Restaurant Brands International Inc. (QSR) Q3 2017 Earnings Report, Transcript and Summary

Good morning and welcome to the Restaurant Brands International Third Quarter 2017 Earnings Release Conference Call. All participants will be in listen-only mode [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] All callers will be limited to one question. Please note, this event is being recorded. I would now like to turn the conference over to Markus Sturm, Head of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone and welcome to Restaurant Brands International's earnings call for the third quarter ended September 30, 2017. A live broadcast of this call may be accessed through the Investor Relations webpage at investor.rbi.com and a recording will be available for replay. Joining me on the call today are Restaurant Brands International CEO, Daniel Schwartz; and CFO, Josh Kobza. The team will be available to answer questions during the Q&A portion of today's call. Today's earnings call contains forward-looking statements, which are subject to various risks set forth in the press release issued this morning and in our SEC filings. In addition, this earnings call includes non-GAAP financial measures. Reconciliations of non-GAAP financial measures are included in the press release available on our website. Let's begin with the agenda for today's call. Daniel will start by discussing highlights for the quarter at Restaurant Brands International and will then review performance of Tim Hortons, Burger King and Popeyes Louisiana Kitchen. Josh will then review consolidated financial results for the quarter. Following which, Daniel will share some concluding remarks before opening the call up for Q&A. I'll now turn the call over to Daniel.

