Texas Roadhouse, Inc. (TXRH) Q4 2021 Earnings Report, Transcript and Summary

00:03 Good evening, and welcome to the Texas Roadhouse Fourth Quarter Earnings Conference Call. Today's call is being recorded. All participants are now in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] 00:34 I would now like to introduce Tonya Robinson, the Chief Financial Officer of Texas Roadhouse. You may begin your conference.

00:43 Thank you, Brian, and good evening everyone. By now, you should have access to our earnings release for the fourth quarter ended December 28th, 2021, it may also be found on our website at texasroadhouse.com in the Investors section. 00:56 Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer all of you to our earnings release and our recent filings with the SEC. These documents provide a more detailed discussion of the relevant factors that could cause actual results to differ materially from those forward-looking statements, including factors related to the COVID-19 pandemic. 01:30 In addition, we may refer to non-GAAP measures. If applicable, reconciliations of the non-GAAP measures to the GAAP information can be found in our earnings release. On the call with me today is, Jerry Morgan, Chief Executive Officer of Texas Roadhouse. Following our remarks, we will open the call for questions. 01:47 Now, I'd like to turn the call over to Jerry.

01:50 Thanks, Tonya, and good evening. We are pleased to finish 2021 with strong revenue and earnings growth versus both the prior year and 2019. Our operators continue to do a great job building sales, providing a legendary experience to our guests, and holding on to margin dollars in the phase of high commodity costs. 02:12 We ended the year with comp sales growth of 18.3%, compared to 2019 and that positive momentum has continued into the new year with comp sales up 20.6% for the first seven weeks of this year, compared to 2021. We are excited about 2022 and the opportunities ahead of us, including another year of top-line growth, driven by our new store openings, franchise acquisitions and sales growth at our existing restaurants. We will continue to deal with many of the same issues that we faced last year, including commodity inflation, staffing challenges and supply shortages. 02:58 However, in my experience as an operator, each year in the restaurant industry comes with its own set of challenges and opportunities. As usual, we will face -- we will focus on what we can control and make the best decisions for the long-term benefit of our restaurants and our brands. We will stick to the fundamentals at Texas Roadhouse, we will continue to build operational excellence and name recognition at Bubba's 33 and we will refine our growth plan for Jaggers. We will continue to focus on our Roadies by ensuring that we are hiring, training and treating them right. And we will continue to embrace technology and use it to enhance the guest experience, while still emphasizing the importance of face-to-face interaction between our restaurant staff and our guests. 03:57 We are finalizing plans for a mid-April menu price increase of approximately 3%. At this time, we have not seen a negative reaction from the price increases that we took in May and November of 2021. All indications are that our guests continue to view Texas Roadhouse as a great value because of the prices that we charge and the quality of food and service that we provide. However, we will never take our guests for granted and know that we must earn their business each and every day. 04:36 On the development front, during the fourth quarter despite equipment supply challenges, we were able to open all 11 restaurants that were scheduled to open. These openings included nine Texas Roadhouse, one Bubba's 33 and one Jaggers. We remain very pleased with how our new restaurants are performing. To put that into perspective, for the first seven weeks of 2022, the 10 Texas Roadhouse and Bubba's 33 restaurants that opened in the fourth quarter averaged over $142,000 in weekly sales. For 2022, we are targeting 25 company-owned restaurants, including as many as four Bubba's 33 openings. We also expect our franchise partners to open as many as five Texas Roadhouse in 2022. 05:36 The reduction in the number of expected openings in 2022 is due to continued delays in the initial permitting and building approval process. With this step taking longer than normal, we are pushing several second half 2022 openings into 2023. 05:57 Going forward, we still believe that building new restaurants and taking care of our existing restaurants are the best uses of cash. At the same time, our strong balance sheet and operating cash flow allows us to also create value for our shareholders and our employees through dividends, share repurchases and franchise acquisitions. 06:24 Finally, I want to thank all of our Roadies, our restaurant managers and everyone at our support center for their tremendous efforts in 2021. I also want to emphasize to each and every one of you that we will remain on offense in 2022, that means keeping our restaurant staffed with the best talent, serving smoking hot entrees and heaping side an ice cold beverages. As your partner and head coach, I promise you that this is how we will continue our winning ways. 7:03 Now Tonya will provide a financial update.

