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spk00: Greetings and welcome to the second quarter 2021 conference call and webcast for Schwoz. We are being hosted by Justin Dye, Chairman and Chief Executive Officer, and Nancy Huber, Chief Financial Officer. Following the presentation, management will take questions submitted via the web link found on Schwoz's Investor Relations website and in the earnings press release. I would also like to remind you that management's prepared remarks and answers to your submitted questions may contain forward-looking statements, which are subject to risks and uncertainties. The words expect, anticipate, could, estimate, believe, potential, will, should, project, and similar expressions, as they are related to choix and anticipated events, outcomes, and results, are such forward-looking statements. Investors are cautioned that our forward-looking statements involve risks and uncertainties that may cause actual events, outcomes, and results to differ materially from those anticipated by Schwoz at this time. Additional information on such risks and uncertainties is available in Schwoz's earnings release and in Schwoz's Form 10-K for the year ended December 31st, 2020 and its foreign chain Q for the quarter ended June 30th, 2021. In addition, other remarks are more fully described in Schwarz's public filing with the U.S. Security and Exchange Commission, which can be reviewed at www.sec.gov or on the company's investor relations website. I would now like to turn the call over to CEO and Chairman Justin Dai.
spk04: hello and thank you for joining us this afternoon i will provide a business update and our cfo nancy huber will review our second quarter financial results in detail before i conclude our presentation with some final thoughts we would then be happy to take your questions during the second quarter of 2021 the company announced the acquisition of southern colorado growers or scg and subsequently announced the signing of the acquisition of two drift dispensaries, bringing the number of overall Schwoz dispensaries to 19. The SCG acquisition includes 36 acres of land with outdoor cultivation capacity, as well as indoor greenhouse and hoop house cultivation facilities and equipment. SCG is the company's first major move into cultivation. and will provide high end premium cannabis directly to our Starbucks dispensaries, as well as significant production of biomass for our purple bees extraction and manufacturing facility. This acquisition was significant as it reaffirms our commitment to grow within Colorado. And as a result, we will demonstrate our overall vertical expansion quarter by quarter as expected and planned. During this quarter, we announced that our revenue increased to $30.7 million compared to $5.4 million during the same period last year, representing a 467% increase. The company's adjusted EBITDA for the quarter of 2021 was $10 million, representing 32.6% of revenue. I'm also pleased to report that we also recorded positive cash flow from operations of $1.4 million over the last six month period. Same store sales of the 17 Starbucks dispensaries when compared to last year prior to taking ownership of the assets were $21.5 million up 16%, 8% above the Colorado market as reported by BDS analytics. Our average basket size increased to $61.04 up 6.4%, and recorded customer transactions increasing as well to 357,056, up 8.9%. This data now includes our four Mesa organic stores acquired in April of 2020. Since completing our acquisitions, approximately 70% of our revenue is derived from retail and 30% from wholesale products. Along with strong revenue growth and adjusted EBITDA results, we continue to be encouraged with our retail results with 68.9% growth on a two-year basis. Wholesale results led by Purple Bee's distillate production also had another record-breaking sales quarter. We continue to improve our operations by executing our playbook in the areas of retail execution, marketing, merchandising, and procurement. Our growth team continues to leverage our in-house best practices in the areas of M&A integration, data analytics, and synergy realization to drive operational efficiencies. As for the federal and state government laws regarding cannabis legislation, in July of this year, Senate Majority Leader Chuck Schumer, Senate Finance Committee Chair Ron Wyden, and Senator Booker released a discussion draft of the Cannabis Administration and Opportunity Act. We applaud their efforts to engage in much needed dialogue around removing cannabis from the federal list of controlled substances. Federal cannabis reforms are seen to be especially urgent as more and more states legalize the adult and medical use of cannabis. To date, adult use of cannabis is legal in 18 states and 37 states have advanced laws to allow medical cannabis. Today, more than a majority of Americans believe cannabis should be legal, either for adult or medical use. We expect both chambers and parties will continue to look at financial reform in our cannabis laws in order to pass the Safe Banking Act so that we can continue to invest and reinvest in our customers and our communities. As always, we'll closely monitor any federal and state changes that would impact our industry and and are poised to make any changes necessary. We have been approved for home delivery of products to Aurora Suburb of Denver, Colorado, and will begin delivery in August. We are awaiting licensing approval for Denver. We are excited to