Pizza Pizza Royalty Corp.

Thank you for standing by. And welcome to the Pizza Pizza Royalties Corp. earnings call for the fourth quarter of 2023. During the presentation, all participants will be in a lesson-only mode. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. As a reminder, this conference is being recorded on Wednesday, March 6, 2024. I will now turn the call over to Ms. Christine De Silva, CFO. Thank you. Please go ahead.

Good afternoon, everyone, and welcome to Pizza Pizza Royalty Corp's earnings call for the fourth quarter ended December 31st, 2023. Joining me on the call today is Pizza Pizza Limited's Chief Executive Officer, Paul Gard. Just a quick note, our discussion today will contain forward-looking statements that may involve risks relating to future events. Actual events may differ materially from projections discussed. All forward-looking statements should be considered in conjunction with the cautionary language in our earnings press release and the risk factors included in our annual information form. Please refer to the earnings press release and the MDNA in the investor relations section of our website for reconciliation and other disclosures related to the non-IFRS financial measures mentioned today. As a reminder, analysts are welcome to ask questions after the prepared remarks. portfolio managers, media, and shareholders can contact us after the call. I will now turn the call over to Paul Goddard to provide a business update.

Thank you, Christine, and welcome everyone to Pizza Pizza's fourth quarter investor conference call. Today, I will discuss our fourth quarter initiatives and results, and we'll share a brief outlook of what's ahead in 2024. Christine will then summarize our key financial highlights before the Q&A at the end. I am proud to say that 2023 was an exceptional year for our brands as we achieved 8.2% same-store sales growth and strengthened our presence across Canada by opening 45 restaurants. Because of the achievements in sales and network growth, the total royalty pool system sales were at a record high, crossing the $600 million threshold, and enabled our board to declare three dividend increases in 2023. And in the fourth quarter, we reported a combined 4% same-store sales growth, as Pizza Pizza restaurants reported 3.5% growth and Pizza 73 restaurants reported 7.3% growth. So growth at both brands was driven by increases in both guest traffic and the average customer chat. Getting into the details of the quarter, our positive momentum continued in the fourth quarter and was driven by several key factors. The strength and resiliency of our brands, supported by our marketing initiatives, our product innovation and diverse menu, our focus on customer experience, and growth in walk-in and pickup, non-traditional and special channels, as well as on third-party platforms. In terms of strength of the brand, Pizza Pizza's innovative marketing activities and partnerships continue to be recognized as industry best in class and are well-received by Canadians, driving strong top-of-mind visibility and engagement scores throughout the year. And this quarter was no different. The fourth quarter contains two of the busiest days for our restaurants, Halloween and New Year's Eve. And as we have done over the past 55 years, we help celebrate and own key moments and occasions for our loyal customers. And on that note, this Halloween past, we had some fun actually with it. We capitalized on our creamy garlic dipping sauce fandom. We really have a real sort of cult following for our creamy garlic sauce in particular. And we actually had our marketing team, they created a creamy garlic dip costume, which we then leveraged to successfully get broad attention on social media channels. to really highlight the creamy garlic sauce in conjunction with our usual strong Halloween occasion popularity, which worked really nicely. So that was a lot of fun. And that was, you know, a really fruitful brand-building initiative as an example of how we continually succeed at keeping our brands top of mind with customers in this competitive QSR landscape. And another way to keep our brands top of mind is through our many high-profile sponsorships and marketing activations through which we sell our delicious products. We are always looking for new and exciting opportunities with our partners, And during the quarter, we have two more exciting samples of this. It would be number one, through our Pizza Pizza sponsorship with the Toronto Maple Leafs, we are now the official helmet sponsor, and our Pizza Pizza logo can be clearly seen on the players' helmets for all home games. This provides literally millions of impressions to customers all across Canada every time they see a Leaf player in action or in a still photo. Number two, continuing on the hockey theme, through our Pizza 73 sponsorships with the Edmonton Oilers and Calgary Flames, we rolled out our Score a Pie promotion. And this promotion has been a massive success at our Pizza Pizza partner locations in the East. It builds brand awareness in a fun, compelling way and helps drive organic transactions as it requires customers to download our app when they see a big QR code in the stadium arena. So we're really excited to launch it at Q4 at Pizza 73 and get all those Alberta hockey fans excited as well. It's a great way