Red Robin Gourmet Burgers, Inc.

Good afternoon, everyone, and welcome to the Red Robin Gourmet Burgers Incorporated fourth quarter 2022 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the call, please signal for an operator by pressing star and then zero on your telephone keypad. This conference is being recorded. During management's presentation and in response to your questions, they will be making forward-looking statements about the company's business outlook and expectations. These forward-looking statements and all other statements that are not historical facts reflect management's beliefs and predictions as of today and therefore are subject to risks and uncertainties as described in the company's SEC filings. Management will also discuss non-GAAP financial measures as part of today's conference call. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles, but are intended to illustrate an alternative measure of the company's operating performance that may be useful. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in the earnings release. The company has posted its fourth quarter and full year 2022 earnings release on its website at ir.redrobin.com. I'd now like to turn the call over to Red Robin CEO, G.J.

Hart. Please go ahead.

Hello and thank you for joining us today.

With me is Todd Wilson, our Chief Financial Officer who will review our quarterly and year-end financial results and outlook for 2023 after I conclude my prepared remarks. I'd like to start by thanking the restaurant management teams and team members in our restaurants. We will succeed because of your passion, dedication, tenacity, and hard work. As I have traveled and visited our restaurants and teams, I've witnessed so much talent and genuine goodness in the people of Red Robin. For that, I am very grateful. As we exited 2022, we took immediate steps to reverse the declining trajectory of the business and set ourselves up for improved performance as we entered 2023. As I initially stated on my inaugural conference call as Red Robin's new CEO last November, I am so excited to be here and my optimism for what we can achieve has only grown since assuming this role. In my first now six months as CEO, We have moved quickly as a company to identify our strategic path forward and transition to a new leadership team. I'm pleased to share the leadership transition is nearing completion. Todd Wilson joined in November as CFO. Sarah Mustetter returned to Red Robin at the same time as Chief Legal Officer. To lead operations teams, Rod Jones started in December and Jesse Griffiths will start later in March. Amy Woolen and Dena DePhillips have done fantastic work as interim CMO and CTO, respectively. I expect we will announce permanent CMO and CTO additions soon, with Amy and Dena continuing to be leaders on the team. Wayne Davis and Jason Russ complete what I am confident will prove to be a fantastic leadership team. We have a great mix of internal and external talent, all with leaders who have proven success in our industry. In January, at the ICR conference, we announced our North Star, a five-point plan that we expect will enhance our competitive positioning, drive sustainable growth, and build long-term shareholder value. In developing this plan, we reviewed the full history of Red Robin, from the parts of the brand and execution that made Red Robin great to any missteps along the way. This plan is a blueprint for the comeback of an iconic brand. Our focus is now squarely on the future. Brands are always evolving and we are moving thoughtfully and quickly to deliver needed changes at Red Robin. We are confident that these changes are right and will result in improved guest experience, team members that are happier, more engaged, and better rewarded, and financial results that reward our investors. I would like to share some additional thoughts on what we were doing in 2023 to execute against the North Star. Number one, to transform us to an operations focused restaurant company. First and foremost, we are going to be operations driven. This means that frontline operators will be involved in all key decisions. They have a voice, their voice matters, and we will listen. We will look to compensate our restaurant leaders as partners by creating a similar program to other companies that I have led. Under this program, the management team at each restaurant will be compensated every month based on the profits of their restaurant. This will instill a real sense of ownership and drive real-time accountability and rewards for performance. We expect to share more communication with the team soon and deploy this compensation model later in 2023. We have also restructured both our restaurant support center and operations leadership. These changes are designed to better support our single unit operators by removing bureaucracy and speeding decision making. Number two, elevating the guest experience. In December, we began adding back bussers, hosts, and bartenders, which were removed in the past. We will progress with a phased implementation to shift our service model back to a more traditional service standard where servers have fewer tables and are supported with Buster assistance. We have already seen evidence in sales gains from these changes as returning to being appropriately staffed allows us to capture guests that are already coming to us but were being lost in the past due to a false wait in the restaurant. We make a commitment to our guests when we hang a sign on each of our 500 plus restaurants that says gourmet burgers. While our burgers today are good, to fully deliver on this commitment, we are upgrading