Cracker Barrel Old Country Store Inc (CBRL) 2013 Q2 法說會逐字稿

Good day, everyone, and welcome to the Cracker Barrel fiscal 2013 second quarter earnings conference call.

Today's conference is being recorded and will be available for replay today, from 2.00 PM Eastern through March 12 at 11.59 PM Eastern by dialing 719-457-0820 and entering passcode 7587468.

At this time, for opening remarks and introductions, I am pleased to turn the call over to Coco Kyriopoulos.

Please go ahead, ma'am.

Thank you, Jennifer.

Good morning and welcome to Cracker Barrel's second quarter fiscal 2013 conference call and webcast.

This morning, we issued a press release announcing our second quarter results and outlook for the 2013 fiscal year.

In this press release and on this call, we will refer to non-GAAP financial measures for the current quarter and fiscal year, adjusted to exclude severance and proxy contest expenses and their related tax effects, as well as adjustments related to the retroactive reinstatement of the Work Opportunities Tax Credit.

We will also refer to non-GAAP financial measures for the prior year and prior year quarter, adjusted to exclude charges and tax effects related to the prior year proxy contest.

The Company believes that excluding these charges and tax effects from its financial results provides information that may be more indicative of the Company's ongoing operating performance, while improving comparability to prior periods.

This information is not intended to be considered in isolation or as a substitute for financial information prepared in accordance with GAAP.

The last page of the press release includes a reconciliation from the non-GAAP information to the GAAP financials.

The press release can be found in the Investor Section of our website, crackerbarrel.com.

In that press release and during this call, statements may be made by Management of their beliefs and expectations of the Company's future operating results or expected future events.

These are what are known as forward-looking statements, which involve risks and uncertainties and in many cases, are beyond Management's control and may cause actual results to differ materially from expectations.

We urge caution to our listeners and readers in considering forward-looking statements and information.

Many of the factors that could affect results are summarized in the cautionary description of risks and uncertainties found at the end of this morning's press release and are described in detail in our reports that we file with or furnish to the SEC.

We urge you to read this information carefully.

We also remind you that we do not comment on earnings estimates made by other parties.

In addition, any guidance or outlook we provide or statements we make regarding trends speak only as of the date they are given and we do not update or express continuing comfort with our guidance, outlooks, or trends except in broadly disseminated disclosures, such as this morning's press release, filings with the SEC, or as otherwise required by law.

On the call with me this morning are Cracker Barrel's President and CEO, Sandy Cochran, and Senior Vice President and CFO, Larry Hyatt.

Sandy will begin with a review of the business and Larry will review the financials and outlook.

We will then open up the call for questions and Sandy will return to close.

We ask that you please limit your questions to matters relating to the Company's performance, outlook, and plans and with that, I'll now turn the call over to Cracker Barrel's President and CEO, Sandra Cochran.

Sandy?

Thanks, Coco, and good morning, everyone.

We're pleased with our second quarter results, as they exceeded our expectations and reflect the continued success of our marketing, menu, and operational initiatives.

Highlights of our success in delivering a strong guest experience during the quarter include -- this was the fifth consecutive quarter of positive traffic, positive restaurant, and retail sales and outperformance of the Knapp-Track Casual Dining Index for sales and traffic and it was another strong quarter of strong guest satisfaction scores.

In January, research from Technomic, a well-recognized industry research firm, further affirmed what our business results are showing.

Cracker Barrel won the food and beverage category for full service restaurants.

This study covered 115 of the leading restaurant chains on more than 60 different attributes.

Before I highlight more details of the second quarter, I'd like to congratulate all of our 70,000 employees on the consistent progress we've made over the last two years.

As a result, for the first time in 10 years, the Company generated positive store traffic against a prior-year quarter with positive store traffic.

While we've grown traffic and revenue, we've also increased our operating income and earnings per share.

Larry will review the financial results for the quarter in more detail and I'll update you on the progress we're making on our 2013 business priorities.

We have several priorities focused around our long-term strategy of enhancing our core business, starting with refreshing and developing select menu categories that reinforce the affordability of Cracker Barrel and the availability of healthy options for our guests.

Our holiday promotion, which featured limited time offerings in on-menu items, was positively received by our guests and contributed to the increase in average check over the quarter.

Our near-term focus is driving our affordability message, primarily at the dinner day part, in a similar fashion to what we did at the lunch day part with our daily lunch specials program.

Much like that program, we're looking to drive interest and excitement in a core menu category.