07:07 Thanks, Jerry. As I begin, please note that most of the comparisons in my prepared remarks are versus 2019 in order to provide a clear understanding of our underlying performance. Please refer to our earnings release for a more detailed discussion of results versus 2020. Results versus 2019, unless otherwise noted are unadjusted and include the negative impact of lapping an extra week in December of that year. 07:35 For the fourth quarter of 2021, we reported diluted earnings per share of $0.76, up 24.1%, driven by strong revenue and restaurant-level profit growth along with the lower income tax rate. Revenue was up $170.3 million, driven by comparable restaurant sales growth of 21.2%, including 8.1% traffic growth and an average check growth of 13.1%. Check growth includes positive mix of 5.3% as guests have moved our higher-priced entrees and increased their frequency of purchasing appetizers and other add-on items. 08:15 Traffic growth continues to be driven by strong to good sales, while guest counts in the dining room were down slightly. For the fourth quarter, our restaurants averaged approximately $17,500 per week in to-go at sales, which represented 14.4% of total sales. Average weekly sales were relatively consistent throughout the quarter at nearly $122,000, compared to $101,000 in Q4 2019. 08:45 By month comparable sales grew 23.6%, 24.7% and 16.6% for our October, November and December periods respectively. We estimate that sales growth for December and the fourth quarter were negatively impacted by 7.1% and 2.8%, respectively due to Christmas shifting from a Wednesday in 2019 to a Saturday in 2021. 09:15 As Jerry mentioned, our sales momentum continued into the first seven weeks of 2022 with comparable sales up 20.6% as compared to the same period in 2021. During the seven weeks, average weekly sales were over $127,000 with to-go sales of just over $20,000 per store or 15.9% of total sales. For the fourth quarter, restaurant margin as a percentage of total sales was 15.8%, down 124 basis points as compared to the fourth quarter of 2019. We also focus on restaurant margin dollars per store week which were up 11.9% to over $19,300 as compared to Q4 2019. 10:00 Food and beverage costs as a percentage of total sales were 35% for the fourth quarter. This was 262 basis points higher than 2019, driven by 17.6% commodity inflation, compared to the fourth quarter of 2020, which was in line with our forecast for high teens inflation. Our beef outlook for the first half of 2022 has improved slightly, but we still expect overall commodity costs to remain elevated with approximately 50% of our commodity basket locked for the first half of 2022, we now expect approximately 17% inflation over that time period. 10:41 For the back half of 2022, we have only a small portion of our basket locked, which makes it challenging to provide meaningful inflation guidance for this time period. However, based on our internal projections which we continuously review and update, we expect inflation in the back half of the year will moderate mostly due to the beef and other prices that we will be lapping. 11:04 Overall, this would result in 12% to 14% inflation for full year 2022. But keep in mind that even if inflation moderates in the back half of the year, the underlying dollar costs for beef and other high-use items will likely still be higher, both year-over-year and sequentially. 11:24 Labor as a percentage of total sales improved 42 basis points to 32.6%, as compared to Q4 2019 even as labor dollars per store week increased 19.2%. This increase in labor dollars per store week was driven by wage and other labor inflation of 15.4% and growth in hours of 3.6%. The remaining increase of 0.2% was primarily due to a $0.8 million adjustment to our quarterly reserve for workers comp. 11:56 For 2022, we are forecasting wage and other labor inflation of approximately 7%, including the impact of enhanced benefits that we are offering to our previous expectation for wage and other labor inflation driven by wage trends as our managers continue to invest in their people. One thing to note here, we expect inflation will be above this level in the first quarter as wage rates did not begin to significantly increase until so the second quarter of 2021. 12:28 Other operating costs were 14.7% of sales, which was 84 basis points lower compared to Q4 2019. Approximately 10 basis points of the decrease relates to the benefit of a $0.8 million adjustment to our quarterly reserve for general liability insurance. Most of the remaining benefit comes from sales leverage. 12:49 Moving to our restaurant margin. G&A came in at 4.8% of revenue, a $4.5 million increase versus 2019. Our effective tax rate for the quarter was 13.5%. Our tax rate continues to see a higher than normal benefit from FICA tip credits driven by the increase in our sales and a higher benefit related to our share-based compensation expense. 13:12 For 2022, we expect an income tax rate of approximately 15%, assuming no changes to the federal tax code are enacted. With regards to cash flow, we ended the fourth quarter with $336 million of cash, which is down $101 million from the end of the third quarter. Cash flow from operations was $120 million and was more than offset by $62 million of capital expenditures, $28 million of dividend payments, $37 million of share repurchases and $90 million of debt repayment. We expect full year 2022 capital expenditures will be approximately $230 million, with the $30 million year-over-year increase, primarily driven by the planned relocation of 6 Texas Roadhouse restaurants in 2022. 14:06 I will also mention on the first day of fiscal 2022, we spent $27 million on the acquisition of 7 domestic franchise restaurants. These restaurants are included in our expectation of 6.5% store week growth. 14:21 Lastly, as announced today in our earnings release, our Board of Directors has authorized a 15% increase in our quarterly dividend payment, increasing it to $0.46 per share from $0.40 per share in 2021. 14:35 Like Jerry, I want to thank everyone for their commitment to Texas Roadhouse and for their hard work, which has helped us achieve so much in 2021 and sets us up for a legendary 2022. 14:47 Operator, please open the line for questions.

14:50 [Operator Instructions] Your first question comes from the line of Brian Bittner with Oppenheimer. Your line is open.

15:06 Thank you. Thanks for the question. Tonya, a question on your same-store sales trends and just how to think about the underlying trend, just given the choppiness and comparisons. You obviously gave us average weekly sales that are trending, I think, you said a little above $127,000. But I'm assuming, maybe that includes a relatively depressed January. So is there any way to think about AWS more recently relative to that $127,000, just so we can understand how the underlying business is performing now that the Omicron headwinds seem to have subsided for the industry? And I have a follow-up.

15:46 Sure, Brian. Yeah. When you think about the first seven weeks and that $127,000, there is a bit of volatility throughout. Really you have a couple of really big sales days with New Year's and Valentine's Day is really big for us and was really big for us this year. And that -- those high sales on those bigger sales days kind of offset a bit of the weather that you would think of as you think about that $127,000, because there was some weather negativity in those numbers. We were closed some days definitely during those first seven weeks. 16:25 So, it's hard to really peel it apart and give you specifics on what that means to that $127,000. But it isn’t hot, it may be slightly down a little bit, but that $127,000 I think is a pretty good number to think about as we continue to head throughout the quarter. And you're absolutely right. We are going to be lapping some pretty tough comparisons starting in March. March of 2021 was when we started seeing our average weekly sales climb above $120,000. So that's when compares will get a little bit tougher.

17:02 Okay. And just a follow-up on the COGS inflation guidance, it implies that the second half is up 7% to 11% despite rolling over the double-digit inflation from the second half of '21. Is there some recent dynamics that you can talk to that's impacting that second half of the year outlook? And can you also help us understand what the pricing factor for the model will be once you do take this mid-April price increase of, I think you said 3%, so we can think about how that ultimately flows through we can see inflation?

17:41 Yeah, sure. Yeah, the commodity -- probably the bigger issue on the commodity inflation in the back half of the year is just that we don't have a lot of costs built up, particularly on beef. We're a little more locked up on chicken in the back half of the year, not on pork. So that is -- makes it really tough to kind of -- just got determined where those costs might land. And so we're looking at historical trends a little bit, we're looking at guidance on what the cattle supply could be, what slaughter rates are, just all of those things are coming into play. But it is really tough to make that call on what we think that number could be, but we feel it was really important to try to get some guidance and some transparency as to what it could be. And so that's where we landed in that spot. 18:28 So, we're going to continue to learn a lot more about the back half of the year. And hopefully as we get closer, we see maybe even a little more softness that we bring those numbers down a little bit more. But that's our best estimate at this time for that. On the pricing side of things with that 3% at the beginning of April, we'll have 5.9% I believe, close to 6% in Q1 and the 1.75% that we have last year rolls off the year at 7.2% for Q2, that's the 3% and then the 4.2% that we took in November that stays consist in Q3. And then if there's no additional pricing in Q4 and EP right around 4% with the roll off of the 4Q and then the 3%. So that's what we think the pricing cadence will look like for the year.

19:23 Thank you so much.

19:25 Yes.

19:26 Your next question is from the line of David Tarantino with Baird. Your line is open.