our cooking techniques. We expect to transition from the existing conveyor belt cooking system to a more traditional flat top cooking method. The flat top sears the burger, sealing in flavor, delivering a product that is 20% larger and provides an even greater quality and value for our guests. This process is simpler and quicker for our team members to execute, and we eliminate significant maintenance and repair costs associated with the cooking platform. We began testing the flat-top cooking method in January and now have 10 restaurants live. Reviews and feedback from both guests and team members has been outstanding. We expect to begin full system deployment in the second quarter and target completion by the middle of this year. Our commitment to our guests extends to ingredient quality improvements and menu innovation. Brian Sullivan joined Red Robin in February to lead our culinary and beverage teams. Brian and I have worked together previously, and I'm confident he'll do a fantastic job to elevate classic items that made Red Robin great and develop new items to satisfy guest feedback. He and his team are already underway developing items like non-fried appetizers, and new entree options. This innovation will provide our guests a wider array of menu and price point options. We have been very pleased with our long-standing Donato's partnership, which is currently available in approximately 250 Red Robin restaurants. Donato's is an excellent product that offers our guests another American favorite on our menu. As we long stated, comparable restaurant sales in restaurants that offer Donatos have outperformed restaurants that do not. In any comeback, there are many opportunities. We are being very thoughtful to be aggressive in our actions and ensure we prioritize putting the core foundation in place first to build for our long-term success. This led to us to scale back the pace of the Donatos expansion. We do anticipate completing approximately 25 Donatos installations in 2023. Number three, remove costs and complexity. The investments in the guest experience are needed, and opportunities to thoughtfully reduce costs provide the funding for those investments in the near term. While the guests felt many of the cost-saving efforts in Red Robin's past, we are now focused on changes that uphold the commitment to quality and do not negatively impact the guest experience. We have already identified meaningful opportunities in our supply chain with simple changes like increasing pack size for the same products we buy today or consolidating vendors to take advantage of our scale. We see opportunities beyond supply chain including. We have engaged our current vendor partners to strengthen those relationship and right size contracts to competitive market standards. We are working to eliminate redundant or unnecessary third-party contracts. We right-sided the support team structure to align with the priorities of the North Star Plan. We are utilizing technology and analytics to identify further opportunities and reduce costs. Four, to optimize the guest engagement. Next, we are optimizing the guest engagement by going back to being a local community brand that supports the communities we serve. This is in contrast with the previous approach of positioning ourselves as a national company with a national media presence. This focus on local store marketing and serving the communities around us is the approach that built Red Robin. And I've used the same approach very successfully in the past. We will continue to build and engage with guests through our Red Robin loyalty platform, which has 11.3 million members today. The goal is to elevate it from being a discount program for its newest members into being a true loyalty platform for those guests that are eager to demonstrate their loyalty to us and drive more frequency. We are fortunate in so many ways. Red Robin is a company that gives back and supports our families and our communities. Later this week, we will issue a press release announcing our partnership with Make-A-Wish Foundation. This is an organization I was privileged to serve on the board of directors in the past. They do wonderful things to inspire children and families, and Red Robin is honored to help support them. Through a donation of 10 cents for every kid's meal we sell, Red Robin is making the largest corporate commitment from a new partner in the history of Make-A-Wish, with a commitment of over $3 million over the next three years. Number five. drive growth in comparable restaurant revenue and unit-level profitability, and deliver on our financial commitments. When we execute on the first four parts of the North Star, we expect the outcome to be growth in comparable restaurant sales, positive guest traffic, meaningful gains in restaurant-level operating profit, and unit economics that compel unit growth in the future. While we see tremendous financial opportunity for Red Robin, Regaining credibility with the investment community is of paramount importance to us. As a result, our financial guidance will be conservative and measured as we work to build a track record of delivering on our financial commitments. In the big picture, our North Star will be the filter that we use to guide our efforts, which we believe will enable us to more than double our 2022 adjusted EBITDA margin by 2025. In closing, Comebacks are not easy, but there is also so much to work with here at Red Robin. We are therefore highly confident that we can bring this brand back better than before, and we hope that you'll share our enthusiasm for where we are headed. Now let me turn the call over to Todd.

