Carrols Restaurant Group, Inc. (NASDAQ:TAST) Q2 2023 Earnings Call Transcript

Carrols Restaurant Group, Inc. (NASDAQ:TAST) Q2 2023 Earnings Call Transcript August 10, 2023

Carrols Restaurant Group, Inc. beats earnings expectations. Reported EPS is $0.27, expectations were $0.02.

Operator: Ladies and gentlemen, welcome to the Carrols Restaurant Group, Inc.’s Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. following the presentation, we will conduct a question-and-answer session. Instructions on how to ask a question will be given at that time. I would like to remind everyone that this conference call is being recorded today, Thursday, August 10, 2023 at 8:30 a.m. Eastern Time and will be available for replay. I will now turn the conference over to Gretta Miles, Carrols’ Controller. Please go ahead.

Gretta Miles: Thank you, Operator, and good morning, everyone. By now you should have access to our earnings announcement released earlier today and our earnings presentation that are both available on our website at www.carrols.com under the Investor Relations section. Before we begin our remarks, I would like to remind everyone that our discussion, including answers to questions posed to management, may include forward-looking statements or comments with respect to our strategies, intentions or plans and the future direction of revenues, input costs or other aspects pertaining to our business. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed on them. We also refer you to our filings with the SEC for more details, both with respect to forward-looking statements, as well as risks that could impact our business and results.

During today’s call, we will discuss certain non-GAAP measures that we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with Generally Accepted Accounting Principles and a reconciliation to comparable GAAP measures is available with our earnings release. With that, I will now turn the call over to our President and CEO, Deborah Derby.

Deborah Derby: Thank you, Gretta, and good morning, everyone. I’m delighted to be speaking with you following my first full quarter as Carrols President and CEO and what a great quarter it has been, as you will soon hear. My focus over the past few months has been threefold; first, spending time in our restaurants. This included store visits in various regions with our Chief Restaurant Officer, Joe Hoffman and his skilled leadership team, as well as with Carrols retired CEO, Dan Accordino, so that I could benefit from their extensive QSR experience and accelerate my own learning curve. In addition, I have been training and working in our Burger King restaurants, which allowed me to personally interact with our customers and observe firsthand what we expect of our restaurant team members.

Second, working with the senior leadership team to identify and prioritize key initiatives to drive our business in 2024 and beyond, a couple of which I will elaborate on further later in our earnings call. And finally, along with the rest of the Carrols team collaborating with our Burger King counterparts to ensure we are aligned on key strategic initiatives and a vision for the future. I believe that our relationship with Burger King has never been stronger and I’m excited about where we can take this brand together. Turning to our results. In the second quarter, we had one of the best quarters in the company’s 63-year history as we achieved $485.2 million of sales, delivered adjusted EBITDA of $44.3 million, generated free cash flow of $37.9 million and reduced our net leverage ratio of 3.5 turns to 3.6 times, as we continue to strengthen our balance sheet and pursue the organic growth opportunities we have across our portfolio.

One of the most significant accomplishments of the quarter is that our Burger King restaurants are well on their way to achieving the highest possible operator rating under the chain-wide evaluation system used by our franchisor. This is a testament to our field management teams operating with an owner mentality and local market mindset despite the Carrols system being more than 3 times bigger than the next largest Burger King franchisee. I want to thank our over 24,000 Carrols employees for this accomplishment without their standing work each and every day, these results wouldn’t have been possible. In addition, during the quarter, we saw the dual benefit of driving demand through operational improvements, while also becoming more cost efficient on labor.

Operationally, we improved our speed of service by 6% versus the same period last year. More importantly, our customers are noticing this progress evidenced by an over 30% improvement in our guest satisfaction scores at our Burger King restaurants. All in all, we continue to believe that guest satisfaction is a key driver of repeat visits and incremental traffic growth. On the efficiency front, we continue to see productivity improvements in labor with inflation decelerating to mid-single digits, lower manager and hourly turnover rates approaching pre-pandemic levels and enhanced operational efficiency from our team members. As a result, we were able to increase hours of operation by over 3%, while reducing labor hours by 3.5%. We are also encouraged by our recent performance at Popeyes, where we have seen strong sales and traffic, as well as improved margin performance while increasing customer satisfaction.

