Q1 2023 Bowlero Corp Earnings Call
Greetings and welcome to the Bolero Corp, first quarter 2023 earnings conference call.
Now my pleasure to introduce your host Ashley decent amount of ICR. Thank you.
Ashley you may begin.
Good afternoon, and welcome to the Valero Corp, first quarter fiscal 2023 earnings conference call.
All participants will be in a listen only mode.
During this call the company may make certain statements that constitute forward looking statements.
Such statements reflect the company's views with respect to future events as of today and are based on management's current expectations estimates forecasts and projections assumptions beliefs and information. These statements are subject to a number of risks and uncertainties that can cause actual events and results to differ.
<unk> from those described in the forward looking statements.
For further details concerning these risks and uncertainties. Please see our annual report on Form 10-K.
Filled with the SEC on September 15th 2022.
The company expressly disclaims any obligation to publicly update or review any forward looking statements, whether as a result of new information future developments or otherwise, except as required by applicable law.
In addition, during today's call the company will discuss non-GAAP financial measures, which we believe could be useful in evaluating our performance reconciliations of adjusted EBITDA to net income calculated under GAAP and other non-GAAP measures.
Can be found in our earnings press release and will be included in our Form 10-Q for the first quarter of fiscal year 2023.
Throughout today's conversation you will hear the company refer to EBITDA and adjusted EBITDA at all times. The company is referring to adjusted EBITDA as described above and reconciled to net income and the associated disclosures.
As a reminder, this conference is being recorded.
I would now like to turn the call over to Brett Parker, President and Chief Financial Officer of Valero. Please go ahead.
Good evening and welcome to the Valero Corp earnings discussion for Q1 of fiscal year 2023, I am Brett Parker, Vice Chairman, President and CFO Bill Airport.
Thank you for joining us today.
As always we value our shareholders and strive to create value for them.
And we're looking forward to discussing our strong financial results from the first quarter of our 2023 fiscal year.
We are pleased to report that we have continued the positive momentum from fiscal year 2022.
2022 was a transformative year for bolero in 2023 will take this company to new Heights.
We believe this trajectory is particularly important as we head into the second and third quarter. So that's why 2023, which historically represents 55% to 60% of our annual revenue.
Beginning with the highlights in the first quarter of fiscal year 2023, Bolero generated record Q1 revenues of $230 million and record Q1, adjusted EBITDA of $65 million.
Compared to the prior year's Q1 revenue grew $49 million or 27% and adjusted EBITDA expanded by $6 million or 11%.
Compared to pre pandemic performance revenue was higher by $82 million or 55% and adjusted EBITDA expanded by $40 million or 162%.
This incredible performance serves as a testament to three key differentiators.
The benefits of QM, EMS, which is our algorithmic Lee power management system.
Management's ability to manage in all macro environments and the continued positive momentum in demand we see in the business.
We have seen this strong demand sustained beyond the quarter end in the first 18 weeks of fiscal year 'twenty, three which takes you through November six revenue has remained extremely robust growing 56% versus pre pandemic levels with same store revenue increasing 36% on the same basis.
When compared to the same time period in prior year, which was an excellent quarter in its own right FY 'twenty three revenues were higher by 30% and same store revenues were higher by 21%.
Adjusted EBITDA margin in the quarter was 28, 4%, which grew 1158 basis points versus the corresponding pre pandemic quarter and reflects our relentless pursuit of world class operational performance.
It's at the core of our company culture.
We continue to deliver margins well in excess of our peers.
As mentioned this operational excellence is supported by our proprietary technologically enabled QM S tool, which focuses on optimizing the revenue generation and cost control discipline across the entire portfolio.
This enables us to generate tremendous cash flow from the business.
In Q1, FY 'twenty, three we generated $36 million in cash from operations.
The ability to continue.
<unk> large amounts of cash from operations enables the business to self fund a large number of center acquisitions, new builds and existing center upgrades and renovations.
In the first quarter, we added three new centers.
November 16th and the fiscal year 'twenty three we have acquired an additional six centers, bringing our total center count to 325.
We also have definitive purchase agreements to acquire an additional three.
Since the start of fiscal 'twenty, two we have added 38, new centers to our portfolio and in so doing grew the center count by approximately 10% on an annualized basis a significant.
Majority of these came with owned real estate as well, which provides long term business security.
And excellent optionality to raise cash through sale leaseback transactions or traditional mortgages.
