FAT Brands Inc. Q1 2023 Earnings Call
Good afternoon, ladies and gentlemen, and thank you for standing by.
Come to the Fat brands, Inc. First quarter 2023 earnings conference call.
This time, all participants have been placed in a listen only mode. Please note that this conference is being recorded today may eight 2023.
On the call from Tech brands, our chairman of the board.
Horn and co Chief Executive Officer, and Chief Financial Officer, Ken cubic on the golf real within this afternoon. The company made its first quarter 2023 financial results publicly available.
Please refer to the earnings release and earnings supplement.
Which are available in the investors section of our website at Www Dot <unk> Dot com.
Each contain additional details about the first quarter, which closed on March 26 2023.
Before we begin I must remind everyone that part of the discussion today will include forward looking statements. These forward looking statements are not guarantees of future performance and therefore undue reliance should not be placed upon them.
Actual results may differ materially from those indicated by forward looking statements due to a number of risks and uncertainties.
The company does not undertake to update forward looking statements at a later date.
For a more detailed discussion of the risks that could impact future operating results and financial condition. Please.
See today's earnings release, and recent FCC filings.
During today's call the company will discuss non-GAAP financial measures, which it believes can be useful in evaluating its performance. The presentation of this additional information should not be considered in isolation, nor as a substitute for results prepared in accordance with GAAP.
Reconciliations to comparable GAAP measures are available in today's earnings release.
I would now like to turn the call over to Andy Witter Horn Chairman of the board.
Thank you operator, and Hello, everyone and thank you all for joining us on the call today.
This afternoon, we made our first quarter 2023 financial results publicly available. Please refer to the earnings release in our earnings supplement both of which are available in the investors section of our website at www dot that brand's dotcom each contain additional details about the first quarter, which closed March 26.
Let me begin by thanking our teams franchisees and employees for their hard work as we continue to grow this business.
Last week 10 cubic and Rob Rosen were named co Chief Executive officers effective may five both Ken and Rob joined Fat brands. In 2021 has played an integral role in our strategic growth initiatives, including acquisitions and driving company profitability.
Ken and Rob will also continue in their respective roles as Chief financial Officer, and head of debt capital markets, while assuming the co CEO role together they will focus on driving forward the company's overarching goals of increasing organic growth through new store openings growing utilization of our manufacturing facilities and bolstered.
The success of our high growth brands, including twin peaks.
I will continue in my new role as chairman of the Board, which I was appointed to in March 2023, where I will focus on our strategic direction capital allocation and ensuring that we execute our business plan, while maintaining quality restaurant operations stepping down from the CEO and president role my goal is to remove the distraction of the personal investigation tied to me regarding matters.
From several years ago before our merger with fog cutter.
Ken and Rob are taking the reins of the company with a fresh slate of directors and I support the growth and evolution of fat brands, including champion in our talented executive team. We have taken the company from three brands to 17 iconic restaurant brands with over 2000 units opened or under construction in system wide sales of $2 2 billion annually.
Over the last five years today fat brands is approximately the 25th largest restaurant company by unit count in the U S. Nine.
95% of our restaurants are franchised, we are more than 750 different franchise owners of which approximately half are multi unit operators.
We operate in 40 countries and 48 U S States, notably 10 of our 17 brands. We're just named to Technomic 2023 Top 500 list, which is determined by key growth metrics, such as sales and unit growth.
I believe we are creating tremendous long term shareholder value as well as short term dividend yield.
Now turning to Q1, specifically total revenue grew eight 5% in the first quarter of 2023 to $100 five $105 7 million compared to $97 $4 million in the first quarter of 2022.
The increase reflects an increase in same store sales and revenues from new restaurants same store sales increased four 3% in the first quarter of 2023.
We grew system wide sales nine 9% to $550 million when compared to the prior year quarter of $504 $9 million.
Looking at profitability, we saw over a 26, 8% increase in adjusted EBITDA to $19 2 million from Q1 2022, adjusted EBITDA of $15 $1 million on a trailing 12 month basis, adjusted EBITDA was $92 $9 million.
Now I would like to discuss our two part growth strategy, consisting of organic growth and growth by acquisition as.
As you know over the last two years, we've had a very robust acquisition strategy by acquiring nine brands.
Similar to 2022 this year, our focus will be on building upon our impressive organic growth pipeline.