Thanks, Markus, and good morning everyone. Thanks for joining us on today’s call. I am excited to give you an update today on our results for the third quarter. Our continued focus on driving restaurant level profitability and a great experience for our guests led to further system-wide sales growth for each of our three brands: Tim Hortons, Burger King and Popeyes Louisiana Kitchen. During the third quarter, we grew adjusted EBITDA to $565 million representing 8% organic growth versus the prior year’s combined results of RBI including Popeyes. System-wide sales growth at Burger King and Tim Hortons combined with the inclusion of Popeyes in our results lead to adjusted diluted EPS of $0.58 per share, up from $0.43 per share in the prior year period. At Tim’s we grew system-wide sales by 3% on a constant currency basis this quarter primarily driven by net restaurant growth of 4.2%. Some of our recent initiatives including our espresso-based beverage platform contributed to improved comparable sales in Canada, but was partially offset by softer comparable sales in the U.S. We maintained our strong momentum at Burger King in the third quarter with system-wide sales growth of 11.2% on a constant currency basis both comparable sales of 3.6% and further accelerated net restaurant growth of 6.6% contributed to our system-wide sales momentum. At Popeyes system-wide sales grew by 4.5% on a constant currency basis for the quarter primarily driven by net restaurant growth of 5.9%. We had softer comparable sales at Popeyes where we saw continued competitive activity during the third quarter. We remain confident in our ability to drive further sales and profitability growth for all three of our brands and look forward to updating everyone in the coming quarters. We believe our long-term strategy of focusing on guest satisfaction and franchisee profitability will allow us to build on the recent momentum at Burger King and to further improve results at Tim Hortons and Popeyes for many years to come. Let's start by reviewing the results for Tim Hortons. This quarter adjusted EBITDA for Tim's was $294 million, up $7 million year-on-year including a favorable FX Impact. On a constant currency basis, this represents a slight decline of 1% versus the prior year. We grew third quarter comparable sales at Tim's by 0.3%, which was primarily driven by comparable sales of positive 0.6% in Canada. Our results in Canada reflects growth in coffee as well as breakfast partially offset by some softness in lunch. We began to see the benefits of our recent initiatives in Canada throughout the quarter including the espresso-based beverage platform that we rolled out earlier this year. We continue to grow our sales of espresso-based beverages with our iced latte in this summer and our pumpkin spice latte in September. We believe this beverage platform will be a key to our long-term growth at Tim’s both with existing and new customers and will continue to be a focus of our strategy. Additionally, our breakfast and baked goods results this quarter benefited from successful product launches such as our Canadian bacon breakfast sandwich and our s’mores tea [ph] and baked goods. In September, we had our annual smile cookie campaign where our restaurant owners raised approximately CAD7 million to help support local charities in the communities such as hospitals, food banks and children's programs. And a further display of our brands commitments to communities Tim Hortons coffee trucks were busily supporting communities affected by the wildfires in Western Canada. And at Tim Hortons donation to the Canadian Red Cross was made to support local efforts. Community involvement has always been a distinctive attribute of the Tim’s brand and we're proud to continue serving and supporting our local communities. Our Tim's mobile app continues to remain a strong focus for us heading into the fourth quarter. Since we launched our mobile order and prepay app at the beginning of the year, we've made further improvements based on feedback received from our restaurant owners. The hard work and engagement from our restaurant owners is really important in making our digital platform of success. A great example of this is with one of our owners in Quebec, who spent time promoting the app with guest in her restaurant encouraging them to use the mobile order and prepay functionality. She is already seeing over 300 mobile transactions per week after just a few months. We also celebrated National Coffee Day in both the U.S. and Canada by providing each guests, who downloaded the app an offer to receive a free coffee. The feedback we've received on the app so far has been encouraging and we're going to continue to work further to enhance the app over time as we believe digital is the key channel for the long-term growth of the brand. On the development front, we grew our Tim’s restaurant count by 4.2% year-on-year, primarily driven by growth in Canada. In the U.S., net restaurant growth has been slow though we remain highly focused on supporting our U.S. partners in their expansion efforts and we continue to make progress with new partners. As an example, we recently signed a new agreement to develop the Cleveland and Youngstown markets, which we believe are logical strategic markets for our growth given the proximity to our successful existing restaurant footprints in Columbus, Michigan and in Western New York. Internationally our first openings in both the Philippines and the UK continue to perform really well and the results are encouraging for the long-term growth potential of the brand in each of our new international markets. We have plans to open even more restaurants in both of these markets this year and are looking forward to our first openings in Mexico and in Spain in the coming months. We look forward to further accelerated development at Tim’s for many years to come both in our existing markets as well as new markets all around the world. Now let's review the results for Burger King. We continued our strong momentum from last quarter with overall system-wide sales growth this quarter of 11.2% driven both by comparable sales of 3.6% and net restaurant growth of 6.6%. Growth in top-line resulted in an adjusted EBITDA of $234 million for the third quarter, up 16% on an organic basis versus the prior year results. Our sales momentum in the U.S. continued into the third quarter with strong comparable sales of 4%. In the U.S., we had successful promotions across dayparts and core products, which contributed positively to comparable sales during the quarter. We also continue to innovate around some of our premium platforms such as our new crispy chicken sandwich with the launch of our chicken parm sandwich in July and the crispy buffalo chicken melt in September. We also introduced the mushroom and Swiss King and The Rodeo King limited time offers during the quarter both of which innovate around our successful Bacon King sandwich launched late last year. Our strategy of maintaining a balanced approach to menu architecture continue to drive further sales growth in the quarter. We also had strong results in many of our international markets like Russia, Turkey, Germany, Spain, China and Brazil. And this was offset by some softness in other markets that experienced broad industry weakness such as Korea and Australia. On the development front, we further accelerated the pace of net restaurant growth as compared to last quarter with third quarter net restaurant growth of 6.6%. Our accelerated pace of development this quarter came from markets all around the world including top growth countries such as China, Russia, France and Brazil as well as markets where we've accelerated restaurant growth more recently such as the United States and India. This quarter we opened our hundred store in India, a country that we entered less than three years ago, which is a great example of the type of growth we look for when entering new markets. We're proud of the expansion that our partner has been able to achieve in such a short time and we continue to work towards further accelerating that growth in the future. We also recently announced a new master franchise in Japan. As the third largest economy in the world, we believe there is still a tremendous amount of growth opportunity for Burger King in Japan, where we currently have fewer than 100 restaurants. We're confident that we will continue growing Burger King all around the world both with existing and new partners for many, many years to come. We also want to take a minute to apply the generosity of our Burger King restaurant owners, an example of which was demonstrated by the positive impact they had in their local communities during the hurricanes experience this quarter. In our Puerto Rico, our partner launched a campaign to help address the local communication challenges experienced in the hurricane aftermath. Our partner quickly reopened his restaurants and welcomed guests to come in and fill out a form indicating that they were safe. The partner then posted each individual's name on social media and on the radio to help our guests to reconnect with their loved ones. At Burger King, we and our franchisees recognize the importance of community involvement and we're proud to share examples of our franchisees generosity. Our local partner responses to hurricanes in Puerto Rico, Houston and Florida are one example, but all of our franchisees continue to make meaningful impacts to their respective communities around the world including to our Burger King McLamore Foundation. Now let's review the results for Popeyes. We grew system-wide sales during the third quarter by 4.5% primarily driven by net restaurant growth of 5.9% partially offset by comparable sales decrease of 1.8%. Our comparable sales declined for the quarter was primarily driven by a U.S. comparable sales decrease of 2.6% partially offset by positive comparable sales in some of our international markets. Our U.S. comparable sales for the quarter reflects the continuation of increased competitive activity that we saw last quarter. As we continue to refine our marketing calendar for the balance of the year and into next year, we’ll be focused on finding ways to deliver our great products that our guests love at the right price points in a competitive landscape. Recent examples of the types of promotions that we intend to pursue include the return of the $5 Big Box in September and the new ten for ten dollars that we launched more recently. Our teams along with our restaurant owners are focused on delivering a great guest experience while staying true to our rich Louisiana heritage and flavor profile. In that regard, we celebrate opportunities to highlight the great work of our Popeyes culinary innovation team responsible for formulating our authentic and flavorful recipes. A few months ago, our head of Popeyes Culinary Innovation, Amy Alarcon, was featured in a popular food network television show highlighting our professionally renowned reputation in being Louisiana fests, a label awarded to us given that we marinate our bonafide fried chicken for at least twelve hours, but serve it to our guests fast. Internationally this quarter we saw a notable strength in Turkey, one of our largest markets outside of the U.S. as a compelling family meal introduction drove growth in comparable sales for the third quarter. This was partially offset by softer results in certain other international markets such as Korea. In terms of development, we grew restaurant count for the third quarter by 5.9% primarily driven by growth in the U.S. and Canada. We're working toward accelerating our expansion around the world and we've been encouraged by the interest we have received both from existing and prospective partners seeking to lead that expansion. Popeyes restaurants continue to benefit from strong unit economics, which coupled with expansive growth potential of the chicken category in many markets solidifies our confidence in the potential of this brand all around the world. The combination of system-wide sales growth and overhead synergies allowed us to grow Popeyes adjusted EBITDA to $37 million for the quarter, up 43% organically year-on-year as compared to Popeyes previous third quarter results. I'd now like to turn the call over to Josh.