to get new customers on board, new data acquisition and app downloads. So it's a real win-win-win. And also it keeps fans very excited as well in venues, which the team's like. In terms of food innovation, it also appears to be a key asset driving brand visibility and incremental sales. So aside from brand strength, the second cornerstone of our success in 2023 and always is our innovation. Innovation is not just about launching new products. It's being innovative about how you promote them and create buzz about those products or innovating the ways customers interact with you. And as we've seen, innovation can also take the form of reimagining existing products or even our packaging to make them more desirable. Earlier in the year, we added to our poutine category of Pizza Pizza and took those successes and rolled out poutine to the Pizza 73 brand as well, where we saw immediate success. We also introduced more snacking options for our customers through our Stromboli offerings, which nicely filled out our pizza menu, and at Pizza 73, created a new opportunity in the lunch day part. We didn't stop innovating in the fourth quarter. We continued to accelerate our product development with the launch of stuffed crust pizzas. This launch showed our ongoing food innovation success while also offering a check-building opportunity. And we're confident that no other large pizza QSR offers so many exciting types of crust, by the way, ranging from keto, cauliflower, gluten-free, gourmet thin, deep pan, and now stuffed crust, in addition to our regular crust pizza, which is delicious, of course. At Pizza 73, seeing the successes in the lunch and snack day part of Q3, the brand continued to develop their offerings with snack-sized panzerottis to complement the other items in the under $10 menu. We have seen significant growth in both these day parts as well as in our walk-in business. And while brand building campaigns and food innovations continue to find success driving visibility, relevance, and sales, we continue to invest in critical technology infrastructure to ensure we're successfully pushing orders for our websites, apps, and call center. During the year, we launched the new Pizza73 website and app and further enhanced our suite of digital ordering to allow for customer push notifications for PISA 73, and new in-app messaging as well. And all these things help piece by piece to just make our applications and our web more sticky. And we continue our investments in data analytics and technology to enhance our customer understanding and, in turn, our business results. Finally, turning to our continuous focus on customer experience, the QSR environment is competitive. Customers have a lot of choices out there in the marketplace. So we have to ensure that we are not just offering customers a buzz-worthy product or value offering, but rather an exceptional experience. And to achieve this, we've launched our A-level operations initiative that is focused on the overall customer experience and in-store restaurant operations. And this is really a never-ending continuous improvement initiative to always aim higher and strive for even stronger experiences for our customers that each and every order visit to our stores. So the overall strength of our foundation, brand strength, marketing messages, enhanced menu, innovations in technology, and continuous improvement in operations will continue to be our growth Key to our growth as we grow forward. Turning to restaurant network growth, we continue to have a large pipeline of franchisee leads that are eager to join the team. And we also have many of our current franchisees looking to further invest in their business and help drive our expansion too. So we always love seeing that. We ended the third quarter with a total of 774 locations, of which 672 were Pizza Pizzas and 102 were Pizza 73. The fourth quarter was also highlighted with 12 new store openings, seven traditional and five non-traditional pizza restaurants, and one non-traditional pizza restaurant was closed. Over the year, our restaurant openings continued our national expansion as we opened in British Columbia, Ontario, Atlantic Canada, and Quebec. Construction times, permitting, and supply chain seem to now be working at a more normal pace, which is excellent to see as well. Beyond Canada, we continue working with our Mexican partners on the next set of restaurant openings as well. We are happy with the progress of the first stores and the level they're achieving and are excited about the long-term potential of this high-consuming, high-pizza-consuming market. But we're certainly going to be judicious and purposeful in how and where we expand our new footprint there. So stay tuned there, and we'll have more store openings this year. Now on to Outlook and some closing remarks. As we look to 2024, we feel we're well-positioned to continue driving our business executing on our plans of innovation, marketing initiatives, digital investments, and delivering high-quality, great value, and delicious hot and fresh food to our customers. Lastly, thank you to our team members and restaurant owner-operators for your commitment and dedication to our customers and our brands, and for being key members in our success. Thank you for listening, and I'll now ask Christine to provide a brief financial update.