During the first quarter, we opened 41 units and for quarter. Two are slated to open 45 units in total we are projected to open 175, new units this year, representing 25% unit growth from the prior year.
Our total development pipeline of organic growth remains the strongest in our company's history with agreements for more than 1000, new restaurants over the next few years, we estimate this growth to be worth approximately $60 million of incremental adjusted EBITDA, which will raise our adjusted EBITDA to approximately $150 million.
This is also noteworthy as it will naturally de lever our balance sheet.
Interest in fat brands concepts remained high as our franchisees see value in building their portfolio within the fat brands family. We have signed 77, new franchise development deals year to date and expect to hit 100 by the end of this quarter.
This is evidenced by an agreement to open 10, new co branded great American cookies and marble slab premium locations in Puerto Rico. These locations are set to open over the next five years. The first two locations slated to open by 2024.
Additionally, we signed a new development deal to bring 20 additional franchised Johnny rockets locations to Mexico over the next 10 years, Johnny Rockets has been operating in Mexico. Since 1991, and currently has approximately 25 restaurants throughout the country.
Also we signed a development agreement to bring 12 co branded fabrics, and Buffalo's Express restaurants, and 10 co branded marble slab creamery and great American cookie locations to Iraq, adding to our existing restaurants in that country.
We also we also continued to innovate with our brands, creating additional opportunities for our franchisees.
During the quarter Pretzel maker opened its first drive thru location in Iowa.
Since opening location has performed incredibly well paving the way for future growth of the store model across the globe.
As part of our organic growth strategy. We're also laser focused on the accelerated development of twin peaks based on the strong unit economics, and our long term growth potential we see for the brand.
Twin peaks continues to produce industry, leading <unk> of around $6 million with some of our highest volume locations in Florida, generating avs between $9 million and $12 million. Each. Additionally, these restaurants had very strong margins.
It's also set to hit a key benchmark by the end of this month, surpassing 100 locations. We anticipate opening 18 to 20, new twin peaks in 2023 closing the year with approximately 115 lodges and almost 40% growth in unit count in just two years since fat brands acquisition between peaks.
Our current twin peaks pipeline includes over 100, new stores, we see similar unit growth for 2024.
Twin peaks is the only brand where we are materially growing the number of company owned locations in key markets as both the return on invested capital and absolute dollar profit are very high.
Traditionally we've opened two to three company owned units each year, but we are striving to increase that in 2024 to five or six units per year and more in the years thereafter.
Co branding is another key part of our strategy to help drive sales and leverage margins, we see great value in pairing similar brands in our portfolio together as a way to drive additional revenue growth through a combined menu approach. We presently have more than 230 co branded locations, mainly consisting of our fabric or Buffalo's express or marble slab creamy.
Great American Cookie pairing.
During the quarter, we brought fabric or back to Illinois with the opening of co branded <unk> and Buffalo's Express in the Chicago area in partnership with a D. T. J development LLC, which includes basketball stars Anthony Davis Junior Derrick Rose and Tim Hardaway Junior.
This opening is just the start of outgrowth in the state as it is tied to a larger multi unit, Illinois franchise development deal.
Similarly.
Brand synergies within our portfolio continue to be an important strategy for cap rates in April we unveiled a new cookie offering across all elevation burgers, we saw an opportunity to enhance elevation burgers dessert program with the cookie dough. We currently produce at our manufacturing facility in Georgia.
Not only will this provide a boost to the elevation menu, but it will also increase the productivity of our manufacturing facility.
Following the elevation Burger Cookie launch, we began rolling out cookies across many of the other burger brands in our portfolio, which should be substantially complete by the end of the summer.
As you know our Georgia based manufacturing facility produces pretzel makes and cookie dough for several of our brands. We believe our factory business today is in its early stages of growth because it only operates at about 35% to 40% of its capacity.
We began expanded utilization of the factory just about a year ago. When we acquired the Nestle Tollhouse Cafe by Chip franchise business. We are still in the process of rebranding approximately 20, Nestle Tollhouse cafe buy chips to great American cookies to date, we have converted approximately 50 stores and expect to complete the remaining 20 conversions by late 2002.
93.
Now, let us turn to fat brands second strategic pillar of growth that is by acquisition when evaluating potential acquisition targets. Our focus remains on strategic acquisition opportunities of brands with a proven track record of long term sustainable and profitable operating performance.
