RCI Hospitality Holdings, Inc. (RICK) Q2 2015 Earnings Report, Transcript and Summary

Greetings and welcome to RCI Hospitality Holdings' Fiscal 2015 Second Quarter Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Gary Fishman who handles Investor Relations for RCI.

Thank you. Please turn to Slide 2. I just want to remind everybody that our Safe Harbor statement is posted at the beginning of our conference call presentation. It reminds you that you may hear or see forward-looking statements that involve a number of risks and uncertainties. I urge you to read it. Actual results may differ materially from those currently anticipated. We disclaim any obligation to update information disclosed in this call as a result of developments which occur afterwards. Please turn to Slide 3. I also direct you to the explanation of non-GAAP and adjusted EBITDA measurements that we use and that are included in our presentation and our news release. Finally, I'd like to invite everyone in the New York City area to join us at Rick's Cabaret New York tonight at 6 O' Clock to get a a firsthand look at one of our flagship club. Rick's Cabaret New York is located at 50 West 33rd Street between 5th and Broadway. If you have an RSVPed, ask for me at the door. Now here is Eric Langan, President and CEO of RCI Hospitality. Eric?

Thank you, Gary. Good afternoon, everyone. Please turn to Slide 4. Second quarter results continue to show strong growth. We generated record revenues of $37.4 million, up 14% year-over-year. GAAP EPS was a loss of $0.28 but keep in mind this includes the accrual for the recently announced New York Fair Labor Standard Act legal settlement. Excluding that and some other items, non-GAAP EPS was $0.50 per share, that's up from $0.47 per share in the first quarter, and it's up 11% year-over-year. The quarter continued to see improved core operating margins in both our night clubs and Bombshells restaurant/bar segment. We saw another solid increase in adjusted EBITDA which reflects our cash generating power. Monthly [ph] report that we are making progress sort of expanding distribution of our robust energy drink. We have spent $1.9 million buying shares in the open market in the first half of fiscal 2015. To-date, we have brought back about 2% of the shares that were outstanding at the end of the last fiscal year. Please turn to Slide 5. As a result we continue to be ontrack for a strong fiscal 2015, halfway through the year, total revenues are $75 million, that's up 19%. Non-GAAP EPS is $0.96, that's up 23% and adjusted EBITDA is $20 million, that's also up about 23%. Please turn to Slide 6. Revenue growth was driven by higher traffic and a net addition of two units. New clubs and restaurants added $4.4 million, that includes the full quarter of Rick's Cabaret Odessa and a nearly full quarter of Down in Texas Saloon in Austin. It also reflects three Bombshells opened over the past years, they are only two Bombshells in the year ago quarter. Same store sales were up more than 2%. As favorable as the quarter was, growth was held back to some degree by bad weather in March, particularly for two weekends in the Dallas-Fort Worth area where we 11 locations, and our two Manhattan clubs also had very difficult comparisons to a year ago when we had the pro-football championship player here in New York City for the first time. Please turn to Slide 7. For the purpose of this discussion, we are going to using our non-GAAP operating margin calculation; this excludes the accrual and some other items. In the second quarter we maintained our 25% of non-GAAP margin that we saw in the first quarter, this is lower than a year ago but you will see from the slide that the second quarter of 2014 had a particularly high operating margin. In addition, the 25% level we experienced in the first two quarters of this fiscal year is greater than three out of the last four quarters. This reflects higher revenues, elimination of unprofitable adult clubs, and the growing performance of Bombshells. In terms of our expenses, I'd like to note a few items. Cost of goods was a little higher as a percentage of revenues, primarily due to more restaurant food sales. Insurance declined due to our new contract, rent plus interest which is how we measure our cost of occupancy fell, that's due to the significant reduction of debt in the fiscal 2014 fourth quarter. The year ago quarter also included temporary higher rent at Rick's Cabaret in New York. The FLSA accrual totaled $10.3 million pretax or $0.65 per share net of tax. This represents our best estimate at the present time of the total cost of the settlement what we announced April 1. As a result of this settlement, legal cost were up year-over-year. Please turn to Slide 8, in addition to the higher non-GAAP earnings, our second quarter performance resulted in more than 11% year-over-year increase in adjusted EBITDA to more than $10 million. Please turn to Slide 9, our balance sheet remains solid. Compared to the end of the first quarter, assets and long term debt increased a little, that's primarily due to the Down in Texas acquisition offset by paying off the last of our Tootsie's debt. At 14%, Tootsie's was our most expensive debt. Paying it off should free up approximately $4 million in cash on an annualized basis. The change in equity reflects the Fair Labor Standard Act accrual, partially offset by the core profits. As I mentioned on the last quarters call, we continue to obtain new financing and refinancing from commercial banks at attractive rates ranging from 5% to 6%. This is significant for three reasons; in the past it was difficult for us to get any