This category, Country Dinner Plates, delivers the guest 14 different entree options, the choice of two vegetables, and bread service, all for $7.69.

Our current menu promotion, which started on January 21 and continues through mid-March, features three Country Dinner Plates, two from our core menu and a limited time offering of Pacific salmon patties.

At the beginning of our fiscal year, we also identified Better For You as a focus area for menu enhancements.

We've been developing a permanent menu category called Wholesome Fixin's that provides guests with flavorful and fresh options at breakfast, lunch, and dinner.

All options are under 500 calories at breakfast and 600 at lunch/dinner and at prices consistent with our current offerings.

We're currently testing the category with the expectation of adding it to the menu this summer.

Regarding our retail business and our priority to grow retail sales with unique merchandise, we were very pleased with how our retail team increased both sales and margin during the quarter.

Our top sellers for the holiday season included wide assortments of women's wraps and scarves, both at good value price points, and whimsical items like our rolling, laughing sock monkey and our playful snowmen decor.

As well, our guests continued to indulge on their children in their lives as children's accessories and apparel sold well over the holidays and novelty chocolates were a hit for holiday treats.

Over the quarter, strong sales of our giftable items offset weaker sales of our holiday-themed merchandise.

Our overall sell-through improved for the holiday months and resulted in higher gross margin for the quarter.

We look ahead to our third quarter.

We anticipate continued strength in our apparel and accessories for spring.

However, we are cautious of the shorter selling season brought on by an early Easter and the discretionary nature of our holiday-themed merchandise.

Another priority for this year is to build on the successful Handcrafted by Cracker Barrel advertising campaign we launched last year.

Our TV advertising ran on nationwide cable stations from the middle of November up to Christmas Day and covered 100% of our stores.

During the same timeframe, we ran radio spots in 65% of our markets, which highlighted the brand's seasonal menu offerings and our retail assortment.

We continued to direct advertising dollars to programs and stations popular with our media target audience of women ages 25 to 54.

As you're aware, billboards are primary marketing tools to support our Cracker Barrel Old Country Store brand and during the quarter, we updated 200 of the 1,600 billboards to highlight the $7.69 price point and 14 choices of our Country Dinner Plates.

When combined with the 100 billboards which continue to highlight the $5.99 daily lunch specials, we currently have 20% of our billboards dedicated to sharp price point messaging and this messaging further reinforces the affordability of our menu.

We also continue to strengthen the relationship with our guests through the use of digital media and our exclusive music program.

We grew our customer base in each of our digital channels and all of our social media outlets increased in engagement during the quarter.

Contributing to the increase was our Pick It to Win It digital campaign, which ran during the holiday weeks and focused on the value and breadth of the retail products in stores and online.

Once again, we find our exclusive music program topping the charts with the release of Russell Moore and Third Time Out, which held the number one spot on the Billboard Bluegrass chart for five weeks.

We also focused on our priority of investing in and leveraging technology and equipment to support operations and reduce costs.

This quarter benefited from many of the initiatives completed in the first quarter, which resulted in reduced cost and increased employee and guest satisfaction.

Our refinements to the hourly labor scheduling system resulted in an improvement to labor cost of approximately 10 basis points.

In addition, the merchandise planning system implemented during the first quarter provided greater visibility on key metrics for better management of our retail operations during the busy holiday season.

We believe that our HR process and technology enhancements implemented during the first quarter improved the overall employee experience in the field.

Most importantly, our guest survey scores continue to remain high and showed an increase in every month of the quarter over the prior-year month in overall satisfaction and overall value.

During the second half of the year, we expect to roll out the second phase of our food production planner and anticipate that later in the fiscal year, we will see a continued reduction in food waste.

Given our operational success, we continue to focus on maximizing shareholder return with a balanced approach to returning cash to shareholders and investing in the Company for future growth.

Over the last six quarters, we've doubled our dividend to $0.50 a quarter, repurchased nearly $15 million worth of shares, and accumulated a significant cash balance.

As announced earlier this month, the Company offered to repurchase all of the 4.7 million Cracker Barrel shares held by Biglari Holdings.

We believe this offer was in the best interest of all of our shareholders and were disappointed that the offer was rejected.

Finally, we continue to make progress on our strategy to extend the brand outside of the Cracker Barrel Old Country Store.

Although it is not material to our financial performance, we were encouraged by the doubling of our eCommerce revenues during the holiday season and plan to continue our efforts to grow this channel and to better connect with our guests outside our retail store.