And as noted we are focused on our high growth brands, particularly our sports slides category and would consider acquiring concepts with locations that can be converted into twin peaks. We're also looking at other categories to round out our portfolio such as salad sandwich coffee brands and finally, we are looking at opportunities that would allow us to further expand our manufacturing business.
Looking at our balance sheet, we have worked hard to maintain a healthy liquidity position consisting of both cash and marketable securities. Further we have taken steps to reduce approximately $5 million in corporate G&A for 2023.
As we all navigate this challenging interest rate an inflationary environment, we have adjusted our focus to realize long term goals that will yield significant shareholder value and execute our corporate strategy, making sure we have adequate liquidity and runway nurturing the brands that we expect will generate significant value in the future to reduce debt and growing our.
EBITDA through new unit openings takes priority in this environment.
I want to address recent discussions regarding the state of our financials fat brands has strong liquidity and is in compliance with all of our debt covenants, our securitized debt, which is the only debt. We have matures in 2051, it begins to amortize a little bit each year for the next couple of years. Beginning later this summer we are prepared for such amortization, we locked in our fix.
Interest rate in 2021 at favorable rates before the crazy increase in interest rates. We are like many other acquirers of brands using debt and equity to make those acquisitions and then paying down that debt over time.
We are focused on getting to a cash flow positive and GAAP net income positive position in the coming quarters, but.
But we are not unlike a number of our peers in this space that are not yet GAAP net income profitable because they are in a high growth state we are creating tremendous value in our brands, which we expect to realize in the future.
Next I'm proud to share in March that we officially launched a newly formed five O N C. Three charitable organization Fat brands Foundation.
Giving back has always been a part of the fat brands DNA. This foundation was created to amplify the existing charitable efforts of our company.
The foundation will partner with local nonprofit organizations in areas in which fat brands has a presence to provide essential programs to help families and communities thrive.
As our company continues to grow in size, we wanted to take our charitable efforts to the next level by launching a new arm that more broadly supports our employees and customers communities.
We are excited to be officially live and to have the opportunity to become more ingrained with local nonprofits that are committed to making a positive impact in our markets, where we operate.
Since its launch the foundation is already funded by local organizations in the following areas children in poverty families with special needs food insecurity education in theater. The foundation was seated with a $250000 donation from fat brands. Upon its inception and will continue to receive support from the company are vendor partners employees.
And franchise partners to further the Directv and.
An impact of the organization in the years to come.
And finally as announced we have also made several changes to our board of Directors. In addition to my appointment as chairman of the board.
In March we elected control company status under the applicable NASDAQ rules.
Further we expanded the board from seven to 10 seats and welcomed eight new directors all of whom bring unique valuable skill sets that will aid in further in the success of fat brands is a leader in the restaurant space. The new director appointments include several current fat brands C suite executives Fairwater Horn, Chief operating Officer, Taylor return Chief Development Officer.
Mason leader Horn, Chief brand Officer, and Donald Brito, Chief concept officer.
Carmen without our international legal consultant for Fat brands is also appointed to the board. Additionally, we appointed three independent directors, Mark Leno with Kenneth cap entitled Child, joining Lynne Collier, who remains on the board and is now the chair of our audit Committee.
We expect these board changes will save the company $1 $1 million per year.
I want to point out that we did not increase our directors' fees, we simply combine the annual and committee fees into a flat rate equal to the same amount.
Further management team members, who serve on the board do not receive board fees.
Additionally, I want to thank the Baker Tilly firm for four years of extremely hard work and professional partnership that helped us grow the company significantly and we will miss working with them, we expect to name and appoint new auditors for the 2023 fiscal year. Shortly I also want to thank those board members, who chose not to continue to serve on the fat brands board for their dedicated service.
In summary, I am confident we have a very strong leadership team in place and a robust pipeline of growth ahead that will naturally delever our balance sheet.
Our long term strategy is to create value through the organic growth of our brands acquire additional brands that are strategic to our portfolio makeup.
Wise value when appropriate to manage any debt outstanding and increase long term value for our stakeholders, while giving them a consistent dividend along the way.
We sincerely appreciate you joining us today and for your interest in fat brands and with that I would like to hand, it over to Ken to talk about our financial highlights from the quarter.