Thank you, G.J., and good afternoon, everyone. I'd like to start by providing a recap of our financial performance for the fiscal fourth quarter of 2022. And then we'll move to our financial guidance for 2023. Total revenues in Q4 were approximately $290 million, an increase of $6.7 million versus the fourth quarter of 2021. The increase in revenue resulted from an increase in comparable restaurant revenue of 2.5% compared to Q4 2021. This is the eighth consecutive quarter of positive comparable restaurant growth. Revenue also increased due to an increase in gift card breakage. Compared to the fourth quarter of 2019, comparable restaurant sales increased by 2.1%. The Red Robin business has posted comparable restaurant sales growth versus 2019 for the past four quarters. Now, four years later in 2023, we expect to generally move past benchmarks to 2019 in our public comments. As a percentage of restaurant sales, dine-in sales mix increased sequentially in each quarter of fiscal year 2022 to approximately 73% in the fourth quarter. Restaurant-level operating profit as a percentage of restaurant revenue was 11.4%, a decrease of approximately 170 basis points compared to the fourth quarter of 2021. Extreme inflationary pressures continued in the fourth quarter in many cost categories. We are very thoughtful to ensure we deliver a great value to our guests and have taken less menu price increases than we observed being reported by many of our competitors. Commodity inflation percentage has moderated from the peak in the second quarter of 2022 to a still elevated 13% in the fourth quarter. Commodity inflation is the primary driver of the 170 basis point increase in cost of goods sold as compared to the fourth quarter of fiscal 2021. Each of our other restaurant operating cost categories, labor, other operating, and occupancy, are unchanged as a percentage of restaurant revenue in the fourth quarter of 2022 as compared to the fourth quarter of 2021. In labor expenses, hourly wage inflation of approximately 6% was offset by menu price increases. Other operating expenses saw lower third-party sales commission resulting from lower third-party sales mix, offset by higher repair and maintenance costs, and utility costs. General and administrative costs were $20.2 million, an increase versus the prior year of $2.5 million, driven primarily by higher spend in professional services, legal fees, and contract termination costs. Selling expenses were $14.2 million, a decrease versus the prior year of $1.5 million as we began the shift and reduction in selling spend to local efforts that we expect will continue in 2023. We recorded a non-cash impairment expense of approximately $25 million related to 36 restaurant locations. This outcome is primarily due to restaurants that did not perform as expected, as a result of inflationary cost pressures at levels not experienced in decades that reduced restaurant-level profitability. We assessed it is appropriate to record this non-cash expense, and we remain optimistic about the future prospects of these restaurants as we expect our North Star initiatives to drive future performance gains. For the fourth quarter of fiscal 2022, adjusted EBITDA was $8.9 million, in line with adjusted EBITDA of $8.9 million in the fourth quarter of 2021. For the fiscal 2022 year, adjusted EBITDA was $52.8 million compared to adjusted EBITDA of $63.5 million in 2021. Capital expenditures totaled $38.2 million for fiscal 2022. Investments in 2022 included completion of our Donato's installations, five restaurant remodels, over 200 vinyl seating renovations, technology upgrades, and a majority of the construction costs related to our new restaurant build in Glendale, Arizona, which we expect to open in March. We ended fiscal 22 with approximately $48.8 million of cash and cash equivalents and $10 million available borrowing capacity under our revolving line of credit. At year end, our outstanding principal balance under our credit agreement was $214 million, and letters of credit outstanding were $9.1 million. As we map our path forward, it is important that we are able to accurately forecast our business performance as we make the needed investments in the guest experience. It is equally important to regain credibility with the investment community and deliver our commitments. With this in mind, we are taking an appropriately conservative approach to guidance. Our guidance for 2023 is as follows. Total revenue of approximately $1.3 billion. Restaurant level operating profit of at least 13%, inclusive of investments in the guest experience, primarily in labor. Selling and general and administrative expense from $120 million to $125 million. Capital expenditures from $35 million to $40 million. adjusted EBITDA from $62.5 million to $72.5 million. I will add texture to this guidance. We are very optimistic about the future of Red Robin and are confident the investments we are making back into the guest experience will resonate with consumers. However, we expect it will take time to build frequency and guest traffic. Our revenue guidance is grounded in a general continuation of comparable restaurant traffic trends experienced by the industry in the fourth quarter of 2022. We anticipate commodity and labor inflation will be in the mid to high single digits with a generally equal level of menu price increases. We have identified and are starting to implement smart cost savings opportunities that support the investments back into the guest experience. We expect these captured savings will increase through the year as additional actions are implemented. We have been encouraged by the resiliency of the consumer despite inflationary pressures on the back of a continued strong labor market. Our comparable restaurant sales and traffic results through the first eight weeks of fiscal 2023 have exceeded the comparable black box benchmark. We attribute this outperformance to our progress to return to industry standard staffing levels that allow us to serve those guests that are already coming to our restaurant and may have balked and been lost in the past due to a false weight. As one reflection of our conservative approach, this strong start to the year is not yet reflected in our 2023 guidance. We announced in January that we are evaluating a sale leaseback transaction for up to 35 owned properties. This evaluation is fully underway and we continue to expect the evaluation to be complete in the first quarter. If pursued, we expect a transaction to be completed in the second quarter of 2023. If we proceed with a transaction, we anticipate using the proceeds to repay debt, fund capital investments, and reach purchase shares of company stock subject to the terms of our credit agreement and board approval. Please note, as we are still evaluating this transaction, our 2023 guidance does not incorporate completion of any sale leaseback transactions. In closing, I joined the team here at Red Robin back in November. I was excited by the opportunities in front of the business then. I'm even more energized and optimistic today. With that, I'll turn the call back over to G.J.

