Boyd Group Services Inc.

Good morning, everyone. Welcome to the Boyd Group Services Inc. First Quarter 2021 Results Conference Call. Listeners are reminded that certain matters discussed in today's conference call or answers that may be given to questions asked could constitute forward-looking statements that are subject to risks and answers related to Boyd's future financial or business performance. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in Boyd's Annual Information Form and other periodic filings and registration statements. And you can access these documents at CDAR's database found at cdar.com. I'd like to remind everyone that this conference call is being recorded today, Wednesday, May 12, 2021. I would now like to introduce Mr. Tim O'Day, President and Chief Executive Officer of Boyd Group Services Inc. Please go ahead, Mr. O'Day.

Thank you, operator. Good morning, everyone, and thank you for joining us for today's call. On the call with me today are Pat Pappapatti, our Executive Vice President and Chief Financial Officer, and Brock Wolbach, our Executive Chair. We released our 2021 first quarter results before markets opened today. You can access our news release as well as our complete financial statements and management discussion analysis on our website at BoydGroup.com. Our news release, financial statements, and MD&A have also been filed on CDAR this morning. On today's call, we'll discuss the financial results for the three-month period ended March 31st, 2021, and provide a general business update. We will then open the call for questions. The first quarter of 2021 continued to be significantly impacted by the COVID-19 pandemic, as business and mobility restrictions continued to impact demand for collision repair services. We continue to focus on health and safety practices such as contact free customer drop off and pick up, enhanced vehicle and facility cleaning practices, social distancing, and wearing personal protective equipment to keep our employees and customers safe. All of which has been very important given the significant surge in COVID infections that occurred during the quarter. We continue to follow key practices that include deep cleaning facilities where an employee or potential or confirmed case of COVID-19 is identified, as well as defined processes for quarantining and testing in situations of potential exposure to help prevent the spread of the virus. As was previously communicated, beginning on January 1, 2021, Boyd is reporting results in U.S. dollars. This change has been made in order to better reflect the company's business activities given the significance of the U.S. denominated revenues. During the first quarter, we recorded sales of 421.6 million, adjusted EBITDA of 52.7 million, and net earnings of 7.7 million. Sales were 426.6 million, a 9.9% decrease when compared to the same period of 2020. This reflects a $19.4 million contribution from 36 new locations. Our same store sales, excluding foreign exchange, decreased by 14.2% in the first quarter. Same store sales, excluding foreign exchange, decreased by 12.6% on a days adjusted basis, recognizing one less selling and production day in the US and Canada in the first quarter of 2021 when compared to the same period of 2020. Same store sales declines in Canada were much more significant than same store sales declines in the US and unfavorable when compared to the fourth quarter of 2020. The first quarter of 2021 was impacted by a significant surge in COVID-19 infections and the reinstatement of restrictions in many markets, especially Canada. Production challenges, including technician capacity constraints in select markets, weather events in southern states, and supply chain disruptions compounded the demand challenges we faced. Gross margin was 46% in the first quarter of 2021, compared to 44.8% achieved in the same period of 2020. The gross margin percentage improved as a result of higher labor margins, including the recognition of the SEWS of approximately $1.5 million. The gross margin percentage was also positively impacted by higher retail glass sales margins, partially offset by a higher mix of parts in relation to labor. Operating expenses for the first quarter of 2021 were $141.2 million, or 33.5% of sales. and John Wysseier. is the seasonality of certain operating expenses, such as employee payroll taxes, which are typically highest in the first quarter of the year. In addition, continued location growth has resulted in increased operating expenses as a percentage of COVID impacted sales. Adjusted EBITDA or EBITDA adjusted for fair value adjustments to financial instruments and costs related to acquisitions and transactions was $52.7 million, a decrease of 12.8% over the same period of 2020. The decrease was primarily due to operating expenses that could not be managed in relation to the reduction in sales and additional operating expenses incurred, along with continued location growth as well as costs incurred to begin rebuilding and supporting the workforce. In total, adjusted EBITDA in the first quarter benefited from the SEWS in the amount of $3.4 million, and as is the objective of the program, Boyd continued to employ and incur costs for employees that would have been laid off or furloughed absent this wage subsidy. Net earnings for the first quarter of 2021 was $7.7 million compared to $17 million in the same period of 2020. Excluding fair value adjustments and acquisition and transaction costs, adjusted net earnings for the first quarter of 2021 was 8.3 million or 39 cents per share compared to adjusted net earnings of 15.2 million or 75 cents per share in the same period of the prior year. The decrease in adjusted net earnings per