Thank you so much Andy I am extremely humbled to take on this new responsibility as co CEO and drive forward the key goals of the company.
Very fortunate to have such a talented team of fat brands.
See great opportunity ahead and building upon our position as one of the largest restaurant companies in the U S.
Turning to our first quarter results total revenue during the first quarter increased eight 5% to $105 7 million.
Reflecting increased same store sales and revenues from new restaurant openings.
Costs and expenses increased to $105 $3 million in the first quarter compared to 96 $9 million in the year ago quarter, primarily due to increased activity from company owned restaurants.
The company's factory as well as professional fees related to certain litigation matters.
Included in cost and expenses general and administrative expense increased to $28 4 million in the first quarter from $24 8 million in the prior year period, primarily due to increased professional fees related to pending litigation and government investigations.
Cost of restaurant and factor revenues increased to $59 $1 million in the first quarter of 2023.
Compared to $54 $8 million in the prior year period, primarily due to higher company owned restaurant and Doe factory revenues.
Depreciation and amortization expense increased to $7 $1 million in the first quarter from $6 $6 million in the year ago quarter, primarily due to depreciation of new company owned restaurant property and equipment.
Refranchising losses in the first quarter of 2023 were zero point $2 million and were comprised of zero point $1 million of net gains related to the sale or closure of Refranchising restaurants, partially offset by zero point $3 million in restaurant operating costs net of food sales.
Advertising expense was $10 $5 million in the first quarter compared to $10 3 million in the prior year period.
<unk> expenses very in relation to advertising revenue.
Other expense for the quarter was $30 million compared to $19 7 million in the year ago quarter and was primarily comprised of interest expense on our securitizations.
Our income tax provision for the quarter was $2 5 million compared to $4 5 million.
A year ago quarter.
Net loss for the quarter was $32 $1 million or $1 95 per diluted share compared to a net loss of $23 $8 million or $1 45 per diluted share in last year's quarter.
And on an as adjusted basis.
Our net loss of $23 $5 million or $1 43 per share.
<unk> to $18 5 million or $1 13 per diluted share in last year's quarter.
Turning to cash flows it's worth noting that our $32 1 million net loss for the quarter included $7 1 million of noncash.
Noncash depreciation and amortization.
Seven $7 million of nonrecurring litigation expense.
$5 million of noncash interest expense one.
$1 1 million of noncash share based compensation.
Zero point $4 million of noncash lease expense. The total of these items and our net loss was $21 $3 million.
With that I'll turn it over to Rob Rosen for a few remarks.
Thanks, Ken our focus will be on bolstering the firm's liquidity decreasing overhead and lowering corporate leverage we will look to lower the corporate leverage by investing the time and capex necessary to both get the pipeline stores open and to grow our position several of the fastest growing portfolio of assets to be sold.
Rob Thanks, and operator, we'd like to open the line for questions. At this time, if there are any.
Yes. Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on your Touchtone phone.
<unk>, Hey, John Tom Technology, Youll request questions will be taken in the order received.
Should you wish to cancel your request. Please press the star followed by the tail.
Your first question is from Joe Gomes from Noble capital. Please ask your question.
Good afternoon, and thanks for taking my questions.
Hi, Joe.
Hey, Joe.
First of all I just wanted to.
Maybe get a little more color on.
Our new co CEO is youre hiring kind of divvy up the responsibilities.
Between the two.
Okay.
Well I think Theres real division between Ken's responsibilities in Rob's responsibilities. So it's pretty easy for these guys to tackle that Ken is the chief financial officer is really covering those aspects of the business and industrial reporting.
All of the.
Finance and accounting roles and Rob running debt capital markets is really all of the balance sheet, all the capital coming onto the balance sheet and the maturities and the.
Cost of capital.
And the retiring of preferred debt overtime and so those two guys working together with fair Who's our chief operating officer really running the brands.
Taylor, our Chief Development Officer, and the rest of his team and the other guys. Its very well divided amongst the entire team not just robin and Ken.
Okay. Thanks for that.
Yeah.
And.
When youre looking at.
The economy.
This is.
Two part question here.
Franchisees seeing any slowdowns in their business doesn't appear so from what you've said.
First quarter results.
And how is demand and interest.
For new franchisees as it still is.
It's running as high or maybe that's cooled down a little bit from last year.