Thank you, Todd. Let me reiterate that all of the elements of our five-point plan are geared towards upholding the exceptional restaurant experience that our guests deserve and fulfilling on our brand promise. Over the next few years, We have a great opportunity ahead of us and are committed to taking bold action to build a successful and sustainable business that will ultimately create value for our shareholders. With the support of our team members here in Englewood and within our restaurants themselves, we are energized by the work we do and thank you for your interest in Red Robin.

We will now open the call for questions.

Thank you. We will now be conducting a question and answer session.

If you would like to ask a question, please press star and then 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and then 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys.

One moment please while we poll for questions. The first question comes from Alex Slagle from Jefferies.

Please proceed with your question, Alex.

Thanks. Hi, GJ. Todd, how are you guys doing? I wanted to just start off, I guess, looking at the same sort of sales drivers for 2023 and just get a sense for what you'd call out as the most significant and visible drivers as we stand here today. And clearly, some of the initiatives, like you mentioned, will take some time to bear fruit. But it seems like some of the opportunities, like the reduction in false weights, can deliver improvements pretty quickly. So just kind of love to hear a bit more about how you're thinking about it. as we look ahead. Hey, Alex. Hey, Alex. This is Todd.

Yeah. You know, I think there's a few angles to that. One, embedded in our guidance, we tried to give the texture through the call there. I think we've been fairly conservative in terms of how we thought about sales in our guidance. We embedded, as we said, kind of continued traffic trends from Q4. In terms of the sales drivers, though, It is really all about the guest experience, right? It's it's staffing the restaurants appropriately It's giving a great experience. It'll be food It'll be atmosphere elements those types of things as I said in my comments though We think the long-term build of that will take time right guests have to come in They have to experience that difference and we can accelerate that to a degree with marketing But we think the long-term build takes time as you alluded to though in the near term. I We believe that the benefit that we're seeing in terms of outpacing the industry to start the quarter is related to staffing and guests that we were losing in the past due to the false weight. So all of that said, we think there's near-term benefits. The long-term plan, though, is really about building healthy, sustainable traffic through a great guest experience.

Okay. I don't know if you care to give more color on just how much you're outperforming the black box benchmark or just a number to give us a frame of reference.

Yeah, I think fair to say we'll probably hold to the outperformance. We're obviously very pleased in that. Yeah, I'm sure you and the audience knows it's been a strong start for the industry. So we're certainly pleased by that, but equally as pleased to be outpacing the industry in because we think it provides data points that it's what we're doing and the changes that we're implementing that are driving those changes or that outperformance.

Okay. And so the components, the same sort of sales as you think about for the year, pricing, I guess, in the high single digits are sort of offsetting the inflation. The menu mix, I'm curious if you can I think you can continue to keep that positive and growing and then on the discounting if you expect that impact to become a positive check driver as you think through your actions through the year on discounting.