Thanks, Daniel. Further system-wide sales growth across each of our brands as well as the inclusion of Popeyes in our results drove adjusted EBITDA of $565 million for the quarter, which represents approximately 8% organic growth versus the prior year combined results of RBI. Our third quarter adjusted net income increased to approximately $276 million versus prior year results of $201 million primarily as a result of adjusted EBITDA growth. Our adjusted diluted EPS for the quarter was $0.58, up approximately 35% from $0.43 in the prior year period. As a reminder neither adjusted net income nor adjusted diluted EPS include Popeyes for the prior year results as the business was acquired in March of this year. It is worth noting that our interest expense for the third quarter includes the full quarter of the $1.75 billion of debt that we raised in May as well as the partial quarter impact of the $1.3 billion of 5% second lien notes raised in August, partially offset by the redemption of $1.25 billion in principal of 6% notes in September. Now let's discuss our cash generation and capital allocation during the quarter. We've had a number of capital structure events over the past few months that we'd like to give an update on. In August, we issued $1.3 billion of second lien senior secured notes with an interest rate of 5%. The net proceeds of which we used in September to redeem $1.25 billion in principal of our existing 6% second lien notes. Subsequently, in September, we issued a $1.5 billion add-on to the 5% notes, which was funded in October and as such is not included in our third quarter results. A majority of the proceeds from the add-on offering where we used to redeem the remaining $1 billion and principle of 6% second lien notes in October. In October, we also amended our existing $500 million revolving credit facility to extend the maturity to 2022. In the third quarter, we generated approximately $339 million of free cash flow calculated as the sum of cash flows from operating activities and cash flows from investing activities. We also paid a total of approximately $155 million in preferred income and dividends and partnership exchangeable unit distributions. As of September 30, 2017, our ending cash balance was approximately $3.6 billion, our total debt balance was $11.8 billion and our net debt was $8.2 billion. This morning we announced that on October 25, 2017, the RBI board of directors formally authorized the full redemption of our preferred shares, which we intend to complete on December 12, 2017, the first possible redemption date. We also announced that we received an exchange notice for a portion of our outstanding partnership exchangeable units. In connection with the exchange, we plan to satisfy a portion of these exchange requests with cash on hand. I'm also pleased to share that on October 25, 2017, the RBI Board of Directors declared a dividend of $0.21 per common share and partnership exchangeable unit of RBI LP, payable on January 3, 2018. The refinancing of a significant portion of our capital structure in 2017, the acquisition of Popeyes, the growth in our dividend and the use of cash on hand to redeem our preferred shares and repurchase partnership exchangeable units illustrates our balanced approach to capital allocation as we look to create further value for all of our stakeholders for many years to come. I'd like to now hand the call back to Daniel for concluding remarks.