share is primarily attributed to the operating expenses and fixed costs such as appreciation and amortization that could not be reduced in relation to the decline in sales due to the COVID-19 pandemic. Adjusted net earnings per share for the three months ended March 31st, 2021 include 1.265 million shares issued in the public offering, which was completed in May of 2020. At the end of the period, we had total debt net of cash of 539.9 million compared to 538.5 million at December 31, 2020. We continue to have financial flexibility with our conservative balance sheet and more than $875 million in dry powder to take advantage of opportunities as they arise. During 2021, the company expects to make cash capital expenditures within the previously guided range of 1.6% to 1.8% of sales. This excludes those capital expenditures related to acquisition and development of new locations, the investment in environmental initiatives such as LED lighting, and the investment in the expansion of the WOW operating waste practices through its corporate applications and process improvement efficiency project. During the first three months of the year, the company has invested approximately $1.4 million in environmental initiatives, of a planned $4 million investment during 2021. These investments will not only provide environmental and social benefits, but also achieve accretive returns on invested capital. Additionally, the company is expanding its while operating weight taxes to its corporate business processes. The related technology and process efficiency project will result in a total of $4 to $5 million being invested before the end of the year and will also be expected to streamline various processes as well as generate economic returns after the project is fully implemented. This initiative began in the third quarter of 2020. Early in the pandemic, the company moved quickly and decisively to take aggressive action to both preserve liquidity and to reduce expenses in preparation of the demand and revenue decline anticipated as a result of the pandemic. This included converting a large number of production facilities to skeleton staffed intake centers, in most cases, staffed with a single employee. In late Q4 of 2020, Boyd made the decision to prepare for the higher post-pandemic demand levels expected in 2021. This was a major factor contributing to our lower adjusted EBITDA margin versus Q3 and Q4 of 2020. We're excited and optimistic about our positioning for the future. We've converted all of our temporary intake centers in the US back to full production facilities, and we've added back most of our indirect and support staffing resources in anticipation of a return to normal demand for our services. Although we are still in the process of the more difficult task of adding back technician capacity and re-engaging in the initiatives that we'd undertaken pre-COVID, to address technician capacity constraints, including but not limited to our technician development program. This may result in us experiencing technician capacity constraints in some markets in the near term, notwithstanding the continued improvement in demand in most of our U.S. markets. This, combined with worsening demand in Canada, as restrictions either continue or are tightened, has resulted in overall sales performance to date in Q2 that is only marginally higher than our Q1 sales. We continue to execute on our growth plans with 35 locations open year-to-date, the majority being single-shop growth. Our pipeline, including acquisitions as well as Greenfield and Brownfield locations, is healthy and we are confident in our ability to achieve our five-year plan. As vaccination rates increase and as market demand returns to normal levels, We are well positioned for the future with our leadership position, our growth pipeline, and many business initiatives, including our WOW Operating Way, Scalable Technician Development Program, scanning and calibration, OE certifications, and NHIC Center strategy, to name a few. As always, operational excellence remains central to our business model. With ongoing investment in our WOW Operating Way, we continue to drive excellence in repair quality, customer satisfaction, and repair cycle times to ensure the continued support of our insurance partners and vehicle owner customers. For me personally, and on behalf of the Board, I would also like to acknowledge Al Davis' retirement from the Board of Directors. Al has served on the Board since 2005 and is independent chair since 2011. He has helped to guide our strategy for many years and I personally appreciate the support and guidance that Al has provided to me during my tenure as CEO and I wish him well in his retirement. In summary and in closing, I continue to be incredibly proud of the steps that we've taken to adjust to this constantly changing environment and to position ourselves well for the future. We continue to believe there will be many opportunities to come from this crisis, both internal and external, and we've put ourselves in a good position come out of this crisis as a stronger company. Our priorities remain taking care of the health and safety of our team members and customers, enhancing shareholder values through accretive acquisition growth, building our capacity as demand returns, as well as preserving financial flexibility and preparing for the opportunities that lie ahead. With that, I would now like to open the call for questions. Operator?

Thank you, sir. At this time, we would like to take any questions you might have for us today. In order to ask a question, simply press star, then the number one on your telephone keypad. We have our first question from the line of David Newman from Big Jordans.