In summary, we're pleased with our second quarter results and our performance during the first half of our fiscal year.

As we look to the second half of the year, our industry is facing several pressures.

Inclement weather in February negatively impacted traffic and the consumer continues to be challenged with an uncertain unemployment outlook, higher FICA taxes, and increasing gas prices.

Despite these headwinds, I remain confident that we have the right team, the right strategic priorities, and one of the strongest, most differentiated brands in the restaurant industry.

With that, I'll hand the call over to Larry for more details on the quarter.

Good morning, everyone, and thank you, Sandy.

I would like to begin by discussing our financial performance for the second quarter of fiscal 2013 and then our outlook for the 2013 fiscal year.

For the second quarter of fiscal 2013, we reported GAAP net income of $35.2 million, or $1.47 per diluted share, and adjusted net income of $34.3 million, or $1.43 per diluted share, compared with adjusted net income of $27.9 million, or $1.20 per diluted share, in the prior year quarter.

We made three adjustments to GAAP net income.

First, expenses related to the proxy contest were $1.2 million in the second quarter or $0.04 per diluted share.

In comparison, proxy contest expenses in the prior-year quarter were $3.2 million or $0.10 per diluted share.

Second, during the second quarter, we made organizational changes, which resulted in severance and related expenses of $0.5 million or $0.02 per diluted share.

Third, in early January, the Federal Government reinstated the Work Opportunity Tax Credit, or WOTC, and made it retroactive to January 1, 2012.

While the full benefit of the WOTC reinstatement on our second quarter earnings was $0.19 per diluted share, the $0.09 per diluted share relating to the prior fiscal year is excluded from adjusted EPS.

Our revenue in the quarter was $702.7 million, compared to $673.2 million in the prior year second quarter.

Our restaurant revenues increased 4.9% to $528.2 million and retail revenues increased 2.8% to $174.5 million.

Our comparable store restaurant sales increased 3.3%, as traffic increased 0.2% and average check increased 3.1%.

The increase in average check reflected menu price increases of approximately 2.6% and a favorable mix impact of 0.5%.

Our comparable store retail sales increased 3.1% in the second quarter.

The Company estimates that inclement weather in the second quarter reduced comparable store traffic and sales by approximately 0.3%.

Our total cost of goods sold in the quarter was 34.8% of revenue, a 20 basis point decrease over the prior-year quarter.

Our restaurant cost of goods was 27.7% of restaurant sales, compared to 27.5% in the prior-year quarter.

This 20 basis point increase was a result of changes in menu mix and increases in food commodity costs, which were partially offset by increases in menu prices and reductions in food waste.

Our commodity costs were up approximately 2.5% in the quarter compared to the prior-year quarter, as increases in beef, fruits and vegetables, and oils were partially offset by reductions in seafood.

Our retail cost of goods sold was 56.1% of retail sales compared to the prior-year quarter of 57.1%.

This 100 basis point improvement was the result of stronger sell-through of holiday merchandise, resulting in lower markdowns.

Our retail inventories at the end of the quarter were $103.5 million, an 11.2% increase over the prior year quarter.

This increase was primarily a result of higher in-stock positions in apparel, accessories, and toys, and the earlier receipt of spring merchandise.

Store payroll and related expenses were $244.9 million, or 34.8% of sales, a decrease of 10 basis points compared to the prior-year quarter.

Continued improvement in hourly labor productivity and the leverage of menu price increases were partially offset by increases in employee benefits.

Our other store operating expenses in the quarter were $122.6 million, or 17.4% of revenue, compared with $119.1 million, or 17.7% of revenue, in the prior-year quarter.

This 30 basis point decrease was a result of the timing of advertising spending and decreases in utilities and supplies expenses, partially offset by an increase in maintenance expense.

Our store operating income was $91 million, or 13% of revenue, compared with $83.8 million or 12.4% of revenue in the prior-year quarter.

On a GAAP basis, our general and administrative expenses in the quarter were $33.8 million or 4.9% of revenue.

Adjusted for proxy contest and severance expenses, our G&A expenses were $32.1 million, or 4.6% of revenue, compared with adjusted G&A expenses of $33.2 million, or 4.9% of revenue, in the prior-year quarter.

This 30 basis point reduction in G&A expenses is due primarily to reductions in compensation expenses.

On a GAAP basis, our operating income was $57.2 million, or 8.1% of revenue, compared with $47.3 million, or 7% of revenue, in the prior-year quarter.