Thanks, Josh. During the third quarter, we grew system-wide sales for each of our brands: Tim Hortons, Burger King and Popeyes Louisiana Kitchen resulting in consolidated organic adjusted EBITDA growth of 8%. We continued the strong momentum at Burger King both in the U.S. and internationally in terms of comparable sales and net restaurant growth. At Tim's, we began to see the benefits of our recent initiatives including our espresso-based beverage platform as well as our digital app launch and we continue to grow the brands footprint around the world. We realized further benefits of our integration efforts at Popeyes during the quarter and we believe we have the right strategies in place to accelerate top-line growth for the long run. We appreciate the hard work of our franchisees and their employees all around the world to further improve the overall guest experience and franchisee profitability at all three of our brands. We look forward to updating everyone on our results again at year-end. Thanks everyone for joining us this morning and we’ll now open up the call for Q&A. Operator?

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Joshua Long of Piper Jaffray. Please go ahead.

Great, thank you. I appreciate the time this morning. I wanted to see if we might be able to talk about the general competitive environment and how you're seeing that shape up just generally across your brands here in the U.S. and then any sort of global comments you might have in terms of just the competitive environments and how the consumer is searching for value? Thank you.

Hi, Josh. It’s Daniel. Thanks for the question. I think what we've said in the past and really what I'll say now I mean quick service restaurant industry always it's always competitive. And our strategy has been consistent across our brands regardless of the environment. If you look at some of the progress that we've made at Burger King in the U.S. for instance in terms of working with our restaurant owners to renovate the restaurants, improve operations, improve marketing, always deliver that balance of value and core and premium has enabled us to grow sales over time. Globally, we're seeing strength in our sales and the pace of our restaurant openings across the world. So while the environment continues to be competitive where we're pleased with our continued strength across our brands.

The next question comes from John Glass of Morgan Stanley. Please go ahead.

Thanks very much and I apologize I joined late, so if some of these have been answered previously, excuse me. Can you talk about Tim's a little bit. Two questions I guess one in Canada what role pricing played in the comp if you didn't talked about that and maybe what the competitive dynamic up there looks like and how you feel you’re competing against that? And the system I think at Tim’s is a little lower than Canada. So what's the dynamic I guess in particular in the U.S.? Do you feel like you're operating at a level that's competitive in the U.S.? Do you feel like there's further adjustments you need to make in that market to stimulate sales because you’re much younger in the market, you expect perhaps comps to be outpacing in the more mature markets.

Yeah, hey, John. Thanks for the question. So the same store sales for the quarter was a little bit better than last quarter and that was driven by Canada, which was up around 0.6%. We saw some growth in coffee and in breakfast in Canada we’re starting to see really the benefits from some of the initiatives that we had launched including the espresso-based beverage platform as well as our additional app. We're innovating around espresso beverages. Over the summer, we launched iced lattes. More recently, we launched our pumpkin spice lattes. And we think this is going to be an important platform to continue to drive long-term growth at Tim’s. And more recently we’re excited about some of the new products that we have launched at lunch including the artisan grilled cheese sandwich and we look forward to innovating around – in new and improved products at launch. We don't specifically breakout pricing impact. What I can say though we’re always very thoughtful and measured in the way that we do take price. As it relates to Tim’s in the U.S., it was a bit softer the environment as you know is quite competitive. We did recently launched lattes there as well and we're encouraged by the progress that we've seen in the U.S. so far since we launched that product. And I think look what we've said about the U.S. in the past, we're really committed to growing the brand for the long-run. It's quite early I think if you look back in time in Tim’s first, [indiscernible] the western part of Canada, it was also a bit slower, it took some time and now its one of our more profitable regions and faster growing regions. So it's going to take time, but we're committed and we have good partners with whom we’ll work collaboratively to make this work in the long run.