commercial bank financing at all, thus we had to pay on debt in most cases exceeded the 5% to 6% range. We are finding we are able to use unencumbered real estate value to collaterize these bank loans. Please turn to Slide 10, looking at our new location schedule in the second quarter we've added Down in Texas and the third quarter we acquired the Seville Club in Minneapolis as previously announced. Please turn to Slide 11, our Nightclub segment consisted of 38 adult clubs and two night clubs in the second quarter. We had another good period in the business; revenues were up more than 2% close to $32 million. Unit count declined slightly due to previously announced closing of underperforming units. Reported operating income declined due to their FLSA accrual. Excluding that adjusted operating income increased 8%. In addition, margin expanded to 32.6% of revenues from 30.9%. As I mentioned, we issued a quite Club in Minneapolis, this is another good solid club that would expand our presence in an existing market. The Seville Club expands our share of the attractive Minneapolis market, enables us to own three of the top locations. Subsidiaries there already own Rick's Cabaret Minneapolis and the Downtown Cabaret, two of our top revenue generating clubs. We anticipate Seville will be accretive to earnings as was Down in Texas. I will talk more about club acquisitions within the context of our capital allocation strategy in a few minutes. Please turn to Slide 12, we are very proud to report Bombshells' second quarter as a segment. Revenues increased more than three-fold to $5 million. This reflects the five units we have today versus two in the year ago quarter. Overall, our target continues to be an average of 60,000 per week per store, or a little more than $3 million annually. Looking at operating margins, that expanded to close to 12% in the second quarter, that's up from 9% in the previous quarter and about breakeven in the year ago quarter. As revenues continue to build and training costs subside, we intend to anticipate continued margin expansion. As I noted in previous call, Bombshell's having created unsolicited interest in franchising. Please turn to Slide 13, we are making progress towards expanding distribution of our robust energy drink. There are four recent developments; one, we launched a distribution program in Florida in April with Southern Wine & Spirits. Southern is the country's largest wine and spirits distributor and operates in 35 states. Two, we are negotiating a manufacturing agreement to significantly lower the cost of product, as we mentioned before we currently import robust from the UK. Three, robust is in the process of launching a fourth flavor, pineapple; this has been requested as a mixer by our on premise bar customers. Remember robust target markets are bars and restaurants, not mass market per say. Four, we reached an exclusive agreement with Legends at Toyota Stadium in Dallas to serve robust. Toyota Stadium is the home of FC Dallas which has been growing in popularity. We continue to believe in the robust opportunity, this is particularly so in light of the fact that distributors are losing Red Bull and Monster Energy Drink. Please turn to Slide 14, because of our confidence in the business as well as the significant undervaluation of our shares we have continued to buy back stock in the open market. For the first six months of the year we have spent $1.9 million to buy back more than 190,000 shares of stock. We have close to $7 million in remaining Board authorization. We will continue to focus cash flow on buying back shares. RCI has generated approximately $15 million of free cash flow for the year for the past few years. At operating cash flow less maintenance CapEx and patent tax excluding onetime items, this represents about 13% free cash flow at our current market capital before any upside from organic growth, this is significantly above the after-tax yields on any of our debt and we think it is a compelling value. By buying back our only shares, shareholders get to own more of the assets that we already know in light without any additional risk. Based on that it perfectly makes sense to buy back shares until we reached a higher $15 a per share which represents about 10% free cash flow yield. I want to emphasize we are not abandoning future acquisitions of restaurants, however to justify doing anything new returns treated value must be significantly above or we can get from simply buying back our own shares. As market conditions dictate however, there may be times when we deviate from this capital allocation plan as we deemed appropriate. Please turn to Slide 15, as we anticipated in the last conference call, the second quarter was a record revenue generating quarter. The third quarter is typically a lower revenue quarter than the first and second but we do believe it will show improvement over the year ago quarter and we continue to have a favorable outlook for fiscal 2015 as a whole due to our improved portfolio over adult clubs and Bombshells growth. We showed the May weather fight, May 2 at about half of our units, been an excellent turnout in each of those locations. Rick's Cabaret in New York will celebrate its 10-year anniversary later this year, and this year RCI is celebrating its 20 Anniversary as a publicly traded company. We are very proud of our track record of two decades of innovation in the adult club segment of the hospitality industry. Speaking on behalf of RCI's management and that of our consideration, I'd like to thank our loyal shareholders for their support. With that, let's open the line for questions. Operator?