I would say to answer the two part question with two hitters I think same store sales or just a little bit softer as we roll into Q2 than they were in Q1.
I think that's consistent across the industry, except maybe in the <unk> side of things.
And we've definitely seen a pickup in business again in the sports lodges, which we're excited about a lot of activity. These days of course with all the different playoff games and then in terms of new franchise development. It's really on track I don't think that will have.
A year like we did in 2022 again, where we sell almost 500, new stores 460, new stores or something like that.
Maybe 350, it's a big number.
<unk>.
We're hoping to get to 200. This year, we're going to hit 100 by the end of the first half of the year and in terms of new store openings were 25%.
Higher new store openings, and we were a year ago. So franchisees are continuing to build stores at a faster pace theres still buying the territory rights for new development, perhaps at a slightly slower space slower pace than last year, but I don't think last years very very good example is a year that we're going to hit every every time.
Right right, yes that would be a little difficult to do but.
Excellent.
You Didnt mention anything on the preferreds just wondering if you can give us an update on what is going on there.
It's in our 10-K and in our 10-Q, we redeemed.
About $45 million of the $137 million of preferred stock that was redeemable.
Last year.
And some of that preferred stock has been permanently retired and we used our securitization facility to generate bonds, we used bonds to buy back stock and we used some cash and so we have reduced the amount of preferred outstanding that is what you would call puttable the balance of that preferred stock.
It remains outstanding it earns a dividend and an extra dividend rate until the time that we retire it but in this environment.
It's difficult to want to issue common equity given the current stock price and so we've chosen to use the securitization facilities in stat and hope that we will retire the rest of that redeemable preferred stock in the coming quarters.
Okay.
Okay.
One more for me and I'll step aside and let someone else get some questions. Here. So I was just looking at restaurant cost as a percentage of restaurant sales came in at about 94, 4%.
For all of 2022 was just a tad under 92% or something.
Different in the first quarter.
Hit that 94, 4% or could we anticipate that number coming down.
In the coming quarters.
Hey, Joe its Kevin I, just wanted to point out in that number that youre talking about the cost of the cost number youre, referring to is the restaurant and factory costs. So you have to do on the revenue side at the factory sales and restaurant sales, we're expecting to continue to increase the margins on our company owned restaurants that will be part of.
Rob in there and Andy revised focus over the next several quarters.
Okay, great. So it's a little bit Glenn.
To lose the percentage number it's a little bit blended there to try to figure it out when they're together.
We're very focused on filling up the factory, we have a large sales in process pipeline of third party manufacturing business as well as rolling out the manufacturing of cookies in pretzels.
Brownies and things like that to our other brands. So that uses up capacity generates more earnings and then of course the growth of twin peaks is extraordinary and that's really where we've elected to invest capital to build more company on stores or convert other brands into twin peaks and so I think youre going to see.
US be able to put a mark on the value of those assets as we roll in to the back half of 2023 and into 2024 and that will be what we earmarked to reduce.
Significant debt.
In the future and very strong way to look at how our business will play out with realizing some value from a couple of assets that will leave us closer if not 100% debt free with a lot of free cash flow over the next two years or three years.
We all thought going into 2022 after all the acquisitions, we made in 2021 that we would be able to issue.
Common equity at a good price in the markets and also refinance our debt portfolio.
Most of the market changed.
And so it made it more difficult to do those things and it made us shift our focus towards a long term solution instead of a short term solution to pay down our debt.
The organic growth, we have that's inherent in the portfolio, where EBITDA will grow from <unk>.
90, something million dollars to a $150 million naturally deleverage this but.
These additional assets and having the ability to realize value on those assets I think the.
The Italian sign in the future Joe. Thank you very much anyone else ask a question.
Yes. The next one is from Roger Lipton from Lipton Financial services. Please ask your question.
Hey, Roger.
Hi, Andy.
If you can answer is there any more room in your in the securitization facility.
You use it.
The end of last year I think in the first quarter is there further room to take down.
If you if you like.
Mike.
Rob why don't you address that.
Roger there is.
The amount that can be issued is based on ratios.
And covenants and performance of the underlying portfolios.
Without getting into too much detail.
Each ones have the room that there is room.
And the portfolio is to continue to issue some more what we refer to as tapped facilities.