And these new centers have been very strong and the anticipated returns are in line with or better than prior center additions.
The pipeline for additional deals remains robust and offers a compelling opportunity to further consolidate and grow the industry.
Beyond the financial performance there were other operational initiatives that we launched this quarter, which gives us additional confidence and excitement for the company's future.
We successfully initiated a pilot of a skill based game of vacation app called money ball that we believe can transform the performance of our centers by deepening engagement with our guests.
Moneyball is an internally developed app that enables guests to ball and challenges for cash or other prizes depending on the location.
Moneyball uses proprietary algorithms to determine odds on certain challenges, which range in difficulty from as easy as breaking 102 as difficult as Boeing and exact score.
We believe that in addition to an enhanced guest experience visitor frequency and in center dwell time could increase.
With that I'll move into a more detailed discussion of the results in Q1 fiscal year 2023.
During the quarter ended October <unk> 2022, we established new high watermarks for both first quarter and trailing 12 months revenue and adjusted EBITDA.
Revenue continues to materially outperform pre pandemic levels, both in total and on a same store basis.
Despite all the well documented macro cost pressures, we continue to produce very strong margins with a Q1 FY 'twenty three adjusted EBITDA margin of 28, 4% compared to 16, 8% in the comparable pre pandemic period.
As previously noted we continue to generate predigest levels of cash from operations, which positions us favorably to continue to execute our growth strategy.
Driving this performance in the quarter was very strong revenue growth.
Top line increased by 27% year over year and surpassed pre pandemic levels by 55%.
Same store sales also rose, 20% compared to prior year quarter.
This increase was supported by continued strong performance of walk in retail.
Notable and accelerating growth in event revenue for the third consecutive quarter.
And a strong recovery in lead revenue.
The dramatic increase in event revenue and the rebound of leaks have the potential to support substantial continuing revenue growth and have resulted in an acceleration of revenue expansion through the week ended November six.
Furthermore, we recently increased prices across the portfolio and we expect the impact of these increases to further materialize in the months ahead.
We continue to monitor customer response of which we have seen none thus far and input costs to inform further price changes.
Adjusted EBITDA was $55 million in the quarter, which represents an increase of $6 million or 11% year over year, and an increase of $40 million or 162% relative to pre pandemic performance.
We reported a net loss of $34 million for the quarter, which includes a $41 million noncash expense related to the evaluation of the earn out shares.
Adjusted for this noncash expense net income would have been a positive $7 million.
In addition, we generated $36 million in cash from operations in Q1.
Consistent with our history, we continued to reinvest in the business and further optimize our capital structure to maximize shareholder value.
As of May 18, 2022, we retired all of the outstanding warrants and reduced ultimate dilution in so doing.
Furthermore, we began returning capital to shareholders under our previously announced $200 million buyback authorization.
Through October 2022, we have repurchased almost $3 9 million shares at an average price of $10.26, returning $40 million to shareholders in less than seven months.
Yes, aforementioned buyback has retired 91% of the approximately $4 3 million shares issued in the warrant exchange.
As we highlighted on page four of the materials. We're proud to report that our store count now stands at 325, which includes the addition of nine new centers since the start of the fiscal year and 38, new centers since the start of fiscal year 2022.
Additionally, we have executed definitive purchase agreements or leases to add another eight new centers to our portfolio in attractive markets across the country.
Our growing footprint continues to improve our presence in and around top msas and simultaneously opens up new markets for us.
We expect the momentum in our acquisition activity to continue as the pipeline remains as robust as ever.
On page five of the materials you can see the recent trends in bowling center revenue.
As mentioned on our last earnings call. If extended release of data is related to the assessment of the waning impact of Covid. The general return to office trend and the evolving macro environment, where there is increasing talk of a weakening consumer inflation and fears of recession.
Despite any potential headwinds, we continue to materially outperform pre pandemic levels and continue to outpace FY 'twenty two's revenue generation.
More specifically since January 2022, our revenue has consistently outperformed pre pandemic levels.
This growth accelerated in February March and April and has been steady other than week to week variances.
Due to anomalies, such as calendar shifts and weather since.
This momentum has continued into the beginning of our busy season.
While the results are preliminary revenue in the most recent week, which ended November six grew an impressive 57% compared to pre pandemic.
We have seen our strong topline performance translate into continued double digit growth in adjusted EBITDA as demonstrated on page six.