Thanks, Paul. Before looking at the results for the quarter, I want to spend a few moments reviewing the structure for any new investors on the call. Pizza Pizza Royalty Corp. indirectly owns the Pizza Pizza and Pizza 73 brands and trademarks through its subsidiary Pizza Pizza Partnership. This partnership has two partners, Pizza Pizza Royalty Corp., the public company, and Pizza Pizza Limited, the private operating company. The Royalty Corp. is a top-line restaurant royalty corp. that earns a monthly royalty through a lease agreement with Pizza Pizza. In exchange for the use of the Pizza Pizza and Pizza 73 trademarks, in restaurant operations, Pizza Pizza Limited pays the partnership a monthly royalty calculated as a percentage of top-line sales. Growth in the court is derived from increases in same-store sales and by adding new restaurants to the royalty pool each year. The royalty pool is adjusted at the beginning of each year by adding new restaurants opened in the previous year, less any restaurants that have been closed. For fiscal 2023, the royalty pool was adjusted on January 1st of 2023 to include 644 pizza pizza restaurants and 99 pizza 73 restaurants. So, on to the results for the quarter. As Paul mentioned, same-store sales growth, a key driver of yield for shareholders, increased 4% for the quarter. Pizza pizza restaurants reported 3.5%, and pizza 73 restaurants reported 7.3%. And as Paul mentioned, both brands saw an increase in customer traffic as well as the average ticket. The combination of restaurants being added to the royalty pool and the same store sales resulted in an increase in overall royalty pool system sales and the corresponding royalty income. Royalty pool system sales for the quarter increased 7% to $163.9 million from $153.2 million in the same quarter last year. By grant, sales from the 644 Pizza Pizza restaurant increased 6.8% to $141.1 million for the quarter, and sales from the 99 Pizza 73 restaurants increased 8.5% to $22.9 million for the quarter. For the year, loyalty pool sales increased 10.6% to $628.4 million from $568.3 million in 2022. The partnership's royalty income earned as a percentage of royalty pool sales increased 7.1% to 10.5 million for the quarter and increased 10.4% to 40.2 million for the year. This is a record level of royalty pool income at the royalty clerk. The partnership also earned interest income on its cash and its short-term investments. For the year, the partnership earned 378,000 of interest income. Now turning to partnership expenses, administrative expenses include listing costs as well as director, legal, and auditor fees. For the quarter, admin expenses were $229,000 and $643,000 for the year. In addition to administrative expenses, the partnership paid interest expense on its $47 million credit facility. Interest paid in the quarter was $323,000 and for the year was $1.3 million. The partnership is currently making interest-only payments on the non-revolving credit facility. The interest rate is locked through April 2025 using a swap agreement that has fixed the rate at a banker's acceptance of 1.81% plus a credit spread for a combined rate of 2.685%. As the credit facility matures in April 2025, the corp will be looking at renewals later this year. So after paying partnerships After the partnership receives royalty income and interest income and pays administrative and interest expense, the resulting net cash is available for distribution to its two partners based on their ownership percentage. The royalty corp shares in 76.1% of partnership distribution, pays taxes on its share of those earnings, and any residual cash is available for distribution as dividends to the company shareholders. During the quarter, the Board of Directors increased the monthly dividends for the third time in 2023. The most recent dividend increase in November of 2023 brings the monthly dividends to 7.75 cents per share. The company declared shareholder dividends of 5.7 million in the current quarter, or 23 cents per share, as compared to 5.1 million, or 20.75 cents per share in 2022. And the payout ratio for the Q4 was 96%. For the year, the company declared shareholder dividends of 21.8 million, or 88.75 cents per share, compared to 19.6 million, or 79.75 cents per share. The resulting payout ratio for the year was 97%. The company targets a payout ratio at or near 100% on an annualized basis. The company's working capital reserve increased $700,000 during the year and was $8.2 million on December 31st. So with the three dividend increases in 2023, the company believes that there is sufficient cash flow to service the company's obligations as they will fall due. The company will continue to closely monitor sales and royalty income to determine when additional dividend adjustments may be warranted. That concludes our financial overview. I'd like to turn the call back to the operator to pull up a question.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your telephone keypad. Should you wish to cancel your request, please press star followed by the two. If you're using a speakerphone, please leave the headset before pressing any keys. And your first question comes from the line of Derek Lazard from TD Securities. Please go ahead.

Good afternoon. This is Cheryl standing for Derek. Thanks for taking our questions, and congratulations on finishing the year on a strong note. Thank you. So I wanted to first start by asking about the solid print on same-source sales growth. Just wondering if you could help us break it down in terms of pricing and volume.