Good morning and aloha. Welcome to Hawaii.

Good morning, David.

A couple of questions on the, I guess, reopening, teething issues, I'll call them, which we're seeing across a number of companies. But with the supply chain disruptions, are you seeing any parts inflation as well? And I'm talking about the steel, aluminum, and all the commodities, obviously, all spiking. And does that change your dynamic of OE versus recycled, refurbished, or aftermarket parts at all?

The supply chain disruptions we mentioned were really not related to the pricing of components. And as we've talked before, from a pricing standpoint, we really pass through pricing for repair costs. As those components become more expensive, though, it may provide more competitive alternatives, whether aftermarket or used. So there could be some shift in that, although nothing that we've noted to date. We have seen some Parts availability issues that have been a challenge from manufacturers related to, I suspect some of it related to just the ability to get parts through the system and from overseas.

Okay. And then on the technician issue, obviously through the pandemic we've seen a real focus on ESG, as I'm sure you guys are aware, EVs and ADAS and all that sort of thing. And How do you navigate going forward? And I would presume that this could actually accelerate consolidation. Just maybe thoughts on the near term, on training, compensation, and things that you've done so effectively in the past to secure technicians. And does that put you in kind of a really competitive advantage versus your peers and consolidate the market?

I think the investments that we've been making in training for the past several years and we have a fairly unique way of doing it because we have a dedicated team of internal technical trainers that actually build relationships with our technicians and help them not only improve their skills using training that's available to the industry, they actually build a relationship with them and focus on improving their productivity as well. But we are very well prepared to continue to invest in our team members to make sure they have the technical skills to perform repairs as they become more complex, including issues related to ADAS, calibration, matters such as that.

Very good. And last one, if I can squeeze one more in, guys. Just in terms of a lot of navel-gazing, I guess, through the pandemic and organizations really looking at their cost structures, et cetera. So I know we're still kind of going through the machinations of it and all that, but post-pandemic, From an OpEx point of view, is there any permanent cost reduction such that your margins could even improve as we get to more normalized conditions?

David, we have taken several measures to address that specific area. So we have streamlined operations, and also we have consolidated certain functions to permanently reduce some expenses and costs.

Okay, and any sort of sense on the magnitude, Pat?

No, we don't want to offer any guidance on that. And also, David, another thing is also the operating way we're expanding into strategic support services like finance, HR, and procurement. Also, those should yield improvement in productivity, too. Very good. Thanks, Arun. Thanks, David.

Thank you. Our next question is from Steve Hansen from Raymond James.

Please go ahead. Good morning. Just a couple quick ones for me, if I may. One, Tim, is just on the acquisition pipeline and the multiples that are being paid. I know you stepped out recently into Hawaii for Dave's suggestion there. Can you just give us a sense for what the cost is for entry-level small platforms and or really looking for the spread between you know, 1B2B tech deals relative to larger mid-sized deals at this point. Has that changed at all?

You know, we really don't provide detailed information on MSO acquisitions. We have communicated for a long time that we underwrite single-shop acquisitions to a 25% ROIC on host synergy EBITDA. And we're still comfortable with that guidance. Obviously, as you get to larger and larger businesses, the multiples become higher. And I think for that reason, it's important for us to have a good mix in our pipeline of, you know, greenfield, brownfield, single shop, and multi-shop opportunities.

But we don't have... We also, I think, we shared in the past that the most we ever paid was 9.6 times to a short back in July of 2017. So you can imagine MSO somewhere falling in between, between four and 9.6. So yeah, there is a higher for MSO typically, again, depends on the strategic value, the quality of earnings, quality of management, and things like that. But I think it's also more attractive.

Let me be asking that way, because I recognize you don't provide specific guidance. I guess I'm just trying to get a sense for... and some of these super regional groups are moving quite quickly right now. Just trying to get a sense for whether that's going to price you out of the market to glass or these mid-sized deals.

I think we'll be able to remain competitive and achieve our five-year growth plan. I'm confident of that.

Okay. I think from a big picture perspective, the industry is highly fragmented, so there's ample opportunity to consolidate. You may see some consolidation, but still, it's highly, highly fragmented.

Yeah, no, I would recommend that. I really appreciate that. Just maybe a follow-on mention is just looking at the piece at which you've brought back some of the staff here, I understand it's not a and many others. So, I'm just trying to get a sense for that expense base.