Looking ahead, we want to not only replicate but accelerate our progress while leveraging our size and scale to impact both our top and bottomlines. One of our new initiatives is an enhanced labor management system, which will allow us to build upon the improvements we’ve already seen in labor productivity. This initiative will include an improved labor model formula, as well as more sophisticated forecasting and scheduling capabilities. Our efforts over the next several months will be focused on refining the labor model and testing it in our restaurants. We anticipate realizing the financial benefits of the project in 2024. The second area of attention is around growing traffic and becoming even more customer obsessed. In particular, through the investments we have made in our Burger King restaurants, such as our customizable outdoor and indoor digital menu boards, we have an opportunity to leverage our size and scale to drive traffic through locally relevant offers that target distinct customer occasions and complement the national marketing initiatives from our franchisor.

We are currently testing these offers in over 10 markets and initial results have demonstrated that we can drive incremental traffic and increase the average check in dayparts where we see an opportunity for increased business. We will continue to test and leverage the learnings from these early pilots to develop a more robust local marketing strategy in 2024. Before I turn the call over to Tony, I’d like to touch on some of our thoughts for the remainder of the year. First, we continue to be optimistic about the improving traffic trends we are seeing at our restaurants. We credit this to the combined impact of our work to enhance the guest experience and increased hours of operation. In particular, at our Burger King restaurants, we believe traffic has also benefited from the refreshes we have made to our restaurants, as well as the equipment upgrades we are making under Burger King’s Royal Reset initiative and the incremental advertising investment under their Reclaim the Flame program.

Much of this spend is still coming in the quarters ahead and we believe should continue to be a traffic driver. Second, going forward, we intend to be cautious on our incremental pricing actions as inflationary pressures continue to abate and the direction of the economy remains uncertain. We anticipate a year-over-year benefit of mid-single digits on average check improvements by the end of 2023 relative to the low-teens average check increase we saw in the second quarter. This more conservative approach to menu pricing is expected to allow us to maintain our positive value gap relative to peers and continue providing customers with compelling value while offsetting inflation and protecting our margin structure. Finally, our top priority remains fortifying our balance sheet, reducing our net debt and staying the course on organic growth.

That said, given the improved results we are seeing and our focus on organic growth, we will deploy some additional capital to accelerate certain high ROI remodel projects that were previously slated to begin in 2024. As a result, and with the benefit of improved clarity on our balance of the year spending and project cadence, we now expect capital expenditures for 2023 to be between $45 million and $50 million, a slight increase from our earlier plan. This level of capital spending allows us to further avail ourselves of contributions from Burger King and should enhance our portfolio through high return projects, while still generating substantial free cash flow for the year. In closing, it was an outstanding quarter results for us and a pleasure working with the talented corporate field and restaurant operations team at Carrols, though, I have experienced and learned during the first few months of my tenure has only reinforced my initial impressions and reasons for joining Carrols, which is that it is a great company with immense potential.

I look forward to building upon the tremendous momentum created in the first half of the year. With that, I will now pass the call over to our Chief Financial Officer and Treasurer, Tony Hull, for a more detailed discussion of our financial results.

Tony Hull: Thank you, Deb, and good morning, everyone. Restaurant sales in the second quarter increased 9.8% to $485.2 million, compared to $441.9 million in the second quarter of 2022. For the quarter, comparable restaurant sales at our Burger King restaurants increased 10.4%, comprised of a 12.7% increase in average check, which was partially offset by a 2% decline in traffic. Comparable restaurant sales at our Popeyes restaurants increased 11.6%, comprised of a 7.4% increase in average check and a 3.9% increase in traffic. Turning to expenses. Our cost of food, beverage and packaging improved 350 basis points to 28.2% of restaurant sales as commodity inflation of approximately 3.5% was more than offset by higher average check.

Beef was $2.83 per pound during the quarter, which was a 1% increase from the same period last year. From where we stand today, we expect commodity inflation to be in the low-to-mid single digits for the remainder of 2023. Restaurant labor expense decreased 180 basis points to 32% of restaurant sales as labor inflation was more than offset by labor efficiencies and higher average check. Hourly wage rates for our team members increased by 4.4% during the quarter compared to the prior year period. As we look ahead, we expect wage inflation in the mid-single digits for the remainder of 2023. Other restaurant operating expense decreased 40 basis points to 15.2% of sales. Rent expense decreased 50 basis points year-over-year as a percentage of sales compared to the prior year period, primarily from the benefit of higher sales on fixed rental agreements.