Thank you. [Operator Instructions] Our first question will come from CK Doll of CKD Analysis [ph]. Please go ahead.

Yes, congratulations, it looks pretty good there. Could you respond the free cash flow figure a little bit more precisely? And how do you define that and how does that compare with perhaps a peer group of your other consumer service companies and I'm really astounded at the incredible act of interest that – in terms of investor years which have RCI shares because it seems like every new idea that comes along into summer services rise to the more you say but you're selling for a very low, what appear free cash flow ratio to share price. But I'd like you to define that a little bit more, how do you define the free cash flow figure?

Basically what we used to use from past free cash flow was we used cash flow less maintenance CapEx which the patent tax and excluding one-time items is kind of how we come up with our free cash flow analysis.

Are you providing guidance on that going forward?

I don't – we don't really have a guidance, I mean I think that you're going to continue to see our – as our revenues increase, our margin increase, our free cash flow is going to continue to increase as well, especially as we make our debt payments and lower the interest expense on our debt as we refinance some of our properties where we're taking loans that had 15 years left on them, put them on May [ph], it used to be at 9.5% interest that are now at 5.25% interest, all that frees up additional cash flow on a go forward basis for us. It appears and I don't think we have any direct peers we can really compare to but we agree with you a 100% that our free cash flow is selling at a huge discount to any other type of yield in the market right now.

Yes, and then one other additional question. As I mentioned a very strong appetite for spin-offs, IPOs, anything that's been priced recently has been very, very highly evaluated, sometimes deficit operations, a price that billions of dollars for some of the technology where dotcom situations, would you consider, it's been on retaining experts, outside experts to develop a game plan for distributing your non-sin [ph] related to, I think it's referred to with your nightclub holdings. And just define where you're going with bombshells, and how much that could be evaluated if it's was spun off to shareholders?

I mean, I think it's a little young right now, obviously we're still working on giving the franchising set up with the attorney's. Once we start to sign up franchisees and actually starting to creating significant revenue from bombshells, depending on where our multiple is versus what we think we can get on a multiple of bombshells, we've always kept that option open. Yes, definitely we would look at either spinning off or doing something with the private equity, some type of deal, we can't get the multiple out of it that it should garner based on its peer group.

Alright, and one very last question, your some hospitality companies, lodging companies like have been exploring development into the Cuban market in Havana. And just wondering if that's something that you could put on the radar screen for future nightclub development?

Right now we think our U.S. presence is very small compared to the overall size of the U.S. market. So we're not really looking to do anything out of the U.S. at this time. But we never say never, it's not something we're exploring at this time though.

Okay, thank you.

Thank you.

The next question will come from Adam Michelson of Cooper & Company [ph]. Please go ahead.

Hi, Eric, nice quarter.

Thank you. Yes, it was nice to get this lawsuit behind us, and now we can really start to seeing the cash flow generation, debt paid off, so we've got a lot of exciting stuff and I think as we move forward, as the cash flows up, as stock phase is out we'll continue to buyback more stock and then once we get this lawsuit settled and/or paid off and that should have considerable amount of free cash.

One thing that just struck me on the income statement was that, your interest cost is starting to come down in a pretty meaningful way. I mean it was $0.5 million less in the first time for the year than a year ago. And being able to take out new debt 5% to 6%, I mean do you see an opportunity to refinance some of your existing 9%, 10%, 11% debt by utilizing new facilities at this kind of call?