Roger one way to think about it is that today, we have cash and marketable securities already on our balance sheet that we havent sold so issuing more securities. We just generate even more available for sale to raise cash we already have $40 million of bonds of $43 million of bonds sitting on the balance sheet alongside of our cash available today and then issuing.
More it's a big number.
That's available if we need it as we have runway here to execute on these brands.
Okay.
And have you yet been able to increase the utilization rate in the in the manufacturing facility or is that.
It's definitely it's definitely up because again, we bought the Nestle Tollhouse brand and then also we are rolling out cookies across all of our restaurant platforms, and some brownies and pretzel items.
So our goal is to get that number up in the fifties here right away, 50% utilization from 33.
And we have a lot of third party contracting that we're negotiating right now where we have sales in process or rfps that we're responding to that I think will utilize a good portion of the capacity thing to think about is we want to utilize capacity for very profitable manufacturing not just for marginal manufacturing.
So we're trying to be thoughtful about if we're going to take on a third party contract are we going to expand into a channel we want to make sure. We're soaking up capacity with extra margin business. So that we can maximize the amount of margin that factory, we can generate before we look towards long term sale of the factory in some sort of a long term supply contract.
So is it.
The project debt.
EBITDA from that facility will be will be moving out through the course of this year.
It is safe to protect that and Furthermore, our goal is to try to utilize as much capacity as possible between now and the ended the year. So that we're in a position to perhaps list the factory business for sale sometime in 2024, it might be towards the second half of 'twenty 'twenty four, but we want to maximize value there and we think it's a great opportunity.
Right.
Alright.
The company twin peaks that you're building.
My assumption is that it.
Generally.
Build to suit capitals available to you you don't need too much of your own.
As well as those stores are doing.
<unk> being so high.
As there is.
Capital out there from developers.
Don't have to use too much of your of your own which that's right I mean, essentially what we do is we use our capital to build the store by the land build the store we get some financing for that along the way and then we might turn around and do some sort of a sale leaseback of the asset and and maybe have some long term financing in place like a lease or something for equipment.
On the store so we're minimizing the amount of long term capital that's invested and that just makes the return on invested capital is very very high and very attractive.
And Joe homeowners team have done an excellent job of managing these stores. They have the team in place to really grow that company owned platform. It's the only part of our business, we're letting that happen and because the ROI so significant and as we've talked about before we really want to see the EBITDA in that business go from a $40 million run rate this year to a 50 million.
And then a $60 million and so on and that will enable us to really realize the long term value of twin peaks in the next three years or so at a very big number.
And what about the the value, which there is no doubt.
Substantial amount in facilities around table or fat Burger.
I mean, presumably that those brands are.
With us considerable amount of money as well.
Absolutely I mean, each one of those brands is worth a lot of money, where it is not our goal to sell off every brand that we have it's our goal to decrease our leverage to either to a very manageable level or no leverage and that's just a function of when we see the brands ready to harvest value, you know, which ones do we do do we spin out.
One of the brands publicly do we sell it to another private equity firm for all cash and reduce debt, which is more likely those are all options that are available to us or.
Erase some cash and some sort of a partial IPO or something we have all of those levers available. We can also.
Always refinance calling reissue our securitized debt like many other private equity firms and issuers do.
We're just we're very fortunate.
In an unfortunate environment, we're very fortunate that we issued this that 2021 with a 30 year fixed rate.
We thought we'd all be able to refinance it for less than 2022 that didn't happen. We had to look further down the road towards a long term solution, but look refinancing those existing securitizations is certainly not off the table. It's just.
It's more expensive to do it today, so what what do you get out of it would be a negative number in terms of savings.
But were created so much value, it's just sort of an annoying fact that we have to live with right now that rates have gone up as much as they have and we can't harvest those short term savings, but it's not changing the value of inside each brand that we're creating we're still opening lots of new stores and improving EBITDA or just cash flow generated by those brands So you're right.
You can look at a number of other brands in our portfolio. Besides twin peaks. Besides the factory and point to a round table of fabric or Johnny rockets, something like that or facilities as having substantial value. If we wanted to do something with one brand or another.
Okay. Thanks very much.
Thank you.
Any other questions.
No further questions at this time, Sir please continue.
Operator, thank you very much and at this time I'd like to complete the call and thank everyone for joining us today and wish you all a good day or good evening and good week take care.
Thank you ladies and gentlemen, the conference has now ended thank you all for participating you may all disconnect.