You know, nobody has a perfect picture of exactly how things are going to unfold. So, I think I'm comfortable with the approach that we've taken and think because of it, we'll be well positioned to service the business as it returns. So, I don't see a need to make any, you know, knee-jerk reactions to, you know, short-term variations in the market. Okay. I appreciate that. Thanks, Steve. Thanks, Steve.

Thanks, Steve.

Thank you. Our next question is from the line of Brett Jordan from Jeffries. Your lines are open.

Good morning. This is Mark Jordan. I'm for Brett. Oh, hi, Mark. Good morning, Mark. How's it going? Just thinking about the outlook you put out today, you said performance thus far during Q2 was only marginally higher than Q1. I guess, is that on a dollar basis or is that a same store sales percentage basis? Dollar basis. Dollar basis, okay. And then if I'm looking correctly at what you restated last year for U.S. dollar terms, what we're looking at in Q220, was that about a 23% decline in same-store sales if I'm looking at that right?

I think Q2 was about, Pat, I don't know if you have that in front of you, I believe it was about 35%. Yeah, it's around 35% more.

Okay.

Okay. I think I might have been looking. I was trying to figure out when it was restated in the U.S. dollars.

You're talking, okay, yeah. The number we just quoted was stated in Canadian dollars. Obviously, you have to exchange it in the U.S. dollars, yeah.

Okay. Okay. All right. And then I guess thinking about how demand trended throughout the quarter, can you talk about what you're seeing maybe in early Q1, how it compared in the later Q1, and maybe – So far, Corey, to date, just kind of how the pace of improvement changed.

Well, I think I'm trying to think of what is it that we can specifically disclose. I mean, we have looked at data from CCC. And clearly, we lapped the pandemic in probably the second week of March. So we started to see year-over-year demand above what had happened when the pandemic began to impact claim counts. But the first quarter overall on the data that we've seen from CCC was still down about 20% from historical norms if you compared it to the 2019 volume. But because the pandemic began to impact claim volumes in March of last year, We saw an uptick relative to prior year in the latter part of March.

Okay, great. And then just one last one. I'm thinking about the mix between parts versus labor. Can you break out what you're seeing there? And then I think in your report mentioned higher labor margins during the quarter. Is that primarily from the wage subsidy? Is there something more structural there?

I think a little bit of it is the wage subsidy, but there's also, as we've – I'd say modified things last year, there was some near-term benefit related to that as well. For example, we have not really invested in the technician development program, which has a negative impact on labor margins in the early going. But we are increasing our investment in that area and have been really building that since in the very early part of the year.

Okay, great. Thank you very much for taking our questions.

Mark, one comment is I think you focus on this same social growth that declined. I think one of the things I think you need to keep in mind is we do have a good chunk of business, around 9% business coming from Canada, and Canada is hit very hard. And you can go to the segment distortion of footnotes and you can do your own calculations. how hard it was. For example, in Q1 of last year, we had $56.49 million. And in Q1 of this year, it's $37.27. And we added several locations in Canada. So you can get a good ballpark same-store decline in Canada. So you have to bake that in when you do the calculations.

Okay, great. I'll take a look at that. Thank you. Thanks, Mark. Thanks, Mark.

Thank you. Our next question is from the line of Maggie MacDougall, Trans People. Good morning, Maggie.

Good morning, Maggie.

Hi, good morning. Thanks for taking my questions. We've had a bit of a development this last week with this pipeline outage and reading about a number of states that are experiencing spikes in gas prices and pipeline-related shortages I'm wondering if you're seeing any impact to your business from this, you know, sort of event and if you can help us understand both that and then some of the non-COVID related things that may have impacted you in key ones such as the weather in southern U.S. Thanks.

Yeah, I would say on the pipeline problem in the eastern part of the country, That's really very, very new, and we probably, if it is having an impact, I doubt we would even see it yet. Although it clearly would have the potential to have an impact on miles driven for some period of time. I'm not sure how long, but I'd say too early to understand on that one. The weather-related events that we were referring to were really the, we had some extreme weather in the southern states in the U.S. during the winter. The obvious one that got most of the press is what happened in Texas, which was ice storms and then significant power outages for several days. But that same storm was hitting other southern states. And as most people know, the southern states are not well prepared to deal with that type of weather event. So rather than plowing the streets, as would happen in northern markets, they really just shut down driving and activity stops. and that's really what we experienced in those states for a period of time during the winter.