Adjusted EBITDA margin was 28, 4%, which surged almost 200 basis points above the comparable pre pandemic metric driven by revenue growth our proprietary technology based solutions that allow us to continually optimize performance and the operating leverage of our business.
Relative to Q1, and FY 'twenty, two adjusted EBITDA margin decreased by 415 basis points.
This short term margin pressure, primarily resulted from the reinvestment and normalizing staffing in order to maximize results in the coming busy season and.
In addition, as we have previously noted Q1 FY 'twenty two adjusted EBITDA margin was unseasonably high due to pandemic related staffing shortages, which have since reached more stabilized levels.
<unk> view on annual margins remains unchanged and the seasonal normalization comes ahead of our seasonally largest Q2 and Q3, which we know experienced hampered demand in FY 'twenty to.
Due to the impact of omicron, any new wave of Covid restrictions.
Moving on to page seven.
We wanted to provide additional context around our record setting revenue and adjusted EBITDA performance for this quarter.
From a seasonality perspective, Q1 is typically a lower volume and margin quarter.
We believe the pre pandemic revenue curve remains the most indicative view of typical seasonality trends in our business with Q2, and Q3, historically, serving as the largest quarters accounting for 55% to 60% of annual revenue and 65% to 70% of annual adjusted EBITDA.
This year the rebound in revenue we saw in the first quarter vis vis event and league.
Supports our confidence heading into the second and third quarters.
We never lost focus on our goal of providing delightful guest experiences for our guests and are now well positioned to do so through fiscal year 2023.
Our overall financial performance is largely a function of our center level economics.
As highlighted on page eight junior level revenue increased $50 million or 28% over the comparable prior year period with positive momentum across each of our guest segments Watkins retail group events and league tournaments.
Center level, EBITDA grew 20% year over year, and an astounding, 95% over the pre pandemic period, reaching $86 million.
Our 38% center level EBITDA margin increased 753 basis points above the comparable pre pandemic period.
Page nine lays out cash flows for the quarter the company generated $36 million in cash from operations during Q1 of FY 'twenty, three growing almost 13% versus the prior year.
This bridges cash flow provides support for our center acquisitions building and the conversion of centers as well as the continued optimization of our capital structure, including share buybacks.
The company finished the quarter and a very strong cash position with balances of nearly $110 million, even after investing $62 million in growing and improving our footprint.
Please note that it is typical for cash decline in the first fiscal quarter due to the seasonal nature of the business combined with the benefits of completing construction projects of all types in the seasonally smaller first and fourth quarters of each year.
In summary.
Polaris Q1, FY 'twenty three performance continues to significantly outpace pre pandemic levels, we set new records in terms of revenue and adjusted EBITDA generated in our first quarter across the company's multi decade history. We.
We are proud of the results, which demonstrate the continuation of the positive momentum and exemplary annual performance, we achieved in fiscal year 2022.
Fiscal year 2023 is off to a strong start and we believe the company is poised to continue its strong performance through a combination of organic growth and new center additions going forward.
Thank you for your time and I look forward to presenting again next quarter.
We will now begin a brief Q&A led by our chairman founder and CEO Thomas Shannon.
Operator, please open the line 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.
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One moment, please while we poll for questions.
Okay.
Thank you. Our first question is from Kevin Hayman with Jpmorgan. Please proceed with your question.
Hey, guys. Thanks for taking my question.
Just a quick one on the.
Remarks, Brett I think you said your annual view on the margins remains unchanged can you just remind us do you see the FY 'twenty twos, 35% EBITDA margin as a base to build on this year.
Thanks.
Yeah.
Yes.
Sure.
Yes, I mean look we we would expect that typically.
As revenue rises.
You know, we would see higher margins as I said from from a combination of the impact from the Q on that.
And then through the operating leverage in the business.
So that's sort of the baseline.
Got it and on the.
Q to date topline figures you sided.
Can you just remind us what the same center sales revenue was trending in the second quarter to date relative to <unk>. Thanks.
Okay.
Yeah.
So the the.
Q1.
<unk>.
Same store sales were higher.
Bye.
55% versus pre pandemic.
Our 2007, or I'm, sorry, 37, 6% versus pre pandemic or 19, 9%.
Year over year.
And the <unk>.
The Q2 year to date, while the year to date.
Through the first 18 weeks, we're seeing same store sales higher by 36% versus pre pandemic and 21%.