Exactly, what we're working on right now starting with trying to get rid of the 13% and 12% and the 11%, all the way down. We're talking with some additional banks right now. Our biggest issue is we hit their single lender limit very quickly. Most of the banks we're dealing with right now are smaller community banks with $4 million, $7 million single lender limits, and so we go in, we put a package together, we basically tap their single lender limit and we're done with that bank, we got to go find the next one. We've got about five bank loans now in the last six months and we're currently talking with couple of other banks right now for some additional stuff. So it looks very promising and I think that provided the market holds where it's at right now, in the next six months I think we'll see us able to pull more of that equity out of our existing real estate and pay-off some of these higher interest loans that we've taken out in the past.

Yes, I mean, it will make a difference if you can. So thanks very much.

Thank you.

[Operator Instructions] The next question will come from John Rolfe of Argand Capital. Please go ahead.

Guys, that's certainly really good news on the debt and others have said the ability to sort of consolidate some of the existing debt under new more attractive rates would be great. That said, it's – the other option that you guys have talked about overtime in terms of sort of unlocking value has been the reach, I didn't see any mention of that in the press release or the presentation or the queue. Has that sort of been – sort of back burner for the time being or are there any updates there that you could give us?

Sure, the REIT has actually been formed – we've been out looking for capital for the REIT, the biggest obstacle right now is most of the capital we're seeing in reach is 9% to 12% money and we're borrowing money from banks at 5% and 6%. So we kind of reevaluated what we want to – how we want to move forward with that at this time, kind of take a wait and see approach. If we get the money in at the right amounts into the REIT, we'll probably start looking at showing off a few of the properties at a time, moving to that REIT model, definitely any new acquisitions, we would love to do through the REIT. But as far as right now we're starting to unlock our existing, the main reason we look at the REIT and through the last two years we're working on this REIT was to get us cheaper money and cheaper capital cost, and right now we're able to do it cheaper without the REIT than we are, if we do it through the REIT other than on new acquisitions. So I think we'll definitely look at the REIT for any new acquisition types that we do. But on the existing stuff right now, if we're able to unlock a few bank loans at 5% I think it makes more sense.

Okay, okay. And it also looked like again, just glancing through the queue that the sort of legal status and proceedings with regards to the poll tax, we're more or less status quo this quarter. Is that a fair assessment or have there been any sort of movements of meaning and regard to what's going on there?

That's a fair assumption for the past quarter. Currently we're in negotiations with the state, we've hired the attorney as you've seen in the release, we've hired attorneys who've been negotiating, I'm expecting something later this week hopefully. Maybe next week, who knows – we're working on that and I expect that we'll get some type of resolution on that and I think it will be very favorable to the company as we continue to work on that.

And the resolution would presumably include both an absolute dollar value as well as some sort of payment plan, is that correct?

Correct, that's definitely what we're working for.

Okay, great. Thank very much.

Thank you.

The next question will come from Steven Martin of Slater Capital Management. Please go ahead.

Thank you. Eric, can you give us an indication, I know you haven't disclosed terms on the Minneapolis acquisition or anything about – the terms yes, but not how the club was performing. Will the club be accretive immediately upon acquisition?

Yes, this will be immediately accretive and to give you an idea that we – most of the financing on the deal, the owner financing was 6% and the bank portion of that financing was at 5.53%. So we have very, very favorable financing terms. On a cash-on-cash basis it's going to be fantastic for us because we came out a pocket just over a $1 million.

And would you care to give us any indication about how the club was performing?

Very similar to our other two locations up there, basically in the $3.5 million to $4 million.

And comparable margins to what the corporation normally does, what the clubs normally do?

We'll get little bit margin out of it and they were for privately held in Manhattan, considerable expenses. On an adjusted basis, the answer is yes, easiest way.

Okay. Legal expense was up a lot, did that include legal for the New York City states settlement, yes there was a considerable cost and aid all the negotiations, all the documents and we were preparing for track, even might we were going to travel April 27. So we didn't sell to the right after the last minute, so we were still doing of our trial prep, we had a very considerable expense in that quarter, those expenses should minimalize over the next six months and disappear after November. And one last one, can you give us a little more color no robust and what the revenues look like or you’ve signed up a lot new distributors, are you currently shipping product of the new distributors?

We’re distributing and have actually sent what I call sales training crews in to work with their sales staff and train their sales staff on placing the product. So far Miami we’re happy with the way the Miami launch is going, and I think that we’re going to see -- we have got some other contract negotiations stuff that we’re working on right now and sales distributors that we’re working with. I think next quarter we will probably get pretty close and then I'm guessing probably by the end of the year robust will be broken out into its own segment.