The next question comes from Mark Petrie of CIBC. Please go ahead.

Hi, good morning. Just wondering if you could update us on your view on a potential deal or agreement with aggregators and delivery partners and the potential implications for your business and your franchisees.

Yeah, delivery – the delivery is something that we're doing actually in several markets around the world. In some markets, there’s a greater percentage of our sales and in certain markets we work internally, in other markets we've partnered with aggregators. I was in China recently where our restaurants, our Burger King China Restaurants have partnered with several of the aggregators there and delivery has become a meaningful piece of the business. And I think we look at it on a country by country basis. And we see it as one of many avenues of growth for our brands around the world for the future.

The next question comes from Brian Bittner of Oppenheimer and Company. Please go ahead.

Thanks guys. Question on Popeyes. Just now that you've had the brand for a couple quarters under your belt. Just wondering if you can better frame the opportunity to really accelerate unit openings there. I mean you have a much larger franchisee roster globally. And you did this very well at Burger King shortly after your 2010 purchase there. So we just love your Popeyes thoughts. And I have a follow up.

Hey, Brian. Good morning. It’s Josh. And thank you for the question. Yeah, we – it has been – actually, it's just – it’s been just a few months now that that Popeyes has been part RBI. And I would say that that we're increasingly excited about the development opportunity both in the U.S. and around the world. We've already made some progress in the U.S. finding new development partners to help us to accelerate the pace of growth and we're talking to a number of potential partners to set up new projects in a number of countries and exciting markets in international markets around the world. So we're very excited about the long run potential for Popeyes and increasingly serve with the few months that we've owned it. If you follow-up just a clarification on the unit exchange so you guys, you're repurchasing five million units and then are you separately issuing eight million units? If you could just clarify that I'd appreciate it.

Yes, of course. So we received an exchange notice for nine million units. And to satisfy that notice we are going to repurchase five million units. And we will issue four million new common shares of RBI corporate.

The next question comes from Andrew Charles of Cowen and Company. Please go ahead.

Great, thank you. Two separate questions from me. Can you talk about the change in culture across realization you've made taking over as President of Tim Hortons Canada. In particular your willingness to provide some cost relief around some of the franchise claims. And separately the question on Tim as you talk about the self softness in the U.S. international markets. So could you talk about efforts in place to help accelerate development outside the U.S. and Canada? Similar you did at BK France, could this involve franchise acquisitions of other coffee concepts to convert to Tim’s so that would be funded by your franchisees or perspective franchisees? Thanks.

Yes this is the two questions. Look as you mentioned I have gotten closer to our Tim Horton's business in recent months. Working with the team here we continue to work with our owner-elected advisory board and we travel to country meeting with our restaurant owners, sharing with them all the positive plans and the positive agenda that we have to drive the brand forward. And we're making good progress, we've had some good innovations around espresso-based beverages, we worked collaboratively with our restaurant owners to launch our mobile order and prepay app. And we're confident that the initiatives that we have, the innovation that we have, the positive agenda is going to drive long-term to get satisfaction and owner profitability. As it relates to international openings, we've had a number of new country entries from the Philippines to the United Kingdom where we're operating great restaurants and delivering that great Tim Hortons guest experience to new guests all around the world. And we're looking forward to taking the brand to places like Mexico pretty soon and shortly thereafter Spain.

The next question comes from Gregory Francfort of Bank of America. Please go ahead.

He guys, I had two questions. The first is may be can you talk about what the some of the learnings you've taken from the Popeyes acquisition and apply to your other businesses.

Yes I think with respect the Popeyes acquisition it’s still quite early as Josh mentioned, it's only been a handful of months. We're excited to bring Popeyes under the RBI family of brands. And we're spending quite a bit of time learning the business, traveling, meeting with our franchise restaurant owners and building our agenda for how to continue to drive great guest satisfaction and owner profitability for many years.

And the other one was just in terms of the gap between the system sales growth in Tim Hortons and then the sales on your line that seemed to have slowed just that gap in this quarter versus last quarter, is that just a matter of the espresso beverage selling being over? Or is there something else maybe that was driving that?

Yes great this is Josh. That is one of the factors but also we made a couple of price adjustments from Q2 to Q3 in our supply chain, as we're always looking to deliver the highest quality goods to our franchisees at a really compelling cost in a high level surface.