19:33 Hi, good afternoon. Tonya, I have a question on all the pieces and how they fit together to frame-up the margin outlook. So I guess with the current level of pricing that you're planning and all of the cost inflation factors you mentioned. I guess, where do you think restaurant margin could shake out for the year?

19:59 Yeah, that's the tough line. I mean, I don't think that it's going to be tough to get into that 17% or 18% range this year, given that level of commodity inflation as it stands today. So we're going to continue to keep an eye on that. But it is tough, that's probably what makes it the most tough. I think we can get some leverage on other operating and I think you can see labor be -- maybe a bit benign bit neutral on a full year basis perhaps, depending on how hours -- where streaming hours continue to grow a bit and things like that. But with that 7% wage and other inflation in there, that's kind of where we land. 20:40 And so, a lot of it's going to depend, David, on traffic and where traffic lands after March. We know we're getting this big pop on comps here for the first 8 weeks of the year and that's certainly going to set us up well to have a strong revenue growth in -- for the whole year, but a lot will depend kind of on where the margin lands, how much traffic we get and how that commodity inflation does shake out in the back half of the year.

21:08 Got it. I guess just as a quick follow-up. You kind of extrapolate the run rate you're seeing in the business recently to the rest of the year. Is it possible that you'd be able to hold margin flat for the year? Are you thinking it's going to be down given all the factors that play?

21:30 I think you know, you could probably -- you can build a scenario for it maybe to be flat. Again, I think it's going to depend on traffic and where that lands and what we're able to do there. So -- but you could build a scenario. I think it'll be -- we feel good about sales for the full year, we feel like we're holding on that to go sales levels and that's been really promising to see that continue to hold up. 21:57 A lot is going to come down to how we're growing traffic in the dining room. Being able -- we know the demand is there on sales and getting the staffing back to where we don't see any impact to having sections closed and things like that will definitely be a big benefit to the year. So a lot depends kind of how on that shapes up, but we feel overall very confident about revenue growth and being able to get it down to the restaurant margin line.

22:28 Great. And then last quick one on this. When does that start to normalize do you think?

22:37 I think it starts coming down a bit off of these -- after these 2 first months of the year. It will start moderating. And I think our estimation is probably maybe it gets to flat by mid-year and it's just back -- kind of back to normal where we would see it slightly positive, but for the most part neutral in the back half of the year.

22:59 Great. Thank you very much.

23:01 You're welcome.

23:04 Your next question is from the line of Dennis Geiger with UBS. Your line is open.

23:10 Great. Thanks for the question. Tonya or Jerry, wanted to ask a little bit more about the longer-term restaurant margin algorithm, that 17% to 18%, has anything changed there with respect to how you're thinking about that algorithm and kind of any thoughts with respect to how quickly you can get there? I guess, Tonya, you said kind of base case, but let's not expect that this year. But just any kind of thoughts looking ahead to that or if anything has changed there?

23:37 Yeah. I think, and our target is 17% to 18%. I think that's a really good spot for us, it's a very healthy target. And if you are looking at the last 2 quarters, we definitely have learned how to manage it with the higher labor and commodity inflation. So as we continue to hold the sales on the to-go side or the dining room side and we have less and less exclusions as well as new people added to it, that will be very important for us to settle. And I believe, again, not knowing how supplies or commodities or some of the other inflationary parts will play out the rest of the year. We have held in the last 2 quarters, no one is going into it. So I think we've learned how to manage it, how to properly run it and we will continue to improve upon that. 24:31 So I feel really good about the direction we're going. If prices can hold or even drop a little bit will be very good for us. And the exclusions are a big part too is that, part of our ability to get fully staffed is to have all of our employees available. Even though we're a little short, the exclusion hurt us because, we don't know when they get chopped for 7 to 10 days, but a lot of that's real positive right now and we feel good going forward that as the COVID continues to settle if it does, remember, last year at this time we thought that too and things changed. But right now, it looks really, really positive going into the rest of the year.

25:13 That's great. Appreciate that, Jerry. Just a quick follow-up to that point, as we think about the staffing environment and the operating environment, just kind of how that impacted sales even margins kind of in the 4Q this year so far, how much of an impact that's had on the business? And then where you are right now, how much more you need from a staffing perspective, if you can kind of quantify that and what kind of benefit that may be going forward as you're able to do that? Thanks a lot.

25:43 Yeah. Sure. Dennis, I'll tell it's really hard to quantify [Technical Difficulty] 10% to 15% of our shifts were impacted by -- areas being closed in the dining room and having those staff -- that staffing challenge. And if you kind of extrapolate that across the quarter, I think it's as much as 2% same-store sales that we probably lost due to those challenges across the quarter.

26:16 Thanks very much.

26:19 Your next question is from the line of Lauren Silberman with Credit Suisse. Your line is open.

26:26 Thank you. So just for some commodities, 50% of the food basket locked in for the first half. Can you remind us of how that compares to where you've been historically at this point in the year? And then just, what's your overall sense of what's driving these elevated levels, given the expectation that you really don't expect to see these costs abate in the back half?

26:47 Yeah. It compares pretty similarly actually to 2020 as far as the percentage as we have locked. They were pretty similar. Coming into the year, pre-COVID, we may have been a little more locked, maybe closer to 60% or so. But still feel good about that 50% in the front half of the year and it's pretty similar to last year. 27:12 As we think about the commodity pressures in the back half of the year, you know it's a little bit -- given the uncertainty that's out there, not just with us but across the industry with the suppliers, the packers and just what things are going to look like, the demand, how supply is going to play out. It gets really tough to kind of lock those prices up in the back half of the year at a price that you're willing to accept. And so, we really felt like we want to wait and see and continue to watch and see how things play out on both the beef side of things and even a little bit on the pork side of things, just continue to see how that plays out for the rest of the year.

27:56 Okay, thanks. And then just a follow-up on the longer-term restaurant margin, So AUV is north of 20% above 2019, a lot more inflation in the model, underlying assumptions seems to make commodity costs on the dollar basis probably hold. So what do you see as the path to get back to the 17% to 18% restaurant margin? How much is in your control versus the underlying macro environment?