The 620 basis point improvement in our restaurant level profit margin to 14% was driven by our strong topline results and our continued focus on operational excellence, as well as the moderation of inflation on our input costs. Looking ahead, we’re currently seeing an expected sequential moderation in comp sales growth due to a reduced benefit from pricing actions and lapping reductions in discounting implemented late last year, partially offset by improved traffic trends. Accordingly, we currently expect moderation in third quarter restaurant level profit margins from what we’ve seen in the first half of this year. General and administrative expenses as a percentage of sales increased 40 basis points year-over-year due to incentive compensation accruals that were absent in the prior year period.

Excluding non-recurring costs, as well as stock compensation expense and including the impact of higher incentive compensation accruals relative to last year, we anticipate 2023 G&A expense of approximately $23 million to $24 million per quarter. For the second quarter, our net income was $15 million or $0.23 per diluted share, compared to the net loss of $26.5 million or $0.52 per diluted share in the prior year period. On an adjusted basis, second quarter net income was $17 million or $0.27 per diluted share, compared to an adjusted net loss of $8.9 million or $0.18 per diluted share in the prior year period. Free cash flow generated in the second quarter was $37.9 million, a significant improvement, compared to the negative free cash flow of $5.7 million in the same period last year.

At the end of the second quarter, cash and cash equivalents totaled $40.9 million and long-term debt, including the current portion in finance lease liabilities was $476.8 million. Our overall interest rate on our debt this past quarter was 5.7%, as approximately 90% of our debt is fixed. As of quarter end, there were no revolver borrowings and $10.5 million of outstanding letters of credit, leaving us with $204.5 million of availability under our revolver. In addition, we have no covenants applicable on our senior credit facilities at this time. This concludes our prepared remarks. We’d like to thank you for your interest in Carrols. Deb, Gretta and I are now happy to answer any questions that you may have. Operator, please open the line for questions.

Q&A Session

Operator: Thank you. [Operator Instructions] Our first question comes from the line of Jeremy Hamblin with Craig-Hallum.

Jeremy Hamblin: Thanks and congrats on the strong results. I wanted to ask about the menu pricing that you’re carrying here for Q3, the expected menu pricing? And also just to see if you could provide some color on quarter-to-date trends, compares get a little bit tougher here in the back half of the year, and as you noted, menu pricing is going to fall some. So I wanted to see if you could provide a little color on what you’ve seen thus far?

Tony Hull: Sure. Excuse me, on the menu pricing, we were about 9% menu price increase in Q2 and that — those numbers are expected to come down to the mid-single-digit percent increases for the back half of the year, a little bit stronger in Q3 than Q4, but we are lapping some pretty sizable menu price increases that we took in September. But just on the other side of that equation, we just took a 1.4% increase last week at Burger King and we’re taking about the same amount for Popeyes this week. So that — the price increasing ability has become really surgical, and as inflation comes down, we’re being more cautious and conservative with menu price increases. So at this point, that’s kind of where we are for the year on price increase — for menu price increases and we’ll see how the — we’ll obviously be agile and change if we see a change in inflation, but that’s sort of where we are.

And in terms of quarter-to-date trends, I think, the — what we said in the call was really where we expect a decline, but still very solid comps in the back half of the year with a little — in the mid-single-digit range, but we’re very encouraged with what we’re seeing in traffic, and obviously, we know that there’s going to be some softening on price. But the question really is how much of those two things offset each other. We don’t have that, but we still think the back half is going to be solid at mid-single digits with, again, a little more strength in the Q3 versus Q4. But again, that could all change. We’ll update you on the next call, obviously, when we have the Q3 under our belt.

Jeremy Hamblin: More specifically, were you able to see — you noted that your relative value and pricing is improving. Has that resulted in getting that traffic to turn positive yet?