Thanks. One more question and I appreciate this may be a challenging one to answer but it's something I've been struggling to understand which is in the states where you've seen let's say driving miles driven and gasoline consumption demand for your services return to more like pre-pandemic levels, have you noted any change in driving patterns related to work from home or just people sort of generally doing more online shopping versus going into stores that could have an impact on demand for collision repair services?

I think the main one, Maggie, would be the measure of congestion, which really is sort of the morning commute and morning and evening commute. and probably ties into schools being open as well, which puts pressure on traffic. Well, there's been improvement, if you will. There's been improvement in congestion. It's gotten better for the collision repair industry. In most markets, it's still not back to normal levels. But I think we're still early on in many places with the recovery. Vaccination rates have increased significantly in the past few months and they'll continue to. So I think we'll just have to wait and see. What happens in terms of the pressure on congestion with the normal commute?

Maggie, in the U.S., I think we don't have large enough sample at this point in time. It's too early. But if you look at other countries, China and Australia, where things have reasonably gone back to normal levels, there I think the frequencies have gone back to historical levels. So if you use that as a proxy, I think that might offer you some clues.

Yeah, yeah, that's really good to know, Pat. Thank you very much. I'll get back in the queue if I have more questions.

Thanks, Maggie. Thanks, Maggie.

Thank you. The next one is from Kate McShane from Goldman Sachs. Hi, good morning.

Good morning. Thanks for taking my question. I was wondering if we could better understand the quarter-to-date composition. I know it's only slightly better so far compared to Q1, but can you talk at all to specifically how it's being driven, if the U.S. is that much better and Canada has stayed similar or has gotten worse? And then my second question was just we heard a comment that you benefited from higher retail glass margins, and I wondered what was driving that.

I would say on the relative difference between Canada and the US, Canada, as many people know, Canada has been on an extraordinarily tight lockdown, and that has absolutely impacted miles driven and claims in Canada. So we're not seeing the reversal of that trend in Canada. In fact, as we communicated, we actually saw lower demand in Q1. than we saw in Q4 in Canada. So hopefully that addresses that question. On the glass, we've had good performance out of our auto glass business, our retail auto glass business, and it does have higher margins than our collision business. So the comment was really just positive performance out of our auto glass business with relatively higher margins.

Thank you.

Thanks, Kate.

Thanks, Kate.

Thank you. Our next question is from the line of Jonathan Lammers from BMO Capital Markets.

Good morning, Jonathan. Good morning. To clarify, have you continued to reopen repair centers in the Q2? And if so, is that being done at a

We really made the decision to reopen all US centers late last year, and that has now occurred. And because business is not yet at normal levels across all of our markets, it does increase fixed costs. So does that answer your question?

I think so. It sounds like everything was reopened at the end of Q4. In the U.S., Jonathan, in the U.S.

In the U.S., not in Canada, but in the U.S. we have converted all the production centers. When they were converted back to intake, they were converted back to production in the U.S., but in Canada we still have not done that completely.

Okay, thank you. And the thematic question, my understanding is that one way that Gerber and Boyd add value to the insurers is by handling some of the claims processing work. I'm reading that the insurers are increasingly deploying AI-based software solutions for claims processing. So my question is, does that help or hurt your ability to add value to the claims process versus the average repair center, this AI-based claims processing?

That's a good question. I think the insurers are really trying to move toward and more touchless claims, processing claims as seamlessly as they can. In a direct repair environment, we would be writing the estimate and submitting it to the insurer and the insurers on a growing basis would use AI tools to evaluate whether our estimates appear to be reasonable. And then if they're not, they may provide us feedback on that. We do have some both staff and technology we use to evaluate our estimates. And we review those before they get to our insurer. So it should put us in a position of having fewer estimates either being reviewed or fewer issues found when they are reviewed. So I think we still have an advantage in that area. Okay, thank you.

Thanks, Jonathan.

Thank you. The next one is from the line of Zachary Evershed from National Bank Financial. Your line is open.

Good morning, Zachary. Good morning, everyone. Good morning, Zach. Some great questions so far, so I'll go a little bit more out there, and feel free to punt on the question if you don't feel like answering. but would you care to comment on legislation in a few states now that's looking to require OEM repair procedures and how that might affect Boyd?

Sure. We follow OEM repair procedures today and all of our locations have access to OEM repair data and repair research is a key part of any repair. and as is following OE repair requirements. So it should have no impact on us. And so the legislation really doesn't change what we would do.