28:19 Well, I think some of the -- obviously the commodity inflation is a little bit out of our control. We kind of have to just wait and see what happens there. Typically, those things tend to be cyclic and I think we'll see those prices turnaround at some point, maybe then I'll get back to levels where they were. But I think, they will come down from where they are at some point in time. 28:42 I think on the labor side, we're going to continue investing on the wage. At some point though that kind of moderates a bit and you're not continuing to grow those rate wages, you've kind of reached that point that you can stay at for a little while [Technical Difficulty] that could potentially allow a little bit more on the margin side. 29:02 And just continuing to drive traffic and be efficient on cost. And our operators already they do a great job at that. It's tougher in this environment and at these high volumes, because some of these, they have to make choices that are a little tougher as far as when the foods coming in the back backdoor and how they're getting it on the table and things like that. So there may be some opportunity as things kind of even out and settle down as Jerry said that you see a little more efficiency perhaps on those costs which helped. 29:38 But I don't think there's going to be any silver bullet, Lauren, or anything [Technical Difficulty] just going to be a combination of continuing to [Technical Difficulty]. And one thing I would mention too. I'm sorry, is this technology. And I think we continue to utilize technology in a way that, as Jerry mentioned, in his prepared comments, it just improves the experience, and let's just focus on other things. And lets us be more about giving the guest an even greater experience because some of the things are being done through technology. So I think that's something we'll continue to see perhaps helping us a bit too.

30:25 Thank you very much.

30:27 You're welcome.

30:29 Your next question is from the line of Jeffrey Bernstein with Barclays. Your line is open.

30:36 Thanks so much. This is actually Jeff Priester on for Jeff Bernstein. Just first on the Bubba's brand, appreciate all the additional color in the press release you're now providing. But how should we be thinking about the long-term potential for this brand, both in terms of units, as well as annual unit growth? I mean for the past four or five years we've kind of been stuck in about 4 units to 6 units the year, should we just kind of assume that or is there going to be a ramp-up in the coming years?

30:59 Yeah, I am feeling really, really confident that we have learned a lot in this coming year or this last year. We want and expect Bubba's to deliver more than that. So even though our target the last few years has been maybe 4 units to 7 units, I do expect to ramp up to 7 to 10 number and then go from there. But I think we are positioned, we like where we're at on our building cost. We are very confident in our new leader of that concept and that person reports directly to me. So, as we have kind of split these concepts apart having a Director or really a Vice President run these concepts and really get focused on that business. I feel like we are going to continue to make strides lot faster than maybe, previously we had attacked it. 31:54 So I absolutely expect [Technical Difficulty] our sales are fantastic, we feel confident about our food, we know the model that we're looking at now financially. So the future in my opinion looks very bright for Bubba's 33. We're really have -- it's exciting. We got to get through this year and get the ground and the foundation laid, but we are ramping up for more expansion there.

32:25 Great. And then Tonya, just on G&A, can you help us with some directional thoughts in terms of what we should expect there, especially considering the [Technical Difficulty].

32:36 Yeah. I think as we look at G&A, we still have very similar philosophy about that. We'd like to see, we want to see those dollars growing less than revenue growth. We highlight to keep it as a percentage of sales. I would like to keep it in that 4.5% range, maybe even a lower and with these high sales volumes, getting a little more leverage there. 32:57 So I think the cadence of that cost across the quarters will be a little more consistent. In 2022, I tell you though there is -- we'll have our NP conference coming up in Q2. And we didn't have that in Q2 of '21. So that will pop that number up a little bit more than what you would expect, if you're basing it off of last year. And then other than that, I think it behaves pretty similarly the cadence of it and then the growth should be under revenue growth.

33:35 Great. Thanks so much.

33:39 Your next question is from the line of Chris O'Cull with Stifel. Your line is open.

33:46 Thanks. Good afternoon guys. [Technical Difficulty] related questions. Jerry, I could -- Could you provide an update on what learnings you've gotten out of the KDS system test in Minnesota? And I know, you had also mentioned testing some new kitchen equipment, I think fryers maybe, just curious if you had uncovered any interesting opportunities there as well?

34:08 Hey, Chris. [indiscernible] I will tell you we are learning a lot at the KDS system in Minnesota. Some of the efficiencies again, most of what we're learning is stuff that we didn't know prior to it. And it's allowing us to really study more of our functionality and our speed from that to execute. So from the KDS standpoint, we are still learning a lot. We have -- we are going to convert an existing store in July to that same deal and see how that goes. So again, we're going to continue to -- we have a new store that opened, we'll have an existing store converted and we will continue to learn from it. 34:52 And obviously, one of the other things, the tablets continue to grow in popularity for us and then our -- what we call calling our Roadhouse pay is really gained some strong momentum and really enhancing that check and change experienced. The ability for the guest to pay and they leave it there convenience and not really wait for us is really a big win. You do see other concepts going in that direction too and it's definitely something we held off on, but we probably shouldn't have. It really is an enhancement to that guest experience, especially when it comes to the end on the -- what I call the check and change side of it.

35:33 That's great. And then I know you put several marketing initiatives maybe some product innovation opportunities on hold during the recovery period this past year. Can you give us an update on how you're thinking about those opportunities this year?

35:47 I think I'm not quite sure. We're continuing to look at line setups and how to be more efficient. I guess when you say that, I would assume you're thinking of [Technical Difficulty] food and then how do we get it out of the window to the guest and we're constantly revamping. We have a display kitchen, we also have what we call a straight line, which really allows our efficiencies to be a little -- it's a little tighter, but we seem to be able to -- the motion test, people are be able to get their job done with less movements. So I think, we're going to continue to look at that. 36:29 I think the big part of settling in learning how to do a 20% to-go model as well as a full busy dining room is the one thing that we've really had to work on our traffic pass to really make it to where it flows a little bit better. So that has been -- as we've integrated and picked back up and held are to-go, but also filled our dining rooms back up probably been the biggest initiative we've looked at is how do we flow better and the traffic for that to-go and where it goes, whether it goes out a side door or back of the kitchen. So those things we continue to look at. 37:11 Our 4 prototypes that we're currently using give our operators a little bit of flexibility, whether that to-go food comes out through the front dining area or whether it goes out through the back of the kitchen, which we've seen some real strong efficiencies. Now we do have that and if you're talking about our drive-up [Technical Difficulty] opting in for that, and it is really working, where people can place their order, they can sit in our parking lot and we can text them to almost it's -- it's not a drive through, but it is a drive-up window and it really is -- the ability to text our guests and let them know when their food is ready, whether they come pick it up inside at one of our walk-up windows or this drive-up window is definitely [Technical Difficulty]

37:59 And then I apologize, Jerry. I was thinking about highlighting early dinner opportunities you are bringing people entering shoulder periods with maybe [Technical Difficulty]

38:08 Well. That's our early [Technical Difficulty] deal. Very exciting always been [Technical Difficulty] we call early dine basically from the time we open until early right before the dinner rush is what we promote and we've got 15 items that are at a better price point. It's -- our menu items just a little bit of a discount, but we will be promoting that a little stronger maybe than we did in 2021. So we feel excited. And Wild West Wednesday will be kicking that back up at a stronger level. It's always been a big win for us on that Wednesday evening. So, yes, those are a couple of initiatives that we will be -- as soon as we need them we will fire them up. And they're teed up and ready, but our sales are so strong right now, I don't know how we're going to push it yet.