add this service to meet our customers' demands. And now, let's move into Colorado cannabis market in general. Based on recent DDS analytics estimates, Colorado sold $586 million of adult use and medical cannabis product during the past quarter, representing approximately 8% growth year-over-year compared to $544 million recorded for the same quarter last year. I'm pleased to report that once again, Schwoz surpassed this number with 16% growth, which includes stores where we have year-over-year measurements. continuing to demonstrate to the market that we can outpace and capture market share in this growth industry. Turning to the future, we continue to evaluate additional opportunities across the cannabis industry in the areas of cultivation, manufacturing, and dispensaries, not just in Colorado, but in other states as well. Our current criteria for potential acquisitions includes the following, revenue growth, or growth potential that exceeds Colorado's averages, EBITDA, profitability with synergy opportunities, attractive acquisition prices that are accretive to our shareholders, and provides additional products in attractive locations. Any announcements regarding expansion intentions will be made once we've reached definitive agreements with prospective partners. Let me also reiterate that we believe our home state of Colorado continues to represent attractive geography to build out our platform as it provides us with the opportunity to acquire targets that are sophisticated and profitable and have already weathered the early boom and bust cycle of the industry. And now I'd like to turn the discussion over to Nancy to continue our second quarter financial review.
spk02: Thank you, Justin. I would now like to review our financial results for the quarter ended June 30th, 2021. As Justin mentioned at the top of the presentation, total revenue for SWAS during the quarter was $30.7 million, representing an increase of approximately 467% compared to $5.4 million during the same period in 2020. Also, just a reminder that in the first quarter of 2021, we changed our segment reporting to align how we now manage and evaluate business performance today. Therefore, we are now reporting by retail, which includes dispensary, and wholesale, which includes MIPS, Big Tomato, and Success Nutrients, and other, which includes revenue from consulting and other small revenue areas. Retail sales for this quarter were $21.5 million compared to $0.7 million reported for the same period in 2020. Wholesale operations increased to $9.2 million from $4.1 million compared to the same period last year. Other sales decreased to $0.02 million from $0.6 million due to a reduced focus on consulting. The continued increase in retail and wholesale revenue is attributed to the acquisition of Mesa Organics in April of 2020, and the completion of the acquisition of Starbucks assets between December and March of 2021, as well as same store sales growth. Total cost of goods and services were $15.8 million during the three months ended June 30th, 2021, compared to $3.1 million during the same period in 2020. This increase was due to added dispensaries and improved sales from our retail and wholesale operations. Gross profit increased $14.9 million during the three months ended June 30th, 2021, compared to $2.3 million during the same period in 2020. Gross profit margin increased as a percentage of revenue to 48.5% from 42.7%. mostly driven by the strength of Starbucks acquisitions and our consolidated purchasing approach. Total operating expenses were $10.5 million during the second quarter, compared to $8.7 million during the same period in 2020. The higher expenses were due to increasing selling, general and administrative expenses, and salaries from the addition of the dispensaries. Q2 2021 adjusted EBITDA was $10 million representing 32.6% of revenue. This number is derived from operating income and adjusting one-time expenses, merger and acquisition and capital raising costs, non-cash related compensation costs and depreciation and amortization. See the financial table in our press release for Q2 2021 adjusted EBITDA reconciliation for adjustments from income from operations for the quarter. This can be found on our website at schwoz.com in the investor section under press releases. Q2 2021 net income was $4.4 million or a gain of approximately 10 cents per share on a basic weighted average as compared to a net loss of $6.6 million or a loss of approximately 16 cents per share on a basic weighted average during the three months ended June 30th, 2020. The company generated positive operating cash flow of $1.4 million and $19.9 million in total cash flow for the first two quarters with $21.1 million in cash and cash equivalents at the end of Q2 2021. Operating cash flow generated in Q2 was used for strategic inventory purchases to be used in the third quarter of this year. Turning now to the outlook of 2021, We are reiterating our 2021 guidance, which excludes transactions that are announced but not closed. The annual revenue guidance is $110 million to $125 million, and projected annual adjusted EBITDA is between $30 million and $36 million. The company remains optimistic regarding the full year based upon reported results to date and the SEG acquisition. Closing the drift dispensaries and feature acquisitions will be additive to these projections. Thank you for your time today, and now I'd like to turn back to Justin, who will open the call to questions and answers.