The FY 'twenty two in the early part.
No.
Q2, so it's essentially peak for our.
Revenue was higher by 52%.
In total and 32% on a same store basis.
Okay.
Great. Thanks very much.
Thank you.
Yes.
Thank you. Our next question is from Ian Zaffino with Oppenheimer. Please proceed with your question.
Hi, great.
Thanks for taking my question.
On the pricing that you mentioned thank.
You mentioned that you recently adjusted your pricing.
If I could caution by Harman.
When have you implemented that.
What areas have you implemented brought in or maybe the magnitude or any type of color you could give us ramping.
Great. Thanks.
Sure, Yeah, and as Tom Shannon Thanks for the question.
We've taken about 9% in a in an average across all the products, so food beverage and Boeing.
And that took place about.
Six weeks ago, Brett correct me, if I'm wrong on that date, but it seems like around six weeks ago is when we took the price increase.
Yes, it's been it's been on a rolling basis, but most of it has been in that window to describe.
Okay. Thanks.
And it was not.
And then this next quarter.
And when you talk about staffing.
Where are we.
In anticipation of.
Additional bonds isn't just mainline following.
Where are the staffing again any color would be helping.
Thanks.
Well, it's across the board so.
If you look back a year.
The first fiscal quarter of last year.
We were just coming out of Covid It was <unk>.
Hard to hire a lot of people didn't come back to work we were dramatically short staffed everywhere. So the margin was unsustainably high.
And I mean, unsustainably, because you might have centers.
Where do you have to managers and the and the par is three or four and so you can sustain that for a while but eventually you just burn out your managers.
So it's really across the board.
And I would I would say that by being short staffed a year ago, we werent able to maximize the opportunity in the second and third fiscal quarters, which are by far the highest.
Revenue quarters, we have and the most important revenue quarters for that reason.
I would say.
Excuse me we are we are very well staffed now in most markets I would say we are optimally staffed.
So we're prepared to capture.
As much revenue as possible in the quarter in the next busy quarter that comes in after the start of the year I think you're already seeing that in the incredibly robust same store sales that we've generated already so far in this quarter.
Yes.
Again work, we're comping with very high numbers against numbers last year that were really good on a revenue basis. I mean, this was just a blowout quarter $230 million of revenue in the quarter are traditionally slowest quarter is a huge number.
So.
Again, you know you you went from.
Very low labor last year, unsustainably low to a more normalized labor environment, which I think positions us extremely well to maximize revenue over the next few quarters.
Okay, great. Thank you very much that's great color.
Sure thing.
Thank you. Our next question is from Stefan <unk> with CJS Securities. Please proceed with your question.
Hey, Thanks for taking my questions.
You mentioned moneyball.
Could you maybe talk about some of the economics here I imagine there is.
Some incremental cost maybe a <unk>.
Utilization that you think could be breakeven and then what you see the potential of Moneyball today.
Well, we're spending in the neighborhood of $3 million to $4 million a year to develop and maintain this product redevelop it entirely in house. So we own it we own all the data I think that's key.
The main point of money ball from our perspective is to increase the number of games bold per visit so increase length of stay and also increased frequency.
And the product will really have two basic iterations one is a for money.
Uh huh.
Version, where we're going to give you a series of challenges and you can put up money against those and when actual money.
The other is a.
A free version, where you have no money at risk and you.
Ken when things like free game coupons free food discounts on food et cetera.
The point of both of those versions is identical to increase the number of games bold per visit and to increase frequency of visitation.
Now.
If you think about it.
The.
Average ball, where it comes in and both are about 2.2 games per visit.
And let's just say that the average game, we charge. The average game rate is about $8. If you can increase.
That that number of games, both by one by one game per visit right, which is the whole system is geared towards incentivize you to do that.
We'll generate another $8 of bowling revenue per guest visit which drops at a 100% margin.
So the potential revenue increase from this product is enormous.
And it's basically all margin less the $3 million to $4 million of ongoing maintenance and improvement costs.
That we're spending.
The goal is not for the in the money version. The goal is not for the house to make money.
Although it could by offering odds the house could be the counterparty, we could actually make money and adjust the yards up or down to have a hold so to speak that's not the goal. The goal is to return basically all of the money to the player and in some cases more than all the money they put it.
Risks and the reason is because we have so much opportunity and increased revenue per visit at at high margin that.
We could give back up to the $8 that were getting for the incremental <unk>.