39:00 Great. Thank you, guys.

39:03 Thank you.

39:04 Thanks, Chris.

39:05 Your next question is from the line of John Glass with Morgan Stanley. Your line is open.

39:11 Thanks very much. First, could you just confirm your comment? Is the dine-in business back to '19 levels or I think you said about it, just where is it relative to '19 levels, please?

39:22 It is slightly below '19 levels. Just a little bit in Q4. [Technical Difficulty] in the first month of the quarter, but then with [Technical Difficulty] as Omicron surge things like that, we obviously saw a bit of an uptick on the to-go side, dining room came back down a little bit and that continued in January. So, where -- we've seen a kind of get close, and then kind of back up a little bit just due to some of those issues and expect that with staffing and things like that getting back to normal. We're going to be able to continue to push that dining room traffic a little harder this year.

39:59 And just following up on staffing, what do you assume labor hours grow in '22? I know it's related to traffic, but I think you talked about a 7%. I think that was just a wage increase, not including the hours, is that right?

40:12 Yeah. The 7% is just wage and other inflation. And then from an hour’s perspective, we really don't give that number, because it is, as you said, tied to kind of traffic expectation. So I think we'll continue to see hours maybe move up a little bit. But from a staffing perspective, we've seen it grow, those hours grow at a pretty good clip. So it will grow a little bit more and it will continue to grow in 2022 and a lot will depend on what traffic comes in at.

40:45 But I guess, just asking the way, you're fully excluding, exclusions, et cetera. You're fully staffed now relative to '19, is that fair or not?

40:54 I think that's fair. I mean we're getting -- we're definitely getting there. It depends on week to week, but I think you've got a lot of stores across the country that are fully staffed, not having any issues there. You've got some others that are still struggling with it a little bit. And I think, we looked at stores in Q4 and to understand a little bit about is it demand or what might be the reason for the dining room sales to remain kind of a little bit moderated and you see wait times in those restaurants, you see folks waiting per table. So it definitely feels more of a staffing issue and that was in Q4 again, John, when we were dealing with a bit of that surge from Omicron and things like that and the exclusions we're playing a bit more into it, but you talked to some operators and many operators will tell you they are feeling much better about the staffing. We just spoke with all of them as we were doing our pricing calls last week, a lot of them say they are definitely feeling a bit of relief from a staffing perspective and others are saying, yes, we're still struggling with that a bit and they still have some work to do there.

42:03 Got it. Thank you.

42:06 42:07 Your next question is from Brian Mullan with Deutsche Bank. Your line is open.

42:13 Hey, thank you. Just a question on the balance sheet. The net cash is still a bit elevated to history even with the share repurchases you've done in the last two quarters, it appears to be a bit of a unique situation following that the reductions to CapEx and dividends took place during COVID. So is there anything that would prohibit or make you more cautious around perhaps stepping up the pace or the magnitude of repurchases, even if it was just a temporary in nature, rather than a permanent thing?

42:39 No, I don't think there's anything that would make me hesitant to do it. I think, we really want to think about franchise acquisition opportunities first. We were having conversations with a couple of different franchise partners about that opportunity. We were able to do -- get one of those deals done right here at the beginning of the year. So that along with growing restaurants and just that CapEx spend, I think is really where our priority is and we're guiding to 25 restaurants this year, as Jerry said. We were hoping to get more than that. And we still may have a chance. Certainly, I know our real estate team is going to be really working hard to get maybe a few more openings in. And -- but now, Brian, I don't -- I wouldn't be opposed to doing more on the share repurchase side. Right now, we're just focused on dilution and probably we will be revisiting that in the back half of the year as far as anything else that we want to do there.

43:37 Okay, thanks. And then just follow-up -- just question on Jaggers. I think, late last year you entered into your first area development agreement. Are you currently looking for more of those agreements? Maybe just how much attention or how much from a resource perspective is being devoted to [Technical Difficulty] where it sits on the priority list and how you're thinking about that longer-term opportunity?

43:59 Yeah. So we were very excited. We actually signed two franchise partners last year, and we are in serious negotiations [Technical Difficulty] in early stages of [Technical Difficulty] are four. So there is no doubt that we see the excitement and enthusiasm around the brand. We feel very confident with the structure that we have built out. We're excited about the partners we have, not only on the company side, but I think it will be a great team effort of us learning how to continue to grow on the franchise model but yet build out our company side. And so from that aspect, there is some excitement and enthusiasm around it. We do expect to continue to grow that brand and learn together with our [Technical Difficulty] franchise partners and go toe to toe with them for a little bit, we'll see who leaves who in the dust.

45:03 Thank you.

45:05 Thanks.

45:06 Your next question is from Brett Levy with MKM Partners. Your line is open.

Great, thanks. I guess, if we try to delve a little deeper on both the margin and the cohorts of your unit classes. Maybe this is another way of trying to ask it. When you think about -- if you've seen over the last few years, are you seeing anything different on your restaurant-level margins in that classes '18, '19, '20? Anything across different regions? And how are you thinking about your total addressable market at this point, total potential number of units domestically and where we should think about those?

45:51 Sure, Brett. You know, there really isn't anything by class year, that I would call out because a lot of it from a margin perspective just a lot depends on what state mandated increases or no tipped wage, they definitely going to have a higher labor cost and higher labor percentage of sales. So they have some additional pricing to help them [Technical Difficulty] some of the that, but we are still always pretty careful on the pricing front even in those states. 46:23 So overall, there is nothing I would really call out geographically other than that. A lot just depends [Technical Difficulty] doesn't really have any, not a lot of difference at all geographically. I mean we have a lot of strength across the country for sure. And so, you continue to see really strong sales growth across the country [Technical Difficulty] across the regions, the day parts and that's been really good to see.