Adjusted for proxy contest and severance expenses, adjusted operating income was $58.9 million, or 8.4% of revenue, compared with $50.6 million, or 7.5% of revenue, in the prior-year quarter.

Our interest expense in the quarter was $10.3 million compared to $11 million in the prior-year quarter, due primarily to lower borrowings.

Our effective income tax rate was 25% as compared to 29.5% in the prior-year quarter.

As noted previously, this decrease was due to the retroactive reinstatement of the WOTC effective to January of 2012.

Capital expenditures in the quarter were $16 million and were $29.3 million on a year-to-date basis as compared to in the prior year, where they were $20 million in the quarter and 38.7% on a year-to-date basis.

Our balance sheet continues to be strong.

We ended the quarter with $186.1 million of cash and equivalents compared with $119.4 million at the end of the prior-year quarter.

Our total debt was approximately $525 million and we have unused capacity in our revolver in excess of $150 million.

We did not repurchase any shares in the second quarter.

With respect to our outlook, everyone should be mindful of the risks and uncertainties associated with this outlook, as described in today's earnings release and in our reports filed with the SEC.

Bearing that in mind and based upon our year-to-date financial performance, the reinstatement of WOTC, the inclement weather in February, the continued food commodity cost pressures, and our concerns about conditions in the United States economy, we are revising our previous full-year guidance.

We continue to expect total revenue for fiscal 2013 of between $2.6 billion and $2.65 billion, reflecting anticipated increases in comparable store restaurant and retail sales in the range of 2% to 3% for the year.

We now expect to open 8 new Cracker Barrel stores in fiscal 2013, which is a reduction from our prior guidance of a range of between 9 and 11.

We expect to report adjusted earnings per diluted share for the fiscal year of between $4.60 and $4.80.

Our adjusted earnings guidance for the full year excludes the impact of the proxy contest, severance expenses, and the prior-year portion of the WOTC tax benefit.

We expect increases in food commodity costs on a constant mix basis of between 4% and 5% for the fiscal year, with the most significant increases in beef, pork, poultry, fruits and vegetables.

We have locked in our pricing on approximately 70% of our commodity requirements for the second half of fiscal 2013, which is equal to the percentage at this time last year.

We expect our adjusted operating margin for the year to be in the range of 7.3% to 7.5% of revenues, our depreciation expense to be between $66 million and $69 million, our net interest expense between $36 million and $38 million.

With the WOTC reinstatement, we expect our effective tax rate for the year to be in the range of 28% to 29%.

We continue to expect capital expenditures for the year to be in the range of $90 million to $100 million.

For the third quarter of fiscal 2013, we expect to report earnings per diluted share of between $0.90 and $0.95.

With that, I will now turn the call back over to the operator and Sandy and I look forward to answering questions.

Thank you very much.

(Operator Instructions)

Jeff Omohundro, Davenport & Company.

Congratulations on your quarter.

My question relates to the guidance in the current quarter and I certainly appreciate the EPS guidance.

But I wonder if you could give a little bit more granularity around your thinking around the weather impact and certainly a number of companies have discussed the impact of late tax refunds and the currently challenging macro environment with gas prices up so much.

I'd just appreciate, perhaps, if you could also maybe provide the embedded comp guidance supporting the EPS story for Q3.

Jeff, we have noted that we saw some significant impact from weather in our February month.

We've not quantified it, but it appears for the month, it could conceivably be in the range of about 100 basis points.

We've seen some impact and Sandy expressed a little caution, I expressed a little caution, on the consumer impact from FICA taxes going up 2% on January 1. It's very hard to quantify what the timing result is of the delayed tax refunds.

I'm aware of the fact that many retailers have done that and far fewer restaurant companies have.

We don't usually offer quarterly sales guidance.

We typically offer full year sales guidance and the quarterly guidance tends to be limited to earnings per share.

As a follow-up to that, with average check growth where it is now, given this macro environment, could you just update us a little bit on your thinking around pricing and what check growth you really think's appropriate?

Thanks.

Yes.

We said in the Analyst and Investor Day last year that, over about a three-year period, that we were looking for average menu price increases in the 1% to 2% range and have said that with respect to 2013, that we would be targeting something roughly in the 2% range.

Second quarter, we had menu price increases in the 2.6% range.

A part of that is timing.

It's timing of menu price increases versus rollover of prior increases.

We still anticipate that menu price increases for the full fiscal year will be in the 2% range.

We take a very methodical and very analytical approach to menu price increases.

