate your continued interest in children will always be available to answer any and all questions again. Thank you stay healthy and have a good evening.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.