Yeah, I'd say, you know, I'm sure you can put it all together, but it's a marginally positive comp sales number that's embedded in our guidance. And I think you've got the components right there. You know, we'll see what happens with inflation, but we do have that mid to high single digit pricing embedded in our numbers. The discounting and the mix components, I'll talk about mix first. You know, as we look at all of the attachment items in our business, meaning appetizers, desserts, alcoholic beverage incidents, we think there's great opportunity in all of those. I would share we're not counting on those necessarily to achieve our guidance numbers, but those are certainly areas that we see big opportunities and have steps to promote. On the discount side, that's a play, I believe, that will take a little bit more time to develop. The team's done great work beginning that plan. We just have to push it across the finish line. But over time, I do expect that you'll see discount levels decline. It may just take a little bit of time to get there.

Thanks. And just one final one I wanted to touch on, the restaurant level margin guidance and just trying to think through the cadence through the year, getting to that 13% and, I guess, the investments that you're making up front on the labor piece and I guess just trying to think through how that's going to flow as we move through the year and any other cost efficiency initiatives that you might have planned out.

Yeah, absolutely. The cost efficiencies, we already have implemented some of those. They'll continue to be implemented, but we know exactly what we're going to do there. Just a matter of getting the execution complete, so that will ramp through the year. Yeah, I think broadly what I may say is, you know, the proof points that we're going to be looking for that confirm to us that we're on the right track are sequential improvements in guest traffic, sequential improvements in guest satisfaction scores, which we're seeing, by the way, and sequential improvements in restaurant level operating profits. So there will be a tilt to that, an upward tilt to that, we expect. And so that's how we're thinking about it, Alex, is starting the year at a thoughtful place. Now, granted, the sales that we've seen to start the year will help that quite a bit that we weren't planning on. But we do anticipate that you'll see an upward trajectory to all of those metrics that I just mentioned. Got it. Thank you very much.

Thank you.

Thank you. Ladies and gentlemen, just another reminder, if you'd like to ask a question, please press star and then one. The next question comes from Todd Brooks from the Benchmark Company. Please go ahead with your question, Todd.

Hey, thanks for taking a couple questions here. Firstly, just Todd, on the restaurant-level operating margin guidance of 13%, I'm just wondering, and we probably need to keep in mind this is a three-year program, plan as far as the North Star goes. And I'm just wondering if you can maybe, I don't know if there's a way you can talk to how investment's going to be staged across the three-year window and the increased ability, if you're getting those three proof points that you talked about when you're answering Alex's question, the ability to self-fund those incremental investments in year two and year three as you hopefully see success with those proof points.

Yeah, Todd, that's exactly kind of the discussion we've been having internally. You know, in terms of how we think about phasing the investments, you know, the addition of bussers and hosts and bartenders, I would say you can think of at the top of that list, right? That goes to the staffing and the false weights that both G.J. and I mentioned on the call or in our prepared remarks. We can measure the opportunity in false weights and what we've lost over the past few years. We know it's a meaningful opportunity, and so those positions are positions that we're looking to add effectively ASAP. The team has already started that work. It just takes time to get there. But those will be the near-term additions. The evolution that G.J. spoke about in terms of the service model, we're confident that that's the right change. That I think will take a little bit more time to fully layer in. It is one I think you can expect. We'll get to completion on that this year. It will just happen throughout the year. Beyond 2023, there are investments that we'll likely look to make into the facility itself and the technology, those types of areas. But our focus in 2023 really is on those labor components. The other piece I should mention, G.J. mentioned his prepared remarks earlier, was the partner compensation program. That's a change that we'll look to make in 2023 as well.

One additional, Todd, one additional thing that we're doing is, as I mentioned when we met at ICR, the management complement and going to having a more traditional sense with a managing partner, a kitchen manager, and assistant managers, that move we're fast going at as well. And then lastly, I would say that The other approach is if we're having success, to Todd's point, sequentially making improvements, that we will continue to earn our way and it will allow us to move faster.

That's great. Thank you both. And then following up, because you just hit the labor bucket, but I know kind of broadening out the menu and elevating the food quality is another key focus of the plan. You talked about rolling out the new flat tops fairly rapidly as well. But as you're thinking about kind of funding better food quality and you bake it in with your commodity outlook, Todd, are the savings there to kind of offset that part of the initiative, or is there an investment in food quality that happens in fiscal 23?

