Joshua Long: Great. Thank you for taking the question first. My condolences to you and the team for your loss. Our thoughts continue to be with you, but appreciate the time to be able to talk about the 4Q results today. When we think about just a lot of the momentum that you, you talked about here in particular, you noted the opportunity for geographic pricing and how that had kind of worked out favorably and there was some excitement there. Where are you at in the terms of the opportunity to see the full expression of that? Just any sort of context there would be helpful and then I had a follow-up.
Tony Hull: Well, I think we’ve seen a lot of it. We’re looking, the team is working on now really pushing hard on that for, an anticipated March price increase. We want to do it strategically and make sure we do it with a minimal impact on traffic. So I think we’ll be able to talk about those things in the future, but it’s definitely much more scientific and pinpointed than it’s been the past. We’ve gotten, we’ve really sharpened up our skills on pricing in this environment, because that really wasn’t a thing before, it was a pretty routine thing before last year. So I just think, we continue to make it strides and our franchisors also investing a lot in that area too, so we’re looking forward to getting their insights. So we think we have ways to go in terms of doing that without doing it strategically. So, we don’t hurt traffic while we do it. So, Joe, do you want to add anything to that or?
Joe Hoffman: No, I think you’re right. I think, I would just add that as far as geographically it €“ we need to look at each one of our areas and make sure that the pricing makes sense for that particular location.
Joshua Long: Thank you. That’s helpful. When we think about the labor environment, you mentioned a couple times that your kind of human capital focus and your team structure was in a good place. Could you add a little bit more context there in terms of either just pure staffing levels, retention, turnover, however you think about kind of contextualizing the improving labor environment?
Joe Hoffman: Yes, this is Joe again, I €“ our applicant flow remains strong, and we’re able to hire where needed. I think the labor market as a whole is seemingly rationalizing itself, but the biggest benefit to us has been the reduced turnover, which I think helps us become more efficient. Once we can begin to retain the employee long enough to continue to do cross-train them and then we find where their strengths are, the better we can create for the guest experience.
Joshua Long: That makes sense. Thank you. And then last one for me, when we think about the COGS outlook and the opportunity for moderating inflation over the course of the year, can you remind us particularly on the beef sourcing or where you source your beef, it seems like there’s some pushes and pulls there in the overall environment, which could lead to some increases in price of whether it’s on the exporting or side of the table. But just curious if we could get a little recap in terms of how you go about your sourcing? Thank you.
Tony Hull: Sure. Our sourcing is through our food co-op and they source it for the entire U.S. Burger King system. There are really two elements, we use internationally sourced beef to sort of depending on €“ depending on pricing can be about a third, I’d say of our beef. Those contracts we have good visibility into for several quarters because, we put the €“ they RSI puts those contracts in place ahead of time. On the U.S. part of the equation, it’s more spot market. It’s not really viable to hedge. So, we are looking carefully at what’s going on with the culling of the herd that has been talked about for several quarters. It’s supposed, its taking place now. So that could reduce the supply right at the time when the demand goes up as we get into the summer months.
So, we think beef is one of the areas that could show an increase this year, but a pretty modest increase. We think it’ll be pretty much on par for the full year versus last year, maybe up a couple percentage points. But obviously when we use the amount of beef we use, that’s a very important that’s a big increase in costs. I’d say the other €“ the other view on commodities right now is, is at least in the first half of the year, we still think that we’re going to be in the high single-digit kind of range. I mean, inflation for us in Q4 was at about 12%, so low teens and it was mid-teens for the full year. So obviously moving in the right direction and we think it’s going to be come below kind of the 10% level in the first half of this year.
So, and then the outlook for the back half of the year is really, is a bit harder to pin down, but given the increase we’ve seen €“ we should see some relief on a lot of commodities in the back half of the year.
Joshua Long: That’s helpful. Thank you. On the third of beef source internationally, where €“ what regions does that typically come from?
Tony Hull: It’s mostly Australia and New Zealand where they have a very €“ they’re at a favorable place in terms of their supply demand because, they went through their calling like three years ago, so they’ve built up the herd and obviously we have a stronger dollar. So those things are creating an opportunity for good pricing on that piece of the equation. But thank you for following up on that. I should have mentioned that.
Joshua Long: Great. Thank you.
Operator: Thank you. Our next question is from the line of Mary Gresla with Bank of America. Please go ahead.
Mary Gresla: Hi, thanks for taking my questions. So first your EBITDA generation is very strong in the quarter, do you expect this to continue and think it’s possible that you could reach your $100 million annual EBITDA target sooner than expected?
Tony Hull: It’s really, the first half of this year we feel good about, again the back half is a little more difficult to predict. So, I would view it as pretty unlikely that we’ll hit that this year. But we’re looking maybe a couple years, beyond we could reach that it’s really going depend on the success of the traffic driving forces from Reclaim the Flame and the investment they’re making in the brand equity there. So, I think it could €“ we’re on a good trajectory to get there. But this year would be €“ that’d be a stretch, I think.
Mary Gresla: Okay. And then is there any change in your openness to acquiring units from other operators that may be struggling? Or are you sort of fully focused on organic growth in the near term?
Tony Hull: We’re primarily focused on organic growth, because that’s going to drive, I €“ we don’t want any certainly on a sort of multi restaurant operator. We don’t want to have the distraction that, that could cause from us not hitting some of our operational efficiency goals and our leveraging goals for COGS and labor. So, and then other operating expenses, we’re working on a number of those as well to rationalize those and to improve the, compared to sales on those costs. So, I think until we get to four times leverage on a total debt basis, I think we’re going to stay focused on organic growth.
Mary Gresla: Got it. Thank you very much.
Operator: Thank you. Our next question is from the line of Fred Wightman with Wolfe Research. Please go ahead.
Fred Wightman: Hey guys, good morning. I was hoping that you could just give us a little bit of context. If we look at some of the management changes in management commentary coming out of RBI and sort of BKC, it seems like there’s this real emphasis and desire to be evaluated on franchisee profitability. And I’m wondering from where you guys sit, if that is actually a change in how they’re communicating with you and actually the franchisee system broadly? And maybe just your thoughts on whether that could improve, I guess the performance of the system and sort of your operational capabilities just with the parent company apparently more focused on franchisee profitability.