The next question comes from Dennis Geiger of UBS. Please go ahead.

Great, thank you. Wonder if you could talk a bit more about any performance differences that Tim's Canada regional differences within the same store sales results? And then if I could get a second one in just with that launch of the espresso-based platform has that opened any doors for you internationally when you think about some of the cultures in various countries? Has that helped having that platform now within the brand? Thank you.

Yes without getting into too much detail as you know the economy in the western part of the country had been a bit softer. And that did affect our sales. But we are committed to driving continued sales growth and profitability growth across the chain. And espresso-based beverage is our – an important product and platform not just in Canada and the U.S. but in as you mentioned as markets all around the world given our guest’s eating habits and coffee drinking habits in places from the Philippines, to the United Kingdom, Mexico, to Spain. So I think we do see this playing an important role in the international expansion of the Tim Hortons brand.

The next question comes from David Palmer of RBC Capital Markets. Please go ahead.

Thanks. Just a couple of questions on Tim Hortons Canada. And forgive me if these were asked already. Bored jumping around. The first is are there any data points you can share that can speak to franchisee profitability in generally the direction – the approval of franchisees in the direction of the business and given all the headlines some data points here could be helpful as we address that. And that's your concern. And I have a quick follow-up if I may. Thank you.

Yes we're obviously David we're always striving to grow franchise profitability and deliver great at the same time and deliver great value for our guests in 2015 and in 2016 franchise profitability group each year. Franchise profitability in the most recent quarter was flat year-on-year and we've seen profitability increase quarter-on-quarter and actually reached now the highest levels we've seen this year. And we're committed to continue growing our restaurant owners bottom line.

And second with regard to Tim's Canada, your big competitor McDonald's has done a lot with their assets up there. They obviously have McCafé too. When you think about Tim's in light of the competitive set what are the big opportunities that you're going after right now or that you think are areas of opportunity, is it with regard to menu, the assets? And putting this in a positive light there could be some things that you think that have a slow burn in terms of being more competitive in that marketplace? Thank you.

Yes as you noted the environment in Canada is competitive. I think some of the opportunities that we already talked about around espresso-based beverages and building our latte business, building our digital business, those we view as opportunities. We also see while we have a significant share of traffic and sales at launch we see an opportunity to build an even bigger lunch business. And more recently, we've launched a new and improved grilled cheese sandwich at lunch which is doing well. And you’re going to see us continuing to build on our lunch business and innovate around new great products at launch which we do view as an opportunity for growth in our business.

The next question comes from Will Slabaugh of Stephens Inc. Please go ahead.

Hi guys this is Heron [ph] of Will. My first question would just be around, I guess the Burger King value and how you see the positioning of that value proposition going forward in light of some of your large QSR peers getting more aggressive?

Yes we made quite a bit of progress on the Burger King brand. Our franchise restaurant owners in the U.S. have done a great job. We're pleased with the pace of growth that we achieved this most recent quarter. And I think that it's really around maintaining that kind of that balanced approach of premium products, of value offerings, limited time offerings and we innovated around our crispy chicken sandwich, we innovated around the BAKING KING platform, we’re promoting the [indiscernible]. So there’s no one piece that accounts for everything. It's really this continued balanced approach in innovative around these platforms that I mention.

The next question comes from Peter Sklar of BMO Capital Markets. Please go ahead.

Thanks. Question on Tim Horton's. What’s the minimum wage going up in Ontario as you know quite substantially on January 1? Can you talk a little bit about what your strategy is going to be to maintain franchisee economics? And whether or not you'll be passing that through on your menu board?

Yes our two primary goals are to continue driving franchise profitability and deliver great value for our guests. And we do look at pricing from time to time and adjust if needed but we always have to balance this with delivering great value for our guests. And ultimately the best way to offset rising costs way is our cost of sales or utilities is to drive sales growth and that at the forefront of our agenda, with our restaurant owners. And that's the number one topic we work with our owner elected advisory board, putting the other programs that are going to drive sales for the long run.

This concludes our question-and-answer session. I would like to turn the conference back over to Daniel Schwartz, Chief Executive Officer, for any closing remarks.

Well thank you all so much for taking the time to join us today. And we look forward to updating you all on our results for the fourth quarter early next year. Thank you so much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.