Yeah, I think just generally speaking, we're up in check and traffic. So I think at both brands, we don't typically break it down too granularly just because of competitive reasons. But we think we've generally found the balance quite well. We have taken some price selectively last year. We tried to monitor things like food costs for our franchisees carefully. But we also want to make sure that we have compelling value offerings. that really resonate. And we think, we really have an eye on traffic and our priority is to drive volume. I mean, more than anything, we don't wanna be relying on price increases to get our revenues up. We really wanna get those and things like our fixed price offering that have really gained a lot of media attention. I think that's been out there now a while. We've got a new TV ad that came out recently as well, that just bolsters that fixed price value message. So that's a fixed price for a whole year, but that's only on one special. It happens to be a very popular special as one example. So we've been, you know, careful, judicious, but I think finding the balance of getting, you know, the right balance of price and volume so we can keep both traffic and check positive.

Okay, that's very helpful. And just zooming in on PISA 73, the number is particularly strong there. Could you highlight any of the drivers there? Is there anything besides price and volume that you think contributed to the strong performance there? And do you think you gained back the lost shares in Alberta in 2022?

Well, I think definitely our website and app revamp helped as well. I think we've been really happy with that. And I think recently the increased activity with the score pie and things like that. It's early days, but it's very encouraging. We've also seen things like catering volumes come back, and that's really at both brands. And those are large catering orders that we have, you know, we've always been very strong with that, but it's been nice with the resurgence of schools and businesses ordering in again as well, both brands. So that's been another way to drive volume. And I think third-party growth, we prefer organic growth, but that's also been been helpful, frankly, adding on some additional third-party channels that has really helped that aspect. And we have really also been putting quite a big effort into really kind of breathing some new life into that brand out there. We've got some more marketing resources on the ground based in Alberta that know Alberta very well. They still ultimately report up to our marketing team here in Toronto, but they really are, I think, really starting to get lots of sort of multiple base hits, if you like, in terms of presenting the brand in a fresher, new light. and also store renovations. We still have many to renovate out there, but we've also renovated a lot of stores. So people are starting to see a fresher, kind of more sassy, more fresh image from Pizza 73 as well. And so we are trying to sort of borrow from what worked well at Pizza Pizza and make sure that we also capitalize out there using some similar initiatives and also some ones unique to Pizza 73 out there.

To add on to what Paul said, we've also introduced a lot of new snackable, craveable items to attract the different day parts, like a snack day part versus just being heavy into the dinner. So we're trying to move people throughout the course of the day. So that's actually a new piece of business for us. We introduced snacker boxes, so chicken with french fries or poutine. We also, with the new website that Paul was talking about, we have a whole new piece of it to create your own menu. So customers are now able to go in and order a single pizza where the Pizza 73 brand used to be heavily focused on two pizzas or pizza and wings, like, larger orders. We're trying to target every customer, similar to what we do at Pizza Pizza, where there's an option at any price point for any customer that wants to come in, and we're trying to take a lot of the successes we had, as Paul said, at Pizza Pizza, and mirror them over at Pizza 73. I see.

That's a very helpful color. And in terms of consumer behavior, just wondering if there's any color you would add on what you saw in the quarter in terms of consumer behavior, whether that's trade down, order pattern, traffic, anything like that.

So we have a lot of different channels through which customers can order. And what we've seen over the course of the last few years is that our pickup and walk-in business has definitely seen a lot of growth. So we're seeing that customer behavior shift to walking in and picking up, whether that's a sign of the economics that they're living in where they want to save on delivery. But we have seen that as a slight change in customer behavior. But because we have locations all across GTA in any suburb, we're available for people to come in and pick up. So we're positioned well for that change in customer behavior.

Yeah, and I think just to add to that, Cheryl, I mean, I think Christine's bang on with that. I think if you look at our menu, I mean, it is pretty diverse. So we can cater to quite a lot of different people. There are some people that are much more health-oriented, for instance, and they honestly are not as concerned with the check size, for instance. And some of our loyalty customers even seem to be less sensitive as well. They'll bundle more and add more. So we like that, and we think we can actually kind of double down on that even more. But there are many of our core groups that are really, really value-oriented, and they might be more inclined to just walk in or pick up, save on delivery fee, They may have a bit of third-party fatigue from ordering from other restaurants as well and just really want to be saving on that. So I think we've got a lot of arrows in our quiver depending on who you are, how you want to come to us sort of any time of day, any channel. And we can pivot pretty quickly as we've done before depending on economic swings, you know, to emphasize value more in our overall menu or less depending on what we feel. And we certainly do, you know, we're reading the macroeconomic data as well. I mean, I think there's a lot of people that are still definitely hurting in Canada, right? We're talking about people getting mortgage renewals. There's a lot of people that are challenged on disposable income. So, you know, we anticipate potentially even more value, I would say. But, you know, we'll see. We would also like to extract, you know, more price when we can from those demographics that aren't as sensitive. So we think with, you know, the ability to leverage our data analytics and things more and more as well, we can make more informed decisions on each of those things.