spk04: In closing today's call, I would like to thank our customers for their loyalty and support, our employees for their focus on creating great customer experiences, and our suppliers and investors for their continued support. Schwoz continues to build momentum, and I'm very excited about our future. We would now be happy to take your questions. To ask a question, please click on the link on the investor relations portion of our website and press submit.
spk03: Thank you, Justin and Nancy, and thank you to everyone who has joined us today. My name is Joanne Jobin. I am the IRO for Schwoz, and I'll be moderating the Q&A on behalf of the team today. And the first submitted question is, why only two acquisitions since Starbuds? Justin, perhaps you can answer this question.
spk04: Yeah, thank you, Joanne. That's a good question. So, You know, Starbucks, we acquired 13 locations and one growing facility. So we certainly have had our hands full making sure we get that integrated appropriately and leveraging synergies with that. But we have a very good pipeline of future acquisitions that once we sign definitive agreements, we will be announcing. We remain confident that we can continue to grow the business. I think our M&A pipeline is as fulsome and as really exciting as it's ever been since we've taken over here. So we still believe we're on track to double our revenues as we've stated in prior conversations. So we feel good about the pipeline and more to come.
spk03: Okay, thank you, Justin. And staying on the StarBuds acquisition questions, somebody has submitted the question, how are things going with StarBuds? Can you share details?
spk04: Yeah, you know, we're really proud of what's happening at Starbucks. We have great store teams. We've got great support people. We have been able to promote a number of legacy Starbucks employees into corporate roles and support roles here at the Schwarz level. So things are going well. I'm really proud of the team. We have now integrated all of the dispensary operation into our point of sale and our ERP system. So we've got common views on inventory, uh, purchasing, merchandising, in-store communications, et cetera. So we can really start to work on category management for products in our stores and be able to have a common assortment and do AB testing on various promotions and things that drive great value for customers. We're continuing to invest capital in the shopping experience to create a differentiated experience in terms of assortment, in terms of great customer service, and great value in high-quality products. And we continue to share best practices across the various locations. So things are going well, and we see more things in the future. I think you can continue to see us working on retail execution, merchandising, as well as we're going to be introducing e-commerce and omnichannel capabilities to the Starbucks platform this quarter. So thank you for the question.
spk03: Okay. We are currently focused in Colorado, but have an aggressive expansion plan. Can you discuss what that looks like for Colorado and other markets? Justin?
spk04: Yeah, thank you. Another good question. We remain focused on being the best operator that we can be in Colorado. We certainly want to be the market leader in Colorado. It is a very large addressable market with well over $2.5 billion in available revenue. We represent a small part of that today, even though we are in a leading position. So we see a lot more opportunity to continue to grow in the state of Colorado. at the dispensary level on the branded product basis, as well as cultivation in manufacturing. You know, looking at other states, we certainly are thinking about that. We'll be incredibly selective in thinking about what the right opportunity is in doing that, and that would be a place where we thought we could see a clear path to becoming number one. and being able to defend our business there and build a really great franchise there. And I think you can see that over the next 18 months. And I think in terms of framing this for people, there are a number of multi-state operators that are looking to expand across the country. There are single-state operators. I think you can think about our strategy as trying to become a very good super-regional operator with a handful of states, in a geographic area where we can share best practices and have leading market share in that area. So we're very excited about Colorado. We're excited about looking at the next opportunity, but we'll be very selective in doing such.