Deborah Derby: Yeah. I’ll take that one. Obviously, traffic continues to be a primary area of focus since it’s essential to the long-term health of the brand. We were still marginally negative this quarter, but we saw continued stabilization from the trends that we experienced last year. And I’d say that, that is obviously an area of continuing focus and it’s — we’re looking at the things that we can impact, such as guest service, operational excellence and local value initiatives, which we believe will continue to move the needle in the right direction. We’re also benefiting from the Fuel the Flame and Royal Reset initiatives that they have at Burger King and we think that with that additional advertising spend layer on top of our restaurant level efforts that will continue to improve on traffic and that, yeah, down the road, we’ll move into positive territory.

Jeremy Hamblin: Great. Thanks for color. And then just you noted a new major labor management system and one that does test and that you believe we’ll be ready to roll out in full for 2024. Is there any more color that you can share on that and what you think the potential, because you noted that you’d see financial benefit you thought in 2024. Any sense on kind of magnitude of benefit from that initiative and just a little bit more…

Deborah Derby: It’s too early…

Jeremy Hamblin: …behind it?

Deborah Derby: I’m sorry, Jeremy, I didn’t mean to cut you off. It’s too early to comment on the financial benefits that we’re expecting to see, because this is really in the preliminary stages. But I will say that the new labor formula is going to incorporate traffic trends in addition to sales to better forecast our labor needs and it’s going to use a much more robust historical data set, which will incorporate seasonality and holidays. And we believe that this enhancement of the methodology will ensure more predictability and staffing for both our restaurant crew and managers, and that this greater efficiency will lead to a better guest and employee experience in addition to the labor savings. But as I mentioned, we are just refining the labor model at this point in time with the labor formula.

So it’s just premature for me to comment on what we anticipate the benefits to see. But that is certainly something we will provide an update on in future quarters.

Jeremy Hamblin: Got it. Last one really quick here. Free cash flow was super impressive in the quarter at $38 million, more than 10% free cash flow yield just in the quarter. In terms — you noted that you’re going to increase your CapEx, I think, prior guide with $40 million or so taking that up a little bit. But in terms of — it seems like you would project to generate pretty nice free cash flow again here in Q3. priorities and use of that free cash flow generation, is it on continuing to pay down a bit more debt or are there other projects that you would earmark that for?

Deborah Derby: So I think we’re going to be very selective in what we do. As Tony mentioned, our priority is going to be focused on stabilizing kind of the balance sheet, and like you said, focusing on the net debt leverage. But we’re also going to be, where there’s an opportunity for high return projects, we’re going to be very interested in investing in those. And as we made in the comment in our remarks, we are going to move forward certain projects that we had slated for 2024 that are high return projects and now that we have the flexibility with the additional cash flow to start them earlier, we’ll take advantage of that. In some cases, it also allows us to avail ourselves of additional contributions from Burger King, which then, of course, only further enhances the return.

Gretta Miles: And Jeremy, I’ll just add…

Jeremy Hamblin: Kay.

Gretta Miles: … a couple of timing things to note for the third — the second quarter, $38 million. We have our second quarter interest payment on our bonds of close to $9 million that will hit in Q3 and hit in Q2 last year. And then we also have a really backloaded CapEx for the — for 2023. Our projects have delayed into the back half of this year for 2023. So those are a couple of other things that will impact your free cash flow number.

Jeremy Hamblin: Great. Thanks. Congratulations and best wishes for continued success.

Deborah Derby: Thanks, Jeremy.

Operator: Thank you. Our next question comes from the line of Joshua Long with Stephens Inc. Please go ahead.

Joshua Long: Great. Thanks for taking my question. I was curious if you could talk a little bit more about the store level operational execution. It’s been very strong here in the first half of the year. Maybe any updates you have on labor, your labor pipeline, turnover at the restaurant level, especially if you just dial in operational focus here as we think back to the second half of the year?

Deborah Derby: Yeah. Absolutely, Josh. I would say the improvements that we’ve seen in operations are one of the things that the team is most proud of during this first half of the year, because it’s been a significant movement. I think what’s really exciting is that we’ve actually seen improvement in every component of the score that we get from our franchisors. So whether it’s guest satisfaction, window time, training, retention, brand standards, all of them moved in a positive direction. So it’s really across all brands, which I think is paying off in terms of the reaction that we’re getting from our guests. In terms of the turnover, all these things generally move together. It’s kind of a synergy you get.