You know, Todd, I'll start off here and let Todd also make comments here. But, you know, we're confident that some of our approach around our vendor partnerships, being able to use our scale and look at – single vendors where it's appropriate, those kind of things we believe will allow us to invest in higher quality that is not going to be incremental spend for us.

And Todd, I would just only add to that of our guidance of at least 13% to all of our comments on being thoughtful of putting out guidance that we're confident we can achieve. That effectively is in line with our 2022 results. And we obviously view that as a floor that we need to work our way up from. So my point in that being, yes, we can grow restaurant-level operating profit while making these investments at the same time.

Yeah, and Todd, I would just lastly say that I think that's a big piece that we've been talking about here is, you know, we feel good that we eventually will get back to margins that this company has achieved in the past. And I think if you look back in history, you know, this company was a pretty steady performer for many years. It may take us a little bit to get there because you can't just snap your fingers and get all this stuff implemented, and we're in a tough environment from a supply chain perspective, but we are highly confident that we'll get there.

Okay, great. Thank you both. Good luck. Thanks, Todd.

Thank you. The next question comes from Andrew Wolf from CLK.

Please proceed with your question, Andrew.

Hi. Good afternoon. And congratulations on the partnership with the Make-A-Wish Foundation.

Thanks. Yeah, we're excited.

I wanted to start with, I guess my bigger picture question is, you alluded to bringing new products to the menu, and I know you've talked about that. Parts of the menu are not sufficient. And talking about non-profit appetizers, there's a lot of opportunity there. Walk us through the product innovation cycle, you know, from ideas and, you know, wherever you're sourcing your ideas internally, externally, to testing and, you know, when these products are actually on the menu.

Well, Andrew, I'll give you just a little bit of a under the tent here in terms of We're trying to move as quickly as possible. We have a lot of consumer insights in terms of what those demands and what those requests are that has been done in the past. And we're going to filter those out. It's like non-fried appetizers that we mentioned. And that's going to be our guiding principles in terms of what we're looking to do. Same thing with entrees. And candidly, by looking back in the history of Red Robin, as well as what the consumer insights that we have, you put those two things together and our Brian Sullivan, who's head of culinary for us, is well on his way to working around those things. We will then put them into a small beta test into restaurants, and then we will expand from there. But I will say that we will probably, if we're feeling really strong about it, we will probably shortchange the normal cycle, which has been too long here at Red Robin, in my opinion. We need to be courageous and make some of those decisions. We may make a mistake. what we believe we have enough insights to bring it to market much faster than it's been done in the past. A little bit nontraditional in terms of the longer cycle that you might think about, but I think in the case of where we are in this comeback, we need to do that.

Got it. All right. Well, we'll go to the restaurants and see what's going on. And a housekeeping question. I think you maybe answered this, but I want to sort of underline it. The restaurants that were closed, were they all company-owned? Or were any?

Yes.

Yes. And just also just on the quarter and, you know, the sequential increase in the food costs as a percent of sales. My takeaway is that it's all the inflation, you know, still peak, you know, hopefully it's peaked, but still the high year over year inflation and sequential inflation. Was there any early, you know, increase in quality? that maybe wasn't funded through the, you know, vendor consolidation or other means, or was it really just all explained by inflation?

Hey, Andrew, this is Todd. You know, in terms of Q4, you can think of that as inflation. You know, the changes that we're talking about really will kick in or have kicked in at the start of the year here on labor, and there were not any material changes in terms of food in the fourth quarter, so that's really an inflation piece. Just for the clarity of it, we're optimistic the inflation percentage has peaked, but we're still seeing year-over-year inflation, and we're still planning for further inflation in 2023. Overall, right? Correct. Correct. So at a lesser percentage than we saw in 2022, but still an increase in cost dollars on an absolute basis.

All right. Well, thank you. Thanks much, Andrew.

Thank you. At this time, there are no further questions.

I'd now like to turn the call over to G.J. Hart for closing remarks. Thank you, sir.

Thank you very much. I appreciate all of you joining us here today. We very much look forward to the journey here and look forward to reporting our first quarter results in late May, and we look forward to talking to you then. Take care.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time, and thank you very much for your participation.