Okay. And when will you and I know there is a precise timetable on this. When will you’ve a better guestimate or estimate of what the New York State case is going to cost?

We don’t know the exact number, I believe the date is September 18th. I’ve to go back and look, but September, I know its September. We will have the claim forms are being sent out right now. They have 90 days to file their claims and so we should have all those back and I believe the final date is -- I know it's in September I can't remember the exact date, I think its 18th, it's definitely in September.

And our next question will come from Nathan Rusbosin of DePrince. Please go ahead with your question.

One, talk to us about the Bombshells getting the significant revenue before you consider any type of spin-out. What are your kind of targets with like -- can you give us some estimates or some targets around what you’re defining a significant revenue numbers?

We’re talking about spinning off into a separate public company, I think probably want to be in the $100 million range, definitely want to be in a much higher earnings. It's very expensive to be a public company as we know from our current position. But I want to make sure if we get the multiple expansion at RICK's we don’t need the necessarily spin that off, we will keep it and basically run and control and run the numbers through our deal. I think it's just little premature, we haven't even started franchising yet, we don’t know what type of franchisees and numbers we’re even talking about at this point. So I hate to sell it off early and then suddenly we have 100 stores franchise and RICK's miss out on that.

So how do you get multiple expansion?

I think we keep selling our story, I think now that this law suit is basically behind us, it's expensed out, that’s going to help. I think when we sell this patron tax deal and that’s done and our balance sheet starts looking much cleaner, the debt is coming down, the interest rates are -- our overall interest rates coming down, our interest expense is dropping. I think that the market got to start paying attention to us. I’ve noticed that our institutional shareholder base is starting to increase again, and so I think that’s really the best way to give multiple expansion is to increase institutional ownership and we’re just going to have to get out there and stay on the road, tell our story and basically just keep performing and the market will catch up to it.

Yes certainly. Do you guys have plans on conferences, roadshows, meeting with [indiscernible].

We talk to lot of people, we probably setup some type of non-deal roadshow again towards the end of the summer. I really want to get the patron tax behind us. I want to get this law suit behind us, I want to everything quantified. I want the numbers done and as we move into 2016 have a nice, clean, fresh, go forward run-rate and know exactly where we’re at and then kind of we will know what kind of cash we’re going to have, and what kind of cash we’re generating and we can hopefully have a franchising up and ready and start selling the franchises. So I think we will be much bigger, better story, as we get through the end of this fiscal year so probably around September October we’re really start getting hard and heavy on telling a story for the 2016 fiscal year.

And then you talked about the full tax hoping to get something settled in the next couple of week's sounds like hopefully.

We’re getting closer and closer, the lawyers have been working it out, I was hoping we could get it done before this call today but we’re just couldn’t get everything done in time. So hopefully soon we will have that done. We will get a release out there and let you guys know exactly how that worked out.

We will see a press release with that as well?

Yes definitely you will see a press release with that.

Okay, I would think that getting both of those even those full tax reserve -- getting both those resolved is a bit of an overhang I would imagine.

It's always really working being out for the last four months I. Give me an idea, the Minneapolis acquisition our Director of Operations is basically negotiate and did that entire acquisition. I had very little involvement just because my time was taken trying to get this law suit settled and work on this patron tax stuff. So I was glad he was able to help out and get that deal done for us.

And then lastly real quick if you could just talk about your kind of longer term margin structures that you’re thinking, I know the Bombshells, your margins are a little weaker than the main the nightclub segment, but just kind of where you guys are seeing your structure go in?

I think that the Bombshell margin structure will probably grow to the 15% to 20% range based on some of the stuff we’re seeing right now. And I think our margins are kind of stay where they are at, so I mean 32% might be hard but I think on your adjusted EBITDA 25% give or take a point each way, I don’t think it's going to change a whole lot. I think we will stay in that range at this point.

And how long is that training, you talked about ramping up the training.

As the legal expenses go away those margins will increase.

Yes. And it sounds like those are.

Yes, we’re getting there.

The New York legal expenses you didn’t break that out, but it sounds like that was kind of more of a onetime thing this quarter, is there any way you could talk about what that number was?