And I think from the operational pediments we’ve been able to make, we’ve been able to spend more time with the training of new associates been able to staff up. As I mentioned in my remarks, the turnover levels are actually approaching closer to what they were pre-COVID and I think that the quality of the candidates that we’re seeing in the pipeline has also improved. So that’s kind of all come together to stabilize the staffing levels at the store and to yield, like I said, improved guest satisfaction results from it.

Joshua Long: That’s very helpful. Thank you. And when we think about comps moderating in the second half of the year, it definitely makes sense as you maybe have some pricing that normalizes and maybe offset or supported by some improving traffic from the initiatives that you discussed. Can you talk about the restaurant level margin and the outlook there? I mean despite ongoing inflation at the — particularly on beef on the food cost line, you’ve done an admirable job maintaining margins there, similarly, on the labor side. So just as you think about comps moderating and maybe tie that together with restaurant level margins for the second half, how are you feeling what are you looking at and kind of where do you think the major pivot points are?

Tony Hull: Well, the major pivot point is going to be how traffic moves. So I think, but we’re really encouraged by what we’re seeing on that front. But, again, it’s no matter how the level of success is going to be, it’s going to be a high mountain decline to offset the some of the menu price lapping and certainly the discount reduction lapping that we’re going to see in the third quarter and fourth quarter. But having said that, we think margins in the back half are going to approach what we saw in the first quarter, less than what we saw in the second quarter. That was obviously exceptional. But we think they’ll approach sort of where they were in the first quarter of this year, because you just have slowing revenue growth against, as you said, continue, there’s still some residual inflation that’s raising our labor costs and our cost of sales.

Joshua Long: That’s helpful. Thank you. And maybe last one for me, when we think about just the — what tends to be some pretty encouraging performance with some of the locally relevant offers utilizing the digital menu boards. Can you talk about what percent of the system has those right now and I think you mentioned maybe more comprehensive or more complete picture as we get into 2024, but any additional information or outlook you could provide there would be helpful?

Deborah Derby: Sure. So, as I mentioned in my remarks, we have it going on in about 10 markets. What we’re currently doing is really using price pointed offers that we’re focusing on beverages and breakfast. They’ve been running for about 12 weeks in those markets and the goal is to expand the reach throughout the balance of the year to additional markets. We’re pretty encouraged by the initial results. We’re seeing both an increase in traffic, as well as in the average check in the areas where those promotions are running and that’s why we’re kind of planning on having an even more robust local marketing plan in 2024.

Joshua Long: Thank you.

Deborah Derby: Welcome. Thanks for the questions.

Operator: Thank you. [Operator Instructions] Our next question comes from the line of Jake Bartlett with Truist Securities. Please go ahead.

Jake Bartlett: Hi. Thank you so much for taking the question. Mine is on the traffic. I think — and it’s still being negative and I think if I get this right, a little bit more negative in the second quarter than the first. And so the question is, hours have been increasing to increasing operating levers. One, I just want to kind of understand better the impact of that. Those might be just low volume hours and maybe not a huge impact. But when you’re seeing traffic still negative, what is your confidence that, that will move positive? And then within the negative traffic, are you seeing that from specific consumers or dayparts or just understanding kind of where your — you’re still kind of losing customers.

Deborah Derby: I mean, I’ll make, I guess, a couple of comments on that one. The traffic is one that is a sustained effort over time and I think that the efforts that we’re putting in at an operational level, as well as that Burger King is putting in at an advertising level, will take time to take hold. I think directionally, obviously, we’re pleased with where it’s going. But we know that there’s a lot more work to be done to get us where we need to go. We continue to see — we think we have opportunities in the business on the value side, but we’re very encouraged on what we’re seeing kind of at the higher end purchases as well from the consumer. So one of the areas that was up the most for us were for transactions over $20, some of which include some of the more discretionary occasions like delivery in late night and those are the areas that we’re putting a lot of effort into.

So we’re encouraged that over time as those take traction, we’ll continue along with the increased advertising spend, which I think on RBI’s call, they mentioned that a lot more of the spend has yet to come in future quarters. So I think those combined things are what are encouraging us to say that we believe that the traffic will ultimately get into the positive territory.

Tony Hull: Yeah. Jake, I just add one thing as Q1 had severe weather. So it was very easy comps, especially in January and the weather was pretty uneventful in Q2 of 2022 and Q2 of 2023. So that’s why we had a slight decline in traffic sequentially from Q1 to Q2. But I think going forward, Deb’s — I think, Deb, captured sort of the forward look that gives us confidence.