spk03: Okay, thank you, Justin. Another question submitted is, now that we've talked about all these expansion plans, what does that look like financially? Do you plan to execute a raise? And if so, how much? Where is the funding coming from? Nancy?
spk02: Thanks, Joanne. Yeah, I'll take that one. So we've completed the borrowing of the additional $5 million from Altmore Capital as part of the SEG acquisition. You'll see that in our subsequent events section of the 10Q. We have about $20 million of cash on hand that we'll also be able to complete a number of acquisitions that we're looking at with. And then we're evaluating funding options as we've constantly discussed with potentially equity debt, convertible debt. We'll find the most cost effective solution at the time that we need that funding to complete any of the acquisitions. And then there was also a question regarding guidance once we have completed acquisitions. So we will not provide guidance for anything that we have on the table until it's closed. And then usually we provide guidance only at the conference calls. And unless it's materially effective, we will probably not provide any additional guidance.
spk03: Okay. Thank you, Nancy. Hope that answers the question on guidance as well. Let's turn over to Southern Colorado Growers. That was a major acquisition. Can you discuss how you expect this to impact your sales and products going forward? Justin, can you take this one?
spk04: Yes, thank you. Thank you, Joanne. You know, we're excited about Southern Colorado Growers. We believe this can be one of the preeminent premier farms in the state. We're very excited about it. And it really offers growing capabilities across the full spectrum, so including indoor greenhouse, light deprivation greenhouses, as well as hoop houses and outdoor growing. So we'll continue to invest in that capability. We're building 60 hoop houses that will provide biomass to our purple bees manufacturing business. And then we will also have really high-quality flour for our retail stores. So we're excited about that capability. We look forward to continuing to work on genetics and offering new strains and doing such. So we think this will be a big part of our going forward strategy and excited about it, and things are going very well there.
spk03: Excellent. The next question submitted is along the same lines, and that is, should we expect to see any further cost synergy benefits in Q3 or Q4 resulting from the recent acquisitions or any cost reduction initiatives?
spk04: Yeah, I think the great, I mean, that's a great question. I think one of the things we're excited about here in Colorado is driving operating leverage and So the more revenue we can put onto our platform, the lower the costs are as a percentage of sales, particularly on the fixed costs. So we're going to continue to work on that. We continue to see best practice opportunities across our fleet of stores in sharing merchandising techniques and new products and pricing and services and marketing programs. So I think you're going to continue to see our operating performance improve. and we'll continue to work on that. We want to build a really efficient business that can compete effectively in today's market, but most importantly, that we're answering our customers' needs and anticipating where they're going, both on the commercial side for our wholesale customers as well as on the retail side.
spk03: Thank you, Justin. Next question. The improvements that we've seen in product margins and revenues continues to be impressive. Do you think you can continue this trend? Nancy?
spk02: Thanks, Joanne. So in terms of revenue, we've talked at least the last two quarters that we've outperformed the Colorado market, and we continue to believe we will do that as we move forward. So we believe we'll have very good revenue showing compared to the market. And in terms of product margins, Between last quarter and this quarter, there was almost an 11% increase in gross margin. Now, I don't think we'll do another 11% next quarter, but we are working, as Justin said, pretty significantly to drive product margins or improve product margins by driving costs down through a number of strategic initiatives we have, so we believe we'll continue to see that. And then in terms of acquisitions, we also believe there's opportunity there. So every acquisition we make, we look at opportunities to synergize. And as Justin said, as you have revenues, you'll continue to move that needle. So we believe with every acquisition, we'll see improvement as well.
spk03: Thank you, Nancy. And sticking with growth numbers and revenue figures over the next quarters, You are now mentioning two-year growth numbers. Why are you using that number over one-year growth?