We do very extensive substitution studies, do very extensive elasticity studies, and we have historically seen and continued to see in this year's second quarter that those increases do pull through.

Jeff, I think you're touching on some important themes for both the second quarter and the quarter we're in.

We feel really good about the delivery of the brand experience, certainly, that we've been delivering.

But in this type of market, we're being very careful about doing things which could negatively disrupt guest behavior.

I think that the programs we're putting into the market address the consumer needs and the demands.

But as Larry said, we're very mindful and concerned about where the consumer is right now with respect to the pricing decisions we're making and about the competitive activity and the level of promotions that we are and could be dealing with.

Very helpful.

Thanks.

Joe Buckley, Bank of America-Merrill Lynch.

It's Andrew Charles on for Joe.

Not to understate your solid sales gains, but looks like the family dining segment was solid across the board this quarter.

Could you talk about the competitive activity you're seeing in the segment?

It appears to be focused on the dinner day-part.

I would say in terms of the discounting, which is given that we compete in our breakfast day-part with the family dining but at lunch/dinner with the casual dining, our competitive landscape is broader than just the family diners.

I think that we, as I just mentioned, I think that the programs that we're putting into place which are addressing value, affordability, and the Better For You are what consumers are looking for, though.

I'm pleased with the results that we're getting.

Okay.

If you were able to repurchase Biglari stock, how would you finance it?

As noted, we have $150 million of capacity on the revolver.

We ended the second quarter, which is admittedly a seasonal high for us because of the holiday season and because of gift card sales, but we ended it with $183 million.

Without going into specifics, as we noted in the letter we sent to Biglari Holdings, we were highly confident that we would have been able to finance it.

Great.

Thank you.

Chris O'Cull, KeyBanc.

Sandy, the team's implemented several menu and advertising changes the past couple years.

Does the Company have evidence that it is appealing to a broader group of consumers from these changes?

Yes, it is.

We think that it is appealing, it is accomplishing what we wanted, which was not only addressing what our core users were looking for, but it was also appealing to younger and lighter users that are often looking for customization, Better For You, and our ability to reinforce that on our menu and offer some new things, I think, has been helpful.

What initiatives have been the most effective, in your mind?

I think it's the combination of really all the initiatives that we've started over a year ago, the advertising campaign, the Handcrafted by Cracker Barrel, which coupled national brand advertising with the radio that reinforced maybe the specific items on our menu, as well as the daily lunch special work we did, the Better For You items on our menu.

I don't want to underestimate the work we've been doing in our stores in delivering on the guest experience.

I think our field teams have done an extraordinary job of providing the kind of guest experience that people are looking for.

Our retail team has done an excellent job in their assortment and in delivering retail service.

I think in times like this, consumers are looking for value and they're looking for it from brands they trust and I think Cracker Barrel just continues to deliver that.

Okay.

Fair enough.

Would you talk about the Company's plan to use excess cash?

Sure, Chris.

Again, as noted, the Company ended the quarter with $183 million.

Sandy noted that, over the last six quarters, we have doubled the cash dividend.

We've repurchased $15 million worth of shares, have retired about $25 million of debt.

We will be looking at the maturation of the Company's swaps at the beginning of May, which gives us additional flexibility to pay down debt.

We continue to have a share repurchase authorization of $100 million from the Board and will be closely monitoring opportunities to make share repurchases to counter dilution.

As the Company announced a couple weeks ago, we tried to do a major share repurchase, but the offer was turned down.

Does the Company have a stated dividend policy or a payout ratio they're targeting?

Not a specific payout ratio, but as we said at our analyst and investor meeting last year, we anticipate a gradual, steady increase in the Company's dividend over time.

Okay.

In terms of debt repayment, what amount of the swaps expire in May and what would be the next move down, what would be the pricing if you moved down the grid?

I'm assuming there's a grid in the credit agreement that allows you to have better pricing over LIBOR.

What's that move in May, if you were to pay down the debt?

Couple questions there.

Right now, the notional value of the swaps is $525 million and it swaps three months LIBOR for 557 basis points.

That swap matures at the beginning of May and is replaced by $400 million of forward swaps at much lower rates, meaning that the Company, at that time, will have the flexibility to pay its debt down, should we choose to [buy] that $125 million.

Right now, our pricing grid's 175 over LIBOR.

That gets set on a fiscal year basis, so that future reductions in that margin would be in subsequent -- it changes quarterly.

I'm sorry.