I don’t know what it was on the top of my head but it was definitely significant. To be honest with you I didn’t look at it, I was so focused on getting all this other stuff, work done it was whatever the number was and there wasn’t much we were going to be able to do with it. So I'm sure Phil can get that number for you at some point in the future if you’re interested in it.

Real quick last question I will let you go then. What keeps you up at night right now? The valuation of the stock I guess, probably the--

The feel for the shareholders that end up having to sell it and can't continue to hold with us, you know on myself I don’t really sell the stock, in fact I’ve been buying it so and the company has been buying stock so it hasn’t really. It doesn’t really keep me at night, like I said I would like to see a better valuation so we can grow a little faster, a little stronger. There are some opportunities out there, we have kind of not really took a good look at that will probably be a decent acquisition for us but at this time I think that the risk-free return on buying back our stock is our best return.

Is there anything that would make you get more aggressive buying back stock to set up the $15 I mean--

Well cash, I mean we got to have the cash available to us. We are stock related cash right now to pay off this law suit in September, we are still buying stock I mean not aggressively as I would like to but we’re still buying back stock when we can. We’re watching our cash flow and king of really doing a lot more juggling of it than normal to make sure we can buy back stock and still make all of our obligations with this law suit settlement.

And our next question will come from Bob Brown, a private investor. Please go ahead.

Just a couple of quick questions, first of all as far as the New York I just wanted to confirm the thing in the press release it was pending on the court approval of the settlement, has the court actually approved at this point?

The preliminary approval has been done yes, now you got to remember there is a final approval step after all claims are made and everything else that closeout the deal. That is in September sometime but we don’t foresee any problems at this time.

And second question is, just curious in terms of, I mean I’ve been shown for many, many years and I know historically we have always had issues because of the industry that we’re in as far as getting bank financing and I'm just curious is because we have diversified a little bit and the whole kind of the hospitality format is opposed just being the [indiscernible] I'm just curious why we’re starting -- it's great news obviously but why we’re starting to be able to get some bank financing.

Well having to truly guess, because I really have no clue myself. I felt somebody told me six months we would be doing bank loans I would still be laughing today but I'm not laughing there, we are getting good solid loans, great terms, from the people that I’ve talked some of the bank presidents that we have borrowed money from and people have talked to who have asked me how did you get passed and the biggest thing is we have these banks have so much liquidity and no place to put the money and so they have to choose between a bad loan or stretching their morals a little bit and RICK is -- well we have RCI Hospitality Holding so we don’t show up on their sheets as RICK's Cabaret International Inc., anymore that’s definitely helped from the [Technical Difficulty] name change has helped and our balance sheet is just so strong and our cash flow generation is so strong. So they are not worried about us paying them back and our credit is great. We have had some bank loans for 10 - 15 years now where we have got small banks and our credit rating is fantastic from all our past dealing with the banks and I think that’s definitely my best guess.

And then last question is just around macro standpoint, I’ve always assumed you know lower gas prices always put little more money in the pocket and [indiscernible] in terms of going out entertainment, I just wondering what you’re seeing in terms of yield back a lower oil prices in Texas. Are you seeing anything worrisome in any of the Texas club because of the economy or people pulling back or people are still spending as far as you’re seeing?

You got remember, we only have two markets that I would consider as exposed to energy prices and that’s Houston which we’re not really exposing that market, our clubs there the [indiscernible] in the Clubonics brand which cater to a different customer base than the general customer base of RICK's and the Odessa we have seen no slowdown at all, in fact if anything Odessa is busier. The spend is better. We don’t have as long a lines on the weekends sometimes which is nice because the lines cause problems and that keeps money spending customers away. So all in all we’re seeing decent customer accounts from it, our Blue Collar clubs I think are doing better, getting a little more maybe another extra customer visit a week or something out of some of them regulars. But overall we haven't seen anything that I can monetize or say hey this is because of energy prices.

And at this time I'm showing no additional questions in the queue. I would like to turn the floor back over to management for closing comments.

Thank you operator and thank you Eric. I want to remind everybody again that we do have a due diligence event at RICK's Cabaret in New York from 6 to 8 clock tonight that’s at 50 West 33rd Street between 5th and Broadway. If you’ve an RSVP ask for me at the door and we look forward to reporting our fiscal 2015 third quarter sales in July and then our third quarter results in August. Thank you and good night everybody.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.