Okay, that's very helpful. And I'm curious for your holiday performance, could you talk about a performance over that period, specifically around the new year? I think that's typically a very busy season for you guys. And how did traffic and tickets perform compared to prior years and pre-pandemic?

Yeah, we usually don't go within quarter, you know, just, you know, for obvious reasons. But I know that generally it's been very strong. We had the crave combo. We were happy with, I think, you know, New Year's is a big day for us. Christmas Eve is a big day for us and other days. So, I mean, I don't know if Christine can add to that or not, but it was generally pretty strong.

Yes, it was, yes, very strong. We didn't see any decrease in customer traffic or transactions during that time. So, again, two of the busiest days were this quarter, Halloween and New Year, and those continue to be very strong days for us.

Okay, that's great to hear. And here's how you feel about the competitive environment right now. I think some of your competitors are like putting out promo campaigns where they offer free pizzas for members. And how do you think the promotional environment compares to pre-pandemic at this point?

Sorry, compared to the last thing you said, Cheryl, how it compares to what?

Pre-pandemic level, the promotional environment.

Okay. Yeah, that's a serious one. a lifetime ago now it seems, but, uh, I would say definitely you are seeing some, you're correct. I think some pretty aggressive behavior with, um, some competitors, um, which, you know, whether it's some sort of stream discounting and things like that, um, which is a sign of the times, I think. So I think, um, as I alluded to, I think there are people are looking for value. Uh, and I, and I think that we're sort of aware of that and there might be more of that activity, but we do function pretty well in that environment as well. Um, so I think that's, uh, we know how to deal with that and, um, You know, we hope to be confident with our specials mixes, for instance, both brands. The Create Your Own, as Christine said, is a great opportunity to get, you know, more, you know, customized products as well. And if you can hook people into our loyalty, which we've done really well at Pizza Pizza, I mean, they keep coming back and back, and they'll add on more to their basket as well. So we think there's, you know, others also have loyalty programs, but we like ours. We've got a really big installed base, and we keep tweaking it and enhancing it behind the scenes, and we're able to mine the data more and more as well and learn every time. And things like in-app push notifications and customized messaging, more frequent pushing of email, et cetera, seems to engage those people more and more. So, you know, the best in the game are also quite good at this, but we always think how do we out-innovate those folks and how can we do something that's more exciting, more compelling. And we like where the brand image is right now with Everyone Deserves Pizza. I think that's Everyone is seeing Pizza Pizza in a new light in recent years, and we are, I think, most people. Pizza 73, we're also trying to take some of those lessons, as we tried to allude to, and make sure we refresh that brand as well and keep it sort of hot and fresh and current.

Okay, that's great. And I think some provinces, including Ontario, have increased their minimum wage late last year. and there seems to be more to come this year. Given this and considering where the commodity costs are, how do you feel about your pricing going into 2024?

Well, I think, you know, we definitely try and stay very current in terms of economic fundamentals. I mean, things like minimum wage are definitely always a concern as it gets pushed up and up, and so we always want to be really tight on our labor. And a lot of that is, you know, when we talk about something like the A-level operations is trying to optimize our labor, make sure stores are really managing their resources really well so that you can hopefully at least keep that in check. And to the extent that we keep pushing our digital ordering for, you know, even for pickup orders, not just delivery orders, we can also minimize the amount of time taken by, you know, human labor in stores as well. So if the store can automate more of its tasks or you can offload that, at least we can operate our restaurants with a smaller crew than some other folks might that don't have the advantage of as much technology as we have. And we're still looking at ways, by the way, with our technology partner that we use, Captain AI, for the GPS order tracking that gives customers convenience how to see the orders on the map. But that also helps our franchisees manage and soon sort of auto dispatch using that technology even more. And so we're looking at ways to eliminate manual processes in the stores, leveraging technology, get hopefully more orders out the door per hour, more deliveries per driver per hour, and so on, so that the economic model is better, essentially more orders, more tips for our drivers, even in the face of increasing wage. So that is a key concern, but I think coming back to pricing, we think we found the right balance there right now. We can tweak it if necessary, but we feel pretty good overall in our whole basket that we're getting check and traffic both increasing. So I think so far we seem to be doing that pretty well.