There's some potential for some modest reduction in the pricing grid, but the big reduction will be the reduction from 557 basis points, which is our current LIBOR swap, to something in the range of 200 basis points on our forward swap.

Okay.

Thank you.

Imran Ali, Wells Fargo.

It's Imran for Jeff Farmer.

Just a quick question, just following up on your lowered unit development guidance, is that still relating to permitting or construction delays into next year or are there other dynamics in play?

Specifically, we had one store that, because of delays, moved from 2013 to 2014 and then had one store that, because of the changes to the criteria, our more stringent site evaluation, we just basically have made a decision not to move forward with.

Got it.

Thanks.

On a separate note, you were touching on this earlier, but I think just in terms of other restaurant companies, what they've encountered recently, I think some of them have pointed to increased, [intra-week] same-store sales volatility, which in turn has resulted in both labor and food prep inefficiencies.

Have you experienced similar top and bottom line trends?

I think I would say that the sales trends over the last few months have been volatile.

Some of that, I think, is relating to weather and pending weather and traffic patterns have been changing, with shifts in holidays and school calendars and things like that.

But underneath that, there does seem to be a higher volatility than we'd had in previous years.

Got it.

Okay.

As far as labor and food prep are concerned, with the additional tools, both in the labor scheduling area and the food production area that our operating teams now have, we seem to be managing through that volatility.

Got it.

Okay.

That's helpful.

Lastly, I was just wondering, do you have any updates on, I think, the licensing agreement you had with Smithfield Foods?

Any updated views on the potential opportunity or something you think you can speak to?

We continue to be excited about the opportunity that licensing will give us to extend our brand, but as you might be aware, we are involved in some litigation concerning that initiative.

I'm not really prepared to talk about the specifics today other than to say that there's numerous defenses.

We have numerous defenses against the claims and we intend to defend the lawsuit vigorously.

Understood.

Okay.

Thanks very much.

Amit Kapoor, Gabelli & Company.

In your prepared remarks and the press release and some questions, you've addressed general economic conditions and consumer spending.

Can you remind us, in view, in light of the higher gas prices, defensively, what have you successfully done to respond to those prices?

How have sales and consumer traffic responded as a consequence of the measures you might take?

Thank you.

I'm not exactly sure -- let me try to answer it.

If I don't, I'll take another stab.

I think that the correlation that we see and we talk about the most is miles driven to our traffic.

We do see higher gas prices as less correlated to traffic but in general, it impacts disposable income and therefore, has an impact on the consumer, which we don't think is helpful.

One of the reasons we think there's so much focus right now on affordability and ensuring that we reinforce the value that you can get at a Cracker Barrel and in our experience, is important.

I think what we've been doing to address the overall consumer environment is ensuring that we're very thoughtful about where we increase prices, that we're very thoughtful about promoting items that reinforce and highlight our affordability, and ensuring that we deliver the kind of guest experience that, if you do choose to spend your dollars in a restaurant visit, that you're happy after you've come to Cracker Barrel.

Okay.

Thank you.

Michael Gallo, CL King.

Congratulations on the good results.

Sandy, my question is on the affordability message and the overall marketing message.

In the 200 or so billboards that you refreshed with the more aggressive affordability image around the $7.69 entrees, I was wondering if you saw an increase in guest traffic at those stores relative to the other stores that had more of the traditional billboard image?

Also, if you can just give us an update on what you saw in terms of lift as you ran TV versus billboard and whether you think you have the right optimal mix between the medium or whether you think you might refine that in the coming year?

Thank you.

Our billboards on the Country Dinner Plates just went in, so we wouldn't have a read yet.

We didn't put those up until January after we got through a holiday promotion.

With respect to our media mix, what we have is radio and TV and billboards.

Our billboard program has been in place for a number of years.

We have over 1,600.

We think it gives us 23 billion impressions.

So, that's sort of an embedded program.

Our radio and TV, we do monitor after each of the flights.

I'm very happy with the TV and what it delivered.

We're still evaluating the radio and how comfortable we are with it, how we could improve it and how important it was in terms of a mix, I think we're still working on.

Thanks very much.

At this time, I would like to go ahead and turn the conference back over to Ms. Sandy Cochran for any closing or additional remarks.

Thank you all for joining us today.

I'm pleased with our second quarter results and the progress we've made on our business priorities.

We look forward to building on the success of this quarter during the second half of the year.

We appreciate your interest and support.

Thank you.

That does conclude today's teleconference.

We do thank you all for your participation.