46:59 And then for the growth, I would just say that, again, we had [Technical Difficulty] we tested and tried and they really impressed us. So that to me allows me to look a little broader in the real estate side and our team is not only looking at our typical communities and metro flexes kind of thing, but there is also these smaller rural communities that we might have bought we couldn't go to, just because of our [Technical Difficulty] maybe a more rural area. So, that is encouraging for me to be able to [Technical Difficulty] continue to expand that future growth pipeline.

47:51 Your next question is from the line of Andrew Strelzik with BMO. Your line is open.

47:59 Hey, good afternoon. Thank you, just one clarification and then a question. The clarification, in terms of the delay in the unit openings from '22, does that -- should we think about that is pushing out kind of the entire development pipeline into future years or is there eventually kind of a bumper year when things normalize and those delays go away? 48:18 And then my question is around locking in the beef prices. I understand with the back half of the year and all the uncertainty that some of the factors or distributors are asking for big premiums. But I guess I'm curious is that still -- is that also the case for the first half of the year where maybe the visibility would be a little bit better, I mean obviously, we've seen prices come in a bit, inflation comes in a bit because that creates an opportunity in the near term and what would need to happen for that kind to converge from a locking perspective and that premium? Thanks.

48:49 And I'll take the first one. I believe some of it is COVID-related for the processing of the permits and some of that, that's probably been the biggest delay aspect of just the length of time it takes to get through the loan process or the working with the real estate team and all of that. So they've had some challenges. I believe that will correct itself very quickly as more and more people get back. It is working faster. It just slowed [Technical Difficulty] I've told and involved in that we will be back on track very quickly and we're working aggressively to hit that number in '23 and then we'll have that timeline built out with that expected delay in there [Technical Difficulty] and be in much better shape from that.

49:48 Sure, Andrew. On the commodity side, it's probably a little unfair on the amount that were locked in the front half of the year, because a lot of times when we're saying what's locked, it's things that are fully fixed on price. And we do quite a bit of buying on formula pricing and things like that, where we know now a little bit more about the pricing that we may get on some of the loads as we look a little more in the short-term. 50:13 So we don't include that in our kind of what we're saying is locked on pricing. But I think from our purchasing teams perspective, they feel very good about what they're doing right now in the short-term and what they're able to negotiate and things like that. If they found an opportunity where they felt like they could lock some of that up, some of those loads up at fixed price, no doubt they would take it and get it done, but they're really looking at so many different things that are involved, just a lot of pieces to the puzzle. And if they feel like they can actually get better benefit by holding off a little bit, they will. 50:49 So that's kind of the way we look at it. And again, hopefully, we continue to just lock up as we go throughout the year. It's just going to be a little more short term like 90 days versus being able to do it for six to nine months.

51:06 Great. Thank you very much.

51:09 Your next question is from John Ivankoe with JP Morgan. Your line is open.

51:15 Hi, thank you. I was hoping to get some education as what you thought was going on with the various cuts within stake? I mean Sirloin, Tenderloin, Ribeye strip all seem to be have different trajectories at different time. So, I mean, I guess kind of explain what you see in the market, if you think it's normal or there is an uncommon amount of noise? And do you actually have any flexibility on the menu in terms of what you feature at what size at, what price that maybe gives a great value to the customer and also protect your own penny profit?

51:50 Yeah. Sure, John. Yeah, I agree with you. I think there is a bit more noise across the different cuts than what we typically would expect to see. I'm hearing a lot more about well, Ribeye, it went this way and top [indiscernible] went this way, I think some of it is just driven by retail and what's going on in grocery stores and some of those big-box retailers and what they're doing with some of these cuts. And maybe have some part of it and a lot of times it could be something from an export perspective, I haven't heard as much on that front, it definitely seems to be more retail-driven right now is the only explanation I could give. But I agree with you. It does seem a little more noisy than you would normally expect on the cut side.

52:35 Yeah, I would just say that I don't know that we would do anything different on the menu necessarily. I think we have a great offering with four sizes on our Sirloin. Our Ribeye has become extremely popular, I would say, with our Bone-in Ribeye, the bigger guy really [Technical Difficulty] ounce cut to an 8-ounce cut and that 8-ounce cut became -- is still to this day very, very popular. So we continue to look at that. So, balancing how many big steaks we have on the menu to how many really value offerings. And our 6-ounce Sirloin and our 8-ounce Sirloin and that 8-ounce strip, those are extremely popular steaks for us. I don't know that we would go smaller but it might be something to look at.

53:27 Okay, thank you. Allow me to pivot to the next question on in terms of acquiring franchisees, your 7 units for $27, I mean at least optically. I mean that doesn't look like a high number of especially for an established restaurant. Is there anything you kind of a different or unusual about that market that would allow you to be able to buy those stores at that price? 53:50 And remind me at least, years ago I remember there is somewhat of the call option feature that existed with your franchisees. Is that something that you could or would want to do? Does the franchisee perhaps want to sort of where we could see an acceleration of franchise, the company ownership on the Texas Roadhouse side?

54:08 Yeah, John. You're right. We do have a roll-up formula that's included in the franchise agreement. It's a stock deal. We haven't done one of those in quite some time, because it just really isn't great for either side from a tax perspective and holding periods and different things like that. They do deals [Technical Difficulty] as a cash deal. And that's worked out really well for us. 54:29 And the seven stores, it's a great market. It's a long-time franchise partner that has been with us and it's just a great portfolio of restaurants. So we felt like $27 million without given multiples or anything like that, $27 million was really was a good solid number for the EBITDA that we were buying and stores that have a lot of sales growth. And it really works well for us. I think when you're thinking about other -- it's been a tough couple of years. There is no doubt about it. But sales have been strong. And our franchise partners have been with us quite some time. So it's tough to say, yes, this environment makes them more willing maybe to sell because they are pretty tough and they just like being part of the Texas Roadhouse family and they like the sales and the returns that they're getting. 55:22 But we're still able to have conversations with them and just talk about timeline and what that means and it might not be something in the short-term, it might be something that we're just setting up more front in the next several years. But the great franchise partners that I think we'll continue to see get some of those deals done and it really does benefit every -- both of us.

55:45 Thank you.

55:49 Your next question is from Peter Saleh with BTIG. Your line is open.

55:56 Great. Thanks for taking my question. Tonya, I want to come back to the conversation around development. You guys reduced the target for this year by few units or maybe as many as 5, yet the CapEx guidance remained the same. So can you just talk about, are you seeing just more inflation in build-out cost or are these units just going to be built and really not open in time to be completed in the number for this year, just any thoughts around that?