spk04: Dr. No, I think that's a great question. With regards to two-year comparisons or two-year stacked identicals, with what happened with COVID and the pandemic last year, and we saw enormous growth with people changing their behaviors, their buying behaviors and staying home. And perhaps not going out to restaurants and bars and things or, you know, live venues for music, et cetera. So we saw quite a bit of growth last year. And I think management here and I think the industry is watching to see how are we going to emerge from the pandemic. And, you know, obviously with the Delta variant out here, we're all watching to see what happens next. you know, with society and what local municipalities are going to, what stipulations they're going to put in place on people traveling and, you know, in terms of restaurant vacancies, et cetera, and how many folks that they're going to take in the respective bars and so forth. So I think we're going to continue to look at that. So when I look at a two-year, you know, in some of these months we're cycling over 50%. comparable identicals. We want to continue to grow with our customers. So I think it's important just to, from a context perspective, understand, you know, if you look at 19 as a good baseline, you had a lot of variation, a lot of changes in 2020. And I think looking at 2021 in a two-year stack comp basis is a good way to think about that. And a lot of the other larger retailers in other sectors are certainly talking about that as well. So I think all of us executives are looking and trying to anticipate what's going to happen. So I think that's a fair way to think about sort of general volume and revenue growth.
spk03: Thank you, Justin. Okay, now we're going to swing over to some retail questions. Do you have any retail stores in the western slope of Colorado or any other connections to the western slope?
spk04: We do not today. But clearly there are a number of locations and a number of municipalities on the western side of the state that we think would be very interesting to us as we continue to take our capabilities, our services, our products to the market. So we'll continue to evaluate that, but we think that is a very nice growth opportunity for us.
spk03: Excellent. Thank you, Justin. The next question, again, on the retail side, do you own the Starbucks name outside of Colorado?
spk04: We do not. We do not. So we have a license for the Starbucks name in the state of Colorado, and that is our relationship with Starbucks today.
spk03: Okay. Thank you. All right. Next question. As we look forward to Q3 and Q4, what seasonality may we expect to see in in volumes and or product mix in your retail stores?
spk02: Thanks, Joanne. Usually we see Q3 as a little stronger than Q4. It's not a huge amount, but it's usually a little bit stronger. But we don't see any significant swings in products at all between the two periods specifically. But we do see that Q3 is usually a little bit stronger than Q4.
spk03: Okay, thank you, Nancy. Let's talk about the home delivery segment. Do you have any sense of how much of that revenue line will be cannibalizing the existing customer bases versus developing new customer acquisitions? And what kind of impact will that have on the overall margins?
spk04: Great question. So let's take it in two pieces. So one is growth. We believe that Omnichannel... and we've seen this in other sectors as well, that e-commerce will broaden the market. We think it's going to continue to help grow the market and make products more accessible, easier to receive. So we expect it to continue to grow. You know, what percentage of the business e-commerce will end up being over time, we will have to evaluate. But I can tell you we're very excited about having a very good, operating model for our customers. So whether they want curbside, same-day delivery, or next-day delivery, we'll be able to provide that to them with great high-quality products at a good value. And we will continue to monitor that as we roll it out across the state. And we'll see. We'll see. But I certainly see a world where you will have brick-and-mortar retail shoppers as well as have
spk02: e-commerce shoppers and it's going to largely depend on the occasion how much time they have and what they're looking for Thank You Justin and now another question about margins how much margin improvement do you hope to see from SCG vertical intervention thanks for that question we don't give guidance on specific improvement in margins from any specific acquisition so I can't answer answer that specifically but I One would expect that we're growing at a significant discount to the price that we're acquiring product from the outside today. Today we really don't have any growth. And so the margin is basically product that we've purchased from third parties. So one would anticipate that our margins will improve pretty significantly as we bring the SCG products on board. In addition, we're investing in some hoop houses there. to improve our biomass supply. So over the next year, you'll see those come online and impact our purple bees margins as well.
spk03: Thank you, Nancy. So we've got a few questions here on the Biosciences Division that we announced last quarter. How is that coming along, and are there any upcoming deliverables?