<unk> bold per visit and still be ahead economically and so it gives us a tremendous tool to sort of dial up or down what the incentive is to to spur that increased play per bit per visit and then to induce people to come back in Baltimore.
That's great color. Thank you so much.
Just squeeze in one more.
He purchased and $4 500000 shares during the quarter.
Can you just talk about the decision that goes into that versus acquiring more centers or ramping up conversions.
Well, we're not capital constrained so we sort of do all of it.
We buy back Opportunistically and we acquire every center or sign every lease that meets our hurdle rate hurdle rate being about 25% compounded over five years.
With a terminal value factored in so we started out the fiscal year with a significant cash balance.
As you know, we generate prudishness prodigious amounts of cash flow.
And at the same time, we're renovating centers, so we're not capital constrained.
And we sort of are in a very virtuous position, where all of these are very high IRR opportunities and thus far we haven't had to pick and choose we've just done all of them.
Great. Thanks, so much.
Sure thing.
Thank you. Our next question is from Eric Handler with <unk> Partners. Please proceed with your question.
Good afternoon, and thanks for the question.
I wonder if we could sort of revisit.
The group events.
<unk> from last year's second quarter.
Obviously on the crime caused a lot of cancellations.
And in those corporate events.
In the quarter can you.
Go back in.
I remember you, saying, what the impact was last year.
Yes.
But let's say whatever that number is.
If we take that number and add it to the $40 million from group events that you.
That was your actual number from last year's <unk> is that a good starting point to think about for group events in this year's Q2.
Yeah.
It seems reasonable I mean, we're.
Trending higher than that now.
So I think you can use that as a baseline but.
In.
Brett we didn't publish this number but can we talk about what we did in Q4 on a comp basis and events.
Through Q3.
Okay, I don't have that number handy I haven't I haven't.
So through <unk>.
Q3, Eric.
I meant revenue or through Q1, sorry with <unk>.
<unk>, 90% versus prior year, and 69% to pre pandemic and momentum is is really strong and it goes far beyond.
Sort of getting back hole, which I think is the starting point that you were describing where the trends are.
Meaningfully more positive than that.
Or.
There are reasons, but there.
I think that's probably a good place to start your equation is is looking at the trends in the year to date.
Theres really nothing better to point to.
And it's the most up to date.
The momentum in that part of the business in particular is extremely strong, but we're not seeing I think what's equally important.
Equity in response to your question, but we're not it's not as if we're seeing some replacement.
In the quarter, we saw events.
69% versus pre pandemic.
We're also seeing retail up 69% and league up 19%. So we're doing better across all lines of business, it's not just that and there isn't any replacement that's happening.
Right, Okay that is that.
That is helpful.
And then with regards to your leagues and tournaments.
Obviously, you just said you got like 19% growth pre pandemic.
Just looking at.
The trend line sequentially in the fourth quarter. It was $21 million, which I think is a shoulder period for leagues, but last year in the second and third quarter, you were like at $26 million to $28 million like how do I think about the seasonality of leagues and in terms of let's say.
Sign ups, how how is that tracking on a year over year basis.
Well the business is evolving it's.
It's evolving from longer leads to shorter leagues et cetera, It's also evolving in that.
There were times of the week, where the league business maximize the revenue opportunity and now it doesn't and so we've selectively taken leagues out to replace with retail. So the fact that we're up in league is pretty astonishing I think the industry as a whole is down.
But.
You know leagues.
<unk> are not your primetime business. They are they are really the off primetime business you have a lot of daily X you have leaks during the week et cetera.
And so.
You know the leaf business for us is up.
There's an evolution going from the 32 week leagues to the shorter social leagues that can be half of that or even shorter, but they spend more on food and beverage, which doesn't directly show up in the league number.
So.
Moving around all in a positive direction and certainly positive for the business, but it's not something that I would particularly focus on sort of in the whole revenue mix.
Got it.
Okay and then one last question if you don't mind.
Net.
I believe all of your debt now is variable.
How are you thinking about them.
The debt that you have outstanding when it makes sense, maybe to pay down some of the debt with excess cash.
How do we think about where the interest rates are trending to.
Well I mean at this point it's.
Even though it's not a low in the sense that everybody got sort of load into the cost of capital is still.
Pretty low, particularly when you compare it to the returns that we get by reinvesting in the business.
So Tom mentioned, the 25% hurdle rate.