56:27 Yeah, sure. You're absolutely right. So a lot of the construction will still start at some point, probably during 2022. And the hope would be that we could get many of those restaurants open early in 2023, much just depends. There were stores that were already opening later in the year. So they may not have had quite everything in from a CapEx perspective. So there is a bit of that play just on still spending that money from a CapEx perspective, even though the unit may not open in 2022, then you have the relocations in there. We talked about six of those this year for Texas Roadhouse. So that's a piece of that too. 57:07 And we're also talking about just existing restaurants. As we talk about these higher levels of to-go sales, and folks getting more comfortable coming back into the dining room, we're just talking about different projects that we may need to have to do corral conversions to get kind of some of that corral back in the waiting area and also still have the ability to do that to go out the window, as Jerry mentioned. So we have some of those projects in place. We're going to be doing some bump-outs this year, getting that program kind of back on track and some other things like that. So that's a little bit too of what is driving that number up a little bit more.

57:53 Okay. And then just lastly, you mentioned some of the operators are claiming they're seeing some relief on staffing. What are the -- what are they attributing some of the improvement in staffing levels to when you've recently spoken with them?

58:10 Well. It's up. I think there is more applicant flow first of all, which is great. We have really done some good initiatives in the third and fourth quarter to continue to attract more and more people. Obviously, the exclusions are really reducing which is great that allows our full staffing where we're at. But I think the biggest thing is that they are seeing more applicant flow. They're excited about more people wanting to come back to work more pick -- picking more hours in from that aspect. I think that's where the positive role is coming from. The folks that were part probably work in a few more hours and the ones that are really we're working a lot of hours are probably taken a little bit of a break because we're starting to build that bench. We're getting close. Like I said on the last call, I feel really good where we're at. I want to feel really great. I'd like to be 110% staff that gives us a lot of options and gives us ability to have fresh legs in strong people work in every ship. Our weekends are extremely busy. We don't like doubles, we really like folks focusing on one shift, doing extremely well, and knowing that they're going to have a little bit of a break, because 10 hours in a building, serving the volume that we're doing, that is definitely hard work there. They compensated really well, they make a lot of money, but they definitely earn it.

59:34 Thank you very much.

59:36 Thanks, Peter.

59:38 Your next question is from the line of David Palmer with Evercore ISI. Your line is open.

59:46 Thanks. Good evening, guys. I'm trying to think about your capacity at the restaurant level and in light of the fact that the industry is down so much in traffic, particularly on-premise, but you're dining room traffic is only slightly below 2019 levels and of course, those levels were industry-leading in terms of traffic productivity in the dining room. So I want to be greedy about your traffic upside from here as you've done so well during COVID and you're already to a high level of productivity. I wonder how you're thinking about the real capacity inside the restaurant, particularly if the kitchen -- it has added hopefully some sticky to-go business from here. So, could you think that the average Texas Roadhouse could handle 10% to 15% more visits, especially if to-go mix holds?

60:35 Yeah, I do. I think America wants great food. And made from scratch -- I think that the flavor of our food, the effort that we put into making it from scratch, the hustle that our people have to serve and the desire to do it right. I think we're fast, we're fun, we're friendly and we will continue to do that. There is definitely are peak hours, we are jamming. We're busy, we have long waits. So there is still opportunity prior to that in our early segment and maybe even our last segment and maybe even some of our Saturday lunch. So to me, yes, there is still room to grow, and we've got to continue to help our guests navigate to an area or a timeline where maybe they -- if they don't want to wait as long. But the ability, I just read an email from a guest that was able to go online and they were told they on Valentine's Day, that they would be able to eat dinner in 2.5 hours from that time. And they had a great experience. So that technology piece that we've talked about to tell someone that you can come in on a Valentine's Day. This is the time you need to show up. We hit their quote, we hit their wait, we delivered on the food and service and they took the initiative to write me a letter telling me how spectacular it was. So yes, I think we can still deliver on our sales growth.

62:07 And thanks for that, Jerry. And just wanted to check on your free inflation forecast, I think they were implying something like high single-digit-ish in the second half of the year. Does that roughly assume that key inputs are going to be roughly near today's levels and if you're running short on something that's the type of level you're going to be doing to get to that high-single digits in the second half?

62:33 I don't know about that, David. I'll tell you, it seems like even though inflation may moderate in the back half of the year, we think the dollars are still potentially going to be going up a bit. So -- and seems to be happening. So I don't know that I would say, the -- and I don't know if that's what you're implying maybe that the dollar cost on [Multiple Speakers].

62:59 Yeah. Well, no, I mean, it really just even if the prices one way to forecast would be just to say that on the stuff particularly that's not locked in, you're going to assume it remains at these high levels, but probably not give you something relief. You can also go with some sort of futures curve type analysis. But right now it's such a weird time where there is a lot of supply chain constraints in that industry. So I want to understand if those come off, if that's going to be a bump in our benefit versus the way you forecasted your inputs.

63:31 No, it would be a benefit. If some of that eased, I mean we forecast each line separately. We're looking at what we think the demand is going to be, what we're going to need to source and then we take that and based on aging and all of those things that come into play kind of build it into when that's going to hit the P&L. So that's the way we're looking at it. 63:52 And we're looking at transportation cost and delivery and all of those things are part of it. So yeah, there is some relief on that, it will come through in the model. And right now, there is not a lot of motivation to forecast that coming in better or being much lower, just based on what we're seeing right now. But hopefully, that'd be great if did.

64:17 Understood. Thank you.

64:21 Sure.

64:22 Your next question is from the line of Jared Garber with Goldman Sachs. Your line is open.

64:31 Hi, [Technical Difficulty] very strong [Technical Difficulty] is high average weekly sales levels. Can you talk about what you're seeing may be on a customer basis? Is the customer using that channel differently, are they the same customers that you're sort of dine-in customers if you have the ability to track that? Are you seeing higher off-premise business maybe during the week [Technical Difficulty] gone out to dinner to the restaurants previously? Just any incremental color on maybe what you think is driving and sustaining that high level of volume out the door? Thanks.