spk04: Yeah, we're excited about our Schwoz Biosciences business. Jim Parco is the president of that business unit. He's recently hired Remy Cacciadori and a PhD in chemistry as director of innovation and quality. Remy is a former cannabis lab director and very well known chemist in Colorado's cannabis industry. So we're excited to add Remy to our team. We're finalizing the construction efforts for our experimental lab with a completion date in the third quarter. We're also executing a development project on single-source all-cannabis terpenes and a move away from additives in vape products, so a more natural organic product line that we think the customer will certainly appreciate and is certainly asking for. We're also actively developing partnerships with leading academic institutions and other R&D companies to put our heads together to continue to leverage the best ideas in to continue to innovate on the product and service side. And then we have a number of other confidential things that typically you would have in your skunk works that we're working on that I think are going to have promise down the road, but more to come on that.
spk03: Thank you, Justin. Now a question regarding the federal government and legalization of cannabis. If cannabis is legalized, let's say when they legalize it by the federal government, will that be a positive for Schwoz?
spk04: Yeah, great. This is a good question. So we are preparing ourselves for a day when we could have interstate commerce. I don't see that happening anytime soon. I don't think our best legal minds and government affair minds think that that's coming anytime soon as well, but we have to be prepared for that. So when we think about what is actually going to be the infrastructure or the architecture of federal and state regulation, we certainly see a world where the states will be able to opt in and decide how they want to treat cannabis, how they want to tax it, how they want to regulate it, and set their own rules up. So I think that's how we're anticipating what's happening on a state-by-state basis, which basically presumes you have to develop a supply chain within each one of these respective states, which really plays to our strength, which is developing a very deep strategy within a state where you can certainly take advantages of things that retail at manufacturing and at cultivation and build a very efficient supply chain. So, in general, we're building this to be preparing for across state lines, but we'll see right now it's a state-by-state game, and we'll have to continue to monitor that. Now, with regards to some of the other regulation or some of the other legislation that is pending, certainly having cannabis descheduled as a Schedule I drug is something that's very, very important to us, opens up the floodgates on capital allows us tax advantages, allows us to behave like a normal business. So we very much look forward to that day when that is deschedulized. But that's not exactly federal legalization. So that would be in addition to that. And then there's other things such as safe banking that would allow us to accept credit cards and some other things that's being proposed. So we're going to continue to be optimistic about it. and see where things go on these various pieces. Very good question.
spk03: Thank you, Justin. Here's a great question on dividends. Is there a possibility in the future as our company grows, must be a shareholder, to provide a dividend to shareholders?
spk04: Well, let me say it this way. We certainly are looking, we're generating free cash flow. It is management's plan and the board's plan to continue to generate free cash flow on a with more and more momentum. I think having said that, when we think about dividends, I think we're very much a growth stock. So right now it would be our view is that we would reinvest any of the profits in any of the free cash flow in the business where we can get outsized returns for our shareholders. And we think that capital's best served doing that today. That doesn't mean down the road, once the growth curve has settled down, And investors are looking for something like that, that we couldn't certainly do that, like a CPG company or a large retail company. But I think that's many years down the road.
spk03: Okay. Thank you. All right. Next question submitted. There is a growing trend towards sale leasebacks with vertically integrated cannabis entities. For example, today Harvest and IIP announced a transaction that just a few minutes ago. What are your thoughts on that trend?
spk04: Another good question. I mean, if you look at other sectors, certainly in other retail sectors, sale leasebacks are a way to finance businesses and growth capital. So I think it really depends. For us, it's a cost of capital discussion. Are we better off buying real estate and then financing it via sale leaseback or putting a mortgage on it? Or are we better off just leasing it from the business the way it is today? And, you know, those are what I would call very simply make buy decisions. So we certainly have the opportunity to acquire real estate in the future. We'll make sure, uh, that we're doing the right thing for our shareholders capital and investing it the right way right now, uh, buying businesses, uh, at the multiples, we're buying them at our ability to create synergies by putting them on our platform. far outpaces buying real estate and then writing real estate up from a valuation perspective. But we'll take it on a case-by-case basis, and sale-leasebacks are very different. The grow asset class is very different than manufacturing, and it's very different from retail. Retail can be repurposed into other businesses where single-use grows, et cetera, is more difficult. We'll continue to look at that. We certainly aren't opposed to owning our own real estate. It provides you financing capabilities down the road because you've got assets that you can finance off of. Good question.