Nearly all of our investment strategies are well ahead of that in actuality.
And what we're seeing.
Those those returns continue so that the spread is just huge so we continue to monitor it and we have considered putting on some caps.
But typically trying to outsmart the interest rate environment.
And marketplace has not been a winning.
A winning strategy for most so yes.
I think at this point, we're more inclined to.
See how things shake shake out because its still dramatically cheaper.
Then what our rate of return is by reinvesting that money in the business.
Thank you very much appreciate it.
Thank you. Thank you. Our next question is from Michael Kaplinsky with Noble capital markets. Please proceed with your question.
Thank you and thanks for taking my questions.
Some of them have already been addressed but I was just wondering in terms of the color on Q2.
And you indicated that you did increase pricing can you talk a little bit about the margins, particularly in event revenue given.
Given the fact that that seems to be rebounding very strongly.
Versus like let's say leak play and others.
So if you could just kind of give us your thoughts on the composition of the revenue mix and how.
Margins kind of play into that given your price increases and so forth.
Sure Michael It's Tom Shannon.
The bowling.
The business has the highest margin its theres no cost of goods sold right. So it's basically all profit on a variable basis, and we're seeing very very robust retail demand and event demand. So the retail bowling has the highest margin the highest volume the most.
And part of the business.
We're seeing you know the most robust demand we've ever seen in the company's history.
We're also seeing extremely strong event sales to and which are accelerating.
And that business is very high margin also just slightly less high margin because you have a thought.
And beverage component.
So instead of it being basically 100% margin, let's call that business.
80, 80% margin.
So.
What I think.
What's important to keep in mind is that the quarter. We just got out of is our lowest grossing quarter, even though it was very very good quarter $230 million of revenue in the quarter.
That it's not surprising that if you were going to have margin compression in any quarter. It would be this one on a year over year basis, because you're going from a quarter, where you had abnormally low input costs to one where they are more normalized and it's not a huge revenue quarter.
And so.
The increase in costs sort of magnitude is magnified on a margin basis versus what it would look like say in this quarter or the next quarter and so.
Yeah.
There is a we made a conscious decision to staff up to be.
Fully capable of maximizing revenue and profit for the rest of the year and we had to staff up in our lowest grossing quarter.
So.
You know the business across the board is extremely strong revenue generation continues to defy our expectations Street expectations, our annual operating plan.
Really everything.
And now we're able to run the business in a sustainable way and most importantly deliver a high quality guest experience.
Well.
Your business is performing extremely well with some pretty strong economic headwinds not all of your peers are doing as well I was just wondering if you have noticed that there might be more.
Interest in acquisitions and that sort of thing given that youre doing so well in others are and I am just wondering if the pipeline of acquisition targets look like they've improved.
From where they were just maybe six months ago.
I don't think theres been any change in that but I will say that the acquisitions. We've done year to date have been extremely good acquisitions. So strikes at Rocklin in California, a center doing $6 million as an independent which is an extremely high number for an independent we just closed on them.
Mark in Omaha yesterday, you might've seen the press release or on Monday, I guess.
Again, another center, an independent doing $6 million, we think those centers have potential under our ownership to get to eight or $9 million.
And when you're at those levels Theyre extremely profitable.
We also acquired Mel's lonestar lanes in Georgetown outside of Austin, Texas.
The OE in Wichita So.
Not just a lot of deal activity, but a lot of really high quality deal activity, which is great and then the rest of the centers are all very good quite good but this last couple of months was unusual in that we did so many deals of really really high quality centers.
Say that the outlook going forward is about the same we have a very robust pipeline. We have five leases signed for new builds construction will start.
After the first of the year and these centers will probably average I would guess $7 million to $8 million, so far far higher than our fleet average so.
It's a combination of deal volume, but also deal quality and the deal quality keeps going up but just to answer your question.
Simple form we havent really seen any change.
In the volume the volume remains really good I think the volume is driven more by the demographics of the sellers.
You have a elderly independent proprietor base.
And.
Thus far we're really the only.
Acquirers of any scale.
Great. Thanks for all the color I appreciate that.
Sure My pleasure.
Thank you there are no further questions at this time I'd like to turn the floor back over to management for any closing comments.
Well I think.
This is Brett Parker I would just thank everybody for joining in and giving us the opportunity to.
Sure our thoughts on what was a <unk>.
Really robust performance in this quarter and we look forward to talking again in a few months.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.