65:12 Yeah, sure. As far as having any data around the guests, we're starting to collect more of that data and learn a little bit more from it. It's still kind of too early to say. But it feels like you've got a couple of things going on. You have guests that are utilizing us for both dine-in and to-go during -- throughout the week or the month or the quarter and maybe they're just increasing the frequency. And then you -- we've got new guests coming in, that maybe to-go with the first time they had ever tried us. We certainly heard about that from operators and folks last year. So I think you've got a lot of different things going on there from that perspective. 65:47 And I think, overall, the online seems to -- I'm sorry, the to-go seems to be sticky and I think a lot of it is because of the online opportunity that we have and we're seeing, I think it's above 65% of the to-go is through online transactions and that has just been really great to see. So I think you're seeing a guest that likes the convenience of it and they like the ability to get online, get it done, step on the way home to get it. 66:17 To your point, we do see a little more of it in the earlier day part, earlier part of the week. But we see it on the weekend too, because a lot of times folks now were so busy on the weekends. They will just do to-go versus waiting to get into the dining room. So, you do going to see it all over. But Monday, Tuesday, Wednesday, you do see quite a bit, I think as folks are heading home from work and things like that, they're stopping to get it.

66:40 And I think it's more about our ability to execute. We improved so much [Technical Difficulty] the convenience and whether it be the walk-up windows or curbside or the things that we're doing just allowed our [Technical Difficulty] I believe, from an operation [Technical Difficulty] convenient. We -- the communication piece that we use, the texting with the guest to let them know. And then the -- obviously, the delivery [Technical Difficulty] it's right. So a couple of factors I think technology has been a driver. Executionally we've done a really good job of focusing on it and making it a better experience for the guests.

67:30 Good. Thanks for that color.

67:32 Thank you.

67:33 Your next question comes from the line of Brian Vaccaro with Raymond James. Your line is open.

67:42 Thanks, and good evening. I'm sorry, I had a phone glitch early in the call. So I just wanted to circle back on the Q&A that is, but wanted to circle back on the quarter-to-date. And you mentioned the $127,000, I think for the seven weeks, but Tonya, could you help ballpark what that looks like in January versus more recent weeks? And also remind us sort of the normal seasonality you see in Q1? Just trying to find my notes on that, but I think March is typically maybe 10%, if not 15% above January? Could you just help sort that out, I'm just trying to set a reasonable expectation for the first quarter?

68:19 Yeah, sure. You're right, March and April are typically higher average weekly sales months for us. And then May and June isn't too shabby as we get into Mother's Day, Father's Day. Mother's Day particularly is a big day in May for us. But over the course without getting into every week, week one [Technical Difficulty] was a bit higher than that average just because you did have Mayor’s Day in there. Things then tapered off a bit in weeks two, three, four, as you were feeling some of that Omicron surge continuing to play out and we were probably a little more impacted on the staffing side with exclusions and things like that. Things began picking up in weeks 5 at a tremendous amount to our average weekly sales. I think, on an overall basis for that 7 weeks, you're talking about another 2000 on top of average weekly sales for Valentine's Day, so that one is a big one. 69:22 But that's a little bit about the cadence. Hopefully, that gives you a little more color on how things played out. And then obviously to you Brian, we would be missed to not say whether obviously played a bit of a negative -- had a negative impact throughout those weeks 2 and costs be down a little bit, just to see it down below that $127,000 average a couple of weeks with weather.

69:50 All right. That's helpful. Thank you, Tonya. And then also wanted to ask on the other OpEx line if I could. It seems like the inflationary pressure is starting to ease within that line. I think you saw close to 100 bps of leverage compared back to pre-COVID levels. Could you just comment on the underlying inflation and other moving pieces you're seeing within that line? And I guess for the additional pricing, is it reasonable to assume you'll continue to see some pretty solid leverage moving through '22?

70:20 Yeah, I think we could. Just given as you continue to see dining room becoming a bigger piece [Technical Difficulty] So in '20 that was ticking up quite a bit as we had higher levels of to-go, more-to-go supplies and to-go was a bigger piece [Technical Difficulty] we're not -- we don't have a whole lot built-in above normal year. Normally we were thinking in that 2% range from an inflation perspective. So that 3% pricing definitely does help. Now you have things in that line like utilities, stuff like that that might go, play out a little differently we will see, but right now that wouldn't be the expectation. And then bonuses are a big part of that line also managing partner, market partner bonuses. And so as the profitability goes, that line adds inflows depending. So [Technical Difficulty] could get season leverage on that also and I think you do have some opportunities to get a bit of leverage on that line in 2022.

71:41All right. Thanks very much. I'll pass it along.

71:43 Thanks, Brian.

71:45 Your next question comes from the line of James Rutherford with Stephens, Inc. Your line is open.

71:52 Hey, good afternoon. Thanks for taking the questions. Jerry, I was curious on kind of capacity-related question. Have you seen any change to average table turns kind of today versus where you were a couple of years ago in the restaurant? And are there things you can do or things you're working on to improve those table [Technical Difficulty]

72:12 Yes, I would say from the tablets definitely help us a little bit faster. We have been able to see some minutes there. Roadhouse pay or the pay at the table has definitely proven to be able to generate a few extra minutes on the table turn. The KDS is still little early to see if that is helping us as a new store. Once they really get settled, then we will be able to kind of identify how they've improved that. 72:45 I think in general, overall, as every year stores open, its efficiencies to be able to get the order in to get the food to the table always is an improvement or we're trying to improve upon [Technical Difficulty] I will just say 55 minute experience. We like to have the guests there for an hour and really make it a memorable deal. 73:16 And we've been able to hit that number pretty consistently overall, once they get through way and they get sat, that experience is pretty consistent and that's what we want to target and focus on. But there are a couple of things that we're excited about that could help shave a couple of minutes off of that and let to guest stay longer, but if there into real hurry, we want to be able to accommodate that in and out experience as you might call it.

73:44 Okay, thanks for that Jerry. And then Tonya. I was going to ask, in the margin this quarter you talked about it a lot, but were there any one-time costs related to COVID, whether it’s exclusions or higher overtime or anything like that that we should just be aware of that might fall off here shortly? Thank you very much.

74:02 Yes, sure. So you're talking, James about across maybe in --

74:07 No in the fourth quarter, were there any kind of meaningful one-time [Technical Difficulty]

74:14 No, nothing significant that we would call out.

74:21 Okay, perfect. Thanks so much.

74:24 There are no further questions at this time. I will now turn the call back over to Tonya Robinson.

74:33 Thanks, Brent. And thanks, everybody for joining us tonight. It was great to hear from you. If you have any other questions, don't hesitate to reach out. Everybody have a great rest of the week.

74:42 Thank you all very much. Appreciate it.