spk03: Okay. Thank you, Justin. Nancy, your stock seems to be very thinly traded. Are there plans to improve liquidity, and how will you accomplish this?
spk02: Yeah. Thanks, Joanne. We're working on telling our story and reaching a wider audience, attending conferences, Those are actually on the increase, not only virtually, but in person. So our objective is to get out and reach as many new investors as possible. And we're evaluating the opportunity to help improve our liquidity at every chance we get. So as we look at deals and look at stock versus debt versus internal debt, we evaluate whether it makes sense to increase shares so that we can improve our liquidity.
spk03: Thank you, Nancy. We're starting to wrap up. We're down to the last few questions here. What do you attribute the exponential growth in your retail and manufacturing sectors to? Justin?
spk04: You know, to be honest with you, we've got a very good team here. I think we have very good plans. We have a good game plan on attacking the market in terms of what are the opportunities, how do we solve customers' problems. So I think the wholesale team has done a really great job of going out and working with customers to find opportunities and to make sure we're solving their problems. Very high quality distillate and products at good value. It's consistent. We do what we say we're going to do. And I think that's a, you know, I think that's welcomed by our customer base on the wholesale side. And we've got other opportunities to continue to offer services and new products for our wholesale customers as well. On the retail side, the team's doing a nice job of sharing best practices, becoming more consistent. using data to make good decisions and You know, we're getting a lot smarter about the business what products are selling what is cut what do customers want and what price points and being able to listen to the customer and then operationalize that across our 17 stores today and future with the two drift stores 19 stores We're going to continue to do that. So we've got work to do. We're going to continue to get better and and continue to grow revenue and continue to work on taking care of the customer. And we think that will pay dividends down the road and in the near future.
spk03: Thank you, Justin. And a final question for today. You have accomplished a lot in the first seven months of 2021. What is the one thing that continues to challenge the company?
spk04: I think it's really speed. We're seeing the industry consolidate. We're going to continue to see the industry consolidate over the next five to ten years. I think just being able to continue to be very diligent around our underwriting of M&A deals and being very consistent and thoughtful about that and working with those that are selling to us and partnering with us to move those along at a good pace. So I think balancing really good underwriting, synergy realization, integration with moving with speed as well. So those are things that we work on every day as a management team, and our teams are out there looking for new real estate locations, new licenses, et cetera. We're going to continue to manage and balance moving with speed with also doing a heck of a job underwriting and executing. And, you know, there's another piece of the economy, and I think this is for a number of CEOs. You know, there is labor. There's challenges with hiring people, and labor is very tight right now. So I think competing for talent and really building a company that has good values where people really buy into that and have an opportunity to grow their career, I think those are going to be differentiators. in the labor market. And I think that sets us up well to do that. But it's certainly something that we have to continue to focus on. I think our industry has to focus on that as well as others.
spk03: Thank you, Justin. And that is all of the questions that we have for today. Justin, do you have any final remarks? And or Nancy, do you have any final remarks before we end the call today?
spk04: I just would like to thank all of our shareholders and investors on this call, and once again, thank our customers and our employees. Really proud of their efforts. They're making things happen quickly, and we need to continue to work very, very hard. This is a great market. It's a great industry. It's moving very quickly, and we're very excited about it. I think we've got great operating momentum, and we're going to need to continue to stay focused on what our mission is, and that's taking care of customers and building a great company, which you've got my commitment to do that. So anyways, we appreciate everybody's interest in Schwoz, and thank you for supporting us.
spk03: Thank you, Justin. Nancy, would you like to say a few words?
spk02: Yeah, I think we would like to thank our investors for their continued interest in the company. and look forward to our future announcements.
spk03: Okay. Thank you, Nancy. Once again, thank you, everyone, for your time and consideration today. If you have further questions that were not answered today, please feel free to submit them directly to me at info at schwoz.com. This now ends the second quarter conference call for Schwoz. Good day, everyone.
spk00: Ladies and gentlemen, this concludes your conference call for today. We thank your participating and ask that you please disconnect your lines.
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