Okay, that's great to hear. And in terms of product innovation, are there any new menu products that you're anticipating for the year or early 2024?

We certainly have a continuous onus on ourselves and our R&T team, our culinary team to keep coming up with things. And they always have some exciting new ones. Not everything passes the test and the scrutiny, but there's certainly a lot of creativity always. You'll definitely see some more innovations for us on the food side, just like you do on the tech side as well. So, you know, we have had quite a state of successes this last year with stromboli, stuffed crust, poutine. We've got curly fries, poutine now in Eastern Canada as well. You know, there's lots of opportunities, but I don't want to give our competitors too much of a heads up on what we have cooking.

Okay, that's helpful. And I think last quarter you noted some higher construction costs and higher cost of financing for new franchisees. Just curious what your expectations are on network expansion in 2024 and how you feel about your pipeline now.

Okay, I think we overall, we feel good about our pipeline. You know, we think that, you know, it's hard to get it always spread out evenly throughout the year, let's say. You know, the spring-summer always seemed to be really strong. But we do feel good. We've got a good pipeline of interest as well. Maybe Christine can comment a little on the construction cost side of things.

Yeah, we've seen this. We did see costs increase initially during COVID.

There was a lot of delays. There was a lot of higher cost of getting things in. We have seen that stabilizing now over the course of the year, less delays. But restaurant bills are still expensive, but we do have a really strong pipeline of franchisees. And because we manage those construction costs in-house, we're able to help the franchisees ensure that they're getting the best value for their building. And then in terms of where we see it growing, we typically expect to grow our traditional network by 3 to 4% every year.

Okay. That's very helpful. And maybe last one from me. I think in Q2, you noted that you implemented visual order tracking. I'm just curious if there's any insight as to how that's been driving performance. Anything you highlight there or any other major initiatives that you think that you're expecting to drive performance going forward?

Yeah, that one, I think that – In terms of repeat orders, I mean, a lot of those customers are in our loyalty program, not all of them, but we certainly, that's really another opportunity to contact the customer via text, email, or in-app itself with the visual order tracking. So we just find people naturally engage more if you kind of ask them or send them a link. And so that does bear some fruit. And I think in terms of ongoing innovation, we are working with our in-house tech team and that same partner, as I was alluding to a few minutes ago, in terms of just more automation at the store level that we think can help the store operation. So, you know, that can result in things like faster delivery times and we have been working on that. We always keep that sort of as a metric as well that we hold ourselves to is how do we get our food faster to customers so that they're therefore happier, it's hotter, it's fresher and it's also a nice experience knowing where your order is which really no one else or at least no other national pizza chain I'm aware of in Canada is doing that. So, it just creates stickiness and it creates a little more loyalty and we'll continue to sort of enhance features on our apps and web and even our customer contact center, we're always thinking, how can we get the orders done faster? How can we be more clear and more helpful to customers? Just make it a more pleasant experience so that no matter how you're coming to us by phone or using our technology or physical visit, how are we making that just a more pleasurable experience, right? We've always said our mission is to make every single visit with us or order with us a really pleasant one so you keep coming back. And so it's a really combination of a lot of things. I think we always have that own us on our ops team, our marketing team, our IT team, et cetera, just to make sure we are innovating, how we make it better than it was last year. And so there's a lot of different aspects, I would say. There's no major new one I would say want to talk about right now, but as we go through the year, I'm sure we'll have more examples to show of how we said we were going to do that and how we did deliver.

Okay, that's very helpful. Those are all my questions. Thanks for taking our questions.

Thanks, Cheryl. Okay, thanks very much, Cheryl.

Thank you once again. Should you wish to ask a question, please press star then the number one on your telephone keypad. There are no further questions at this time. Mr. Silva, please proceed.

Thank you everyone for joining us on the call this afternoon. If you have any further questions after the call, please contact us. Our information is on the earnings release. Thank you and have a great evening.

Thank you. Ladies and gentlemen, let us conclude our conference for today. Thank you all for participating. You may all disconnect. Goodbye.