And if the like kind or quality clause ends up being a Trojan horse for OEM part sales, since you guys are a pass through on parts cost for repairs, that should have no impact either?

Well, yeah, I think that, and you're really referring to OE position statements where they say you need to use an OE part. Is that what you're referring to?

Or like kind of, yeah. Or like kind of, yeah.

I mean, some of the OEs are even taking a more aggressive position on used parts as not being appropriate for the repair. But I think the, you know, the aftermarket is protected. And I think in order to keep repair costs down, We need to continue to evaluate and use cost-effective quality alternative parts where it makes sense. So I think those are usually position statements by the OEs rather than mandates. And I think the mandates would be a little bit more difficult. So if we were forced to only use OE parts, then I think the risk is that it could increase repair costs and potentially impact total loss rates. but I think there will be a fair amount of market pressure to continue to have a healthy alternative part market.

Makes sense. Thanks very much. I'll turn it over.

Thanks, Zachary.

Thank you.

Thank you. We have a follow-up question from Steve Hansen from Raymond James. Please go ahead.

Yeah, thanks, guys. Just to follow up on some of the I guess news to changes to capital gains taxes that are coming down the pipe in the U.S. Is that entered to any of your discussions thus far? I guess ultimately trying to figure out here are there more sellers that are willing to contemplate getting off their facilities in the shorter term because of some potential changes to capital gains taxes and does that increase your pipeline at all or is it just a move point? Thanks.

Steve, it should. and again, obviously, sellers won't come and outright say that, but I think it should. And as you know, that legislation is still at the proposal stage and if it comes to pass, I think certainly it should have an impact. You'll have more motivated sellers in the shorter term.

Okay, but it's not really entered into any discussions as far. I guess, you know, you're not seeing any discernible change in your interest in selling thus far, so more steady course.

So we don't talk specific details, but our pipeline is very robust. So we can tell you that, but beyond that, we don't tell them what's motivating the sellers. We have a number of conversations, but we don't get into that level of disclosure.

Oh, thoughtful. Thanks, guys. Appreciate that. Thanks, Steve.

Thank you. Another question from Daryl Young from TD Securities.

Morning, gentlemen. Just one quick one from you. With regards to the technician shortage, has there been a net outflow of technicians during the pandemic from the industry, just individuals that may have been laid off in the early days and shifted into a new career path? And then I guess second to that, has the rate of poaching between large MSOs of technicians changed at all during the pandemic?

On the first question on the net outflow, I haven't seen any data on that. I do know, and most people have read about this, but the participation rate in the workforce is pretty low right now, and there are a lot of enhanced unemployment benefits in many states that don't even require that you're actively looking for employment to continue to collect unemployment. So I think that's making it difficult for employers to staff up. In the US, those benefits are scheduled, at least the federal portion of those benefits are scheduled to end in October. So that will probably help improve the participation rate in the workforce. And I just don't have any data on outflow from the industry. On the other question, I probably wouldn't comment on specific activities that happen amongst larger players. It's always been a very competitive environment for technicians. but I probably can't comment on that further. Okay, fair enough. Thanks very much, guys. Thank you.

Thank you. Your next question is from the line of Krista Fryson from CIBC.

Good morning, Krista. Hi, thanks for taking my question. Just to follow up on some of the previous questions, I understand that you've reopened all of your U.S. shops So at this point, are all the Canadian ones reopened as well?

No. No, as I mentioned, the business in Canada remains at relatively low levels, and it has not yet made sense to reopen all the facilities for full production.

Okay, and then just another question. Obviously, Canada has been underperforming due to some of the lockdowns, but in the States, where those states have fully reopened. Have you seen some shops return to pre-pandemic levels or is that still taking some time?

I would say if you look at individual shops, we would see that. There may even be markets that are nearing pre-pandemic levels. And then there are others where maybe restrictions remain more significant or infection rates are high that could be impacted more than others. and hopefully over the coming months as vaccination rates continue to increase and infection rates decrease, that'll balance out.

Great. Thank you. That's it for me.

Thanks, Krista. Thanks, Krista.

Thank you. We don't have any further questions at this time. Presenters, please continue.

Okay. Well, thank you, operator, and thank you all once again for joining our call today. and we look forward to reporting our second quarter results to you in August. Thanks and have a great day. Thanks everyone. Bye-bye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Have a great day.