Jake Bartlett: Great. Great. That all makes a lot of sense. And I guess, to that point on the forward look and kind of what the approach is here, do you anticipate any kind of change in focus just broadly from the marketing campaign, another hamburger fast food company yesterday talked about a shift maybe more — a little more towards value in their marketing approach. But do you see any kind of need for or reason to kind of change or refocus the marketing message or do you anticipate that that’s going to happen in the back half of the year?

Deborah Derby: Let’s take, again, a lot of the marketing, obviously, is driven by Burger King, so they could provide a lot more detail in terms of where they see it going. But I know a key part of it is to continue to focus on the core business on the Whopper, which is our strength, while also taking advantage of certain other opportunities. So the most recent promotion that they had, I think, launched just this Monday, which is on the wraps, the Crispy …

Tony Hull: Coming Monday.

Deborah Derby: The coming Monday, Chicken, right, August 14. The — that’s going to be focused on kind of that value end of the customer or kind of the more occasional snacking type of customers. So I think it’s going to be a very balanced core, as well as opportunistically where they think that we can grow the business in other areas. And then our plan, obviously, is to complement the national advertising campaign with local marketing initiatives that we can execute at the restaurant level to create a holistic — something that appeals to any of the customers that want to come in.

Jake Bartlett: Great. And then my last question is on — with the balance sheet with leverage coming down very quickly, it seems like it’s — like we could — you could start to look again at buying stores, acquiring stores like had been such a nickel [ph] part of the model in the past. Are we nearing the point where you’re considering kind of getting back into that cadence where you are kind of a regular grower kind of a low risk way to grow. Maybe just remind us what your kind of what — where are you able to [Technical Difficulty] before that begins and whether that’s becoming more of a part of the conversation, now the results…

Deborah Derby: Right.

Jake Bartlett: …so much.

Deborah Derby: So, I would say, Jake, that’s still the short-term. Our focus is really on the organic growth. We continue to see ways that we continue to improve the operation and the appearance of our existing portfolio. So that’s kind of, I think, the initial focus short term. Certainly, if there’s opportunistic things that would come along that would make sense for us, particularly smaller acquisitions, we would certainly take a look at those. But that isn’t a primary focus right now. That said, we, the senior leadership team and the Board are working on a three-year strategy and I believe that, obviously, you’ll see acquisitions as a component of that going forward, but we’re not at a point where we can really share the details of that at this time. That’s something that we’ll be sharing in future quarters with you.

Jake Bartlett: Got it. Could you just remind me what your kind of target leverage? What — I know you’ve mentioned in the past is, I don’t recall it right now, just what kind of your comfortable leverage ratio is?

Tony Hull: Those are two different questions. The historical was, we were looking at 4 times total net debt leverage. I think the — sort of the going forward numbers is part of the discussion with the Board that Deb just alluded to and so we’ll report on that as we get feedback from that. I think the important thing in terms of what were our sort of near-term, medium-term focus is really fortifying the balance sheet, because we have some debt coming up in two-plus years that we were starting to think about it. We want to be very — we want to be very opportunistic, I guess, is the best word on.

Deborah Derby: Yeah.

Tony Hull: And when we capture, when we do that refinancing, so we have obviously a huge runway. But the important thing is we have to balance sort of reinvestment in the business, which we’re keeping pretty modest and generating free cash flow so we can show the credit side of our investor base that we can improve our credit ratings and do everything we can to really minimize our interest cost on the next part of — when we do the refinancing. So I think that’s going to weigh in pretty big on what that new number is going to be, that new leverage number is going to be or if it changes at all.

Deborah Derby: Yeah.

Tony Hull: So, again, all TBD.

Jake Bartlett: Got it. Got it. Okay. Thank you so much. Appreciate it.

Deborah Derby: Thanks for the questions, Jake.

Operator: Thank you. As there are no further questions, I will now hand the conference over to Deborah Derby for closing comments.

Deborah Derby: Thank you everyone, again, for joining us this morning and for your interest in Carrols. We appreciate your time and we look forward to speaking with you next quarter.

Operator: Thank you. The conference of Carrols Restaurants Group has now concluded. Thank you for your participation. You may now disconnect your lines.